<PAGE>

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                -----------------

                                   FORM 20 - F

                     ANNUAL REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
                        COMMISSION FILE NUMBER 000-30852

                                -----------------

                          GRUPO FINANCIERO GALICIA S.A.

             (Exact name of Registrant as specified in its charter)

                             GALICIA FINANCIAL GROUP
                 (Translation of Registrant's name into English)

                              REPUBLIC OF ARGENTINA
                 (Jurisdiction of incorporation or organization)

                          GRUPO FINANCIERO GALICIA S.A.

                          TTE. GRAL. JUAN D. PERON 456

                        C1038 AAJ-BUENOS AIRES, ARGENTINA

                    (Address of principal executive offices)

 SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      None

 SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

      Class B Ordinary Shares, Ps. 1.00 par value, ten shares of which are
                    represented by American Depositary Shares

 SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d)
                                   OF THE ACT:

                                      None

      Indicate the number of outstanding shares of each of the issuer's classes
of capital or common stock as of the close of the period covered by the annual
report:

<TABLE>
<S>                                                          <C>
Class A Ordinary Shares, Ps. 1.00 par value . . . . . . . .  281,221,650

Class B Ordinary Shares, Ps. 1.00 par value . . . . . . . .  811,185,367
</TABLE>

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark which financial statement item the registrant has
elected to follow.

                            Item 17 [ ] Item 18 [X]

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
PRESENTATION OF FINANCIAL INFORMATION.......................................................................     1

PART I......................................................................................................     4

     ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.........................................     4
     ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.......................................................     4
     ITEM 3.  KEY INFORMATION...............................................................................     4
              Selected Financial Data.......................................................................     4
              Exchange Rate Information.....................................................................     8
              Risk Factors..................................................................................     8
     ITEM 4.  INFORMATION ON THE COMPANY....................................................................    19
              Organization..................................................................................    19
              Organizational Structure......................................................................    19
              History.......................................................................................    21
              Capital Investments and Divestitures..........................................................    21
              Our Strategy..................................................................................    23
              Business Overview.............................................................................    23
              Competition...................................................................................    44
              Sales and Marketing...........................................................................    46
              Property......................................................................................    47
              Selected Statistical Information..............................................................    48
              Government Regulation.........................................................................    90
              Minimum Capital Requirements of Nonbanking Companies..........................................    90
              Main Regulatory Changes in 2002 and 2003......................................................    91
              Argentine Banking System and Regulation.......................................................    99
     ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS..................................................   114
     ITEM 5A. OPERATING RESULTS.............................................................................   114
              General.......................................................................................   114
              Inflation Accounting Adjustments..............................................................   114
              Currency Composition of Our Balance Sheet.....................................................   114
              Argentine Economy in 2003.....................................................................   116
              Argentine Financial System....................................................................   117
              Results of Operations of Grupo Galicia for the Fiscal Years Ending December 31, 2003, December
              31, 2002 and December 31, 2001................................................................   118
              U.S. GAAP and Argentine Banking GAAP Reconciliation...........................................   135
              Results by Segments...........................................................................   142
              Consolidated Assets...........................................................................   149
              Exposure to the Argentine Public Sector.......................................................   152
              Off-Balance Sheet Arrangements................................................................   152
              Securitization of Assets......................................................................   154
              Funding.......................................................................................   155
              Contractual Obligations.......................................................................   158
              Other Commitments.............................................................................   160
              Critical Accounting Policies..................................................................   161
     ITEM 5B. LIQUIDITY AND CAPITAL RESOURCES...............................................................   167
              Liquidity.....................................................................................   167
              Capital.......................................................................................   172
              Capital Expenditures..........................................................................   173
     ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES....................................................   174
              Our Board of Directors........................................................................   174
              Functions of Our Board of Directors...........................................................   175
</TABLE>

                                      (i)

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
               Our Supervisory Committee.....................................................................   176
               Compensation of Directors.....................................................................   177
               Management of Grupo Galicia...................................................................   177
               Board of Directors of Banco Galicia...........................................................   178
               Functions of the Board of Directors of Banco Galicia..........................................   180
               Banco Galicia's Executive Officers............................................................   181
               Banco Galicia's Supervisory Committee.........................................................   183
               Compensation of Banco Galicia's Directors.....................................................   184
               Compensation of Banco Galicia's Officers......................................................   184
               Employees.....................................................................................   185
               Share Ownership...............................................................................   186
     ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.............................................   187
               Major Shareholders............................................................................   187
               Related Party Transactions....................................................................   189
     ITEM 8.   FINANCIAL INFORMATION.........................................................................   190
               Legal Proceedings.............................................................................   190
               Dividend Policy and Dividends.................................................................   191
               Significant Changes...........................................................................   192
     ITEM 9.   THE OFFER AND LISTING.........................................................................   193
               Shares and ADSs...............................................................................   193
               Argentine Securities Market...................................................................   197
               Market Regulations............................................................................   197
     ITEM 10.  ADDITIONAL INFORMATION........................................................................   198
               Description of Our Bylaws.....................................................................   198
               Shareholders' Meetings........................................................................   202
               Exchange Controls.............................................................................   206
               Taxation......................................................................................   206
               Material Contracts............................................................................   212
               Documents on Display..........................................................................   212
     ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................................   213
               General.......................................................................................   213
               Interest Rate Risk............................................................................   214
               Foreign Exchange Rate Risk....................................................................   218
     ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES........................................   219

PART II......................................................................................................   220

     ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES...............................................   220
     ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS..................   220
     ITEM 15.  CONTROLS AND PROCEDURES.......................................................................   220
     ITEM 16.  [RESERVED]....................................................................................   221
     ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT..............................................................   221
     ITEM 16B. CODE OF ETHICS................................................................................   221
     ITEM 16C. PRINCIPAL ACCOUNTANTS' FEES AND SERVICES......................................................   221

PART III.....................................................................................................   223

     ITEM 17.  FINANCIAL STATEMENTS..........................................................................   223
     ITEM 18.  FINANCIAL STATEMENTS..........................................................................   223
     ITEM 19.  EXHIBITS......................................................................................   223
</TABLE>

                                      (ii)

<PAGE>

                      PRESENTATION OF FINANCIAL INFORMATION

      Our consolidated financial statements consolidate the accounts of Grupo
Financiero Galicia S.A. and its subsidiaries. Therefore, our consolidated
financial statements include the accounts of:

-     Grupo Financiero Galicia S.A., the holding company;

-     Sudamericana Holding S.A. and its subsidiaries;

-     Galicia Warrants S.A.;

-     Net Investments S.A. and its subsidiaries; and

-     Banco de Galicia y Buenos Aires S.A., its wholly-owned subsidiary, Banco
      Galicia Uruguay S.A ("Galicia Uruguay") and its subsidiaries and other
      subsidiaries and affiliated companies required to be consolidated under
      Argentine Banking GAAP (collectively, the "Bank" or "Banco Galicia").

      In this annual report, references to "we," "our," "us," the "Group" and
"Grupo Galicia" are to Grupo Financiero Galicia S.A. and its consolidated
subsidiaries.

      We were formed on September 14, 1999, as a financial services holding
company to hold all of the shares of capital stock of Banco Galicia held by
members of the Escasany, Ayerza and Braun families. As a result, our only
significant asset as of December 31, 1999, was our interest in Banco Galicia. In
July 2000, we conducted an exchange offer in which we offered to exchange shares
of Banco Galicia for shares of Grupo Galicia. As a result of the exchange offer,
our only significant asset was our 93.23% interest in Banco Galicia. As of
December 31, 2002, and December 31, 2003, our interest in Banco Galicia was
93.59% as a result of open-market purchases.

      For periods prior to July 1, 2000, the financial statements of Banco
Galicia, as our predecessor, have been presented for fiscal years ended June 30.
From July 1, 2000, the financial statements of Grupo Galicia have been presented
for the six-month fiscal year ended December 31, 2000, and for the fiscal years
ended December 31, 2001, 2002 and 2003.

      Grupo Galicia and Banco Galicia maintain their financial books and records
in Argentine pesos and prepare their financial statements to conform to the
accounting rules of the Argentine Central Bank, which prescribes the generally
accepted accounting principles for all banks in Argentina. This annual report
refers to those accounting principles as "Argentine Banking GAAP." Argentine
Banking GAAP differs in certain relevant respects from generally accepted
accounting principles in Argentina ("Argentine GAAP"). Argentine Banking GAAP
also differs in certain significant respects from generally accepted accounting
principles in the United States ("U.S. GAAP"). See Item 5. "Operating and
Financial Review and Prospects -- Item 5A. Operating Results -- U.S. GAAP and
Argentine Banking GAAP Reconciliation" and note 38 to our consolidated audited
financial statements included in this annual report for a description of the
principal differences between Argentine GAAP and Argentine Banking GAAP and note
39 to our financial statements for reconciliation of the principal differences
between Argentine Banking GAAP and U.S. GAAP for the periods up to December 31,
2003. A reconciliation to U.S. GAAP of Grupo Galicia's net income and total
shareholders' equity is presented for the three fiscal years ending December 31,
2003.

      In this annual report, references to "US$," "U.S. dollars," and "dollars"
are to United States dollars and references to "Ps." or "pesos" are to Argentine
pesos. Unless this annual report states otherwise, through December 31, 2001,
the exchange rate used to convert foreign currency amounts into pesos on our
balance sheets and income statements (as well as those of Banco Galicia) was the
exchange rate quoted as of each relevant date or period end by Banco de la
Nacion Argentina ("Banco Nacion"). In the case of dollars, until December 31,
2001, the Banco Nacion quotes for such exchange rates had been Ps. 1.0 per
US$1.00, the peso-dollar parity introduced in 1991 by Law No. 23,128 (the
"Convertibility Law").

      On January 7, 2002, Argentina abandoned fixed peso-dollar parity. After
devaluing the peso and setting the official exchange rate at Ps. 1.4 per
US$1.00, on February 11, 2002, the government allowed the peso to float.
Argentine Central Bank Communique "A" 3671, dated July 25, 2002, required that
its published reference exchange rate be used by banks to value all foreign
currency accounts instead of the exchange rate quoted by Banco Nacion. We began
to use the reference exchange rate quoted by the Argentine Central Bank to value
our foreign currency assets and liabilities in July 2002. Unless stated
otherwise, in this annual report, references to the exchange rate since that
time are to the reference exchange rate published by the Argentine Central Bank.

<PAGE>

      The exchange rates used in the December 31, 2003, and December 31, 2002,
consolidated financial statements were Ps. 2.93 per US$1.00, and Ps. 3.36 per
US$1.00, respectively, as quoted by the Argentine Central Bank. As of June 25,
2004, the exchange rate, as quoted by the Argentine Central Bank, was Ps. 2.95
per US$1.00. Since Argentina has not been servicing its sovereign debt since the
end of 2001, this rate may not accurately reflect the real value of the peso
compared to that of the dollar.

      On August 22, 1995, the government of Argentina published Decree No.
316/95, which eliminated the requirement that financial statements be restated
for inflation (beginning with financial statements prepared after September 1,
1995). In compliance with this decree and applicable regulations of the Comision
Nacional de Valores (the National Securities Commission or the "CNV"), Banco
Galicia discontinued adjusting its financial statements for inflation.
Therefore, Banco Galicia's financial statements were not adjusted for inflation
for any fiscal year ended after September 1, 1995, through December 31, 2001.
Since we were formed in 1999, our financial statements have not been adjusted
for inflation for the fiscal years ended December 31, 1999, 2000 and 2001.

      Mainly as a result of the abandonment in 2002 of the fixed exchange rate,
Argentina experienced a high rate of inflation. Wholesale prices, as measured by
the wholesale price index ("WPI") published by the Instituto Nacional de
Estadistica y Censos (National Institute of Statistics and Census or "INDEC"),
increased approximately 118.44% in 2002. In accordance with then applicable
accounting rules, starting January 1, 2002, we began to adjust our financial
statements and those of Banco Galicia for inflation based on changes in the WPI.
On July 17, 2002, the Argentine government published Decree No. 1269/02,
repealing Decree No. 316/95 and reestablishing the policy of restating financial
information to account for inflation for periods beginning on or after January
1, 2002. Consequently, inflation accounting was reintroduced in accordance with
Argentine Central Bank Communique "A" 3702, Resolution No. 415/02 of the CNV and
Resolution No. 240/02 of the Argentine Federation of Professional Councils of
Economic Sciences ("FACPCE"), the body that establishes Argentine GAAP.

      Primarily as a result of the stabilization of the WPI during the first
half of 2003, the Argentine government published Decree No. 664/03 and the
Argentine Central Bank issued Communique "A" 3921, dated April 8, 2003, which
eliminated the requirement that financial statements be prepared in constant
currency. These rules became effective for financial periods ending on or after
March 1, 2003. Likewise, on April 8, 2003, the CNV issued Resolution No. 441/03
discontinuing inflation accounting as of March 1, 2003. Under professional
accounting standards, application of that method remained in effect until
September 30, 2003, when the Professional Council of Economic Sciences of the
Autonomous City of Buenos Aires (C.P.C.E.C.A.B.A.) discontinued the recognition
of changes in the purchasing power of currency effective October 1, 2003. From
March 2003 to September 2003, prices fell on average approximately 2%.

      In this annual report and in the financial statements included in this
annual report, unless stated otherwise, our figures and Banco Galicia's figures
as of and for the fiscal year ended December 31, 2003, include the effects of
inflation accounting through February 28, 2003. (The WPI increased 0.87% between
January 1, 2003 and February 28, 2003.) Figures for periods prior to December
31, 2002, have been restated in constant Argentine pesos as of February 28,
2003, applying the approximately 120.35% change in the WPI for the period from
January 1, 2002, to February 28, 2003. In addition, for comparison purposes and
unless stated otherwise, we have restated in constant pesos of February 28,
2003, all other financial data as of and for periods prior to February 28, 2003,
included in this annual report.

      Throughout this annual report, "asymmetric pesification" refers to the
compulsory asymmetric conversion in January 2002 of most dollar-denominated
assets and certain liabilities of Argentine financial institutions into
peso-denominated assets and liabilities at different exchange rates. This is
more fully described in Item 4. "Information on the Company -- Main Regulatory
Changes in 2002 and 2003."

      Unless otherwise indicated, we have derived all market share and other
industry information from information published by the Argentine Central Bank.

      This annual report contains forward-looking statements that involve
substantial risks and uncertainties, including, in particular, statements about
our plans, strategies and prospects under the captions Item 4. "Information on
the Company -- Business Overview -- Banco Galicia's Strategy," Item 5.
"Operating and Financial Review and Prospects -- Item 5A. Operating Results" and
Item 5. "Operating and Financial Review and Prospects -- Item 5B.

                                      -2-
<PAGE>

Liquidity and Capital Resources." All statements other than statements of
historical fact contained in this annual report (including statements regarding
our future financial position, business strategy, budgets, projected costs and
management's plans and objectives for future operations) are forward-looking
statements. In addition, forward-looking statements generally can be identified
by the use of such words as "may," "will," "expect," "intend," "estimate,"
"anticipate," "believe" or "continue" or similar terminology. Although we
believe that the expectations reflected in these forward-looking statements are
reasonable, we do not provide any assurance with respect to these statements.
Because these statements are subject to risks and uncertainties, actual results
may differ materially and adversely from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially and adversely include but are not limited to:

      -     changes in general economic, business, political, legal, social or
            other conditions in Argentina or elsewhere in Latin America;

      -     changes in capital markets in general that may affect policies or
            attitudes toward lending to Argentina or Argentine companies;

      -     our inability to obtain additional debt or equity financing on
            attractive terms, which may limit our ability to fund existing
            operations and to finance new activities; and

      -     the other factors discussed under Item 3. "Key Information -- Risk
            Factors" in this annual report.

      You should not place undue reliance on forward-looking statements, which
speak only as of the date that they were made. Moreover, you should consider
these cautionary statements in connection with any written or oral
forward-looking statements that we may issue in the future. We do not undertake
any obligation to release publicly any revisions to forward-looking statements
after completion of this annual report to reflect later events or circumstances
or to reflect the occurrence of unanticipated events.

                                      -3-
<PAGE>

                                     PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

      Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

      Not applicable.

ITEM 3. KEY INFORMATION

SELECTED FINANCIAL DATA

-        The following table presents summary historical financial and other
      information about us and Banco Galicia as of the dates and for the periods
      indicated. The financial statements for the fiscal year ending December
      31, 2003, include the effects of inflation accounting through February 28,
      2003. The financial statements as of and for the fiscal year ended
      December 31, 2002, and the financial data for prior periods have been
      restated in constant pesos of February 28, 2003.

-        The selected consolidated financial information as of December 31,
      2003, and 2002, and for the fiscal years ending December 31, 2003, 2002
      and 2001, has been derived from our audited consolidated financial
      statements included in this annual report.

-        The selected consolidated financial information as of December 31, 2001
      and 2000, June 30, 2000 and 1999, and for the six-month period ended
      December 31, 2000, and for the fiscal years ended June 30, 2000 and 1999,
      has been derived from our audited consolidated financial statements not
      included in this annual report.

-        We prepare our financial statements in accordance with Argentine
      Banking GAAP, which differs from Argentine GAAP and U.S. GAAP. Our audited
      consolidated financial statements contain a description of the principal
      differences between Argentine GAAP and Argentine Banking GAAP and a
      reconciliation to U.S. GAAP of our shareholders' equity as of December 31,
      2003, 2002 and 2001, and our net income for the three years ended December
      31, 2003. See notes 38 and 39 to our audited consolidated financial
      statements included in this annual report.

-        You should read this data in conjunction with Item 5. "Operating and
      Financial Review and Prospects" and our audited consolidated financial
      statements.

                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                                                                         GRUPO FINANCIERO GALICIA
                                              ---------------------------------------------------------------------------
                                                                                                        6 MONTHS
                                                                FISCAL YEAR ENDED                          ENDED
                                              ---------------------------------------------------------------------------
                                                                   DECEMBER 31,                         DECEMBER 31,
                                              ---------------------------------------------------------------------------
                                                    2003               2003          2002          2001           2000
                                              ---------------------------------------------------------------------------
                                                (in millions
                                              of U.S. dollars,   (in millions of
                                                except as       pesos, except as   (in millions of February 28, 2003,
                                                noted)(1)          noted)(1)        constant pesos, except as noted)(1)
<S>                                           <C>               <C>               <C>          <C>            <C>
CONSOLIDATED INCOME STATEMENT IN
ACCORDANCE WITH ARGENTINE BANKING GAAP
Financial Income............................    US$573.4          Ps. 1,681.9     Ps.5,797.7   Ps.  3,586.8   Ps. 1,807.3
Net Financial Income (2)....................        61.0                179.0        1,237.3        1,460.7         831.7
Provision for Losses on Loans and Other
  Receivables...............................        97.6                286.4        1,648.5        1,008.5         272.4
Income before Taxes.........................       (73.8)              (216.5)      (2,775.1)         423.7         313.5
Income Tax..................................        (0.2)                (0.6)         (66.4)        (159.1)       (115.4)
Net Income before the Absorption............       (74.0)              (217.1)      (2,841.5)         264.6         198.1
Absorption subject to the Approval of
  the Annual Shareholders Meeting...........           -                    -        1,370.0              -             -
Net Income after the Absorption.............       (74.0)              (217.1)      (1,471.5)         264.6         198.1
Adjusted Net Income per Share (in
  Pesos) (**)...............................      (0.068)              (0.199)        (1.347)         0.242         0.194
Cash Dividends per Share (in Pesos).........           -                    -              -              -             -
Book Value per Share (in Pesos).............       0.457                1.339          1.500          2.841         2.843
Stock Dividends per Share (in Pesos)........           -                    -              -              -             -
AMOUNTS IN ACCORDANCE WITH U.S. GAAP
Net Income (loss)...........................    US$249.3          Ps.   731.3     Ps.  422.5   Ps. (8,638.4)  Ps.   216.6
Adjusted Net Income (loss) per Share........       0.228                0.669          0.386         (7.907)        0.212
Book Value (deficit) per Share..............      (1.390)              (4.077)        (4.964)        (5.390)        2.629
Financial Income............................       938.3              2,752.0        2,613.1        3,569.3       1,813.5
Net Financial Income .......................       425.9              1,249.1       (1,947.3)       1,444.2         837.7
Provision for Losses on Loans and Other
  Receivables ..............................        93.6                274.6          928.8        4,731.0         261.2
Income Tax..................................       (13.1)               (38.4)          66.5          212.9         102.5
CONSOLIDATED BALANCE SHEET IN ACCORDANCE
WITH ARGENTINE BANKING GAAP
Cash and Due from Banks.....................    US$281.7          Ps.   826.2     Ps.  576.9   Ps.  1,139.9   Ps. 1,366.4
Government Securities, Net..................       988.4              2,898.9        1,826.9          273.3         170.1
Loans, Net .................................     3,744.9             10,983.8       10,682.1       20,107.2      20,363.1
Total Assets................................     7,805.9             22,894.7       23,904.5       27,877.6      36,888.4
Deposits....................................     1,903.9              5,584.0        5,209.3       13,502.8      19,619.2
Other Funds (3).............................     5,403.4             15,848.4       17,056.5       11,271.3      14,358.8
Total Shareholders' Equity..................       498.6              1,462.3        1,638.7        3,103.5       2,910.4
Average Total Assets (4)....................     7,681.7             22,530.3       29,500.9       31,967.4      33,430.0
PERCENTAGE OF PERIOD-END BALANCE SHEET
ITEMS DENOMINATED IN DOLLARS:
Loans, Net of Allowances....................           -                 6.40%          9.11%         86.34%        79.85%
Total Assets................................           -                36.43          43.30          80.05         75.65
Deposits....................................           -                29.67          40.08          81.15         70.61
Total Liabilities...........................           -                36.82          43.97          74.07         79.06
AMOUNTS IN ACCORDANCE WITH U.S. GAAP
Trading Securities..........................    US$112.1          Ps.   328.8     Ps.   35.5   Ps.    141.9   Ps.   228.7
Available-for-Sale Securities...............       549.4              1,611.5        1,380.6        2,914.3       4,377.4
Total Assets................................     5,082.5             14,907.1       14,862.4       21,061.8      32,797.3
Total Liabilities...........................     6,600.9             19,360.4       20,284.7       26,949.6      30,105.2
Shareholders' Equity (Deficit)..............    (1,518.4)            (4,453.3)      (5,422.3)      (5,887.8)      2,692.1

<CAPTION>
                                                    BANCO GALICIA
                                              -------------------------
                                                  FISCAL YEAR ENDED
                                              -------------------------
                                                        JUNE 30,
                                              -------------------------
                                                  2000         1999
                                              -------------------------
                                              (in millions of February
                                              28, 2003, constant pesos,
                                                 except as noted)(1)
<S>                                           <C>           <C>
CONSOLIDATED INCOME STATEMENT IN
ACCORDANCE WITH ARGENTINE BANKING GAAP
Financial Income............................  Ps. 3,303.9   Ps. 2,796.4
Net Financial Income (2)....................      1,593.1       1,261.4
Provision for Losses on Loans and Other
  Receivables...............................        549.8         475.9
Income before Taxes.........................        507.9         491.6
Income Tax..................................       (163.5)       (159.7)
Net Income before the Absorption............        344.4         331.9
Absorption subject to the Approval of
  the Annual Shareholders Meeting...........            -             -
Net Income after the Absorption.............        344.4         331.9
Adjusted Net Income per Share (in
  Pesos) (**)...............................        0.294         0.284
Cash Dividends per Share (in Pesos).........          0.4           0.2
Book Value per Share (in Pesos).............        2.285         2.277
Stock Dividends per Share (in Pesos)........            -           0.4
AMOUNTS IN ACCORDANCE WITH U.S. GAAP
Net Income (loss)...........................  Ps.   361.4   Ps.   329.2
Adjusted Net Income (loss) per Share........        0.309         0.282
Book Value (deficit) per Share..............        2.281         1.917
Financial Income............................      3,297.3       2,781.4
Net Financial Income .......................      1,586.5       1,246.5
Provision for Losses on Loans and Other
  Receivables ..............................        514.1         507.3
Income Tax..................................        146.0          94.7
CONSOLIDATED BALANCE SHEET IN ACCORDANCE
WITH ARGENTINE BANKING GAAP
Cash and Due from Banks.....................  Ps. 1,378.0   Ps. 1,746.3
Government Securities, Net..................        906.0       1,490.2
Loans, Net .................................     20,551.3      18,611.4
Total Assets................................     35,435.5      30,233.3
Deposits....................................     19,266.2      17,298.1
Other Funds (3).............................     13,234.0      10,267.4
Total Shareholders' Equity..................      2,935.3       2,667.8
Average Total Assets (4)....................     30,767.8      28,047.2
PERCENTAGE OF PERIOD-END BALANCE SHEET
ITEMS DENOMINATED IN DOLLARS:
Loans, Net of Allowances....................        77.55%        75.70%
Total Assets................................        74.20         72.08
Deposits....................................        69.43         65.81
Total Liabilities...........................        78.56         75.20
AMOUNTS IN ACCORDANCE WITH U.S. GAAP
Trading Securities..........................  Ps.   858.2   Ps.   981.9
Available-for-Sale Securities...............      3,658.8       3,995.3
Total Assets................................     32,180.9      28,883.4
Total Liabilities...........................     29,509.6      26,637.9
Shareholders' Equity (Deficit)..............      2,671.3       2,245.5
</TABLE>

                                      -5-
<PAGE>

<TABLE>
<CAPTION>
                                                                           GRUPO GALICIA                          BANCO GALICIA
                                                           ----------------------------------------------       ----------------
                                                                                           6 MONTHS
                                                              FISCAL YEAR ENDED               ENDED             FISCAL YEAR ENDED
                                                           ----------------------------------------------       -----------------
                                                                  DECEMBER 31,             DECEMBER 31,             JUNE 30,
                                                           ----------------------------------------------       -----------------
                                                                 2003         2002        2001      2000         2000      1999
                                                           ----------------------------------------------------------------------
                                                           (in millions of
                                                           pesos, except as     (in millions of February 28, 2003, constant
                                                              noted)(1)             pesos, except as noted)(1)
<S>                                                        <C>               <C>         <C>        <C>          <C>       <C>
SELECTED RATIOS
RATIOS IN ACCORDANCE WITH ARGENTINE GAAP
PROFITABILITY AND EFFICIENCY
 Net Yield on Interest Earning Assets (5)(*)............        0.89%          3.66%      6.54%      5.98%        6.18%     5.80%
 Financial Margin (6)(*)................................        0.86           4.59       5.36       5.88         6.07      5.22
 Return on Assets (7)(*)................................       (0.92)         (5.90)      0.90       1.27         1.12      1.18
 Return on Shareholders' Equity (8)(*)..................      (14.19)        (60.51)      8.67      14.68        12.41     13.32
 Net Income from Services as a Percentage of Operating
  Income (9)............................................       68.72          24.30      39.22      33.64        32.13     33.94
 Efficiency ratio (10)..................................      107.11          59.97      57.00      53.09        57.04     64.82
CAPITAL
 Shareholders' Equity as a Percentage of Total Assets..         6.39%          6.86%     11.13%      7.89%        8.28%     8.82%
 Total Liabilities as a Multiple of Shareholders'
  Equity................................................       14.66x         13.59x      7.98x     11.68x       11.07x    10.33x
 Total Capital Ratio (11)...............................           -              -      17.18%     15.26%       17.34%    13.08%
LIQUIDITY
 Cash and Due from Banks as a Percentage of Total
  Deposits..............................................       14.80%         11.07%      8.44%      6.96%        7.15%    10.10%
 Loans, Net as a Percentage of Total Assets.............       47.98          44.69      72.13      55.21        58.00     61.56
QUALITY CREDITS
 Past Due Loans (12) as a Percentage of Total Loans ....        8.35%          9.93%      4.96%      3.46%        3.40%     3.67%
 Non Accrual Loans (13) as a Percentage of Total Loans         10.73          13.08       6.74       4.04         3.95      4.51
 Allowance for Loan Losses as a Percentage of
  Nonaccrual Loans (13).................................       90.61         104.45      73.94      70.40        69.07     68.24
 Net Charge-Offs (14) as a Percentage of Average Loans..        1.98%          1.89%      2.20%      2.20%        2.80%     2.44%
RATIOS IN ACCORDANCE WITH U.S. GAAP
Capital
 Shareholders' Equity (deficit) as a Percentage of
  Total Assets..........................................      (29.87)%       (36.48)%   (27.96)%     8.21%        8.30%     7.77%
 Total Liabilities as a Multiple of Total
  Shareholders' Equity..................................       (4.35)x        (3.74)x    (4.58)x    11.18x       11.05x    11.86x
Liquidity
 Loans, Net as a Percentage of Total Assets.............       57.33%         54.88%     61.11%     62.07%       63.79%    64.23%
Credit Quality
 Allowance for Loan Losses as a Percentage of
Nonaccrual Loans........................................      190.43%        179.55%    413.51%     72.99%       73.07%    76.21%
INFLATION AND EXCHANGE RATE
 Inflation (Deflation) (15) (16)........................        2.03%        118.44%     (4.30)%    (0.55)%       4.51%    (5.14)%
 Currency Devaluation Rate (16) (%).....................      (12.79)        236.30          -          -            -         -
 CER (17)...............................................        3.66          40.53          -          -            -         -
 CVS (18)...............................................       15.85           0.83          -          -            -         -
</TABLE>

                                      -6-
<PAGE>

(*)   Annualized for the six-month period ended December 31, 2000.

(**)  Before the loss absorption mechanism established by Argentine Central Bank
      Communique "A" 3800, net income per share for fiscal year 2002 was Ps.
      (2.601).

(1)   The exchange rate used to convert the December 31, 2003, amounts into U.S.
      dollars was Ps. 2.933 per US$1.00. For fiscal year 2003, the amounts
      include the effects of inflation accounting through February 28, 2003. For
      prior periods, they have been restated in constant pesos of February 28,
      2003. All amounts are stated in millions of pesos, except inflation,
      percentages, ratios, multiples and per-share data.

(2)   Net financial income represents mainly income from interest on loans and
      other receivables from financial brokerage plus net income from government
      and corporate debt securities, including gains and losses, less interest
      on deposits and other liabilities from financial intermediation and
      monetary loss from financial brokerage. For fiscal years 2002 and 2003, it
      also includes the CER adjustment.

(3)   Includes mainly liabilities with the Argentine Central Bank, other banks
      and international entities.

(4)   The average balances of assets and liabilities, including the related
      interest receivable and payable are calculated on a daily basis for Banco
      Galicia and for Galicia Uruguay and on a monthly basis for us and our
      nonbanking subsidiaries as well as for Tarjetas Regionales S.A. (the
      regional credit card company in which the Bank holds majority interest),
      us and our nonbanking subsidiaries as well as for Tarjetas Regionales S.A.
      (the regional credit card company in which the Bank holds a majority
      interest).

(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 plus minority interest plus unrealized valuation difference as
      a percentage of average total assets. Before the loss absorption mechanism
      allowed by Argentine Central Bank Communique "A" 3800, this ratio was
      (10.55)% for fiscal year 2002.

(8)   Net income plus unrealized valuation difference as a percentage of average
      shareholders' equity. Before the loss absorption mechanism allowed by
      Argentine Central Bank Communique "A" 3800, this ratio was (116.84) % for
      fiscal year 2002.

(9)   Operating income is defined as net financial income plus net income from
      services plus monetary loss from financial intermediation plus the
      unrealized valuation difference. Excluding from the calculation the
      unrealized valuation difference (in accordance with Argentine Central Bank
      Communique "A" 3703), this ratio was 214.52% for fiscal year 2002.

(10)  Administrative expenses net of the monetary gain (loss) from operating
      expenses as a percentage of operating income as defined above. Excluding
      from the calculation the unrealized valuation difference (in accordance
      with Argentine Central Bank Communique "A" 3703), this ratio was 529.39%
      for fiscal year 2002.

(11)  Compliance with the capital adequacy rules of the Argentine Central Bank
      was suspended during 2002 and 2003 (including December 31, 2002, and
      December 31, 2003).

(12)  Past-due loans consist of amounts of entire loan principal and interest
      receivable for those loans for which either the principal or any interest
      payment is 91 days or more past due.

(13)  Nonaccrual loans are defined as those loans falling into the following
      categories under the Argentine Central Bank's classification system: (a)
      consumer: defective fulfillment, difficulty in recovery, uncollectible or
      uncollectible for technical reasons and (b) commercial: with problems,
      high risk of insolvency, uncollectible or uncollectible for technical
      reasons.

(14)  Charge-offs plus direct charge-offs minus bad debts recovered.

(15)  As measured by changes in the wholesale price index (WPI) in Argentina.

(16)  Source: INDEC.

(17)  The "CER" is the coeficiente de estabilizacion de referencia, an
      adjustment coefficient based on changes in the consumer price index, which
      became effective February 3, 2002. See Item 4. "Information on the Company
      -- Main Regulatory Changes in 2002 and 2003."

(18)  The "CVS" is the coeficiente de variacion salarial, an adjustment
      coefficient based on the variation of salaries, which became effective
      October 1, 2002. See Item 4. "Information on the Company -- Main
      Regulatory Changes in 2002 and 2003."

                                      -7-
<PAGE>

EXCHANGE RATE INFORMATION

      On January 7, 2002, the Argentine Congress enacted Law No. 25,561 (the
Public Emergency and Foreign Exchange System Reform Law, the "Public Emergency
Law"), abandoning over 10 years of fixed U.S. dollar - peso parity. After
devaluing the peso and setting the official exchange rate at Ps. 1.4 per US$1.0,
on February 11, 2002, the government allowed the peso to float. The shortage of
dollars and their heightened demand caused the peso to devalue significantly in
the first half of 2002. Since June 30, 2002, the peso has appreciated versus the
dollar from an exchange rate of Ps. 3.80 per U.S. dollar to an average exchange
rate of Ps. 2.96 per U.S. dollar for the month of June 2004 (through June 25).
There can be no assurance that the peso will not depreciate in the future,
particularly while the restructuring of a substantial portion of Argentina's
foreign debt remains unresolved.

      The following table sets forth the annual high, low, average and
period-end exchange rates for U.S. dollars for the periods indicated, expressed
in pesos per dollar and not adjusted for inflation.

<TABLE>
<CAPTION>
                                                                            EXCHANGE RATE (1)
                                                  ------------------------------------------------------------------
                                                    HIGH               LOW             AVERAGE (2)        PERIOD-END
                                                  ------------------------------------------------------------------
<C>                                               <C>                <C>                <C>                 <C>
1999....................................          1.0000             1.0000             1.0000(3)           1.0000
2000....................................          1.0000             1.0000             1.0000(3)           1.0000
2001....................................          1.0000             1.0000             1.0000(3)           1.0000
2002....................................          3.9000             1.0000             3.0724(3)           3.3630
2003....................................          3.3625             2.7485             2.9491(3)           2.9330

December 2003                                     2.9898             2.9330             2.9606              2.9330
January 2004............................          2.9428             2.8567             2.8928              2.9327
February 2004...........................          2.9613             2.9165             2.9319              2.9235
March 2004..............................          2.9387             2.8550             2.8976              2.8550
April 2004..............................          2.8633             2.8037             2.8359              2.8452
May 2004................................          2.9642             2.8438             2.9197              2.9642
June 2004 (through June 25, 2004)                 2.9743             2.9378             2.9601              2.9543
</TABLE>

(1)   Until June 2002, asked closing quotations as quoted by Banco Nacion. Since
      July 2002, closing reference exchange rate as published by the Argentine
      Central Bank.

(2)   Daily average of closing quotations, unless otherwise noted.

(3)   Based on monthly averages.

RISK FACTORS

      YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW IN ADDITION TO THE
OTHER INFORMATION CONTAINED IN THIS ANNUAL REPORT. WE ALSO MAY FACE RISKS AND
UNCERTAINTIES THAT ARE NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM
IMMATERIAL, WHICH MAY IMPAIR OUR BUSINESS. IN GENERAL, YOU TAKE MORE RISK WHEN
YOU INVEST IN THE SECURITIES OF ISSUERS IN EMERGING MARKETS SUCH AS ARGENTINA
THAN WHEN YOU INVEST IN THE SECURITIES OF ISSUERS IN THE UNITED STATES AND
CERTAIN OTHER MARKETS.

                     RISK FACTORS RELATING TO GRUPO GALICIA

WE ARE A HOLDING COMPANY, AND OUR ABILITY TO PAY CASH DIVIDENDS DEPENDS ON THE
PROFITABILITY OF OUR SUBSIDIARIES

      We are a holding company, and as such we conduct all of our operations
through our subsidiaries. As a holding company, we expect dividends or other
intercompany transfers of funds from our subsidiaries to be our primary source
of funds to pay our expenses and dividends. Banco Galicia is our most
significant subsidiary. As of December 31, 2003, Banco Galicia accounted for
99.2% of our consolidated assets and 91.7% of our consolidated net loss. While
we do not anticipate conducting operations at the holding company level, any
expenses we incur, in excess of minimum levels, will reduce amounts available to
be distributed to our shareholders. The ability of our subsidiaries to pay
dividends and make other payments to us will depend on their results of
operations and financial

                                      -8-
<PAGE>

condition and may be restricted by, among other things, applicable corporate and
other laws and regulations and agreements of our subsidiaries. In addition, our
ability to pay dividends will be subject to legal and other requirements at the
holding company level.

      During 2003 and 2002, due to Banco Galicia's adverse financial condition,
we did not receive any dividends from Banco Galicia. Banco Galicia is prohibited
from paying any cash dividends or making any advances, loans or capital
contributions to us, its other affiliates or subsidiaries for so long as amounts
are due to the Argentine Central Bank for liquidity support assistance.
Furthermore, Banco Galicia is restricted in paying dividends since under
Argentine Central Bank regulations it must reduce its retained earnings
available to be distributed as cash dividends by the difference between the
market value and the carrying value of the compensatory and hedge bonds, after
netting the legal reserve and other reserves established by Banco Galicia's
bylaws. Consequently, our ability to distribute cash dividends to our
shareholders has been, and continues to be, materially and adversely affected.

      Last, the loan agreements entered into by Banco Galicia as part of its
foreign debt restructuring limit its ability to pay dividends on its capital
stock. See Item 8. "Financial Information -- Dividend Policy and Dividends --
Dividend Policy."

WE MAY OPERATE FINANCE-RELATED BUSINESSES THAT HAVE LITTLE OR NO REGULATORY
SUPERVISION

      We may operate finance-related businesses outside of Banco Galicia that
are not regulated by the Argentine Central Bank. These businesses will be
subject only to those regulatory limitations that may be applicable to them. We
cannot assure you that we will not enter into businesses that have little or no
regulatory supervision or that entail greater risks than our existing
businesses.

GALICIA RETIRO COMPANIA DE SEGUROS S.A., OUR INDIRECT SUBSIDIARY, COULD FACE
ADVERSE FINANCIAL CONSEQUENCES IN THE EVENT THAT SOME OF ITS CUSTOMERS SEEK AND
SUBSEQUENTLY OBTAIN DISADVANTAGEOUS JUDICIAL RELIEF

      Our indirect insurance subsidiary, Galicia Retiro Compania de Seguros S.A.
("Galicia Retiro"), could face adverse financial consequences if certain of its
customers who did not participate in its restructuring plan described below seek
and subsequently obtain disadvantageous judicial relief.

      In order to address the adverse financial consequences caused by
asymmetric pesification of the dollar-denominated liabilities and assets of
Galicia Retiro and, in particular, in order to avoid a potential liquidity
shortfall in the repayment of its affected dollar-denominated liabilities,
Galicia Retiro submitted to the Argentine Superintendency of Insurance a plan to
reprogram the repayment schedule of its dollar-denominated annuities. The
Argentine Superintendency of Insurance approved this plan on June 12, 2003. On
June 30, 2003, Galicia Retiro launched an exchange offer for the reprogramming
of these dollar-denominated annuities. The exchange offer expired on August 31,
2003, and resulted in 69% of its customers participating in the voluntary
reprogramming (31% of its customers did not participate).

      We cannot assure you that a significant number of the customers that
abstained from the reprogramming plan will not initiate legal actions and obtain
subsequent judgments that could result in adverse financial consequences to
Galicia Retiro. Sudamericana Holding S.A., one of our subsidiaries and the
controlling shareholder of Galicia Retiro, has committed to make capital
contributions to Galicia Retiro of up to Ps. 6.2 million in the event that
Galicia Retiro experiences liquidity shortfalls in connection with the
satisfaction of its payment obligations under the plan.

ADVERSE MARKET CONDITIONS ARE ALSO HAVING A NEGATIVE IMPACT ON OUR NONBANKING
BUSINESSES

      In addition to the negative impact that the package of economic measures
adopted during 2002 has had on Banco Galicia, such measures have profoundly
affected the general business environment in Argentina and its level of
activity. Although each of our subsidiaries has been affected differently by the
difficult financial conditions in Argentina (and the region as a whole),
depending on its particular business activity, some effects have been

                                      -9-
<PAGE>

experienced by all and all of these effects have been adverse. For a discussion
on the negative impact of these economic measures on Banco Galicia, see " --
Risk Factors Relating to the Bank."

WE ARE SUBJECT TO CORPORATE DISCLOSURE AND ACCOUNTING STANDARDS THAT MAY LIMIT
THE INFORMATION AVAILABLE TO OUR SHAREHOLDERS

      A principal objective of the securities laws of the United States,
Argentina and other countries is to promote full and fair disclosure of all
material information of companies issuing securities. However, there may be less
publicly available information about us than is regularly published by or about
listed companies in certain countries with highly developed capital markets,
such as the United States. While we are subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, the periodic disclosure
required of non-U.S. issuers under the U.S. Exchange Act is more limited than
the periodic disclosure required of U.S. issuers. Furthermore, Grupo Galicia is
not required to comply with the U.S. Securities and Exchange Commission ("SEC")
proxy rules in connection with shareholders' meetings.

      We maintain our financial books and records in pesos and prepare our
financial statements in conformity with Argentine Banking GAAP, which differs in
certain respects from Argentine GAAP and U.S. GAAP.

OUR SHAREHOLDERS MAY BE SUBJECT TO LIABILITY FOR CERTAIN VOTES OF THEIR
SECURITIES

      Our shareholders are not liable for our obligations. Instead, shareholders
are generally liable only for the payment of the shares they subscribe. However,
shareholders who have a conflict of interest with us and who do not abstain from
voting may be held liable for damages to us. Also, shareholders who willfully or
negligently vote in favor of a resolution that is subsequently declared void by
a court as contrary to Argentine law or our bylaws may be held liable for
damages to us or to other third parties, including other shareholders.

U.S. HOLDERS OF OUR CLASS B SHARES MAY NOT BE ABLE TO EXERCISE PREEMPTIVE AND
ACCRETION RIGHTS

      Under Argentine law, holders of our class B shares have preemptive and
accretion rights with respect to those shares (including shares underlying our
ADSs). United States holders of our class B shares may not be able to exercise
those rights unless a registration statement under the Securities Act of 1933 is
effective with respect to those rights or an exemption from the registration
requirements of the Securities Act is available. We are not obligated to file a
registration statement with respect to those rights or the shares related to
those rights. We cannot assure you that we will file such a registration
statement or that an exemption from registration will be available. Unless those
shares are registered or an exemption from registration applies, a United States
holder of class B shares (including those underlying our ADSs) may receive only
the net proceeds from those preemptive rights if those rights can be sold.

AN ACTIVE PUBLIC MARKET FOR OUR CLASS B SHARES MAY NOT CONTINUE TO EXIST

      Although our class B shares are currently traded on the Buenos Aires Stock
Exchange, the Cordoba Stock Exchange and the Nasdaq SmallCap Market (in the case
of our ADSs), we cannot assure you that these public markets for our shares will
continue to exist in the future.

                       RISK FACTORS RELATING TO ARGENTINA

      Substantially all of our operations, property and customers are located in
Argentina. Accordingly, the quality of our loan portfolio and our financial
condition and results of operations depend to a significant extent on
macroeconomic and political conditions prevailing from time to time in
Argentina. The political and economic crisis of late 2001 and early 2002 in
Argentina and the Argentine government's actions to address this crisis, which
are described in greater detail below and under Item 4. "Information on the
Company -- Main Regulatory Changes in 2002 and 2003," have had and could
continue to have a material adverse effect on our business, financial condition
and results of operations.

                                      -10-
<PAGE>

THE CURRENT GROWTH AND STABILIZATION MAY NOT BE SUSTAINABLE, WHICH COULD
ADVERSELY AFFECT THE ECONOMY AND THE FINANCIAL SYSTEM

      During 2001 and 2002, Argentina went through a period of great political,
economic and social instability, leading to the early resignation of President
de la Rua in December 2001, the default on part of Argentina's sovereign debt
and the devaluation of the Argentine peso in January 2002 after more than 10
years of fixed exchange-rate parity with the U.S. dollar. Following the
appointment of Eduardo Duhalde as president in early 2002, the Argentine
government undertook a number of far-reaching initiatives that radically changed
the monetary and foreign exchange regime of the country and the regulatory
environment for doing business in Argentina for all sectors of activity,
including the financial sector. The impact of these measures on the Argentine
economy was significant and remains uncertain in the long run.

      The Duhalde administration succeeded in stabilizing the main macroeconomic
variables in the second half of 2002. After a virtual collapse as a result of
the crisis, Argentina's gross domestic product ("GDP") has grown substantially
since the second half of 2002, in the broader context of a favorable world
economy. The current president, Nestor Kirchner, while highly critical of
certain policies followed in the 1990s, has not yet unveiled a comprehensive
economic program. The economic policy of the government has consisted mainly of
administering the crisis through monetary and fiscal policies and has not
included structural reforms considered necessary to support long-term economic
growth. In addition, while in September 2003 and June 2004, the government made
public announcements regarding possible terms for a restructuring of its foreign
debt with private creditors, the final terms of the restructuring and the timing
of that restructuring remain uncertain.

      If the Kirchner administration is not capable of implementing economic
policies needed to turn the economic growth Argentina is experiencing into
sustainable development in the long run, there is considerable risk that
political and economic instability will increase. This would likely have a
negative impact on the Argentine economy and on the financial system, including
us and Banco Galicia. In addition, we cannot assure you that the economy will
not suffer additional shocks, especially if political pressure in Argentina
inhibits the implementation of economic policies designed to generate growth and
enhance consumer and investor confidence.

ARGENTINA'S INSOLVENCY AND FAILURE TO RESTRUCTURE ITS SOVEREIGN DEBT COULD
PREVENT ECONOMIC GROWTH

      On December 23, 2001, Argentina declared the suspension of payments on its
sovereign debt, except for debt owed to multilateral credit agencies. Although
Argentina did not default on its debt with multilateral agency creditors, during
most of 2002 and the beginning of 2003, it had numerous rounds of negotiations
with the International Monetary Fund (the "IMF") regarding Argentina's economic
program and the medium-term refinancing of its debt with the IMF. In spite of
the medium-term agreement reached by the Argentine government with the IMF in
September 2003, the lack of a strong IMF program may adversely affect
Argentina's ability to restructure its approximately US$100 billion of defaulted
debt with private creditors. Argentina's access to the voluntary international
credit market is generally viewed as dependent on the satisfactory resolution of
this restructuring.

      Uncertainties regarding the government's debt restructuring and the
adoption of certain measures affecting key sectors of the economy such as the
utility companies and the financial system have a significant impact on the
private sector's ability to grow and invest. If the inability of the Argentine
government and the private sector to complete the restructuring of outstanding
claims and to access foreign financing continues, the fiscal situation of the
country could be severely affected, undermining the ability of the government to
implement adequate economic policies (including structural reforms) and
preventing the private sector from reembarking on a positive investment cycle.
If economic growth fails to materialize in the medium and long term, political
and economic volatility are likely to recur. This would most likely negatively
and materially impact the different entities operating in Argentina, including
the financial system, us and Banco Galicia.

VOLATILITY OF THE REGULATORY ENVIRONMENT COULD CONTINUE TO BE HIGH AND FUTURE
ARGENTINE GOVERNMENTAL POLICIES COULD AFFECT THE ECONOMY AS A WHOLE AS WELL AS
FINANCIAL INSTITUTIONS AND BANCO GALICIA

      The Argentine government has historically exercised significant influence
over the economy, and financial institutions in particular have operated in a
highly regulated environment for extended periods of time. Since

                                      -11-
<PAGE>



December 2001, the Argentine government has promulgated numerous, far-reaching
and not always consistent laws and regulations affecting the economy in general
as well as financial institutions in particular. Laws and regulations currently
governing the economy or the financial sector may continue to change in the
future, particularly given that important structural reforms have not been
undertaken. We cannot assure you that future changes in the regulatory
environment and government policies will not adversely affect financial
institutions in Argentina, including Banco Galicia, as well as its business,
financial condition or results of operations or its ability to honor its foreign
currency-denominated debt obligations. The lack of a clear and stable regulatory
environment imposes significant limitations on the operation of the banking
system, including Banco Galicia, and creates uncertainties as to our future
financial condition and results of operations.

INFLATION MAY RISE FROM CURRENT LEVELS AND FURTHER UNDERMINE THE ECONOMY

      Following the decision in January 2002 to abandon the fixed exchange rate
regime set forth in the Convertibility Law, the devaluation of the peso created
pressure on the domestic price system and generated inflation in 2002 after
several years of price stability and, in prior years, price deflation. During
2002, wholesale inflation reached a rate of approximately 118.4% and consumer
prices rose 40.95%, although the rate of inflation decreased during the second
half of the year. In 2003, consumer prices increased 3.7%, and wholesale prices
increased 2.0%. In the first five months of 2004, consumer prices increased 2.7%
and wholesale prices 3.9%.

      Given the uncertainties regarding the government's future policies, we can
give no assurance that the value of the peso will remain stable or that
inflation will not recur. In the past, inflation has materially undermined the
Argentine economy and the government's ability to create conditions that would
permit growth. In addition, high inflation or high volatility in inflation rates
would negatively and materially affect the business volume of the financial
system and preclude it from resuming financial intermediation activities. This
could be expected in turn to negatively affect the level of economic activity
and employment. High inflation would also undermine Argentina's foreign
competitiveness by diluting the effects of peso devaluation, with the same
negative effects on the level of economic activity and employment. We cannot
assure you that higher rates of inflation will not negatively affect the
Argentine economy in the future.

SIGNIFICANT FLUCTUATION IN THE VALUE OF THE PESO WOULD ADVERSELY AFFECT THE
ARGENTINE ECONOMY

      The devaluation of the peso on January 7, 2002, resulted in a 240%
increase in the nominal exchange rate of the peso versus the U.S. dollar during
2002. In 2003, the peso appreciated and the exchange rate decreased 12.8%.
Despite the positive effects of the real depreciation of the peso on the
competitiveness of certain sectors of the Argentine economy, the depreciation
has had far-reaching negative impacts on the Argentine economy and on
businesses, and individuals' financial condition. The devaluation of the peso
has had a negative impact on the ability of Argentine businesses to honor their
foreign debt, led to very high inflation in 2002, strongly reduced real wages,
had a negative impact on businesses whose activity is dependent on the domestic
market demand, such as utilities and the financial industry and adversely
affected the government's ability to honor its foreign debt obligations.

