Grupo Financiero Galicia S.A.

“Corporation which has not adhered to the optional system

for the mandatory acquisition of shares in a public offering"Financial Statements

for the three-month period ended

March 31, 2010, presented in comparative format

Translation of financial statements originally issued in Spanish













Company’s Name:
Grupo Financiero Galicia S.A.

“Corporation which has not adhered to the optional system

for the mandatory acquisition of shares in a public offering"Legal domicile:
Tte. Gral. Juan D. Perón No. 456 – 2nd floor Autonomous City of Buenos AiresPrincipal line of business:
Financial and Investment ActivitiesFiscal year N° 12For the three-month period commenced January 1, 2010 and ended March 31, 2010,

presented in comparative format.Date of registration with the Public Registry of Commerce:Of Bylaws:
September 30, 1999Date of latest amendment to Bylaws:
June 26, 2006Registration number with the Corporation Control Authority (I.G.J.):
11,891Sequential Number – Corporation Control Authority (I.G.J.):
1,671,058Date of expiration of the Company’s Bylaws:
June 30, 2100Description of the Controlling Company:Company’s Name:
EBA Holding S.A.Principal line of business:
Financial and Investment ActivitiesInterest held by the Controlling Company in the Shareholders’ equity as of 03.31.10:
22.65%Percentage of votes which the Controlling Company is entitled to as of 03.31.10:
59.42%






Capital status as of 03.31.10  (Note 8 to the Financial Statements)

(figures stated in thousands of pesos for “Subscribed” and “Paid-in” shares)SharesNumber
Class
Voting rights per share
Subscribed
Paid-in281,221,650
Ordinary class “A”, face value of 1
5
281,222
281,222960,185,367
Ordinary class “B”, face value of 1
1
960,185
960,1851,241,407,017


1,241,407
1,241,407







1
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Consolidated Balance Sheet
 As of March 31, 2010 and December 31, 2009.
 (Figures stated in thousands of pesos)





03.31.10
12.31.09ASSETSCASH AND DUE FROM BANKS
4,001,839
3,696,309-Cash
1,265,952
1,379,888-Financial institutions and correspondents
2,735,887
2,316,421-Argentine Central Bank
2,485,147
2,066,792-Other local financial institutions
8,370
6,783-Foreign
242,370
242,846GOVERNMENT AND CORPORATE SECURITIES
4,137,873
3,920,407-Holdings of securities in investment accounts and special investment accounts
566,800
43,350-Holdings of trading securities
134,502
114,186-Government securities received in connection with reverse repo transactions with the Argentine Central Bank
-
152,650-Government unlisted securities
1,678,081
1,981,972-Investments in listed corporate securities
17,710
13,171-Securities issued by the Argentine Central Bank
1,916,403
1,615,078-Allowances
(175,623)
-LOANS
14,060,605
13,477,901-To the non-financial public sector
21,603
25,416-To the financial sector
14,031
25,352-Interbank loans (call money loans granted)
14,000
25,300-Other loans to local financial institutions
27
24-Accrued interests, adjustments and quotation differences receivable
4
28-To the non-financial private sector and residents abroad
14,835,556
14,233,579-Advances
738,626
630,068-Promissory notes
3,184,387
3,205,433-Mortgage loans
926,477
964,291-Pledge loans
70,358
64,819-Personal loans
1,929,993
1,724,413-Credit card loans
6,062,074
5,691,335-Others
1,780,059
1,828,591-Accrued interests, adjustments and quotation differences receivable
202,540
178,837-Documented interest
(58,818)
(54,185)-Unallocated collections
(140)
(23)-Allowances
(810,585)
(806,446)OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE
3,593,357
3,360,434-Argentine Central Bank
283,301
493,129-Amounts receivable for spot and forward sales to be settled
685,691
23,650-Securities receivable under spot and forward purchases to be settled
509,170
681,148-Premiums from brought options
238
436-Others not included in the debtor classification regulations
1,618,241
1,659,726-Unlisted negotiable obligations
36,358
38,979-Balances from forward transactions without delivery of underlying asset to be settled
4,587
1,040-Others included in the debtor classification regulations
480,986
488,280-Accrued interests receivable not included in the debtor classification regulations
5,170
4,554-Accrued interests receivable included in the debtor classification regulations
2,324
2,523-Allowances
(32,709)
(33,031)





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.




2
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Consolidated Balance Sheet
 As of March 31, 2010 and December 31, 2009.
 (Figures stated in thousands of pesos)




03.31.10
12.31.09ASSETS UNDER FINANCIAL LEASES
327,673
339,150-Assets under financial leases
331,305
342,759-Allowances
(3,632)
(3,609)EQUITY INVESTMENTS
56,249
53,895-In financial institutions
1,922
1,882-Others
59,962
57,973-Allowances
(5,635)
(5,960)MISCELLANEOUS RECEIVABLES
959,877
1,155,178-Receivables for assets sold
35,137
34,106-Minimum presumed income tax
347,015
328,619-Others
607,267
820,875-Accrued interests on receivables for assets sold
280
124-Other accrued interests and adjustments receivable
109
109-Allowances
(29,931)
(28,655)BANK PREMISES AND EQUIPMENT
896,352
898,321MISCELLANEOUS ASSETS
65,342
63,841INTANGIBLE ASSETS
560,547
572,324-Goodwill
23,648
26,346-Organization and development expenses
536,899
545,978UNALLOCATED ITEMS
13,495
27,239OTHER ASSETS
35,624
37,367TOTAL ASSETS
28,708,833
27,602,366





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.

































































3
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Consolidated Balance Sheet
 As of March 31, 2010 and December 31, 2009.
 (Figures stated in thousands of pesos)




03.31.10
12.31.09LIABILITIESDEPOSITS
17,964,686
17,039,366-Non-financial public sector
1,395,205
1,377,236-Financial sector
249,799
228,480-Non-financial private sector and residents abroad
16,319,682
15,433,650-Current accounts
3,834,620
3,631,399-Savings Accounts
4,985,937
4,765,626-Time Deposits
7,183,973
6,727,792-Investment accounts
140
109-Others
254,440
248,247-Accrued interests and quotation differences payable
60,572
60,477OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE
6,187,378
6,119,437-Argentine Central Bank
1,568
3,215-Others
1,568
3,215-Banks and international entities
545,712
545,022-Unsubordinated negotiable obligations
1,194,427
1,539,754-Amounts payable for spot and forward purchases to be settled
446,281
618,375-Securities to be delivered under spot and forward sales to be settled
741,201
175,655-Loans from local financial institutions
208,596
251,481-Interbank loans (call money loans received)
50,000
70,000-Other loans from local financial institutions
155,992
179,701-Accrued interests payable
2,604
1,780-Balances from forward transactions without delivery of underlying asset to be settled
13,991
8,060-Others
3,004,008
2,934,951-Accrued interests and quotation differences payable
31,594
42,924MISCELLANEOUS LIABILITIES
591,233
578,699-Dividends payable
10,877
17,000-Directors' and syndics' fees
6,234
7,071-Others
574,122
554,628PROVISIONS
279,311
255,922SUBORDINATED NEGOTIABLE OBLIGATIONS
1,159,624
1,137,447UNALLOCATED ITEMS
3,880
7,393OTHER LIABILITIES
122,903
122,994MINORITY INTEREST IN CONSOLIDATED ENTITIES OR COMPANIES
298,867
288,569TOTAL LIABILITIES
26,607,882
25,549,827SHAREHOLDERS' EQUITY
2,100,951
2,052,539TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
28,708,833
27,602,366





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.























4
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Consolidated Memorandum Accounts
 As of March 31, 2010 and December 31, 2009.
 (Figures stated in thousands of pesos)





03.31.10
12.31.09DEBIT
29,228,776
25,834,331CONTINGENT
7,005,725
6,585,436-Loans obtained (unused balances)
85,826
83,095-Guarantees received
4,611,561
4,353,162-Others not included in the debtor classification regulations
17,165
16,813-Contingencies re. contra items
2,291,173
2,132,366CONTROL
12,967,592
12,295,092-Uncollectible loans
1,007,872
920,032-Others
11,473,645
10,916,434-Control re. contra items
486,075
458,626DERIVATIVES
7,742,115
5,546,998-"Notional" value of forward transactions without delivery of underlying asset
3,587,770
2,558,926-Interest rate swaps
75,500
45,500-Others
902,000
523,000-Derivatives re. contra items
3,176,845
2,419,572TRUST ACCOUNTS
1,513,344
1,406,805-Trust funds
1,513,344
1,406,805CREDIT
29,228,776
25,834,331CONTINGENT
7,005,725
6,585,436-Loans granted (unused balances)
1,363,541
1,323,498-Guarantees granted to the Argentine Central Bank
3,157
3,135-Other guarantees granted included in the debtor classification regulations
231,955
194,474-Other guarantees granted not included in the debtor classification regulations
365,545
364,851-Others included in the debtor classification regulations
313,796
234,159-Others not included in the debtor classification regulations
13,179
12,249-Contingencies re. contra items
4,714,552
4,453,070CONTROL
12,967,592
12,295,092-Checks and drafts to be credited
485,856
458,411-Others
423,702
416,731-Control re. contra items
12,058,034
11,419,950DERIVATIVES
7,742,115
5,546,998-"Notional" value of put options written
125,668
121,815-"Notional" value of call options written
8,100
8,100-"Notional" value of forward transactions without delivery of underlying asset
2,749,577
2,181,157-Others
293,500
108,500-Derivatives re. contra items
4,565,270
3,127,426TRUST ACCOUNTS
1,513,344
1,406,805-Trust liabilities re. contra items
1,513,344
1,406,805





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.














5


Grupo Financiero Galicia S.A.


“Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information


Consolidated Income Statement


For the period of three months commenced January 1, 2010 and ended March 31, 2010, presented in comparative format with the same period of the previous fiscal year.


(Figures stated in thousands of pesos)




03.31.10
03.31.09FINANCIAL INCOME
736,880
763,317-Interest on cash and due from banks
137
230-Interest on loans to the financial sector
753
1,611-Interest on advances
36,247
54,728-Interest on promissory notes
113,725
104,315-Interest on mortgage loans
25,418
31,283-Interest on pledge loans
2,260
2,993-Interest on credit card loans
223,431
200,804-Interest on other loans
140,000
96,215-Net income from government and corporate securities
116,258
85,892-Interest on other receivables resulting from financial brokerage
5,080
6,745-Net income from secured loans – Decree No. 1387/01
1,018
6,773-CER adjustment
1,464
19,371-Exchange rate differences on gold and foreign currency
25,990
34,706-Others
45,099
117,651FINANCIAL EXPENSES
330,256
384,708-Interest on current account deposits
3,790
3,164-Interest on savings account deposits
1,148
862-Interests on time deposits
187,460
231,055-Interest on interbank loans received (call money loans)
1,433
208-Interest on other loans from financial institutions
-
92-Interest on other liabilities resulting from financial brokerage
33,351
71,109-Interest on subordinated obligations
33,400
29,613-Other interest
936
785-Net income from options
197
--CER adjustment
45
150-Contributions made to Deposit Insurance Fund
7,351
6,076-Others
61,145
41,594GROSS FINANCIAL MARGIN
406,624
378,609PROVISIONS FOR LOAN LOSSES
120,991
177,452INCOME FROM SERVICES
536,514
401,496-Related to lending transactions
139,221
89,053-Related to borrowing transactions
130,840
101,048-Other commissions
8,523
5,437-Others
257,930
205,958EXPENSES FOR SERVICES
147,049
103,656-Commissions
59,793
44,783-Others
87,256
58,873





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.














6


Grupo Financiero Galicia S.A.


“Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information


Consolidated Income Statement


For the period of three months commenced January 1, 2010 and ended March 31, 2010, presented in comparative format with the same period of the previous fiscal year.


(Figures stated in thousands of pesos)




03.31.10
03.31.09ADMINISTRATIVE EXPENSES
589,707
456,291-Personnel expenses
338,783
245,747-Directors’ and syndics' fees
2,865
1,723-Other fees
17,215
14,946-Advertising and publicity
35,787
29,629-Taxes
37,411
31,736-Depreciation of bank premises and equipment
18,061
18,176-Amortization of organization expenses
13,088
10,017-Other operating expenses
77,665
67,040-Others
48,832
37,277NET INCOME FROM FINANCIAL BROKERAGE
85,391
42,706MINORITY INTEREST RESULT
(19,665)
(8,648)MISCELLANEOUS INCOME
132,714
211,107-Net income from equity investments
2,549
--Penalty interests
10,703
1,673-Loans recovered and allowances reversed
16,130
9,363-CER adjustment
-
7-Others
103,332
200,064MISCELLANEOUS LOSSES
96,425
98,724-Net income from equity investments
-
1,607-Penalty interests and charges in favor of the Argentine Central Bank
4
23-Provisions for losses on miscellaneous receivables and other provisions
30,142
27,176-CER adjustment
9
--Amortization of differences arising from court resolutions
29,175
27,511-Depreciation and losses from miscellaneous assets
307
469-Amortization of goodwill
2,698
2,849-Others
34,090
39,089NET INCOME BEFORE INCOME TAX
102,015
146,441INCOME TAX
50,317
54,542NET INCOME FOR THE PERIOD
51,698
91,899





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.



































7
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Consolidated Statement of Cash Flows and Cash Equivalents
 For the period of three months commenced January 1, 2010 and ended March 31, 2010, presented in comparative format with the same period of the previous fiscal year.
 (Figures stated in thousands of pesos)




03.31.10
03.31.09CHANGES IN CASH AND CASH EQUIVALENTS (Note 22)-Cash at beginning of fiscal year
5,428,730
4,795,383-Cash at period-end
5,963,984
4,119,369Increase / (Decrease) in cash (in constant currency)
535,254
(676,014)CAUSES FOR CHANGES IN CASH (IN CONSTANT CURRENCY)Operating activitiesNet collections/(payments) for:-Government and corporate securities
785,954
(643,163)-Loans-To the financial sector
732
2,313-To the non-financial public sector
3,775
5,176-To the non-financial private sector and residents abroad
(350,009)
149,510-Other receivables resulting from financial brokerage
92,172
(46,800)-Assets under financial leases
17,661
42,352-Deposits-To the financial sector
21,319
12,320-To the non-financial public sector
17,969
87,718-To the non-financial private sector and residents abroad
623,197
124,786-Other liabilities from financial brokerage-Financing from the financial sector-Interbank loans (call money loans received)
(21,433)
(208)-Others (except from liabilities included in financing activities)
40,116
22,282Collections related to income from services
630,136
511,531Payments related to expenses for services
(130,752)
(131,479)Administrative expenses paid
(602,218)
(466,269)Payment of organization and development expenses
(30,398)
(28,620)Collection for penalty interests, net
10,699
1,650Differences arising from court resolutions paid
(3,503)
1,496Collection of dividends from other companies
1,222
29Other collections related to miscellaneous profits and losses
7,910
(92,514)Net collections / (payments) for other operating activities-Other receivables and miscellaneous liabilities
(125,041)
15,213-Other operating activities, net
13,968
127,619Income tax and minimum presumed income tax payment
(29,858)
(27,017)Net cash flow generated by (used in) operating activities
973,618
(332,075)Investment activitiesPayments for bank premises and equipment, net
(14,178)
(15,962)Payments for miscellaneous assets, net
(4,157)
(19,830)Payments for equity investments
(661)
(1,267)Net cash flows used in investment activities
(18,996)
(37,059)





8
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Consolidated Statement of Cash Flows and Cash Equivalents
 For the period of three months commenced January 1, 2010 and ended March 31, 2010, presented in comparative format with the same period of the previous fiscal year.
 (Figures stated in thousands of pesos)





03.31.10
03.31.09Financing activitiesNet collections/(payments) for:-Unsubordinated negotiable obligations
(405,959)
(173,235)-Argentine Central Bank-Others
(1,647)
1,120-Banks and international entities
383
(177,598)-Subordinated obligations
(34,905)
(28,072)-Loans from local financial institutions
(22,885)
(15,976)Distribution of dividends
-
(23,148)Other collections from financing activities
1,269
-Cash flow used in financing activities
(463,744)
(416,909)Financial results and by holding of cash and cash equivalents (including interest 
and monetary result)
44,376
110,029Increase / Decrease in cash, net
535,254
(676,014)





The accompanying Notes 1 to 25 are an integral part of these consolidated financial statements.





9
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary Accounting Information
 Notes to the Consolidated Financial Statements
 For the period of three months commenced January 1, 2010 and ended March 31, 2010, presented in comparative format with the same period of the previous fiscal year.
 (Figures stated in thousands of pesos)


NOTE 1:                      PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS





The consolidated Financial Statements are presented in line with the provisions of Argentine Central Bank’s (“B.C.R.A.”) Communiqué "A" 3147 and supplementary regulations regarding financial reporting requirements for the publication of quarterly and annual financial statements, with the guidelines of Technical Pronouncement Nos. 8 and 19 of the Argentine Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E”) and with the guidelines of the General Resolution No. 434/03 of the National Securities Commission (“C.N.V.”). These financial statements include the balances corresponding to the operations carried out by Grupo Financiero Galicia S.A. (the Company) and its subsidiaries located in Argentina and abroad and form part of said Company’s quarterly / annual financial statements as supplementary information, reason for which they should be read in conjunction with them.





These financial statements reflect the effects of the changes in the purchasing power of the currency up to February 28, 2003, by following the restatement method established by Technical Resolution No. 6 of F.A.C.P.C.E. In line with Argentine Central Bank’s Communiqué “A” 3921, Decree No. 664/03 of the National Executive Branch and General Resolution No. 441/03 of the C.N.V., the Company discontinued the application of that method and therefore did not recognize the effects of the changes in the purchasing power of the currency originated after March 1, 2003.





Resolution M.D. No. 41/03 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires (C.P.C.E.C.A.B.A) established the discontinuation of the recognition of the changes in the purchasing power of the currency, effective October 1, 2003.





NOTE 2:                      ACCOUNTING STANDARDS





The most relevant accounting standards used in preparing the consolidated financial statements are listed below:





a.
Consolidation of Financial Statements


The financial statements of Grupo Financiero Galicia S.A. have been consolidated on a line-by-line basis with those of Banco de Galicia y Buenos Aires S.A., Net Investment S.A., Galicia Warrants S.A., Sudamericana Holding S.A., Galval Agente de Valores S.A. and GV Mandataria de Valores S.A. (See Note 3 to the consolidated financial statements).





Banco de Galicia y Buenos Aires S.A. is the Company’s main equity investment, a financial institution subject to the Argentine Central Bank regulations. For this reason, the Company has adopted the valuation and disclosure criteria applied by Banco de Galicia y Buenos Aires S.A.





Banco de Galicia y Buenos Aires S. A.’s consolidated financial statements include the balances of its subsidiaries abroad: Banco Galicia Uruguay S. A. and Galicia (Cayman) Limited. The conversion into pesos of these subsidiaries’ accounting balances was made according to the following:


i.
Assets and liabilities were converted into pesos according to item b.1.


ii.
Allotted capital has been computed for the actually disbursed restated amounts.


iii.
Accumulated earnings were determined as the difference between assets, liabilities and the allotted capital.


iv.
Earnings for the period were determined by the difference between the accumulated earnings at the beginning of the fiscal year and the accumulated earnings at the end of the period. The balances of income statement accounts were converted into pesos applying the monthly average exchange rates recorded in each month of this fiscal period.


v.
The significant items arising from intercompany transactions, not involving third parties, have been eliminated from the Balance Sheet and the Income Statement.


10
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))




NOTE 2:                      Continued


b.
Consistency of accounting principles


Accounting principles applied to the financial statements of Net Investment S.A., Galicia Warrants S.A., Galval Agente de Valores S.A. and GV Mandataria de Valores S.A., are similar to those applied by the Company (See Note 1 to the financial statements).





Furthermore, the consolidated financial statements of Sudamericana Holding S. A. were prepared in accordance with the disclosure and valuation criteria approved by the Argentine Superintendency of Insurance; which in some aspects differ from the Argentine GAAP in force, in particular as regards the valuation of investments in Secured Loans and certain government securities. Nevertheless, this departure has not produced a significant effect on the financial statements of Grupo Financiero Galicia S.A.





The main valuation criteria applied by Banco de Galicia y Buenos Aires S.A. are listed below:





b.1.           Foreign currency assets and liabilities


These are stated at the U.S. dollar exchange rate set by the Argentine Central Bank, at the close of operations on the last business day of each month.





As of March 31, 2010, December 31, 2009 and March 31, 2009, balances in U.S. dollars were converted applying the reference exchange rate (figures stated in pesos $ 3.8763, $ 3.7967 and $ 3.7135, respectively) set by the Argentine Central Bank.





Assets and liabilities valued in foreign currencies other than the U.S. dollar have been converted into the latter currency using the swap rates informed by the Argentine Central Bank.





b.2.           Government and corporate securities


b.2.1.           Government Securities


b.2.1.1.  Holdings of securities in investment accounts


Peso-denominated Bonds issued by the Argentine Nation at Badlar rate due 2015 (Bonar 2015)


In January 2010, Bonar 2015 with a F.V. of $ 668,178 were recorded in this item, from which F.V. $627,178 were valued at their acquisition cost increased according to the internal rate of return (IRR) (see item b.2.1.4.c) and F.V. $41,000 were valued at market values as of the previous fiscal year-end. The above recognition of F.V. $627,178, which pursuant to the regulations in force should be carried out at market values, generated income for $240,624.




As of March 31, 2010, these holdings have been valued at their acquisition cost increased on an exponential basis according to their IRR. These instruments’ market value was their acquisition cost at the closing of operations on the day before they were recognized in this item.




Had these securities been valued at market price, Banco de Galicia y Buenos Aires S. A. ́s Shareholders ́ Equity would have been decreased by $ 31,122 as of March 31, 2010.




b.2.1.2.      Holdings of trading securities


These are recorded at the closing price for each class of securities at period/ fiscal year end, plus the value of amortization and interest coupons due and receivable, less estimated selling costs, when applicable.





b.2.1.3.      Government securities from repo transactions with the Argentine Central Bank.


As of the previous fiscal year-end, these securities were valued as per the above item b.2.1.2.





b.2.1.4.      Government unlisted securities


Taking into consideration the valuation criteria used, these holdings include the following securities:


a)
National Government Bonds in US dollars Libor due 2012 – Compensatory and Hedge Bonds (Boden 2012):


These bonds were received within the scope of sections 28 and 29 of Decree No 905/02. Pursuant to the option provided for in current regulations, these have been valued at their technical value.


The same criterion was applied to holdings of such bonds used in repo transactions recorded under “Other Receivables Resulting from Financial Brokerage” and “Miscellaneous Receivables”. As of March 31, 2010, sales pending settlement for a F.V. of $ 48,441 have been valued at the arrangement price for each transaction.


11
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued


Had these securities been marked to market, the shareholders’ equity would have been reduced by approximately $137,246 as of March 31, 2010 and $ 175,818 as of December 31, 2009, respectively.





Furthermore, Banco de Galicia y Buenos Aires S. A. has established an allowance for impairment of value equal to the estimated difference between their book value and that one the Bank considers it as reasonable realization value. As of March 31, 2010, said difference amounts to $ 175,623.





b)
Discount Bonds and GDP-Linked Negotiable Securities:


These Bonds were received in exchange for Mid-Term Argentine Republic External Notes, Series 74 and 75 carried out by the National Government pursuant to Decree No. 1735/04.





