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 nine-month period ended September 30, 2011,

presented in comparative format.











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° 13For the nine-month period beginning on January 1, 2011 and ending on

September 30, 2011, presented in comparative format.Date of Registration with the Public Registry of Commerce ofBylaws of Grupo Financiero Galicia S.A.:
September 30, 1999Date of Latest Amendment to Grupo Financiero Galicia S.A.’s Bylaws:
July 16, 2010Registration Number with the Corporation Control Authority (I.G.J.):
12,749Sequential Number – Corporation Control Authority:
1,671,058Date of Expiration of Grupo Financiero Galicia S.A.’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 of Grupo Financiero Galicia S.A. as of  9/30/11:
22.65%Percentage of Votes of Grupo Financiero Galicia S.A. to which the Controlling Company is Entitled as of 9/30/11:
59.42%




Capital status as of 9/30/11 (Note 8 to the Financial Statements)

(Figures Stated in Thousands of Pesos for “Subscribed” and “Paid-in” Shares)SharesNumber
Type
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 September 30, 2011 and December 31, 2010.
 (Figures Stated in Thousands of Pesos)




9/30/11
12/31/10ASSETSCASH AND DUE FROM BANKS
6,902,248
5,645,571-Cash
2,261,686
1,489,374-Financial Institutions and Correspondents
4,640,562
4,156,197-B.C.R.A.
4,401,148
3,932,281-Other Local Financial Institutions
22,599
14,607-Foreign
216,815
209,309GOVERNMENT AND PRIVATE SECURITIES
3,764,984
2,278,012-Holdings Recorded at Fair Market Value
75,079
68,231-Holdings Recorded at their Acquisition Cost plus the I.R.R.
156,190
133,756-Securities Issued by the B.C.R.A.
3,532,603
2,065,723-Investments in Listed Private Securities
1,112
10,302LOANS
28,311,137
21,353,781-To the Non-financial Public Sector
24,156
24,565-To the Financial Sector
236,412
80,633-Interbank Loans (Call Money Loans Granted)
129,000
32,500-Other Loans to Local Financial Institutions
102,567
47,968-Accrued interest, Adjustments and Quotation Differences Receivable
4,845
165-To the Non-financial Private Sector and Residents Abroad
29,290,949
22,287,056-Advances
2,227,998
977,890-Promissory Notes
5,693,546
4,534,326-Mortgage Loans
942,663
950,237-Pledge Loans
187,315
119,175-Personal Loans
5,520,436
4,093,559-Credit Card Loans
11,464,858
9,120,092-Others
3,027,169
2,297,507-Accrued interest, Adjustments and Quotation Differences Receivable
342,979
277,070-Documented Interests
(115,931)
(81,804)-Unallocated Collections
(84)
(996)-Allowances
(1,240,380)
(1,038,473)OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE
3,638,796
3,325,990-B.C.R.A.
579,923
402,386-Amounts Receivable for Spot and Forward Sales to be Settled
311,533
237,333-Securities Receivable under Spot and Forward Purchases to be Settled
760,272
914,124-Premiums from Bought Options
497
--Others Not Included in the Debtor Classification Regulations
1,442,098
1,286,039-Unlisted Negotiable Obligations
165,823
99,237-Balances from Forward Transactions without Delivery of Underlying Asset to be Settled
6,542
5,403-Others Included in the Debtor Classification Regulations
422,274
511,594-Accrued interest Receivable Included in the Debtor Classification Regulations
1,849
1,680-Allowances
(52,015)
(131,806)




The accompanying Notes 1 to 24 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 September 30, 2011 and December 31, 2010.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
12/31/10RECEIVABLES FROM FINANCIAL LEASES
559,227
428,080-Receivables from Financial Leases
555,915
426,626-Accrued interest and Adjustments Receivable
9,721
6,923-Allowances
(6,409)
(5,469)EQUITY INVESTMENTS
55,720
52,848-In Financial Institutions
2,084
1,971-Others
75,621
64,140-Allowances
(21,985)
(13,263)MISCELLANEOU.S. RECEIVABLES
1,193,813
1,082,561-Receivables for Assets Sold
33,891
35,403-Minimum Presumed Income Tax
428,125
395,738-Others
771,920
677,151-Accrued Interest on Receivables for Assets Sold
295
135-Other Accrued interest and Adjustments Receivable
2,326
159-Allowances
(42,744)
(26,025)BANK PREMISES AND EQUIPMENT
991,897
948,067MISCELLANEOU.S. ASSETS
151,986
81,403INTANGIBLE ASSETS
600,086
454,115-Goodwill
11,889
23,467-Organization and Development Expenses
588,197
430,648UNALLOCATED ITEMS
2,558
4,844OTHER ASSETS
83,525
52,791TOTAL ASSETS
46,255,977
35,708,063
 
 The accompanying Notes 1 to 24 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 September 30, 2011 and December 31, 2010.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
12/31/10LIABILITIESDEPOSITS
28,531,542
22,222,764-Non-financial Public Sector
1,956,660
874,201-Financial Sector
15,347
9,934-Non-financial Private Sector and Residents Abroad
26,559,535
21,338,629-Current Accounts
6,642,572
5,466,532-Savings Accounts
8,419,768
6,356,877-Time Deposits
10,871,285
8,975,889-Investment Accounts
163,647
156,935-Others
353,940
306,139-Accrued interest and Quotation Differences Payable
108,323
76,257OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE
11,058,707
7,608,071-B.C.R.A.
2,778
2,105-Others
2,778
2,105-Banks and International Entities
918,081
646,745-Unsubordinated Negotiable Obligations
2,850,721
775,863-Amounts Payable for Spot and Forward Purchases to be Settled
741,491
950,453-Securities to be Delivered under Spot and Forward Sales to be Settled
317,225
229,684-Premiums from written options
308
--Loans from Local Financial Institutions
776,922
613,197-Other Loans from Local Financial Institutions
771,899
610,022-Accrued Interest payable
5,023
3,175-Balances from Forward Transactions without Delivery of Underlying Asset to be Settled
5,797
11,085-Others
5,354,822
4,358,049-Accrued interest and Quotation Differences Payable
90,562
20,890MISCELLANEOU.S. LIABILITIES
1,243,073
909,632-Dividends Payable
767
20,000-Directors' and Syndics' Fees
9,149
9,672-Others
1,233,157
879,957-Adjustments and Accrued Interest payable
-
3PROVISIONS
617,143
698,244SUBORDINATED NEGOTIABLE OBLIGATIONS
958,052
1,253,027UNALLOCATED ITEMS
7,411
24,456OTHER LIABILITIES
163,488
140,158MINORITY INTEREST IN CONSOLIDATED ENTITIES OR COMPANIES
480,120
382,211TOTAL LIABILITIES
43,059,536
33,238,563SHAREHOLDERS' EQUITY
3,196,441
2,469,500TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
46,255,977
35,708,063
 
 The accompanying Notes 1 to 24 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 Balance Sheet
 As of September 30, 2011 and December 31, 2010.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
12/31/10DEBIT
48,831,866
36,743,223CONTINGENT
11,574,616
9,244,609-Loans Obtained (Unused Balances)
365,121
350,858-Guarantees Received
7,441,830
5,974,377-Others not Included in the Debtor Classification Regulations
17,972
20,191-Contingencies re. Contra Items
3,749,693
2,899,183CONTROL
24,764,075
16,802,332-Uncollectible Loans
1,654,235
1,500,275-Others
22,202,708
14,772,617-Control re. Contra Items
907,132
529,440DERIVATIVES
9,113,196
8,193,303-"Notional" Value of Call Options Bought
8,821
--"Notional" Value of Forward Transactions without Delivery of Underlying Asset
6,144,477
4,624,786-Interest Rate Swaps
339,000
178,000-Derivatives re. Contra Items
2,620,898
3,390,517TRUST ACCOUNTS
3,379,979
2,502,979-Trust Funds
3,379,979
2,502,979CREDIT
48,831,866
36,743,223CONTINGENT
11,574,616
9,244,609-Loans Granted (Unused Balances)
2,446,953
1,840,214-Guarantees Granted to the B.C.R.A.
33,124
1,869-Other Guarantees Granted Included in the Debtor Classification Regulations
242,722
213,830-Other Guarantees Granted not Included in the Debtor Classification Regulations
360,175
370,231-Others Included in the Debtor Classification Regulations
636,604
447,505-Others not Included in the Debtor Classification Regulations
30,115
25,534-Contingencies re. Contra Items
7,824,923
6,345,426CONTROL
24,764,075
16,802,332-Checks and Drafts to be Credited
906,894
529,215-Others
519,823
480,227-Control re. Contra Items
23,337,358
15,792,890DERIVATIVES
9,113,196
8,193,303-"Notional" Value of Call Options Written
9,253
--"Notional" Value of Put Options Written
66,736
98,743-"Notional" Value of Forward Transactions without Delivery of Underlying Asset
2,544,909
3,291,774-Derivatives re. Contra Items
6,492,298
4,802,786TRUST ACCOUNTS
3,379,979
2,502,979-Trust Liabilities re. Contra Items
3,379,979
2,502,979




The accompanying Notes 1 to 24 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 nine-month period beginning on January 1, 2011 and ending on September 30, 2011, presented in
 comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos)
 9/30/11
9/30/10FINANCIAL INCOME
4,110,337
2,440,302-Interest on Cash and Due from Banks
502
582-Interest on Loans to the Financial Sector
12,528
5,031-Interest on Advances
239,721
130,247-Interest on Promissory Notes
523,340
355,706-Interest on Mortgage Loans
83,117
77,274-Interest on Pledge Loans
16,749
7,687-Interest on Credit Card Loans
1,221,967
801,654-Interest on Financial Leases
64,847
45,946-Interest on Other Loans
1,336,105
619,875-Net Income from Government and Private Securities
452,314
243,224-Interest on Other Receivables Resulting from Financial Brokerage
18,068
10,804-Net Income from Secured Loans – Decree No. 1387/01
3,524
2,767-C.E.R. Adjustment
1,740
4,581-Exchange Rate Differences on Gold and Foreign Currency
21,512
46,876-Others
114,303
88,048FINANCIAL EXPENSES
1,552,715
1,007,365-Interest on Current Account Deposits
-
5,478-Interest on Savings Account Deposits
5,806
3,806-Interest on Time Deposits
819,741
540,291-Interest on Interbank Loans Received (Call Money Loans)
569
4,838-Interest on Other Loans from Financial Institutions
29,400
2,083-Interest on Other Liabilities Resulting From Financial Brokerage
234,406
117,845-Interest on Subordinated Negotiable Obligations
86,230
102,496-Other Interests
19,283
2,761-Net Income from Options
40
436-C.E.R. Adjustment
77
33-Contributions Made to Deposit Insurance Fund
32,237
23,189-Others
324,926
204,109GROSS FINANCIAL MARGIN
2,557,622
1,432,937PROVISIONS FOR LOAN LOSSES
571,817
389,248INCOME FROM SERVICES
2,520,893
1,775,947-Related to Lending Transactions
678,025
456,715-Related to Borrowing Transactions
473,312
400,533-Other Commissions
52,031
29,969-Others
1,317,525
888,730EXPENSES FOR SERVICES
759,700
501,502-Commissions
332,285
205,444-Others
427,415
296,058




The accompanying Notes 1 to 24 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 nine-month period beginning on January 1, 2011 and ending on September 30, 2011, presented in
 comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
9/30/10ADMINISTRATIVE EXPENSES
3,042,284
1,980,855-Personnel Expenses
1,719,147
1,116,724-Directors’ and Syndics' Fees
11,076
6,929-Other Fees
132,966
66,962-Advertising and Publicity
197,304
127,267-Taxes
213,784
133,098-Depreciation of Bank Premises and Equipment
68,472
56,335-Amortization of Organization Expenses
69,610
44,205-Other Operating Expenses
383,647
263,701-Others
246,278
165,634NET INCOME FROM FINANCIAL BROKERAGE
704,714
337,279MINORITY INTEREST RESULT
(121,214)
(72,617)MISCELLANEOU.S. INCOME
969,391
513,743-Net Income from Equity Investments
100,040
31,386-Penalty Interests
60,947
38,264-Loans Recovered and Allowances Reversed
154,147
112,245-Others
654,257
331,848MISCELLANEOU.S. LOSSES
359,057
383,558-Penalty Interests and Charges in favor of the B.C.R.A.
730
48-Provisions for Losses on Miscellaneous Receivables and Other Provisions
74,193
58,033-C.E.R. Adjustment
34
30-Amortization of Differences Arising from Court Resolutions
4,683
196,154-Depreciation and Losses from Miscellaneous Assets
1,452
974-Amortization of Goodwill
12,155
8,483-Others
265,810
119,836NET INCOME BEFORE INCOME TAX
1,193,834
394,847INCOME TAX
442,065
175,556NET INCOME FOR THE PERIOD
751,769
219,291


The accompanying Notes 1 to 24 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 Income Statement
 For the nine-month period beginning on January 1, 2011 and ending on September 30, 2011, presented in
 comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
9/30/10CHANGES IN CASH AND CASH EQUIVALENTS (Note 22)-Cash at Beginning of Fiscal Year
7,443,517
5,428,730-Cash at Period-end
9,328,983
6,363,553Increase in Cash, Net (in Constant Currency)
1,885,466
934,823CAUSES FOR CHANGES IN CASH (IN CONSTANT CURRENCY)Operating ActivitiesNet Collections/(Payments) for:-Government and Private Securities
(713,789)
1,565,873-Loans-To the Financial Sector
(46,846)
(34,422)-To the Non-financial Public Sector
2,141
3,810-To the Non-financial Private Sector and Residents Abroad
(3,565,159)
(2,227,678)-Other Receivables Resulting from Financial Brokerage
(193,532)
374,839-Receivables from Financial Leases
(65,188)
1,986-Deposits-To the Financial Sector
5,413
(66,327)-To the Non-financial Public Sector
1,082,459
(546,052)-To the Non-financial Private Sector and Residents Abroad
4,113,294
2,711,365-Other Liabilities from Financial Brokerage-Financing from the Financial Sector-Interbank Loans (Call Money Loans Received)
-
15,662-Others (Except from Liabilities Included in Financing Activities)
906,584
426,757Collections related to Income from Services
2,975,977
1,966,419Payments related to Expenses for Services
(704,416)
(432,812)Administrative Expenses Paid
(3,071,657)
(1,958,099)Payment of Organization and Development Expenses
(227,755)
(124,937)Collection for Penalty Interests, Net
60,217
38,216Differences Arising from Court Resolutions Paid
(4,683)
(17,751)Collection of Dividends from Other Companies
14,694
43,139Other Collections related to Miscellaneous Profits and Losses
121,138
60,822Net Collections / (Payments) for Other Operating Activities-Other Receivables and Miscellaneous Liabilities
(281,996)
(198,599)-Other Operating Activities, Net
(69,676)
(22,723)Income Tax and Minimum Presumed Income Tax Payment
(178,126)
(115,282)Net Cash Flow Generated by Operating Activities
159,094
1,464,206Investment ActivitiesPayments for Bank Premises and Equipment, Net
(101,392)
(65,439)Payments for Miscellaneous Assets, Net
(78,083)
(22,392)Payments for Equity Investments
(10,443)
(335,188)Other Collections / (Payments) for Investment Activities-Cash and Cash Equivalents related to the Acquisition of Compañía Financiera Argentina S.A., Cobranzas y Servicios S.A. and Procesadora Regional S.A.
-
117,549Net Cash Flows used in Investment Activities
(189,918)
(305,470)




The accompanying Notes 1 to 24 are an integral part of these consolidated financial statements.




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 Income Statement
 For the nine-month period beginning on January 1, 2011 and ending on September 30, 2011, presented in
 comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
9/30/10Financing ActivitiesNet Collections/(Payments) for:-Unsubordinated Negotiable Obligations
1,815,888
(517,883)-B.C.R.A.-Others
673
(340)-Banks and International Entities
252,971
132,273-Subordinated Negotiable Obligations
(437,154)
(73,761)-Loans from Local Financial Institutions
133,815
148,492Distribution of Dividends
(44,372)
(3,237)Other Collections from Financing Activities
-
1,950Cash Flow Generated by / (Used in) Financing Activities
1,721,821
(312,506)Financial Results and by Holding of Cash and Cash Equivalents (including Interests and Monetary Result)
194,469
88,593Increase in Cash, Net
1,885,466
934,823




The accompanying Notes 1 to 24 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 nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$))
 NOTE 1:                      PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
 
 These consolidated financial statements are presented in accordance with the provisions of the Argentine Central Bank’s (the “B.C.R.A.”) Communiqué "A" 3147 and supplementary regulations regarding financial reporting requirements for the publication of quarterly and annual financial statements, the guidelines of Technical Pronouncement Nos. 8 and 19 of the Argentine Federation of Professional Councils in Economic Sciences (the “F.A.C.P.C.E.”) and the guidelines of the General Resolution No. 434/03 of the National Securities Commission (the “C.N.V.”). These financial statements include the balances corresponding to the operations carried out by the Company and its subsidiaries located in Argentina and abroad and form part of the Company’s quarterly/annual financial statements as supplementary information; as such, 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 the B.C.R.A.’s Communiqué “A” 3921, Decree No. 664/03 of the the executive branch of the Argentine government 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 experienced after March 1, 2003.
 
 Resolution M.D. No. 41/03 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires (the “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 the Company 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 B.C.R.A. 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. (in liquidation) 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 ($) and U.S. Dollars (U.S.$))




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 Superintendence of Insurance, which in some aspects differ from the Argentine GAAP in effect, in particular with respect to 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 the Company.
 
 As a result of the changes set forth by the B.C.R.A., effective March 1, 2011, with respect to the valuation and disclosure criteria of government and private securities, for comparison purposes, Banco de Galicia y Buenos Aires S.A. began adjusting the balances of some accounts under this caption in accordance with current regulations on December 31, 2010. These variations do not significantly affect the presentation of the financial statements as a whole.
 
 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 B.C.R.A., at the close of operations on the last business day of each month.
 
 As of September 30, 2011, December 31, 2010 and September 30, 2010, balances in U.S. Dollars were converted applying the reference exchange rate (AR$4.2045, AR$3.9758 and AR$3.9607, respectively) set by the B.C.R.A.
 