      During 2003 and 2004, the peso recovered a part of its value versus the
dollar. Among other reasons, this appreciation was the result of reduced imports
and the lack of local demand for dollars resulting in the government's continued
default on part of its foreign debt as well as the default by numerous
private-sector companies on their payments to foreign creditors. If imports were
to remain low and the restructuring of the Argentine sovereign and
private-sector debt currently in default were not to occur or were substantially
delayed, the combination of a strong trade surplus and controls over the foreign
exchange market (still outstanding even if substantially relaxed) could result
in a further real appreciation of the peso. In the short term, a significant
real appreciation of the peso would adversely affect exports and reduce the
Argentine public sector's revenues by reducing tax collection in real terms,
given the strong reliance of the public sector on taxes on exports. The
government would have to identify other sources of revenues or reduce spending
to close the fiscal gap resulting from decreasing export tax receipts and could
turn to printing money. Tax increases and/or inflation could prompt recessionary
pressures. See " -- Inflation may rise from current levels and further undermine
the economy."

      In addition, the appreciation of the peso against the U.S. dollar
negatively impacts the financial condition of entities with long foreign
currency positions (i.e., where the amount of foreign currency-denominated
assets exceeds

                                      -12-
<PAGE>

foreign currency-denominated liabilities), such as Banco Galicia. See " -- Risk
Factors Relating to the Bank -- For the foreseeable future, the Bank could have
limitations on its ability to manage effectively its assets and liabilities so
as to minimize risks resulting from mismatches in terms of currencies,
maturities and yields."

      Therefore, significant fluctuations in the value of the peso would have
significant adverse effects on the Argentine economy and on our financial
condition and results of operations. We cannot assure you that future polices of
the Argentine government will be successful in stabilizing the value of the
peso.

THE FOREIGN EXCHANGE MARKET IS SUBJECT TO CONTROLS THAT COULD PREVENT CERTAIN
FINANCIAL INSTITUTIONS FROM HONORING THEIR DEBT WITH FOREIGN CREDITORS

      On December 3, 2001, most transfers of funds abroad to effect payment of
financial indebtedness began to require the prior authorization of the Argentine
Central Bank. Foreign exchange controls, which were maintained with certain
variations throughout all of 2002, were tightened at the beginning of the second
semester of 2002. The existence of such controls and the prevailing significant
surplus in the country's trade balance (which resulted in greater availability
of foreign currency) contributed to the appreciation of the peso. Beginning in
November 2002 and throughout 2003, the Argentine Central Bank progressively
eased most of the restrictions imposed on the foreign exchange market.

      We cannot assure you that the Argentine Central Bank will continue to ease
restrictions on the foreign exchange market or that it will not implement more
restrictive rules in the future. If the Argentine Central Bank maintains the
current restrictions or if it reinstates more restrictive rules, financial
institutions, including the Bank, may face difficulties in making transfers of
U.S. dollars abroad for payment of their financial obligations.

DUE TO THE CURRENT SOCIAL AND POLITICAL CRISIS, INVESTING IN ARGENTINA ENTAILS
MANY OTHER RISKS

      Investing in Argentina also involves the following risks:

      -     civil unrest, rioting, looting, nationwide protests, widespread
            social unrest and strikes;

      -     expropriation, nationalization and forced renegotiation or
            modification of existing contracts;

      -     taxation policies, including royalty and tax increases and
            retroactive tax claims; and

      -     changes in laws and policies of the United States affecting foreign
            trade, taxation and investment.

FINANCIAL MARKETS IN ARGENTINA COULD BE ADVERSELY AFFECTED BY DEVELOPMENTS IN
OTHER EMERGING MARKETS

      Financial and securities markets in Argentina are influenced, to varying
degrees, by economic and market conditions in other emerging market countries.
Although economic conditions vary from country to country, investors' reactions
to the events occurring in one country may substantially affect securities from
issuers in other countries, including Argentina. We cannot assure you that
Argentina's economy will not be adversely impacted by events affecting other
emerging markets. The political and economic events that occurred in Mexico in
1994 and the collapse of several Asian economies between 1997 and 1998, to cite
two well-known downturns of the 1990s, both adversely impacted the Argentine
economy. These and similar developments can be expected to affect the Argentine
economy in the future.

             RISK FACTORS RELATING TO THE ARGENTINE FINANCIAL SYSTEM

THE RECOVERY OF THE FINANCIAL SYSTEM IS DEPENDENT UPON THE ABILITY OF FINANCIAL
INSTITUTIONS TO REGAIN THE CONFIDENCE OF DEPOSITORS

      The massive withdrawal of deposits experienced by the Argentine financial
system and the Bank during 2001 and the first half of 2002 were largely due to
the lack of confidence of depositors in the Argentine government's ability to
repay its debt (including its debt within the financial system) and to maintain
peso-dollar

                                      -13-
<PAGE>

parity in the context of its solvency crisis. The range of measures implemented
by the Argentine government in the last quarter of 2001 and during the first
half of 2002 further undermined the confidence of depositors and investors in
the Argentine financial system and in all financial institutions. In addition,
the measures taken by the government to protect the solvency of the banking
system generated significant opposition among depositors frustrated by losses
incurred on their savings.

      The recovery of the financial system and the Bank depends in part on the
ability of Argentine financial institutions to regain the confidence of
depositors. Although the financial system as a whole has seen a substantial
recovery in deposits (mostly transactional deposits) in 2002 and 2003, we cannot
assure you that this trend will continue or that the deposit base of the
Argentine financial system, including the Bank's, will not be affected in the
future by adverse economic, social and political events. Such volatility will
have a direct impact on the manner in which financial institutions within the
financial system, including the Bank, conduct their business and on their
ability to operate as financial intermediaries.

RECENT ARGENTINE ECONOMIC POLICIES CREATE UNCERTAINTY AS TO THE FUTURE PROFILE
AND ACTIVITIES OF THE BANKING SYSTEM

      As a result of the 2001 and 2002 crisis, the financial system practically
ceased acting as an intermediary between savings and credit. The depth of the
crisis and the effect of the crisis on depositors' confidence in the financial
system create significant uncertainties as to the likelihood that the financial
system will fully recover its ability to act as an intermediary between savings
and credit in the short or medium term. Despite certain signs that loan
origination has begun to resume, the period of time in which banking activity in
Argentina will most likely be limited to providing a narrow range of commercial
banking services remains uncertain.

      Even though deposits in the financial system and with the Bank resumed
growth in mid-2002, most of these new deposits are either sight or very
short-term time deposits. The increase in deposits, particularly longer term
time deposits, would have to persist over time to allow financial institutions
to rely on deposits as a source of funding capable of supporting an adequate
level of financial intermediation activity. This would require the public to
regain confidence in the Argentine financial system. At the same time, it would
also require an increase in the public's demand for credit, which is in turn
dependent on the removal of uncertainty regarding Argentina's economic future.
We cannot assure you that these trends will materialize (or, if they do, that
these developments will occur at the requisite pace) so as to allow financial
intermediation activities to resume and attain the volume necessary to improve
the income generation capacity of Argentine financial institutions, including
the Bank.

      Under these circumstances, for an undetermined period of time, the scale
of operations of Argentine-based financial institutions, including the Bank,
their business volume, the amount of their assets and liabilities and their
income generation capacity will be much lower than precrisis levels. We cannot
assure you that this will change in the future.

DETERIORATION OF FINANCIAL INSTITUTIONS' ASSET QUALITY DUE TO THE ECONOMIC
CRISIS MAY AFFECT THEIR FINANCIAL CONDITION AND THEIR INCOME GENERATION CAPACITY

      The capacity of Argentine public- and private-sector debtors to repay
their loans, already impaired by the deep and persistent recession that began in
the second half of 1998, deteriorated significantly in 2002 as a result of the
economic crisis. The Bank established allowances for loan losses for significant
amounts in 2002 to cover the risks inherent to its portfolio of loans to the
private sector. In 2003, the quality of the Bank's loan portfolio improved from
2002 levels as a result of high GDP growth and a better overall economic
environment. However, this improvement did not fully offset the deterioration
caused by the crisis in the quality of the assets of financial institutions with
a significant exposure to Argentine debtors. We cannot assure you that the
current improvement of the quality of the financial system's private-sector loan
portfolio will continue.

      In addition, currently, the financial system's assets, as well as those of
the Bank, include a substantial exposure to debt instruments of the Argentine
public sector. The Argentine public sector is currently in default on part of
its foreign debt, including the Argentine Republic External Notes held by the
Bank. Argentine public-sector solvency in the long run is today uncertain, given
that its defaulted foreign debt has not yet been restructured and that an
economic policy with long-term objectives has not yet been defined. Although the
Argentine government is

                                      -14-
<PAGE>

current on the Bonos del Gobierno Nacional due August 3, 2012, issued by the
Republic of Argentina ("BODEN 2012") and promissory notes secured by tax
collections known as prestamos garantizados ("secured loans") held by banks, we
cannot assure you that the Argentine government will be able to service its
internal and external debt over the medium and long terms. See Item 5.
"Operating and Financial Review and Prospects -- Item 5A. Operating Results --
Consolidated Assets."

      Currently, to a large extent, the value of a large portion of the assets
held by Argentine banks, as well as those banks' income generation capacity, is
dependent on the Argentine public sector's repayment capacity, which is
currently dependent on the Argentine government's ability to restructure its
foreign debt and to establish an economic policy that is successful in promoting
sustainable economic growth in the long run. See " -- Risk Factors Relating to
Argentina -- Argentina's insolvency and failure to restructure its sovereign
debt could prevent economic growth."

AN INCREASING NUMBER OF JUDGMENTS AGAINST FINANCIAL INSTITUTIONS, IN CONNECTION
WITH THE CORRALON, MAY RESULT IN FURTHER DETERIORATION OF FINANCIAL
INSTITUTIONS' DEPOSIT BASE AND LIQUIDITY, INCLUDING THOSE OF THE BANK

      As a consequence of measures adopted by the government in connection with
the pesification of deposits originally denominated in dollars and the
restructuring of bank deposits, since the beginning of 2002, individuals and
legal entities have initiated a significant number of legal actions against
financial institutions, including the Bank, on the basis that these measures
violated constitutional and other rights. These actions ("amparo claims")
resulted in a significant withdrawal of deposits from the financial system and
the Bank. Amparo claims have also resulted in significant losses for financial
institutions, including the Bank, because financial institutions have had to
reimburse restructured deposits (mostly dollar-denominated deposits before
pesification) at the market exchange rate rather than at the Ps. 1.40 per U.S.
dollar exchange rate (plus the CER adjustment and interest accrued) at which
deposits were pesified and booked. These losses have been deferred, but
Argentine Central Bank Communique "A" 3916 established that the deferred asset
must be amortized. In addition, the government has not provided compensation for
these losses, no regulations have been issued regarding such compensation and
the Supreme Court has not yet resolved the constitutionality of the pesification
measures.

      Although restructured deposits have decreased significantly as depositors
have exchanged restructured deposits for government bonds and although the peso
has appreciated significantly in the recent months, we cannot assure you that an
increasing number of judgments against financial institutions, including the
Bank, will not be obtained, leading to additional erosion of the deposit base
and imposing a further demand on the liquidity of financial institutions,
including the Bank.

THE LACK OF COMPENSATION TO FINANCIAL INSTITUTIONS FOR CERTAIN LOSSES GENERATED
BY THE GOVERNMENT'S ECONOMIC POLICY COULD BE DETRIMENTAL TO THEIR FINANCIAL
CONDITION, INCLUDING THAT OF THE BANK

      Certain measures taken by the Argentine government to address the economic
crisis in 2002 resulted in significant losses to the financial system. In
response, the Argentine authorities have provided that financial institutions
can seek compensation from the government for some but not all of those losses.
In fact, to date, the government has not recognized claims brought by financial
institutions for losses resulting from amparo claims or for the effects of
asymmetric pesification on the balance sheet of nonbanking subsidiaries with
activities complementary to those of the parent financial institution (such as
the regional credit card companies in which the Bank holds a controlling
interest). See Item 4. "Information on the Company -- Main Regulatory Changes in
2002 and 2003."

      With respect to the differences generated by the payments by the Bank
pursuant to amparo claims, as of December 31, 2003, the Bank had recorded an
intangible asset amounting to Ps. 487.0 million, net of the amortization
mandated by the Argentine Central Bank, on account of its right to receive
compensation for having had to make payments pursuant to judicial orders
relating to the amparo claims for amounts higher than those provided for by the
pesification decrees. The decision by the government to provide compensation is
still pending.

      With respect to measures establishing the use of different indexes (the
CER and the CVS) to adjust the principal of certain assets and liabilities of
financial institutions ("asymmetric indexation"), on November 14, 2003, the
Argentine government enacted Law No. 25,796, providing compensation for the
negative effects on financial institutions' financial condition arising from
these measures. Subsequently, through the issuance of different rules,

                                      -15-
<PAGE>

including Resolution No. 302/04 of the Ministry of Economy, the Ministry of
Economy and the Argentine Central Bank have administered Law No. 25,796, in a
way that, in the Bank's opinion, is contrary to its provisions. On May 6, 2004,
the Bank presented a letter to the executive branch, the Ministry of Economy and
the Argentine Central Bank reiterating the claim for compensation that it had
made on December 30, 2003. On May 18, 2004, the deadline for financial
institutions to opt into the compensation regime established by the government,
the Bank did not request to do so but rather restated its right to be
compensated for the negative effects of asymmetric indexation, formally
challenging Resolution No. 302/04 of the Ministry of Economy. Based on the
provisions of Law No. 25,769, as of December 31, 2003, the Bank had recorded Ps.
102.7 million under "Other Receivables Resulting from Financial Intermediation"
on account of its right to receive compensation from the government for
asymmetric indexation.

      See Item 4. "Information on the Company -- Main Regulatory Changes in 2002
and 2003 -- Compensation to Financial Institutions -- For Asymmetric Indexation
and for Differences Related to Amparo Claims" and Item 4. "Information on the
Company -- Argentine Banking System and Regulation -- Argentine Banking
Regulation -- Treatment of Losses in Connection with Amparo Claims."

      We cannot assure you that the government will provide compensation to
financial institutions, such as the Bank, for any such potential losses. The
failure of the government to compensate these potential losses would have a
negative effect on our financial condition.

NEW LIMITATIONS TO CREDITORS' RIGHTS IN ARGENTINA AND TO THE ABILITY TO
FORECLOSE ON CERTAIN GUARANTEES AND COLLATERAL MAY ADVERSELY IMPACT FINANCIAL
INSTITUTIONS

      In 2002, the Argentine government passed various laws and regulations
limiting the ability of creditors to foreclose on collateral and to exercise
their rights pursuant to guarantees and similar instruments upon the occurrence
of a default by a debtor under a financing agreement. Such limitations have
restricted Argentine creditors, such as the Bank, from initiating collection
actions or lawsuits to recover on defaulted loans. Even if these rules ceased to
be applicable, we cannot assure you that the Argentine government will not pass
new rules and regulations restricting the ability of creditors to enforce their
rights pursuant to debt agreements, guarantees and similar instruments.

                        RISK FACTORS RELATING TO THE BANK

FOR THE FORESEEABLE FUTURE, THE BANK COULD HAVE LIMITATIONS ON ITS ABILITY TO
MANAGE EFFECTIVELY ITS ASSETS AND LIABILITIES SO AS TO MINIMIZE RISKS RESULTING
FROM MISMATCHES IN TERMS OF CURRENCIES, MATURITIES AND YIELDS

      In the course of implementing asymmetric pesification, the government
modified the yields of the assets and the cost of the liabilities that were
pesified. Fixed maximum and minimum interest rates were established for pesified
assets and liabilities, respectively. In addition, the principal of those assets
and liabilities was tied to either the CER or the CVS, and, in most cases,
maturities were extended. The terms and conditions of peso-denominated assets
with the public sector and certain peso-denominated deposits were also modified.

      The amendments and modifications of the Bank's assets and liabilities
resulting from the government measures to address the economic crisis have
created mismatches between its assets and liabilities in terms of currency,
maturity and yield. Even though the Bank has been successful in the
restructuring of its foreign debt and its debt with the Argentine Central Bank,
for the foreseeable future, it will have limitations on its ability to manage
effectively its assets and liabilities so as to minimize risks resulting from
mismatches in terms of currencies and yields. See Item 5. "Operating and
Financial Review and Prospects -- Item 5A. Operating Results -- Currency
Composition of Our Balance Sheet" and Item 4. "Information on the Company --
Main Regulatory Changes in 2002 and 2003" in this annual report.

                                      -16-
<PAGE>

THE BANK'S NEW DEBT AGREEMENTS RESTRICT ITS ABILITY TO TAKE SOME ACTIONS

      The new loan agreements and indenture entered into by the Bank as part of
its foreign debt restructuring, include a number of significant covenants that,
among other things, will restrict the Bank's ability to:

      -     pay dividends on stock or purchase its stock or the stock of its
            subsidiaries;

      -     make certain types of investments;

      -     use the proceeds of the sale of certain assets or the issuance of
            debt or equity securities;

      -     engage in certain transactions with affiliates; and

      -     engage in nonfinancial business activities.

Some of these agreements also require the Bank to maintain specified financial
ratios. A breach of any of these covenants or the Bank's inability to maintain
the required ratios could result in a default in respect of the related
indebtedness. In the event of a default, the relevant lenders could elect, among
other options, to declare the indebtedness, together with accrued interest and
other fees, to be immediately due and payable.

A MAJORITY OF THE BANK'S ASSETS ARE CONCENTRATED IN ARGENTINE PUBLIC-SECTOR DEBT
INSTRUMENTS

      As of December 31, 2003, the Bank's exposure to the Argentine public
sector, including the compensatory and hedge bonds (BODEN 2012 received or to be
received by the Bank in accordance with applicable regulations as compensation
for asymmetric pesification) amounted to Ps. 17,175.9 million, representing
approximately 75.6% of total assets. See Item 5. "Operating and Financial Review
and Prospects -- Item 5A. Operating Results -- Exposure to the Argentine Public
Sector" and Item 4. "Information on the Company -- Main Regulatory Changes in
2002 and 2003 -- Compensation to Financial Institutions" in this annual report.
Consequently, the value of the Bank's assets, its income and cash flow
generation capacity and future financial condition are heavily dependent on the
Argentine government's ability to comply with its payment obligations. In turn,
the ability of the Argentine government to comply with its payment obligations
is dependent on, among other things, the successful outcome of the restructuring
of the Argentine government's foreign debt, the result of which remains
uncertain, and its ability to establish an economic policy that is successful in
promoting sustainable economic growth in the long run.

      In addition, although there is a trading market for the BODEN 2012, the
Bank may be limited in its ability to dispose of many of its government assets.

THE BANK HAS RECORDED BODEN 2012 AND ITS RIGHTS TO RECEIVE OR ACQUIRE FUTURE
BODEN 2012 AS ASSETS HAVING A VALUE EQUAL TO THE FACE AMOUNT OF THE BODEN 2012
RECEIVED OR TO BE RECEIVED AND ACQUIRED, WHICH DOES NOT REFLECT ITS ACTUAL
MARKET VALUE

      Although, in accordance with Argentine Central Bank accounting rules, the
Bank has recorded the BODEN 2012 already received and its right to acquire BODEN
2012 in the future as assets having a value equal to 100% of the face value of
such BODEN 2012, the market value of these assets is significantly lower. The
BODEN 2012 are unsecured debt obligations of the Argentine government, which is
currently in payment default on a substantial portion of its indebtedness. As of
June 25, 2004, the BODEN 2012 were not rated and were trading in the secondary
market at a price of approximately US$66.90 for every US$100 of face value.

THERE IS A POSSIBILITY THAT THE BANK WILL RECEIVE LESS BODEN 2012 FROM THE
ARGENTINE GOVERNMENT THAN IT BELIEVES IT IS ENTITLED TO RECEIVE

      As of December 31, 2003, the Bank had recorded Ps. 1,610.0 million on
account of that part of the compensatory bond that was actually received from
the Argentine Central Bank. In addition, in accordance with applicable rules,
the Bank determined that it is entitled to receive Ps. 1,013.9 million of
additional compensatory bond and Ps. 3,615.7 million of a hedge bond it is also
entitled to acquire from the government with Argentine

                                      -17-
<PAGE>

Central Bank financing. The amount of compensatory and hedge bonds represented,
as of December 31, 2003, 27.5% of the Bank's assets.

      The Argentine Central Bank is required to approve the Bank's claim for
compensatory and hedge bonds prior to their full delivery to the Bank. In 2003,
the Argentine Central Bank reviewed the Bank's application for both compensatory
and hedge bonds, and the Bank has made adjustments to the carrying value of its
receivables for bonds to be received.

      The actual amount of BODEN 2012 the Bank ultimately receives as
compensation for the effects of asymmetric pesification and the actual amount of
debt it ultimately incurs from the Argentine Central Bank to purchase the hedge
bond remain subject to negotiation with the Argentine Central Bank. As a result,
the amount of compensation the Bank ultimately receives and the related
liabilities it incurs may differ from the amounts recorded on its balance sheet,
and these differences could adversely affect our financial condition.

THE BODEN 2012 MAY BE SUBJECT TO SUBSEQUENT RENEGOTIATION

      The Argentine government is in the process of restructuring most of its
foreign debt. We cannot assure you that this process will not ultimately result
in a requirement or decision by the Argentine government to restructure the
BODEN 2012 on terms less favorable than those currently in place.

FAILURE BY GALICIA URUGUAY TO REPAY DEPOSITS RESTRUCTURED IN 2002 IN ACCORDANCE
WITH THEIR TERMS COULD ADVERSELY AFFECT THE CONFIDENCE OF OUR DEPOSITORS

      Galicia Uruguay completed the restructuring of its deposits during 2002.
It expects to satisfy its obligations arising from the restructuring of its
deposits with funds provided by payments in respect of its loan portfolio,
repayment by the Bank of its debt with Galicia Uruguay and the BODEN 2012
pertaining to Galicia Uruguay on account of the pesification of some of its
loans and recorded by the Bank in Argentina.

      In early January 2003 and in September 2003, Galicia Uruguay paid the
first and second installments, respectively, contemplated in its deposit
restructuring agreement, and in September 2003 and March 2004, Galicia Uruguay
completed two offers to exchange restructured deposits for cash, new negotiable
obligations it issued and BODEN 2012. As a result, the amount of Galicia
Uruguay's indebtedness to its depositors has declined substantially. In
addition, Galicia Uruguay has received authorization from the Central Bank of
Uruguay to create a trust that will receive its assets, including the BODEN 2012
referred to above, to secure the repayment of its indebtedness to its
depositors.

      The failure by Galicia Uruguay to honor its restructured liabilities on a
timely basis would likely have a significant negative impact on the Bank's
operations in Argentina, with a loss of reputation, customers and deposits,
given that the two banks share their customer base to a large extent. In such an
event, our financial condition and results of operations would likely be
materially and adversely affected. See Item 4. "Information on the Company --
Business Overview -- Banco Galicia -- Galicia Capitalization and Liquidity
Plan," Item 4. "Information on the Company -- Selected Statistical Information
-- Composition of Deposits," and Item 5. "Operating and Financial Review and
Prospects -- Item 5A. Operating Results -- Contractual Obligations."

THE BANK'S FUTURE BUSINESS ACTIVITIES MAY BE SUBSTANTIALLY DIFFERENT THAN THOSE
UNDERTAKEN BY THE BANK HISTORICALLY

      As a result of the political and economic crisis in Argentina that began
in late 2001 and the significant adverse effects that that crisis has had on the
Bank and other financial institutions operating in Argentina, we cannot assure
you that the Bank will be able to undertake the same type of business activities
in the future or maintain the same level of market activity that it enjoyed in
periods prior to December 2001. Therefore, the Bank's future business
activities, as well as the levels of those business activities, and the Bank's
market share may differ substantially from its business and levels at December
31, 2001, or in precrisis periods.

                                      -18-
<PAGE>

IT MAY BE DIFFICULT FOR THE BANK TO IMPLEMENT ITS BUSINESS STRATEGY SUCCESSFULLY

      The current economic situation in Argentina makes it difficult to predict
whether the Bank will be able to implement successfully its business strategy,
including increasing fee income and loan origination so as to generate
sufficient revenue to cover expenses. See Item 4. "Information on the Company --
Business Overview -- Banco Galicia -- Banco Galicia's Strategy." Demand for
fee-related products and services as well as credit demand is increasing in
Argentina, together with the improved situation of the economy, but the economy
as a whole and the relevant markets have not stabilized enough to be certain
that demand will continue to grow. Therefore, we cannot assure you that the
Bank's business strategy will in fact be successful or that continuing or new
events in Argentina will not adversely affect the Argentine economy so as to
call into question the Bank's ability to implement its business strategy
successfully and to regain full financial stability.

ITEM 4. INFORMATION ON THE COMPANY

ORGANIZATION

      We were incorporated on September 14, 1999, as a stock corporation
(sociedad anonima) under the laws of Argentina. Our domicile is in Buenos Aires,
Argentina. Under our bylaws, our corporate duration is until June 30, 2100. Our
duration can be extended by resolution taken at a general extraordinary
shareholders' meeting. Our principal executive offices are located at Teniente
General Juan D. Peron 456, Second Floor, (1038) Buenos Aires, Argentina. Our
telephone number is (54-11) 4343-7528.

      Our agent for service of process in the United States is C T Corporation
System, presently located at 111 Eighth Avenue, 13th Floor, New York, New York
10011.

ORGANIZATIONAL STRUCTURE

      The following chart illustrates our organizational structure as of
December 31, 2003. Percentages indicate the ownership interests held. All of the
companies shown in the chart are incorporated in Argentina, except for:

-     Banco Galicia Uruguay S.A., incorporated in Uruguay;

-     Galicia Pension Fund Ltd. and Banco de Galicia (Cayman) Ltd. ("Galicia
      Cayman"), incorporated in the Cayman Islands and currently in provisional
      liquidation;

-     Net Investment BV (Netherlands), incorporated in the Netherlands; and

-     Tradecom Holanda, incorporated in the Netherlands.

      Since February 13, 2002, Galicia Uruguay's activities have been suspended.
See " -- Business Overview -- Banco Galicia -- Banco Galicia Uruguay S.A. and
Banco de Galicia (Cayman) Ltd."

                                      -19-
<PAGE>

[ORGANIZATIONAL STRUCTURE CHART DEPICTING OUR SUBSIDIARIES:

Galicia Warrants S.A.
Sudamericana Holding S.A.
Net Investment S.A.
Banco de Galicia y Buenos Aires S.A.
Banco Galicia Uruguay S.A.
Banco de Galicia (Cayman) Ltd. (In Provisional Liquidation)
Galicia Pension Fund Ltd.
Galicia Administradora de Fondos S.A.
Tarjetas Regionales S.A.
Tarjeta Naranja S.A.
Tarjetas Cuyanas S.A.
Tarjetas del Mar S.A.
Galicia Vida Compania de Seguros S.A.
Galicia Retiro Compania de Seguros S.A.
Instituto de Salta Compania de Seguros de Vida S.A.
Medigap Salud S.A.
Sudamericana Asesores de Seguros S.A.
Galicia Patrimoniales Compania de Seguros S.A.
Duenovende S.A. (In Liquidation)
B2 Agro S.A.
Net Investment BV (Netherlands)
Tradecom International (Netherlands)
Tradecom Argentina S.A.
Galicia Capital Markets S.A.
Galicia Valores S.A. Sociedad de Bolsa
Galicia Factoring y Leasing S.A.
Agro Galicia S.A.
Banelco S.A.
Galicia Immobiliaria S.A.
Privatized Companies(1)
Other Subsidiaries(2)]

1)   Aguas Provinciales de Santa Fe S.A. 12.5%; Inversora Diamante S.A. 12.5%;
     Electrigal S.A. 12.5%; Inversora Nihuiles S.A. 12.4991%; Correo Argentino
     S.A. 11.77%; Aguas Cordobesas S.A. 10.833%; Aguas Argentinas S.A. 8.26%;
     A.E.C. S.A. 6.965%, Caminos de las Sierras S.A. 2.4835%.

2)   Coelsa 13.682%; Alfer S.A. 9.8024%; Corporacion Financiera S.A. 9.09%;
     Interbanking S.A. 8.33%; Seguros de Depositos S.A. ("Sedesa") 7.2296%;
     Finanban S.A. 6.67%; Ocye S.A. 6.0%; Argencontrol S.A. 5.766%; Visa 5.0%;
     Mercado Abierto Electronico S.A. 1.4851%; AIG-GE Capital Latin American
     Infrastructure Fund LP 1.396214%; Banco Latinoamericano de Exportaciones
     S.A. 0.22%; S.W.I.F.T. S.C. 0.02%.

      When we refer to our business or when we use the terms "Grupo Galicia" or
the "Group," we mean the businesses of Grupo Galicia, the holding company,
Galicia Warrants S.A., Sudamericana Holding S.A. and its subsidiaries, Net
Investments S.A. and its subsidiaries, and Banco Galicia consolidated with
Galicia Uruguay and its subsidiaries, Tarjetas Regionales S.A. and its
subsidiaries, and the following consolidated subsidiaries: Galicia Valores S.A.,
Sociedad de Bolsa, Galicia Capital Markets S.A. and its subsidiaries, Galicia
Factoring y Leasing S.A. and AgroGalicia S.A. (collectively, the "Bank" or
"Banco Galicia").

                                      -20-
<PAGE>

HISTORY

      We were formed as a financial services holding company to hold all of the
shares of capital stock of Banco Galicia held by members of the Escasany, Ayerza
and Braun families. We were formed with an initial nominal capital of 24,000
common shares, 12,516 of which were designated class A shares and 11,484 of
which were designated as class B shares. Following the formation of Grupo
Galicia, the holding companies which held the shares in Banco Galicia on behalf
of the Escasany, Ayerza and Braun families were merged into Grupo Galicia.
Following the merger, we held 46.34% of the outstanding shares of Banco Galicia.
Simultaneously with the merger, we increased our capital from 24,000 to
543,000,000 common shares, 281,221,650 of which were designated as class A
shares and 261,778,350 of which were designated as class B shares. Following
this capital increase, all of our class A shares were held by EBA Holding S.A.,
an Argentine corporation that is 100% owned by our controlling shareholders, and
our class B shares were held directly by our controlling shareholders in an
amount equal to their ownership interests in the holding companies that were
merged into Grupo Galicia.

      On May 16, 2000, we held an extraordinary shareholders' meeting during
which the shareholders unanimously approved a capital increase of up to Ps.
628,704,540 and approved the public offering and listings of our class B shares.
All of the new common shares were designated as class B shares, with a par value
of Ps. 1.00. During this extraordinary shareholders' meeting, all of our
existing shareholders waived their preemptive rights in order to establish the
basis for the exchange offer of our shares for Banco Galicia shares. At the same
shareholders' meeting, the shareholders determined that the exchange ratio for
the exchange offer would be one class B share of Banco Galicia for 2.5 of our
class B shares and one ADS of Banco Galicia for one of our ADSs. We completed
the exchange offer in July 2000 with a capital increase of Ps. 549,407,017. At
the completion of the exchange offer, our only significant asset was our 93.23%
interest in Banco Galicia. By the end of 2003, our interest was 93.59% as a
result of open-market purchases.

      We are a holding company whose corporate purpose is exclusively related to
financial services and investment. Under our bylaws, we may not carry out
transactions described in the Financial Entities Law (Ley de Entidades
Financieras). Therefore, it is not our intention to compete with Banco Galicia.
Rather, we seek to broaden and complement Banco Galicia's operations and
businesses through holdings in companies and undertakings whose objectives are
related to financial activities. Consequently, we operate in financial and
related activities that Banco Galicia cannot carry out or in which it can only
participate in a limited way or in those activities that would not be profitable
for the Bank due to current regulations.

      In September 2000, we acquired 87.5% of the capital stock and voting
rights of Net Investment S.A., a company in which Banco Galicia holds the
remaining 12.5% interest.

      In December 2000, we acquired 37.5% Sudamericana Holding S.A., while Banco
Galicia purchased 12.5%.

      In August 2001, we acquired 87.5% of the capital stock and voting rights
of Galicia Warrants S.A., a company in which Banco Galicia holds the remaining
12.5% interest.

      In September 2001, we made a new investment in the insurance business by
acquiring from Hartford Life International Ltd. (U.S.A.) and Hartford Life Ltd.
(Bermuda) 50% of the capital stock and voting rights of Sudamericana Holding
S.A. As a result of this transaction, we increased our interest in that company
to 87.5%, while the remaining 12.5% continues to belong to Banco Galicia.

CAPITAL INVESTMENTS AND DIVESTITURES

GRUPO GALICIA

      During 2003, our only capital contribution was to Net Investment S.A. for
Ps. 3.6 million. During 2002, we made capital contributions in the amount of Ps.
4.20 million to Net Investment. During 2001, Grupo Galicia made the following
capital investments:

                                      -21-
<PAGE>

            -     invested Ps. 5.4 million in aggregate in Banco Galicia through
                  open-market purchases of the Bank's common shares;

            -     made capital contributions of Ps. 5 million in Net Investment;

            -     contributed Ps. 0.6 million to BtoB Comercial S.A. and, along
                  with Banco Galicia, assigned along our interests in BtoB
                  Comercial to Net Investment so that the business could be
                  carried out by Tradecom International N.V., in which Net
                  Investment has a minority stake;

            -     invested Ps. 21.04 million in the insurance business by
                  acquiring from Hartford Life International Ltd. (U.S.A.) and
                  Hartford Life Ltd. (Bermuda) 50% of the capital stock and
                  voting rights of Sudamericana Holding S.A., raising our stake
                  to 87.50% (the remaining 12.50% was held by Banco Galicia).

            For 2004, we have budgeted investments amounting to Ps. 0.8 million
to be applied to Net Investment.

BANCO GALICIA

      During 2003, the Bank's capital expenditures amounted to Ps. 21.2 million,
distributed as follows:

      -     Ps. 2.6 million in fixed assets;

      -     Ps. 10.3 million in construction in progress; and

      -     Ps. 8.3 million in intangible assets.

      During 2003 the Bank did not make any significant investments or
divestitures. The Bank has budgeted capital expenditures for the fiscal year
ended December 31, 2004, for the following purposes and amounts:

<TABLE>
<S>                                              <C>
Construction of the Banco Galicia tower          Ps. 48.0 million
Hardware, software and system maintenance            29.5 million
Other                                                 5.5 million
                                                 ----------------
Total                                            Ps. 83.0 million
</TABLE>

      Banco Galicia expects to finance its capital expenditures from the cash
flow derived from operations.

      During 2002, the Bank's capital expenditures totaled Ps. 56.2 million,
distributed as follows:

      -     Ps. 12.9 million in fixed assets;

      -     Ps. 23.6 million in construction in progress; and

      -     Ps. 19.7 million in intangible assets.

      During 2002 the Bank did not make any significant investments or
divestitures.

      During 2001, the Bank's capital expenditures totaled Ps. 226.9 million,
distributed as follows:

      -     Ps. 79.1 million in fixed assets;

      -     Ps. 38.1 million in construction in progress; and

      -     Ps. 109.7 million in intangible assets.

      On October 15, 2001, the Bank acquired the assets and liabilities of the
retail division of ABN Amro Bank Argentina, principally deposits, mortgage
loans, credit cards and insurance policies. The Bank paid US$46 million, of
which US$42 million was paid in cash and the remaining US$4 million through an
agreement to distribute ABN Amro's financial products. Banco Galicia acquired 22
branches and 270 employees in this transaction.

      On March 21, 2001, the Bank's board of directors decided to sell the
Bank's equity interest in Banco Barclays e Galicia S.A. (10,449,541 shares
equivalent to a 22.71% interest) under the terms of a public tender offer,

                                      -22-
<PAGE>

which was conducted in Brazil by Barclays Bank plc, to purchase all of the
shares of Banco Barclays e Galicia. The price set by Barclays Bank plc was R$
5.77 (5.77 Brazilian reais) (equivalent to Ps. 2.67 per share at the March 19,
2001, exchange rate of R$ 2.165 per peso and equivalent to Ps. 5.88 per share in
constant pesos of February 28, 2003). The acquisition price was adjusted for
Brazilian inflation (as measured by the Monetary Correction Rate index) between
that date and the settlement date (August 2001). As of December 31, 2000, the
book value of the Bank's interest in Banco Barclays e Galicia S.A. had been Ps.
78.9 million.

OUR STRATEGY

      Our main objective is to be one of Argentina's leading comprehensive
financial services companies while continuing to strengthen Banco Galicia's
position as one of Argentina's leading banks. Our holding company structure
enhances the Bank's ability to compete more effectively and to enter into new
finance-related businesses (that are restricted to banks by the applicable
regulatory framework), and to profit from the trends in the financial industry
worldwide. We can summarize our strategy in six main points:

      -     Establish a platform to enhance value for our shareholders and
            customers: By facilitating the creation of autonomous businesses, we
            will be able to leverage the experience and knowledge of the market
            of our various companies in a more targeted and efficient manner.
            Furthermore, this platform will provide us with greater flexibility
            to react to market trends and to respond rapidly to client needs
            with respect to new products, markets and distribution channels.

      -     Take advantage of maximum flexibility to enter into potential
            strategic alliances: By organizing certain of our business lines
            into separate subsidiaries, we will optimize the potential for
            strategic alliances in our businesses. This will provide additional
            flexibility to develop new businesses in the most effective manner.

      -     Obtain appropriate levels of participation in certain high-growth
            businesses and take advantage of the potential cross-selling
            opportunities: The Argentine Central Bank limits the ability of
            financial institutions to make investments in subsidiaries that
            develop activities that are considered "noncomplementary" to banking
            activity. We believe that some of these businesses have future
            growth potential in Argentina. Unlike Banco Galicia, we have no
            limits on our investments in noncomplementary businesses such as
            insurance. Moreover, we have established controlling interests in
            some of these businesses to leverage Banco Galicia's and other
            companies' customer bases into cross-selling opportunities.

      -     Establish a corporate structure by business units: We intend to
            create an appropriate corporate structure aligned to the evolution
            of our several business sectors. We expect that this will allow a
            more accurate assessment of sources of income and cost control,
            facilitate benchmarking of those businesses against other similar
            ones and therefore facilitate our commercial effectiveness and
            efficiency in the use of resources.

      -     Optimize the capital structure of our subsidiaries: With a structure
            of separate subsidiaries, we can allocate capital more effectively
            by designing optimal capital structures for our subsidiaries,
            thereby reducing their cost of capital and investment and further
            expanding their growth.

      -     Adapt the business to current economic conditions: Since January 1,
            2002, economic, financial and business conditions have radically
            changed in Argentina. We are making our best efforts to finance the
            companies we control with their own respective cash flows and to
            minimize the need for any cash contributions. In addition, we have
            suspended the payment of any cash dividends in order to preserve an
            appropriate level of liquidity in order to fund our own expenses and
            existing projects.

BUSINESS OVERVIEW

BANCO GALICIA

      Overview

      In 2001 and 2002, the Bank operated in an economy that was experiencing
significant economic difficulties including, among other things, several runs on
the financial system's deposits and the deepening of a prolonged

                                      -23-
<PAGE>

recession. The Argentine economic and financial crisis was aggravated by
significant political instability and in 2002 by a radical change in the
regulatory framework for doing business in Argentina, both generally and for the
financial system in particular. In addition, in 2002, the peso was devalued
approximately 70.0%, the financial condition of the public and the private
sectors (including businesses as well as individuals) deteriorated and inflation
rose.

      In 2003, the Bank's financial condition improved along with the overall
economic situation in Argentina, and the macroeconomic environment stabilized.
In addition, new government regulations were implemented, principally to deal
with some of the impacts of the crisis on financial institutions, as more fully
described in this annual report. Nevertheless, the improvements in the overall
economic environment were not sufficient for large financial institutions such
as the Bank to overcome all of the effects of the crisis on their financial
condition. As a result, the Bank suffered a Ps. 199.0 million net loss in 2003,
which was nonetheless substantially lower than the Ps. 1,184.9 million net loss
for 2002. As of December 31, 2003, the Bank's shareholders' equity was Ps.
1,352.8 million, its consolidated assets amounted to Ps. 22,707.8 million, its
consolidated net loans were Ps. 10,934.8 million and its consolidated deposits
amounted to Ps. 5,595.1 million.

      In May 2002, the Bank implemented the Galicia Capitalization and Liquidity
Plan, which the Bank designed to address the liquidity shortage caused by the
deposit run, the unavailability of other sources of funds and other negative
impacts of the Argentine crisis on it. To date, the Bank has successfully
implemented the measures contemplated by the Bank's capitalization and liquidity
plan as described under " -- Galicia Capitalization and Liquidity Plan."

      Following the implementation of its capitalization and liquidity plan, the
Bank has seen its deposits in Argentina increase. Based on daily information
published by the Argentine Central Bank, as of December 31, 2003, the Bank's
estimated deposit market share of "voluntary" deposits in Argentina (i.e.,
deposits in current and savings accounts and voluntary time deposits) was 4.75%
compared to 4.34% as of December 31, 2002.

      The Bank is principally engaged in commercial banking and provides a wide
variety of banking products and services to large corporations, medium- and
small-sized companies and individuals. Depending on the type of customer, these
services include personal and corporate loans, deposit-taking, credit and debit
cards, residential mortgage loans, fiduciary and custodial services and
electronic banking. The Bank is also involved in other finance-related
businesses, such as investment banking, insurance distribution and asset
management. During 2003, the Bank's lending activity was limited, but currently
the Bank is increasingly originating new loans to individuals as well as to the
commercial sector.

      The Bank provides services through one of the most extensive and
diversified distribution platforms of all private-sector banks in Argentina,
with 226 full-service branches, 555 automated teller machines ("ATMs") and 524
self-service terminals as of December 31, 2003, along with other electronic
banking facilities such as phone banking and e-banking. As of December 31, 2003,
our branch network covered all of the Argentine provinces, except for Tierra del
Fuego, and all the main cities of Argentina.

      Banco Galicia's Strategy

      In light of the effects that the 2001 - 2002 Argentine crisis had had on
its financial condition and given that the crisis significantly impaired the
financial system's ability to act as an intermediary between the public's
savings and the supply of credit, the Bank directed its efforts in 2002 toward:

         -  implementing its capitalization and liquidity plan in order to
            restore the Bank's liquidity and solvency (explained in more detail
            below);

         -  dealing with its portfolio of nonperforming loans, which had
            increased significantly as a result of the crisis, including
            ensuring adequate provisions for loan losses;

         -  focusing more than in the past on the generation of fee income from
            a variety of transactional financial services;

                                      -24-
<PAGE>

         -  improving the efficiency of its operations through cost reductions;

         -  regaining deposit market share; and

         -  maintaining a high liquidity ratio after the immediate increase
            achieved through the capitalization and liquidity plan.

      Facing a better overall Argentine economic and business environment in
2003, in order to generate revenue, the Bank:

         -  continued to concentrate on the provision of transactional financial
            services, supported by a more aggressive marketing strategy;

         -  resumed certain credit activities of a short-term nature, mainly
            through advances on current accounts, credit-card financing and the
            purchase of checks;

         -  concentrated on advancing the restructuring of its commercial loan
            portfolio;

         -  remained committed to strict cost controls;

         -  continued to increase its deposit market share; and

         -  maintained a high liquidity ratio.

      In 2003, with respect to its capitalization and liquidity plan, the Bank
continued the process of restructuring its foreign debt, mainly by focusing on
renegotiation of the foreign debt of its head office in Argentina and its Cayman
branch. This renegotiation was successfully concluded on May 18, 2004, marking
the last of the measures set out in the Bank's capitalization and liquidity
plan. In addition, in 2003, the Bank focused on restructuring its debt with the
Argentine Central Bank into a long-term liability. This restructuring was
successfully concluded on February 3, 2004. As a result of these developments,
the Bank increased its capitalization to a level that management believes will
assure capital availability for an extended period. See " -- Restructuring of
the Foreign Debt of the Bank's Head Office in Argentina and its Cayman Branch"
and " -- Capitalization."

            In the restructuring of its liabilities, the Bank sought to create a
new debt profile consistent with the expected cash flow of its assets and to
prevent servicing of the restructured debt from affecting the growth prospects
of its business. Based on this objective as well as several competitive
strengths that were unaffected by the crisis, the Bank's current strategy is to:

         -  reposition the Bank as the leading Argentine bank;

         -  exploit fully the strengths represented by the Bank's extensive
            distribution platform and significant market penetration;

         -  continue to increase its deposit market share in order to recover
            its historical market share of approximately 10% over the next few
            years;

         -  increase significantly its peso-denominated lending in order to
            increase its financial income and reduce its asset and liability
            mismatches;

         -  maintain and develop further the Bank's leadership in transactional
            and electronic banking products;

         -  rebuild relationships with corporates and consolidate
            leadership in the agribusiness and middle-market sectors;

                                      -25-
<PAGE>

            -  maintain cost efficiency and expense control; and

            -  maintain an adequate capital base.

      On a consolidated basis, including its regional credit card companies, the
Bank has a large base of approximately 2.3 million customers. The Bank's
competitive capacity remains intact and is based on the following strengths:

            -  its significant share of the financial system's deposits;

            -  its ability to retain customers (neither the streamlining of the
               Bank's distribution network in 2002 nor the deposit runs
               experienced during the crisis resulted in a significant loss of
               customers);

            -  its extensive and diversified distribution platforms within the
               Argentine financial system;

            -  its leading position as a provider of transactional and
               electronic banking services, which are, and are expected to
               continue to be over the medium term, the core of financial
               activity in the Argentine financial system

            -  its wide product offerings, which are constantly adapted to the
               new economic environment and which include technology-based
               services;

            -  its brand image;

            -  its asset and liability structure: the Bank has a lower level of
               currency mismatches and less exposure to amparo claims and
               judgments than most of its competitors;

            -  its considerable fee income, which provides the highest coverage
               of expenses and the lowest breakeven spread among its
               competition; and

            -  its level of capitalization (after completion of its foreign debt
               restructuring, the Bank is one of the most highly capitalized
               banks in the Argentine financial system).

      Galicia Capitalization and Liquidity Plan

      On March 21, 2002, the Bank submitted a capitalization and liquidity plan
to the Argentine Central Bank in order to restore its liquidity and solvency,
which plan was supplemented on March 22, 2002, and April 11, 2002. The main
objectives of the plan were (1) the immediate restoration of the Bank's
liquidity through raising cash in amounts sufficient to allow the Bank to
reimburse a significant portion of its demand deposits without having to rely on
financial assistance from the Argentine Central Bank; (2) an increase in the
Bank's capitalization in the context of the restructuring of its foreign debt;
(3) the orderly winding down of the Bank's operating units abroad; and (4)
streamlining of the Bank's operations and a reduction in its administrative
expenses in order to adapt to levels of financial activity significantly lower
than those experienced in the precrisis period. The board of directors of the
Argentine Central Bank approved the plan on May 3, 2002.

      As of the date of this annual report, the Bank had accomplished all of the
steps laid out in its capitalization and liquidity plan.

      After the initial increase in the Bank's liquidity in May 2002,
immediately after the launch of the Galicia capitalization and liquidity plan,
the Bank continued to rebuild its liquidity position without requiring further
financial assistance from the Argentine Central Bank. The initial increase in
the Bank's liquidity was achieved through the securitization or sale of mortgage
and commercial loan portfolios in exchange for cash and through loans from
Sedesa (the entity that manages Argentina's deposit insurance fund) and the
Fiduciary Fund for the Assistance of Financial Institutions and Insurance
Companies (FFAEFyS). As of December 31, 2003, the Bank's liquid assets, on an
unconsolidated basis, considering only those of the Argentine operation,
amounted to 60.37% of

                                      -26-
<PAGE>

its transactional deposits (deposits in current and savings accounts) and 26.73%
of its total deposits. Liquid assets include cash, the balance of the Bank's
current account at the Argentine Central Bank, the balance of special escrow
accounts held by the Bank at the Argentine Central Bank in favor of
clearinghouses, holdings of Lebac (short-term Argentine Central Bank notes) and
short-term placements in correspondent banks.

         As part of the capitalization and liquidity plan, the Bank streamlined
its operational structure and reduced its administrative expenses in order to
adapt to the new economic and regulatory context that resulted from the crisis
in 2002. Its strict cost-control policy has continued. See Item 5. "Operating
and Financial Review and Prospects--Item 5A. Operating Results--Results of
Operations of Grupo Galicia for the Fiscal Years Ending December 31, 2003,
December 31, 2002 and December 31, 2001."

         In accordance with its capitalization and liquidity plan, the Bank
restructured the liabilities of its New York branch, which then totaled US$327.8
million, in 2002. This step was necessary to ensure the orderly winding down of
the affairs of the New York branch, which was closed on January 30, 2003. As of
the date of this annual report, US$115.8 million in aggregate principal amount
of two negotiable obligations issued by the Bank's head office in Argentina to
restructure the New York Branch debt remain outstanding.

         Similarly, during 2002, the Bank restructured deposits at Galicia
Uruguay. See "--Banco Galicia Uruguay S.A. and Banco de Galicia (Cayman)
Ltd.--Galicia Uruguay."

         In addition, in accordance with the capitalization and liquidity plan,
the Bank's representative offices in Sao Paulo and London, as well as the Bank's
securities business incorporated in the United Kingdom, Galicia y Buenos Aires
Securities (UK) Ltd., were closed on September 30, 2002.

         The sections below summarize the progress made by the Bank during 2003
and 2004 toward completing implementation of the capitalization and liquidity
plan's measures, including restructuring the foreign debt of the Bank's head
office in Argentina and its Cayman branch, the increase in the Bank's
capitalization tied to the foreign debt restructuring and other developments
regarding the Bank's subsidiary in Uruguay.

         Restructuring of the Foreign Debt of the Bank's Head Office in
Argentina and its Cayman Branch

         Overview

         On June 12, 2002, the Bank announced that it would not pay any
principal or interest on its foreign debt effective as of May 1, 2002, and
announced its intention to restructure all of the foreign debt of the Bank's
head office in Argentina and its Cayman branch within the framework of the
capitalization and liquidity plan. In this connection, the Bank hired an
international investment bank as an adviser in the restructuring process, and
negotiations to restructure the foreign debt began in June 2002. On November 25,
2003, the Bank announced that it had reached a nonbinding agreement in principle
with the members of an ad hoc steering committee representing the Bank's
principal bank and multilateral agency creditors regarding terms for the
proposed restructuring. We refer to these bank and multilateral agency creditors
as "bank creditors" below.

         In December 2003, the Bank announced the restructuring terms to its
bank creditors and bondholders. The Bank offered its bank creditors and
bondholders instruments with substantially similar economic terms. The
instruments delivered to the bondholders, however, were issued under an
indenture, and the instruments issued to the bank creditors were issued under
various loan facilities that contain additional covenants not included in the
indenture.

         On May 18, 2004, the Bank successfully closed the restructuring of
US$1,320.9 million of the foreign debt of its head office in Argentina and its
Cayman Branch. This amount represented 98.2% of the foreign debt eligible for
restructuring.

                                      -27-

<PAGE>

         Approval of the Bank's Foreign Debt Restructuring and Argentine Central
Bank Debt Restructuring

         In accordance with Argentine Central Bank Communique "A" 3940, in order
for a bank to be eligible to restructure the financial assistance for liquidity
support it received from the Argentine Central Bank into long-term debt under
the terms established by Decree No. 739/03 and No. 1262/03, the Argentine
Central Bank had to approve the terms and conditions of the bank's foreign debt
restructuring proposal before December 5, 2003.