As of March 31, 2010 and December 31, 2009, the securities received have been recorded at the lowest of the total future nominal cash payments up to maturity, specified by the terms and conditions of the new securities and the carrying value of the securities tendered as of March 17, 2005. Said amount was net of charged financial services. Had these securities been marked to market, as of March 31, 2010 and December 31, 2009, Banco de Galicia y Buenos Aires S.A’ Shareholders’ equity would have been reduced by approximately $ 278,076 and $ 284,111, respectively.





c)
Peso-denominated Bonds issued by the Argentine Nation at Badlar rate due 2015 (Bonar 2015):


These bonds derived from the debt swap offered by the National Government as per resolutions Nos. 216/09 and 57/09 jointly adopted by the Ministry of Finance (Secretaría de Hacienda y de Finanzas).





Banco de Galicia y Buenos Aires S.A. exchanged National Government Bonds in Pesos at 2% due 2014 (Boden 2014) with a F.V. of $ 683,647 (recorded in the Bank ́s Shareholders equity in February 2009 within the scope of an exchange transaction of National Secured Loans at market price) for Bonar 2015 with a F.V. of $ 912,669. The exchange ratio used was Bonar 2015 with a F.V. of $ 133.50 (figure stated in Pesos) for each Boden 2014 with a F.V. of $ 100 (figure stated in Pesos).





Pursuant to the guidelines established by the Argentine Central Bank for public debt instruments subscribed through a debt swap, these bonds were stated in the Shareholders ́ Equity at the value these exchanged securities had recorded.





As of December 31, 2009, these holdings amounted to a F.V. of $ 746,178, which total $ 323,744 (in January 2010, the amount of F.V. $ 627,178 were recognized in investment accounts. See note b.2.1.1. As of March 31, 2010, these bonds recorded in this item amounted to a F.V. of $ 92,000, which total $ 42,829. These bonds have been valued at their acquisition cost increased according to the accrual of their internal rate of return (IRR).





Had these securities been valued at market price, Banco de Galicia y Buenos Aires S. A. ́s Shareholders ́ Equity would have been increased by $ 30,928 as of March 31, 2010 and by $ 317,596 as of December 31, 2009.





b.2.1.5.       Securities issued by the Argentine Central Bank


a)
Listed securities:


These are recorded at the closing listed price for each class of securities at the end of each period/fiscal year.





The same criterion was applied to holdings of such bonds used in purchase transactions pending settlement.





b)
Unlisted securities:


Holdings of unlisted securities were valued at their acquisition cost increased on an exponential basis according to their IRR. These securities bought and sold pending settlement have been valued at the arrangement price for each transaction.


Had these securities been marked to market, the shareholders’ equity would have been increased by approximately $ 4,079 as of March 31, 2010 and $ 2,254 as of December 31, 2009.





Since these securities do not have volatility or present value published by the Argentine Central Bank, their market value was calculated based on the respective cash payments discounted by the internal rate of return of securities with similar characteristics and duration and with volatility published by said institution.





c)
Holdings of securities in special investment accounts:


As of the previous fiscal year-end, these securities have been valued pursuant to the provisions set forth by the Argentine Central Bank, at their acquisition cost increased on an exponential basis according to their IRR.


12
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued


The same criterion was applied to holdings of such securities used in repo transactions recorded under “Other Receivables Resulting from Financial Brokerage” and “Miscellaneous Receivables”.





As of the previous fiscal year-end, these securities amounted to $ 269,925 and have registered no significant differences as compared to market values.





b.2.2.           Investments in listed corporate securities


These securities are valued at the period/fiscal year-end closing price, less estimated selling costs, when applicable.





b.3.           Secured Loans – Decree No. 1387/01


As from February 2009, these Secured Loans have been valued on the basis of the highest value that arises from the difference between the present value, informed by the Argentine Central Bank, and their book value, net. The latter value is the book value recorded as of January 31, 2009, increased monthly by the IRR and adjusted by the CER, net of charged financial services received.





In the case these Secured Loans’ present value is lower than their book value, the monthly accrual is charged to an asset regularizing account. Such account shall be reversed by charging its balance to Income as long as such balance is higher than the positive difference existing between the present value and the net book value, as recorded in the previous fiscal year.





As of March 31, 2010 and December 31, 2009, Secured Loans’ balance was $85 and $ 3,780, respectively, and no balance was recorded in the Regularizing Account.





As of March 31, 2010 and December 31, 2009, their estimated realizable value does not record any difference when compared to their book value. The estimated realizable value was obtained by calculating the present value of their future cash flow of amortization and interest, based on the market rate of debt instruments of the same issuer.





b.4.           Accrual of adjustments, interest, exchange rate differences, premiums on future transactions and variable income


For foreign and local currency transactions with a principal adjustment clause, as well as for those in which rates have been prearranged for terms up to 92 days, the accrual has been recognized on a linear basis. For local currency transactions at rates arranged for longer periods, interest has been accrued on an exponential basis.





For lending and borrowing transactions, which according to the legal and/or contractual conditions may be applicable, the adjustment by the CER has been accrued.





b.5.           Debt securities and Participation Certificates in Financial Trusts


Debt securities added at par have been recorded at their technical value; the remaining holdings were valued at their cost increased according to their internal rate of return. Participation certificates in financial trusts are valued taking into account the share in the assets, net of liabilities, that stem from the financial statements of the respective trusts, as modified by the application of the Argentine Central Bank regulations, when applicable.





b.6.           Unlisted negotiable obligations


Holdings of these securities are valued at their acquisition cost increased on an exponential basis according to their internal rate of return.





b.7.           Assets under financial leases


Assets under financial leases are stated at cost less accumulated amortization, adjusted by the CER, where applicable.





b.8.           Interest in other companies


b.8.1.        In financial institutions and supplementary and authorized activities


Argentine:


Banco de Galicia y Buenos Aires S.A.’s equity investment in Banelco S.A. is valued under the equity method, based on this company’s last financial statements available.





The rest of the companies with supplementary activities, in which Banco de Galicia y Buenos Aires S.A. has an equity investment, are valued at their acquisition cost restated as set forth in Note 1 to these financial statements, plus, when applicable, stock dividends and uncollected cash.


13
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued





Banco de Galicia y Buenos Aires S.A. established an allowance for impairment of value for the amount by which it is estimated that the value of the investment in Compensadora Electrónica S.A. exceeds the equity method value.





b.8.2.           In other companies


Argentine:


These are stated at their acquisition cost restated as mentioned in the above Note 1 to these financial statements, plus, when applicable, stock dividends and uncollected cash.





An allowance for impairment of value has been established for the amount by which it is estimated that the value of the investments in Argencontrol S.A., Alfer S.A. (in liquidation), Galicia Inmobiliaria S.A. (in liquidation), Electrigal S.A., and Autopista Ezeiza Cañuelas S.A. and Aguas Cordobesas S.A. exceeds their equity method value.





Foreign:


These are stated at cost, plus stock dividends recognized at their face value.





For the conversion into local currency, the procedure referred to in item b.1. was applied.





b.9.           Bank premises and equipment and miscellaneous assets


Bank premises and equipment and miscellaneous assets have been valued at their restated cost (see Note 1 above), plus the increase in value of the real estate property derived from a technical revaluation made in 1981, less accumulated depreciation.





Depreciation of these assets is determined based on their estimated useful lives, expressed in months. A full month's depreciation is recognized in the month in which an asset is acquired, while no depreciation is recognized in the month in which it is sold or retired, over a maximum of 600 months for real estate property, 120 months for furniture and fittings and 60 months for the rest of assets.





The residual value of the assets, taken as a whole, does not exceed their economic utilization value.





b.10.           Other miscellaneous assets


These assets are valued at their restated acquisition cost (see Note 1 above), less the corresponding accumulated depreciations.





For those miscellaneous assets earmarked for sale, the effects of the changes in the purchasing power of the currency as from January 1, 2002 have not been given accounting recognition.





The depreciation charge for these assets is calculated following the same criterion as that mentioned in item b.9. above.





b.11.           Intangible assets


Intangible assets have been valued at their restated acquisition cost (see Note 1 above), less the corresponding accumulated depreciations, calculated proportionally over the estimated number of months of useful life.





Amortization has been recognized on a straight-line basis over a maximum of 120 months for "Goodwill" and over a maximum of 60 months for "Organization and Development Expenses”.





Effective March 2003, the Argentine Central Bank established that the difference resulting from compliance with court resolutions made in lawsuits filed challenging the current regulations applicable to deposits with the financial system, within the framework of the provisions of Law No. 25561, Decree No. 214/02 and supplementary regulations, must also be recorded under this caption, the amortization of which must take place in a maximum of 60 equal, monthly and consecutive installments as from April 2003. (See Note 16.1 to the consolidated financial statements).





In the period from December 2005 to December 2008, through Communiqué “A” 4439 and supplementary ones, the Argentine Central Bank authorized those financial institutions who have granted, as from that date, new commercial loans with an average life of more than 2 years, to defer the charge to income related to the above-mentioned amortization.





As of December 31, 2008, the balance of $ 209,661 corresponding to deferred accumulated amortizations, will begin to be amortized as from January 2009 in up to 36 equal, monthly and consecutive installments.


14
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued





As of March 31, 2010 and December 31, 2009, on account of such legal proceedings, $ 233,381 and $ 259,053, respectively, were registered as assets.





b.12.           Transactions with derivative instruments


Derivative instruments have been recorded as stated in Note 18.





b.13.           Allowances for loan losses and provisions for contingent commitments


These have been established based upon the estimated default risk of Banco de Galicia y Buenos Aires S.A. credit portfolio, which results from an evaluation of debtors' compliance with their payment obligations, their economic and financial condition, and the guarantees securing their related transactions, in line with the Argentine Central Bank regulations.





b.14.           Income Tax


The income tax charge reported by Banco de Galicia y Buenos Aires S.A. has been determined in accordance with the Argentine Central Bank regulations, which do not consider the application of the deferred tax method. As of March 31, 2010, Banco de Galicia y Buenos Aires S.A. recorded no income tax charge because, as of that date, it estimated it had incurred in an accumulated tax loss.





b.15.           Minimum presumed income tax


Pursuant to Section 13 of the Law No. 25063 as amended by Law No. 25360, if the minimum presumed income tax were to exceed income tax in a given fiscal year, such excess may be computed as a payment on account of the income tax that could be generated in any of the next ten fiscal years.





The recognition of this deferred asset and its realization stem from the ability to generate sufficient future taxable income for offsetting purposes, in accordance with projections prepared in conformity with the Argentine Central Bank regulations.





Based on the aforementioned, Banco de Galicia y Buenos Aires S.A, as of March 31, 2010 and December 31, 2009, has assets of $ 342,261 and $ 323,966, respectively.





In addition to the statement made in the preceding paragraphs, as of March 31, 2010, companies controlled by Banco de Galicia y Buenos Aires S.A. record an asset of $ 3,660 for the minimum presumed income tax, while as of December 31, 2009, this amount was $ 3,033.





b.16.           Severance payments


Banco de Galicia y Buenos Aires S.A. directly charges severance payments to expenses.





The amounts that the Bank may possibly have to pay for labor lawsuits are covered by a provision, which is recorded under "Liabilities - Provisions for Severance Payments”.





b.17.           Liabilities - Provisions


As of March 31, 2010 and December 31, 2009, Banco de Galicia y Buenos Aires S.A. has set up provisions for labor, legal, fiscal commitments and other miscellaneous risks.





b.18.           Accounting estimates


The preparation of financial statements at a given date requires Banco de Galicia y Buenos Aires S.A.’s management to make estimates and assessments regarding the determination of the amount of assets and liabilities; contingent assets and liabilities, as well as the income and expenses recorded for the period/fiscal year. Therefore, the Bank’s management makes estimates in order to calculate, at any given moment, for example, the recoverable value of assets, the allowances for loan losses and provisions for other contingencies, the depreciation charges and the income tax charge. Future actual results may differ from estimates and assessments made at the date these financial statements were prepared.





c.           Differences between the Argentine Central Bank’s regulations and Argentine GAAP in the Autonomous City of Buenos Aires


The C.P.C.E.C.A.B.A passed Resolutions C.D. No. 93/05 and 42/06, which adopt Technical Pronouncements 6 to 23 issued by the F.A.C.P.C.E. as the Argentine GAAP; said resolutions were amended with the purpose of unifying the Argentine GAAP and the interpretation of accounting and auditing standards 1 to 4. On December 29, 2005 and December 14, 2006, the C.N.V. approved said resolutions with certain amendments.


15
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued


At the date these financial statements were prepared, the Argentine Central Bank has not yet adopted these regulations. For this reason, Banco de Galicia y Buenos Aires S.A. has prepared its financial statements without considering certain valuation and disclosure criteria included in the Argentine GAAP in force in the Autonomous City of Buenos Aires (C.A.B.A.).





The main differences between the Argentine Central Bank regulations and Argentine GAAP in the Autonomous City of Buenos Aires are detailed below:





c.1.           Accounting for income tax according to the deferred tax method


Banco de Galicia y Buenos Aires S.A. determines the income tax charge by applying the enacted tax rate to the estimated taxable income, without considering the effect of any temporary differences between accounting and tax results.





Pursuant to the Argentine GAAP in force in the Autonomous City of Buenos Aires, the income tax must be recognized using the deferred tax method and, therefore, deferred tax assets or liabilities must be established based on the aforementioned temporary differences. In addition, unused tax loss carry-forwards or fiscal credits that may be offset against future taxable income should be recognized as deferred assets, provided that taxable income is likely to be generated.





The application of this criterion based on projections prepared by Banco de Galicia y Buenos Aires S.A. would determine deferred tax assets as of March 31, 2010, amounting to $ 321,673, and to $ 256,617 as of December 31, 2009.





16
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued


c.2.           Valuation of assets with the non-financial public and private sectors


c.2.1.        Government Securities


Argentine Central Bank regulations set forth specific valuation criteria for government securities recorded in special investment accounts and holdings of unlisted securities, which are described in item b.2.1.





Pursuant to the Argentine GAAP in force in the Autonomous City of Buenos Aires, the above-mentioned assets must be valued at their current value. Differences derived from the application of the different valuation criteria are detailed in the above-mentioned Note.





c.2.2.           National Secured Loans


In accordance with the Argentine Central Bank regulations, as of March 31, 2010 and December 31, 2009, Banco de Galicia y Buenos Aires S.A. valued its holdings of Secured Loans as per item b.3. Pursuant to the provisions of Resolution C.D. No. 290/01 of the C.P.C.E.C.A.B.A, the restructured assets should have been valued based upon the respective market quotations of the securities exchanged as of November 6, 2001, which as from that date are considered to be the acquisition cost, if applicable, plus the interests accrued corresponding to the internal rate of return until the closing date of each period.





As of March 31, 2010 and December 31, 2009, their estimated realizable value does not record any difference when compared to their book value.





c.2.3.           Financial reporting of effects generated by court decisions on deposits


As disclosed in Note 16.1 of the consolidated financial statements, as of March 31, 2010, Banco de Galicia y Buenos Aires S.A. records an asset for $ 233,381 under “Intangible Assets – Organization and Development Expenses”, while as of December 31, 2009 said amount was $ 259,053, for the residual value of the differences resulting from compliance with court resolutions on reimbursement of deposits within the framework of Law No. 25561, Decree No. 214/02 and supplementary regulations. Argentine GAAP admit the registration of such asset and of the corresponding allowance, based on the best estimate of the recoverable amounts.





c.2.4.           Allowances for receivables from the non-financial public sector


Current regulations issued by the Argentine Central Bank on the establishment of allowances provide that credits against the public sector are not subject to allowances for loan losses. Pursuant to Argentine GAAP, those allowances must be estimated based on the recoverability risk of assets.





c.3.           Conversion of financial statements


The conversion into pesos of the financial statements of the foreign subsidiaries for the purpose of their consolidation with Banco de Galicia y Buenos Aires S.A.’s financial statements, made in accordance with the Argentine Central Bank regulations, differs from Argentine GAAP (Technical Pronouncement No. 18). Argentine GAAP require that:





a) the measurements in the financial statements to be converted into pesos that are stated in period-end foreign currency (current values, recoverable values) be converted at the exchange rate of the financial statements’ date; and





b) the measurements in the financial statements to be converted into pesos that are stated in foreign currency of periods predating the closing date (for example: those which represent historical costs, income, expenses) be converted at the relevant historical exchange rates, restated at fiscal year-end currency, when applicable due to the application of Technical Pronouncement No.17. Exchange-rate differences arising from conversion of the financial statements shall be treated as financial income or losses, as the case may be.





The application of this criterion does not have a significant impact on Banco de Galicia y Buenos Aires S.A.'s consolidated financial statements.





17
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 2:                      Continued


c.4.           Restructured loans and liabilities


Pursuant to the regulations issued by the Argentine Central Bank, Banco de Galicia y Buenos Aires S.A. recorded restructured loans and financial obligations based on the actually restructured principal amounts plus accrued interests and capital adjustments, when applicable, minus collections or payments made.





Pursuant to Argentine GAAP, those restructured loans and liabilities, for which modification of original conditions imply a substitution of instruments, must be recorded on the basis of the best possible estimate of the amounts receivable or payable discounted at a market rate that reflects market evaluations on the time value of money and the specific risks of such assets and liabilities at the time of restructuring.





d.
Adoption of the International Financial Reporting Standards by the National Securities Commission


In addition to the specifications set forth in Note 17 to the financial statements, the international financial reporting standards adopted by the National Securities Commission are not applicable to Banco de Galicia y Buenos Aires S.A., Galicia Seguros S.A., Galicia Retiro S.A. and Sudamericana Asesores de Seguros S.A. This is due to the fact that the C.N.V. holds the position to accept accounting criteria set forth by other regulatory or control bodies, such as those established by the Argentine Central Bank for the companies included in the Financial Institutions Law and those established by the Argentine Superintendency of Insurance for insurance companies.





Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A., institutions which are both included in the public offering system because of their Negotiable Obligations pursuant to Law No. 17811, have approved their respective implementation plans according to the provisions set forth in General Resolution No. 562 issued by the C.N.V. Thus, Tarjetas Regionales S.A.’s Board of Directors approved a plan to voluntarily implement said regulations, which will be carried out in coordination with the above-mentioned subsidiaries.





This Resolution is not mandatory for the rest of the companies controlled by Grupo Financiero Galicia S.A. However, these companies’ Board of Directors have introduced the described change in regulations for consolidation purposes with Grupo Financiero Galicia’s financial statements.





NOTE 3:                      BASIC INFORMATION ON CONSOLIDATED CONTROLLED COMPANIES





The basic information regarding Grupo Financiero Galicia S.A.’s controlled companies is presented in Note 10 and Schedule C to these individual financial statements.





Grupo Financiero Galicia S.A. directly holds 87.50% of the capital stock and voting rights of Net Investment S.A., Galicia Warrants S.A. and Sudamericana Holding S.A.; while its controlled company, Banco de Galicia y Buenos Aires S.A., holds the remaining 12.50% of the capital stock and voting rights of those companies. Furthermore, Grupo Financiero Galicia S.A. directly holds 90.00% of the capital stock and voting rights of GV Mandataria de Valores S.A.; while its controlled company Galval Agente de Valores S.A. holds the remaining 10.00% of the capital stock and voting rights of said company.





Sudamericana Holding S.A's results have been adapted to cover a three-month period as of December 31, 2009, for consolidation purposes. This Company’s financial statements, in turn, have been consolidated on a line-by-line basis with the financial statements of Galicia Retiro Cía. de Seguros S.A., Galicia Seguros S.A. and Sudamericana Asesores de Seguros S.A.





Banco de Galicia y Buenos Aires S.A.’s consolidated financial statements include the assets, liabilities, and results of the controlled companies, either directly and indirectly, detailed below:


18
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 3:                      Continued





As of March 31, 2010Issuing company
Shares
Percentage held inClass
Number
Total capital
Possible votesBanco Galicia Uruguay S.A. (*)
Ordinary shares
791,353
100.0000
100.0000Tarjetas Regionales S.A. (**)
Ordinary shares
207,586,358
100.0000
100.0000Galicia Factoring y Leasing S.A. (in liquidation)
Ordinary shares
1,889,700
99.9800
99.9800Galicia Valores S.A. Sociedad de Bolsa
Ordinary shares
999,996
99.9900
99.9900Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
Ordinary shares
20,000
100.0000
100.0000Tarjetas Cuyanas S.A.
Ordinary shares
1,939,970
60.0000
60.0000Tarjeta Naranja S.A.
Ordinary shares
1,920
80.0000
80.0000Tarjetas del Mar S.A.
Ordinary shares
2,424,208
99.9990
99.9990Cobranzas Regionales S.A.
Ordinary shares
7,754
77.5400
77.5400Tarjeta Naranja Dominicana S.A.
Ordinary shares
1,072,360
39.9998
39.9998Galicia (Cayman) Limited
Ordinary shares
68,535,621
100.0000
100.0000


(*) Shares stated at F.V. of 1,000 Uruguayan pesos.


(**) Ordinary shares A and B.




As of December 31, 2009Issuing company
Shares
Percentage held inClass
Number
Total capital
Possible votesBanco Galicia Uruguay S.A. (*)
Ordinary shares
791,353
100.0000
100.0000Tarjetas Regionales S.A. (**)
Ordinary shares
207,586,358
100.0000
100.0000Galicia Factoring y Leasing S.A. (in liquidation)
Ordinary shares
1,889,700
99.9800
99.9800Galicia Valores S.A. Sociedad de Bolsa
Ordinary shares
999,996
99.9900
99.9900Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
Ordinary shares
20,000
100.0000
100.0000Tarjetas Cuyanas S.A.
Ordinary shares
1,939,970
60.0000
60.0000Tarjeta Naranja S.A.
Ordinary shares
1,920
80.0000
80.0000Tarjetas del Mar S.A.
Ordinary shares
2,424,208
99.9990
99.9990Cobranzas Regionales S.A.
Ordinary shares
7,754
77.5400
77.5400Tarjeta Naranja Dominicana S.A.
Ordinary shares
1,072,360
39.9998
39.9998Galicia (Cayman) Limited
Ordinary shares
68,535,621
100.0000
100.0000
 (*) Shares stated at F.V. of 1,000 Uruguayan pesos.
 (**) Ordinary shares A and B.


As of March 31, 2010Issuing company
Assets
Liabilities
Shareholders’ equity
Net incomeBanco Galicia Uruguay S.A.
212,704
157,461
55,243
(2,120)Tarjetas Regionales S.A.
699,735
2,570
697,165
71,150Galicia Factoring y Leasing S.A. (in liquidation)
6,135
316
5,819
75Galicia Valores S.A. Sociedad de Bolsa
96,392
79,478
16,914
221Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
5,031
2,140
2,891
359Tarjetas del Mar S.A.
70,056
49,083
20,973
(564)Tarjeta Naranja S.A.
2,831,330
2,192,454
638,876
81,173Tarjetas Cuyanas S.A.
527,675
403,991
123,684
13,230Cobranzas Regionales S.A.
4,282
2,780
1,502
145Tarjeta Naranja Dominicana S.A.
6,975
1,673
5,302
(2,848)Galicia (Cayman) Limited
220,891
-
220,891
15,006





19
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 3:                      Continued





Balance Sheet as of December 31, 2009 and Income as of March 31, 2009Issuing company
Assets
Liabilities
Shareholders’ equity
Net incomeBanco Galicia Uruguay S.A.
234,228
178,044
56,184
(8,987)Tarjetas Regionales S.A.
636,344
2,477
633,867
30,544Galicia Factoring y Leasing S.A. (in liquidation)
6,075
331
5,744
342Galicia Valores S.A. Sociedad de Bolsa
63,962
47,270
16,692
61Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
4,545
2,012
2,533
132Tarjetas del Mar S.A.
62,617
41,080
21,537
(849)Tarjeta Naranja S.A.
2,703,865
2,098,762
605,103
35,592Tarjetas Cuyanas S.A.
512,468
391,601
120,867
5,699Cobranzas Regionales S.A.
3,125
1,768
1,357
55Tarjeta Naranja Dominicana S.A.
6,919
1,672
5,247
(2,919)Galicia (Cayman) Limited
201,656
-
201,656
(4,935)





The controlled companies’ financial statements were adapted to the valuation and disclosure standards set by the Argentine Central Bank and cover the same period as that of Banco de Galicia y Buenos Aires S.A.’s financial statements.