 Assets and liabilities valued in foreign currencies other than the U.S. Dollar have been converted into the latter currency using the swap rates provided by the B.C.R.A.
 
 b.2.
Government and Private Securities
 
 b.2.1.
Government Securities
 
 As of March 1, 2011, the B.C.R.A. set forth, according to the probable use  of such assets, two valuation criteria for holdings of non-financial public sector debt instruments.
   a)
Fair Market ValueThese holdings are government securities and monetary regulation instruments included in the volatilities or present values data issued by the B.C.R.A.



These are recorded at the closing price for each class of securities in the corresponding markets or at their present value, if any, plus the value of amortization and/or interest coupons due and receivable, less estimated selling costs, as applicable.b)
Acquisition Cost plus the Internal Rate of Return (the “I.R.R.”)These include government securities and monetary regulation instruments issued by the B.C.R.A. that are not included in the above-mentioned item.



These holdings are recorded at their acquisition cost increased on an exponential basis according to their I.R.R. The monthly accrual is charged to income or an asset regularizing account, according to the following classes:b1)Government debt instruments subscribed through swap, payment or exchange by any other government debt instruments. In the event that the market value of each instrument is lower than its book value,    50% of the monthly accrual of the I.R.R. must be charged to an asset regularizing account. These regularizing
  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 ($) and U.S. Dollars (U.S.$))




NOTE 2:                      Continued





account must be reversed by charging to income to the extent its balance exceeds the positive difference between the market value and book value.



b2) Monetary regulation instruments issued by the B.C.R.A. The monthly accrual of the I.R.R. must be charged to income.



b3) Government securities that were not subscribed through swap with no volatility or present value informed by the B.C.R.A. These are recorded at the present value of cash flows discounted by the I.R.R. of securities with similar characteristics and duration and with volatility. When the book value exceeds the present value, the monthly accrual must be recorded to an asset regularizing account.Furthermore, and pursuant to the policy of Banco de Galicia y Buenos Aires S.A., those instruments subject to be valued at the fair market value and then decided to be valued at their acquisition cost plus the I.R.R. may be recorded in this item, when purpose thereof is to obtain contractual cash flows.



In these cases, the maximum amount to be used must not exceed net liquid assets of 40% of deposits.



Application of the above-mentioned criteria was consistent with those criteria used by Banco de Galicia y Buenos Aires S.A. up to February 28, 2011; therefore, no significant effects on Banco de Galicia y Buenos Aires S.A.’s financial condition have been registered.



As of September 30, 2011, and taking into account the above-mentioned valuation criteria, Banco de Galicia y Buenos Aires S.A. records its holdings according to the following:


b.2.1.1.
Holdings Recorded at Fair Market Value
 
 These holdings include trading securities that were valued according to what is stated in item b.2.1.a.
 
 The same criterion was applied to holdings of such securities used in purchase and sale transactions pending settlement and repo transactions.
 
 b.2.1.2.
Holdings Recorded at their Acquisition Cost plus the I.R.R.
 
 In this caption, Banco de Galicia y Buenos Aires S.A. records Peso-denominated bonds issued by the Argentine government at Badlar rate due 2015 (“Bonar 2015”) for a face value of AR$139,178 which, as of December 31, 2010 and until February 28, 2011 were recorded under “Holdings in Investment Accounts” valued at their acquisition cost increased on an exponential basis according to their I.R.R. The transfer value of this caption was the one recorded as of February 28, 2011.
 
 As of September 30, 2011, these holdings have been valued according to what is stated in item b.2.1.b, that is, the total amount of the monthly accrual has been charged to income.
 
 The same criterion was applied to the securities used in repo transactions.
 
 Had these securities with a face value of AR$668,178 been marked to market, the shareholders’ equity would have been increased by approximately AR$46,952 as of September 30, 2011 and AR$84,496 as of December 31, 2010.
 
 b.2.1.3.
Securities Issued by the B.C.R.A.
 
 a) At Fair Market Value:
 
 These are recorded at the closing listed price for each class of securities at the end of the period/fiscal year.
 
 The securities bought and sold pending settlement have been valued at the arrangement price for each transaction.
  b)           At the Acquisition Cost plus the I.R.R.:
  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 ($) and U.S. Dollars (U.S.$))




NOTE 2:                      Continued





Holdings of these securities were valued at their acquisition cost increased on an exponential basis according to their I.R.R. The same criterion was applied to holdings of such securities used in loans and repo transactions. The 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 AR$4,379 as of September 30, 2011 and AR$2,129 as of December 31, 2010.
 
 Since these securities do not have volatility or present value published by the B.C.R.A., their market value was calculated based on the respective cash payments discounted by the I.R.R. of securities with similar characteristics and duration and with volatility published by these institution.
 
 b.2.2.
Investments in Listed Private Securities
 
 These securities are valued at the period/fiscal year-end closing price, less estimated selling costs, as applicable.
 
 b.3.
Accrual of Adjustments, Interests, 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, interests have been accrued on an exponential basis.
 
 In the first quarter, Banco de Galicia y Buenos Aires S.A. received deposits accruing interest at a variable-rate pursuant to B.C.R.A. regulations. The fixed-rate yield of each transaction is accrued as per the above-mentioned paragraph, while variable-rate yield is accrued by applying the ratio of the agreed yield to the positive variation in the underlying asset’s price, which is taken as a basis for determining these variation, and occurred between the original arrangement term and the end of the month. see Note 18.
 
 For lending and borrowing transactions, which according to the legal and/or contractual conditions may be applicable, the adjustment by the C.E.R. has been accrued.
 
 For lending transactions, Banco de Galicia y Buenos Aires S.A. does not recognize interest accrual when debtors are classified in a non-accrual status.
 
 b.4.
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 I.R.R. 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 B.C.R.A. regulations, as applicable. Trusts, with government-sector assets as underlying assets, have been valued pursuant to the valuation criteria described in item b.2.1.b. In the particular case of the participation certificate in Galtrust I Financial Trust, it has been recorded according to what is stated in item b.2.1.b3. To such ends, Banco de Galicia y Buenos Aires S.A. used the allowance established in the previous fiscal year in the amount of AR$98,638.
 
 Had this certificate been valued at its present value, Banco de Galicia y Buenos Aires S. A. ́s shareholders ́ equity would have been decreased by AR$103,724 as of September 30, 2011.
 
 b.5.
Unlisted Negotiable Obligations
 
 Holdings of these securities are valued at their acquisition cost increased on an exponential basis according to their I.R.R.
 
 b.6.
Receivables from Financial Leases
 
 These receivables are recorded at the present value of the sum of periodic installments and residual values previously established and calculated pursuant to the terms and conditions agreed upon the corresponding financial lease, and increased according to their I.R.R.
 
 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 ($) and U.S. Dollars (U.S.$))
  NOTE 2:                      Continued
 
 b.7.
Equity Investments
 
 b.7.1.
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 available financial statements.
 
 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, as applicable, stock dividends and uncollected cash.
 
 Banco de Galicia y Buenos Aires S.A. established an allowance for impairment of value in the amount by which it is estimated that the value of its investment in Compensadora Electrónica S.A. exceeds the equity method value.
 
 b.7.2.
In Other Companies
 
 Argentine:
 
 These are stated at their acquisition cost restated as mentioned in the above Note 1 to these financial statements, plus, as applicable, stock dividends and uncollected cash.
 
 An allowance for impairment of value has been established in the amount by which it is estimated that the book value of the investments in Argencontrol S.A., Alfer S.A. (in liquidation), Electrigal S.A., Autopista Ezeiza Cañuelas S.A. and Aguas Cordobesas S.A. exceed 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 in item b.1. was applied.
 
 b.8.
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.
 
 Financial leases that mainly transfer risks and benefits inherent to the leased property are registered at the beginning of the lease either by the cash value of the leased property or the present value of cash flows established in the financial lease, whichever is the lowest.
 
 The 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 other assets.
 
 The residual value of the assets, taken as a whole, does not exceed their economic utilization value.
 
 b.9.
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 above.




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 ($) and U.S. Dollars (U.S.$))




NOTE 2:                      Continued





b.10.
Intangible Assets
 
 Intangible assets have been valued at their restated acquisition cost (see Note 1 above), less the corresponding accumulated amortization, 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 B.C.R.A. established that the difference between the amount paid for 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, and the amount resulting from converting deposits at the AR$1.40 per U.S. Dollar exchange rate adjusted by the C.E.R. and interest accrued up to the payment date, must also be recorded under this caption. The B.C.R.A. also established that related amortization must take place in a maximum of 60 equal, monthly and consecutive installments starting April 2003.
 
 As of September 30, 2011 and December 31, 2010, this item has been fully amortized; thus, total accumulated amortization amounts to AR$864,320 and AR$859,638, respectively.
 
 Banco de Galicia y Buenos Aires S.A. carried out the abovementioned amortization for the purposes of complying with the provisions set forth by the B.C.R.A. only. However, Banco de Galicia y Buenos Aires S.A. has repeatedly reserved its right to make claims expressing the negative effect on its financial condition caused by the reimbursement of deposits originally in U.S. Dollars pursuant to court orders, which exceeded the amount established in the aforementioned regulation. On November 30, 2003,  Banco de Galicia y Buenos Aires S.A. formally requested that the executive branch of the Argentine government, with a copy to the Arentine Ministry of Economy and to the B.C.R.A., the payment of due compensation for the losses incurred that were generated by the "asymmetric pesification," and specifically for the negative effect on its financial condition caused by court resolutions.
 
 b.11.
Transactions with Derivative Instruments
 
 Derivative instruments have been recorded as stated in Note 18.
 
 b.12.
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.’s 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 B.C.R.A. regulations.
 
 b.13.
Income Tax
 
 The income tax charge reported by Banco de Galicia y Buenos Aires S.A. has been determined in accordance with B.C.R.A. regulations, which do not apply the deferred tax method. As of September 30, 2011, Banco de Galicia y Buenos Aires S.A. recorded an income tax charge in the amount of AR$121,000.
 
 Although an accumulated tax loss was determined as of December 31, 2010, Banco de Galicia y Buenos Aires S.A. estimates that, according to projections prepared pursuant to the provisions set forth by the B.C.R.A., the income tax amount will be higher and this excess will be computed as a payment on account of the minimum presumed income tax for the fiscal period 2011.
 
 Therefore, the recording of prepayments on account of the minimum presumed income tax for the fiscal period 2011 by Banco de Galicia y Buenos Aires S.A. is not applicable.
 
 b.14.
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.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 2:                      Continued





The recognition of this right and its realization stem from the ability to generate future taxable income sufficient for offsetting purposes, in line with projections prepared in accordance with B.C.R.A. regulations.
 
 Based on the aforementioned, Banco de Galicia y Buenos Aires S.A, as of September 30, 2011 and December 31, 2010, has assets in the amount of AR$417,220 and AR$389,613, respectively.
 
 In addition to the statements made in the preceding paragraphs, as of September 30, 2011, companies controlled by Banco de Galicia y Buenos Aires S.A. recorded an asset of AR$10,903 for the minimum presumed income tax, while as of December 31, 2010, this amount was AR$5,882.
 
 b.15.
Liabilities -  Banco de Galicia y Buenos Aires S.A.’s Customers Fidelity Program “Quiero”(I want)
 
 Banco de Galicia y Buenos Aires S.A. estimates the fair value of the points assigned to Banco de Galicia y Buenos Aires S.A.’s customers through the “Quiero” (“I want”) Program. Such value is assessed by means of a mathematical model that takes into account certain events of exchange percentages, the cost for the exchanged points based on the combination of available products and the preferences of Banco de Galicia y Buenos Aires S.A.’s customers, as well the expiration term of the customers’ non-exchanged points.
 
 As of September 30, 2011, Banco de Galicia y Buenos Aires S.A.’s liabilities recorded AR$35,630 from its customers’ non-exchanged points.
 
 b.16.
Severance Payments
 
 Banco de Galicia y Buenos Aires S.A. directly charges severance payments to expenses.
 
 The amounts that Banco de Galicia y Buenos Aires S.A. 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 – Other Provisions
 
 As of September 30, 2011 and December 31, 2010, Banco de Galicia y Buenos Aires S.A. 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. Therefore, Banco de Galicia y Buenos Aires S.A.’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 on the date that these financial statements were prepared.
 
 c.
Differences between the B.C.R.A.’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; these 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 these resolutions with certain amendments.
 
 On the date that these financial statements were prepared, the B.C.R.A. 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 effect in the Autonomous City of Buenos Aires.
 
 The main differences between B.C.R.A. regulations and Argentine GAAP in the Autonomous City of Buenos Aires are detailed below:
 
 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 ($) and U.S. Dollars (U.S.$))




NOTE 2:                      Continued





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 effect 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 result in deferred tax assets in the amount of AR$224,348 as of September 30, 2011, and AR$244,912 as of December 31, 2010.
 
 c.2.
Valuation of Assets with the Non-Financial Public and Private Sectors
 
 c.2.1.
Government Securities
 
 B.C.R.A. regulations set forth specific valuation criteria for government securities recorded at their acquisition cost plus the I.R.R., which are described in b.2.1.b. Pursuant to the Argentine GAAP in effect 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.
Allowances for Receivables from the Non-Financial Public Sector
 
 Current regulations issued by the B.C.R.A. 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 B.C.R.A. regulations, differs from Argentine GAAP (Technical Pronouncement No. 18). Argentine GAAP requires 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, as applicable due to the application of Technical Pronouncement No.17. Exchange-rate differences arising from conversion of the financial statements must be treated as financial income or losses, as the case may be.
 
 The application of this criterion that replaces what has been stated in Note 2.b.7 “Equity Investments in Other Foreign Companies” does not have a significant impact on Banco de Galicia y Buenos Aires S.A.’s consolidated financial statements.
 
 c.4.
Restructured Loans and Liabilities
 
 Pursuant to the regulations issued by the B.C.R.A., Banco de Galicia y Buenos Aires S.A. recorded restructured loans and financial obligations based on the actually restructured principal amounts plus accrued interest and capital adjustments, as 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.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 2:                      Continued





c.5.
Equity Investments – Negative Goodwill
 
 As of September 30, 2011 and December 31, 2010, Banco de Galicia y Buenos Aires S.A. recorded a negative goodwill (net of the accumulated amortizations) in the amounts of AR$371,712 and AR$465,634, respectively, thus regularizing the equity investments. This negative goodwill stems from the difference between the acquisition cost paid by the companies Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. and their equity method value estimated at the time of the purchase.
 
 Pursuant to B.C.R.A. regulations, the negative goodwill has to be charged to Income with regard to the causes that have originated it, not to exceed a 60-month straight-line method amortization. Pursuant to Argentine GAAP, the negative goodwill that is not related to expenses estimations or estimated future losses should be recognized as a gain at the time of the purchase.
 
 d.
Adoption of the International Financial Reporting Standards by the C.N.V.
 
 In addition to the specifications set forth in Note 17 to the financial statements, the international financial reporting standards adopted by the C.N.V. are not applicable to Banco de Galicia y Buenos Aires S.A., Compañía Financiera Argentina S.A., Galicia Seguros S.A. or Galicia Retiro S.A. This is due to the fact that the C.N.V. accepts accounting criteria set forth by other regulatory or control bodies, such as those established by the B.C.R.A. for the companies subject to the Financial Institutions Law and those established by the Argentine Superintendence 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 these regulations, which is being carried out in coordination with the above-mentioned subsidiaries.
 
 This resolution is not mandatory for the rest of the companies controlled by the Company. However, these companies’ boards of directors have decided to introduce the described change starting on January 1, 2012, for consolidation purposes with the Company’s financial statements.
 
 NOTE 3:                      BASIC INFORMATION ON CONSOLIDATED CONTROLLED COMPANIES
 
 The basic information regarding the Company’s controlled companies is presented in Note 10 and Schedule C to these individual financial statements.
 
 The Company 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%. Furthermore, the Company 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%.
 
 Sudamericana Holding S.A's results have been adapted to cover a nine-month period as of September 30, 2011 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.
 
 In this period, Banco de Galicia y Buenos Aires S.A. carried out a reorganization process of the corporate structure of its subsidiaries with supplementary activities. This fact has not caused the controlling interest by Banco de Galicia y Buenos Aires S.A. to be modified. As part of this process, Tarjetas del Mar S.A. has partially spinned off its shareholders’ equity for the creation of a new company called Tarjeta Mira S.A.
 
 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 ($) and U.S. Dollars (U.S.$))




NOTE 3:                      Continued





As a result of this spin-off, Banco de Galicia y Buenos Aires S.A. holds a 98% stake in Tarjeta del Mar S.A., and Compañía Financiera Argentina S.A. holds the remaining 2%. Furthermore, Tarjeta Mira S.A.’s shareholders are as follows: Tarjeta Naranja S.A. holds 98% of the shares of this company and Tarjetas Regionales S.A. holds the remaining 2%.
 
 In September 2011, Banco de Galicia y Buenos Aires S.A. and the Company acquired a 2% and 3% stake, respectively, in Compañía Financiera Argentina S.A. from Tarjetas Regionales S.A.; thus, Banco de Galicia y Buenos Aires S.A. currently holds 97% of this company’s capital stock and voting rights.
 
 In addition, Banco de Galicia y Buenos Aires S.A. sold a 90% stake in Procesadora Regional S.A. to Tarjetas Regionales S.A.; thus, Banco de Galicia y Buenos Aires S.A. currently directly holds 5% of the shares of this company and Tarjetas Regionales S.A. holds the remaining 95%.
 
 Furthermore, Tarjetas Regionales S.A. acquired 95% of the shares of Cobranzas Regionales S.A. and Tarjeta Naranja S.A. holds the remaining 5%.
 