         On November 28, 2003, the Financial System's Restructuring Unit (Unidad
de Reestructuracion del Sistema Financiero), the regulatory body responsible for
restructuring the Argentine financial system after the 2001-2002 crisis,
informed the Bank that it had authorized the Argentine Central Bank to extend
the maturity of the Bank's debt with the Argentine Central Bank for liquidity
support by up to 120 monthly installments in accordance with the repayment
schedule presented by the Bank to the Argentine Central Bank and in accordance
with the provisions of Decree No. 1262/03. For a description of the
restructuring of the financial assistance granted by the Argentine Central Bank
to the Bank for liquidity support, see Item 5. "Operating and Financial Review
and Prospects--Item 5A. Operating Results--Funding."

         On December 3, 2003, the Argentine Central Bank informed the Bank that
its board of directors had approved the terms and conditions of the proposed
restructuring of the foreign debt of the Bank's head office and the Bank's
Cayman branch.

         On February 3, 2004, the Argentine Central Bank informed the Bank that
it had approved the Bank's request to adhere to the regime (established by
Decree No. 739/03 and modified by Decree No. 1262/03) for the repayment of the
debt for liquidity support owed to the Argentine Central Bank, as well as the
amortization schedule for that debt proposed by the Bank. The schedule was based
on the minimum amortization set up by the applicable rules and on the proceeds
of the assets eligible as collateral for such debt pursuant to these rules.
Therefore, the schedule contemplates repayment of the restructured debt in 92
monthly installments beginning in March 2004.

         By Resolution No. 152/04, dated May 14, 2004, the Argentine Central
Bank approved the economic terms of the restructuring of the foreign debt of the
Bank's head office in Argentina and its Cayman branch.

         Terms of the Foreign Debt Restructuring

         In the Bank's foreign debt restructuring, the Bank offered its
bondholders and bank creditors the ability to exchange their existing debt for
units comprised of a new long-term debt instrument maturing in 2014 and a new
subordinated debt instrument maturing in 2019 in a par-for-par first step
exchange offer. The bondholders and bank creditors were then given the option to
participate in a second step to the exchange, in which they could receive for
their units:

         -        cash (at a discount) (the "cash offer");

         -        BODEN 2012 (at a discount) (the "BODEN offer");

         -        new long-term debt instruments (at par); or

         -        new medium-term debt instruments (at par) and up to 149
                  million preferred shares of our preferred shares (or, instead
                  of such shares, cash, if any, paid to us by existing
                  shareholders electing to subscribe for our preferred shares in
                  a preemptive rights offering) (the "equity participation
                  option").

         In addition, creditors that agreed to sign firm commitments to the Bank
for new trade facilities in an aggregate principal amount up to US$35 million
were permitted to elect to receive new medium-term debt instruments maturing in
2010 (at par) (the "new money option").

         Each of the optional second-step offers was subject to proration.

                                      -28-

<PAGE>

         By offering the units, which contained a subordinated component, in the
par-for-par first step exchange offer, the Bank's main objective was to generate
complementary regulatory capital for an extended period. The second step was
intended to satisfy creditors' varying investment preferences.

         To make the Bank's foreign debt restructuring possible:

            -     We approved a capital increase through the issuance of up to
                  149 million preferred shares, each of them mandatorily
                  convertible into one of our class B shares on May 13, 2005,
                  the first anniversary date of issuance (or, if earlier, on the
                  occurrence of a change of control of Grupo Galicia). As a
                  result of the exercises made by the existing shareholders in
                  our preemptive rights offering, creditors opting for the
                  equity participation offer received 87.8 million preferred
                  shares and US$30 million in cash and we received approximately
                  US$100 million of subordinated bonds in exchange for those
                  shares and cash. We issued the 149 million preferred shares on
                  May 13, 2004.

            -     Our controlling shareholders assigned part of their preemptive
                  and accretion rights to a trust established for the benefit of
                  the Bank's creditors.

            -     We entered into a registration rights agreement for the
                  benefit of the holders of our preferred shares in the United
                  States in which we agreed to (1) file a shelf registration
                  statement with the U.S. Securities and Exchange Commission
                  covering the resale of those restricted preferred shares
                  within 270 days of the expiration date of the exchange offer;
                  (2) use our reasonable best efforts to cause the shelf
                  registration statement to become effective within 360 days of
                  the offer's expiration date; and (3) use our reasonable best
                  efforts to keep the shelf registration statement effective
                  from on or before June 1, 2005, until the date on which all of
                  the restricted preferred shares have been sold under the shelf
                  registration statement or September 1, 2005, whichever comes
                  first.

            -     We entered into an agreement with the Bank's bank creditors in
                  which we agreed to maintain certain corporate governance
                  standards and to provide them with certain financial
                  information and reports on a quarterly and annual basis.

         In addition, in accordance with the terms of the Bank's foreign debt
restructuring, the Bank made a US$15.5 million cash payment for interest accrued
until April 30, 2002, and applied US$42.4 million not used in the cash offer to
prepay at par (plus capitalized interest) long-term instruments to be delivered
to creditors participating in the restructuring.

         Based on the final amounts validly tendered, on May 18, 2004, the Bank:

            -     paid US$13.6 million to creditors participating in the cash
                  offer;

            -     transferred US$36.9 million of nominal value of BODEN 2012 to
                  creditors participating in the BODEN offer; and

            -     issued the following new debt instruments:

                          -     US$648.5 million of long-term dollar-denominated
                                debt instruments, of which US$464.8 million were
                                dollar-denominated negotiable obligations due
                                2014 issued under the 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 issued under the
                                indenture.

                          -     US$230.0 million of subordinated
                                dollar-denominated debt instruments, of which
                                US$218.2 million were dollar-denominated
                                negotiable obligations due 2019 issued under the
                                indenture.

                                      -29-

<PAGE>

         The Bank also restructured trade debt for a principal amount of US$25.3
million in exchange for US$26.6 million of new trade debt to be repaid in 12
equal, consecutive monthly installments beginning in June 2004.

         In addition, the Bank entered into a new trade facility agreement for
US$35 million with creditors participating in the new money option.

         The following table shows certain information on the Bank's debt
restructuring:

<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF:                                                                      IN MILLIONS
<S>                                                                                    <C>
a) Old debt to be restructured as of December 31, 2003.............................    U.S.$ 1,349.6

b) Old debt to be restructured as of April 27, 2004 (1)............................          1,344.7 (2)

c) Old debt participating in the restructuring as of April 27, 2004 (1)............          1,320.9

d) New debt, including past due interest capitalized (3) (4).......................          1,399.6

e) New debt issued (4) (5).........................................................          1,278.3

f) Old debt not restructured as of May 18, 2004 (6)................................             22.9 (7)
</TABLE>

(1)  Expiration date of the exchange offer.

(2)  The decrease in the principal amount of debt to be restructured as compared
     to December 31, 2003, resulted from the fact that, in accordance with
     Argentine law, borrowers that were also holders of certain of the Bank's
     debt instruments under restructuring used such holdings to repay past-due
     loans granted to them by the Bank.

(3)  Interest past due between May 1, 2002, and December 31, 2003, was
     capitalized at 4.75% per annum, except for trade debt for a principal
     amount of US$25.3 million for which interest was capitalized at Libor plus
     1%. Interest past due until April 30, 2002, was paid in cash.

(4)  Excludes trade debt.

(5)  After having applied US$42.4 million not used in the cash offer to prepay
     long-term debt instruments included in (d).

(6)  Settlement date of the exchange offer.

(7)  Between the expiration date and the settlement date, the amount of debt not
     restructured decreased by US$0.9 million as a result of the repayment by
     borrowers that were also holders of debt subject to restructuring of
     past-due loans made to them by the Bank by using their holdings of such
     debt and, to a lesser extent, as a result of the renegotiation of debt not
     restructured under the terms of the restructuring.

         Capitalization

         The Bank's capitalization and liquidity plan considered the Bank's
capitalization as an integral part of the restructuring of its foreign debt.
Accordingly, as part of that plan, the Bank proposed to the Argentine Central
Bank a capitalization increase of up to US$300 million.

         The Bank's shareholders' meeting held on September 30, 2003, approved
the establishment of a global debt program under Argentine law for the issuance
of the Bank's new debt, in order to consummate the Bank's foreign debt
restructuring through the public offering of securities issued pursuant to such
program, which securities were not to be convertible into shares of the Bank. In
addition, the Bank's shareholders resolved that securities issued under the
global debt program could be subordinated in order to be computed as capital
solely for Argentine Central Bank regulatory purposes and not as capital stock.

         As a result of the restructuring of the foreign debt of the Bank's head
office in Argentina and its Cayman branch, the Bank increased its capitalization
by US$278.9 million. Specifically, this capital increase resulted from:

               -    the exchange of debt subject to restructuring for cash and
                    BODEN 2012 at a discount and the capitalization of interest
                    at a rate lower than the contractual rate recorded in the
                    Bank's books, which generated in aggregate a US$48.9 million
                    increase in shareholders' equity; and

               -    the issuance of US$230.0 million of subordinated debt
                    computable as supplemental capital in accordance with the
                    Argentine Central Bank's capital adequacy rules.

                                      -30-

<PAGE>

         As a result of the earlier restructuring of the debt of the Bank's New
York branch in 2002, the Bank had increased its capitalization by US$42.6
million by exchanging the old debt for new debt or cash at a discount.

         Banco Galicia Uruguay S.A. and Banco de Galicia (Cayman) Ltd.

         Galicia Uruguay

         As of December 31, 2003, Galicia Uruguay was intervened and its
activities were suspended. The Central Bank of Uruguay had imposed this status
in early 2002 as a result of the effects of the Argentine crisis on Galicia
Uruguay, but postponed its effect until May 31, 2004. As discussed below, the
Central Bank of Uruguay has again postponed Galicia Uruguay's intervention and
suspension of activities until the measures agreed upon between Galicia Uruguay
and the Uruguayan and Argentine regulatory authorities mentioned below in the
last paragraph of this section are implemented.

         As a result of the intervention of Galicia Uruguay by the Central Bank
of Uruguay, during 2002 and in early 2003, audited financial statements prepared
in accordance with Argentine Banking GAAP were not available for Galicia
Uruguay. As disclosed in the Bank's financial statements for the fiscal year
ended December 31, 2002, prepared in accordance with Argentine Banking GAAP, the
Bank decided to fully provision its investment in Galicia Uruguay and its
subsidiary Banco de Galicia (Cayman) Ltd. for the amounts recorded in its books
as of December 31, 2001. Likewise, the Bank deemed it appropriate to discontinue
line-by-line consolidation of both subsidiaries' financial statements with those
of the Bank for as long as these circumstances continue. However, the Bank
established a reserve, under the liability account "Provisions--Other
Contingencies" on its unconsolidated balance sheet to cover the estimated
negative consolidated shareholders' equity of the two subsidiaries.

         Subsequent to the preparation, in accordance with Argentine Banking
GAAP, of our consolidated financial statements for the fiscal year ended
December 31, 2002, we received additional information related to the
consolidated financial information of Galicia Uruguay. Therefore, the December
31, 2002, audited consolidated financial statements included in this annual
report include line-by-line consolidation of the consolidated financial
statements of Galicia Uruguay. Beginning September 30, 2003, the Bank's access
to financial information for Galicia Uruguay and its subsidiaries was
regularized. The Bank has therefore resumed line-by-line consolidation of the
consolidated financial statements of Galicia Uruguay.

         As of December 31, 2003, Galicia Uruguay's shareholders' equity was
US$(244.8) million.

         On December 23, 2002, Galicia Uruguay restructured its deposits with a
high degree of participation by its depositors (participation exceeded the legal
majority required under Uruguayan law). The restructuring became binding on all
creditors once approved by a court in Montevideo on that date. The restructuring
provided for an initial cash payment in dollars equivalent to 3% of the credit
balance of each creditor. The remaining balances were to be paid, at the
particular creditor's election, in time deposits or negotiable obligations
issued by Galicia Uruguay, both maturing in September 2011, with principal
amortization in nine annual installments in September of each year (each of the
first two installments representing 15% of the remaining balance, with each of
the other seven installments 10% of the balance) at a 2% fixed annual interest
rate, payable annually each September. On June 20, 2002, the Bank offered a
pledge of Galicia Uruguay's commercial loan portfolio as guarantee of payment of
the restructured deposits.

         On January 9, 2003, Galicia Uruguay made payment of the first
installment under the extrajudicial agreement.

         On June 17, 2003, Galicia Uruguay opened a period in which it received
expressions of interest from customers for different options to exchange
deposits restructured in 2002 (as time deposits or negotiable obligations) for
different proportions of BODEN 2012 and/or new negotiable obligations to be
issued by Galicia Uruguay and cash. The objective of this exchange was to
reprofile on a voluntary basis the already restructured deposit base, both to
satisfy differing depositors' liquidity-return preferences and to improve the
distribution of cash flows over time. This voluntary exchange period ended on
July 24, 2003. Galicia Uruguay received expressions of interest from customers
for an aggregate amount of US$185 million, which reflected customers' choice to
receive BODEN 2012

                                      -31-

<PAGE>

in an aggregate amount of US$137 million, together with new negotiable
obligations to be issued by Galicia Uruguay in an aggregate amount of US$44
million.

         On August 14, 2003, the Argentine Central Bank approved the terms and
conditions for the restructuring of the Bank's US$399.5 million debt with
Galicia Uruguay through its Cayman branch as well as the transfer to Galicia
Uruguay through the Cayman branch of cash for US$72.1 million and BODEN 2012 for
a nominal amount of US$137 million, corresponding to the first principal
amortization of the Bank's debt with Galicia Uruguay and to interest due as of
August 15, 2003, on such debt. This debt corresponds to deposits made by Galicia
Uruguay in the Cayman branch and later placed with the Bank by means of credit
lines. The Argentine Central Bank must preapprove future payments of principal
and interest. As of December 31, 2003, this debt amounted to US$221.6 million.

         In September 2003, as scheduled, Galicia Uruguay paid the second
installment due under the original restructuring schedule (as modified by the
results of the exchange offer) and settled the exchange offer.

         On December 9, 2003, Galicia Uruguay commenced a period in which it
solicited expressions of interest from its customers to participate in a second
voluntary exchange of all restructured deposits and negotiable obligations or
certificates issued by Galicia Uruguay or its subsidiary Banco de Galicia
(Cayman) Ltd. (in provisional liquidation) to restructure deposits. The
consideration offered consisted of a cash payment for 17.5% of the principal
amount owed (equivalent to paying in advance the installment due in September
2004) and BODEN 2012 for the remaining balance. The exchange was limited to an
aggregate amount of US$300 million. On March 15, 2004, the exchange offer was
settled for an aggregate amount of US$206 million.

         As of December 31, 2003, compensation to the Bank for the effects of
asymmetric pesification on a consolidated basis (but excluding domestic
subsidiaries with complementary activity) was determined to be US$2.2 billion of
BODEN 2012 (nominal value). This amount, which as of the date of this annual
report is under review by the Argentine Central Bank, has been recorded in the
books of the Bank's head office in Argentina and includes compensation for
Galicia Uruguay's pesified loans.

         On June 1, 2004, the Bank announced the decision by the Central Bank of
Uruguay and Argentine regulatory authorities to authorize the creation of a
trust to hold assets of Galicia Uruguay, the proceeds of which will be used for
the repayment of Galicia Uruguay's obligations under the restructuring agreement
reached with its depositors in 2002. The creation of the trust does not alter
the rights of Galicia Uruguay's depositors in connection with the 2002 agreement
or in connection with subsequent exchanges of restructured deposits. The Central
Bank of Uruguay also resolved that, concurrently with the implementation of the
trust, Galicia Uruguay's intervention will be lifted and Galicia Uruguay's board
of directors will be restored. Given that the license to operate as a domestic
commercial bank, which is granted by the Central Bank of Uruguay, is not
necessary to such effects, such license will be revoked. However, Galicia
Uruguay will retain the authorization that had been granted to it by the
Executive Branch of the Uruguayan government.

         Banco de Galicia (Cayman) Ltd.

         Galicia Uruguay's situation affected its subsidiary Galicia Cayman. As
a consequence, on July 18, 2002, at the request of Galicia Cayman, the Cayman
Islands courts designated two joint provisional liquidators in order to allow a
voluntary debt restructuring agreement to be reached between Galicia Cayman and
its creditors. By late May 2003, Galicia Cayman together with the provisional
liquidators, completed a debt restructuring proposal and, with the authorization
of the Cayman Islands court, presented it to all Galicia Cayman creditors for
their consideration.

         On May 29, 2003, the restructuring proposal made to creditors was
submitted before the Cayman Islands court. Galicia Cayman proposed to pay to its
class A creditors an initial cash payment equivalent to 5% of the amount owed
for principal and interest accrued through July 18, 2002, plus a transferable
certificate equivalent to 95% of the amount owed for principal and interest
accrued through July 18, 2002. The terms of the certificate are the following:
(1) principal amortization in nine annual installments (the first two for 15% of
principal and the remaining for 10%), payable each September; (2) a 2% annual
interest rate (plus 1% if after the payment of all creditors pursuant to the
proposal and repayment of the subordinated loan, as described below, any assets
remain);

                                      -32-

<PAGE>

(3) the certificate will bear interest beginning the effective date of the
agreement; and (4) interest will be payable annually, together with principal,
and calculated on the remaining debt balance. Once all class A creditors are
paid, the remainder of the assets of Galicia Cayman will be applied to the
payment of the claim of its class B creditor, Galicia Pension Fund Ltd. (a
subsidiary of Galicia Cayman) for US$2.9 million, which has been subordinated to
the payment of all class A creditors. In addition, Grupo Galicia made a US$1.2
million subordinated loan in favor of Galicia Cayman, which will accrue interest
at an annual rate of 2% and will be repaid once all creditors of Galicia Cayman
have been paid in accordance with the restructuring.

         By a vote of creditors representing in number and debt held, 99.7% of
the votes issued, Galicia Cayman's restructuring proposal was approved in whole
on July 10, 2003. The degree of acceptance exceeded the legal majority required.
With the approval of the restructuring proposal by the Cayman Islands court and
its filing with the Cayman Islands Corporate Record, both on July 16, 2003, the
restructuring plan became effective and mandatory on that same date for all
creditors. The initial cash payment was made on August 8, 2003.

         In accordance with the restructuring plan, Galicia Cayman commenced
voluntary liquidation and surrendered its banking license effective December 31,
2002.

         Banco Galicia's Operations

         Retail Banking

         The retail banking division oversees all of the areas that provide
financial services to individuals and manages distribution channels. Banco
Galicia provides a wide range of financial products and services to individuals,
covering both transactions and investments. On the transactions side, Banco
Galicia offers customers checking and savings accounts, credit and debit cards,
foreign exchange brokerage and payroll direct deposit. On the investments side,
its products and services include certificates of deposit, mutual funds and
insurance products. In addition, Banco Galicia provides credit for the
acquisition of consumer goods and housing through personal loans, residential
mortgages, pledge and credit card loans. During 2002 and 2003, credit provision
was not significant.

         Consumer Banking

         Deposits and Accounts - During fiscal year 2003, the Bank's efforts
were aimed at strengthening relations with its customers having investment
products based on individualized professional advice. In this way, the Bank
succeeded in increasing the portfolio of retail-sector deposits by 86% during
the fiscal year, outperforming the overall development of the financial system,
which grew 53%. With respect to retail time deposits, 105% growth was recorded,
which was also higher than the 67% growth experienced by the system as a whole.
In April 2003, the Argentine government offered a voluntary mechanism to
reimburse restructured deposits (known as CEDROS, for the initials in Spanish of
"Certificates of Restructured Deposits"). Adherence to this mechanism reached
40% of the Bank's CEDROS, and there was a high level of reinvestment of released
funds.

         Beginning in June 2003, the number of current accounts reversed the
decreasing trend present in the early part of 2003, ending the fiscal year with
a reduction of only 1.9% compared to December 2002. The number of account
closings dropped 60%, while sales progressively recovered. New account openings
grew 188%, which was influenced by promotional campaigns of product packages
carried out in April and May that targeted the Bank's customers who did not have
current accounts. The number of savings accounts decreased 14%, in part due to
the closing of accounts with no activity. However, monthly balances deposited in
these accounts grew 80%, while average balance per account increased 100% over
the period.

         Loans - In 2003, the credit market showed slightly increasing demand
while the supply of credit started to recover. Consistent with this trend, the
Bank has launched new credit lines aimed at meeting the needs of its existing
customer base and also resumed prequalifying customers for personal loans.

         The Bank's portfolio of loans to individuals (excluding the regional
credit-card companies' portfolio) only decreased 2% in 2003, compared to the
sharp reduction in 2002. This was the result of lower prepayments made by
customers, the reactivation of credit supply and the launching of new credit
lines.

                                      -33-

<PAGE>

         Credit and Debit Cards - During 2003, the Bank maintained its
leadership in the credit card business. At the end of the fiscal year, the Bank
was ranked first in credit card use in the Visa system, with a market share of
15.8%. The Bank has a 10.8% share of the total cards managed by financial
institutions. The Bank's share in American Express amounted to 31.9% as measured
by credit card use and 22.5% as measured by the number of cards managed.
Purchases made with Visa cards during 2003 increased over 24% and those made
with American Express cards grew 30% compared with the prior year. This increase
was favored by plans for the repayment of purchases in installments, beginning
mainly in the second half of the year. Other factors that acted as an incentive
to channeling purchases through credit cards were the 3% VAT refund provided for
by the government beginning in October 2003, as well as the Felices Compras
("happy shopping") campaign launched by the Bank at the end of the year, in
which more than 39,500 customers were awarded a prize for purchases made with
their credit and debit cards.

         With respect to debit cards, the Bank's market share reached 12.4% at
the end of the year, measured by debit card use and 15.6% measured by number of
cards. In addition, the Bank has launched continuous consumption incentive plans
for this portfolio, encouraging customers to replace cash with the use of debit
cards even for small purchases. In addition to these plans, the government
provided for a 5% VAT refund. As a result, debit card use increased 9% during
2003 compared with the prior year.

         Foreign Exchange Brokerage - During 2003, the Bank continued to operate
actively in the consumer segment of the foreign exchange market. Beginning in
June 2003, the Bank introduced, as part of its services, foreign exchange
transactions in euros in its branches located in the Federal Capital, the Buenos
Aires metropolitan area and the main cities of Argentina's provinces. Moreover,
the Bank promoted this service among its customers by direct marketing and
advertising campaigns aimed at noncustomers. The monthly average amount of
transactions conducted at the Bank's branches increased 19% with respect to the
volume in December 2002.

         Regional Credit Card Companies - The Banks pursues the consumer finance
business aimed at the lower-income segment of the population through
subsidiaries of Tarjetas Regionales S.A., a holding company. These companies
(the "regional credit cards companies") issue credit cards in certain regions of
Argentina and provide financing through these credit cards as well as personal
loans.

         As of December 31, 2003, Banco Galicia held 68.22% of Tarjetas
Regionales while Galicia Cayman holds the remaining 31.78%. At the same date,
the Bank held directly or indirectly (through Tarjetas Regionales) majority
interests in the following regional credit card and consumer finance companies:

               -    80.0% in Tarjeta Naranja S.A., a company operating in
                    central and southern Argentina. In March 2001, Tarjetas del
                    Sur S.A., a regional credit card company that operated in
                    the southern part of Argentina that was directly and
                    indirectly controlled by the Bank, was merged into Tarjeta
                    Naranja.

               -    60.0% in Tarjetas Cuyanas S.A., a company operating in the
                    provinces of the Cuyo region.

               -    60.0% in Tarjeta Comfiar S.A., a company operating mostly in
                    the province of Santa Fe. Tarjeta Naranja acquired a 40.0%
                    equity interest in Tarjeta Comfiar in July 2000. As a
                    result, as of December 31, 2003, Tarjetas Regionales
                    controlled, directly or indirectly, 92.0% of Tarjeta
                    Comfiar.

               -    99.99% in Tarjetas del Mar S.A., a company operating in the
                    city of Mar del Plata and the surrounding area.

         Along with the purchase of 40% of the shares of Tarjeta Comfiar,
Tarjeta Naranja took over management of this company.

         The performance of the regional credit card companies showed a
significant improvement in 2003 as a result of the overall improvement
experienced by the Argentine economy, low competition and higher operating
efficiency.

                                      -34-

<PAGE>

         Greater activity levels led to an increase in the number of credit card
statements issued, and these companies experienced a strong increase in their
customer base, in credit card purchases and in the financing of these purchases.
All of this contributed to 71% growth in the operating companies' income. In
terms of expenses, the restrictive staffing and general cost-control policies
initiated in mid-2001 were maintained, and projects on operating concentration
were resumed. Moreover, debtor delinquency decreased throughout the fiscal year.
At year-end, the nonaccrual portfolio represented 3.9% of the total portfolio,
the lowest level reached in the history of these companies. The reduction in the
exchange rate during 2003 had a favorable effect on these companies' results in
view of their short foreign-currency position. In aggregate, in 2003, the
regional credit card companies showed net income of Ps. 88.5 million, of which
Ps. 59.2 million pertained to the Bank.

         With respect to their obligations denominated in foreign currency and
obtained through the issuance of dollar-denominated negotiable obligations prior
to the 2001-2002 crisis, in early 2002, these companies offered their creditors
the payment in accordance with the pesification provisions established by the
government (i.e., pesification at the Ps. 1.0 per US$1.00 exchange rate with
principal adjustment by the CER index) or, alternatively, their restructuring by
means of agreements for the settlement of the negotiable obligations and the
subscription by its holders of new debt certificates secured by a trust. Tarjeta
Naranja, Tarjetas Cuyanas and Tarjetas del Mar invited holders of their
negotiable obligations to exchange those obligations for debt certificates
issued under a trust, assigning a percentage of their cash flows to secure the
payment of their obligations through this trust. By means of these payment
alternatives, at the close of fiscal year 2003, 98.5% of the original negotiable
obligations issued had been settled.

         As of December 31, 2003, Tarjeta Comfiar and Tarjetas del Mar recorded
negative shareholders' equity and their accumulated losses exceeded 50% of their
capital stock and of the shareholders' irrevocable contributions. Tarjetas
Regionales was in the same condition. Decree No. 1293/03, published on December
23, 2003, in the Official Gazette, extended to December 10, 2004, the suspension
of the applicability of the sections of the Argentine Companies Law that require
that a company be liquidated due to the loss of its capital stock and that a
mandatory capital reduction be made when losses exceed the company's reserves
and 50% of the capital stock.

         On September 15, 2003, the boards of directors of Tarjeta Comfiar and
Tarjeta Naranja approved a preliminary agreement for the merger of these
companies, whereby Tarjeta Naranja would absorb Tarjeta Comfiar with management
of the two companies to be unified as of January 1, 2004. This preliminary
agreement was approved by both Tarjeta Comfiar's and Tarjeta Naranja's
extraordinary shareholders' meetings held on October 2, 2003. The final
agreement was approved November 14, 2003.

         After the close of fiscal year 2003, the debt of Tarjeta Naranja,
Tarjeta Comfiar and Tarjetas del Mar with the Bank and its Cayman branch for an
aggregate amount of Ps. 255 million was restructured. The principal terms of the
plan for this restructuring were as follows:

-    Debt of Tarjeta Naranja and Tarjeta Comfiar (which has been merged into
     Tarjeta Naranja): The Bank and Tarjeta Naranja's minority shareholders made
     irrevocable contributions for future share issues for a total amount of Ps.
     25 million. The debt remaining (in the amount of Ps. 167 million) was
     restructured through the creation of a trust that issued, for an equal
     amount, peso-denominated notes secured by a fiduciary guarantee with a 6
     1/2-year maturity and a floating interest rate. The fiduciary guarantee
     consists of the higher of 2% of Tarjeta Naranja's monthly cash flow and
     1.28205% of the trust notes' face value plus interest. Trust notes
     amounting to Ps. 100 million were transferred to the Bank in exchange for
     Tarjeta Naranja's and Tarjeta Comfiar's past-due and unpaid loans. Debt
     owed by Tarjeta Comfiar to the Bank's Cayman branch, amounting to US$22.4
     million plus interest, was canceled: the Bank granted Tarjeta Naranja a Ps.
     67 million peso-denominated loan, which was canceled through the delivery
     of trust notes for a total amount of Ps. 67 million.

-    Debt of Tarjetas del Mar: Tarjetas del Mar restructured its debt with the
     Bank and its Cayman branch through a Ps. 51 million irrevocable
     contribution for future share issuances and restructured its remaining Ps.
     12 million debt with the Bank with a four-year loan with principal
     amortization of 5%, 10%, 15% and 70% per year, payable in quarterly equal
     installments each year, at an interest rate equal to the Tasa Encuesta
     Corregida (an interest rate published daily by the Argentine Central Bank)
     plus 2%. As part of this agreement, Tarjeta Naranja, together with Tarjetas
     del Mar, assumed this new debt.

                                      -35-

<PAGE>

         In this way, on January 30, 2004, these companies' debt with the Bank
and its Cayman branch was regularized, and Tarjeta Comfiar S.A. was absorbed by
Tarjeta Naranja S.A. on January 1, 2004.

         Insurance - In 1996, Banco Galicia established a joint venture with
Hartford Life International, creating Galicia Vida Compania de Seguros S.A. to
sell life insurance and annuities. The Bank's interest in Galicia Vida was
12.5%. Toward the end of 1996, Galicia Vida began to market products
specifically designed for distribution through the Banco Galicia network. In
December 2000, the Bank sold its interest in Galicia Vida Compania de Seguros
S.A. and purchased 12.5% of Sudamericana Holding S.A., a life and retirement
insurance holding company. The other shareholders of Sudamericana Holding were
Hartford Life International Corp. (U.S.) and Hartford Life Limited (Bermuda)
(with a 50% stake) and Grupo Galicia (with the remaining 37.5%). In September
2001, we acquired the Hartford Life International Corp. (U.S.) and Hartford Life
Limited (Bermuda) stakes, raising our interest to 87.5%, while Banco Galicia
continued to hold the remaining 12.5%.

         The Bank markets Sudamericana's life and life-related insurance
products through its own distribution network. Sudamericana's subsidiaries also
sell their products through the company's own distribution capabilities. The
Bank also sells through its distribution network property and casualty insurance
from other companies.

         During 2003, the Bank continued consolidating its position as an
insurance provider with a wide offering of products and greater functional
integration with insurance companies and achieved improvements in efficiency
ratios as well as in business volume. Income derived from the bank assurance
business amounted in 2003 to Ps. 22.0 million. Insurance policies not related to
credit operations grew 46% in comparison to the previous year, while
credit-related policies showed a 33% reduction. This decline was the result of
prepayments and the slow increase in the Bank's loan portfolio. Promotional
actions taken during the period resulted in a 30% increase in the number of
policies managed by the Bank, with an increase from 16% to 22% in the share of
insurance products in the Bank's customer database. At the close of fiscal year
2003, the Bank managed approximately 300,000 insurance policies, 30% higher than
at the end of 2002.

         Within the Bank, the branch network continues to lead in sales of
insurance products. However, nontraditional channels have shown significant
sales growth.

         Traditional distribution channels - Due to its extensive and broad
geographic distribution, the branch network is one of the Bank's most important
competitive advantages. This is reinforced by a unified management system
through the use of the Bank's Intranet, modern systems and communication
technology and a service model that is continuously being improved.

         Fiscal year 2003 was characterized by the branch network's strong focus
on sales activities.

         At the end of 2003, the Bank's branch network in Argentina totaled 226
branches, one branch less than in December 2002. These branches are located in
all of the Argentine provinces except Tierra del Fuego.

         Automated Banking - The alternative channels department is responsible
for managing those customer service, transactions and sales channels that differ
from traditional branches. Its operations cover both individual and corporate
customers and are mainly carried out through the Customer Contact Center,
e-galicia.com and "Red Galicia 24" (the Bank's network of automated teller
machines and self-service terminals).

         As in prior fiscal years, the trend of increasing use of alternative
channels among the Bank's customers continued. In December 2003, 68.4% of all
customer transactions were carried out through the Bank's alternative channels,
showing a 10% improvement with respect to same month over the prior year.

         The Customer Contact Center currently has 260 staff positions and
consists of the following departments: Fonobanco, Fonobanco Seguros, Foreign
Trade, Galicia Responde, Telemarketing, the Investment Center, the Collection
Center and the switchboard. These units also have support areas for ongoing
improvement in service quality. During the fiscal year, the Customer Contact
Center handled over 14 million incoming and outgoing calls. This volume was
similar to that recorded during previous fiscal year.

                                      -36-

<PAGE>

         e-galicia.com has operating segments for both individuals ("Home
Banking") and companies ("Galicia Office"), enabling its customers to operate as
if they were carrying out their transactions over the telephone, at an automated
teller machine or in a traditional branch. Furthermore, through e-galicia.com,
visitors have access to information about the products and benefits offered by
the Bank, as well as specific sections that advise users on issues of interest
to them: foreign trade, insurance, taxes, up-to-the-minute news on the financial
market and several current topics. Through Home Banking, Banco Galicia's
individual customers can make inquiries and requests and conduct transactions
from any computer with access to the Internet.

         e-galicia.com has shown exponential growth since it was launched.
Today, the website receives almost 1.2 million visits monthly. Through Home
Banking, 1.8 million inquiries and transactions are carried out every month.
These numbers represent a 20% growth compared to the end of 2002. The number of
Home Banking customers continued to grow in 2003, with an 8% increase compared
to December 2002. Among the large variety of available transactions, the payment
of taxes and accounts through direct connection to the website
Pagomiscuentas.com increased 51% for fiscal year 2003, while the transfer of
funds to third-party accounts increased 32%. Likewise, the monetary volume
managed through Home Banking grew 66%.

         At the end of 2003, Red Galicia 24 was made up of 1,079
state-of-the-art technology terminals located throughout the country in
traditional branches as well as in neutral positions (gas stations and
supermarkets), in line with the Bank's strategy to be close to its customers and
provide them with the means to solve their transactional requirements in a
dynamic, simple and safe way.

         Network of Automated Banking Terminals

         During 2003, more than 30 million transactions were carried out in the
Bank's 555 ATMs, one of the largest networks in Argentina, while 9 million
transactions were conducted at the Bank's 524 self-service terminals. These
figures show a 7% decrease in comparison with the number of transactions
conducted during 2002, which is in line with the change seen by the rest of the
financial system for these types of transactions.

         Private Banking

         This business unit provides private-banking and advisory services to
medium- and high-net worth individuals and manages collective investment
portfolios. During 2003, it focused its effort on strengthening customer
relations and on recovering those customers who had stopped having contact with
the Bank. As a consequence, deposits managed by this sector increased 162% and
the number of managed portfolios grew 31% during the year. Relations with the
Bank's customers were encouraged by providing more sophisticated investment
options, such as securities, stock options and participation in various
restructuring processes of corporate debt instruments carried out during the
year.

         Wholesale Banking

         The wholesale banking division encompasses the areas that provide
commercial and investment banking services as well as international services.
The wholesale banking division is also responsible for managing the Bank's
commercial portfolio credit risk.

         Corporate and Middle Market Banking

         Corporate and middle market banking provides commercial banking
services to all types of businesses and all sectors of the economy, organized by
type of customer. In addition, in 2003, the Bank established a corporate
restructuring department.

         There was an increase in activity both in the financial system and in
the economy as a whole in 2003, with the return of deposits and the resumption
of banking business generally. In this new scenario, the Bank adapted its
product and service offering to the needs of businesses and updated it both
regarding technological and financial resources in order to make it competitive
in the new financial market.

                                      -37-

<PAGE>

         During 2003, the corporate and middle market banking departments mainly
focused on rebuilding relationships with customers and generating income from
services by means of the integral management of the treasury of corporate
customers. Services were adapted to the new business scenario, covering the
transactional needs of customers and providing them with financial solutions to
increase their working capital and thereby improve their business activity. That
was attained in the different segments in which the Bank offers services, thus
strengthening the relationship-banking model applied by the Bank.

         Presence in the small- and medium-sized companies ("PYMEs") sector,
where the Bank has a leading position, was consolidated through different
commercial actions. The "add Banco Galicia's benefits to your company" campaign
positioned the Bank as the first bank that launched working-capital credit lines
to the market. The Bank also was a leader in the "Sepyme" line bid (a credit
line created to subsidize the interest rate for the purchase of highly liquid
instruments within a government program to promote the growth of micro-, small-
and medium-sized companies), offering a Ps. 25 million credit line at a 12%
interest rate, which resulted in a 9% interest rate for customers.

         Through the "Banco Galicia, always with the agriculture and livestock
sector" campaign, as well as through participation in various agribusiness
events, the Bank strengthened its leading presence in a key sector of the
economy.

         Within the corporate segment, a highly competitive product was
developed: Cobranzas Integradas Galicia (Galicia Integrated Collections), which
is aimed at meeting the needs of companies that have a substantial volume of
invoices and allowing companies, among other things, to identify their
customers. Furthermore, in view of the importance that transactions in dollars
have started to have and with the purpose of reinforcing the Bank's service
offering, special current accounts and collections and transfers in dollars were
added to the product menu. Banco Galicia was the first bank to offer collection
in dollars for customers' integral treasury management. In addition, the Bank
continued adding improvements to its payment and collection systems, seeking to
migrate the highest possible number of customers to this channel and to optimize
such services. These improvements were mainly reflected in more and better
information through electronic channels. Another outstanding event was the
addition of Tradecom's advantages to the electronic services offering.

         There was also a resumption of credit activities in 2003, initially
through 90-day loans, mainly by means of the purchase of checks to date and
deferred checks, which are highly liquid documents. In mid-2003, financial loans
in pesos and prefinancing of exports in dollars were added, both with a 180-day
term. With the improvement in the Bank's liquidity position, the terms for
peso-denominated loans were extended to three years. As of December 31, 2003,
the Bank's total loan portfolio to small- and medium-sized companies, including
loans to the agriculture and livestock sector, amounted to Ps. 850.3 million,
4.5% lower than at the close of the previous fiscal year, while the loan
portfolio to large corporations amounted to Ps. 1,820.4 million, showing a 14.6%
decrease during the fiscal year.

         Galicia Office

         Galicia Office is e-galicia.com's exclusive section for corporations.

         Through Galicia Office, companies may, at no cost, review the
statements of all their bank products (such as accounts, loans, investments and
receivables from Visa and Galicia Rural transactions). They may also access a
range of information about their entire portfolio of checks and checks returned,
request and confirm checkbooks, make transfers between their accounts and to
those of third parties within or outside the Bank, make investments, inquire
about their foreign trade transactions, pay their employees' salaries safely,
renew their digital signature online and pay their suppliers.

         Galicia Office expanded significantly during 2003, both in terms of
number of customers and volume of transactions. During fiscal year 2003, new
functionalities were added to the service, which contributed to higher-quality
service and higher customer satisfaction levels. Likewise, marketing campaigns
were conducted for customers who use the Bank's direct deposit system in order
to migrate such customers to the "e-model," thus optimizing time and costs, as
well as offering them a more dynamic and safe service. During 2003, the number
of

                                      -38-

<PAGE>

customers increased 22% over the previous fiscal year. The level of transactions
increased 256%, with more than 210,000 transactions conducted.

         Investment Banking

         Investment banking services include advisory and structured finance
services for corporations, institutions and governments, both national and
provincial. These services are provided by the Bank through its investment
banking department, which oversees the activity of the Bank's subsidiary Galicia
Capital Markets S.A. ("GCM"). In addition, the department manages the Bank's own
industrial investments and private equity funds. GCM is a 99.99%-owned
subsidiary of Banco Galicia. GCM recorded a Ps. 22.1 million loss for fiscal
year 2003 and negative net worth of Ps. 6.2 million as of December 31, 2003.

         Investment banking activities include advising the Bank with respect to
its funding strategy in the capital markets; providing financial advisory and
structured finance services to customers both from the private and public
sectors, including mergers and acquisitions; and managing the Bank's investments
in utility and infrastructure companies.

         Regarding the advice provided to the Bank on its funding strategy, the
department continued working under the guidelines of the Galicia capitalization
and liquidity plan. Once the Bank recovered a satisfactory liquidity position in
2002, the investment banking department concentrated its efforts on
restructuring the Bank's foreign debt. Furthermore, during fiscal year 2003, it
advised Galicia Uruguay on the exchange offer made to the customers of this
subsidiary. With respect to advising and structuring of financial transactions
for customers both from the private and public sectors, during 2003, the
department continued working within a complex macroeconomic environment
characterized by the restriction, for both sectors, of access to mid- and
long-term financing. Therefore, during 2003, the department focused on the
development of products such as trusts, which are expected to have an increasing
presence in the financial market during the current year, on providing advice
concerning the restructuring of the Bank's commercial loan portfolio and, to a
lesser extent, on mergers and acquisitions.

         The portfolio of industrial investments acquired by the Bank as a
result of its participation in the privatizations that took place during the
1990s amounted, after valuation reserves, to Ps. 68.8 million, the largest
investments being an 8.26% interest in Aguas Argentinas S.A. with a Ps. 23.4
million net book value, and interests, both of 12.5%, in Inversora Nihuiles S.A.
and Inversora Diamante S.A. (two holding companies in the electricity generation
business) with a net book value of Ps. 15.7 million and Ps. 12.9 million,
respectively.

         In August 1997, the Argentine executive branch granted Correo Argentino
S.A., a company in which the Bank had a 12.5% minority interest (which declined
to 11.77% in 1999), the license to provide all postal, monetary and telegraph
services previously provided by Empresa Nacional de Correos y Telegrafos S.A.
(ENCOTESA), a public-sector company running the Argentine postal service. The
term of the license was for 30 years, beginning on September 1, 1997. On
September 18, 2001, Correo Argentino filed for bankruptcy protection (concurso
preventivo) under the terms of Law No. 24,522. Among other reasons, the failure
by Correo Argentino to pay the government for the use of the license, the filing
for bankruptcy protection and the bankruptcy of Correo Argentino constituted
events causing the termination of the right to operate the license that had been
granted.

         On November 19, 2003, the Bank was informed of the executive branch's
decision to rescind the contract between the government and Correo Argentino. On
December 16, 2003, an Argentine court declared Correo Argentino bankrupt. That
decision was not final as of the date of this annual report because it has been
appealed, and it did not have an impact on the Bank's shareholders' equity or
results of operations during 2003, as both the investment in, and the credit
exposure to, Correo Argentino had been fully provisioned since 2002. Likewise,
the related estimated contingencies were also provisioned.

         On March 25, 2004, a guaranty granted by the Bank in favor of the
Argentine government in connection with Correo Argentino's compliance with the
contract for Ps. 7.3 million was called. The related claim has been proved as a
possible claim in the reorganization proceedings involving Correo Argentino. The
claim is fully covered by an allowance. The Bank will pay this guaranty as
provided in accordance with conditions to be established by the National
Communications Commission, as applicable.

                                      -39-

<PAGE>

         International

         The Bank's international department provides services involving
international financing, credit and services related to foreign trade and
factoring activities. In addition, the division manages the Bank's foreign
network and fund-raising from international commercial banks. This department
also manages relations with correspondent banks and international credit
agencies.

         Accordingly, since 2002 this department's activities mainly
concentrated on its participation in the implementation of the Galicia
capitalization and liquidity plan, especially relating to the Bank's foreign
debt restructuring process, which started with the restructuring of the New York
branch's debt and Galicia Uruguay's deposits and the winding down of the Bank's
operating units abroad in 2002, and continued in 2003 with the closing of the
New York branch in January, the restructuring of Galicia Cayman's deposits in
July and the negotiations to restructure the foreign debt of the Bank's head
office in Argentina and its Cayman Branch during most of 2003. On December 23,
2003, the Bank launched the exchange offer to carry out that restructuring.

         The restructuring of the foreign debt of the Bank's head office in
Argentina and its Cayman branch was completed in May 2004. See "--Restructuring
of the Foreign Debt of the Bank's Head Office in Argentina and its Cayman
Branch."

         Before the 2001-2002 crisis, the New York branch concentrated on
providing international financial services to the Bank's customers, mainly
Argentine corporations and individuals.

         In its capacity as a domestic financial institution in Uruguay, Galicia
Uruguay was allowed to perform all permitted financial activities in Uruguay,
with residents and nonresidents. As of December 31, 2001, Galicia Uruguay had
representative offices in Buenos Aires and New York and branch offices in five
Uruguayan cities. As of December 31, 2001, Galicia Uruguay was Uruguay's largest
private financial institution in terms of shareholders' equity. Galicia
Uruguay's activities are currently suspended. See "--Banco Galicia Uruguay S.A.
and Banco de Galicia (Cayman) Ltd."

         Galicia Cayman was established as another alternative deposit location
for the Bank's customers. As of December 31, 2003, Banco Galicia owned 34.7% and
Galicia Uruguay owned 65.3% of Galicia Cayman's capital stock. The company is
currently in provisional liquidation. See "--Banco Galicia Uruguay S.A. and
Banco de Galicia (Cayman) Ltd."

         Regarding foreign trade activities, fiscal year 2003 witnessed a
gradual loosening of the foreign exchange regulations set forth in 2002 that
affect both trading and financial activities. This change made trading
transactions easier for exporters and importers and also expanded trade and
working capital financing alternatives. The year ended with regulations that
allow advancing the payment of imports, even before the shipment of goods,
admitting, on the other hand, extended terms for the liquidation of exports
proceeds. In addition, Argentine foreign trade expanded significantly,
particularly imports. See Item 5. "Operating and Financial Review and
Prospects--Item 5A. Operating Results--Argentine Economy in 2003." Within this
environment, the Bank recorded a 29.2% increase in the annual volume of
foreign-trade transactions in comparison with the prior fiscal year to US$1,351
million in 2003, representing 3.17% of the Argentine foreign trade for that
year. This share was higher than that achieved in the previous fiscal year,
which was 3%. This positive result was due to the strong repositioning the Bank
attained through its strategy of providing customers with assistance and
collaboration in all the regions in Argentina. In addition, the Bank's
information technology tools facilitated companies' transactions and greatly
contributed to their efficiency, a factor that clearly differentiated the Bank
from its competitors.

         Until mid-2002, through Galicia Factoring y Leasing S.A., Banco Galicia
provided leasing and domestic and international factoring services to small- and
medium-sized businesses. Banco Galicia owns 99.98% of Galicia Factoring. Galicia
Factoring is a member of Factors Chain International, an organization based in
Amsterdam that has more than 120 members in 44 countries. Banco Galicia finances
the factoring provided by Galicia Factoring, while the latter administers the
transactions. In mid-2002, the administration of domestic factoring and leasing
transactions was transferred to the Bank in order to make the cost structure
more efficient and achieve economies of scale in an uncertain and unfavorable
economic environment. International factoring was retained within Galicia
Factoring.

                                      -40-

<PAGE>

         In 2003, Galicia Factoring ended its eighth fiscal year. The company
adapted its international factoring services to the new regulations and
incorporated forfaiting. (Forfaiting is a method of trade financing that allows
exporters to obtain cash and eliminate risk by selling their medium-term
receivables on a "without recourse" basis.) In this way, the Bank's offering was
supplemented, and customers were provided with all the tools necessary for the
conduct of foreign-trade transactions.

         Treasury Division

         During fiscal year 2003, the treasury division began to report to the
Bank's board of directors.

         The treasury division is responsible for the management of the Bank's
treasury operations and its proprietary liquidity, foreign exchange and
securities positions and participates in the management of market, liquidity,
interest-rate and currency risks. To this end, it develops the necessary data
and strategies to keep such risks within the limits established by the Bank's
board of directors. Similarly, it is responsible for the administration of
third-party assets, mainly the FIMA mutual fund portfolios. The division
provides services to corporations, financial institutions, mutual funds,
pension/retirement funds and insurance companies. Intermediation services in
various markets are carried out by the Bank, sometimes in its capacity as agent
of the Mercado Abierto Electronico, the Argentine over-the-counter market, and
through Galicia Valores S.A., a brokerage firm that operates on the Buenos Aires
Stock Exchange.

         Banco Galicia offers brokerage services through its branch network. All
equity brokerage activities are conducted by Galicia Valores, a 99.99%-owned
subsidiary of Banco Galicia. Galicia Valores provides equity securities trading
and custodial services to Banco Galicia customers. Galicia Valores is a
shareholder of the Buenos Aires Stock Market, affiliated with the BASE, and
therefore effects transactions as either principal or agent on that exchange.
Galicia Valores does not make investment decisions for its customers.

         Financial Operation

         During 2003, events took place that contributed to considerable
improvement in the domestic capital markets in comparison to 2002. A significant
change was evidenced in the corporate sector's situation in view of the general
improvement in the economy, which had started to show as of the second half of
2002, after a first semester dominated by uncertainty and a strong contraction
in the level of activity. Likewise, the bond market resumed a certain surge with
the appearance of new instruments issued by the national government during the
last two years. This situation, together with the stability shown by the
exchange rate and the pronounced decrease of interest rates, led to a renewed
interest both in the stock market and the bond market in search for more
attractive yields. Volumes traded in the local market increased significantly
during 2003. The volume of government securities traded during 2003 on the
Mercado Abierto Electronico reached an estimated US$19,949 million, compared
with US$5,082 million in 2002. In this market, the Bank's share of the total
volume traded was 0.94%, higher than the 0.05% for 2002. The total traded on the
stock market in 2003 was Ps. 10,150 million. Galicia Valores contributed Ps.
73.5 million of this amount, which represented a 0.7% market share.

         Continuing with the policy it adopted in 2002, the Argentine Central
Bank greatly increased its issuance of short-term bills known as LEBAC. The net
placement of peso-denominated LEBAC amounted to Ps. 6,430 million, a figure that
includes CER-adjusted LEBAC, which had an increasing participation throughout
the year. By contrast, dollar-denominated LEBAC greatly reduced their
participation as a way to sterilize the monetary supply on the part of the
Argentine Central Bank. Within this context, the Bank had a higher share in this
market when compared to 2002, reaching almost 3% of total issuances.

         Asset Management

         This business unit is responsible for managing third-party funds,
mainly the FIMA mutual funds, for which the Bank acts as distributor and
custodian. Galicia Administradora de Fondos S.A. is the fund manager for the
FIMA mutual funds. These funds are invested in different assets, such as
government securities, shares or bank deposits, depending on the risk profile of
each mutual fund.

                                      -41-

<PAGE>

         After the difficult climate created for investors by the economic and
financial crisis of 2001 and 2002 interest in this kind of product returned in
2003. Interest was greatest in time deposit funds or money market' funds, which
were mainly requested by corporations and institutional investors. To a lesser
extent, investors who wished to take advantage of the low price of Argentine
equities and fixed-income securities invested in such funds. Both equities and
bonds performed well in 2003, with the Buenos Aires Stock Exchange, as measured
by the Merval Index, rising 104% and bonds, as measured by the performance of
the Fima Renta Dolares (the FIMA dollar fixed-income fund), climbing 20%.

         FIMA funds under management increased from Ps. 108 million as of
December 31, 2002, to Ps. 170 million at the close of fiscal year 2003. Of this
amount, Ps. 120 million corresponded to operational funds (funds that can
undergo subscription and redemption transactions) and Ps. 50 million
corresponded to funds the shares of which have been restructured or had been
invested in national treasury bills due and unpaid.

         Internet

         The Bank carries out its Internet businesses primarily through Net
Investment S.A. Banco Galicia's stake in the company is 12.5%, while the
remaining 87.5% is held by Grupo Galicia. See "--Net Investment S.A."

SUDAMERICANA HOLDING S.A.

         Sudamericana Holding S.A. is a group of life and retirement insurance
companies.