Tarjetas Regionales S. A.’s financial statements as of March 31, 2010, company in which Banco de Galicia y Buenos Aires S. A. holds 68.218548% and Galicia (Cayman) Limited holds the remaining 31.781452%, which were used for consolidation purposes, have in turn consolidated on a line-by-line basis with the financial statements of Tarjeta Naranja S. A., Tarjetas Cuyanas S. A. and Tarjetas del Mar S. A., in which Tarjetas Regionales S. A. holds a controlling interest. Percentages of direct controlling interest are as follows:





Issuing company
03.31.10
12.31.09Tarjetas Cuyanas S.A.
60.000%
60.000%Tarjetas del Mar S.A.
99.999%
99.999%Tarjeta Naranja S.A.
80.000%
80.000%





Tarjeta Naranja S.A.’s financial statements have been consolidated with the financial statements of Cobranzas Regionales S.A., a company in which Tarjeta Naranja S.A. holds 87.7% of the voting stock and with the financial statements of Tarjeta Naranja Dominicana S.A., a company in which Tarjeta Naranja S.A. holds 49.9998% of the voting stock.





Taking into account the evolution of Tarjeta Naranja Dominicana S.A. ́s results, Tarjeta Naranja S.A. has provisioned its 100% interest in said company. Said provision is recorded in these consolidated financial statements under Liabilities - Provisions. As of the period-end, Tarjeta Naranja Dominicana S.A.’s shareholders have agreed on a business plan aimed at achieving a break-even point during this fiscal-year.





Furthermore, Tarjetas Cuyanas S.A. holds a 12.3% interest in Cobranzas Regionales S.A.'s capital stock and voting rights.





NOTE 4:                      MINORITY INTEREST IN CONSOLIDATED ENTITIES OR COMPANIES





The percentage of the controlled companies’ shareholders’ equity owned by third parties has been disclosed in the Balance Sheet, under the "Minority Interest in consolidated entities or companies" caption. The result of minority interest is disclosed in the Income Statement under "Minority Interest Results”.


20
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 4:                      Continued





The minority interest percentages as of March 31, 2010 and December 31, 2009 are the following:





Issuing company
03.31.10
12.31.09Banco de Galicia y Buenos Aires S.A.
5.27410%
5.29495%Net Investment S.A.
0.65926%
0.66187%Sudamericana Holding S.A.
0.65925%
0.66185%Galicia Warrants S.A.
0.65926%
0.66187%Galicia Retiro Cía. de Seguros S.A. (*)
0.65931%
0.66192%Galicia Seguros S.A. (*)
0.65946%
0.66207%Sudamericana Asesores de Seguros S.A. (*)
0.66482%
0.66742%


(*) Minority interest determined based on the financial statements as of December 31, 2009 and September 30, 2009.





The minority interest percentages held by Banco de Galicia y Buenos Aires S.A. are listed below:





Issuing company
03.31.10
12.31.09Galicia Valores S.A. Sociedad de Bolsa
0.0100%
0.0100%Galicia Factoring y Leasing S.A. (in liquidation)
0.0200%
0.0200%Tarjetas Cuyanas S.A.
40.0000%
40.0000%Tarjeta Naranja S.A.
20.0000%
20.0000%Tarjetas del Mar S.A.
0.0010%
0.0010%Cobranzas Regionales S.A.
22.4600%
22.4600%Tarjeta Naranja Dominicana S.A.
60.0002%
60.0002%





NOTE 5:                      RESTRICTED ASSETS AND OTHER CONTINGENT LIABILITIES





Pursuant to the Argentine Central Bank regulations, Banco de Galicia y Buenos Aires S.A. shall maintain a monthly average liquidity level. Computable assets to meet minimum cash requirements are cash and the current accounts opened at the Argentine Central Bank.





As of March 31, 2010, the balances registered as computable items are as follows:





Item
$
US$
Euros (*)Cash held in Banco de Galicia y Buenos Aires S.A.’s subsidiaries
563,911
46,812
10,080Cash held in valuables transportation companies and in transit
299,321
32,697
4,973Special escrow accounts at the Argentine Central Bank
1,385,827
355,691
-Total computable items to meet minimum cash requirements
2,249,059
435,200
15,053


(*) Figures stated in thousands of U.S. dollars.





I) As of March 31, 2010, Banco de Galicia y Buenos Aires S.A.’s ability to dispose of the following assets was restricted as mentioned below:





a. Cash and due from banks, government securities and secured loans


- For repo transactions
$ 91,722- For transactions carried out at the Rosario Futures Exchange (Rofex) and at the Mercado Abierto Electrónico (MAE)
$ 156,078- For credit / debit cards transactions
$ 77,891- For attachments (See Note 20.b)
$ 54,514- For other transactions
$ 1,039


21
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 5:                      Continued





b. Special escrow accounts


Special escrow accounts have been opened at the Argentine Central Bank as collateral for transactions involving electronic clearing houses, checks for settling debts and other similar transactions, which, as of March 31, 2010 amounted to $ 279,444.





c. Deposits in favor of the Argentine Central Bank


- Unavailable deposits related to foreign exchange transactions
$ 533- Securities held in custody to act as register agent of book-entry mortgage securities
$ 3,157





d. Equity investments


The item "Equity Investments" includes shares, the transfer of which is subject to the prior approval of the National or Provincial authorities, as applicable, under the terms of the concession contracts signed:





- Electrigal S.A.: 1,222,406 ordinary registered non-endorsable non-transferable shares.


- Aguas Cordobesas S.A.: 900,000 ordinary class E shares.





Banco de Galicia y Buenos Aires S.A., as a shareholder of Aguas Cordobesas S.A. and proportionally to its 10.833% interest, is jointly responsible before the Provincial State for the contractual obligations arising from the concession contract during the entire term thereof.





Should any of the other shareholders fail to comply with the commitments arising from their joint responsibility, Banco de Galicia y Buenos Aires S.A. may be forced to assume the unfulfilled commitment by the grantor, but only in the proportion and to the extent of the interest held by the said Bank.





e. Guarantees granted for direct obligations


As of March 31, 2010, Banco de Galicia y Buenos Aires S.A. has recorded $ 289,846 as collateral for credit lines granted by the IFC, and the related transactions have been allocated to the resources provided by the IFC.





As collateral for the requested funds, Banco de Galicia y Buenos Aires S.A. used BODEN 2012 for a F.V. of US$ 140,000, equal to $ 203,560, through the Argentine Central Bank, to the Subsecretaría de la Micro, Pequeña y Mediana Empresa y Desarrollo Provincial destined to the financing of the Global Credit Program for Small and Medium Companies. As of March 31, 2010, the balance of secured loans was $ 66,051.





Furthermore, as of March 31, 2010, Banco de Galicia y Buenos Aires S. A. used Boden 2012 for a F.V. of US$ 5,100 equal to $ 7,415 as collateral for the loans granted within the Credit Program to the Province of San Juan for the amount of $ 3,198.





As of December 31, 2009, the total amount of restricted assets for the aforementioned items was $ 1,241,813.





II) As of March 31, 2010, the ability of Banco de Galicia y Buenos Aires S.A. to dispose of the assets of its subsidiaries was restricted as follows:





a. Galicia Valores S.A. Sociedad de Bolsa:


As of March 31, 2010 and December 31, 2009, this Company holds three shares of Mercado de Valores de Buenos Aires S.A., which secure an insurance covering its transactions for $ 6,450.





b. Tarjetas Cuyanas S.A.:


As of March 31, 2010 and December 31, 2009, the company’s ability to dispose of time deposits for $ 650 was restricted because these amounts were earmarked as guarantee for two collection agreements signed with the Revenue Board of the Province of Mendoza (Dirección General de Rentas de la Provincia de Mendoza) and Telefónica de Argentina S.A.





22
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 5:                      Continued





c. Tarjeta Naranja S.A.:


Attachments in connection with lawsuits have been levied on current account deposits for $ 421. Furthermore, Tarjeta Naranja S.A. has paid $ 350 as guarantees regarding certain tax issues. These amounts shall not be available until such issues are resolved.





Furthermore, Tarjeta Naranja S.A. has guaranteed several loans from financial institutions, through funds registered into escrow accounts. Said collateral shall be effective up to the total cancellation of the above-mentioned loans, which non-amortized principal as of March 31, 2010 amounts to $ 131,000.





Moreover, pursuant to the agreements entered into with financial institutions and as collateral for the loans received, Tarjeta Naranja S.A. has agreed not to dispose of or lease any assets or levy any tax on such assets, for an amount higher than 25% of Tarjeta Naranja S.A.’s assets in some cases, and 15% of said company’s shareholders equity.





d. Banco Galicia Uruguay S.A.:


Under a fixed pledge agreement signed on July 24, 2003, and registered with the Registry of Property–Personal Property–Pledges Division of Montevideo-Uruguay, on August 5, 2003 and registered again with said Registry on June 10, 2008; Galicia Uruguay S.A.’s credit rights against all of its debtors have been pledged in favor of the holders of the transferable time-deposit certificates and/or negotiable obligations issued in compliance with the debt restructuring plan approved.





As mentioned in Note 16.3 to the consolidated financial statements, Banco Galicia Uruguay S.A. repaid in advance the remaining balance of the debt restructuring plan. Uruguayan courts authorized the release on the restriction existing over the credits that guaranteed said agreement, being effective on April, 2010.





III) As of March 31, 2010, the ability to dispose of the following assets corresponding to Galval Agente de Valores S.A. was restricted as mentioned below:


On December 20, 2005, in compliance with the Regulations issued by the Securities and Exchange Commission of Uruguay, Galval Agente de Valores S.A. made a deposit of 2,000,000 indexed units with the Uruguayan Central Bank. Said deposit has been pledged in favor of such Bank, as collateral for compliance with regulations governing the activities carried out by securities agents.





NOTE 6:                      GOVERNMENT AND CORPORATE SECURITIES





Government and corporate securities listed below were classified pursuant to the Argentine Central Bank regulations.





As of March 31, 2010 and December 31, 2009, holdings of government and corporate securities were as follows:





03.31.10
12.31.09Government SecuritiesListedRecorded at market valueTrading securities-Government bonds
121,004
104,542-Repo transactions with the Argentine Central Bank
-
152,650-Others
13,498
9,644Total trading securities
134,502
266,836Recorded at cost after amortizationIn investment accounts and special investment accounts-Government bonds
566,800
--Securities issued by the Argentine Central Bank
-
43,350Total securities in investment accounts and special investment accounts
566,800
43,350







23
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 6:                      Continued





03.31.10
12.31.09Securities issued by the Argentine Central Bank-From repo transactions
556,051
--Listed Securities
131,816
651,050-Unlisted Securities
1,228,536
964,028Total securities issued by the Argentine Central Bank
1,916,403
1,615,078UnlistedGovernment bonds
1,678,081
1,981,972Total unlisted securities
1,678,081
1,981,972Allowances
(175,623)
-Total government securities
4,120,163
3,907,236Corporate Securities-Negotiable obligations (listed)
9,929
5,613-Shares
74
53-Negotiable mutual funds from abroad (E.T.Fs.)
7,707
7,505Total corporate securities
17,710
13,171Total government and corporate securities
4,137,873
3,920,407





NOTE 7:                      LOANS





The lending activities carried out by Banco de Galicia y Buenos Aires S.A. are as follows:





a. Loans to the non-financial public sector: they are primarily loans to the National Government and to Provincial Governments.


b. Loans to the financial sector: they represent loans to banks and local financial institutions.


c. Loans to the non-financial private sector and residents abroad: they include the following types of loans:





-
Advances: short-term obligations issued in favor of customers.


-
Promissory notes: endorsed promissory notes, factoring.


-
Mortgage loans: loans for the purchase of real estate properties for housing purposes, secured by such purchased real estate property or commercial loans secured by real estate mortgages.


-
Pledge loans: loans in which a pledge is granted as collateral, as an integral part of the loan instrument.


-
Credit card loans: loans granted to credit card holders.


-
Personal loans: loans to natural persons.


-
Others: this item primarily involves export prefinancing loans and short-term placements in banks abroad.





Pursuant to the Argentine Central Bank regulations, Banco de Galicia y Buenos Aires S.A. must disclose the breakdown of its loan portfolio to: the non-financial public sector, the financial sector and the non-financial private sector and residents abroad. Moreover, Banco de Galicia y Buenos Aires S.A. must disclose the type of collateral established on the applicable loans to the non-financial private sector.





As of March 31, 2010 and December 31, 2009, the classification of the loan portfolio was as follows:





03.31.10
12.31.09Non-financial public sector
21,603
25,416Financial sector
14,031
25,352Non-financial private sector and residents abroad
14,835,556
14,233,579-With preferred guarantees
1,119,740
1,142,199-With other collateral
2,658,063
2,450,075-With no collateral
11,057,753
10,641,305Subtotal
14,871,190
14,284,347Allowance for loan losses
(810,585)
(806,446)Total
14,060,605
13,477,901




NOTE 7:                      Continued
 Said loans were granted in the normal course of transactions with standard terms, interest rates, and collateral requirements.


24
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 8:                      EQUITY INVESTMENTS





As of March 31, 2010 and December 31, 2009, the breakdown of “Equity Investments” was a follows:





03.31.10
12.31.09In financial institutions and supplementary and authorized activities-Banco Latinoamericano de Exportaciones S.A.
1,922
1,882-Banelco S.A.
10,015
8,681-Mercado de Valores de Buenos Aires S.A.
8,141
8,143-Visa Argentina S.A.
3,169
3,169-Others
850
852Total equity investments in financial institutions, supplementary and authorized activities
24,097
22,727In non-financial institutions-AEC S.A.
22,041
21,379-Aguas Cordobesas S.A.
8,911
8,911-Electrigal S.A.
5,455
5,455-Others
1,380
1,383Total equity investments in non-financial institutions
37,787
37,128Allowances
(5,635)
(5,960)Total equity investments
56,249
53,895





NOTE 9:                      INTANGIBLE ASSETS - GOODWILL





The following table shows the breakdown of goodwill per activity as of March 31, 2010 and December 31, 2009, respectively:





03.31.10
12.31.09In banks
23,648
26,346Total
23,648
26,346





NOTE 10:                      TRUST AND SECURITY AGENT ACTIVITIES





a) Trust contracts for purposes of guaranteeing compliance with obligations:


Purpose: in order to guarantee compliance with contractual obligations, the parties to these agreements have agreed to deliver Banco de Galicia y Buenos Aires S.A., amounts as fiduciary property, to be invested according to the following detail:





Date of Contract
Trustor
Balances of Trust Funds

$
Maturity Date

(1)11.01.06
Peñaflor
1
12.31.1004.10.07
Sullair
1
12.31.1002.12.08
Sinteplast
184
01.28.1312.21.09
Las Blondas
323
12.31.11Total
509


(1) These amounts shall be released monthly until settlement date of trustor obligations or maturity date, whichever occurs first.





25
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 10:                      Continued





b) Financial trust contracts:


Purpose: to administer and exercise the fiduciary ownership of the trust assets until the redemption of debt securities and participation certificates:





Date of Contract
Trust
Balances of Trust Funds
Maturity Date$
US$07.13.05
Rumbo Norte I
3,295
18
07.13.11 (3)10.12.05
Hydro I
20,812
-
09.05.17 (2)12.05.06
Faid 2011
62,441
-
02.28.12 (3)12.06.06
Gas I
178,494
-
06.30.11 (3)03.02.07
Agro Nitralco
3,072
-
06.30.10 (3)09.05.07
Saturno VII
116
-
12.31.10 (3)11.22.07
Radio Sapienza VI
352
-
01.12.11 (3)05.06.08
Agro Nitralco II
16,401
2
12.31.10 (3)05.14.09
Gas II
1,227,773
-
05.31.14 (3)Totals
1,512,756
20


(2) These amounts shall be released monthly until redemption of debt securities.


(3) Estimated date, since maturity date shall occur at the time of the distribution of all of trust assets.





c) Banco de Galicia y Buenos Aires S.A. ́s activities as Security Agent:


Under the terms and conditions for the issuance of Negotiable Obligations Class I for a F.V. of US$ 25,000 corresponding to INVAP S.E., Banco de Galicia y Buenos Aires S.A. entered into an agreement with the latter whereby the Bank undertakes the function of Security Agent.





Pursuant to the terms set forth in the above agreement, INVAP S.E. granted in rem rights with first pledge and privilege over payment rights and any other credit right owned by INVAP S.E. in favor of the Security Agent and in representation of the holders of the secured obligations, in order that the latter can guarantee compliance thereof until the redemption of such Negotiable Obligations.





Banco de Galicia y Buenos Aires S. A., in its capacity as Security Agent, is in charge of the administration of pledged banking accounts, authorized investments, and also carries out all functions specified under the terms and conditions of the agreement. Pledged balances as of March 31, 2010 and December 31, 2009, amount to $ 3,522 and $ 3,538, respectively; and US$ 39,378 for both dates.





NOTE 11:                      NEGOTIABLE OBLIGATIONS





Banco de Galicia y Buenos Aires S.A. has the following Negotiable Obligations outstanding issued under the following Global Programs:





Authorized Amount (*)
Type of Negotiable Obligations
Term of Program
Date of approval by Shareholders’ Meeting
Approval by the C.N.V.US$ 2,000,000
Simple negotiable obligations, not convertible into shares, subordinated or not, secured or unsecured.
5 years
09.30.03 confirmed on 04.27.06
Resolution No. 14708 dated 12.29.03US$ 342,500
Simple negotiable obligations, not convertible into shares, subordinated or not, to be adjusted or not, secured or unsecured
5 years
04.28.05 confirmed on 04.26.07
Resolution No. 15228 dated 11.04.05


(*) Or its equivalent in other currencies.





Banco de Galicia y Buenos Aires S.A. has the following Negotiable Obligations outstanding issued under the first global program:


26
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 11:                      Continued





Date of issuance
Currency
Residual face value

US$

As of 03.31.10
Type
Term
Rate
Book value (*)

$
Issuance authorized by the C.N.V.As of

03.31.10
As of

12.31.0905.18.04
US$
133,732

Simple
(1)
(2)
525,827
762,404
12.29.03 and 04.27.0405.18.04
US$
293,469
(**)
Subordinated
(3)
(4)
1,164,232
1,141,924
12.29.03 and 04.27.04


(*) It includes principal and interest net of expenses.


(**) This amount includes US$ 75,258 of the capitalization of interest services due between July 1, 2004 and January 1, 2010, inclusively on the account of the payment-in-kind (by means of Negotiable Obligations due 2019).


The net proceeds of the above-mentioned issues of Negotiable Obligations were used to refinance the foreign debt in accordance with Section 36 of the Law on Negotiable Obligations, the Argentine Central Bank regulations, and other applicable regulations.


(1) The residual principal of the Negotiable Obligations due 2014 (82.63%) shall be amortized semi-annually, beginning July 1, 2010, in installments equal to 11.11% of the original principal amount, until their maturity date on January 1, 2014, when the remaining 4.86% of the original principal amount is due.


(2) As from January 1, 2008, these Negotiable Obligations shall accrue interest payable in cash at an annual fixed rate of 7%.


(3) These obligations shall be fully amortized upon maturity on January 1, 2019, unless their principal is previously redeemed at par, plus unpaid accrued interests and additional amounts, if any, fully or partially at the issuer’s option at any time, after all Negotiable Obligations due 2014 have been fully repaid.


(4) Interests on Negotiable Obligations due 2019 shall be payable in cash and in additional Negotiable Obligations due 2019, semi-annually in arrears on January 1 and July 1 of each year, commencing on July 1, 2004. Negotiable Obligations due 2019 shall accrue interest payable in cash at an annual fixed rate of 6% as from January 1, 2004 up to, but not including, January 1, 2014. Such interest rate will increase to 11% per annum as from January 1, 2014 up to, but not including, January 1, 2019, the maturity date of the Negotiable Obligations due 2019, unless they are previously redeemed.


Interests payable in kind (by means of Negotiable Obligations due 2019) shall accrue at an annual fixed rate of 5%, beginning on January 1, 2004, and shall be payable on January 1, 2014 and January 1, 2019, unless these Negotiable Obligations are previously redeemed.





In January 2010, the last installment on principal and interest corresponding to Negotiable Obligations due 2010 was repaid, being its cash value of $ 132,923 as of the previous fiscal year-end.





During January 2010, Banco de Galicia y Buenos Aires S.A. cancelled part of the Negotiable Obligations due 2014 for a F.V. of US$ 45,771. These securities had been acquired at market price. This transaction originated an income of approximately $ 3,300.





As of March 31, 2010, Banco de Galicia y Buenos S. A.’s holdings of Negotiable Obligations due 2014 are for an amount of $ 26,977.





Banco de Galicia y Buenos Aires S. A. has not issued Negotiable Obligations under the second global program.





Furthermore, as of March 31, 2010, Banco de Galicia y Buenos Aires S.A. holds past due Negotiable Obligations, the holders of which have not tendered to the restructuring offer as follows:





Date of issuance
Currency
Residual face value

US$ as of 03.31.10
Type
Term
Rate
Book value (*)

$
Issuance authorized by the C.N.V.As of 03.31.10
As of 12.31.0911.08.93
US$
1,673
Simple
10 years
9.00%
11,397
11,021
10.08.93


(*) This amount includes principal and interest.





27
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 11:                      Continued





In accordance with the provisions of the Law on Negotiable Obligations and the Argentine Central Bank regulations, the net proceeds of the negotiable obligations were applied to grant loans to domestic companies to finance investments in physical assets in Argentina, working capital or to restructure liabilities, personal loans and mortgage loans to finance housing construction, or to acquire interest in domestic companies’ capital stock and other uses envisaged by current regulations.





In addition to Banco de Galicia y Buenos Aires S.A., its consolidated entities have the following negotiable obligations outstanding:





a) Tarjetas Regionales S.A.


As of the date of these financial statements, the companies controlled by Tarjetas Regionales S.A. have the following programs of issuance and series of negotiable obligations outstanding, issued in order to finance their operations:





Tarjeta Naranja S.A.





Authorized amount
Type of Negotiable Obligations
Term of Program
Date of approval by Shareholders’ Meeting
Approval by the C.N.V.US$ 350,000
Simple negotiable obligations, not convertible into shares
5 years
10.31.07
Resolution No. 15785 dated 11.16.07





The Company has the following Negotiable Obligations outstanding issued under this Global Program as of the close of each period / fiscal year:





Date of Placement
Currency
Class Number
Amount in US$
Type
Term
Maturity date
Rate
Book value $ (*)
Issuance authorized by the C.N.V.03.31.10
12.31.0911.29.06
US$ (1)
IV
100,000
Simple
60 months
11.29.11
Annual nominal fixed at 15.5%
153,950
153,950
11.08.0608.31.09
US$ (2)
Class IX Series 1
35,000
Simple
366 days
09.01.10
(**)
136,150
133,700
08.11.0908.31.09
US$ (2)
Class IX Series 2
15,000
Simple
730 days
08.31.11
Annual nominal fixed at 12.5% (***)
58,350
57,300
08.11.09


(*)  It corresponds to principal amount outstanding as of the indicated dates.


