##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 20-F
  o
    
    Registration Statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
 or
 þ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the fiscal year ended December 31, 2009
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the transition period from  to
 or
 o
    
    Shell Company Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Date of event requiring this Shell Company Report
 Commission File Number 000-30852
 
 GRUPO FINANCIERO GALICIA S.A.
  GALICIA FINANCIAL GROUP
 REPUBLIC OF ARGENTINA
 Grupo Financiero Galicia S.A.
Tte. Gral. Juan D. Perón 456
C1038 AAJ-Buenos Aires, Argentina
 Pedro Richards, Chief Executive Officer
Tel: 54 11 4 343 7528 / Fax: 54 11 4 331 9183, prichards@gfgsa.com
Perón 456, 2° Piso C1038AAJ Buenos Aires ARGENTINA
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Name of each exchange on which registered     Title of each class
  Securities registered or to be registered pursuant to Section 12(g) of the Act:
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
  Class A Ordinary Shares, Ps.1.00 par value
    
    281,221,650Class B Ordinary Shares, Ps.1.00 par value
    
    960,185,367
 Yes o No þ
 Yes o No þ
 Yes þ No o
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
  U.S. GAAP o
    
    International Financial Reporting Standards
As issued by the International Accounting Standards Board o
    
    Other þ
 Item 17 o Item 18 þ
 Yes o No þ




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##### Table of Contents



TABLE OF CONTENTS
 PageItem 1. Identity of Directors, Senior Management and Advisers
    
    
    3Item 2. Offer Statistics and Expected Timetable
    
    
    3Item 3. Key Information
    
    
    3Item 3.A. Selected Financial Data
    
    
    3Exchange Rate Information
    
    
    6Item 3.B. Capitalization and Indebtedness
    
    
    7Item 3.C. Reasons for the Offer and Use of Proceeds
    
    
    7Item 3.D. Risk Factors
    
    
    7Item 4. Information on the Company
    
    
    17History and Development of the Company
    
    
    17Organizational Structure
    
    
    17History
    
    
    18Business
    
    
    24Competition
    
    
    31Sales and Marketing
    
    
    33Property
    
    
    34Capital Investments and Divestitures
    
    
    35Selected Statistical Information
    
    
    37Government Regulation
    
    
    70Argentine Banking Regulation
    
    
    74Credit Cards Regulation
    
    
    82Concealment and Laundering of Assets of a Criminal Origin
    
    
    83Item 4A. Unresolved Staff Comments
    
    
    85Item 5. Operating and Financial Review and Prospects
    
    
    85Item 5.A. Operating Results
    
    
    85Overview
    
    
    85The Argentine Economy, Financial System and Insurance Industry in the Three Years Ended December 31, 2009
    
    
    86Inflation
    
    
    90Currency Composition of Our Balance Sheet
    
    
    90Results of Operations for the Fiscal Years Ended December 31, 2009, December 31, 2008 and December 31, 2007
    
    
    91U.S. GAAP and Argentine Banking GAAP Reconciliation
    
    
    104Results by Segments
    
    
    109Consolidated Assets
    
    
    114Exposure to the Argentine Public Sector
    
    
    115Securitization of Assets
    
    
    116Funding
    
    
    116Contractual Obligations
    
    
    121Off-Balance Sheet Arrangements
    
    
    122Critical Accounting Policies
    
    
    123U.S. GAAP  Critical Accounting Policies
    
    
    124Principal Trends
    
    
    128Item 5.B. Liquidity and Capital Resources
    
    
    129Liquidity  Holding Company on an Individual Basis
    
    
    129Consolidated Cash Flows
    
    
    130Banco Galicias Liquidity Management
    
    
    134Capital
    
    
    136Capital Expenditures
    
    
    136Item 6. Directors, Senior Management and Employees
    
    
    137Our Board of Directors
    
    
    137Our Audit Committee
    
    
    139
  i




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TABLE OF CONTENTS
 PageOur Supervisory Committee
    
    
    139Compensation of Our Directors
    
    
    141Management of Grupo Financiero Galicia
    
    
    141Board of Directors of Banco Galicia
    
    
    142Functions of the Board of Directors of Banco Galicia
    
    
    143Banco Galicias Executive Officers
    
    
    145Banco Galicias Supervisory Committee
    
    
    148Compensation of Banco Galicias Directors and Officers
    
    
    149Employees
    
    
    150Nasdaq Corporate Governance Standards
    
    
    150Share Ownership
    
    
    153Item 7. Major Shareholders and Related Party Transactions
    
    
    153Major Shareholders
    
    
    153Related Party Transactions
    
    
    154Item 8. Financial Information
    
    
    155Legal Proceedings
    
    
    156Dividend Policy and Dividends
    
    
    157Significant Changes
    
    
    159Item 9. The Offer and Listing
    
    
    160Shares and ADSs
    
    
    160Argentine Securities Market
    
    
    162Market Regulations
    
    
    163Item 10. Additional Information
    
    
    164Description of Our Bylaws
    
    
    164Exchange Controls
    
    
    171Taxation
    
    
    171Material Contracts
    
    
    176Documents on Display
    
    
    177Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    177General
    
    
    177Interest Rate Risk
    
    
    178Foreign Exchange Rate Risk
    
    
    181Currency Mismatches
    
    
    182Market Risk
    
    
    185Item 12. Description of Securities Other Than Equity Securities
    
    
    185Item 12.D. American Depositary Shares
    
    
    185Fees and Charges Applicable to ADS Holders
    
    
    185Fees and Direct and Indirect Payments Made by the Depositary to Us
    
    
    186Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    187Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    187Item 15. Controls and Procedures
    
    
    187Item 16. [Reserved]
    
    
    188Item 16A. Audit Committee Financial Expert
    
    
    188Item 16B. Code of Ethics
    
    
    188Item 16C. Principal Accountants Fees and Services
    
    
    188Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    189Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    189Item 17. Financial Statements
    
    
    190Item 18. Financial Statements
    
    
    190Item 19. Exhibits
    
    
    190SIGNATURE
    
    
    192Exhibit 2.4Exhibit 4.7Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2
   ii




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##### Table of Contents



PRESENTATION OF FINANCIAL INFORMATION
  
    
    Grupo Financiero Galicia S.A.;
 
    
    Banco de Galicia y Buenos Aires S.A., our largest subsidiary, its wholly-owned
subsidiaries Banco Galicia Uruguay S.A., (Galicia Uruguay) and Galicia Cayman Limited
(Galicia Cayman), and other subsidiaries and affiliated companies required to be
consolidated under Argentine Banking GAAP (collectively Banco Galicia or the Bank
except where otherwise noted);
 
    
    Tarjetas Regionales S.A., a wholly owned subsidiary of the Bank, and its operating
subsidiaries;
 
    
    Sudamericana Holding S.A., and its subsidiaries;
 
    
    Galicia Warrants S.A.;
 
    
    Net Investment S.A.,
 
    
    Galval Agente de Valores S.A.; and
 
    
    GV Mandataria de Valores S.A. (GV Mandataria).




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##### Table of Contents



FORWARD LOOKING STATEMENTS
  
    
    changes in general political, legal, social or other conditions in Argentina;
 
    
    changes in capital markets in general that may affect policies or attitudes toward
lending to Argentina or Argentine companies, including expected or unexpected
turbulence or volatility in domestic or international financial markets;
 
    
    changes in regional, national and international business and economic conditions,
including inflation;
 
    
    changes in government regulation, including tax regulations and changes in or
failures to comply with banking or other regulations;
 
    
    increased competition in the banking, financial services, credit card services,
insurance, asset management and related industries;
 
    
    changes in interest rates which may, among other things, adversely affect margins;
 
    
    a loss of market share by any of our main businesses;
 
    
    a change in the credit cycle and increased borrowers defaults;
 
    
    our inability to sustain or improve our performance;
 
    
    our inability to obtain additional debt or equity financing on attractive conditions
or at all, which may limit our ability to fund existing operations and to finance new
activities;
 
    
    technological changes, changes in consumer spending and saving habits, our
inability to implement new technologies, and
 
    
    other factors discussed under Item 3. Key Information-Item 3.D. Risk Factors in
this annual report.
    2




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##### Table of Contents



PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 Item 3.A. Selected Financial Data
      3




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##### Table of Contents



Fiscal Year Ended December 31,2009
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millionsof USDollars,except asnoted)(1)Unaudited
    
    
    (in millions of Pesos, except as noted)(1)Consolidated Income Statement in Accordance with Argentine Banking
GAAPFinancial Income
    
    
    791.6
    
    
    
    3,005.6
    
    
    
    2,559.3
    
    
    
    1,997.9
    
    
    
    2,229.8
    
    
    
    2,398.6Financial Expenses
    
    
    384.7
    
    
    
    1,460.5
    
    
    
    1,421.0
    
    
    
    1,246.7
    
    
    
    1,851.6
    
    
    
    1,845.9Net Financial Income (2)
    
    
    407.0
    
    
    
    1,545.1
    
    
    
    1,138.3
    
    
    
    751.2
    
    
    
    378.2
    
    
    
    552.7Provision for Losses on Loans and Other Receivables
    
    
    168.4
    
    
    
    639.5
    
    
    
    395.4
    
    
    
    255.5
    
    
    
    110.9
    
    
    
    76.7Income before Taxes
    
    
    101.5
    
    
    
    385.3
    
    
    
    250.8
    
    
    
    117.5
    
    
    
    75.3
    
    
    
    126.5Income Tax
    
    
    (41.1
    )
    
    
    (156.0
    )
    
    
    (74.0
    )
    
    
    (71.5
    )
    
    
    (94.2
    )
    
    
    (19.3
    )Net Income / (Loss)
    
    
    60.4
    
    
    
    229.3
    
    
    
    176.8
    
    
    
    46.0
    
    
    
    (18.9
    )
    
    
    107.2Earnings / (Loss) per Share (in Pesos)
    
    
    0.049
    
    
    
    0.185
    
    
    
    0.142
    
    
    
    0.037
    
    
    
    (0.015
    )
    
    
    0.086Cash Dividends per Share (in Pesos)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock Dividends per Share (in Pesos)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Book Value per Share (in Pesos)
    
    
    0.435
    
    
    
    1.653
    
    
    
    1.487
    
    
    
    1.333
    
    
    
    1.296
    
    
    
    1.310Amounts in Accordance with U.S. GAAPNet Income / (Loss)
    
    
    202.9
    
    
    
    770.2
    
    
    
    (1,171.0
    )
    
    
    592.9
    
    
    
    3,524.9
    
    
    
    731.0Basic and Diluted Earnings / (Losses) per Share (in Pesos)
    
    
    0.2
    
    
    
    0.6
    
    
    
    (0.9
    )
    
    
    0.5
    
    
    
    2.8
    
    
    
    0.6Book Value / (Deficit) per Share (in Pesos)
    
    
    0.3
    
    
    
    1.0
    
    
    
    (0.6
    )
    
    
    0.2
    
    
    
    0.1
    
    
    
    (1.7
    )Financial Income
    
    
    888.9
    
    
    
    3,374.8
    
    
    
    1,201.7
    
    
    
    2,433.2
    
    
    
    5,456.4
    
    
    
    2,958.7Financial Expenses
    
    
    377.8
    
    
    
    1,434.4
    
    
    
    1,391.3
    
    
    
    1,160.1
    
    
    
    1,863.6
    
    
    
    1,845.9Net Financial Income / (Loss)
    
    
    511.1
    
    
    
    1,940.4
    
    
    
    (189.6
    )
    
    
    1,273.1
    
    
    
    3,592.8
    
    
    
    1,112.8Provision for Losses on Loans and Other Receivables
    
    
    138.9
    
    
    
    527.3
    
    
    
    450.1
    
    
    
    203.4
    
    
    
    160.3
    
    
    
    113.5Income Tax
    
    
    (14.4
    )
    
    
    (54.5
    )
    
    
    50.9
    
    
    
    (92.5
    )
    
    
    (277.1
    )
    
    
    19.3Consolidated Balance Sheet in Accordance with Argentine Banking GAAPCash and Due from Banks
    
    
    973.6
    
    
    
    3,696.3
    
    
    
    3,405.1
    
    
    
    2,960.0
    
    
    
    2,294.8
    
    
    
    1,041.2Government Securities, Net
    
    
    1,029.1
    
    
    
    3,907.2
    
    
    
    1,531.8
    
    
    
    1,693.0
    
    
    
    3,188.3
    
    
    
    5,967.4Loans, Net
    
    
    3,549.9
    
    
    
    13,477.9
    
    
    
    11,774.6
    
    
    
    11,601.0
    
    
    
    10,525.0
    
    
    
    10,557.6Total Assets
    
    
    7,270.1
    
    
    
    27,602.4
    
    
    
    24,735.8
    
    
    
    22,828.7
    
    
    
    23,615.4
    
    
    
    25,638.1Deposits
    
    
    4,488.0
    
    
    
    17,039.4
    
    
    
    14,056.1
    
    
    
    13,165.6
    
    
    
    10,779.4
    
    
    
    8,421.7Other Funds (3)
    
    
    2,241.6
    
    
    
    8,510.5
    
    
    
    8,834.0
    
    
    
    8,008.6
    
    
    
    11,227.5
    
    
    
    15,589.6Total Shareholders Equity
    
    
    540.6
    
    
    
    2,052.5
    
    
    
    1,845.7
    
    
    
    1,654.5
    
    
    
    1,608.5
    
    
    
    1,626.8Average Total Assets (4)
    
    
    6,501.8
    
    
    
    24,685.3
    
    
    
    23,412.5
    
    
    
    21,332.4
    
    
    
    24,614.5
    
    
    
    24,238.1Percentage of Period-end Balance Sheet Items Denominated in Dollars:Loans, Net of Allowances
    
    
    17.78
    
    
    
    17.78
    
    
    
    16.97
    
    
    
    15.13
    
    
    
    16.66
    
    
    
    9.84Total Assets
    
    
    24.95
    
    
    
    24.95
    
    
    
    28.85
    
    
    
    27.60
    
    
    
    28.94
    
    
    
    26.55Deposits
    
    
    18.16
    
    
    
    18.16
    
    
    
    16.98
    
    
    
    15.53
    
    
    
    14.13
    
    
    
    15.55Total Liabilities
    
    
    27.73
    
    
    
    27.73
    
    
    
    32.47
    
    
    
    32.84
    
    
    
    30.41
    
    
    
    25.81Amounts in Accordance with U.S. GAAPTrading Securities
    
    
    529.9
    
    
    
    2,011.9
    
    
    
    989.6
    
    
    
    476.2
    
    
    
    208.2
    
    
    
    790.0Available-for-Sale Securities
    
    
    1,031.7
    
    
    
    3,916.9
    
    
    
    2,050.0
    
    
    
    3,717.3
    
    
    
    5,214.6
    
    
    
    5,350.3Total Assets
    
    
    8,001.1
    
    
    
    30,377.6
    
    
    
    25,159.7
    
    
    
    24,429.1
    
    
    
    24,107.0
    
    
    
    19,949.3Total Liabilities
    
    
    7,675.5
    
    
    
    29,141.4
    
    
    
    25,914.1
    
    
    
    24,191.0
    
    
    
    23,961.2
    
    
    
    22,077.6Shareholders Equity (Deficit)
    
    
    325.6
    
    
    
    1,236.3
    
    
    
    (754.4
    )
    
    
    238.1
    
    
    
    145.8
    
    
    
    (2,128.3
    )
  4




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##### Table of Contents



Fiscal Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millions of Pesos, except as noted)(1)Selected Ratios
in Accordance with Argentine Banking GAAPProfitability and EfficiencyNet Yield on Interest Earning Assets (5)
    
    
    9.10
    %
    
    
    5.72
    %
    
    
    4.13
    %
    
    
    1.21
    %
    
    
    2.38
    %Financial Margin (6)
    
    
    8.41
    
    
    
    5.72
    
    
    
    4.12
    
    
    
    1.74
    
    
    
    2.53Return on Average Assets (7)
    
    
    1.12
    
    
    
    0.91
    
    
    
    0.37
    
    
    
    
    
    
    
    0.59Return on Average Shareholders Equity (8)
    
    
    11.69
    
    
    
    10.13
    
    
    
    2.86
    
    
    
    (1.15
    )
    
    
    6.83Net Income from Services as a Percentage of Operating Income (9)
    
    
    45.90
    
    
    
    51.07
    
    
    
    54.86
    
    
    
    63.99
    
    
    
    48.65Efficiency ratio (10)
    
    
    71.05
    
    
    
    76.57
    
    
    
    77.29
    
    
    
    92.80
    
    
    
    72.56CapitalShareholders Equity as a Percentage of Total Assets
    
    
    7.44
    %
    
    
    7.46
    %
    
    
    7.25
    %
    
    
    6.81
    %
    
    
    6.35
    %Total Liabilities as a Multiple of Shareholders Equity
    
    
    12.45
    x
    
    
    12.40
    x
    
    
    12.80
    x
    
    
    13.68
    x
    
    
    14.76
    xTotal Capital Ratio
    
    
    14.35
    %
    
    
    13.92
    %
    
    
    15.54
    %
    
    
    15.03
    %
    
    
    20.78
    %LiquidityCash and Due from Banks as a Percentage of Total Deposits
    
    
    21.69
    %
    
    
    24.23
    %
    
    
    22.48
    %
    
    
    21.29
    %
    
    
    12.36
    %Loans, Net as a Percentage of Total Assets
    
    
    48.83
    
    
    
    47.60
    
    
    
    50.82
    
    
    
    44.57
    
    
    
    41.18Credit QualityPast Due Loans (11) as a Percentage of Total Loans
    
    
    3.95
    %
    
    
    2.87
    %
    
    
    2.77
    %
    
    
    2.38
    %
    
    
    2.34
    %Non-Accrual Loans (12) as a Percentage of Total Loans
    
    
    4.77
    
    
    
    3.49
    
    
    
    3.14
    
    
    
    2.58
    
    
    
    3.50Allowance for Loan Losses as a Percentage of Non-accrual Loans(12)
    
    
    118.64
    
    
    
    123.11
    
    
    
    114.05
    
    
    
    117.16
    
    
    
    111.90Net Charge-Offs (13) as a Percentage of Average Loans
    
    
    2.84
    
    
    
    1.83
    
    
    
    0.65
    
    
    
    1.42
    
    
    
    1.49Ratios in Accordance with U.S. GAAPCapitalShareholders Equity (deficit) as a Percentage of Total Assets
    
    
    4.07
    %
    
    
    (3.00
    )%
    
    
    0.97
    %
    
    
    0.60
    %
    
    
    (10.67
    )%Total Liabilities as a Multiple of Total Shareholders Equity
    
    
    23.57
    x
    
    
    (34.35
    )x
    
    
    101.61
    x
    
    
    164.33
    x
    
    
    (10.37
    )xLiquidityLoans, Net as a Percentage of Total Assets
    
    
    45.55
    %
    
    
    49.59
    %
    
    
    49.36
    %
    
    
    40.10
    %
    
    
    50.15
    %Credit QualityAllowance for Loan Losses as a Percentage of Non-Accrual Loans
    
    
    108.37
    
    
    
    141.34
    
    
    
    132.13
    
    
    
    168.58
    
    
    
    139.49Inflation and Exchange RateWholesale Inflation (14)
    
    
    10.04
    %
    
    
    8.82
    %
    
    
    14.56
    %
    
    
    7.14
    %
    
    
    10.69
    %Consumer Inflation (15)
    
    
    7.69
    
    
    
    7.24
    
    
    
    8.47
    
    
    
    9.84
    
    
    
    12.33Exchange Rate Variation (16) (%)
    
    
    9.93
    
    
    
    9.61
    
    
    
    2.66
    
    
    
    1.25
    
    
    
    1.94CER (17)
    
    
    6.95
    
    
    
    7.97
    
    
    
    8.50
    
    
    
    10.08
    
    
    
    11.75
 The ratios disclosed above are considered significant for the Management despite of the fact that they are not a specific requirement of any GAAP.
  5




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##### Table of Contents



(1)
    
    The exchange rate used to convert the December 31, 2009 amounts into US Dollars was
Ps.3.7967 per US$1.00. All amounts are stated in millions of Pesos, except inflation and
exchange rates, percentages, ratios, multiples and per-share data.(2)
    
    Net financial income primarily represents income from interest on loans and other receivables
resulting from financial brokerage plus net income from government and corporate debt
securities, including gains and losses, minus interest on deposits and other liabilities from
financial intermediation and monetary loss from financial brokerage. It also includes the CER
adjustment.(3)
    
    Includes primarily liabilities with other banks and international entities. Until December
31, 2006, debt with the Argentine Central Bank was also included.(4)
    
    The average balances of assets, including the related interest that is due are calculated on
a daily basis for Banco Galicia and for Galicia Uruguay, as well as for Tarjetas Regionales
S.A consolidated with its operating subsidiaries, and on a monthly basis for Grupo Financiero
Galicia and its non-banking subsidiaries.(5)
    
    Net interest earned divided by interest-earning assets. For a description of net interest
earned, see Item 4. Information on the Company-Selected Statistical
Information-Interest-Earning Assets-Net Yield on Interest-Earning Assets.(6)
    
    Financial margin represents net financial income divided by average interest-earning assets.(7)
    
    Net income excluding minority interest as a percentage of average total assets.(8)
    
    Net income as a percentage of average shareholders equity.(9)
    
    Operating income is defined as net financial income plus net income from services.(10)
    
    Administrative expenses as a percentage of operating income as defined above.(11)
    
    Past-due loans are defined as the aggregate principal amount of a loan plus any accrued
interest that is due and payable for which either the principal or any interest payment is 91
days or more past due.(12)
    
    Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio:
Medium Risk, High Risk, Uncollectible, and Uncollectible Due to Technical Reasons, and
(b) Commercial portfolio: With problems, High Risk of Insolvency, Uncollectible, and
Uncollectible Due to Technical Reasons.(13)
    
    Charge-offs plus direct charge-offs minus bad debts recovered.(14)
    
    As measured by the annual change in the end-of-period Wholesale Price Index (WPI),
published by INDEC.(15)
    
    As measured by the annual change in the end-of-period Consumer Price Index (CPI), published
by INDEC.(16)
    
    Annual change in the end-of-period exchange rate expressed in Pesos per US Dollar.(17)
    
    The CER is the Coeficiente de Estabilización de Referencia, an adjustment coefficient
based on changes in the Consumer Price Index. 
 Exchange Rate Information
  Exchange Rate(1)High
    
    
    Low
    
    
    Average(2) (3)
    
    
    Period-End(in Pesos per US Dollar)2005
    
    
    3.0523
    
    
    
    2.8592
    
    
    
    2.9312
    (3)
    
    
    3.03152006
    
    
    3.1072
    
    
    
    3.0305
    
    
    
    3.0784
    (3)
    
    
    3.06952007
    
    
    3.1797
    
    
    
    3.0553
    
    
    
    3.1196
    (3)
    
    
    3.15102008
    
    
    3.4537
    
    
    
    3.0128
    
    
    
    3.1801
    (3)
    
    
    3.45372009
    
    
    3.8545
    
    
    
    3.4497
    
    
    
    3.7478
    (3)
    
    
    3.7967December 2009
    
    
    3.8205
    
    
    
    3.7920
    
    
    
    3.8070
    
    
    
    3.7967January 2010
    
    
    3.8230
    
    
    
    3.7942
    
    
    
    3.8042
    
    
    
    3.8230February 2010
    
    
    3.8677
    
    
    
    3.8310
    
    
    
    3.8512
    
    
    
    3.8598March 2010
    
    
    3.8763
    
    
    
    3.8543
    
    
    
    3.8627
    
    
    
    3.8763April 2010
    
    
    3.8862
    
    
    
    3.8682
    
    
    
    3.8761
    
    
    
    3.8862May 2010
    
    
    3.9268
    
    
    
    3.8860
    
    
    
    3.9020
    
    
    
    3.9268
 (1)
    
    Using closing reference exchange rates as published by the Argentine Central Bank.(2)
    
    Monthly average of daily closing quotations, unless otherwise noted.(3)
    
    Based on the annual
average of the last day of each months closing quotation.   6




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Item 3.B. Capitalization and Indebtedness
  
 Item 3.C. Reasons for the Offer and Use of Proceeds
  
 Item 3.D. Risk Factors
 You should carefully consider the risks described below in addition to the other information
contained in this annual report. In addition, most, if not all, of the risks described below must
be evaluated bearing in mind that our most important asset is our equity interest in Banco Galicia,
thus, a material change in Banco Galicias shareholders equity or income statement would also
adversely affect our businesses and results of operations. We may also face risks and uncertainties
that are not presently known to us or that we currently deem immaterial, which may impair our
business. Our operations, property and customers are located mainly in Argentina. Accordingly, the
quality of our customer portfolio, loan portfolio, financial condition and results of operations
depend, to a significant extent, on the macroeconomic and political conditions prevailing in
Argentina. In general, the risk assumed when investing in the securities of issuers from
countries such as Argentina, is higher than when investing in the securities of issuers from
developed countries.
 Risk Factors Relating to Argentina
 Political and economic instability in Argentina and Government intervention in the economy as well
as market conditions may adversely affect Grupo Financiero Galicias business and prospects.
     Inflation could increase and affect the economy and Grupo Financiero Galicias financial condition.
    7




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Argentinas ability to obtain financing and attract direct foreign investment is limited, which
could adversely affect the economy.
  Congreso de la Nación Argentina lock law
     8




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An excessive real appreciation of the peso could create a recession and renewed pressures on the
foreign exchange market.
   Inflation could increase and affect the economy
and Grupo Financiero Galicias financial condition
 An eventual future devaluation of the peso could adversely affect the Argentine economy and Grupo
Financiero Galicia.
    9




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Argentinas economy and its goods and financial services markets and securities markets remain
vulnerable to external shocks which could have an adverse effect on the countrys economic growth
and Grupo Financiero Galicias prospects.
         10




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A decline in the international prices for Argentinas main commodity exports could have an adverse
effect on Argentinas economic growth and on Grupo Financiero Galicias prospects.
   The foreign exchange market is subject to controls, which could adversely affect the ability and
method in which Grupo Financiero Galicia and its subsidiaries repays its obligations denominated in
a foreign currency.
     11




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High volatility in the regulatory framework could adversely affect the countrys economy in general
as well as financial institutions and Grupo Financiero Galicia and/or its subsidiaries
    Foreign judgments may not be able to be normally enforced in Argentina
    Risk Factors Relating to the Argentine Financial System
 The recovery of the financial system is dependent upon the ability of financial institutions,
including Banco Galicia, to maintain and increase the confidence of depositors.
    12




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The negative consequences of the 2001-2002 crisis on the profile and activities of the financial
system could not be completely overcome.
   Sistema Integrado Previsional Argentino Administración Nacional de la
Seguridad Social
   The asset quality of financial institutions could deteriorate if the growth process is interrupted.
     13




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Judgments against financial institutions relating to the pesification and rescheduling of deposits
could deteriorate financial institutions profitability.
 acción de amparo or amparo
 amparo
 The reform of the Integrated Pension and Retirement Benefits System could adversely affect the
capital market evolution in Argentina.
   Consumer protection laws may limit some of the rights afforded to Grupo Financiero Galicia and its
subsidiaries.
    14




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Future limitations on creditors rights in Argentina and on the ability to foreclose on
certain guarantees and collateral may adversely impact financial institutions.
  The stability of the Argentine banking system is uncertain.
      Risk Factors Relating to Us
 Part of Banco Galicias assets is invested in debt instruments of the Argentine public sector.
    Banco Galicias public sector assets have been accounted for pursuant the Argentine Central Banks
valuation rules, which implies that their book value does not reflect market values.
   Banco Galicias net position in assets adjustable by the Resource Stabilization Coefficient
(Coeficiente de Estabilización de Referencia) (CER) exposes it to real interest rate variation.
   15




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Increased competition and consolidation in the banking and financial industry could adversely
affect Banco Galicias operations.
  Grupo Financiero Galicia could be unable to invest in its business developments and/or to repay its
financial obligations due to a lack of liquidity caused by it being a holding company.
    It could be difficult for Grupo Financiero Galicia and its subsidiaries to completely overcome all
the negative residual effects of the 2001-2002 crisis.
 amparo
    16




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Certain administrative proceedings started by tax authorities against financial institutions could
generate losses to such institutions, including Banco Galicia.
  Grupo Financiero Galicias estimates and established reserves for credit risk and potential credit
losses may prove to be inaccurate and/or insufficient, which may materially and adversely affect
its financial condition and results of operations.
      Changes in market conditions, and any risks associated therewith, could materially and adversely
affect Grupo Financiero Galicias financial condition and results of operations.
  
 Item 4. Information on the Company
 
 History and Development of the Company
 sociedad anónima
    
 Organizational Structure
  
    
    Galicia Uruguay, incorporated in Uruguay and currently not an operating financial
institution;
 
    
    Galval Agente de Valores S.A. or Galval, incorporated in Uruguay;
 
    
    Galicia (Cayman) Ltd. or Galicia Cayman, incorporated in the Cayman Islands;
 
    
    Tarjeta Naranja Dominicana S.A., incorporated in the Dominican Republic.
  17




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History
 Grupo Financiero Galicia
     18




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Banco Galicia
 Superintendencia de Entidades Financieras y Cambiarias
      19




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Interior Interior
        20




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Restructuring of the Foreign Debt of the Banks Head Office in Argentina and its Cayman Branch
   
    
    US$648.5 million of long-term Dollar-denominated debt instruments, of which US$464.8
million were Dollar-denominated negotiable obligations due 2014 (referred to as the Step
Up Notes Due 2014 or the 2014 Notes) issued under an indenture.
 
    
    US$399.8 million of medium-term Dollar-denominated debt instruments, of which US$352.8
million were Dollar-denominated negotiable obligations due 2010 (referred to as the
Floating Rate Notes Due 2010 or the 2010 Notes) issued under an indenture.
 
    
    US$230.0 million of subordinated Dollar-denominated debt instruments, of which US$218.2
million were Dollar-denominated negotiable obligations due 2019 (referred to as the
Subordinated Notes Due 2019 or the 2019 Notes) issued under an indenture.
  Banco Galicias 2007 Capital Increase
    21




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Banco Galicia Uruguay S.A. and Galicia (Cayman) Ltd.
 Casa Bancaria
   Regional Credit Card Companies
       22




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Sudamericana
  Net Investment S.A.
    Galicia Warrants S.A.
   23




---



##### Table of Contents



Galval
  GV Mandataria
  
 Business
 Banking
     Wholesale Banking
    24




---



##### Table of Contents



Cobranza Integrada Galicia , Pago
a Proveedores Pago de Haberes
  Cobranza Integrada Galicia
  Galicia Rural
       25




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Retail Banking
  Cada
día Más
       26




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Geographical Area
    
    Number of BranchesCity of Buenos Aires
    
    
    77Greater Buenos Aires
    
    
    61Rest of the Province of Buenos Aires
    
    
    28Santa Fe
    
    
    15Córdoba
    
    
    14Mendoza
    
    
    9Entre Ríos and Chubut
    
    
    4
    eachRío Negro
    
    
    3Corrientes, La Pampa, Misiones, San Luis, Tierra del Fuego and Tucumán
    
    
    2
    eachCatamarca, Chaco, Formosa, Jujuy, La Rioja, Neuquén, Salta, Santa Cruz, Santiago del Estero and San Juan
    
    
    1
    eachTotal
    
    
    237
  27




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Regional Credit- card Companies (Consumption)
      28




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Financial Division
   th th
 th rd
     29




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Insurance
     Other Businesses
 Galicia Warrants:
  Net Investment:
   30




---



##### Table of Contents



Galval
 GV Mandataria:
  
 Competition
  Banking
       31




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Argentine Banking System
   Ley de Entidades Financieras,
   Regional Credit Cards
  Insurance
    32




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##### Table of Contents



Sales and Marketing
  March 2010Branches(number)Bank Branches
    
    
    236Regional Credit Card Cos. Branches
    
    
    156Business Centers and In-House Facilities
    
    
    15Private-Banking Centers
    
    
    13Electronic Banking Terminals(number)ATMs
    
    
    667Self-Service Terminals
    
    
    767Electronic Banking Transactions(thousands per month)ATMs + Self-Service Terminals
    
    
    11,386Phone-Banking
    
    
    429e-banking
    
    
    17,564
      33




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##### Table of Contents



Property
  SquareMetersProperty
    
    Address
    
    (approx.)
    
    
    Main UsesGrupo Financiero Galicia- Owned
    
    -Tte. Gral. Juan D. Perón 456, 2nd floor, Buenos Aires, Argentina
    
    
    191
    
    
    Administrative activities-Maipú 241, Buenos Aires, Argentina(1)
    
    
    1,616
    
    
    Administrative activitiesBanco de Galicia y Buenos Aires S.A.- Owned
    
    -Tte. Gral. Juan D. Perón 407, Buenos Aires, Argentina
    
    
    17,300
    
    
    Administrative activities-Tte. Gral. Juan D. Perón 430, Buenos Aires, Argentina
    
    
    42,000
    
    
    Administrative activities-Florida 361, Buenos Aires, Argentina
    
    
    7,300
    
    
    Administrative activities- Rented
    
    -San Martín 178/200, Buenos Aires, Argentina
    
    
    3,600
    
    
    Administrative activitiesBanco Galicia Uruguay S.A.- Rented
    
    -Montevideo, Uruguay
    
    
    580
    
    
    Storage-Dr. Americo Ricaldoni 2468, Montevideo, Uruguay
    
    
    400
    
    
    Administrative activitiesTarjeta Naranja S.A.- Owned
    
    -Sucre 152, 154 and 541, Córdoba, Argentina
    
    
    6,300
    
    
    Administrative activities-Humberto Primo, Córdoba, Argentina
    
    
    4,900
    
    
    Administrative activities-Ruta Nacional 36, km. 8, Córdoba, Argentina
    
    
    49,200
    
    
    Storage-San Jerónimo 2348 and 2350, Santa Fe, Argentina
    
    
    1,475
    
    
    Administrative activities- Rented
    
    -Sucre 145/151, La Rioja 359, 364 and 375, Córdoba, Argentina
    
    
    4,450
    
    
    Administrativeactivities, printingcentre and storageRío Grande, Tierra del Fuego, Argentina
    
    
    300
    
    
    Administrative activitiesTarjetas Cuyanas S.A.- Rented
    
    -Belgrano 1415, Mendoza, Argentina
    
    
    1,740
    
    
    Administrative activities-Belgrano 1462, Mendoza, Argentina
    
    
    1,156
    
    
    Administrative activities-Belgrano 1478, Mendoza, Argentina
    
    
    175
    
    
    Printing centre-Olascoaga 348, San José, Mendoza, Argentina
    
    
    580
    
    
    Storage
  34




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SquareMetersProperty
    
    Address
    
    (approx.)
    
    
    Main UsesTarjetas del Mar S.A.- Rented
    
    -Luro 3001, Mar del Plata, Buenos Aires, Argentina
    
    
    240
    
    
    Administrative Activities-Luro 2943, Mar del Plata, Buenos Aires, Argentina
    
    
    765
    
    
    Administrative ActivitiesGalicia Seguros S.A.- Owned
    
    -Maipú 241, Buenos Aires, Argentina
    
    
    1,643
    
    
    Administrative activitiesGalicia Warrants S.A.- Owned
    
    -Tte. Gral. Juan D. Perón 456, 6th floor, Buenos Aires, Argentina
    
    
    118
    
    
    Administrative activities-Alsina 3396/3510, San Miguel de Tucumán, Tucumán, Argentina
    
    
    12,800
    
    
    Storage- Rented
    
    -Lavalle 3272, San Miguel de Tucumán, Tucumán, Argentina
    
    
    3,200
    
    
    Storage-Alto Verde, Chicligasta, Tucumán, Argentina
    
    
    2,000
    
    
    Storage-Pasaje 1° de Mayo Esquina 25 de Mayo, Barrio el Corte Alderete,Tucumán, Argentina
    
    
    2,000
    
    
    Storage-San Martín 891 PB, San Miguel de Tucumán, Tucumán, Argentina
    
    
    64
    
    
    Administrative activitiesGalval Agente de Valores S.A.- Rented
    
    -Zona Franca, Montevideo, Uruguay
    
    
    120
    
    
    Administrative activitiesGV Mandataria de Valores S.A.- Rented
    
    -25 de Mayo 432, 3rd floor, Buenos Aires, Argentina(2)
    
    
    336
    
    
    Administrative activities
 (1)
    
    We lease four units to the Bank equivalent to 755.91 square meters, for Ps.22,677 per month
and four units to Galicia Seguros S.A. equivalent to 817.17 square meters, for Ps.24,515 per
month. We hold a 45.4 square meters unit vacant for storage.(2)
    
    Banco Galicia leases, from September 1, 2008 to August 31, 2011, a property to GV
Mandataria, for US$4,500 per month during the first year, US$4,635 during the second year and
US$4,775 during the third year.  
    
    Banco Galicia: 237 branches located in Argentina, 137 of which were owned and 100 of
which were rented by Banco Galicia, located in all of Argentinas 23 provinces.
 
    
    Tarjeta Naranja S.A.: 115 sales points located in 21 of the 23 Argentine provinces, 114
of which were rented by the company.
 
    
    Tarjetas Cuyanas S.A.: 27 sales points and 15 client assistance centers in the provinces
of Mendoza, San Juan, San Luis, Santiago del Estero, La Pampa, La Rioja, Catamarca,
Neuquén, Rio Negro, Salta, Jujuy and Tucumán. All of them were rented.
 
    
    Tarjetas del Mar S.A.: 8 sales points located in the Province of Buenos Aires, all of
which were rented. In addition, it owns 7 sale stands located in premises that belong to La
Anónima supermarket chain, in the provinces of Neuquén and Río Negro.
 
 Capital Investments and Divestitures
  
    
    Ps.56.6 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings);
    
    Ps.4.7 million in construction in progress; and
    
    Ps.118.2 million in organizational and IT system development expenses.
  
    
    Ps.103.4 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings);
    
    Ps.44 million in construction in progress; and
    
    Ps.132.5 million in organizational and IT system development expenses.
  
    
    Ps.80.5 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings);
    
    Ps.44.7 million in construction in progress; and
    
    Ps.83.5 million in organizational and IT system development expenses.
   35




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(In millions of Pesos)Infrastructure of Corporate Buildings, Tower and Branches
(construction, furniture, equipment, phones, etc.)
    
    Ps.
    100.0Fixed Assets
    
    
    51.7Organizational and IT System Development
    
    
    100.6Total
    
    Ps.
    252.3
    36




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##### Table of Contents



Selected Statistical Information
   Average Balance Sheet and Income from Interest-Earning Assets and Expenses from Interest-Bearing
Liabilities
     Fiscal Year Ended December 31, 2009 (*)Pesos
    
    
    Dollars
    
    
    TotalAverage
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    Accrued
    
    
    Yield/
    
    
    Average
    
    
    Accrued
    
    
    Yield/
    
    
    Average
    
    
    Accrued
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate(in millions of Pesos, except rates)AssetsGovernment Securities
    
    
    2,500.7
    
    
    
    505.0
    
    
    
    20.19
    
    
    
    2,185.8
    
    
    
    50.1
    
    
    
    2.29
    
    
    
    4,686.5
    
    
    
    555.1
    
    
    
    11.84LoansPrivate Sector
    
    
    9,431.6
    
    
    
    2,049.8
    
    
    
    21.73
    
    
    
    1,912.0
    
    
    
    140.3
    
    
    
    7.34
    
    
    
    11,343.6
    
    
    
    2,190.1
    
    
    
    19.31Public Sector
    
    
    120.0
    
    
    
    27.0
    
    
    
    22.50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120.0
    
    
    
    27.0
    
    
    
    22.50Total Loans
    
    
    9,551.6
    
    
    
    2,076.8
    
    
    
    21.74
    
    
    
    1,912.0
    
    
    
    140.3
    
    
    
    7.34
    
    
    
    11,463.6
    
    
    
    2,217.1
    
    
    
    19.34Other
    
    
    1,717.9
    
    
    
    111.2
    
    
    
    6.47
    
    
    
    510.0
    
    
    
    4.0
    
    
    
    0.78
    
    
    
    2,227.9
    
    
    
    115.2
    
    
    
    5.17Total Interest-Earning Assets
    
    
    13,770.2
    
    
    
    2,693.0
    
    
    
    19.56
    
    
    
    4,607.8
    
    
    
    194.4
    
    
    
    4.22
    
    
    
    18,378.0
    
    
    
    2,887.4
    
    
    
    15.71Cash and Gold
    
    
    1,515.2
    
    
    
    
    
    
    
    
    
    
    
    1,913.5
    
    
    
    
    
    
    
    
    
    
    
    3,428.7
    
    
    
    
    
    
    
    Equity in Other Companies
    
    
    843.2
    
    
    
    
    
    
    
    
    
    
    
    157.2
    
    
    
    
    
    
    
    
    
    
    
    1,000.4
    
    
    
    
    
    
    
    Other Assets
    
    
    2,482.3
    
    
    
    
    
    
    
    
    
    
    
    162.9
    
    
    
    
    
    
    
    
    
    
    
    2,645.2
    
    
    
    
    
    
    
    Allowances
    
    
    (724.8
    )
    
    
    
    
    
    
    
    
    
    
    (42.2
    )
    
    
    
    
    
    
    
    
    
    
    (767.0
    )
    
    
    
    
    
    
    Total Assets
    
    
    17,886.1
    
    
    
    
    
    
    
    
    
    
    
    6,799.2
    
    
    
    
    
    
    
    
    
    
    
    24,685.3
    
    
    
    
    
    
    
    Liabilities and EquityDepositsCurrent Accounts
    
    
    790.0
    
    
    
    12.9
    
    
    
    1.63
    
    
    
    497.3
    
    
    
    
    
    
    
    
    
    
    
    1,287.3
    
    
    
    12.9
    
    
    
    1.00Savings Accounts
    
    
    1,988.4
    
    
    
    5.7
    
    
    
    0.29
    
    
    
    1,026.1
    
    
    
    
    
    
    
    
    
    
    
    3,014.5
    
    
    
    5.7
    
    
    
    0.19Time Deposits
    
    
    6,073.9
    
    
    
    843.2
    
    
    
    13.88
    
    
    
    1,318.0
    
    
    
    19.1
    
    
    
    1.45
    
    
    
    7,391.9
    
    
    
    862.3
    
    
    
    11.67Total Interest-Bearing Deposits
    
    
    8,852.3
    
    
    
    861.8
    
    
    
    9.74
    
    
    
    2,841.4
    
    
    
    19.1
    
    
    
    0.67
    
    
    
    11,693.7
    
    
    
    880.9
    
    
    
    7.53Argentine Central Bank
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    Other Financial Entities
    
    
    236.5
    
    
    
    44.8
    
    
    
    18.94
    
    
    
    167.9
    
    
    
    9.0
    
    
    
    5.36
    
    
    
    404.4
    
    
    
    53.8
    
    
    
    13.30Debt Securities
    
    
    325.8
    
    
    
    59.7
    
    
    
    18.32
    
    
    
    2,404.1
    
    
    
    164.6
    
    
    
    6.85
    
    
    
    2,729.9
    
    
    
    224.3
    
    
    
    8.22Other
    
    
    162.9
    
    
    
    12.2
    
    
    
    7.49
    
    
    
    931.9
    
    
    
    44.1
    
    
    
    4.73
    
    
    
    1,094.8
    
    
    
    56.3
    
    
    
    5.14Total Interest-Bearing
Liabilities
    
    
    9,577.5
    
    
    
    978.5
    
    
    
    10.22
    
    
    
    6,345.9
    
    
    
    236.8
    
    
    
    3.73
    
    
    
    15,923.4
    
    
    
    1,215.3
    
    
    
    7.63Demand Deposits
    
    
    3,058.8
    
    
    
    
    
    
    
    
    
    
    
    6.2
    
    
    
    
    
    
    
    
    
    
    
    3,065.0
    
    
    
    
    
    
    
    Other Liabilities
    
    
    2,816.3
    
    
    
    
    
    
    
    
    
    
    
    669.5
    
    
    
    
    
    
    
    
    
    
    
    3,485.8
    
    
    
    
    
    
    
    Minority Interests
    
    
    249.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249.9
    
    
    
    
    
    
    
    Shareholders Equity
    
    
    1,961.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,961.2
    
    
    
    
    
    
    
    Total Liabilities and Equity
    
    
    17,663.7
    
    
    
    
    
    
    
    
    
    
    
    7,021.6
    
    
    
    
    
    
    
    
    
    
    
    24,685.3
    
    
    
    
    
    
    
    Spread and Net YieldInterest Rate Spread
    
    
    
    
    
    
    
    
    
    
    9.34
    
    
    
    
    
    
    
    
    
    
    
    0.49
    
    
    
    
    
    
    
    
    
    
    
    8.08Cost of Funds Supporting
Interest-Earning Assets
    
    
    
    
    
    
    
    
    
    
    7.11
    
    
    
    
    
    
    
    
    
    
    
    5.14
    
    
    
    
    
    
    
    
    
    
    
    6.61Net Yield on Interest-Earning
Assets
    
    
    
    
    
    
    
    
    
    
    12.45
    
    
    
    
    
    
    
    
    
    
    
    (0.92
    )
    
    
    
    
    
    
    
    
    
    
    9.10
 (*)
    
    Rates include the CER adjustment.  37




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##### Table of Contents



Fiscal Year Ended December 31, 2008 (*)Pesos
    
    
    Dollars
    
    
    TotalAverage
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    Accrued
    
    
    Yield/
    
    
    Average
    
    
    Accrued
    
    
    Yield/
    
    
    Average
    
    
    Accrued
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate(in millions of Pesos, except rates)AssetsGovernment Securities
    
    
    1,161.4
    
    
    
    72.2
    
    
    
    6.22
    
    
    
    2,480.8
    
    
    
    76.3
    
    
    
    3.08
    
    
    
    3,642.2
    
    
    
    148.5
    
    
    
    4.08LoansPrivate Sector
    
    
    8,848.1
    
    
    
    1,756.6
    
    
    
    19.85
    
    
    
    1,964.4
    
    
    
    132.6
    
    
    
    6.75
    
    
    
    10,812.5
    
    
    
    1,889.2
    
    
    
    17.47Public Sector
    
    
    1,264.8
    
    
    
    165.7
    
    
    
    13.10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,264.8
    
    
    
    165.7
    
    
    
    13.10Total Loans
    
    
    10,112.9
    
    
    
    1,922.3
    
    
    
    19.01
    
    
    
    1,964.4
    
    
    
    132.6
    
    
    
    6.75
    
    
    
    12,077.3
    
    
    
    2,054.9
    
    
    
    17.01Other(1)
    
    
    2,908.1
    
    
    
    197.0
    
    
    
    6.77
    
    
    
    1,264.9
    
    
    
    15.2
    
    
    
    1.20
    
    
    
    4,173.0
    
    
    
    212.2
    
    
    
    5.09Total Interest-Earning Assets
    
    
    14,182.4
    
    
    
    2,191.5
    
    
    
    15.45
    
    
    
    5,710.1
    
    
    
    224.1
    
    
    
    3.92
    
    
    
    19,892.5
    
    
    
    2,415.6
    
    
    
    12.14Cash and Gold
    
    
    599.2
    
    
    
    
    
    
    
    
    
    
    
    287.9
    
    
    
    
    
    
    
    
    
    
    
    887.1
    
    
    
    
    
    
    
    Equity in Other Companies
    
    
    708.4
    
    
    
    
    
    
    
    
    
    
    
    63.8
    
    
    
    
    
    
    
    
    
    
    
    772.2
    
    
    
    
    
    
    
    Other Assets
    
    
    2,211.6
    
    
    
    
    
    
    
    
    
    
    
    218.2
    
    
    
    
    
    
    
    
    
    
    
    2,429.8
    
    
    
    
    
    
    
    Allowances
    
    
    (479.1
    )
    
    
    
    
    
    
    
    
    
    
    (90.0
    )
    
    
    
    
    
    
    
    
    
    
    (569.1
    )
    
    
    
    
    
    
    Total Assets
    
    
    17,222.5
    
    
    
    
    
    
    
    
    
    
    
    6,190.0
    
    
    
    
    
    
    
    
    
    
    
    23,412.5
    
    
    
    
    
    
    
    Liabilities and EquityDepositsCurrent Accounts
    
    
    697.7
    
    
    
    21.6
    
    
    
    3.10
    
    
    
    250.4
    
    
    
    
    
    
    
    
    
    
    
    948.1
    
    
    
    21.6
    
    
    
    2.28Savings Accounts
    
    
    1,849.3
    
    
    
    4.7
    
    
    
    0.25
    
    
    
    738.4
    
    
    
    
    
    
    
    
    
    
    
    2,587.7
    
    
    
    4.7
    
    
    
    0.18Time Deposits
    
    
    5,797.6
    
    
    
    749.9
    
    
    
    12.93
    
    
    
    971.8
    
    
    
    17.8
    
    
    
    1.83
    
    
    
    6,769.4
    
    
    
    767.7
    
    
    
    11.34Total Interest-Bearing Deposits
    
    
    8,344.6
    
    
    
    776.2
    
    
    
    9.30
    
    
    
    1,960.6
    
    
    
    17.8
    
    
    
    0.91
    
    
    
    10,305.2
    
    
    
    794.0
    
    
    
    7.70Argentine Central Bank
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    
    
    
    
    Other Financial Entities
    
    
    297.7
    
    
    
    53.8
    
    
    
    18.07
    
    
    
    797.5
    
    
    
    39.3
    
    
    
    4.93
    
    
    
    1,095.2
    
    
    
    93.1
    
    
    
    8.50Debt Securities
    
    
    487.3
    
    
    
    70.5
    
    
    
    14.47
    
    
    
    2,312.5
    
    
    
    209.6
    
    
    
    9.06
    
    
    
    2,799.8
    
    
    
    280.1
    
    
    
    10.00Other
    
    
    224.9
    
    
    
    21.6
    
    
    
    9.60
    
    
    
    1,269.0
    
    
    
    88.9
    
    
    
    7.01
    
    
    
    1,493.9
    
    
    
    110.5
    
    
    
    7.40Total Interest-Bearing
Liabilities
    
    
    9,354.5
    
    
    
    922.1
    
    
    
    9.86
    
    
    
    6,340.0
    
    
    
    355.6
    
    
    
    5.61
    
    
    
    15,694.5
    
    
    
    1,277.7
    
    
    
    8.14Demand Deposits
    
    
    2,873.6
    
    
    
    
    
    
    
    
    
    
    
    12.4
    
    
    
    
    
    
    
    
    
    
    
    2,886.0
    
    
    
    
    
    
    
    Other Liabilities
    
    
    2,313.1
    
    
    
    
    
    
    
    
    
    
    
    559.5
    
    
    
    
    
    
    
    
    
    
    
    2,872.6
    
    
    
    
    
    
    
    Minority Interests
    
    
    214.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    214.4
    
    
    
    
    
    
    
    Shareholders Equity
    
    
    1,745.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,745.0
    
    
    
    
    
    
    
    Total Liabilities and Equity
    
    
    16,500.6
    
    
    
    
    
    
    
    
    
    
    
    6,911.9
    
    
    
    
    
    
    
    
    
    
    
    23,412.5
    
    
    
    
    
    
    
    Spread and Net YieldInterest Rate Spread
    
    
    
    
    
    
    
    
    
    
    5.59
    
    
    
    
    
    
    
    
    
    
    
    (1.69
    )
    
    
    
    
    
    
    
    
    
    
    4.00Cost of Funds Supporting
Interest-Earning Assets
    
    
    
    
    
    
    
    
    
    
    6.50
    
    
    
    
    
    
    
    
    
    
    
    6.23
    
    
    
    
    
    
    