 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:
 
 As of September 30, 2011Issuing Company
Shares
Percentage Held inClass
Number
Total Capital
Possible VotesBanco Galicia Uruguay S.A. (in liquidation) (*)
Ordinary Shares
666,278
100.000
100.000Tarjetas Regionales S.A. (**)
Ordinary Shares
188,099,844
100.000
100.000Galicia Valores S.A. Sociedad de Bolsa
Ordinary Shares
999,996
99.990
99.990Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
Ordinary Shares
20,000
100.000
100.000Tarjetas Cuyanas S.A. (***)
Ordinary Shares
1,939,970
60.000
60.000Tarjeta Naranja S.A. (***)
Ordinary Shares
1,920
80.000
80.000Tarjetas del Mar S.A.
Ordinary Shares
3,785,689
99.940
99.940Cobranzas Regionales S.A. (****)
Ordinary Shares
9,900
99.000
99.000Tarjeta Naranja Dominicana S.A.
Ordinary Shares
234,501
40.000
40.000Galicia (Cayman) Limited (1)
Ordinary Shares
22,626,513
100.000
100.000Compañía Financiera Argentina S.A.
Ordinary Shares
540,835,625
100.000
100.000Cobranzas y Servicios S.A.
Ordinary Shares
475,014
99.850
99.850Procesadora Regional S.A.
Ordinary Shares
1,526,712
100.000
100.000Tarjeta Mira S.A. (***)
Ordinary Shares
1,717,625
80.400
80.400
 (*) Shares stated at face value of 1,000 Uruguayan Pesos.
 (**) Ordinary shares A and B.
 (***) With a face value of 10.
 (***) With a face value of 100.
 (1) The Galicia (Cayman) Ltd.’s Extraordinary Shareholders’ Meeting held on September, 2011 resolved to redeem shares for US$23,787.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 3:                      Continued




As of December 31, 2010Issuing Company
Shares
Percentage Held inClass
Number
Total Capital
Possible VotesBanco Galicia Uruguay S.A. (in liquidation) (*)
Ordinary Shares
666,278
100.000
100.000Tarjetas Regionales S.A. (**)
Ordinary Shares
207,586,358
100.000
100.000Galicia Valores S.A. Sociedad de Bolsa
Ordinary Shares
999,996
99.990
99.990Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
Ordinary Shares
20,000
100.000
100.000Tarjetas Cuyanas S.A. (***)
Ordinary Shares
1,939,970
60.000
60.000Tarjeta Naranja S.A. (***)
Ordinary Shares
1,920
80.000
80.000Tarjetas del Mar S.A.
Ordinary Shares
2,424,208
99.999
99.999Cobranzas Regionales S.A. (****)
Ordinary Shares
7,754
77.540
77.540Tarjeta Naranja Dominicana S.A.
Ordinary Shares
234,501
40.000
40.000Galicia (Cayman) Limited
Ordinary Shares
46,413,383
100.000
100.000Compañía Financiera Argentina S.A.
Ordinary Shares
557,562,500
100.000
100.000Cobranzas y Servicios S.A.
Ordinary Shares
475,728
100.000
100.000Procesadora Regional S.A.
Ordinary Shares
1,526,712
100.000
100.000
 (*) Shares stated at face value of 1,000 Uruguayan Pesos.
 (**) Ordinary shares A and B.
 (***) With a face value of 10.
 (****) With a face value of 100.
 
 As of September 30, 2011Issuing Company
Assets
Liabilities
Shareholders’ Equity
Net IncomeBanco Galicia Uruguay S.A. (in liquidation)
97,689
46,611
51,078
2,392Tarjetas Regionales S.A.
1,065,604
4,606
1,060,998
266,147Galicia Valores S.A. Sociedad de Bolsa
75,347
56,767
18,580
463Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
8,264
2,831
5,433
1,514Tarjetas del Mar S.A.
179,297
152,849
26,448
(13,463)Tarjeta Naranja S.A.
5,112,602
3,994,875
1,117,727
304,044Tarjetas Cuyanas S.A.
1,106,113
901,463
204,650
52,220Cobranzas Regionales S.A.
9,103
5,728
3,375
1,377Tarjeta Naranja Dominicana S.A.
8,875
2,143
6,732
(860)Galicia (Cayman) Limited
244,517
-
244,517
68,985Compañía Financiera Argentina S.A.
1,935,219
1,062,710
872,509
159,324Cobranzas y Servicios S.A.
23,658
3,643
20,015
1,446Procesadora Regional S.A.
7,624
5,577
2,047
1,037Tarjeta Mira S.A.
83,896
68,230
15,666
(513)




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 ($) and U.S. Dollars (U.S.$))




NOTE 3:                      Continued




Balance Sheet as of December 31, 2010 and Income as of September 30, 2010Issuing Company
Assets
Liabilities
Shareholders’ Equity
Net IncomeBanco Galicia Uruguay S.A. (in liquidation)
161,116
115,080
46,036
(4,872)Tarjetas Regionales S.A.
897,934
3,083
894,851
225,792Galicia Valores S.A. Sociedad de Bolsa
72,227
54,110
18,117
847Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión
6,478
2,559
3,919
1,034Tarjetas del Mar S.A.
127,287
106,195
21,092
(4,622)Tarjeta Naranja S.A.
3,744,868
2,849,185
895,683
237,876Tarjetas Cuyanas S.A.
888,946
727,558
161,388
34,038Cobranzas Regionales S.A.
5,526
3,528
1,998
497Tarjeta Naranja Dominicana S.A.
7,446
2,440
5,006
(4,267)Galicia (Cayman) Limited
260,568
12
260,556
57,130Compañía Financiera Argentina S.A.
1,727,760
959,031
768,729
26,274Cobranzas y Servicios S.A.
21,974
3,405
18,569
1,582Procesadora Regional S.A.
5,364
4,354
1,010
(1,224)
 
 The controlled companies’ financial statements were adapted, as applicable, to the valuation and disclosure standards set by the B.C.R.A. and cover the same period as that of Banco de Galicia y Buenos Aires S.A.’s financial statements.
 
 Due to the acquisition of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., Banco de Galicia y Buenos Aires S.A. recorded a negative goodwill in the amount, net of amortizations, of AR$371,712 as of September 30, 2011 and AR$465,634 as of December 31, 2010. This negative goodwill is recorded in the consolidated balance sheet under the “Liabilities – Provisions” caption.
 
 Taking into account the date that the above-mentioned companies were acquired, Banco de Galicia y Buenos Aires S.A. recorded income and cash flows generated as of July 1, 2010 in the income statement and statement of cash flows, respectively.
 
 On August 10, 2011, at Tarjetas Regionales S.A.’s extraordinary xhareholders’ meeting a reduction in the capital stock in the amount of AR$19,487 was approved that only included shares held by Galicia (Cayman) Ltd. This fact caused a modification in such holdings’ percentage from 31.781452% to 24.7142%.
 
 Tarjetas Regionales S.A.’s financial statements as of September 30, 2011, a company in which Banco de Galicia y Buenos Aires S.A. holds 75.2858% and Galicia (Cayman) Limited holds the remaining 24.7142%, 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., Cobranzas Regionales S. A. and Procesadora Regional S.A. Percentages of direct and indirect controlling interest by Tarjetas Regionales S.A. are as follows:
 
 Issuing Company
9/30/11
12/31/10Tarjetas Cuyanas S.A.
60.000%
60.000%Tarjetas del Mar S.A.
-
99.999%Tarjeta Naranja S.A.
80.000%
80.000%Procesadora Regional S.A.
100.000%
-Cobranza Regional S.A.
99.000%
77.540%Tarjeta Mira S.A.
80.400%
-
 
 Tarjeta Naranja S.A.’s financial statements as of September 30, 2011 have been consolidated with the financial statements of Tarjeta Mira S.A., a company in which Tarjeta Naranja S.A. holds 98% of the voting stock and with the financial statements of Tarjeta Naranja Dominicana S.A., a company in which Tarjeta Naranja S.A. holds 50% of the voting stock.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 3:                      Continued




As of the date these financial statements are issued, Tarjeta Naranja Dominicana S.A.’s shareholders have agreed on a business plan aimed at achieving a break-even point. Notwithstanding the above, while this business plan is being achieved and based on principles of prudence, Tarjeta Naranja S.A. decided to set up allowances for this plan.
 
 Furthermore, in July, 2011, Tarjeta Naranja S.A. acquired a 24% interest in Tarjeta Naranja Perú S.A.C. This company is devoted to activities related to collection, membership and processing of credit cards, and other similar services.
 
 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”.
 
 The minority interest percentages as of September 30, 2011 and December 31, 2010 are as follows:
 
 Issuing Company
9/30/11
12/31/10Banco de Galicia y Buenos Aires S.A.
5.15926%
5.15926%Net Investment S.A.
0.64491%
0.64491%Sudamericana Holding S.A.
0.64489%
0.64489%Galicia Warrants S.A.
0.64491%
0.64491%Galicia Retiro Cía. de Seguros S.A.
0.64496%
0.64496%Galicia Seguros S.A.
0.64511%
0.64511%Sudamericana Asesores de Seguros S.A.
0.65046%
0.65046%
 
 The minority interest percentages held by Banco de Galicia y Buenos Aires S.A. are listed below:
 
 Issuing Company
9/30/11
12/31/10Galicia Valores S.A. Sociedad de Bolsa
0.0100%
0.0100%Tarjetas Cuyanas S.A.
40.0000%
40.0000%Tarjeta Naranja S.A.
20.0000%
20.0000%Tarjetas del Mar S.A.
0.0600%
0.0010%Cobranzas Regionales S.A.
1.0000%
22.4600%Tarjeta Naranja Dominicana S.A.
60.0000%
60.0000%Tarjeta Mira S.A.
19.6000%
-Cobranzas y Servicios S.A.
0.1500%
-
 
 NOTE 5:                      RESTRICTED ASSETS AND OTHER CONTINGENT LIABILITIES
 
 Pursuant to B.C.R.A. regulations, Banco de Galicia y Buenos Aires S.A. must maintain a monthly average liquidity level. Computable assets to meet minimum cash requirements are cash and the current accounts opened at the B.C.R.A.
 
 As of September 30, 2011, the balances registered as computable items are as follows:
 
 Item
AR$
U.S.$
Euros (*)Cash Held in Banco de Galicia y Buenos Aires S.A.’s Subsidiaries
1,021,394
62,153
5,887Cash Held in Valuables Transportation Companies and in Transit
634,258
45,826
5,207Special Escrow Accounts at the B.C.R.A.
1,977,918
684,128
-Total Computable Items to Meet Minimum Cash Requirements
3,633,570
792,107
11,094
 (*) Figures stated in thousands of U.S. Dollars.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 5:                      Continued


I) As of September 30, 2011, Banco de Galicia y Buenos Aires S.A.’s ability to dispose of the following assets was restricted as mentioned below:
 
 a. Funds and Government Securities
 
 - For repo transactions
$
122,375- For transactions carried out at the Rosario Futures Exchange (Rofex) and at the Mercado Abierto Electrónico (“MAE”)
$
148,753- For debit / credit cards transactions
$
119,204- For attachments
$
2,007- For other transactions
$
2,154
 
 b. Special Escrow Accounts
 
 Special escrow accounts have been opened at the B.C.R.A. as collateral for transactions involving electronic clearing houses, checks for settling debts and other similar transactions, which, as of September 30, 2011 amounted to AR$486,520.
 
 c. Deposits in favor of the B.C.R.A.
 
 - Unavailable deposits related to foreign exchange transactions
$
533- Securities held in custody to act as register agent of book-entry mortgage securities
$
2,103
 
 d. Equity Investments
 
 The item "Equity Investments" includes shares, the transfer of which is subject to the prior approval of the Argentine 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 Argentine 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 Banco de Galicia y Buenos Aires S.A.
 
 e. Guarantees Granted for Direct Obligations
 
 As of September 30, 2011, Banco de Galicia y Buenos Aires S.A. has recorded AR$282,327 as collateral for credit lines granted by the International Finance Corporation (the “IFC”), and the related transactions have been allocated to the resources provided by the IFC.
 
 As collateral for the loans granted pursuant to the Global Credit Program for Small and Medium Companies (Subsecretaría de la Micro, Pequeña y Mediana Empresa y Desarrollo Provincial), Banco de Galicia y Buenos Aires S. A. used Argentine national government bonds due 2015 for a face value of US$85,000 (equal to AR$101,362). As of September 30, 2011, the balance of secured loans was AR$43,087.
 
 Furthermore, as of September 30, 2011, Banco de Galicia y Buenos Aires S.A. used national government bonds due 2015 in Pesos for a face value of US$8,200 (equal to AR$9,778) as collateral for the loans granted pursuant to the Credit Program to the Province of San Juan in the amount of AR$5,588.
 
 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 ($) and U.S. Dollars (U.S.$))




NOTE 5:                      Continued


In addition, Banco de Galicia y Buenos Aires S.A. used national government bonds due 2015 in Pesos for a face value of US$4,000 equal to AR$4,770 as collateral for the loans granted pursuant to the Credit Program to the Province of Mendoza in the amount of AR$3,172.
 
 As of previous fiscal year-end, the total amount of restricted assets for the aforementioned items was AR$1,085,971.
 
 II) As of September 30, 2011, 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 September 30, 2011 and December 31, 2010, this company holds three shares of Mercado de Valores de Buenos Aires S.A., which secure an insurance covering transactions for AR$6,450.
 
 b. Tarjetas Cuyanas S.A.:
 
 As of September 30, 2011 and December 31, 2010, this company’s ability to dispose of time deposits for AR$1,190 and AR$764 was restricted because these amounts were earmarked as guarantees 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.
 
 Furthermore, Tarjetas Cuyanas S.A. has entered into a syndicated loan with certain financial institutions guaranteed by the Company with a pledge through the assignment of part of the performing loan portfolio. In the current period, the Company complied with these obligations.
 
 c. Tarjeta Naranja S.A.:
 
 Attachments in connection with lawsuits have been levied on current account deposits for AR$454. Furthermore, Tarjeta Naranja S.A. has paid AR$350 as guarantees regarding certain tax issues. These amounts must not be available until such issues are resolved.
 
 Furthermore, Tarjeta Naranja S.A. has guaranteed several loans from financial institutions with funds registered into escrow accounts. This collateral must be effective up to the total cancellation of the above-mentioned loans, which non-amortized principal as of September 30, 2011 amounts to AR$161,300.
 
 Moreover, pursuant to the agreements entered into with financial institutions and as collateral for the loans received and the issuance of negotiable obligations, 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 its assets in some cases, and 15% of its shareholders’ equity. The above-mentioned restrictions must not be applied for transactions carried out during the ordinary course of Tarjeta Naranja S.A. ́s business.
 
 d. Compañía Financiera Argentina S.A.:
 
 As a consequence of certain lawsuits and claims related to the ordinary course of business, as of September 30, 2011 and December 31, 2010, Compañía Financiera Argentina S.A. has been levied attachments on some banking accounts for an amount of AR$469 and AR$468 respectively, recorded under “Miscellaneous Receivables”. This amount has been fully provisioned.
 
 Furthermore, as of September 30, 2011, with the purpose of conducting transactions at the Mercado Abierto Electrónico S.A., this company records collateral in favor of the B.C.R.A. for a face value of AR$30,000 from instruments issued by this entity, equal to AR$31,021, which has been recorded under “Other Receivables Resulting from Financing Brokerage.”
 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 ($) and U.S. Dollars (U.S.$))




NOTE 5:                      Continued


III) As of September 30, 2011, the ability to dispose of the following assets corresponding to Galval Agente de Valores S.A. was restricted as mentioned below:
 
 a. 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 (B.C.U. as per its initials in Spanish). This deposit has been pledged in favor of such bank, as collateral for compliance with regulations governing the activities carried out by securities agents. Galval Agente de Valores S.A. also made a deposit of 50,000 indexed units with the Uruguayan Central Bank to honor payments with this entity.
 
 b. On December 16, 2010 this company made a deposit with Credit Uruguay Banco as credit-card collateral for an amount of US$5.
 
 NOTE 6:                      GOVERNMENT AND PRIVATE SECURITIES
 
 Government and private securities listed below were classified pursuant to B.C.R.A. regulations.
 
 As of September 30, 2011 and December 31, 2010, holdings of government and corporate securities were as follows:
 
 9/30/11
12/31/10Government SecuritiesHoldings Recorded at Fair Market Value-Government Bonds
70,621
56,100-Others
4,458
12,131Total Holdings Recorded at Fair Market Value
75,079
68,231Holdings Recorded at their Acquisition Cost plus the I.R.R.-Government Bonds
156,190
133,756Total Holdings Recorded at their Acquisition Cost plus the I.R.R.
156,190
133,756Securities Issued by the B.C.R.A.-B.C.R.A. Bills at Fair Market Value
41,385
359,073-B.C.R.A. Bills for Repo Transactions
20,633
180,232-B.C.R.A. Bills at Acquisition Cost plus the I.R.R.
314,337
257,454-B.C.R.A. Notes at Fair Market Value
306,064
2,903-B.C.R.A. Notes for Repo Transactions
63,756
--B.C.R.A. Notes at Acquisition Cost plus the I.R.R.
2,786,428
1,266,061Total Securities Issued by the B.C.R.A.
3,532,603
2,065,723Total Government Securities
3,763,872
2,267,710Private Securities-Negotiable Obligations (Listed)
1,064
4,484-Shares
48
68-Negotiable Mutual Funds from Abroad (E.T.Fs.)
-
5,750Total Private Securities
1,112
10,302Total Government and Private Securities
3,764,984
2,278,012
 
 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 Argentine national and 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:




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 ($) and U.S. Dollars (U.S.$))
  NOTE 7:                      Continued
 –
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 B.C.R.A. 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 September 30, 2011 and December 31, 2010, the classification of the loan portfolio was as follows:
 
 9/30/11
12/31/10Non-financial Public Sector
24,156
24,565Financial Sector
236,412
80,633Non-financial Private Sector and Residents Abroad
29,290,949
22,287,056-With Preferred Guarantees
1,360,457
1,257,111-With Other Collateral
4,747,934
3,694,518-With No Collateral
23,182,558
17,335,427Subtotal
29,551,517
22,392,254Allowance for Loan Losses
(1,240,380)
(1,038,473)Total
28,311,137
21,353,781
 
 These loans were granted in the normal course of transactions with standard terms, interest rates, and collateral requirements.
 
 NOTE 8:                      EQUITY INVESTMENTS
 
 As of September 30, 2011 and December 31, 2010, the breakdown of “Equity Investments” was a follows:
  9/30/11
12/31/10In Financial Institutions and Supplementary and Authorized Activities-Banco Latinoamericano de Exportaciones S.A.
2,084
1,971-Tarjeta Naranja Perú S.A.
6,390
--Banelco S.A.
10,775
9,569-Mercado de Valores de Buenos Aires S.A.
8,142
8,138-Visa Argentina S.A.
3,000
3,000-Others
788
790Total Equity Investments in Financial Institutions, Supplementary and Authorized Activities
31,179
23,468In Non-financial Institutions-AEC S.A.
26,703
26,703-Aguas Cordobesas S.A.
8,911
8,911-Electrigal S.A.
5,455
5,455-Distrocuyo S.A.
3,955
--Others
1,502
1,574Total Equity Investments in Non-financial Institutions
46,526
42,643Allowances
(21,985)
(13,263)Total Equity Investments
55,720
52,848


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 ($) and U.S. Dollars (U.S.$))
  NOTE 9:                      INTANGIBLE ASSETS - GOODWILL
 The following table shows the breakdown of goodwill per activity as of September 30, 2011 and December 31, 2010, respectively:
 
 9/30/11
12/31/10In Banks
11,311
19,903Data Processing
578
3,564Total
11,889
23,467
 
 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 to Banco de Galicia y Buenos Aires S.A., as fiduciary property, amounts to be applied according to the following breakdown:
 
 Date of Contract
Trustor
Balances of Trust Funds

$
Maturity Date

(1)4/10/07
Sullair
7
1/31/132/12/08
Sinteplast
262
1/28/1312/21/09
Las Blondas
492
12/31/119/24/10
Grupo Gestión
2,028
9/30/1212/07/10
Aceitero Trust Fund
39,797
12/31/1112/20/10
Tecsan II
27,151
12/28/137/26/11
Tecsan III
100,000
7/28/16Total
169,737
 (1) These amounts must be released monthly until settlement date of trustor obligations or maturity date, whichever occurs first.
 