(**)  Placement made at 92.54% of Negotiable Obligations ́ face value.


(***) Placement made at 104.42% of Negotiable Obligations ́ face value.


(1) The Company issued and placed Class IV Negotiable Obligations for a total amount of US$ 100,000, which, as specified by the terms and conditions of the securities, was converted into $ 307,900. Investor assumes the exchange rate risk since amortization and interest services are calculated based on the principal amounts in pesos converted into dollars on each payment date.


(2) On August 31, 2009, the Company issued and placed Class IX Negotiable Obligations for a total amount of US$ 50,000, for which US$ 48,063 obtained through said issuance; which, as specified by the terms and conditions of the securities, was converted into $ 184,986 as of December 31, 2009.





28
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 11:                      Continued





Tarjetas Cuyanas S.A.





Authorized amount
Type of Negotiable Obligations
Term of Program
Date of approval by Shareholders’ Meeting
Approval by the C.N.V.US$ 80,000
Simple negotiable obligations, not convertible into shares
5 years
03.22.07
Resolution No. 15627 dated 05.02.07





The Company has the following Negotiable Obligations outstanding issued under this Global Program as of the close of each period / fiscal year:





Date of Placement
Currency
Class Number
Amount
Type

(**)
Term
Maturity date
Rate
Book value $ (*)
Issuance authorized by the C.N.V.03.31.10
12.31.0906.14.07
$
XVIII
$ 200,064 (1)
Simple
5 years
06.14.12
Annual nominal fixed at 12%
82,880
80,556
05.24.07 and 06.14.0712.02.09
US$
XX
US$ 20,000
Simple
1 year
12.03.10
Annual nominal fixed at 6.12%
73,364
70,356
11.18.09


(*) It corresponds to principal amount and interest outstanding as of the indicated dates.


(**) Negotiable obligations not convertible into shares.


(1) The Company issued and placed Series XVIII Negotiable Obligations for a total amount of US$ 65,000, which as specified by the terms and conditions of the securities, was converted into $ 200,064. Investor assumes the exchange rate risk since amortization and interest services are calculated based on the principal amounts in pesos converted into dollars on each payment date.





Tarjetas Cuyanas S.A.’s Board of Directors approved the informative prospect for the issuance of simple Negotiable Obligations for an amount of US$ 120,000. At the date of these financial statements, the above-mentioned prospect is subject to authorization by the C.N.V.





NOTE 12:                      MINIMUM CAPITAL REQUIREMENTS





Grupo Financiero Galicia S.A. is not subject to the minimum capital requirements established by the Argentine Central Bank.





Furthermore, Grupo Financiero Galicia S.A. meets the minimum capital requirements established by the Corporations Law, which amount to $ 12.





Pursuant to the Argentine Central Bank regulations, Banco de Galicia y Buenos Aires S.A. is required to maintain a minimum capital, which is calculated by weighting risks related to assets and to balances of bank premises and equipment and miscellaneous and intangible assets.





As called for by the Argentine Central Bank regulations, as of March 31, 2010 and December 31, 2009, minimum capital requirements were as follows:





Date
Capital required
Computable capital
Computable capital as

a % of the capital requirement03.31.10
1,719,020
2,833,022
164.8012.31.09
1,611,504
2,789,198
173.08





29
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 13:                      CONTRIBUTION TO THE DEPOSIT INSURANCE SYSTEM





Law No. 24485 and Decree No. 540/95 established the creation of the Deposit Insurance System to cover the risk attached to bank deposits, in addition to the system of privileges and safeguards envisaged in the Financial Institutions Law.





The National Executive Branch through Decree No. 1127/98 dated September 24, 1998 extended this insurance system to demand deposits and time deposits of up to $ 30 denominated either in pesos and/or in foreign currency.





This system does not cover deposits made by other financial institutions (including time deposit certificates acquired through a secondary transaction), deposits made by parties related to Banco de Galicia y Buenos Aires S.A., either directly or indirectly, deposits of securities, acceptances or guarantees and those deposits set up after July 1, 1995 at an interest rate exceeding the one established regularly by the Argentine Central Bank based on a daily survey conducted by it. Those deposits whose ownership has been acquired through endorsement and those placements made as a result of incentives other than interest rates are also excluded. This system has been implemented through the constitution of the Deposit Insurance Fund (“FGD”), which is managed by a company called Seguros de Depósitos S.A. (SEDESA). SEDESA’s shareholders are the Argentine Central Bank and the financial institutions, in the proportion determined for each one by the Argentine Central Bank based on the contributions made to the fund.





As from January 1, 2005, the Argentine Central Bank set this contribution at 0.015% per month.





NOTE 14:                      RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF PROFITS





In the case of Banco de Galicia y Buenos Aires S.A., the Argentine Central Bank regulations require that 20% of the profits shown in the Income Statement at fiscal year-end, plus (or less), the adjustments made in previous fiscal years and, less, if any, the Loss accumulated at previous fiscal year-end, be allocated to the legal reserve.





This proportion applies regardless of the ratio of the Legal Reserve fund to Capital Stock. In the event said reserve is reduced by any reason, no profits can be distributed until its total refund.





The Argentine Central Bank set rules for the conditions under which financial institutions can make the distribution of profits. According to the new scheme, profits can be distributed as long as results are positive after deducting not only the Reserves, that may be legally and statutory required, but also the following items from Retained Earnings: the difference between the book value and the market value of public sector assets and/or debt instruments issued by the Argentine Central Bank not valued at market price, the amount of the asset representing the losses from lawsuits related to deposits and any adjustments required by the external auditors or the Argentine Central Bank not having been recognized.





Moreover, in order that a financial institution be able to distribute profits, said institution must comply with the capital adequacy rule, i.e. with the calculation of minimum capital requirements and the regulatory capital.





To these purposes, this shall be done by deducting from its assets and Retained Earnings all the items mentioned in the paragraph above, as well as the asset recorded in connection with the minimum presumed income tax and the amounts allocated to the repayment of long-term debt instruments subject to be computed as computable regulatory capital (RPC) pursuant to Communiqué "A" 4576.





Moreover, in such calculation, a financial institution shall not be able to compute the temporary reductions that affect minimum capital requirements, computable regulatory capital or its capital adequacy.





In addition to the above-mentioned, the Argentine Central Bank shall not accept distribution of profits as long as computable capital is lower than minimum capital requirements increased by 30%.





As of March 31, 2010, the adjustments which should be made to Banco de Galicia y Buenos Aires S.A.’s Retained Earnings, pursuant to the Argentine Central Bank regulations, are as follows:


30
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 14:                      Continued





- The positive net difference between the book value and the market value of public sector assets and/or debt instruments issued by the Argentine Central Bank not valued at market price:
$ (509,298)- The amount of the assets representing losses from lawsuits related to deposits:
$ (233,381)





Distribution of profits shall require the prior authorization of the Argentine Central Bank, which intervention shall have the purpose of verifying the aforementioned requirements have been fulfilled.





Loan agreements entered into by Banco de Galicia y Buenos Aires S.A. as part of its foreign debt restructuring limit the Bank’s ability to directly or indirectly declare or pay dividends, or make distributions in relation to shares of capital stock, except for stock dividends or distributions. It was also established that such restriction shall not apply to dividends paid to said Entity by a consolidated subsidiary.





Notwithstanding the above mentioned, those agreements contemplate that Banco de Galicia y Buenos Aires S.A. may directly or indirectly declare or pay dividends, and may permit its subsidiaries to do so, if: “(i) no default or event of default has taken place and continues to take place immediately before and after such payment has been made; (ii) the total outstanding Senior Debt were to be equal to or less than fifty percent (50%) of the amount of originally issued total Senior Debt; and (iii) the Bank repays two U.S. dollars (US$ 2) of Long-Term Debt principal for each U.S. dollar (US$ 1) paid as dividends.”





The shareholders of Tarjeta Naranja S.A. ratified the decision made by the Board of Directors and set forth the following policy for the distribution of dividends: a) to keep under Retained Earnings, those retained earnings corresponding to fiscal years prior to 2005 and, therefore, not to distribute them as dividends, and b) to set the maximum limit for the distribution of dividends at 25% of the realized and liquid profits of each fiscal year as from fiscal year 2005 onwards. These restrictions shall remain in force as long as the company's shareholder's equity is below $ 300,000.





In accordance with the terms and conditions for the issuance of Negotiable Obligations Class IV and IX, as well as in accordance with certain financial loan contracts, said company has also agreed not to distribute dividends that may exceed 50% of the company's net income.





NOTE 15:                      NATIONAL SECURITIES COMMISSION (“C.N.V.”)





Resolution No. 368/01


As of March 31, 2010, Banco de Galicia y Buenos Aires S.A.’ shareholders’ equity exceeds that required by Resolution No. 368/01, Chapter XIX, items 4 and 5 of the C.N.V. to act as an over-the-counter broker.





Furthermore, in compliance with Section 32 of Chapter XI of that Resolution, in its capacity as depository of the mutual funds "FIMA ACCIONES", "FIMA P.B. ACCIONES," "FIMA RENTA EN PESOS," "FIMA RENTA EN DOLARES," "FIMA AHORRO PESOS," "FIMA RENTA PLUS," "FIMA RENTA CORTO PLAZO," "FIMA MONEY MARKET EN PESOS (Liquidado)," "FIMA NUEVO RENTA EN DOLARES," "FIMA GLOBAL ASSETS," "FIMA RENTA LATINOAMERICANA," “FIMA PREMIUM” and “FIMA OBLIGACIONES NEGOCIABLES,” as of March 31, 2010, Banco de Galicia y Buenos Aires S.A. holds a total of 778,439,347 units under custody for a market value of $ 1,130,621, which is included in the "Depositors of Securities held in Custody" account. As of previous fiscal year-end, the securities held in custody totaled 772,152,388 units and their market value amounted to $ 1,097,845.





31
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 16:                      ISSUES DERIVED FROM THE SYSTEMIC CRISIS OF LATE 2001





16.1 -           Deposits with the financial system – Legal actions requesting protection of constitutional guarantees


As a result of the provisions of Decree No. 1570/01, Law No. 25561, Decree No. 214/02 and concurrent regulations, and as a consequence of the restrictions on cash withdrawals and of the measures that established the pesification and restructuring of foreign-currency deposits, as from December 2001 a significant number of claims have been filed against the National State and/or financial institutions, and requesting prompt payment of deposits in their original currency. Most courts have ruled these emergency regulations unconstitutional. The difference between the amounts paid as a result of the abovementioned court orders and the amount resulting from converting deposits at the $ 1.40 per U.S. dollars exchange rate, adjusted by the CER and interest accrued up to the payment date, which amounted to $ 841,248 and $ 837,745, as of March 31, 2010 and December 31, 2009, respectively, has been recorded under “Intangible Assets”. Residual values as of said dates total $ 233,381 and $ 259,053, respectively. Banco de Galicia y Buenos Aires S.A. has repeatedly reserved its right to make any claim at suitable time, in view of the negative effect caused on its financial condition by the reimbursement of deposits originally denominated in US dollars or in pesos for the equivalent amount at the market exchange rate, as ruled by the Judicial Branch. Such loss was not taken into account by the National State in the calculation of the compensation to Financial Institutions. The method of accounting for such right as a deferred loss, set forth by the Argentine Central Bank regulations, does not affect its existence or legitimacy.





On December 30, 2003, Banco de Galicia y Buenos Aires S.A. formally requested the National Executive Branch, with a copy to the Ministry of Economy ("MECON") and to the Argentine Central Bank, the payment of due compensation for the losses incurred that were generated by the "asymmetric pesification" and especially for the negative effect on its financial condition caused by court resolutions. Banco de Galicia y Buenos Aires S.A. has reserved its right to further extend such request in order to encompass losses made definitive by new final judgments.





On December 27, 2006, the Argentine Supreme Court of Justice (the “Supreme Court”) ruled on the case named "Massa c/ Estado Nacional y Bank Boston" and decided that the sued bank should fulfill its obligation to reimburse a deposit made in U.S. dollars subject to emergency regulations, paying the original amount converted into pesos at the exchange rate of $ 1.40 per dollar, adjusted by the CER until the payment day, with a 4% annual interest and calculating the amounts paid based on preliminary injunctions or other reasons such as payments on account, according to the ruling adopted in the Kujarchuk case by the Argentine Supreme Court of Justice.





On March 20, 2007 Supreme Court of Justice ruled, in the case of "EMM S.R.L. c/ Tía S.A.", that Decree No. 214/02 did not apply to judicial deposits, and that such deposits must be reimbursed to the depositors in their original currency.





The above-mentioned resolutions by the Argentine Supreme Court of Justice would be strongly followed in similar cases to be heard by lower courts.





Banco de Galicia y Buenos Aires S.A. keeps addressing court resolutions gradually on a case-by-case basis in accordance with the individual circumstances of each case. Management continuously monitors and analyzes the implications of such resolutions for similarly situated cases.





With respect to judicial deposits that were pesified, the Argentine Central Bank provided that, as from July 2007, institutions should establish a provision equal to the difference that arises from deposits’ balances recorded as outstanding at each month-end in their original currency and the balance in pesos that was recorded in the books. This provision established as of March 31, 2010 and charged to Income amounts to $ 1,821, compared to $ 1,774 recorded as of December 31, 2009.





16.2 -           Claims due to foreign exchange differences arising from the repayment of financial assistance during foreign-exchange market holidays in January 2002.


During December 2001, Banco de Galicia y Buenos Aires S.A. received financial assistance in pesos from the Argentine Central Bank to face a temporary liquidity shortage. This financial assistance was repaid by using the funds, in U.S. dollars, provided by the Bank Liquidity Fund, on January 2 and 4, 2002.





On the day those funds were credited, the Argentine Central Bank had declared a foreign-exchange market holiday.


NOTE 16:                      Continued





On January 6, 2002, before the market was reopened, Law No. 25561 was enacted, which repealed the convertibility system and established a new exchange rate of $1.40 per U.S. dollar.


32
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


As a result of the aforementioned regulations, during the foreign-exchange market holiday, no foreign currency could be traded.





Consequently, the U.S. dollars funds credited by the Bank Liquidity Fund on January 2 and 4, 2002, remained in U.S. dollars until the reopening of the market.





On that date, and in accordance with the regulations in force, the U.S. dollar was sold at $1.40.





Therefore, when the Argentine Central Bank applied US$ 410,000 to the payment by Banco de Galicia y Buenos Aires S.A. of the financial assistance granted, it should have cancelled US$ 410,000 per $ 1.40, that is, the amount of $574,000, and not only $ 410,000.





This has infringed the guarantee of inviolability of private property and equal treatment before the law.





Banco de Galicia y Buenos Aires S.A. considers that the $ 164,000 difference will have to be reimbursed to the Bank, dated January 2002, or that an equivalent restoration of its equity should be considered.





Banco de Galicia y Buenos Aires S.A. has a claim outstanding before the Argentine Central Bank to recover the above-mentioned amount. Such right has not been accounted for in these financial statements.





16.3 -           Situation of Banco Galicia Uruguay S.A.


During fiscal year 2009 Galicia Uruguay repaid the remaining balance of the debt restructuring plan entered into with its creditors. Uruguayan courts authorized the release on the restriction existing over the credits that guaranteed said agreement, being effective on April, 2010.





It is worth noting that the Uruguayan authorities resolved to maintain the authorization to operate granted to Banco Galicia Uruguay S.A. by the Executive Branch and withdraw the authorization to act as a commercial bank.





As of the period-end, Banco Galicia Uruguay S.A.'s Shareholders Equity amounts to $ 55,243.





NOTE 17:                      SETTING UP OF FINANCIAL TRUSTS





a) Financial trusts with Banco de Galicia y Buenos Aires S.A. as trustor outstanding at the period/fiscal year end:





Name
Creation Date
Estimated maturity date
Trustee
Trust assets
Portfolio transferred
Book value of securities held in own portfolio03.31.10
12.31.09Galtrust I
10.13.00
10.10.15
First Trust of New York N.A.
Secured Bonds in Pesos at 2% due 2018 (1)
US$

490,224 (*)
566,316
584,111Galicia
04.16.02
05.06.32
Bapro Mandatos y Negocios S.A.
National Government Bonds in Pesos at 2% due 2014 (2)
$ 108,000
77,711
79,990Créditos Inmobiliarios Galicia II
10.12.05
12.15.25
Deustche Bank S.A.
Mortgage loans
$ 150,000
57,582
56,172Galicia Personales VI
09.28.07
06.15.12
Deustche Bank S.A.
Personal loans
$ 108,081
14,319
17,175Galicia Personales VII
02.21.08
11.15.12
Deustche Bank S.A.
Personal loans
$150,000
37,289
35,216Galicia Personales VIII
07.04.08
04.15.13
Deustche Bank S.A.
Personal loans
$ 187,500
59,095
55,518





33
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 17:                      Continued





(*) The remaining US$ 9,776 was transferred in cash.


(1) In exchange for loans to the Provincial Governments.


(2) In exchange for secured loans.





b) As of March 31, 2010 and December 31, 2009, Banco de Galicia y Buenos Aires S.A. records financial trusts in own portfolio:


- Received as loan repayment for $ 57,666 and $ 58,662, respectively.


- Acquired as investments for $ 43,826 and $ 52,232, respectively.





c) Financial trusts with the companies controlled by Tarjetas Regionales S.A. as trustors outstanding at period/fiscal year-end.





Tarjeta Naranja S.A.





Name
Creation Date
Estimated maturity date
Trustee
Trust assets
Portfolio transferred
Book value of securities held in own portfolio03.31.10
12.31.09Tarjeta Naranja Trust VI
12.11.07
01.23.10
Equity Trust Company (Argentina) S.A.
Certain credit rights against cardholders
$ 150,003
-
25,115Tarjeta Naranja Trust VII
02.19.08
07.23.10
Equity Trust Company (Argentina) S.A.
Certain credit rights against cardholders
$ 142,913
25,131
24,664





Name
Creation Date
Estimated maturity date
Trustee
Trust assets
Portfolio transferred
Book value of securities held in own portfolio03.31.10
12.31.09Tarjeta Naranja Trust VIII
08.05.08
09.20.10
Equity Trust Company (Argentina) S.A.
Certain credit rights against cardholders
$ 138,742
48,616
47,917Tarjeta Naranja Trust IX
12.12.08
05.20.10
Equity Trust Company (Argentina) S.A.
Certain credit rights against cardholders
$ 90,615
19,578
24,786





As of March 31, 2010, Tarjeta Naranja S.A.’s holdings of participation certificates and debt securities totaled $68,162 and $25,163, respectively. As of December 31, 2009, its holdings of participation certificates and debt securities totaled $ 91,475 and $ 31,007, respectively.





Tarjetas Cuyanas S.A.





Name
Creation Date
Estimated maturity date
Trustee
Trust assets
Portfolio transferred
Book value of securities held in own portfolio03.31.10
12.31.09Tarjetas Cuyanas Trust V
02.04.08
03.15.10
Equity Trust Company (Argentina) S.A.
Certain credit rights against cardholders
$ 61,700
-
21,637(*)


(*) It corresponds to participation certificates.





34
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 18:                      DERIVATIVE INSTRUMENTS





FORWARD PURCHASE-SALE OF FOREIGN CURRENCY WITHOUT DELIVERY OF THE UNDERLYING ASSET


Mercado Abierto Electrónico (MAE) and Rosario Futures Exchange (ROFEX) have trading environments for the closing, recording and settlement of financial forward transactions carried out among its agents, being Banco de Galicia y Buenos Aires S.A. one of them. Settlement is carried on a daily basis, in pesos, for the difference, if any, between the closing price of the underlying asset and the closing price or value of the underlying asset corresponding to the previous day, the difference in price being charged to income.





As of March 31, 2010, forward purchase and sale transactions totaled $ 3,428,602 and $ 2,680,947, respectively, while as of December 31, 2009 they totaled $ 2,441,126 and $ 2,116,549. Said transactions are recorded under Memorandum Accounts for the notional value traded.





In case accrued balances pending settlement exist, they are recorded under “Other Receivables from Financial Brokerage” and/or “Other Liabilities Resulting from Financial Brokerage”, as the case may be.





Apart from that, transactions have been conducted directly with customers pursuant to the above-mentioned conditions, being the balances settled at the expiration date of the contract. As of March 31, 2010, purchase and sale transactions totaled $ 38,950 and $ 348,360, respectively, while as of December 31, 2009, they amounted to $ 354,958 (sales).





PURCHASE-SALE OF INTEREST RATE FUTURES


Banco de Galicia y Buenos Aires S.A. trades these products within the trading environment created by the MAE. The underlying asset is the Badlar rate for time deposits of 30 to 35 days and of more than one million pesos of private banks. Settlement is carried on a daily basis for the difference between the forward price or value of the traded underlying asset and the closing price or value, the difference in price being charged to income.





As of March 31, 2010, purchase and sale transactions conducted amounted to $ 812,000 and $ 293,500, respectively, while as of December 31, 2009 they totaled $ 433,000 and $ 108,500, respectively. Said transactions are recorded under Memorandum accounts for the notional value traded.





In case balances pending settlement exist, they are recorded under “Other Receivables from Financial Brokerage” and/or “Other Liabilities Resulting from Financial Brokerage”, as the case may be.





INTEREST RATE SWAPS


These transactions are conducted within the environment created by the MAE, and the settlement thereof is carried out on a monthly basis, in pesos, for the difference between the cash flows calculated using a variable rate (Badlar for time deposits of 30 to 35 days of private banks) and the cash flows calculated using a fixed rate, or vice versa, on the notional value traded, the difference in price being charged to income.





As of March 31, 2010, transactions conducted amounted to $ 75,500, while as of December 31, 2009, they amounted to $ 45,500, and are recorded under Memorandum Accounts for the notional value traded.





In case accrued balances pending settlement exist, they are recorded under “Other Receivables from Financial Brokerage” and/or “Other Liabilities Resulting from Financial Brokerage”, as the case may be.





As of March 31, 2010, the estimated market value of such instruments amounted to approximately $ 36 (Assets), while as of December 31, 2009, it amounted to $ 27 (Assets).





CALL OPTIONS WRITTEN


Banco de Galicia y Buenos Aires S.A. has granted a call option on the Class “A” Participation Certificate issued by the Godoy Cruz Financial Trust. As of March 31, 2010 and December 31, 2009, the strike price is $ 8,100 plus interests, and the option can be exercised until June 30, 2010.





35
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 18:                      Continued





PUT OPTIONS WRITTEN


As established by Section 4, subsection a), and Section 6 of Decree No 1836/02 and regulations of the Argentine Central Bank, Banco de Galicia y Buenos Aires S.A. granted the holders of Rescheduled Deposit Certificates, who had opted to receive Boden 2013 and Boden 2012 in lieu of the payment of those certificates, an option to sell coupons. Said options, as of March 31, 2010 and December 31, 2009, are valued at the strike price.





The strike price will be equal to that resulting from converting the face value of each coupon in U.S. dollars into pesos at a rate of $1.40 per U.S. dollar adjusted by applying the C.E.R. variation, which arises from comparing the index as of February 3, 2002 to that corresponding to the due date of the coupon. That value shall in no case exceed the principal and interest amounts in pesos resulting from applying to the face value of the coupon in U.S. dollars the buying exchange rate quoted by Banco de la Nación Argentina on the payment date of that coupon.





These options have been recorded under “Memorandum Accounts – Credit-Derivatives - Notional Value of Put Options Written” in the amount of $ 125,668 as of March 31, 2010 and $ 121,815 as of December 31, 2009, respectively.