    
    
    
    
    6.42Net Yield on Interest-Earning
Assets
    
    
    
    
    
    
    
    
    
    
    8.95
    
    
    
    
    
    
    
    
    
    
    
    (2.30
    )
    
    
    
    
    
    
    
    
    
    
    5.72
 (*)
    
    Rates include the CER adjustment.(1)
    
    Includes, among other amounts, the amounts corresponding to the Compensatory Bond and the Hedge Bond to be received.  38




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##### Table of Contents



Fiscal Year Ended December 31, 2007 (*)Pesos
    
    
    Dollars
    
    
    TotalAverage
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    Accrued
    
    
    Yield/
    
    
    Average
    
    
    Accrued
    
    
    Yield/
    
    
    Average
    
    
    Accrued
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate(in millions of Pesos, except rates)AssetsGovernment Securities
    
    
    1,209.1
    
    
    
    16.9
    
    
    
    1.40
    
    
    
    3,069.7
    
    
    
    129.4
    
    
    
    4.22
    
    
    
    4,278.8
    
    
    
    146.3
    
    
    
    3.42LoansPrivate Sector
    
    
    7,178.8
    
    
    
    1,163.5
    
    
    
    16.21
    
    
    
    1,665.0
    
    
    
    107.1
    
    
    
    6.43
    
    
    
    8,843.8
    
    
    
    1,270.6
    
    
    
    14.37Public Sector
    
    
    1,685.1
    
    
    
    221.2
    
    
    
    13.13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,685.1
    
    
    
    221.2
    
    
    
    13.13Total Loans
    
    
    8,863.9
    
    
    
    1,384.7
    
    
    
    15.62
    
    
    
    1,665.0
    
    
    
    107.1
    
    
    
    6.43
    
    
    
    10,528.9
    
    
    
    1,491.8
    
    
    
    14.17Other(1)
    
    
    2,378.1
    
    
    
    155.2
    
    
    
    6.53
    
    
    
    1,040.1
    
    
    
    29.8
    
    
    
    2.87
    
    
    
    3,418.2
    
    
    
    185.0
    
    
    
    5.41Total Interest-Earning Assets
    
    
    12,451.1
    
    
    
    1,556.8
    
    
    
    12.50
    
    
    
    5,774.8
    
    
    
    266.3
    
    
    
    4.61
    
    
    
    18,225.9
    
    
    
    1,823.1
    
    
    
    10.00Cash and Gold
    
    
    484.6
    
    
    
    
    
    
    
    
    
    
    
    201.6
    
    
    
    
    
    
    
    
    
    
    
    686.2
    
    
    
    
    
    
    
    Equity in Other Companies
    
    
    661.0
    
    
    
    
    
    
    
    
    
    
    
    65.2
    
    
    
    
    
    
    
    
    
    
    
    726.2
    
    
    
    
    
    
    
    Other Assets
    
    
    2,010.4
    
    
    
    
    
    
    
    
    
    
    
    126.8
    
    
    
    
    
    
    
    
    
    
    
    2,137.2
    
    
    
    
    
    
    
    Allowances
    
    
    (335.9
    )
    
    
    
    
    
    
    
    
    
    
    (107.2
    )
    
    
    
    
    
    
    
    
    
    
    (443.1
    )
    
    
    
    
    
    
    Total Assets
    
    
    15,271.2
    
    
    
    
    
    
    
    
    
    
    
    6,061.2
    
    
    
    
    
    
    
    
    
    
    
    21,332.4
    
    
    
    
    
    
    
    Liabilities and EquityDepositsCurrent Accounts
    
    
    531.0
    
    
    
    16.4
    
    
    
    3.09
    
    
    
    147.4
    
    
    
    
    
    
    
    
    
    
    
    678.4
    
    
    
    16.4
    
    
    
    2.42Savings Accounts
    
    
    1,647.2
    
    
    
    5.1
    
    
    
    0.31
    
    
    
    605.7
    
    
    
    
    
    
    
    
    
    
    
    2,252.9
    
    
    
    5.1
    
    
    
    0.23Time Deposits
    
    
    5,705.6
    
    
    
    547.0
    
    
    
    9.59
    
    
    
    900.6
    
    
    
    15.4
    
    
    
    1.71
    
    
    
    6,606.2
    
    
    
    562.4
    
    
    
    8.51Total Interest-Bearing Deposits
    
    
    7,883.8
    
    
    
    568.5
    
    
    
    7.21
    
    
    
    1,653.7
    
    
    
    15.4
    
    
    
    0.93
    
    
    
    9,537.5
    
    
    
    583.9
    
    
    
    6.12Argentine Central Bank
    
    
    261.3
    
    
    
    68.8
    
    
    
    26.33
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    261.5
    
    
    
    68.8
    
    
    
    26.31Other Financial Entities
    
    
    186.4
    
    
    
    27.2
    
    
    
    14.59
    
    
    
    352.8
    
    
    
    16.9
    
    
    
    4.79
    
    
    
    539.2
    
    
    
    44.1
    
    
    
    8.18Debt Securities
    
    
    530.0
    
    
    
    77.7
    
    
    
    14.66
    
    
    
    2,830.1
    
    
    
    213.3
    
    
    
    7.54
    
    
    
    3,360.1
    
    
    
    291.0
    
    
    
    8.66Other
    
    
    149.7
    
    
    
    16.5
    
    
    
    11.02
    
    
    
    1,010.8
    
    
    
    66.9
    
    
    
    6.62
    
    
    
    1,160.5
    
    
    
    83.4
    
    
    
    7.19Total Interest-Bearing
Liabilities
    
    
    9,011.2
    
    
    
    758.7
    
    
    
    8.42
    
    
    
    5,847.6
    
    
    
    312.5
    
    
    
    5.34
    
    
    
    14,858.8
    
    
    
    1,071.2
    
    
    
    7.21Demand Deposits
    
    
    2,287.6
    
    
    
    
    
    
    
    
    
    
    
    19.9
    
    
    
    
    
    
    
    
    
    
    
    2,307.5
    
    
    
    
    
    
    
    Other Liabilities
    
    
    1,872.7
    
    
    
    
    
    
    
    
    
    
    
    513.8
    
    
    
    
    
    
    
    
    
    
    
    2,386.5
    
    
    
    
    
    
    
    Minority Interests
    
    
    172.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    172.9
    
    
    
    
    
    
    
    Shareholders Equity
    
    
    1,606.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,606.7
    
    
    
    
    
    
    
    Total Liabilities and Equity
    
    
    14,951.1
    
    
    
    
    
    
    
    
    
    
    
    6,381.3
    
    
    
    
    
    
    
    
    
    
    
    21,332.4
    
    
    
    
    
    
    
    Spread and Net YieldInterest Rate Spread
    
    
    
    
    
    
    
    
    
    
    4.08
    
    
    
    
    
    
    
    
    
    
    
    (0.73
    )
    
    
    
    
    
    
    
    
    
    
    2.79Cost of Funds Supporting
Interest-Earning Assets
    
    
    
    
    
    
    
    
    
    
    6.09
    
    
    
    
    
    
    
    
    
    
    
    5.41
    
    
    
    
    
    
    
    
    
    
    
    5.88Net Yield on Interest-Earning
Assets
    
    
    
    
    
    
    
    
    
    
    6.41
    
    
    
    
    
    
    
    
    
    
    
    (0.80
    )
    
    
    
    
    
    
    
    
    
    
    4.13
 (*)
    
    Rates include the CER adjustment.(1)
    
    Includes, among other amounts, the amounts corresponding to the Compensatory Bond and the Hedge Bond to be received.  39




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##### Table of Contents



Changes in Net Interest Income-Volume and Rate Analysis
  Fiscal Year 2009/ Fiscal Year 2008,
    
    
    Fiscal Year 2008/ Fiscal Year 2007,Increase (Decrease) due to changes in
    
    
    Increase (Decrease) due to changes inVolume
    
    
    Rate
    
    
    Net Change
    
    
    Volume
    
    
    Rate
    
    
    Net Change(in millions of Pesos)Interest Earning AssetsGovernment SecuritiesPesos
    
    
    146.6
    
    
    
    286.2
    
    
    
    432.8
    
    
    
    (0.6
    )
    
    
    55.9
    
    
    
    55.3Dollars
    
    
    (8.4
    )
    
    
    (17.8
    )
    
    
    (26.2
    )
    
    
    (22.0
    )
    
    
    (31.1
    )
    
    
    (53.1
    )Total
    
    
    138.2
    
    
    
    268.4
    
    
    
    406.6
    
    
    
    (22.6
    )
    
    
    24.8
    
    
    
    2.2LoansPrivate SectorPesos
    
    
    120.4
    
    
    
    172.8
    
    
    
    293.2
    
    
    
    301.5
    
    
    
    291.6
    
    
    
    593.1Dollars
    
    
    (3.4
    )
    
    
    11.1
    
    
    
    7.7
    
    
    
    20.0
    
    
    
    5.5
    
    
    
    25.5Total
    
    
    117.0
    
    
    
    183.9
    
    
    
    300.9
    
    
    
    321.5
    
    
    
    297.1
    
    
    
    618.6Public SectorPesos
    
    
    (668.4
    )
    
    
    529.7
    
    
    
    (138.7
    )
    
    
    (55.1
    )
    
    
    (0.4
    )
    
    
    (55.5
    )Dollars
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    (668.4
    )
    
    
    529.7
    
    
    
    (138.7
    )
    
    
    (55.1
    )
    
    
    (0.4
    )
    
    
    (55.5
    )OtherPesos
    
    
    (77.4
    )
    
    
    (8.4
    )
    
    
    (85.8
    )
    
    
    35.7
    
    
    
    6.1
    
    
    
    41.8Dollars
    
    
    (7.0
    )
    
    
    (4.2
    )
    
    
    (11.2
    )
    
    
    8.7
    
    
    
    (23.3
    )
    
    
    (14.6
    )Total
    
    
    (84.4
    )
    
    
    (12.6
    )
    
    
    (97.0
    )
    
    
    44.4
    
    
    
    (17.2
    )
    
    
    27.2Total Interest-Earning AssetsPesos
    
    
    (478.8
    )
    
    
    980.3
    
    
    
    501.5
    
    
    
    281.5
    
    
    
    353.2
    
    
    
    634.7Dollars
    
    
    (18.8
    )
    
    
    (10.9
    )
    
    
    (29.7
    )
    
    
    6.7
    
    
    
    (48.9
    )
    
    
    (42.2
    )Total
    
    
    (497.6
    )
    
    
    969.4
    
    
    
    471.8
    
    
    
    288.2
    
    
    
    304.3
    
    
    
    592.5Interest Bearing LiabilitiesDemand AccountPesos
    
    
    3.4
    
    
    
    (12.1
    )
    
    
    (8.7
    )
    
    
    5.2
    
    
    
    
    
    
    
    5.2Dollars
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3.4
    
    
    
    (12.1
    )
    
    
    (8.7
    )
    
    
    5.2
    
    
    
    
    
    
    
    5.2Savings AccountPesos
    
    
    0.4
    
    
    
    0.6
    
    
    
    1.0
    
    
    
    0.9
    
    
    
    (1.3
    )
    
    
    (0.4
    )Dollars
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    0.4
    
    
    
    0.6
    
    
    
    1.0
    
    
    
    0.9
    
    
    
    (1.3
    )
    
    
    (0.4
    )Time DepositsPesos
    
    
    36.8
    
    
    
    56.5
    
    
    
    93.3
    
    
    
    9.0
    
    
    
    193.9
    
    
    
    202.9Dollars
    
    
    3.2
    
    
    
    (1.9
    )
    
    
    1.3
    
    
    
    1.3
    
    
    
    1.1
    
    
    
    2.4Total
    
    
    40.0
    
    
    
    54.6
    
    
    
    94.6
    
    
    
    10.3
    
    
    
    195.0
    
    
    
    205.3With the Argentine Central BankPesos
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34.4
    )
    
    
    (34.4
    )
    
    
    (68.8
    )Dollars
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34.4
    )
    
    
    (34.4
    )
    
    
    (68.8
    )With Other Financial EntitiesPesos
    
    
    (11.8
    )
    
    
    2.8
    
    
    
    (9.0
    )
    
    
    19.0
    
    
    
    7.6
    
    
    
    26.6Dollars
    
    
    (33.9
    )
    
    
    3.6
    
    
    
    (30.3
    )
    
    
    21.9
    
    
    
    0.5
    
    
    
    22.4Total
    
    
    (45.7
    )
    
    
    6.4
    
    
    
    (39.3
    )
    
    
    40.9
    
    
    
    8.1
    
    
    
    49.0Negotiable ObligationsPesos
    
    
    (55.5
    )
    
    
    44.7
    
    
    
    (10.8
    )
    
    
    (6.2
    )
    
    
    (1.0
    )
    
    
    (7.2
    )Dollars
    
    
    8.7
    
    
    
    (53.7
    )
    
    
    (45.0
    )
    
    
    (42.8
    )
    
    
    39.1
    
    
    
    (3.7
    )Total
    
    
    (46.8
    )
    
    
    (9.0
    )
    
    
    (55.8
    )
    
    
    (49.0
    )
    
    
    38.1
    
    
    
    (10.9
    )Other liabilitiesPesos
    
    
    (5.2
    )
    
    
    (4.2
    )
    
    
    (9.4
    )
    
    
    6.9
    
    
    
    (1.8
    )
    
    
    5.1Dollars
    
    
    (20.2
    )
    
    
    (24.6
    )
    
    
    (44.8
    )
    
    
    17.9
    
    
    
    4.1
    
    
    
    22.0Total
    
    
    (25.4
    )
    
    
    (28.8
    )
    
    
    (54.2
    )
    
    
    24.8
    
    
    
    2.3
    
    
    
    27.1Total Interest Bearing LiabilitiesPesos
    
    
    (31.9
    )
    
    
    88.3
    
    
    
    56.4
    
    
    
    0.4
    
    
    
    163.0
    
    
    
    163.4Dollars
    
    
    (42.2
    )
    
    
    (76.6
    )
    
    
    (118.8
    )
    
    
    (1.7
    )
    
    
    44.8
    
    
    
    43.1Total
    
    
    (74.1
    )
    
    
    11.7
    
    
    
    (62.4
    )
    
    
    (1.3
    )
    
    
    207.8
    
    
    
    206.5
  40




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##### Table of Contents



Interest-Earning Assets-Net Yield on Interest-Earning Assets
  Fiscal Year Ended December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos, except percentages)Total Average Interest-Earning AssetsPesos
    
    
    13,770.2
    
    
    
    14,182.4
    
    
    
    12,451.1Dollars
    
    
    4,607.8
    
    
    
    5,710.1
    
    
    
    5,774.8Total
    
    
    18,378.0
    
    
    
    19,892.5
    
    
    
    18,225.9Net Interest Earned(1)Pesos
    
    
    1,714.5
    
    
    
    1,269.4
    
    
    
    798.1Dollars
    
    
    (42.4
    )
    
    
    (131.5
    )
    
    
    (46.2
    )Total
    
    
    1,672.1
    
    
    
    1,137.9
    
    
    
    751.9Net Yield on Interest-Earning Assets(2)(%)Pesos
    
    
    12.45
    
    
    
    8.95
    
    
    
    6.41Dollars
    
    
    (0.92
    )
    
    
    (2.30
    )
    
    
    (0.80
    )Weighted-Average Yield
    
    
    9.10
    
    
    
    5.72
    
    
    
    4.13Interest Spread, Nominal Basis(3)(%)Pesos
    
    
    9.34
    
    
    
    5.59
    
    
    
    4.08Dollars
    
    
    0.49
    
    
    
    (1.69
    )
    
    
    (0.73
    )Weighted-Average Yield
    
    
    8.08
    
    
    
    4.00
    
    
    
    2.79Credit Related Fees Included in Net Interest EarnedPesos
    
    
    84.2
    
    
    
    69.9
    
    
    
    43.5Dollars
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    84.2
    
    
    
    69.9
    
    
    
    43.5
 (1)
    
    Net interest earned corresponds to the net financial income (Financial Income minus
Financial Expenses, as set forth in the Income Statement),plus (i) financial fees
included in Income from Services  In Relation to Lending Transactions in the Income
Statement,(ii) contributions to the Deposits Insurance Fund included in the item with the
same denomination that is part of the Financial Expenses caption in the Income Statement,
and (iii) contributions and taxes on financial income included in the Income Statement under
Financial Expenses  Others;minus (i) net income from corporate securities,
included under Financial Income/Expenses  Interest Income and Gains/Losses from Holdings
of Government and Corporate Securities, in the Income Statement,(ii) differences in
quotation of gold and foreign currency included in the item with the same denomination that
is part of the Financial Expenses/Income caption in the Income Statement, and (iii) the
premiums and adjustments on forward transactions in foreign currency, included in the item
Financial Income-Others in the Income Statement. Net interest earned also includes income
from government securities used as security margins in repurchase transactions. This
income/loss is included in Miscellaneous Income/Loss  Others in the Income Statement. Net
income from government securities includes both interest and gains/losses due to the
variation of market quotations.(2)
    
    Net interest earned, divided by average interest-earning assets.(3)
    
    Interest spread, nominal basis is the difference between the average nominal interest rate
on interest-earning assets and the average nominal interest rate on interest-bearing
deposits.  41




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##### Table of Contents



Government and Corporate Securities
  Fiscal Year Ended December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Government SecuritiesPesosInvestment
    
    
    43.3
    
    
    
    22.8
    
    
    
    17.1Issued by Argentine Central Bank  Lebac and Nobac
    
    
    43.3
    
    
    
    22.8
    
    
    
    17.1Trading
    
    
    100.7
    
    
    
    233.7
    
    
    
    38.9Bonar Bonds
    
    
    42.7
    
    
    
    
    
    
    
    36.7Bogar Bonds
    
    
    
    
    
    
    1.6
    
    
    
    2.1Others
    
    
    58.0
    
    
    
    232.1
    
    
    
    0.1Issued by Argentine Central Bank
    
    
    1,615.1
    
    
    
    550.2
    
    
    
    331.6Lebac Unquoted
    
    
    934.6
    
    
    
    
    
    
    
    11.0Lebac Quoted
    
    
    633.9
    
    
    
    
    
    
    
    103.3Nobac Unquoted
    
    
    29.5
    
    
    
    520.2
    
    
    
    8.3Nobac Quoted
    
    
    17.1
    
    
    
    30.0
    
    
    
    209.0Without Quotation
    
    
    945.7
    
    
    
    69.8
    
    
    
    1.9Bonar Bonds
    
    
    323.7
    
    
    
    
    
    
    
    Discount Bonds in Pesos
    
    
    622.0
    
    
    
    69.8
    
    
    
    1.9Total Government Securities in Pesos
    
    
    2,704.8
    
    
    
    876.5
    
    
    
    389.5DollarsInvestment
    
    
    
    
    
    
    527.4
    
    
    
    1,303.4Boden 2012 Bonds
    
    
    
    
    
    
    525.9
    
    
    
    1,303.4Boden 2013 Bonds
    
    
    
    
    
    
    1.5
    
    
    
    Trading
    
    
    13.5
    
    
    
    0.4
    
    
    
    0.1Boden 2012 Bonds
    
    
    
    
    
    
    
    
    
    
    0.1Others
    
    
    13.5
    
    
    
    0.4
    
    
    
    Government Securities for Repurchase Agreement
Transactions with the Argentinte Central Bank
    
    
    152.7
    
    
    
    127.5
    
    
    
    Boden 2013  2015 Bonds
    
    
    
    
    
    
    127.5
    
    
    
    Bonar Bonds
    
    
    152.7
    
    
    
    
    
    
    
    Without Quotation
    
    
    1,036.2
    
    
    
    
    
    
    
    Boden 2012 Bonds
    
    
    1,032.4
    
    
    
    
    
    
    
    Others
    
    
    3.8
    
    
    
    
    
    
    
    Total Government Securities in Dollars
    
    
    1,202.4
    
    
    
    655.3
    
    
    
    1,303.5Total Government Securities
    
    
    3,907.2
    
    
    
    1,531.8
    
    
    
    1,693.0Corporate Securities
    
    
    13.2
    
    
    
    0.1
    
    
    
    1.0Corporate Equity Securities (Quoted) in Pesos
    
    
    0.1
    
    
    
    0.1
    
    
    
    1.0Corporate Equity Securities (Quoted) in Dollars
    
    
    13.1
    
    
    
    
    
    
    
    Total Government and Corporate Securities
    
    
    3,920.4
    
    
    
    1,531.9
    
    
    
    1,694.0
   42




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##### Table of Contents



Government Securities  Net Position
  As of December 31, 2009Spot
    
    
    SpotForward
    
    
    Forward
    
    
    purchases
    
    
    sales
    
    
    NetHoldings
    
    
    Purchases
    
    
    Sales
    
    
    to be settled
    
    
    to be settled
    
    
    Position(in millions of Pesos)Government SecuritiesInvestment PortfolioPesos
    
    
    43.3
    
    
    
    226.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    269.9Trading or Financial Brokerage PortfolioPesos
    
    
    100.7
    
    
    
    
    
    
    
    
    
    
    
    1.7
    
    
    
    6.4
    
    
    
    96.0Dollars
    
    
    13.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13.5Government Securities for Repurchase
Agreement Transactions with the Argentinte
Central BankDollars
    
    
    152.7
    
    
    
    
    
    
    
    152.7
    
    
    
    
    
    
    
    
    
    
    
    Government Securities without quotationPesos
    
    
    945.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    945.7Dollars
    
    
    1,036.2
    
    
    
    887.6
    
    
    
    
    
    
    
    
    
    
    
    13.1
    
    
    
    1,910.7Securities issued by the Argentine Central BankPesos
    
    
    1,615.1
    
    
    
    91.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,706.8Total Government Securities
    
    
    3,907.2
    
    
    
    1,205.9
    
    
    
    152.7
    
    
    
    1.7
    
    
    
    19.5
    
    
    
    4,942.6Corporate Equity Securities (Quoted)
    
    
    13.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13.2Total Government and Corporate Securities
    
    
    3,920.2
    
    
    
    1,205.9
    
    
    
    152.7
    
    
    
    1.7
    
    
    
    19.5
    
    
    
    4,955.8
  43




---



##### Table of Contents



Valuation
  Investment portfolio
   44




---



##### Table of Contents



Convergence to market value pursuant to Communiqué A 3911 and supplementary regulations
   45




---



##### Table of Contents



Argentine government securities from the restructuring process that took place in 2005
    Government and corporate debt securities without quotation
   46




---



##### Table of Contents



Securities available for sale
  Remaining Maturity and Weighted-Average Yield
  Maturity Yield
 Maturing after 1
    
    
    Maturing after 5Maturing
    
    
    year but within
    
    
    years but within
    
    
    MaturingTotal
    
    
    within 1 year
    
    
    5 years
    
    
    10 years
    
    
    after 10 yearsBook
    
    
    Book
    
    
    
    
    
    
    Book
    
    
    
    
    
    
    Book
    
    
    
    
    
    
    BookValue
    
    
    Value
    
    
    Yield(1)
    
    
    Value
    
    
    Yield(1)
    
    
    Value
    
    
    Yield(1)
    
    
    Value
    
    
    Yield(1)(in millions of Pesos, except percentages)Government SecuritiesHeld for Trading and Brokerage
Purposes (carried at market value)Pesos
    
    
    100.7
    
    
    
    8.6
    
    
    
    7.0
    %
    
    
    80.2
    
    
    
    14.5
    %
    
    
    2.3
    
    
    
    11.2
    %
    
    
    9.5
    
    
    
    11.0
    %Dollars
    
    
    13.5
    
    
    
    0.9
    
    
    
    10.9
    %
    
    
    11.7
    
    
    
    3.8
    %
    
    
    0.9
    
    
    
    3.0
    %
    
    
    
    
    
    
    Held for Investment (carried at amortized cost)Pesos
    
    
    43.3
    
    
    
    43.3
    
    
    
    13.5
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Government Securities for Repurchase Agreement
Transactions with the Argentinte Central BankDollars
    
    
    152.7
    
    
    
    38.2
    
    
    
    10.1
    %
    
    
    114.5
    
    
    
    10.1
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Instruments Issued by the Argentine Central
BankPesos
    
    
    1,615.1
    
    
    
    1,615.1
    
    
    
    8.9
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Securities Without QuotationPesos
    
    
    945.7
    
    
    
    
    
    
    
    
    
    
    
    323.7
    
    
    
    20.6
    %
    
    
    
    
    
    
    
    
    
    
    622.5
    
    
    
    11.4
    %Dollars
    
    
    1,036.2
    
    
    
    344.6
    
    
    
    9.1
    %
    
    
    690.7
    
    
    
    9.1
    %
    
    
    1.0
    
    
    
    12.0
    %
    
    
    
    
    
    
    Total Government Securities
    
    
    3,907.2
    
    
    
    2,050.7
    
    
    
    9.1
    %
    
    
    1,220.8
    
    
    
    12.5
    %
    
    
    4.2
    
    
    
    9.6
    %
    
    
    631.5
    
    
    
    11.4
    %Corporate Debt Securities
    
    
    13.2
    
    
    
    0.1
    
    
    
    8.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13.1
    
    
    
    10.4
    %Total Portfolio
    
    
    3,920.4
    
    
    
    2,050.8
    
    
    
    9.1
    %
    
    
    1,220.8
    
    
    
    12.5
    %
    
    
    4.2
    
    
    
    9.6
    %
    
    
    644.6
    
    
    
    11.4
    %
 (1)
    
    Effective yield based on December 31, 2009 quoted market values.  47




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##### Table of Contents



Loan Portfolio
  As of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millions of Pesos)Principal and InterestNon-Financial Public Sector
    
    
    5.0
    
    
    
    1,319.6
    
    
    
    1,210.5
    
    
    
    2,690.6
    
    
    
    5,187.5Local Financial Sector
    
    
    25.4
    
    
    
    148.1
    
    
    
    110.0
    
    
    
    311.6
    
    
    
    128.2Non-Financial Private Sector and Residents Abroad (1)Advances
    
    
    630.1
    
    
    
    594.4
    
    
    
    792.1
    
    
    
    346.3
    
    
    
    223.6Promissory Notes
    
    
    3,205.4
    
    
    
    2,116.3
    
    
    
    2,911.2
    
    
    
    2,143.7
    
    
    
    1,836.9Mortgage Loans
    
    
    964.3
    
    
    
    1,026.8
    
    
    
    945.1
    
    
    
    688.0
    
    
    
    503.4Pledge Loans
    
    
    64.8
    
    
    
    81.0
    
    
    
    94.5
    
    
    
    67.1
    
    
    
    121.1Personal Loans
    
    
    1,724.4
    
    
    
    1,217.6
    
    
    
    977.9
    
    
    
    563.2
    
    
    
    258.0Credit Card Loans
    
    
    5,691.3
    
    
    
    4,378.4
    
    
    
    3,630.1
    
    
    
    2,458.6
    
    
    
    1,732.1Placements in Banks Abroad
    
    
    440.7
    
    
    
    334.5
    
    
    
    158.0
    
    
    
    608.0
    
    
    
    212.9Other Loans
    
    
    1,387.9
    
    
    
    883.3
    
    
    
    1,010.8
    
    
    
    794.8
    
    
    
    599.8Accrued Interest, Adjustment and Quotation Differences
Receivable
    
    
    178.8
    
    
    
    185.8
    
    
    
    177.0
    
    
    
    155.0
    
    
    
    146.8Documented Interest
    
    
    (54.2
    )
    
    
    (38.5
    )
    
    
    (42.5
    )
    
    
    (23.3
    )
    
    
    (12.3
    )Total Non-Financial Private-Sector and Residents Abroad
    
    
    14,233.5
    
    
    
    10,779.6
    
    
    
    10,654.2
    
    
    
    7,801.4
    
    
    
    5,622.3Total Gross Loans
    
    
    14,263.9
    
    
    
    12,247.3
    
    
    
    11,974.7
    
    
    
    10,803.6
    
    
    
    10,938.0Allowance for Loan Losses
    
    
    (806.4
    )
    
    
    (526.8
    )
    
    
    (428.6
    )
    
    
    (327.0
    )
    
    
    (427.9
    )Total Loans
    
    
    13,457.5
    
    
    
    11,720.5
    
    
    
    11,546.1
    
    
    
    10,476.6
    
    
    
    10,510.1Loans with GuaranteesWith Preferred Guarantees (2)
    
    
    1,142.2
    
    
    
    1,332.8
    
    
    
    1,289.8
    
    
    
    1,076.2
    
    
    
    838.5Other Guarantees
    
    
    2,453.9
    
    
    
    2,971.1
    
    
    
    3,180.2
    
    
    
    4,103.6
    
    
    
    6,317.3Total Loans with Guarantees
    
    
    3,596.1
    
    
    
    4,303.9
    
    
    
    4,470.0
    
    
    
    5,179.8
    
    
    
    7,155.8
 (1)
    
    Categories of loans include: -
    
    Advances: short-term obligations drawn on by customers through overdrafts.-
    
    Promissory Notes: endorsed promissory notes, negotiable obligations and other promises to pay signed by one borrower or
group of borrowers and factored loans.-
    
    Mortgage Loans: loans granted to purchase or improve real estate and collateralized by such real estate and commercial loans
secured by a real estate mortgage.-
    
    Pledge Loans: loans secured by collateral (such as cars or machinery) other than real estate, where such collateral is an
integral part of the loan documents.-
    
    Personal Loans: loans to individuals.-
    
    Credit-Card Loans: loans granted through credit cards to credit card holders.-
    
    Placements in Banks Abroad: short-term loans to banks abroad.-
    
    Other Loans: loans not included in other categories.-
    
    Documented Interest: discount on notes and bills. (2)
    
    Preferred guarantees include mortgages on real estate property or pledges on movable property, such as cars or machinery, where the
Bank has priority, endorsements of the Federal Office of the Secretary of Finance, pledges of Government securities, or gold or cash as
collateral.     48




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##### Table of Contents



Loans by Type of Borrower
  As of December 31,2009
    
    
    2008
    
    
    2007Amount
    
    
    % of Total
    
    
    Amount
    
    
    % of Total
    
    
    Amount
    
    
    % of Total(in millions of Pesos, except percentages)Corporate
    
    
    1,801.1
    
    
    
    12.63
    
    
    
    1,148.6
    
    
    
    9.38
    
    
    
    1,870.0
    
    
    
    15.62Middle-Market Companies
    
    
    4,844.5
    
    
    
    33.96
    
    
    
    3,716.8
    
    
    
    30.35
    
    
    
    3,993.8
    
    
    
    33.35- Agribusiness
    
    
    1,962.9
    
    
    
    13.76
    
    
    
    1,461.4
    
    
    
    11.93
    
    
    
    1,341.9
    
    
    
    11.21- SMEs
    
    
    2,881.6
    
    
    
    20.20
    
    
    
    2,255.4
    
    
    
    18.42
    
    
    
    2,651.9
    
    
    
    22.14Commercial Loans
    
    
    6,645.6
    
    
    
    46.59
    
    
    
    4,865.4
    
    
    
    39.73
    
    
    
    5,863.8
    
    
    
    48.97Individuals
    
    
    7,142.8
    
    
    
    50.07
    
    
    
    5,578.3
    
    
    
    45.55
    
    
    
    4,631.4
    
    
    
    38.68- Bank
    
    
    4,296.4
    
    
    
    30.12
    
    
    
    3,232.0
    
    
    
    26.39
    
    
    
    2,603.1
    
    
    
    21.74- Regional Credit Card Companies
    
    
    2,846.4
    
    
    
    19.95
    
    
    
    2,346.3
    
    
    
    19.16
    
    
    
    2,028.3
    
    
    
    16.94Financial Sector (1)
    
    
    470.5
    
    
    
    3.30
    
    
    
    484.0
    
    
    
    3.95
    
    
    
    269.0
    
    
    
    2.25Non-Financial Public Sector
    
    
    5.0
    
    
    
    0.04
    
    
    
    1,319.6
    
    
    
    10.77
    
    
    
    1,210.5
    
    
    
    10.10Total(2)
    
    
    14,263.9
    
    
    
    100.00
    
    
    
    12,247.3
    
    
    
    100.00
    
    
    
    11,974.7
    
    
    
    100.00
 (1)
    
    Includes local and international financial sector. Financial Sector loans are primarily composed of interbank loans
(call money loans), overnight deposits at international money center banks and loans to provincial banks.(2)
    
    Before the allowance for loan losses.   49




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##### Table of Contents



Loans by Economic Activity
  As of December 31,2009
    
    
    2008
    
    
    2007% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    Amount
    
    
    Total(in millions of Pesos, except percentages)Financial Sector(1)
    
    
    470.5
    
    
    
    3.30
    
    
    
    484.0
    
    
    
    3.95
    
    
    
    269.0
    
    
    
    2.25ServicesNon-Financial Public Sector
    
    
    5.0
    
    
    
    0.04
    
    
    
    1,319.6
    
    
    
    10.77
    
    
    
    1,210.5
    
    
    
    10.10Communications, Transportation Health and Others
    
    
    1,020.2
    
    
    
    7.15
    
    
    
    838.3
    
    
    
    6.84
    
    
    
    936.7
    
    
    
    7.82Electricity, Gas, Water Supply and Sewage
Services
    
    
    43.7
    
    
    
    0.31
    
    
    
    30.7
    
    
    
    0.25
    
    
    
    198.2
    
    
    
    1.66Other Financial Services
    
    
    12.8
    
    
    
    0.09
    
    
    
    44.5
    
    
    
    0.37
    
    
    
    11.7
    
    
    
    0.10Total
    
    
    1,081.7
    
    
    
    7.59
    
    
    
    2,233.1
    
    
    
    18.23
    
    
    
    2,357.1
    
    
    
    19.68Primary ProductsAgriculture and Livestock
    
    
    1,803.8
    
    
    
    12.65
    
    
    
    1,274.5
    
    
    
    10.41
    
    
    
    1,217.8
    
    
    
    10.17Fishing, Forestry and Mining
    
    
    177.8
    
    
    
    1.25
    
    
    
    60.9
    
    
    
    0.49
    
    
    
    49.8
    
    
    
    0.42Total
    
    
    1,981.6
    
    
    
    13.90
    
    
    
    1,335.4
    
    
    
    10.90
    
    
    
    1,267.6
    
    
    
    10.59Consumer
    
    
    6,781.5
    
    
    
    47.54
    
    
    
    5,294.9
    
    
    
    43.23
    
    
    
    4,402.4
    
    
    
    36.76Retail Trade
    
    
    719.5
    
    
    
    5.04
    
    
    
    537.2
    
    
    
    4.39
    
    
    
    721.0
    
    
    
    6.02Wholesale Trade
    
    
    931.4
    
    
    
    6.53
    
    
    
    647.0
    
    
    
    5.28
    
    
    
    854.3
    
    
    
    7.13Construction
    
    
    177.0
    
    
    
    1.24
    
    
    
    82.2
    
    
    
    0.67
    
    
    
    268.1
    
    
    
    2.24ManufacturingFoodstuffs
    
    
    773.2
    
    
    
    5.42
    
    
    
    533.6
    
    
    
    4.36
    
    
    
    561.4
    
    
    
    4.69Transportation Materials
    
    
    41.9
    
    
    
    0.29
    
    
    
    81.5
    
    
    
    0.67
    
    
    
    69.3
    
    
    
    0.58Chemicals and Oil
    
    
    378.3
    
    
    
    2.65
    
    
    
    293.2
    
    
    
    2.39
    
    
    
    339.6
    
    
    
    2.84Manufacturing Industries
    
    
    891.5
    
    
    
    6.25
    
    
    
    682.6
    
    
    
    5.57
    
    
    
    836.1
    
    
    
    6.98Total
    
    
    2,084.9
    
    
    
    14.61
    
    
    
    1,590.9
    
    
    
    12.99
    
    
    
    1,806.4
    
    
    
    15.09Other Loans
    
    
    35.8
    
    
    
    0.25
    
    
    
    42.6
    
    
    
    0.36
    
    
    
    28.8
    
    
    
    0.24Total(2)
    
    
    14,263.9
    
    
    
    100.00
    
    
    
    12,247.3
    
    
    
    100.00
    
    
    
    11,974.7
    
    
    
    100.00
 (1)
    
    Includes local and international financial sectors.(2)
    
    Before the allowance for loan losses.   Maturity Composition of the Loan Portfolio
  After 1
    
    
    After 6
    
    
    
    
    
    
    After 3Month but
    
    
    Months but
    
    
    After 1 Year
    
    
    Years but
    
    
    
    
    
    
    Total atWithin 1
    
    
    within 6
    
    
    within 12
    
    
    but within 3
    
    
    within 5
    
    
    After 5
    
    
    DecemberMonth
    
    
    Months
    
    
    Months
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    31, 2009(in millions of Pesos)Non-Financial Public Sector(1)
    
    
    1.3
    
    
    
    0.5
    
    
    
    0.4
    
    
    
    1.8
    
    
    
    1.0
    
    
    
    
    
    
    
    5.0Financial Sector(1)
    
    
    25.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25.4Private Sector and Residents Abroad
    
    
    7,720.5
    
    
    
    3,325.8
    
    
    
    1,122.1
    
    
    
    1,363.6
    
    
    
    479.3
    
    
    
    222.3
    
    
    
    14,233.6- Advances
    
    
    387.1
    
    
    
    235.0
    
    
    
    6.1
    
    
    
    1.9
    
    
    
    
    
    
    
    
    
    
    
    630.1- Promissory Notes
    
    
    1,148.7
    
    
    
    1,353.3
    
    
    
    364.5
    
    
    
    307.0
    
    
    
    22.2
    
    
    
    9.7
    
    
    
    3,205.4- Mortgage Loans
    
    
    20.9
    
    
    
    97.6
    
    
    
    92.2
    
    
    
    324.4
    
    
    
    218.9
    
    
    
    210.4
    
    
    
    964.4- Pledge Loans
    
    
    4.9
    
    
    
    16.7
    
    
    
    14.9
    
    
    
    21.4
    
    
    
    4.7
    
    
    
    2.2
    
    
    
    64.8- Personal Loans
    
    
    94.7
    
    
    
    400.4
    
    
    
    330.3
    
    
    
    665.9
    
    
    
    233.1
    
    
    
    
    
    
    
    1,724.4- Credit-Card Loans
    
    
    4,250.9
    
    
    
    1,107.5
    
    
    
    292.3
    
    
    
    40.6
    
    
    
    
    
    
    
    
    
    
    
    5,691.3- Other Loans
    
    
    1,688.7
    
    
    
    115.3
    
    
    
    21.8
    
    
    
    2.4
    
    
    
    0.4
    
    
    
    
    
    
    
    1,828.6- Accrued Interest and Quotation
Differences Receivable (1)
    
    
    178.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178.8- (Documented Interest)
    
    
    (54.2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54.2
    )- (Unallocated Collections)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allowance for Loan Losses(2)
    
    
    (806.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (806.4
    )Total Loans, Net
    
    
    6,940.8
    
    
    
    3,326.3
    
    
    
    1,122.5
    
    
    
    1,365.4
    
    
    
    480.3
    
    
    
    222.3
    
    
    
    13,457.6
 (1)
    
    Interest and the CER adjustment were assigned to the first month.(2)
    
    Allowances were assigned to the first month as were past due loans and loans in judicial proceedings.  50




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##### Table of Contents



Interest Rate Sensitivity of Outstanding Loans
  In millions of Pesos
    
    
    As a % of Total LoansVariable Rate (1)(2)Pesos
    
    
    7,089.6
    
    
    
    50.12Dollars
    
    
    778.8
    
    
    
    5.51Total
    
    
    7,868.4
    
    
    
    55.63Fixed Rate (2)(3)Pesos
    
    
    4,640.4
    
    
    
    32.80Dollars
    
    
    1,636.3
    
    
    
    11.57Total
    
    
    6,276.7
    
    
    
    44.37Past Due LoansPesos
    
    
    528.2
    
    
    
    3.74Dollars
    
    
    21.4
    
    
    
    0.15Total
    
    
    549.6
    
    
    
    3.89
 (1)
    
    Includes overdraft loans.(2)
    
    Includes past due loans and excludes interest receivable, differences in quotations and the CER adjustment.(3)
    
    Includes short-term and long-term loans whose rates are determined at the beginning of the loans life. Credit Review Process
   Banco Galicia
     51




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##### Table of Contents



Retail Credit Approval and Recovery.
    Corporate Credit Approval and Recovery.
  52




---



##### Table of Contents



Qualitative analysis
    
    Assessment of the corporate borrowers creditworthiness performed by the officer in
charge of the account based on personal knowledge.Economic and financial risk
    
    Quantitative analysis of the borrowers balance sheet amounts.Economic risk of the sector
    
    Measurement of the general risk of the economic sector where the borrower operates (based
on statistical information, internal and external).Environmental risk
    
    Environmental impact analysis (required for all investment projects of significant
amounts).
   Regional Credit Card Companies
    53




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##### Table of Contents



Main Argentine Central Banks Rules on Loan Classification and Loan Loss Provisions
 General
           54




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##### Table of Contents



Refinancing
    
    
    Judicial AgreementsMonthly or
    
    Others
    
    
    Previous
    
    
    Com. ABimonthly
    
    Previous %
    
    
    Com. A 4975
    
    
    %
    
    
    4975Category change from 5 to 4
    
    3 installments
    
    
    20
    %
    
    
    15
    %Category change from 4 to 3
    
    3 installments
    
    
    15
    %
    
    
    10
    %Category change from 3 to 2
    
    2 installments
    
    
    10
    %
    
    
    5
    %
    
    
    20
    %
    
    
    15
    %Category change from 2 to 1
    
    1 installment
    
    
    10
    %
    
    
    5
    %
    
    
    20
    %
    
    
    15
    %
     55




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##### Table of Contents



Loan Classification
  Commercial Portfolio
 Loan Classification
    
    Description1. Normal Situation
    
    The debtor is widely able to meet its financial obligations, demonstrating
significant cash flows, a liquid financial situation, an adequate financial structure, a
timely payment record, competent management, available information in a timely, accurate
manner and satisfactory internal controls. The debtor is in the upper 50% of a sector of
activity that is operating properly and has good prospects.2. With Special Follow-up
    
    Cash flow analysis reflects that the debt may be repaid even though
it is possible that the customers future payment ability may deteriorate without a proper
follow-up.This category is divided into two subcategories:(2.a). Under Observation;(2.b). Under Negotiation or Refinancing Agreements.3. With Problems
    
    Cash flow analysis evidences problems to repay the debt, and therefore, if
these problems are not solved, there may be some losses.4. High Risk of Insolvency
    
    Cash flow analysis evidences that repayment of the full debt is
highly unlikely.5. Uncollectible
    
    The amounts in this category are deemed total losses. Even though these assets
may be recovered under certain future circumstances, inability to make payments is evident at
the date of the analysis. It includes loans to insolvent or bankrupt borrowers.6. Uncollectible due to Technical Reasons
    
    Loans to borrowers indicated by the Argentine Central
Bank to be in non-accrual status with financial institutions that have been liquidated or are
being liquidated, or whose authorization to operate has been revoked. It also includes loans
to foreign banks and other institutions that are not:(i) classified as normal;(ii) subject to the supervision of the Argentine
Central Bank or other similar authority of the
country of origin;(iii) classified as investment grade by any of the
rating agencies admitted pursuant to Communiqué
A 2729 of the Argentine Central Bank.
 Consumer Portfolio
 Loan Classification
    
    Description1. Normal Situation
    
    Loans with timely repayment or arrears not exceeding 31 days, both of
principal and interest.2. Low Risk
    
    Occasional late payments, with a payment in arrears of more than 32 days and up to
90 days. A customer classified as Normal having been refinanced may be recategorized within
this category, as long as he amortizes one principal installment (whether monthly or
bimonthly) or repays 5% of principal.3. Medium Risk
    
    Some inability to make payments, with arrears of more than 91 days and up to 180
days. A customer classified as Low Risk having been refinanced may be recategorized within
this category, as long as he amortizes two principal installments (whether monthly or
bimonthly) or repays 5% of principal.
  56




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##### Table of Contents



Loan Classification
    
    Description4. High Risk
    
    Judicial proceedings demanding payment have been initiated or arrears of more than
180 days and up to one year. A customer classified as Medium Risk having been refinanced may
be recategorized within this category, as long as he amortizes three principal installments
(whether monthly or bimonthly) or repays 10% of principal.5. Uncollectible
    
    Loans to insolvent or bankrupt borrowers, or subject to judicial proceedings,
with little or no possibility of collection, or with arrears in excess of one year.6. Uncollectible due to Technical Reasons
    
    Loans to borrowers who fall within the conditions
described above under Commercial Portfolio-Uncollectible due to Technical Reasons.
 Loan Loss Provision Requirements
 Allocated Provisions
 Minimum Allowances for Loan Losses
 Category
    
    Secured
    
    
    Unsecured1. Normal Situation
    
    
    1.0
    %
    
    
    1.0
    %2. (a) Under Observation and Low Risk
    
    
    3.0
    %
    
    
    5.0
    %2. (b) Under Negotiation or Refinancing Agreements
    
    
    6.0
    %
    
    
    12.0
    %3. With Problems and Medium Risk
    
    
    12.0
    %
    
    
    25.0
    %4. High Risk of Insolvency and High Risk
    
    
    25.0
    %
    
    
    50.0
    %5. Uncollectible
    
    
    50.0
    %
    
    
    100.0
    %6. Uncollectible Due to Technical Reasons
    
    
    100.0
    %
    
    
    100.0
    %
  General Provisions
   57




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##### Table of Contents



Classification of the Loan Portfolio based on Argentine Central Bank Regulations
  As of December 31, 2009Amounts Not Yet Due
    
    
    Amounts Past Due
    
    
    Total Loans(in millions of Pesos, except percentages)Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %Loan Portfolio Classification1. Normal and Normal Performance
    
    
    13,273.6
    
    
    
    96.89
    
    
    
    
    
    
    
    
    
    
    
    13,273.6
    
    
    
    93.062. With Special Follow-up  Under observation and Low Risk
    
    
    310.6
    
    
    
    2.27
    
    
    
    
    
    
    
    
    
    
    
    310.6
    
    
    
    2.183. With Problems and Medium Risk
    
    
    85.1
    
    
    
    0.62
    
    
    
    146.2
    
    
    
    25.92
    
    
    
    231.3
    
    
    
    1.624. High Risk of Insolvency and High Risk
    
    
    30.5
    
    
    
    0.22
    
    
    
    308.1
    
    
    
    54.62
    
    
    
    338.6
    
    
    
    2.375. Uncollectible
    
    
    
    
    
    
    
    
    
    
    109.0
    
    
    
    19.32
    
    
    
    109.0
    
    
    
    0.766. Uncollectible Due to Technical Reasons
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    0.14
    
    
    
    0.8
    
    
    
    0.01Total
    
    
    13,699.8
    
    
    
    100.00
    
    
    
    564.1
    
    
    
    100.00
    
    
    
    14,263.9
    
    
    
    100.00
 As of December 31, 2008Amounts Not Yet Due
    
    
    Amounts Past Due
    
    
    Total Loans(in millions of Pesos, except percentages)Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %Loan Portfolio Classification1. Normal and Normal Performance
    
    
    11,430.6
    
    
    
    96.09
    
    
    
    
    
    
    
    
    
    
    
    11,430.6
    
    
    
    93.332. With Special Follow-up  Under observation and Low Risk
    
    
    388.8
    
    
    
    3.27
    
    
    
    
    
    
    
    
    
    
    
    388.8
    
    
    
    3.183. With Problems and Medium Risk
    
    
    54.1
    
    
    
    0.46
    
    
    
    103.1
    
    
    
    29.29
    
    
    
    157.2
    
    
    
    1.284. High Risk of Insolvency and High Risk
    
    
    21.8
    
    
    
    0.18
    
    
    
    185.4
    
    
    
    52.67
    
    
    
    207.2
    
    
    
    1.695. Uncollectible
    
    
    
    
    
    
    
    
    
    
    62.0
    
    
    
    17.61
    
    
    
    62.0
    
    
    
    0.516. Uncollectible Due to Technical Reasons
    
    
    
    
    
    
    
    
    
    
    1.5
    
    
    
    0.43
    
    
    
    1.5
    
    
    
    0.01Total
    
    
    11,895.3
    
    
    
    100.00
    
    
    
    352.0
    
    
    
    100.00
    
    
    
    12,247.3
    
    
    
    100.00
 As of December 31, 2007Amounts Not Yet Due
    
    
    Amounts Past Due
    
    
    Total Loans(in millions of Pesos, except percentages)Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %Loan Portfolio Classification1. Normal and Normal Performance
    
    
    11,242.7
    
    
    
    96.57
    
    
    
    
    
    
    
    
    
    
    
    11,242.7
    
    
    
    93.892. With Special Follow-up  Under observation and Low Risk
    
    
    356.2
    
    
    
    3.06
    
    
    
    
    
    
    
    
    
    
    
    356.2
    
    
    
    2.973. With Problems and Medium Risk
    
    
    31.7
    
    
    
    0.27
    
    
    
    56.0
    
    
    
    16.87
    
    
    
    87.7
    
    
    
    0.734. High Risk of Insolvency and High Risk
    
    
    12.1
    
    
    
    0.10
    
    
    
    221.0
    
    
    
    66.57
    
    
    
    233.1
    
    
    
    1.955. Uncollectible
    
    
    
    
    
    
    
    
    
    
    48.1
    
    
    
    14.49
    
    
    
    48.1
    
    
    
    0.406. Uncollectible Due to Technical Reasons
    
    
    
    
    
    
    
    
    
    
    6.9
    
    
    
    2.07
    
    
    
    6.9
    
    
    
    0.06Total
    
    
    11,642.7
    
    
    
    100.00
    
    
    
    332.0
    
    
    
    100.00
    
    
    
    11,974.7
    
    
    
    100.00
  58




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##### Table of Contents



As of December 31, 2006Amounts Not Yet Due
    
    
    Amounts Past Due
    
    
    Total Loans(in millions of Pesos, except percentages)Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %Loan Portfolio Classification1. Normal and Normal Performance
    
    
    10,149.9
    
    
    
    96.24
    
    
    
    
    
    
    
    
    
    
    
    10,149.9
    
    
    
    93.942. With Special Follow-up  Under observation and Low Risk
    
    
    374.6
    
    
    
    3.54
    
    
    
    
    
    
    
    
    
    
    
    374.6
    
    
    
    3.473. With Problems and Medium Risk
    
    
    12.2
    
    
    
    0.12
    
    
    
    30.0
    
    
    
    11.69
    
    
    
    42.2
    
    
    
    0.394. High Risk of Insolvency and High Risk
    
    
    10.2
    
    
    
    0.10
    
    
    
    192.7
    
    
    
    75.07
    
    
    
    202.9
    
    
    
    1.885. Uncollectible
    
    
    
    
    
    
    
    
    
    
    28.8
    
    
    
    11.22
    
    
    
    28.8
    
    
    
    0.276. Uncollectible Due to Technical Reasons
    
    
    
    
    
    
    
    
    
    
    5.2
    
    
    
    2.02
    
    
    
    5.2
    
    
    
    0.05Total
    
    
    10,546.9
    
    
    
    100.00
    
    
    
    256.7
    
    
    
    100.00
    
    
    
    10,803.6
    
    
    
    100.00
 As of December 31, 2005Amounts Not Yet Due
    
    
    Amounts Past Due
    
    
    Total Loans(in millions of Pesos, except percentages)Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %Loan Portfolio Classification1. Normal and Normal Performance
    
    
    10,171.2
    
    
    
    95.22
    
    
    
    
    
    
    
    
    
    
    
    10,171.2
    
    
    
    92.992. With Special Follow-up  Under observation and Low Risk
    
    
    384.4
    
    
    