 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$
U.S.$7/13/05
Rumbo Norte I
1,779
7
7/13/11 (3)10/12/05
Hydro I
11,892
-
9/05/17 (2)12/05/06
Faid 2011
34,920
-
2/28/12 (3)12/06/06
Gas I
16,662
-
12/31/11 (3)9/05/07
Saturno VII
96
-
12/31/11 (3)6/05/08
Agro Nitralco II
8,432
-
12/31/11 (3)5/14/09
Gas II
2,921,096
-
5/31/14 (3)8/31/10
Sursem I
120
-
9/30/11 (3)2/10/11
Cag S.A.
38,277
-
10/31/11 (3)3/22/11
Atanor
28,772
-
4/01/12 (3)4/25/11
Faid 2015
42,963
-
2/29/16 (3)6/08/11
Mila III
38,816
-
10/31/16 (3)7/04/11
Sursem II
17,941
-
7/31/12 (3)9/01/11
Mila IV
11,150
-
6/30/17 (3)9/14/11
Cag S.A. II
37,295
-
9/30/12 (3)Totals
3,210,211
7
 (2) These amounts must 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.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 10:                    Continued
 
 c)Banco de Galicia y Buenos Aires S.A. ́s activities as Security Agent:
 
 c.1) Under the terms and conditions for the issuance of negotiable obligations class I for a face value 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 Banco de Galicia y Buenos Aires S.A. 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 September 30, 2011 amount to US$49,362 and AR$56, while as of December 31, 2010 these balances amounted to US$34,774 and AR$97.
 
 c.2) On April 8, 2011 Banco de Galicia y Buenos Aires S.A. was appointed security agent to custody the National Treasury’s endorsement guarantees in favor of ENARSA (Energía Argentina SA) that were assigned in favor of Nación Fideicomisos SA in its capacity of trustee of “ENARSA-BARRAGAN” and “ENARSA-BRIGADIER LOPEZ” financial trusts.
 
 These endorsement guarantees secure the payment of all obligations arising from the above-mentioned trusts for the total amount of US$1,340,000.
 
 Banco de Galicia y Buenos Aires S.A., in its capacity as security agent, will act as custodian of the documents regarding the National Treasury’s endorsement guarantees and will be in charge of managing all legal and notarial proceedings with respect to the enforcement thereof.
 
 As of September 30, 2011, the balances recorded from these transactions amount to US$1,364,097 and AR$408.
 
 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 at 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
9/30/03 confirmed on 4/27/06
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
4/28/05 confirmed on 4/26/07
Resolution No. 15228 dated 11/04/05 and extended through Resolution No. 16454 dated 11/11/10.
 (*) Or its equivalent in other currencies.
  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 ($) and U.S. Dollars (U.S.$))




Banco de Galicia y Buenos Aires S.A.  has the following negotiable obligations outstanding issued under the global program of US$2,000,000:
 
 NOTE 11:                    Continued
 
 Date of Issuance
Currency
Residual Face Value

US$

9/30/11 (**)
Type
Term
Rate
Book Value (*)

$
Issuance Authorized by the C.N.V.9/30/11
12/31/105/18/04
U.S.$
223,666
Subordinated
(1)
(2)
963,387
1,257,955
12/29/03 and 4/27/04
 (*) It includes principal and interest net of expenses.
 (**) This amount includes US$5,455 of the capitalization of interest services due July 1, 2011 on the account of the payment-in-kind (by means of negotiable obligations due 2019).
 The net proceeds of the above-mentioned issuance of negotiable obligations were used to refinance the foreign debt in accordance with Section 36 of the Law on Negotiable Obligations, B.C.R.A. regulations, and other applicable regulations.
 (1) These obligations must be fully amortized upon maturity on January 1, 2019, unless their principal is previously redeemed at par, plus unpaid accrued interest 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.
 (2) Interest on negotiable obligations due 2019 must 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 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.
 Interest 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 must be payable on January 1, 2014 and January 1, 2019, unless these negotiable obligations are previously redeemed.
 
 In February 2011, Banco de Galicia y Buenos Aires S.A. made a payment in advance on account of interest accrued as from January 1, 2004 to December 31, 2010 in the amount of US$90,115 corresponding to negotiable obligations due 2019.  This payment should originally have been made on January 1, 2014. Furthermore, interest accrued up to the day before payment date were also paid in the amount of US$1,404.
 
 Banco de Galicia y Buenos Aires S.A.  has the following negotiable obligations outstanding issued under the global program of US$342,500:
 
 Date of Issuance
Currency
Residual Face Value

U.S.$

9/30/11
Type
Term
Rate
Book Value (*)

$
Issuance Authorized by the C.N.V.9/30/11
12/31/105/04/11
U.S.$
300,000
Simple
84 months
(1)
1,296,172
-
11/04/05 and 11/11/10
 (*) Includes principal and interest net of expenses.
 (1) Interest agreed at an annual 8.75% rate must be paid semiannually on May 4 and November 4 of each year until the maturity date, starting on November 4, 2011.
 
 The net proceeds from this issuance was applied to working capital, other loans and other uses allowed by the provisions of the Law on Negotiable Obligations and B.C.R.A. regulations.
 
 As of September 30, 2011, Banco de Galicia y Buenos Aires S.A. records in its portfolio negotiable obligations due 2018 in the amount of AR$11,603 under purchase transactions pending settlement.
 
 Furthermore, as of September 30, 2011, 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

U.S.$

9/30/11
Type
Term
Rate
Book Value (*)

$
Issuance Authorized by the C.N.V.9/30/11
12/31/1011/08/93
U.S.$
1,673
Simple
10 years
9.00%
13,312
12,139
10/08/93
 (*) This amount includes principal and interest.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 11:                    Continued
 
 In accordance with the provisions of the Law on Negotiable Obligations and B.C.R.A. 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 allowed 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 and issuances of negotiable obligations outstanding, the purpose of which is to finance 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$450,000
Simple negotiable obligations, not convertible into shares
5 years
1/04/2011
Resolution No. 15785 dated 11.16.07 and Resolution No. 16319 dated 4/27/10 and Resolution No. 16571 dated 5/24/11.
 
 Tarjeta Naranja S.A. has the following negotiable obligations outstanding issued under its global program as of the close of the period / fiscal year:
 
 Date of Placement
Currency
Class Number
Amount
Type
Term
Estimated Maturity Date
Rate
Book Value (*)
Issuance Authorized by the C.N.V.9/30/11
12/31/1011/29/06
US$(1)
IV
US$100,000
Simple
60 months
11/29/11
Annual Nominal Fixed at 15.5%
38,488
76,975
11/08/068/31/09
US$(2)
Class IX Series 2
US$15,000
Simple
730 days
8/31/11
Annual Nominal Fixed at 12.5% (**)
-
60,000
8/11/095/06/10
AR$
X
AR$49,535
Simple
270 days
1/31/11
Variable Badlar Rate + 2.75%
-
49,535
4/26/109/10/10
AR$
XI
AR$42,154
Simple
270 days
6/07/11
Variable Badlar Rate + 2.95%
-
42,154
8/23/1010/09/10
U.S.$
XII
US$36,819
Simple
365 days
9/10/11
(***)
-
147,274
8/23/101/28/11
U.S.$
XIII
US$200,000
Simple
72 months
1/28/17
Annual Fixed Rate at 9%
845,000
-
1/14/116/14/11
AR$
Class XIV Series I
$20,000
Simple
270 days
3/10/12
Annual Nominal Fixed at 13.5%
20,000
-
6/06/116/14/11
AR$
Class XIV Series II
$79,852
Simple
21 months
3/14/13
Variable Badlar Rate + 3.40%
79,852
-
6/06/11
 (*) Corresponds to principal amount outstanding as of the indicated dates.
 (**)          Placement made at 104.42% of negotiable obligations ́ face value.
 (***)        Placement made at 93.90% of negotiable obligations ́ face value.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 11:                    Continued
 (1) Tarjeta Naranja S.A. 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 new securities, was converted into AR$307,900 and must be payable in Pesos. 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, Tarjeta Naranja S.A. issued and placed class IX negotiable obligations for a total amount of US$50,000, for which US$48,063 obtained through this issuance; which, as specified by the terms and conditions of the securities, was converted into AR$184,986.
 
 Tarjetas Cuyanas S.A.
 
 Authorized Amount
Type of Negotiable Obligations
Term of Program
Date of Approval at Shareholders’ Meeting
Approval by the C.N.V.US$80,000
Simple negotiable obligations, not convertible into shares
5 years
3/22/07 confirmed on 4/09/07
Resolution No. 15627 dated 5/02/07US$120,000
Simple negotiable obligations, not convertible into shares
5 years
3/30/10 confirmed on 4/06/10
Resolution No. 16328 dated 5/18/10
 
 Tarjetas Cuyanas S.A. has the following negotiable obligations outstanding under these programs as of the close of the period/fiscal year:
 
 Date of Placement
Currency
Class Number
Amount
Type

(**)
Term
Estimated Maturity Date
Rate
Book Value (*)
Issuance Authorized by the C.N.V.9/30/11
12/31/106/14/07
U.S.$
XVIII
US$65,000

(1)
Simple
5 years
6/14/12
Annual Nominal Fixed at 12%
20,626
39,930
5/24/07 and 6/14/076/22/10
AR$
I
AR$30,000
Simple
270 days
3/18/11
Variable Badlar Rate + 3%
-
29,669
6/10/1012/14/10
AR$
II
AR$38,781
Simple
270 days
9/09/11
Annual Nominal Fixed at 9.95%
-
34,799
11/19/1012/14/10
U.S.$
III
US$20,247
Simple
365 days
12/14/11
Annual Nominal Fixed at 6%
83,772
74,882
11/19/104/15/11
AR$
IV
AR$50,000
Simple
270 days
1/10/12
Variable Badlar Rate + 2.85%
51,310
-
4/06/117/29/11
AR$
V Series I
AR$12,931
Simple
270 days
4/24/12
Annual Nominal Fixed at 14%
12,992
-
7/21/117/29/11
AR$
V Series II
AR$77,305
Simple
550 days
1/29/13
Variable Badlar Rate + 4%
76,610
-
7/21/11
 (*) Corresponds to principal amount and interest outstanding as of the indicated dates.
 (**) Not convertible into shares.
 (1) This 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 AR$200,063. 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.
 
 Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A. carried out currency hedging transactions in relation to the principal payment of its negotiable obligations for a total amount of US$220,247 from which US$210,437 were carried out with Banco de Galicia y Buenos Aires S.A.
 
 b) Compañía Financiera Argentina S.A.
 
 As of the date of these financial statements, Compañía Financiera Argentina S.A. has the following programs and series of negotiable obligations outstanding, the purpose of which is to finance its operations:
  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 ($) and U.S. Dollars (U.S.$))




NOTE 11:                    Continued
 Authorized Amount
Type of Negotiable Obligations
Term of Program
Date of Approval at Shareholders’ Meeting
Approval by the C.N.V.US$250,000
Simple negotiable obligations, not convertible into shares
8/03/16
11/25/10
Resolution No. 16505 dated 1/27/11
 
 Compañía Financiera Argentina S.A. has the following negotiable obligations outstanding under its global program as of the close of the period / fiscal year:
 
 Date of Placement
Currency
Class Number
Amount
Type

(**)
Term
Estimated Maturity Date
Rate
Book Value (*)
Issuance Authorized by the C.N.V.9/30/11
12/31/103/28/11
AR$
Class III Series I
AR$56,000
Simple
270 days
12/23/11
Variable Badlar Rate + 3.26%
56,174
-
3/15/113/28/11
AR$
Class III Series II
AR$44,000
Simple
21 months
12/28/12
Variable Badlar Rate + 4.08%
44,063
-
3/15/117/19/11
AR$
Class IV Series II
AR$102,000
Simple
18 months
1/19/13
Variable Badlar Rate + 4%
105,363
-
6/29/11
 (*) Corresponds to principal amount and interest outstanding as of the indicated dates.
 (**) Not convertible into shares.
 
 NOTE 12:                    MINIMUM CAPITAL REQUIREMENTS
 
 The Company is not subject to the minimum capital requirements established by the B.C.R.A.
 
 Furthermore, the Company meets the minimum capital requirements established by the Corporations Law, which amount to AR$12.
 
 Pursuant to B.C.R.A. regulations, Banco de Galicia y Buenos Aires S.A. is required to maintain a minimum capital, which is calculated by weighing risks related to assets and to balances of bank premises and equipment and miscellaneous and intangible assets.
 
 As called for by B.C.R.A. regulations, as of September 30, 2011 and December 31, 2010, minimum capital requirements were as follows:
 
 Date
Capital Required
Computable Capital
Computable Capital as

a % of the Capital Requirement9/30/11
2,533,125
4,071,409
160.7312/31/10
2,007,081
3,593,930
179.06
 
 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 called for by the Financial Institutions Law.
 
 The executive branch of the Argentine government, through Decree No. 1127/98 dated September 24, 1998, established the maximum amount for this insurance system to demand deposits and time deposits denominated either in Pesos and/or in foreign currency. As from January 2011, this amount has been established at AR$120.
  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 ($) and U.S. Dollars (U.S.$))




NOTE 13:                    Continued
 
 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 B.C.R.A. 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. (SE.DE.S.A.). SE.DE.S.A.’s shareholders are the B.C.R.A. and the financial institutions, in the proportion determined for each one by the B.C.R.A. based on the contributions made to the fund.
 
 As from January 1, 2005, the B.C.R.A. 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., B.C.R.A. 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 that this reserve is reduced for any reason, no profits can be distributed until it is completely re-funded.
 
 The B.C.R.A. 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 (as may be legally or statutorily required) not only the reserves, 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 B.C.R.A. 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 B.C.R.A. that has not been recognized.
 
 Moreover, in order for a financial institution to be able to distribute profits, it must comply with the capital adequacy rule, i.e. with the calculation of minimum capital requirements and the regulatory capital.
 
 This must be done by deducting from assets and retained earnings all 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 (which are to be computed as computable regulatory capital (“R.P.C.”) pursuant to Communiqué "A" 4576).
 
 Moreover, in such calculation, a financial institution must not be able to compute the temporary reductions that affect minimum capital requirements, R.P.C. or its capital adequacy.
 
 In addition to the above-mentioned, the B.C.R.A. must not accept distribution of profits as long as R.P.C. is lower than minimum capital requirements increased by 30%.
 
 As of September 30, 2011, the adjustment to retained earnings pursuant to B.C.R.A. regulations is as follows:
  - The positive net difference between the book value and the market value of public sector assets and/or debt instruments issued by the B.C.R.A. not valued at market price:
AR$-56,246




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 ($) and U.S. Dollars (U.S.$))




NOTE 14:                    Continued
 
 Distribution of profits requires the prior authorization of the B.C.R.A.’s Superintendence of Financial and Foreign Exchange Institutions, which must verify that the aforementioned requirements have been fulfilled.
 
 It was decided at Tarjeta Naranja S.A.’s ordinary and extraordinary shareholders’ meeting held on March 16, 2006 to set the maximum limit for the distribution of dividends at 25% of the realized and liquid profits of each fiscal year. This restriction will remain in effect as long as Tarjeta Naranja S.A.’s shareholders’ equity is below $300,000.
 
 Pursuant to the pricing supplements used in connection with the negotiable obligations class IV, XIII and XIV, as well as in accordance with certain financial loan contracts, Tarjeta Naranja S.A. has agreed not to distribute dividends that may exceed 50% of its net income. This restriction also applies in the event that there is any excess on certain indebtedness ratios.
 
 NOTE 15:                    C.N.V.
 
 Resolution No. 368/01: as of September 30, 2011, Banco de Galicia y Buenos Aires S.A.’ shareholders’ equity exceeds the amount that is required by Resolution No. 368/01, Chapter XIX, items 4 and 5 of the C.N.V. in order 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 PLU.S.," "FIMA RENTA CORTO PLAZO," "FIMA MONEY MARKET EN PESOS (Liquidado)," "FIMA NUEVO RENTA EN DOLARES," "FIMA GLOBAL ASSETS," "FIMA RENTA LATINOAMERICANA," “FIMA PREMIUM”, “FIMA AHORRO PLU.S.” and “FIMA OBLIGACIONES NEGOCIABLES,” as of September 30, 2011, Banco de Galicia y Buenos Aires S.A. holds a total of 1,064,735,612 units under its custody for a market value of AR$1,790,702, which is included in the "Depositors of Securities Held in Custody" account. As of previous fiscal year-end, the securities held in custody totaled 851,406,095 units and their market value amounted to AR$1,417,001.
 
 NOTE 16:                    SITUATION OF BANCO GALICIA URUGUAY S.A. (IN LIQUIDATION)
 
 In May, 2009, Banco Galicia Uruguay S.A. (in liquidation) wholly repaid in advance the debt restructuring plan entered into with its creditors. Having fulfilled its obligations, its shareholders resolved, at the shareholders’ meeting held on June 30, 2010, to voluntarily dissolve and liquidate the company. The authorization to operate as a bank was revoked in October 2011.
 
 Furthermore, taking into consideration the financial ramifications of the liquidation process, shareholders decided to reduce the company’s R.P.C. by a value equal to US$2,069 through the voluntary redemption of shares, which was carried out on October 28, 2010.
 