OPTIONS FOR REVERSE REPURCHASE AGREEMENT TRANSACTIONS WITH THE ARGENTINE CENTRAL BANK AT PRE-FIXED RATE


Banco de Galicia y Buenos Aires S.A. has acquired options for reverse repurchase agreement transactions with the Argentine Central Bank, at a pre-fixed rate, in bids carried out by the Argentine Central Bank, pursuant to the terms of Communiqué “A” 4943 and supplementary regulations. The purpose thereof is to guarantee the possibility to get liquidity at a pre-fixed rate, if necessary. The term to exercise an option is 365 days as from each auction.





At the time of exercising the option, the amount of the reverse repurchase agreement to be requested shall not exceed the increase in the loans in pesos to the private sector -excluding the consumer portfolio- that would have taken place between the date of the bid and the date the option is exercised, and/or the amount of the bid.





As of March 31, 2010 and December 31, 2009, total bidding transactions amounted to $ 90,000. Those transactions are recorded under “Derivatives Debit Memorandum Accounts – Other Derivatives re contra Items".





Premiums paid are accrued for the duration of transactions.





Banco de Galicia y Buenos Aires S.A.'s management of financial risks is carried within the limits of the policies approved by the Board of Directors in such respect. In that sense, "derivative instruments" allow, depending on market conditions, to adjust risk exposures to the established limits, thus contributing to keep such exposures within the parameters set forth by said policies. Banco de Galicia y Buenos Aires S.A. plans to continue to use these instruments in the future, as long as their use is favorably assessed, in order to limit certain risk exposures.





NOTE 19:                      CHANGES IN SIGNIFICANT ASSETS AND LIABILITIES





There follows the breakdown of the most significant assets and liabilities shown in these consolidated financial statements, presented in comparative format with the previous fiscal year, in order to disclose the changes in those assets and liabilities during the current period:





36
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 19:                      Continued





03.31.10
12.31.09ASSETSLOANS
14,060,605
13,477,901- To the non-financial public sector
21,603
25,416- To the financial sector
14,031
25,352- Interbank loans (call money loans granted)
14,000
25,300- Other loans to local financial institutions
27
24- Accrued interests, adjustments and quotation differences receivable
4
28- To the non-financial private sector and residents abroad
14,835,556
14,233,579- Advances
738,626
630,068- Promissory notes
3,184,387
3,205,433- Mortgage loans
926,477
964,291- Pledge loans
70,358
64,819- Personal loans
1,929,993
1,724,413- Credit-card loans
6,062,074
5,691,335- Others
1,780,059
1,828,591- Accrued interests, adjustments and quotation differences receivable
202,540
178,837- Documented interest
(58,818)
(54,185)- Unallocated collections
(140)
(23)- Allowances
(810,585)
(806,446)OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE
3,593,357
3,360,434- Argentine Central Bank
283,301
493,129- Amounts receivable for spot and forward sales to be settled
685,691
23,650- Securities receivable under spot and forward purchases to be settled
509,170
681,148- Premiums from brought options
238
436- Others not included in the debtor classification regulations
1,618,241
1,659,726- Unlisted negotiable obligations
36,358
38,979- Balances from forward transactions without delivery of underlying asset to be settled
4,587
1,040- Others included in the debtor classification regulations
480,986
488,280- Accrued interests receivable not included in the debtor classification regulations
5,170
4,554- Accrued interests receivable included in the debtor classification regulations
2,324
2,523- Allowances
(32,709)
(33,031)





03.31.10
12.31.09LIABILITIESDEPOSITS
17,964,686
17,039,366- Non-financial public sector
1,395,205
1,377,236- Financial sector
249,799
228,480- Non-financial private sector and residents abroad
16,319,682
15,433,650- Current accounts
3,834,620
3,631,399- Savings Accounts
4,985,937
4,765,626- Time Deposits
7,183,973
6,727,792- Investment accounts
140
109- Others
254,440
248,247- Accrued interests and quotation differences payable
60,572
60,477







37
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 19:                      Continued





03.31.10
12.31.09OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE
6,187,378
6,119,437- Argentine Central Bank
1,568
3,215- Others
1,568
3,215- Banks and international entities
545,712
545,022- Unsubordinated negotiable obligations
1,194,427
1,539,754- Amounts payable for spot and forward purchases to be settled
446,281
618,375- Securities to be delivered under spot and forward sales to be settled
741,201
175,655- Loans from local financial institutions
208,596
251,481- Interbank loans (call money loans received)
50,000
70,000- Other loans from local financial institutions
155,992
179,701- Accrued interests payable
2,604
1,780- Balances from forward transactions without delivery of underlying asset to be settled
13,991
8,060- Others
3,004,008
2,934,951- Accrued interests and quotation differences payable
31,594
42,924SUBORDINATED NEGOTIABLE OBLIGATIONS
1,159,624
1,137,447





NOTE 20:                      CONTINGENCIES





A. Tax Contingencies


Banco de Galicia y Buenos Aires S.A.:


At the date of these financial statements, provincial tax collection authorities, as well as tax collection authorities from the Autonomous City of Buenos Aires, are in the process (in different degrees of completion) of conducting audits mainly regarding the Compensatory Bond granted by the National Government to compensate financial institutions for the losses generated by the asymmetric pesification of loans and deposits.





As regards the determination of tax collection authorities from the Autonomous City of Buenos Aires, in May 2009 the Governmental Public Revenue Authority (A.G.I.P.) commenced tax enforcement proceedings in order to compulsorily collect the amount determined by the tax collection authorities. Within the framework of the legal actions brought by Banco de Galicia y Buenos Aires S.A. with the purpose of challenging the determination of the tax collection authority, a preliminary injunction was granted by the Argentine Federal Court of Appeals in Administrative Matters for the amount corresponding to the Compensatory Bond and, therefore, the Court ordered the A.G.I.P. to refrain from starting tax enforcement proceedings or else requesting precautionary measures for such purpose.





As a result of the foregoing, tax enforcement proceedings are in progress for an original principal amount of $ 38,952, which amount was determined by the tax collection authorities.





Tax collection authorities from the Autonomous City of Buenos Aires continued with the proceedings and, on June 3, 2009, Banco de Galicia y Buenos Aires S.A. raised an objection of incompetence. These proceedings are in progress and no judgment has been rendered to date.





Furthermore, regarding the claims made by the different jurisdictions, Banco de Galicia y Buenos Aires S.A. has been expressing its disagreement regarding these adjustments at the corresponding administrative and/or legal proceedings. These proceedings and their possible effects are constantly being monitored by the management division. Even though Banco de Galicia y Buenos Aires S.A. considers it has complied with its tax liabilities in full pursuant to current regulations, the allowances deemed appropriate pursuant to the evolution of each proceeding have been set up.


38
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 20:                      Continued





Tarjetas Regionales S.A.:


At the date of these consolidated financial statements, the Argentine Revenue Service (AFIP), the Revenue Board of the Province of Córdoba and the Municipalities of the provinces of Mendoza and San Luis are in the process of conducting audits, in different degrees of completion. Said agencies have served notices and made claims regarding taxes applicable to Tarjetas Regionales S.A.'s subsidiaries. Therefore, the companies are taking the corresponding administrative and legal steps in order to solve such issues. As of March 31, 2010, the original amount claimed for taxes totals $ 9,900 approximately.





Based on the opinions of their tax advisors, the companies believe that the abovementioned claims are both legally and technically groundless and that taxes related to the claims have been correctly calculated in accordance with tax regulations in force and existing case law.





However, since the final outcome of these measures cannot be foreseen, provisions have been set up to cover such contingencies.





B. Consumer Protection Associations


Consumer Protection Associations, on behalf of consumers, have filed claims against Banco de Galicia y Buenos Aires S.A. with regard to the collection of some financial charges.




Within this environment, in the case entitled “Padec Prevención Asesoramiento y Defensa del Consumidor c/ Banco de Galicia y Buenos Aires S.A. s/ Incidente de embargo” (“Padec Prevención Asesoramiento y Defensa del Consumidor vs. Banco de Galicia y Buenos Aires S.A. over attachment proceedings) (Proceedings No. 091708), in March 2010 the Court ordered an attachment on the account Banco de Galicia y Buenos Aires S.A. holds at the Argentine Central Bank.




Banco de Galicia y Buenos Aires S.A. made an offer –which was allowed- to replace the attachment with a surety bond until a decision is reached on the judgment appeal. After period-end, the judge accepted the offer and, consequently, the attached funds were reimbursed to Banco de Galicia y Buenos Aires S.A. Banco de Galicia y Buenos Aires S.A. considers the resolution of these controversies will not have a significant impact on its financial condition.




NOTE 21:                      SEGMENT REPORTING





Below, there is a breakdown of the accounting information as of March 31, 2010 and 2009, by related business segment:





Primary segment: Business.





Financial brokerage
Services
TotalIncome
736,880
536,514
1,273,394Expenses
(330,256)
(147,049)
(477,305)Result as of 03.31.10
406,624
389,465
796,089Result as of 03.31.09
378,609
297,840
676,449





Secondary segment: Geographic.





Financial brokerage
City of Buenos Aires
Rest of the country
Foreign
TotalIncome
440,348
292,197
4,335
736,880Expenses
(197,356)
(130,957)
(1,943)
(330,256)Result as of 03.31.10
242,992
161,240
2,392
406,624Result as of 03.31.09
229,742
143,587
5,280
378,609





Services
City of Buenos Aires
Rest of the country
Foreign
TotalIncome
320,613
212,745
3,156
536,514Expenses
(87,874)
(58,310)
(865)
(147,049)Result as of 03.31.10
232,739
154,435
2,291
389,465Result as of 03.31.09
180,731
112,955
4,154
297,840








39
 
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))





NOTE 21:                      Continued





The accounting measurement of assets and liabilities allocated to the above-mentioned segments is the following:





03.31.10
12.31.09ASSETSGOVERNMENT AND CORPORATE SECURITIES
4,137,873
3,920,407LOANS
14,060,605
13,477,901OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE
3,593,357
3,360,434ASSETS UNDER FINANCIAL LEASES
327,673
339,150





03.31.10
12.31.09LIABILITIESDEPOSITS
17,964,686
17,039,366OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE
6,187,378
6,119,437SUBORDINATED NEGOTIABLE OBLIGATIONS
1,159,624
1,137,447





NOTE 22:                      STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS





Cash and due from banks and assets held with the purpose of complying with the short-term commitments undertook, with a high level of liquidity, easily converted into known amounts of cash, subject to insignificant changes in value and with a maturity less than three months from the date of the acquisition thereof, are considered to be cash and cash equivalents. The breakdown is as follows:





03.31.10
12.31.09
03.31.09
12.31.08Cash and due from banks
4,001,839
3,696,309
3,224,227
3,405,133Securities issued by the Argentine Central Bank
896,834
728,743
124,560
520,239Reverse repo transactions with the Argentine Central Bank
500,446
153,173
313,959
359,444Interbank loans - (call money loans granted)
14,000
25,300
29,400
40,200Loans granted to prime companies with maturity up to 7 days, used as liquidity reserve
45,441
79,810
197,079
58,100Overnight placements in banks abroad
231,758
440,745
135,581
334,547Other cash placements
273,666
304,650
94,563
77,720Cash and cash equivalents
5,963,984
5,428,730
4,119,369
4,795,383








NOTE 23:                      BANCO DE GALICIA Y BUENOS AIRES S.A.’S RISK MANAGEMENT POLICIES





Based on the best practices and with the purpose of achieving an effective risk management system, Banco de Galicia y Buenos Aires S.A. has redesigned the Risk Management Division, redefining its role, hierarchical level and structure. This Division shall be responsible for monitoring and managing, in an active and comprehensive form, the different risks of Banco de Galicia y Buenos Aires S.A. (credit, financial and operational risks) and its subsidiaries. The aim of the Risk Management Division and the Anti-Money Laundering Unit is to guarantee the Board of Directors that they are fully aware of the risks Banco de Galicia y Buenos Aires S.A. is exposed to; and they as well create and propose the policies and procedures necessary to mitigate and control such risks.





Financial risks


Banco de Galicia y Buenos Aires S.A. intends to achieve a structure of financial assets and liabilities aimed at maximizing its return on equity, both short-term and long-term, within an overall framework of acceptable risks.





40
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 23:                      Continued





Liquidity


Banco de Galicia y Buenos Aires S.A. tries to maintain a level of liquid assets that would allow the Bank to meet contractual maturities, face the potential investment opportunities and the demand for credit. For that purpose, it establishes a liquidity objective based on the behavior of its deposits during the 2001-2002 crisis, considered to be the “worst scenario”. Two types of liquidity are defined: “operational” liquidity (to address Banco de Galicia y Buenos Aires S.A.'s daily operations) and “additional” liquidity (excess liquidity available). There is a minimum limit for “operational liquidity”, which is equal to a percentage of certain short-term liabilities, and, for “additional liquidity”, there exist minimum limits differentiated by currency that are equal to a percentage of the liquidity necessary to face the worst scenario in each case. At the same time, it is necessary to maintain a margin that would allow the Bank to face certain reductions in deposits without failing to comply with the cash reserves determined by the Argentine Central Bank. This policy specifies which assets constitute liquidity. With the purpose of taking flows into consideration, gaps between the contractual maturities of consolidated financial assets and liabilities are as well analyzed and monitored. There is a floor for the gap between maturities, determined based on the gap accumulated at all times during the first year. A contingency plan determines the steps to be taken and the assets from which liquid resources additional to those set forth in the above-mentioned policy can be obtained.





Also, with the purpose of mitigating the liquidity risk that arises from deposit concentration per customer, Banco de Galicia y Buenos Aires S.A. has a policy that regulates the concentration of deposits among the main customers.





Currency risk


As regards the risk inherent to the structure of assets and liabilities per currency, limits have been established, in terms of maximum positions authorized, for mismatches in pesos adjusted by CER and those in foreign currency that belong to Banco de Galicia y Buenos Aires S.A on a consolidated basis.





Interest rate risk


Aimed at limiting the sensitivity of Banco de Galicia y Buenos Aires S.A.'s value and results with respect to variations in the interest rate inherent to the structure of certain assets and liabilities, caps have been determined: (i) for the possible negative variation of net financial results for the first year between an interest rate increase scenario and a “base” scenario, and (ii) for the possible negative variation between the net present value of assets and liabilities of the “base” scenario and such value upon the occurrence of an increase in interest rates. Calculations are made once a month using the method known as "simulation of scenarios" and taking into consideration assets and liabilities from Banco de Galicia y Buenos Aires S.A.’s Balance Sheet on a consolidated basis.





Market risk


In order to measure and monitor risks derived from the variation in the price of financial instruments that form the trading securities portfolio, a model known as “Value at Risk” (also known as "VaR") is used. This model determines intra-daily, for Banco de Galicia y Buenos Aires S.A. individually, the possible loss that could be generated by the positions in securities and currencies under certain parameters. Maximum authorized losses in terms of positions in securities and in foreign currency are determined for a fiscal year.





Cross border risk


In order to regulate risk exposures in international jurisdictions, limits were established taking into consideration the jurisdiction’s credit rating, the type of transaction and a maximum exposure per counterparty.





Credit risk


Banco de Galicia y Buenos Aires S.A.’s credit granting and analysis system is applied in a centralized manner and is based on the concept of “opposition of interests”, which is generated from the division between credit and commercial functions. Apart from that, it includes credit control by borrower and monitoring of loans with problems and associated losses. That makes it possible to early detect situations that can entail any degree of portfolio deterioration and to appropriately safeguard the Bank's assets.


41
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 23:                      Continued





Banco de Galicia y Buenos Aires S.A.'s Credit Management Division proposes credit risk policies and procedures, and the Risk Management Division approves them and verifies compliance therewith. Also, the Risk Management Division assesses credit risk on a continuous basis and develops credit assessment models to be applied to risk products. The Credit Management Division is also responsible for loan approval, classification of the loan portfolio and recovery of past due loans.





Banco de Galicia y Buenos Aires S.A. constantly monitors its loan portfolio through different indicators (of non performance, portfolio reduction, etc.) as well as the classification thereof. The loan portfolio classification is in compliance with the Argentine Central Bank’s regulations. In turn, the Bank has developed advanced statistical models which result in an internal rating to order and analyze credit risk in terms of expected losses (with the ability to calculate the different components that constitute this formula), as well as to adjust lending rates and/or risk policies by customer groups or segments. As regards companies, these models are being tested. As regards individuals, these models are being implemented.





The granting of loans exceeding a certain amount and all loans to financial institutions (national and international) and related parties is decided by the Board of Directors' Credit Committee, made up of Directors, the Risk Management Division Manager and the Credit Management Division Manager. The remaining loans are approved by the Retail Credit Department or the Corporate Credit Department pursuant to credit limits previously granted.





The analysis of the requests of different credit products by consumers is performed automatically through credit scoring computer systems, as well as loan granting guidelines based on the customer’s credit history, both in the system and in the Bank itself (“credit screening"). As regards companies, before approving a loan, the Bank conducts an assessment on the customer and its financial condition. For loans above certain amounts, an environmental impact analysis is conducted.





Furthermore, within the credit policies framework, Banco de Galicia y Buenos Aires S.A. has a Concentration by Sector Policy for the corporate banking division, aimed at mitigating the risk related to the concentration by economic activity.





Banco de Galicia y Buenos Aires S.A.’s Internal Audit is in charge of supervising the loan portfolio classification pursuant to the Argentine Central Bank's regulations.





Operational risk


On July 30, 2008, Banco de Galicia y Buenos Aires S.A.’s Board of Directors approved the policy regarding operational risk management, pursuant to the guidelines established by the Bank in such respect, and within the framework of the provisions determined by the Argentine Central Bank in Communiqué “A” 4793 and supplementary regulations.





Banco de Galicia y Buenos Aires S.A. started to implement an operational risk management system in a progressive manner and through a schedule determined in such Communiqué.





Furthermore, the Bank incorporated an operational risk events database that will comply with the reporting requirements set forth in Communiqué “A” 4904 of the Argentine Central Bank.





Banco de Galicia y Buenos Aires S.A. adopts the definition of operational risk determined by the Argentine Central Bank and the best international practices. Operational risk is the risk of losses due to the lack of conformity or due to failure of internal processes, the acts of people or systems, or else because of external events. This definition includes legal risk, but does not include strategic and reputation risks.





Banco de Galicia y Buenos Aires S.A.’s Board of Directors, the Risk Management Committee, the Risk Management Division, the Operational Risk Unit and the Wholesale and Retail Banking and Support divisions have their roles and responsibilities as regards this risk clearly defined.





Banco de Galicia y Buenos Aires S.A.'s Risk Management Division, a functional area that reports to the Chief Executive Officer, is responsible for the comprehensive management of the Bank’s three different categories of risk: financial, credit and operational risk. The Bank has a specific and independent unit for the management of each particular risk.





NOTE 23:                      Continued





Banco de Galicia y Buenos Aires S.A. manages operational risk inherent to its products, activities, processes and relevant systems, technology and information security processes, as well as risks derived from subcontracted activities and from services rendered by providers. Furthermore, before launching or introducing new products, activities, processes or systems, their inherent operational risk is properly assessed.


42
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


Banco de Galicia y Buenos Aires S.A.’s purpose is to consider a methodological approach regarding operational risk management, with an emphasis on encouraging continuous improvements in the assessment practices, what will allow the following: identification, assessment, monitoring, control and mitigation of the different risks inherent to the business and banking operations.





Risk regarding money laundering and other illegal activities


As regards the control and prevention of this risk, Banco de Galicia y Buenos Aires S.A. complies with the Argentine Central Bank regulations and Law No. 25246, which amends the Criminal Code as to concealment and asset laundering and creates the Financial Information Unit (“U.I.F.” - Unidad de Información Financiera), under the jurisdiction of the Argentine Ministry of Justice. The U.I.F. is in charge of the analysis, treatment and transmission of the information subject matter of this risk.





Banco de Galicia y Buenos Aires S.A. has control policies, procedures and structures that are in line with the characteristics of the different products offered by the Bank. Said policies and procedures allow monitoring transactions in order to detect, under certain parameters, such transactions that should be considered unusual, and to report them before the U.I.F. in the cases that may correspond. The Anti-Money Laundering Unit (“U.A.L.” as per its initials in Spanish) is in charge of managing this risk, through the implementation of control and prevention procedures as well as the communication thereof to the rest of the organization through the drafting of the corresponding handbooks and the training of all collaborators.





Banco de Galicia y Buenos Aires S.A. has appointed a director to be in charge of this risk and has created a Committee responsible for planning and coordinating the policies determined by the Board of Directors, as well as enforcing compliance therewith. It is worth noting that the basic principle on which the regulations regarding prevention and control of this risk are based is in line with the “know your customer” policy enforced worldwide. The management of this risk is regularly reviewed by Internal Audit.





NOTE 24:                      AGREEEMENT FOR THE PURCHASE OF SHARES





During June 2009, Banco de Galicia y Buenos Aires S.A. entered into an agreement with American International Group Inc. and AIG Consumer Finance Group Inc. for the purchase of 80% of the shares belonging to Compañía Financiera Argentina S.A., Cobranzas y Servicios S.A. and AIG Universal Processing Center S.A., companies incorporated in Argentina that carry out financial and supplementary activities.





Furthermore, the potential buyers of the remaining 20% of the shares belonging to the aforementioned companies made an offer to carry out a "put option" regarding those shares.





In December 2009, such potential buyers assigned their rights to purchase the shares belonging to the aforementioned companies to Banco de Galicia y Buenos Aires S.A. and Tarjetas Regionales S.A.





Due to the above, Banco de Galicia y Buenos Aires S.A. and Tarjetas Regionales S.A. acquired a right to buy 95% and 5%, respectively, of the shares belonging to Compañía Financiera Argentina S.A., Cobranzas & Servicios S.A. and AIG Universal Processing Center S.A., subject to the approval of the Argentine Central Bank, among other conditions.





The original price for the transference of all the shares, agreed with the current owners and subject to the customary adjustments for this type of transactions, was set at the amount of $ 166,500; while the price for the assignment of the right to buy was set at $ 21,100.





43
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Consolidated Financial Statements (Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 25:                      SUBSEQUENT EVENTS





Banco de Galicia y Buenos Aires S.A.


The Shareholders’ Meeting held on April 14, 2010, resolved, pursuant to the rules and regulations in force, to distribute the Retained Earnings as of December 31, 2009, as follows:


- Legal Reserve:                                        $   34,370


- To following Fiscal Year:                      $ 297,445





Galicia Factoring y Leasing S.A. (in liquidation)


The Shareholders’ Meeting held on April 7, 2010, decided the early dissolution and later liquidation of the company under the terms of section 94 of Law No. 19550. In this regard, Banco Galicia y Buenos Aires S.A. will continue conducting the international factoring transactions.





Galicia Warrants S.A.