    3.60
    
    
    
    
    
    
    
    
    
    
    
    384.4
    
    
    
    3.513. With Problems and Medium Risk
    
    
    120.4
    
    
    
    1.13
    
    
    
    206.9
    
    
    
    80.82
    
    
    
    327.3
    
    
    
    2.994. High Risk of Insolvency and High Risk
    
    
    6.0
    
    
    
    0.05
    
    
    
    23.0
    
    
    
    8.98
    
    
    
    29.0
    
    
    
    0.275. Uncollectible
    
    
    
    
    
    
    
    
    
    
    22.8
    
    
    
    8.91
    
    
    
    22.8
    
    
    
    0.216. Uncollectible Due to Technical Reasons
    
    
    
    
    
    
    
    
    
    
    3.3
    
    
    
    1.29
    
    
    
    3.3
    
    
    
    0.03Total
    
    
    10,682.0
    
    
    
    100.00
    
    
    
    256.0
    
    
    
    100.00
    
    
    
    10,938.0
    
    
    
    100.00
 Amounts Past Due and Non-Accrual Loans
  As of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millions of Pesos, except ratios)Total Loans(1)
    
    
    14,263.9
    
    
    
    12,247.3
    
    
    
    11,974.7
    
    
    
    10,803.6
    
    
    
    10,938.0Non-Accrual Loans(2)With Preferred Guarantees
    
    
    33.7
    
    
    
    42.0
    
    
    
    43.5
    
    
    
    40.2
    
    
    
    58.4With Other Guarantees
    
    
    97.9
    
    
    
    10.3
    
    
    
    5.0
    
    
    
    5.1
    
    
    
    6.5Without Guarantees
    
    
    548.1
    
    
    
    375.6
    
    
    
    327.3
    
    
    
    233.8
    
    
    
    317.5Total Non-Accrual Loans(2)
    
    
    679.7
    
    
    
    427.9
    
    
    
    375.8
    
    
    
    279.1
    
    
    
    382.4Past Due Loan PortfolioNon-Financial Public Sector
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Local Financial Sector
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Financial Private Sector and Residents AbroadAdvances
    
    
    64.4
    
    
    
    25.9
    
    
    
    23.0
    
    
    
    20.9
    
    
    
    14.1Promissory Notes
    
    
    90.5
    
    
    
    24.5
    
    
    
    134.5
    
    
    
    135.2
    
    
    
    191.6Mortgage Loans
    
    
    16.8
    
    
    
    24.9
    
    
    
    30.0
    
    
    
    28.4
    
    
    
    14.6Pledge Loans
    
    
    2.7
    
    
    
    1.1
    
    
    
    0.8
    
    
    
    0.3
    
    
    
    0.5Personal Loans
    
    
    69.8
    
    
    
    45.7
    
    
    
    17.6
    
    
    
    4.1
    
    
    
    0.8Credit-Card Loans
    
    
    285.9
    
    
    
    215.0
    
    
    
    115.4
    
    
    
    62.7
    
    
    
    33.4Placements with Correspondent Banks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Loans
    
    
    34.0
    
    
    
    14.9
    
    
    
    10.7
    
    
    
    5.1
    
    
    
    1.0Total Past Due Loans
    
    
    564.1
    
    
    
    352.0
    
    
    
    332.0
    
    
    
    256.7
    
    
    
    256.0Past Due LoansWith Preferred Guarantees
    
    
    19.8
    
    
    
    26.0
    
    
    
    30.8
    
    
    
    28.9
    
    
    
    16.1With Other Guarantees
    
    
    66.9
    
    
    
    9.0
    
    
    
    4.2
    
    
    
    4.3
    
    
    
    4.9Without Guarantees
    
    
    477.4
    
    
    
    317.0
    
    
    
    297.0
    
    
    
    223.5
    
    
    
    235.0Total Past Due Loans
    
    
    564.1
    
    
    
    352.0
    
    
    
    332.0
    
    
    
    256.7
    
    
    
    256.0Allowance for Loan Losses
    
    
    806.4
    
    
    
    526.8
    
    
    
    428.6
    
    
    
    327.0
    
    
    
    427.9
  59




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##### Table of Contents



As of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millions of Pesos, except ratios)Ratios (%)As a % of Total Loans:- Total Past Due Loans
    
    
    3.95
    
    
    
    2.87
    
    
    
    2.77
    
    
    
    2.38
    
    
    
    2.34- Past Due Loans with Preferred Guarantees
    
    
    0.14
    
    
    
    0.21
    
    
    
    0.26
    
    
    
    0.27
    
    
    
    0.15- Past Due Loans with Other Guarantees
    
    
    0.47
    
    
    
    0.07
    
    
    
    0.03
    
    
    
    0.04
    
    
    
    0.04- Past Due Unsecured Amounts
    
    
    3.34
    
    
    
    2.59
    
    
    
    2.48
    
    
    
    2.07
    
    
    
    2.15- Non-Accrual Loans (2)
    
    
    4.77
    
    
    
    3.49
    
    
    
    3.14
    
    
    
    2.58
    
    
    
    3.50- Non-Accrual Loans (2) (Excluding Interbank Loans)
    
    
    4.93
    
    
    
    3.60
    
    
    
    3.18
    
    
    
    2.79
    
    
    
    3.57Non-Accrual Loans (2) as a Percentage of Loans to the
Private Sector
    
    
    4.77
    
    
    
    3.95
    
    
    
    3.53
    
    
    
    3.49
    
    
    
    6.77Allowance for Loan Losses as a % of:- Total Loans
    
    
    5.65
    
    
    
    4.30
    
    
    
    3.58
    
    
    
    3.03
    
    
    
    3.91- Total Loans Excluding Interbank Loans
    
    
    5.84
    
    
    
    4.44
    
    
    
    3.63
    
    
    
    3.27
    
    
    
    4.00- Total Non-Accrual Loans (2)
    
    
    118.64
    
    
    
    123.11
    
    
    
    114.05
    
    
    
    117.16
    
    
    
    111.90Non-Accrual Loans with Guarantees as a Percentage
of Non-Accrual Loans (2)
    
    
    19.36
    
    
    
    12.22
    
    
    
    12.91
    
    
    
    16.23
    
    
    
    16.97Non-Accrual Loans as a Percentage of Total Past Due
Loans
    
    
    120.49
    
    
    
    121.56
    
    
    
    113.20
    
    
    
    108.73
    
    
    
    149.38
 (1)
    
    Before the allowance for loan losses.(2)
    
    Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio: Medium Risk, High Risk,
Uncollectible, and Uncollectible Due to Technical Reasons, and (b) Commercial portfolio: With problems, High Risk of
Insolvency, Uncollectible, and Uncollectible Due to Technical Reasons.    
    
    in the consumer portfolio: Medium Risk, High Risk, Uncollectible and
Uncollectible Due to Technical Reasons.
 
    
    in the commercial portfolio: With Problems, High Risk of Insolvency,
Uncollectible and Uncollectible Due to Technical Reasons.
  60




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##### Table of Contents



As of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millions of Pesos)Interest Income
that Would Have
Been Recorded on
Non-Accrual Loans
on which the
Accrual of Interest
was Discontinued
    
    
    52.0
    
    
    
    35.4
    
    
    
    35.9
    
    
    
    23.7
    
    
    
    45.9Recoveries of
Interest on Loans
Classified as
Non-Accrual on
which the Accrual
of Interest had
been Discontinued
(1)
    
    
    2.6
    
    
    
    1.8
    
    
    
    1.8
    
    
    
    1.2
    
    
    
    2.3
 (1)
    
    Recorded under Miscellaneous Income. Loan Loss Experience
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(in millions of Pesos, except ratios)Total Loans, Average(1)
    
    
    11,481.9
    
    
    
    12,077.3
    
    
    
    10,528.9
    
    
    
    10,851.0
    
    
    
    9,746.9Allowance for Loan Losses at Beginning of Period(2)
    
    
    526.8
    
    
    
    428.6
    
    
    
    327.0
    
    
    
    427.9
    
    
    
    632.6Changes in the Allowance for Loan Losses During the Period (2)Provisions Charged to Income
    
    
    625.9
    
    
    
    384.6
    
    
    
    248.4
    
    
    
    105.3
    
    
    
    61.1Prior Allowances Reversed
    
    
    (5.4
    )
    
    
    (6.5
    )
    
    
    (21.5
    )
    
    
    (32.5
    )
    
    
    (96.2
    )Charge-Offs (A)
    
    
    (354.5
    )
    
    
    (289.2
    )
    
    
    (125.4
    )
    
    
    (200.8
    )
    
    
    (174.5
    )Inflation and Foreign Exchange Effect and Other Adjustments
    
    
    13.6
    
    
    
    9.3
    
    
    
    0.1
    
    
    
    27.1
    
    
    
    4.9Allowance for Loan Losses at End of Period
    
    
    806.4
    
    
    
    526.8
    
    
    
    428.6
    
    
    
    327.0
    
    
    
    427.9Charge to the Income Statement during the PeriodProvisions Charged to Income (2)
    
    
    625.9
    
    
    
    384.6
    
    
    
    248.4
    
    
    
    105.3
    
    
    
    61.1Direct Charge-Offs, Net of Recoveries (B)
    
    
    (27.9
    )
    
    
    (68.4
    )
    
    
    (57.2
    )
    
    
    (46.4
    )
    
    
    (28.9
    )Recoveries of Provisions
    
    
    (5.4
    )
    
    
    (6.5
    )
    
    
    (21.5
    )
    
    
    (32.5
    )
    
    
    (96.2
    )Net Charge (Benefit) to the Income Statement
    
    
    592.6
    
    
    
    309.7
    
    
    
    169.7
    
    
    
    26.4
    
    
    
    (64.0
    )Ratios (%)Charge-Offs (A+B) to Average Loans (3)
    
    
    2.84
    
    
    
    1.83
    
    
    
    0.65
    
    
    
    1.42
    
    
    
    1.49Net Charge to the Income Statement to Average Loans(3)
    
    
    5.16
    
    
    
    2.56
    
    
    
    1.61
    
    
    
    0.24
    
    
    
    (0.66
    )
 (1)
    
    Before the allowance for loan losses.(2)
    
    Includes quotation differences for Galicia Uruguay and Cayman Branch.(3)
    
    Charge-offs plus direct charge-offs minus bad debts recovered.   61




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##### Table of Contents



Allocation of the Allowance for Loan Losses
 
 As of December 31,2009
    
    
    2008
    
    
    2007Loan
    
    
    
    
    
    
    
    
    
    
    Loan
    
    
    
    
    
    
    
    
    
    
    Loan% of
    
    
    Category
    
    
    
    
    
    
    % of
    
    
    Category
    
    
    
    
    
    
    % of
    
    
    CategoryAmount
    
    
    Loans
    
    
    %
    
    
    Amount
    
    
    Loans
    
    
    %
    
    
    Amount
    
    
    Loans
    
    
    %(in millions of Pesos, except percentages)Non-Financial Public Sector
    
    
    
    
    
    
    
    
    
    
    0.04
    
    
    
    
    
    
    
    
    
    
    
    10.77
    
    
    
    
    
    
    
    
    
    
    
    10.11Local Financial Sector
    
    
    
    
    
    
    
    
    
    
    0.18
    
    
    
    
    
    
    
    
    
    
    
    1.21
    
    
    
    
    
    
    
    
    
    
    
    0.92Non-Financial Private
Sector and Residents
AbroadAdvances
    
    
    31.7
    
    
    
    0.22
    
    
    
    4.42
    
    
    
    14.5
    
    
    
    0.12
    
    
    
    4.85
    
    
    
    16.2
    
    
    
    0.13
    
    
    
    6.61Promissory Notes
    
    
    80.3
    
    
    
    0.56
    
    
    
    22.47
    
    
    
    34.9
    
    
    
    0.28
    
    
    
    17.28
    
    
    
    119.8
    
    
    
    1.00
    
    
    
    24.31Mortgage Loans
    
    
    11.8
    
    
    
    0.08
    
    
    
    6.76
    
    
    
    21.9
    
    
    
    0.18
    
    
    
    8.38
    
    
    
    26.5
    
    
    
    0.22
    
    
    
    7.89Pledge Loans
    
    
    1.5
    
    
    
    0.01
    
    
    
    0.45
    
    
    
    0.5
    
    
    
    
    
    
    
    0.66
    
    
    
    0.3
    
    
    
    
    
    
    
    0.79Personal Loans
    
    
    63.9
    
    
    
    0.45
    
    
    
    12.09
    
    
    
    37.8
    
    
    
    0.31
    
    
    
    9.94
    
    
    
    14.0
    
    
    
    0.12
    
    
    
    8.17Credit-Card Loans
    
    
    168.3
    
    
    
    1.18
    
    
    
    39.90
    
    
    
    111.4
    
    
    
    0.91
    
    
    
    35.75
    
    
    
    56.0
    
    
    
    0.47
    
    
    
    30.31Placements in
Correspondent Banks
    
    
    
    
    
    
    
    
    
    
    3.09
    
    
    
    
    
    
    
    
    
    
    
    2.73
    
    
    
    
    
    
    
    
    
    
    
    1.32Other
    
    
    16.0
    
    
    
    0.11
    
    
    
    10.60
    
    
    
    7.4
    
    
    
    0.06
    
    
    
    8.43
    
    
    
    7.9
    
    
    
    0.07
    
    
    
    9.57Unallocated (1)
    
    
    432.9
    
    
    
    3.04
    
    
    
    
    
    
    
    298.4
    
    
    
    2.44
    
    
    
    
    
    
    
    187.9
    
    
    
    1.57
    
    
    
    Total
    
    
    806.4
    
    
    
    5.65
    
    
    
    100.00
    
    
    
    526.8
    
    
    
    4.30
    
    
    
    100.00
    
    
    
    428.6
    
    
    
    3.58
    
    
    
    100.00
 As of December 31,2006
    
    
    2005Amount
    
    
    % of Loans
    
    
    Loan Category %
    
    
    Amount
    
    
    % of Loans
    
    
    Loan Category %(in millions of Pesos, except percentages)Non-Financial Public Sector
    
    
    
    
    
    
    
    
    
    
    24.90
    
    
    
    
    
    
    
    
    
    
    
    47.43Local Financial Sector
    
    
    
    
    
    
    
    
    
    
    2.88
    
    
    
    
    
    
    
    
    
    
    
    1.17Non-Financial Private
Sector and Residents
AbroadAdvances
    
    
    16.3
    
    
    
    0.15
    
    
    
    3.21
    
    
    
    12.3
    
    
    
    0.11
    
    
    
    2.04Promissory Notes
    
    
    151.1
    
    
    
    1.40
    
    
    
    19.84
    
    
    
    186.4
    
    
    
    1.70
    
    
    
    16.79Mortgage Loans
    
    
    25.0
    
    
    
    0.23
    
    
    
    6.37
    
    
    
    21.6
    
    
    
    0.20
    
    
    
    4.60Pledge Loans
    
    
    0.4
    
    
    
    
    
    
    
    0.62
    
    
    
    0.5
    
    
    
    
    
    
    
    1.11Personal Loans
    
    
    3.7
    
    
    
    0.03
    
    
    
    5.21
    
    
    
    0.9
    
    
    
    0.01
    
    
    
    2.36Credit-Card Loans
    
    
    28.5
    
    
    
    0.26
    
    
    
    22.76
    
    
    
    14.0
    
    
    
    0.13
    
    
    
    15.84Placements in
Correspondent Banks
    
    
    
    
    
    
    
    
    
    
    5.63
    
    
    
    
    
    
    
    
    
    
    
    1.95Other
    
    
    1.0
    
    
    
    0.01
    
    
    
    8.58
    
    
    
    17.1
    
    
    
    0.16
    
    
    
    6.71Unallocated (1)
    
    
    101.0
    
    
    
    0.95
    
    
    
    
    
    
    
    175.1
    
    
    
    1.60
    
    
    
    Total
    
    
    327.0
    
    
    
    3.03
    
    
    
    100.00
    
    
    
    427.9
    
    
    
    3.91
    
    
    
    100.00
 (1)
    
    The unallocated reserve consists of the allowances established on the portfolio classified in the normal situation
category and includes additional reserves in excess of Argentine Central Bank minimum requirements.  62




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##### Table of Contents



Charge-Offs
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Charge-offs by TypeAdvances
    
    
    21.3
    
    
    
    17.3
    
    
    
    6.1Promissory Notes
    
    
    20.3
    
    
    
    92.3
    
    
    
    35.1Mortgage Loans
    
    
    9.9
    
    
    
    7.9
    
    
    
    5.4Pledge Loans
    
    
    0.3
    
    
    
    0.1
    
    
    
    0.2Personal Loans
    
    
    60.8
    
    
    
    27.5
    
    
    
    6.6Credit-Card LoansBanco Galicia
    
    
    54.9
    
    
    
    31.6
    
    
    
    9.2Regional Credit-Card Companies
    
    
    178.6
    
    
    
    107.7
    
    
    
    60.6Other Loans
    
    
    8.4
    
    
    
    4.8
    
    
    
    2.2Total
    
    
    354.5
    
    
    
    289.2
    
    
    
    125.4
   Foreign Outstandings
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007Country
    
    (in millions of Pesos)United KingdomDemand Deposits
    
    
    5.5
    
    
    
    6.0
    
    
    
    2.0Forward Purchases of Boden 2012 Bonds
    
    
    
    
    
    
    829.0
    
    
    
    1,244.8Forward Purchases of Discount Bonds in Pesos
    
    
    
    
    
    
    603.2
    
    
    
    600.6Total
    
    
    5.5
    
    
    
    1,438.2
    
    
    
    1,847.4United StatesDemand Deposits
    
    
    178.6
    
    
    
    353.4
    
    
    
    532.1Overnight Placements
    
    
    440.5
    
    
    
    317.3
    
    
    
    159.3Other
    
    
    21.6
    
    
    
    0.7
    
    
    
    Total
    
    
    640.7
    
    
    
    671.4
    
    
    
    691.4GermanyDemand Deposits
    
    
    2.1
    
    
    
    3.0
    
    
    
    0.9Forward Purchases of Boden 2012 Bonds
    
    
    803.4
    
    
    
    1,087.9
    
    
    
    240.8Forward Purchases of Discount Bonds in Pesos
    
    
    
    
    
    
    
    
    
    
    105.9Total
    
    
    805.5
    
    
    
    1,090.9
    
    
    
    347.6
 
    
    As of December 31, 2009, we had the following foreign outstandings: Ps.5.5 million
(0.02% of our total assets) with United Kingdom financial institutions, corresponding
to demand deposits with such institutions.
 
    
    Ps.640.7 million (2.3% of our total assets) representing liquid placements with
United States financial institutions, of which Ps.178.6 million correspond to demand
deposits and Ps.440.5 million represent overnight placements.
 
    
    Ps.805.5 million (2.9% of our total assets) with a German financial institution,
of which Ps.803.4 million represent two forward purchases of Boden 2012 Bonds in
connection with repurchase transactions with the applicable financial institution,
and Ps.2.1 million correspond to demand deposits with such institution; both
repurchase transactions are for a two-year term; all bear market floating interest
rates based on Libor plus a fixed spread.
  63




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##### Table of Contents



Deposits
  As of December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Current Accounts and Other Demand Deposits
    
    
    3,719.2
    
    
    
    3,105.4
    
    
    
    2,675.4Savings Accounts
    
    
    4,994.7
    
    
    
    4,035.0
    
    
    
    3,380.1Time Deposits
    
    
    7,954.7
    
    
    
    6,548.0
    
    
    
    6,704.8Other Deposits(1)
    
    
    248.8
    
    
    
    263.2
    
    
    
    291.6Plus: Accrued Interest, Quotation
Differences and CER Adjustment
    
    
    122.0
    
    
    
    104.5
    
    
    
    113.7Total Deposits
    
    
    17,039.4
    
    
    
    14,056.1
    
    
    
    13,165.6
 (1)
    
    Includes among other, deposits originated by Decree No. 616/05, Reprogrammed
Deposits under judicial proceedings and other demand deposits.     Peso-Denominated
    
    
    Dollar-Denominated
    
    
    Total% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    Amount
    
    
    Total(in millions of Pesos, except percentages)Current Accounts and Demand Deposits
    
    Ps.
    3,719.2
    
    
    
    26.9
    %
    
    
    
    
    
    
    
    %
    
    Ps.
    3,719.2
    
    
    
    22.0
    %Savings Accounts
    
    
    3,405.3
    
    
    
    24.6
    
    
    Ps.
    1,589.4
    
    
    
    51.3
    
    
    
    4,994.7
    
    
    
    29.5Time Deposits
    
    
    6,561.6
    
    
    
    47.5
    
    
    
    1,393.2
    
    
    
    45.1
    
    
    
    7,954.8
    
    
    
    47.0Maturing Within 30 Days
    
    
    1,471.6
    
    
    
    10.6
    
    
    
    309.1
    
    
    
    10.0
    
    
    
    1,780.7
    
    
    
    10.5Maturing After 31 Days but Within 59 Days
    
    
    1,932.4
    
    
    
    14.0
    
    
    
    311.0
    
    
    
    10.1
    
    
    
    2,243.4
    
    
    
    13.3Maturing After 60 Days but Within 89 Days
    
    
    933.8
    
    
    
    6.8
    
    
    
    175.7
    
    
    
    5.7
    
    
    
    1,109.5
    
    
    
    6.6Maturing After 90 Days but Within 179 Days
    
    
    771.1
    
    
    
    5.6
    
    
    
    389.6
    
    
    
    12.6
    
    
    
    1,160.7
    
    
    
    6.9Maturing After 180 Days but Within 365 Days
    
    
    852.0
    
    
    
    6.2
    
    
    
    185.9
    
    
    
    6.0
    
    
    
    1,037.9
    
    
    
    6.1Maturing After 365 Days
    
    
    600.7
    
    
    
    4.3
    
    
    
    21.9
    
    
    
    0.7
    
    
    
    622.6
    
    
    
    3.6Other Deposits
    
    
    138.9
    
    
    
    1.0
    
    
    
    109.7
    
    
    
    3.6
    
    
    
    248.6
    
    
    
    1.5Maturing Within 30 Days
    
    
    134.0
    
    
    
    1.0
    
    
    
    100.4
    
    
    
    3.3
    
    
    
    234.4
    
    
    
    1.4Maturing After 31 Days but Within 59 Days
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Maturing After 60 Days but Within 89 Days
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Maturing After 90 Days but Within 179 Days
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Maturing After 180 Days but Within 365 Days
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Maturing After 365 Days
    
    
    4.9
    
    
    
    
    
    
    
    9.3
    
    
    
    0.3
    
    
    
    14.2
    
    
    
    0.1Total Deposits(1)
    
    Ps.
    13,825.0
    
    
    
    100.0
    %
    
    Ps.
    3,092.3
    
    
    
    100.0
    %
    
    Ps.
    16,917.3
    
    
    
    100.0
    %
 (1)
    
    Only principal. Excludes the CER adjustment  64




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##### Table of Contents



amparo
  Domestic Offices
    
    
    Foreign Offices(in millions of Pesos)Time DepositsWithin 30 Days
    
    
    1,097.4
    
    
    
    After 31 Days but Within 59 Days
    
    
    1,553.4
    
    
    
    After 60 Days but Within 89 Days
    
    
    722.0
    
    
    
    After 90 Days but Within 179 Days
    
    
    800.8
    
    
    
    After 180 Days but Within 365 Days
    
    
    897.7
    
    
    
    After 365 Days
    
    
    608.7
    
    
    
    Total Time Deposits
    
    
    5,680.0
    
    
    
    Other Deposits
    
    
    
    
    
    
    Total Deposits(1)
    
    
    5,680.0
    
    
    
    
 (1)
    
    Only principal. Excludes the CER adjustment. Return on Equity and Assets
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos, except percentages)Net Income / (Loss)
    
    
    229.3
    
    
    
    176.8
    
    
    
    46.0Average Total Assets
    
    
    24,685.3
    
    
    
    23,412.5
    
    
    
    21,332.4Average Shareholders Equity
    
    
    1,961.2
    
    
    
    1,745.0
    
    
    
    1,606.7Shareholders Equity at End of the Period
    
    
    2,052.5
    
    
    
    1,845.7
    
    
    
    1,654.5Net Income as a Percentage of:Average Total Assets
    
    
    1.12
    
    
    
    0.91
    
    
    
    0.37Average Shareholders Equity
    
    
    11.69
    
    
    
    10.13
    
    
    
    2.86Declared Cash Dividends
    
    
    
    
    
    
    
    
    
    
    Dividend Payout Ratio
    
    
    
    
    
    
    
    
    
    
    Average Shareholders Equity as a Percentage of Average Total Assets
    
    
    7.94
    
    
    
    7.45
    
    
    
    7.53Shareholders Equity at the End of the Period as a Percentage of
Average Total Assets
    
    
    8.31
    
    
    
    7.88
    
    
    
    7.76
  65




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##### Table of Contents



Short-term Borrowings
  As of December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos )Short-Term BorrowingsArgentine Central Bank
    
    
    2.1
    
    
    
    1.7
    
    
    
    0.7Other Banks and International EntitiesCredit Lines from Domestic Banks
    
    
    86.9
    
    
    
    43.6
    
    
    
    33.2Credit Lines from Foreign Banks
    
    
    180.0
    
    
    
    354.6
    
    
    
    258.0Repurchases with Domestic Banks
    
    
    278.1
    
    
    
    34.7
    
    
    
    Negotiable Obligations
    
    
    125.8
    
    
    
    108.9
    
    
    
    36.3Total
    
    
    672.9
    
    
    
    543.5
    
    
    
    328.2
   
    
    the weighted-average interest rate at year-end,
 
    
    the maximum balance recorded at the monthly closing dates of the periods,
 
    
    the average balances for each period, and
 
    
    the weighted-average interest rate for the periods.
 As of December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos, except percentages)Argentine Central BankWeighted-average Interest Rate at End of Period
    
    
    
    
    
    
    
    
    
    
    Maximum Balance Recorded at the Monthly Closing Dates
    
    Ps.
    2.8
    
    
    Ps.
    1.7
    
    
    Ps.
    0.9Average Balances for Each Period
    
    Ps.
    1.3
    
    
    Ps.
    1.1
    
    
    Ps.
    0.6Weighted-average Interest Rate for the Period
    
    
    
    
    
    
    
    
    
    
    Credit Lines from Domestic BanksWeighted-average Interest Rate at End of Period
    
    
    10.9
    %
    
    
    24.7
    %
    
    
    14.2
    %Maximum Balance Recorded at the Monthly Closing Dates
    
    Ps.
    86.9
    
    
    Ps.
    261.5
    
    
    Ps.
    92.6Average Balances for Each Period
    
    Ps.
    45.6
    
    
    Ps.
    72.9
    
    
    Ps.
    57.5Weighted-average Interest Rate for the Period
    
    
    12.2
    %
    
    
    13.7
    %
    
    
    9.5
    %Credit Lines from Foreign BanksWeighted-average Interest Rate at End of Period
    
    
    2.5
    %
    
    
    5.4
    %
    
    
    5.6
    %Maximum Balance Recorded at the Monthly Closing Dates
    
    Ps.
    257.2
    
    
    Ps.
    457.4
    
    
    Ps.
    258.0Average Balances for Each Period
    
    Ps.
    153.1
    
    
    Ps.
    373.6
    
    
    Ps.
    106.7Weighted-average Interest Rate for the Period
    
    
    5.1
    %
    
    
    4.5
    %
    
    
    5.8
    %Repurchases with Domestic BanksWeighted-average Interest Rate at End of Period
    
    
    9.8
    %
    
    
    10.5
    %
    
    
    
    %Maximum Balance Recorded at the Monthly Closing Dates
    
    Ps.
    278.1
    
    
    Ps.
    400.6
    
    
    Ps.
    317.4Average Balances for Each Period
    
    Ps.
    25.9
    
    
    Ps.
    132.8
    
    
    Ps.
    138.3Weighted-average Interest Rate for the Period
    
    
    9.6
    %
    
    
    10.5
    %
    
    
    8.9
    %Repurchases with Foreign BanksWeighted-average Interest Rate at End of Period
    
    
    
    
    
    
    
    
    
    
    Maximum Balance Recorded at the Monthly Closing Dates
    
    
    
    
    
    
    
    
    
    
    Average Balances for Each Period
    
    
    
    
    
    
    
    
    
    
    Weighted-average Interest Rate for the Period
    
    
    
    
    
    
    
    
    
    
    Negotiable ObligationsWeighted-average Interest Rate at End of Period
    
    
    
    %
    
    
    12.1
    %
    
    
    8.2
    %Maximum Balance Recorded at the Monthly Closing Dates
    
    Ps.
    247.7
    
    
    Ps.
    108.9
    
    
    Ps.
    65.7Average Balances for Each Period
    
    Ps.
    139.8
    
    
    Ps.
    49.8
    
    
    Ps.
    50.8Weighted-average Interest Rate for the Period
    
    
    5.5
    %
    
    
    9.9
    %
    
    
    9.3
    %
  66




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##### Table of Contents



Regulatory Capital
 Grupo Financiero Galicia
 Ley de Sociedades Comerciales
 Banco Galicia
    January 1st/ December 31st
    
    Alfa 1
    
    
    Alfa 22004
    
    
    0.05
    
    
    
    0.202005
    
    
    0.15
    
    
    
    0.402006
    
    
    0.30
    
    
    
    0.702007
    
    
    0.50
    
    
    
    1.002008
    
    
    0.75
    
    
    
    2009
    
    
    1.00
    
    
    
    
   67




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##### Table of Contents



As of December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos, except percentages)Shareholders Equity
    
    
    2,126.5
    
    
    
    1,954.7
    
    
    
    1,759.4Argentine Central Bank Minimum Capital Requirements(1)Allocated to Financial Assets
    
    
    1,064.1
    
    
    
    1,014.1
    
    
    
    845.3Allocated to Fixed Assets, Intangible and Unquoted Equity
Investments
    
    
    168.7
    
    
    
    169.5
    
    
    
    153.2Allocated to Market Risk
    
    
    14.3
    
    
    
    5.4
    
    
    
    20.4Allocated to Interest-Rate Risk
    
    
    20.7
    
    
    
    50.7
    
    
    
    52.4Lending to the Non-Financial Public Sector
    
    
    343.7
    
    
    
    324.8
    
    
    
    231.5Total (A)
    
    
    1,611.5
    
    
    
    1,564.5
    
    
    
    1,302.8Computable Regulatory Capital Calculated Under Argentine Banking
GAAPCore Capital
    
    
    1,991.2
    
    
    
    1,789.1
    
    
    
    1,756.4Supplemental Capital
    
    
    1,070.2
    
    
    
    994.7
    
    
    
    757.1DeductionsInvestments in Financial Entities
    
    
    (1.9
    )
    
    
    (1.7
    )
    
    
    (1.5
    )Organization Expenses
    
    
    (274.9
    )
    
    
    (191.3
    )
    
    
    (100.6
    )Goodwill Recorded from June 30, 1997
    
    
    (17.5
    )
    
    
    (28.5
    )
    
    
    (47.6
    )Real Estate Properties for Banco Galicias Own Use and
Miscellaneous, for which No Title Deed has been Made
    
    
    (8.4
    )
    
    
    (6.3
    )
    
    
    (2.8
    )Other
    
    
    (9.9
    )
    
    
    (17.0
    )
    
    
    (7.0
    )Total
    
    
    (312.6
    )
    
    
    (244.8
    )
    
    
    (159.5
    )Additional Capital  Market Variation
    
    
    40.4
    
    
    
    13.3
    
    
    
    3.1Total (B)
    
    
    2,789.2
    
    
    
    2,552.3
    
    
    
    2,357.1Excess CapitalExcess Over Required Capital (B)-(A)
    
    
    1,177.7
    
    
    
    987.8
    
    
    
    1,054.3Excess Over Required Capital as a % of Required Capital
    
    
    73.08
    
    
    
    63.14
    
    
    
    80.93Total Capital Ratio
    
    
    14.35
    
    
    
    13.92
    
    
    
    15.54
 (1)
    
    In accordance with Argentine Central Bank rules applicable at each date.    68




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##### Table of Contents



Regional Credit Card Companies
  Minimum Capital Requirements of Insurance Companies
  (a)
    
    By line of insurance: this method establishes a fixed amount by line of insurance. For life
insurance companies, it is Ps.4 million, increasing to Ps.5 million for companies that offer
pension-linked life insurance. For providers of retirement insurance that do not offer
pension-linked annuities, the requirement is Ps.3 million (increasing to Ps.5 million for
companies that offer pension-linked annuities). For companies that offer property insurance
that includes damage coverage (excluding those related to vehicles) the requirement is Ps.1.5
million (increasing to Ps.8 million for companies that offer all P&C products).
 (b)
    
    By premiums and additional fees: to use this method, the company must calculate the sum of
the premiums written and additional fees earned in the last 12 months. Based on the total, the
company must calculate 16%. Finally, it must adjust the total by the ratio of net paid claims
to gross paid claims for the last 36 months. This ratio must be at least 50%.
 (c)
    
    By claims: to use this method, the company must calculate the sum of gross claims paid during
the 36 months prior to the end of the period under analysis. To that amount, it must add the
difference between the balance of unpaid claims as of the end of the period under analysis and
the balance of unpaid claims as of the 36th month prior to the end of the period
under analysis. The resulting figure must be divided by three. Then the company must calculate
23%. The resulting figure must be adjusted by the ratio of net paid claims to gross paid
claims for the last 36 months. This ratio must be at least 50%.
 (d)
    
    For life insurance companies that offer policies with an investment component, the figures
obtained in b) and c) must be increased by an amount equal to 4% of the technical reserves
adjusted by the ratio of net technical reserves to gross technical reserves (at least 85%),
plus 0.3% of at-risk capital adjusted by the ratio of retained at-risk capital to total
at-risk capital (at least 50%).
    69




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Government Regulation
 General
  Régimen de la Transparencia de la Oferta Pública
 Ley de Defensa de la Competencia Ley de Lealtad Comercial Ley
de Defensa del Consumidor
    
 Ley de Tarjetas de
Crédito
     70




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Foreign Exchange Market
    (a)
    
    Foreign exchange flows into and from the local foreign exchange market and all
resident new debt transactions that may imply future foreign exchange payments to
nonresidents must be registered with the Argentine Central Bank.
 (b)
    
    All new debt of the private sector with non-residents must be for a minimum term of
365 days, except for international trade financing and primary issuances of debt
securities, if such securities public offering and listing on self-regulated markets in
Argentina has been duly authorized.
 (c)
    
    All inflows of foreign exchange resulting from such indebtedness, with the exceptions
mentioned in the previous item and those regulated by the Argentine Central Bank which are
detailed below, and all inflows of foreign exchange by non-residents, excluding direct
foreign investments and certain portfolio investments (subscriptions of primary issuances
of debt and equity securities, which public offering and listing in self-regulated markets
in Argentina has been duly authorized, and government securities acquired in the secondary
market), must be for a term of at least 365 days and will be subject to a 30% deposit
requirement.
 (d)
    
    Such deposit requirement will be held in a local financial institution as an
unremunerated Dollar-denominated time deposit maturing in at least 365 days; such funds
will not be available as a guarantee for any kind of debt and, upon the deposit maturity
date, such funds will become available within the country and, therefore, will be subject
to the applicable restrictions on foreign exchange transfers abroad.
 (e)
    
    The 30% deposit is not required for, among other things, inflows of foreign currency:
 (i)
    
    resulting from loans granted to residents by local financial institutions in
foreign currency;
 (ii)
    
    resulting from capital contributions to local institutions, when the
contributor owns, previously or as a result of such contributions, 10% or more of the
companys capital or votes, subject to compliance with certain requirements;
 (iii)
    
    resulting from sales of interests in local entities to direct investors;(iv)
    
    to be applied to real estate acquisitions;
 (v)
    
    resulting from an indebtedness with multilateral and bilateral credit agencies
and with official credit agencies;
 (vi)
    
    resulting from other foreign indebtedness of the local non-financial private
sector, with an average life of no less than two years, the proceeds of which will be
applied to the acquisition of non-financial investments (as defined by the Argentine
Central Bank);
 (vii)
    
    resulting from other foreign indebtedness where the proceeds will be applied
to the settlement of foreign debt principal amortization or long term investments in
foreign assets;
 (viii)
    
    that will be utilized within 10 business days from their liquidation in the local
foreign exchange market for purposes listed as current transactions within the
international accounts by the International Monetary Fund, among others, within such
purposes are the payment by non-Argentine residents of certain local taxes; or
 (ix)
    
    resulting from the sale of foreign assets of residents in order to subscribe to
primary issuances of public debt issued by the Government; and
 (f)
    
    The proceeds of sales of foreign assets brought into the country by residents
(capital repatriation) will be subject to the 30% deposit requirement noted in (c)
above, which will apply to any amounts exceeding US$2.0 million per month if certain other
operative requirements are met.
  71




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(a)
    
    With no limit in the case of: (i) proceeds from the principal amortization of
government securities; (ii) recoveries from local bankruptcies; (iii) proceeds from the
sale of direct investments in the non-financial private sector in Argentina or the final
disposition of such investments if they were made with foreign currency that entered the
local foreign exchange market no less than 365 days before; and (iv) certain other specific
cases.
 (b)
    
    With a US$500,000 monthly limit in the case of the aggregate proceeds of the sale of
portfolio investments made with foreign currency that entered the local foreign exchange
market no less than 365 days before.
 (c)
    
    With a US$5,000 monthly limit in cases not contemplated above, unless authorization
from the Argentine Central Bank is obtained.
    Compensation to Financial Institutions
 For the Asymmetric Pesification and its Consequences
  
    
    the losses caused by the mandatory conversion into Pesos of certain liabilities at
the Ps.1.4 per US$1.0 exchange rate, which exchange rate was greater than the Ps.1.0
per US$1.0 exchange rate established for the conversion into Pesos of certain
Dollar-denominated assets. This was to be achieved through the delivery of a
Peso-denominated compensatory bond issued by the Government.
 
    
    the currency mismatch left on financial institutions balance sheets after the
compulsory pesification of certain of their assets and liabilities after the
conversion of the Peso-denominated compensatory bond into a Dollar-denominated
compensatory bond. This would be achieved by the purchase by financial institutions of
a Dollar-denominated hedge bond. For such purpose, the Government established the
issuance of a Dollar-denominated bond bearing Libor and maturing in 2012 (Boden 2012
Bonds).
    72




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For Differences Related to Amparo Claims
        73




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Argentine Banking Regulation
 The following is a summary of certain matters relating to the Argentine banking system,
including provisions of Argentine law and regulations applicable to financial institutions in
Argentina. This summary is not intended to constitute a complete analysis of all laws and
regulations applicable to financial institutions in Argentina.
 General
   
 Supervision
     74




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Examination by the Argentine Central Bank
   BASIC System
  
    
    B (Bonos or Bonds). On an annual basis, all financial institutions in Argentina were
required to engage in certain debt issuing transactions in order to expose them to scrutiny
and analysis by third parties with high standards. This requirement was eliminated by the
Argentine Central Bank effective March 1, 2002.
 
    
    A (Auditoría or Audit). The Argentine Central Bank requires a set of external audit
procedures that include: (a) the creation of a registry of auditors; (b) the implementation
of strict accounting procedures to be complied with by external auditors; (c) the payment
of a performance guarantee by those auditors to induce their compliance with the
procedures, and (d) the creation of a department within the Argentine Central Bank liable
for verifying that the procedures are followed. The purpose of this requirement is to
assure accurate disclosure by the financial institutions to both the Superintendency and
the public.
 
    
    S (Supervisión or Supervision). The Argentine Central Bank has the right to inspect
financial institutions from time to time.
 
    
    I (Información or Information). Financial institutions are required to file on a
monthly basis certain daily, weekly, monthly and quarterly statistical information.
 
    
    C (Calificación or Rating). The Argentine Central Bank established a system that
required the periodic credit evaluation of financial entities by internationally recognized
rating agencies, which was suspended by Communiqué A 3601 in May 2002.
 Legal Reserve
  Limitations on Types of Business
   75




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Computable Regulatory Capital
    76




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Capital Adequacy Requirements
  Capitalization of Debt Instruments
  Profit Distribution
  Treatment of Losses in Connection with Amparo Claims
  amparo amparo
 amparo
 amparo Amparo
 Legal Reserve Requirements for Liquidity Purposes
 amparo
  77




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
    
    Demand deposits:
 
    
    Peso-denominated current accounts and savings accounts: 19%.
 
    
    Dollar-denominated savings accounts: 20%.
 
    
    Time deposits, including those adjusted by CER (by remaining maturity):
 
    
    Peso-denominated: up to 29 days: 14%; from 30 to 59 days: 11%; from 60 to 89
days: 7%; from 90 to 179 days: 2%; from 180 to 365 days: 0%.
 
    
    Dollar-denominated: up to 29 days: 20%; from 30 to 59 days: 15%; from 60 to 89
days: 10%; from 90 to 179 days: 5%; from 180 to 365 days: 2%; and more than 365
days: 0%.
   Lending Limits
     78




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79




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Loan Classification System and Loan Loss Provisions
  Valuation of Public Sector Assets
  Financial Assistance from the Argentine Central Bank
 Financial Assistance for Liquidity Support Granted After March 10, 2003
  Financial Assistance for Liquidity Support Granted Before April 1, 2003
  Foreign Currency Position
  Deposit Insurance System
 Fondo de Garantía de los Depósitos
  80




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Priority Rights of Depositors
   
    
    deposits of individuals or entities up to Ps.50,000 or the equivalent thereof in
foreign currency, with only one person per deposit being able to use this preference.
For the determination of this preference, all deposits of the same person registered by
the entity shall be computed;
 
    
    deposits in excess of Ps.50,000 or the equivalent thereof in foreign currency,
referred to above;
 
    
    liabilities originated on commercial credit lines granted to the financial entity,
which are directly related with international trade.
   Financial Institutions with Economic Difficulties
   81




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Dissolution and Liquidation of Financial Institutions
    
 Credit Cards Regulation
  
    
    sets a 3% cap on the rate a credit card company can charge merchants for processing
customer card holders transactions with such merchants, calculated as a percentage of
the customers purchases. With respect to debit cards, the cap is set at 1.5% and the
amounts relating to the customers purchases should be processed in a maximum of 3
Business Days;
  82




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
    
    establishes that credit card companies must provide the Argentine Central Bank with
the information on their loan portfolio that such entity requires; and
 
    
    sets a cap on the interest rate a credit card company can charge a card holder,
which cannot exceed by more than 25% the average interest rate charged by the issuer on
personal loans and, for non-bank issuers, it cannot exceed by more than 25% the
financial systems average interest rate on personal loans (published by the Argentine
Central Bank between the first and fifth day of each month).
  
 Concealment and Laundering of Assets of a Criminal Origin
 Unidad de Información Financiera
  i)
    
    Any person who converts, transfers, administers, sells, encumbers or uses money
or any other asset derived from any crime in which he was not involved, with the
possible result of giving those original or secondary assets the appearance of having a
legal origin and as long as their value is greater than Ps.50,000, whether through a
single act or through a series of related events, will be imprisoned for two to ten
years and will be fined an amount that will be between two and ten times the amount of
the transaction.
 ii)
    
    Any person that was not involved in a crime committed by another person but
that (a) helps a person to elude or escape from an investigation by the relevant
authority; (b) hides, alters or destroys any trail, evidence or object related to the
crime or helps the perpetrator of the crime or any participant to hide them, alter them
or make them disappear; (c) acquires, receives or hides money or objects arising from a
crime; (d) does not report a crime or does not identify a perpetrator of or participant
in a crime that is known to him when obligated to do so in order to promote the
criminal prosecution of a crime of such nature; or (e) secures or helps the perpetrator
of or participant in a crime to secure the product or profit of a crime, will be
imprisoned for six months to three years.
    83




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Consejo de
Profesionales de Ciencias Económica
      84




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Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 
 Item 5.A. Operating Results
  
 Overview
  
    
    Expand the volume of our business with the private sector;
 
    
    Progressively strengthen our balance sheet by consistently reducing the Banks high
exposure to the public sector, as well as those liabilities incurred by the Bank as a
consequence of the 2001-2002 crisis, and
 
    
    Capitalize the Bank.
         85




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The Argentine Economy, Financial System and Insurance Industry in the Three Years Ended December
31, 2009
     86




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87




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The Argentine Financial System
     88




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89




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The Argentine Insurance Industry
    
 Inflation
  For the 12-month period ended December 31,(in percentages)
    
    2009
    
    
    2008
    
    
    2007Price Indices (1)WPI
    
    
    10.27
    
    
    
    8.82
    
    
    
    14.56CPI
    
    
    7.69
    
    
    
    7.24
    
    
    
    8.47Adjustment IndicesCER
    
    
    6.95
    
    
    
    7.97
    
    
    
    8.50
 (1)
    
    Source: INDEC.  
 Currency Composition of Our Balance Sheet
  As of December 31,2009
    
    
    2008
    
    
    2007(In millions of Pesos)AssetsIn Pesos, Unadjusted
    
    
    19,791.0
    
    
    
    15,165.1
    
    
    
    14,177.0In Pesos, Adjusted by the CER
    
    
    926.3
    
    
    
    2,439.2
    
    
    
    2,350.7In Foreign Currency (1)
    
    
    6,885.1
    
    
    
    7,131.5
    
    
    
    6,301.0Total Assets
    
    
    27,602.4
    
    
    
    24,735.8
    
    
    
    22,828.7Liabilities and Shareholders EquityIn Pesos, Unadjusted, Including Shareholders Equity
    
    
    20,513.1
    
    
    
    17,262.1
    
    
    
    15,597.3In Pesos, Adjusted by the CER
    
    
    14.9
    
    
    
    50.3
    
    
    
    277.3In Foreign Currency (1)
    
    
    7,074.3
    
    
    
    7,423.4
    
    
    
    6,954.1Total Liabilities and Shareholders Equity
    
    
    27,602.3
    
    
    
    24,735.8
    
    
    
    22,828.7
 (1)
    
    If adjusted to reflect forward sales and purchases of foreign exchange made by the Bank
and recorded off-balance sheet, assets amounted to Ps.9,223.1 million and liabilities to
Ps.9,175.3 million.   90




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Results of Operations for the Fiscal Years Ended December 31, 2009, December 31, 2008 and December
31, 2007
  Net Income/Loss
 Fiscal Year Ended
    
    
    ChangeDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009/2008
    
    
    2008/2007(in millions of Pesos, except percentages)Consolidated Income StatementFinancial Income
    
    
    3,005.6
    
    
    
    2,559.3
    
    
    
    1,997.9
    
    
    
    446.3
    
    
    
    561.4Financial Expenses
    
    
    1,460.5
    
    
    
    1,421.0
    
    
    
    1,246.7
    
    
    
    39.5
    
    
    
    174.3Net financial Income
    
    
    1,545.1
    
    
    
    1,138.3
    
    
    
    751.2
    
    
    
    406.8
    
    
    
    387.1Provision for Losses on Loans and Other Receivables
    
    
    639.5
    
    
    
    395.4
    
    
    
    255.5
    
    
    
    244.1
    
    
    
    139.9Net income from Services
    
    
    1,310.9
    
    
    
    1,187.9
    
    
    
    913.1
    
    
    
    123.0
    
    
    
    274.8Administrative Expenses
    
    
    2,029.1
    
    
    
    1,781.1
    
    
    
    1,286.3
    
    
    
    248.0
    
    
    
    494.8Minority Interest
    
    
    (46.5
    )
    
    
    (35.8
    )
    
    
    (32.1
    )
    
    
    (10.7
    )
    
    
    (3.7
    )Income / (Loss) from Equity Investments
    
    
    11.3
    
    
    
    56.8
    
    
    
    2.0
    
    
    
    (45.5
    )
    
    
    54.8Miscellaneous Income / (Loss), Net
    
    
    233.1
    
    
    
    80.1
    
    
    
    25.1
    
    
    
    153.0
    
    
    
    55.0Income Tax
    
    
    (156.0
    )
    
    
    (74.0
    )
    
    
    (71.5
    )
    
    
    (82.0
    )
    
    
    (2.5
    )Net income / (Loss)
    
    
    229.3
    
    
    
    176.8
    
    
    
    46.0
    
    
    
    52.5
    
    
    
    130.8Return on Average Assets (1)
    
    
    1.12
    %
    
    
    0.91
    %
    
    
    0.37
    %
    
    
    0.21
    %
    
    
    0.54
    %Return on Average Shareholders Equity
    
    
    11.69
    %
    
    
    10.13
    %
    
    
    2.86
    %
    
    
    1.56
    %
    
    
    7.27
    %
 (1)
    
    For the calculation of the return on average assets, profits or losses corresponding to minority interests are excluded
from net income.   Fiscal Year 2009 Compared to Fiscal Year 2008
  
    
    a Ps.446.3 million increase in financial income, from Ps.2,559.3 million to Ps.3,005.6
million,
 
    
    a Ps.153.0 million increase in miscellaneous net income, from Ps.80.1 million to
Ps.233.1 million, and
 
    
    a Ps.123.0 million increase in net income from services, from Ps.1,187.9 million to
Ps.1,310.9 million.
  
    
    a Ps.244.1 million increase in provisions for loan losses from Ps.395.4 million to
Ps.639.5 million,
 
    
    a Ps.248.0 million increase in administrative expenses, from Ps.1,781.1 million to
Ps.2,029.1 million,
 
    
    an increase in income tax of Ps.82.0 million, from Ps.74.0 million, to Ps.156.0 million,
and
 
    
    a decrease of Ps.45.5 million in equity investments, from Ps.56.8 million to Ps.11.3
million.
  91




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Fiscal Year 2008 Compared to Fiscal Year 2007
  
    
    a 30.1% increase in net income from services, from Ps.913.1 million to Ps.1,187.9
million,
 
    
    a 28.1% increase in financial income, from Ps.1,997.9 million to Ps.2,559.3 million,
 
    
    a Ps.55.0 million increase in miscellaneous net income, from Ps.25.1 million to Ps.80.1
million, and
 
    
    a Ps.54.8 million increase in income from equity investments, from Ps.2.0 million to
Ps.56.8 million.
  
    
    a 38.5% increase in administrative expenses, which increased from Ps.1,286.3 million to
Ps.1,781.1 million,
 
    
    a 14.0% increase in financial expenses, from Ps.1,246.7 million to Ps.1,421.0 million,
and
 
    
    a Ps.139.9 million increase in provisions for loan losses, from Ps.255.5 million to
Ps.395.4 million.
 Financial Income
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Income on Loans and Other Receivables Resulting
from Financial Brokerage and Premiums Earned on
Reverse Repurchases
    
    
    2,207.7
    
    
    
    1,930.3
    
    
    
    1,413.2Income from Government and Corporate Securities, Net
    
    
    559.1
    
    
    
    238.1
    
    
    
    241.3CER Adjustment
    
    
    24.4
    
    
    
    123.9
    
    
    
    205.1Other (1)
    
    
    214.4
    
    
    
    267.0
    
    
    
    138.3Total
    
    
    3,005.6
    
    
    
    2,559.3
    
    
    
    1,997.9
 (1)
    
    Reflects income from financial leases, net, and differences in the quotation of gold and
foreign currency as well as premiums on forward sales of foreign exchange.  As of December 31,2009
    
    
    2008
    
    
    2007Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate(in millions of Pesos, except rates)Interest-Earning Assets
    
    
    18,378.0
    
    
    
    15.71
    %
    
    
    19,892.5
    
    
    
    12.14
    %
    
    
    18,225.9
    
    
    
    10.00
    %Government Securities
    
    
    4,686.5
    
    
    
    11.84
    
    
    
    3,642.2
    
    
    
    4.08
    
    
    