         The insurance business we have undertaken through our interest in
Sudamericana is part of our strategy to strengthen our position as a leading
financial services provider, thus supplementing those businesses that Banco
Galicia may only conduct to a limited extent in line with prevailing
regulations.

         Total written premiums of all companies controlled by Sudamericana
during this fiscal year represented 2.5% of the Argentine individual insurance
market, ranking Sudamericana eighth among Argentine life insurance companies.
Sudamericana companies insured 1,365,039 persons and managed 43,973 policies as
of December 31, 2003.

         In 2002, the company continued with the cost-cutting program it started
during the previous fiscal year. The streamlining of its organizational
structure significantly contributed to the general improvement in efficiency it
experienced.

         From a purely commercial point of view, and within the framework of
stability the insurance industry experienced during a significant portion of
2003, the company adopted measures aimed at maintaining and gradually improving
portfolio profitability through the following activities:

         -    Fidelity programs were implemented for life insurance individual
              customers and two new products were launched: Protection against
              Accidents and Health Protection. With respect to insurance,
              portfolios were analyzed and adjusted if necessary to improve
              their profitability.

         -    Distribution efforts were focused on Banco Galicia and Tarjetas
              Regionales, and the development of the insurance broker network
              was intensified. Likewise, the productivity of telephone sales and
              direct marketing efforts rose.

         -    Instituto de Salta continued consolidating its regionalization
              project in the northwestern provinces of Argentina.

         With the purpose of diversifying insured risks and making good use of
the growing demand for property insurance, new insurance products for homeowners
and theft in ATMs were launched. The merger of Galicia Vida and Aseguradora de
Personas, together with the transfer of Medigap Salud S.A.'s business to Galicia
Vida represent a significant improvement in terms of operating efficiency and
expense reduction.

         The Argentine Superintendency of Insurance approved, by means of
Resolution No. 29,302, the Regularization Plan submitted by Galicia Retiro with
the purpose of renegotiating policies originally issued in

                                      -42-

<PAGE>

dollars (Inversion Garantizada and Ahorro Planeado), which were later pesified.
The main characteristic of this restructuring plan was the offer of a conversion
into pesos higher than that provided for by the regulations in force or the
possibility of acquiring a life annuity. Approximately 69% of Galicia Retiro's
customers accepted one of the alternatives offered and 31% decided to remain
within the legal framework.

         During 2004, Sudamericana aims to attain a higher volume of premiums
with a substantial improvement in profitability by:

         -        generating business through products both profitable and
                  highly appreciated by our mid-income segment customers.

         -        converting channels (Organizers and Brokers Network - Banco
                  Galicia - Tarjetas Regionales) into differentiating factors by
                  level of advice, which would allow for the creation of
                  long-term relationships with insureds.

         -        improving insurance policy periods.

         -        consolidating Instituto de Salta's regionalization.

         -        improving the loss experience level through a sensible risk
                  underwriting and loss adjustment program, as well as fighting
                  illegitimate practices.

         -        searching for greater cost-effectiveness by revising and
                  adjusting processes and systems.

NET INVESTMENT S.A.

         We carry out our Internet businesses primarily through Net Investment
S.A., a holding company dedicated to investing in and developing businesses
involved in technology, communications, the Internet, connectivity, and content.
The objective of Net Investment is to create value for its shareholders,
investing in projects in which the business model is based on positive cash
flows and profits. Our stake in the company is 87.5%, while the remaining 12.5%
is held by Banco Galicia.

         Net Investment's strategy during 2003 was to carry on projects with
minimum investments with the purpose of redesigning and adjusting such projects
to the new market conditions. It also seeks to offer, among other things, mobile
payment solutions, content, connectivity, B2B electronic services, development
of high-bandwidth Internet projects and content for wireless and satellite
technology services. In all cases, it seeks to create and benefit from synergies
with Banco Galicia's operations.

         Net Investment's primary purpose is not to become a player whose
e-business operations are only made through capital investments. Rather, its
intention is that the opportunities that can be realized contribute to Banco
Galicia's and our comprehensive business structure, thus boosting the
comparative advantages of our companies and each of our business units.

         During fiscal year 2003, Net Investment carried out businesses through
its controlled companies Tradecom and Red de Campo. Net Investment has an
indirect stake of 16.19% in Tradecom International N.V., a holding company that
carries out its commercial activities by means of subsidiaries in Argentina and
Brazil. These companies render B2B e-commerce support services and virtual
markets for transactions between companies and suppliers. The award of the
Panama Channel reverse-auction bid renewal confirms Tradecom International's
strategy of acting as an electronic supply solutions provider. Tradecom
Argentina continued implementation of its project at Clariant, a customer of
Tradecom Argentina and Brazil. Clariant is also expected to transfer technology
from Tradecom Argentina for utilization in Venezuela and Mexico during 2004.
With respect to commercial developments, Tradecom International began to
implement an electronic supply project at Gestion Compartida, which is owned by
Grupo Clarin and which manages the group's purchase transactions. Tradecom
Brazil continues to grow and develop through the operation of vertical markets
and rendering services to large customers in Brazil together with Unibanco, a
major stakeholder of the company. In November 2003, Tradecom Argentina
renegotiated

                                      -43-

<PAGE>

its foreign debt, which financed the software-license royalties the company had
to pay to operate in Argentina. The renegotiated terms provide for principal
reductions, together with a refinancing scheme with a five-year grace period.
This plan should make it possible for Tradecom Argentina to pay its
international obligations from its own cash flow and to consolidate its
financial position.

         B2Agro S.A. operates under the trade name of "Red de Campo" in the
agricultural sector, one of the most important areas of the Argentine economy.
It is a commercial services company that provides solutions specifically
designed for each of the participants in the agricultural and livestock
production chain in order to facilitate their management, business and
integration to the productive process.

         As indicated in the annual report for the previous fiscal year, the
Internet portal Soloduenos, operated by Dueno Vende S.A., ceased to operate on
January 1, 2003. The decision to close down was made due to the difficult
macroeconomic situation and the government response to the crisis in early 2002.
Two developments impacted what had been the main sources of incoe for the
company: the drying up of mortgage lending and the significant decrease in the
number of purchase-and-sale transactions. This situation led Dueno Vende's
shareholders to approve the dissolution and subsequent liquidation of the
company at ordinary and extraordinary shareholders' meetings held on April 21,
2003.

GALICIA WARRANTS S.A.

         Galicia Warrants S.A. was founded in April 1993 to issue deposit
certificates and warrants, as provided for by Law No. 9,643, both regarding its
own deposits and third-party deposits. We own 87.5% of Galicia Warrants and the
remaining 12.5% stake is owned by Banco Galicia. Galicia Warrants is a leading
company in the deposit certificates and warrants issuance market. It has been
continuously conducting transactions since 1994, supporting both medium- and
large-size companies in regard to the custody of stocks. Galicia Warrants' main
objective is to enable its customers to access credit and financing, which are
guaranteed by the property kept in custody as of the issuance of the
corresponding certificates. Galicia Warrants has rendered property custody and
control services to over 600 companies in more than 800 warehouses distributed
throughout the country, having generated the highest business concentration in
the humid pampas.

         Galicia Warrants owns a plant at San Salvador, province of Entre Rios,
for the conditioning and storage of 40,000 tons of paddy rice, which began
operations in 1998.

         As of the end of 2001, the warrants business suffered a substantial
change of direction due to the lack of credit and the pronounced drop in demand
from sectors that traditionally used these products.

         The stabilization of economic variables that occurred during much of
2003 justifies better growth expectations, but with products and company
portfolios different from those seen before the crisis. This situation is a
great opportunity for the company to reposition with new companies and economic
sectors that will now start demanding the products it offers. Galicia Warrants
forecasts a significant activity increase in its cereal storage plant in Entre
Rios, in view of the increase in rice sector production levels boosted by firm
prices throughout 2003.

         During Galicia Warrants' fiscal year ended April 2003, the volume of
transactions amounted to US$34.71 million, with a turnover of Ps. 3.85 million.
The turnover amount for the following eight-month period, until December 2003,
was Ps. 2 million.

COMPETITION

         In general terms, the competitive business environment in Argentina is
still being influenced by the effects of the devaluation together with the
measures adopted by the government since 2002. Changes and new regulatory
frameworks are expected, especially in the financial industry and in some
privatized utilities companies. The country's sovereign debt is still in default
pending restructuring.

                                      -44-

<PAGE>

         Due to our financial holding structure, competition is not felt
directly at the holding company level but rather at the level of the operating
subsidiaries. We face fierce competition in most of the areas in which we are
active.

BANKING

         Banco Galicia faces significant competition in all of its principal
areas of operation. Until late 2001, mainly large foreign banks operating in
Argentina as universal banks, but also Argentine national and provincial
government-owned banks, private-sector domestic banks and to a lesser extent
cooperative banks, competed with Banco Galicia in traditional commercial
banking, investment banking, private banking and the provision of services such
as credit cards, asset management, securities brokerage and insurance products.
With capital movements completely free during most of the 1990s and until
November 30, 2001, Banco Galicia also faced competition from foreign banks
established abroad, mainly in corporate and investment banking as well as
private banking. Nonbank financial institutions in Argentina also competed for
customers' funds and in the provision of certain banking services, such as
consumer finance, credit cards and insurance products.

         As a result of the 2001-2002 crisis, financial activity was almost
paralyzed during the first part of 2002. Short-term deposit-taking resumed in
the second half of 2002. Lending activities resumed somewhat in 2003 and more
strongly in the first half of 2004, but remained limited to the provision of
short-term loans through the discount of checks, foreign trade financing and
credit card lending. Mortgage and pledge loans have not resumed yet. In general,
bank activity is currently concentrated mostly in the management of means of
payment, foreign trade services and foreign exchange brokerage. With respect to
the activities currently being developed by banks, the Bank faces competition
from the large universal foreign banks operating in Argentina, from Argentine
national and provincial government-owned banks private-sector domestic banks and
to a lesser extent from cooperative banks, as well as from nonbank financial
institutions. Competition from public-sector banks has decreased from the
immediate post-crisis period as the public that initially turned to them as a
safe harbor during the crisis has begun to exit those banks in search of better
service. Competition is expected to increase from certain domestically owned
private-sector banks, which prior to the crisis operated in merchant or private
banking and acquired the retail operations of banks that left the business as a
result of the crisis.

         The estimated deposit market share of "voluntary" deposits of the Bank
(in the Argentine financial system only) based on daily information published by
the Argentine Central Bank increased to 4.75% as of December 31, 2003, compared
to 4.34% as of December 31, 2002, 3.83% as of June 30, 2002, and 10.0% as of
June 30, 2001.

         Despite the market-share loss due to the crisis, the Bank continues to
be one of the leading banks in Argentina and the largest domestically owned
private-sector bank. As of December 31, 2003, and measured by its deposits in
Argentina only, the Bank was ranked sixth in the whole financial system and
third among private-sector banks (including foreign banks). Measured in the same
way, as of December 31, 2002, the Bank was ranked ninth in the whole financial
system and sixth among private-sector banks (including foreign banks).

         For information on the Argentine banking system, see "--Argentine
Banking System and Regulation--Argentine Banking System."

REGIONAL CREDIT CARD COMPANIES

         No official data is available about the Argentine consumer finance
market in which the companies that issue regional credit cards operate. The
2001-2002 economic crisis significantly affected these companies' competitors,
with most of them having ceased operations. Therefore, in general, competition
is currently almost nonexistent for these companies and much lower than in the
precrisis period. There are certain consumer finance-oriented players, whose
business model is based on the provision of loans, and therefore do not exactly
participate in the same business.

                                      -45-

<PAGE>

INSURANCE INDUSTRY

         After the collapse suffered by the Argentine economy in 2002, the
insurance business managed to stabilize throughout 2003, and a moderate recovery
is expected for 2004. Insurance growth estimates are calculated at around 8% to
10%, still above the growth line of the GDP.

         Total insurance for the last 12 months increased, at constant values,
1.4% with respect to the previous year, reaching, according to official
estimates, Ps. 9,545 million, at constant values as of November 2003.

         The current growth is mainly driven by the following sectors:
pension-linked life insurance (vida previsional), life annuities and automotive
and home insurance. With respect to distribution, the business is expected to
continue being channeled mainly through insurance brokers, who are expected to
exert greater pressure on the part of the channel represented by banks.

         Industry consolidation is expected to continue due to the fact that
foreign companies find this sector less attractive as a consequence of the end
of fixed, one-to-one parity between the peso and the U.S. dollar, higher capital
requirements and lower financial results, which force companies to attain higher
technical results.

         The property insurance sector's volume of premiums was Ps. 6,300
million for the fiscal year, at constant values as of November 2003. The main
segment of this sector is automotive insurance (52%), followed by fire and
homeowners, insurance (35%) and workers' compensation.

         Even though automotive insurance is the most important segment in terms
of volume of premiums written, the current security situation in Argentina makes
it the segment with the highest loss experience.

         The volume of premiums of the individual insurance sector was
approximately Ps. 2,500 million in 2003. The most important segments of this
sector are life insurance (44%), pension-linked life annuities (rentas
vitalicias previsionales) (32%), pension-linked life insurance (15%) and
retirement plans (7%). There has been a marked growth in life and ordinary
annuities, which are first among the individual insurance sector and are shaping
up as the insurance products that will grow the fastest in 2004.

         During 2003, individual insurance adapted and consolidated in response
to the needs of a new market that requires insurance coverage focused mainly on
protection, leaving behind retirement insurance with capitalization, the most
important product within the stable environment of the 1990s. This new situation
led many companies to change strategies and move toward life insurance products
with health components or to develop strategies that involved the acquisition of
semipublic health-care providers or prepaid medical assistance companies.

SALES AND MARKETING

         Banco Galicia operates one of the most extensive and diversified
distribution networks among private-sector banks in Argentina. Banco Galicia's
distribution capabilities are our principal marketing channel.

         While continuing with its long-term objective to consolidate its
leadership in the Argentine financial system, the Bank significantly reduced its
distribution platform during 2002 as a result of the crisis and did not expand
it in 2003. Despite the reduction, the Bank's distribution network continues to
be one of the largest and most flexible distribution platforms in the country
and the Bank has kept nationwide coverage.

         The Bank markets all of its financial products and services to high-,
medium- and medium-low-income individuals, including insurance and FIMA mutual
funds, through its branch network. Within the branches, the sales force is
specialized by segment. The Bank's sales policy encourages tellers to perform
sales functions too. Wealthy individuals who are private banking customers are
served by specialized officers through a special network of service centers and
a head office facility. The Bank's distribution channel for the lower-income
segment of the population is the network of offices of the regional credit card
companies. Until mid-2002, the Bank also served this segment through the Galicia
Ahora network, which has been merged into the branch network.

                                      -46-

<PAGE>

         Commercial banking services to large corporations (including medium to
large companies) and banks are provided in a centralized manner. Branch officers
are responsible for the Bank's relationship with middle-market and small
businesses and most of the agriculture/livestock sector customers.

         All of the Bank's individual and corporate customers have access to the
Bank's electronic distribution channels, including the ATM network, a
multifunction call center and an e-banking website. The Bank's call center
performs telemarketing and credit recovery functions.

         Special mobile sales forces are maintained to market various products
and services to individuals and employees of client corporations.

         The Bank uses a data warehouse, to perform segmentation and
profitability analyses, estimate performance patterns and cross-selling indices
and forecast client response based on historical information and data-mining. It
has turned its focus to a segmented marketing approach. In the late 1990s, the
data warehouse capabilities began to be used to design marketing campaigns
focused on specific segments of the Bank's customer base. In addition, the Bank
began to focus its marketing strategy on the development of long-term
relationships with customers based on its knowledge of those customers. As part
of this client-oriented strategy, the Bank began to implement customer
relationship management ("CRM") technology to support continuous improvement of
its relationship with customers. The Bank continues with this strategy.

         In 2002, the economic crisis and the measures taken by the government
to deal with the crisis had a strong impact on financial institutions' relations
with customers. After the first semester of the year, the Bank implemented
several initiatives to retain and recover customers by focusing on quality of
service, which according to surveys, appeared to be customers' most valued
attribute of a bank. During 2002, the Bank worked to offer its customers
transactional banking services and concrete benefits originated from the use of
its means of payment. The goal was to make the customer the main beneficiary of
services different from those offered in the market. The Bank's media presence
remained low until September when a promotional campaign with heavy advertising
was launched.

         In 2003, as the crisis that affected the financial system was largely
overcome, the Bank implemented the Lideres de Calidad de Servicio (Service
Quality Leaders) program in its branch network aimed at improving customer focus
among Bank team members. In that year, Banco Galicia's image and "top of mind"
(immediate brand recollection) improved significantly, boosted by highly
accepted advertising campaigns and by important investments in the media. In
that regard, the development of constant promotional and loyalty campaigns that
highlighted the targeted attributes of the brand contributed to rebuilding
customer relations with the Bank. The customer satisfaction survey for the last
quarter of 2003 showed a significant upturn in the satisfaction rate, which
regained the peak reached before the crisis that took place at the end of 2001.

PROPERTY

GRUPO GALICIA

         We currently own 150 square meters of office space at Tte. Gral. Juan
D. Peron 456, 2nd floor, Buenos Aires, Argentina, to house its management,
accounting, administrative and investor relations functions.

         In addition, we also own a building containing eight functional units,
equivalent to 1,618.48 square meters, located at Maipu 241, Buenos Aires.
Currently, we lease one functional unit, equivalent to 201 square meters,
receiving Ps. 3,200 per month, and hold two functional units vacant for leasing.
The remaining five functional units are being occupied by the following
subsidiaries: Sudamericana Holding S.A., B2Agro S.A., Galicia Vida Compania de
Seguros S.A. and Galicia Retiro Compania de Seguros S.A.

BANCO GALICIA

         Banco Galicia's principal executive offices consist of approximately
17,270 square meters at Tte. Gral. Juan D. Peron 407, Buenos Aires. In addition,
Banco Galicia owns approximately 7,340 square meters at Florida 361, Buenos
Aires, and rents approximately 9,325 square meters of space at Tte. Gral. Juan
D. Peron 525, Buenos

                                      -47-

<PAGE>

Aires and approximately 3,630 square meters of space at San Martin 178/200,
Buenos Aires. All spaces serve as annexes to the Bank's principal executive
offices.

         In 1994, Banco Galicia purchased the building located at Reconquista
188/200, Buenos Aires, and between 1992 and 2000 it purchased the building
located at Tte. Gral. Juan D. Peron 444, Buenos Aires. In these locations,
construction was begun of a new corporate tower. The Bank plans to centralize a
significant portion of its offices that are currently in the vicinity in this
building.

         As of December 31, 2003, Banco Galicia's branch network consisted of
226 branches in Argentina, 137 of which were owned and 89 of which were rented
by Banco Galicia. The Argentine branches were located in 22 of Argentina's 23
provinces.

         The head office of Galicia Uruguay is located at Luis Alberto Herrera
1248, 21st and 22nd floors, Edificio World Trade Center, Montevideo, Uruguay,
and consist of approximately 880 square meters. Galicia Uruguay also rents a
warehouse in Montevideo, where it stores documents. As of December 31, 2003,
Galicia Uruguay had three branches, including the head office, two of which it
owned and one of which it rented. Banco Galicia Cayman Ltd. and the Cayman
Islands branch are located in the Cayman Islands and The Bank of Nova Scotia
Trust Co. acts as its registered office.

         Tarjeta Naranja S.A. owns two buildings at Sucre 152 and Sucre 154,
Cordoba, Argentina, to house part of its management and administrative
functions. These buildings contain approximately 1,390 square meters. The
company rents office space at Sucre 145/151 and La Rioja 375, Cordoba, which, in
aggregate is approximately 3,670 square meters. These locations serve as annexes
to its principal executive offices. It also rents warehouse space at Humberto
1 degrees 2165, Cordoba, which consists of approximately 1,115 square meters, at
La Rioja 364, Cordoba, which is approximately 350 square meters and serves as a
printing center for marketing material and Los Andes 197, Cordoba, which is
approximately 1,765 square meters. As of December 31, 2003, Tarjeta Naranja
operated 75 sales points located in 17 of the 23 Argentine provinces, 73 of
which were rented by the company. This figure includes the branches that
previously comprised Tarjeta Comfiar's branch network.

         Tarjetas Cuyanas S.A's principal executive offices are rented. They
consist of approximately 1,160 square meters of space at Belgrano 1415, Mendoza,
Argentina. As of December 31, 2003, its distribution network consisted of 10
sales points located in the provinces of Mendoza, San Juan and San Luis. All of
them were rented by the company.

         Tarjetas del Mar S.A.'s principal executive offices are located at
Maipu 241, 2nd Floor, Buenos Aires, Argentina. They contain approximately 240
square meters of space. As of December 31, 2003, its distribution network
consisted of three sales points located in the province of Buenos Aires. Both
the head office and the branches were rented by the company.

SELECTED STATISTICAL INFORMATION

         You should read this information in conjunction with the other
information provided in this annual report, including our audited consolidated
financial statements and Item 5. "Operating and Financial Review and Prospects."
We prepared this information from our financial records, which are maintained
under accounting methods established by the Argentine Central Bank under
Argentine Banking GAAP, and do not reflect adjustments necessary to reflect the
information in accordance with U.S. GAAP. We have expressed all amounts in
millions of pesos, except percentages, ratios, multiples and per-share data.

         Unless otherwise stated, in this section the exchange rate used to
convert foreign currency amounts into pesos was the exchange rate as of each
relevant date or period end that Banco Nacion or the Argentine Central Bank
quoted. In the case of dollars, until December 31, 2001, the Banco Nacion quotes
for such exchange rates were Ps. 1.0 per US$1.0. The exchange rate used for the
preparation of the financial statements as of December 31, 2002 was Ps. 3.363
per US$1.0 and Ps. 2.933 per US$1.0 for the preparation of the financial
statements as of December 31, 2003. See Item 3. "Key Information--Exchange Rate
Information," Item 3. "Key Information--Risk Factors," and "--Main Regulatory
Changes in 2002 and 2003."

                                      -48-

<PAGE>

         The dollar-denominated assets and liabilities reflect balances held by
Banco Galicia, Galicia Uruguay, the New York and Cayman branches and the nonbank
affiliated companies required to be consolidated. Until the suspension of its
activities, the Bank's foreign branches or subsidiaries operated mainly in
dollars.

         Until December 31, 2001, Banco Galicia and the nonbank affiliated
companies required to be consolidated operated both in dollars and in pesos.
This was a consequence of the dual currency system of the Argentine economy.
After that date, transactions in the financial system denominated in dollars
have been significantly reduced and the dollar-denominated balances as of
December 2002 and 2003 are mainly nonpesified assets and liabilities and the
compensatory and hedge bonds received or to be received as compensation for
asymmetric pesification.

         In 2002, Argentina experienced a high rate of inflation. The WPI
increased approximately 118.44% between January 1, 2002 and December 31, 2002.
Between January 1, 2003 and February 28, 2003, the WPI increased 0.87%. Between
January 1, 2002 and February 28, 2003, the WPI increased 120.35%. In accordance
with the then applicable accounting rules, starting January 1, 2002, our
financial statements and those of the Bank began to be adjusted for inflation.
Subsequently, as a result of the stabilization of the WPI during the first half
of 2003, the requirement that financial statements be prepared in constant
currency was eliminated for financial periods ending on or after March 1, 2003.

         Accordingly, information included in this section as of and for the
fiscal year ended December 31, 2003 include the effects of inflation accounting
through February 28, 2003, with the WPI increasing 0.87% between January 1, 2003
and February 28, 2003, while the information for periods prior to February 28,
2003 has been restated in constant pesos as of February 28, 2003 applying the
approximately 120.35% change in the WPI for the period from January 1, 2002 to
February 28, 2003. High rates of inflation affect the comparability of financial
performance on a period-to-period basis. Although inflation accounting improves
the comparability of the financial information, it does not eliminate or correct
many of the distortions created by inflation that will affect period-to-period
comparisons of financial information.

AVERAGE BALANCE SHEET AND INCOME FROM INTEREST-EARNING ASSETS AND EXPENSES FROM
INTEREST-BEARING LIABILITIES

         The average balances of interest-earning assets and interest-bearing
liabilities, including the related interest receivable and payable, are
calculated on a daily basis for Banco Galicia and Galicia Uruguay. The average
balances of interest-earning assets and interest bearing liabilities are
calculated on a monthly basis for Tarjetas Regionales S.A. and the regional
credit card companies in which it holds majority interests and for Grupo Galicia
and its nonbanking subsidiaries.

         Average balances have been separated between those denominated in pesos
and those denominated in dollars. The nominal interest rate is the amount of
interest earned or paid during the period divided by the related average
balance.

         Net gains/losses on government securities and related differences in
market quotations are included in interest earned. Banco Galicia manages its
trading activities in government securities as an integral part of its business.
Banco Galicia does not distinguish between interest income and market gains or
losses on its government securities portfolio. The nonaccrual loans balance is
included in the average loan balance calculation.

         For fiscal year 2002, the average nominal interest rates were converted
to real rates using the following formula:

                1 + N(p)                     (1 + N(d) (1 + D)
    R(p) =     ----------  - 1    R(d) =    -------------------  -  1
                 1 + I                             1 + I

Where:

   R(p) =  real average rate for peso-denominated assets and liabilities for
           the period;

   R(d) =  real average rate for foreign currency-denominated assets and
           liabilities for the period;

   N(p) =  nominal average rate for peso-denominated assets and liabilities for
           the period;

                                      -49-

<PAGE>

   N(d) =  nominal average rate for foreign currency-denominated assets and
           liabilities for the period;

   D    =  devaluation rate of the peso to the dollar for the period; and

   I    =  inflation rate in Argentina for the period (based on the variation of
           CER).

         The real interest rate can be negative for a portfolio of
peso-denominated loans when the inflation rate for the period is higher than the
average nominal rate of the loan portfolio for the same period. A similar effect
could occur for a portfolio of foreign currency-denominated loans when the
inflation rate for the period is higher than the sum of the devaluation rate for
the period and the corresponding average nominal rate of the portfolio.

         The formula for the average real rate for foreign currency-denominated
assets and liabilities (R(d)) reflects a gain or loss in purchasing power caused
by the difference between the devaluation rate of the Argentine peso and the
inflation rate in Argentina during the period.

         The following example illustrates the calculation of the real interest
rate for a U.S. dollar asset bearing a nominal annual interest rate of 10% (Nd =
0.10), assuming a 5% annual devaluation rate (D = 0.05) and a 12% annual
inflation rate (I = 0.12):

         (1 + 0.10) (1 + 0.05)
R(d) =   ---------------------   -  1  =  3.125% per year
               1 + 0.12

         In the example, since the inflation rate was higher than the
devaluation rate, the real rate is lower than the nominal rate in dollars. If,
for example, the annual devaluation rate were 15%, using the same numbers, the
real rate in Argentine pesos would be 12.9%, which is higher than the nominal
rate in dollars. Using the same numbers, if the annual inflation rate were
greater than 15.5%, the real rate would be negative.

                                      -50-

<PAGE>

         The following table shows Grupo Galicia's consolidated average
balances, interest earned or paid and nominal interest rates for
interest-earning assets and interest-bearing liabilities for the fiscal year
ended December 31, 2003.

<TABLE>
<CAPTION>
                                          GRUPO GALICIA, FISCAL YEAR ENDED DECEMBER 31, 2003 (*)
                             --------------------------------------------------------------------------------
                                                        PESOS                            DOLLARS
                             --------------------------------------------------------------------------------
                                            INTEREST   AVERAGE                INTEREST   AVERAGE
                               AVERAGE       EARNED/    YIELD/    AVERAGE      EARNED/    YIELD/    AVERAGE
                               BALANCE        PAID      RATE      BALANCE       PAID      RATE      BALANCE
-------------------------------------------------------------------------------------------------------------
                                                   (in millions of pesos, except rates)
<S>                          <C>           <C>         <C>      <C>           <C>        <C>      <C>
ASSETS

Government Securities......  Ps.   250.5   Ps.   23.3    9.30%  Ps. 1,832.3   Ps. 48.2     2.63%  Ps. 2,082.8
Loans
   Private Sector..........      2,981.0        705.6   23.67         986.2       89.2     9.04       3,967.2
   Public Sector...........      7,589.5        342.6    4.51             -          -        -       7,589.5
                             -----------   ----------   -----   -----------   --------    -----   -----------
Total Loans................     10,570.5      1,048.2    9.92         986.2       89.2     9.04      11,556.7
Other......................      1,309.3         61.1    4.67       5,776.3       64.4     1.11       7,085.6
                             -----------   ----------   -----   -----------   --------    -----   -----------
TOTAL INTEREST-EARNING
ASSETS.....................     12,130.3      1,132.6    9.34%      8,594.8      201.8     2.35%     20,725.1
Cash and Gold..............        207.0            -       -         135.5          -        -         342.5
Equity in Other Companies..        462.1            -       -         140.4          -        -         602.5
Other Assets...............      2,275.1            -       -         128.2          -        -       2,403.3
Allowances.................     (1,291.7)           -       -        (251.4)         -        -      (1,543.1)
                             -----------   ----------   -----   -----------   --------    -----   -----------
TOTAL ASSETS...............  Ps.13,782.8            -       -   Ps. 8,747.5          -        -   Ps.22,530.3

LIABILITIES AND EQUITY

Deposits
   Current Accounts........  Ps.   185.1   Ps.    3.0    1.62%  Ps.    30.5          -        -   Ps.   215.6
   Saving Accounts.........        434.6          3.4    0.78         178.5          -        -         613.1
   Time Deposits...........      2,185.4        230.6   10.55       1,422.9   Ps. 26.8     1.88%      3,608.3
                             -----------   ----------   -----   -----------   --------    -----   -----------
TOTAL INTEREST-BEARING
DEPOSITS                         2,805.1        237.0    8.45       1,631.9       26.8     1.64       4,437.0
Argentine Central Bank.....      8,062.0        473.1    5.87           0.7          -        -       8,062.7
Other Financial Entities...        174.4         69.9   40.08       1,900.0      121.0     6.37       2,074.4
Debt Securities............            -            -       -       2,710.5      154.2     5.69       2,710.5
Other .....................         45.7          9.6   21.01       1,307.4       58.4     4.47       1,353.1
                             -----------   ----------   -----   -----------   --------    -----   -----------
TOTAL INTEREST-BEARING
LIABILITIES................     11,087.2        789.6    7.12%      7,550.5      360.4     4.77%     18,637.7
Demand deposits............        700.6            -       -          72.2          -        -         772.8
Other Liabilities..........        939.4            -       -         561.5          -        -       1,500.9
Minority Interests.........         89.5            -       -           0.0          -        -          89.5
Shareholders' Equity.......      1,529.4            -       -             -          -        -       1,529.4
                             -----------   ----------   -----   -----------   --------    -----   -----------
TOTAL LIABILITIES
AND EQUITY.................  Ps.14,346.1            -       -   Ps. 8,184.2          -        -   Ps.22,530.3
SPREAD AND NET YIELD
Interest Rate Spread.......                              2.22%                            (2.42)%
Cost of Funds Supporting
Interest-Earning Assets....                              6.51                              4.19
Net Yield on
Interest-Earning Assets....                              2.83                             (1.85)
                             ===========   ==========   =====   ===========   ========    =====   ===========

<CAPTION>
                                   GRUPO GALICIA, FISCAL YEAR
                                   ENDED DECEMBER 31, 2003 (*)
                                   ---------------------------
                                                    TOTAL
                                   ---------------------------
                                       INTEREST    AVERAGE
                                        EARNED/     YIELD/
                                         PAID       RATE
--------------------------------------------------------------

<S>                                    <C>         <C>
ASSETS

Government Securities......            Ps.  71.5     3.43%
Loans
   Private Sector..........                794.8    20.03
   Public Sector...........                342.6     4.51
                                       ---------   ------
Total Loans................              1,137.4     9.84
Other......................                125.5     1.77
                                       ---------   ------
TOTAL INTEREST-EARNING
ASSETS.....................              1,334.4     6.44%
Cash and Gold..............                    -        -
Equity in Other Companies..                    -        -
Other Assets...............                    -        -
Allowances.................                    -        -
                                       ---------   ------
TOTAL ASSETS...............                    -        -

LIABILITIES AND EQUITY

Deposits
   Current Accounts........            Ps.   3.0     1.39%
   Saving Accounts.........                  3.4     0.55
   Time Deposits...........                257.4     7.13
                                       ---------   ------
TOTAL INTEREST-BEARING
DEPOSITS                                   263.8     5.95
Argentine Central Bank.....                473.1     5.87
Other Financial Entities...                190.9     9.20
Debt Securities............                154.2     5.69
Other .....................                 68.0     5.03
                                       ---------   ------
TOTAL INTEREST-BEARING
LIABILITIES................              1,150.0     6.17%
Demand deposits............                    -        -
Other Liabilities..........                    -        -
Minority Interests.........                    -        -
Shareholders' Equity.......                    -        -
                                       ---------   ------
TOTAL LIABILITIES
AND EQUITY.................                    -        -
SPREAD AND NET YIELD
Interest Rate Spread.......                          0.27%
Cost of Funds Supporting
Interest-Earning Assets....                          5.55
Net Yield on
Interest-Earning Assets....                          0.89
                                       =========   ======
</TABLE>

(*) Rates include the CER adjustment.

                                      -51-

<PAGE>

         The following tables show Grupo Galicia's consolidated average
balances, interest earned or paid and nominal and real interest rates for
interest-earning assets and interest-bearing liabilities for the fiscal year
ended December 31, 2002.

<TABLE>
<CAPTION>
                                                          GRUPO GALICIA, FISCAL YEAR ENDED DECEMBER 31, 2002 (*)
                                         ----------------------------------------------------------------------------------------
                                                                    PESOS                                 DOLLARS
                                         ----------------------------------------------------------------------------------------
                                                       INTEREST    AVERAGE                   INTEREST     AVERAGE
                                           AVERAGE      EARNED/     YIELD/       AVERAGE      EARNED/      YIELD/     AVERAGE
                                           BALANCE       PAID        RATE        BALANCE       PAID        RATE       BALANCE
---------------------------------------------------------------------------------------------------------------------------------
                                                     (in millions of February 28, 2003, constant pesos, except rates)
<S>                                     <C>           <C>         <C>          <C>           <C>         <C>          <C>
ASSETS

Government Securities ................. Ps.   575.4   Ps.  213.7       37.14%  Ps. 1,680.2   Ps.   84.9        5.05%  Ps. 2,255.6
Loans
   Private Sector .....................     4,959.9      1,345.1       27.12       1,989.6        102.1        5.13      6,949.5
   Public Sector ......................     8,312.9      2,956.9       35.57             -            -           -      8,312.9
                                        -----------   ----------  ----------   -----------   ----------  ----------  -----------
Total Loans ...........................    13,272.8      4,302.0       32.41       1,989.6        102.1        5.13     15,262.4
Other .................................     1,338.9        448.8       33.52       8,096.6        161.6        2.00      9,435.5
                                        -----------   ----------  ----------   -----------   ----------  ----------  -----------

TOTAL INTEREST-EARNING ASSETS .........    15,187.1      4,964.5       32.69%     11,766.4        348.6        2.96%    26,953.5
Cash and Gold .........................       226.6            -           -         190.7            -           -        417.3
Equity in Other Companies .............       538.5            -           -         253.0            -           -        791.5
Other Assets ..........................     2,090.7            -           -         670.0            -           -      2,760.7
Allowances ............................    (1,281.3)           -           -        (140.8)           -           -     (1,422.1)
                                        -----------   ----------  ----------   -----------   ----------  ----------  -----------
TOTAL ASSETS .......................... Ps.16,761.6            -           -   Ps.12,739.3            -           -  Ps.29,500.9

LIABILITIES AND EQUITY

Deposits
   Current Accounts ................... Ps.   161.7   Ps.   17.1       10.58%  Ps.    32.9   Ps.    0.4        1.22% Ps.   194.6
   Saving Accounts ....................     1,000.3          6.6        0.66         451.5          2.5        0.55      1,451.8
   Time Deposits ......................     2,917.4      1,214.1       41.62       3,454.1        120.6        3.49      6,371.5
                                        -----------   ----------  ----------   -----------   ----------  ----------  -----------
TOTAL INTEREST-BEARING DEPOSITS .......     4,079.4      1,237.8       30.34       3,938.5        123.5        3.14      8,017.9
Argentine Central Bank ................     7,144.1      2,237.7       31.32           3.5          0.1        2.86      7,147.6
Other Financial Entities ..............       198.8         29.8       14.99       2,579.9        216.1        8.38      2,778.7
Debt Securities .......................        16.3          2.4       14.72       2,552.2        149.2        5.85      2,568.5
Other .................................       769.9        200.8       26.08       1,613.7        128.6        7.97      2,383.6
                                        -----------   ----------  ----------   -----------   ----------  ----------  -----------
TOTAL INTEREST-BEARING LIABILITIES ....    12,208.5      3,708.5       30.38%     10,687.8        617.5        5.78%    22,896.3
Demand deposits .......................       622.9            -           -         232.0            -           -        854.9
Other Liabilities .....................     2,455.7            -           -         714.7            -           -      3,170.4
Minority Interests ....................       147.4            -           -           0.0            -           -        147.4
Shareholders' Equity ..................     2,431.9            -           -             -            -           -      2,431.9
                                        -----------   ----------  ----------   -----------   ----------  ----------  -----------
TOTAL LIABILITIES AND EQUITY .......... Ps.17,866.4            -           -   Ps.11,634.5            -           -  Ps.29,500.9
SPREAD AND NET YIELD
Interest Rate Spread ..................                                 2.31%                                 (2.82)%
Cost of Funds Supporting
  Interest-Earning Assets .............                                24.42                                   5.25
Net Yield on Interest-Earning Assets ..                                 8.27                                  (2.29)

<CAPTION>
                                         GRUPO GALICIA, FISCAL YEAR
                                         ENDED DECEMBER 31, 2002 (*)
                                         ------------------------
                                                          TOTAL
                                         ------------------------
                                            INTEREST    AVERAGE
                                             EARNED/     YIELD/
                                              PAID        RATE
-----------------------------------------------------------------
                                          (in millions of February
                                          28, 2003, constant pesos,
                                                except rates)
<S>                                        <C>         <C>
ASSETS

Government Securities ..................   Ps.  298.6       13.24%
Loans
   Private Sector ......................      1,447.2       20.82
   Public Sector .......................      2,956.9       35.57
                                           ----------  ----------
Total Loans ............................      4,404.1       28.86
Other ..................................        610.4        6.47
                                           ----------  ----------

TOTAL INTEREST-EARNING ASSETS ..........      5,313.1       19.71%
Cash and Gold ..........................            -           -
Equity in Other Companies ..............            -           -
Other Assets ...........................            -           -
Allowances .............................            -           -
                                           ----------  ----------
TOTAL ASSETS ...........................            -           -

LIABILITIES AND EQUITY

Deposits
   Current Accounts ....................   Ps.   17.5        8.99%
   Saving Accounts .....................          9.1        0.63
   Time Deposits .......................      1,334.7       20.95
                                           ----------  ----------
TOTAL INTEREST-BEARING DEPOSITS ........      1,361.3       16.98
Argentine Central Bank .................      2,237.8       31.31
Other Financial Entities ...............        245.9        8.85
Debt Securities ........................        151.6        5.90
Other ..................................        329.4       13.82
                                           ----------  ----------
TOTAL INTEREST-BEARING LIABILITIES .....      4,326.0       18.89%
Demand deposits ........................            -           -
Other Liabilities ......................            -           -
Minority Interests .....................            -           -
Shareholders' Equity ...................            -           -
                                           ----------  ----------
TOTAL LIABILITIES AND EQUITY ...........            -           -
SPREAD AND NET YIELD
Interest Rate Spread ...................                     0.82%
Cost of Funds Supporting
  Interest-Earning Assets ..............                    16.05
Net Yield on Interest-Earning Assets ...                     3.66
</TABLE>

(*) Rates include the CER adjustment.

                                      -52-

<PAGE>

<TABLE>
<CAPTION>
                                                              GRUPO GALICIA, FISCAL YEAR ENDED DECEMBER 31, 2002 (*)
                                         ------------------------------------------------------------------------------------------
                                                                           PESOS                                        DOLLARS
                                         ------------------------------------------------------------------------------------------
                                                          INTEREST         AVERAGE                       INTEREST       AVERAGE
                                           AVERAGE         EARNED/          REAL/          AVERAGE        EARNED/        REAL/
                                           BALANCE          PAID            RATE           BALANCE         PAID          RATE
-----------------------------------------------------------------------------------------------------------------------------------
                                                       (in millions of February 28, 2003, constant pesos, except rates)
<S>                                     <C>              <C>             <C>            <C>             <C>           <C>
ASSETS

Government Securities ...............   Ps.   575.4      Ps.  213.7          (37.22)%   Ps. 1,680.2     Ps.   84.9         61.74%
Loans
   Private Sector ...................       4,959.9         1,345.1          (41.81)        1,989.6          102.1         61.85
   Public Sector ....................       8,312.9         2,956.9          (37.94)            0.0            0.0          0.00
                                        -----------      ----------      ----------     -----------     ----------    ----------
Total Loans .........................      13,272.8         4,302.0          (39.38)        1,989.6          102.1         61.85
Other ...............................       1,338.9           448.8          (38.88)        8,096.6          161.6         57.03
                                        -----------      ----------      ----------     -----------     ----------    ----------
TOTAL INTEREST-EARNING ASSETS .......      15,187.1         4,964.5          (39.26)%      11,766.4          348.6         58.52%
Cash and Gold .......................         226.6               -               -           190.7              -             -
Equity in Other Companies ...........         538.5               -               -           253.0              -             -
Other Assets ........................       2,090.7               -               -           670.0              -             -
Allowances ..........................      (1,281.3)              -               -          (140.8)             -             -
                                        -----------      ----------      ----------     -----------     ----------    ----------
TOTAL ASSETS ........................   Ps.16,761.6               -               -     Ps.12,739.3              -             -

LIABILITIES AND EQUITY

Deposits
   Current Accounts .................   Ps.   161.7      Ps.   17.1          (49.36)%   Ps.    32.9     Ps.    0.4         55.83%
   Saving Accounts ..................       1,000.3             6.6          (53.92)          451.5            2.5         54.82
   Time Deposits ....................       2,917.4         1,214.1          (35.17)        3,454.1          120.6         59.33
                                        -----------      ----------      ----------     -----------     ----------    ----------
TOTAL INTEREST-BEARING DEPOSITS .....       4,079.4         1,237.8          (40.33)        3,938.5          123.5         58.78
Argentine Central Bank ..............       7,144.1         2,237.7          (39.88)            3.5            0.1         58.05
Other Financial Entities ............         198.8            29.8          (47.37)        2,579.9          216.1         66.85
Debt Securities .....................          16.3             2.4          (47.54)        2,552.2          149.2         62.96
Other ...............................         769.9           200.8          (42.27)        1,613.7          128.6         66.23
                                        -----------      ----------      ----------     -----------     ----------    ----------
TOTAL INTEREST-BEARING
  LIABILITIES .......................      12,208.5         3,708.5          (40.32)%      10,687.8          617.5         62.85%
Demand deposits .....................         622.9               -               -           232.0              -             -
Other Liabilities ...................       2,455.7               -               -           714.7              -             -
Minority Interests ..................         147.4               -               -               -              -             -
Shareholders' Equity ................       2,431.9               -               -               -              -             -
                                        -----------      ----------      ----------     -----------     ----------    ----------
TOTAL LIABILITIES AND EQUITY ........   Ps.17,866.4               -               -     Ps.11,634.5              -             -
SPREAD AND NET YIELD
Interest Rate Spread ................                                          1.06%                                       (4.33)%
Cost of Funds Supporting
  Interest-Earning Assets ...........                                        (43.04)                                       62.03
Net Yield on Interest-Earning
  Assets ............................                                        (50.44)                                       50.43

<CAPTION>
                                                     GRUPO GALICIA, FISCAL YEAR ENDED DECEMBER 31, 2002 (*)
                                                --------------------------------------------------------------
                                                                                                 TOTAL
                                                --------------------------------------------------------------
                                                                       INTEREST                AVERAGE
                                                    AVERAGE             EARNED/                  REAL/
                                                    BALANCE              PAID                    RATE
--------------------------------------------------------------------------------------------------------------
                                               (in millions of February 28, 2003, constant pesos, except rates)
<S>                                               <C>                 <C>                     <C>
ASSETS

Government Securities .......................     Ps. 2,255.6         Ps.  298.6                   36.49%
Loans
   Private Sector ...........................         6,949.5            1,447.2                  (12.13)
   Public Sector ............................         8,312.9            2,956.9                  (37.94)
                                                  -----------         ----------              ----------
Total Loans .................................        15,262.4            4,404.1                  (26.18)
Other .......................................         9,435.5              610.4                   43.42
                                                  -----------         ----------              ----------
TOTAL INTEREST-EARNING ASSETS ...............        26,953.5            5,313.1                    3.43%
Cash and Gold ...............................           417.3                  -                       -
Equity in Other Companies ...................           791.5                  -                       -
Other Assets ................................         2,760.7                  -                       -
Allowances ..................................        (1,422.1)                 -                       -
                                                  -----------         ----------              ----------
TOTAL ASSETS ................................     Ps.29,500.9                  -                       -

LIABILITIES AND EQUITY

Deposits
   Current Accounts .........................     Ps.   194.6         Ps.   17.5                  (31.57)%
   Saving Accounts ..........................         1,451.8                9.1                  (20.11)
   Time Deposits ............................         6,371.5            1,334.7                   16.06
                                                  -----------         ----------              ----------
TOTAL INTEREST-BEARING DEPOSITS .............         8,017.9            1,361.3                    8.35
Argentine Central Bank ......................         7,147.6            2,237.8                  (39.83)
Other Financial Entities ....................         2,778.7              245.9                   58.68
Debt Securities .............................         2,568.5              151.6                   62.26
Other .......................................         2,383.6              329.4                   31.19
                                                  -----------         ----------              ----------
TOTAL INTEREST-BEARING
  LIABILITIES ...............................        22,896.3            4,326.0                    7.84%
Demand deposits .............................           854.9                  -                       -
Other Liabilities ...........................         3,170.4                  -                       -
Minority Interests ..........................           147.4                  -                       -
Shareholders' Equity ........................         2,431.9                  -                       -
                                                  -----------         ----------              ----------
TOTAL LIABILITIES AND EQUITY ................     Ps.29,500.9                  -                       -
SPREAD AND NET YIELD
Interest Rate Spread ........................                                                      (4.41)%
Cost of Funds Supporting
  Interest-Earning Assets ...................                                                       2.83
Net Yield on Interest-Earning
  Assets ....................................                                                      (6.41)
</TABLE>

(*) Rates include the CER adjustment.

                                      -53-

<PAGE>

         The following tables show Grupo Galicia's consolidated average
balances, interest earned or paid and nominal interest rates for
interest-earning assets and interest-bearing liabilities for the fiscal year
ended December 31, 2001.

<TABLE>
<CAPTION>
                                                            GRUPO GALICIA, FISCAL YEAR ENDED DECEMBER 31, 2001
                                         ----------------------------------------------------------------------------------
                                                                         PESOS                                   DOLLARS
                                         ----------------------------------------------------------------------------------
                                                          INTEREST      AVERAGE                     INTEREST     AVERAGE
                                          AVERAGE          EARNED/       YIELD/     AVERAGE          EARNED/      YIELD/
                                          BALANCE           PAID         RATE       BALANCE           PAID        RATE
---------------------------------------------------------------------------------------------------------------------------
                                                 (in millions of February 28, 2003, constant pesos, except rates)
<S>                                      <C>             <C>            <C>       <C>              <C>           <C>
ASSETS

Government Securities ................   Ps.   43.2      Ps.   6.9         15.97% Ps.  2,488.1     Ps. 270.5        10.87%
Loans
   Private Sector ....................      3,903.3          986.2         25.27       9,840.0       1,192.3        12.12
   Public Sector .....................        225.4           48.5         21.52       6,033.6         979.0        16.23
                                         ----------      ---------      --------  ------------     ---------     --------
Total Loans ..........................      4,128.7        1,034.7         25.06      15,873.6       2,171.3        13.68
Other ................................        136.3            8.2          6.02       4,584.3         317.5         6.93
                                         ----------      ---------      --------  ------------     ---------     --------
TOTAL INTEREST-EARNING ASSETS ........      4,308.2        1,049.8         24.37%     22,946.0       2,759.3        12.03%
Cash and Gold ........................        462.9              -             -         291.5             -            -
Equity in Other Companies ............        277.4              -             -         347.9             -            -
Other Assets .........................      3,019.6              -             -       1,074.9             -            -
Allowances ...........................       (317.3)             -             -        (443.7)            -            -
                                         ----------      ---------      --------  ------------     ---------     --------
TOTAL ASSETS .........................   Ps.7,750.8              -             -  Ps. 24,216.6             -            -

LIABILITIES AND EQUITY

Deposits
   Current Accounts ..................   Ps.  204.3      Ps.  17.1          8.37% Ps.    535.6     Ps.  35.7         6.67%
   Saving Accounts ...................      1,006.1           16.9          1.68       1,415.5          21.4         1.51
   Time Deposits .....................      2,285.2          320.7         14.03      11,965.1       1,067.8         8.92
                                         ----------      ---------      --------  ------------     ---------     --------
TOTAL INTEREST-BEARING DEPOSITS ......      3,495.6          354.7         10.15      13,916.2       1,124.9         8.08
Argentine Central Bank ...............        111.8           10.8          9.66          37.9           3.1         8.18
Other Financial Entities .............         37.7           14.3         37.93       1,670.8         132.9         7.95
Debt Securities ......................            -              -             -       2,934.2         245.7         8.37
Other ................................          1.5            0.2         13.33       1,841.6         138.8         7.54
                                         ----------      ---------      --------  ------------     ---------     --------
TOTAL INTEREST-BEARING
  LIABILITIES ........................      3,646.6          380.0         10.42%     20,400.7       1,645.4         8.07%
Demand deposits ......................      1,079.7              -             -         121.7             -            -
Other Liabilities ....................      1,070.3              -             -       2,335.7             -            -
Minority Interests ...................        259.3              -             -             -             -            -
Shareholders' Equity .................      3,053.4              -             -             -             -            -
                                         ----------      ---------      --------  ------------     ---------     --------
TOTAL LIABILITIES AND EQUITY .........   Ps.9,109.3              -             -  Ps. 22,858.1             -            -
SPREAD AND NET YIELD
Interest Rate Spread .................                                     13.95%                                    3.96%
Cost of Funds Supporting
  Interest-Earning Assets ............                                      8.82                                     7.17
Net Yield on Interest-Earning
  Assets .............................                                     15.55                                     4.85

<CAPTION>
                                               GRUPO GALICIA, FISCAL YEAR ENDED DECEMBER 31, 2001
                                         -----------------------------------------------------------
                                                                                              TOTAL
                                         -----------------------------------------------------------
                                                                      INTEREST               AVERAGE
                                            AVERAGE                    EARNED/                YIELD/
                                            BALANCE                     PAID                   RATE
-----------------------------------------------------------------------------------------------------
                                        (in millions of February 28, 2003, constant pesos, except rates)
<S>                                       <C>                        <C>                     <C>
ASSETS

Government Securities ................    Ps. 2,531.3                Ps.   277.4                10.96%
Loans
   Private Sector ....................       13,743.3                    2,178.5                15.85
   Public Sector .....................        6,259.0                    1,027.5                16.42
                                          -----------                -----------             --------
Total Loans ..........................       20,002.3                    3,206.0                16.03
Other ................................        4,720.6                      325.7                 6.90
                                          -----------                -----------             --------
TOTAL INTEREST-EARNING ASSETS ........       27,254.2                    3,809.1                13.98%
Cash and Gold ........................          754.4                          -                    -
Equity in Other Companies ............          625.3                          -                    -
Other Assets .........................        4,094.5                          -                    -
Allowances ...........................         (761.0)                         -                    -
                                          -----------                -----------             --------
TOTAL ASSETS .........................    Ps.31,967.4                          -                    -

LIABILITIES AND EQUITY

Deposits
   Current Accounts ..................    Ps.   739.9                Ps.    52.8                 7.14%
   Saving Accounts ...................        2,421.6                       38.3                 1.58
   Time Deposits .....................       14,250.3                    1,388.5                 9.74
                                          -----------                -----------             --------
TOTAL INTEREST-BEARING DEPOSITS ......       17,411.8                    1,479.6                 8.50
Argentine Central Bank ...............          149.7                       13.9                 9.29
Other Financial Entities .............        1,708.5                      147.2                 8.62
Debt Securities ......................        2,934.2                      245.7                 8.37
Other ................................        1,843.1                      139.0                 7.54
                                          -----------                -----------             --------
TOTAL INTEREST-BEARING
  LIABILITIES ........................       24,047.3                    2,025.4                 8.42%
Demand deposits ......................        1,201.4                          -                    -
Other Liabilities ....................        3,406.0                          -                    -
Minority Interests ...................          259.3                          -                    -
Shareholders' Equity .................        3,053.4                          -                    -
                                          -----------                -----------             --------
TOTAL LIABILITIES AND EQUITY .........    Ps.31,967.4                          -                    -
SPREAD AND NET YIELD
Interest Rate Spread .................                                                           5.56%
Cost of Funds Supporting
  Interest-Earning Assets ............                                                           7.43
Net Yield on Interest-Earning
  Assets .............................                                                           6.54
</TABLE>

                                      -54-

<PAGE>

CHANGES IN NET INTEREST INCOME--VOLUME AND RATE ANALYSIS

         The table on the following page allocates, by currency, changes in
Grupo Galicia's consolidated interest income and interest expenses between
changes in the average volume of interest-earning assets and interest-bearing
liabilities and changes in their respective nominal interest rates for (i) the
fiscal year ended December 31, 2003 compared with the fiscal year ended December
31, 2002; and (ii) the fiscal year ended December 31, 2002, compared with the
fiscal year ended December 31, 2001. Differences related to rate or volume are
allocated proportionally to the rate variance and the volume variance,
respectively.