The Shareholders’ Meeting held on April 7, 2010 approved the distribution of retained earnings as of December 31, 2009, for $ 7,725, as follows:


- To cash dividends:                                $   1,500


- To discretionary reserve:                      $   6,225








44
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Balance Sheet
 As of March 31, 2010 and December 31, 2009.
 (Figures stated in thousands of pesos)




03.31.10
12.31.09ASSETSCURRENT ASSETSCash and due from banks (Notes 2 and 11)
4,068
3,817Investments (Notes 9 and 11 and Schedules C, D and G)
27,139
28,723Other receivables (Notes 3, 9, and 11 and Schedule G)
2,148
3,072Total Current Assets
33,355
35,612NON-CURRENT ASSETSOther receivables (Notes 3, 9, and 11 and Schedule G)
54,378
51,730Investments (Note 9 and Schedules B, C and G)
2,226,971
2,166,754Fixed assets (Schedule A)
2,999
3,019Total Non-Current Assets
2,284,348
2,221,503Total Assets
2,317,703
2,257,115LIABILITIESCURRENT LIABILITIESFinancial debts (Notes 4, 9 and 16 and Schedule G)
131,378
125,793Salaries and social security contributions (Notes 5 and 9)
593
1,146Tax liabilities (Notes 6, 9 and 13)
26,079
26,208Other liabilities (Notes 7, 9 and 11 and Schedule G)
14,072
10,230Total Current Liabilities
172,122
163,377NON-CURRENT LIABILITIESFinancial debts (Notes 4, 9 and 16 and Schedule G)
43,211
41,193Tax liabilities (Notes 6, 9 and 13)
1,413
-Other liabilities (Notes 7 and 9)
6
6Total Non-Current Liabilities
44,630
41,199Total Liabilities
216,752
204,576SHAREHOLDERS' EQUITY (per related statement)
2,100,951
2,052,539Total Liabilities and Shareholders' Equity
2,317,703
2,257,115





The accompanying notes 1 to 19 and schedules A, B, C, D, G, and H are an integral part of these financial statements.





45
 
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Memorandum Accounts
 As of March 31, 2010 and December 31, 2009.
 (Figures stated in thousands of pesos)





03.31.10
12.31.09Forward purchase of foreign currency without delivery of the underlying asset (Note 15 and Schedule G)
120,218
117,800





The accompanying notes 1 to 19 and schedules A, B, C, D, G, and H are an integral part of these financial statements.







46
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Income Statement
 For the three-month period commenced January 1, 2010 and ended
 March 31, 2010, presented in comparative format with the same period of the previous fiscal year.
 (Figures stated in thousands of pesos)




03.31.10
03.31.09Net income on investments in related institutions
60,437
27,038Administrative expenses (Note 11 and Schedule H)
(4,229)
(6,649)Financial income and by holding
(6,033)
101,819- Generated by assets
1,599
4,194InterestsMutual funds
15
28On time deposits (*)
18
7On promissory notes receivable (*)
42
42Result on negotiable obligations (*)
(96)
4Result on negotiable mutual funds from abroad
101
-Exchange-rate difference
1,519
4,113- Generated by liabilities
(7,632)
97,625InterestsOn financial debts (*)
(4,154)
(1,110)Others
(5)
(338)Exchange-rate difference
(3,473)
13,523Income on loan repayment (Note 18)
-
85,550Other income and expenses (*) – Income
1,268
44Net Income before income tax
51,443
122,252Income tax (Note 13)
255
(30,353)Net Income for the period
51,698
91,899


(*) Balances net of eliminations corresponding to transactions conducted with companies included in section 33 of Law No. 19550. See Note 11.




The accompanying notes 1 to 19 and schedules A, B, C, D, G, and H are an integral part of these financial statements.





47
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Statement of Changes in the Shareholders’ Equity
 For the three-month period commenced January 1, 2010 and ended
 March 31, 2010, presented in comparative format with the previous fiscal year.
 (Figures stated in thousands of pesos)





Item
Shareholders’ contributions

(Note 8)
Retained earnings

(Notes 12 and 15)
Total shareholders’ equityCapital stock
Capital adjustment
Premium for negotiation of shares in own portfolio
Total
Legal reserve
Discretionary reserve
Valuation adjustment of hedging derivatives
Retained earningsBalances as of 12.31.08
1,241,407
278,131
606
1,520,144
37,157
97,204
14,421
176,819
1,845,745Valuation adjustment of hedging derivatives (Note 15)
-
-
-
-
-
-
(14,421)
-
(14,421)Income for the period
-
-
-
-
-
-
-
91,899
91,899Balances as of 03.31.09
1,241,407
278,131
606
1,520,144
37,157
97,204
-
268,718
1,923,223





Balances as of 12.31.09
1,241,407
278,131
606
1,520,144
45,998
265,182
(8,060)
229,275
2,052,539Valuation adjustment of hedging derivatives (Note 15)
-
-
-
-
-
-
(3,286)
-
(3,286)Income for the period
-
-
-
-
-
-
-
51,698
51,698Balances as of 03.31.10
1,241,407
278,131
606
1,520,144
45,998
265,182
(11,346)
280,973
2,100,951





The accompanying notes 1 to 19 and schedules A, B, C, D, G, and H are an integral part of these financial statements.







48
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Statement of Cash Flows
 For the three-month period commenced January 1, 2010 and ended
 March 31, 2010, presented in comparative format with the same period of the previous fiscal year.
 (Figures stated in thousands of pesos)





03.31.10
03.31.09CHANGES IN CASH(Note 1.j)Cash at beginning of fiscal year
19,422
27,562Cash at period-end
18,002
2,290Net decrease in cash
(1,420)
(25,272)CAUSES FOR CHANGES IN CASHOperating activitiesCollections for services
1,456
142Payments to suppliers of goods and services
(1,897)
(3,890)Personnel salaries and social security contributions
(1,614)
(1,338)Payment of other taxes
(339)
(2,192)Collections for other net operating activities
38
-Net cash flow used in operating activities
(2,356)
(7,278)Investment activitiesPayments for purchases of fixed assets
(3)
-Collection of Interest
939
1,006Collections for investments liquidation, net
-
13,073Net cash flow generated by investment activities
936
14,079Financing activitiesInterests paid
-
(100)Payment of loans received, net
-
(31,973)Net cash flow used in financing activities
-
(32,073)Net decrease in cash
(1,420)
(25,272)





The accompanying notes 1 to 19 and schedules A, B, C, D, G, and H are an integral part of these financial statements.




49
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements
 For the three-month period commenced January 1, 2010 and
 ended March 31, 2010, presented in comparative format.
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))





NOTE 1:                      BASIS FOR THE PREPARATION OF THE FINANCIAL STATEMENTS





On August 10, 2005, the C.P.C.E.C.A.B.A. passed Resolution C.D. No. 93/05, which adopts Technical Pronouncements 6 to 22 issued by the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) as the Argentine GAAP; said resolutions were amended with the purpose of unifying the Argentine GAAP and the interpretation of the accounting and auditing standards 1 to 4. The above-mentioned resolution is effective for fiscal years commenced on and after January 1, 2006. On December 29, 2005, the National Securities Commission (C.N.V.) approved C.P.C.E.C.A.B.A’s C.D. No. 93/05 with certain amendments.





These financial statements have been stated in thousands of Argentine pesos and prepared in accordance with disclosure and valuation accounting standards contained in Technical Pronouncements issued by the Argentine F.A.C.P.C.E. and approved by the C.P.C.E.C.A.B.A. and the C.N.V., with the considerations mentioned in Note 2 to the consolidated financial statements in relation to the criteria for the valuation of the subsidiary Banco de Galicia y Buenos Aires S.A.





The preparation of financial statements at a given date requires the Company’s management to make estimates and assessments regarding events and/or situations and/or circumstances that affect or may affect the amounts of assets and liabilities reported and the disclosure of contingent assets and liabilities at that date, as well as the income and expenses recorded for the period. The Company’s management makes estimates in order to calculate, at any given moment, for example, the depreciation charges, the recoverable value of assets, the income tax charge and provisions for contingencies. Estimates and assessments made at the date these financial statements were prepared may differ from the situations, events and/or circumstances that may finally occur in the future.





On March 25, 2003, the National Executive Branch issued Decree No. 664 establishing that financial statements for fiscal years ending as from said date be stated in nominal currency. Consequently, in accordance with Resolution No. 441/03 of the C.N.V., the Company discontinued the restatement of its financial statements as from March 1, 2003. This criterion is not in line with Argentine GAAP, under which financial statements are to be restated until September 30, 2003. Nevertheless, this departure has not produced a significant effect on the financial statements.





The index used for restating the items in these financial statements was the domestic wholesale price index published by the National Statistics and Census Institute (I.N.D.E.C.).





Certain figures in the financial statements for the fiscal year ended December 31, 2009 have been reclassified for purposes of their presentation in comparative format with those for this period.





The most relevant accounting policies used in preparing the Financial Statements are listed below:





a. Assets and liabilities in domestic currency


Monetary assets and liabilities which include, where applicable, the interest accrued at period/year-end, are stated in period-end currency and therefore require no adjustment whatsoever.





b. Assets and liabilities in foreign currency (U.S. dollars and Euros)


Foreign currency assets and liabilities (in U.S. dollars and Euros) have been stated at Banco de la Nación Argentina’s buying and selling exchange rates, respectively, in force at the close of operations on the last working day of each period/fiscal year. Interests receivable or payable have been accrued, where applicable.





c. Investments


c.1. Current


Time and special current account deposits, as well as foreign mutual fund units, have been valued at their face value plus accrued interest at the end of each period/fiscal year.





Argentine mutual fund units have been valued at period/fiscal year-end closing price.





50
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 1:                      Continued





Negotiable obligations and negotiable mutual funds from abroad have been valued at their closing price at period/fiscal year-end.





c.2. Non-Current


The equity investment in Banco de Galicia y Buenos Aires S.A. has been recognized at its equity method as of March 31, 2010 and December 31, 2009, which arises from financial statements prepared in accordance with Argentine Banking GAAP, which differ in the aspects mentioned in Note 2.c. to the consolidated financial statements from Argentine GAAP.





The equity investments in Net Investment S.A., Galicia Warrants S.A., Galval Agente de Valores S.A. and GV Mandataria de Valores S.A. are recognized using the equity method as of March 31, 2010 and December 31, 2009, where applicable.





The equity investment in Sudamericana Holding S.A. has been recorded using the equity method, on the basis of the financial statements dated December 31, 2009 and September 30, 2009, and considering the significant changes occurred from such dates to the closing date of the corresponding financial statements.





The consolidated financial statements of Sudamericana Holding S.A. have been prepared pursuant to the regulations of the Argentine Superintendency of Insurance (S.S.N. as per its initials in Spanish), which differ from Argentine GAAP in the aspects mentioned in Note 2.b. to the consolidated financial statements. Nevertheless, this departure has not produced a significant effect on the financial statements of Grupo Financiero Galicia S.A.





Galval Agente de Valores S.A.’s financial statements were originally issued in foreign currency and later converted into pesos as detailed below:





- Assets and liabilities were converted at the buying exchange rate established by Banco de la Nación Argentina in force at the closing of operations on the last working day of the period/fiscal year.


- Capital and capital contributions have been computed for the amounts actually disbursed.


- Accumulated earnings were determined as the difference between assets, liabilities, capital and capital contributions.


- Results for the period were determined as the difference between the opening balance and closing balance of accumulated earnings.


- Items in the income statement were converted into pesos applying the monthly average exchange rates.





d. Goodwill


Goodwill resulting from the acquisition of shares in other companies, which is recorded under “Investments”, has been valued at its acquisition cost, net of the corresponding accumulated depreciation, calculated proportionally over the estimated useful life.





Amortization is assessed on a straight-line basis in equal monthly installments, being the amortization term of 120 months. See Schedule B.





The updated residual value of the assets does not exceed their estimated recoverable value at period/fiscal year-end.





e. Fixed assets


Fixed assets have been valued at their acquisition cost, restated at constant currency as mentioned in this Note, net of the corresponding accumulated depreciation.





Depreciation charges are calculated following the straight-line method, at rates determined based on the useful life assigned to the assets, which is 60 months for hardware and software, furniture and fixtures and vehicles and 600 months for real estate property. See Schedule A.





The updated residual value of the assets, taken as a whole, does not exceed their combined market value at period/fiscal year-end.





NOTE 1:                      Continued





f. Financial debt


Financial debt has been valued pursuant to the amount of money received, net of transaction costs, plus financial interests accrued based on the internal rate of return estimated at the initial recording time.


51
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


Financial debts in foreign currency have been valued at the selling exchange rate quoted by Banco de la Nación Argentina as of period/fiscal year-end.





g. Income tax and minimum presumed income tax


The Company has recognized the income tax charge according to the deferred tax method, thus recognizing the temporary differences between measurements of accounting and tax assets and liabilities, at the rate in force (See Note 13 to the financial statements).





The Company determines the minimum presumed income tax at the statutory rate of 1% of the computable assets at year-end. This tax is supplementary to the income tax. The Company’s tax liability for each fiscal year shall be determined by the higher of the two taxes.





It is worth noting that, if the minimum presumed income tax were to exceed income tax in a given fiscal year, such excess may be computed as a payment on account of the income tax that could be generated in any of the next ten fiscal years.





As of December 31, 2009, he Company recorded credit for $ 908, which is recorded by offsetting the income tax determined for fiscal period 2009 (See Note 13 to the Financial Statements).





The Company has set up a provision for the minimum presumed income tax credit, corresponding to the charge for the period of $ 281, since its recovery is not likely at the date of these financial statements.





h. Derivative Instruments


As of March 31, 2010 and December 31, 2009, derivative instruments have been valued at their estimated current value at those dates.





Differences originated from the application of measurement criteria, corresponding to derivative instruments considered to be ineffective hedge instruments, have been recognized in results for the period/fiscal year; while differences corresponding to derivative instruments in the form of hedge instruments considered to be effective to cover cash flow risks have been recognized in shareholders’ equity under “Valuation adjustment of hedging derivative instruments”. These balances are reclassified to results for the period/fiscal year in which the covered item affects such results.





i. Shareholders’ Equity


i.1. Activity in the shareholders’ equity accounts has been restated as mentioned in paragraphs five and six of this note.





The "Subscribed and paid in capital" account has been stated at its face value and at the value of the contributions, in the currency value of the period/fiscal year in which those contributions were actually made.





The adjustment stemming from the restatement of that account in constant currency has been allocated to the “Principal adjustment” account.





i.2. Income and expense accounts


The results for each period are presented in the period in which they accrue.





j. Statement of Cash Flows


“Cash and due from banks” and investments and credit held with the purpose of complying with the short-term commitments undertook, with a high level of liquidity, easily converted into known amounts of cash, subject to insignificant risks of changes in value and with a maturity less than three months from the date of the acquisition thereof, are considered to be cash and cash equivalents. The breakdown is as follows:




NOTE 1:                      Continued





03.31.10
12.31.09Cash and due from banks (Note 2)
4,068
3,817Investments (Schedule D)
13,934
15,605Total
18,002
19,422








52




NOTE 2:                      CASH AND DUE FROM BANKS





The breakdown of this caption was the following:




03.31.10
12.31.09Cash
11
11Cash in custody in other banks (Schedule G)
3,963
3,743Due from banks – current accounts (Note 11)
94
63Total
4,068
3,817





NOTE 3:                      OTHER RECEIVABLES





The breakdown of this caption was the following:





03.31.10
12.31.09CurrentTax credit
48
-Promissory notes receivable (Note 11 and Schedule G)
1,099
2,096Sundry debtors (Note 11)
607
959Prepaid expenses
12
12Others (Note 11)
382
5Total
2,148
3,072





03.31.10
12.31.09Non-CurrentTax credit – mandatory savings
5
5Tax credit – income tax (Note 13)
1,318
1,063Promissory notes receivable (Note 11 and Schedule G)
53,054
50,661Sundry debtors
1
1Total
54,378
51,730





NOTE 4:                      FINANCIAL DEBT





The breakdown of this caption was the following:





03.31.10
12.31.09CurrentNegotiable obligations (Note 16 and Schedule G)
131,378
125,793Total
131,378
125,793





03.31.10
12.31.09Non-CurrentNegotiable obligations (Note 16 and Schedule G)
43,211
41,193Total
43,211
41,193





53
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 5:                      SALARIES AND SOCIAL SECURITY CONTRIBUTIONS





The breakdown of this caption was the following:





03.31.10
12.31.09CurrentArgentine integrated social security system
75
80Others
3
7Provision for annual legal bonus (S.A.C) and social security contributions
65
-Provision for bonuses
89
354Provision for retirement insurance
120
480Provision for Directors’ and Syndics' fees
241
225Total
593
1,146





NOTE 6:                      TAX LIABILITIES





The breakdown of this caption was the following:





03.31.10
12.31.09CurrentIncome tax – withholdings to be deposited
68
52Income tax payable (net)
21,672
-Provision for income tax (net) (Note 13)
-
21,853Provision for turnover tax (net)
61
25Provision for tax on personal assets – substitute taxpayer
4,278
4,278Total
26,079
26,208





03.31.10
12.31.09Non-CurrentProvision for minimum presumed income tax
281
-Provision for tax on personal assets – substitute taxpayer
1,132
-Total
1,413
-





NOTE 7:                      OTHER LIABILITIES





The breakdown of this caption was the following:





03.31.10
12.31.09CurrentSundry creditors
67
8Provision for expenses (Note 11 and Schedule G)
2,656
2,159Balance of futures contracts to be settled (Note 15)
11,346
8,060Directors’ qualification bonds
3
3Total
14,072
10,230





03.31.10
12.31.09Non-CurrentDirectors’ qualification bonds
6
6Total
6
6





54
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 8:                      CAPITAL STATUS





As of March 31, 2010, capital status was as follows:


Capital stock issued, subscribed, paid in and recorded
Face value
Restated at constant
currencyBalances as of 12.31.08
1,241,407
1,519,538Balances as of 12.31.09
1,241,407
1,519,538Balances as of 03.31.10
1,241,407
1,519,538





NOTE 9:                      ESTIMATED COLLECTION OR PAYMENT TERMS OF RECEIVABLES, INVESTMENTS, AND DEBTS





As of March 31, 2010, the breakdown of receivables, investments, and debts according to their estimated collection or payment term was the following:


Investments
Other receivables
Financial debt
Salaries and social security contributions
Tax Liabilities
Other liabilities1st. Quarter (*)
27,139
1,911
131,378
143
21,801
11,6652nd. Quarter (*)
-
7
-
-
4,278
1,9563rd. Quarter (*)
-
230
-
-
-
1644th. Quarter (*)
-
-
-
450
-
287After one year (*)
-
54,372
43,211
-
1,413
6Subtotal falling due
27,139
56,520
174,589
593
27,492
14,078No set due date
2,226,971
6
-
-
-
-Past due
-
-
-
-
-
-Total
2,254,110
56,526
174,589
593
27,492
14,078Non-interest bearing
2,226,971
2,373
-
593
27,492
14,078At variable rate
8,126
54,153
-
-
-
-At fixed rate
19,013
-
174,589
-
-
-Total
2,254,110
56,526
174,589
593
27,492
14,078


(*) As from the date of these financial statements.





NOTE 10:                      EQUITY INVESTMENTS





The breakdown of equity investments was the following:


As of March 31, 2010Issuing company
Shares
Percentage held inClass
Number
Total capital
Possible votesBanco de Galicia y Buenos Aires S.A.
Ord. Class “A”
101Ord. Class “B”
532,668,858Total
532,668,959
94.725896
94.725900Net Investment S.A.
Ordinary
10,500
87.500000
87.500000Sudamericana Holding S.A.
Ordinary
162,447
87.500337
87.500337Galicia Warrants S.A.
Ordinary
175,000
87.500000
87.500000GV Mandataria de Valores S.A.
Ordinary
10,800
90.000000
90.000000Galval Agente de Valores S.A.
Ordinary
49,870,052
100.000000
100.000000





As of December 31, 2009Issuing company
Shares
Percentage held inClass
Number
Total capital
Possible votesBanco de Galicia y Buenos Aires S.A.
Ord. Class “A”
101Ord. Class “B”
532,551,605Total
532,551,706
94.705045
94.705048Net Investment S.A.
Ordinary
10,500
87.500000
87.500000Sudamericana Holding S.A.
Ordinary
162,447
87.500337
87.500337Galicia Warrants S.A.
Ordinary
175,000
87.500000
87.500000GV Mandataria de Valores S.A.
Ordinary
10,800
90.000000
90.000000Galval Agente de Valores S.A.
Ordinary
49,870,052
100.000000
100.000000


The financial condition and results of controlled companies were the following:


55
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 10:                      Continued





As of March 31, 2010 (*)Assets
Liabilities
Shareholders’ equity
Net incomeBanco de Galicia y Buenos Aires S.A.
28,354,655
26,167,421
2,187,234
60,708Net Investment S.A.
166
117
49
(48)Galicia Warrants S.A.
28,311
14,658
13,653
261Galval Agente de Valores S.A.
8,571
1,605
6,966
(1,288)GV Mandataria de Valores S.A.
1,402
1,132
270
111Sudamericana Holding S.A. (**)
240,323
161,398
78,925
5,124


(*) See Note 1.c.2.


(**) Financial condition and results as of 12.31.09.





Financial condition as of December 31, 2009 and results as of March 31, 2009 (*)Assets
Liabilities
Shareholders’ equity
Net incomeBanco de Galicia y Buenos Aires S.A.
27,224,687
25,098,165
2,126,522
30,107Net Investment S.A.
265
217
48
(325)Galicia Warrants S.A.
28,594
15,202
13,392
(540)Galval Agente de Valores S.A.
8,605
350
8,255
(946)GV Mandataria de Valores S.A.
1,775
1,616
159
(4)Sudamericana Holding S.A. (**)
260,694
169,893
90,801
10,907


(*) See Note 1.c.2.


(**) Financial condition as of 09.30.09 and results as of 12.31.08.





NOTE 11:                      SECTION 33 OF LAW 19550 - CORPORATIONS LAW





The financial statements include the following significant balances corresponding to transactions with its controlled companies and its subsidiaries:





Banco de Galicia y Buenos Aires S.A.


03.31.10
12.31.09AssetsCash and due from banks – current accounts (Note 2)
84
57Investments – special current accounts (Schedule D)
1
1Investments – time deposits (Schedule D)
8,649
10,363Other receivables – promissory notes receivable (Note 3 and Schedule G)
54,153
52,757Total
62,887
63,178





03.31.10
12.31.09LiabilitiesOther liabilities – provision for expenses (Note 7)
281
226Total
281
226





03.31.10
03.31.09IncomeFinancial income – interests on special current accounts
-
1Financial income – interests on time deposits
255
120Financial income – interests on promissory notes receivable
807
797Other income and expenses – fixed assets under lease
68
104Total
1,130
1,022





03.31.10
03.31.09ExpensesAdministrative expenses (Schedule H)Trademark leasing
305
280Bank expenses
2
2General expenses
77
114Total
384
396







56





NOTE 11:                      Continued





Banco Galicia Uruguay S.A.


03.31.10
03.31.09IncomeFinancial income – interests on negotiable obligations
-
4Total
-
4





Galval Agente de Valores S.A.


03.31.10
12.31.09LiabilitiesOther liabilities – provision for expenses (Note 7 and Schedule G)
33
25Total
33
25





03.31.10
03.31.09ExpensesAdministrative expenses (Schedule H)General expenses
34
18Total
34
18





Galicia Seguros S.A.


03.31.10
12.31.09AssetsOther receivables – others (Note 3)
30
-Total
30
-





Galicia Seguros S.A. (continued)


03.31.10
03.31.09IncomeOther income – fixed assets under lease
74
37Total
74
37





Net Investment S.A.


03.31.10
12.31.09AssetsOther receivables - sundry creditors (Note 3)
101
201Total
101
201





GV Mandataria de Valores S.A.


03.31.10
12.31.09AssetsOther receivables - sundry creditors (Note 3)
506
757Total
506
757





Sudamericana Holding S.A.


03.31.10
03.31.09ExpensesFinancial income and by holding – generated by liabilitiesInterests on financial debts (*)
-
6,870Total
-
6,870


(*) These correspond to the loan for $ 97,000 repaid on 06/04/2009 (See Note 18)





Additionally, the purchase and sale of foreign exchange related to the transactions described in Note 18 was carried out with Banco de Galicia y Buenos Aires S.A.