    4,278.8
    
    
    
    3.42Loans
    
    
    11,463.6
    
    
    
    19.34
    
    
    
    12,077.3
    
    
    
    17.01
    
    
    
    10,528.9
    
    
    
    14.17Other (1)
    
    
    2,227.9
    
    
    
    5.17
    
    
    
    4,173.0
    
    
    
    5.09
    
    
    
    3,418.2
    
    
    
    5.41Interest-Bearing Liabilities
    
    
    15,923.4
    
    
    
    7.63
    %
    
    
    15,694.5
    
    
    
    8.14
    %
    
    
    14,858.8
    
    
    
    7.21
    %Current Accounts
    
    
    1,287.3
    
    
    
    1.00
    
    
    
    948.1
    
    
    
    2.28
    
    
    
    678.4
    
    
    
    2.42Savings Accounts
    
    
    3,014.5
    
    
    
    0.19
    
    
    
    2,587.7
    
    
    
    0.18
    
    
    
    2,252.9
    
    
    
    0.23Time Deposits
    
    
    7,391.9
    
    
    
    11.67
    
    
    
    6,769.4
    
    
    
    11.34
    
    
    
    6,606.2
    
    
    
    8.51Argentine Central Bank (2)
    
    
    0.6
    
    
    
    
    
    
    
    0.4
    
    
    
    
    
    
    
    261.5
    
    
    
    26.31Debt Securities
    
    
    2,729.9
    
    
    
    8.22
    
    
    
    2,799.8
    
    
    
    10.00
    
    
    
    3,360.1
    
    
    
    8.66Other Interest-bearing Liabilities
    
    
    1,499.2
    
    
    
    7.34
    
    
    
    2,589.1
    
    
    
    7.86
    
    
    
    1,699.7
    
    
    
    7.50Spread and Net YieldInterest Spread, Nominal Basis (3)
    
    
    
    
    
    
    8.08
    
    
    
    
    
    
    
    4.00
    
    
    
    
    
    
    
    2.79Net Yield on Interest-earning Assets (4)
    
    
    
    
    
    
    9.10
    
    
    
    
    
    
    
    5.72
    
    
    
    
    
    
    
    4.13Financial Margin (5)
    
    
    
    
    
    
    8.41
    
    
    
    
    
    
    
    5.72
    
    
    
    
    
    
    
    4.12
 (1)
    
    Until April 2007, it included, among others, the amounts corresponding to the Compensatory Bond and the Hedge Bond to be received.  92




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(2)
    
    Until April 2007, it included, among others, the financial assistance granted by the Argentine Central Bank and the advance from this entity for the acquisition of the Hedge Bond.(3)
    
    Reflects the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities. Interest rates include the CER
adjustment.(4)
    
    Net interest earned divided by average interest-earning assets. Interest rates include the CER adjustment.(5)
    
    Represents net financial income, divided by average interest-earning assets. Fiscal Year 2009 Compared to Fiscal Year 2008
        th
  93




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th
     94




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Fiscal Year EndedDecember 31,(in percentages)
    
    2009
    
    
    2008
    
    
    2007Total Deposits
    
    
    6.29
    
    
    
    5.93
    
    
    
    6.32Private-Sector DepositsTotal
    
    
    7.81
    
    
    
    7.61
    
    
    
    8.23Deposits in Current and Savings Accounts and Non-Restructured Time Deposits
    
    
    8.07
    
    
    
    7.87
    
    
    
    8.55Total Loans
    
    
    6.91
    
    
    
    6.16
    
    
    
    7.41Private-Sector Loans
    
    
    7.67
    
    
    
    6.12
    
    
    
    7.75
 Banco de Galicia y Buenos Aires S.A., only, within the Argentine financial system. Based on daily information on
deposits and loans prepared by the Argentine Central Bank using-end of month balances. Beginning on December
2008, deposits from AFJPs were transferred to the ANSES, which implied a transfer of deposits from the private
sector to the public sector. Fiscal Year 2008 Compared to Fiscal Year 2007
          95




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Financial Expenses
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Interest on Deposits
    
    
    877.9
    
    
    
    786.1
    
    
    
    547.3Negotiable Obligations
    
    
    284.5
    
    
    
    288.8
    
    
    
    335.2Contributions and Taxes
    
    
    161.7
    
    
    
    135.9
    
    
    
    86.4CER Adjustment
    
    
    0.3
    
    
    
    9.2
    
    
    
    67.0Other (1)
    
    
    136.1
    
    
    
    201.0
    
    
    
    210.8Total
    
    
    1,460.5
    
    
    
    1,421.0
    
    
    
    1,246.7
 (1)
    
    Includes accrued interest on liabilities resulting from financial brokerage with banks and
international entities and premiums payable on repurchases. Fiscal Year 2009 Compared to Fiscal Year 2008
          97




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Fiscal Year 2008 Compared to Fiscal Year 2007
     Sistema Integrado Previsional Argentino SIPA Fondo de Garantía de
Sustentabilidad Administración Nacional de
Seguridad Social or ANSES
  98




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Net Financial Income
      99




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##### Table of Contents



Provision for Losses on Loans and Other Receivables
    Net Income from Services
  Fiscal Year Ended
    
    
    % ChangeDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009/2008
    
    
    2008/2007(in millions of Pesos)
    
    
    (in percentages)Income FromCredit Cards
    
    
    1,148.2
    
    
    
    952.6
    
    
    
    669.5
    
    
    
    20.5
    
    
    
    42.3Deposits Accounts
    
    
    252.9
    
    
    
    201.7
    
    
    
    160.5
    
    
    
    25.4
    
    
    
    25.7Cash Management
    
    
    18.6
    
    
    
    17.8
    
    
    
    13.8
    
    
    
    4.5
    
    
    
    29.0Safe Deposit Box
    
    
    30.2
    
    
    
    18.0
    
    
    
    13.2
    
    
    
    67.8
    
    
    
    36.4Services for Shipments
    
    
    14.9
    
    
    
    11.1
    
    
    
    8.3
    
    
    
    34.2
    
    
    
    33.7Product Package
    
    
    14.3
    
    
    
    11.4
    
    
    
    7.9
    
    
    
    25.4
    
    
    
    44.3Financial Fees
    
    
    50.1
    
    
    
    42.0
    
    
    
    28.8
    
    
    
    19.3
    
    
    
    45.8Credit-related Fees
    
    
    96.5
    
    
    
    95.7
    
    
    
    79.1
    
    
    
    0.8
    
    
    
    21.0Check Collection
    
    
    33.0
    
    
    
    33.9
    
    
    
    27.3
    
    
    
    (2.7
    )
    
    
    24.2Collection Services (Taxes and Utility Bills)
    
    
    25.7
    
    
    
    19.5
    
    
    
    14.1
    
    
    
    31.8
    
    
    
    38.3International Trade
    
    
    51.8
    
    
    
    46.1
    
    
    
    39.5
    
    
    
    12.4
    
    
    
    16.7Other (1)
    
    
    90.6
    
    
    
    122.3
    
    
    
    108.7
    
    
    
    (25.9
    )
    
    
    12.5Total Income
    
    
    1,826.8
    
    
    
    1,572.1
    
    
    
    1,170.7
    
    
    
    16.2
    
    
    
    34.3Total Expenses
    
    
    515.9
    
    
    
    384.2
    
    
    
    257.6
    
    
    
    34.3
    
    
    
    49.1Net Income from Services
    
    
    1,310.9
    
    
    
    1,187.9
    
    
    
    913.1
    
    
    
    10.4
    
    
    
    30.1
 (1)
    
    Includes, among others, fees from investment banking activities, asset management, assets under custody and
guarantees granted. Fiscal Year 2009 Compared to Fiscal Year 2008
   100




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Fiscal Year 2008 Compared to Fiscal Year 2007
        101




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% ChangeDecember 31,
    
    
    December 31,Credit Cards
    
    2009
    
    
    2008
    
    
    2007
    
    
    2009/2008
    
    
    2008/2007(number of credit cards, except otherwise noted)
    
    
    (percentages)Visa
    
    
    982,866
    
    
    
    936,267
    
    
    
    855,708
    
    
    
    4.98
    
    
    
    9.41Gold
    
    
    262,388
    
    
    
    203,464
    
    
    
    172,830
    
    
    
    28.96
    
    
    
    17.72International
    
    
    471,766
    
    
    
    470,709
    
    
    
    433,000
    
    
    
    0.22
    
    
    
    8.71Domestic
    
    
    189,626
    
    
    
    227,785
    
    
    
    229,174
    
    
    
    (16.75
    )
    
    
    (0.61
    )Business
    
    
    28,430
    
    
    
    20,976
    
    
    
    15,962
    
    
    
    35.54
    
    
    
    31.41Corporate
    
    
    1,130
    
    
    
    960
    
    
    
    295
    
    
    
    17.71
    
    
    
    225.42Platinum
    
    
    29,526
    
    
    
    12,373
    
    
    
    4,447
    
    
    
    138.63
    
    
    
    178.23Galicia Rural
    
    
    7,157
    
    
    
    6,215
    
    
    
    5,841
    
    
    
    15.16
    
    
    
    6.40American Express
    
    
    308,942
    
    
    
    241,145
    
    
    
    195,360
    
    
    
    28.11
    
    
    
    23.44Gold
    
    
    143,899
    
    
    
    99,970
    
    
    
    79,829
    
    
    
    43.94
    
    
    
    25.23International
    
    
    145,111
    
    
    
    133,644
    
    
    
    115,531
    
    
    
    8.58
    
    
    
    15.68Platinum
    
    
    19,932
    
    
    
    7,531
    
    
    
    
    
    
    
    164.67
    
    
    
    MasterCard
    
    
    57,276
    
    
    
    54,916
    
    
    
    50,577
    
    
    
    4.30
    
    
    
    8.58Gold
    
    
    19,452
    
    
    
    16,790
    
    
    
    13,203
    
    
    
    15.85
    
    
    
    27.17MasterCard
    
    
    36,670
    
    
    
    36,531
    
    
    
    35,684
    
    
    
    0.38
    
    
    
    2.37Argencard
    
    
    1,154
    
    
    
    1,595
    
    
    
    1,690
    
    
    
    (27.65
    )
    
    
    (5.62
    )Regional Credit-Card Companies
    
    
    4,618,199
    
    
    
    4,742,816
    
    
    
    4,283,770
    
    
    
    (2.63
    )
    
    
    10.72Local Brands
    
    
    2,944,544
    
    
    
    2,864,709
    
    
    
    2,479,788
    
    
    
    2.79
    
    
    
    15.52Visa
    
    
    1,424,453
    
    
    
    1,628,185
    
    
    
    1,599,046
    
    
    
    (12.51
    )
    
    
    1.82MasterCard
    
    
    221,575
    
    
    
    217,090
    
    
    
    182,237
    
    
    
    2.07
    
    
    
    19.13American Express
    
    
    27,627
    
    
    
    32,832
    
    
    
    22,699
    
    
    
    (15.85
    )
    
    
    44.64Total
    
    
    5,974,440
    
    
    
    5,981,359
    
    
    
    5,391,256
    
    
    
    (0.12
    )
    
    
    10.95Total Amount of Purchases(in millions of Pesos)
    
    Ps.
    18,142
    
    
    Ps.
    14,949
    
    
    Ps.
    11,566
    
    
    
    21.36
    
    
    
    29.24
 Administrative Expenses
  Fiscal Year Ended
    
    
    % ChangeDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009/2008
    
    
    2008/2007(in millions of Pesos)
    
    
    (in percentages)Salaries and Social Security Contributions
    
    
    975.8
    
    
    
    805.2
    
    
    
    540.6
    
    
    
    21.2
    
    
    
    48.9Property-related Expenses
    
    
    136.1
    
    
    
    113.2
    
    
    
    89.9
    
    
    
    20.2
    
    
    
    25.9Personnel Services
    
    
    76.8
    
    
    
    90.8
    
    
    
    75.7
    
    
    
    (15.4
    )
    
    
    19.9Advertising and Publicity
    
    
    127.8
    
    
    
    146.5
    
    
    
    113.8
    
    
    
    (12.8
    )
    
    
    28.7Amount Accrued in Relation to Directors and Syndics Compensation
    
    
    8.6
    
    
    
    8.2
    
    
    
    6.4
    
    
    
    4.9
    
    
    
    28.1Electricity and Communications
    
    
    85.9
    
    
    
    72.7
    
    
    
    57.2
    
    
    
    18.2
    
    
    
    27.1Taxes
    
    
    139.3
    
    
    
    104.0
    
    
    
    70.4
    
    
    
    33.9
    
    
    
    47.7Other
    
    
    478.8
    
    
    
    440.5
    
    
    
    332.3
    
    
    
    8.7
    
    
    
    32.6Total
    
    
    2,029.1
    
    
    
    1,781.1
    
    
    
    1,286.3
    
    
    
    13.9
    
    
    
    38.5
 Fiscal Year 2009 Compared to Fiscal Year 2008
    102




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Fiscal Year 2008 Compared to Fiscal Year 2007
    Income/(Loss) from Equity Investments
   Miscellaneous Income/(Loss), Net
  amparo
   103




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##### Table of Contents



amparo
 Income Tax
     
 U.S. GAAP and Argentine Banking GAAP Reconciliation
 General
  Allowances for Loan Losses
   December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007(in millions of Pesos)Argentine Banking GAAP
    
    
    806.4
    
    
    
    526.8
    
    
    
    428.6U.S. GAAPASC 310Allowance for Loan Losses
    
    
    101.7
    
    
    
    134.5
    
    
    
    246.3Effect of BG Trust Securitization
 Treated as a Secured Borrowing
for U.S. GAAP Purposes
    
    
    (36.9
    )
    
    
    (40.9
    )
    
    
    (64.9
    )ASC 450
    
    
    678.0
    
    
    
    481.7
    
    
    
    240.9U.S. GAAP Shareholders Equity Adjustment*
    
    
    63.6
    
    
    
    (48.5
    )
    
    
    6.3
 *
    
    Including qualitative and quantitative adjustments.  104




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##### Table of Contents



ASC310 Analysis
  
    
    With Problems
 
    
    High Risk of Insolvency
 
    
    Uncollectible
  December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007(in millions of Pesos)Loan Loss Reserve Under U.S. GAAP  ASC 310 Analysis
    
    
    101.7
    
    
    
    134.5
    
    
    
    246.3
  ASC 450 Analysis
  December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007(in millions of Pesos)Loan Loss Reserve Under
U.S. GAAP  ASC 450 Analysis
    
    
    678.0
    
    
    
    481.7
    
    
    
    240.9
  
    
    Loan loss reserves as a percentage of non-accrual loans,
 
    
    Loan loss reserves as a percentage of total amounts past due, and
 
    
    Loan loss reserves as a percentage of past-due unsecured amounts.
  December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Loan Loss Reserves as a Percentage of Non-accrual Loans
    
    
    108.37
    %
    
    
    141.34
    %
    
    
    132.13
    %Loan Loss Reserves as a Percentage of Total Amounts Past Due
    
    
    130.58
    %
    
    
    171.81
    %
    
    
    149.57
    %Loan Loss Reserves as a Percentage of Past-due Unsecured Amounts
    
    
    154.29
    %
    
    
    190.78
    %
    
    
    167.19
    %
  105




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##### Table of Contents



Carrying Value of Certain Government Securities and Receivables for Government Securities
     amparo amparo
  December 31, 2009
    
    
    December 31, 2008Book
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BookValue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ValueAmortized
    
    
    Argentine
    
    
    
    
    
    
    
    
    
    
    Shareholders
    
    
    Amortized
    
    
    Argentine
    
    
    
    
    
    
    
    
    
    
    ShareholdersCost US
    
    
    Banking
    
    
    Market
    
    
    Unrealized
    
    
    Equity
    
    
    Cost US
    
    
    Banking
    
    
    Market
    
    
    Unrealized
    
    
    Equity(In millions of Pesos)
    
    GAAP
    
    
    GAAP
    
    
    Value
    
    
    (Loss)/Gain
    
    
    Adjustment
    
    
    GAAP
    
    
    GAAP
    
    
    Value
    
    
    (Loss)/Gain
    
    
    AdjustmentBoden 2012 Bonds
    
    
    901.0
    
    
    
    1,906.9
    
    
    
    1,731.1
    
    
    
    830.1
    
    
    
    (175.8
    )
    
    
    1,964.5
    
    
    
    2,350.8
    
    
    
    1,253.4
    
    
    
    
    
    
    
    (1,097.4
    )Discount Bonds
    
    
    169.9
    
    
    
    622.0
    
    
    
    337.9
    
    
    
    132.2
    
    
    
    (284.1
    )
    
    
    297.3
    
    
    
    666.9
    
    
    
    196.5
    
    
    
    
    
    
    
    (470.4
    )Bonar 2015 Bonds
    
    
    591.5
    
    
    
    359.0
    
    
    
    676.6
    
    
    
    85.0
    
    
    
    (317.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Foreign Debt Restructuring
     106




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##### Table of Contents



Securitizations
     
    
    The decline is attributable solely to adverse interest rate movements, and
does not a connection with a credit event;
 
    
    The principal and interest payments have been made as scheduled, and there
is no evidence that the debtor will not continue to do so;
 
    
    The future principal payments will be sufficient to recover the current
amortized cost of the security; and
 
    
    Grupo Financiero Galicia has the intent to hold the security at least until
the fair value of the security recovers to a level that exceeds the securitys
amortized costs.
  Transfers of financial assets consolidated  Variable Interest Entities
   
    
    determine whether the entity meets the criteria to qualify as a VIE and;
 
    
    determine whether Grupo Financiero Galicia is the primary beneficiary of the
VIE.
  
    
    the design of the entity, including the nature of its risks and the purpose for
which the entity was created, to determine the variability that the entity was
designed to create and distribute to its interest holders;
 
    
    the nature of the involvement with the entity;
 
    
    whether control of the entity may be achieved through arrangements that do not
involve voting equity;
 
    
    whether there is sufficient equity investment at risk to finance the activities
of the entity and;
 
    
    whether parties other than the equity holders have the obligation to absorb
expected losses or the right to received residual returns.
  107




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
    
    whether the variable interest absorbs the majority of the VIEs expected losses;
 
    
    whether the variable interest receives the majority of the VIEs expected
returns and;
 
    
    whether Grupo Financiero Galicia has the ability to make decisions that
significantly affect the VIEs results and activities.
   (In millions of Pesos)
    
    December 31, 2009Cash and due from banks
    
    Ps.
    15.2Loans (net of allowances)
    
    
    463.7Other assets
    
    
    8.9Total Assets
    
    
    487.8Debt Securities
    
    
    279.6Certificates of Participation
    
    
    193.3Other liabilities
    
    
    14.9Total Liabilities
    
    
    487.8
 Income Tax
          108




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##### Table of Contents



Summary
  Net Income (Loss)
    
    
    Shareholders Equity (Deficit)Argentine Banking
    
    
    
    
    
    
    Argentine BankingGAAP
    
    
    U.S. GAAP
    
    
    GAAP
    
    
    U.S. GAAP(in millions of Pesos)Fiscal Year 2009
    
    
    229.3
    
    
    
    770.2
    
    
    
    2,052.5
    
    
    
    1,236.3Fiscal Year 2008
    
    
    176.8
    
    
    
    (1,171.0
    )
    
    
    1,845.7
    
    
    
    (754.4
    )Fiscal Year 2007
    
    
    46.0
    
    
    
    592.9
    
    
    
    1,654.5
    
    
    
    238.1
  
    
    Boden 2012 Bonds, Discount Bonds in Pesos and Bonar 2015 Bonds are reflected at market values, with
changes from market values at the time of exchange being recognized as other
comprehensive income. With the improvement in the Argentine economy, market values have
varied significantly, with a favorable influence on the financial position of Grupo
Financiero Galicia.
 
    
    Certain of our securitization transactions are considered sales under U.S. GAAP, with
the valuation of retained interests reflecting fair values, with changes in unrealized
gains and losses charged to equity through other comprehensive income. The increase in the fair value during 2009, compared to the previous year, was mainly
due to the decrease in the discount real rate utilized in the calculation of the fair
value of Galtrust I.
 
    
    The recognition of the Deferred Income Taxes under U.S. GAAP due to the fact that
Grupo Financiero Galicia considers it more likely than not that it will recover the
temporary differences and the net loss carry forward. In addition, Grupo Financiero
Galicia believed that its presumed minimum income tax is not more likely than not to be
recovered in the carryforward period and hence a valuation allowance was provided against
this amount.
  
    
    Boden 2012 Bonds, Bonar 2015 Bond and Discount Bonds in Pesos are reflected at market
values, with changes from market values at the time of exchange being recognized as other
comprehensive income as of December 31, 2009. Otherwise, as of December 31, 2008 Grupo
Financiero Galicia had recorded an other than temporary impairment, which resulted in a
significant decrease in its net income for Boden 2012 and Discount Bonds.
 
    
    The receipt of Bonar 2015 Bonds through an exchange that occurred during 2009
generated a significant income for US GAAP purposes.
 
    
    Certain of our securitization transactions are considered sales under U.S. GAAP, with
the valuation of retained interests reflecting fair values, with changes in unrealized
gains and losses charged to equity through other comprehensive income as of December 31,
2009. Otherwise, as of December 31, 2008 Grupo Financiero Galicia had recorded an other
than temporary impairment of the certificates of participation in Galtrust I, in Nues
Trust and in Almafuerte Special Fund which resulted in a significant decrease in its net
income.
 
    
    The recognition of the Deferred Income Taxes under U.S. GAAP due to the fact that
Grupo Financiero Galicia considers it more likely than not that it will recover the
temporary differences and the net loss carry forward. In addition, Grupo Financiero
Galicia believe that its presumed minimum income tax is not more likely than not to be
recovered in the carryforward period and hence a valuation allowance was provided against
this amount.
 
 Results by Segments
    
    
    Banking: our banking business segment represents Banco de Galicia y Buenos Aires S.A.
consolidated line by line with Galicia Uruguay, Galicia (Cayman) Limited and its
subsidiaries and the results of other small banking-related subsidiaries.
 
    
    Regional Credit Cards: our regional credit cards business segment represents the
accounts of Tarjetas Regionales S.A. consolidated with its subsidiaries.
 
    
    Insurance: our insurance business segment represents the accounts of Sudamericana and
its subsidiaries.
 
    
    Other Grupo Businesses: this segment includes the results of Net Investment, Galicia
Warrants, GV Mandataria and Galval.
   109




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##### Table of Contents



Banking
  As of December 31,In millions of Pesos, except percentages
    
    2009
    
    
    2008
    
    
    2007Net Financial Income
    
    
    1,144.2
    
    
    
    847.3
    
    
    
    516.2Net Income from Services
    
    
    727.9
    
    
    
    655.0
    
    
    
    520.4Net Operating Revenue
    
    
    1,872.1
    
    
    
    1,502.3
    
    
    
    1,036.6Provisions for Loan Losses
    
    
    388.7
    
    
    
    214.9
    
    
    
    159.2Administrative Expenses
    
    
    1,321.8
    
    
    
    1,166.5
    
    
    
    875.1Net Operating Income
    
    
    161.6
    
    
    
    120.9
    
    
    
    2.3Income from Equity InvestmentsTarjetas Regionales SA
    
    
    133.0
    
    
    
    76.4
    
    
    
    88.2Sudamericana
    
    
    3.4
    
    
    
    2.9
    
    
    
    1.9Others
    
    
    13.1
    
    
    
    58.1
    
    
    
    3.5Income from Equity Investments
    
    
    149.5
    
    
    
    137.4
    
    
    
    93.6Other Income (Loss)
    
    
    (139.3
    )
    
    
    (63.0
    )
    
    
    (65.5
    )Net Income
    
    
    171.8
    
    
    
    195.3
    
    
    
    30.4Net Income as a % of Grupo Financiero Galicias Net Income
    
    
    75
    %
    
    
    110
    %
    
    
    66
    %Average Loans
    
    
    8,959.4
    
    
    
    8,707.5
    
    
    
    7,140.6Average Deposits
    
    
    14,765.9
    
    
    
    13,199.0
    
    
    
    11,857.0
       110




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##### Table of Contents



amparo amparo amparo amparo
 Regional Credit Cards
  As of December 31,In millions of Pesos, except percentages
    
    2009
    
    
    2008
    
    
    2007Net Financial Income
    
    
    375.5
    
    
    
    296.2
    
    
    
    203.2Net Income from Services
    
    
    737.0
    
    
    
    571.8
    
    
    
    409.0Net Operating Revenue
    
    
    1,112.5
    
    
    
    868.0
    
    
    
    612.2Provisions for Loan Losses
    
    
    250.8
    
    
    
    180.4
    
    
    
    96.3Administrative Expenses
    
    
    621.9
    
    
    
    554.5
    
    
    
    369.5Net Operating Income
    
    
    239.8
    
    
    
    133.1
    
    
    
    146.4Other Income (Loss)
    
    
    54.9
    
    
    
    45.2
    
    
    
    41.4Minority Interests
    
    
    (32.6
    )
    
    
    (20.6
    )
    
    
    (27.5
    )Pre-tax Income
    
    
    262.1
    
    
    
    157.7
    
    
    
    160.3Income Tax Provision
    
    
    129.1
    
    
    
    81.3
    
    
    
    72.1Net Income
    
    
    133.0
    
    
    
    76.4
    
    
    
    88.2Net Income as a % of Grupo Financiero Galicias Net Income
    
    
    58
    %
    
    
    43
    %
    
    
    192
    %Average Loans
    
    
    2,402.5
    
    
    
    2,105.0
    
    
    
    1,703.1
  111




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##### Table of Contents



Insurance
  As of September 30,In millions of Pesos, except percentages
    
    2009
    
    
    2008
    
    
    2007Net Financial Income
    
    
    28.5
    
    
    
    20.2
    
    
    
    16.6Net Operating Revenue
    
    
    28.5
    
    
    
    20.2
    
    
    
    16.6Administrative Expenses
    
    
    42.9
    
    
    
    30.0
    
    
    
    16.1Net Operating Income
    
    
    (14.4
    )
    
    
    (9.8
    )
    
    
    0.5Other Income (Loss)
    
    
    55.3
    
    
    
    43.5
    
    
    
    22.0Pre-tax Income
    
    
    40.9
    
    
    
    33.7
    
    
    
    22.5Income Tax Provision
    
    
    14.1
    
    
    
    11.1
    
    
    
    7.9Net Income
    
    
    26.8
    
    
    
    22.6
    
    
    
    14.6Net Income as a % of Grupo Financiero Galicias Net Income
    
    
    12
    %
    
    
    13
    %
    
    
    32
    %
  112




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Other Grupo Businesses
     113




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##### Table of Contents



Consolidated Assets
  As of December 31,2009
    
    
    2008
    
    
    2007Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %(in millions of Pesos, except percentages)Cash and Due from Banks
    
    
    3,696.3
    
    
    
    13.4
    
    
    
    3,405.1
    
    
    
    13.8
    
    
    
    2,960.0
    
    
    
    13.0Government and Corporate Securities
    
    
    3,920.4
    
    
    
    14.2
    
    
    
    1,531.9
    
    
    
    6.2
    
    
    
    1,694.0
    
    
    
    7.4Loans
    
    
    13,477.9
    
    
    
    48.8
    
    
    
    11,774.6
    
    
    
    47.6
    
    
    
    11,601.0
    
    
    
    50.8Other Assets
    
    
    6,507.8
    
    
    
    23.6
    
    
    
    8,024.2
    
    
    
    32.4
    
    
    
    6,573.7
    
    
    
    28.8Total
    
    
    27,602.4
    
    
    
    100.0
    
    
    
    24,735.8
    
    
    
    100.0
    
    
    
    22,828.7
    
    
    
    100.0
      
    
    Ps.1,242.7 million recorded under Bank Premises and Equipment, Miscellaneous Assets
and Intangible Assets, excluding from the latter the deferred losses from amparoclaims.
 
    
    Ps.887.6 million of forward purchases of Boden 2012 Bonds in connection with repurchase
agreement transactions (including the corresponding security margins recorded as
Miscellaneous Receivables in the balance sheet).
 
    
    Ps.584.1 million corresponding to our holdings of debt securities and participation
certificates issued by the Galtrust I Financial Trust, resulting from the securitization of
loans to the provincial public sector in late 2000.
 
    
    Ps.428.7 million corresponding to holdings of the participation certificate in, and debt
securities of, the special fund (referred to as Special Fund Former Almafuerte Bank)
jointly formed by the Bank with other private-sector banks in order to facilitate the
recovery of the assets of former Almafuerte Bank.
 
    
    Ps.339.2 million corresponding to Assets under Financial Leases.
 
    
    Ps.331.5 million corresponding to participation certificates in, and debt securities of,
different financial trusts, created by the Bank or by third parties.
 
    
    Ps.327.0 million corresponding to the minimum presumed income tax recorded under
Miscellaneous Receivables.
  114




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
    
    Ps.272.4 million corresponding to balances deposited at the Argentine Central Bank as
guarantees in favor of clearing houses.
 
    
    Ps.259.1 million recorded as an intangible asset, which reflect deferred losses in
connection with amparoclaims due to the difference between the amount paid to depositors
(the deposits original contractual amount, collected by depositors in US Dollars or at the
free market exchange rate) as a consequence of court orders, and the amount established by
the pesification rules (conversion at the Ps.1.40 per US Dollar exchange rate, plus CER
adjustment and interest), net of the accumulated amortization, plus the amount of deferred
amortization.
 
    
    Ps.226.6 million of forward purchases of Discount Bonds in Pesos in connection with
repurchase agreements (including the corresponding security margins recorded as
Miscellaneous Receivables in the balance sheet).
 
    
    Ps.65.2 million corresponding to equity investments.
 
    
    Ps.32.5 million corresponding to debt securities, mostly of the Bank (Ps.39.8 million)
and the rest corresponding to securities issued by other companies.
 
 Exposure to the Argentine Public Sector
  As of December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Net Position in Government Securities
    
    
    4,933.0
    
    
    
    3,645.3
    
    
    
    3,877.8Trading and Investment Accounts
    
    
    1,810.5
    
    
    
    627.6
    
    
    
    435.8Boden 2012 Bonds
    
    
    1,906.9
    
    
    
    2,350.8
    
    
    
    2,744.3Nobac 2010
    
    
    269.9
    
    
    
    
    
    
    
    Bonar 2015 Bonds
    
    
    323.7
    
    
    
    
    
    
    
    Discount Bonds in Pesos and GDP-Linked Negotiable Securities
    
    
    622.0
    
    
    
    666.9
    
    
    
    697.7Loans
    
    
    25.4
    
    
    
    1,480.7
    
    
    
    1,372.6Financial Sector
    
    
    
    
    
    
    107.1
    
    
    
    107.1Secured Loans and Others
    
    
    25.4
    
    
    
    1,373.6
    
    
    
    1,265.5Other Receivables Resulting from Financial Brokerage
    
    
    924.6
    
    
    
    928.3
    
    
    
    870.4Trusts Certificates of Participation and Securities
    
    
    923.7
    
    
    
    927.5
    
    
    
    870.1Other
    
    
    0.9
    
    
    
    0.8
    
    
    
    0.3Total Assets(1)
    
    
    5,883.0
    
    
    
    6,054.3
    
    
    
    6,120.8
 (1)
    
    Does not include deposits with the Argentine Central Bank, which constitute one of the items by which
the Bank complies with the Argentine Central Banks minimum cash requirements. th
   115




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Securitization of Assets
   
 Funding
       116




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##### Table of Contents



December 31,2009
    
    
    2008
    
    
    2007Amounts
    
    
    %
    
    
    Amounts
    
    
    %
    
    
    Amounts
    
    
    %(in millions of Pesos, except percentages)Deposits
    
    
    17,039.4
    
    
    
    61.7
    
    
    
    14,056.1
    
    
    
    56.8
    
    
    
    13,165.6
    
    
    
    57.8Current Accounts and Other Demand Deposits
    
    
    3,719.1
    
    
    
    13.5
    
    
    
    3,105.4
    
    
    
    12.6
    
    
    
    2,675.4
    
    
    
    11.7Savings Accounts
    
    
    4,994.7
    
    
    
    18.1
    
    
    
    4,035.0
    
    
    
    16.3
    
    
    
    3,380.1
    
    
    
    14.8Time Deposits
    
    
    7,954.8
    
    
    
    28.8
    
    
    
    6,548.0
    
    
    
    26.5
    
    
    
    6,708.8
    
    
    
    29.5Other Deposits
    
    
    248.7
    
    
    
    0.9
    
    
    
    263.2
    
    
    
    1.1
    
    
    
    291.6
    
    
    
    1.3Accrued Interest, Quotation Differences and CER Adjustment
    
    
    122.1
    
    
    
    0.4
    
    
    
    104.5
    
    
    
    0.4
    
    
    
    113.7
    
    
    
    0.5Debt with Financial Institutions(1)
    
    
    1,480.1
    
    
    
    5.4
    
    
    
    2,172.9
    
    
    
    8.8
    
    
    
    2,307.8
    
    
    
    10.1Domestic Financial Institutions
    
    
    322.3
    
    
    
    1.2
    
    
    
    248.6
    
    
    
    1.0
    
    
    
    318.5
    
    
    
    1.4International Banks and Credit Agencies
    
    
    548.1
    
    
    
    2.0
    
    
    
    941.5
    
    
    
    3.8
    
    
    
    733.3
    
    
    
    3.2Repurchases
    
    
    609.7
    
    
    
    2.2
    
    
    
    982.8
    
    
    
    4.0
    
    
    
    1,256.0
    
    
    
    5.5Negotiable Obligations (Unsubordinated and Subordinated)(1)
    
    
    2,716.6
    
    
    
    9.8
    
    
    
    2,932.5
    
    
    
    11.9
    
    
    
    3,105.6
    
    
    
    13.6Other obligations
    
    
    4,314.0
    
    
    
    15.6
    
    
    
    3,728.6
    
    
    
    15.0
    
    
    
    2,595.2
    
    
    
    11.3Shareholders Equity
    
    
    2,052.5
    
    
    
    7.4
    
    
    
    1,845.7
    
    
    
    7.5
    
    
    
    1,654.5
    
    
    
    7.2Total Funding
    
    
    27,602.6
    
    
    
    100.0
    
    
    
    24,735.8
    
    
    
    100.0
    
    
    
    22,828.7
    
    
    
    100.0
 (1)
    
    Includes accrued interest, quotation differences, and CER adjustment where applicable.    117




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
    
    Ps.129.9 million and Ps.736.5 million of 2010 Notes and 2014 Notes, respectively, and
Ps.1,082.1 million of 2019 Notes, all of them issued in 2004 and corresponding to new
debt of the Bank resulting from the foreign debt restructuring completed in May of said
year.
 
    
    Ps.133.7 million and Ps.57.3 million of Class IX Series I and II Negotiable
Obligations, respectively, maturing in 2010 and 2011, issued by Tarjeta Naranja S.A.
 
    
    Ps.75.9 million of Series XX Negotiable Obligations, maturing in 2010, issued by
Tarjetas Cuyanas S.A.
 
    
    Ps.125.8 million and Ps.40.3 million of Serie I and Serie II Negotiable Obligations,
respectively, maturing in 2010 and 2011, issued by Grupo Financiero Galicia S.A.
 
    
    Ps.6.4 million of past due foreign debt included in the Banks 2004 debt
restructuring, the holders of which did not participate in such restructuring.
    Ratings
    118




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##### Table of Contents



Standard &
    
    
    
    EvaluadoraPoors
    
    Fitch Argentina
    
    Latinoamericana
    
    MoodysLOCAL RATINGSGrupo Financiero Galicia S.A.Rating of Shares
    
    1Short-/Medium Term Debt(1)
    
    
    
    
    
    A+Banco de Galicia y Buenos Aires S.A.Counterparty Rating
    
    raAMedium-/Long-Term Debt (2) (3)
    
    raA
    
    
    
    A+
    
    Aa3.arSubordinated Debt (2) (4)
    
    raA-
    
    
    
    A
    
    Aa3.arDeposits (Long Term / Short Term)
    
    raA / raA-1Deposits (Local Currency / Foreign Currency)
    
    
    
    
    
    
    
    Aa2.ar / Ba1.arTrustee
    
    
    
    
    
    
    
    TQ1(-).arTarjeta Naranja S.A.Medium-/Long-Term Debt (2) (5)
    
    
    
    A+(arg)Short-Term Debt (2) (6)
    
    
    
    A+(arg)Tarjetas Cuyanas S.A.Long-Term Debt (2) (7)
    
    
    
    A-(arg)Short-Term Debt (2) (8)
    
    
    
    A-(arg)INTERNATIONAL RATINGSTarjeta Naranja S.A.Medium-/Long-Term Debt (2) (9)
    
    
    
    B-Tarjetas Cuyanas S.A.Long-Term Debt (2) (7)
    
    
    
    B-
 (1)
    
    Negotiable Obligations Due in 2010 and 2011, issued on June 4, 2009.(2)
    
    See -Contractual Obligations.(3)
    
    Negotiable Obligations Due in 2010 and Negotiable Obligations Due in
2014.(4)
    
    Subordinated Negotiable Obligations Due in 2019.(5)
    
    Class IV and Class IX, Series II Negotiable Obligations.(6)
    
    Class IX Series I Negotiable Obligations.(7)
    
    Series XVIII Negotiable Obligations.(8)
    
    Series XX Negotiable Obligations.(9)
    
    Class IV Negotiable Obligations.  119




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Debt Programs
        120




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##### Table of Contents



Contractual Obligations
  Annual
    
    
    
    
    
    Less than
    
    
    1 to 3
    
    
    3 to 5
    
    
    Over 5Maturity
    
    Interest Rate
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsGrupo Financiero GaliciaNegotiable Obligations Serie I Due 2010 (US$) (1)
    
    2010
    
    
    
    
    125.8
    
    
    
    125.8
    
    
    
    
    
    
    
    
    
    
    
    Negotiable Obligations Serie II Due 2011 (US$) (1)
    
    2011
    
    12.50%
    
    
    41.2
    
    
    
    0.9
    
    
    
    40.3
    
    
    
    
    
    
    
    Banco GaliciaDepositsTime Deposits (including Other Deposits) (Pesos/US$)
    
    Various
    
    Various
    
    
    8,089.6
    
    
    
    7,949.6
    
    
    
    139.9
    
    
    
    0.1
    
    
    
    Bonds2010 Notes (US$) (2) (3) (4)
    
    2010
    
    Libor + 350 bp
    
    
    133.0
    
    
    
    133.0
    
    
    
    
    
    
    
    
    
    
    
    2014 Notes (US$) (2) (3) (5)
    
    2014
    
    7.00%
    
    
    762.4
    
    
    
    200.5
    
    
    
    349.2
    
    
    
    212.7
    
    
    
    2019 Notes (US$) (2) (6)
    
    2019
    
    11.00%
    
    
    1,137.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,137.49% Notes Due 2003 (US$) (7)
    
    2003
    
    9.00%
    
    
    11.1
    
    
    
    11.1
    
    
    
    
    
    
    
    
    
    
    
    LoansFloating Rate Loans Due 2010 (US$)(2) (3) (4)
    
    2010
    
    Libor + 350 bp
    
    
    2.0
    
    
    
    2.0
    
    
    
    
    
    
    
    
    
    
    
    Floating Rate Loans Due 2014 (US$) (2) (3) (5)
    
    2014
    
    Libor + 85 bp
    
    
    95.9
    
    
    
    23.5
    
    
    
    45.0
    
    
    
    27.4
    
    
    
    Floating Rate Loans Due 2019 (US$) (2) (8)
    
    2019
    
    Libor + 578 bp
    
    
    7.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.6IFC Financial Loans (US$)
    
    Various
    
    Libor + 350 bp
    
    
    261.1
    
    
    
    49.1
    
    
    
    115.5
    
    
    
    96.5
    
    
    
    Other Financial Loans (US$) (9)
    
    2010
    
    Various
    
    
    181.2
    
    
    
    181.2
    
    
    
    
    
    
    
    
    
    
    
    IDB Financial Loans (Pesos)
    
    Various
    
    Various
    
    
    70.8
    
    
    
    14.9
    
    
    
    26.4
    
    
    
    16.1
    
    
    
    13.4Fontar Financial Loans (Pesos)
    
    Various
    
    Various
    
    
    62.0
    
    
    
    16.6
    
    
    
    26.1
    
    
    
    13.0
    
    
    
    6.3Short-Term Interbank Loans (Pesos)
    
    2010
    
    9.76%
    
    
    70.0
    
    
    
    70.0
    
    
    
    
    
    
    
    
    
    
    
    Repurchases (Pesos) (10)
    
    2010
    
    Various
    
    
    278.3
    
    
    
    278.3
    
    
    
    
    
    
    
    
    
    
    
    Repurchases (US$) (10)
    
    2010
    
    Various
    
    
    331.4
    
    
    
    331.4
    
    
    
    
    
    
    
    
    
    
    
    Tarjetas Regionales S.A.Financial Loans with Local Banks (Pesos)
    
    Various
    
    Various
    
    
    181.4
    
    
    
    116.3
    
    
    
    65.1
    
    
    
    
    
    
    
    Negotiable Obligations (Pesos/US$) (11)
    
    Various
    
    Various
    
    
    505.7
    
    
    
    328.4
    
    
    
    177.3
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    12,347.9
    
    
    
    9,832.6
    
    
    
    984.8
    
    
    
    365.8
    
    
    
    1,164.7
 Principal and interest. Includes the CER adjustment, where applicable.(1)
    
    Corresponds to Notes issued by Grupo Financiero Galicia in dollars and in two series. Series I was issued with discounted base and in a 360-day term. Series II was issued at a 12.5% fixed rate with a
540-day term. Principal of both series will be fully paid at maturity. Interest in Series II will be paid in a 180-day term.(2)
    
    Issued in 2004 as part of the restructuring of the foreign debt of the Banks Head Office and its Cayman Branch.(3)
    
    Interest payable in cash, semiannually, on January 1 and July 1 of each year, beginning on July 1, 2004.(4)
    
    Floating Rate Notes Due 2010: Principal amortizes semiannually, on January 1 and July 1 of each year, beginning on July 1, 2006, in eight equal installments of 12.5% of principal at issuance or
incurrence, until maturity on January 1, 2010, when the remaining 12.5% is due.(5)
    
    Step-Up Rate Notes Due 2014: Principal amortizes semiannually, on January 1 and July 1 of each year, beginning on January 1, 2010, in eight equal installments of 11.11% of principal at issuance or
incurrence, until maturity, when the remaining 4.86% is due (during 2007, the Bank made a cancellation in advance which was applied to the last installment, which modified the original cash flow). The rate
increased 1% on January 1 of each year, until it reached 7% on January 1, 2008.(6)
    
    Subordinated Notes Due 2019: Interest paid in cash: 6% per annum from January 1, 2004 until (but not including) January 1, 2014, payable semiannually, on January 1 and July 1 of each year, beginning on
July 1, 2004. Unless the notes are previously redeemed, the annual interest rate will increase to 11% per annum from that date until (but not including) January 1, 2019. Interest paid in additional
subordinated negotiable obligations due 2019: 5% per annum from January 1, 2004, to be paid on January 1, 2014 and January 1, 2019. Principal amortizes in full on January 1, 2019, unless the notes are
previously redeemed at par plus accrued but unpaid interest, in whole or in part, at the Banks option, at any time after the 2010 Notes and the 2014 Notes have been repaid in full and, otherwise, in
accordance with the terms of the agreements governing such notes.(7)
    
    The balance represents debt not tendered by its holders to the exchange offered by the Bank to restructure its foreign debt, which was completed in May 2004.(8)
    
    Interest payable in cash: Libor+78 b.p., per annum from January 1, 2004, until (but not including) January 1, 2014, payable semiannually, on January 1 and July 1 of each year, beginning on July 1, 2004.
Unless the loans are previously redeemed, the annual interest rate will increase to Libor+578 b.p. per annum from that date until (but not including) January 1, 2019. Also pays interest in additional
subordinated loans, due 2019: 5% per annum from January 1, 2004, to be paid on January 1, 2014 and January 1, 2019. Principal amortizes in full on January 1, 2019 unless the loans are previously redeemed at
part plus accrued interest and additional amounts, if any, in whole or in part at the Banks option, in accordance with the terms of the agreements governing such loans.(9)
    
    Borrowings to finance international trade operations to Bank customers.(10)
    
    Includes premiums.(11)
    
    Includes the following Negotiable Obligations: 
    
    Tarjetas Cuyanas Series XVIII:issued in pesos. Interests are payable semiannually, in June and December, principal amortizes semiannually in 9 installments, the first four installments of 15%
beginning on June 14, 2008. The following 3 installments of 10% and the last two installments of 5% each. As to December, Ps.80 million payable in 3 installments of Ps.20 million corresponding to the
10% of the initial value and 2 installments of Ps.10 million.
 
    
    Tarjetas Cuyanas Series XX:issued in dollars. US$20 million. Principal amount is payable in full on December 2, 2010. No interest accrues since it was issued at a discount in respect to its
nominal value.
 
    
    Tarjeta Naranja S.A. Class IV:issued in pesos, at a 12.5 % fixed rate, with maturity on November 29, 2011. Interests are payable semiannually, in May and November of each year, beginning in
May 29, 2007. Principal amortizes in 8 equal installments of 12.5% in the same months, beginning on May 29, 2008.
 
    
    Tarjeta Naranja S.A. Class IX Series I:issued in dollars. Principal is payable in full on September 1, 2010. No interest accrues since it was issued at a discount in respect to its nominal
value.
 
    
    Tarjeta Naranja S.A. Class IX Series II:issued in dollars, at a 12.5 % fixed rate. Interests are payable semiannually in March and September of each year. Principal will be fully repaid on
the maturity date.
  121




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Off- Balance Sheet Contractual Obligations
 Operating Leases
  (In millions of Pesos)2010
    
    
    50.842011
    
    
    59.692012
    
    
    67.342013
    
    
    74.482014
    
    
    79.962015 and After
    
    
    84.31Total
    
    
    416.62
 Other
   
 Off-Balance Sheet Arrangements
   Commitments to Extend Credit, Stand-By Letters of Credit and Guarantees Granted
      122




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##### Table of Contents



December 31,2009(in millions of Pesos)Commitments to Extend Credit
    
    
    1,323.5Standby Letters of Credit
    
    
    175.5Guarantees Granted
    
    
    194.5Acceptances
    
    
    58.9
    December 31,2009(in millions of Pesos)Preferred Counter Guarantees
    
    
    15.4Other Counter Guarantees
    
    
    33.3
  Other
  December 31, 2009(in millions of Pesos)Checks Drawn on the Bank
    
    
    378.6Checks Drawn on Other Banks
    
    
    458.4Bills and Other Items for Collection
    
    
    2,262.3
    
 Critical Accounting Policies
   123




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Allowance for Loan Losses
    Other Receivables Resulting from Financial Brokerage and Miscellaneous Receivables
  Goodwill
  
 U.S. GAAP  Critical Accounting Policies
  Other-than-temporary impairment
              124




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Allowance for Loan Losses
          Fair Value Estimates
     125




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##### Table of Contents



Fair Value Hierarchy
   
    
    Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets.
 
    
    Level 2: inputs to the valuation methodology include quoted prices for similar assets
and liabilities in active markets, and inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the asset or
liability.Inputs include the following:
 (a)
    
    Quoted prices for similar assets or liabilities in active markets;(b)
    
    Quoted prices for identical or similar assets or liabilities in
non-active markets;(c)
    
    Pricing models whose inputs are observable for substantially the full
term of the asset or liability; and(d)
    
    Pricing models whose inputs are derived principally from or corroborated
by observable market data through correlation or other means.
 
    
    Level 3: inputs to the valuation methodology are unobservable and significant to the
fair value measurement.
  Determination of Fair Value
   Impairment of Assets Other Than Loans
    126




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Deferred Tax Asset Valuation Allowance
     Assets Not Recognized Under U.S. GAAP
  amparo amparo
  127




---



##### Table of Contents



Securitizations
    Exchange of Assets
    
 Principal Trends
 Related to Argentina
     Related to the Financial System
   128




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##### Table of Contents



Related to Us
    
 Item 5.B. Liquidity and Capital Resources
 
 Liquidity  Holding Company on an Individual Basis
         129




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##### Table of Contents



Consolidated Cash Flows
     130




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##### Table of Contents



December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos)Funds (1) at the Beginning of the Fiscal Year
    
    Ps.
    4,795.4
    
    
    Ps.
    3,766.2
    
    
    Ps.
    4,988.2Funds Provided (Used) by Operating Activities
    
    
    1,464.8
    
    
    
    888.6
    
    
    
    2,449.8- Funds Provided by the Sale Of or Proceeds From Government Securities
    
    
    1,120.9
    
    
    
    839.2
    
    
    
    1,589.5- CER Adjustment
    
    
    6.5
    
    
    
    (113.2
    )
    
    
    485.6- Other
    
    
    337.4
    
    
    
    162.6
    
    
    
    374.7Funds Provided (Used) by Investing Activities
    
    
    (1,526.0
    )
    
    
    1,057.1
    
    
    
    (1,715.7
    )- Net Increase/Decrease in Loans
    
    
    (1,185.6
    )
    
    
    1,501.3
    
    
    
    (1,410.8
    )Loans to the Private Sector
    
    
    (1,193.6
    )
    
    
    1,444.6
    
    
    
    (2,027.8
    )Loans to the Public Sector
    
    
    8.0
    
    
    
    56.7
    
    
    
    617.0- Other
    
    
    (340.4
    )
    
    
    (444.2
    )
    
    
    (304.9
    )Funds Provided (Used) by Financing Activities
    
    
    517.9
    
    
    
    (1.065.6
    )
    
    
    (2,003.9
    )- Net Increase in Deposits
    
    
    1,838.7
    
    
    
    (57.0
    )
    
    
    1,752.5- Funds Provided/Used by Repurchases
    
    
    (409.3
    )
    
    
    (376.6
    )
    
    
    229.9- Funds Raised by the Regional Credit Card Companies
    
    
    197.7
    
    
    
    269.5
    
    
    
    174.9- Payments on Long-term Debt
    
    
    (778.6
    )
    
    
    (743.5
    )
    
    
    (1,770.3
    )- Payments on Long-term Debt by Galicia Uruguay
    
    
    0.0
    
    
    
    0.0
    
    
    
    (53.2
    )- Payments on Debt with the Argentine Central Bank
    
    
    1.5
    
    
    
    1.0
    
    
    
    (2,713.0
    )- Other
    
    
    (332.1
    )
    
    
    (159.0
    )
    
    
    375.3-Effect of Exchange Rate on Cash and Cash Equivalents
    
    
    176.7
    
    
    
    149.2
    
    
    
    47.9Funds at the End of the Fiscal Year
    
    Ps.
    5,428.7
    
    
    Ps.
    4,795.4
    
    
    Ps.
    3,766.2
 (1)
    
    Cash and cash equivalents.        131




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Cash Flows from Operating Activities
    Cash Flows from Investing Activities
 amparo
 amparo
  132




---



##### Table of Contents



amparo
 Cash Flows from Financing Activities
  (i)
    
    a Ps.580.9 million net decrease in long term credit facilities, mainly
corresponding to: (a) payments of interest on restructured debt for US$41.4 million,
(b) the payment of two amortization installments on debt due 2010 for US$68.4 million,
(c) the prepayment of the Banks 2014 Notes for US$77.3 million, (d) a decrease of
Ps.6.8 million of IFC loans and (e) a Ps.86 million net decrease in funds obtained by
the regional credit card companies through the issuance of negotiable obligations;(ii)
    
    a Ps.409.3 million net decrease in repurchase transactions; and(iii)
    
    a Ps.319.9 million net decrease in short-term borrowings, mainly due to the
decrease in borrowings from local and foreign banks, for Ps.327.5 million.
     (i)
    
    a Ps.474.0 million net decrease in long term credit facilities, mainly
corresponding to: (a) payments of interest on restructured debt for US$49 million, (b)
the payment of two amortization installments on debt due 2010 for US$68.4 million, (c)
the prepayment of the Banks 2014 Notes for US$30.2 million, (d) a reduction of US$24.6
million of Banco Galicia Uruguays restructured debt structured as negotiable
obligations, (e) an increase of Ps.153.6 million of IFC loans and (f) a Ps.80.5 million
net decrease in funds obtained by the regional credit card companies through the
issuance of negotiable obligations;(ii)
    
    a Ps.376.6 million net decrease in repurchase transactions;(iii)
    
    a Ps.156.6 million net decrease in short-term borrowings, mainly due to: (a)
the decrease in borrowings from local and foreign banks, for Ps.81.0 million and (b)
the payment of US$24.0 million as part of a US$80 million loan granted to us in last
year; and(iv)
    
    a Ps.57.0 million decrease in deposits, corresponding to: (a) a decrease of
Ps.908.4 million in time deposits and (b) an increase of Ps.868.1 million in demand
deposits.
  133




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##### Table of Contents



(i)
    
    a Ps.1,823.5 million decrease in long-term liabilities, mainly corresponding
to: (a) payments of interest on restructured debt for Ps.280.0 million, (b) principal
amortization of the 2007 Notes for Ps.121.6 million, (c) payments by the regional
credit card companies on negotiable obligations for Ps.151.0 million, (d) repurchases
of loans due 2010 and 2014 for Ps.593.3 million, (e) payment of two amortization
installments on debt due 2010 for Ps.277.9 million, (f) prepayment of 2010 Notes for
Ps.155.9 million and of 2014 Notes for Ps.119.1 million, (g) prepayment of 2014 Notes
triggered by the cash subscription for the Banks capital increase under our
restructured foreign debt agreements, for Ps.71.5 million, and (h) settlement by
Galicia Uruguay of restructured debt, for Ps.53.2 million, and
 (ii)
    
    a Ps.2,332.5 million decrease of short-term borrowings, mainly due to the full
repayment of financial assistance from the Argentine Central Bank, for Ps.2,713.0
million, partially offset by an increase in borrowings from local banks, for Ps.102.9
million.
  