                                      -55-

<PAGE>

<TABLE>
<CAPTION>
                                       FISCAL YEAR 2003/ FISCAL YEAR 2002,                FISCAL YEAR 2002/ FISCAL YEAR 2001,
                                      INCREASE (DECREASE) DUE TO CHANGES IN              INCREASE (DECREASE) DUE TO CHANGES IN
                                     -----------------------------------------        -------------------------------------------
                                      VOLUME          RATE         NET CHANGE          VOLUME            RATE          NET CHANGE
                                     -----------------------------------------        --------------------------------------------
                                               (in millions of pesos)             (in millions of February 28, 2003, constant pesos)
<S>                                  <C>          <C>             <C>                 <C>              <C>             <C>
INTEREST EARNING ASSETS
Government securities
      Pesos..................        Ps. (81.8)   Ps.   (108.6)   Ps.   (190.4)       Ps.   186.6      Ps.   20.2      Ps.   206.8
      Dollars................              8.5           (45.2)          (36.7)             (70.1)         (115.5)          (185.6)
                                     -----------------------------------------        --------------------------------------------
Total .......................            (73.3)         (153.8)         (227.1)             116.5           (95.3)            21.2
Loans
Private Sector
      Pesos..................           (484.9)         (154.6)         (639.5)             282.3            76.6            358.9
      Dollars................             25.2           (38.1)          (12.9)            (632.8)         (457.4)        (1,090.2)
                                     -----------------------------------------        --------------------------------------------
Total .......................           (459.7)         (192.7)         (652.4)            (350.5)         (380.8)          (731.3)
Public Sector
      Pesos..................           (236.9)       (2,377.4)       (2,614.3)           2,856.5            51.9          2,908.4
      Dollars................                -               -               -             (489.6)         (489.4)          (979.0)
                                     -----------------------------------------        --------------------------------------------
Total .......................           (236.9)       (2,377.4)       (2,614.3)           2,366.9          (437.5)         1,929.4
Other
      Pesos..................             (9.7)         (378.0)         (387.7)             288.8           151.8            440.6
      Dollars................            (38.2)          (59.0)          (97.2)          (2,207.0)        2,051.1           (155.9)
                                     -----------------------------------------        --------------------------------------------
Total .......................            (47.9)         (437.0)         (484.9)          (1,918.2)        2,202.9            284.7
TOTAL INTEREST-EARNING ASSETS
      Pesos..................           (813.3)       (3,018.6)       (3,831.9)           3,614.2           300.5          3,914.7
      Dollars................             (4.5)         (142.3)         (146.8)          (3,399.5)          988.8         (2,410.7)
                                     -----------------------------------------        --------------------------------------------
TOTAL .......................        Ps.(817.8)   Ps. (3,160.9)   Ps. (3,978.7)       Ps.   214.7      Ps.1,289.3      Ps. 1,504.0
                                     -----------------------------------------        --------------------------------------------
INTEREST BEARING LIABILITIES
Demand Account
      Pesos..................              2.9           (17.0)          (14.1)                 -               -                -
      Dollars................                -            (0.4)           (0.4)             (19.0)          (16.3)           (35.3)
                                     -----------------------------------------        --------------------------------------------
Total .......................              2.9           (17.4)          (14.5)             (19.0)          (16.3)           (35.3)
Saving Account
      Pesos..................             (4.8)            1.6            (3.2)                 -           (10.3)           (10.3)
      Dollars................             (0.9)           (1.6)           (2.5)              (9.8)           (9.1)           (18.9)
                                     -----------------------------------------        --------------------------------------------
Total .......................             (5.7)            0.0            (5.7)              (9.8)          (19.4)           (29.2)
Time Deposits
      Pesos..................           (247.4)         (736.1)         (983.5)             110.1           783.3            893.4
      Dollars................            (52.6)          (41.2)          (93.8)            (510.2)         (437.0)          (947.2)
                                     -----------------------------------------        --------------------------------------------
Total .......................           (300.0)         (777.3)       (1,077.3)            (400.1)          346.3            (53.8)
With the Argentine Central Bank
      Pesos..................            331.4        (2,096.0)       (1,764.6)           2,149.4            77.5          2,226.9
      Dollars................                -            (0.1)           (0.1)              (1.7)           (1.3)            (3.0)
                                     -----------------------------------------        --------------------------------------------
Total .......................            331.4        (2,096.1)       (1,764.7)           2,147.7            76.2          2,223.9
With Other Financial Entities
      Pesos..................             (3.2)           43.3            40.1               18.1            (2.6)            15.5
      Dollars................            (49.8)          (45.3)          (95.1)              75.8             7.4             83.2
                                     -----------------------------------------        --------------------------------------------
Total .......................            (53.0)           (2.0)          (55.0)              93.9             4.8             98.7
Negotiable Obligations
      Pesos..................             (0.3)           (2.1)           (2.4)               2.4               -              2.4
      Dollars................              8.1            (3.1)            5.0              (29.2)          (67.3)           (96.5)
                                     -----------------------------------------        --------------------------------------------
Total........................              7.8            (5.2)            2.6              (26.8)          (67.3)           (94.1)
Other liabilities
      Pesos..................           (158.4)          (32.8)         (191.2)             200.5             0.1            200.6
      Dollars................            (21.2)          (49.0)          (70.2)             (19.2)            9.0            (10.2)
                                     -----------------------------------------        --------------------------------------------
Total .......................           (179.6)          (81.8)         (261.4)             181.3             9.1            190.4
TOTAL INTEREST BEARING LIABILITIES
      Pesos..................            (79.8)       (2,839.1)       (2,918.9)           2,480.5           848.0          3,328.5
      Dollars................           (116.4)         (140.7)         (257.1)            (513.3)         (514.6)        (1,027.9)
                                     -----------------------------------------        --------------------------------------------
TOTAL .......................        Ps.(196.2)   Ps. (2,979.8)   Ps. (3,176.0)       Ps. 1,967.2      Ps.  333.4      Ps. 2,300.6
</TABLE>

                                      -56-

<PAGE>

INTEREST-EARNING ASSETS--NET YIELD ON INTEREST-EARNING ASSETS

         The following table analyzes, by currency of denomination, the levels
of Grupo Galicia's and Banco Galicia's average interest-earning assets and net
interest earned, and illustrates the net yields and spreads obtained, for each
of the periods indicated.

<TABLE>
<CAPTION>
                                                                                           GRUPO GALICIA
                                                                    -----------------------------------------------------------
                                                                                  FISCAL YEAR ENDED DECEMBER 31,
                                                                    -----------------------------------------------------------
                                                                            2003                  2002                 2001
                                                                    -----------------------------------------------------------
                                                                     (in millions of        (in millions of February 28, 2003,
                                                                    pesos, except rates)       constant pesos, except rates)
<S>                                                                     <C>                   <C>                   <C>
TOTAL AVERAGE INTEREST-EARNING ASSETS
     Pesos......................................................        Ps. 12,130.3          Ps. 15,187.1          Ps. 4,308.2
     Dollars....................................................             8,594.8              11,766.4             22,946.0
                                                                        -------------------------------------------------------
TOTAL...........................................................            20,725.1              26,953.5             27,254.2
NET INTEREST EARNED (1)
     Pesos......................................................               343.0               1,256.0                669.8
     Dollars....................................................              (158.6)               (268.9)             1,113.9
                                                                        -------------------------------------------------------
TOTAL...........................................................               184.4                 987.1              1,783.7
NET YIELD ON INTEREST-EARNING ASSETS (2) (%)
     Pesos......................................................                2.83%                 8.27%               15.55%
     Dollars....................................................               (1.85)                (2.29)                4.85
WEIGHTED-AVERAGE YIELD..........................................                0.89                  3.66                 6.54
INTEREST SPREAD, NOMINAL BASIS (3) (%)
     Pesos......................................................                2.22                  2.31                13.95
     Dollars....................................................               (2.42)                (2.82)                3.96
WEIGHTED-AVERAGE YIELD..........................................                0.27                  0.82                 5.56
NET YIELD ON INTEREST-EARNING ASSETS, REAL BASIS (4) (%)
     Pesos......................................................                   -                (50.44)                   -
     Dollars....................................................                   -                 50.43                    -
WEIGHTED-AVERAGE YIELD..........................................                   -                 (6.41)                   -
INTEREST SPREAD, REAL BASIS (4) (%)
     Pesos......................................................                   -                  1.06                    -
     Dollars....................................................                   -                 (4.33)                   -
WEIGHTED-AVERAGE YIELD..........................................                   -                 (4.41)                   -
                                                                        =======================================================
</TABLE>

(*)      Rates have been annualized.

(1)      Net interest earned corresponds to the Group's or the Bank's net
         financial income plus:

         -  Credit related fees (included in "Income from Services - In Relation
            to Lending Transactions" in the Income Statement) - Contributions to
            the deposit insurance system, and contributions and taxes on
            financial income included in the income statement line "Financial
            Expenses - Other," less:

         -  Net income from the corporate securities included under "Financial
            Income/Expenses- Interest Income and Holdings Gains/Losses from
            Government and Corporate Securities," in the income statement and

         -  Differences in quotation of gold and foreign currency and premiums
            on foreign currency transactions, included in "Financial
            Income/Expenses - Other," in the income statement.

(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.

(4)      Net interest margin and interest spread, presented on a real basis,
         when compared with the corresponding information presented on a nominal
         basis, reflect the gain or loss in purchasing power of the dollar
         caused by the difference between the pesos fluctuation and inflation in
         Argentina for each period.

GOVERNMENT AND CORPORATE SECURITIES

         The following table shows Grupo Galicia's holdings of government and
corporate securities at the balance sheet dates, and the breakdown of the
portfolio in accordance with the Argentine Central Bank classification system

                                      -57-

<PAGE>

and by the securities' currency of denomination. As of December 31, 2003, the
Bank's holdings of government and corporate securities were identical to its net
position as the Bank did not enter into any forward purchases or sales and no
spot transactions pending settlement were outstanding as of that date.

<TABLE>
<CAPTION>
                                                                                        GRUPO GALICIA,
                                                                       ---------------------------------------------
                                                                                      AS OF DECEMBER 31,
                                                                       ---------------------------------------------
                                                                             2003                        2002
                                                                       ---------------------------------------------
                                                                       (in millions of             (in millions of
                                                                            pesos)                February 28, 2003,
                                                                                                   constant pesos)
<S>                                                                     <C>                       <C>
GOVERNMENT SECURITIES
Pesos
     Trading..........................................................    Ps.   313.1                 Ps.     2.5
     Investments......................................................              -                           -
     Available for Sale...............................................              -                           -
     Unlisted Securities..............................................           79.3                       140.4
                                                                          ---------------------------------------
TOTAL GOVERNMENT SECURITIES IN PESOS..................................    Ps.   392.4                 Ps.   142.9
Dollars
     Trading..........................................................    Ps.    14.5                 Ps.     4.8
     Investments......................................................        2,485.1                     1,673.0
     Available for Sale...............................................              -                           -
     Unlisted Securities .............................................            6.9                         6.2
                                                                          ---------------------------------------
TOTAL GOVERNMENT SECURITIES IN DOLLARS................................    Ps. 2,506.5                 Ps. 1,684.0
                                                                          ---------------------------------------
TOTAL GOVERNMENT SECURITIES...........................................    Ps. 2,898.9                 Ps. 1,826.9
CORPORATE EQUITY SECURITIES (QUOTED)
     Pesos............................................................              -                           -
     Dollars..........................................................              -                           -
                                                                          ---------------------------------------
TOTAL CORPORATE EQUITY SECURITIES ....................................              -                           -
                                                                          ---------------------------------------
TOTAL GOVERNMENT AND CORPORATE EQUITY SECURITIES .....................    Ps. 2,898.9                 Ps. 1,826.9
MUTUAL FUNDS..........................................................              -                           -
CORPORATE DEBT SECURITIES
     Pesos............................................................    Ps.     0.2                 Ps.     0.2
     Dollars..........................................................            1.0                         2.7
                                                                          ---------------------------------------
TOTAL CORPORATE DEBT SECURITIES.......................................    Ps.     1.2                 Ps.     2.9
                                                                          ---------------------------------------
TOTAL GOVERNMENT AND CORPORATE SECURITIES ............................    Ps. 2,900.1                 Ps. 1,829.8
                                                                          =======================================
</TABLE>

         As of December 31, 2003, the Group's portfolio of government securities
amounted to Ps. 2,898.9 million. Of such total Ps. 2,897.3 million corresponded
to the Bank and the remaining Ps. 1.6 million to Sudamericana Holding S.A. The
Bank's total mainly comprised (i) peso-denominated Lebac for Ps. 305.5 million
(held for trading in the Argentine Central Bank classification system), (ii)
peso-denominated Fiscal Credit Certificates (unlisted) for Ps. 78.6 million, and
(iii) dollar-denominated Argentine Republic External Notes for Ps. 875.1 million
and BODEN 2012 for Ps. 1,610.0 million (held for investment in the Argentine
Central Bank classification system), all of them recorded by the Bank in
Argentina. The BODEN 2012 corresponded to the bonds actually received by the
Bank as compensation for the effects of asymmetric pesification (compensatory
and hedge bonds).

         The increase in the Group's holdings of government securities in 2003
over the Ps. 1,826.9 million held as of December 31, 2002, was mainly due to the
receipt by the Bank of additional compensatory BODEN 2012 during 2003, in the
amount of US$609.2 million of nominal BODEN 2012, net of US$137 million of
nominal BODEN 2012 transferred to Galicia Uruguay and used by the latter to
settle the exchange offer made to its depositors in 2003. This increase was
partially offset by the decrease in the exchange rate during 2003, from Ps.
3.336 as of December 31, 2002 to Ps. 2.933 as of December 31, 2003.

         The increase in the Group's holdings of government securities in 2002
as compared with the Ps. 273.2 million held as of December 31, 2001, was mainly
due to the recording in 2002, by the Bank, of BODEN 2012 as compensation for
asymmetric pesification, as established by Decrees No. 214/02, 494/02, 905/02
and 2167/02, the latter published in the Official Gazette on October 29, 2002.
See "--Main Regulatory Changes in 2002 and 2003--

                                      -58-

<PAGE>

Compensation to Financial Institutions." This increase was also attributable to
the increase in the exchange rate during 2002.

         The BODEN 2012 effectively received by the Bank are recorded as
government securities while the BODEN 2012 still to be received are recorded as
"Other Receivables from Financial Brokerage."

         In accordance with Argentine Central Bank rules, quoted government
securities held-for-trading purposes are carried at their Argentine closing
market quotation less estimated selling costs.

         Argentine Central Bank Communique "A" 3857, dated January 7, 2003,
established that financial institutions could record as investments, only those
securities incorporated to their balance sheets through December 31, 2002. After
that date, the value of any securities (except the compensatory and the hedge
bonds received and to be received according to applicable compensation rules or
other compensation to be received) incorporated into a bank's position will be
marked-to-market.

         As of December 31, 2003, in accordance with Argentine Central Bank
accounting rules, the Bank recorded the BODEN 2012 already received and its
right to acquire BODEN 2012 in the future as assets having equal value to 100%
of the face value of such BODEN 2012. The estimated market value of these assets
is significantly lower. As of June 25, 2004, the BODEN 2012 were trading at
approximately 66.90% of par value. See Item 3. "Key Information--Risk
Factors--Risk Factors Relating to the Bank--The Bank has recorded BODEN 2012 and
its rights to receive or acquire future BODEN 2012 as assets having a value
equal to the face amount of the BODEN 2012 received or to be received and
acquired, which does not reflect its actual market value," Item 3. "Key
Information--Risk Factors--Risk Factors Relating to the Bank--There is a
possibility that the Bank receives less BODEN 2012 from the Argentine government
than it believes it is entitled to receive," and Item 3. "Key Information--Risk
Factors--Risk Factors Relating to the Bank--The BODEN 2012 may be subject to
subsequent renegotiation." The Argentine Republic External Notes were held for
investment and carried at their face value.

         The Argentine Republic External Notes and the Tax Credit Certificates
are in payment default.

         Through its Communique "A" 3278, the Argentine Central Bank established
that effective June 1, 2001, quoted government securities in investment accounts
had to be valued at their acquisition cost increased by accruing their internal
rate of return over the period elapsed since the date of inclusion of the
securities in the investment account category. This was also applicable to the
securities incorporated in investments accounts prior to June 1, 2001. In this
case, the acquisition cost was established as their book value as of May 31,
2001, resulting from the previous valuation rules. The change in valuation rules
was not be retroactive nor should it generate any accounting adjustments. For
government securities previously included in trading accounts, the cost value is
their closing market value as of the day before their transfer to an investment
account. In accordance with Argentine Central Bank rules, the carrying value of
investment-account securities must be reduced at each month end for the positive
difference between their book value and their market value increased by 20%.

         For the securities received by financial institutions as compensation
for the effects of asymmetric pesification under the provisions of Decrees No.
905/02 and No. 2167/02 carried at their face value (in the Bank's case, BODEN
2012), the reduction mentioned in the preceding paragraph for the difference
between book value and market value increased by 20.0% is not applicable.
However, on October 29, 2002, Argentine Central Bank Communique "A" 3785
restricted the distribution of cash dividends by establishing that banks should
adjust their earnings to be distributed as cash dividends with the difference
between the market value and the carrying value of these bonds.

         Beginning March 1, 2000, quoted government securities classified as
investments began to be carried at their acquisition cost increased at the end
of each service period by the corresponding coupon rate.

         Unquoted government securities are carried at the lower of cost or net
realizable value plus any applicable contractual adjustments for movements in
price indices, or at their technical values, which are government-published
schedules of value that increase over the term of the security.

                                      -59-

<PAGE>

         We also own, manage and trade a portfolio of corporate securities.
Unquoted corporate debt securities are carried at the residual value plus
accrued interest. Quoted corporate debt and equity securities are considered as
held for trading and, therefore, are carried at market value.

                                      -60-

<PAGE>

         The following table analyzes the remaining maturity and
weighted-average yield of Grupo Galicia's holdings of investment and trading
government and corporate securities as of December 31, 2003. The Group's
investment and trading portfolio yields do not contain any tax equivalency
adjustments.

<TABLE>
<CAPTION>
                                                                             MATURITY YIELD
                               -----------------------------------------------------------------------------------------------------
                                                                                                                MATURING
                                                                                          MATURING AFTER 1   AFTER 5 YEARS  MATURING
                                                     PAST                  MATURING      YEAR BUT WITHIN 5   BUT WITHIN 10   AFTER
                                                DUE/CALLABLE            WITHIN 1 YEAR          YEARS              YEARS     10 YEARS
                               -----------------------------------------------------------------------------------------------------
                                TOTAL BOOK    BOOK         BOOK                 BOOK     YIELD     BOOK        YIELD   BOOK   YIELD
                                  VALUE       VALUE        VALUE    YIELD (1)   VALUE     (1)      VALUE        (1)    VALUE   (1)
                               -----------------------------------------------------------------------------------------------------
                                                                   (in millions of pesos)
<S>                            <C>          <C>         <C>         <C>       <C>        <C>     <C>           <C>     <C>    <C>
GOVERNMENT SECURITIES
 HELD FOR TRADING
 AND BROKERAGE PURPOSES
 (CARRIED AT MARKET VALUE)
  Pesos....................... Ps.   313.1  Ps.   2.8   Ps. 298.7      10.6%  Ps.  11.6    9.1%          -         -     -       -
  Dollars                             14.5        0.7         1.7       0.6         6.6    1.6   Ps.   5.5       1.6%    -       -
HELD FOR INVESTMENT
 (CARRIED AT AMORTIZED COST)
  Pesos.......................           -          -           -         -           -      -           -         -     -       -
  Dollars.....................     2,485.1      875.1           -         -       805.0    1.6       805.0       1.6     -       -
UNLISTED SECURITIES
  Pesos.......................        79.3          -         0.7       9.0        78.6   47.7           -         -     -       -
  Dollars.....................         6.9          -           -         -         2.6    1.3         4.3       1.3     -       -
TOTAL GOVERNMENT SECURITIES... Ps. 2,898.9  Ps. 878.6   Ps. 301.1      10.6%  Ps. 904.4    5.7%  Ps. 814.8       1.6%    -       -
CORPORATE DEBT SECURITIES.....         1.2          -           -         -         0.2      -         1.0         -     -       -
MUTUAL FUNDS..................           -          -           -         -           -      -           -         -     -       -
TOTAL PORTFOLIO............... Ps. 2,900.1  Ps. 878.6   Ps. 301.1      10.6%  Ps. 904.6    5.7%  Ps. 815.8       1.6%    -       -
</TABLE>

(1)      Effective yield based on December 31, 2003 quoted market values.

LOAN PORTFOLIO

         The following table analyzes Banco Galicia's loan portfolio by type of
loan and total loans with guarantees. Total loans reflect the Bank's loan
portfolio including past due principal amounts.

<TABLE>
<CAPTION>
                                                                      AS OF DECEMBER 31,                        AS OF JUNE 30,
                                                --------------------------------------------------------   -------------------------
                                                    2003           2002           2001           2000          2000         1999
                                                ------------------------------------------------------------------------------------
                                               (in millions
                                                  of pesos )               (in millions of February 28, 2003, constant pesos)
<S>                                             <C>            <C>            <C>           <C>            <C>          <C>
Principal and Interest
Nonfinancial Public Sector...................   Ps.  7,751.4   Ps.  7,634.7   Ps.  8,669.7  Ps.  5,762.7   Ps. 5,516.8  Ps. 4,247.4
Local Financial Sector.......................          194.7          134.8          190.8       1,121.4         795.9        939.8
Nonfinancial Private Sector and Residents
 Abroad (1)
   Advances...................................         219.1          227.0          811.1         968.0       1,742.7      1,505.4
   Notes......................................       1,387.8        1,544.3        3,888.9       4,948.6       5,408.8      4,766.8
   Mortgage Loans.............................         719.6          864.0        3,298.2       3,504.6       2,991.9      2,780.8
   Pledge Loans...............................          54.6          191.5          841.8         875.9         858.5        905.0
   Personal Loans.............................          55.2          120.0          583.4         812.0         728.0        674.0
   Credit-Cards Loans.........................         818.8          585.0        1,875.3       1,667.1       1,445.0      1,230.9
   Placements in Correspondent Banks..........         172.4          158.3          377.5         770.6       1,229.5      1,679.7
   Other Loans................................         217.9          251.4          196.0         271.6         178.7        262.8
   Accrued Interest, Adjustment and
     Quotation Differences Receivable.........         523.1          608.5          392.1         353.5         313.6        290.0
   Documented Interest........................          (2.5)         (10.8)         (55.1)        (96.9)        (81.3)       (80.0)
                                                ------------   ------------   ------------  ------------  ------------  -----------
Total ........................................      12,112.1       12,308.7       21,069.7      20,959.1      21,128.1     19,202.6
Allowance for Loan Losses.....................      (1,177.3)      (1,681.8)      (1,050.3)       (596.0)       (576.9)      (591.2)
                                                ------------   ------------   ------------  ------------  ------------  -----------
TOTAL LOANS...................................  Ps. 10,934.8   Ps. 10,626.9   Ps. 20,019.4  Ps. 20,363.1  Ps. 20,551.2  Ps.18,611.4
                                                ------------   ------------   ------------  ------------  ------------  -----------
</TABLE>

                                      -61-

<PAGE>

<TABLE>
<CAPTION>
                                                                      AS OF DECEMBER 31,                        AS OF JUNE 30,
                                                --------------------------------------------------------   -------------------------
                                                    2003           2002           2001           2000           2000          1999
                                                ------------------------------------------------------------------------------------
                                               (in millions
                                                  of pesos )               (in millions of February 28, 2003, constant pesos)
<S>                                             <C>            <C>            <C>           <C>            <C>           <C>
Secured Loans
   With Preferred Guarantees (2) (3)..........  Ps.  1,228.8   Ps.  9,280.5   Ps. 13,389.8  Ps.  8,677.9   Ps.  9,128.3  Ps. 8,519.3
   Other Guarantees (3).......................       8,636.7          523.0        1,689.8       2,192.4        2,008.5      2,111.3
                                                ------------   ------------   ------------  ------------   ------------  -----------
TOTAL SECURED LOANS...........................  Ps.  9,865.5   Ps.  9,803.5   Ps. 15,079.6  Ps. 10,870.3   Ps. 11,136.8  Ps.10,630.6
                                                ============   ============   ============  ============   ============  ===========
</TABLE>

(1) Categories of loans above include:

       - Advances: short-term obligations drawn on by customers
       through overdrafts. Also, prefinancing of exporters and other
       customers in connection with documents evidencing the future
       receipt of cash.

       - 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, were such collateral is an
       integral part of the loan documents.

       - Personal loans: loans to individuals.

       - Credit Cards Loans: loans granted through credit cards to
       credit card holders.

       - Placements in correspondent banks: short-term loans to other
       banks and short-term loans from Banco Galicia Uruguay S.A. to
       major international banks outside of Uruguay.

       - 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 the priority right, endorsements of the Federal Office of the
    Secretary of Finance, pledges of Argentine Government securities, or
    gold or cash collateral.

(3) Pursuant to Argentine Central Bank Communique "A" 3918, beginnning in
    April 2003, tax revenues shared by the national government and the
    provinces ceased to be considered "Preferred Guarantees."

         As of December 31, 2003, and since 2002, loans to the nonfinancial
public sector have represented the Bank's most important loan portfolio.

         As of December 31, 2003, the portfolio of loans to the nonfinancial
public sector, valued pursuant to Argentine Central Bank Communique "A" 3911,
amounted to Ps. 7,751.4 million (principal amount, adjustment and interests)
valued at their present value calculated by applying a 3.0% discount rate in
accordance with Argentine Central Bank Communique "A" 3911. Of this total
amount:

(i)      Ps. 4,277.7 million were secured loans created by Decree No. 1387/01,
         which the Bank received in exchange for its eligible portfolio of debt
         instruments of the national government, including bonds and loans to
         the national government, the terms and conditions of which were later
         modified by the government, including their pesification.

(ii)     Ps. 3,473.7 million were secured loans created by Decree No. 1579/02,
         which the Bank received in exchange for its portfolio of loans to the
         provincial governments and for the loans made to such governments
         through the FFAEFyS. This amount included Ps. 22.0 million of a loan
         for which the exchange had not been completed as of December 31, 2003.
         The Bank tendered in the exchange under Decree No. 1579/02 all of its
         portfolio of loans to provincial governments and opted to exchange all
         of the BOGAR to be received in the exchange for promissory notes. As of
         December 31, 2003, the Bank had received BOGAR for the provincial debt
         for which the exchange had been completed and after the close of the
         fiscal year it received BOGAR for the remaining portion of provincial
         debt. As of the date of this annual report, the Bank has not yet
         received the promissory notes but expects to receive them in the
         future.

         The application in 2003 of Communique "A" 3911 reduced by Ps. 198.1
million the book value of the Bank's secured loan portfolio. For a description
of the valuation methodology introduced by Communique

                                      -62-

<PAGE>

"A"3911, see "--Argentine Banking System and Regulation--Argentine Banking
Regulation--Valuation of Public-Sector Assets" and Item 5. "Operating and
Financial Review and Prospects--Item 5A. Operating Results--Results of
Operations of Grupo Galicia for the Fiscal Years Ending December 31, 2003,
December 31, 2002 and December 31, 2001."

         As of the date of this annual report, all of the secured loans are
current.

         As of December 31, 2003, loans to the financial public sector amounted
to Ps. 194.7 million and the remaining Ps. 4,166.0 million corresponded to gross
loans (plus adjustments and accrued interest) to the nonfinancial private
sector. Net loans to the private sector amounted to Ps. 2,988.7 million.

         The nominal and relative decrease of the portfolio of loans to the
private sector in 2002 and 2003, as compared to pre-crisis periods, is related
to their pesification at the Ps. 1.0 per U.S. dollar parity and to the
exceptions provided for by the regulations in connection with the applicability
of the adjustment by the CER and their adjustment mostly by the CVS, beginning
in September 2003 only. This decrease also reflects payments and prepayments
made by private-sector debtors (in part, in 2002, by using their restructured
deposits held at the Bank to pay off such loans), while certain secured loans
begin to amortize in 2005 only. In addition this decrease reflects the fact that
most loans to the private sector were not adjusted by an index (until 2003)
while the previous periods figures where restated by using the WPI variation.
Similarly, the decrease in the private sector portfolio was also the consequence
of the securitization or sale of part of the Bank's loan portfolio in the first
half of 2002 in order to restore the Bank's liquidity within the framework of
the Galicia capitalization and liquidity plan.

         During 2003, the only type of loan to the private sector that showed an
increase was credit-card lending, which increase was mainly the result of an
increase in the loan portfolio of the regional credit card companies.

         The decrease in the amount of secured loans during 2002 was mainly due
to: (i) the sale of secured loans to the "Secured Loans Trust" in exchange for
cash as part of the Galicia capitalization and liquidity plan (see Item 5.
"Operating and Financial Review and Prospects--Item 5A. Operating
Results--Securitization of Assets"); (ii) to the use of secured loans to acquire
the government securities that were delivered to depositors with the Bank that
participated in the exchange of restructured deposits for government securities
("Canje I") established by Decree No. 905/02, which was settled in December 2003
(see "--Main Regulatory Changes in 2002 and 2003--Deposits"); and (iii) to the
recording of the secured loans granted as collateral of the loan from FFAEFyS as
"Miscellaneous Receivables (see Item 5. "Operating and Financial Review and
Prospects--Item 5A. Operating Results--Consolidated Assets").

         In 2001, through Decree No. 1387/03, the government offered to swap
voluntarily debt instruments (bonds and loans) held by local investors
representing an exposure to the national and provincial governments for secured
loans. The Bank decided to swap all of its eligible portfolio of government
securities and loans made to the national and provincial public sectors in
exchange for secured loans. The swap of debt instruments originally representing
an exposure to the national public sector was completed on November 6, 2001. The
swap of eligible debt instruments originally representing an exposure to the
provinces was not completed until late 2003. As of December 31, 2001, the Bank
had recorded the provincial loans in accordance with the applicable terms and
conditions of the new secured loans to be received.

         Once the Argentine currency devaluation was effective in January 2002,
Decree No. 471/02 enacted on March 13, 2002, established that obligations
denominated in U.S. dollars of the national, provincial and municipal public
sectors outstanding as of February 3, 2002 would be converted into pesos at the
exchange rate of Ps. 1.40 per U.S. dollar and would be adjusted by the CER.
Moreover, said Decree established that public sector's obligations would bear a
fixed annual interest rate ranging from 3.0% to 5.5% depending on their average
life.

         Decree No. 1579, dated August 28, 2002, established a new restructuring
of provincial government debt. The restructuring consisted of a voluntary
exchange of provincial government debt for bonds ("BOGAR") or loans (promissory
notes), issued by the FFAEFyS and secured by the federal government's tax
receipts shared with the provinces, with a 16-year term, a 2% fixed annual
interest rate and amortization in 156 monthly and consecutive installments
beginning on March 4, 2005. This Decree included as eligible for tender in the
exchange the financial assistance provided to provincial governments through
loans the FFAEFyS, a portfolio that was not eligible under

                                      -63-

<PAGE>

the provisions of Decree No. 1387/01. The Bank tendered in the exchange under
Decree No. 579/02 all of its portfolio of loans to provincial governments and
pursuant to the option provided by section 3, subsection k of the Decree, opted
to exchange all of the BOGAR to be received in the exchange for promissory
notes.

         Loans by Type of Borrower

         The following table analyzes the breakdown of Banco Galicia's total
loan portfolio, by type of borrower at December 31, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
                                                                                   AS OF DECEMBER 31,
                                                  ----------------------------------------------------------------------------------
                                                             2003                         2002                       2001
                                                  ----------------------------------------------------------------------------------
                                                     AMOUNT      % OF TOTAL       AMOUNT       % OF TOTAL    AMOUNT       % OF TOTAL
                                                  ----------------------------------------------------------------------------------
                                                  (in millions of pesos)      (in millions of February 28, 2003, constant pesos)
<S>                                               <C>            <C>           <C>             <C>         <C>            <C>
  Corporate................................       Ps.  1,820.4       15.03%    Ps.  2,130.8       17.31%   Ps.  2,728.6       12.95%
  Middle-Market Companies .................              850.3        7.02            890.1        7.23         3,129.8       14.85
Commercial Loans...........................            2,670.7       22.05          3,020.9       24.54         5,858.4       27.80
Individuals................................            1,324.7       10.94          1,297.7       10.54         4,466.0       21.20
Financial Sector (1).......................              357.4        2.95            172.0        1.40           658.6        3.13
Non Financial Public Sector................            7,751.4       64.00          7,634.7       62.03         8,669.7       41.15
Other Loans................................                7.9        0.06            183.4        1.49         1,417.0        6.72
                                                  ---------------------------------------------------------------------------------
TOTAL (2)..................................       Ps. 12,112.1      100.00%    Ps. 12,308.7      100.00%   Ps. 21,069.7      100.00%
                                                  ---------------------------------------------------------------------------------
</TABLE>

(1) Includes local and international financial sector. Financial Sector loans
    are primarily composed by interbank loans(call money loans), overnight
    deposit at international money center banks and loans to provincial banks.

(2) Before the allowance for loan losses.

                                      -64-
<PAGE>
      Loans by Economic Activity

      The following table sets forth at the dates indicated an analysis of Banco
Galicia's loan portfolio according to the borrowers' main economic activity.
Figures include principal and interest.

<TABLE>
<CAPTION>
                                                              AS OF DECEMBER 31,
                                      ---------------------------------------------------------------
                                              2003                 2002                  2001
                                      ---------------------------------------------------------------
                                                      % OF               % OF                % OF
                                           AMOUNT    TOTAL    AMOUNT    TOTAL     AMOUNT     TOTAL
                                      ---------------------------------------------------------------
                                        (in millions of
                                         pesos, except      (in millions of February 28, 2003,
                                          percentages)      constant pesos, except percentages)
<S>                                   <C>           <C>     <C>         <C>      <C>         <C>
Financial Sector...................   Ps.   357.4     2.95% Ps.   172.0    1.40% Ps.   658.6     3.13%
Services
  Nonfinancial Government Sector...       7,751.4    64.00      7,634.7   62.03      8,669.7    41.15
  Comunic., Transportation Health
  and Others                                320.2     2.64        334.1    2.71        594.5     2.82
  Electricity, Gas, Water
  Supply and Sewage Services.......         239.0     1.97        235.8    1.92        344.4     1.63
  Other Financial Services.........         362.2     2.99        548.5    4.45        399.3     1.90
                                      -----------   ------  ----------- -------  -----------  -------
    Total..........................       8,672.8    71.60      8,753.1   71.11     10,007.9    47.50
Primary Products
  Agriculture and Livestock........         389.6     3.22        464.5    3.77       1370.2     6.50
  Fishing, Forestry and Mining.....          93.0     0.77         91.1    0.74         94.7     0.45
                                      -----------   ------  ----------- -------  -----------  -------
   Total...........................         482.6     3.99        555.6    4.51      1,464.9     6.95
Consumer...........................       1,258.5    10.39      1,106.4    8.99      4,466.0    21.20
Retail Trade.......................         278.5     2.30        276.4    2.25        633.3     3.01
Wholesale Trade....................          67.7     0.56         67.6    0.55        247.0     1.17
Construction.......................         404.2     3.34        513.0    4.17        915.3     4.34
Manufacturing
  Foodstuffs.......................         166.7     1.38        205.0    1.66        484.8     2.30
  Transportation Materials.........          18.6     0.15         27.9    0.23         92.3     0.44
  Chemicals and Oil................         109.5     0.90        110.6    0.90        286.2     1.36
  Manufacturing Industries.........         235.0     1.94        391.9    3.18        797.5     3.78
                                      -----------   ------  ----------- -------  -----------  -------
   Total...........................         529.8     4.37        735.4    5.97      1,660.8     7.88
Other Loans (1)....................          60.6     0.50        129.2    1.05      1,015.9     4.82
                                      -----------   ------  ----------- -------  -----------  -------
  TOTAL (2)........................   Ps.12,112.1   100.00% Ps.12,308.7  100.00% Ps.21,069.7   100.00%
                                      -----------   ------  ----------- -------  -----------  -------
</TABLE>

(1) "Other loans" is an Argentine Central Bank classification that primarily
    includes loans in judicial proceedings.

(2) Before the allowance for loan losses.

      In the table above, the loans that are identified as consumer loans are
classified as consumer loans for purposes of the Argentine Central Bank
classification and provisioning system. All of the other loans represent
commercial loans for the purpose of the Argentine Central Bank's classification
and provisioning system. See " -- Argentine Central Bank's Loan Classification
and Loan Loss Provisions."

                                      -65-

<PAGE>

      Maturity Composition of the Loan Portfolio

      The following table sets forth an analysis by type of loan and time
remaining to maturity of Banco Galicia's loan portfolio before deducting the
allowance for loan losses at December 31, 2003.

<TABLE>
<CAPTION>
                                                            AFTER 6
                                                 AFTER 1    MONTHS         AFTER 1     AFTER 3
                                                MONTH BUT     BUT         YEAR BUT    YEARS BUT                 TOTAL AT
                                     WITHIN 1    WITHIN 6  WITHIN 12      WITHIN 3    WITHIN 5      AFTER 5     DECEMBER
                                      MONTH      MONTHS     MONTHS          YEARS       YEARS        YEARS      31, 2003
                                   ----------   ---------  ---------      ---------   ---------   -----------  -----------
                                                               (in millions of pesos)
<S>                                <C>          <C>        <C>            <C>         <C>         <C>          <C>
Nonfinancial Public Sector (1)....          -           -  Ps.   0.6      Ps. 335.9   Ps. 424.6   Ps. 6,990.3  Ps. 7,751.4
Financial Sector (1).............. Ps.  144.1   Ps.   6.2        7.4           29.6         7.4             -        194.7
Private Sector and Residents
Abroad............................    2,630.4       334.4      213.7          412.0       254.4         321.1      4,166.0
   - Advances.....................      183.7        34.1        0.4            0.9           -             -        219.1
   - Promissory Notes.............      674.7       230.5      132.3          183.7       102.1          64.5      1,387.8
   - Mortgages Loans..............       41.5        41.5       56.4          195.7       150.3         234.2        719.6
   - Pledge Loans.................       16.7         8.4        9.8           17.7         1.8           0.2         54.6
   - Personal Loans...............        7.3        19.3       14.7           13.9           -             -         55.2
   - Credit-Cards Loans...........      818.8           -          -              -           -             -        818.8
   - Other Loans..................      367.7         0.6        0.1            0.1         0.2          22.2        390.9
   - Accrued Interest and
      Quotation Differences
      Receivable (1)..............      523.1           -          -              -           -             -        523.1
   - (Documented Interest)........       (2.5)          -          -              -           -             -         (2.5)
   - (Unallocated Collections)....       (0.6)          -          -              -           -             -         (0.6)
Allowance for Loan Losses (2).....   (1,177.3)          -          -              -           -             -     (1,177.3)
                                   ----------   ---------  ---------      ---------   ---------   -----------  -----------
TOTAL LOANS, NET.................. Ps.1,597.2   Ps. 340.6  Ps. 221.7      Ps. 777.5   Ps. 686.4   Ps. 7,311.4  Ps.10,934.8
                                   ==========   =========  =========      =========   =========   ===========  ===========
</TABLE>

(1)   Interests and CER adjustment were assigned to the first month.

(2)   The allowances were assigned to the first month like past due loans and
      loans in judicial proceedings.

      In the table above, consumer loans as classified by the Argentine Central
Bank consist of personal loans, credit card loans, as well as certain portions
of advances, mortgage loans and pledge loans.

      Interest Rate Sensitivity of Outstanding Loans as of December 31, 2003

      The following table presents the interest rate sensitivity of Banco
Galicia's outstanding loans as of December 31, 2003.

<TABLE>
<CAPTION>
                                                                        (in millions of pesos)             AS A % OF TOTAL LOANS
                                                                        ------------------------           ---------------------
<S>                                                                     <C>                                <C>
Variable Rate (1)(2)
       Pesos......................................................         Ps.  7,511.8                            81.31%
       Dollars....................................................                289.4                             3.13
                                                                           ------------                            -----
    TOTAL.........................................................         Ps.  7,801.2                            84.44%
Fixed Rate (2)(3)
       Pesos......................................................         Ps.    831.1                             9.00%
       Dollars....................................................                606.0                             6.56
                                                                           ------------                            -----
    TOTAL.........................................................         Ps.  1,437.1                            15.56%
Past Due Loans
       Pesos......................................................         Ps.  1,291.0                            13.97%
       Dollars....................................................                 11.9                             0.13
                                                                           ------------                            -----
    TOTAL.........................................................         Ps.  1,302.9                            14.10
                                                                           ============                            =====
</TABLE>

(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.

                                      -66-

<PAGE>

CREDIT REVIEW PROCESS

      Credit risk is the potential for financial loss resulting from the failure
of a borrower to honor its financial contractual obligations. Credit risk at
Grupo Galicia arises mainly from Banco Galicia's lending activities and from the
fact that, in the normal course of its business, the Bank is a party to certain
financial transactions with off-balance sheet risk, mainly commitments to extend
credit and guarantees granted. See also Item 5. "Operating and Financial Review
and Prospects -- Item 5A. Operating Results -- Off-Balance Sheet Arrangements."

      The Bank's credit approval and credit risk analysis is a centralized
process based on the concept of "opposition of interests." This is achieved
through the existing division between the credit and the origination functions
thus enabling the Bank to achieve an ongoing and efficient control of asset
quality, a proactive management of problem loans, aggressive write-offs of
uncollectible loans, and an adequate loan loss provisioning. The process also
includes credit-quality monitoring of the borrower, as well as monitoring of
problem loans and related losses. The process facilitates early detection of
situations that could entail some degree of portfolio impairment and provides
appropriate protection of the Bank's assets.

      The Bank's credit division is responsible for the Bank's credit risk
management policies and procedures, which have to be approved by the board of
directors, both for the retail and the corporate banking businesses. The Bank's
credit division monitors credit risk management performance, provides ongoing
assessment of the loan portfolio risk and establishes the measurement methods to
be applied to the different risk products. The credit division is responsible
for loan approval and classification of the loan portfolio. The corporate
recovery department reporting to the wholesale banking division is responsible
for commercial loan portfolio collection. Reporting to the retail banking
division, the retail credit department carries out most individual loan
portfolio approval and classification under the supervision of the credit
division. It also is responsible for collection of loans to individuals.

      Individual Portfolio

      In the case of loans to individuals, the Bank assesses applications for
different types of loans including credit-card loans, current account loans and
personal loans with or without guarantees. Origination of mortgage loans was
discontinued during 2002, due to the prevailing economic situation. New mortgage
loans were launched in late 2003 but origination has been limited.

      Applications for these types of loans are assessed through computerized
credit-scoring systems that take into account different variables to determine
the customer's profile and repayment capacity. Analysis of the information
required from applicants and the credit approval or refusal decision is made in
a centralized manner. The retail credit department approves loans of up to Ps.
250,000. Above such amount and up to Ps. 1.0 million, the approval of the credit
division is required. Loans to individuals of more than Ps. 1 million are
approved by the credit committee of the board of directors.

      Applicants previous credit performance, both at Banco Galicia or in the
financial system as a whole, is verified through internal information and
information supplied by Organizacion Veraz S.A., a company that provides credit
information services.

      The retail credit department classifies the loan portfolio, in accordance
with the Argentine Central Bank's applicable rules and the Bank's own internal
policy. It also coordinates the relation with the Bank's internal auditor which
supervises the portfolio classification, and with the independent auditor. As
described under " -- Argentine Central Bank's Loan Classification and Loan Loss
Provisions," classification of the retail loan portfolio is based on the
borrower's payment performance, pursuant to the rules set forth by the Argentine
Central Bank.

      With respect to the recovery of past-due loans, the Department manages the
consumer loan portfolio from the early stages until the portfolio returns to a
normal status or the recovery procedures are abandoned for loans deemed
uncollectible. When a consumer loan is more than three days past due, recovery
procedures are undertaken through the Collection Center (a specialized area of
the Bank's Customer Contact Center) or through letters or visits to the
borrower's residence. A follow-up system that performs automated telephone calls
is also used for loans in early stages of delinquency. For a better coverage of
distant locations, the Department also coordinates actions with

                                      -67-

<PAGE>

the branch network staff. When these early procedures are exhausted, collection
is turned to collection agencies hired by the Bank to handle recovery through
litigation or out of court procedures, and the retail credit department
supervises the process.

      Banco Galicia does not classify, nor does it provide for recovery
procedures of certain small balance loans, including credit card balances from
membership fees and other administrative costs charged to customers on
unsolicited credit cards, small residual balances from lending operations where
the cost of recovery and legal costs are prohibitive. These small balance loans
are charged-off directly to the income statement.

      Commercial Portfolio

      Prior to the approval of a loan, Banco Galicia's analysis involves the
evaluation and assessment of the corporate borrower and its financial status.
For credits to customers with revenues above certain amounts, Banco Galicia
makes a standard analysis of each credit line and corporate borrower. For
credits to customers with revenues below certain amounts, Banco Galicia uses
automated systems of risk evaluation that provide financial and nonfinancial
information on the corporate borrower.

      Banco Galicia bases the risk assessment on the following factors:

Qualitative analysis..........  assessment of the quality of the corporate
                                borrower by the line officer to which the
                                account is assigned on the basis of personal
                                knowledge.

Economic and financial risk...  quantitative results obtained from analysis of
                                the corporate borrower's financial statements.

Economic sector risk..........  measure of the general risk of the sector in
                                which the corporate borrower operates (based on
                                statistical information gathered from internal
                                and external sources).

      The corporate credit department is in charge of the management of the
commercial loan portfolio risk and reports to the credit division. As of
December 31, 2003, this department reported to the wholesale banking division.
The credit division monitors the credit risk of the commercial loan portfolio on
a borrower-by-borrower basis and carries out the related procedures. It also
classifies the commercial loan portfolio and defines loan-loss provisioning.

      The internal audit division is in charge of overseeing the classification
of the loan portfolio, in accordance with regulations established by the
Argentine Central Bank.

      The corporate and middle market banking departments are responsible for
the relationship with corporate customers, for both the planning and management
of the various lines of business, for credit origination. The corporate
restructuring unit was created in 2002 within the corporate banking department
in order to carry on the process of restructuring the loans granted to certain
large corporate customers. It is expected that in 2004, upon completion of the
restructuring of the commercial portfolio under this unit's management, that it
will be incorporated into the corporate banking department.

      All extensions of credit must be approved by an officer from the credit
division. Commercial credit approval is structured depending on the credit limit
assigned to each customer, as follows:

-  Under Ps. 1.0 million: credit extensions proposed by the business officers
   must be signed by officers of the corporate credit department, in accordance
   with pre-established credit authority levels.

-  More than Ps. 1.0 million and up to Ps. 3.5 million: credit extensions
   must be approved by the senior credit committee, composed of at least (i) the
   Chief Credit Officer (the manager of the credit division) or, alternatively,
   the manager of the corporate credit department; and (ii) one of the managers
   of the following departments

                                      -68-

<PAGE>

      pertaining to the wholesale banking division: corporate banking, middle
      market banking or corporate recovery.

-     Above Ps. 3.5 million: credit extensions must be approved by the credit
      committee of the Bank's board of directors, with the participation of at
      least one director, the chief credit officer or, alternatively, the
      manager of the corporate credit department and the manager in charge of
      the department proposing the extension of credit.

         The primary responsibility of the corporate credit department is to
approve loans to corporate customers with a credit limit not exceeding Ps. 3.5
million, ensuring the overall objective of maintaining high credit-quality
standards and complying with the Bank's policies and procedures. Prior to
presentations to the credit committees of corporate borrowers whose credit limit
exceeds Ps. 3.5 million, the department prepares analyses and reports that
assess the credit risk involved. This department classifies the performing and
nonperforming commercial portfolios, in accordance with the regulations set by
the Argentine Central Bank and with the Bank's own internal policies. It also
coordinates relations with the Argentine Central Bank, the independent auditors,
and the rating agencies in connection with credit risk information. Moreover, it
reviews all those businesses whose total credit exceeds Ps. 1.0 million, in
accordance with a review schedule determined by the level of credit risk.

         The corporate recovery department, reporting to the wholesale banking
division, is responsible for monitoring and controlling past-due commercial
portfolios and for recovery of the entire commercial portfolio. It acts
proactively and designs action plans on a case-by-case basis to recover any
amounts that exceed the credit limits that are assigned to the different
corporate customers. This unit also oversees recovery of problem loans in the
corporate portfolio (different from those addressed by the corporate
restructuring unit), managing them efficiently and working to regularize the
status of those customers that are most attractive to the Bank. Furthermore,
this unit manages problem loans for which recovery is being settled through
litigation or out of court agreements. This unit also manages and oversees
lawsuits carried out in various jurisdictions by outside law firms hired to
handle these matters.