 As of the period-end, Banco Galicia Uruguay S.A. (in liquidation)'s shareholders equity amounts to AR$51,078.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 17:                    SETTING UP OF FINANCIAL TRUSTS
 
 a) Outstanding financial trusts with Banco de Galicia y Buenos Aires S.A. acting as trustor at period-end:
 
 Name
Creation Date
Estimated Maturity Date
Trustee
Trust Assets
Portfolio Transferred
Book Value of Securities Held in Own Portfolio9/30/11
12/31/10Galtrust I
10/13/00
10/10/15
First Trust of New York N.A.
Secured Bonds in Pesos at 2% due 2018 (1)
U.S.$490,224 (*)
524,834
521,862 (**)Galicia
4/16/02
5/06/32
Bapro Mandatos y Negocios S.A.
Argentine government Bonds in Pesos at 2% due 2014 (2)
AR$108,000
103,815
96,364Créditos Inmobiliarios Galicia II
10/12/05
12/15/25
Deustche Bank S.A.
Mortgage Loans
AR$150,000
-
721Galicia Personales VII
2/21/08
11/15/12
Deustche Bank S.A.
Personal Loans
AR$150,000
-
1,652
 (*) The remaining US$9,776 was transferred in cash.
 (**) Net of the allowance for impairment of value (Note 2.b.4)
 (1) In exchange for loans to the provincial governments of Argentina.
 (2) In exchange for secured loans.
 
 b) As of September 30, 2011 and December 31, 2010, Banco de Galicia y Buenos Aires S.A. records financial trusts in its own portfolio:
 
 - Received as loan repayment for AR$113,128 and AR$20,752, respectively;
 - Acquired as investments for AR$247,192 and AR$140,084, respectively.
 
 NOTE 18:                    DERIVATIVE INSTRUMENTS
 
 FORWARD PURCHASE-SALE OF FOREIGN CURRENCY WITHOUT DELIVERY OF THE UNDERLYING ASSET
 
 Mercado Abierto Electrónico and Rosario Futures Exchange (RO.F.EX.) have trading environments for the closing, recording and settlement of financial forward transactions carried out among its agents, one of which is Banco de Galicia y Buenos Aires S.A. 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 is charged to income).
 
 As of September 30, 2011, forward purchase and sale transactions totaled AR$5,212,103 and AR$1,626,753, respectively, while as of December 31, 2010 they totaled AR$3,341,808 and AR$2,393,976, respectively.
 
 These 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.
 
 Aside from that, transactions have been conducted directly with customers pursuant to the above-mentioned conditions, with the balances settled at the expiration date of the contract. As of September 30, 2011, forward purchase and sale transactions totaled AR$7,334 and AR$1,332,216, respectively, while as of December 31, 2010, purchase and sale transactions totaled AR$23,598 and AR$420,971, respectively.
 
 PURCHASE-SALE OF INTEREST RATE FUTURES
 
 Banco de Galicia y Buenos Aires S.A. trades these products within the trading environment created by the Mercado Abierto Electrónico. 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, with the difference in price charged to income. As of September 30, 2011, purchase and sale transactions conducted amounted to AR$762,100 and AR$502,100, respectively, while as of December 31, 2010 they totaled AR$1,140,100 and AR$780,100, respectively. These transactions are recorded under “Memorandum Accounts” for the notional value traded.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 18:                    Continued
 
 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 Mercado Abierto Electrónico, 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, with the difference in price charged to income.
 
 As of September 30, 2011, transactions conducted amounted to AR$299,000, while as of December 31, 2010, they amounted to AR$138,000, 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.
 
 Moreover, transactions have been conducted with customers, which, as of September 30, 2011 and December 31, 2010, amounted to AR$40,000.
 
 As of September 30, 2011, the estimated market value of such instruments amounted to approximately AR$1,247 (liabilities), while as of December 31, 2010, it amounted to AR$67 (assets).
 
 CALL OPTIONS BOUGHT AND WRITTEN ON GOLD FUTURES WITHOUT DELIVERY OF THE UNDERLYING ASSET
 
 These transactions have been conducted with the purpose of hedging the variable yield of the deposits received by Banco de Galicia y Buenos Aires S.A. and set forth by the B.C.R.A.
 
 The deposit date, the term to exercise the option and the underlying asset are the same as those of the related deposit. Notional amounts have been computed so that the offset value of derivative instruments is similar to the variable yield of the investment. Changes in the value of the underlying asset at the time of the arrangement and at period-end, equivalent to the variable yield, have been recognized as income and are recorded under “Other Receivables Resulting from Financial Brokerage” and/or under “Other Liabilities Resulting from Financial Brokerage”, as appropriate.  Premiums received and/or paid have accrued on a straight-line basis during the currency of the agreement.
 
 As of September 30, 2011, call options bought and written totaled AR$8,821 and AR$9,253, respectively. These options have been recorded under “Memorandum Accounts – Debit-Derivatives - Notional Value of Call Options Bought” and under “Memorandum Accounts – Credit-Derivatives – Notional Value of Call Options Written”.
 
 PUT OPTIONS WRITTEN
 
 As established by Section 4, subsection a), and Section 6 of Decree No 1836/02 and regulations of the B.C.R.A., Banco de Galicia y Buenos Aires S.A. granted the holders of rescheduled deposit certificates, who had opted to receive Argentine government Boden 2013 notes and Argentine government Boden 2012 notes in lieu of the payment of those certificates, an option to sell coupons. These options, as of September 30, 2011 and December 31, 2010, are valued at the strike price.
 
 The strike price will be equal to the value that results from converting the face value of each coupon in U.S. Dollars into Pesos at a rate of AR$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 must 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 AR$66,736 as of September 30, 2011 and AR$98,743 as of December 31, 2010, respectively.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 18:                    Continued
 Banco de Galicia y Buenos Aires S.A.'s management of financial risks is carried out in accordance with the policies of its board of directors. In that sense, “derivative instruments” carried out by Banco de Galicia y Buenos Aires S.A. are means for Banco de Galicia y Buenos Aires S.A. to hedge its risk exposures and/or used as a financial product to develop investment and trading strategies. In both cases, the use of these instruments by Banco de Galicia y Buenos Aires S.A. is performed within the guidelines of internal policies set forth by Banco de Galicia y Buenos Aires S.A.
 
 NOTE 19:                      CHANGES IN SIGNIFICANT ASSETS AND LIABILITIES
 
 The breakdown of the most significant assets and liabilities shown in these consolidated financial statements, presented in comparative format with the previous fiscal year is set forth below in order to disclose the changes in those assets and liabilities during the current period:
 
 9/30/11
12/31/10ASSETSLOANS
28,311,137
21,353,781-To the Non-financial Public Sector
24,156
24,565-To the Financial Sector
236,412
80,633-Interbank Loans (Call Money Loans Granted)
129,000
32,500-Other Loans to Local Financial Institutions
102,567
47,968-Accrued interest, Adjustments and Quotation Differences Receivable
4,845
165-To the Non-financial Private Sector and Residents Abroad
29,290,949
22,287,056-Advances
2,227,998
977,890-Promissory Notes
5,693,546
4,534,326-Mortgage Loans
942,663
950,237-Pledge Loans
187,315
119,175-Personal Loans
5,520,436
4,093,559-Credit-card Loans
11,464,858
9,120,092-Others
3,027,169
2,297,507-Accrued interest, Adjustments and Quotation Differences Receivable
342,979
277,070-Documented Interest
(115,931)
(81,804)-Unallocated Collections
(84)
(996)-Allowances
(1,240,380)
(1,038,473)OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE
3,638,796
3,325,990-B.C.R.A.
579,923
402,386-Amounts Receivable for Spot and Forward Sales to be Settled
311,533
237,333-Securities Receivable under Spot and Forward Purchases to be Settled
760,272
914,124-Premiums from Bought Options
497
--Others Not Included in the Debtor Classification Regulations
1,442,098
1,286,039-Unlisted Negotiable Obligations
165,823
99,237-Balances from Forward Transactions without Delivery of Underlying Asset to be Settled
6,542
5,403-Others Included in the Debtor Classification Regulations
422,274
511,594-Accrued interest Receivable Included in the Debtor Classification Regulations
1,849
1,680-Allowances
(52,015)
(131,806)
 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 ($) and U.S. Dollars (U.S.$))


NOTE 19:                    Continued
 
 9/30/11
12/31/10LIABILITIESDEPOSITS
28,531,542
22,222,764-Non-financial Public Sector
1,956,660
874,201-Financial Sector
15,347
9,934-Non-financial Private Sector and Residents Abroad
26,559,535
21,338,629-Current Accounts
6,642,572
5,466,532-Savings Accounts
8,419,768
6,356,877-Time Deposits
10,871,285
8,975,889-Investment Accounts
163,647
156,935-Others
353,940
306,139-Accrued interest and Quotation Differences Payable
108,323
76,257OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE
11,058,707
7,608,071-B.C.R.A.
2,778
2,105-Others
2,778
2,105-Banks and International Entities
918,081
646,745-Unsubordinated Negotiable Obligations
2,850,721
775,863-Amounts Payable for Spot and Forward Purchases to be Settled
741,491
950,453-Securities to be Delivered under Spot and Forward Sales to be Settled
317,225
229,684-Premiums from Options Written
308
--Loans from Local Financial Institutions
776,922
613,197-Other Loans from Local Financial Institutions
771,899
610,022-Accrued Interest payable
5,023
3,175-Balances from Forward Transactions without Delivery of Underlying Asset to be Settled
5,797
11,085-Others
5,354,822
4,358,049-Accrued interest and Quotation Differences Payable
90,562
20,890SUBORDINATED NEGOTIABLE OBLIGATIONS
958,052
1,253,027
 
 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 Argentine government to compensate financial institutions for the losses generated by the asymmetric pesification of loans and deposits.
 
 With respect to the determination of tax collection authorities from the Autonomous City of Buenos Aires, 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 authorities, a preliminary injunction was granted by the Argentine Federal Court of Appeals in Administrative Matters in the amount corresponding to the Compensatory Bond, which was ratified by the Supreme Court of Justice. Therefore, the court ordered the Argentine Revenue Service (“A.F.I.P.”) to refrain from starting tax enforcement proceedings or otherwise requesting precautionary measures for such purposes.
 
 With regard to other Autonomous City of Buenos Aires’ claims, Banco de Galicia y Buenos Aires S.A. adhered to the System for the Regularization of Tax Liabilities in Arrears (Law No. 3461 and regulatory dispositions), which provides for the total relief of interest and fines. Banco de Galicia y Buenos Aires S.A.
 
 With regard to other Autonomous City of Buenos Aires’ claims, Banco de Galicia y Buenos Aires S.A. adhered to the System for the Regularization of Tax Liabilities in Arrears (Law No. 3461 and regulatory dispositions), which provides for the total relief of interest and fines. Banco de Galicia y Buenos Aires S.A.’s adherence to this system was set forth within the framework of the respective cases before the corresponding judicial authorities.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 20:                    Continued
 
 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 management. Even though Banco de Galicia y Buenos Aires S.A. believes that it has complied with its tax liabilities in full in accordance with current regulations, the allowances deemed appropriate to deal with each proceeding have been set up.
 
 Tarjetas Regionales S.A.:
 
 At the date of these consolidated financial statements, the A.F.I.P., 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, which are at different stages of completion. These 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. The original amount claimed for taxes totals approximately AR$11,550.
 
 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 effect and existing case law.
 
 However, since the final outcome of these measures cannot be foreseen, provisions have been set up to cover such contingencies.
 
 Compañía Financiera Argentina S.A.:
 
 As regards Compañía Financiera Argentina S.A., the A.F.I.P. conducted audits on fiscal years 1998 and 1999, not accepting certain uncollectible loans to be recorded as uncollectible receivables deductible from income tax and minimum presumed income tax. The original amount claimed for taxes by the tax collection authorities totals AR$2,094.
 
 Since the final resolution of this controversy is still uncertain, 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.
 
 Banco de Galicia y Buenos Aires S.A. considers that the resolution of these controversies will not have a significant impact on its financial condition.
 
 NOTE 21:                    SEGMENT REPORTING
 
 A breakdown of the accounting information as of September 30, 2011 and 2010 (by related business segment) is set forth below:
 
 Primary Segment: Business.
 
 Financial Brokerage
Services
TotalIncome
4,110,337
2,520,893
6,631,230Expenses
(1,552,715)
(759,700)
(2,312,415)Result as of 9/30/11
2,557,622
1,761,193
4,318,815Result as of 9/30/10
1,432,937
1,274,445
2,707,382
  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 ($) and U.S. Dollars (U.S.$))


NOTE 21:                    Continued
 
 Secondary Segment: Geographic.
 
 Financial Brokerage
City of Buenos Aires
Rest of the Country
Foreign
TotalIncome
2,383,995
1,716,888
9,454
4,110,337Expenses
(900,575)
(648,569)
(3,571)
(1,552,715)Result as of 9/30/11
1,483,420
1,068,319
5,883
2,557,622Result as of 9/30/10
831,103
587,504
14,330
1,432,937
 
 Services
City of Buenos Aires
Rest of the Country
Foreign
TotalIncome
1,462,118
1,052,977
5,798
2,520,893Expenses
(440,626)
(317,327)
(1,747)
(759,700)Result as of 9/30/11
1,021,492
735,650
4,051
1,761,193Result as of 9/30/10
739,178
522,522
12,745
1,274,445
 
 The accounting measurement of assets and liabilities allocated to the above-mentioned segments is the following:
 
 9/30/11
12/31/10ASSETSGOVERNMENT AND PRIVATE SECURITIES
3,764,984
2,278,012LOANS
28,311,137
21,353,781OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE
3,638,796
3,325,990RECEIVABLES FROM FINANCIAL LEASES
559,227
428,080
 
 9/30/11
12/31/10LIABILITIESDEPOSITS
28,531,542
22,222,764OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE
11,058,707
7,608,071SUBORDINATED NEGOTIABLE OBLIGATIONS
958,052
1,253,027
 
 NOTE 22:                    STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS
 
 Cash and due from banks and assets held with the purpose of complying with short-term commitments, with a high level of liquidity, which are easily converted into known amounts of cash, are subject to insignificant changes in value and have 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:
 
 9/30/11
12/31/10
9/30/10
12/31/09Cash and Due from Banks
6,902,248
5,645,571
5,203,961
3,696,309Securities Issued by the B.C.R.A.
1,589,608
1,023,935
482,549
728,743Reverse Repo Transactions with the B.C.R.A.
77,960
-
96,995
153,173Interbank Loans - (Call Money Loans Granted)
129,000
32,500
42,000
25,300Loans Granted to Prime Companies with Maturity up to 7 Days, Used as Liquidity Reserve
-
-
-
79,810Overnight Placements in Banks Abroad
311,559
215,282
256,145
440,745Other Cash Placements
318,608
526,229
281,903
304,650Cash and Cash Equivalents
9,328,983
7,443,517
6,363,553
5,428,730
 
 NOTE 23:                    BANCO DE GALICIA Y BUENOS AIRES S.A.’S RISK MANAGEMENT POLICIES
 
 The specific function of the comprehensive management of Banco de Galicia y Buenos Aires S.A.’s risks (credit, financial and operational risks) has been allocated to the Risk Management Division; independence from the rest of the business areas is guaranteed since it directly reports to Banco de Galicia y Buenos Aires S.A.’s General Division and, at the same time, is involved in the decisions made by each area.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 23:                    Continued
 
 The aim of the Risk Management Division and the Anti-Money Laundering Unit is to be fully aware of the risks Banco de Galicia y Buenos Aires S.A. is exposed to and to create the policies and procedures necessary to mitigate and control such risks.
 
 Financial Risks
 
 Banco de Galicia y Buenos Aires S.A.'s objective in asset and liability management is to achieve a structure of financial assets and liabilities that maximizes its return on equity, both short-term and long-term, within an environment of acceptable risk.
 
 Liquidity
 
 Banco de Galicia y Buenos Aires S.A. tries to maintain a level of liquid assets that allows it to meet financial commitments at contractual maturity, take advantage of potential investment opportunities, and meet credit demands.
 
 The current liquidity policy in effect provides for the setting of limits and monitoring in terms of a) liquidity as regards stock: a level of “Management Liquidity” was established as the excess over legal minimum cash requirements, taking into consideration the characteristics and behavior of Banco de Galicia y Buenos Aires S.A.’s different liabilities, and the liquid assets that make up such liquidity were determined as well; and b) cash flow liquidity: gaps between the contractual maturities of consolidated financial assets and liabilities are analyzed and monitored. There is a floor for the gap between maturities, determined based on the gap accumulated against total liabilities permanently complied with during the first year.
 
 There is also a contingency plan that sets forth the measures to be taken and the assets from which to obtain liquid resources, in addition to those contemplated by the policy described.
 
 In order to mitigate the liquidity risk stemming from the deposit concentration by customer, Banco de Galicia y Buenos Aires S.A. has a policy in place that regulates deposit concentration in the largest customers.
 
 Currency Risk
 
 In order to manage and mitigate the “currency risk,” Banco de Galicia y Buenos Aires S.A. has a policy in place that relates to two currencies in addition to the Peso: assets and liabilities adjusted by C.E.R. and foreign currency. The policy currently in effect sets forth technical limitations on maximum positions "bought" (assets denominated in a certain currency exceeding liabilities denominated in that same currency) and “sold” (assets denominated in a certain currency that are lower than the liabilities in that same currency) for mismatches in Pesos, adjustable by C.E.R. and in foreign currencies, as a ratio of the R.P.C. of Banco de Galicia y Buenos Aires S.A., on a consolidated basis. Banco de Galicia y Buenos Aires S.A. manages the gap between assets and liabilities, but also with respect to the futures market in foreign currency. Banco de Galicia y Buenos Aires S.A.'s futures transactions (futures in Dollars) are subject to the limitations that take into account the characteristics of each negotiation environment.
 
 Interest Rate Risk
 
 In order to mitigate the sensitivity of Banco de Galicia y Buenos Aires S.A.’s results to variations in interest rates, maximum limits have been established for: (i) the potential negative impact on net financial income for the first year in the context of rising interest rates relative to a "base" scenario, and (ii) the potential negative impact on the net present value of Banco de Galicia y Buenos Aires S.A.’s assets and liabilities in the "base" scenario relative to the value before an increase in interest rates. Calculations are carried out monthly using the methodology known as “scenario simulation,” and taking into account the assets and liabilities of Banco de Galicia y Buenos Aires S.A.'s consolidated balance sheet.
 