 Banco Galicias Liquidity Management
 Banco Galicia Consolidated Liquidity Gaps
   As of December 31, 2009(1)Less thanone Year
    
    
    1  5 Years
    
    
    5  10 Years
    
    
    Over 10 Years
    
    
    Total(in millions of Pesos, except ratios)AssetsCash and Due from Banks
    
    
    1,616.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,616.6Argentine Central Bank  Escrow Accounts
    
    
    2,339.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,339.2Overnight Placements
    
    
    440.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    440.7Loans  Public Sector
    
    
    1.0
    
    
    
    2.7
    
    
    
    
    
    
    
    
    
    
    
    3.7Loans  Private Sector
    
    
    10,929.3
    
    
    
    1,716.3
    
    
    
    200.6
    
    
    
    16.7
    
    
    
    12,862.9Government Securities
    
    
    2,583.3
    
    
    
    1,155.3
    
    
    
    105.8
    
    
    
    
    
    
    
    3,844.4Negotiable Obligations and Corporate Securities
    
    
    21.4
    
    
    
    10.1
    
    
    
    
    
    
    
    
    
    
    
    31.5Financial Trusts
    
    
    449.3
    
    
    
    366.5
    
    
    
    462.6
    
    
    
    0.1
    
    
    
    1,278.5Special Fund Former Almafuerte Bank
    
    
    162.2
    
    
    
    238.7
    
    
    
    
    
    
    
    
    
    
    
    400.9Other Financing
    
    
    12.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12.7Assets under Financial Lease
    
    
    132.6
    
    
    
    161.5
    
    
    
    49.3
    
    
    
    0.1
    
    
    
    343.5Other
    
    
    357.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    357.1Total Assets
    
    
    19,045.4
    
    
    
    3,651.1
    
    
    
    818.3
    
    
    
    16.9
    
    
    
    23,531.7LiabilitiesSavings Accounts
    
    
    5,022.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,022.0Demand Deposits
    
    
    3,927.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,927.4Time Deposits
    
    
    7,851.4
    
    
    
    139.9
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    7,991.5Negotiable Obligations
    
    
    636.8
    
    
    
    1,822.8
    
    
    
    
    
    
    
    
    
    
    
    2,459.6International Banks and Credit Agencies
    
    
    253.0
    
    
    
    342.9
    
    
    
    
    
    
    
    
    
    
    
    595.9Domestic Banks
    
    
    209.8
    
    
    
    146.7
    
    
    
    19.6
    
    
    
    
    
    
    
    376.1Other Liabilities (1)
    
    
    3,216.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,216.1Total Liabilities
    
    
    21,116.5
    
    
    
    2,452.3
    
    
    
    19.7
    
    
    
    0.1
    
    
    
    23,588.6Asset / Liability Gap
    
    
    (2,071.1
    )
    
    
    1,198.8
    
    
    
    798.6
    
    
    
    16.8
    
    
    
    (56.9
    )Cumulative Gap
    
    
    (2,071.1
    )
    
    
    (872.3
    )
    
    
    (73.7
    )
    
    
    (56.9
    )
    
    
    (56.9
    )Ratio of Cumulative Gap to Cumulative Liabilities
    
    
    (9.8
    )%
    
    
    (3.7
    )%
    
    
    (0.3
    )%
    
    
    (0.2
    )%Ratio of Cumulative Gap to Total Liabilities
    
    
    (8.8
    )%
    
    
    (3.7
    )%
    
    
    (0.3
    )%
    
    
    (0.2
    )%
 Principal plus CER adjustment. Does not include interest.(1)
    
    Includes, mainly, debt with retailers due to credit card operations, liabilities in connection with repurchase transactions, debt
with domestic credit agencies and collections for third parties. The Less than One Year bucket also includes Ps.6.4 million
corresponding to the Banks foreign debt not tendered by its holders in the exchange offered to restructure such foreign debt, which
was completed in May 2004.  134




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##### Table of Contents



Banco Galicia (Unconsolidated) Liquidity Management
   As of December 31, 2009(in millions of Pesos)Legal Requirement
    
    Ps.
    3,819.8Excess Liquidity
    
    
    2,319.0Total Liquidity (1)
    
    Ps.
    6,138.8
 (1)
    
    Excludes cash and due from banks of consolidated companies.    135




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##### Table of Contents



Capital
  As of December 31,2009
    
    
    2008
    
    
    2007(in millions of Pesos, except ratios, multiples and percentages)Shareholders Equity
    
    Ps.
    2,052.5
    
    
    Ps.
    1,845.7
    
    
    Ps.
    1,654.5Shareholders Equity as a Percentage of Total Assets
    
    
    7.44
    %
    
    
    7.46
    %
    
    
    7.25
    %Total Liabilities as a Multiple of Total Shareholders Equity
    
    
    12.45
    x
    
    
    12.40
    x
    
    
    12.80
    xTangible Shareholders Equity (1) as a Percentage of Total Assets
    
    
    5.36
    %
    
    
    5.17
    %
    
    
    5.28
    %
 (1)
    
    Tangible shareholders equity represents shareholders equity minus intangible assets.  
 Capital Expenditures
    136




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 
 Our Board of Directors
 th
 Principal
    
    Member
    
    CurrentName
    
    Position
    
    Date of Birth
    
    Occupation
    
    Since
    
    Term EndsEduardo J. Escasany
    
    Chairman
    
    June 30, 1950
    
    Businessman
    
    April 2005
    
    December 2012Pablo Gutiérrez
    
    Vice Chairman
    
    December 9, 1959
    
    Banker
    
    April 2003
    
    December 2012Abel Ayerza
    
    Director
    
    May 27, 1939
    
    Businessman
    
    September 1999
    
    December 2011Federico Braun
    
    Director
    
    February 4, 1950
    
    Businessman
    
    September 1999
    
    December 2010Antonio R. Garcés
    
    Director
    
    May 30, 1942
    
    Banker
    
    April 2002
    
    December 2010Enrique Martin
    
    Director
    
    October 19, 1945
    
    Businessman
    
    April 2006
    
    December 2011Luis O. Oddone
    
    Director
    
    May 11, 1938
    
    Businessman
    
    April 2005
    
    December 2012Silvestre Vila Moret
    
    Director
    
    April 26, 1971
    
    Businessman
    
    June 2002
    
    December 2010Eduardo J. Zimmermann
    
    Director
    
    January 3, 1931
    
    Businessman
    
    April 2000
    
    December 2011María Ofelia Hordeñana
de Escasany
    
    Alternate Director
    
    December 30, 1920
    
    Businesswoman
    
    April 2000
    
    December 2010Sergio Grinenco
    
    Alternate Director
    
    May 26, 1948
    
    Banker
    
    April 2003
    
    December 2011Alejandro Rojas Lagarde
    
    Alternate Director
    
    July 17, 1937
    
    Lawyer
    
    April 2000
    
    December 2011Luis S. Monsegur
    
    Alternate Director
    
    August 15, 1936
    
    Accountant
    
    April 2000
    
    December 2010
  Eduardo Escasany:
 Pablo Gutiérrez:
 Abel Ayerza:
  137




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##### Table of Contents



Federico Braun:
 Antonio Garcés:
 Enrique Martin:
 Luis Omar Oddone:
 Silvestre Vila Moret
 Eduardo Jesús Zimmermann:
 María Ofelia Hordeñana de Escasany:
 Sergio Grinenco
  138




---



##### Table of Contents



Alejandro María Rojas Lagarde:
 Luis Sila Monsegur:
    
 Our Audit Committee
   
 Our Supervisory Committee
   139




---



##### Table of Contents



Principal
    
    CurrentName
    
    Position
    
    Occupation
    
    Term EndsNorberto Corizzo
    
    Syndic
    
    Accountant
    
    December 2010Luis A. Díaz
    
    Syndic
    
    Accountant
    
    December 2010Enrique M. Garda Olaciregui
    
    Syndic
    
    Lawyer
    
    December 2010Miguel Armando
    
    Alternate Syndic
    
    Lawyer
    
    December 2010Fernando Noetinger
    
    Alternate Syndic
    
    Lawyer
    
    December 2010Horacio Tedín
    
    Alternate Syndic
    
    Lawyer
    
    December 2010
  Norberto Corizzo:
 Luis Díaz:
 Enrique M. Garda Olaciregui:
 Miguel Armando
 Fernando Noetinger
 Horacio Tedín:
  140




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##### Table of Contents



Compensation of Our Directors
  th
   
 Management of Grupo Financiero Galicia
      141




---



##### Table of Contents



Board of Directors of Banco Galicia
  Date of
    
    Principal
    
    Member
    
    CurrentName
    
    Position
    
    Birth
    
    Occupation
    
    Since
    
    Term EndsAntonio R. Garcés
    
    Chairman of the
Board
    
    May 30, 1942
    
    Banker
    
    September 2001
    
    December 2011Sergio Grinenco
    
    Vice Chairman
    
    May 26, 1948
    
    Banker
    
    April 2003
    
    December 2011Guillermo J. Pando
    
    Secretary Director
    
    October 23, 1948
    
    Banker
    
    April 2003
    
    December 2012Pablo Gutierrez
    
    Director
    
    December 9, 1959
    
    Banker
    
    April 2005
    
    December 2011Luis M. Ribaya
    
    Director
    
    July 17, 1952
    
    Banker
    
    September 2001
    
    December 2010Pablo M. Garat (1)
    
    Director
    
    January 12, 1953
    
    Lawyer
    
    April 2004
    
    December 2012Ignacio A. González García(1)
(3)
    
    Director
    
    April 23, 1944
    
    Accountant
    
    April 2010
    
    December 2012Enrique García Pinto
    
    Alternate Director
    
    August 10, 1948
    
    
    
    April 2009
    
    December 2011Raúl Héctor Seoane
    
    Alternate Director
    
    July 18, 1953
    
    Banker
    
    April 2005
    
    December 2011Juan C. Fossatti (2) (3)
    
    Alternate Director
    
    September 11, 1955
    
    Lawyer
    
    June 2002
    
    December 2012Julio P. Naveyra (2)
    
    Alternate Director
    
    March 24, 1941
    
    Accountant
    
    April 2004
    
    December 2012Osvaldo H. Canova (2)
    
    Alternate Director
    
    December 8, 1934
    
    Accountant
    
    April 2004
    
    December 2012
 (1)
    
    In accordance with the rules of the CNV, and pursuant to the classifications adopted by the CNV, Messrs. Pablo M. Garat and Ignacio A.
González García are independent and were elected at the ordinary shareholders meeting held on April 14, 2010. The Board of Directors
meeting held on April 15, 2010 elected them as members of the Audit Committee. Messrs. Garat and González García are also independent
directors in accordance with the Nasdaq rules.(2)
    
    In accordance with the rules of the CNV, and pursuant to the classifications adopted by the CNV, Mr. Fossatti, Mr. Canova and Mr.
Naveyra are independent alternate directors. They would replace the independent directors in case of vacancy. They are also independent
directors in accordance with the Nasdaq rules.(3)
    
    Mr. Juan Carlos Fossatti, has assumed the position as Director until Mr. Ignacio A. González García obtains the authorization from the
Argentine Central Bank to assume the position, which is still pending.  Antonio Roberto Garcés
 Sergio Grinenco
 Guillermo Juan Pando
 Pablo Gutierrez
  142




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##### Table of Contents



Luis María Ribaya
 Pablo María Garat
 Ignacio Abel González García:
 Raúl Héctor Seoane
 Enrique García Pinto:
 Juan Carlos Fossatti
 Julio Pedro Naveyra:
 Osvaldo Héctor Canova:
 
 Functions of the Board of Directors of Banco Galicia
    143




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##### Table of Contents



Risk Management Committee:
 Credit Committee:
 Information Technology Committee:
 Audit Committee:
 Committee for the Control and Prevention of Money Laundering and Funding of Terrorist
Activities:
 Committee for Information Integrity:
  144




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##### Table of Contents



Human Resources Committee:
 Asset and Liabilities Committee (Alco):
 Customer Assistance Committee:
 Planning and Management Control Committee:
 Segments and Business Management Committee:
  
 Banco Galicias Executive Officers
    145




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##### Table of Contents



Daniel Antonio Llambías
  Division
    
    ManagerRetail Banking
    
    Juan SarquisWholesale Banking
    
    Gastón BourdieuFinancial
    
    Pablo María LeonRisk Management
    
    Juan Carlos LAfflittoCredit
    
    Marcelo PonciniComprehensive Corporate Services
    
    Miguel Ángel PeñaOrganizational Development and Human Resources
    
    Enrique BehrendsPlanning and Financial Control
    
    Raúl H. Seoane
 Retail Banking Division
 Wholesale Banking Division
 Financial Division
 Credit Division
 Comprehensive Corporate Services Division
 Organizational Development and Human Resources Division
  146




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##### Table of Contents



Planning and Financial Control Division
  Department
    
    ManagerLegal Advisory Services Department
    
    María Elena CasasnovasResearch Department
    
    Nicolás Dujovne
 Legal Advisory Services Department
 Research Department
  Department
    
    ManagerInternal Audit
    
    Omar SeveriniInstitutional Affairs and Press Department
    
    Diego Francisco VidelaAnti-money Laundering Unit
    
    Claudia Estecho
 Internal Audit Department
 Institutional Affairs and Press Department
 Anti-money Laundering Unit
  Juan H. Sarquís:
 Gastón Bourdieu
 Pablo M. Leon
  147




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##### Table of Contents



Juan Carlos LAfflitto
 Marcelo Poncini
 Miguel Angel Peña: Asociación Argentina de Usuarios de la Informática y las Comunicaciones
 Enrique Carlos Behrends:
 Raúl H. Seoane See Board of Directors of Banco Galicia.
 María Elena Casasnovas
 Nicolás Dujovne
 Omar Severini:
 Diego Francisco Videla:
 Claudia Raquel Estecho:
 
 Banco Galicias Supervisory Committee
   148




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##### Table of Contents



Year of
    
    
    
    PrincipalName
    
    Appointment
    
    Position
    
    Occupation
    
    Current Term EndsEnrique M. Garda Olaciregui
    
    
    2010
    
    
    Syndic
    
    Lawyer
    
    December 31, 2010Norberto D. Corizzo
    
    
    2010
    
    
    Syndic
    
    Accountant
    
    December 31, 2010Luis A. Díaz
    
    
    2010
    
    
    Syndic
    
    Accountant
    
    December 31, 2010Fernando Noetinger
    
    
    2010
    
    
    Alternate Syndic
    
    Lawyer
    
    December 31, 2010Miguel N. Armando
    
    
    2010
    
    
    Alternate Syndic
    
    Lawyer
    
    December 31, 2010Ricardo A. Bertoglio
    
    
    2010
    
    
    Alternate Syndic
    
    Accountant
    
    December 31, 2010
  Ricardo Adolfo Bertoglio
 
 Compensation of Banco Galicias Directors and Officers
      
    
    total compensation, including salaries, variable compensation and other related
concepts for the directors that are also employees and for executive and supervision
functions they perform, and
 
    
    compensation for the independent directors.
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##### Table of Contents



Employees
  As of December 31,2009
    
    
    2008
    
    
    2007Grupo Financiero Galicia S.A.
    
    
    10
    
    
    
    9
    
    
    
    10Banco de Galicia y Buenos Aires S.A.
    
    
    5,028
    
    
    
    5,324
    
    
    
    5,164Branches
    
    
    2.636
    
    
    
    2,888
    
    
    
    2,604Head Office
    
    
    2.392
    
    
    
    2,436
    
    
    
    2,560Galicia Uruguay
    
    
    8
    
    
    
    10
    
    
    
    13Regional Credit-Card Companies
    
    
    3,936
    
    
    
    3,898
    
    
    
    3,769Sudamericana Consolidated
    
    
    116
    
    
    
    105
    
    
    
    96Other Subsidiaries
    
    
    44
    
    
    
    62
    
    
    
    51Total
    
    
    9.142
    
    
    
    9,408
    
    
    
    9,103
    
 Nasdaq Corporate Governance Standards
  (i)
    
    Rule 5250 (d)  Distribution of Annual and Interim Reports. In lieu of the requirements
of Rule 5250 (d), we follow Argentine law, which requires that companies make public a
Spanish language annual report, including annual audited consolidated financial statements,
by filing such annual report with the CNV and the BASE, within 70 calendar days of the end
of the companys fiscal year. Interim reports must be filed with the CNV and the BASE
within 42 calendar days of the end of each fiscal quarter. The BASE publishes the annual
reports and interim reports in the BASE bulletin and makes the bulletin available for
inspection at its offices. In addition, our shareholders can receive copies of our annual
reports and any interim reports upon such shareholders request.
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(ii)
    
    Rule 5605 (b) (1)  Majority of Independent Directors. In lieu of the requirements of
Rule 5605 (b) (1), we follow Argentine law, which does not require that a majority of the
board of directors be comprised of independent directors. Argentine law instead requires
that public companies in Argentina such as us must have a sufficient number of independent
directors to be able to form an audit committee of at least three members, the majority of
which must be independent pursuant to the criteria established by the CNV. In addition,
because we are a controlled company as defined in Rule 5615 (c) (1), we are relying on
the exemption provided thereby for purposes of complying with Rule 5615 (c) (2).
 (iii)
    
    Rule 5605 (b) (2)  Executive Sessions of Independent Directors. In lieu of the
requirements of Rule 5605 (b) (2), we follow Argentine law which does not require
independent directors to hold regularly scheduled meetings at which only such independent
directors are present (i.e., executive sessions). Our Board of Directors as a whole is
responsible for monitoring our affairs. In addition, under Argentine law, the board of
directors may approve the delegation of specific responsibilities to designated directors
or non-director managers of the company. Also, it is mandatory for public companies to form
a supervisory committee (composed of syndics), which is responsible for monitoring the
legality of the companys actions under Argentine law and the conformity thereof with its
by-laws. Finally, our audit committee has regularly scheduled meetings and, as such, such
meetings will serve a substantially similar purpose as executive sessions.
 (iv)
    
    Rule 5605 (d)  Compensation of Officers. In lieu of the requirements of Rule 5605 (d),
we follow Argentine law, which does not require companies to form a compensation committee
comprised solely of independent directors. It also is not required in Argentine law that
the compensation of the chief executive officer and all other executive officers be
determined by either a majority of the independent directors or a compensation committee
comprised solely of independent directors. Under Argentine law, the board of directors is
the corporate body responsible for determining the compensation of the chief executive
officer and all other executive officers, so long as they are not directors. In addition,
under Argentine law, the audit committee shall give its opinion about the reasonableness of
managements proposals on fees and option plans for directors or managers of the company.
Finally, because we are a controlled company as defined in Rule 5615 (c) (1), we are
relying on the exemption provided thereby for purposes of complying with Rule 5615 (c) (2).
 (v)
    
    Rule 5605 (e) (1)  Nomination of Directors. In lieu of the requirements of Rule 5605
(e) (1), we follow Argentine law which requires that directors be nominated directly by the
shareholders at the shareholders meeting and that they be selected and recommended by the
shareholders themselves. Under Argentine law, it is the responsibility of the ordinary
shareholders meeting to appoint and remove directors and to set their compensation. In
addition, because we are a controlled company as defined in Rule 5615 (c) (1), we are
relying on the exemption provided thereby for purposes of complying with Rule 5615 (c) (2).
 (vi)
    
    Rule 5605 (c) (1)  Audit Committee Charter. In lieu of the requirements of Rule 5605
(c) (1), we follow Argentine law, which requires that audit committees have a charter but
does not require that companies certify as to the adoption of the charter nor does it
require an annual review and assessment thereof. Argentine law instead requires that
companies prepare a proposed plan or course of action with respect to those matters, which
are the responsibility of the companys audit committee. Such plan or course of
action could, at the discretion of our audit committee, include a review and assessment of
the audit committee charter.
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(vii)
    
    Rule 5605 (c) (2)  Audit Committee Composition. Argentine law does not require, and
it is equally not customary business practice in Argentina, that companies have an audit
committee comprised solely of independent directors. Argentine law instead requires that
companies establish an audit committee with at least three members comprised of a majority
of independent directors as defined by Argentine law. Nonetheless, although not required by
Argentine law, we have a three member audit committee comprised of entirely independent
directors, as independence is defined in Rule 10 A-3 (b) (1), one of which the Board of
Directors has determined to be an audit committee financial expert. In addition, we have a
supervisory committee (comisión fiscalizadora) composed of three syndics, which are in
charge of monitoring the legality, under Argentine law, of the actions of our board of
directors and the conformity of such actions with our by-laws.
 (viii)
    
    Rule 5620 (c)  Quorum. In lieu of the requirements of Rule 5620 (c), we follow Argentine
law and our bylaws, which distinguish between ordinary meetings and extraordinary meetings
and require, in connection with ordinary meetings, that a quorum consist of a majority of
stock entitled to vote. If no quorum is present at the first meeting, a second meeting may
be called at which the shareholders present, whatever their number, constitute a quorum and
resolutions may be adopted by an absolute majority of the votes present. Argentine law and
our bylaws require, in connection with extraordinary meetings, that a quorum consist of 60%
of the stock entitled to vote. However, if such quorum is not present at the first meeting,
our bylaws provide that a second meeting may be called which may be held with the number of
shareholders present. In both ordinary and extraordinary meetings, decisions are adopted by
an absolute majority of votes present at the meeting, except for certain fundamental
matters (such as mergers and spin-offs (when we are not the surviving entity and the
surviving entity is not listed on any stock exchange), anticipated liquidation, a change in
our domicile to outside of Argentina, total or partial recapitalization of our statutory
capital following a loss, any transformation in our corporate legal form or a substantial
change in our corporate purpose) which require an approval by vote of the majority of all
the stock entitled to vote (all stock being entitled to only one vote).
 (ix)
    
    Rule 5620 (b)  Solicitation of Proxies. In lieu of the requirements of Rule 5620 (b),
we follow Argentine law which requires that notices of shareholders meetings be published,
for five consecutive days, in the Official Gazette and in a widely circulated newspaper in
Argentina no earlier than 45 calendar days prior to the meeting and at least 20 calendar
days prior to such meeting. In order to attend a meeting and be listed on the meeting
registry, shareholders are required to submit evidence of their book-entry share account
held at Caja de Valores S.A. (Caja de Valores) up to three business days prior to the
scheduled meeting date. If entitled to attend the meeting, a shareholder may be represented
by proxy (properly executed and delivered with a certified signature) granted to any other
person, with the exception of a director, syndic, member of the surveillance committee
(consejo de vigilancia), manager or employee of the issuer, which are prohibited by
Argentine law from acting as proxies. In addition, our ADR holders receive, prior to the
shareholders meeting, a notice listing the matters on the agenda, a copy of the annual
report and a voting card.
 (x)
    
    Rule 5630 (a)  Conflicts of Interest. In lieu of the requirements of Rule 5630 (a), we
follow Argentine law which requires that related party transactions be approved by the
audit committee when the transaction exceeds one percent (1%) of the corporations net
worth, measured pursuant to the last audited balance sheet, so long as the relevant
transaction exceeds the equivalent of three hundred thousand Argentine Pesos (Ps.300,000).
Directors can contract with the corporation only on terms consistent with prevailing market
terms. If the contract is not in accordance with prevailing market terms, such transaction
must be pre-approved by the board of directors (excluding the interested director). In
addition, under Argentine law, a shareholder is required to abstain from voting on a
business transaction in which its interests may be in conflict with the interests of the
company. In the event such shareholder votes on such business transaction and such business
transaction would not have been approved without such shareholders vote, such shareholder
may be liable to the company for damages and the resolution may be declared void.
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Share Ownership
  
 Item 7. Major Shareholders and Related Party Transactions
 
 Major Shareholders
    Class A Shares
 Name
    
    Class A Shares
    
    % of Class A Shares
    
    
    % of Total VotesEBA Holding S.A.
    
    281,221,650 class A shares
    
    
    100
    
    
    
    59.4
 Class B Shares
 Name
    
    Class B Shares
    
    % of Class B Shares
    
    
    % of Total VotesThe Bank of New York(1)
    
    331,544,340 class B shares
    
    
    34.5
    
    
    
    14.0ANSES (2)
    
    253,745,743 class B shares
    
    
    26.4
    
    
    
    10.7EBA Holding Shareholders(3)
    
    127,424,761 class B shares
    
    
    13.3
    
    
    
    5.4Banco Santander (4)
    
    82,741,540 class B shares
    
    
    8.6
    
    
    
    3.5
 (1)
    
    Pursuant to the requirements of Argentine law, all class B shares represented by ADSs are owned of record by The Bank of New York, as
Depositary. The address for the Bank of New York is 101 Barclay Street, New York 10286, and the country of organization is the United States.
This includes the holdings of Banco Santander.(2)
    
    ANSES holding is obtained through information supplied by Caja de Valores and information gathered from the ANSES. Said holding includes
46,521,340 shares in ADS.(3)
    
    No member holds more than 2.0% of the capital stock. Said holding includes 25,959,510 shares in the form of ADS.(4)
    
    Information is based on the 20-F filed by Banco Santander dated June 30, 2009. The address for Banco Santander is Ciudad Grupo Santander
28660, Boadilla del Monte, Madrid, Spain, and the country of organization is the Kingdom of Spain. The holding is in ADRs.  Name
    
    Shares
    
    % of Shares
    
    
    % of Total VotesThe Bank of New York
    
    331,544,340 class B shares
    
    
    26.7
    
    
    
    14.0EBA Holding S.A.
    
    281,221,650 class A shares
    
    
    22.7
    
    
    
    59.4ANSES
    
    253,745,743 class B shares
    
    
    20.4
    
    
    
    10.7EBA Holding Shareholders
    
    127,424,761 class B shares
    
    
    10.3
    
    
    
    5.4Banco Santander
    
    82,741,540 class B shares
    
    
    6.7
    
    
    
    3.5
  153




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Related Party Transactions
   Outstanding amountEntity
    
    Granted in
    
    Rate
    
    
    Original Amount
    
    
    December 31, 2009
    
    
    April 30, 2010%
    
    
    (in millions of Pesos)Net Investment S.A.
    
    Nov/Apr 2009
    
    
    0.0
    
    
    Ps.
    0.20
    
    
    Ps.
    0.20
    
    
    Ps.
    0.10GV Mandataria de Valores S.A.
    
    Nov/Sep 2009
    
    
    0.0
    
    
    Ps.
    0.57
    
    
    Ps.
    0.76
    
    
    Ps.
    0.57
  154




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##### Table of Contents



April 30, 2010
    
    
    December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007In millions of Pesos, except as notedAggregate Total Financial Exposure
    
    Ps.
    83.3
    
    
    Ps.
    76.0
    
    
    Ps.
    74.9
    
    
    Ps.
    40.8Number of Recipient Related Parties
    
    
    225
    
    
    
    219
    
    
    
    221
    
    
    
    207Individuals
    
    
    174
    
    
    
    172
    
    
    
    174
    
    
    
    168Companies
    
    
    51
    
    
    
    47
    
    
    
    47
    
    
    
    39Average Total Financial Exposure
    
    Ps.
    0.4
    
    
    Ps.
    0.3
    
    
    Ps.
    0.3
    
    
    Ps.
    0.2Single Largest Exposure
    
    Ps.
    19.3
    
    
    Ps.
    18.9
    
    
    Ps.
    30.5
    
    
    Ps.
    11.6
   
 Item 8. Financial Information
   155




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Legal Proceedings
  Theseus S.A. y
otra c/ Banco de Galicia y Buenos Aires S.A. y Grupo Financiero Galicia S.A. s/ Ordinario
  Banco Galicia
  amparo
  156




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##### Table of Contents



Legal Proceedings Grupo Financiero Galicia
 Regional Credit Card Companies
  
 Dividend Policy and Dividends
 Dividend Policy
      157




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##### Table of Contents



(amparos)
  
    
    Calculation of the distributable profits subtracting the net difference between
the book value and the market price of the government debt.
 
    
    Compliance with minimum capital requirements plus 30% after the payment of the
dividend.
 
    
    Compliance with minimum capital cash reserves after the payment of the dividend.
  In millions of PesosTo Legal Reserve
    
    
    34.4To Next Fiscal Year
    
    
    297.4
 amparo
  158




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##### Table of Contents



Dividends
   
 Significant Changes
 Grupo Financiero Galicia
   Banco Galicia
      159




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##### Table of Contents



Item 9. The Offer and Listing
 
 Shares and ADSs
    Grupo Financiero Galicia  Class B Shares Buenos Aires Stock Exchange (in Pesos)
 Average Daily VolumeHigh
    
    
    Low
    
    
    (in thousands of Class B shares)Calendar Year2005
    
    
    2.81
    
    
    
    2.06
    
    
    
    4,784.62006
    
    
    2.86
    
    
    
    1.72
    
    
    
    2,045.32007
    
    
    3.37
    
    
    
    2.23
    
    
    
    1,924.82008
    
    
    2.36
    
    
    
    0.57
    
    
    
    3,549.42009
    
    
    1.81
    
    
    
    0.61
    
    
    
    2,471.5Two Most Recent Fiscal Years2008First Quarter
    
    
    2.36
    
    
    
    1.94
    
    
    
    1,290.8Second Quarter
    
    
    2.26
    
    
    
    1.57
    
    
    
    1,465.5Third Quarter
    
    
    1.63
    
    
    
    1.12
    
    
    
    1,642.9Fourth Quarter
    
    
    1.56
    
    
    
    0.57
    
    
    
    3,549.42009First Quarter
    
    
    0.88
    
    
    
    0.61
    
    
    
    1,497.9Second Quarter
    
    
    1.28
    
    
    
    0.70
    
    
    
    2,669.4Third Quarter
    
    
    1.81
    
    
    
    1.26
    
    
    
    1,747.7Fourth Quarter
    
    
    2,30
    
    
    
    1,76
    
    
    
    1,742.82010First Quarter
    
    
    2.41
    
    
    
    1.84
    
    
    
    1,306.4Second Quarter (through May 31, 2010)
    
    
    2.53
    
    
    
    2.02
    
    
    
    2,056.8Most Recent Six MonthsDecember 2009
    
    
    2.16
    
    
    
    1.97
    
    
    
    1,155.1January 2010
    
    
    2.24
    
    
    
    1.97
    
    
    
    1,435.3February 2010
    
    
    2.04
    
    
    
    1.84
    
    
    
    926.3March 2010
    
    
    2.41
    
    
    
    1.94
    
    
    
    1,560.9April 2010
    
    
    2.53
    
    
    
    2.35
    
    
    
    1,688.6May 2010
    
    
    2.40
    
    
    
    2.02
    
    
    
    2,444.3
  160




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##### Table of Contents



Grupo Financiero Galicia  Preferred Shares Outstanding from May 13, 2004 to May 11, 2005  Buenos
Aires Stock Exchange (in Pesos)
 Average Daily VolumeHigh
    
    
    Low
    
    
    (in thousands of preferred shares)Calendar Year2005(through May 11, 2005)
    
    
    2.72
    
    
    
    2.03
    
    
    
    183.4Most Recent Fiscal Year2005First Quarter
    
    
    2.72
    
    
    
    2.10
    
    
    
    230.9Second Quarter (through May 11, 2005)
    
    
    2.34
    
    
    
    2.03
    
    
    
    81.8Most Recent Six MonthsDecember 2004
    
    
    2.48
    
    
    
    1.99
    
    
    
    275.2January 2005
    
    
    2.44
    
    
    
    2.26
    
    
    
    146.0February 2005
    
    
    2.69
    
    
    
    2.37
    
    
    
    184.3March 2005
    
    
    2.72
    
    
    
    2.10
    
    
    
    360.3April 2005
    
    
    2.25
    
    
    
    2.03
    
    
    
    100.4May 2005 (through May 11, 2005)
    
    
    2.34
    
    
    
    2.15
    
    
    
    32.9
 Grupo Financiero Galicia  ADSs  Nasdaq Capital Market (in US$)
 Average Daily VolumeHigh
    
    
    Low
    
    
    (in thousands of ADRs)Calendar Year2005
    
    
    9.62
    
    
    
    6.87
    
    
    
    347.32006
    
    
    9.56
    
    
    
    5.61
    
    
    
    190.22007
    
    
    11.12
    
    
    
    6.98
    
    
    
    273.12008
    
    
    7.60
    
    
    
    1.45
    
    
    
    251.62009
    
    
    6.10
    
    
    
    1.56
    
    
    
    160,0Two Most Recent Fiscal Years2008First Quarter
    
    
    7.60
    
    
    
    6.14
    
    
    
    259.3Second Quarter
    
    
    7.07
    
    
    
    4.92
    
    
    
    235.2Third Quarter
    
    
    5.30
    
    
    
    3.63
    
    
    
    222.2Fourth Quarter
    
    
    5.00
    
    
    
    1.45
    
    
    
    290.12009First Quarter
    
    
    2.42
    
    
    
    1.56
    
    
    
    100.9Second Quarter
    
    
    3.28
    
    
    
    1.80
    
    
    
    191.1Third Quarter
    
    
    4.71
    
    
    
    3.10
    
    
    
    163.0Fourth Quarter
    
    
    6.10
    
    
    
    4.55
    
    
    
    187.72010First Quarter
    
    
    6.20
    
    
    
    4.72
    
    
    
    113.6Second Quarter (through May 31, 2010)
    
    
    6.48
    
    
    
    5.12
    
    
    
    171.8Most Recent Six MonthsDecember 2009
    
    
    5.77
    
    
    
    5.27
    
    
    
    87.0January 2010
    
    
    5.99
    
    
    
    5.15
    
    
    
    98.7February 2010
    
    
    5.34
    
    
    
    4.72
    
    
    
    83.8March 2010
    
    
    6.20
    
    
    
    4.90
    
    
    
    150.6April 2010
    
    
    6.48
    
    
    
    5.83
    
    
    
    163.7May 2010
    
    
    6.12
    
    
    
    5.12
    
    
    
    180.3
  161




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Banco Galicia  Class B Shares  Buenos Aires Stock Exchange (in Pesos)
 Average Daily Trading VolumeHigh
    
    
    Low
    
    
    ( in thousand Class B shares)Calendar Year2005
    
    
    4.30
    
    
    
    3.60
    
    
    
    1.962006
    
    
    4.50
    
    
    
    3.04
    
    
    
    1.562007
    
    
    6.46
    
    
    
    4.25
    
    
    
    2.742008
    
    
    4.45
    
    
    
    2.15
    
    
    
    3.302009
    
    
    3.55
    
    
    
    2.10
    
    
    
    6.47Two Most Recent Fiscal Years2008First Quarter
    
    
    4.45
    
    
    
    4.08
    
    
    
    1.87Second Quarter
    
    
    4.45
    
    
    
    3.65
    
    
    
    4.59Third Quarter
    
    
    3.85
    
    
    
    3.69
    
    
    
    0.88Fourth Quarter
    
    
    3.85
    
    
    
    2.40
    
    
    
    4.192009First Quarter
    
    
    2.38
    
    
    
    2.17
    
    
    
    0.69Second Quarter
    
    
    2.30
    
    
    
    2.15
    
    
    
    4.03Third Quarter
    
    
    3.00
    
    
    
    2.10
    
    
    
    14.85Fourth Quarter
    
    
    3.55
    
    
    
    3.04
    
    
    
    6.062010First Quarter
    
    
    4.15
    
    
    
    3.17
    
    
    
    3.51Second Quarter (through May 31, 2010)
    
    
    4.20
    
    
    
    3.50
    
    
    
    1.70Most Recent Six MonthsDecember 2009
    
    
    3.40
    
    
    
    3.20
    
    
    
    1.60January 2010
    
    
    3.70
    
    
    
    3.50
    
    
    
    5.55February 2010
    
    
    3.50
    
    
    
    3.17
    
    
    
    0.52March 2010
    
    
    4.15
    
    
    
    3.20
    
    
    
    4.37April 2010
    
    
    4.11
    
    
    
    3.90
    
    
    
    1.71May 2010
    
    
    4.20
    
    
    
    3.50
    
    
    
    1.79
  
 Argentine Securities Market
   162




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Sistema Integrado de Negociación Asistida
por Computación
 st
  
 Market Regulations
     163




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##### Table of Contents



Item 10. Additional Information
 
 Description of Our Bylaws
 General
    
  164




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##### Table of Contents



Outstanding Capital Stock
  As of December 31, 2009Shares
    
    Number of Shares
    
    
    % of Capital Stock
    
    
    % of Voting RightsClass A Shares
    
    
    281,221,650
    
    
    
    22.65
    
    
    
    59.42Class B Shares
    
    
    960,185,367
    
    
    
    77.35
    
    
    
    40.58Total
    
    
    1,241,407,017
    
    
    
    100.00
    
    
    
    100.00
 Registration and Transfer
   Voting Rights
  
    
    a merger or spin-off in which we are not the surviving corporation, unless the
acquirers shares are authorized to be publicly offered or listed on any stock exchange;
 
    
    a transformation in our legal corporate form;
 
    
    a fundamental change in our corporate purpose;
 
    
    a change of our domicile to outside Argentina;
 
    
    a voluntary termination of our public offering or listing authorization;
 
    
    our continuation following a delisting or a mandatory cancellation of our public
offering or listing authorization;
 
    
    a total or partial recapitalization of our statutory capital following a loss; or
 
    
    the appointment of syndics.
  
    
    EBA Holding sells 100% of its class A shares;
 
    
    EBA Holding sells a portion of our class A shares to a third person who, when
aggregating all our class A shares with our class B shares owned by such person, if any,
obtains 50% plus one vote of our total votes; or
 
    
    the current shareholders of EBA Holding sell shares of EBA Holding that will allow the
buyer to exercise more than 50% of the voting power of EBA Holding at any general
shareholders meeting of EBA Holding shareholders, except for transfers to other current
shareholders of EBA Holding or to their heirs or their legal successors or to entities
owned by any of them.
 Limited Liability of Shareholders
   165




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Directors
      Appointment of Directors and Syndics by Cumulative Voting
  Compensation of Directors
    166




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##### Table of Contents



Syndics
  Shareholders Meetings
  
    
    approval of the financial statements and general performance of the management for the
preceding fiscal year;
 
    
    appointment and remuneration of directors and members of the supervisory committee;
 
    
    allocation of profits; and
 
    
    any other matter the board of directors decides to submit to the shareholders meeting
concerning the companys business administration. Matters which may be discussed at these
or other ordinary meetings include resolutions regarding the responsibility of directors
and members of the supervisory committee, as well as capital increases and the issuance of
negotiable obligations.
       167




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##### Table of Contents



Dividends
       Capital Increases and Reductions
   168




---



##### Table of Contents



Preemptive Rights
      Appraisal Rights
  
    
    a merger or spin-off in which we are not the surviving corporation, unless the
acquirers shares are authorized to be publicly offered or listed on any stock exchange,
 
    
    a transformation in our legal corporate form,
 
    
    a fundamental change in our corporate purpose,
 
    
    a change of our domicile to outside Argentina,
 
    
    a voluntary termination of our public offering or listing authorization,
 
    
    our continuation following a delisting or a mandatory cancellation of our public
offering or listing authorization, or
 
    
    a total or partial recapitalization of our statutory capital following a loss,
     169




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##### Table of Contents



Preferred Stock
   Conflicts of Interest
  Redemption or Repurchase
 
  Liquidation
   170




---



##### Table of Contents



Other Provisions
  
 Exchange Controls
  
 Taxation
  Argentine Taxes
 Taxation of Dividends
    Taxation of Capital Gains
 
    171




---



##### Table of Contents



Procurador del Tesoro
 Transfer Taxes
  Tax on Minimum Notional Income
    Personal Assets Tax
  
  172




---



##### Table of Contents



Other Taxes
  Deposit and Withdrawal of Class B Shares in Exchange for ADSs
  United States Taxes
      173




---



##### Table of Contents



Each prospective purchaser should consult its own tax advisor with respect to the U.S.
Federal, state, local and foreign tax consequences of acquiring, owning or disposing of class B
shares or ADSs.
 Ownership of ADSs in General
  Taxation of Cash Dividends and Distribution of Stock
      174




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##### Table of Contents



Taxation of Capital Gains
     Passive Foreign Investment Company Considerations
     175




---



##### Table of Contents



Backup Withholding and Information Reporting
    New Legislation
  THE ABOVE SUMMARIES ARE NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES
RELATING TO THE OWNERSHIP OF THE CLASS B SHARES OR ADSs. YOU SHOULD CONSULT AN INDEPENDENT TAX
ADVISOR CONCERNING THE TAX CONSEQUENCES OF YOUR PARTICULAR SITUATION.
 
 Material Contracts
   176




---



##### Table of Contents



Documents on Display
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 
 General
   177




---



##### Table of Contents



Interest Rate Risk
    Limit on the Net Financial Income for the First Year
    178




---



##### Table of Contents



Net Portfolio
    
    Net Financial Income(1)(In millions of Pesos, except percentages)
    
    As of December 31, 2009
    
    
    As of December 31, 2008Change in Interest Rates in b.p.
    
    Variation
    
    
    % Change in the NFI
    
    
    Variation
    
    
    % Change in the NFI200
    
    
    (47.3
    )
    
    
    (2.65
    )%
    
    
    (48.0
    )
    
    
    (4.59
    )%150
    
    
    (35.4
    )
    
    
    (1.98
    )%
    
    
    (36.0
    )
    
    
    (3.44
    )%100
    
    
    (23.5
    )
    
    
    (1.32
    )%
    
    
    (23.9
    )
    
    
    (2.29
    )%50
    
    
    (11.8
    )
    
    
    (0.66
    )%
    
    
    (12.0
    )
    
    
    (1.15
    )%Static
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50)
    
    
    12.1
    
    
    
    0.68
    %
    
    
    13.9
    
    
    
    1.33
    %(100)
    
    
    24.8
    
    
    
    1.39
    %
    
    
    23.7
    
    
    
    2.27
    %(150)
    
    
    37.4
    
    
    
    2.10
    %
    
    
    35.4
    
    
    
    3.39
    %(200)
    
    
    50.1
    
    
    
    2.80
    %
    
    
    47.2
    
    
    
    4.52
    %
 Net Trading Portfolio
    
    Net Financial Income(1)(In millions of Pesos, except percentages)
    
    As of December 31, 2009
    
    
    As of December 31, 2008Change in Interest Rates in b.p.
    
    Variation
    
    
    % Change in the NFI
    
    
    Variation
    
    
    % Change in the NFI200
    
    
    32.5
    
    
    
    1.82
    %
    
    
    11.0
    
    
    
    1.05
    %150
    
    
    24.4
    
    
    
    1.37
    %
    
    
    8.3
    
    
    
    0.79
    %100
    
    
    16.3
    
    
    
    0.91
    %
    
    
    5.5
    
    
    
    0.53
    %50
    
    
    8.1
    
    
    
    0.45
    %
    
    
    2.8
    
    
    
    0.27
    %Static
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50)
    
    
    (8.2
    )
    
    
    (0.46
    )%
    
    
    (2.7
    )
    
    
    (0.26
    )%(100)
    
    
    (16.3
    )
    
    
    (0.91
    )%
    
    
    (5.5
    )
    
    
    (0.53
    )%(150)
    
    
    (24.4
    )
    
    
    (1.37
    )%
    
    
    (8.2
    )
    
    
    (0.78
    )%(200)
    
    
    (32.6
    )
    
    
    (1.83
    )%
    
    
    (11.0
    )
    
    
    (1.05
    )%
 Net Non Trading Portfolio
    
    Net Financial Income(1)(In millions of Pesos, except percentages)
    
    As of December 31, 2009
    
    
    As of December 31, 2008Change in Interest Rates in b.p.
    
    Variation
    
    
    % Change in the NFI
    
    
    Variation
    
    
    % Change in the NFI200
    
    
    (79.8
    )
    
    
    (4.47
    )%
    
    
    (59.0
    )
    
    
    (5.65
    )%150
    
    
    (59.8
    )
    
    
    (3.35
    )%
    
    
    (44.3
    )
    
    
    (4.24
    )%100
    
    
    (39.8
    )
    
    
    (2.23
    )%
    
    
    (29.4
    )
    
    
    (2.81
    )%50
    
    
    (19.9
    )
    
    
    (1.11
    )%
    
    
    (14.8
    )
    
    
    (1.41
    )%Static
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50)
    
    
    20.3
    
    
    
    1.14
    %
    
    
    16.6
    
    
    
    1.59
    %(100)
    
    
    41.1
    
    
    
    2.30
    %
    
    
    29.2
    
    
    
    2.79
    %(150)
    
    
    61.8
    
    
    
    3.46
    %
    
    
    43.6
    
    
    
    4.18
    %(200)
    
    
    82.7
    
    
    
    4.63
    %
    
    
    58.2
    
    
    
    5.57
    %
 (1)
    
    Net interest of the first year. Net Present Value of Assets and Liabilities
   179




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##### Table of Contents



Net Portfolio
    
    Net Fair Value(In millions of Pesos, except percentages)
    
    As of December 31, 2009
    
    
    As of December 31, 2008Change in Interest Rates in b.p.
    
    Variation
    
    
    % Change in the RPC
    
    
    Variation
    
    
    % Change in the RPC200
    
    
    (104.6
    )
    
    
    (3.80
    )%
    
    
    (4.6
    )
    
    
    (0.18
    )%150
    
    
    (80.1
    )
    
    
    (2.91
    )%
    
    
    (3.6
    )
    
    
    (0.14
    )%100
    
    
    (54.6
    )
    
    
    (1.98
    )%
    
    
    (2.7
    )
    
    
    (0.11
    )%50
    
    
    (27.9
    )
    
    
    (1.01
    )%
    
    
    (1.2
    )
    
    
    (0.05
    )%Static
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50)
    
    
    29.2
    
    
    
    1.06
    %
    
    
    1.3
    
    
    
    0.05
    %(100)
    
    
    59.7
    
    
    
    2.17
    %
    
    
    2.6
    
    
    
    0.10
    %(150)
    
    
    91.7
    
    
    
    3.33
    %
    
    
    4.0
    
    
    
    0.15
    %(200)
    
    
    125.3
    
    
    
    4.55
    %
    
    
    5.3
    
    
    
    0.21
    %
 Net Trading Portfolio
    
    Net Fair Value(In millions of Pesos, except percentages)
    
    As of December 31, 2009
    
    
    As of December 31, 2008Change in Interest Rates in b.p.
    
    Variation
    
    
    % Change in the RPC
    
    
    Variation
    
    
    % Change in the RPC200
    
    
    (5.3
    )
    
    
    (0.19
    )%
    
    
    (0.7
    )
    
    
    (0.03
    )%150
    
    
    (4.0
    )
    
    
    (0.15
    )%
    
    
    (0.5
    )
    
    
    (0.02
    )%100
    
    
    (2.6
    )
    
    
    (0.09
    )%
    
    
    (0.3
    )
    
    
    (0.01
    )%50
    
    
    (1.3
    )
    
    
    (0.05
    )%
    
    
    (0.2
    )
    
    
    (0.01
    )%Static
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50)
    
    
    1.3
    
    
    
    0.05
    %
    
    
    0.2
    
    
    
    0.01
    %(100)
    
    
    2.6
    
    
    
    0.09
    %
    
    
    0.4
    
    
    
    0.02
    %(150)
    
    
    3.9
    
    
    
    0.14
    %
    
    
    0.5
    
    
    
    0.02
    %(200)
    
    
    5.2
    
    
    
    0.19
    %
    
    
    0.7
    
    
    
    0.03
    %
 Net Non Trading Portfolio
    
    Net Fair Value(In millions of Pesos, except percentages)
    
    As of December 31, 2009
    
    
    As of December 31, 2008Change in Interest Rates in b.p.
    