         The Bank's information systems provide both financial and nonfinancial
data about customers. They can also perform automated risk evaluations and
financial-statements projections, and have the capacity to generate automatic
warnings about situations that may indicate an increase in risk.

         As a result of the Argentine economic situation and the measures taken
by the government in 2002 (mentioned in other sections of this annual report),
during 2003 and 2002, substantially all of the Bank's commercial loan portfolio
underwent a restructuring process. This process has not yet been completed.

         Breakdown of the Bank's Total Credit Portfolio by Credit Authority
Levels

         The following table shows the breakdown of the Bank's total credit
portfolio by credit authority levels.

<TABLE>
<CAPTION>
                              APPROVAL AUTHORITY           NUMBER OF        TOTAL CREDIT(1)        % OF
                           LEVEL IN MILLIONS OF PESOS       ACCOUNTS     IN MILLIONS OF PESOS  TOTAL CREDIT
                           --------------------------      ---------     --------------------  -------------
<S>                        <C>                             <C>           <C>                   <C>
Credit Committee of the
Board of Directors              Over Ps. 3.5                      127            10,512.2          80.8%
                                More than Ps.
                                1.0 and Up to
Senior Credit Committee         Ps. 3.5                           192               335.2           2.6%

Credit Officers                 Up to Ps. 1.0               1,354,439             2,153.4          16.6%
                                -------------               ---------          ----------         -----
                                        TOTAL               1,354,758            13,000.8         100.0%
                                                            =========          ==========         =====
</TABLE>

(1)   In accordance with Argentine Central Bank's methodology for preparation of
      the Statement of Debtor's Status, total credit is defined as the sum of
      loans, certain accounts representing credit transactions under the balance
      sheet heading "Other Receivables from Financial Brokerage," assets under
      financial leases, and the off-balance sheet accounts "Guarantees Granted"
      and "Unused Balances of Loans Granted."

      Policy for Requiring Collateral

      The credit review process of Banco Galicia is unaffected by the collateral
underlying the loan. The Bank's credit review process and the Argentine Central
Bank's loan classification system is based on a borrower's capacity to repay or
on the past due status of the loan rather than on the structure of the loan.
However, once a loan is

                                      -69-

<PAGE>

classified, the level of the reserve that should be made against the loan is
determined by whether the loan is secured or unsecured.

      Although the procedures for assessing a borrower's credit worthiness are
unaffected by the collateral of the loan, Banco Galicia performs additional
procedures to review the existence and valuation of the collateral on all major
loans on an annual basis. For nonperforming commercial loans, this review is
performed every six months. Banco Galicia reviews the existence and valuation of
collateral on consumer loans on a sample basis.

ARGENTINE CENTRAL BANK'S LOAN CLASSIFICATION AND LOAN LOSS PROVISIONS

      General

      The Argentine Central Bank's loan classification system is a bifurcated
system, that applies certain criteria to classify loans in a bank's consumer
portfolio, and another set of criteria to classify loans in its commercial
portfolio. The classification system is independent of the currency in which the
loan was denominated, since the dual currency system was part of Argentine
federal law. Subsequent to December 31, 2001, the economic policy measures taken
by the government provided for the "pesification" of most loans denominated in
foreign currency outstanding as of December 31, 2001. For a description of the
pesification process and some of the measures adopted by the Argentine
government to mandatorily restructure private sector loans, see " -- Main
Regulatory Changes in 2002 and 2003 -- Loans to the Private Sector and
Asymmetric Indexation."

      The loan classification criteria applied to loans in the consumer
portfolio are based mainly on delinquency aging. For the purposes of the
Argentine Central Bank, consumer loans are defined as residential mortgage
loans, personal loans, pledge loans, credit-card loans and other types of
installment credits to individuals. All other loans are considered as commercial
loans. In addition, as permitted by the Argentine Central Bank, the Bank
classifies as consumer loans all commercial loans that are for an amount less
than Ps. 200,000 for purposes of applying the Argentine Central Bank's
provisioning requirements. As a result, the Bank classifies such loans based on
the delinquency aging system rather than on the borrower's ability to repay.

      The principal criterion of classification of loans in the commercial
portfolio is each borrower's ability to pay, as measured principally by such
borrower's future cash flow. In this loan classification system, all customers
in an economic group (all corporate and financial entities, both domestic and
foreign, which are controlled, directly or indirectly, by a customer) are
considered as one borrower. For example, if one or more loans in a group of
loans to an economic group becomes classified, all loans to that group are
reclassified in the most severe classification. Banks may opt to apply the
consumer loan classification criteria to commercial loans of up to Ps. 200,000.
If a customer has both commercial and consumer loans, consumer loans will be
added to commercial loans to determine eligibility for classification in the
consumer portfolio.

      Interbank transactions of less than 30 days in maturity, as well as loans
to provincial governments or to financial institutions majority-owned by the
Argentine national, provincial or city governments with governmental guarantees,
are excluded from this procedure.

      In applying the Argentine Central Bank's classifications to commercial
loans, a bank must assess the following factors:

            -     management and operating history of the borrower;

            -     present and projected financial situation of the borrower with
                  a review of the borrower's financial statements;

            -     borrower's payment history and ability to service debt;

            -     capability of the borrower's internal information and control
                  systems to provide accurate and timely financial information;
                  and

            -     general risk of the sector in which the borrower operates and
                  its relative position within that sector.

                                      -70-

<PAGE>

      Argentine Central Bank rules establish that periodic evaluations of the
commercial portfolio must be performed by an evaluation team independent from
the officers that originate the loans. Alternatively, if such officers carry out
these evaluations, they must be subject to independent supervision. The retail
credit department of the retail banking division and the corporate credit
department of the wholesale banking division are responsible for these
evaluations, being independent from the business units that originate loans.

      The frequency of the evaluation of each borrower depends on the Bank's
exposure to such borrower. The Argentine Central Bank requires that the larger
the exposure, the more frequent the review. A review is conducted every calendar
quarter when credit exposure to that borrower is equal to or in excess of 5.0%
of the Bank's Regulatory Capital on the last day of the month prior to the
review. Alternatively, a review is conducted every six months when exposure
amounts to the lesser of Ps. 1,000,000 or 1.0% of the Bank's Regulatory Capital
on the last day of the month prior to review. In any case, at least 50.0% of the
commercial portfolio must be reviewed by the end of each six months, and all
other borrowers in the commercial portfolio must be reviewed during the fiscal
year, so that the entire commercial portfolio is reviewed every fiscal year.

      Reviews must be reevaluated and documented in a borrower's file upon a
negative change in objective criteria such as an increase in days past due,
filing for bankruptcy or protection from creditors, or a judicial proceeding
initiated against a borrower. In addition, a reevaluation is triggered when,
based on information made available by the Argentine Central Bank, any other
financial institution holding at least 10.0% of a borrower's total outstanding
credit downgrades its classification of that borrower, or when an independent
rating agency downgrades the rating it grants to a borrower's debt securities.

      The Argentine Central Bank allows only one level of discrepancy between
the classification that the Bank assigns and the lowest classification assigned
by at least two other banks whose combined credit to the borrower represents
40.0% or more of the total credit of the borrower within the financial system,
considering all banks. Information on each bank's classification of its
borrowers is released by the Argentine Central Bank to all banks on a monthly
basis. If a bank's classification differs by more than one level from the lowest
classification, it must immediately downgrade its classification of the borrower
to the same classification, or within one classification level.

      Argentine Central Bank Communique "A" 3418 issued on January 3, 2002,
allowed for increased flexibility of the rules for classification of borrowers
for December 2001 and January 2002, by temporarily extending the late-payment
period admitted for borrowers in categories 1 and 2 by 31 additional days, both
for the commercial and consumer portfolios. On February 7, 2002, through its
Communique "A" 3463, the Argentine Central Bank further extended the
late-payment periods established by Communique "A" 3418 by 31 additional days.
Subsequently, no additional extension was provided.

      Through Communique "A" 3918, issued on April 4, 2003, the Argentine
Central Bank also established that beginning on March 31, 2003, customers with
debt in the whole financial system of up to Ps. 5.0 million were to be
classified in the same manner as consumer loans, that is, they would be
automatically classified according to the number of days the debt is past due.
In addition, the obligatory reclassification of debtors with different ratings
in the financial system was suspended until December 31, 2003. In accordance
with such Communique, between December 1, 2001 and March 31, 2003, the number of
days such loans had been past due was computed taking one day for every three
days past due in the period from December 1, 2001 to March 31, 2003. This
treatment was also provided to the portfolio of commercial loans of up to Ps.
200.000, which under the previous rules were already automatically classified
according to their delinquency aging.

      Loan Classification

      The following tables set forth the Argentine Central Bank's six loan
classifications corresponding to levels of risk. Banco Galicia's total exposure
to a private sector customer must be classified in the riskiest classification
that corresponds to any part of such exposure.

                                      -71-
<PAGE>

<TABLE>
<CAPTION>
              Loan Classification                                                      Description
              -------------------                                                      -----------
<S>                                                    <C>
                                                                              (a)      COMMERCIAL PORTFOLIO

1.  Normal.....................................        Borrower can easily service all financial obligations; shows strong cash
                                                       flow, liquid current financial situation, adequate financial structure,
                                                       punctual payment record, capable management, timely and precise available
                                                       information and satisfactory internal controls. Borrower is determined to be
                                                       in the top 50.0% of an industry that is performing well and has a good
                                                       outlook.

2.  With Special Follow-Up.....................        Cash flow analysis indicates debt can be serviced, with the possibility that
                                                       if not closely observed, future payment capacity could be impaired.

                                                        This category is divided into two subcategories:

                                                        (2.a). Under observation;

                                                        (2.b). Under negotiation or under agreements to refinance.

3.  With Problems..............................        Cash flow analysis evidences problems in normal servicing of existing debt,
                                                       such that if the problems are not solved, they may result in some loss.

4.  High Risk of Insolvency....................        Cash flow analysis demonstrates that full repayment of the borrower's
                                                       obligations is highly improbable.

5.  Uncollectible..............................        Debts in this category are considered total losses. Although these assets
                                                       could have a possibility of recovery under certain future circumstances, lack
                                                       of collectibility is evident as of the date of analysis.  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 arrears
                                                       to any liquidated or bankrupt financial entity.  Also includes loans to
                                                       foreign banks and other financial institutions which 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, and

                                                       (iii)  classified as "investment grade"by any of the
                                                              rating agencies admitted to the Argentine Central
                                                              Bank pursuant to Communique "A" 2729.
</TABLE>

                                      -72-

<PAGE>

<TABLE>
<S>                                                    <C>
                                                              (b)      CONSUMER PORTFOLIO

1.  Normal Performance.........................        Current Loans and Loans that are up to 31 days past due on
                                                       principal and/or interest, including loans that are
                                                       current.

2.  Inadequate Performance.....................        Debt payment is occasionally delinquent, with arrears from
                                                       32 to 90 days.

3.  Deficient Performance......................        Debt is in arrears at least 91 days and up to 180 days.

4.  Difficult Collection.......................        Judicial proceedings demanding payment have been initiated against
                                                       the borrower, or the borrower is delinquent with arrears greater than
                                                       180 days and up to one year past due.

5.  Uncollectible..............................        Loans to insolvent or bankrupt borrowers, or borrowers
                                                       subject to judicial proceedings, with little or no
                                                       possibility of collection, or in 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.
</TABLE>

         Loan Loss Provision Requirements

         Allocated Provisions


         The minimum loan loss provisions required by the Argentine Central Bank
relate to the above loan classification and are described in the following
table, where the percentages are applicable to the borrower's total credit
outstanding, including contingencies.

<TABLE>
<CAPTION>
                                                                        WITH
                                                                        SELF-             WITH            WITHOUT
                                                                     LIQUIDATING         OTHER          PREFERRED
                                                                      PREFERRED         PREFERRED       GUARANTEES
                      LOAN CLASSIFICATION                             GUARANTEES       GUARANTEES       OR SECURITY
                      -------------------                             ----------       ----------       -----------
<S>                                                                  <C>               <C>              <C>
"With Special Follow Up" and "Inadequate Performance"
"Inadequate Performance - Under Observation"...................            1.0%             3.0%             5.0%
"Inadequate Performance - Under Negotiation or Agreement to                1.0              6.0             12.0
Refinance".....................................................
"With Problems" and "Deficient Performance"....................            1.0             12.0             25.0
"High Risk of Insolvency" and "Difficult Collection"...........            1.0             25.0             50.0
"Uncollectible"................................................            1.0             50.0            100.0
"Uncollectible Due to Technical Reasons".......................          100.0%           100.0%           100.0%
</TABLE>

         Banks are required to cease the accrual of interest or to establish
provisions of 100.0% of the interest accrued on loans to borrowers classified as
"with problems," "deficient performance" or under higher risk categories.

         Pursuant to Argentine Central Bank regulation, these minimum provisions
are not required for interbank financial transactions of less than thirty days,
or loans to provincial governments or to financial institutions majority-owned
by the Argentine national, provincial or city governments with governmental
guarantees.

                                      -73-

<PAGE>

      General Provisions

      In addition to the specific loan loss allowances described above, the
Argentine Central Bank established in November 1992 a mandatory general
allowance requirement of 1.0% for all loans in its "normal" and "normal
performance" categories which was fully implemented on January 1, 1996. This
general allowance is not required for interbank financial transactions of less
than thirty days, or loans to provincial governments or to financial
institutions majority-owned by the Argentine national, provincial or city
governments with governmental guarantees. This general allowance is determined
based on the Bank's judgment of the entire loan portfolio risk at each reporting
period.

      As of December 31, 2003, the Bank maintained a general loan loss allowance
of Ps. 313.6 million, which exceeded by Ps. 293.0 million the 1.0% general
allowance minimum requirement for the "normal" and "normal performance" loan
portfolio established by the Argentine Central Bank's rules. The excess over the
minimum requirement, which represents only 38% of that reported as of December
31, 2002, was maintained in connection with commercial loans under a
restructuring process, which restructuring had not been completed.

      As of December 31, 2002, Banco Galicia maintained a general loan loss
allowance of Ps. 822.3 million, which exceeded by Ps. 787.0 million the 1.0%
general allowance minimum requirement for the "normal" and "normal performance"
loan portfolio established by the Argentine Central Bank's rules. As explained
above, this general allowance is determined based on the Bank's judgment of the
entire loan portfolio risk at each reporting period. Therefore, the excess over
the minimum requirement reflected the judgment that the consequences of the
Argentine economic and political crisis of late 2001 and 2002 on the loan
portfolio had not unfolded completely as of the balance sheet date and that the
risk that loans that were impaired had not been identified as impaired as of the
balance sheet date was still high. In addition, as the restructuring process in
the Bank's commercial portfolio began only in the second half of the 2002,
uncertainty about the outcome of the process was still high.

      As of December 31, 2001, Banco Galicia maintained a general loan loss
allowance of Ps. 440.9 million, which exceeded by Ps. 331.6 million the 1.0%
general allowance minimum requirement for the "normal" and "normal performance"
loan portfolio established by the Argentine Central Bank's rules. The excess
over the minimum requirement reflected the fact that the Argentine economic and
political crisis of late 2001 had just begun to unfold as of December 31, 2001,
the balance sheet date. Therefore, given that the crisis had reached
unprecedented levels and in the unprecedented context of uncertainty prevailing
at the time, the risk that loans that were impaired had not been identified as
impaired as of the balance sheet date was much higher than in previous years.

CLASSIFICATION OF THE LOAN PORTFOLIO BASED ON ARGENTINE CENTRAL BANK REGULATIONS

      The following tables set forth the amounts of Banco Galicia's loans past
due and the amounts not yet due of the loan portfolio, applying the Argentine
Central Bank's loan classification criteria in effect at the dates indicated
below.

      Nonaccrual loans correspond to those loans classified under the last four
categories of the classification.

      For December 31, 2001, the Bank applied the 30-day flexibility for the
classification of borrowers in categories 1 and 2 which was allowed by Argentine
Central Bank Communique "A" 3418, only to the classification of the Bank's
portfolio that is automatically classified according to the delinquency aging
system (consumer loans and all commercial loans that are for an amount of less
than Ps. 200,000). Commercial loans continued to be classified according to the
borrower's ability to repay. As a consequence, the classification of consumer
loans in the categories 1, 2, and 3 of the classification of the loan portfolio
as of December 31, 2001 followed a different criterion than in previous periods.
On December 31, 2002, the prior criterion was again applicable.

      Loans classified as category "2.b" pursuant to the Argentine Central
Bank's classification, which correspond to loans under a restructuring process
but that do not constitute nonperforming portfolios, amounted to Ps. 212.6
million as of December 31, 2003, 54.3% lower than the Ps. 464.8 million recorded
at the close of fiscal year 2002. In the case of the Bank, this portfolio
consisted of commercial loans only.

                                      -74-

<PAGE>

<TABLE>
<CAPTION>
                                                                             AS OF DECEMBER 31, 2003
                                                       ---------------------------------------------------------------------
                                                       AMOUNTS NOT YET DUE(1)   AMOUNTS PAST DUE          TOTAL LOANS
                                                       ---------------------  -------------------  -------------------------
                                                                    (in millions of pesos, except percentages)
<S>                                                    <C>            <C>     <C>         <C>       <C>               <C>
LOAN PORTFOLIO CLASSIFICATION
Normal and Normal Performance.......................   Ps.10,004.9     90.13%          -        -   Ps.  10,004.9      82.60%
With Special Follow-up and Inadequate Performance...         807.9      7.28           -        -           807.9       6.67
With Problems and Deficient Performance.............         237.9      2.14  Ps.  426.5    42.19%          664.4       5.49
High Risk of Insolvency and Difficult Collection....          50.4      0.45       245.4    24.27           295.8       2.44
Uncollectible.......................................             -         -       324.9    32.14           324.9       2.68
Uncollectible Due to Technical Reasons..............             -         -        14.2     1.40            14.2       0.12
                                                       -----------    ------  ----------  -------   -------------     ------
TOTAL...............................................   Ps.11,101.1    100.00% Ps.1,011.0   100.00%  Ps.  12,112.1     100.00%
                                                       -----------    ------  ----------  -------   -------------     ------
</TABLE>

<TABLE>
<CAPTION>
                                                                             AS OF DECEMBER 31, 2002
                                                       --------------------------------------------------------------------
                                                       AMOUNTS NOT YET DUE(1)   AMOUNTS PAST DUE          TOTAL LOANS
                                                       ---------------------  -------------------  ------------------------
                                                                   (In millions of  February 28, 2003, constant
                                                                               pesos, except  percentages)
<S>                                                    <C>            <C>     <C>          <C>     <C>               <C>
LOAN PORTFOLIO CLASSIFICATION
Normal and Normal Performance.......................   Ps. 9,758.0     88.02%          -        -  Ps.   9,758.0      79.28%
With Special Follow-up and Inadequate Performance...         940.5      8.48           -        -          940.5       7.64
With Problems and Deficient Performance.............         321.5      2.90  Ps.  556.3    45.50%         877.8       7.13
High Risk of Insolvency and Difficult Collection....          66.1      0.60       453.4    37.09          519.5       4.22
Uncollectible.......................................             -         -       198.2    16.21          198.2       1.61
Uncollectible Due to Technical Reasons..............             -         -        14.7     1.20           14.7       0.12
                                                       -----------    ------  ----------   ------  -------------     ------
TOTAL...............................................   Ps.11,086.1    100.00% Ps.1,222.6   100.00% Ps.  12,308.7     100.00%
                                                       -----------    ------  ----------   ------  -------------     ------
</TABLE>

<TABLE>
<CAPTION>
                                                                          AS OF DECEMBER 31, 2001
                                                      --------------------------------------------------------------------
                                                       AMOUNTS NOT YET DUE(1)   AMOUNTS PAST DUE          TOTAL LOANS
                                                       ---------------------  -------------------  ------------------------
                                                              (in millions of February 28, 2003, constant pesos,
                                                                              except percentages)
<S>                                                    <C>            <C>     <C>          <C>     <C>               <C>
LOAN PORTFOLIO CLASSIFICATION
Normal and Normal Performance.......................   Ps.19,287.1     96.32%          -        -  Ps.  19,287.1      91.54%
With Special Follow-up and Inadequate Performance...         362.0      1.81           -        -          362.0       1.72
With Problems and Deficient Performance.............         198.9      0.99  Ps.  157.4    15.05%         356.3       1.69
High Risk of Insolvency and Difficult Collection....         175.8      0.88       624.7    59.73          800.5       3.80
Uncollectible.......................................             -        -        217.5    20.79          217.5       1.03
Uncollectible Due to Technical Reasons..............             -        -         46.3     4.43           46.3       0.22
                                                       -----------    ------  ----------   ------  -------------     ------
TOTAL...............................................   Ps.20,023.8    100.00% Ps.1,045.9   100.00% Ps.  21,069.7     100.00%
                                                       -----------    ------  ----------   ------  -------------     ------
</TABLE>

<TABLE>
<CAPTION>
                                                                         AS OF DECEMBER 31, 2000
                                                      --------------------------------------------------------------------
                                                       AMOUNTS NOT YET DUE(1)   AMOUNTS PAST DUE          TOTAL LOANS
                                                       ---------------------  -------------------  ------------------------
                                                               (in millions of February 28, 2003,constant pesos,
                                                                           except percentages)
<S>                                                    <C>            <C>     <C>          <C>     <C>               <C>
LOAN PORTFOLIO CLASSIFICATION
Normal and Normal Performance.......................   Ps.19,776.5     97.74%          -        -  Ps.  19,776.5      94.36%
With Special Follow-up and Inadequate Performance...         335.8      1.66           -        -          335.8       1.60
With Problems and Deficient Performance.............          64.8      0.32  Ps.  104.5    14.41%         169.3       0.81
High Risk of Insolvency and Difficult Collection....          56.6      0.28       400.4    55.19          457.0       2.18
Uncollectible.......................................             -         -       216.8    29.88          216.8       1.03
Uncollectible Due to Technical Reasons..............             -         -         3.7     0.52            3.7       0.02
                                                       -----------    ------  ----------   ------  -------------     ------
TOTAL...............................................   Ps.20,233.7    100.00% Ps.  725.4   100.00% Ps.  20,959.1     100.00%
                                                       -----------    ------  ----------   ------  -------------     ------
</TABLE>
                                      -75-

<PAGE>

<TABLE>
<CAPTION>
                                                                               AS OF JUNE 30, 2000
                                                       --------------------------------------------------------------------
                                                       AMOUNTS NOT YET DUE(1)   AMOUNTS PAST DUE          TOTAL LOANS
                                                       ---------------------  -------------------  ------------------------
                                                           (in millions of February 28, 2003, constant pesos, except
                                                                               percentages)
<S>                                                    <C>            <C>     <C>          <C>     <C>               <C>
LOAN PORTFOLIO CLASSIFICATION
Normal and Normal Performance.......................   Ps.19,938.1     97.69%          -        -  Ps.  19,938.1      94.37%
With Special Follow-up and Inadequate Performance...         354.8      1.74           -        -          354.8       1.68
With Problems and Deficient Performance.............          70.1      0.34  Ps.   89.0    12.38%         159.1       0.75
High Risk of Insolvency and Difficult Collection....          46.1      0.23       399.3    55.54          445.4       2.11
Uncollectible.......................................             -         -       229.6    31.93          229.6       1.09
Uncollectible Due to Technical Reasons..............             -         -         1.1     0.15            1.1       0.00
                                                       -----------    ------  ----------   ------  -------------     ------
TOTAL...............................................   Ps.20,409.1    100.00% Ps.  719.0   100.00% Ps.  21,128.1     100.00%
                                                       -----------    ------  ----------   ------  -------------     ------
</TABLE>

<TABLE>
<CAPTION>
                                                                               AS OF JUNE 30, 1999
                                                       --------------------------------------------------------------------
                                                       AMOUNTS NOT YET DUE(1)   AMOUNTS PAST DUE          TOTAL LOANS
                                                       ---------------------  -------------------  ------------------------
                                                          (in millions of February 28, 2003, constant pesos, except
                                                                               percentages)
<S>                                                    <C>            <C>     <C>         <C>      <C>               <C>
LOAN PORTFOLIO CLASSIFICATION
Normal and Normal Performance.......................   Ps.17,969.2     97.14%          -        -  Ps.  17,969.2      93.58%
With Special Follow-up and Inadequate Performance...         366.9      1.98           -        -          366.9       1.92
With Problems and Deficient Performance.............         104.5      0.57  Ps.  107.4    15.23%         211.9       1.10
High Risk of Insolvency and Difficult Collection....          57.5      0.31       388.9    55.21          446.4       2.32
Uncollectible.......................................             -        -        206.0    29.24          206.0       1.07
Uncollectible Due to Technical Reasons..............             -        -          2.2     0.32            2.2       0.01
                                                       -----------    ------  ----------  -------  -------------     ------
TOTAL...............................................   Ps.18,498.1    100.00% Ps.  704.5  100.00%  Ps.  19,202.6     100.00%
                                                       -----------    ------  ----------  -------  -------------     ------
</TABLE>

(1) Amounts not yet due represent the portion of a loan that has not yet become
    due, such as the future installments of a consumer loan.

ANALYSIS OF AMOUNTS PAST DUE AND NONACCRUAL LOANS

         The table on the following page analyzes amounts past due 90 days or
more in Banco Galicia's loan portfolio, by type of loan and by type of guarantee
at the dates indicated, as well as the Bank's nonaccrual loan portfolio, by type
of guarantee, the Bank's allowance for loan losses and its main asset quality
ratios at the dates indicated.

                                      -76-

<PAGE>

<TABLE>
<CAPTION>
                                                                  AS OF DECEMBER 31,                          AS OF JUNE 30,
                                                ------------------------------------------------------  -------------------------
                                                  2003           2002            2001            2000         2000       1999
                                                ---------------------------------------------------------------------------------
                                                (in millions
                                                of pesos,
                                                  except
                                                  ratios)       (in millions of February 28, 2003, constant pesos, except ratios)
<S>                                             <C>          <C>             <C>          <C>           <C>           <C>
TOTAL LOANS (1)..............................   Ps.12,112.1  Ps .12,308.7    Ps.21,069.7  Ps. 20,959.1  Ps. 21,128.1  Ps.19,202.6
NONACCRUAL LOANS (2)
  With Preferred Guarantees..................         496.5         610.8          578.4         366.9         383.8        355.6
  With Other Guarantees......................         275.8         282.9          198.5          35.5          65.9         82.1
  Without Guarantees.........................         527.0         716.5          643.7         444.4         385.5        428.8
                                                -----------  ------------    -----------  ------------  ------------  -----------
TOTAL NONACCRUAL LOANS (2)...................   Ps. 1,299.3  Ps.  1,610.2    Ps. 1,420.6  Ps.    846.8  Ps.    835.2  Ps.   866.5
PAST DUE LOAN PORTFOLIO
 Nonfinancial Public Sector..................             -             -              -             -             -            -
 Local Financial Sector......................             -             -              -             -             -            -
 Nonfinancial Private Sector and Residents
  Abroad
  Advances...................................   Ps.    93.9  Ps.     64.9    Ps.    79.8  Ps.     59.9  Ps.     73.6  Ps.    54.9
  Notes......................................         528.2         741.0          307.6         112.4         137.7        120.3
  Mortgage Loans.............................         211.7         217.2          313.6         202.8         189.7        194.3
  Pledge Loans...............................          28.3          35.7           74.0          78.5          90.3         67.4
  Personal Loans.............................         110.2          58.6           94.5          82.6          76.2         53.3
  Credit-Card Loans..........................          30.6         100.4          174.5         171.4         150.3        208.0
  Placements with Correspondent Banks........             -             -              -             -             -            -
  Other Loans................................           8.1           4.8            1.9          17.8           1.2          6.3
                                                -----------  ------------    -----------  ------------  ------------  -----------
TOTAL PAST DUE LOANS.........................   Ps. 1,011.0  Ps.  1,222.6    Ps. 1,045.9  Ps.    725.4  Ps.    719.0  Ps.   704.5
 Past Due Loans
  With Preferred Guarantees..................   Ps.   415.7  Ps.    449.3    Ps.   388.3  Ps.    288.2  Ps.    308.7  Ps.   256.9
  With Other Guarantees......................         235.6         172.5           76.1          32.8          63.3         79.8
  Without Guarantees.........................         359.7         600.8          581.5         404.4         347.0        367.8
                                                -----------  ------------    -----------  ------------  ------------  -----------
TOTAL PAST DUE LOANS.........................   Ps. 1,011.0  Ps.  1,222.6    Ps. 1,045.9  Ps.    725.4  Ps.    719.0  Ps.   704.5
ALLOWANCE FOR LOAN LOSSES....................   Ps. 1,177.3  Ps.  1,681.8    Ps. 1,050.3  Ps.    596.0  Ps.    576.9  Ps.   591.2
RATIOS (%)
 As a % of Total Loans:
 - Total Past Due Loans .....................          8.35%         9.93%          4.96%         3.46%         3.40%        3.67%
 - Past Due Loans with Preferred Guarantees..          3.43          3.65           1.84          1.38          1.46         1.34
 - Past Due Loans with Other Guarantees......          1.95          1.40           0.36          0.16          0.30         0.42
 - Past Due Unsecured Amounts................          2.97          4.88           2.76          1.92          1.64         1.91
 - Nonaccrual Loans (2)......................         10.73         13.08           6.74          4.04          3.95         4.51
 - Nonaccrual Loans (2) (Excluding
  Interbank Loans)...........................         10.88         13.25           6.87          4.33          4.23         4.97
 Allowance for Loan Losses as a % of :
 - Total Loans...............................          9.72         13.66           4.98          2.84          2.73         3.08
 - Total Loans Excluding Interbank Loans.....          9.86         13.84           5.08          3.04          2.92         3.39
 - Total Nonaccrual Loans (2)................         90.61        104.45          73.93         70.38         69.07        68.23
 Nonaccrual Loans with Guarantees as a
   Percentage of Nonaccrual Loans (2)........         59.44         55.50          54.69         47.52         53.84        50.52
 Nonaccrual Loans as a Percentage of Total
   Past Due Loans............................        128.52        131.70         135.83        116.74        116.16       123.00
                                                ===========  ============    ===========  ============  ============  ===========
</TABLE>

(1)   Before the allowance for loan losses.

(2)   Nonaccrual loans are defined as those loans in the categories of: (a)
      consumer portfolio: defective fulfillment, difficulty in recovery,
      uncollectible and uncollectible due to technical reasons; (b) commercial
      portfolio: with problems, high risk of insolvency, uncollectible and
      uncollectible due to technical reasons.

                                      -77-
<PAGE>

      As a result of the Argentine economic situation in 2002 and of the
measures taken by the government that modified the terms and conditions of the
Bank's private-sector loan portfolio, substantially all of the Bank's loan
portfolio underwent a restructuring process. This process had not been completed
as of December 31, 2003, and continues as of the date of this annual report. See
" -- Main Regulatory Changes in 2002 and 2003 -- Loans to the Private Sector and
Asymmetric Indexation."

      The amount of loan restructurings included in the nonaccrual loan balance
as of December 31, 2001 was Ps. 47.6 million. The amounts were: Ps. 49.5 million
as of December 31, 2000; Ps. 50.6 million as of June 30, 2000; and Ps. 65.5
million as of June 30, 1999, respectively.

      Under Argentine Central Bank rules, banks are required to cease the
accrual of interest or to establish provisions of 100.0% of the interest accrued
on all loans pertaining to the nonaccrual loan portfolio, that is, all loans to
borrowers in the categories of:

      -     in the consumer portfolio: defective fulfillment, difficulty in
            recovery, uncollectible and uncollectible due to technical reasons.

      -     in the commercial portfolio: with problems, high risk of insolvency,
            uncollectible and uncollectible due to technical reasons.

      During 2003, interest income that would have been recorded on those
nonaccrual loans on which the accrual of interest was discontinued amounted to
Ps. 39.9 million. Recoveries of interest on loans classified as nonaccrual on
which the accrual of interest had been discontinued amounted to approximately
Ps. 2.0 million (recorded under "Miscellaneous Income") during the same period.

      During the years ended December 31, 2002, 2001 and the six-month period
ended December 31, 2000, interest income that would have been recorded on those
nonaccrual loans on which the accrual of interest was discontinued amounted to
Ps. 40.4 million, Ps. 119.6 million and Ps. 24.4 million, respectively.
Recoveries of interest on loans classified as nonaccrual on which the accrual of
interest had been discontinued amounted to approximately Ps. 2.0 million, Ps.
6.0 million and Ps. 1.3 million (recorded under "Miscellaneous Income") during
the same periods, respectively.

      The nonaccrual to total loans ratio deteriorated in 2001 as a result of
the deterioration of Argentina's overall economic situation during he year, that
worsened throughout 2001 and deepened into an unprecedented political and
economic crisis which disrupted Argentina's financial system and real economy.
It should be noted that this ratio had already increased in the last six months
of 2000 as a result of the long recession that Argentina was undergoing at the
time and that had begun in the second half of 1998. In 2002 the severe economic
crisis had as a direct consequence an additional significant deterioration of
the Bank's loan portfolio quality as compared to that of prior fiscal years. In
2003, the improvement in the overall Argentine economy and the advances made by
the Bank in the restructuring of its commercial portfolio generated an
improvement in the quality of the its loan portfolio. Despite this improvement,
the high level nonaccrual loans in 2003 continues to reflect the deterioration
of Argentina's economic situation and the measures adopted by the government
aimed at restructuring private-sector debts, mainly in 2002. As of December 31,
2003, the nonaccrual portfolio as a percentage of total loans was 10.73%,
compared to 13.08% at the close of fiscal year 2002. Considering the
private-sector loan portfolio only, at the close of fiscal year 2003, the
nonaccrual loan portfolio represented 31.19% of the total portfolio of loans to
the private sector, compared to 35.47% a year before.

      In 2002, the Bank made a substantial effort to increase its allowances for
loan losses and the coverage of the nonaccrual loan portfolio with allowances
for loan losses. Due to the significant allowances set up in the previous fiscal
year, coverage of nonaccrual loan portfolio with allowances reached 90.61% at
the end of fiscal year 2003 and allowances as a percentage of total loans
amounted to 9.72%. At that same date, the nonaccrual portfolio with guarantees
amounted to 59.44%. Coverage with allowances for loan losses of the nonaccrual
portfolio plus loans classified as category "2.b" pursuant to the Argentine
Central Bank's classification (amounting to Ps. 212.6 million as of December 31,
2003) was 77.87% at the end of fiscal year 2003.

      In the year ended June 30, 2000, the improvement in the nonaccrual to
total loans ratio was due to an increase in charge-offs, rather than to an
improvement in the credit quality of the Bank's portfolio.

                                      -78-
<PAGE>

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

      The following table presents an analysis of the allowance for loan losses
at the dates indicated. Certain loans are charged off directly to the income
statement and, therefore, are not reflected in the allowance.

<TABLE>
<CAPTION>
                                                                                       SIX MONTHS
                                                       FISCAL YEAR ENDED                  ENDED               FISCAL YEAR ENDED
                                                --------------------------------------------------------  ------------------------
                                                                      DECEMBER 31,                                JUNE 30,
                                                --------------------------------------------------------  ------------------------
                                                      2003         2002            2001         2000          2000         1999
                                                --------------- ------------    ----------  ------------  ------------  ----------
                                                (in millions of
                                                 pesos, except
                                                    ratios)     (in millions of February 28, 2003, constant pesos, except ratios)
<S>                                             <C>             <C>           <C>           <C>           <C>           <C>
TOTAL LOANS, AVERAGE (1).......................  Ps. 11,556.7   Ps. 15,262.4  Ps. 20,002.3  Ps. 19,676.5  Ps. 18,252.7  Ps.16,565.9
ALLOWANCE FOR LOAN LOSSES AT BEGINNING
 OF PERIOD.....................................       1,681.8        1,050.3         596.0         576.9         591.2        545.1
Changes in the Allowance for Loan Losses
  during the Period
Provisions Charged to Income...................         217.1        1,599.5         922.0         253.8         530.6        450.6
Prior Allowances Reversed......................        (402.1)             -          (2.0)         (2.9)         (3.5)        (0.2)
Charge-Offs (A)................................        (267.3)        (305.7)       (465.7)       (231.8)       (541.4)      (404.3)
Inflation Effect...............................         (52.2)        (662.3)            -             -             -            -
                                                 ------------   ------------  ------------  ------------  ------------  -----------
ALLOWANCE FOR LOAN LOSSES AT END OF PERIOD.....  Ps.  1,177.3   Ps.  1,681.8  Ps.  1,050.3  Ps.    596.0  Ps.    576.9  Ps.   591.2
Charge to the Income Statement during the
 Period Provisions Charged to Income...........         217.1        1,599.5         922.0         253.8         530.6        450.6
 Direct Charge-Offs, Net of Recoveries (B).....         (38.6)         (17.2)        (25.8)        (15.6)        (29.6)         0.7
 Recoveries of Provisions......................        (402.1)             -          (2.0)         (2.9)         (3.5)        (0.2)
                                                 ------------   ------------  ------------  ------------  ------------  -----------
NET CHARGE (BENEFIT) TO THE INCOME STATEMENT     Ps.   (223.6)  Ps.  1,582.3  Ps.    894.2  Ps.    235.3  Ps.    497.5  Ps.   451.1
RATIOS (%)
 Charge-Offs (A+B) to Average Loans (2)........          1.98%          1.89%         2.20%         2.20%         2.80%        2.44%
 Net Charge to the Income Statement to Average
 Loans (3).....................................         (1.93)         10.37          4.47          2.39          2.73         2.72
</TABLE>

(1)   Before the allowance for loan losses.

(2)   Charge-offs plus direct charge-offs minus bad debts recovered.

(3)   Income statement charges consist of net provisions plus net direct
      charge-offs (direct charge-offs minus bad debts recovered).

      As of December 31, 2003, the loan loss allowance was Ps. 1,177.3 million.
This amount represented a coverage of the nonaccrual loan portfolio of 90.61%,
which was lower than the 104.45% level as of December 31, 2002, but higher than
the levels reached in prior fiscal years.

      The lower loan loss allowance reported at the close of fiscal year 2003,
as compared to the prior fiscal year, reflects the reduced overall risk faced by
the Bank's loan portfolio after completion of several debt restructurings. See "
-- Argentine Central Bank's Loan Classification and Loan Loss Provisions -- Loan
Loss Provision Requirements -- General Provisions" above.

      The increase in the allowance for loan losses as of December 31, 2002,
when compared to December 31, 2001 and the increases in the year ended December
31, 2001, the six-month period ended December 31, 2000 and in the year ended
June 30, 2000 when compared to the previous fiscal year are part of a continuing
trend that reflects the continuous worsening of the economic conditions in
Argentina between late 1998 and 2002. This is reflected in a general
deterioration of credit quality, higher levels of nonperforming loans and higher
charge-offs across the entire loan portfolio.

      The increase in the years ended December 31, 2002 and 2001 can also be
attributed to the increase in the unallocated reserve as of each year end. For
an explanation of the increase in the Bank's general unallocated allowance, see
" -- Argentine Central Bank's Loan Classification and Loan Loss Provisions --
Loan Loss Provision Requirements -- General Provisions" above.

                                      -79-
<PAGE>

      In 2003, the net effect on the income statement was a benefit of Ps. 223.6
million, representing 1.93% of the average loan balance for the fiscal year.
This gain was the consequence of the improvement in the quality of the loan
portfolio which resulted in the recovery of loan loss provisions. The net charge
to the income statement as a percentage of average loans was 10.37% in fiscal
year 2002, 4.47% during fiscal year 2001 and 2.39% during the six months ended
December 31, 2000. This reflects the fact that the Bank assigned an increased
portion of its income, both to nonaccrual portfolio charge offs and to provide
for a higher coverage of such portfolio with allowances, given that the quality
of such portfolio deteriorated significantly during 2001, especially in the last
quarter of the year, and in 2002.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

      The following table presents the allocation of Banco Galicia's allowance
for loan losses among the various loan categories and shows such allowances as a
percentage of Banco Galicia's total loan portfolio before deducting the
allowance for loan losses, in each case for the periods indicated. The table
also shows each loan category as a percentage of Banco Galicia's total loan
portfolio before deducting the allowance for loan losses at the dates indicated.

<TABLE>
<CAPTION>
                                                                       AS OF DECEMBER 31,
                                  ---------------------------------------------------------------------------------------------
                                               2003                           2002                            2001
                                  ------------------------------  ----------------------------   ------------------------------
                                                % OF      LOAN                  % OF      LOAN               % OF       LOAN
                                      AMOUNT   LOANS   CATEGORY %    AMOUNT     LOANS CATEGORY %    AMOUNT  LOANS    CATEGORY %
                                  ------------------------------  ------------------------------ ------------------------------
                                  (in millions of pesos,  (in millions of February 28, 2003, constant pesos, except percentages)
                                    except percentages)
<S>                               <C>          <C>     <C>        <C>           <C>     <C>      <C>        <C>      <C>
Nonfinancial Public Sector......            -       -      64.00%          -       -     62.03%           -       -      41.15%
Local Financial Sector..........            -       -       1.61           -       -      1.09            -       -       0.91
Nonfinancial Private Sector and
 Residents Abroad
  Advances......................  Ps.    78.8    0.65%      1.81  Ps.   40.1    0.33%     1.84   Ps.   46.1    0.22%      3.85
  Notes.........................        441.9    3.65      11.46       569.0    4.62     12.55        219.2    1.04      18.46
  Mortgage Loans................        142.6    1.18       5.94       122.1    0.99      7.02        154.5    0.73      15.65
  Pledge Loans..................         22.7    0.19       0.45        24.3    0.20      1.56         33.5    0.16       4.00
  Personal Loans................        157.6    1.30       0.46        48.4    0.39      0.97         64.8    0.31       2.77
  Credit-Card Loans.............         14.5    0.12       6.76        55.6    0.45      4.75         83.7    0.40       8.90
  Placements in Correspondent
   Banks........................            -       -       1.42           -       -      1.29            -       -       1.79
  Other ........................          5.6    0.05       6.09         0.0    0.00      6.90          3.7    0.02       2.52
Unallocated (1).................        313.6    2.58          -       822.3    6.68         -        444.8    2.10          -
                                  -----------  ------  ---------  ---------- -------    ------   ---------- -------  ---------
TOTAL...........................  Ps. 1,177.3    9.72%    100.00% Ps.1,681.8   13.66%   100.00%  Ps.1,050.3    4.98%    100.00%
                                  ===========  ======  =========  ========== =======    ======   ========== =======  =========
</TABLE>

                                      -80-
<PAGE>

<TABLE>
<CAPTION>
                                           AS OF DECEMBER 31,                           AS OF JUNE 30,
                                      ------------------------------------------------------------------------------------------
                                                    2000                           2000                         1999
                                      ------------------------------------------------------------------------------------------
                                                    % OF      LOAN                % OF      LOAN               % OF    LOAN
                                        AMOUNT     LOANS    CATEGORY %  AMOUNT    LOANS   CATEGORY %  AMOUNT  LOANS  CATEGORY %
                                      ------------------------------------------------------------------------------------------
                                               (in millions of February 28, 2003, constant pesos, except percentages)
<S>                                    <C>         <C>      <C>         <C>       <C>     <C>        <C>      <C>    <C>
Nonfinancial Public Sector...........          -        -    27.49%            -       -     26.11%        -     -    22.12%
Local Financial Sector...............          -        -     5.35             -       -      3.77         -     -     4.90
Nonfinancial Private Sector and
Residents Abroad
 Advances............................  Ps.  35.9     0.17%    4.62      Ps. 40.1    0.19%     8.25   Ps.31.1  0.16%    7.84
 Notes...............................       76.7     0.37    23.61          82.9    0.39     25.60      71.6  0.37    24.82
 Mortgage Loans......................      100.3     0.48    16.72          89.9    0.43     14.16      97.8  0.51    14.48
 Pledge Loans........................       37.2     0.18     4.18          39.0    0.19      4.06      30.0  0.16     4.71
 Personal Loans......................       58.0     0.28     3.87          51.6    0.24      3.45      46.1  0.24     3.51
 Credit-Card Loans...................       84.8     0.40     7.95          86.8    0.41      6.84     134.2  0.70     6.41
 Placements in Correspondent Banks...          -        -     3.68             -       -      5.82         -     -     8.75
 Other...............................       10.7     0.05     2.53          11.2    0.05      1.94      12.1  0.06     2.46
Unallocated (1)......................      192.4     0.91        -         175.4    0.83         -     168.3  0.88        -
                                       ---------   ------   ------      --------  ------  --------  --------  ----   ------
TOTAL................................  Ps. 596.0     2.84%  100.00%     Ps.576.9    2.73%   100.00% Ps.591.2  3.08%  100.00%
                                       =========   ======   ======      ========  ======  ========  ========  ====   ======
</TABLE>

(1) The unallocated reserve consists of the allowances established on the
portfolio classified in the "normal" and "normal performance" categories and
includes additional reserves in excess of Argentine Central Bank minimum
requirements.

                                      -81-
<PAGE>

CHARGE-OFFS

      The following table sets forth the allocation of the main charge-offs made
by Banco Galicia during the years ended December 31, 2003 and 2002, 2001 and the
six-month period ended December 31, 2000.

<TABLE>
<CAPTION>
                                                                            FISCAL YEAR ENDED
                                                --------------------------------------------------------------------------
                                                                                DECEMBER 31,
                                                --------------------------------------------------------------------------
                                                       2003                       2002                     2001
                                                --------------------------------------------------------------------------
                                                (in millions of pesos)   (in millions of February 28, 2003, constant pesos)
<S>                                             <C>                             <C>                     <C>
CHARGE-OFFS BY TYPE

  Advances.....................................       Ps. 31.3                  Ps. 48.6                Ps. 59.0
  Notes
     Promissory Notes .........................           65.0                      14.9                    20.1
     Discounted and Purchased Bills............              -                         -                    20.7
     Documentary Credits.......................              -                         -                       -
  Mortgage Loans...............................           34.4                      18.5                    16.5
  Pledge Loans.................................           18.8                      19.1                    41.0
  Personal Loans...............................           36.9                      33.7                   108.8
  Credit-Card Loans
     Banco Galicia.............................           27.9                      22.1                    50.2
     Regional Credit-Card Companies............           52.9                      89.3                   147.9
  Other Loans .................................            0.1                       5.7                     1.5
  Adjustment and Restatement...................              -                      31.5                       -
  Other........................................              -                         -                       -
                                                      --------                  --------                --------
  TOTAL........................................       Ps.267.3                  Ps.283.4(*)             Ps.465.7
                                                      ========                  ========                ========
</TABLE>


(*) Does not include Ps. 22.3 million corresponding to Banco Galicia Uruguay
S.A.

      During fiscal year 2003 the overall level of charge-offs decreased from
the level reported in the prior fiscal year, mainly as a result of the
significant decrease in charge-offs related to loans granted by the regional
credit card companies, which mainly comprises loans to the client segment that
was first affected by the crisis, and therefore this portfolio had experienced
significant charge offs in the prior years. This was partially offset by higher
charge offs on mortgage loans and promissory notes.

      The overall level of charge offs for the year ended December 31, 2002,
reflects the effects on the Bank's loan portfolio quality of the outbreak of the
crisis in late 2001 and of the crisis environment prevailing during 2002. It
also reflects the effects of the Argentine government measures aimed at
restructuring private-sector loan portfolios. When comparing the 2002 figures in
the table above with the previous periods' figures, it should be taken into
account that previous year's data was restated in constant currency of February
28, 2003, by using the variation of the WPI, that is using a coefficient of
2.2035. The decrease in the overall level of charge offs in real terms is mainly
due to this restatement. When compared in nominal terms, the overall level of
charge offs in 2002 was 33.0% higher than in 2001. By type of loan, and when
compared in nominal terms, increases can be observed in charge offs of
promissory notes, mortgages and the regional credit-card companies portfolios.
The increases in promissory notes and mortgage portfolios mainly reflect the
fact that the economic crisis of 2002 significantly affected businesses,
including several large businesses. The increase in the charge offs in the
regional credit-card portfolio continued to show the more than proportional
effect of the crisis (increase in unemployment and decrease in the purchasing
power of income) on the lower-income segment of the population.

      The overall level of charge offs for the year ended December 31, 2001,
reflects the deepening during year 2001 of the recession that began in the
second half of 1998. The overall level of charge-offs remained mostly unchanged
when compared to the annualized level of charge-offs made during the six-month
period ended December 30, 2000. However, charge-offs by type of loan for the
year ended December 31, 2001, showed certain variations when compared to the
annualized amounts of the six-month period ended December 30, 2000, mostly due

                                      -82-
<PAGE>

to the dynamics of the long and deep economic recession. Higher charge offs of
advances and discounted and purchased bills reflect the fact that, during 2001,
the adverse effects of the persistent economic recession extended into the
medium and large corporate sector more intensely than in previous periods, with
businesses being the main recipients of this type of unsecured loans.
Charge-offs on notes and mortgage and pledge loans decreased indicating a slower
deterioration of the credit quality of this type of loans. Charge offs on
personal loans and credit-card loans related to credit cards managed by the Bank
itself remained unchanged. Charge-offs on credit-card loans granted by the
regional credit-card companies increased significantly reflecting the fact that
the customer segment of these companies, the lower end of the consumer segment
of the interior of Argentina, was one of the most affected by the deepening of
the recession in 2001.

FOREIGN OUTSTANDINGS

      Cross-border or foreign outstandings for a particular country are defined
as the sum of all claims on third parties domiciled in that country and comprise
loans (including accrued interest), acceptances, interest-bearing deposits with
other banks, other interest-bearing investments and any other monetary assets
that are denominated in dollars or other nonlocal currency. At the end of fiscal
year 2003, we did not have any foreign outstandings that represented 0.75% or
more of our total assets.

      At the end of fiscal year 2002, we had foreign outstandings amounting to
Ps. 206.3 million with United States banks and other financial institutions,
representing 0.86% of our total assets. There were no other foreign outstanding
representing more than 0.75% of our total assets.

      At the end of fiscal year 2001, we had foreign outstandings with United
States banks and other financial institutions of Ps. 698.2 million and with
United Kingdom banks and financial institutions for Ps. 1,113.2 million,
representing 2.50% and 3.99% of our total assets, respectively. There were no
other foreign outstandings representing more than 0.75% of our total assets.

COMPOSITION OF DEPOSITS

      The following table sets out the composition of Grupo Galicia's deposits
as of December 31, 2003, 2002 and 2001. Grupo Galicia's deposits mainly
represent Banco Galicia's deposits.

<TABLE>
<CAPTION>
                                                                      GRUPO GALICIA
                                                     --------------------------------------------
                                                                    AS OF DECEMBER 31,
                                                     --------------------------------------------
                                                         2003             2002            2001
                                                     --------------------------------------------
                                                      (in millions     (in millions of February 28,
                                                        of pesos)         2003, constant pesos)
<S>                                                  <C>               <C>            <C>
Current Accounts and Other Demand Deposits.........  Ps. 1,178.8       Ps.  730.3     Ps.  1,907.9
Savings Accounts...................................        818.9            563.9          3,240.6
Time Deposits......................................      2,838.4          2,423.1          6,936.7
Restructured Deposits (1) .........................        381.9            948.4                -
Other Deposits.....................................        168.7            166.3          1,285.8
Plus:  Interest Payable and Differences in
Quotations (2).....................................        197.3            377.3            131.9
                                                     -----------       ----------     ------------
TOTAL DEPOSITS.....................................  Ps. 5,584.0       Ps.5,209.3     Ps. 13,502.9
                                                     -----------       ----------     ------------
</TABLE>

(1)   CEDROS, plus restructured deposits exchanged for government bonds in the
      Canje II, which have not been delivered to customers yet, plus
      restructured deposits under judicial proceedings.