 Market Risk
 
 All brokerage transactions and/or investments in government securities, currencies, derivatives and debt securities issued by the B.C.R.A. listed in the Argentine capital markets, and which value varies in accordance with the fluctuation of the market prices thereof, are included in the policy that limits the tolerable losses for the fiscal year.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 23:                    Continued
 
 In order to measure and control the risk derived from the price variations of the financial instruments that make up the brokerage or trading portfolio, a model known as "Value at Risk" ("VaR") is used, among other methodologies. On an intra-day basis and for Banco de Galicia y Buenos Aires S.A. on an individual basis, this model measures the potential loss generated by the positions in securities, derivatives, and foreign-currencies under certain parameters. The VaR methodology estimates the changes in value of a portfolio caused by variations of one basis point in the interest rate; such methodology is applied to measure and control of the risk associated with the brokerage of debt securities issued by the B.C.R.A.
 
 Cross Border Risk
 
 In order to control the exposure to risks in international environments, limits were set up taking into account credit ratings of certain countries, the type of transaction and a maximum exposure to a given country with which Banco de Galicia y Buenos Aires S.A. is comfortable.
 
 Transfer Risk
 
 With the purpose of mitigating the risk generated by a possible change in domestic laws that could hinder the transfer of foreign currency abroad to pay for liabilities assumed, a policy that sets a limit to liabilities with parties from abroad as a percentage of total liabilities was approved at the end of the first quarter.
 
 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, with respect to both retail and wholesale businesses. This allows an ongoing and efficient monitoring of the quality of assets, a proactive management of problem loans, aggressive write-offs of uncollectible loans, and conservative loan loss provisioning.
 
 Apart from that, this system includes the follow-up of the models for measuring the portfolio risk at the operation and customer levels, thus making it possible to detect early any situations that could create portfolio deterioration, and to appropriately safeguard Banco de Galicia y Buenos Aires S.A.’s assets.
 
 Banco de Galicia y Buenos Aires S.A.’s Risk Management and Insurance Division approves the credit risk policies and procedures, verifies compliance therewith and assesses credit risk on an ongoing basis.
 
 The retail banking approval policy is focused on automatic credit-extension processes. Such processes are based on behavior analysis models. Banco de Galicia y Buenos Aires S.A. is strongly focused on attracting payroll deposits, which statistically are more favorable than other kinds of deposits.
 
 In wholesale banking transactions, the extension of credit is based on the credit, cash flow, balance sheet and applicant's analysis based on statistical rating models.
 
 During fiscal year 2010, the review-by-sector policy was implemented, which sets forth the levels of review for the economic activities pertaining to the private-sector portfolio, which are directly related to their total credit and/or R.P.C. concentration.
 
 Banco de Galicia y Buenos Aires S.A.’s Risk Management Division also constantly monitors its portfolio using different indicators/ratios (asset quality of the loan portfolio, provisioning of the non-accrual portfolio, non-performance, roll rates, etc.), as well as the classification and concentration thereof (through maximum ratios between the exposure to each client, its own R.P.C. and that of each client). This loan portfolio classification, as well as the monitoring processes, are carried out in accordance with B.C.R.A. 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 Banco de Galicia y Buenos Aires S.A., and within the framework of the provisions set forth by the B.C.R.A. in Communiqué “A” 4793 and supplementary regulations.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 23:                    Continued
 Banco de Galicia y Buenos Aires S.A. started to implement an operational risk management system in an on-going manner and in accordance with a timeline determined in such Communiqué.
 
 Furthermore, Banco de Galicia y Buenos Aires S.A incorporated an operational risk events database that will comply with the reporting requirements set forth in Communiqué “A” 4904 of the B.C.R.A.
 
 Banco de Galicia y Buenos Aires S.A. adopted the “operational risk” definition used by the Argentine Central Bank and best international practices, which defines such term as the risk of loss resulting from the lack of adjustment or failure of internal procedures, staff procedures or systems procedures, or those risks created by external events. This definition includes legal risk, but excludes strategic and reputational risks.
 
 Banco de Galicia y Buenos Aires S.A.’s boards of directors, Risk Management Committee, Risk Management Division, Operational Risk Unit and Business and Support Divisions each have clearly defined roles and responsibilities which relate to this risk..
 
 Banco de Galicia y Buenos Aires S.A.’s Risk Management Division, which reports to Banco de Galicia y Buenos Aires S.A.’s chief executive officer, focuses on the comprehensive management of Banco de Galicia y Buenos Aires S.A.'s risks in three categories (and three independent sub-divisions): financial, credit and operational. Banco de Galicia y Buenos Aires S.A. has a specific and independent unit for the management of each particular risk.
 
 Banco de Galicia y Buenos Aires S.A. works to manage the operational risk related to its products, activities, processes (including data protection), systems and technology, as well as the risk related to outsourced business activities and services rendered by suppliers. In addition, before launching or introducing new products, activities, processes or systems, Banco de Galicia y Buenos Aires S.A. analyzes the inherent operational risk associated with such products, etc.
 
 Banco de Galicia y Buenos Aires S.A.'s purpose is to have a systematic approach for dealing with operational risk management, focused on improvements related to the identification, assessment, follow-up, control and mitigation of the various risks related to banking activities.
 
 Risk regarding Money Laundering and Other Illegal Activities
 
 As regards the control and prevention of money laundering, Banco de Galicia y Buenos Aires S.A. complies with B.C.R.A. regulations and Law No. 25246, which amends the Argentine Criminal Code as to concealment and asset laundering and creates the Financial Information Unit (“U.I.F.” as per its initials in Spanish - 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 applied using a “risk-based approach.” Such policies and procedures allow for the monitoring of transactions, pursuant to the “risk profile of customers,” in order to detect such transactions that should be considered unusual, and to report them to the U.I.F. Banco de Galicia y Buenos Aires S.A.’s Anti-Money Laundering Unit is in charge of managing this activity, 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. The management of this risk is regularly reviewed by Banco de Galicia y Buenos Aires S.A.’s Internal Audit Department.
 
 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. The basic principles on which the regulations regarding prevention and control of this risk are based are in line with the best international practices.
 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 ($) and U.S. Dollars (U.S.$))


NOTE 24:                    SUBSEQUENT EVENTS
 
 Tarjeta Naranja S.A.
 
 During October 2011, Tarjeta Naranja S.A.’s board of directors decided to approve the issuance of class XV negotiable obligations within the framework of the global program explained in Note 11 to the consolidated financial statements.
 
 Tarjetas Cuyanas S.A.
 
 During October 2011, Tarjetas Cuyanas S.A. placed class VI negotiable obligations in two series: series I for a face value of US$18,883, which will be amortized in only one installment at maturity, on October 4, 2012, at an annual nominal fixed rate of 7.5%; and series II for US$7,184, at an annual nominal fixed rate of 8.5%, the principal of which must be paid upon maturity, on October 4, 2013.
 
 Sudamericana Holding S.A.
 
 On October 28, 2011, it was decided at the ordinary and extraordinary shareholders’ meeting of Sudamericana Holding S.A. to distribute the retained earnings as of June 30, 2011 in the amount of AR$64,053 as follows: (i) AR$13,000 would be allocated to the payment of dividends, and (ii) the remaining AR$51,053 would be used to increase the discretionary reserve.
 
 GV Mandataria de Valores S.A.
 
 During October 2011, the Company made irrevocable contributions to GV Mandataria de Valores S.A. for a total amount of AR$850.
 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 September 30, 2011 and December 31, 2010.
 (Figures Stated in Thousands of Pesos)
 9/30/11
12/31/10ASSETSCURRENT ASSETSCash and Due from Banks (Notes 2 and 11 and Schedule G)
890
830Investments (Notes 9 and 11 and Schedules D and G)
38,159
26,468Other Receivables (Notes 3, 9, and 11 and Schedule G)
8,380
2,109Total Current Assets
47,429
29,407NON-CURRENT ASSETSOther Receivables (Notes 3, 9, 11 and 13 and Schedules E and G)
43,668
56,794Investments (Note 9 and Schedules B, C and G)
3,311,272
2,623,911Fixed Assets (Schedule A)
1,250
1,048Total Non-current Assets
3,356,190
2,681,753Total Assets
3,403,619
2,711,160LIABILITIESCURRENT LIABILITIESFinancial Debts (Notes 4, 9 and 16 and Schedule G)
78,436
42,787Salaries and Social Security Contributions (Notes 5 and 9)
1,633
1,735Tax Liabilities (Notes 6 and 9)
6,442
6,554Other Liabilities (Notes 7, 9 and 11 and Schedule G)
4,384
10,184Total Current Liabilities
90,895
61,260NON-CURRENT LIABILITIESFinancial Debts (Notes 4, 9 and 16 and Schedule G)
116,277
180,394Other Liabilities (Notes 7 and 9)
6
6Total Non-current Liabilities
116,283
180,400Total Liabilities
207,178
241,660SHAREHOLDERS' EQUITY (Per Related Statement)
3,196,441
2,469,500Total Liabilities and Shareholders' Equity
3,403,619
2,711,160
  The accompanying notes 1 to 17 and schedules A, B, C, D, E, 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 September 30, 2011 and December 31, 2010.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
12/31/10Forward Purchase of Foreign Currency Without Delivery of the Underlying Asset (Note 15 and Schedule G)
117,740
119,280
 
 The accompanying notes 1 to 17 and schedules A, B, C, D, E, 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 nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
9/30/10Net Income on Investments in Related Institutions
786,020
269,416Administrative Expenses (Note 11 and Schedule H)
(14,892)
(17,049)Financial Income and by Holding
(23,664)
(33,687)-Generated by Assets
4,525
4,059InterestOn Special Current Account Deposits
9
1Mutual Funds
244
81On Time Deposits (*)
92
39On Promissory Notes Receivable (*)
108
135Result on Negotiable Obligations
-
32Result on Negotiable Mutual Funds from Abroad
-
30Exchange-Rate Difference
4,072
3,741-Generated by Liabilities
(28,189)
(37,746)InterestOn Financial Debts
(13,693)
(13,740)Others
-
(320)Exchange-Rate Difference
(14,496)
(23,686)Other Income and Expenses (*) – Income
5,238
892Net Income before Income Tax
752,702
219,572Income Tax (Note 13)
(933)
(281)Net Income for the Period
751,769
219,291
 (*) 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 17 and schedules A, B, C, D, E, 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 nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, 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)Capital Stock
Capital Adjustment
Premium for Negotiation of Shares in Own Portfolio
Total
Legal Reserve
Discretionary Reserve
Valuation Adjustment of Hedging Derivatives
Retained Earnings
Total Shareholders’ EquityBalances 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
-
-
-
-
-
-
8,060
-
8,060Distribution of Retained Earnings (1)- Legal Reserve
-
-
-
-
11,464
-
-
(11,464)
-- Discretionary Reserve
-
-
-
-
-
217,811
-
(217,811)
-Income for the Period
-
-
-
-
-
-
-
219,291
219,291Balances as of 9/30/10
1,241,407
278,131
606
1,520,144
57,462
482,993
-
219,291
2,279,890
  Balances as of 12/31/10
1,241,407
278,131
606
1,520,144
57,462
482,993
-
408,901
2,469,500Distribution of Retained Earnings (2)- Legal Reserve
-
-
-
-
20,445
-
-
(20,445)
-- Discretionary Reserve
-
-
-
-
-
363,628
-
(363,628)
-- Cash Dividends
-
-
-
-
-
-
-
(24,828)
(24,828)Income for the Period
-
-
-
-
-
-
-
751,769
751,769Balances as of 9/30/11
1,241,407
278,131
606
1,520,144
77,907
846,621
-
751,769
3,196,441
  (1) Approved at the ordinary shareholders’ meeting held on April 14, 2010.
 (2) Approved at the ordinary shareholders’ meeting held on April 27, 2011.
 
 The accompanying notes 1 to 17 and schedules A, B, C, D, E, 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 nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format with the same period of the previous fiscal year.
 (Figures Stated in Thousands of Pesos)
 
 9/30/11
9/30/10CHANGES IN CASH(Note 1.j)Cash at Beginning of Fiscal Year
27,298
19,422Cash at Period-end
39,049
28,216Increase in Cash, Net
11,751
8,794CAUSES FOR CHANGES IN CASHOperating ActivitiesCollections for Services
-
1,664Payments to Suppliers of Goods and Services
(8,315)
(9,328)Personnel Salaries and Social Security Contributions
(5,271)
(3,689)Payment of Other Taxes
(10,073)
(7,925)Income Tax Payments and Prepayments
-
(21,822)(Payments) / Collections for Other Operating Activities, Net
(7,272)
412Net Cash Flow (Used in) Operating Activities
(30,931)
(40,688)Investment ActivitiesCollections for Sale of Fixed Assets
146
-Payments for Purchases of Fixed Assets
(296)
(167)Collections for Prepayments due to the Sale of Fixed Assets
-
2,998Dividends Collections
121,836
656Interests Collections, Net
19,234
1,083Payments for Equity Investments
(25,669)
-Net Cash Flow Generated by Investment Activities
115,251
4,570Financing ActivitiesDistribution of Dividends, Net of Taxes
(18,792)
-(Payments) / Collections of Loans Received, Net
(53,777)
44,912Net Cash Flow (Used in) / Generated by Financing Activities
(72,569)
44,912Increase in Cash, Net
11,751
8,794
 
 The accompanying notes 1 to 17 and schedules A, B, C, D, E, 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 nine-month period beginning on January 1, 2011 and
 ending on September 30, 2011, presented in comparative format.
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$))
 
 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 F.A.C.P.C.E. as the Argentine GAAP; such 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 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 F.A.C.P.C.E., 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 subsidiaries Banco de Galicia y Buenos Aires S.A. and Sudamericana Holding 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 actually occur in the future.
 
 On March 25, 2003, the the executive branch of the Argentine government issued Decree No. 664 establishing that financial statements for fiscal years ending after such 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 after 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.
 
 Certain figures in the financial statements for the fiscal year ended December 31, 2010 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, as applicable, the interest accrued at period/fiscal 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 effect at the close of operations on the last working day of each period/fiscal year. Interest receivable or payable has been accrued, as applicable.
 
 c.
Investments
 
 c.1.
Current
 
 Time and special current account deposits have been valued at their face value, plus accrued interest at period/fiscal year-end.
 
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 1:                      Continued
 
 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 September 30, 2011 and December 31, 2010, 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., GV Mandataria de Valores S.A., Sudamericana Holding S.A. and Compañía Financiera Argentina S.A. are recognized using the equity method as of September 30, 2011.
 
 The consolidated financial statements of Sudamericana Holding S.A. have been prepared pursuant to the regulations of the Argentine Superintendency of Insurance, 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 the Company.
 
 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 effect at the closing of operations on the last working day of the period/fiscal year.
 - Capital and capital contributions have been computed in 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, with an 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 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.
 
 f.
Financial Debt
 
 Financial debt has been valued pursuant to the amount of money received, net of transaction costs, plus financial interest accrued based on the I.R.R. estimated at the initial recording time.
 
 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.
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 1:                      Continued
 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 effect (see Note 13 to the financial statements). Due to the unlikelihood that future taxable income may be enough to absorb tax losses, the Company has established an allowance for impairment of value with regard to such income and has not recorded tax losses.  See Schedule E.
 
 The Company determines the minimum presumed income tax at the statutory rate of 1% of the computable assets at period/fiscal year-end. This tax is supplementary to the income tax. The Company’s tax liability for each fiscal year must be determined by the higher of the two taxes. However, 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 Company has set up a provision for the minimum presumed income tax credit accrued during the period and the previous fiscal year, for AR$851 and AR$936, respectively, since its recovery is not likely at the issuance date of these financial statements. See Schedule E.
 
 h.
Derivative Instruments
 
 As of September 30, 2011 and December 31, 2010, derivative instruments have been valued at their estimated current value at those dates.
 
 Differences originated as a consequence of the measurement criterion mentioned in the previous paragraph have been recognized in results for the period/fiscal year.
 
 i.
Shareholders’ Equity
 
 i.1.
Activity in the Shareholders’ Equity accounts has been restated as mentioned in paragraphs four and five 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 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:
 
 9/30/11
12/31/10Cash and Due from Banks (Note 2)
890
830Investments (Schedule D)
38,159
26,468Total
39,049
27,298
 
 52
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 2:                      CASH AND DUE FROM BANKS
 The breakdown of this caption was the following:
 
 9/30/11
12/31/10Cash
12
11Cash in Custody in Other Banks (Schedule G)
614
653Due from Banks – Current Accounts (Note 11)
264
166Total
890
830
 
 NOTE 3:                      OTHER RECEIVABLES
 
 The breakdown of this caption was the following:
 
 9/30/11
12/31/10CurrentTax Credit
398
-Recoverable Expenses
6,338Promissory Notes Receivable (Note 11 and Schedule G)
902
2,103Sundry Debtors (Note 11)
657
-Prepaid Expenses
12
6Others
73
-Total
8,380
2,109
 
 9/30/11
12/31/10Non-CurrentTax Credit – Income Tax (Note 13 and Schedule E)
-
1,034Promissory Notes Receivable (Note 11 and Schedule G)
43,667
55,754Sundry Debtors
1
1Prepaid Expenses
-
5Total
43,668
56,794
 
 NOTE 4:                      FINANCIAL DEBT
 
 The breakdown of this caption was the following:
 
 9/30/11
12/31/10CurrentNegotiable Obligations (Note 16 and Schedule G)
78,436
42,787Total
78,436
42,787
 
 9/30/11
12/31/10Non-CurrentNegotiable Obligations (Note 16 and Schedule G)
116,277
180,394Total
116,277
180,394
 
 NOTE 5:                      SALARIES AND SOCIAL SECURITY CONTRIBUTIONS
 
 The breakdown of this caption was the following:
 
 9/30/11
12/31/10CurrentArgentine Integrated Social Security System
124
148Provision for Annual Legal Bonus (SAC)
120
-Provision for Bonuses
596
656Provision for Retirement Insurance
643
720Provision for Directors’ and Syndics' Fees
141
195Others
9
16Total
1,633
1,735
  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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 6:                      TAX LIABILITIES
 
 The breakdown of this caption was the following:
 
 9/30/11
12/31/10CurrentIncome Tax – Withholdings to Be Deposited
104
91Provision for Minimum Presumed Income Tax
-
206Provision for Turnover Tax (Net)
-
50Provision for Tax on Personal Assets – Substitute Taxpayer
6,338
6,207Total
6,442
6,554
 
 NOTE 7:                      OTHER LIABILITIES
 
 The breakdown of this caption was the following:
 
 9/30/11
12/31/10CurrentSundry Creditors
224
86Provision for Expenses (Note 11 and Schedule G)
2,101
2,265Balance of Futures Contracts to be Settled (Note 15)
2,056
7,830Directors’ Qualification Bonds
3
3Total
4,384
10,184
 
 9/30/11
12/31/10Non-CurrentDirectors’ Qualification Bonds
6
6Total
6
6
 
 NOTE 8:                      CAPITAL STATU.S.
 