    Variation
    
    
    % Change in the RPC
    
    
    Variation
    
    
    % Change in the RPC200
    
    
    (99.3
    )
    
    
    (3.61
    )%
    
    
    (3.9
    )
    
    
    (0.15
    )%150
    
    
    (76.1
    )
    
    
    (2.76
    )%
    
    
    (3.1
    )
    
    
    (0.12
    )%100
    
    
    (52.0
    )
    
    
    (1.89
    )%
    
    
    (2.4
    )
    
    
    (0.10
    )%50
    
    
    (26.6
    )
    
    
    (0.97
    )%
    
    
    (1.0
    )
    
    
    (0.04
    )%Static(50)
    
    
    27.9
    
    
    
    1.01
    %
    
    
    1.1
    
    
    
    0.04
    %(100)
    
    
    57.1
    
    
    
    2.07
    %
    
    
    2.2
    
    
    
    0.09
    %(150)
    
    
    87.8
    
    
    
    3.19
    %
    
    
    3.5
    
    
    
    0.14
    %(200)
    
    
    120.1
    
    
    
    4.36
    %
    
    
    4.6
    
    
    
    0.18
    %
  180




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##### Table of Contents



Foreign Exchange Rate Risk
      Value of Foreign Currency Net Position as ofDecember 31, 2009Percentage Change in the Value of the Peso Relative to the Dollar(1)
    
    Amount
    
    
    Absolute Variation
    
    
    % Change(In millions of Pesos, except percentages)40%
    
    
    85.5
    
    
    
    24.4
    
    
    
    39.930%
    
    
    79.4
    
    
    
    18.3
    
    
    
    30.020%
    
    
    73.3
    
    
    
    12.2
    
    
    
    20.010%
    
    
    67.2
    
    
    
    6.1
    
    
    
    10.0Static
    
    
    61.1
    (2)
    
    
    
    
    
    
    (10)%
    
    
    55.0
    
    
    
    (6.1
    )
    
    
    (10.0
    )(20)%
    
    
    48.9
    
    
    
    (12.2
    )
    
    
    (20.0
    )(30)%
    
    
    42.8
    
    
    
    (18.3
    )
    
    
    (30.0
    )(40)%
    
    
    36.7
    
    
    
    (24.4
    )
    
    
    (39.9
    )
 (1)
    
    Devaluation / (Revaluation).(2)
    
    Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts.  181




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##### Table of Contents



Value of Foreign Currency Net Position as ofDecember 31, 2008Percentage Change in the Value of the Peso Relative to the Dollar(1)
    
    Amount
    
    
    Absolute Variation
    
    
    % Change(In millions of Pesos, except percentages)40%
    
    
    318.6
    
    
    
    91.0
    
    
    
    40.030%
    
    
    295.9
    
    
    
    68.3
    
    
    
    30.020%
    
    
    273.1
    
    
    
    45.5
    
    
    
    20.010%
    
    
    250.4
    
    
    
    22.8
    
    
    
    10.0Static
    
    
    227.6
    (2)
    
    
    
    
    
    
    (10)%
    
    
    204.8
    
    
    
    (22.8
    )
    
    
    (10.0
    )(20)%
    
    
    182.1
    
    
    
    (45.5
    )
    
    
    (20.0
    )(30)%
    
    
    159.3
    
    
    
    (68.3
    )
    
    
    (30.0
    )(40)%
    
    
    136.6
    
    
    
    (91.0
    )
    
    
    (40.0
    )
 (1)
    
    Devaluation / (Revaluation).(2)
    
    Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts. Value of Foreign Currency Net Position as ofDecember 31, 2007Percentage Change in the Value of the Peso Relative to the Dollar(1)
    
    Amount
    
    
    Absolute Variation
    
    
    % Change(In millions of Pesos, except percentages)40%
    
    
    453.9
    
    
    
    129.7
    
    
    
    40.030%
    
    
    421.5
    
    
    
    97.3
    
    
    
    30.020%
    
    
    389.0
    
    
    
    64.8
    
    
    
    20.010%
    
    
    356.6
    
    
    
    32.4
    
    
    
    10.0Static
    
    
    324.2
    (2)
    
    
    
    
    
    
    (10)%
    
    
    291.8
    
    
    
    (32.4
    )
    
    
    (10.0
    )(20)%
    
    
    259.4
    
    
    
    (64.8
    )
    
    
    (20.0
    )(30)%
    
    
    226.9
    
    
    
    (97.3
    )
    
    
    (30.0
    )(40)%
    
    
    194.5
    
    
    
    (129.7
    )
    
    
    (40.0
    )
 (1)
    
    Devaluation / (Revaluation).(2)
    
    Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts. 
 Currency Mismatches
    182




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##### Table of Contents



As of December 31, 2009Assets
    
    
    Liabilities
    
    
    Gap(In millions of Pesos)Financial Assets and Liabilities
    
    
    23,663.4
    
    
    
    24,016.6
    
    
    
    (353.2
    )Pesos  Adjusted by CER
    
    
    887.5
    
    
    
    14.9
    
    
    
    872.6Pesos  Unadjusted
    
    
    15,976.8
    
    
    
    17,026.6
    
    
    
    (1,049.8
    )Foreign Currency (1)
    
    
    6,799.1
    
    
    
    6,975.1
    
    
    
    (176.0
    )Other Assets and Liabilities
    
    
    3,561.3
    
    
    
    1,081.6
    
    
    
    2,479.8Total Gap
    
    
    27,224.7
    
    
    
    25,098.2
    
    
    
    2,126.5Adjusted for Forward Transactions Recorded in Memo Accounts
Financial Assets and Liabilities
    
    
    23,663.4
    
    
    
    24,016.6
    
    
    
    (353.2
    )Pesos  Adjusted by the CER
    
    
    887.5
    
    
    
    14.9
    
    
    
    872.6Pesos  Unadjusted, Including Shareholders Equity (2)
    
    
    13,638.8
    
    
    
    14,925.7
    
    
    
    (1,286.9
    )Foreign Currency (1)(2)
    
    
    9,137.1
    
    
    
    9,076.0
    
    
    
    61.1Other Assets and Liabilities
    
    
    3,561.3
    
    
    
    1,081.6
    
    
    
    2,479.7Total Adjusted Gap
    
    
    27,224.7
    
    
    
    25,098.2
    
    
    
    2,126.5
 (1)
    
    In Pesos, at an exchange rate of Ps.3.7967 per US$1.0.(2)
    
    Adjusted for forward sales and purchases of foreign exchange made by the Bank and recorded off-balance sheet.  Peso-denominated Assets and Liabilities Adjusted by CER
     Assets and Liabilities Denominated in Foreign Currency
   183




---



##### Table of Contents



Non-Adjusted Peso-Denominated Assets and Liabilities
     184




---



##### Table of Contents



Other Assets and Liabilities
  
 Market Risk
  (i)
    
    A 95% degree of confidence.(ii)
    
    VaR estimates are made for holding periods of one day and n days, where n is
defined as the number of days necessary to liquidate the position in each security.(iii)
    
    In the case of new issuances, the available trading days are taken into consideration;
if there are not enough trading days or if there are no quotations, the volatility of bonds
from domestic issuers with similar risk and characteristics is used.
  
 Item 12. Description of Securities Other Than Equity Securities
 
 Item 12.D. American Depositary Shares
 
 Fees and Charges Applicable to ADS Holders
  Persons depositing or withdrawing shares must pay
    
    For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
    
         Issuance of ADSs, including issuances resulting
from a distribution of shares or rights or other
property     Cancellation of ADSs for the purpose of
withdrawal, including if the deposit agreement
terminates$0.02 (or less) per ADS
    
         Any cash distribution to ADS registered holdersA fee equivalent to the fee that would be payable if
securities distributed to you had been shares and
the shares had been deposited for issuance of ADSs
    
         Distribution of securities distributed to
holders of deposited securities which are distributed
by the depositary to ADS registered holdersRegistration or transfer fees
    
         Transfer and registration of shares on our
share register to or from the name of the depositary or
its agent when you deposit or withdraw shares
  185




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##### Table of Contents



Persons depositing or withdrawing shares must pay
    
    For:Expenses of the depositary
    
         Cable, telex and facsimile transmissions (when
expressly provided in the deposit agreement)     Converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary
or the custodian have to pay on any ADS or share
underlying an ADS, for example, stock transfer
taxes, stamp duty or withholding taxes.
    
         As necessaryAny charges incurred by the depositary or its agents 
for servicing the deposited securities
    
         As necessary
 
 Fees and Direct and Indirect Payments Made by the Depositary to Us
 Past Fees and Payments
  Future Fees and Payments
     186




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##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
        187




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##### Table of Contents



Item 16. [Reserved]
 
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
  
 Item 16C. Principal Accountants Fees and Services
  2009
    
    
    2008(In thousands of Pesos)Audit Fees
    
    
    6,882
    
    
    
    6,756Audit Related Fees
    
    
    1,648
    
    
    
    1,428Tax Fees
    
    
    891
    
    
    
    685All Other Fees
    
    
    964
    
    
    
    656Total
    
    
    10,385
    
    
    
    9,525
 Audit Fees
   188




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##### Table of Contents



Audit-Related Fees
  Tax Fees
  All Other Fees
  Audit Committee Pre-approval
  
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
   189




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##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
 Report of the Independent Registered Public Accounting Firm as of and for the fiscal years ended
December 31, 2009, 2008 and 2007.Consolidated Balance Sheets as of December 31, 2009 and 2008.Consolidated Statements of Income for the years ended December 31, 2009, 2008 and 2007.Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007.Consolidated Statements of Changes in Shareholders Equity for the years ended December 31, 2009,
2008 and 2007.Notes to the Consolidated Financial Statements.You can find our audited consolidated financial statements on pages F-1 to F-94 of this annual
report.
 
 Item 19. Exhibits
 Exhibit
    
    Description1.1
    
    
    Unofficial English language translation of the Bylaws (estatutos sociales).****2.1
    
    
    Form of Deposit Agreement between The Bank of New York and the registrant, including the form
of American Depositary Receipt.*2.2
    
    
    Indenture, dated as of May 18, 2004, among the Bank, The Bank of New York and Banco Rio de la
Plata S.A.**2.3
    
    
    Indenture, dated as of June 4, 2009, among Grupo Financiero Galicia, The Bank of New York
Mellon, Banco de Valores S.A. and The Bank of New York (Luxembourg) S.A.*******2.4
    
    
    Indenture, dated as of June 8, 2010, among Grupo Financiero Galicia, The Bank of New York
Mellon, Banco de Valores S.A. and The Bank of New York Mellon (Luxembourg) S.A.4.1
    
    
    English translation of form of Financial Trust Contract, dated April 16, 2002, among the
Bank, Banco Provincia de Buenos Aires and BAPRO Mandatos y Negocios S.A.***4.2
    
    
    Form of Restructured Loan Facility (as evidenced by the Note Purchase Agreement, dated as of
April 27, 2004, among Banco de Galicia y Buenos Aires S.A., Barclays Bank PLC, the holders
party thereto and Deutsche Bank Trust Company Americas).**4.3
    
    
    Form of First Amendment and Waiver to Restructured Loan Facility (as evidenced by the First
Amendment and Waiver to the Note Purchase Agreement, dated as of December 20, 2004, among
Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust
Company Americas).****
  190




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##### Table of Contents



Exhibit
    
    Description4.4
    
    
    Form of Second Amendment to Restructured Loan Facility (as evidenced by the Second Amendment
to the Note Purchase Agreement, dated as of August 25, 2006, among Banco de Galicia y Buenos
Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).*****4.5
    
    
    Form of Third Amendment to Restructured Loan Facility (as evidenced by the Third Amendment to
the Note Purchase Agreement, dated as of December 28, 2007, among Banco de Galicia y Buenos
Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).******4.6
    
    
    Loan Agreement, dated as of July 24, 2007, between Grupo Financiero Galicia S.A. and Merrill
Lynch International.******4.7
    
    
    Stock Purchase Agreement, dated as of June 1, 2009, among American International Group, Inc.,
AIG Consumer Finance Group, Inc. and Banco de Galicia y Buenos Aires S.A., and the other
parties signatory thereto.8.1
    
    
    For a list of our subsidiaries as of the end of the fiscal year covered by this annual
report, please see Item 4. Information on the Company-Organizational Structure.11.1
    
    
    Code of Ethics.*******11.2
    
    
    Code of Corporate Governance Good Practices.*******12.1
    
    
    Certification of the principal executive officer required under Rule 13a-14(a) or Rule
15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.12.2
    
    
    Certification of the principal financial officer required under Rule 13a-14(a) or Rule
15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.13.1
    
    
    Certification of the principal executive officer required pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.13.2
    
    
    Certification of the principal financial officer required pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Incorporated by reference from our Registration Statement on Form F-4 (333-11960).**
    
    Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31,
2003.***
    
    Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31,
2002.****
    
    Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31,
2004.*****
    
    Incorporated by reference from our Annual Report on Form 20-F for the year ended December
31, 2006.******
    
    Incorporated by reference from our Annual Report on Form 20-F for the year ended December
31, 2007.*******
    
    Incorporated by reference from our Annual Report on Form 20-F for the year ended December
31, 2008.  191




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##### Table of Contents



SIGNATURE
  GRUPO FINANCIERO GALICIA S.A.By:
    /s/ Pedro Alberto RichardsName:
    Pedro RichardsTitle:
    Chief Executive OfficerBy:
    /s/ José Luis GentileName:
    José Luis GentileTitle:
    Chief Financial Officer   192




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##### Table of Contents



GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of the Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    F-3Consolidated Statements of Income for the fiscal years ended December 31, 2009, 2008 and 2007
    
    
    F-6Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2009, 2008 and 2007
    
    
    F-8Consolidated Statements of Changes in Shareholders Equity for the fiscal years ended
December 31, 2009, 2008 and 2007
    
    
    F-10Notes to the Consolidated Financial Statements
    
    
    F-11
  F-1




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##### Table of Contents



Report of the Independent Registered Public Accounting Firm
      
 
  F-2




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 
 Consolidated Balance Sheets
 As of December 31, 2009 and 2008
 December 31,2009
    
    
    2008ASSETSA. Cash and due from banksCash
    
    
    1,379,888
    
    
    
    986,687Financial institutions and correspondents
    
    
    2,316,421
    
    
    
    2,418,446Argentine Central Bank
    
    
    2,066,792
    
    
    
    2,036,164Other local financial institutions
    
    
    6,783
    
    
    
    16,228Foreign
    
    
    242,846
    
    
    
    366,054Ps.
    3,696,309
    
    
    Ps.
    3,405,133B. Government and corporate securitiesHoldings of special investment account securities
    
    
    43,350
    
    
    
    Holdings of trading securities
    
    
    114,186
    
    
    
    252,584Government securities from repo transactions with the Argentine
Central Bank
    
    
    152,650
    
    
    
    127,532Government securities without quotation
    
    
    1,981,972
    
    
    
    595,678Securities issued by the Argentine Central Bank
    
    
    1,615,078
    
    
    
    556,020Investments in quoted corporate securities
    
    
    13,171
    
    
    
    56Ps.
    3,920,407
    
    
    Ps.
    1,531,870C. LoansTo the non-financial public sector
    
    
    25,416
    
    
    
    1,373,642To the financial sector
    
    
    25,352
    
    
    
    148,115Interbank loans  (call money loans granted)
    
    
    25,300
    
    
    
    40,200Other loans to domestic financial institutions
    
    
    24
    
    
    
    65,662Accrued interest, adjustments and exchange rate differences
receivable
    
    
    28
    
    
    
    42,253To the non-financial private sector and residents abroad
    
    
    14,233,579
    
    
    
    10,779,630Overdrafts
    
    
    630,068
    
    
    
    594,365Promissory notes
    
    
    3,205,433
    
    
    
    2,116,303Mortgage loans
    
    
    964,291
    
    
    
    1,026,754Pledge loans
    
    
    64,819
    
    
    
    80,991Personal loans
    
    
    1,724,413
    
    
    
    1,217,645Credit card loans
    
    
    5,691,335
    
    
    
    4,378,366Other
    
    
    1,828,591
    
    
    
    1,217,984Accrued Interest, adjustments and quotation differences receivable
    
    
    178,837
    
    
    
    185,762Documented interest
    
    
    (54,185
    )
    
    
    (38,468
    )Unallocated collections
    
    
    (23
    )
    
    
    (72
    )Allowances
    
    
    (806,446
    )
    
    
    (526,801
    )Ps.
    13,477,901
    
    
    Ps.
    11,774,586D. Other receivables resulting from financial brokerageArgentine Central Bank
    
    
    493,129
    
    
    
    627,212Amounts receivable for spot and forward sales to be settled
    
    
    23,650
    
    
    
    4,031Securities receivable under spot and forward purchases to be settled
    
    
    681,148
    
    
    
    1,314,589Negotiable obligations without quotation
    
    
    38,979
    
    
    
    4,951Balances from forward transactions without delivery of underlying asset
to be settled
    
    
    1,040
    
    
    
    10,445Other
    
    
    2,155,519
    
    
    
    2,174,794Allowances
    
    
    (33,031
    )
    
    
    (12,252
    )Ps.
    3,360,434
    
    
    Ps.
    4,123,770
 The accompanying Notes are an integral part of these consolidated financial statements
  F-3




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Consolidated Balance Sheets  Continued
As of December 31, 2009 and 2008
 December 31,2009
    
    
    2008ASSETS (Continued)E. Assets under financial leasesAssets under financial leases
    
    
    342,759
    
    
    
    449,936Allowances
    
    
    (3,609
    )
    
    
    (4,699
    )Ps.
    339,150
    
    
    Ps.
    445,237F. Equity investmentsIn financial institutions
    
    
    1,882
    
    
    
    1,712Other
    
    
    57,973
    
    
    
    50,018Allowances
    
    
    (5,960
    )
    
    
    (3,211
    )Ps.
    53,895
    
    
    Ps.
    48,519G. Miscellaneous receivablesReceivables for assets sold
    
    
    34,106
    
    
    
    18,031Tax on minimum presumed income  Tax credit
    
    
    328,619
    
    
    
    284,421Other
    
    
    820,875
    
    
    
    1,623,860Accrued interest on receivables for assets sold
    
    
    124
    
    
    
    108Other accrued interest and adjustments receivable
    
    
    109
    
    
    
    86Allowances
    
    
    (28,655
    )
    
    
    (81,298
    )Ps.
    1,155,178
    
    
    Ps.
    1,845,208H. Bank premises and equipment
    
    Ps.
    898,321
    
    
    Ps.
    871,269I. Miscellaneous assets
    
    Ps.
    63,841
    
    
    Ps.
    78,623J. Intangible assetsGoodwill
    
    
    26,346
    
    
    
    37,804Organization and development expenses
    
    
    545,978
    
    
    
    529,175Ps.
    572,324
    
    
    Ps.
    566,979K. Unallocated items
    
    
    27,239
    
    
    
    5,744L. Other Assets
    
    
    37,367
    
    
    
    38,852Total Assets
    
    Ps.
    27,602,366
    
    
    Ps.
    24,735,790
 The accompanying Notes are an integral part of these consolidated financial statements
  F-4




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Consolidated Balance Sheets  Continued
As of December 31, 2009 and 2008
 December 31,2009
    
    
    2008LIABILITIES AND SHAREHOLDERS EQUITYM. DepositsNon-financial public sector
    
    Ps.
    1,377,236
    
    
    Ps.
    1,290,958Financial sector
    
    
    228,480
    
    
    
    169,302Non-financial private sector and residents abroad
    
    
    15,433,650
    
    
    
    12,595,874Current accounts
    
    
    3,631,399
    
    
    
    3,002,003Saving accounts
    
    
    4,765,626
    
    
    
    3,843,596Time deposits
    
    
    6,727,792
    
    
    
    5,411,178Investment accounts
    
    
    109
    
    
    
    206Other
    
    
    248,247
    
    
    
    261,927Accrued interest and quotation differences payable
    
    
    60,477
    
    
    
    76,964Ps.
    17,039,366
    
    
    Ps.
    14,056,134N. Other liabilities resulting from financial brokerageArgentine Central Bank
    
    
    3,215
    
    
    
    1,682Other
    
    
    3,215
    
    
    
    1,682Banks and international entities
    
    
    545,022
    
    
    
    941,483Unsubordinated negotiable obligations
    
    
    1,539,754
    
    
    
    1,886,138Amounts payable for spot and forward purchases to be settled
    
    
    618,375
    
    
    
    1,014,120Securities to be delivered under spot and forward sales to be settled
    
    
    175,655
    
    
    
    363,640Loans from domestic financial institutions
    
    
    251,481
    
    
    
    248,550-Interbank loans (call money loans received)
    
    
    70,000
    
    
    
    -Other loans from domestic financial institutions
    
    
    179,701
    
    
    
    245,630-Accrued interest payable
    
    
    1,780
    
    
    
    2,920Balances from forward transactions without delivery of underlying
asset to be settled
    
    
    8,060
    
    
    
    1,270Other
    
    
    2,934,951
    
    
    
    2,207,308Accrued interest and quotation differences payable
    
    
    42,924
    
    
    
    75,261Ps.
    6,119,437
    
    
    Ps.
    6,739,452O. Miscellaneous liabilitiesDividends payable
    
    
    17,000
    
    
    
    16,147Directors and Syndics fees
    
    
    7,071
    
    
    
    4,946Other
    
    
    554,628
    
    
    
    457,627Ps.
    578,699
    
    
    Ps.
    478,720P. Provisions
    
    
    255,922
    
    
    
    257,333Q. Subordinated negotiable obligations
    
    
    1,137,447
    
    
    
    986,969R. Unallocated items
    
    
    7,393
    
    
    
    12,627S. Other Liabilities
    
    
    122,994
    
    
    
    112,606T. Non-controlling interests
    
    
    288,569
    
    
    
    246,204Total Liabilities
    
    Ps.
    25,549,827
    
    
    Ps.
    22,890,045SHAREHOLDERS EQUITY
    
    
    2,052,539
    
    
    
    1,845,745Total Liabilities and Shareholders Equity
    
    Ps.
    27,602,366
    
    
    Ps.
    24,735,790
 The accompanying Notes are an integral part of these consolidated financial statements
  F-5




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 
 Consolidated Statements of Income
 For the fiscal years ended December 31, 2009, 2008 and 2007
 December 31,2009
    
    
    2008
    
    
    2007A. Financial incomeInterest on cash and due from banks
    
    Ps.
    638
    
    
    Ps.
    8,765
    
    
    Ps.
    14,895Interest on loans granted to the financial sector
    
    
    4,819
    
    
    
    3,896
    
    
    
    3,345Interest on overdrafts
    
    
    191,791
    
    
    
    182,804
    
    
    
    111,299Interest on promissory notes
    
    
    400,898
    
    
    
    440,490
    
    
    
    294,154Interest on mortgage loans
    
    
    118,474
    
    
    
    126,543
    
    
    
    98,364Interest on pledge loans
    
    
    11,305
    
    
    
    14,998
    
    
    
    12,408Interest on credit card loans
    
    
    837,484
    
    
    
    656,477
    
    
    
    431,790Interest on other loans
    
    
    436,759
    
    
    
    317,501
    
    
    
    202,771Interest on other receivables resulting from financial brokerage
    
    
    23,255
    
    
    
    33,994
    
    
    
    36,231Net income from government and corporate securities
    
    
    559,099
    
    
    
    238,098
    
    
    
    241,303Net income from secured loans  Decree No. 1387/01
    
    
    11,460
    
    
    
    59,851
    
    
    
    79,709Consumer price index adjustment (CER)
    
    
    24,429
    
    
    
    123,948
    
    
    
    205,145Exchange rate differences on foreign currency
    
    
    127,454
    
    
    
    77,898
    
    
    
    87,957Other
    
    
    257,772
    
    
    
    274,088
    
    
    
    178,515Ps.
    3,005,637
    
    
    Ps.
    2,559,351
    
    
    Ps.
    1,997,886B. Financial expensesInterest on current account deposits
    
    
    12,852
    
    
    
    21,641
    
    
    
    16,377Interest on savings account deposits
    
    
    3,722
    
    
    
    3,446
    
    
    
    4,540Interest on time deposits
    
    
    858,468
    
    
    
    757,699
    
    
    
    521,096Interest on interbank loans received (call money loans)
    
    
    3,702
    
    
    
    5,696
    
    
    
    3,918Interest on financing from the financial sector
    
    
    1,276
    
    
    
    774
    
    
    
    1,946Interest on other liabilities resulting from financial brokerage
    
    
    231,972
    
    
    
    297,026
    
    
    
    313,586Interest on subordinated obligations
    
    
    125,343
    
    
    
    101,424
    
    
    
    94,660Other interest
    
    
    2,882
    
    
    
    3,313
    
    
    
    45,848Consumer price index adjustment
    
    
    345
    
    
    
    9,249
    
    
    
    66,984Contributions made to Deposit Insurance Fund
    
    
    26,030
    
    
    
    23,555
    
    
    
    20,378Other
    
    
    193,867
    
    
    
    197,196
    
    
    
    157,367Ps.
    1,460,459
    
    
    Ps.
    1,421,019
    
    
    Ps.
    1,246,700C. Gross brokerage margin
    
    
    1,545,178
    
    
    
    1,138,332
    
    
    
    751,186Loan loss provisions
    
    
    639,505
    
    
    
    395,389
    
    
    
    255,502D. Income from servicesIn relation to lending transactions
    
    
    456,466
    
    
    
    379,752
    
    
    
    334,730In relation to borrowing transactions
    
    
    440,633
    
    
    
    370,181
    
    
    
    293,308Other commissions
    
    
    26,781
    
    
    
    22,415
    
    
    
    18,731Other
    
    
    902,903
    
    
    
    799,800
    
    
    
    523,931Ps.
    1,826,783
    
    
    Ps.
    1,572,148
    
    
    Ps.
    1,170,700E. Expenses for servicesCommissions
    
    
    197,714
    
    
    
    164,780
    
    
    
    117,708Other
    
    
    318,149
    
    
    
    219,500
    
    
    
    139,896Ps.
    515,863
    
    
    Ps.
    384,280
    
    
    Ps.
    257,604
 The accompanying Notes are an integral part of these consolidated financial statements
  F-6




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Consolidated Statements of Income  Continued
For the fiscal years ended December 31, 2009, 2008 and 2007
 December 31,2009
    
    
    2008
    
    
    2007F. Administrative expensesPersonnel expenses
    
    
    1,119,084
    
    
    
    966,213
    
    
    
    670,587Directors and syndics fees
    
    
    8,563
    
    
    
    8,153
    
    
    
    6,415Other fees
    
    
    70,144
    
    
    
    56,938
    
    
    
    42,939Advertising and publicity
    
    
    127,836
    
    
    
    146,496
    
    
    
    113,809Taxes
    
    
    139,327
    
    
    
    103,998
    
    
    
    70,393Depreciation of bank premises and equipment
    
    
    73,904
    
    
    
    61,910
    
    
    
    49,952Amortization of organization expenses
    
    
    45,908
    
    
    
    37,950
    
    
    
    35,640Other operating expenses
    
    
    280,104
    
    
    
    249,219
    
    
    
    190,616Other
    
    
    164,259
    
    
    
    150,201
    
    
    
    105,973Ps.
    2,029,129
    
    
    Ps.
    1,781,078
    
    
    Ps.
    1,286,324Net Income from financial brokerage
    
    Ps.
    187,464
    
    
    Ps.
    149,733
    
    
    Ps.
    122,456G. Non-controlling interests result
    
    Ps.
    (46,512
    )
    
    Ps.
    (35,812
    )
    
    Ps.
    (32,119
    )H. Miscellaneous incomeNet lncome from equity investments
    
    
    11,347
    
    
    
    56,764
    
    
    
    1,957Default interests
    
    
    37,243
    
    
    
    4,429
    
    
    
    1,988Loans recovered and allowances reversed
    
    
    48,347
    
    
    
    103,992
    
    
    
    95,969Other
    
    
    502,346
    
    
    
    333,646
    
    
    
    173,581Consumer price index adjustment (CER)
    
    
    78
    
    
    
    28
    
    
    
    8Ps.
    599,361
    
    
    Ps.
    498,859
    
    
    Ps.
    273,503I. Miscellaneous lossesDefault interests and charges in favor of the Argentine Central Bank
    
    
    72
    
    
    
    17
    
    
    
    15Loan loss provisions for miscellaneous receivables and other
provisions
    
    
    109,296
    
    
    
    161,703
    
    
    
    48,151Amortization of differences arising from court resolutions
    
    
    109,310
    
    
    
    39,545
    
    
    
    108,667Depreciation and losses from miscellaneous assets
    
    
    1,708
    
    
    
    1,405
    
    
    
    627Amortization of goodwill
    
    
    11,457
    
    
    
    20,462
    
    
    
    19,687Other
    
    
    123,168
    
    
    
    138,784
    
    
    
    69,155Consumer price index adjustment
    
    
    35
    
    
    
    31
    
    
    
    35Ps.
    355,046
    
    
    Ps.
    361,947
    
    
    Ps.
    246,337Net Income before tax
    
    
    385,267
    
    
    
    250,833
    
    
    
    117,503J. Income tax
    
    Ps.
    155,992
    
    
    Ps.
    74,014
    
    
    Ps.
    71,466Net Income for the fiscal year
    
    Ps.
    229,275
    
    
    Ps.
    176,819
    
    
    Ps.
    46,037Net Income per common share (basic and assuming full dilution)
    
    
    0.185
    
    
    
    0.142
    
    
    
    0.037
 The accompanying Notes are an integral part of these consolidated financial statements
  F-7




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 
 Consolidated Statements of Cash Flows
 For the fiscal years ended December 31, 2009, 2008 and 2007
  December 31,2009
    
    
    2008
    
    
    2007Cash Flow from operating activities:Net Income for the year
    
    Ps.
    229,275
    
    
    Ps.
    176,819
    
    
    Ps.
    46,037Adjustments to reconcile net income to net cash from
Operating activities:Depreciation of bank premises and equipment and
Miscellaneous assets
    
    
    74,856
    
    
    
    63,309
    
    
    
    50,570Amortization of intangible assets
    
    
    166,675
    
    
    
    97,957
    
    
    
    163,994Increase in allowances for loan and other losses, net of reversals
    
    
    487,636
    
    
    
    335,658
    
    
    
    269,201Equity loss / (gain) of unconsolidated subsidiaries
    
    
    (11,347
    )
    
    
    (56,764
    )
    
    
    (1,957
    )Gain on sale of premises and equipment
    
    
    (13,997
    )
    
    
    (695
    )
    
    
    (1,472
    )Consumer price index adjustment (CER/CVS)
    
    
    6,482
    
    
    
    (113,226
    )
    
    
    485,628Unrealized foreign exchange (loss) / gain
    
    
    (420,052
    )
    
    
    (229,426
    )
    
    
    37,057Decrease in government securities
    
    
    1,120,852
    
    
    
    839,152
    
    
    
    1,589,476Increase in other assets
    
    
    (37,908
    )
    
    
    (122,938
    )
    
    
    (27,441
    )Decrease in other liabilities
    
    
    (137,712
    )
    
    
    (101,284
    )
    
    
    (161,327
    )Net cash provided by operating activities
    
    Ps.
    1,464,760
    
    
    Ps.
    888,562
    
    
    Ps.
    2,449,766Cash Flow from investing activities:(Increase) / Decrease in loans, net
    
    
    (1,185,582
    )
    
    
    1,501,309
    
    
    
    (1,410,830
    )Sales of investments in other companies
    
    
    
    
    
    
    10,421
    
    
    
    Increase in equity investments in other companies
    
    
    (7,231
    )
    
    
    (5,063
    )
    
    
    (1,698
    )Increase in deposits at the Argentine Central Bank
    
    
    (72,188
    )
    
    
    (76,838
    )
    
    
    (45,941
    )Additions to bank premises and equipment, miscellaneous,
and intangible assets
    
    
    (282,553
    )
    
    
    (403,085
    )
    
    
    (287,620
    )Proceeds from sales of premises and equipment
    
    
    21,551
    
    
    
    30,337
    
    
    
    30,381Net cash (used in) / provided by investing activities
    
    Ps.
    (1,526,003
    )
    
    Ps.
    1,057,081
    
    
    Ps.
    (1,715,708
    )Cash Flow from financing activities:Capital Increase in subsidiaries from minority shareholders
    
    
    
    
    
    
    
    
    
    
    299Cash dividends paid in Non-controlling interests
    
    
    (10,728
    )
    
    
    (1,404
    )
    
    
    (5,517
    )Increase / (Decrease) in deposits, net
    
    
    1,838,725
    
    
    
    (57,029
    )
    
    
    1,752,527Borrowings under credit facilities  long-term
    
    
    197,677
    
    
    
    269,498
    
    
    
    369,668Payments on credit facilities  long-term
    
    
    (778,594
    )
    
    
    (743,476
    )
    
    
    (1,823,464
    )Decrease in short-term borrowings, net
    
    
    (319,911
    )
    
    
    (156,579
    )
    
    
    (2,527,284
    )(Decrease) / Increase in repurchase agreements
    
    
    (409,314
    )
    
    
    (376,645
    )
    
    
    229,886Net cash used in financing activities
    
    Ps.
    517,855
    
    
    Ps.
    (1,065,635
    )
    
    Ps.
    (2,003,885
    )
 The accompanying Notes are an integral part of these consolidated financial statements
  F-8




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Consolidated Statements of Cash Flows  Continued
For the fiscal years ended December 31, 2009, 2008 and 2007
 December 31,2009
    
    
    2008
    
    
    2007Increase / (Decrease) in cash and cash equivalents, net
    
    Ps.
    456,612
    
    
    Ps.
    880,008
    
    
    Ps.
    (1,269,827
    )Cash and cash equivalents at the beginning of the year
    
    
    4,795,383
    
    
    
    3,766,207
    
    
    
    4,988,198Effect of exchange rate changes on cash and cash equivalents
    
    
    176,735
    
    
    
    149,168
    
    
    
    47,836Cash and cash equivalents at the end of the year
    
    Ps.
    5,428,730
    
    
    Ps.
    4,795,383
    
    
    Ps.
    3,766,207Supplemental disclosures relative to cash flows:Interest paid
    
    Ps.
    1,285,145
    
    
    Ps.
    1,227,389
    
    
    Ps.
    951,134Income tax paid
    
    Ps.
    124,653
    
    
    Ps.
    64,914
    
    
    Ps.
    32,996Minimum Presumed Income Tax
(*)
    
    Ps.
    35,501
    
    
    Ps.
    19,767
    
    
    Ps.
    31,353Non-Cash Investing and financing activitiesTrust Interest
    
    Ps.
    40,998
    
    
    Ps.
    159,376
    
    
    Ps.
    98,121Assets Exchange Transactions
    
    Ps.
    1,333,647
    
    
    Ps.
    
    
    
    Ps.
    
 (*)
    
    The MPIT is calculated based on assets and can be credited against future income tax. The accompanying Notes are an integral part of these consolidated financial statements
  F-9




---



##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 
 Consolidated Statements of Changes in Shareholders Equity
 For the years ended December 31, 2009, 2008 and 2007
  Inflationadjustments to
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (AccumulatedCapital Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    deficit) /
    
    
    TotalCapital
    
    
    Paid in
    
    
    and Paid in
    
    
    Treasury
    
    
    Profit reserves
    
    
    Retained
    
    
    ShareholdersStock
    
    
    Capital
    
    
    Capital
    
    
    Stock
    
    
    Legal
    
    
    Other
    
    
    earnings
    
    
    EquityBalance at December 31, 2006
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    278,131
    
    
    
    
    
    
    Ps.
    34,855
    
    
    Ps.
    72,383
    
    
    Ps.
    (18,914
    )
    
    Ps.
    1,608,468Absorption approved by the
shareholders meeting on
April 26.2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,914
    )
    
    
    18,914
    
    
    
    Net loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,037
    
    
    
    46,037Balance at December 31, 2007
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    278,131
    
    
    
    
    
    
    Ps.
    34,855
    
    
    Ps.
    53,469
    
    
    Ps.
    46,037
    
    
    Ps.
    1,654,505Distribution of retained
earnings by the
shareholders meeting on
April 29,2008Legal Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,302
    
    
    
    
    
    
    
    (2,302
    )
    
    
    Discretionary Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,735
    
    
    
    (43,735
    )
    
    
    Valuation Differences
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,421
    
    
    
    
    
    
    
    14,421Net Income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    176,819
    
    
    
    176,819Balance at December 31, 2008
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    278,131
    
    
    
    
    
    
    Ps.
    37,157
    
    
    Ps.
    111,625
    
    
    
    176,819
    
    
    
    1,845,745Distribution of retained
earnings by the
shareholders meeting on
April 28,2009Legal Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,841
    
    
    
    
    
    
    
    (8,841
    )
    
    
    Discretionary Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,978
    
    
    
    (167,978
    )
    
    
    Valuation Differences
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,481
    )
    
    
    
    
    
    
    (22,481
    )Net Income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    229,275
    
    
    
    229,275Balance at December 31, 2009
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    278,131
    
    
    
    
    
    
    Ps.
    45,998
    
    
    Ps.
    257,122
    
    
    
    229,275
    
    
    
    2,052,539
 The accompanying Notes are an integral part of these consolidated financial statements
  F-10




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 
 Notes to the Consolidated Financial Statements
 For the years ended December 31, 2009, 2008 and 2007
  1. Basis of Presentation.
    December 31,Issuing Company
    
    2009
    
    
    2008Grupo Financiero Galicia S.A.Galval Agente de Valores S.A.
    
    
    100.00
    %
    
    
    100.00
    %GV Mandataria de Valores S.A.
    
    
    100.00
    %
    
    
    100.00
    %Net Investment S.A.
    
    
    99.34
    %
    
    
    99.33
    %Galicia Warrants S.A.
    
    
    99.34
    %
    
    
    99.33
    %Sudamericana Holding S.A.
    
    
    99.34
    %
    
    
    99.33
    %Banco de Galicia y Buenos Aires S.A.
    
    
    94.71
    %
    
    
    94.66
    %Banco Galicia Uruguay S.A.
    
    
    94.71
    %
    
    
    94.66
    %Tarjetas Regionales S.A.
    
    
    94.71
    %
    
    
    94.66
    %Galicia Administradora de Fondos S.A.Sociedad Gerente de Fondos Comunes de Inversión
    
    
    94.71
    %
    
    
    94.66
    %Galicia (Cayman) Ltd.
    
    
    94.71
    %
    
    
    94.66
    %Tarjetas del Mar S.A.
    
    
    94.70
    %
    
    
    94.65
    %Galicia Valores S.A. Sociedad de Bolsa
    
    
    94.70
    %
    
    
    94.65
    %Galicia Factoring y Leasing S.A.
    
    
    94.69
    %
    
    
    94.64
    %Tarjeta Naranja S.A.
    
    
    75.76
    %
    
    
    75.73
    %Cobranzas Regionales S.A.
    
    
    73.43
    %
    
    
    73.40
    %Tarjetas Cuyanas S.A.
    
    
    56.82
    %
    
    
    56.80
    %Tarjeta Naranja Dominicana S.A.
    
    
    37.88
    %
    
    
    37.86
    %Galicia Pension Fund S.A.
    
    
    
    %
    
    
    94.66
    %
  F-11




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
   2. Significant Accounting Policies.
      2.1 Presentation of Financial Statements in Constant Argentine Pesos.
    2.2 Foreign Currency.
    F-12




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  2.3 Government and Corporate Securities.
   Valuation of Government Securities under Argentine Banking GAAP.
             F-13




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
        National Secured Loans
    F-14




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
     2.4 Financial Trust Debt Securities and Certificates of Participation.
  2.5 Interest Income (Expense) Recognition.
    2.6 Allowances for Loan Losses.
   F-15




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 2.7 Provisions for Contingencies.
  2.8 Equity Investments.
   
    
    Ownership of a portion of a related companys capital granting the voting power necessary
to influence the approval of such companys financial statements and profits distribution.
 
    
    Representation in the related companys board of directors or corporate governance body.
 
    
    Participation in the definition of the related companys policies.
 
    
    Existence of significant transactions between the company holding the interest and the
related company (for example, when the former is the latters only supplier or by far its most
important client).
 
    
    Interchange of senior officers among companies.
 
    
    Technical dependence of one of the companies on the other.
  2.9 Bank Premises and Equipment and Miscellaneous Assets.
      F-16




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 2.10 Intangible Assets.
    2.11 Shareholders Equity.
  2.12 Minimum Presumed Income Tax and Income Tax.
     F-17




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  2.13 Statements of Cash Flows.
 Statement of
Cash Flows
  2.14 Use of Estimates.
  3. Restricted Assets.
   December 31,2009
    
    
    2008Peso balances
    
    Ps.
    1,985,771
    
    
    Ps.
    1,713,396Foreign currency balances
    
    
    1,715,157
    
    
    
    1,328,983
  December 31,2009
    
    
    2008Funds and securities pledged under various arrangements
    
    Ps.
    1,043,398
    
    
    Ps.
    1,992,080Shares on equity investments (*)
    
    
    5,250
    
    
    
    5,250Deposits in the Argentine Central Bank, restricted
under Argentine Central Bank regulations
    
    
    3,668
    
    
    
    3,055Loans pledged and real property granted as
collateral-Banco Galicia Uruguay S.A. (**)
    
    
    3,857
    
    
    
    65,468Loans granted as collateral(***)
    
    
    199,801
    
    
    
    157,693Total
    
    Ps.
    1,255,974
    
    
    Ps.
    2,223,546
 (*)
    
    Shares over which transferability is subject to prior approval of the National or
Provincial authorities, as applicable, under the terms of certain concession contracts signed.  F-18




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 The Bank, as a shareholder of Aguas Cordobesas S. A. and proportionally to its 10.833%
interest, is jointly responsible 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, the Bank may be forced to assume the
unfulfilled commitment by the grantor, but only in the proportion and to the extent of the interest
held by the Bank.(**)
    
    Under a fixed pledged agreement signed on July 24, 2003 and registered with the Registry of
Property  Movable Property  Pledges Division of Montevideo  Uruguay, on August 5, 2003, Galicia
Uruguay S.A.s credit rights against all of its debtors have been pledged in favor of the holders
of transferable time deposit certificates and/or negotiable obligations issued in compliance with
the debt restructuring plan approved.Galicia Uruguay S.A. repaid in advance the remaining balance of the debt restructuring plan.
Furthermore, the necessary proceedings for the release of the above-mentioned pledge are being
taken.(***)
    
    As of December 31, 2009, the Bank has recorded Ps.283,895 as collateral for credit lines
granted by the IFC, and the related transactions have been allocated to the resources provided by
the IFC. As collateral for the requested funds, the Bank used Boden 2012 for a face value of US$
140,000, equivalent to a cash amount of Ps.199,801, through the Argentine Central Bank, to the
Subsecretaría de la Micro, Pequeña y Mediana Empresa y Desarrollo Provincial destined to the
financing of the Global Credit Program for Small and Medium Companies. As of December 31,
2009, balance of secured loans was Ps.70,983.Furthermore, as of December 31, 2009, the Bank used Boden 2012 for a face value of US$ 5,100 equal
to Ps.7,278 as collateral for the loans granted within the Credit Program to the Province of San
Juan for the amount of Ps.3,523. 4. Interest-Bearing Deposits with Other Banks.
 .
  F-19




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 5. Government and Corporate Securities.
  December 31,2009
    
    
    2008Government SecuritiesFor trading purposes:Government Bonds
    
    Ps.
    104,542
    
    
    Ps.
    252,154Repo transactions with the Argentine Central Bank
    
    
    152,650
    
    
    
    127,532Other
    
    
    9,644
    
    
    
    430Total trading securities
    
    Ps.
    266,836
    
    
    Ps.
    380,116Recorded at cost after amortizationIn special investment accountsSecurities issued by the Argentine Central Bank
    
    
    43,350
    
    
    
    Total securities in investment accounts
    
    Ps.
    43,350
    
    
    Ps.
    Securities issued by the Argentine Central BankSecurities with quotation
    
    
    651,050
    
    
    
    35,781Securities without quotation
    
    
    964,028
    
    
    
    520,239Total Securities issued by the Argentine Central Bank
    
    Ps.
    1,615,078
    
    
    Ps.
    556,020Without quotationGovernment Bonds
    
    
    1,981,972
    
    
    
    595,678Total Without quotation securities
    
    
    1,981,972
    
    
    
    595,678Total government securities
    
    Ps.
    3,907,236
    
    
    Ps.
    1,531,814Corporate SecuritiesShares
    
    
    53
    
    
    
    Marketable Negotiable obligations
    
    
    5,613
    
    
    
    56Negotiable Mutual Funds
    
    
    7,505
    
    
    
    Total corporate securities
    
    Ps.
    13,171
    
    
    Ps.
    56Total government and corporate securities
    
    Ps.
    3,920,407
    
    
    Ps.
    1,531,870
    6. Loans.
  
    
    Loans to the non-financial public sector: loans to the federal and provincial governments of
Argentina.
    
    Loans to the financial sector: loans to local banks and financial entities.
    
    Loans to the non-financial private sector and residents abroad: include the following types of
lending:
 Overdrafts
 Promissory Notes
 Mortgage loans
 Pledge loans
 Credit card loans
 Personal loans
 Others
  F-20




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
   December 31,2009
    
    
    2008Non-financial public sector
    
    Ps.
    25,416
    
    
    Ps.
    1,373,642Financial sector (Argentine)
    
    
    25,352
    
    
    
    148,115Non-financial private sector and residents abroad
    
    
    14,233,579
    
    
    
    10,779,630- With preferred guarantees
    
    
    1,142,199
    
    
    
    1,332,798- With other guarantees
    
    
    2,450,075
    
    
    
    1,546,237- Unsecured
    
    
    10,641,305
    
    
    
    7,900,595Subtotal
    
    
    14,284,347
    
    
    
    12,301,387Allowance for loan losses (See Note 7)
    
    
    (806,446
    )
    
    
    (526,801
    )Total
    
    Ps.
    13,477,901
    
    
    Ps.
    11,774,586
  December 31,2009
    
    
    2008Financial Sector
    
    
    3.30
    %
    
    
    3.95
    %Services
    
    
    7.59
    %
    
    
    18.23
    %Primary Products
    
    
    13.90
    %
    
    
    10.90
    %Consumer
    
    
    47.54
    %
    
    
    43.23
    %Retail Trade
    
    
    5.04
    %
    
    
    4.39
    %Wholesale Trade
    
    
    6.53
    %
    
    
    5.28
    %Construction
    
    
    1.24
    %
    
    
    0.67
    %Manufacturing
    
    
    14.61
    %
    
    
    12.99
    %
  F-21




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 7. Allowance for Loan Losses.
  December 31,2009
    
    
    2008
    
    
    2007Balance at beginning of year
    
    Ps.
    526,801
    
    
    Ps.
    428,607
    
    
    Ps.
    327,042Provision charged to income
    
    
    625,897
    
    
    
    384,606
    
    
    
    248,415Recoveries
    
    
    (5,424
    )
    
    
    (6,510
    )
    
    
    (21,556
    )Foreign exchange effect and other adjustments
    
    
    13,693
    
    
    
    9,289
    
    
    
    131Loans charged off
    
    
    (354,521
    )
    
    
    (289,191
    )
    
    
    (125,425
    )Balance at end of year
    
    Ps.
    806,446
    
    
    Ps.
    526,801
    
    
    Ps.
    428,607
  December 31,2009
    
    
    2008
    
    
    2007Provisions charged to income
    
    Ps.
    625,897
    
    
    Ps.
    384,606
    
    
    Ps.
    248,415Direct charge-offs
    
    
    10,501
    
    
    
    7,307
    
    
    
    4,334Other receivable losses
    
    
    3,051
    
    
    
    2,545
    
    
    
    1,413Financial leases
    
    
    56
    
    
    
    931
    
    
    
    1,340Ps.
    639,505
    
    
    Ps.
    395,389
    
    
    Ps.
    255,502
  8. Other Receivables Resulting from Financial Brokerage.
  December 31,2009
    
    
    2008Preferred guarantees, including deposits with The Argentine Central Bank
    
    Ps.
    516,001
    
    
    Ps.
    697,634Other guarantees
    
    
    90,192
    
    
    
    1,588Unsecured
    
    
    2,787,272
    
    
    
    3,436,800Less: Allowance for doubtful accounts
    
    
    (33,031
    )
    
    
    (12,252
    )Ps.
    3,360,434
    
    
    Ps.
    4,123,770
  December 31,2009
    
    
    2008Mutual funds
    
    Ps.
    126,936
    
    
    Ps.
    39,443Galtrust I
    
    
    584,111
    
    
    
    633,996Other financial trust participation certificates
    
    
    941,542
    
    
    
    971,064Accrued commissions
    
    
    28,896
    
    
    
    19,015Others
    
    
    474,034
    
    
    
    511,276Ps.
    2,155,519
    
    
    Ps.
    2,174,794
  F-22




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 9. Equity Investments.
  December 31,2009
    
    
    2008In Financial Institutions, complementary and authorized activitiesBanelco S.A.
    
    Ps.
    8,681
    
    
    Ps.
    8,453Visa Argentina S.A.
    
    
    3,169
    
    
    
    2,576Mercado de Valores de Buenos Aires S.A.
    
    
    8,143
    
    
    
    8,142Banco Latinoamericano de Exportaciones S.A.
    
    
    1,882
    
    
    
    1,712Others
    
    
    852
    
    
    
    861Total equity investments in Financial Institutions, complementary
and authorized activities
    
    Ps.
    22,727
    
    
    Ps.
    21,744In Non-financial InstitutionsElectrigal S.A.
    
    
    5,455
    
    
    
    5,455A.E.C. S.A.
    
    
    21,379
    
    
    
    14,244Aguas Cordobesas S.A.
    
    
    8,911
    
    
    
    8,911Other
    
    
    1,383
    
    
    
    1,376Total equity investments in non-financial institutions
    
    Ps.
    37,128
    
    
    Ps.
    29,986Allowances
    
    Ps.
    (5,960
    )
    
    Ps.
    (3,211
    )Total Equity investments
    
    Ps.
    53,895
    
    
    Ps.
    48,519
 10. Fixed Assets and Intangible Assets.
  December 31,2009
    
    
    2008Land and buildings
    
    Ps.
    927,100
    
    
    Ps.
    890,660Furniture and fittings
    
    
    197,563
    
    
    
    182,205Machinery and equipment
    
    
    345,273
    
    
    
    305,187Vehicles
    
    
    2,592
    
    
    
    1,243Others
    
    
    4,671
    
    
    
    6,202Accumulated depreciation
    
    
    (578,878
    )
    
    
    (514,228
    )Ps.
    898,321
    
    
    Ps.
    871,269
   December 31,2009
    
    
    2008Goodwill, net of accumulated
amortization of Ps.87,700 and
Ps.164,790 , respectively
    
    Ps.
    26,346
    
    
    Ps.
    37,804Organization and development
expenses, net of accumulated
amortization of Ps.202,214 and
Ps.163,157 respectively
    
    
    286,925
    
    
    
    212,301Legal actions related to the
payment of deposits (amparo
claims), net of accumulated
amortization of Ps.578,692 and
Ps.469,382 , respectively (see
Note 2.10)
    
    
    259,053
    
    
    
    316,874Ps.
    572,324
    
    
    Ps.
    566,979
  F-23




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    December 31,2009
    
    
    2008Banking
    
    
    26,346
    
    
    
    37,139Regional Credit Card companies
    
    
    
    
    
    
    665Ps.
    26,346
    
    
    Ps.
    37,804
 11. Miscellaneous Assets.
  December 31,2009
    
    
    2008Construction in progress
    
    Ps.
    1,370
    
    
    Ps.
    24,857Deposits on fixed asset purchases
    
    
    831
    
    
    
    20,955Stationery and supplies
    
    
    15,363
    
    
    
    9,607Real estate held for sale
    
    
    5,561
    
    
    
    7,326Others
    
    
    40,716
    
    
    
    15,878Ps.
    63,841
    
    
    Ps.
    78,623
 12. Allowances and Provisions.
  December 31,2009
    
    
    2008Allowances against asset accounts:Other receivables resulting from financial brokerage, for collection risk (a)
    
    
    33,031
    
    
    
    12,252Assets under financial leases (a)
    
    
    3,609
    
    
    
    4,699Equity investments in other companies (b)
    
    
    5,960
    
    
    
    3,211Miscellaneous receivables, for collection risk (a)
    
    
    28,655
    
    
    
    81,298Reserves for contingencies:For severance payments (c)
    
    
    5,892
    
    
    
    3,212Litigations (d)
    
    
    57,042
    
    
    
    32,125Other contingencies (e)
    
    
    148,352
    
    
    
    189,936Sundry liabilities arising from credit card activities (f)
    
    
    44,493
    
    
    
    31,849Other commitments (g)
    
    
    143
    
    
    
    211Total reserves for contingencies
    
    Ps.
    255,922
    
    
    Ps.
    257,333
  F-24




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 (a)
    
    Based upon an assessment of debtors performance, the economic and financial
situation and the guarantees collateralizing their respective transactions.(b)
    
    Includes the estimated losses due to the excess of the cost plus dividend method over the
equity method in non-majority owned equity investments.(c)
    
    Estimated amounts payable under labor lawsuits filed against the Bank by former employees.(d)
    
    Litigation arising from different types of claims from customers (e.g., claims for thefts from
safe deposit boxes, the cashing of checks that have been fraudulently altered, discrepancies in
deposits and payments services that the Bank renders, etc).(e)
    
    At the date of these consolidated financial statements, there are several review and assessment
processes ongoing, at different progress stages, initiated by the provincial and Autonomous City of
Buenos Aires Tax Authorities related to the turnover tax, mainly corresponding to fiscal year
2002, and basically in connection with the Compensatory Bond set forth by the National Government
in order to compensate financial institutions for the losses resulting from the asymmetric
pesification of loans and deposits.The Bank has been expressing its disagreement regarding these adjustments at the corresponding
administrative and/or legal proceedings. These proceedings and their possible effects are
constantly being monitored by the management division. Even though the foregoing has not been
finally resolved yet, the Bank considers it has complied with its tax liabilities in full pursuant
to current regulations, since it is not possible to foresee the final outcome, the Bank has
established provisions deemed suitable according to each processs status.(f)
    
    Reserves for a guarantee of credit-cards receivable and for the estimated liability for the
insurance of the payment of credit-cards balance in the event of the death of the credit-card
holders.At the date of these consolidated financial statements, the Argentine Revenue Service (AFIP), the
Revenue Board of the Province of Córdoba and the Municipalities of the cities of Mendoza and San
Luis are in the process of conducting audits, with respect to claims made by such agencies,
regarding taxes applicable to Credit Cards issuing companies. The amount claimed for such reason,
adjusted as of December 31, 2009, totals Ps.9,900, approximately.Based on the opinions of their tax advisors, the companies believe that the abovementioned claims
are both legally and technically groundless.However, since the final outcome of these measures cannot be foreseen, provisions have been set up
to cover such contingencies. Therefore, both companies are taking the corresponding administrative
and legal steps in order to solve such issues.(g)
    
    Represents contingent commitments in connection with customers classified in categories other
than the normal categories under Argentine Banking GAAP.  F-25




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 13.
    Other Liabilities
Resulting from Financial Brokerage- Banks and International Entities, and Loans from Domestic Financial Institutions.
  December 31,2009
    
    
    2008DescriptionBank and International EntitiesContractual long-term LiabilitiesFloating Rate Bank Loans 2010
    
    Ps.
    2,024
    
    
    Ps.
    5,507Floating Rate Bank Loans 2014
    
    
    94,902
    
    
    
    86,078Floating Rate Bank Loans 2019
    
    
    7,364
    
    
    
    6,239Internacional Finance Corp. (I.F.C.)
    