57
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 12:                      RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF PROFITS





Pursuant to Section 70 of the Corporations Law, the Corporate Bylaws and Resolution No. 368/01 of the C.N.V., 5% of the net income for the year should be transferred to the Legal Reserve until 20% of the capital stock is reached.





NOTE 13:                      INCOME TAX





The following tables show the changes and breakdown of deferred tax assets and liabilities:





Assets
Losses
Investments
TotalBalances as of 12.31.08
1,271
989
2,260Charge to income
(1,206)
581
(625)Others
(65)
-
(65)Balances as of 12.31.09
-
1,570
1,570Charge to income
-
39
39Balances as of 03.31.10
-
1,609
1,609





Liabilities
Fixed assets
Financial debt
TotalBalances as of 12.31.08
7
-
7Charge to income
(1)
501
500Balances as of 12.31.09
6
501
507Charge to income
-
(216)
(216)Balances as of 03.31.10
6
285
291





As the above-mentioned information shows, as of March 31, 2010 and December 31, 2009 the Company’s deferred tax assets amounted to $ 1,318 and $ 1,063 respectively.





Tax losses recorded by the Company, pending being used, amount to approximately $ 1,945, pursuant to the following breakdown:





Issuance year
Amount
Year due
Deferred tax assets2010
1,945
2015
681





The deferred tax originated from such tax losses has not been recorded by the Company, since it is supposed that the recovery thereof is not likely at the date of these financial statements.





As regards the deferred tax liabilities stemming from the difference between the carrying value adjusted for inflation of the fixed assets and the taxable value (or income tax base), Grupo Financiero Galicia S.A. decided not to record said liabilities but to submit a note to the financial statements presenting the supplementary information required to be included in the Response (identified as 7) to Question 3 of Interpretation No. 3 of F.A.C.P.C.E.





The deferred tax liabilities created due to the effect of the adjustment for inflation of the non-monetary assets amount to $ 315 and $ 317, as of March 31, 2010 and December 31, 2009, respectively. They mainly stem from the real estate valuation. Said liabilities are expected to revert in approximately 41 years, the remaining useful life of real estate, being the amount for each fiscal year of $ 8.





The classification of assets and liabilities by net deferred tax recorded in accordance with its expected reversion term is shown in Note 9.





The following table shows the reconciliation of income tax charged to Income to that which would result from applying the tax rate in force to the accounting income before tax:


58
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 13:                      Continued





03.31.10
03.31.09Income before income tax
51,443
122,252Income tax rate in force
35%
35%Result for the period at the tax rate
18,005
42,788Permanent differences at the tax rateIncrease in income tax- Expenses not included in tax return
1,995
3,683- Other causes
114
151Decrease in income tax- Results on investments in related institutions
(21,009)
(12,045)- Other causes
(41)
(4,224)- Allowance for impairment of value
681
-Total income tax charge recorded – (income) / loss
(255)
30,353





The following table shows the reconciliation of tax charged to Income to tax determined for the period for tax purposes:





03.31.10
03.31.09Total income tax charge recorded – (income) / loss
(255)
30,353Temporary differences- Variation in assets due to deferred tax
39
(1,161)- Variation in liabilities due to deferred tax
216
1Total tax determined for tax purposes
-
29,193





Breakdown of net income tax provision:





03.31.10
12.31.09Total tax determined for tax purposes
-
23,628Tax credit
-
(1,775)Income tax provision (net)
-
21,853





NOTE 14:                      EARNINGS PER SHARE





Below is a breakdown of the earnings per share as of March 31, 2010 and 2009:





03.31.10
03.31.09Income for the period
51,698
91,899Outstanding ordinary shares weighted average
1,241,407
1,241,407Diluted ordinary shares weighted average
1,241,407
1,241,407Earnings per ordinary share- Basic
0.0416
0.0740- Diluted
0.0416
0.0740





NOTE 15:                      DERIVATIVE INSTRUMENTS





On October 14, 2008, a forward foreign currency hedge contract was entered into, aimed at covering the risk associated with the exchange rate exposure of financial debts in U.S. Dollars.





As mentioned in the paragraph above, since the Company's purpose when entering into this contract was to reduce its exposure to U.S. Dollar fluctuations and denominate its future commitments in Pesos, and the main terms of the contract (amount and due date) were similar to those of the financial debt, the contract has been considered a hedging instrument effective to cover cash flow risks related to the item being covered (financial debts).





As of December 31, 2008, changes in the market value of this derivative instrument for $ 14,421 were charged to Shareholders' Equity, under "Adjustment to the valuation of hedging derivatives”.




59
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))





NOTE 15:                      Continued




On January 6, 2009, due to the payment of the financial debts in foreign currency, which are covered by the derivative instrument, a sales contract under similar terms was entered into in order to offset the effects of the above-mentioned forward purchase agreement. Therefore, the reversal of the aforementioned valuation adjustment was carried out on that date, being charged to income for the fiscal year.





Later, the Company entered into a forward foreign currency hedge contract with the purpose of covering the risk associated with the exchange rate exposure of Negotiable Obligations issued in U.S. Dollars.





As of March 31, 2010, the following contract is outstanding, which is considered an effective hedging instrument.





Reference foreign currency
Amount in the reference foreign currency (in thousands)
Forward exchange rate ($ for US$)
Exchange rate for settlement
Settlement dateUS$
(1)
31,000
(2)
4.2600
B.C.R.A.
(3)
05.31.10


(1) U.S. dollars.


(2) This hedge contract sets forth that if during the currency thereof the exchange rate is lower than or equal to $ 3.50 (three pesos and fifty cents), the Company shall have to furnish a security in favor of the contracting party for an amount equivalent to the difference between the reference exchange rate of $ 3.75 (three pesos and seventy five cents) and the exchange rate in force at the time such security is furnished, for the amount of the contract.


(3) Reference exchange rate set by the Argentine Central Bank. (Communiqué “A” 3500).





Settlement of this transaction at the settlement date shall be carried without the physical delivery of the currency. That is to say, it shall be by compensation or difference between the spot exchange rate for settlement and the forward exchange rate.





As of March 31, 2010, changes in the market value of derivative instruments considered effective hedging documents for $ (11,346) have been charged to Shareholders’ Equity under “Adjustment to the valuation of hedging derivatives”, and shall be recorded as results when the covered item affects such results.





NOTE 16:                      GLOBAL PROGRAM FOR THE ISSUANCE OF NEGOTIABLE OBLIGATIONS





On March 9, 2009, the General Ordinary Shareholders’ Meeting approved the creation of a Global Program for the Issuance of simple Negotiable Obligations, not convertible into shares. Such Negotiable Obligations may be short-, mid- and/or long-term, secured or unsecured, peso-denominated, dollar-denominated or else may be in any other currency, subject to the compliance with all the legal or regulatory requirements applicable to the issuance in such currency or currency unit, adjustable or non-adjustable, and for a maximum outstanding F.V. of up to US$ 60,000 (sixty million U.S. dollars) or the equivalent thereof in another currency.





The maximum term of the program shall be five years as of the date the program is authorized by the C.N.V., or for any longer term authorized pursuant to regulations in force.





Apart from that, the Negotiable Obligations may be issued pursuant to the laws and jurisdiction of Argentina and/or any other foreign country, in several classes and/or series during the period the Program is outstanding, with the possibility to re-issue the amortized classes and/or series without exceeding the Program’s total amount, and with the possibility that the maturity dates of the different classes and/or series issued occur after the Program’s expiration date, with amortization terms not to be lower than the minimum term or higher than the maximum term permitted by the regulations set forth by the C.N.V., among other characteristics thereof.





By means of resolution No. 16113 dated April 29, 2009, the C.N.V. decided to authorize, with certain conditions, the creation of the Global Program. On May 8, 2009, together with the release of such conditions, the National Securities Commission approved the Price Supplement of the Negotiable Obligations Class I, Series I and II, for a F.V. of US$ 45,000.


60
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 16:                      Continued





On June 4, 2009, Series I and II corresponding to Negotiable Obligations Class I were issued, the main characteristics of which are described as follows:





Series No.
Face Value amount in US$
Issuance price (in thousands of US$)
Term (in days)
Maturity date
Interest rate
Book value

$I
34,404
0.09268
360
05.30.10
(*)
131,378II
10,596
0.10348
720
05.25.11
Annual nominal 12.5%
43,211


(*) Negotiable Obligations Series I do not accrue interests as they were issued on a discounted base.





The first interest payment for Series II was carried out on December 1, 2009, for the amount of US$ 653.





On May 7, 2010, the C.N.V. authorized, within the Global Program outstanding, the issuance of Negotiable Obligations Class II, Series I, II and III, for US$ 45,000.





The Shareholders’ Meeting held on April 14, 2010 approved an increase of US$ 40,000 in the amount of the Global Program for the Issuance of Negotiable Obligations. Therefore, the maximum amount of the Program, which nowadays is of up to US$ 60,000 or its equivalent in any other currency, shall be of up to US$ 100,000 or its equivalent in any other currency.





NOTE 17:                      ADOPTION OF THE INTERNATIONAL FINANCIAL REPORTING STANDARDS  BY THE NATIONAL SECURITIES COMMISSION





The National Securities Commission (C.N.V.) has established the application of Technical Pronouncement No. 26 of the Argentine Federation of Professional Councils in Economic Sciences, which adopts the International Financial Reporting Standards issued by the IASB (International Accounting Standards Board) for certain entities included within the public offering system regulated by Law 17811, whether because of their capital or their negotiable obligations, or because they have requested to be included in such system. The application of such standards shall be compulsory for the Company as from the fiscal year commenced on January 1, 2012. The Board of Directors approved the specific implementation plan on April 28, 2010.





It is worth noting that Technical Pronouncement No. 26 waives the compulsory application of the International Financial Reporting Standards to companies regarding which, even if they have negotiable securities within the public offering system, whether because of their capital or else their negotiable obligations, the C.N.V. holds the position to accept accounting criteria set forth by other regulatory or control bodies, such as companies included in the Financial Institutions Law and insurance companies.





Additionally, Note 2.d. to the consolidated financial statements includes the steps taken by subsidiaries that were forced to adopt the abovementioned change in regulations.





NOTE 18:                      REPAYMENT OF FINANCIAL DEBTS DURING FISCAL YEAR 2009





On January 7, 2009, the loan for US$ 62,000, which matured on July 25, 2009, was repaid in advance through a sole and final payment of US$ 39,100, with own funds and funds from financing granted by local institutions.





Due to the aforementioned transaction, the Company has recorded non-recurring extraordinary income for $ 85,550, which arises from considering the original amount of the loan for US$ 62,000, plus interests that, as of January 6, 2009 amounted to US$ 1,883 and was waived, less the amount of US$ 39,100 for the repayment in full of the debt.





The financing granted by local institutions referred to in the first paragraph was repaid with funds obtained from the issuance of Negotiable Obligations. (See Note 16 to these financial statements.)





61
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))


NOTE 19:                      SUBSEQUENT EVENTS





Distribution of Retained Earnings:


The Shareholders’ Meeting held on April 14, 2010, resolved, pursuant to the rules and regulations in force, to distribute the Retained Earnings as of December 31, 2009, as follows:




- Legal Reserve:                                        $   11,464
 - Discretion ary Reserve:                         $ 217,811




Sale of real estate


On May 7, 2010, the Company entered into a purchase and sale agreement with Galicia Seguros S.A. to sell the property located in Maipú 241, Autonomous City of Buenos Aires, for US$ 2,131. Such sale is subject to the approval of the Argentine National Superintendence of Insurance (Superintendencia de Seguros de la Nación).





62
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Fixed assets and investments in assets of a similar nature
 For the three-month period ended March 31, 2010,
 presented in comparative format.
 (Figures stated in thousands of pesos)





Schedule A




Main account
At beginning of year
Increases
Balance at fiscal year end
Depreciations
Net book value
Net book value for previous fiscal yearAccumulated at beginning of year
Rate annual %
Amount for the period
Accumulated at the close of yearReal estate
3,446
-
3,446
506
2
16
522
2,924
2,940Furniture and facilities
220
-
220
214
20
1
215
5
6Machines and equipment
449
-
449
402
20
4
406
43
47Hardware
270
3
273
244
20
2
246
27
26Totals as of 03.31.10
4,385
3
4,388
1,366

23
1,389
2,999
-Totals as of 12.31.09
4,346
39
4,385
1,269

97
1,366
-
3,019





63
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Goodwill
 For the three-month period ended March 31, 2010,
 presented in comparative format.
 (Figures stated in thousands of pesos)




Schedule B




Main account
At beginning of year
Balance at fiscal year end
Depreciations
Net book value
Net book value for previous fiscal yearAccumulated at beginning of year
Rate annual %
Amount for the period
Accumulated at the close of yearGoodwill (Schedule C)
12,788
12,788
3,091
10
320
3,411
9,377
9,697Totals as of 03.31.10
12,788
12,788
3,091

320
3,411
9,377
-Totals as of 12.31.09
12,788
12,788
1,812

1,279
3,091
-
9,697





64
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Investments in shares and other negotiable securities
 Equity investments
 For the three-month period ended March 31, 2010,
 presented in comparative format.
 (Figures stated in thousands of pesos)


Schedule C




Issuance and characteristics of the securities
Class
Face value
Number
Market

cost
Market price
Equity method value
Recorded value as of

03.31.10
Recorded value as of 12.31.09Current investments (*) (Schedule G)E.T.Fs. from abroad



7,545
7,707
-
7,707
7,505Negotiable obligations



5,677
5,498
-
5,498
5,613Total



13,222
13,205
-
13,205
13,118Non-current investmentsCorporations. Section  33 of Law No.19550:Controlled Companies (Note 10 and Schedule G):Banco de Galicia y Buenos Aires S.A.
Class “A” ordinary
0.001
101
3,028,727
2,130,676
2,129,249
2,129,249
2,072,245Class “B” ordinary
0.001
532,668,858532,668,959Goodwill (Schedule B)


12,788
-
-
9,377
9,697Galicia Warrants S.A.
Ordinary
0.001
175,000
11,829
-
11,957
11,957
11,728Galval Agente de Valores S.A.
Ordinary
0.001
49,870,052
13,274
-
6,966
6,966
8,255Net Investment S.A.
Ordinary
0.001
10,500
22,341
-
50
50
42Sudamericana Holding S.A.
Ordinary
0.001
162,447
42,918
-
69,128
69,128
64,644GV Mandataria de Valores S.A.
Ordinary
0.001
10,800
11
-
244
244
143Total



3,131,888
2,130,676
2,217,594
2,226,971
2,166,754


(*) Include accrued interests, if applicable.





Issuance and characteristics of the securities
INFORMATION ON THE ISSUING COMPANIESLatest financial statements (Note 10)Principal line of business
Date
Capital Stock
Net income
Shareholders’ equity
Percentage of equity held in the capital stockNon-current investmentsCorporations. Section  33 of Law No.19550:Controlled Companies (Note 10):Banco de Galicia y Buenos Aires S.A.
Financial Activities
03.31.10
562,327

60,708
(1)
2,187,234
94.725896Galicia Warrants S.A.
Issuance of deposit certificates and warrants
03.31.10
200

261
(1)
13,653
87.500000Galval Agente de Valores S.A.
Custody of Securities
03.31.10
8,255
(2)
(1,288)
(1)
6,966
100.000000Net Investment S.A.
Information Technology
03.31.10
12

(48)
(1)
49
87.500000Sudamericana Holding S.A.
Financial and investment activities
12.31.09
186

12,021
(3)
78,925
87.500337GV Mandataria de Valores S.A.
Agent
03.31.10
12

111
(1)
270
90.000000


(1) For the three-month period ended 03.31.10.


(2) Equivalent to 49,870,052 thousand Uruguayan pesos.


(3) For the six-month period ended 12.31.09.





65
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Other Investments
 For the three-month period ended March 31, 2010,
 presented in comparative format.
 (Figures stated in thousands of pesos)


Schedule D




Main account and characteristics
Recorded value as of 03.31.10
Recorded value as of 12.31.09Current investments (*)Deposits in special current accounts (Note 11 and Schedule G)
4,639
3,234Mutual Funds (Schedule G)
419
1,786Time deposits (Note 11)
8,876
10,585Total
13,934
15,605


(*) Include accrued interests, if applicable.




66
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Foreign Currency Assets and Liabilities
 For the three-month period ended March 31, 2010,
 presented in comparative format.
 (Figures stated in thousands of pesos and thousands of U.S. dollars and/or Euros)


Schedule G




Captions
Amount and type of foreign currency
Exchange rate
Amount in Argentine currency as of 03.31.10
Amount and type of foreign currency
Amount in Argentine currency as of 12.31.09AssetsCurrent assetsCash and due from banks- Cash in custody in other banks
US$
1,032.64
3.8380
3,963
US$
995.48
3,743Investments- Deposits in special current accounts
US$
1,208.46
3.8380
4,638
US$
859.92
3,233- Mutual Funds
US$
1.69
3.8380
6
US$
1.69
6- E.T.Fs. from abroad
US$
2,008.13
3.8380
7,707
US$
1,996.03
7,505- Negotiable obligations
US$
1,432.50
3.8380
5,498
US$
1,492.90
5,613Other receivables- Promissory notes receivable
US$
286.28
3.8380
1,099
US$
557.56
2,096Total Current Assets



22,911


22,196Non-current assetsOther receivables- Promissory notes receivable
US$
13,823.56
3.8380
53,054
US$
13,473.62
50,661Investments- Equity investments
US$
1,815.07
3.8380
6,966
US$
2,195.41
8,255Total Non-Current Assets



60,020


58,916Total Assets



82,931


81,112LiabilitiesCurrent liabilitiesFinancial debt- Negotiable obligations
US$
33,877.95
3.8780
131,378
US$
33,103.34
125,793Other liabilities- Provision for expenses
US$
377.88
3.8780
1,465
US$
303.51
1,153- Provision for expenses
€
2.55
5.2477
14
€
2.55
14Total Current Liabilities



132,857


126,960Non-current liabilitiesFinancial debt- Negotiable obligations
US$
11,142.53
3.8780
43,211
US$
10,840.36
41,193Total Non-Current Liabilities



43,211


41,193Total Liabilities



176,068


168,153Memorandum Accounts- Forward purchase of foreign currency
US$
31,000.00
3.8780
120,218
US$
31,000.00
117,800





67
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Information required by Section 64, subsection b) of Law No. 19550
 For the three-month period ended March 31, 2010,
 presented in comparative format.
 (Figures stated in thousands of pesos)


Schedule H




Captions
Total as of

03.31.10
Administrative Expenses
Total as of

03.31.09Salaries and social security contributions
1,015
1,015
669Bonuses
89
89
63Entertainment, travel, and per diem
-
-
6Services to the staff
-
-
4Training expenses
14
14
-Retirement insurance
120
120
145Directors’ and syndics' fees
472
472
348Fees for services
685
685
2,075Taxes
1,318
1,318
2,518Security services
1
1
1Insurance
94
94
82Leases
1
1
-Stationery and office supplies
13
13
11Electricity and communications
23
23
23Maintenance expenses
31
31
4Depreciation of fixed assets
23
23
24Bank charges (*)
3
3
79Condominium Expenses
36
36
23General expenses (*)
241
241
532Vehicle expenses
25
25
27Leasing of brand (*)
16
16
15Expenses corresponding to the “Global Program for the Issuance of Negotiable Obligations”
9
9
-Totals
4,229
4,229
6,649


(*) Balances net of eliminations corresponding to transactions conducted with companies included in section 33 of Law No. 19550. See Note 11 to the financial statements.


68
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Additional Information to the Notes to the Financial Statements
 For the three-month period commenced January 1, 2010 and ended
 March 31, 2010, presented in comparative format.
 (Figures stated in thousands of pesos)




NOTE 1:
SIGNIFICANT SPECIFIC LEGAL SYSTEMS ENTAILING CONTINGENT EXPIRATION OR RESURGENCE OF BENEFITS ENVISAGED BY THOSE REGULATIONS


None.





NOTE 2:
SIGNIFICANT CHANGES IN THE COMPANY ACTIVITIES OR OTHER SIMILAR CIRCUMSTANCES THAT OCCURRED DURING THE PERIODS COVERED BY THE FINANCIAL STATEMENTS WHICH MAY HAVE AN EFFECT ON THEIR COMPARISON WITH THOSE PRESENTED IN PREVIOUS PERIODS, OR THOSE THAT SHALL BE PRESENTED IN FUTURE PERIODS.


None.





NOTE 3:                CLASSIFICATION OF RECEIVABLES AND DEBT BALANCES


a)      Receivables: See Note 9 to the financial statements.


b)      Debts: See Note 9 to the financial statements.





NOTE 4:                CLASSIFICATION OF RECEIVABLES AND DEBTS ACCORDING TO THEIR FINANCIAL EFFECTS


a)      Receivables: See Notes 1.a., 1.b. and 9 and Schedule G to the financial statements.


b)      Debts: See Notes 1.a., 1.b. and 9 and Schedule G to the financial statements.





NOTE 5:                BREAKDOWN OF PERCENTAGE OF EQUITY INVESTMENTS – SECTION 33 OF LAW 19550


See Note 10 and Schedule C to the financial statements.





NOTE 6:
RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS OR SYNDICS OR THEIR RELATIVES UP TO THE SECOND DEGREE INCLUSIVE


As of March 31, 2010 and December 31, 2009, there were no receivables from or loans granted to directors or syndics or their relatives up to the second degree inclusive.





NOTE 7:                PHYSICAL INVENTORY OF INVENTORIES


As of March 31, 2010 and December 31, 2009, the Company did not have any inventories.





NOTE 8:                CURRENT VALUES


See Notes 1.c. and 1.d. to the financial statements.





NOTE 9:                FIXED ASSETS


See Schedule A to the financial statements.


a)      Fixed assets that have been technically appraised:


As of March 31, 2010 and December 31, 2009, the Company did not have any fixed assets that have been technically appraised.


b)      Fixed assets not used because they are obsolete:


As of March 31, 2010 and December 31, 2009, the Company did not have any obsolete fixed assets which have a book value.





NOTE 10:              EQUITY INVESTMENTS


The Company is engaged in financial and investment activities, so the restrictions of Section 31 of Law No. 19550 do not apply to its equity investments in other companies.


69
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Additional Information to the Notes to the Financial Statements(Continued)
 (Figures stated in thousands of pesos)





NOTE 11:              RECOVERABLE VALUES


As of March 31, 2010 and December 31, 2009, the criterion followed by the Company for determining the recoverable value of its fixed assets consisted in using their economic utilization value, based on the possibility of absorbing future depreciation charges with the profits reported by it.





NOTE 12:              INSURANCE


As of March 31, 2010 and December 31, 2009, the breakdown of insurance policies taken out by the Company for its fixed assets was as follows:





Insured assets
Risks covered
Insured amount
Book Value as of 03.31.10
Book Value as of 12.31.09Building, electronic equipment and/or office assets.
Fire, thunderbolt, explosion and/or theft.
1,040
860
750





NOTE 13:             POSITIVE AND NEGATIVE CONTINGENCIES


a)
Elements used for the calculation of provisions, the total or partial balances of which exceed two percent of Shareholders’ Equity:  None.


b)
Contingencies which, at the date of the financial statements, are not of remote occurrence, the effects of which have not been given accounting recognition:

As of March 31, 2010 and December 31, 2009, there were no contingencies which are not of remote occurrence and the effects of which have not been given accounting recognition.


NOTE 14:              IRREVOCABLE ADVANCES TOWARDS FUTURE SHARE SUBSCRIPTIONS


a)
Status of capitalization arrangements:  As of March 31, 2010 and December 31, 2009, there were no irrevocable contributions towards future share subscriptions.b)
Cumulative unpaid dividends on preferred shares:  As of March 31, 2010 and December 31, 2009, there were no cumulative unpaid dividends on preferred shares.