 As of September 30, 2011, capital status was as follows:
 
 Capital Stock Issued, Subscribed, Paid-in and Recorded
Face Value
Restated at Constant CurrencyBalances as of 12/31/09
1,241,407
1,519,538Balances as of 12/31/10
1,241,407
1,519,538Balances as of 9/30/11
1,241,407
1,519,538
 
 NOTE 9:                      ESTIMATED COLLECTION OR PAYMENT TERMS OF RECEIVABLES, INVESTMENTS, AND DEBTS
 
 As of September 30, 2011, 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 (*)
38,159
8,229
-
253
104
5322nd Quarter (*)
-
1
-
1,239
-
2,1393rd Quarter (*)
-
1
78,436
141
6,338
4934th Quarter (*)
-
149
-
-
-
1,220After One Year (*)
-
43,667
116,277
-
-
6Subtotal Falling Due
38,159
52,047
194,713
1,633
6,442
4,390No Set Due Date
3,311,272
1
-
-
-
-Past Due
-
-
-
-
-
-Total
3,349,431
52,048
194,713
1,633
6,442
4,390Non-interest Bearing
3,311,272
7,479
-
1,633
6,442
4,390At Variable Rate
907
44,569
-
-
-
-At Fixed Rate
37,252
-
194,713
-
-
-Total
3,349,431
52,048
194,713
1,633
6,442
4,390
 (*) From the date of these financial statements.
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 10:                    EQUITY INVESTMENTS
 
 The breakdown of equity investments was the following:
 
 As of September 30, 2011Issuing Company
Shares
Percentage Held inClass
Number
Total Capital
Possible VotesBanco de Galicia y Buenos Aires S.A.
Ordinary Class “A”
101Ordinary Class “B”
533,314,664Total
533,314,765
94.840741
94.840745Net 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
100.000000Compañía Financiera Argentina S.A.
Ordinary
16,726,875
3.000000
3.000000
 
 As of December 31, 2010Issuing Company
Shares
Percentage Held inClass
Number
Total Capital
Possible VotesBanco de Galicia y Buenos Aires S.A.
Ordinary Class “A”
101Ordinary Class “B”
533,314,664Total
533,314,765
94.840741
94.840745Net 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:
 
 As of September 30, 2011Assets
Liabilities
Shareholders’ Equity
Net IncomeBanco de Galicia y Buenos Aires S.A.
45,735,231
42,491,385
3,243,846
748,284Net Investment S.A.
165
6
159
(26)Galicia Warrants S.A.
34,063
17,426
16,637
4,192Galval Agente de Valores S.A.
7,638
2,863
4,775
(3,409)GV Mandataria de Valores S.A.
759
370
389
110Sudamericana Holding S.A.
383,024
256,173
126,851
71,749Compañía Financiera Argentina S.A.
1,935,219
1,062,710
872,509
159,324
 
 Financial Condition as of December 31, 2010 and Net Income as of September 30, 2010 (*)Assets
Liabilities
Shareholders’ Equity
Net IncomeBanco de Galicia y Buenos Aires S.A.
35,298,911
32,703,255
2,595,656
271,299Net Investment S.A.
209
24
185
(86)Galicia Warrants S.A.
28,247
14,295
13,952
2,029Galval Agente de Valores S.A.
8,803
619
8,184
(3,426)GV Mandataria de Valores S.A.
555
277
278
219Sudamericana Holding S.A.
293,886
188,784
105,102
19,118
 
 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 ($) and U.S. Dollars (U.S.$))
 
 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.
 
 9/30/11
12/31/10AssetsCash and Due from Banks – Current Accounts (Note 2)
115
152Investments – Special Current Accounts (Schedule D)
1
5,291Other Receivables – Promissory Notes Receivable (Note 3 and Schedule G)
44,569
57,857Total
44,685
63,300
 
 9/30/11
12/31/10LiabilitiesOther Liabilities – Provision for Expenses (Note 7)
215
257Total
215
257
 
 9/30/11
9/30/10IncomeFinancial Income – Interest on Time Deposits
1,076
397Financial Income – Interest on Promissory Notes Receivable
2,090
2,559Other Income – Fixed Assets under Lease
-
150Total
3,166
3,106
 
 9/30/11
9/30/10ExpensesAdministrative Expenses (Schedule H)Trademark Leasing
1,034
941Bank Expenses
5
6General Expenses
381
369Expenses Corresponding to the Issuance of the Global Program for the Issuance of Negotiable Obligations
-
52Total
1,420
1,368
 
 Galval Agente de Valores S.A.
 
 9/30/11
12/31/10LiabilitiesOther Liabilities – Provision for Expenses (Note 7 and Schedule G)
-
22Total
-
22
 
 9/30/11
9/30/10ExpensesAdministrative Expenses (Schedule H)General Expenses
53
84Total
53
84
 
 56
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 11:                    Continued
 
 Galicia Seguros S.A.
 
 9/30/11
9/30/10IncomeOther Income – Fixed Assets under Lease
-
221Total
-
221
 
 Galicia Warrants S.A.
 
 9/30/11
12/31/10AssetsOther Receivables - Sundry Creditors (Note 3)
656
-Total
656
-
 
 Additionally, the purchase and sale of foreign exchange derivatives instruments related to the transactions described in Note 16 was carried out with Banco de Galicia y Buenos Aires S.A.
 
 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
Other Receivables
Other Liabilities
TotalBalances as of 12/31/09
1,570
-
1,570Charge to Income
103
-
103Balances as of 12/31/10
1,673
-
1,673Charge to Income
(1,673)
(13)
(1,686)Others
-
13
13Balances as of 9/30/11
-
-
-
 
 Liabilities

Fixed Assets
Financial Debt
TotalBalances as of 12/31/09

6
501
507Charge to Income

1
131
132Balances as of 12/31/10

7
632
639Charge to Income

(121)
(632)
(753)Others

114
-
114Balances as of 9/30/11

-
-
-
 
 As the above-mentioned information shows, as of December 31, 2010 the Company’s deferred tax assets amounted to AR$1,034. Based on the Company’s estimates, at period-end an allowance for AR$1,149 has been allocated for the deferred tax assets recorded. See Schedule E.
 
 Tax losses recorded by the Company, pending being used, amount to approximately AR$40,527, pursuant to the following breakdown:
 
 Issuance Year
Amount
Year Due
Deferred Tax Assets2010
19,035
2015
6,6622011
21,492
2016
7,522
 
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 13:                    Continued
 
 The deferred tax originated from such tax losses has been fully provisioned, since it is supposed that the recovery thereof is not likely at the issuance date of these financial statements.  See Schedule E.
 
 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 results to that which would result from applying the tax rate in effect to the accounting income before tax:
 
 9/30/11
9/30/10Income Before Income Tax
752,702
219,572Income Tax Rate in effect
35%
35%Result for the Period at the Tax Rate
263,446
76,850Permanent Differences at the Tax RateIncrease in Income Tax- Expenses not Included in Tax Return
5,071
9,832- Other Causes
847
631Decrease in Income Tax- Results on Investments in Related Institutions
(274,974)
(94,009)- Other Causes
(2,128)
(16)- Allowance for Impairment of Value (Schedule E)
8,671
6,993Total Income Tax Charge Recorded – Loss
933
281
 
 The following table shows the reconciliation of tax charged to results to tax determined for the period for tax purposes:
 
 9/30/11
9/30/10Total Income Tax Charge Recorded – Loss
933
281Temporary Differences- Variation in Assets due to Deferred Tax
(1,686)
(30)- Variation in Liabilities due to Deferred Tax
753
(251)Total Tax Determined for Tax Purposes
-
-
 
 NOTE 14:                    EARNINGS PER SHARE
 
 Below is a breakdown of the earnings per share as of September 30, 2011 and 2010:
 
 9/30/11
9/30/10Income for the Period
751,769
219,291Outstanding Ordinary Shares Weighted Average
1,241,407
1,241,407Diluted Ordinary Shares Weighted Average
1,241,407
1,241,407Earnings per Ordinary Share- Basic
0.6056
0.1766- Diluted
0.6056
0.1766
 
 NOTE 15:                    DERIVATIVE INSTRUMENTS
 
 The Company enters into forward foreign currency hedge contracts with the purpose of covering the risk associated with the exchange rate exposure of financial debts in U.S. Dollars.
 
 The Company’s purpose when entering into these contracts is to reduce its exposure to U.S. Dollar fluctuations and denominate its future commitments in Pesos.
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 15:                    Continued
 
 On May 31, 2010, the contract entered into in fiscal year 2009 was settled, recording a AR$10,329 loss, which was charged to income for the fiscal year.
 
 The contracts entered into in fiscal year 2010 were settled, recording an AR$8,493 loss, of which AR$663 correspond to this fiscal year.
 
 During this period, new agreements were entered into and settled, recording a AR$39 loss.
 
 As of September 30, 2011, the following contracts are outstanding:
 
 Reference Foreign Currency
Amount in the Reference Foreign Currency (In Thousands)
Forward Exchange Rate (AR$ for U.S.$)
Exchange Rate for Settlement
Settlement DateU.S.$
(1)
8,000
(2)
4.5000
B.C.R.A.
(4)
02/29/2012U.S.$
(1)
20,000
(3)
4.5200
B.C.R.A.
(4)
03/30/2012
 (1) U.S. Dollars.
 (2) The hedge contract sets forth that if during the currency thereof the exchange rate is lower than or equal to AR$3.80 (three Pesos and eighty cents), the Company will have to furnish a security in favor of the contracting party for an amount equivalent to the difference between the reference exchange rate of AR$4.0315 and the exchange rate in effect at the time such security is furnished, in the amount of the contract.
 (3) The hedge contract sets forth that if during the currency thereof the exchange rate is lower than or equal to AR$3.80 (three Pesos and eighty cents), the Company will have to furnish a security in favor of the contracting party for an amount equivalent to the difference between the reference exchange rate of AR$4.052 and the exchange rate in effect at the time such security is furnished, in the amount of the contract.
 (4) Reference exchange rate set by the B.C.R.A. (Communiqué “A” 3500).
 
 Settlement of this transaction at the settlement date must be carried out without the physical delivery of the currency. That is to say, it must be by compensation or difference between the spot exchange rate for settlement and the forward exchange rate.
 
 The Company has not entered into contracts regarding derivatives for speculative purposes.
 
 NOTE 16:                    GLOBAL PROGRAM FOR THE ISSUANCE OF NEGOTIABLE OBLIGATIONS
 
 On March 9, 2009, the creation of the global program for the Issuance of simple negotiable obligations, not convertible into shares, was approved at the general ordinary shareholders’ meeting of the Company. Such negotiable obligations may be short-, mid- and/or long-term, secured or unsecured, Peso-denominated, Dollar-denominated or 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 face value of up to US$60,000 (sixty million U.S. Dollars) or the equivalent thereof in another currency.
 
 The maximum term of the program must 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 effect.
 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 ($) and U.S. Dollars (U.S.$))
 
 NOTE 16:                    Continued
 
 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.
 
 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 C.N.V. approved the pricing supplement used in connection with the issuance of the class I, series I and II negotiable obligations, for a face value of US$45,000.
 
 On June 4, 2009, series I and II corresponding to negotiable obligations class I were issued.
 
 On May 30, 2010, series I corresponding to negotiable obligations class I for a face value of US$34,404 was repaid.
 
 On May 25, 2011, series II corresponding to negotiable obligations class I was repaid, the main characteristics of which are described as follows:
 
 Series No.
face value Amount in U.S.$
Issuance Price (In Thousands of U.S.$)
Term (In Days)
Maturity Date
Interest Rate
Book Value

$9/30/11
12/31/10II
10,596
0.10348
720
5/25/11
Annual nominal at 12.5%
-
42,787
 
 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.
 
 On June 8, 2010, series II and III corresponding to negotiable obligations class II were issued, the main characteristics of which are described as follows:
 
 Series No.
face value Amount in U.S.$
Issuance Price (In Thousands of U.S.$)
Term (In Days)
Maturity Date
Interest Rate
Book Value

$9/30/11
12/31/10II
18,143
0.10182
721
5/29/12
8%
78,436
72,866III
26,857
0.10128
1078
5/21/13
9%
116,277
107,528
 
 An increase of US$40,000 in the amount of the global program for the issuance of negotiable obligations was approved at the Company’s shareholders’ meeting held on April 14, 2010. The maximum amount of the program, which currently is up to US$60,000 or its equivalent in any other currency, must be up to US$100,000 or its equivalent in any other currency.
 60
 Grupo Financiero Galicia S.A.
 “Corporation which has not Adhered to the Optional System
 for the Mandatory Acquisition of Shares in a Public Offering" Notes to the Financial Statements(continued)
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$))
 
 NOTE 17:                    ADOPTION OF THE INTERNATIONAL FINANCIAL REPORTING STANDARDS BY THE C.N.V.
 
 The C.N.V. has established the application of Technical Pronouncement No. 26 of the F.A.C.P.C.E., which adopts the International Financial Reporting Standards issued by the International Accounting Standards Board (“I.A.S.B.”) 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 by the Company of these standards is mandatory starting January 1, 2012. The Company’s board of directors approved the specific implementation plan on April 28, 2010.
 
 Technical Pronouncement No. 26 waives the compulsory application of the International Financial Reporting Standards to certain companies, even if they have negotiable securities within the public offering system (whether because of their capital or their negotiable obligations). The C.N.V. accepts accounting criteria set forth by other regulatory or control bodies, such as companies included in the Financial Institutions Law and insurance companies.
 
 At the date of these financial statements, the Company is implementing the necessary changes in order to adopt (taking into consideration what is mentioned in the previous paragraph) the financial reporting standards on January 1, 2012, which mainly affect the presentation of the Company’s consolidated financial information. In this respect, the Company is working on the information models required by such accounting standards, both for the annual reporting of information and for information to be reported for interim periods.The main changes will affect (i) the reporting of the consolidated financial statements as main financial statements, (ii) the amendment of information to be included in the Notes to the financial statements, such as the classification of financial instruments, the level of importance of estimates made, and the disclosure of qualitative and quantitative aspects related to the management of financial risks, and (iii) the reconciliation of information by segments, among other aspects related to the presentation of information.
 
 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.
 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" Fixed Assets and Investments in Assets of a Similar Nature
 For the nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 Schedule A
 
 Main Account
At Beginning of Year
Increases
Decreases
Balance at Fiscal Year End
Depreciations
Net Book Value
Net Book Value for Previous Fiscal YearAccumulated at Beginning of Year
Decreases
Rate Annual %
Amount For the Period
Accumulated at the Close of YearReal Estate
918
-
-
918
145
-
2
13
158
760
773Furniture and Facilities
220
-
-
220
217
-
20
1
218
2
3Machines and Equipment
545
183
-
728
422
-
20
36
458
270
123Vehicles
128
108
-
236
15
-
20
34
49
187
113Hardware
292
5
-
297
256
-
20
10
266
31
36Totals as of 9/30/11
2,103
296
-
2,399
1,055
-

94
1,149
1,250
-Totals as of 12/31/10
4,385
246
2,528
2,103
1,366
418

107
1,055
-
1,048
 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" Goodwill
 For the nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 
 Schedule B
 
 Main Account
At Beginning of Year
Increases
Decreases
Balance at Fiscal Year End
Depreciations
Net Book Value
Net Book Value for Previous Fiscal YearAccumulated at Beginning of Year
Decreases
Rate Annual %
Amount For the Period
Accumulated at the Close of YearGoodwill

(Schedule C)
17,190
-
-
17,190
4,424
-
10
1,455
5,879
11,311
12,766Totals as of 9/30/11
17,190
-
-
17,190
4,424
-

1,455
5,879
11,311
-Totals as of 12/31/10
12,788
4,402
-
17,190
3,091
-

1,333
4,424
-
12,766
 
 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" Investments in Shares and other Negotiable Securities
 Equity Investments
 For the nine-month period ended September 30, 2011
 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 9/30/11
Recorded Value as of 12/31/10Non-current InvestmentsCorporations. Section  33 of Law No.19550:Companies subject to Direct and Indirect Control (Note 10 and Schedule G):Banco de Galicia y Buenos Aires S.A.
Ordinary Class “A”
0.001
101
3,036,022
5,546,474
3,149,291
3,149,291
2,522,197Ordinary Class “B”
0.001
533,314,664533,314,765Goodwill (Schedule B)


17,190
-
-
11,311
12,766Galicia Warrants S.A.
Ordinary
0.001
175,000
11,829
-
14,567
14,567
12,218Galval Agente de Valores S.A.
Ordinary
0.001
49,870,052
13,274
-
4,775
4,775
8,184Net Investment S.A.
Ordinary
0.001
10,500
22,341
-
139
139
162Sudamericana Holding S.A.
Ordinary
0.001
162,447
42,918
-
104,664
104,664
68,133GV Mandataria de Valores S.A.
Ordinary
0.001
10,800
11
-
350
350
251Compañía Financiera Argentina S.A.
Ordinary
0.001
16,726,875
25,669
-
26,175
26,175
-Total



3,169,254
5,546,474
3,299,961
3,311,272
2,623,911
 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 (continued)
 For the nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 Schedule C (continued)
 
 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:Companies subject to Direct and Indirect Control:Banco de Galicia y Buenos Aires S.A.
Financial Activities
9/30/11
562,327

748,284

3,243,846
94.840741Galicia Warrants S.A.
Issuance of Deposit Certificates and Warrants
9/30/11
200

4,192

16,637
87.500000Galval Agente de Valores S.A.
Custody of Securities
9/30/11
8,184
(1)
(3,409)

4,775
100.000000Net Investment S.A.
Information Technology
9/30/11
12

(26)

159
87.500000Sudamericana Holding S.A.
Financial and Investment Activities
9/30/11
186

19,878
(2)
126,851
87.500337GV Mandataria de Valores S.A.
Agent
9/30/11
12

110

389
90.000000Compañía Financiera Argentina S.A.
Financial Activities
9/30/11
557,563

159,324

872,509
3.000000
 (1) Equivalent to 49,870,052 thousand Uruguayan Pesos.
 (2) For the three-month period ended 9/30/11.
 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 nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 Schedule D
 
 Main Account and Characteristics
Recorded Value as of 9/30/11
Recorded Value as of 12/31/10Current Investments (*)Deposits in Special Current Accounts (Note 11 and Schedule G)
36,835
24,803Mutual Funds
907
1,198Time Deposits
417
467Total
38,159
26,468
 (*) Include accrued interest, 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" Allowances
 For the nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 Schedule E
 