    
    260,771
    
    
    
    267,067Loan Merrill Lynch
    
    
    
    
    
    
    214,086Other lines from foreign banks
    
    
    
    
    
    
    7,943Total long-term liabilities
    
    Ps.
    365,061
    
    
    Ps.
    586,920Contractual short-term liabilities:Other lines from foreign banks
    
    
    179,961
    
    
    
    354,563Total short-term liabilities
    
    Ps.
    179,961
    
    
    Ps.
    354,563Total Banks and International Entities
    
    Ps.
    545,022
    
    
    Ps.
    941,483Domestic and Financial InstitutionsContractual long-term liabilities:BICE (Banco de Inversión y Comercio Exterior)
    
    
    
    
    
    
    5,056Other lines from domestic banks
    
    
    164,612
    
    
    
    199,873Total long-term liabilities
    
    Ps.
    164,612
    
    
    Ps.
    204,929Contractual short-term liabilities:Other lines from credit from domestic banks
    
    
    86,869
    
    
    
    43,621Total short-term liabilities
    
    Ps.
    86,869
    
    
    Ps.
    43,621Total Domestic and Financial Institutions
    
    Ps.
    251,481
    
    
    Ps.
    248,550TOTAL
    
    Ps.
    796,503
    
    
    Ps.
    1,190,033
    Contractual long-term Liabilities2010
    
    
    172,8332011
    
    
    136,2202012
    
    
    89,3622013
    
    
    80,6632014
    
    
    43,232Thereafter
    
    
    7,363Ps.
    529,673
  F-26




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 14. Other Liabilities Resulting from Financial Brokerage  Negotiable Obligations.
  AnnualInterest
    
    
    December 31,Negotiable Obligations (1)
    
    Maturity
    
    
    Rate
    
    
    2009
    
    
    2008Contractual Long-term liabilities:9% Notes Due 2003(*)
    
    
    2003
    
    
    
    9.00
    %
    
    
    6,352
    
    
    
    5,813(Semi-annual interest, principal payable at maturity)Banco Galicia  Note 2010 - Libor +350 BP
    
    
    2010
    
    
    
    6.65
    %
    
    
    129,858
    
    
    
    353,755(Semi-annual interest)Banco Galicia Uruguay S.A. Unsubordinated (restructured
deposits)
    
    Various
    
    Various
    
    
    
    
    
    
    54,305(Annual interest, principal payable every year)Banco Galicia  Note 2014
    
    
    2014
    
    
    
    7.00
    %
    
    
    736,542
    
    
    
    933,106(Semi  annual interest)Banco Galicia  Subordinated Note 2019
    
    
    2019
    
    
    
    11.00
    %
    
    
    1,137,447
    
    
    
    986,969(Semi-annual interest, principal payable at maturity)Tarjeta Cuyanas S.A. Serie XX
    
    
    2010
    
    
    
    
    
    
    
    75,934
    
    
    
    (Issued at a discount base- principal payable at maturity)Tarjeta Naranja Class IV
    
    
    2011
    
    
    
    15.50
    %
    
    
    156,794
    
    
    
    229,821(Interest fixed, semi-annual interest- principal payable
every six months)Tarjeta Naranja Class IX Serie I
    
    
    2010
    
    
    
    
    
    
    
    133,296
    
    
    
    (Issued at a discount base- principal payable at maturity)Tarjeta Naranja Class IX Serie II
    
    
    2011
    
    
    
    12.50
    %
    
    
    55,416
    
    
    
    (Interest fixed, semi-annual interest- principal payable
at maturity)Grupo Financiero Galicia Serie II
    
    
    2011
    
    
    
    12.50
    %
    
    
    40,263
    
    
    
    (Interest fixed, semi-annual interest- principal payable
at maturity)Tarjeta Cuyanas S.A. Serie XVIII
    
    
    2012
    
    
    
    12.00
    %
    
    
    79,506
    
    
    
    139,128(Interest fixed, semi-annual interest- principal payable
every six months)Tarjeta Naranja Class VII
(Fixed Interest, principal payable at maturity)
    
    
    2009
    
    
    
    10,50
    %
    
    
    
    
    
    
    61,355Total long-term liabilities
    
    
    
    
    
    
    
    
    
    Ps.
    2,551,408
    
    
    Ps.
    2,764,252Contractual Short-term liabilities:Tarjeta Naranja Class VIII
(Fixed Interest, principal payable at maturity)
    
    
    2009
    
    
    
    11,00
    %
    
    
    
    
    
    
    69,058Tarjetas Cuyanas S. XIX
(Fixed Interest, principal payable at maturity)
    
    
    2009
    
    
    
    14,00
    %
    
    
    
    
    
    
    39,797Grupo Financiero Galicia Serie I
(Issued at a discounted base, principal
payable at maturity)
    
    
    2010
    
    
    
    
    
    
    
    125,793
    
    
    
    Total short-term liabilities
    
    
    
    
    
    
    
    
    
    
    125,793
    
    
    
    108,855Ps.
    2,677,201
    
    
    Ps.
    2,873,107
 (1)
    
    Only principal, except for Subordinated Obligations which include accrued interest for Ps.59,553.  F-27




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    Past due (*)
    
    
    6,3522010
    
    
    553,4492011
    
    
    456,8932012
    
    
    184,5442013
    
    
    174,6062014
    
    
    38,117Thereafter
    
    
    1,137,447Total
    
    Ps.
    2,551,408
 (*)
    
    Corresponds to past due debt not yet restructured. 15.
    Balances in Foreign Currency.
  December 31,2009
    
    
    2008Assets:Cash and due from banks
    
    Ps.
    1,867,910
    
    
    Ps.
    1,806,827Government and corporate securities
    
    
    1,215,571
    
    
    
    672,354Loans
    
    
    2,395,667
    
    
    
    1,998,358Other receivables resulting from financial brokerage
    
    
    899,804
    
    
    
    1,630,433Assets under financial leases
    
    
    29,147
    
    
    
    23,541Equity investments in other companies
    
    
    1,939
    
    
    
    1,762Miscellaneous receivables
    
    
    462,434
    
    
    
    995,257Bank premises and equipment
    
    
    738
    
    
    
    4,990Miscellaneous assets
    
    
    38
    
    
    
    297Intangible assets
    
    
    569
    
    
    
    601Unallocated items
    
    
    12,572
    
    
    
    2,791Other assets
    
    
    70
    
    
    
    129Total
    
    Ps.
    6,886,459
    
    
    Ps.
    7,137,340Liabilities:Deposits
    
    Ps.
    3,094,442
    
    
    Ps.
    2,386,180Other liabilities resulting from financial brokerage
    
    
    2,827,321
    
    
    
    4,031,939Miscellaneous liabilities
    
    
    11,951
    
    
    
    14,746Subordinated Negotiable Obligations
    
    
    1,137,447
    
    
    
    986,969Provisions
    
    
    11,493
    
    
    
    8,244Unallocated items
    
    
    3,078
    
    
    
    3,519Other Liabilities
    
    
    86
    
    
    
    85Total
    
    Ps.
    7,085,818
    
    
    Ps.
    7,431,682
  F-28




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 16. Transactions with Related Parties.
   17. Breakdown of Captions Included in the Income Statement.
 December 31,2009
    
    
    2008
    
    
    2007Financial IncomeInterest on other receivables resulting from
financial brokerage:Interest on purchased certificates of deposits
    
    
    14,914
    
    
    
    6,033
    
    
    
    5,374Compensatory Bond
    
    
    
    
    
    
    
    
    
    
    3,699Additional interest on current accounts and
special accounts with the Argentine Central Bank
    
    
    
    
    
    
    12,241
    
    
    
    19,621Advance payment-Leasing
    
    
    2,928
    
    
    
    12,332
    
    
    
    5,708Other
    
    
    5,413
    
    
    
    3,388
    
    
    
    1,829Ps.
    23,255
    
    
    Ps.
    33,994
    
    
    Ps.
    36,231OtherPremiums on forward purchases of Government
securities under repos
    
    
    16,114
    
    
    
    7,013
    
    
    
    2,863Interest on pre-export and export financing
    
    
    94,517
    
    
    
    69,238
    
    
    
    57,447Result from other credits by financial brokerage
    
    
    62,814
    
    
    
    11,076
    
    
    
    71,667Leasing
    
    
    80,194
    
    
    
    80,036
    
    
    
    46,534Net position of valuation public sector loans
    
    
    4,106
    
    
    
    9,157
    
    
    
    Net position of forward transactions in pesos
    
    
    27
    
    
    
    95,433
    
    
    
    Other
    
    
    
    
    
    
    2,135
    
    
    
    4Ps.
    257,772
    
    
    Ps.
    274,088
    
    
    Ps.
    178,515Financial ExpensesInterest on other liabilities resulting from
financial brokerage:Interest on negotiable obligations
    
    
    157,970
    
    
    
    187,320
    
    
    
    240,569Interest on other liabilities resulting from
financial brokerage from other banks and
international entities
    
    
    74,002
    
    
    
    109,706
    
    
    
    73,017Ps.
    231,972
    
    
    Ps.
    297,026
    
    
    Ps.
    313,586Other interestInterest on Argentine Central Bank loans
    
    
    
    
    
    
    
    
    
    
    5,782CER adjustment on Argentine Central Bank advances
    
    
    
    
    
    
    
    
    
    
    34,766Other
    
    
    2,882
    
    
    
    3,313
    
    
    
    5,300Ps.
    2,882
    
    
    Ps.
    3,313
    
    
    Ps.
    45,848
  F-29




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 December 31,2009
    
    
    2008
    
    
    2007OtherPremiums on repo transactions
    
    
    33,780
    
    
    
    84,823
    
    
    
    68,727Contributions and taxes on financial income
    
    
    135,644
    
    
    
    112,373
    
    
    
    66,028Net position of valuation public sector loans
    
    
    
    
    
    
    
    
    
    
    6,440Net position of forward transactions in pesos
    
    
    24,068
    
    
    
    
    
    
    
    16,172Other
    
    
    375
    
    
    
    
    
    
    
    Ps.
    193,867
    
    
    Ps.
    197,196
    
    
    Ps.
    157,367Income from servicesOtherCommissions on credit cards
    
    
    781,367
    
    
    
    652,040
    
    
    
    410,543Safety rental
    
    
    30,221
    
    
    
    18,003
    
    
    
    13,213Insurance premiums
    
    
    12,671
    
    
    
    58,901
    
    
    
    49,032Other
    
    
    78,644
    
    
    
    70,856
    
    
    
    51,143Ps.
    902,903
    
    
    Ps.
    799,800
    
    
    Ps.
    523,931Expenses for servicesOtherGross revenue taxes
    
    
    91,016
    
    
    
    74,339
    
    
    
    52,504Linked with credit cards
    
    
    212,427
    
    
    
    130,813
    
    
    
    77,555Other
    
    
    14,706
    
    
    
    14,348
    
    
    
    9,837Ps.
    318,149
    
    
    Ps.
    219,500
    
    
    Ps.
    139,896Administrative expensesOther operating expensesRentals
    
    
    62,234
    
    
    
    51,292
    
    
    
    39,963Electricity and communications
    
    
    85,850
    
    
    
    72,712
    
    
    
    57,205Maintenance and repair expenses
    
    
    52,134
    
    
    
    43,841
    
    
    
    34,780Security Services
    
    
    50,282
    
    
    
    42,255
    
    
    
    31,752Other operating expenses
    
    
    29,604
    
    
    
    39,119
    
    
    
    26,916Ps.
    280,104
    
    
    Ps.
    249,219
    
    
    Ps.
    190,616Miscellaneous incomeOtherInterest on miscellaneous receivables
    
    
    31,076
    
    
    
    39,382
    
    
    
    19,875Premiums and commissions from insurance business
    
    
    333,669
    
    
    
    276,019
    
    
    
    115,567Waiver for repayment of debt
    
    
    85,550
    
    
    
    
    
    
    
    Other
    
    
    52,051
    
    
    
    18,245
    
    
    
    38,139Ps.
    502,346
    
    
    Ps.
    333,646
    
    
    Ps.
    173,581Miscellaneous lossesOtherClaims
    
    
    2,561
    
    
    
    1,821
    
    
    
    1,191Commissions and expenses on insurance business
    
    
    93,686
    
    
    
    119,045
    
    
    
    52,019Other
    
    
    26,921
    
    
    
    17,918
    
    
    
    15,945Ps.
    123,168
    
    
    Ps.
    138,784
    
    
    Ps.
    69,155
 18. Income Taxes.
   F-30




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  19. Shareholders Equity and Restrictions Imposed on the Distribution of Dividends.
        
    
    The positive difference between the book value and the market value of public sector
assets and/or debt instruments issued by the Argentine Central Bank not valued at market
price: Ps.(723,036).
    
    The amount of the assets representing losses from lawsuits related to deposits: Ps.(259,053).
    F-31




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    20. Minimum Capital.
     Computable Capital as a %Minimum Capital.
    
    
    Computable Capital.
    
    
    of Minimum Capital.December 31, 2009
    
    Ps.
    1,611,504
    
    
    Ps.
    2,789,198
    
    
    
    173,08December 31, 2008
    
    Ps.
    1,564,542
    
    
    Ps.
    2,552,269
    
    
    
    163,13
 21. Earnings per Share.
    F-32




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  22. Contribution to the Deposit Insurance System.
       F-33




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 23. Statements of Income and Balance Sheets.
  December 31,2009
    
    
    2008
    
    
    2007Interest income:Interest and fees on loans (*)
    
    Ps.
    2,278,655
    
    
    Ps.
    2,099,393
    
    
    Ps.
    1,505,134Interest and dividends on investment securities:Tax-exempt
    
    
    270,353
    
    
    
    76,912
    
    
    
    99,880Interest on interest bearing deposits with other banks
    
    
    638
    
    
    
    8,765
    
    
    
    14,895Interest on other receivables from financial brokerage
    
    
    90,186
    
    
    
    163,420
    
    
    
    158,767Trading account interest, net
    
    
    284,837
    
    
    
    71,515
    
    
    
    46,396Total interest income
    
    
    2,924,669
    
    
    
    2,420,005
    
    
    
    1,825,072Interest expenseInterest on deposits
    
    
    880,775
    
    
    
    794,037
    
    
    
    583,873Interest on securities sold under agreements to repurchase
    
    
    33,780
    
    
    
    84,823
    
    
    
    68,736Interest on short-term liabilities from financial
intermediation
    
    
    67,283
    
    
    
    82,667
    
    
    
    58,926Interest on long-term liabilities from financial
intermediation (*)
    
    
    233,477
    
    
    
    316,141
    
    
    
    359,602Total interest expense
    
    
    1,215,315
    
    
    
    1,277,668
    
    
    
    1,071,137Net interest income
    
    
    1,709,354
    
    
    
    1,142,337
    
    
    
    753,935Provision for loan losses, Net of reversals
    
    
    595,713
    
    
    
    313,188
    
    
    
    172,470Net interest income /(expense) after provision for loan
losses
    
    
    1,113,641
    
    
    
    829,149
    
    
    
    581,465
 (*)
    
    Includes CER/CVS adjustments.  F-34




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 December 31,2009
    
    
    2008
    
    
    2007Non-interest income:Service charges on deposit accounts
    
    Ps.
    253,299
    
    
    Ps.
    201,653
    
    
    Ps.
    160,534Credit-card service charges and fees
    
    
    704,025
    
    
    
    548,629
    
    
    
    434,358Other commissions
    
    
    882,084
    
    
    
    897,715
    
    
    
    610,984Income from equity in other companies
    
    
    11,347
    
    
    
    56,764
    
    
    
    1,957Premiums and commissions on
insurance business
    
    
    333,669
    
    
    
    276,019
    
    
    
    115,567Other
    
    
    195,426
    
    
    
    139,949
    
    
    
    121,428Total non-interest income
    
    Ps.
    2,379,850
    
    
    Ps.
    2,120,729
    
    
    Ps.
    1,444,828Non-interest expense:Commissions
    
    
    424,847
    
    
    
    309,808
    
    
    
    204,867Salaries and social security charges
    
    
    975,767
    
    
    
    805,197
    
    
    
    540,643Fees and external administrative services
    
    
    183,730
    
    
    
    161,192
    
    
    
    125,502Depreciation of bank premises and equipment
    
    
    73,904
    
    
    
    61,910
    
    
    
    49,952Personnel services
    
    
    76,760
    
    
    
    90,791
    
    
    
    75,650Rentals
    
    
    62,234
    
    
    
    51,292
    
    
    
    39,963Electricity and communications
    
    
    85,850
    
    
    
    72,712
    
    
    
    57,205Advertising and publicity
    
    
    127,836
    
    
    
    146,496
    
    
    
    113,809Taxes
    
    
    406,161
    
    
    
    324,475
    
    
    
    214,006Amortization of organization and development expenses
    
    
    45,908
    
    
    
    37,950
    
    
    
    35,640Maintenance and repair expenses
    
    
    52,134
    
    
    
    43,841
    
    
    
    34,780Commissions and expenses on insurance business
    
    
    93,686
    
    
    
    119,045
    
    
    
    52,019Amortization of Amparo claims
    
    
    109,310
    
    
    
    39,545
    
    
    
    108,667Other Provisions and reserves
    
    
    109,296
    
    
    
    161,703
    
    
    
    48,151Other
    
    
    234,289
    
    
    
    237,276
    
    
    
    175,817Total non-interest expense
    
    Ps.
    3,061,712
    
    
    Ps.
    2,663,233
    
    
    Ps.
    1,876,671Income before tax expense
    
    
    431,779
    
    
    
    286,645
    
    
    
    149,622Income tax expense
    
    
    (155,992
    )
    
    
    (74,014
    )
    
    
    (71,466
    )Net Income
    
    Ps.
    275,787
    
    
    Ps.
    212,631
    
    
    Ps.
    78,156Less: Net Income attributable to
non-controlling interest
    
    
    46,512
    
    
    
    35,812
    
    
    
    32,119Net Income attributable to Parent Company
    
    Ps.
    229,275
    
    
    Ps.
    176,819
    
    
    Ps.
    46,037
  F-35




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  December 31,2009
    
    
    2008Assets:Cash and due from banks
    
    Ps.
    3,713,335
    
    
    Ps.
    3,440,912Interest-bearing deposits in other banks
    
    
    440,745
    
    
    
    317,278Federal funds sold and securities purchased under resale
agreements or similar agreements
    
    
    178,474
    
    
    
    416,914Trading account assets
    
    
    2,011,860
    
    
    
    989,565Available for sale securities
    
    
    4,471,928
    
    
    
    4,325,448Loans
    
    
    14,368,457
    
    
    
    12,951,627Allowances for loan losses
    
    
    (812,354
    )
    
    
    (539,475
    )Miscellaneous receivables
    
    
    619,944
    
    
    
    998,331Fixed assets
    
    
    898,321
    
    
    
    871,269Intangible Assets
    
    
    572,234
    
    
    
    566,979Other assets
    
    
    1,540,164
    
    
    
    1,282,416Total assets
    
    Ps.
    28,003,108
    
    
    Ps.
    25,621,264Liabilities and Shareholders Equity:Deposits
    
    Ps.
    16,917,453
    
    
    Ps.
    13,953,478Short-term borrowing
    
    
    392,623
    
    
    
    507,039Other liabilities
    
    
    313,526
    
    
    
    368,278Amounts payable for spot and forward purchases to be settled
    
    
    618,375
    
    
    
    1,014,120Other liabilities resulting from financial brokerage
    
    
    3,489,899
    
    
    
    3,394,246Long-term debt
    
    
    3,081,081
    
    
    
    3,556,101Miscellaneous Liabilities
    
    
    578,699
    
    
    
    478,720Contingent liabilities
    
    
    255,922
    
    
    
    257,333Total Liabilities
    
    
    25,647,578
    
    
    
    23,098,467Total Parent Company Shareholders Equity
    
    
    2,052,539
    
    
    
    1,845,745Non-controlling Interest
    
    
    302,991
    
    
    
    246,204Total liabilities and shareholders equity
    
    Ps.
    28,003,108
    
    
    Ps.
    25,621,264
  December 31, 2009
    
    
    December 31, 2008Unrealized
    
    
    
    
    
    
    
    
    
    
    UnrealizedCarrying value
    
    
    Gains/(Losses)
    
    
    Market value
    
    
    Carrying value
    
    
    Gains/(Losses)
    
    
    Market valueBoden 2012 Bonds 
Compensatory Bond
and Hedge Bond
    
    
    1,906,907
    
    
    
    830,119
    
    
    
    1,731,089
    
    
    
    2,350,815
    
    
    
    
    
    
    
    1,253,440GalTrust I
    
    
    584,111
    
    
    
    193,651
    
    
    
    211,647
    
    
    
    633,996
    
    
    
    
    
    
    
    67,881Discount Bonds
    
    
    598,601
    
    
    
    132,209
    
    
    
    302,124
    
    
    
    641,804
    
    
    
    
    
    
    
    161,531Bonar 2015
    
    
    323,744
    
    
    
    85,032
    
    
    
    641,340
    
    
    
    
    
    
    
    
    
    
    
    Other assets
    
    
    1,058,565
    
    
    
    14,163
    
    
    
    1,030,678
    
    
    
    698,833
    
    
    
    20,241
    
    
    
    567,174TOTAL
    
    Ps.
    4,471,928
    
    
    
    1,255,174
    
    
    
    3,916,878
    
    
    Ps.
    4,325,448
    
    
    Ps.
    20,241
    
    
    Ps.
    2,050,026
  December 31, 2009Maturing after 1
    
    
    Maturing afterMaturing within
    
    
    year but within
    
    
    5 years but within
    
    
    Maturing afterCarrying Value
    
    
    1 year
    
    
    5 years
    
    
    10 years
    
    
    10 yearsBoden 2012 Bonds 
Compensatory Bond
and Hedge Bond
    
    
    1,906,907
    
    
    
    626,928
    
    
    
    1,279,979
    
    
    
    
    
    
    
    GalTrust I
    
    
    584,111
    
    
    
    
    
    
    
    160,292
    
    
    
    423,819
    
    
    
    Discount Bonds
    
    
    598,601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    598,601Bonar 2015
    
    
    323,744
    
    
    
    37,803
    
    
    
    190,550
    
    
    
    95,391
    
    
    
    Other assets
    
    
    1,058,565
    
    
    
    709,596
    
    
    
    330,616
    
    
    
    18,353
    
    
    
    TOTAL
    
    Ps.
    4,471,928
    
    
    
    1,374,327
    
    
    
    1,961,437
    
    
    
    537,563
    
    
    
    598,601
  F-36




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 24. Operations by Geographical Segment.
  December 31,2009
    
    
    2008
    
    
    2007Total revenues:(*)Republic of Argentina
    
    Ps.
    5,417,227
    
    
    Ps.
    4,582,947
    
    
    Ps.
    3,376,524Republic of Uruguay
    
    
    14,489
    
    
    
    47,411
    
    
    
    65,565Grand Cayman Island
    
    
    65
    
    
    
    
    
    
    
    Net income (loss), net of
monetary effects allocable to
each country:Republic of Argentina
    
    
    238,740
    
    
    
    166,368
    
    
    
    28,214Republic of Uruguay
    
    
    (7,274
    )
    
    
    10,451
    
    
    
    17,823Grand Cayman Island
    
    
    (2,191
    )
    
    
    
    
    
    
    Total assets:Republic of Argentina
    
    
    27,350,754
    
    
    
    24,349,404
    
    
    
    22,335,675Republic of Uruguay
    
    
    237,544
    
    
    
    386,386
    
    
    
    493,063Grand Cayman Island
    
    
    14,068
    
    
    
    
    
    
    
    Fixed assetsRepublic of Argentina
    
    
    897,583
    
    
    
    866,179
    
    
    
    732,109Republic of Uruguay
    
    
    738
    
    
    
    5,090
    
    
    
    11,023Miscellaneous assetsRepublic of Argentina
    
    
    63,803
    
    
    
    78,326
    
    
    
    112,534Republic of Uruguay
    
    
    38
    
    
    
    297
    
    
    
    41GoodwillRepublic of Argentina
    
    
    26,346
    
    
    
    37,804
    
    
    
    58,266Other intangible assetsRepublic of Argentina
    
    
    545,409
    
    
    
    528,115
    
    
    
    389,078Republic of Uruguay
    
    
    569
    
    
    
    1,060
    
    
    
    974Geographical segment assets as
a percentage of total assetsRepublic of Argentina
    
    
    99.09
    %
    
    
    98.44
    %
    
    
    97.84
    %Republic of Uruguay
    
    
    0.86
    %
    
    
    1.56
    %
    
    
    2.16
    %Grand Cayman Island
    
    
    0.05
    %
    
    
    
    
    
    
    
 (*)
    
    The caption Revenues include financial income, income from services and miscellaneous income.  F-37




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 25. Financial Instruments with Off-Balance Sheet Risk.
     December 31,2009
    
    
    2008Commitments to extend credit
    
    Ps.
    1,323,498
    
    
    Ps.
    1,003,449Standby letters of credit
    
    
    175,525
    
    
    
    157,056Guarantees granted
    
    
    194,474
    
    
    
    208,851Acceptances
    
    
    58,904
    
    
    
    69,500
     December 31,2009
    
    
    2008Preferred counter-guarantees
    
    Ps.
    15,353
    
    
    Ps.
    34,748Other counter-guarantees
    
    
    33,344
    
    
    
    43,253
  F-38




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  December 31,2009
    
    
    2008Checks drawn on the Bank
    
    Ps.
    378,631
    
    
    Ps.
    439,809Checks drawn on the other Bank
    
    
    458,411
    
    
    
    369,531Bills and other items for collection
    
    
    2,262,278
    
    
    
    1,322,145
   26. Derivative Financial Instruments.
   F-39




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  Notional
    
    
    Net Book Valueas of
    
    
    Net Book Valueas ofAverage
    
    Amount as of
    
    
    December 31,
    
    
    December 31,
    
    
    Fair Value as of
    
    
    Fair Value as ofWeighted
    
    December 31,
    
    
    2009 Asset
    
    
    2008 Asset
    
    
    December 31,
    
    
    December 31,Type of Contract
    
    Underlying
    
    Maturity Term
    
    2009
    
    
    / (Liability)
    
    
    / (Liability)
    
    
    2009
    
    
    2008FUTURES (a)- Purchases
    
    Foreign currency
    
    4 months
    
    
    2,441,126
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    - Purchases
    
    Interest Rate
    
    5 months
    
    
    433,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    - Sales
    
    Foreign currency
    
    4 months
    
    
    2,116,549
    
    
    
    
    
    
    
    (297
    )(*)
    
    
    
    
    
    
    (297
    )(*)- Sales
    
    Interest Rate
    
    5 months
    
    
    108,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    FORWARDS  CLIENTS (b)- Purchases
    
    Foreign currency
    
    3 months
    
    
    
    
    
    
    
    
    
    
    65
    (*)
    
    
    
    
    
    
    65
    (*)- Sales
    
    Foreign currency
    
    8 months
    
    
    64,608
    
    
    
    1,040
    
    
    
    (23,556
    )(*)
    
    
    1,040
    
    
    
    (23,556
    )(*)FORWARD FOREIGN CURRENCY
HEDGE CONTRACT (c)- Purchases
    
    Foreign currency
    
    4 months
    
    
    31,000
    
    
    
    (8,060
    )
    
    
    15,827
    
    
    
    (8,060
    )
    
    
    15,827OPTIONS (d)- Put option written Boden 2012 coupon
    
    National government securities
    
    20 months
    
    
    29,285
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,649
    )- Put option written Boden 2013 coupon
    
    National government securities
    
    21 months
    
    
    92,530
    
    
    
    
    
    
    
    
    
    
    
    (3,997
    )
    
    
    (32,572
    )INTEREST RATE SWAP (e)- Fixed for variable interest rate
    
    Other
    
    11 months
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    - Variable for fixed interest rate
    
    Other
    
    15 months
    
    
    40,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (*)
    
    As of December 31, 2009 and 2008, the amounts correspond to sales as well as purchases.(a)
    
    These transactions are made through recognized exchange markets, such as Mercado Abierto
Electrónico (MAE) and Mercado a Término de Rosario (ROFEX).The general settlement method for these transactions does not require delivery of the traded
underlying asset. Rather, settlement is carried on a daily basis for the difference, if any,
between the closing price of the underlying asset and the closing price or value of the underlying
asset corresponding to the previous day, the difference in price
being charged to income.The Group records under Other Receivables from Financial Brokerage and / or Other Liabilities Resulting
from Financial Brokerage, as the case may be, the difference between the agreed foreign currency
exchange rate and such exchange rate at the end of the year according with the future prices
published by the recognized exchange markets mentioned above.As of December 31, 2009, there are not pending amounts recorded for purchases-sales futures
transactions.    F-40




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 (b)
    
    These transactions have been conducted directly with customers pursuant to the
above-mentioned conditions. The Group records under Other Receivables from Financial Brokerage
and / or Other Liabilities Resulting from Financial Brokerage, as the case may be, the difference
between the agreed foreign currency exchange rate and such exchange rate at the end of the year
according with the future prices published by Rofex.(c)
    
    On October 14, 2008, the Group entered into a forward foreign currency hedge contract, aimed to
hedge the risk associated with the exchange rate exposure of financial debt designated in U.S. Dollars. On January 6, 2009, due to the payment of the financial debts in foreign currency, which are
covered by the derivative instrument, a sales contract under similar terms was entered into in
order to offset the effects of the above-mentioned forward purchase agreement. Since the Groups purpose when entering into this contract was to reduce its exposure to US Dollar
fluctuations and denominate its future commitments in Pesos, and the main terms of the contract
(amount and due date) are similar to those of the financial debt, the derivative has been
designated as a cash flow hedge. Changes in the fair value of this derivative have been charged to
shareholders equity, under Valuation difference from hedging derivatives, and shall be
recorded as results when the covered item affects such results. (d)
    
    As established by Decree 1836/02 and Argentine Central Bank regulations, in connection with the
second exchange offered by the government to exchange restructured deposits for government bonds,
the Bank granted an option to sell coupons to the holders of restructured deposits certificates who
had opted to receive Boden 2013 Bonds and Boden 2012 Bonds in exchange for their certificates.The exercise price will be equal to that resulting from converting to pesos the face value of each
coupon in U.S. dollars at a rate of Ps.1.40 per U.S. dollar adjusted by applying the CER, which
arises from comparing the index at February 3, 2002 to that corresponding to the due date of the
coupon. That value shall in no case exceed the principal and interest amounts in pesos resulting
from applying the face value of the coupon in U.S. dollars at the buying exchange rate quoted by
Banco de la Nación Argentina (Banco Nación) on the payment date of that coupon.As of December 31, 2009 and 2008, the options bought and sold were recorded at their exercise price
in memorandum accounts. The premiums collected and/or paid have been accrued on a straight-line
basis over the life of the contract. e)
    
    These transactions are conducted within the environment created by the MAE, and the settlement
thereof is carried out on a monthly basis, in pesos, for the difference between the cash flows
calculated using a variable rate (Badlar for time deposits of 30 to 35 days of private banks) and
the cash flows calculated using a fixed rate, or vice versa, on the notional value traded, the
difference in price being charged to income.In case accrued balances pending settlement exist, they are recorded under Other Receivables
from Financial Brokerage and/or Other Liabilities Resulting from Financial Brokerage, as the
case may be.As of December 31, 2009, there are not pending amounts recorded for purchases-sales futures
transactions.  F-41




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 27. Disclosure about Fair Value of Financial Instruments.
    2009
    
    
    2008Book Value
    
    
    Fair Value
    
    
    Book Value
    
    
    Fair ValueDerivative activities: (see Note 26)Assets
    
    Ps.
    1,040
    
    
    Ps.
    1,040
    
    
    Ps.
    15,892
    
    
    Ps.
    15,892Liabilities
    
    
    8,060
    
    
    
    12,057
    
    
    
    23,853
    
    
    
    67,073Non derivative activities:Assets:Cash and due from banks (1)
    
    Ps.
    3,696,309
    
    
    Ps.
    3,696,309
    
    
    Ps.
    3,405,133
    
    
    Ps.
    3,405,133Government securities (2)Trading
    
    
    1,881,914
    
    
    
    1,882,548
    
    
    
    913,350
    
    
    
    913,350Without quotation
    
    
    1,981,972
    
    
    
    1,920,869
    
    
    
    69,772
    
    
    
    20,559Investment
    
    
    43,350
    
    
    
    43,395
    
    
    
    548,692
    
    
    
    303,196Corporate Equity Securities
    
    
    13,171
    
    
    
    13,171
    
    
    
    
    
    
    
    Loans (3)
    
    
    13,477,901
    
    
    
    13,732,385
    
    
    
    11,774,586
    
    
    
    11,211,857Others (4)
    
    
    3,830,321
    
    
    
    3,322,184
    
    
    
    5,416,276
    
    
    
    3,501,411Liabilities:Deposits (5)
    
    Ps.
    17,039,366
    
    
    Ps.
    17,047,003
    
    
    Ps.
    14,056,134
    
    
    Ps.
    13,979,359Other liabilities resulting from financial
Intermediation:Banks and international entities and
Loans from Domestic Financial
Institutions (6) and Negotiable obligations (7)
    
    
    3,517,579
    
    
    
    3,359,272
    
    
    
    4,140,741
    
    
    
    2,419,854Others (8)
    
    
    3,731,245
    
    
    
    3,537,588
    
    
    
    3,561,827
    
    
    
    3,502,958
  (1)
    
    Cash and due from banks:By definition, cash and due from banks are short-term and do not
possess credit loss risk. The carrying values as of December 31, 2009 and 2008 are a reasonable
estimate of fair value.(2)
    
    Government securities:Government securities held for trading purposes are carried at fair
value. Holdings of investment account securities correspond to securities issued by Argentine
Central Bank which fair value corresponds to their quoted market value. Securities without
quotation include Boden 2012 Bonds related to the compensation to financial institutions, Discount
Bonds and Bonar 2015 Bonds. Such bonds had quoted market values and therefore their fair value
where determined using the mentioned quoted market values.  F-42




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 (3)
    
    Loans:The fair values of loans are estimated for groups of similar characteristics,
including type of loan, credit quality incorporating the credit risk factor. For floating- or
adjustable-rate loans, which mature or are repriced within a short period of time, the carrying
values are considered to be a reasonable estimate of fair values. For fixed-rate loans, market
prices are not generally available and the fair values are estimated discounting the estimated
future cash flows based on the contracted maturity of the loans. The discount rates are based on
the current market rates corresponding to the applicable maturity. Where quoted market prices or
estimated fair values are available, primarily for loans to refinancing countries, loans held for
dispositions or sales and certain other foreign loans, the fair values are based on such market
prices and estimated fair values, including secondary market prices. For nonperforming loans, the
fair values are generally determined on an individual basis by discounting the estimated future
cash flows and may be based on the appraisal value of underlying collateral as appropriate.(4)
    
    OthersIncludes other receivables from financial brokerage and equity investments in other
companies. A majority of the items include purchases of government securities held for investment
purposes which fair value is determined by the quoted market value of the underlying government
securities, mostly Boden 2012 Bonds, Securities issued by Argentine Central Bank and Discount
Bonds. This caption also included financial trusts certificates of participation which their fair
value is estimated using valuation techniques to convert the future amounts to a single present
amount discounted. The measurement is based on the value indicated by current market expectation
about those future amounts. The estimated of the cash flows is based on the future cash flows from
the securitized assets, considering the prepayments, historical loan performance, etc. Equity
investments in companies where significant influence is exercised are not within the scope of ASC
825, Financial Instruments. Equity investments in other companies are carried at market value less
costs to sell.(5)
    
    Deposits:The fair value of deposit liabilities on demand and savings account deposits is
similar to its book value. The fair value of time deposits was calculated by discounting
contractual cash flows using current market rates for instruments with similar maturities.(6)
    
    Banks and international entities and loans from domestic financial institutions:Includes
credit lines borrowed under different credit arrangements from local and foreign banks and
entities. Most of them were restructured as of May 2004. As of December 2009 and 2008, when no
quoted market prices were available, the estimated fair value has been calculated by discounting
the contractual cash flows of these liabilities at estimated market rates.(7)
    
    Negotiable obligations:As of December 31, 2009 and 2008, the fair value of the negotiable
obligations was determined based on quoted market prices and when no quoted market prices were
available, the estimated fair value has been calculated by discounting the contractual cash flows
of these liabilities at estimated market rates.(8)
    
    Others:Includes other liabilities resulting from financial brokerage. Their fair value was
estimated at the expected future cash flows discounted at the estimated rates at year-end.  F-43




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 28. Pending events derived from the systems crisis in late 2001.
 Legal actions requesting protection of Constitutional guarantees.
          F-44




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  Claims due to foreign exchange differences arising from the repayment of financial assistance
during foreign exchange market holidays in January 2002.
       29. Preferred Liabilities of the former Banco Almafuerte Coop. Ltdo.
   F-45




---



##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    30. Financial Trusts.
  Book value of securitiesIssuance
    
    
    Estimated
    
    
    
    
    
    
    Portfolio
    
    
    held in own portfolioName
    
    Date
    
    
    maturity date
    
    
    Trustee
    
    Trust assets
    
    transferred
    
    
    12.31.09
    
    
    12.31.08Galtrust I
    
    
    10.13.00
    
    
    
    10.10.15
    
    
    First Trust of New York N.A.
    
    Secured Bonds in Pesos at 2% due 2018 (1)
    
    US$
    490,224
    (*)
    
    Ps.
    584,111
    
    
    Ps.
    633,996Galicia
    
    
    04.16.02
    
    
    
    05.06.32
    
    
    Bapro Mandatos y Negocios S.A.
    
    National Government Bonds in Pesos at 2% due 2014 (2)
    
    Ps.
    108,000
    
    
    Ps.
    79,990
    
    
    Ps.
    73,447Créditos Inmobiliarios Galicia I
    
    
    08.17.05
    
    
    
    03.15.15
    
    
    Deustche Bank S.A.
    
    Mortgage loans
    
    Ps.
    91,000
    
    
    
    
    
    
    Ps.
    21,291Créditos Inmobiliarios Galicia II
    
    
    10.12.05
    
    
    
    12.15.25
    
    
    Deustche Bank S.A.
    
    Mortgage loans
    
    Ps.
    150,000
    
    
    Ps.
    56,172
    
    
    Ps.
    49,892Galicia Prendas Comerciales
    
    
    07.03.06
    
    
    
    02.15.11
    
    
    Deustche Bank S.A.
    
    Pledge loans
    
    Ps.
    86,623
    
    
    
    
    
    
    Ps.
    6,593Galicia Leasing I
    
    
    09.22.06
    
    
    
    05.15.11
    
    
    Deustche Bank S.A.
    
    Assets under financial leases
    
    Ps.
    150,000
    
    
    
    
    
    
    Ps.
    24,168Galicia Personales IV
    
    
    01.17.07
    
    
    
    10.15.11
    
    
    Deustche Bank S.A.
    
    Personal loans
    
    Ps.
    100,000
    
    
    
    
    
    
    Ps.
    13,737Galicia Personales V
    
    
    04.13.07
    
    
    
    01.15.12
    
    
    Deustche Bank S.A.
    
    Personal loans
    
    Ps.
    150,000
    
    
    
    
    
    
    Ps.
    25,168Galicia Personales VI
    
    
    09.28.07
    
    
    
    06.15.12
    
    
    Deustche Bank S.A.
    
    Personal loans
    
    Ps.
    108,081
    
    
    Ps.
    17,175
    
    
    Ps.
    17,670Galicia Personales VII
    
    
    02.21.08
    
    
    
    11.15.12
    
    
    Deustche Bank S.A.
    
    Personal loans
    
    Ps.
    150,000
    
    
    Ps.
    35,216
    
    
    Ps.
    25,010Galicia Personales VIII
    
    
    07.04.08
    
    
    
    04.15.13
    
    
    Deustche Bank S.A.
    
    Personal loans
    
    Ps.
    187,500
    
    
    Ps.
    55,518
    
    
    Ps.
    39,956Totals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    828,182
    
    
    Ps.
    930,928
 (*)
    
    The remaining US $9,776 was transferred in cash.(1)
    
    In exchange for loans to the Provincial Governments.(2)
    
    In exchange for secured loans.  
    
    Received as loan repayment for Ps.58,662 and Ps.57,378, respectively.
    
    Acquired as investments for Ps.52,232 and Ps.9,891, respectively.
  F-46




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
     Tarjeta Naranja S.A.
 Estimated
    
    
    
    
    
    
    
    
    
    
    Book value of securities heldIssuance
    
    
    maturity
    
    
    
    
    
    
    Portfolio
    
    
    in own portfolioName
    
    Date
    
    
    date
    
    
    Trustee
    
    Trust assets
    
    transferred
    
    
    12.31.09
    
    
    12.31.08Tarjeta Naranja Trust V
    
    
    10.09.07
    
    
    
    11.20.09
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    115,306
    
    
    
    
    
    
    Ps.
    21,391Tarjeta Naranja Trust VI
    
    
    12.11.07
    
    
    
    01.23.10
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    150,003
    
    
    Ps.
    25,115
    
    
    Ps.
    24,983Tarjeta Naranja Trust VII
    
    
    02.19.08
    
    
    
    07.23.10
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    142,913
    
    
    Ps.
    24,664
    
    
    Ps.
    25,316Tarjeta Naranja Trust VIII
    
    
    08.05.08
    
    
    
    09.20.10
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    138,742
    
    
    Ps.
    47,917
    
    
    Ps.
    46,235Tarjeta Naranja Trust IX
    
    
    12.12.08
    
    
    
    05.20.10
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    90,615
    
    
    Ps.
    24,786
    
    
    
    Totals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    122,482
    
    
    Ps.
    117,925
   F-47




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Tarjetas Cuyanas S.A.
 Estimated
    
    
    
    
    
    
    
    
    
    
    Book value of securities heldIssuance
    
    
    maturity
    
    
    
    
    
    
    Portfolio
    
    
    in own portfolioName
    
    Date
    
    
    date
    
    
    Trustee
    
    Trust assets
    
    transferred
    
    
    12.31.09
    
    
    12.31.08Tarjetas Cuyanas Trust V
    
    
    02.04.08
    
    
    
    03.15.10
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    61,700
    
    
    Ps.
    21,637
    
    
    Ps.
    14,733Tarjetas Cuyanas Trust VI
    
    
    07.07.08
    
    
    
    06.24.09
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    89,000
    
    
    
    
    
    
    Ps.
    20,221Totals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    21,637
    
    
    Ps.
    34,954
  Tarjetas del Mar S.A.
 Book value of securitiesIssuance
    
    
    Estimated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    held in own portfolioName
    
    Date
    
    
    maturity date
    
    
    Trustee
    
    Trust assets
    
    
    Portfolio transferred
    
    
    12.31.09
    
    
    12.31.08Tarjetas del Mar Serie IV
    
    
    07.28.08
    
    
    
    05.31.09
    
    
    Equity Trust Company (Argentina) S.A.
    
    Certain credit rights against cardholders
    
    Ps.
    26,800
    
    
    
    
    
    
    Ps.
    5,186
   
    
    Trust contracts for purposes of guaranteeing compliance with obligations:
  Balances of TrustFunds
    
    
    Maturity DateDate of Contract
    
    Trustor
    
    Ps.
    
    
    (1)04.10.07
    
    Sullair
    
    
    2
    
    
    
    12.31.10O2.12.08
    
    Sinteplast
    
    
    9
    
    
    
    01.28.13Totals
    
    
    11
 (1)
    
    These amounts shall be released monthly until settlement date of trustor obligations
or maturity date, whichever occurs first.  F-48




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 
    
    Financial trust contracts:   Balances of Trust FundsDate of Contract
    
    Trust
    
    Ps.
    