(2)   Includes the CER adjustment of CEDROs.

      In 2003, the Group's consolidated deposits increased 7.2% as a result of
the increase of voluntary deposits (deposits in current accounts, savings
accounts and time deposits) raised by the Bank in Argentina. The increase in
voluntary deposits was to a large extent due to the government measures aimed at
"freeing" restructured deposits and exchanging them for government bonds. See "
-- Main Regulatory Changes in 2002 and 2003 -- Deposits." Substantially all of
the increase in time deposits was in short-term peso-denominated time deposits.

      The increase in consolidated time deposits was partially offset by the
payment by Galicia Uruguay of the first installment of the restructuring
schedule agreed with the depositors in December 31, 2003. In addition, the

                                      -83-
<PAGE>

following factors contributed to offset the increase in the Bank's total
deposits: (i) the decrease of the exchange rate during 2003 from Ps. 3,363 per
U.S. dollar as of December 31, 2002 to Ps. 2,933 as of December 2003; and (ii)
restructured deposits continued to decrease as a result of their amortization in
accordance with the schedule established by the government, the payments made by
the Bank as a consequence of the judicial orders received by the Bank mandating
the reimbursement of deposits, and to the above mentioned measures to eliminate
the restructured deposits.

      Restructured deposits in Argentina as of December 31, 2003 amounted to Ps.
381.9 million (principal only), with a 59.7% decrease from Ps. 948.4 million
(principal only) as of December 31, 2002. Consequently, these deposits
represented 6.8% of total deposits as of December 31, 2003, compared to 18.2% as
of December 31, 2002.

      During 2002, the Group's consolidated deposits decreased 61.4% due to:

      (i)   the continuity of the run on the Argentine financial system's
            deposits during the first months of 2002;

      (ii)  the run on its deposits experienced by Galicia Uruguay until the
            suspension of its activities in February 13, 2002;

      (iii) the restructuring, completed during the last quarter of 2002, of
            Galicia Uruguay's deposits, which, in accordance with the
            restructuring proposal and depositor preferences, were partially
            replaced by negotiable obligations;

      (iv)  the decrease in the Bank's deposits in Argentina as a consequence of
            the judicial orders received by the Bank mandating the reimbursement
            of deposits; and

      (v)   the completion by late December 2002 of the Canje I. See " -- Main
            Regulatory Changes in 2002 and 2003 -- Deposits."

      It should be noted that, in the table above, prior years' figures were
restated in constant currency of February 28, 2003, by using the variation of
the WPI between January 1, 2002 and February 28, 2003, that is by using a
coefficient of 2.2035. Therefore, the decrease in 2002 is to a large extent
explained by said restatement of the December 31, 2001, figures. In nominal
terms, the fall in the Group's consolidated deposits was 15.7%.

      The decrease of the Bank's total deposits in 2002 was mitigated by the
fact that: (i) total deposits as of December 31, 2002, included US$554.9 million
of deposits at the Bank's foreign branches and subsidiaries, that were dollar
denominated and valued at the market exchange rate, and (ii) the exchange rate
during 2002 increased from Ps. 1.00 per U.S. dollar as of December 31, 2001 to
Ps. 3.363 as of December 2002.

      The decrease in savings accounts during 2002 is attributable to the fact
that most savings accounts in the Bank operating in Argentina were dollar
denominated as of December 31, 2001 and these deposits were restructured, with
the balances of these restructured deposits (net of decreases and amortizations)
shown under "Restructured Deposits" in the table above. This line included as of
December 31, 2002, Ps. 948.4 million of restructured deposits (principal only).
No restructured deposits were outstanding as of the close of fiscal year 2001.
The decrease in time deposits is due, in part, to the restructuring of a large
portion of Galicia Uruguay deposits as negotiable obligations. Galicia Uruguay
had consolidated deposits for US$1,355.7 million as of December 2001 which were
mostly time deposits. As of December 31, 2002 this subsidiary's consolidated
deposits amounted to US$550.0 million.

      The table above shows the significant loss in deposits experienced by the
Bank in 2001 as a consequence of the massive runs suffered by the Bank in
Argentina throughout 2001 and by its subsidiary, Galicia Uruguay, in December
2001. Consolidated deposits fell 31.2% during 2001.

      For more information on deposits, see Item 5. "Operating and Financial
Review and Prospects -- Item 5A. Operating Results -- Funding."

                                      -84-
<PAGE>

      The following table provides a breakdown of the Group's consolidated
deposits as of December 31, 2003, by contractual maturity date and currency of
denomination. As already mentioned in this annual report, the contractual
maturity of CEDROs was set by the Argentine government's regulations.

<TABLE>
<CAPTION>
                                                        PESO-DENOMINATED        DOLLAR-DENOMINATED         TOTAL
                                                      ----------------------------------------------------------------
                                                                     % OF                  % OF                  % OF
                                                       AMOUNT       TOTAL       AMOUNT     TOTAL      AMOUNT    TOTAL
                                                      ----------------------------------------------------------------
                                                                            (in millions of pesos)
<S>                                                   <C>           <C>       <C>          <C>      <C>         <C>
Current Accounts and Demand Deposits................  Ps.1,130.1     30.2%    Ps.   48.7      3.0%  Ps.1,178.8   21.9%
Savings Accounts....................................       641.6     17.2          177.3     10.8        818.9   15.2
Time Deposits.......................................     1,507.6     40.3        1,330.8     80.9      2,838.4   52.7
     Maturing within 30 Days........................       349.0      9.3           65.3      4.0        414.3    7.7
     Maturing after 31 Days but within 59 Days......       402.8     10.8           44.4      2.7        447.2    8.3
     Maturing after 60 Days but within 89 Days......       449.0     12.0           28.3      1.7        477.3    8.9
     Maturing after 90 Days but within 179 Days.....       263.3      7.0           24.6      1.5        287.9    5.3
     Maturing after 180 Days but within 365 Days....        42.5      1.2            6.5      0.4         49.0    0.9
     Maturing after 365 Days........................         1.0        -        1,161.7     70.6      1,162.7   21.6
Restructured Deposits (1)...........................       381.9     10.2              -        -        381.9    7.1
Other Deposits......................................        79.8      2.1           88.9      5.3        168.7    3.1
     Maturing within 30 Days........................        79.3      2.1           82.5      5.0        161.8    3.0
     Maturing 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........................         0.5        -            6.4      0.3          6.9    0.1
                                                      ----------    -----     ----------   ------   ----------  -----
TOTAL DEPOSITS (2)..................................  Ps.3,741.0    100.0%    Ps.1,645.7    100.0%  Ps.5,386.7  100.0%
                                                      ----------    -----     ----------   ------   ----------  -----
</TABLE>

(1)   CEDROs, plus restructured deposits exchanged for government bonds in the
      Canje II, which have not been delivered to customers yet, plus
      restructured deposits under judicial proceedings. Only principal. Excludes
      the CER adjustment.

(2)   Only principal.

      The preceding table shows that the highest concentration of time deposits
is in the "Within 30 Days," "After 31 Days but Within 59 Days" and "After 60
Days but Within 89 Days" categories, amounting to 24.9% of the total.

      With respect to time deposits raised in Argentina, it is worth pointing
out that, even though the Argentine Central Bank had authorized the raising of
time deposits of less than 30 days (up to 7- and 14-day terms) as from March
2002, depending on the characteristics of the funds raised, through Communique
"A" 4032 effective as of November 1, 2003, such entity reestablished the minimum
term to raise deposits in 30 days. The average maturity of our voluntary time
deposits in Argentina both peso- and dollar-denominated was approximately 60
days as of December 31, 2003, having increased during 2003 from approximately 40
days as of December 31, 2002.

      Dollar-denominated time deposits in the table above with a maturity of
more than 365 days corresponded primarily to Galicia Uruguay's consolidated
restructured deposits.

      The schedule established by the government for the reimbursement of CEDROS
began in March 2002 and January 2003, for those originally denominated in pesos
and in U.S. dollars, respectively, and expires in November 2004 and August 2005,
respectively.

      As of December 31, 2003, dollar-denominated deposits, for Ps. 1,645.7
million, represented 30.6% of total deposits, Ps. 1,270.8 million of which
corresponded to Galicia Uruguay consolidated, representing mostly time deposits,
and Ps. 0.8 million to the Bank's Cayman Branch.

      The following table provides information about the maturity of the Group's
outstanding time deposits exceeding Ps. 100,000, according to whether they were
opened at domestic or foreign branches as of December 31, 2003.

                                      -85-
<PAGE>

<TABLE>
<CAPTION>
                                                                                 ISSUED BY            ISSUED BY
                                                                              DOMESTIC OFFICES     FOREIGN OFFICES
                                                                              ----------------     ---------------
                                                                                    (in millions of pesos)
<S>                                                                           <C>                  <C>
Time Deposits
    Within 29 Days...........................................................    Ps. 151.1                   -
    After 30 Days but within 59 Days.........................................        180.0                   -
    After 60 Days but within 89 Days.........................................        146.9                   -
    After 90 Days but within 179 Days........................................        128.4                   -
    After 180 Days but within 365 Days.......................................         29.7                   -
    After 365 Days...........................................................          1.3             1,060.5
                                                                                 ---------         -----------
TOTAL TIME DEPOSITS..........................................................    Ps. 637.4         Ps. 1,060.5
RESTRUCTURED DEPOSITS........................................................    Ps. 108.8                   -
Other Deposits
    Within 29 Days...........................................................            -                   -
    After 30 Days but within 59 Days.........................................            -                   -
    After 60 Days but within 89 Days.........................................            -                   -
    After 90 Days but within 179 Days........................................            -                   -
    After 180 Days but within 365 Days.......................................            -                   -
    After 365 Days...........................................................            -         Ps.     6.4
                                                                                 ---------         -----------
TOTAL OTHER DEPOSITS.........................................................            -         Ps.     6.4
                                                                                 ---------         -----------
TOTAL DEPOSITS (2) ..........................................................    Ps. 746.2         Ps. 1,066.9
                                                                                 =========         ===========
</TABLE>

(1)   CEDROS, plus restructured deposits exchanged for government bonds in the
      Canje II, which have not been delivered to customers yet, plus
      restructured deposits under judicial proceedings. Only principal. Excludes
      the CER adjustment.

(2)   Only principal.

RETURN ON EQUITY AND ASSETS

      The following table presents certain selected financial information and
ratios for Grupo Galicia for the periods indicated.

<TABLE>
<CAPTION>
                                                                                             GRUPO GALICIA
                                                                          ---------------------------------------------
                                                                                           FISCAL YEAR ENDED
                                                                          ---------------------------------------------
                                                                                              DECEMBER 31,
                                                                          ---------------------------------------------
                                                                                2003            2002            2001
                                                                          ---------------------------------------------
                                                                          (in millions of   (in millions of February 28,
                                                                           pesos, except    2003, constant pesos, except
                                                                           percentages)           percentages)
<S>                                                                       <C>              <C>              <C>
Net Income After the Loss Absorption..................................    Ps.  (217.1)     Ps. (1,471.5)    Ps.   264.6
Net Income Before the Loss Absorption.................................         (217.1)         (2,841.5)          264.6
Average Total Assets..................................................       22,530.3          29,500.9        31,967.4
Average Shareholders' Equity..........................................        1,529.4           2,431.9         3,053.4
Shareholders' Equity at End of the Period.............................        1,462.3           1,638.7         3,103.5
Return on Assets (1)..................................................          (0.92)%           (5.90)%          0.90%
Return on Shareholders' Equity (2)....................................         (14.19)           (60.51)           8.67
Declared Cash Dividends...............................................              -                 -               -
Dividend Payout Ratio.................................................              -                 -               -
Average Shareholders' Equity as a Percentage of Average Total Assets..           6.79%             8.24%           9.55%
Shareholders' Equity at the End of the Period as a Percentage of
 Average Total Assets.................................................           6.49              5.55            9.71
                                                                          ===========      ============     ===========
</TABLE>

(1)   Before the absorption allowed by Argentine Central Bank Communique "A"
      3800, for fiscal year 2002 this ratio was (10.55) %.

(2)   Before the absorption allowed by Argentine Central Bank Communique "A"
      3800, for fiscal year 2002 this ratio was (116.84) %.

                                      -86-
<PAGE>

SHORT-TERM BORROWINGS

      Grupo Galicia's short-term borrowings represents mainly Banco Galicia's
short-term borrowings.

      Short-term borrowings include all the Bank's borrowings (including repos
and debt securities or negotiable obligations) with a contractual maturity of
less than one year, owed to the Argentine Central Bank, foreign and domestic
financial institutions and negotiable obligations holders.

<TABLE>
<CAPTION>
                                                                                  AS OF DECEMBER 31,
                                                                 ---------------------------------------------------
                                                                   2003                 2002                2001
                                                                 ---------------------------------------------------
                                                                                         (in millions of February 28,
                                                                 (in millions of pesos)     2003, constant pesos)
<S>                                                              <C>                 <C>                 <C>
SHORT-TERM BORROWINGS
Argentine Central Bank......................................     Ps.    0.8          Ps. 4,831.2         Ps. 2,719.8
Other Banks and International Entities (1)
    Lines of Credit from Domestic Banks.....................           25.1                 48.0                42.8
    Lines of Credit from Foreign Banks......................        1,231.8              1,548.8               567.4
Repos with Domestic Banks (1)...............................              -                    -               954.8
Repos with Foreign Banks (1)................................              -                    -                88.1
Debt Securities (1) ........................................            9.5                129.2               962.7
                                                                 ----------          -----------         -----------
TOTAL.......................................................     Ps.1,267.2          Ps. 6,557.2         Ps. 5,335.6
                                                                 ==========          ===========         ===========
</TABLE>

(1)   For 2003 and 2002, included short term borrowings under restructuring.

      Banco Galicia's short-term borrowings totaled Ps. 1,267.2 million as of
December 31, 2003, compared to Ps. 6,557.1 million as of December 31, 2002 and
Ps. 5,335.6 million as of December 31, 2001.

      The decrease in the Bank's short term borrowings in 2003 is mainly due to
the fact that, as of December 31, 2003, the financial assistance for liquidity
support owed to the Argentine Central Bank was recorded as a long term
liability, while as of December 31, 2002, such liabilities were recorded as a
30-day revolving facility. On November 27, 2003, through its Resolution No. 1,
the Financial System's Restructuring Unit authorized the Argentine Central Bank
to restructure such financial assistance in accordance with: (i) the provisions
of Decree No. 739/03 and Decree No. 1262/03 and (ii) the repayment schedule
presented by the Bank to the Argentine Central Bank. On February 3, 2003, the
Argentine Central Bank approved such schedule, which contemplates the repayment
of the financial assistance for liquidity support owed to the Argentine Central
Bank in 92 monthly installments beginning in March 2004, inclusively. As of
December 31, 2002, Ps. 4,831.2 million corresponding to such assistance were
included as short term borrowings. See Item 5. "Operating and Financial Review
and Prospects -- Item 5A. Operating Results -- Funding."

      In addition short term borrowings decreased in 2003 due to: (i) the
decrease of the balance of lines with foreign banks, mainly as a result of the
appreciation of the peso, and (ii) the decrease of the balance of negotiable
obligations as a result of the progress made by the regional credit card
companies in the restructuring of its short-term negotiable obligations, past
due as of December 31, 2002, into long term liabilities.

      The increase in the Bank's short term borrowings in 2002 as compared with
2001 was attributable to: (i) additional financial assistance for liquidity
support granted by the Argentine Central Bank to the Bank, in the first months
of 2002 and before the implementation of the Galicia capitalization and
liquidity plan. It should be noted that the balance of "Repos with Domestic
Banks" as of December 31, 2001, mainly represents Repos with the Argentine
Central Bank, given that as a result of the crisis, in late 2001, the only
source of funding available to banks in the local market became the Argentine
Central Bank, in its capacity as lender of last resort. At maturity such Repos
were cancelled by means of advances from the Argentine Central Bank.

      The increase in the balance of lines from foreign banks in 2002 mainly
reflects the reallocation of an US commercial paper recorded as negotiable
obligations as debt with foreign banks, for US$250 million.

                                      -87-
<PAGE>

      The following table shows for the significant short-term borrowings of
Grupo Galicia for the fiscal years ended December 31, 2003, 2002 and 2001:

      -     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.

<TABLE>
<CAPTION>
                                                                            GRUPO GALICIA, AS OF DECEMBER 31,
                                                                    -----------------------------------------------------
                                                                         2003               2002               2001
                                                                    -----------------------------------------------------
                                                                    (in millions of     (in millions of February 28, 2003,
                                                                       pesos )                  constant pesos)
<S>                                                                 <C>                 <C>                 <C>
ARGENTINE CENTRAL BANK
    Weighted-average interest rate at end of period........                9.00%               4.38%               9.00%
    Maximum balance recorded at the monthly closing dates..         Ps.     0.8         Ps. 4,831.2             3,414.0
    Average balances for each period.......................                 0.3             4,297.8               294.4
    Weighted-average interest rate for the period..........                9.00%              29.09%               9.00%
LINES OF CREDIT FROM DOMESTIC BANKS
    Weighted-average interest rate at end of period........                6.88%               6.48%              20.35%
    Maximum balance recorded at the monthly closing dates..         Ps.    43.4         Ps.   144.3         Ps.   172.3
    Average balances for each period.......................                35.4                73.1               182.7
    Weighted-average interest rate for the period .........                6.82%               9.86%              37.03%
LINES OF CREDIT FROM FOREIGN BANKS
    Weighted average interest rate at end of period .......                7.10%               6.20%               6.51%
    Maximum balance recorded at the monthly closing dates..         Ps. 1,344.4         Ps. 1,877.6         Ps.   916.9
    Average balances for each period ......................             1,239.0             1,443.2               715.7
    Weighted average interest rate for the period .........                7.10%               6.12%               6.19%
REPOS WITH DOMESTIC BANKS
    Weighted-average interest rate at end of period .......                   -                   -                9.00%
    Maximum balance recorded at the monthly closing dates..                   -         Ps. 1,056.8         Ps. 1,259.1
    Average balances for each period ......................                   -               330.9                91.9
    Weighted-average interest rate for the period .........                   -               33.42%               9.13%
REPOS WITH FOREIGN BANKS
    Weighted-average interest rate at end of period .......                   -                   -                3.50%
    Maximum balance recorded at the monthly closing dates..                   -                   -         Ps.   461.8
    Average balances for each period ......................                   -                   -               365.8
    Weighted-average interest rate for the period .........                   -                   -               3.91%
NEGOTIABLE OBLIGATIONS
    Weighted-average interest rate at end of period .......               16.05%              16.18%               9.44%
    Maximum balance recorded at the monthly closing dates..         Ps.   128.0         Ps.   238.7         Ps. 1,377.4
    Average balances for each period ......................                50.9               182.7             1,235.5
    Weighted-average interest rate for the period..........               16.05%              16.19%               8.86%
                                                                    -----------         -----------         -----------
</TABLE>

REGULATORY CAPITAL

      The capital adequacy of Grupo Galicia is not under the supervision of the
Argentine Central Bank. Grupo Galicia has a minimum capital requirement
established by the Commercial Companies' Law (Ley de Sociedades Comerciales) of
Ps. 0.012 million.

      Due to the significant changes suffered during 2002 by the financial
system's operations, which significantly affected the variables to determine the
minimum capital requirements, through its Communiques "A" 3599 and "A" 3604
dated May 3 and 9, 2002, respectively, the Argentine Central Bank suspended the
submission of capital adequacy information by financial institutions. On June 2,
2003 and July 25, 2003, through its Communiques "A" 3959 and "A" 3986,
respectively, the Argentine Central Bank established new capital adequacy rules
and that compliance with such rules by financial institutions would be required
beginning on January 1, 2004.

                                      -88-
<PAGE>

The Bank was in compliance with the Argentine Central Bank's new capital
adequacy requirements during 2004, both before and after the increase in its
regulatory capital resulting from the restructuring of the foreign debt of its
head office in Argentina and of its Cayman Branch. For more information on this
restructuring see " -- Business Overview -- Banco Galicia -- Restructuring of
the Foreign Debt of the Bank's Head Office in Argentina and its Cayman Branch."

      The current and the previous capital adequacy rules established by the
Argentine Central Bank are based on the methodology of the Basel Committee on
Banking Supervision of the Bank for International Settlements. Banks have to
comply with capital requirements both on an unconsolidated basis and on a
consolidated basis with its significant subsidiaries. Banco Galicia's
significant subsidiaries are Galicia Uruguay and the regional credit-card
companies that Banco Galicia indirectly controls.

      For more information on Argentine Central Bank's minimum capital
requirement rules, see " -- Argentine Banking System and Regulation -- Argentine
Banking Regulation -- Capital Adequacy Requirements."

      The table below presents Banco Galicia's capital requirement and
computable capital for the dates indicated. The information is consolidated with
significant subsidiaries, with the regional credit card companies incorporated
in June 1999.

<TABLE>
<CAPTION>
                                                                                  AS OF DECEMBER 31,
                                                         -------------------------------------------------------------------
                                                              2003(*)                2002(*)                        2001
                                                         -------------------------------------------------------------------
                                                         (in millions of pesos,  (in millions of February 28, 2003, constant
                                                         except  percentages)             pesos, except percentages)
<S>                                                      <C>                     <C>                            <C>
SHAREHOLDERS' EQUITY................................        Ps. 1,352.8            Ps. 1,551.7                  Ps. 3,090.3
ARGENTINE CENTRAL BANK MINIMUM CAPITAL
  REQUIREMENTS
  Allocated to Financial Assets ....................                  -                      -                      1,465.3
  Allocated to Fixed Assets ........................                  -                      -                        202.3
  Allocated to Market Risk..........................                  -                      -                          0.2
  Allocated to Interest-Rate Risk...................                  -                      -                         64.1
  Lending to the Nonfinancial Public Sector.........                  -                      -                         55.7
  Government Securities in Investment
  Accounts..........................................                  -                      -                         92.3
                                                            -----------            -----------                  -----------
MINIMUM CAPITAL REQUIRED BY THE ARGENTINE
  CENTRAL  BANK (A)                                                   -                      -                  Ps. 1,879.9
CAPITAL CALCULATED UNDER ARGENTINE BANKING
  GAAP
 Core Capital.......................................                  -                      -                      3,103.1
 Supplemental Capital...............................                  -                      -                        158.6
 Deductions
  Investments in Financial Entities.................                  -                      -                         (2.2)
  Organization Expenses.............................                  -                      -                       (208.4)
  Goodwill Recorded from June 30, 1997..............                  -                      -                       (258.2)
  Real Estate Properties for Banco
     Galicia's Own Use and Miscellaneous,
     for which no title deed has been made..........                                                                  (61.7)
  Other.............................................                  -                      -                        (58.0)
                                                            -----------            -----------                  -----------
 Total..............................................                  -                      -                       (588.5)
 Additional Capital - Market Variation..............                  -                      -                          2.2
                                                            -----------            -----------                  -----------
CAPITAL CALCULATED UNDER ARGENTINE BANKING
  GAAP..............................................                  -                      -                  Ps. 2,675.4
EXCESS CAPITAL
  Excess over required Capital (B)-(A)..............                  -                      -                  Ps.   795.5
  Excess over Required Capital as a % of
  Required Capital .................................                  -                      -                        42.32%
Total Capital Ratio.................................                  -                      -                        17.18
</TABLE>

(*) Through its Communiques "A" 3599 and "A" 3604 dated May 3 and 9, 2002,
respectively, the Argentine Central Bank suspended the submission of this
information.

      As of December 31, 2001, the Bank's computable capital exceeded the
minimum capital requirement of Ps. 1,879.9 million by Ps. 795.5 million,
representing an excess of 42.3%. This represented a Ps. 245.7 million

                                      -89-
<PAGE>

increase in excess computable capital from the December 31, 2000 level,
primarily due to a Ps. 102.3 million decrease in the minimum capital requirement
and a Ps. 143.4 million increase in the regulatory capital calculated under the
Argentine Central Bank rules. The lower minimum capital requirement can be
explained by the reduction in the risk-weighted value of financial assets,
mainly due to the decrease in the average loan balance during 2001, while the
higher computable capital was mainly a consequence of the increase in retained
earnings.

      For more information regarding Banco Galicia's capital, see Item 5.
"Operating and Financial Review and Prospects -- Item 5B. Liquidity and Capital
Resources -- Capital."

GOVERNMENT REGULATION

      As a financial services holding company, Grupo Galicia does not have a
specific institution controlling its activities as a holding entity.
Nevertheless, its subsidiaries have different regulatory entities regulating
their activities.

      In the case of Banco Galicia, the Argentine Central Bank is the regulatory
entity. For a description of Argentine banking regulations and the main
regulatory changes introduced by the government affecting financial
institutions' activities, see " -- Main Regulatory Changes in 2002 and 2003" and
" -- Argentine Banking System and Regulation -- Argentine Banking Regulation"
below.

      With respect to the insurance business, Sudamericana Holding S.A.'s
insurance subsidiaries are regulated by the National Insurance Superintendency
and Laws No. 17,418, No. 20,091 and No. 22,400. The insurance companies held by
Sudamericana Holding S.A. are Galicia Vida Compania de Seguros S.A., Galicia
Retiro Compania de Seguros S.A., Galicia Patrimoniales S.A. and Instituto de
Salta Compania de Seguros de Vida S.A. Sudamericana Holding S.A. also holds
Medigap Salud S.A. and Sudamericana Asesores de Seguros S.A., both of which are
regulated by the Commercial Companies' Law. Sudamericana Asesores de Seguros
S.A. is also regulated by the National Insurance Superintendency through Law No.
22,400.

      Net Investment S.A., our Internet incubator, and its controlled companies
are regulated by the Commercial Companies' Law and do not have a specific
regulating agency.

      Galicia Warrants is regulated by National Law No. 9,643.

MINIMUM CAPITAL REQUIREMENTS OF NONBANKING COMPANIES

      We and the companies we control are regulated by the Law Governing
Commercial Companies. In section No. 186, the law establishes that the capital
of a corporation (sociedad anonima) cannot be less than Ps. 12,000 (twelve
thousand pesos). In addition to this law, the Bank must also comply with the
regulations set forth by the Argentine Central Bank.

      The insurance companies controlled by Sudamericana Holding S.A. must meet
the minimum capital requirements set by General Resolution No. 25,804 of
Argentina's Superintendency of Insurance. The abovementioned resolution requires
insurance companies to maintain a minimum capital level equivalent to the
highest of the amounts calculated as follows:

a)    By line of insurance: This method establishes a fixed amount by line of
      insurance. For life insurance companies, it is Ps. 750,000, rising to Ps.
      3 million for companies that offer pension-linked life insurance. For
      annuity providers that do not offer life annuities or annuities covering
      disability and other work-related risks, the requirement is Ps. 2 million.
      For property insurance companies, the requirement is Ps. 5 million,
      excluding the automotive line of business.

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. Of the total, the company must calculate 18% of any
      result up to Ps. 5 million, and 16% of any result over Ps. 5 million.
      Finally, it must add the resulting figures and 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%.

                                      -90-
<PAGE>

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 26% of any result up to Ps. 3.5 million, and
      23% of any result over Ps. 3.5 million. 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. The latter total must be
      adjusted by the ratio of net claims reserves to gross claims reserves (at
      least 85%), plus 0.03% of at-risk capital adjusted by the ratio of net
      claims reserves to gross claims reserves (at least 50%).

         The minimum required capital must then be compared to computable
capital, defined as shareholder's equity less noncomputable assets.
Noncomputable assets consist mainly of deferred charges, pending capital
contributions, and excess investments in authorized instruments. As of December
31, 2003, the computable capital of the companies held by Sudamericana Holding
S.A. exceeded the minimum requirement of Ps. 11.7 million by Ps. 19.6 million,
representing an excess of approximately 167%.

MAIN REGULATORY CHANGES IN 2002 AND 2003

GENERAL

         In order to deal with the 2001 and 2002 crisis, on January 7, 2002,
Congress enacted the Public Emergency Law. The main measures taken by the
government through the enactment of such Law and a series of decrees, include
the following:

         -  ratifying the suspension of payments of Argentina's sovereign
            debt except for debt with the multilateral credit agencies;

         -  repealing of the articles of the Convertibility Law that had
            established in 1991 the one-to-one peso-dollar parity, devaluing the
            peso and subsequently allowing the peso to float, which resulted in
            an increase in such parity of approximately 240.0% during 2002;

         -  tightening of foreign-exchange controls and restrictions to
            transfers abroad, which began to be loosened at the end of 2002;

         -  ratifying and tightening the restrictions to cash withdrawals
            from bank deposits established in December 2001 (the "corralito"),
            restrictions that were lifted in December 2002;

         -  establishing a compulsory "asymmetric" conversion of certain
            dollar-denominated assets and liabilities into peso-denominated
            assets and liabilities at different exchange rates ("asymmetric
            pesification"), as follows:

            -     private sector debt (individual and corporate
                  dollar-denominated debt) with financial institutions, and
                  other creditors, was converted into peso-denominated debt at a
                  one-to-one exchange rate;

            -     dollar-denominated public sector debt instruments in financial
                  institutions' portfolios, both national and provincial, were
                  converted into peso-denominated instruments at an exchange
                  rate of Ps. 1.40 per US$1.00; and

            -     dollar-denominated bank deposits were converted into
                  peso-denominated bank deposits at an exchange rate of Ps. 1.40
                  per US$1.00, while public-sector debt, bank and corporate debt
                  governed by foreign law remained dollar-denominated;.

         -  modifying the yields of assets and the cost of liabilities
            pesified at the Ps. 1.40 per US$1.00 exchange rate, establishing
            fixed maximum and minimum interest rates, respectively, and
            establishing the indexation of the capital of those assets and
            liabilities to the variation of prices or salaries;

                                      -91-
<PAGE>

         -  restructuring bank peso-denominated time deposits and
            dollar-denominated deposits, above certain amounts, and establishing
            a repayment schedule ending in 2003 and 2005 depending on whether
            the deposit was originally peso or dollar-denominated (this
            restructuring was known as the "corralon");

         -  establishing a series of voluntary swaps of deposits in the
            "corralito" or of restructured deposits for government bonds, as a
            response to the inability of the financial system to return deposits
            in accordance with their original terms and conditions. Through
            Decree No. 739/03 of April 1, 2003, the lifting of the "corralon"
            was established;

         -  amending the charter of the Argentine Central Bank; and

         -  allocating government bonds to financial institutions in
            compensation for the losses that would otherwise arise from the
            "asymmetric pesification." As of the date of this annual report, the
            government and the Argentine Central Bank have provided a series of
            rules to determine the amount of compensation in connection with the
            "asymmetric pesification" to which each financial institution is
            entitled. However, certain situations remain that have not been
            contemplated by such rules, such as the provision of compensation
            for the effects of the "asymmetric pesification" on nonbanking
            subsidiaries with complementary activities.

         On October 29, 2003, the Congress approved the provision to financial
institutions of compensation for the imposition by the government of different
inflation adjustment coefficients on pesified bank assets. However, as of the
date of this annual report, the provision of compensation to financial
institutions for the negative effect on their financial condition resulting from
the reimbursement of dollar-denominated deposits, pursuant to depositors'
judicial actions ("amparo claims"), at exchange rates greater than Ps. 1.40 per
US$1.00, is pending.

         Some of these measures are described in more detail below and under "
-- Argentine Banking System and Regulation -- Argentine Banking Regulation."

FOREIGN EXCHANGE MARKET

         In late 2001 and early 2002 restrictions were imposed on access to the
Argentine foreign exchange market and on capital movements, which were tightened
by mid 2002. The Public Emergency Law put an end to the Convertibility Law
regime and thereby abandoned over ten years of fixed 1-to-1 U.S. dollar-peso
parity, and granted the Executive Branch the power to set the exchange rate
between the peso and foreign currencies and to regulate the foreign exchange
market.

         In order to prevent the appreciation of the peso that took place
principally during the fourth quarter of 2002, and mainly through its
Communiques "A" 3826, "A" 3843, "A" 3845, "A" 3866, "A" 3944, "A" 4087, and A"
4079, the Argentine Central Bank began to ease some of these restrictions.

         Effective January 1, 2003, the Argentine Central Bank authorized the
anticipated payment of imports and extended the maximum period for exporters of
capital goods to liquidate foreign exchange. Likewise, it subsequently lifted
restrictions on: (i) transfers of foreign exchange abroad to effect payments of
principal in connection with nonfinancial private sector debts of a financial
nature that had been restructured and in connection with debts that had become
past due for amounts not to exceed US$150,000 per month; and (ii) the transfer
of funds to pay interest on financial debts, profits and dividends. In addition:
(i) access of individuals and legal entities to the foreign exchange market was
enhanced by increasing the monthly purchase amounts authorized from US$100,000
to US$150,000; (ii) authorized holdings of foreign exchange by financial
institutions were also increased; and (iii) the limit over which exporters had
to liquidate foreign exchange with the Argentine Central Bank was increased from
US$200,000 to US$1.0 million.

         In May 2003, the foreign exchange market regulations were further
relaxed. Mainly through Communique "A" 3944, effective May 6, 2003, the
Argentine Central Bank provided for an additional easing of restrictions, which
included, among others, the following:

                                      -92-
<PAGE>

-  the period for exporters of goods and services to liquidate foreign exchange
   was extended from 30 to 90 working days;

-  except for certain export transactions, the obligation for exporters to
   liquidate foreign exchange through the Argentine Central Bank was eliminated;

-  anticipated payment of foreign debt arising from import transactions was
   authorized independently from the contractual maturity;

-  the requirement to obtain prior authorization of the Argentine Central Bank
   was eliminated for transfers of funds abroad for payment of principal of
   debts of a financial nature by financial and nonfinancial legal entities and
   local governments. The need for Argentine Central Bank prior authorization
   was not lifted in the case of financial institutions with outstanding
   financial assistance for liquidity support from the Argentine Central Bank.
   See " -- Argentine Banking System and Regulation -- Argentine Banking
   Regulation -- Financial Assistance from the Argentine Central Bank --
   Financial Assistance for Liquidity Support Granted Before April 1, 2003." The
   requirement to obtain prior authorization from the Argentine Central Bank is
   not applicable to the payments in connection with the Bank's foreign debt
   restructured on May 18, 2004, as such restructuring was approved by the
   Argentine Central Bank. See " -- Business Overview -- Banco Galicia --
   Restructuring of the Foreign Debt of the Bank's Head Office in Argentina and
   its Cayman Branch." On February 3, 2004, financial institutions with no
   outstanding financial assistance from the Argentine Central Bank were
   authorized to prepay debts with foreign creditors, with certain exceptions.

-  the limit to purchase foreign exchange without the prior authorization of the
   Argentine Central Bank, applicable to all Argentine residents, was increased
   from to US$500,000 per month. On January 20, 2004, Communique "A" 4079
   increased such limit to US$1 million, and Communique "A" 4128, dated April,
   16, 2004, increased it again to US$2 million.

         On June 30, 2003, Decree No. 285/03, regulated by Argentine Central
Bank Communique "A" 3972, established effective July 1, 2003, a system for the
registration of funds entering into Argentina and a 180-day restriction on the
remittance of such registered funds abroad. This restriction does not apply to
foreign trade transactions or to foreign direct investment.

         During 2003, the Argentine Central Bank issued a series of rules
further enhancing access to the foreign exchange market. Effective as of
February 3, 2004, through Communique "A" 4086, access by mutual funds to the
foreign exchange market was authorized.

LOANS TO THE PRIVATE SECTOR AND ASYMMETRIC INDEXATION

         Pursuant to Decree No. 214/02 dated February 3, 2002, as amended, loans
to the private sector were pesified at the Ps. 1 per dollar parity. These loans'
principal was to be adjusted by a coefficient whose variation is tied to the
changes in the consumer price index. The adjustment coefficient was known as the
Stabilization Coefficient of Reference ("Coeficiente de Estabilizacion de
Referencia") or CER (as per its initials in Spanish), with a maximum interest
rate was to be applied. The adjustment by the CER coefficient would be
retroactively applied beginning 180 days as from February 4, 2002. Subsequently,
most of the loans to individuals were excluded from this adjustment, which was
replaced by another coefficient that is linked to the changes in the general
level of salaries. This coefficient was called the Variation Coefficient of
Salaries ("Coeficiente de Variacion de Salarios") or CVS (as per its initials in
Spanish). Decrees No. 762/2002 and No. 1242/2002, dated May 7, 2002 and July 15,
2002, respectively, Law No. 25,713 dated November 28, 2002, as ruled by Decree
No. 44/03 dated January 26, 2003, and Law No. 25,796, published in the Official
Gazette on November 17, 2003 and passed by Congress on November 14, 2003
provided for the following measures, among others:

      -  the following loans originally agreed in U.S. dollars and then pesified
         were excluded from the application of the CER: (i) loans secured by
         residential mortgages on property representing the borrower's sole
         family residence agreed upon for up to US$250,000; ii) personal loans
         originally agreed up to Ps. 12,000 or US$12,000 or the equivalent
         amount in foreign currency; and iii) personal loans secured by a pledge
         originally agreed up to Ps. 30,000 or US$30,000 or the equivalent
         amount in foreign currency.

      -  the application of the adjustment by the CVS as from October 1, 2002
         (until such date, loan conditions to be applied would be those in force
         as of February 2, 2002) and the elimination of such adjustment

                                      -93-
<PAGE>

         beginning on April 1, 2004. This rule was regulated through Decree No.
         117/04 published in the Official Gazette on January 6, 2004 and through
         Communique "A" 4103 issued by the Argentine Central Bank. The Bank
         began to apply the adjustment by the CVS to the principal of eligible
         loans on November 2003.

      -  loans to be adjusted by the CER shall bear an interest rate ranging
         from 3.5% to 8%, depending on the type of debtor, the existence of
         guarantees and the type of loan.

      -  loans to be adjusted by the CVS shall bear an interest rate that would
         be the lowest between the loan's contractual rate and the following
         maximum interest rates: 12.38% for mortgage loans, 16.41% for loans
         secured by a pledge and 25.48% for personal loans.

      -  those debtors with obligations not included in the above-mentioned
         exceptions and with a total indebtedness in the financial system, as of
         February 3, 2002, of up to Ps. 400,000, would be able to capitalize the
         CER adjustment accrued up to September 30, 2002. Once the debt's new
         amount was recalculated in such way, the loan had to be restructured so
         that the first installment at the moment of the restructuring did not
         exceed the last installment paid in accordance with the previous
         conditions. If the loan was not an installment loan, the CER adjustment
         accrued and accumulated up to September 30, 2002, must be paid in
         installments throughout a period of not less than 120 days. Decree No.
         117/2004 set forth that the restructuring of these loans and the offer
         of alternatives to debtors by creditors to pay off the accumulated CER
         amounts had to be made before March 1, 2004.

         On July 25, 2003, the Argentine Central Bank authorized, through its
Communique "A" 3987, financial institutions to grant loans to be adjusted by the
CER, with the purposes of increasing peso-denominated loan origination, both
medium- and long-term.

         DURING MOST OF 2002, SEVERAL REGULATIONS WERE IN FORCE THAT RESTRICTED
CREDITORS' ABILITY TO EXERCISE THEIR RIGHTS, INCLUDING FORECLOSURE PROCEEDINGS
ON MORTGAGES AND PLEDGES, ALL PRELIMINARY MEASURES, SUCH AS ATTACHMENTS AND
PRELIMINARY INJUNCTIONS ON THOSE GOODS AND/OR FACILITIES OWNED BY DEBTORS. THE
SUSPENSION OF FORECLOSURE PROCEEDINGS WAS EXTENDED SEVERAL TIMES THROUGH
REGULATIONS OR BY MEANS OF BANKS' VOLUNTARY COMMITMENT TO NOT BRING FORECLOSURE
ACTIONS AGAINST DEBTORS UNTIL THE NATIONAL CONGRESS HAD THE OPPORTUNITY TO
CONSIDER A NEW PROJECT OF LAW IN SUCH RESPECT.

         On February 4, 2003, Decree No. 204/03 created the Legal Emergency
Units to act as mediators between borrowers and creditors during a 90-day period
beginning on February 6, 2003, the date of publication of the Decree in the
Official Gazette. This mechanism did not involve the suspension or interruption
of judicial proceedings' terms or of judicial or extrajudicial foreclosures, as
regulated by the applicable rules.

         On May 8, 2003, Congress enacted Act No. 25,737 whereby foreclosure
proceedings on real property constituting the home of debtors were suspended for
90-day working days from the date said regulation was published, that is June 3,
2003. On June 26, 2003, through Decree No. 247/03 the government created the
Foreclosure Proceedings Registry (Registro de Procedimientos de Ejecucion), with
the purposes of identifying borrowers affected by foreclosure proceedings on
their sole home, assess the situation and offer a solution not affecting
creditors' rights or the Government's financial condition.

         Through Law No. 25,798 enacted on November 6, 2003, the Mortgage
Refinancing Regime (Sistema de Refinanciacion Hipotecaria) was created in order
to refinance nonperforming loans secured by real property constituting the
debtor's sole family residence. The Bank decided not to participate in this
mortgage refinancing regime.

DEPOSITS

         On December 3, 2001, Decree No. 1570/01 established the restrictions to
depositors' ability to make cash withdrawals from bank accounts known as the
"corralito." The "corralito" did not prevent transfers of deposits among banks.
A banking holiday was imposed between December 21, 2001 until January 10, 2002.

                                      -94-
<PAGE>

         On January 10, 2002, Resolution No. 6/02 of the Ministry of Economy
established the first restructuring of time deposits in pesos and of most
deposits originally denominated in U.S. dollars, above certain amounts. Certain
nonrestructured amounts in dollar-denominated deposit accounts were allowed to
be transferred to peso-denominated demand accounts at the Ps. 1.40 exchange rate
and depositors were allowed to make monthly withdrawals of up to US$500. This
limit was modified several times. Resolution No. 6/02, as amended, established a
restructured deposits' monthly reimbursement schedule beginning in March 2002
and ending in November 2004, in the case of deposits originally constituted in
pesos, and beginning in January 2003 and ending in August 2005, for deposits
originally constituted in dollars. Restructured deposits were known as deposits
in the "corralon" and were not allowed to be transferred among banks. After
Resolution No. 6/02, the "corralito" referred to the restrictions applicable to
transactional deposits only.

         On February 3, 2002, Decree No. 214/02 established the mandatory
conversion of all deposits in U.S. dollars or other foreign currencies in the
Argentine financial system into pesos at the exchange rate of Ps. 1.40 per
US$1.00. Decree No. 214/02 also allowed for the entire withdrawal of salaries
and pensions in cash and other exceptions.

         The "corralito" and the "corralon" were meant to shield banks from
massive withdrawal of deposits. However, the financial system's deposit levels
continued to diminish. One of the reasons for this was the increased access to
funds in demand accounts that was permitted by Decree No. 214/02 and the
subsequent withdrawal of all such funds by depositors in the context of the
prevailing lack of confidence in the financial system. The other factor that
became increasingly important beginning March 2002, was the increase in the
number of successful amparo claims obtained by depositors requiring banks to
release deposits.

         During March and April 2002, due to the fact that outflows from the
financial system were used to purchase foreign currency, the exchange rate began
to increase and, as a result, the inflation accelerated too. The government
declared, on April 19, 2002, a new banking and foreign-exchange market holiday
that lasted until April 29, 2002. During such period, the Minister of Economy
resigned and Mr. Roberto Lavagna, was appointed to replace him. In order to
restrict fund outflows from the financial system, Law No. 25,587 was passed on
April 25, 2002, that required banks to release deposits only when amparo claims
had been issued pursuant to final non-appealable judicial decisions. Enforcement
of this Law limited bank losses of deposits due to amparo claims, but did not
eliminate them.

         In an attempt to solve the problem that the "corralito" and "the
corralon" represented, Minister Lavagna proposed a voluntary exchange of
deposits for government bonds, known as "Canje I." Decree No. 905/02 established
a mechanism pursuant to which any holder of restructured deposits and demand
deposits, as well as depositors having participated in a prior voluntary
exchange established by Decree No. 494/02, were given the option to exchange
their deposits for new Argentine government bonds. These were a peso-denominated
bond maturing in 2007 (BODEN 2007) and two dollar-denominated bonds, one
maturing in 2005 and the other in 2012 (BODEN 2005 and BODEN 2012). The period
to exercise the options expired in mid July 2002.

         Decree No. 905/02 established that financial institutions would acquire
the government bonds to be offered to depositors in cash, obtained by means of
advances to be granted to them by the Argentine Central Bank. These advances had
to be fully secured by public- and private-sector debt instruments held by
financial institutions, in accordance with the provisions of article 15 of
Decree No. 905/02 (which established assets included and their order of
preference), except in the case of BODEN 2012, which had to be acquired in the
first place by delivering 9.0% National Government Bonds maturing 2002 ("Bonos
Encaje"). Such advances would have the same terms as the bonds to be subscribed
with the funds provided by them.

         In addition, Decree No. 905/02 established that non-exchanged
restructured deposits would remain under the repayment schedule defined by
Resolution No. 6/02 as amended, but would be registered with Caja de Valores
S.A. and constitute publicly negotiable certificates known as "CEDROs," listed
in self-regulated exchanges of the country. CEDROs could be used for
subscription of primary issues of equity and debt securities authorized to be
publicly offered by the CNV and authorized to be listed by an exchange and to
repay loans granted by the same financial institution where the deposits were
held.

                                      -95-
<PAGE>

         Through Decree No. 1836/02 dated September 16, 2002, the government
announced a new exchange (known as "Canje II") of deposits for government bonds
and the possibility for holders of restructured deposits outstanding as of May
31, 2002 of up to Ps. 7,000 (excluding the CER adjustment), to exchange them for
cash. Financial institutions were allowed to extend this possibility to holders
of restructured deposits of up to Ps. 10,000 (excluding the CER adjustment). The
period to receive cash began in September 23, 2002, and expired on November 21,
2002. This new exchange contemplated different options for holders of CEDROs or
depositors that might have participated in the previous exchange implemented by
the government. The period to exercise these options, began in September 23,
2002 and expired on May 23, 2003.

         Decree No. 1836/02 opened the possibility for financial institutions to
acquire the government bonds to be delivered to depositors, in exchange for
secured loans and other public sector debt instruments held by financial
institutions included in art.15 of Decree No. 905/02, with the preference there
established. In addition, Decree No. 1836/02 allowed financial institutions to
offer dollar-denominated government bonds maturing in 2006 to depositors having
initiated judicial actions pending resolution, to recover their deposits.
Acceptance of such bonds is voluntary.

         Given the favorable trend shown during the second half of 2002 by the
financial system's deposit base, through its Resolution No. 668/02 and effective
December 2, 2002, the Ministry of Economy eliminated the restrictions still in
force on the amounts that depositors were allowed to withdraw in cash from
transactional deposit accounts. These measures meant the lifting of the
"corralito."

         On March 5, 2003, the Argentine Supreme Court (the "Supreme Court")
ruled on the lawsuit of the Province of San Luis against the Argentine
government, concerning the claim for the reimbursement, in dollars or in pesos
for an amount equivalent to the dollar amount at the free exchange rate, of a
pesified dollar-denominated deposit that the Province of San Luis holds at Banco
Nacion. In its ruling, the Supreme Court declared art. 2 of Decree No. 214/02
unconstitutional (the article that had pesified the dollar-denominated deposits
outstanding in the Argentine financial system) and ordered Banco Nacion to
reimburse the Province of San Luis' deposit in dollars or in pesos for an amount
equivalent to the dollar amount at the free exchange rate. In its ruling, the
Supreme Court established a 60-day term for the parties to convene or determine
the manner and the terms of the reimbursement of the deposit. The parties did
not reach an agreement within the established period. Resolution of this issue
by the Supreme Court is pending as of the date of this annual report.

         Continuing with the progressive release of restructured deposits,
through Decree No. 739/03 of April 1, 2003, regulated by Argentine Central Bank
Communique "A" 3919, the Argentine government allowed holders of such deposits
to request from financial institutions and the Argentine government, the
reimbursement of their deposits, on conditions that varied depending on the
amount of the deposit and its original currency of denomination. In all cases
the difference between the nominal amount of the deposit's principal adjusted by
the CER (which was reimbursed in cash plus interest by banks) and the equivalent
in pesos of the original dollar amount of the deposit at the exchange rate
informed by the Argentine Central Bank as of April 1, 2003 (Ps. 2.979 per
US$1.00), will be repaid by the Argentine government through the delivery of
"National Government Bonds in Dollars Maturing 2013" ("BODEN 2013"). The period
to exercise the options contemplated began on April 8 and ended on May 23, 2003.
The process to eliminate the "corralon" was completed in August 2003.

COMPENSATION TO FINANCIAL INSTITUTIONS

         For Asymmetric Pesification and its Consequences

         Mainly through Decrees No. 214/02, No. 320/02, No. 410/02, No. 471/02,
No. 704/02, No. 905/02 and No. 992/02 and complementary ones, as amended, and
Argentine Central Bank Communiques "A" 3467, 3507, 3561 and 3648 and
complementary ones, as amended, a significant portion of financial institutions'
assets and liabilities denominated in foreign currency, which formed part of
their net asset position in foreign currency were converted into pesos at
different exchange rates.

         Decree No. 214/02 provided for the compensation, through the issuance
by the government of a bond to be delivered to financial institutions, of the
losses that financial institutions would otherwise suffer as a result of the
conversion of bank assets and liabilities into pesos at different exchange rates
and the short foreign currency

                                      -96-
<PAGE>

positions that would result from such conversion. Decree No. 494/02 provided a
methodology for the calculation of the amount of compensation and established
that the government objective in providing such compensation was to cause
financial institutions' net worth to return to the levels prior to the
pesification, by compensating them for:

-  the losses caused by the conversion into pesos of a significant portion of
   their liabilities at the Ps. 1.40 per US$1.00 exchange rate, greater than the
   Ps. 1.00 per US$1.00 exchange rate established for the conversion into pesos
   of a significant portion of its dollar-denominated assets. This would be
   achieved through the issuance and delivery of a peso-denominated compensatory
   bond maturing in 2007 ("BODEN 2007").

-  the currency mismatch generated by the compulsory pesification of certain
   portions of financial institutions' assets and liabilities. This would be
   achieved through the conversion of the compensatory bond originally
   peso-denominated into a dollar-denominated compensatory bond and, if
   necessary, through the subscription of a dollar-denominated hedge bond. For
   this, the government established the issuance of a dollar-denominated bond
   bearing LIBOR and maturing in 2012 ("BODEN 2012").

         Among other measures, Decree No. 905/02, replaced the provisions of
Decree No. 494/02 in connection with the methodology for calculating the
compensation to be received by financial institutions. Decree No. 905/02
established that (i) the compensation to which a financial institution was
entitled would be calculated by taking into account the imbalances generated by
the government's pesification measures in the balance sheet of such financial
institution's head office and branches located in Argentina as of December 31,
2001, only; and (ii) provision of compensation on account of imbalances
generated in the balance sheets of such institution's foreign branches and
subsidiaries would be limited exclusively to the effects of the pesification of
such foreign branches' and subsidiaries' investments in secured loans.
Compensation for the pesification of other assets of a bank's foreign branches
and subsidiaries and of the assets of local subsidiaries with complementary
activities subject to Argentine Law was not contemplated. On October 28, 2002,
Decree No. 2167/02 incorporated into the compensation scope those assets and
liabilities subject to Argentine Law and recorded in foreign branches and
subsidiaries that were pesified by Decree No. 214/02 and complementary ones. The
assets of subsidiaries with complementary activity remained excluded.