 
 Captions
Balances at Beginning of Fiscal Year
Increases
Decreases
Balances at Period-End
Balances at the Close of the Previous Fiscal YearDeducted from Assets- Impairment of Value of Tax Losses
8,843
8,671
2,181
15,333
8,843- Impairment of Value of Minimum Presumed Income Tax Receivables
936
851
-
1,787
936Total as of 9/30/11
9,779
9,522
2,181
17,120
-Total as of 12/31/10
-
9,900
121
-
9,779
 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" Foreign Currency Assets and Liabilities
 For the nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos ($), Thousands of U.S. Dollars (U.S.$) and/or Euros (€))
 Schedule G
 
 Captions
Amount and Type of Foreign Currency
Exchange Rate
Amount in Argentine currency as of 9/30/11
Amount and Type of Foreign Currency
Amount in Argentine Pesos as of 12/31/10AssetsCurrent AssetsCash and Due from Banks- Cash in Custody in Other Banks
U.S.$
147.32
4.1650
614
U.S.$
165.83
653Investments- Deposits in Special Current Accounts
U.S.$
8,843.80
4.1650
36,834
U.S.$
6,301.21
24,802Other Receivables- Promissory Notes Receivable
U.S.$
216.54
4.1650
902
U.S.$
534.38
2,103Total Current Assets



38,350


27,558Non-current AssetsOther Receivables- Promissory Notes Receivable
U.S.$
10,484.30
4.1650
43,667
U.S.$
14,165.31
55,754Investments- Equity Investments
U.S.$
1,146.38
4.1650
4,775
U.S.$
2,079.20
8,184Total Non-current Assets



48,442


63,938Total Assets



86,792


91,496LiabilitiesCurrent LiabilitiesFinancial Debt- Negotiable Obligations
U.S.$
18,652.83
4.2050
78,436
U.S.$
10,761.37
42,787Other Liabilities- Provision for Expenses
U.S.$
242.63
4.2050
1,020
U.S.$
281.30
1,118- Provision for Expenses
€
0.50
5.6570
3
€
0.50
3Total Current Liabilities



79,459


43,908Non-current LiabilitiesFinancial Debt- Negotiable Obligations
U.S.$
27,652.20
4.2050
116,277
U.S.$
45,370.75
180,394Total Non-current Liabilities



116,277


180,394Total Liabilities



195,736


224,302Memorandum Accounts- Forward Purchase of Foreign Currency
U.S.$
28,000.00
4.2050
117,740
U.S.$
30,000.00
119,280
 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"
 Information Required by Section 64, Subsection b) of Law No. 19550
 For the nine-month period ended September 30, 2011
 presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 Schedule H
 
  Captions
Total as of

9/30/11
Administrative Expenses
Total as of

9/30/10Salaries and Social Security Contributions
5,088
5,088
3,447Bonuses
642
642
492Entertainment, Transportation, and Per Diem
375
375
13Services to the Staff
50
50
14Training Expenses
56
56
69Retirement Insurance
608
608
540Directors’ and Syndics' Fees
1,116
1,116
926Fees for Services
3,536
3,536
2,433Taxes
1,908
1,908
6,827Security Services
6
6
4Insurance
247
247
249Leases
3
3
2Stationery and Office Supplies
54
54
46Electricity and Communications
98
98
74Maintenance Expenses
22
22
122Depreciation of Fixed Assets
94
94
83Bank Charges (*)
16
16
15Condominium Expenses
35
35
94General Expenses (*)
738
738
824Vehicle Expenses
58
58
61Trademark Leasing (*)
53
53
50Expenses Corresponding to the “Global Program for the Issuance of Negotiable Obligations”
89
89
664Totals
14,892
14,892
17,049
  (*) 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.
 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
 For the nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format.
 (Figures Stated in Thousands of Pesos)
 
 NOTE 1:
SIGNIFICANT SPECIFIC LEGAL SYSTEMS CAUSING EXPIRATION OR RESURGENCE OF BENEFITS
 
 None.
 
 NOTE 2:
SIGNIFICANT CHANGES IN COMPANY ACTIVITIES OR OTHER CIRCUMSTANCES THAT OCCURRED DURING THE FISCAL YEARS COVERED BY THE FINANCIAL STATEMENTS WHICH MAY HAVE AN EFFECT ON THEIR COMPARISON WITH THOSE PRESENTED IN PREVIOUS FISCAL YEARS, OR THOSE THAT WILL BE PRESENTED IN FUTURE FISCAL YEARS.
 
 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 September 30, 2011 and December 31, 2010 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
 
 As of September 30, 2011 and December 31, 2010, the Company did not have any inventory.
 
 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 September 30, 2011 and December 31, 2010, the Company did not have any fixed assets that have been technically appraised.
 
 b)
Fixed assets not used because they are obsolete:
 
 As of September 30, 2011 and December 31, 2010, the Company did not have any obsolete fixed assets which have a book value.
 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"
 Additional Information to the Notes to the Financial Statements
 For the nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format.
 (Figures Stated in Thousands of Pesos) (continued)
 
 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.
 
 NOTE 11:
RECOVERABLE VALUES
 
 As of September 30, 2011 and December 31, 2010, 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 September 30, 2011 and December 31, 2010, 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 9/30/11
Book Value as of 12/31/10Building, Electronic Equipment and/or Office Assets.
Fire, Thunderbolt, Explosion and/or Theft.
1,363
1,063
935Vehicles
Theft, Robbery, Fire or Total Loss
270
187
113
 
 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 September 30, 2011 and December 31, 2010, 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 September 30, 2011 and December 31, 2010, there were no irrevocable contributions towards future share subscriptions.
 
 b)
Cumulative unpaid dividends on preferred shares:
 
 As of September 30, 2011 and December 31, 2010, there were no cumulative unpaid dividends on preferred shares.
 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"
 Additional Information to the Notes to the Financial Statements
 For the nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format.
 (Figures Stated in Thousands of Pesos) (continued)
 
 NOTE 15:
RESTRICTIONS ON THE DISTRIBUTION OF RETAINED EARNINGS
 
 See Note 12 to the financial statements.
 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"
 Supplementary and Explanatory Statement by the Board of Directors
 For the nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, 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 of the Company 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 September 30, 2011 and December 31, 2010, the Company had not set up any allowances or provisions.
 
 b) Inventory:
 
 As of September 30, 2011 and December 31, 2010, the Company did not have any inventory.
 
 B. Non-Current Assets:
 
 a) Receivables:
 
 See Schedule E.
 
 b) Inventory:
 
 As of September 30, 2011 and December 31, 2010, the Company did not have any inventory.
 
 c) Investments:
 
 See Note 10 and Schedule C to the financial statements.
 
 d) Fixed Assets:
 
 1) As of September 30, 2011 and December 31, 2010, the Company did not have any fixed assets that have been technically appraised.
 2) As of September 30, 2011 and December 31, 2010, 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 September 30, 2011 and December 31, 2010, there were no deferred charges.
 
 C. Current Liabilities:
 
 a) 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:
 
 See Schedule E.
 
 E. Foreign Currency Assets and Liabilities:
 
 See Note 1.b. and Schedule G to the financial statements.
 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"
 Supplementary and Explanatory Statement by the Board of Directors
 For the nine-month period beginning on January 1, 2011 and ending on
 September 30, 2011, presented in comparative format.
 (Figures Stated in Thousands of Pesos) (continued)
 
 F. Shareholders’ Equity:
 
 1) As of September 30, 2011 and December 31, 2010, the shareholders’ equity did not include the "Irrevocable Advances towards Future Share Issues" account.
 
 2) As of September 30, 2011 and December 31, 2010, the Company had not set up any technical appraisal reserve, nor has it reversed any reserve of that kind.
 
 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 September 30, 2011 and December 31, 2010, 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 September 30, 2011 and December 31, 2010, 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 9/30/11
Book Value as of 12/31/10Building, Electronic Equipment and/or Office Assets.
Fire, Thunderbolt, Explosion and/or Theft.
1,363
1,063
935Vehicles
Theft, Robbery, Fire or Total Loss
270
187
113
 
 6) As of September 30, 2011 and December 31, 2010, there were no contingencies highly likely to occur which have not been given accounting recognition.
 
 7) As of September 30, 2011 and December 31, 2010, the Company did not have any receivables including implicit interests or index adjustments.
 
 The Company has complied with the requirements of Section 65 of Law No. 19550 in these financial statements.
 
 Autonomous City of Buenos Aires, November 8, 2011.
 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 September 30, 2011 and 2010
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$))
 
 The Company’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 fiscal period ended September 30, 2011 reported by the Company amounts to AR$751,769. This profit has been mainly generated as a consequence of the valuation of equity investments in our subsidiaries.
 
 On April 14, 2010, it was resolved at the Company’s ordinary shareholders' meeting to distribute the retained earnings as of December 31, 2009, through the allocation of AR$11,464 to legal reserve and AR$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 was up to US$60,000 or its equivalent in any other currency, must be 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. On June 8, 2010, series II and III corresponding to class II were issued (see Note 16 to the financial statements.)
 
 On May 7, 2010, the Company entered into a purchase and sale agreement with Galicia Seguros S.A. to sell the functional units property of the Company located in Maipú 241, Autonomous City of Buenos Aires, for US$2,131. On September 23, 2010, the Argentine Superintendence of Insurance authorized the above-mentioned transaction. The corresponding deed of sale was executed on November 3, 2010.
 
 On April 27, 2011, it was resolved at the Company’s ordinary shareholders' meeting to distribute the retained earnings as of December 31, 2010, through the allocation of AR$20,445 to legal reserve, AR$24,828 to cash dividends and AR$363,628 to discretionary reserve.
 
 On May 3, 2011, in compliance with what was approved at the aforementioned ordinary shareholders’ meeting, the Company’s board of directors decided to put at the disposal of shareholders, from May 16 or at a later date in accordance with the rules and regulations in effect in the jurisdictions where the Company’s shares are listed, the amount of AR$24,828 as cash dividends, corresponding to the fiscal year ended December 31, 2010, an amount which represents 2% of the Company’s capital stock.
 
 On September 6, 2011, the Company’s board of directors decided to purchase 16,726,875 ordinary registered non-endorsable shares, with a face value of $1 per share and entitled to one vote each, representing 3% of the capital stock of Compañía Financiera Argentina S.A., which were offered by Tarjetas Regionales S.A. The remaining 97% is held by Banco de Galicia y Buenos Aires S.A.
 75
 Grupo Financiero Galicia S.A.
 “Corporation which has not Adhered to the Optional System
 for the Mandatory Acquisition of Shares in a Public Offering"
 Informative Review as of September 30, 2011 and 2010
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$))
 
 BALANCE SHEET FIGURES
 
 9/30/11
9/30/10
9/30/09
9/30/08
9/30/07AssetsCurrent Assets
47,429
30,469
38,118
21,849
93,189Non-current Assets
3,356,190
2,493,238
2,174,190
1,980,670
1,777,162Total Assets
3,403,619
2,523,707
2,212,308
2,002,519
1,870,351LiabilitiesCurrent Liabilities
90,895
58,937
164,216
203,415
65,178Non-current Liabilities
116,283
184,880
42,974
6
195,311Total Liabilities
207,178
243,817
207,190
203,421
260,489Shareholders’ Equity
3,196,441
2,279,890
2,005,118
1,799,098
1,609,862Total
3,403,619
2,523,707
2,212,308
2,002,519
1,870,351
 
 INCOME STATEMENT
 
 9/30/11
9/30/10
9/30/09
9/30/08
9/30/07Ordinary Operating Result
771,128
252,367
114,644
157,669
960Financial Results
(23,664)
(33,687)
93,080
(11,618)
4,373Other Income and Expenses
5,238
892
271
(1,753)
(855)Net Operating Income
752,702
219,572
207,995
144,298
4,478Income Tax
(933)
(281)
(28,032)
295
(3,084)Net Income
751,769
219,291
179,963
144,593
1,394
 
 RATIOS
 
 9/30/11
9/30/10
9/30/09
9/30/08
9/30/07Liquidity
0.52180
0.51698
0.23212
0.10741
1.42976Credit Standing
15.42848
9.35082
9.67768
8.84421
6.18015Capital Assets
0.98607
0.98793
0.98277
0.98909
0.95018
 
 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 B.C.R.A. 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 F.A.C.P.C.E..
 
 Progress Made Regarding Compliance with the Plan for the Implementation of the International Financial Reporting Standards (I.F.R.S.)
 
 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 I.F.R.S., which was approved by the board of directors of the Company at their meeting held on April 28, 2010.
 
 After monitoring the specific plan for the implementation of the I.F.R.S., the board of directors of the Company 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 (see Note 17 to the financial statements.)
 76
 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 September 30, 2011 and 2010
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$))
 
 
 Equity Investments in Other Controlled 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.
 
 During fiscal years 2009 and 2010, this company entered into agreements for the repayment of irrevocable contributions made by its shareholders, determining that such contributions would be used for the absorption of the losses recorded at the end of each of the aforementioned fiscal years.
 
 Taking into consideration the search of the board of directors of this company for new business alternatives, in fiscal year 2010 this company subscribed shares belonging to a foreign company that carries out activities related to business development through the internet. The equity investment held in this company to date represents 0.21% of corporate capital.
 
 ·
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 the Company in this company is 87.50%. Banco de Galicia y Buenos Aires S.A. has the remaining 12.50%.
 
 The insurance business undertaken by this company is one of the most important aspects of the Company’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 beginning on January 1, 2011 and ending on September 30, 2011 amounted to AR$432,969.
 
 As of September 30, 2011, these companies had approximately 5.5 million insured in all their lines of business.
 
 From a commercial standpoint, within a more favorable context, this company maintains its purpose of taking advantage of the greater demand for insurance coverage to significantly increase its sales.
 
 As a result of this effort, the premium volume for the third quarter of 2011 exceeded that for the same period of the previous year by 45%.
 
 ·
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 the Company in this company is 87.50%; the remaining 12.50% interest is held by Banco de Galicia y Buenos Aires S.A.
 
 This 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.
 
 During the period beginning on January 1, 2011 and ending on September 30, 2011, Galicia Warrants S.A. has recorded income from services in the amount of AR$13,648. Net income for the period was AR$4,192.
 
 As of September 30, 2011, deposit certificates and warrants issued amounted to AR$293,935, regarding merchandise under custody located throughout the country.
 77
 Grupo Financiero Galicia S.A.
 “Corporation which has not Adhered to the Optional System
 for the Mandatory Acquisition of Shares in a Public Offering"
 Informative Review as of September 30, 2011 and 2010
 (Figures Stated in Thousands of Pesos ($) and U.S. Dollars (U.S.$)) (continued)
 
 Furthermore, this company will maintain its management capacity in order to render a better service and respond to the increase in the volume of business it believes the market will demand during 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. The Company has a 100% interest in this company.
 
 On February 4, 2005, the Uruguayan Central Bank decided to conclusively confirm the registration of this company with the Registry of the Stock Exchange.
 
 In September 2005, Galval Agente de Valores S.A. started to operate in a gradual manner and, as of September 30, 2011, it holds customers’ securities in custody in the amount of US$124,750, of which US$10,632 corresponds to the holding of securities belonging to the Company.
 
 As of September 30, 2011, Galval Agente de Valores S.A. had recorded income in the amount of US$674, with a recorded net loss of US$933.
 
 It is expected that if customers start looking for investments in the market that are more profitable than conservative positions, there will be a positive impact on this company’s income from fees from securities trading operations.
 
 ·
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 the Company in this company is 90%; the remaining 10% interest is held by Galval Agente de Valores S.A.
 
 This 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, this company entered into an agreement to act as agent of Galval Agente de Valores S.A., which is currently the only activity it carries out.
 
 Income from services amounted to AR$2,499 for the fiscal period beginning on January 1, 2011 and ending on September 30, 2011, with a pretax net income of AR$185.
 
 The Company’s outlook for fiscal year 2011 is generally linked to the development of the Argentine economy, and particularly to the evolution of the financial system of Argentina.
 
 
 Autonomous City of Buenos Aires, November 8, 2011.
 78
 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 members of the Supervisory Syndics’ Committee 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 September 30, 2011, and the related Income Statement, Statement of Changes in Shareholders' Equity and Statement of Cash Flows for the nine-month period then ended, as well as supplementary Notes 1 to 17, Schedules A, B, C, D, E, 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 nine-month period ended September 30, 2011, with Notes 1 to 24, 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 F.A.C.P.C.E. 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 November 8, 2011, 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 nine-month period ended September 30, 2011 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 C.N.V., 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.
 79
 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 B.C.R.A. 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.
 
 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 September 30, 2011 and its consolidated financial statements at that date, detailed in item 1 above, prepared in accordance with B.C.R.A. 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 these 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.
 
 With respect to 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 nine-month period ended September 30, 2011, 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, November 08, 2011.
 
 
 Supervisory Syndics’ Committee
 80
  logo
  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 September 30, 2011, and the related income statements, statements of changes in shareholders' equity and statements of cash flows for the nine-month periods ended September 30, 2011 and 2010, as well as supplementary Notes 1 to 17 and Schedules A, B, C, D, E, 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 September 30, 2011, and the consolidated income statements and consolidated statements of cash flows and cash equivalents for the nine-month periods ended September 30, 2011 and 2010, together with Notes 1 to 24, 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 F.A.C.P.C.E. 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 its financial statements following the valuation and disclosure criteria established by B.C.R.A. 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 effect in the Autonomous City of Buenos Aires.
  81
  logo
 
 4.
On February 17, 2011 we issued our audit report on the Company's financial statements and consolidated financial statements for the fiscal years ended December 31, 2010 and 2009 with an unqualified opinion, without qualifications regarding the B.C.R.A.'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, 2010 and 2009 mentioned in item 4, we express the following:
 
 a)
the financial statements of Grupo Financiero Galicia S.A. as of September 30, 2011 and 2010 and its consolidated financial statements at those dates, detailed in item 1 above, prepared in accordance with B.C.R.A. 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 these 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, 2010.
 
 6.
As called for by the regulations in effect, 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 C.N.V..
 
 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 September 30, 2011 and 2010, 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.
  82
  logo
 
 d)
As of September 30, 2011, 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 AR$98,000.16, which was not yet due at that date.
 
 
 
 Autonomous City of Buenos Aires, November 8, 2011.
 
 
 PRICE WATERHOU.S.E & CO. S.R.L.