    
    US$
    
    
    Maturity Date07.13.05
    
    Rumbo Norte I
    
    
    3,363
    
    
    
    24
    
    
    
    07.13.11
    (3)10.12.05
    
    Hydro I
    
    
    22,054
    
    
    
    
    
    
    
    09.05.17
    (2)12.05.06
    
    Faid 2011
    
    
    55,003
    
    
    
    
    
    
    
    02.28.12
    (3)12.06.06
    
    Gas I
    
    
    233,506
    
    
    
    
    
    
    
    06.30.11
    (3)03.02.07
    
    Agro Nitralco
    
    
    3,071
    
    
    
    
    
    
    
    06.30.10
    (3)09.05.07
    
    Saturno VII
    
    
    108
    
    
    
    
    
    
    
    12.31.10
    (3)11.22.07
    
    Radio Sapienza VI
    
    
    728
    
    
    
    
    
    
    
    01.12.11
    (3)05.06.08
    
    Agro Nitralco II
    
    
    16,401
    
    
    
    2
    
    
    
    12.31.10
    (3)05.14.09
    
    Gas II
    
    
    1,072,463
    
    
    
    
    
    
    
    05.31.14
    (3)Totals
    
    
    1,406,697
    
    
    
    26
 (2)
    
    These amounts shall be released monthly until redemption of debt securities.(3)
    
    Estimated date, since maturity date shall occur at the time of the distribution of all of trust
assets. 31. Segment Reporting.
     Banking:
  F-49




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Regional Credit Cards:
 Insurance:
 Other Grupo Businesses:
   F-50




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Regional
    
    
    
    
    
    
    Other Grupos
    
    
    
    
    
    
    ConsolidatedIn Pesos Thousands
    
    Banking
    
    
    Credit Cards
    
    
    Insurance
    
    
    Businesses
    
    
    Adjustments
    
    
    TotalYear ended December 31, 2009Net Financial Income
    
    
    1,144,226
    
    
    
    375,491
    
    
    
    28,543
    
    
    
    (1,931
    )
    
    
    (1,151
    )
    
    
    1,545,178Net Income from Services
    
    
    727,855
    
    
    
    736,985
    
    
    
    
    
    
    
    12,485
    
    
    
    (166,405
    )
    
    
    1,310,920Net Operating Revenue
    
    
    1,872,081
    
    
    
    1,112,476
    
    
    
    28,543
    
    
    
    10,554
    
    
    
    (167,556
    )
    
    
    2,856,098Provisions for Loan Losses
    
    
    388,665
    
    
    
    250,840
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    639,505Administrative Expenses
    
    
    1,321,785
    
    
    
    621,865
    
    
    
    42,984
    
    
    
    19,255
    
    
    
    23,240
    
    
    
    2,029,129Net Operating Income
    
    
    161,631
    
    
    
    239,771
    
    
    
    (14,441
    )
    
    
    (8,701
    )
    
    
    (190,796
    )
    
    
    187,464Income from Equity InvestmentTarjetas Regionales SA
    
    
    133,028
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (133,028
    )Sudamericana
    
    
    3,352
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,352
    )Others
    
    
    13,139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,792
    )
    
    
    11,347Other Income (Loss)
    
    
    (139,303
    )
    
    
    54,966
    
    
    
    55,327
    
    
    
    15,629
    
    
    
    246,349
    
    
    
    232,968Non-controlling interests
    
    
    
    
    
    
    (32,642
    )
    
    
    
    
    
    
    
    
    
    
    (13,870
    )
    
    
    (46,512
    )Pre-tax Income
    
    
    171,847
    
    
    
    262,095
    
    
    
    40,886
    
    
    
    6,928
    
    
    
    (96,489
    )
    
    
    385,267Income tax provision
    
    
    
    
    
    
    129,067
    
    
    
    14,153
    
    
    
    4,576
    
    
    
    8,196
    
    
    
    155,992Net Income
    
    
    171,847
    
    
    
    133,028
    
    
    
    26,733
    
    
    
    2,352
    
    
    
    (104,685
    )
    
    
    229,275Net Income as a % of Grupo Financiero Galicias Net Income
    
    
    75
    %
    
    
    58
    %
    
    
    12
    %
    
    
    1
    %Average:Private Loans
    
    
    8,959,360
    
    
    
    2,402,489
    
    
    
    
    
    
    
    
    
    
    
    (18,215
    )
    
    
    11,343,634Deposits
    
    
    14,765,933
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,376
    )
    
    
    14,758,557End of Period:Assets
    
    
    27,224,687
    
    
    
    3,365,737
    
    
    
    260,694
    
    
    
    39,209
    
    
    
    (3,287,961
    )
    
    
    27,602,366Equity
    
    
    2,126,522
    
    
    
    586,757
    
    
    
    90,801
    
    
    
    21,854
    
    
    
    (773,395
    )
    
    
    2,052,539
  F-51




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Regional
    
    
    
    
    
    
    Other Grupo
    
    
    
    
    
    
    ConsolidatedIn Pesos Thousands
    
    Banking
    
    
    Credit Cards
    
    
    Insurance
    
    
    Businesses
    
    
    Adjustments
    
    
    TotalYear ended December 31, 2008Net Financial Income
    
    
    847,282
    
    
    
    296,156
    
    
    
    20,156
    
    
    
    (80
    )
    
    
    (25,182
    )
    
    
    1,138,332Net Income from Services
    
    
    654,952
    
    
    
    571,829
    
    
    
    
    
    
    
    12,897
    
    
    
    (51,810
    )
    
    
    1,187,868Net Operating Revenue
    
    
    1,502,234
    
    
    
    867,985
    
    
    
    20,156
    
    
    
    12,817
    
    
    
    (76,992
    )
    
    
    2,326,200Provisions for Loan Losses
    
    
    214,948
    
    
    
    180,441
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    395,389Administrative Expenses
    
    
    1,166,476
    
    
    
    554,451
    
    
    
    29,963
    
    
    
    13,463
    
    
    
    16,725
    
    
    
    1,781,078Net Operating Income
    
    
    120,810
    
    
    
    133,093
    
    
    
    (9,807
    )
    
    
    (646
    )
    
    
    (93,717
    )
    
    
    149,733Income from Equity InvestmentTarjetas Regionales SA
    
    
    76,436
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,436
    )
    
    
    Sudamericana
    
    
    2,866
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,866
    )
    
    
    Others
    
    
    58,164
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,400
    )
    
    
    56,764Other Income (Loss)
    
    
    (63,014
    )
    
    
    45,242
    
    
    
    43,506
    
    
    
    2,104
    
    
    
    52,310
    
    
    
    80,148Non-controlling interests
    
    
    
    
    
    
    (20,646
    )
    
    
    
    
    
    
    
    
    
    
    (15,166
    )
    
    
    (35,812
    )Pre-tax Income
    
    
    195,262
    
    
    
    157,689
    
    
    
    33,699
    
    
    
    1,458
    
    
    
    (137,275
    )
    
    
    250,833Income tax provision
    
    
    
    
    
    
    81,253
    
    
    
    11,140
    
    
    
    1,328
    
    
    
    (19,707
    )
    
    
    74,014Net Income
    
    
    195,262
    
    
    
    76,436
    
    
    
    22,559
    
    
    
    130
    
    
    
    (117,568
    )
    
    
    176,819Net Income as a % of Grupo Financiero Galicias Net Income
    
    
    110.43
    %
    
    
    43.23
    %
    
    
    12.76
    %
    
    
    0.07
    %Average:Loans
    
    
    8,707,477
    
    
    
    2,104,993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,812,470Deposits
    
    
    13,199,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,712
    )
    
    
    13,191,288End of Period:Assets
    
    
    24,439,812
    
    
    
    2,763,843
    
    
    
    227,719
    
    
    
    22,552
    
    
    
    (2,718,136
    )
    
    
    24,735,790Equity
    
    
    1,954,666
    
    
    
    453,728
    
    
    
    77,065
    
    
    
    8,641
    
    
    
    (648,355
    )
    
    
    1,845,745
  F-52




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Regional
    
    
    
    
    
    
    Other Grupo
    
    
    
    
    
    
    ConsolidatedIn Pesos thousand
    
    Banking
    
    
    Credit Cards
    
    
    Insurance
    
    
    Businesses
    
    
    Adjustments
    
    
    TotalYear ended December 31, 2007Net Financial Income
    
    
    516,158
    
    
    
    203,187
    
    
    
    16,640
    
    
    
    559
    
    
    
    14,642
    
    
    
    751,186Net Income from Services
    
    
    520,471
    
    
    
    409,019
    
    
    
    
    
    
    
    8,468
    
    
    
    (24,862
    )
    
    
    913,096Net Operating Revenue
    
    
    1,036,629
    
    
    
    612,206
    
    
    
    16,640
    
    
    
    9,027
    
    
    
    (10,220
    )
    
    
    1,664,282Provisions for Loan Losses
    
    
    159,197
    
    
    
    96,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255,502Administrative Expenses
    
    
    875,085
    
    
    
    369,476
    
    
    
    16,147
    
    
    
    9,147
    
    
    
    16,469
    
    
    
    1,286,324Net Operating Income
    
    
    2,347
    
    
    
    146,425
    
    
    
    493
    
    
    
    (120
    )
    
    
    (26,689
    )
    
    
    122,456Income from Equity InvestmentTarjetas Regionales SA
    
    
    88,154
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88,154
    )
    
    
    Sudamericana
    
    
    1,910
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,910
    )
    
    
    Others
    
    
    3,476
    
    
    
    
    
    
    
    
    
    
    
    (31
    )
    
    
    (1,488
    )
    
    
    1,957Other Income (Loss)
    
    
    (65,465
    )
    
    
    41,343
    
    
    
    21,983
    
    
    
    2,198
    
    
    
    25,150
    
    
    
    25,209Non-controlling interests
    
    
    
    
    
    
    (27,510
    )
    
    
    
    
    
    
    
    
    
    
    (4,609
    )
    
    
    (32,119
    )Pre-tax Income
    
    
    30,422
    
    
    
    160,258
    
    
    
    22,476
    
    
    
    2,047
    
    
    
    (97,700
    )
    
    
    117,503Income tax provision
    
    
    
    
    
    
    72,104
    
    
    
    7,846
    
    
    
    819
    
    
    
    (9,303
    )
    
    
    71,466Net Income
    
    
    30,422
    
    
    
    88,154
    
    
    
    14,630
    
    
    
    1,228
    
    
    
    (88,397
    )
    
    
    46,037Net Income as a % of Grupo Financiero Galicias Net Income
    
    
    66.1
    %
    
    
    191.5
    %
    
    
    31.8
    %
    
    
    2.7
    %
    
    
    
    
    
    
    Averages:Loans
    
    
    7,140,643
    
    
    
    1,703,145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,843,788Deposits
    
    
    11,857,001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,059
    )
    
    
    11,844,942End of Period:Assets
    
    
    20,682,613
    
    
    
    2,397,126
    
    
    
    155,427
    
    
    
    12,449
    
    
    
    (418,877
    )
    
    
    22,828,738Equity
    
    
    1,759,396
    
    
    
    377,294
    
    
    
    64,506
    
    
    
    9,406
    
    
    
    (556,097
    )
    
    
    1,654,505
  F-53




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 32.
Agreement for the purchases of shares.
     33. Differences between the Argentine Central Banks regulations and Argentine GAAP in the
Autonomous City of Buenos Aires.
  Boden 2012 Bonds
   Bonar 2015 Bonds
  Discount Bonds and GDP-Linked Negotiable Securities
   F-54




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  Secured loans
   Accounting disclosure of effects generated by court decisions on deposits
  Conversion of financial statements
      F-55




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Allowance for loan losses  Non-financial public sector
  Accounting for income tax according to the deferred tax method
   Adoption of the International Financial Reporting Standards by the National Securities
Commission
    34.
Subsequent events.
     F-56




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 35. Summary of Significant Differences between Argentine Central Bank Rules and United States
Accounting Principles.
  a. Income tax
    F-57




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  December 31, 2009ASC 740-10
    
    
    ASC 740-10applied to
    
    
    applied to U.S.Argentine GAAP
    
    
    GAAPbalances
    
    
    adjustments
    
    
    ASC 740-10Deferred tax assetsAllowance for loan losses  private sector
    
    
    175,935
    
    
    
    (22,285
    )
    
    
    153,650Compensatory Bond, Bonar Bonds, Discount Bonds and other investments
    
    
    (41,792
    )
    
    
    49,764
    
    
    
    7,972Amortization of Intangible assets
    
    
    93,938
    
    
    
    
    
    
    
    93,938Compensation related to the payment of deposits
    
    
    
    
    
    
    90,669
    
    
    
    90,669Impairment of fixed assets and foreclosed assets
    
    
    
    
    
    
    20,087
    
    
    
    20,087Provision for contingencies
    
    
    71,225
    
    
    
    
    
    
    
    71,225Debt restructuring
    
    
    
    
    
    
    48,045
    
    
    
    48,045Others
    
    
    84,921
    
    
    
    60,797
    
    
    
    145,718Loss carry forward
    
    
    93,821
    
    
    
    
    
    
    
    93,821Total gross deferred tax assets
    
    Ps.
    478,048
    
    
    Ps.
    247,077
    
    
    Ps.
    725,125Deferred tax liabilities:Allowance for loan losses  public sector
    
    
    (25,743
    )
    
    
    
    
    
    
    (25,743
    )Others
    
    
    (122,672
    )
    
    
    
    
    
    
    (122,672
    )Total gross deferred tax liabilities
    
    Ps.
    (148,415
    )
    
    Ps.
    
    
    
    Ps.
    (148,415
    )Net deferred income tax asset before valuation allowance
    
    Ps.
    329,633
    
    
    Ps.
    247,077
    
    
    Ps.
    576,710Valuation allowance
    
    
    
    
    
    
    
    
    
    
    Net deferred income tax assets
    
    Ps.
    329,633
    
    
    Ps.
    247,077
    
    
    Ps.
    576,710
 December 31, 2008ASC 740-10
    
    
    ASC 740-10applied to
    
    
    applied to U.S.Argentine GAAP
    
    
    GAAPbalances
    
    
    adjustments
    
    
    ASC 740-10Deferred tax assetsAllowance for loan losses  private sector
    
    
    138,917
    
    
    
    16,973
    
    
    
    155,890Allowance for loan losses  public sector
    
    
    12,101
    
    
    
    
    
    
    
    12,101Amortization of Intangible assets
    
    
    70,654
    
    
    
    
    
    
    
    70,654Compensation related to the payment of deposits
    
    
    
    
    
    
    110,906
    
    
    
    110,906Impairment of fixed assets and foreclosed assets
    
    
    
    
    
    
    20,575
    
    
    
    20,575Provision for contingencies
    
    
    87,065
    
    
    
    
    
    
    
    87,065Debt restructuring
    
    
    
    
    
    
    59,984
    
    
    
    59,984Others
    
    
    54,768
    
    
    
    46,175
    
    
    
    100,943Loss carry forward
    
    
    799,138
    
    
    
    
    
    
    
    799,138Total gross deferred tax assets
    
    Ps.
    1,162,643
    
    
    Ps.
    254,613
    
    
    Ps.
    1,417,256Deferred tax liabilities:Compensatory and Hedge bond, Provincial public debt and
Discount Bond
    
    Ps.
    (563,288
    )
    
    Ps.
    548,711
    
    
    Ps.
    (14,577
    )Others
    
    
    (128,307
    )
    
    
    
    
    
    
    (128,307
    )Total gross deferred tax liabilities
    
    Ps.
    (691,595
    )
    
    Ps.
    548,711
    
    
    Ps.
    (142,884
    )Net deferred income tax asset before valuation allowance
    
    Ps.
    471,048
    
    
    Ps.
    803,324
    
    
    Ps.
    1,274,372Valuation allowance
    
    
    (799,138
    )
    
    
    
    
    
    
    (799,138
    )Net deferred income tax (liabilities) / assets
    
    Ps.
    (328,090
    )
    
    Ps.
    803,324
    
    
    Ps.
    475,234
  F-58




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  December 31,2009
    
    
    2008
    
    
    2007Statutory income tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Tax provision computed by applying
the statutory rate to the income
before taxation calculated in
accordance with U.S. GAAP
    
    Ps.
    288,659
    
    
    Ps.
    (427,665
    )
    
    Ps.
    239,896Tax exempt income
    
    
    564,995
    
    
    
    92,791
    
    
    
    (162,249
    )Valuation allowance
    
    
    (799,138
    )
    
    
    283,952
    
    
    
    14,875Actual tax provision under U.S. GAAP
    
    Ps.
    54,516
    
    
    Ps.
    (50,922
    )
    
    Ps.
    92,522
      Jurisdiction
    
    Tax yearArgentina
    
    
    2005  2009Uruguay
    
    
    2005  2009
 b. Commissions on loans
   F-59




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 c. Intangible assets
 Goodwill
     Software costs
  d. Loan loss reserves
  (i) Loan charge offs and recoveries
   F-60




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 (ii) Loans  Non-financial national public sector
      (iii) Loans / Bonds  Non-financial provincial public sector
     F-61




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  (iv) Loans to the non-financial private sector and residents abroad
    F-62




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  December 31,2009
    
    
    2008
    
    
    2007Total impaired loans
    
    Ps.
    286,255
    
    
    Ps.
    286,489
    
    
    Ps.
    399,528Average impaired loans during the year
    
    
    185,270
    
    
    
    179,969
    
    
    
    398,419Total impaired loans with no allowance under U.S. GAAP
    
    
    39,051
    
    
    
    10,603
    
    
    
    7,132Cash payments received for interest on impaired loans,
Recognized as income
    
    
    1,667
    
    
    
    831
    
    
    
    473Allowance for impaired loans under ASC 310-10
    
    
    101,682
    
    
    
    134,527
    
    
    
    246,293
   F-63




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  Valuation AllowancesArgentineBanking GAAP
    
    
    US GAAP
    
    
    AdjustmentDecember 31, 2008
    
    Ps.
    544,174
    
    
    Ps.
    592,669
    
    
    Ps.
    (48,495
    )Variances
    
    
    271,789
    
    
    
    159,623
    
    
    
    December 31, 2009
    
    
    815,963
    
    
    
    752,292
    
    
    
    63,671
 e. Government securities and other investments
 (i) Compensatory and Hedge bonds received and Hedge Bonds in connection with the
compensation for foreign currency position and compensatory bonds received and to be
received in connection with the compensation for asymmetric pesification.
         F-64




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 2009
    
    
    2008Book
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BookValue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ValueAmortized
    
    
    Argentine
    
    
    
    
    
    
    
    
    
    
    Shareholders
    
    
    Amortized
    
    
    Argentine
    
    
    
    
    
    
    Unrealized
    
    
    ShareholdersCost US
    
    
    Banking
    
    
    Market
    
    
    Unrealized
    
    
    equity
    
    
    Cost US
    
    
    Banking
    
    
    Market
    
    
    (Loss)/
    
    
    equityGAAP
    
    
    GAAP
    
    
    Value
    
    
    (Loss)/Gain
    
    
    Adjustment
    
    
    GAAP
    
    
    GAAP
    
    
    Value
    
    
    Gain
    
    
    Adjustment(In thousands of Ps.)BODEN 2012 Bonds
    
    
    900,971
    
    
    
    1,906,907
    
    
    
    1,731,089
    
    
    
    830,119
    
    
    
    (175,818
    )
    
    
    1,964,504
    
    
    
    2,350,815
    
    
    
    1,253,440
    
    
    
    
    
    
    
    (1,097,375
    )
 (ii) External Notes / Discount Bonds and GDP-Linked Negotiable Securities
 ,
       2009
    
    
    2008Book
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BookValue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ValueAmortized
    
    
    Argentine
    
    
    
    
    
    
    
    
    
    
    Shareholders
    
    
    Amortized
    
    
    Argentine
    
    
    
    
    
    
    
    
    
    
    ShareholdersCost US
    
    
    Banking
    
    
    Market
    
    
    Unrealized
    
    
    equity
    
    
    Cost US
    
    
    Banking
    
    
    Market
    
    
    Unrealized
    
    
    equityGAAP
    
    
    GAAP
    
    
    Value
    
    
    (Loss)/Gain
    
    
    Adjustment
    
    
    GAAP
    
    
    GAAP
    
    
    Value
    
    
    (Loss)/Gain
    
    
    Adjustment(In thousands of Ps.)Discount Bonds
    
    
    169,915
    
    
    
    621,983
    
    
    
    337,872
    
    
    
    132,209
    
    
    
    (284,111
    )
    
    
    297,280
    
    
    
    666,874
    
    
    
    196,502
    
    
    
    
    
    
    
    (470,372
    )
  F-65




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 (iii) Bonar 2015 Bonds
      2009BookValueAmortized
    
    
    ArgentineCost US
    
    
    Banking
    
    
    Market
    
    
    Unrealized
    
    
    Shareholders equityGAAP
    
    
    GAAP
    
    
    Value
    
    
    (Loss)/Gain
    
    
    Adjustment(In thousands of Ps.)BONAR 2015 Bonds
    
    
    591,548
    
    
    
    358,984
    
    
    
    676,580
    
    
    
    85,032
    
    
    
    317,596
 (iv) Other investments
     F-66




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
   f. Items in process of collection
   g. Compensation related to the payment of deposits
     h. Transfers of financial assets
 Financial trust Galtrust I
   F-67




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    December 31,
    
    
    December 31,
    
    
    December 31,Discount real rate for:
    
    2009
    
    
    2008
    
    
    2007Galtrust I Participation Certificates
    
    
    23
    %
    
    
    40
    %
    
    
    9
    %
       F-68




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Financial Trust Galicia
   BG Financial Trust
  Financial Trust Tarjetas del Mar Serie IV
  Other transfers of financial assets consolidated into the Groups financial statements in
accordance with U.S. GAAP
   
    
    determine whether the entity meets the criteria to qualify as a VIE and;
    
    determine whether the Group is the primary beneficiary of the VIE.
  F-69




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  
    
    the design of the entity, including the nature of its risks and the purpose for which
the entity was created, to determine the variability that the entity was designed to create
and distribute to its interest holders;
    
    the nature of the involvement with the entity;
    
    whether control of the entity may be achieved through arrangements that do not involve
voting equity;
    
    whether there is sufficient equity investment at risk to finance the activities of the
entity and;
    
    whether parties other than the equity holders have the obligation to absorb expected
losses or the right to received residual returns.
  
    
    whether the variable interest absorbs the majority of the VIEs expected
losses;
    
    whether the variable interest receives the majority of the VIEs expected
returns and;
    
    whether the Group has the ability to make decisions that significantly affect
the VIEs results and activities.
   December 31,
    
    
    December 31,2009
    
    
    2008Cash and due from banks
    
    Ps.
    15,220
    
    
    Ps.
    33,372Loans (net of allowances)
    
    
    463,742
    
    
    
    939,955Other assets
    
    
    8,833
    
    
    
    21,157Total Assets
    
    Ps.
    487,795
    
    
    Ps.
    994,484Debt Securities
    
    Ps.
    279,583
    
    
    Ps.
    721,993Certificates of Participation
    
    
    193,321
    
    
    
    247,651Other liabilities
    
    
    14,891
    
    
    
    24,840Total Liabilities
    
    Ps.
    487,795
    
    
    Ps.
    994,484
  Other transfers of financial assets accounted for as sales under U.S. GAAP
   F-70




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
       
    
    The continuing involvement in these trusts is related to the acting as servicer of the
Group securitized assets and the retained interest hold by the Group through certificates
of participation;
    
    There were no restrictions on assets reported by an entity in its statement of financial
position related to a transferred financial asset.
 i. Acceptances
   j. Impairment of real estate properties and foreclosed assets
 Impairment of
Long-lived
Assets
  F-71




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
     k. Equity investments in other companies
    l.
Financial Instruments
 Guarantees
 Financial guarantee  Exchange of deposits with the financial system II  Written Options.
   F-72




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
   Other Financial Guarantees
   2009Estimated
    
    
    U.S. GAAPMaximum
    
    
    Proceeds
    
    
    CarryingPotential
    
    
    From collateral
    
    
    Amount -Payments (*)
    
    
    Recourse
    
    
    LiabilityFinancial guarantees
    
    
    112,899
    
    
    
    3,719
    
    
    
    152Ps.
    112,899
    
    
    Ps.
    3,719
    
    
    Ps.
    152
 2008Estimated
    
    
    U.S. GAAPMaximum
    
    
    Proceeds
    
    
    CarryingPotential
    
    
    From collateral
    
    
    Amount -Payments (*)
    
    
    Recourse
    
    
    LiabilityFinancial guarantees
    
    
    72,008
    
    
    
    5,362
    
    
    
    292Ps.
    72,008
    
    
    Ps.
    5,362
    
    
    Ps.
    292
 (*)
    
    The maximum potential payments represent a worse-case scenario, and do not necessarily
reflect expected results. Estimated proceeds from collateral and recourse represent the anticipated
value of assets that could be liquidated or received from other parties to offset the Companys
payments under guarantees.   F-73




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 m. Non-controlling interest
   n. Foreign Debt Restructuring
        F-74




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  o. Repurchase Agreements and Reverse Repurchase Agreements (Repos and Reverse Repos)
    p. Fair Value Measurements Disclosures
   Fair Value Hierarchy
   
    
    Level 1  inputs to the valuation methodology are quoted prices
(unadjusted) for identical assets or liabilities in active markets.
  F-75




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 
    
    Level 2  inputs to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the asset or liability, either
directly or indirectly, for substantially the full term of the asset or liability.Level 2  inputs include the following:
 a)
    
    Quoted prices for similar assets or liabilities in active markets;b)
    
    Quoted prices for identical or similar assets or liabilities in non-active markets;c)
    
    Pricing models whose inputs are observable for substantially the full term of the asset
or liability; andd)
    
    Pricing models whose inputs are derived principally from or corroborated by
observable market data through correlation or other means
 
    
    Level 3  inputs to the valuation methodology are unobservable and
significant to the fair value measurement.
  Determination of Fair Value
    Assets
 a)Government securities and other investments
  b) Securities receivable under repurchase agreements
   F-76




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 c) Transfers of financial assets
  d) Derivatives Financial Instruments
  Liabilities
 e Securities to be delivered under spot and forward sales to be settled
  f) Derivatives Financial Instruments
  Items measured at fair value on a recurring basis
   F-77




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Internal
    
    
    Internalmodels with
    
    
    models withQuoted
    
    
    significant
    
    
    significantmarket prices
    
    
    observable
    
    
    unobservableTotal
    
    
    in active
    
    
    market
    
    
    marketcarrying
    
    
    markets
    
    
    parameters
    
    
    parametersBalances as of December 31, 2009
    
    value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)ASSETSa.1) Trading SecuritiesNational Government Securities
    
    Ps.
    266,836
    
    
    Ps.
    266,836
    
    
    Ps.
    
    
    
    Ps.
    a.2) Whitout Quotation  National Government
SecuritiesCompensatory and Hedge Bond Received
    
    
    938,340
    
    
    
    938,340
    
    
    
    
    
    
    
    Discount Bonds & GDP Linked Negotiable Sec.
    
    
    337,872
    
    
    
    337,872
    
    
    
    
    
    
    
    Bonar 2015 Bonds
    
    
    676,580
    
    
    
    676,580
    
    
    
    
    
    
    
    a.3) Securities issued by Argentine Central BankSecurities issued by the Argentine Central Bank
    
    
    1,658,473
    
    
    
    1,658,473
    
    
    
    
    
    
    
    a.4) Other Investments (*)
    
    
    410,702
    
    
    
    
    
    
    
    
    
    
    
    410,702a.5) Corporates SecuritiesShares
    
    
    53
    
    
    
    53
    
    
    
    
    
    
    
    Marketable Negotioble Obligations
    
    
    5,613
    
    
    
    5,613
    
    
    
    
    
    
    
    Negotiable Mutual Funds
    
    
    7,505
    
    
    
    7,505
    
    
    
    
    
    
    
    b) Securities receivable under repurchase
agreementsb.1) Whitout Quotation  National Government
SecuritiesCompensatory and Hedge Bond Received
    
    
    805,724
    
    
    
    805,724
    
    
    
    
    
    
    
    b.2) Securities issued by Argentine Central BankSecurities issued by Argentine Central Bank
    
    
    226,682
    
    
    
    226,682
    
    
    
    
    
    
    
    c) Transfers of financial assetsDebt Securities and Certificates of Participation
    
    
    50,939
    
    
    
    
    
    
    
    
    
    
    
    50,939Certificate of Participation Galtrust I
    
    
    211,647
    
    
    
    
    
    
    
    
    
    
    
    211,647d) Derivatives financial instruments
    
    
    1,040
    
    
    
    
    
    
    
    1,040
    
    
    
    TOTAL ASSETS AT FAIR VALUE
    
    
    5,598,006
    
    
    
    4,923,678
    
    
    
    1,040
    
    
    
    673,288LIABILITIESe) Securities to be delivered under spot and
forward sales to be settled
    
    
    (12,975
    )
    
    
    (12,975
    )
    
    
    
    
    
    
    f) Derivatives finacial instruments
    
    
    (12,057
    )
    
    
    
    
    
    
    (12,057
    )
    
    
    TOTAL LIABILITIES AT FAIR VALUE
    
    
    (25,032
    )
    
    
    (12,975
    )
    
    
    (12,057
    )
    
    
    
 (*)
    
    This amount is related to the fair value of the Certificate of Participation of Nues Trust and
Almafuerte Special Fund.  F-78




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Internal
    
    
    Internalmodels with
    
    
    models withQuoted
    
    
    significant
    
    
    significantmarket prices
    
    
    observable
    
    
    unobservableTotal
    
    
    in active
    
    
    market
    
    
    marketcarrying
    
    
    markets
    
    
    parameters
    
    
    parametersBalances as of December 31, 2008
    
    value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)ASSETSa.1) Trading SecuritiesNational Government Securities
    
    Ps.
    363,146
    
    
    Ps.
    363,146
    
    
    Ps.
    
    
    
    Ps.
    a.2) Whitout Quotation  National Government
SecuritiesCompensatory and Hedge Bond Received
    
    
    280,410
    
    
    
    280,410
    
    
    
    
    
    
    
    Discount Bonds & GDP Linked Negotiable Sec.
    
    
    51,871
    
    
    
    51,871
    
    
    
    
    
    
    
    a.3) Securities issued by Argentine Central BankSecurities issued by the Argentine Central Bank
    
    
    550,204
    
    
    
    550,204
    
    
    
    
    
    
    
    a.4) Other Investments(*)
    
    
    301,486
    
    
    
    
    
    
    
    
    
    
    
    301,486a.5) Corporate Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares
    
    
    56
    
    
    
    56
    
    
    
    
    
    
    
    b) Securities receivable under repurchase
agreementsb.1) Whitout Quotation  National Government
SecuritiesCompensatory and Hedge Bond Received
    
    
    973,030
    
    
    
    973,030
    
    
    
    
    
    
    
    Discount Bonds
    
    
    144,631
    
    
    
    144,631
    
    
    
    
    
    
    
    c) Transfers of financial assetsDebt Securities and Certificates of Participation
    
    
    58,177
    
    
    
    
    
    
    
    
    
    
    
    58,177Certificate of Participation Galtrust I
    
    
    67,881
    
    
    
    
    
    
    
    
    
    
    
    67,881d) Derivatives financial instruments
    
    
    15,892
    
    
    
    
    
    
    
    15,892
    
    
    
    TOTAL ASSETS AT FAIR VALUE
    
    
    2,806,784
    
    
    
    2,363,348
    
    
    
    15,892
    
    
    
    427,544LIABILITIESe) Derivatives financial instruments
    
    
    (67,073
    )
    
    
    (297
    )
    
    
    (66,776
    )
    
    
    TOTAL LIABILITIES AT FAIR VALUE
    
    
    (67,073
    )
    
    
    (297
    )
    
    
    (66,776
    )
    
    
    
 (*)
    
    This amount is related to the fair value of the Certificate of Participation of Nues Trust and
Almafuerte Special Fund.  F-79




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Changes in level 3 fair value measurements
  Total Fair ValueBalances as of December 31,
    
    MeasurementsAvailable for sale securities
    
    Ps.Fair value, December 31, 2007
    
    
    737,649Total gains or losses (realized/unrealized)
    
    
    (247,634
    )Included in earnings
    
    
    (259,762
    )Included in other comprehensive income
    
    
    12,128Purchases, issuances and settlements
    
    
    (62,471
    )Transfers in to/ out of level 3
    
    
    Fair value, December 31, 2008
    
    
    427,544Total gains or losses (realized/unrealized)
    
    
    266,700Included in earnings
    
    
    18,737Included in other comprehensive income
    
    
    247,963Purchases, issuances and settlements
    
    
    (20,956
    )Transfers in to/ out of level 3
    
    
    Fair value, December 31, 2009
    
    
    673,288
  Total Fair Value MeasurementsBalances as of December 31,
    
    2009
    
    
    2008Available for sale securities
    
    Ps.
    
    
    
    Ps.Classification of gains and losses
(realized/unrealized) included in
earnings:Financial Income
    
    
    18,737
    
    
    
    (259,762
    )Total
    
    
    18,737
    
    
    
    (259,762
    )
  q. New authoritative pronouncements
   F-80




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
   1.
    
    intends to sell the security;
 2.
    
    is more likely than not to be required to sell the security before recovering its cost;
or
 3.
    
    does not expect to recover the securitys entire amortized cost basis (even if the
entity does not intend to sell)  that is, a credit loss.
  1.
    
    the estimated amount relating to the credit loss, and2.
    
    all other changes in fair value.
    F-81




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    
    
    Eliminates the scope exception for qualifying special-purpose entities
    
    Eliminates the quantitative model for determining which party should consolidate and
replaces it with a qualitative model focusing on decision-making for an entitys significant
economic activities
    
    Requires a company to continually reassess whether it should consolidate an entity subject
to ASC 810-10
    
    Requires an assessment of whether an entity is subject to the standard due to a troubled
debt restructuring
    
    Requires extensive new disclosures
    F-82




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
        F-83




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    F-84




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Consolidated net income
 December 31,2009
    
    
    2008
    
    
    2007Net income as stated
    
    Ps.
    229,275
    
    
    Ps.
    176,819
    
    
    Ps.
    46,037Loan origination fees and costs (Note 35 b.)
    
    
    (51,828
    )
    
    
    10,300
    
    
    
    (38,629
    )Intangible assets:Goodwill amortization and impairment (Note 35 c.)
    
    
    11,458
    
    
    
    (77,605
    )
    
    
    19,687Other intangible assets (Note 35 c.)
    
    
    (30,548
    )
    
    
    (24,593
    )
    
    
    3,965Compensation related to the payment of deposits (Note 35 g.)
    
    
    57,821
    
    
    
    (39,850
    )
    
    
    90,197Equity investments in other companies  Impairment (Note 35 k.)
    
    
    (4,731
    )
    
    
    (3,882
    )
    
    
    (8,381
    )Gain on exchange of National Public Debt (Note 35 d.(ii))
    
    
    32,213
    
    
    
    48,228
    
    
    
    196,743Provincial Public Debt (Note 35 d.(iii))
    
    
    
    
    
    
    
    
    
    
    198,099Loan impairment  Private sector (Note 35 d.(iv))
    
    
    112,166
    
    
    
    (54,748
    )
    
    
    52,056Transfers of financial assets (Note 35 h.)
    
    
    (18,727
    )
    
    
    (376,975
    )
    
    
    8,814Government Securities and other investments:Compensatory Bond received and Hedge Bond (Note 35 e.(i))
    
    
    91,438
    
    
    
    (838,609
    )
    
    
    63,973GDP  Linked Negotiable Securities (Note 35 e.(ii))
    
    
    2,465
    
    
    
    (31,479
    )
    
    
    (23,683
    )Bonar 2015
Bonds (Note 35 e (iii))
    
    
    232,564
    
    
    
    
    
    
    
    Other available for sale securities (Note 35 e.(ii) (iv))
    
    
    51,587
    
    
    
    (197,564
    )
    
    
    36,151Real estate properties asset amortization (Note 35 j.)
    
    
    1,395
    
    
    
    1,395
    
    
    
    1,395Recognition for the fair value of obligations assumed under
Financial guarantees issued (Note 35 l.)
    
    
    31,303
    
    
    
    (35,727
    )
    
    
    (5,773
    )Foreign Debt restructuring (Note 35 n.)
    
    
    34,111
    
    
    
    29,749
    
    
    
    86,558Deferred Income tax (Note 35 a.)
    
    
    101,476
    
    
    
    124,936
    
    
    
    (21,056
    )Minimum Presumed Income Tax (Note 35 a. )
    
    
    (44,198
    )
    
    
    (25,906
    )
    
    
    (39,631
    )Net income (loss) in accordance with U.S. GAAP
    
    Ps.
    839,240
    
    
    Ps.
    (1,315,511
    )
    
    Ps.
    666,522Less Net Income (Loss) attributable to the Non-controlling
Interest (Note 35 m)
    
    
    (69,017
    )
    
    
    144,533
    
    
    
    (73,627
    )Net Income (Loss) attributable to Parent Company in accordance
with US GAAP
    
    Ps.
    770,223
    
    
    Ps.
    (1,170,978
    )
    
    Ps.
    592,895Average number of shares outstanding (in thousands) (Note 21)
    
    
    1,241,407
    
    
    
    1,241,407
    
    
    
    1,241,407Basic net income (loss) per share in accordance with U.S. GAAP
(Note 21)
    
    
    0.620
    
    
    
    (0.943
    )
    
    
    0.478Diluted net income (loss) per share in accordance with U.S.
GAAP (Note 21)
    
    
    0.620
    
    
    
    (0.943
    )
    
    
    0.478
  F-85




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Consolidated shareholders equity
 December 31,2009
    
    
    2008Shareholders equity as stated
    
    Ps.
    2,052,539
    
    
    Ps.
    1,845,745Loan origination fees and costs (Note 35 b.)
    
    
    (92,064
    )
    
    
    (40,236
    )Intangible assets:Goodwill amortization and impairment (Note 35 c.)
    
    
    25,207
    
    
    
    13,749Other intangible assets (Note 35 c.)
    
    
    (77,354
    )
    
    
    (46,806
    )Compensation related to the payment of deposits (Note 35 g)
    
    
    (259,053
    )
    
    
    (316,874
    )Equity investments in other companies  Impairment (Note 35 k.)
    
    
    (31,548
    )
    
    
    (26,817
    )Loans  non Financial Public Sector  Secured loans (Note 35 d.(ii))
    
    
    (282
    )
    
    
    (32,495
    )Loan impairment  Private sector (Note 35 d.(iv))
    
    
    63,671
    
    
    
    (48,495
    )Government securities and other investments:Compensatory and Hedge Bond received (Note 35 e.(i))
    
    
    (175,818
    )
    
    
    (1,097,375
    )Discount Bonds (Note 35 e.(ii))
    
    
    (296,477
    )
    
    
    (480,273
    )GDP  Linked Negotiable Securities (Note 35 e.(ii))
    
    
    12,366
    
    
    
    9,901Bonar 2015
Bonds (Note 35 e.(iii))
    
    
    317,596
    
    
    
    Other Investments (Note 35 e (iv))
    
    
    (22,369
    )
    
    
    (110,716
    )Financial
assets transferred (Note 35 h.)(*)
    
    
    (429,280
    )
    
    
    (587,058
    )Impairment of real estate properties and foreclosed assets
(Note 35 j.)
    
    
    (67,155
    )
    
    
    (67,155
    )Real Estate properties amortization (Note 35 j.)
    
    
    9,765
    
    
    
    8,370Minimum Presumed Income Tax (Note 35 a.)
    
    
    (328,619
    )
    
    
    (284,421
    )Deferred Income tax (Note 35 a.)
    
    
    576,710
    
    
    
    475,234Recognition for the fair value of obligations assumed under
financial guarantees issued (Note 35 l.)
    
    
    (4,149
    )
    
    
    (43,512
    )Foreign debt restructuring (Note 35 n.)
    
    
    (137,272
    )
    
    
    (171,383
    )Consolidated shareholders equity (deficit) in accordance with
U.S. GAAP
    
    Ps.
    1,136,414
    
    
    Ps.
    (1,000,617
    )Non-controlling Interest (Note 35 m.)
    
    
    99,908
    
    
    
    246,204Consolidated Parent Company Shareholders Equity (Deficit) in
accordance with US GAAP
    
    Ps.
    1,236,322
    
    
    Ps.
    (754,413
    )
 (*)
    
    As of December 31, 2009 the adjustment described under the caption Financial assets transferred
amounted Ps. (429,280) include: Financial Trust Galtrust Is adjustment Ps. (372,464); Financial Trust
Galicia Ps. (51,298); Other transfers of financial assets accounted for as sales Ps. (5,380) and servicing
liabilities Ps. (138).  F-86




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  Grupo Galicia
 Other
    
    
    
    
    
    
    TotalAdjustments to
    
    
    
    
    
    
    
    
    
    
    Comprehensive
    
    
    
    
    
    
    ShareholdersCapital
    
    
    Paid
    
    
    Shareholders
    
    
    
    
    
    
    
    
    
    
    Income
    
    
    Retained
    
    
    Equity Parent
    
    
    Non controllingStock
    
    
    in Capital
    
    
    Equity
    
    
    Legal
    
    
    Other
    
    
    (loss)
    
    
    Earnings
    
    
    Company
    
    
    interestBalance at December
31, 2006
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    294,254
    
    
    Ps.
    34,855
    
    
    Ps.
    72,383
    
    
    Ps.
    356,801
    
    
    Ps.
    (1,854,497
    )
    
    Ps.
    145,809
    
    
    Ps.
    167,185Distribution of
retained earnings:Absorption approved
by the shareholders
meeting on April
26, 2007Discretionary Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,914
    )
    
    
    
    
    
    
    18,914
    
    
    
    
    
    
    
    Unrealized gain of
available-for-sale
securities, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (500,622
    )
    
    
    
    
    
    
    (500,622
    )
    
    
    8,113Net Income (Loss) in
accordance with US
GAAP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    592,895
    
    
    
    592,895
    
    
    
    (73,627
    )Balance at December
31, 2007
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    294,254
    
    
    Ps.
    34,855
    
    
    Ps.
    53,469
    
    
    Ps.
    (143,821
    )
    
    Ps.
    (1,242,688
    )
    
    Ps.
    238,082
    
    
    Ps.
    101,671Distribution of
retained earnings:Absorption approved
by the shareholders
meeting on April
29,2008Legal Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,302
    
    
    
    
    
    
    
    
    
    
    
    (2,302
    )
    
    
    
    
    
    
    Discretionary Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,735
    
    
    
    
    
    
    
    (43,735
    )
    
    
    
    
    
    
    Unrealized gain of
available-for-sale
securities, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178,483
    
    
    
    
    
    
    
    178,483
    
    
    
    Net Income (Loss) in
accordance with US
GAAP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,170,978
    )
    
    
    (1,170,978
    )
    
    
    144,533Balance at December
31, 2008
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    294,254
    
    
    Ps.
    37,157
    
    
    Ps.
    97,204
    
    
    Ps.
    34,662
    
    
    Ps.
    (2,459,703
    )
    
    Ps.
    (754,413
    )
    
    Ps.
    246,204Distribution of
retained earnings:Absorption approved
by the shareholders
meeting on April
28,2009Legal Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,841
    
    
    
    
    
    
    
    
    
    
    
    (8,841
    )
    
    
    
    
    
    
    Discretionary Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,978
    
    
    
    
    
    
    
    (167,978
    )
    
    
    
    
    
    
    Unrealized gain of
available-for-sale
securities, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,220,512
    
    
    
    
    
    
    
    1,220,512
    
    
    
    (77,279
    )Net Income (Loss) in
accordance with US
GAAP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    770,223
    
    
    
    770,223
    
    
    
    (69,017
    )Balance at December
31, 2009
    
    Ps.
    1,241,407
    
    
    Ps.
    606
    
    
    Ps.
    294,254
    
    
    Ps.
    45,998
    
    
    Ps.
    265,182
    
    
    Ps.
    1,255,174
    
    
    Ps.
    (1,866,299
    )
    
    Ps.
    1,236,322
    
    
    Ps.
    99,908
 Comprehensive income
   F-87




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
  December 31,2009
    
    
    2008
    
    
    2007Income StatementFinancial Income
    
    Ps.
    3,374,800
    
    
    Ps.
    1,201,697
    
    
    Ps.
    2,433,198Financial Expenditures
    
    
    1,434,408
    
    
    
    1,391,270
    
    
    
    1,160,142Net Financial Income (Loss)
    
    
    1,940,392
    
    
    
    (189,573
    )
    
    
    1,273,056Provision for Loan Losses
    
    
    527,339
    
    
    
    450,137
    
    
    
    203,446Income from Services
    
    
    1,802,381
    
    
    
    1,538,380
    
    
    
    1,153,619Expenditures from Services
    
    
    515,648
    
    
    
    383,654
    
    
    
    257,242Administrative Expenses
    
    
    2,063,546
    
    
    
    1,799,579
    
    
    
    1,258,089Net Income / (Loss) from Financial Brokerage
    
    
    636,240
    
    
    
    (1,284,563
    )
    
    
    707,898Miscellaneous Income
    
    
    594,630
    
    
    
    494,977
    
    
    
    271,546Miscellaneous Losses
    
    
    290,602
    
    
    
    541,035
    
    
    
    188,281Net Income / (Loss) before Income tax
    
    
    940,268
    
    
    
    (1,330,621
    )
    
    
    791,163Income Tax
    
    
    54,516
    
    
    
    (50,922
    )
    
    
    92,522Net income (loss) under U.S. GAAP
    
    
    885,752
    
    
    
    (1,279,699
    )
    
    
    698,641Less Net Income attributable to the
Non-controlling Interest
    
    
    (115,529
    )
    
    
    108,721
    
    
    
    (105,746
    )Net Income attributable to Parent Company
    
    
    770,223
    
    
    
    (1,170,978
    )
    
    
    592,895Other comprehensive income (loss):Unrealized gains (losses) on securities
    
    
    1,220,512
    
    
    
    178,483
    
    
    
    (500,622
    )Other comprehensive income (loss)
    
    
    1,220,512
    
    
    
    178,483
    
    
    
    (500,622
    )Comprehensive income (Loss)
    
    Ps.
    1,990,735
    
    
    Ps.
    (992,495
    )
    
    Ps.
    92,273
  December 31,2009
    
    
    2008
    
    
    2007Boden 2012 Bonds  Compensatory Bond
    
    
    830,119
    
    
    
    
    
    
    
    (47,694
    )GalTrust I
    
    
    193,651
    
    
    
    
    
    
    
    (97,166
    )Discount Bonds
    
    
    132,209
    
    
    
    
    
    
    
    34,020Bonar 2015 Bonds
    
    
    85,032
    
    
    
    
    
    
    
    Other
    
    
    14,163
    
    
    
    34,662
    
    
    
    (32,981
    )Accumulated other comprehensive
income/
(loss)
    
    Ps.
    1,255,174
    
    
    Ps.
    34,662
    
    
    Ps.
    (143,821
    )
   F-88




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Concentration of risk  Total exposure to the public sector  Argentine government and provinces
  December 31, 2009
    
    
    December 31, 2008Argentine
    
    
    
    
    
    
    ArgentineBanking
    
    
    
    
    
    
    BankingGAAP
    
    
    U.S. GAAP
    
    
    GAAP
    
    
    U.S. GAAPArgentine national
government loans
    
    Ps.
    25,416
    
    
    Ps.
    25,134
    
    
    Ps.
    1,481,563
    
    
    Ps.
    1,449,068Other Argentine
public-sector receivables
    
    
    344,842
    
    
    
    271,024
    
    
    
    297,467
    
    
    
    186,751Galtrust I
(securitization of
Provincial Loans)
    
    
    579,730
    
    
    
    207,266
    
    
    
    630,002
    
    
    
    63,887Compensatory bond received
    
    
    1,906,907
    
    
    
    1,731,089
    
    
    
    2,350,815
    
    
    
    1,253,440Securities issued by the
Argentine Cental Bank
    
    
    1,953,676
    
    
    
    1,953,827
    
    
    
    583,757
    
    
    
    583,757Discount Bonds & GDP
Linked Negotiable
Securities
    
    
    621,983
    
    
    
    337,872
    
    
    
    666,874
    
    
    
    196,502Bonar 2015 Bonds
    
    
    358,984
    
    
    
    676,580
    
    
    
    
    
    
    
    Other (1)
    
    
    91,420
    
    
    
    91,420
    
    
    
    43,817
    
    
    
    43,817Total
    
    Ps.
    5,882,958
    
    
    Ps.
    5,294,212
    
    
    Ps.
    6,054,295
    
    
    Ps.
    3,777,222
 (1)
    
    Includes bonds and other national government bonds. Risks and Uncertainties
 Government Securities
      F-89




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
    
    
    intends to sell the security;
 
    
    is more likely than not to be required to sell the security before recovering its
cost; or
 
    
    does not expect to recover the securitys entire amortized cost basis (even if
the entity does not intend to sell)that is, a credit loss.
  
    
    the estimated amount relating to the credit loss, and
 
    
    all other changes in fair value.
   Allowance for loan losses
  U.S. GAAP estimates
  36.
Parent only Financial Statements.
   F-90




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Balance sheet (Parent Company only)
 December 31,2009
    
    
    2008ASSETSA. Cash and due from BanksCash
    
    Ps.
    11
    
    
    Ps.
    10Financial institutions and correspondents
    
    
    63
    
    
    
    207Ps.
    74
    
    
    Ps.
    217B. Government and corporate securitiesHoldings of trading securities
    
    
    
    
    
    
    191Investments in listed corporate securities
    
    
    13,118
    
    
    
    Ps.
    13,118
    
    
    Ps.
    191C. LoansTo the financial sector
    
    
    52,757
    
    
    
    47,264Ps.
    52,757
    
    
    Ps.
    47,264D. Other receivables resulting from financial brokerageNegotiable obligations without quotation
    
    
    
    
    
    
    711Balances from forward transactions without delivery of
underlying asset to be settled
    
    
    
    
    
    
    15,827Other receivables not included in the debtor classification Regulations
    
    
    1,786
    
    
    
    147Other receivables included in the debtor classification Regulations
    
    
    17,381
    
    
    
    26,850Accrued interest receivable included in the debtor Classification regulations
    
    
    181
    
    
    
    161Ps.
    19,348
    
    
    Ps.
    43,696F. Equity investmentsIn financial institutions
    
    
    2,072,245
    
    
    
    1,898,232Other
    
    
    84,812
    
    
    
    63,899Ps.
    2,157,057
    
    
    Ps.
    1,962,131G. Miscellaneous receivablesTax on minimum presumed income  Tax credit
    
    
    908
    
    
    
    869Other
    
    
    2,980
    
    
    
    6,178Ps.
    3,888
    
    
    Ps.
    7,047H. Bank premises and equipment
    
    
    2,993
    
    
    
    3,044J. Intangible assetsGoodwill
    
    
    9,697
    
    
    
    10,976Organization and development expenses
    
    
    26
    
    
    
    33Ps.
    9,723
    
    
    Ps.
    11,009Total Assets
    
    Ps.
    2,258,958
    
    
    Ps.
    2,074,599
  F-91




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 December 31,2009
    
    
    2008LIABILITIES AND SHAREHOLDERS EQUITYN. Other liabilities resulting from financial brokerageBanks and international entities
    
    Ps.
    
    
    
    Ps.
    214,086Unsurbordinated negotiable obligations
    
    
    166,056
    
    
    
    Balances from forward transactions without delivery of underlying asset to be settled
    
    
    8,060
    
    
    
    Accrued interest and quotation differences payable
    
    
    930
    
    
    
    6,250175,046
    
    
    
    220,336O. Miscellaneous liabilitiesDirectors and Syndics fees
    
    Ps.
    225
    
    
    Ps.
    60Other
    
    
    31,148
    
    
    
    8,45831,373
    
    
    
    8,518Total Liabilities
    
    Ps.
    206,419
    
    
    Ps.
    228,854SHAREHOLDERS EQUITY
    
    Ps.
    2,052,539
    
    
    Ps.
    1,845,745Total Liabilities and Shareholders Equity
    
    Ps.
    2,258,958
    
    
    Ps.
    2,074,599
  F-92




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Statement of Income (Parent Company only)
 December 31,2009
    
    
    2008
    
    
    2007A. Financial incomeInterest on loans granted to the financial sector
    
    
    120
    
    
    
    97
    
    
    
    694Interest on other loans
    
    
    
    
    
    
    
    
    
    
    670Interest on other receivables resulting from financial brokerage
    
    
    74
    
    
    
    314
    
    
    
    388Net income from government and corporate securities
    
    
    484
    
    
    
    126
    
    
    
    5,817Exchange rate differences on gold and foreign currency
    
    
    16,120
    
    
    
    
    
    
    
    Other
    
    
    27
    
    
    
    
    
    
    
    897Ps.
    16,825
    
    
    Ps.
    537
    
    
    Ps.
    8,466B. Financial expensesInterest on other liabilities resulting from financial brokerage
    
    Ps.
    11,071
    
    
    Ps.
    17,062
    
    
    Ps.
    8,565Exchange rate differences on gold and foreign currency
    
    
    
    
    
    
    11,258
    
    
    
    Other
    
    
    266
    
    
    
    280
    
    
    
    302Ps.
    11,337
    
    
    Ps.
    28,600
    
    
    Ps.
    8,867C. Gross brokerage margin
    
    
    5,488
    
    
    
    (28,063
    )
    
    
    (401
    )F. Administrative expensesPersonnel expenses
    
    
    3,786
    
    
    
    3,492
    
    
    
    2,953Directors and syndics fees
    
    
    1,080
    
    
    
    1,013
    
    
    
    933Other fees
    
    
    5,125
    
    
    
    3,182
    
    
    
    3,522Taxes
    
    
    6,984
    
    
    
    1,208
    
    
    
    2,150Other operating expenses
    
    
    685
    
    
    
    521
    
    
    
    529Other
    
    
    5,558
    
    
    
    5,080
    
    
    
    4,665Ps.
    23,218
    
    
    Ps.
    14,496
    
    
    Ps.
    14,752Net Income / (Loss) from financial brokerage
    
    Ps.
    (17,730
    )
    
    Ps.
    (42,559
    )
    
    Ps.
    (15,153
    )H. Miscellaneous incomeNet income on long-term investments
    
    
    188,069
    
    
    
    219,688
    
    
    
    65,840Other
    
    
    86,090
    
    
    
    1,557
    
    
    
    609Ps.
    274,159
    
    
    Ps.
    221,245
    
    
    Ps.
    66,449I. Miscellaneous lossesOther
    
    
    2,401
    
    
    
    3,952
    
    
    
    2,111Ps.
    2,401
    
    
    Ps.
    3,952
    
    
    Ps.
    2,111Net Income before tax
    
    
    254,028
    
    
    
    174,734
    
    
    
    49,185J. Income tax
    
    Ps.
    24,753
    
    
    Ps.
    (2,085
    )
    
    Ps.
    3,148Net income for the fiscal year
    
    Ps.
    229,275
    
    
    Ps.
    176,819
    
    
    Ps.
    46,037
 (1)
    
    Includes the foreign currency position compensation.  F-93




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##### Table of Contents



Grupo Financiero Galicia S.A. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2009, 2008 and 2007
 Statement of cash flows (Parent Company only)
 December 31,2009
    
    
    2008
    
    
    2007CHANGES IN CASHCash at the beginning of the year
    
    Ps.
    27,562
    
    
    Ps.
    26,407
    
    
    Ps.
    15,727Increase / (decrease) in cash
    
    
    (8,140
    )
    
    
    1,155
    
    
    
    10,680Cash at end of year
    
    
    19,422
    
    
    
    27,562
    
    
    
    26,407Cash provided by (used in) operating activitiesLess:
    
    
    (27,160
    )
    
    
    (15,349
    )
    
    
    (25,404
    )Operating expenses paidPlus:Other operating income received
    
    
    2,996
    
    
    
    5,294
    
    
    
    20,694Cash provided by (used in) operating activities
    
    Ps.
    (24,164
    )
    
    Ps.
    (10,055
    )
    
    Ps.
    (4,710
    )Other sources of cashCollection for the issuance of negotiable obligations
    
    
    160,345
    
    
    
    
    
    
    
    Loan received
    
    
    
    
    
    
    
    
    
    
    250,960Dividends
    
    
    15,969
    
    
    
    12,163
    
    
    
    9,450Increase in short-term investment
    
    
    4,022
    
    
    
    1,676
    
    
    
    5,062Collection of deposit as per Decree 616/2005
    
    
    
    
    
    
    72,360
    
    
    
    Other sources of cash
    
    
    581
    
    
    
    1,806
    
    
    
    718Other sources of cash
    
    Ps.
    180,917
    
    
    Ps.
    88,005
    
    
    Ps.
    266,190Other uses of cashPayment of loans received
    
    
    (152,772
    )
    
    
    (76,760
    )
    
    
    Increase in fixed assets
    
    
    (39
    )
    
    
    (24
    )
    
    
    (213
    )Increase in long-term investments
    
    
    (12,082
    )
    
    
    (11
    )
    
    
    (175,299
    )Deposit as per Decree 616/2005
    
    
    
    
    
    
    
    
    
    
    (75,288
    )Total other uses of cash
    
    Ps.
    (164,893
    )
    
    Ps.
    (76,795
    )
    
    Ps.
    (250,800
    )Increase / (decrease) in cash
    
    Ps.
    (8,140
    )
    
    Ps.
    1,155
    
    
    Ps.
    10,680
   F-94