NOTE 15:              RESTRICTIONS ON THE DISTRIBUTION OF RETAINED EARNINGS


See Note 12 to the financial statements.


70
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary and Explanatory Statement by the Board of Directors
 For the three-month period commenced January 1, 2010 and ended
 March 31, 2010, presented in comparative format.
 (Figures stated in thousands of pesos)




Pursuant to the provisions of the standards regarding accounting documentation of the Córdoba Stock Exchange Regulations, the Board of Directors hereby submits the following supplementary and explanatory information.





A. Current Assets:


a) Receivables:


1) See Note 9 to the financial statements.


2) See Notes 3 and 9 to the financial statements.


3) As of March 31, 2010 and December 31, 2009, the Company had not set up any allowances or provisions.





b) Inventories:


As of March 31, 2010 and December 31, 2009, the Company did not have any inventories.





B. Non-Current Assets:


a) Receivables:


As of March 31, 2010 and December 31, 2009, the Company had not set up any allowances or provisions.





b) Inventories:


As of March 31, 2010 and December 31, 2009, the Company did not have any inventories.





c) Investments:


See Note 10 and Schedule C to the financial statements.





d) Fixed assets:


1) As of March 31, 2010 and December 31, 2009, the Company did not have any fixed assets that have been technically appraised.


2) As of March 31, 2010 and December 31, 2009, the Company did not have any obsolete fixed assets which have a book value.





e) Intangible assets:


1) See Note 1.d and Schedules B and C to the financial statements.


2) As of March 31, 2010 and December 31, 2009, there were no deferred charges.





C. Current Liabilities:


1) See Note 9 to the financial statements.


2) See Notes 4, 5, 6, 7 and 9 to the financial statements.





D. Allowances and provisions:


As of March 31, 2010 and December 31, 2009, the Company had not recorded any allowances or provisions.





E. Foreign Currency Assets and Liabilities:


See Note 1.b. and Schedule G to the financial statements.





F. Shareholders’ Equity:


1) As of March 31, 2010 and December 31, 2009, the Shareholders’ Equity did not include the "Irrevocable Advances towards future share issues" account.


2) As of March 31, 2010 and December 31, 2009, the Company had not set up any technical appraisal reserve; nor has it reversed any reserve of that kind.


71
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Supplementary and Explanatory Statement by the Board of Directors(Continued)
 (Figures stated in thousands of pesos)





G. Miscellaneous:


1) The Company is engaged in financial and investment activities, so the restrictions of Section 31 of Law No. 19550 do not apply to its equity investments in other companies.


2) See Notes 9 and 11 to the financial statements.


3) As of March 31, 2010 and December 31, 2009, there were no receivables from or loans granted to directors or syndics or their relatives up to the second degree inclusive.


4) See Notes 9 and 11 to the financial statements.


5) As of March 31, 2010 and December 31, 2009, the breakdown of insurance policies taken out by the Company for its fixed assets was as follows:





Insured assets
Risks covered
Insured amount
Book Value as of 03.31.10
Book Value as of 12.31.09Building, electronic equipment and/or office assets.
Fire, thunderbolt, explosion and/or theft.
1,040
860
750





6) As of March 31, 2010 and December 31, 2009, there were no contingencies highly likely to occur which have not been given accounting recognition.


7) As of March 31, 2010 and December 31, 2009, the Company did not have any receivables including implicit interests or index adjustments.





As of March 31, 2010 and December 31, 2009, the Company had negotiable obligations issued at a discounted rate. See Note 16 to the financial statements.





The Company has complied with the requirements of Section 65 of Law No. 19550 in these financial statements.








Autonomous City of Buenos Aires, May 11, 2010





72
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Informative Review as of March 31, 2010 and 2009
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))





Grupo Financiero Galicia S.A.’s purpose is to strengthen its position as a leading company devoted to providing comprehensive financial services and, at the same time, to continue to strengthen Banco de Galicia y Buenos Aires S.A.’s position as one of the leading companies in Argentina. This strategy shall be carried out by supplementing the operations and business conducted by Banco de Galicia y Buenos Aires S.A. through equity investments in companies and undertakings, either existing or to be created, engaged in financial activities as they are understood in the modern economy.





The income for the three-month period ended March 31, 2010 amounted to $51,698. This profit has been mainly generated as a consequence of the valuation of equity investments in our subsidiaries.





On March 9, 2009 the General Ordinary Shareholders’ Meeting approved the creation of a Global Program for the Issuance of Simple Negotiable Obligations, not convertible into shares, for a maximum outstanding face value that shall not exceed US$ 60,000 (sixty million U.S. dollars) or the equivalent thereof in another currency.





On April 28, 2009, the Ordinary Shareholders' Meeting of Grupo Financiero Galicia S.A. resolved to distribute the Retained Earnings as of December 31, 2008, through the allocation of $ 8,841 to Legal Reserve and $ 167,978 to Discretionary Reserve.





By means of Resolution No. 16113 dated April 29, 2009, the National Securities Commission decided to authorize, with certain conditions, the creation of a Global Program for the Issuance of simple Negotiable Obligations, non-convertible into shares, for a maximum face amount outstanding at any time during the life of the Program that cannot exceed US$ 60,000 or its equivalent in any other currency. On May 8, 2009, together with the release of such conditions, the National Securities Commission approved the Price Supplement of the Negotiable Obligations Class I, Series I and II, for a F.V. of US$ 45,000. On June 4, 2009, the above-mentioned Series were issued. (See Note 16 to the financial statements.)





On April 14, 2010, the Ordinary Shareholders' Meeting of Grupo Financiero Galicia S.A. resolved to distribute the Retained Earnings as of December 31, 2009, through the allocation of $ 11,464 to Legal Reserve and $ 217,811 to Discretionary Reserve.





Furthermore, the above-mentioned Shareholders’ Meeting approved an increase of US$ 40,000 in the amount of the Global Program for the Issuance of Negotiable Obligations. Therefore, the maximum amount of the Program, which nowadays is of up to US$ 60,000 or its equivalent in any other currency, shall be of up to US$ 100,000 or its equivalent in any other currency. (See Note 16 to the financial statements.)





On May 7, 2010, the C.N.V. authorized, within the Global Program outstanding, the issuance of Negotiable Obligations Class II, Series I, II and III, for US$ 45,000.





BALANCE SHEET FIGURES





03.31.10
03.31.09
03.31.08
03.31.07
03.31.06AssetsCurrent assets
33,355
6,758
107,254
317,400
32,378Non-current assets
2,284,348
2,063,146
1,858,434
1,284,993
1,599,739Total Assets
2,317,703
2,069,904
1,965,688
1,602,393
1,632,117LiabilitiesCurrent liabilities
172,122
117,891
76,878
6,289
6,992Non-current liabilities
44,630
28,790
198,149
5,772
12,640Total Liabilities
216,752
146,681
275,027
12,061
19,632Shareholders’ equity
2,100,951
1,923,223
1,690,661
1,590,332
1,612,485Total
2,317,703
2,069,904
1,965,688
1,602,393
1,632,117


73
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Informative Review as of March 31, 2010 and 2009
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))




INCOME STATEMENT





03.31.10
03.31.09
03.31.08
03.31.07
03.31.06Ordinary operating result
56,208
20,389
41,035
(27,163)
(20,876)Financial results
(6,033)
101,819
(5,486)
13,223
11,589Other income and expenses
1,268
44
607
734
1,222Net Operating Income
51,443
122,252
36,156
(13,206)
(8,065)Income Tax
255
(30,353)
-
(4,930)
(6,226)Net income
51,698
91,899
36,156
(18,136)
(14,291)





RATIOS





03.31.10
03.31.09
03.31.08
03.31.07
03.31.06Liquidity
0.19379
0.05732
1.39512
50.46907
4.63072Credit standing
9.69288
13.11160
6.14725
131.85739
82.13554Capital assets
0.98561
0.99674
0.94544
0.80192
0.98016





The individual financial statements have been considered in order to disclose the Balance Sheet figures and net Income statement figures, as the consolidated financial statements are presented in line with the provisions of Communiqué “A” 3147 from the Argentine Central Bank and supplementary regulations regarding financial reporting requirements for the publication of annual financial statements, and observing the guidelines of Technical Pronouncement No. 8 of the Argentine Federation of Professional Councils in Economic Sciences.





Progress made regarding compliance with the Plan for the Implementation of the International Financial Reporting Standards (IFRS)





Pursuant to what was determined by the C.N.V. through General Resolution No. 562/09, the Company developed a Plan for the Implementation of the IFRS, which was approved by the Board of Directors at the meeting held on April 28, 2010.





After having monitored the specific plan for the implementation of the IFRS, the Board of Directors is not aware of any circumstances that may require modifications to the above-referred plan or that may indicate a possible departure from the goals and dates set.





Equity investments in other companies


·
Banco de Galicia y Buenos Aires S.A.


See the Notes to the consolidated financial statements that correspond to Banco de Galicia y Buenos Aires S.A.





·
Net Investment S.A.


The business volume reached during fiscal year 2008 was not enough to cover the company’s operating expenses. Taking into consideration the economic estimates for fiscal year 2009, Net Investment S.A.’s Board of Directors decided to refocus its operations and rightsize its structure, pursuant to the new order of activities to be carried out.





Due to the circumstances mentioned in the previous paragraph, the company entered into agreements for the payment of irrevocable contributions with its shareholders. Such agreements provide for the allocation of irrevocable contributions to cover the losses.





The Ordinary Shareholders’ Meeting held on April 12, 2010 decided to use the irrevocable contributions received as of December 31, 2009, for the absorption of the losses for $ 768 recorded in the balance sheet for the period ended on such date and record the remaining balance of $ 3 under the “Other Reserves” account.


74
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Informative Review as of March 31, 2010 and 2009
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))





The Board of Directors is working on finding new business alternatives.





·
Sudamericana Holding S.A.


Sudamericana Holding S.A. is a holding company providing life, retirement, property, and casualty insurance and insurance brokerage services. The equity investment held by Grupo Financiero Galicia S.A. in this company is 87.50%. Banco de Galicia y Buenos Aires S.A. has the remaining 12.50%.





The insurance business undertaken by the Company is one of the most important aspects of Grupo Financiero Galicia S.A.’s strategy to strengthen its position as a leading financial services provider.





Joint production of the insurance companies controlled by Sudamericana Holding S.A. in the life, retirement and property insurance business, during the fiscal period commenced on January 1, 2010 and ended on March 31, 2010, amounted to $ 86,925.





As of March 31, 2010, these companies had approximately 4.2 million insured in all their lines of business.





From a commercial standpoint, within a more favorable context, the company maintains its purpose of taking advantage of the greater demand for insurance coverage to significantly increase the companies’ sales.





As a result of this effort, the premium volume for the first quarter of 2010 exceeded that for the same period of the previous year by 10.4%.




·
Galicia Warrants S.A.


Galicia Warrants S.A. was established in 1993 and, since then, has become a leading company. It renders services to the financial sector as an additional credit instrument. It also renders a full spectrum of services related to inventory management to the productive sector.





The equity investment held by Grupo Financiero Galicia S.A. in this company is 87.50%, while the remaining 12.50% interest is held by Banco de Galicia y Buenos Aires S.A.





The company has its corporate headquarters in Buenos Aires and an office in the city of Tucumán, through which it has developed the warrants issuance market and has incorporated the storage service in different regional economies and geographic areas of the country.





For the fiscal year ended December 31, 2009, Galicia Warrants S.A. has recorded income from services for $ 10,854 and income from the sale of the grain storage plant in San Salvador, province of Entre Ríos, for $ 10,629. Net income for the fiscal year was $ 7,725.





During the first quarter of 2010, deposit certificates and warrants were issued for $ 110,727, regarding merchandise under custody located throughout the country.





During the first quarter, the higher credit offer and the better performance of productive markets allowed the company to recover the business volumes which had been hit by the crisis that took place at the beginning of 2009, and generated a more optimistic outlook for the rest of this fiscal year.




·
Galval Agente de Valores S.A.


Galval Agente de Valores S.A. is a direct user of the Free-trade Zone of Montevideo and provides services as a securities agent in Uruguay. Grupo Financiero Galicia S.A. has a 100% interest in this company.





On February 4, 2005, the Uruguayan Central Bank decided to conclusively confirm the registration of the Company with the Registry of the Stock Exchange.





75
 Grupo Financiero Galicia S.A.
 “Corporation which has not adhered to the optional system
 for the mandatory acquisition of shares in a public offering"
 Informative Review as of March 31, 2010 and 2009
 (Figures stated in thousands of pesos ($) and U.S. dollars (US$))





As from September, 2005, Galval Agente de Valores S.A. started to operate in a gradual manner and, as of March 31, 2010 it holds customers’ securities in custody for US$ 120,455, of which US$ 18,306 correspond to the holding of securities belonging to Grupo Financiero Galicia S.A.





As of March 31, 2010, Galval Agente de Valores S.A. had recorded income for US$ 162,451, with a recorded net loss of US$ 380.





Results for fiscal year 2010 shall be subject to the level of recovery the global economy may experience, and to the impact such recovery may have on the region.





The outlook for this fiscal year is mainly related to the possible consolidation of stability and recovery that capital markets have shown during the last months.





Results shall be mainly subject to those variables which, in case they are achieved, could lead to an increase in the purchase and sale of securities, what would directly have an influence on the increase in income for the company.





·
GV Mandataria de Valores S.A.


On July 16, 2008, GV Mandataria de Valores S.A. was registered with the Corporation Control Authority (I.G.J.). The equity investment held by Grupo Financiero Galicia S.A. in this company is 90%, while the remaining 10% interest is held by Galval Agente de Valores S.A.





The Company's main purpose is to represent, act as agent and carry out other brokerage activities of any sort, both for domestic and foreign companies.





In December 2008, the company entered into an agreement to act as agent of Galval Agente de Valores S.A., being nowadays the only activity it carries out.





Income from services amounted to $ 1,050 for the fiscal period commenced January 1, 2010 and ended March 31, 2010, with a pretax net income of $ 181.








Grupo Financiero Galicia S.A.’s outlook for fiscal year 2010 is basically linked to the development of the Argentine economy, and particularly the evolution of the financial system.








Autonomous City of Buenos Aires, May 11, 2010





76


REPORT OF THE SUPERVISORY SYNDICS’ COMMITTEE











To the Directors of


Grupo Financiero Galicia S.A.


Tte. Gral. Juan D. Perón 456 – 2nd floor


Autonomous City of Buenos Aires






1.
In our capacity as Syndics of Grupo Financiero Galicia S.A., we have performed a limited review of the Balance Sheet of Grupo Financiero Galicia S.A. (the "Company") as of  March 31, 2010, and the related Income Statement, Statement of Changes in Shareholders' Equity and Statement of Cash Flows for the three-month period then ended, as well as supplementary Notes 1 to 19, Schedules A, B, C, D, G and H, the Additional Information to the Notes to the Financial Statements required by Section 68 of the Buenos Aires Stock Exchange regulations and the Supplementary and Explanatory Statement by the Board of Directors, required by the regulations concerning Accounting Documentation of the Córdoba Stock Exchange, and the Informative Review to that date, which have been submitted by the Company to our consideration. Furthermore, we have performed a limited review of the consolidated financial statements of Grupo Financiero Galicia S.A. and its subsidiaries for the three-month period ended March 31, 2010, with Notes 1 to 25, which are presented as supplementary information. The preparation and issuance of those financial statements are the responsibility of the Company.





2.
Our work was conducted in accordance with standards applicable to syndics in Argentina. These standards require the application of the procedures established by Technical Pronouncement No. 7 of the Argentine Federation of Professional Councils in Economic Sciences for limited reviews of financial statements for interim periods, and include verifying the consistency of the documents reviewed with the information concerning corporate decisions, as disclosed in minutes, and the conformity of those decisions with the law and the bylaws insofar as concerns formal and documental aspects. For purposes of our professional work, we have reviewed the work performed by the external auditors of the Company, Price Waterhouse & Co. S.R.L., who issued their limited review report on May 11, 2010, in accordance with auditing standards applicable in Argentina for limited reviews of financial statements for interim periods. A limited review mainly involves applying analytical procedures to the accounting information and making inquiries to the staff responsible for accounting and financial issues. The scope of such review is substantially more limited than that of an audit of the financial statements, the objective of which is to issue an opinion on the financial statements as a whole. Therefore, we do not express such an opinion. We have not evaluated the business criteria regarding the different areas of the Company, as these matters are its exclusive responsibility.





In addition, we have verified that the Additional Information to the Notes to the Financial Statements, the Supplementary and Explanatory Statement by the Board of Directors, and the Informative Review, for the three-month period ended March 31, 2010 contain the information required by Section 68 of the Rules and Regulations of the Bolsa de Comercio de Buenos Aires (Buenos Aires Stock Exchange), Section 2 of the Rules concerning Accounting Documentation of the Córdoba Stock Exchange Regulations and Regulations of the National Securities Commission, respectively, and insofar as concerns our field of competence, that the numerical data contained therein are in agreement with the Company’s accounting records and other relevant documentation. Assumptions and projections on future events contained in that documentation are the exclusive responsibility of the Board of Directors.





We also report that, in compliance with the legality control that is part of our field of competence, during this period we have applied the procedures described in Section 294 of Law No. 19550, which we deemed necessary according to the circumstances.





3.
The subsidiary Banco de Galicia y Buenos Aires S.A. has prepared its financial statements following the valuation and disclosure criteria established by Argentine Central Bank regulations, which have been taken as the basis for calculating the equity method value and preparing the consolidated financial statements of the Company. As mentioned in Note 2.c to the consolidated financial statements, those criteria for valuing certain assets and liabilities and the regulations on financial reporting issued by the control body differ from the professional accounting standards applicable in the Autonomous City of Buenos Aires.


77


4.
Based on our review, with the scope mentioned in paragraph 2 above, we report that the financial statements of Grupo Financiero Galicia S.A. as of March 31, 2010 and its consolidated financial statements at that date, detailed in item 1 above, prepared in accordance with Argentine Central Bank regulations and, except as mentioned in paragraph 3 above, with accounting standards applicable in the Autonomous City of Buenos Aires, give consideration to all significant facts and circumstances which are known to us and, in relation to said financial statements, we have no observations to make. In compliance with the legality control that is part of our field of competence, we have no observations to make.




As regards the Additional Information to the Notes to the Financial Statements, the Supplementary and Explanatory Statement by the Board of Directors, and the Informative Review, for the three-month period ended March 31, 2010, we have no observations to make insofar as concerns our field of competence, and the assertions on future events are the exclusive responsibility of the Company’s Board of Directors.





Furthermore, we report that the accompanying financial statements stem from accounting records kept, in all formal aspects, in compliance with legal regulations prevailing in Argentina.











Autonomous City of Buenos Aires, May 11, 2010











Supervisory Syndics’ Committee





78










Limited Review Report











To the Chairman and Directors of


Grupo Financiero Galicia S.A.


Legal address: Tte. Gral. Juan D. Perón 456 – 2nd floor


Autonomous City of Buenos Aires





C.U.I.T. 30-70496280-7





1.
We have performed a limited review of the Balance Sheet of Grupo Financiero Galicia S.A. as of March 31, 2010, and the related income statements, statements of changes in shareholders' equity and statements of cash flows for the three-month periods ended March 31, 2010 and 2009, as well as supplementary Notes 1 to 19 and Schedules A, B, C, D, G and H, the Additional Information to the Notes to the Financial Statements required by Section 68 of the Buenos Aires Stock Exchange regulations, and the Supplementary and Explanatory Statement by the Board of Directors, as required by the rules concerning Accounting Documentation Regulations of the Córdoba Stock Exchange Regulations and the Informative Review to those dates, which supplement them. Furthermore, we have performed a limited review of the consolidated Balance Sheet of Grupo Financiero Galicia S.A. as of March 31, 2010, and the consolidated income statements and consolidated statements of cash flows and cash equivalents for the three-month periods ended March 31, 2010 and 2009, together with Notes 1 to 25, which are presented as supplementary information. The preparation and issuance of those financial statements are the responsibility of the Company.





2.
Our review was limited to the application of the procedures set forth by Technical Pronouncement No. 7 of the Argentine Federation of Professional Councils in Economic Sciences for limited reviews of financial statements for interim periods, which mainly involve applying analytical procedures to the financial statement figures and making inquiries to the Company staff responsible for preparing the information included in the financial statements and its subsequent analysis. The scope of these reviews is substantially more limited than that of an audit examination, the purpose of which is to express an opinion on the financial statements under examination. Accordingly, we do not express an opinion on the Company’s financial condition, the results of its operations, changes in its shareholders’ equity and cash flows, or on its consolidated financial condition, the consolidated results of its operations and consolidated cash flows.





3.
The subsidiary Banco de Galicia y Buenos Aires S.A. has prepared their financial statements following the valuation and disclosure criteria established by Argentine Central Bank regulations, which have been taken as the basis for calculating the equity method value and preparing the consolidated financial statements of the Company. As mentioned in Note 2c. to the consolidated financial statements, the abovementioned valuation criteria regarding certain assets and liabilities, and the regulations on the financial reporting issued by the control body, differ from the Argentine professional accounting standards in force in the Autonomous City of Buenos Aires.





4.
On February 15, 2010 we issued our audit report on the Company's financial statements and consolidated financial statements for the fiscal years ended December 31, 2009 and 2008 with an unqualified opinion, without qualifications regarding the Argentine Central Bank's regulations and departures from professional accounting standards similar to those indicated in item 3 above.





5.
Based on the work done and on our examination of the financial statements of Grupo Financiero Galicia S.A. and its consolidated financial statements for the fiscal years ended December 31, 2009 and 2008 mentioned in item 4, we express the following:





a)
the financial statements of Grupo Financiero Galicia S.A. as of March 31, 2010 and 2009 and its consolidated financial statements at those dates, detailed in item 1 above, prepared in accordance with Argentine Central Bank regulations and, except as mentioned in item 3 above, with professional accounting standards applicable in the Autonomous City of Buenos Aires, give consideration to all significant facts and circumstances which are known to us and, in relation to said financial statements, we have no observations to make.





b)
the comparative information included in the parent-only and consolidated balance sheet and in supplementary Notes and Schedules to the attached financial statements stems from financial statements of Grupo Financiero Galicia S.A. as of December 31, 2009.











6.
As called for by the regulations in force, we report that:





a)
The financial statements of Grupo Financiero Galicia S.A. and its consolidated financial statements have been transcribed to the “Inventory and Balance Sheet” book and, insofar as concerns our field of competence, are in compliance with the provisions of the Corporations Law, and pertinent resolutions of the National Securities Commission.





b)
The financial statements of Grupo Financiero Galicia S.A. stem from accounting records kept, in all formal aspects, in compliance with legal regulations.





c)
We have read the Additional Information to the Notes to the Financial Statements required by Section 68 of the Buenos Aires Stock Exchange regulations, the Supplementary and Explanatory Statement by the Board of Directors, required by the regulations concerning Accounting Documentation of the Córdoba Stock Exchange and the Informative Review as of  March 31, 2010 and 2009, about which, insofar as concerns our field of competence, we have no significant observations to make other than the one mentioned in item 3 above. Projections about future events contained in that information are the exclusive responsibility of the Company’s Board of Directors.





d)
As of March 31, 2010, Grupo Financiero Galicia S.A.'s accrued debt with the Argentine Integrated Social Security System, which stems from the accounting records and settlements carried out by the Company, amounted to $ 58,211.72, which was not yet due at that date.








Autonomous City of Buenos Aires, May 11, 2010








PRICE WATERHOUSE & CO. S.R.L.