         Argentine Central Bank Communiques "A" 3805 and "A" 3825 regulated
Decree No. 2167/02 and established that no later than December 23, 2002,
financial institutions had to inform the Argentine Central Bank of the amounts
of compensation to which they were entitled under the new rules. The Argentine
Central Bank has to confirm the amounts after its review. In the Bank's case,
such review by the Argentine Central Bank has not been completed as of the date
hereof.

         The Bank has the option to purchase the hedge bond using secured loans
pursuant to the provisions of Decree No. 2167/02. If the hedge bond is purchased
through borrowings from the Argentine Central Bank, pursuant to article 15 of
Decree No. 905/02 such borrowings have to be collateralized by the following
assets in the following priority: (i) secured loans representing in origin an
exposure to the Argentine government, beginning with those with the shorter
average life; (ii) secured loans representing in origin an exposure to the
provinces, beginning with those with the shorter average life; and (iii) other
assets with the public sector at the criteria of the Ministry of Economy and the
Argentine Central Bank. If a bank does not have the required assets, it must
give as collateral loans to the private sector classified in the first two
categories of the Argentine Central Bank loan classification, beginning with
mortgage loans, or if necessary such bank's shareholders shall pledge their
shares in such bank. The value of the collateral required must be equal to
100.0% of the amount of the borrowings. No assets have been given as collateral
by the Bank as of the date of this annual report because the compensation bonds
have not been received in full by the Bank yet. In addition, article 17 of
Decree No. 905/02 established that such borrowings from the Argentine Central
Bank to purchase the hedge bond may be repaid with the assets pledged as
collateral thereto at any time following (i) a default by the Argentine
government on the new debt issued pursuant to Decree No. 1387/01 (secured
loans), and (ii) the date on which the government shall have completed the
restructuring of its foreign debt.

         Subsequently, Resolution No. 6/04 of the Ministry of Economy, as
regulated by Argentine Central Bank Communiques "A" 4122 and "A" 4130, issued on
March 26 and April 26, 2004, respectively, established certain changes to the
methodology for the calculation of the compensation for asymmetric pesification:
(i) certain transactions such as debts with a bank's foreign head office as of
December 31, 2001 and a bank's borrowings

                                      -97-
<PAGE>

which FX risk had been hedged by the bank's head office were excluded from the
compensation calculation; (ii) the methodology for the compensation
corresponding to holdings of foreign-currency-denominated certificates of
participation and debt securities issued by financial trusts was established;
and (iii) compensation in the case of nonpesified loans for which payments were
received between January 15 and March 3, 2002, at exchange rates higher than Ps.
1.4 per U.S. dollar, was reduced.

         As of the date of this annual report, the resolution from the Argentine
Central Bank regarding the final amount of this compensation to the Bank is
pending. See Item 5. "Operating and Financial Review and Prospects -- Item 5A.
Operating Results -- Consolidated Assets."

         For Asymmetric Indexation and for Differences Related to Amparo Claims

         Financial institutions have requested to the government that they be
compensated for the losses generated to them by other economic policy measures
or facts such as: (i) the reimbursement of deposits pursuant to amparo claims at
the free market exchange rate, which was greater than that established by the
government for the conversion into pesos of financial institutions' assets and
liabilities; and (ii) the adjustment for inflation of included assets and
liabilities by using different coefficients, the CER or the CVS ("asymmetric
indexation").

         Law No. 25,796, published in the Official Gazette on November 17, 2003,
set forth the compensation to financial institutions by the Argentine Government
for the negative effects generated on financial institutions' financial
condition by asymmetric indexation. To that end, this law allowed the National
Government to issue "National Government Bonds Denominated in Pesos at a
Variable Rate Maturing in 2013" for up to Ps. 2,800 million. These bonds shall
bear the financial system's average interest rate on deposits not subject to any
principal adjustment. Law No. 25,796 was regulated by Decree No. 117/2004,
published in the Official Gazette on January 26, 2004, which provided for: (i)
the compensation's mechanism; (ii) the optional participation in the
compensation regime by financial institutions; and (iii) the possibility for
financial institutions to opt for a total or partial participation.

         As of December 31, 2003, based on the provisions set forth by Law No.
25,796, which did not provide for a partial option, the Bank had recorded, on
the basis of a total option, Ps. 102.7 million under "Other Receivables from
Financial Brokerage" on account of the estimated compensation amount.

         Subsequently, through the issuance of different rules, the Ministry and
the Argentine Central Bank further regulated Law No. 25,796, in a way that, in
the Bank's opinion, is contrary to the provisions of Law No. 25,796. On May 6,
2004, the Bank presented a letter to the Executive Branch, the Ministry of
Economy and the Argentine Central Bank maintaining the claim for compensation
that it had made on December 30, 2003. On May 18, 2004, the date of expiration
of the period established by such rules for financial institutions to opt for
their participation in the compensation regime laid down by such rules, the Bank
did not request to participate in such compensation regime and made a new
presentation before the Ministry of Economy and the Argentine Central Bank,
restating its right to be compensated for the negative effects of asymmetric
indexation and formally challenging the new rules. Based on the provisions of
Law No. 25,709, as of December 31, 2003, the Bank had recorded Ps. 102.7 million
under "Other Receivables Resulting from Financial Intermediation" on account of
its right to receive compensation from the government for asymmetric indexation.

         With respect to the differences generated by the payments made by the
Bank pursuant to amparo claims, the Bank recorded an intangible asset, the
amount of which as of December 31, 2003, was Ps. 487.0 million, net of the
amortization mandated by the Argentine Central Bank. on account of its right to
receive compensation for having had to make payments pursuant to judicial orders
for amounts higher than those provided for by the pesification decrees. See " --
Argentine Banking System and Regulation -- Argentine Banking Regulation --
Treatment of Losses in Connection with Amparo Claims." As of the date of this
annual report, rules for the provision of compensation to financial institutions
on account of the differences arising from the reimbursement of
dollar-denominated deposits pursuant to amparo claims for amounts higher than
those provided for by the pesification decrees are pending, and the government
has expressed that it was contrary to the provision of such compensation.

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<PAGE>

INFLATION ACCOUNTING

         The Banks' financial statements have been restated for inflation for
periods ended in 2002 and up to February 28, 2003. For a description of the
applicable regulations, see "Presentation of Financial Information" at the
beginning of this annual report.

ARGENTINE BANKING SYSTEM AND REGULATION

ARGENTINE BANKING SYSTEM

         As of December 31, 2003, the Argentine financial system consisted of 96
financial institutions, of which 75 were banks and 21 were financial nonbank
institutions (including finance companies, credit unions, savings and loan
associations). Of the 75 banks, 15 were Argentine government-owned or related
banks. As of December 31, 2003, out of the 60 private-sector banks:

      -  31 were private-sector domestically-owned banks (i.e., sociedades
         anonimas);

      -  27 were foreign-owned banks (i.e., local branches or subsidiaries of
         foreign banks); and

      -  2 were cooperative banks (bancos cooperativos limitados), also
         domestically-owned.

         As of that date, the largest private-sector banks, in terms of total
deposits, were: BBVA Banco Frances, Banco Rio Santander, Banco Galicia,
Citibank, BankBoston and HSBC Bank. Except for the Bank, these were all
foreign-owned banks. According to information published by the Argentine Central
Bank as of December 31, 2003, private-sector banks accounted for 51.5% of total
deposits and approximately 68.2% of total net loans in the Argentine financial
system. Argentine financial industry regulations do not raise any entry or exit
barriers, nor do they make any differentiation between locally or foreign-owned
institutions. Cooperative banks are active principally in consumer banking, with
a special emphasis on the lower end of the market. As of December 31, 2003,
financial entities (other than banks) accounted for approximately 0.2% of
deposits and 0.8% of net loans in the Argentine financial system.

         As of December 31, 2003, the largest Argentine government-owned or
related banks, in terms of total deposits, were Banco Nacion and Banco de la
Provincia de Buenos Aires. Under the provisions of the Financial Institutions'
Law, public banks have comparable rights and obligations as private banks,
except that public banks handle public revenues and promote regional development
and certain public banks have preferential tax treatment. The bylaws of some
Argentine government-owned banks provide that the governments that own them
(national and provincial) guarantee their commitments. Under current law, Banco
de la Provincia de Buenos Aires is not subject to taxes, levies or contributions
that the Argentine government may impose. According to information published by
the Argentine Central Bank, as of December 31, 2003, government-owned banks and
banks in which the Argentine government (national, provincial and municipal) had
an ownership interest accounted for 48.2% of deposits and 30.9% of loans in the
Argentine financial system.

         Consolidation has been a dominant theme in the banking sector since the
Convertibility Law was implemented in 1991, with the total number of financial
institutions declining from 214 in 1991 to 96 at December 31, 2003, with the ten
largest private banks holding 41.9% of the system's deposits as of December 31,
2003. We expect consolidation in the Argentine financial system to continue.

         During the decade of the 1990s, foreign banks significantly increased
their presence in the Argentine financial system. Since the last quarter of
1996, control of many of the largest Argentine private-sector domestically-owned
commercial banks has been transferred to foreign banks, which ended up
controlling the largest private sector financial institutions except the Bank.
This foreign presence grew both in the universal bank sector and among financial
institutions specializing in specific products or markets. Currently, this
situation has not changed despite the fact that the number of foreign banks
decreased by twelve through December 2003 as compared with the number at the end
of 2001. In this period, most foreign banks operating in Argentina have
experienced losses in their Argentine operations. It is still unclear at the
moment which foreign institutions will remain in the country.

                                      -99-
<PAGE>

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

         Since 1977, banking activities in Argentina have been regulated under
the Financial Institutions' Law which places the supervision and control of the
Argentine banking system in the hands of the Argentine Central Bank, which is an
autonomous institution. The Argentine Central Bank has vested the
Superintendencia de Entidades Financieras y Cambiarias (Superintendency of
Financial and Exchange Institutions, the "Financial Superintendency") with most
of the Argentine Central Bank's supervisory powers. In this section, unless the
context otherwise requires, references to the Argentine Central Bank shall be
understood as references to the Argentine Central Bank acting through the
Financial Superintendency. The Financial Institutions' Law provides the
Argentine Central Bank with broad access to the accounting systems, books,
correspondence, and other documents of banking institutions. The Argentine
Central Bank regulates the supply of credit and monitors the liquidity of, and
generally supervises the operation of, the Argentine banking system. The
Argentine Central Bank enforces the Financial Institutions' Law and grants
authorization for banks to operate in Argentina. The Financial Institutions' Law
confers numerous powers to the Argentine Central Bank, including the ability to
grant and revoke bank licenses, to authorize the establishment of branches
outside Argentina, to approve bank mergers, capital increases and certain
transfers of stock, to fix minimum capital, liquidity and solvency requirements
and lending limits, to grant certain credit facilities to financial institutions
in cases of temporary liquidity problems and to promulgate other regulations
that further the intent of the Financial Institutions' Law.

         Current regulations place the operation of local and foreign owned
banks on equal regulatory terms.

         The Public Emergency Law sanctioned on February 6, 2002 introduced
substantial amendments to the Argentine Central Bank's charter which, among
others, released certain restrictions on its ability to act as a lender of last
resort, allowed the Argentine Central Bank to make advances to the Argentine
government for up to 10.0% of the cash funds obtained during the preceding 12
months (which before could only be effected by purchasing at market prices
negotiable securities issued by the National Treasury) and released the
restriction whereby up to one third of the freely available international
reserves could be composed of government securities considered at market values.

The Financial Institutions Law and the Argentine Central Bank charter were
recently amended by Law No. 25, 780, published in the Official Gazette on
September 8, 2003. The main provisions established by such law are the
following: (1) authorization was given to the Argentine Central Bank to make
temporary loans to the Argentine government for up to 12.0% of the monetary
base, and to make loans for an amount of up to 10.0% of the total annual amount
raised by the Argentine government in cash during the last 12 months, both of
which shall be reimbursed within 12 months from the relevant date of
disbursement. Such temporary loans cannot not exceed 12.0% of the monetary base,
except those destined exclusively to the payment of outstanding obligations to
multilateral agencies; (2) indemnity for Argentine Central Bank officers was
provided for, by stating that the "opportunity, merits or convenience" of
certain of their decisions (mostly related to the liquidation and restructuring
of financial institutions) must be reviewed by the courts only when such
decisions have been clearly made in an unreasonable and arbitrary manner; (3)
authorization was given to the Argentine Central Bank to exclude assets and
liabilities of financial institutions with liquidity and solvency problems and
establish the rules for their valuation, and assign the transfer of excluded
assets and liabilities to other financial entities, or transfer assets to
financial trusts (see " -- Financial Institutions with Economic Difficulties");
(4) amendment in the degree of payment preferences in favor of creditors (see "
-- Priority Rights of Depositors"); and (5) authorization was given to the
Argentine Central Bank to disburse rediscounts to financial institutions with
liquidity or solvency problems, during the term of the Public Emergency Law.

         Supervision

                                     -100-
<PAGE>

         As supervisor of the Argentine financial system, the Argentine Central
Bank requires financial institutions to submit information on a daily, monthly,
quarterly, semiannual and annual basis. These reports that include balance
sheets and income statements, information relating to reserve funds, use of
deposits, portfolio quality (including details on debtors and any loan-loss
provision established) and other pertinent information, allow the Argentine
Central Bank to monitor financial institutions' financial condition and business
practices.

         The Argentine Central Bank carries out formal inspections from time to
time of all banking institutions for purposes of monitoring compliance by banks
with legal and regulatory requirements. If the Argentine Central Bank rules are
breached, it may impose various sanctions depending on the gravity of the
violation. These sanctions range from calling attention to the infraction to the
imposition of fines or even the revocation of the financial institution's
operating license. Moreover, noncompliance with certain rules may result in the
obligatory presentation to the Argentine Central Bank of specific adequacy or
regularization plans. The Argentine Central Bank must approve these plans in
order for the financial institution to remain in business.

         Financial institutions have been subject to the supervision of the
Argentine Central Bank on a consolidated basis since 1994. The Argentine Central
Bank requires financial entities (i) to consolidate their quarterly and annual
financial statements with all corporate and financial entities in its economic
group; and (ii) to prepare consolidated semiannual financial statements for its
economic group, unless the company or financial entity controlling the economic
group is required to prepare audited consolidated financial statements in the
country in which it is incorporated. Information set out in " -- Limitations on
Types of Business," " -- Capital Adequacy Requirements," " -- Lending Limits,"
and " -- Loan Classification System and Loan Loss Provisions" below, relating to
a bank's loan portfolio, are calculated on a consolidated basis. However,
regulations relating to a bank's deposits are not based on consolidated
information, but on such bank's deposits in Argentina (for example, liquidity
requirements and contributions to the deposit insurance system).

         Due to the significant impact of the crisis that unfolded in Argentina
since December 2001, in 2002 the Argentine Central Bank suspended the
requirement of submission of certain information or changed or postponed the
filing dates prescribed by the information regime to which financial
institutions were subject. In particular, see the " -- Capital Adequacy
Requirements" section below.

         Financial System's Restructuring Unit ("Unidad de Reestructuracion del
         Sistema Financiero" or "URSF")

         Decree No. 1262/03 of April 1, 2003, created the Financial System's
Restructuring Unit, comprised of three members appointed by the Ministry of
Economy and three members appointed by the Argentine Central Bank to decide on
the strategy to be followed and the measures to be taken in order to restructure
the Argentine financial system, including the conditions under which financial
institutions will repay the financial assistance granted by the Argentine
Central Bank. See " -- Financial Assistance from the Argentine Central Bank --
Financial Assistance for Liquidity Support Granted Before April 1, 2003."

         Examination by the Argentine Central Bank

         The Argentine Central Bank established the "CAMEL" quality rating
system which is based on weighting the creditworthiness, compliance with the
Financial Institutions' Law, administrative order and general operating solvency
of a financial institution. Each letter of the CAMEL system corresponds to the
following areas of the operations of each bank being rated: "C" represents
capital, "A" represents assets, "M" represents management, "E" represents
earnings, and "L" represents liquidity. Each factor is evaluated and rated on a
scale from 1 to 5, 1 being the highest rating an entity can receive. By
combining the individual factors that are under evaluation, a combined index can
be obtained that represents the final rating for the financial institution.

         The Argentine Central Bank begun to rate each Argentine financial
institution based on the results of a periodic examination conducted by the
Financial Superintendency, in accordance with the CAMEL system, in October 1994.
The last examination of Banco Galicia was based on information as of September
30, 2000 and the rating obtained, informed to the Bank on October 15, 2001 was
the highest among financial institutions, as had occurred in the previous years.

                                     -101-
<PAGE>

         On October 6, 2003, the Argentine Central Bank issued Communique "A"
4027 requiring financial institutions to provide information regarding their
business plan and their projections. This information had to be filed with the
Argentine Central Bank on or prior to October 31, 2003, and the Argentine
Central Bank has required updates.

         BASIC System

         The Argentine Central Bank established a control system ("BASIC") which
requires all financial entities to comply with a set of procedures concerning
the operations of such financial entities with the purpose of allowing the
public access to a greater level of information and safety with respect to their
holdings in the Argentine financial system. Each letter of the BASIC system
corresponds to one of the following procedures:

         - 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. The Bank was always in compliance with
         this requirement, which was repealed through Argentine Central Bank
         Communique "A" 3498, effective March 1, 2002.

         - A ("Auditoria" or Audit). The Argentine Central Bank requires a set
         of audit procedures that include: (a) the creation of a registry of
         auditors; (b) the implementation of strict accounting procedures to be
         complied with by 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 disclosures by the financial
         institutions to both the Financial Superintendency and the public.

         - S ("Supervision" or Supervision). The Argentine Central Bank has the
         right to inspect financial institutions from time to time.

         - I ("Informacion" or Information). Financial institutions are required
         to file on a monthly basis certain daily, weekly, monthly and quarterly
         statistical information.

         - C ("Calificacion" or Rating). The Argentine Central Bank established
         a system requiring periodic credit evaluation by internationally
         recognized rating agencies, which was suspended by Communique "A" 3601
         in May 2002.

         Legal Reserve

         The Argentine Central Bank requires that each year banks allocate to a
legal reserve a percentage of net income set by the Argentine Central Bank,
which is currently 20.0%. Such reserve can only be used during periods in which
a bank has incurred losses and has exhausted all allowances and other
provisions. Dividends may not be paid if the legal reserve has been impaired.

         Limitations on Types of Business

         As provided by the Financial Institutions' Law, commercial banks are
authorized to conduct all activities and operations that are not specifically
prohibited by law or by regulations of the Argentine Central Bank. Some of the
activities which are permitted include the ability to make and receive loans; to
receive deposits from the public in both local and foreign currency; to
guarantee customers' debts; to acquire, place or negotiate stock or debt
securities in the Argentine OTC Market, subject to the approval of the CNV; to
conduct transactions in foreign currency; to act as fiduciary; and to issue
credit cards.

         Banks are not permitted to own commercial, industrial, agricultural and
other types of businesses, except with prior authorization from the Argentine
Central Bank. Under Argentine Central Bank regulations, the aggregate amount of
equity investments of a commercial bank (including participations in domestic
mutual funds called fondos comunes de inversion) may not exceed 50.0% of such
bank's Adjusted Shareholders' Equity or Computable Regulatory Capital (as
defined below). In addition, investments in:

         -        unlisted equity shares excluding (a) stock of companies which
                  provide services complementary to the services offered by the
                  bank, and (b) certain stock participations which are necessary
                  in order to obtain the rendering of public services, if any,

                                     -102-
<PAGE>

         -        listed stock and participations in mutual funds which are not
                  included in order to determine the capital requirements
                  related to market risk; and

         -        listed stock that does not have a "largely publicly available"
                  market price (when daily quotes of relevant transactions are
                  available, which quotes would not be significantly affected by
                  the disposition of the bank's holdings of such stock)

may not exceed, in the aggregate, 15.0% of a bank's Adjusted Shareholders'
Equity.

         "Adjusted Shareholders' Equity" or "Computable Regulatory Capital" is
defined under the Argentine Central Bank's regulations as the so-called (a)
"basic" shareholders' equity or "core capital," which includes capital stock,
capital adjustments, reserves, uncapitalized irrevocable capital contributions,
audited retained earnings and, pursuant to the consolidated supervision regime,
third party holdings; plus (b) the so-called "complementary" shareholders'
equity which includes certain subordinated debt securities, a portion of the
allowances required by the Argentine Central Bank in respect of loans classified
Normal and Normal Performance (as such terms are defined in " -- Selected
Statistical Information -- Argentine Central Bank's Loan Classification and Loan
Loss Provisions") plus certain unaudited net income and less certain items such
as permanent investments in other financial institutions, capital assigned to
offshore branches, certain intangible assets and nonpaid capital.

         Nevertheless, for purposes of calculating the limits described both
above and in " -- Lending Limits," it is not necessary to deduct the capital
assigned to offshore branches from a bank's shareholders' equity.

         Under Argentine Central Bank regulations, financial institutions are
typically precluded from engaging directly in insurance activities and from
holding an equity interest in excess of 12.5% of the outstanding capital of a
company that does not provide services complementary to those provided by
financial institutions or which exceeds specified percentages of the respective
financial institution's Adjusted Shareholders' Equity as described above. The
Argentine Central Bank determines which services are complementary to the
services provided by financial institutions.

         Through Communique "A" 3918 the Argentine Central Bank established that
beginning on April 1, 2003 and until December 31, 2003, financial institutions
will be allowed to receive in payment of credits granted shares or equity
participations in the capital of a company that engages in activities other than
complementary activities, not exceeding 20.0% of the capital stock or of voting
rights, subject to certain conditions.

         Treatment of Losses in Connection with Amparo Claims

         Through Communique "A" 3916 dated April 3, 2003, the Argentine Central
Bank provided for the recording of an intangible asset on account of the
difference between the amount paid by financial institutions pursuant to legal
actions and the amount resulting from the conversion into pesos of the balance
of the U.S. dollar deposits reimbursed, at the exchange rate of Ps. 1.40 per
US$1 (adjusted by the CER plus interests accrued up to the payment date). In
addition, it established that the corresponding amount shall be amortized in 60
monthly equal and consecutive installments as from April 2003. As of December
31, 2003, the Bank had recorded an intangible asset of Ps. 487.0 million and
amortizations amounted to Ps. 77.9 million during 2003.

         The Bank has reserved its right to file any legal actions, at suitable
times, in view of the negative effect caused on its financial condition by the
reimbursement of originally dollar-denominated deposits, pursuant to legal
orders or final judgments, either in dollars or in pesos for the equivalent
amount at the market exchange rate, since compensation of this effect was not
included into the calculation of the compensation to financial institutions. The
method of recording a deferred loss set forth by the Argentine Central Bank in
the above-mentioned Communique does not affect the legitimacy of such rights.

         Legal Reserve Requirements

         After the crisis of early 1995 (known as the "Tequila crisis") a system
of "minimum liquidity requirements" was created in substitution of the prior
minimum cash reserve requirements' system. In order to meet the minimum
liquidity requirements, a percentage of a bank's liabilities, depending on the
type of account, and on the remaining maturity of the liability had to be
invested in certain specific instruments, so that financial institutions

                                     -103-
<PAGE>

could obtain a return on the reserves. Compliance with the minimum liquidity
requirements was determined in average for monthly periods. However, the
Argentine Central Bank modifies from time to time this practice depending on
monetary policy considerations.

         Effective June 1, 2001, Argentine Central Bank Communique "A" 3274
changed the regulations for bank reserve requirements: (i) minimum liquidity
requirements remained in effect only for liabilities with a fixed maturity, for
which banks continued, as previously required, to apply a sliding scale of
minimum percentage liquidity requirements that decreased as the remaining
maturity of the liability increased. These percentages were set at 22.0% for
remaining maturities of up to 89 days, 15.0% for up to 179 days, 10.0% for up to
364 days, and 0.0% for more than one year; and (ii) "minimum cash requirements"
were established for demand deposits (savings accounts, current accounts, and
other demand-deposit accounts) at 15.5%. The assets eligible for compliance with
this requirement were cash held in bank vaults and balances held at the
Argentine Central Bank. Through its Communique "A" 3311, the Argentine Central
Bank reduced the minimum liquidity requirements for the July-August 2001 period,
and allowed the inclusion of cash being transported and cash held in custody
with armored-car companies as eligible for compliance with minimum cash
requirements.

         Beginning June 1, 2001, bank accounts at the Argentine Central Bank
began to be remunerated. Reverse repurchase agreements with the Argentine
Central Bank ceased to be eligible to comply with the minimum liquidity
requirements. The minimum liquidity requirements and the minimum cash
requirements and banks' compliance with the level required continued to be
determined in average for monthly periods.

         Due to the systemic liquidity shortage resulting from deposit outflows,
which accelerated during the last quarter of 2001, in December of that year, the
Argentine Central Bank established temporary emergency reserve requirements.

         Effective March 1, 2002, Communique "A" 3498, of the Argentine Central
Bank eliminated the minimum liquidity requirements and modified the regulations
addressing minimum cash requirements. Compliance with the minimum cash
requirements must be accomplished, in the same currency as the liability that
originates the requirement, with cash in bank vaults, the balances of banks'
current accounts at the Argentine Central Bank and the balances of the special
escrow accounts held by banks at the Argentine Central Bank in favor of clearing
houses.

         Communique "A" 3598 created the "minimum placement requirements,"
effective May 1, 2002, applicable only to peso demand deposits (deposits in
savings accounts and current accounts). Communique "A" 3732 of September 13,
2002, extended this requirement to time deposits in pesos constituted with funds
from the "corralito."

         The minimum cash requirements outstanding as of December 31, 2002, were
14.0% for time deposits and 22.0% for demand deposits. Regulations allowed the
"Special Funds former Almafuerte and Mendoza Banks" to be considered as a lower
requirement in accordance with Argentine Central Bank Resolution No. 36/03. See
Item 5. "Operating and Financial Review and Prospects -- Item 5A. Operating
Results -- Consolidated Assets." The assets computable for compliance with this
requirement are the technical cash, which comprises notes and currencies in
banks' vaults and the balances of the peso- and dollar-denominated accounts and
of the escrow accounts in favor of the clearing houses held by banks at the
Argentine Central Bank.

         As of December 31, 2002, the minimum fund placement requirements were
12.0% for time deposits in pesos and 18.0% for demand deposits in pesos. Certain
assets were eligible to comply with this requirement: (i) credits acquired from
or debt securities or participation certificates issued by financial trusts or
other sums of money applied to those ends obtained in transactions formalized or
to be formalized as from November 26, 1998, related to the restructuring of
financial institutions under the framework of article 35bis of the Financial
Institutions Law, including possible unpaid balances of participation
certificates or debt securities of such trusts, subscribed before January 31,
2001, (ii) Lebac in pesos adjustable by the CER and (iii) holdings of "National
Government Bonds at 9.0% Maturing in 2002." On this respect, the Argentine
Central Bank established a schedule that exhausted the amounts computable in
July 2003. In case a bank did not have the necessary assets, the "minimum fund
placement requirements" turned into greater "minimum cash requirements."

         On March 21, 2003, Communique "A" 3905 distinguished the minimum cash
requirements applicable to time deposits by their remaining maturity and
incorporated restructured deposits to the calculation base, applying to

                                     -104-
<PAGE>

such deposits the same scale of requirements, based on remaining maturity, than
to time deposits. The percentage requirements established ranged from 12.0% for
time deposits maturing in up to 29 days, to 4.0% for deposits maturing in up to
365 days, and 0.0% for deposits maturing after 365 days.

         During 2003, in several occasions, the Argentine Central Bank reduced
the minimum cash requirements and minimum fund placement requirements
applicable.

         Through Communique "A" 4032, dated October 10, 2003, the Argentine
Central Bank increased the percentages of minimum cash requirements effective
November 1, 2003. In addition, through such Communique, it discontinued,
effective November 1, 2003, the minimum fund placement requirements.

         Through its Communique "A" 4051, dated November 27, 2003, as amended by
Communique "A" 4140, dated May 14, 2004, the Argentine Central Bank reduced the
percentages of minimum cash requirements applicable to demand-deposit accounts
(mainly current accounts and savings accounts ), from 23% to 20%.

         On May 28, 2004, Communique "A" 4147 established several changes, as
follows:

         -  Effective June 1, 2004, the percentage of minimum cash requirements
            applicable to peso-denominated current accounts and saving accounts,
            other peso-denominated demand-deposit accounts was reduced from 20%
            to 18%. The percentage applicable to dollar-denominated current
            accounts was reduced to 18% and for dollar-denominated saving
            accounts and other dollar-denominated demand-deposits it was reduced
            to 20%;

         -  Effective August 1, 2004: the percentages applicable to
            dollar-denominated saving accounts and other dollar-denominated
            demand-deposits, except current accounts, will increase from 20% to
            30%; and those applicable to minimum demand-deposits by mutual funds
            required by regulatory requirements, will increase from 80% to 100%;

         -  Effective on the same date, the percentages applicable to
            dollar-denominated time deposits, restructured deposits,
            acceptances, swaps, negotiable obligations (issued after January 1,
            2002) and other liabilities with a fixed maturity, will be based on
            their remaining maturity, as follows:

                  Less than 29 Days:            from 18.0% to 35%

                  From 30 Days to 59 Days:      from 14.0% to 28%

                  From 60 Days to 89 Days:      from 10.0% to 20%

                  From 90 Days to 179 Days:     from 5.0% to 10.0%

                  From 180 Days to 365 Days:    from 3.0% to 6.0%

Beginning on August 1, 2004, the applicable requirement for any type of deposit
by mutual funds, excluding those demand-deposits mentioned in (ii), will be 25%
for peso-denominated deposits and 40% for dollar-denominated deposits.

         The Bank was in compliance with the legal reserve requirements as of
December 31, 2003.

         Capital Adequacy Requirements

         Due to the deep changes made during 2002 to the financial system's
operations, which significantly affected the variables to determine the minimum
capital requirements, through its Communiques "A" 3599 and "A" 3604 dated May 3
and 9, 2002, respectively, the Argentine Central Bank suspended the submission
of this information by financial institutions.

         Until December 31, 2001, Argentine banks had to comply with the minimum
capital requirements established by the Argentine Central Bank, which were based
on the methodology of the Basel Committee on Banking Supervision of the Bank for
International Settlements. Banks had to comply with capital requirements both on
an unconsolidated basis and on a consolidated basis with its significant
subsidiaries. Until December 31, 2001,

                                     -105-
<PAGE>

the Bank had complied in excess with the minimum capital requirements. See " --
Selected Statistical Information -- Regulatory Capital."

         Through its Communique "A" 3959 dated June 2, 2003, the Argentine
Central Bank established a new minimum capital requirements regime for financial
institutions.

         The new regime's main features are:

                  -        an 8.0% requirement on risk-weighted assets,
                           consistent with the international standard set forth
                           by the Basel Committee;

                  -        equal percentage requirements for financial
                           institutions' exposures to private and public
                           sectors' assets;

                  -        the requirement of increasing capital as a function
                           of loans' interest rates was discontinued;

                  -        an additional requirement was established to cover
                           the risk inherent to mismatches between the rate of
                           inflation and market interest rates;

                  -        the determination of the capital requirements to
                           cover market and interest-rate risks, shall
                           incorporate the dollar as well as the adjustments by
                           the CER and the CVS;

                  -        the increase or decrease of the capital requirement
                           depending on the rating granted to each institution
                           by the Superintendency of Financial and Foreign
                           Exchange Institutions was discontinued;

                  -        risk weightings will be adjusted to take into
                           account, among others, the changes introduced in late
                           March 2003 regarding the treatment of public-sector
                           assets.

         Through Communique "A" 3959, the Argentine Central Bank required
minimum capital information to be presented on a monthly basis for periods after
May 1, 2003, but did not specify a date of effectiveness for the minimum capital
requirement. On July 25, 2003, Argentine Central Bank Communique "A" 3986 made
certain modifications and clarifications to the new rule on minimum capital
requirements introduced by Communique "A" 3959, established that the new minimum
capital requirements will become effective in January 2004, and maintained the
obligation for financial institutions to comply with the associated information
regime.

         Communique "A" 3986 established that, beginning in January 2004, two
coefficients known as "Alfa 1" and "Alfa 2" will be applied, in order to
temporarily reduce the minimum capital requirement to cover credit risk and the
minimum capital requirement to cover interest-rate risk, respectively.

         "Alfa 1" will be applied exclusively to government securities held in
investment accounts; loans granted to the nonfinancial public sector until May
31, 2003; government securities received by financial institutions as
compensation for the effects of the "asymmetric pesification" (articles 28 and
29 of Decree No. 905/02); and debt instruments issued by the Fiduciary Fund for
Provincial Development (Decree No. 1579/02). For the year 2004, the first period
for applying this coefficient, "Alfa 1" was established in 0.05 and its value
will increase progressively to reach 1 on January 2009.

         The initial value of "Alfa 2" will be 0.20 for the year 2004. The value
of this coefficient will increase progressively to reach 1 in January 2007.

         Lending Limits

         The aggregate amount of equity participation and credit, including
guarantees granted, a bank can grant to any credit customer at any time is based
on the bank's Adjusted Shareholders' Equity on the last day of the immediately
preceding month and on the customer's net worth.

                                     -106-
<PAGE>

         According to Argentine Central Bank rules, a commercial bank may not
lend or otherwise extend credit to (referred to herein as "financial
assistance") or participate in the capital stock of a single unrelated customer
(together with its affiliates) in amounts in excess of 15.0% of the bank's
Adjusted Shareholders' Equity or 100.0% of such customer's net worth. However, a
bank may grant additional financial assistance to such customer up to an amount
equal to 10.0% of the bank's Adjusted Shareholders' Equity if such additional
financial assistance is secured with certain liquid assets, including public or
private debt securities.

         Under Argentine Central Bank regulations, the aggregate amount of
investments of a commercial bank in the stock of third parties, including
participation in certain mutual funds authorized pursuant to Argentine Central
Bank regulations, may not exceed 50.0% of such bank's Adjusted Shareholders'
Equity, with the aggregate amount of such investments on the assets described
below being limited to 15.0% of such Adjusted Shareholders' Equity. Such assets
are:

            -  unlisted stock, excluding (a) stock of companies which provide
               services complementary to the services offered by the bank and
               (b) any stock participation which is necessary in order to obtain
               the rendering of public services;

            -  listed stock and participations in mutual funds which are not
               taken into account in order to determine the market risk related
               capital requirements referred to below; and

            -  listed stock which does not have a "largely publicly available"
               Market price. Under the regulations, a stock's market price is
               considered to be "largely publicly available" when daily quotes
               of relevant transactions are available, which quotes would not be
               significantly affected by the disposition of the bank's holdings
               of such stock.

In addition, an equity investment of a commercial bank in another company that
does not provide services complementary to the services provided by the
commercial bank may not exceed 12.5% of such company's net worth.

         Total financial assistance that a commercial bank may grant to any
particular borrower and its affiliates are also limited based on the borrower's
net worth. Total financial assistance to any one borrower and its affiliates may
not exceed, in general, 100.0% of such borrower's net worth, but such limit may
be increased to 300.0% of the borrower's net worth if such amount does not
exceed 2.5% of the bank's Adjusted Shareholders' Equity. Communique "A" 4060,
dated December 22, 2003, allowed financial institutions to grant new loans
exceeding 300% of the borrower's net worth, but not exceeding 2.5% of the bank's
Adjusted Shareholders' Equity, considering each client debt, and 15% considering
total debt of clients in the same situation. This authorization will expire on
June 30, 2005.

         The Argentine Central Bank regulates loans to a bank's "related
parties," defined as a bank's affiliates and related individuals. For purposes
of these lending limits, "affiliate" means any entity over which a bank,
directly or indirectly, has control, is controlled by, or is under common
control with, or any entity over which a bank has, directly or indirectly,
significant influence with respect to such entity's corporate decisions.
"Related individuals" means a bank's directors, senior management, syndics and
such persons' direct relatives.

         The Argentine Central Bank limits the amount banks can lend to their
related parties depending on the rating granted to each bank by the Financial
Superintendency. Banks rated 4 or 5 are forbidden to lend to their related
parties. Banks ranked between 1 and 3 cannot extend financial assistance to
their related parties in an amount which exceeds, together with any equity
participation held by the bank in its affiliates, 5.0% of such bank's Adjusted
Shareholders' Equity. However, a bank may grant additional financial assistance
to such related parties up to an amount equal to 10.0% of such bank's Adjusted
Shareholders' Equity: (i) if the affiliate provides complementary services
(defined as services in connection with stock brokerage, issuance of credit or
debit or similar cards, financial intermediation in leasing and factoring
transactions) (ii) in the case of temporary acquisition of shareholdings in
companies to facilitate their development in order to sell such holdings
afterwards, (iii) if the affiliate is a local financial institution rated other
than 1 or 2 by the Argentine Central Bank, or (iv) if such additional financial
assistance is secured with certain liquid assets, including public or private
debt securities. If the affiliate is a financial institution rated 1, the amount
of financial assistance can reach 100.0% of a bank's Adjusted Shareholders'
Equity. If the receiving affiliate financial institution is rated 2, the amount
of financial assistance can

                                     -107-
<PAGE>

reach 10.0% without limitations and an additional 90.0% should the term for the
loans and other credit facilities not exceed 180 days.

         In addition, the aggregate amount of a bank's equity participation in,
and nonexempt financial assistance to, its related parties may not exceed 20.0%
of such bank's Adjusted Shareholders' Equity.

         In addition, with respect to related persons who are individuals, the
total amount of loans to those related persons cannot exceed Ps. 50,000, which
must be used exclusively for personal or family purposes. Failure to properly
observe these requirements can result in an increase of the minimum capital
requirements for credit risk in an amount equal to 100.0% of the daily excess
amounts over the requirements beginning on the month when the excess amounts
appear and continuing while the excess amounts remain.

         Notwithstanding the limitations described above, the aggregate amount
of nonexempt financial assistance (including equity participations)
independently of whether customers qualify as related parties or not of a bank
as to which such assistance and participation exceeds 10.0% of such bank's
Adjusted Shareholders' Equity, may not exceed three times the bank's Adjusted
Shareholders' Equity excluding financial assistance to domestic financial
institutions, or five times the bank's Adjusted Shareholders' Equity including
financial assistance to domestic financial institutions.

         The Bank has complied with such rules. On February 11, 2002, through
its Resolution No. 81/02, the board of directors of the Argentine Central Bank
prohibited the Bank from granting any further financing to related parties.

         Communique "A" 3911 issued on March 28, 2003, established limits to a
financial institution's new exposure to the Argentine public sector applicable
granted after April 1, 2003. These limits exclude the stock exposure outstanding
as of March 31, 2003, and government securities received as compensation in
accordance with Decree No. 905/02 or those to be received pursuant to other
regulations. Beginning April 1, 2003, new financial assistance to the Argentine
public sector must be within the limits established as follows: (i) aggregate
exposure to national public sector debt instruments (including financial
assistance to other public sector jurisdictions secured by the federal tax
collection shared with such jurisdictions) cannot exceed 50.0% of a bank's
regulatory capital or Adjusted Shareholders' Equity, (ii) aggregate exposure to
each provincial jurisdiction and the City of Buenos Aires (including financial
assistance to municipal jurisdictions secured by the federal tax collection
shared with such jurisdictions but excluding those included in the previous
item) may not exceed 10.0% of a bank's Adjusted Shareholders' Equity and shall
be secured by local tax collection revenues or by a pledge or be instrumented as
a leasing transaction, and (iii) aggregate exposure to each municipal
jurisdiction may not exceed 3.0% of a bank's Adjusted Shareholders' Equity and
must be secured in the same manner. Total exposure to municipal jurisdictions
shall not exceed 15.0% of a bank's Adjusted Shareholders' Equity and the total
exposure to the public sector, described in items (i), (ii) and (iii), above,
must not exceed 75.0%. In addition, beginning January 1, 2006, the average
financial assistance to all the public sector must not exceed 40.0% of a bank's
total assets as of the end of the previous month. Any excess over this limit
will determine an equal increase in the minimum capital requirement.

         Loan Classification System and Loan Loss Provisions

         In 1994, the Argentine Central Bank introduced the current loan
classification system and corresponding minimum loan loss provision requirements
applicable to loans and other types of credit (together, referred to as "loans"
in this section) of private sector borrowers.

         The current loan classification system is a bifurcated system, applying
certain criteria to classify loans in a bank's "consumer" portfolio, and another
set of criteria to classify loans in its "commercial" portfolio. The loan
classification criteria applied to loans in the consumer portfolio are based on
delinquency aging, while the principal criterion of classification of loans in
the commercial portfolio is each borrower's ability to pay, as measured mainly
by such borrower's future cash flow. In the loan classification system, all
customers in an economic group are considered as one borrower. If a customer has
both commercial and consumer loans, consumer loans will be added to commercial
loans to determine eligibility for classification in the consumer portfolio.
Loans backed with preferred guarantees will be considered at 50.0% of their face
value.

                                     -108-
<PAGE>

         Until December 31, 2002, banks could opt to apply the consumer loan
classification criteria to commercial loans of up to Ps. 200,000. Through
Communique "A" 3918, issued on April 4, 2003, the Argentine Central Bank
established that between March 31, 2003 and December 31, 2003, customers with
debt in the whole financial system of up to Ps. 5.0 million will be classified
in the same manner as consumer loans, that is, they will be automatically
classified according to the number of days the debt is past due. For the
classification, one day past due will be computed for each 3 days elapsed in the
period from December 1, 2001 to March 31, 2003. This treatment will also be
provided to the portfolio of commercial loans of up to Ps. 200,000, which under
the previous rules were already automatically classified. The aggregate amount
of net reversal of allowances outstanding as of February 28, 2003, if
corresponding, must be reflected in a specific liability account the balance of
which shall be used for the establishment of new allowances beginning in April
2004.

         For a description of the Argentine Central Bank's loan classification
system and the Argentine Central Bank's minimum loan provision requirements, see
" -- Selected Statistical Information -- Argentine Central Bank's Loan
Classification and Loan Loss Provisions."

         Valuation of Public Sector Assets

         For a description of the rules governing the valuation of government
securities, see " -- Selected Statistical Information -- Government and
Corporate Securities."

         In November 2001, the government offered a swap of public-sector debt
instruments for secured loans to the Argentine government (Decree No. 1387/01).
As of December 2001, only the swap of Argentine government debt instruments was
completed. Beginning in November 2001, the Bank recorded the secured loans to
the national government and those loans to the provinces tendered in the swap in
accordance with the terms and conditions of the new secured loans. This swap
reduced the yields of public-sector debt instruments and extended their maturity
but did not modify their currency of denomination.

         The rules issued in 2002 compulsorily pesified the Argentine government
secured loans and modified their other terms and conditions (maturity, interest
rate and principal adjustment). Decree No. 471/02 established that all secured
loans outstanding as of February 3, 2002 had to be pesified at the Ps. 1.40 per
US$1.00 exchange rate, with their principal adjusted by the CER and fixed annual
interest rates ranging from 3.0% to 5.5% depending on their term. For secured
loans representing in origin an exposure to the provinces, Decree No. 1579/02
dated August 28, 2002, introduced an additional restructuring through the
offering of a new swap for secured notes (BOGAR) or loans issued by the FFDP
maturing in 16 years, principal adjusted by the CER and a fixed 2.0% annual
interest rate. The new swap included loans to the FFDP, excluded from the first
swap, and recognized the loans to the provinces originally tendered in the first
swap. The swap was completed in early 2004. The Bank records provincial secured
loans in accordance with the terms and conditions established by Decree No.
1579/02 since November 2002.

         Through its Communique "A" 3911, the Argentine Central Bank established
a new method for the valuation of secured loans, government securities not
subject to capital requirements to cover market risk, promissory notes issued by
the FFDP and other loans to the nonfinancial public sector, excluding among
others, government securities recorded in investment accounts, compensatory and
hedge bonds and Lebac, short-term Argentine Central Bank notes.

         Beginning with the financial statements for March 2003, included assets
began to be valued at the lower between their face and present values. To
determine present values, the Argentine Central Bank established a discount rate
that increases gradually over time. Its initial value was 3.0% per annum,
applicable during 2003 and until December 2003, inclusively. Thereafter the
discount rate increases by 0.25% semiannually until 2005. In 2006 it will be
5.0% and in 2007 the discount rate will be 5% plus a function of the market
yield of national-government securities. Beginning in 2008 the applicable
discount rate will be the average market yield of national-government
securities. The face value is the balance of each instrument adjusted according
to its contractual terms. The difference between the lower of present and face
values, and the book value has to be reflected in an asset regularizing account,
for a positive difference, or be charged to income, for a negative one.

         Subsequently, Argentine Central Bank Communique "A" 4084, dated January
30, 2004, modified the public-sector assets valuation rules established by
Communique "A" 3911, as follows:

                                     -109-
<PAGE>

         - Public-sector assets granted as collateral of advances from the
         Argentine Central Bank to purchase BODEN (both for clients and held by
         banks) contemplated by articles 10, 11 and 12 of Decree No. 905/02 were
         excluded from the valuation rules for public-sector assets established
         by Communique "A" 3911 (valuation at present value resulting from a
         discount rate established by this Communique). Those assets can be
         recorded at the value determined by the Argentine Central Bank for
         their use as collateral.

         - Cash flow of provincial secured loans created by Decree No. 1579/02
         (BOGAR) must be used to calculate the present value of past-due and
         unpaid public-sector assets.

         Finally, this Communique provided for the reversal of the interest
accrued on past-due government assets after December 31, 2001, if corresponding.

         Financial Assistance from the Argentine Central Bank

         Financial Assistance Granted for Liquidity Support Beginning March 10,
2003

         Communique "A" 3901, issued on March 19, 2003, established an automatic
mechanism to regulate the provision by the Argentine Central Bank to financial
institutions of assistance for liquidity support. This mechanism does not apply
to the financial assistance granted for such reasons during the 2001/2002
crisis.

         Financial Assistance for Liquidity Support Granted Before April 1, 2003

         Through Decree No. 739/03, the Argentine government established a
voluntary procedure for the restructuring of the financial assistance granted by
the Argentine Central Bank to financial institutions during the crisis that
affected the financial system since 2001. The basic purpose was to harmonize the
cash flows of those financial institutions that are simultaneously debtors (for
having received financial assistance from the Argentine Central Bank) and
creditors (for their holdings of debt instruments) of the public sector.

         Art. 9 of this Decree established that balances due must be amortized
in pesos, in the same number of installments as those of the assets granted as
guarantees of the financial assistance received, without exceeding 70 monthly
installments. Argentine Central Bank Communique "A" 3941 established a minimum
cumulative amortization schedule and a monthly repayment of not less than 0.90%
of the adjusted balance. Mandatory accelerated repayment is contemplated when
the interest rate earned by the assets granted as guarantees exceeds 3.5% per
annum. In addition, voluntary prepayment is available.

         Decree No. 739/03 also established that financial assistance subject to
this repayment system shall be guaranteed by the Argentine government secured
loans issued under Decree No. 1646/01 and, in the absence of the latter, Secured
Notes issued under the provisions of Decree No. 1579/02 or bonds issued under
the provisions of Decree Nos. 905/02, 1836/02 and 739/03. Pursuant to Argentine
Central Bank Communique "A" 3941, all instruments to be delivered as security
must be adjustable by the variation of the CER. These securities are to be
maintained with no decrease until restructuring of the government's foreign debt
is concluded under Decree No. 1387/01 or December 31, 2004, whichever occurs
first (except for prepayments, in which case the securities are to be returned
on a pro rata basis in the inverse order of their granting).

         Argentine Central Bank Communique "A" 3941 established that all
amortization installments and interest payments shall be automatically withdrawn
from the accounts the financial institution holds with the Argentine Central
Bank.

         In accordance with Argentine Central Bank Communique "A" 3940, for a
bank to be eligible to restructure the financial assistance for liquidity
reasons provided to it by the Argentine Central Bank, under the terms
established by Decrees No. 739/03 and No. 1262/03, such bank was required to
have received the approval of the Argentine Central Bank to the terms and
conditions for the restructuring of their foreign debt before December 5, 2003.

         Decree No. 1262/03 provided that the Argentine Central Bank shall
modify the above mentioned repayment conditions, when the URSF establishes so,
subject to the following conditions: (i) the average life of the assets

                                     -110-
<PAGE>

granted as guarantees of the financial assistance received exceeds 70 months and
(ii) the financial institution falls under the provisions of articles 34 and
35bis of the Financial Institutions Law and has adopted a reorganization plan
approved by the URSF. In this case, repayment will occur in the same number of
installments as that of the assets granted as guarantees of the financial
assistance received with a maximum number of 120 monthly installments and a
monthly amortization of not less than 0.4%. Also, upon the occurrence of an
event of default, the URSF has the right to accelerate the maturity of such
financial assistance.

         On November 28, 2003, the URSF informed the Bank that through
Resolution No. 1 dated November 27, 2003, it had authorized the Argentine
Central Bank to extend the maturity of the Banks' debt for liquidity support
with said entity, within the regime established by Decree No. 739/03, pursuant
to the repayment schedule submitted by the Bank to the Argentine Central Bank
and under the terms provided for by Decree No. 1262/03.

         By means of a note dated February 3, 2004, the Argentine Central Bank
informed the Bank that it had approved the Bank's request to adhere to the
regime of repayment of the debt owed to said entity for liquidity support
established by Decree No. 739/03 and extended through Decree No. 1262/03.
Through the same note the Argentine Central Bank informed the Bank that it had
also authorized such debt's amortization schedule submitted by the Bank, which
is the result of the minimum amortization defined by the applicable regulations
and of the cash flows of the assets eligible as collateral pursuant to such
regulations. Consequently, this schedule comprises the debt repayment in 92
monthly installments as from March 2004, inclusively.

         Foreign Currency Position

         Through Communique "A" 3889, the Argentine Central Bank limited
financial institutions' foreign currency exposure based on such institution's
"Global Foreign Currency Net Position" (assets and liabilities from financial
brokerage and securities denominated in foreign currencies). Beginning May 1,
2003, the absolute value of the "Global Foreign Currency Net Position" must not
exceed 30.0% of a bank's computable capital or Adjusted Shareholders' Equity as
of the end of the previous month. In the case of short positions, the limit was
set at the lower of 30.0% of computable capital or liquid shareholders' equity.
For those financial institutions that expected not to be able to comply with
such limits, a period for the presentation of a compliance plan was provided
that expired May 15, 2003. On that date, the Bank notified the Argentine Central
Bank of an excess in its global foreign currency position and proposed a
compliance plan, a response with respect to which is pending.

         Through Communique "A" 4135, issued on May 5, 2004, the Argentine
Central Bank established an additional limit to be observed by financial
institutions. Beginning on July 1, 2004, balances of demand accounts, assets and
liabilities included in this regime which are usually traded in institutional
markets with a significant volume of transactions or which become due within 180
days, will not be able to exceed a percentage to be determined. In order to
calculate this position, they should be considered only those securities
recorded at their market value, but not excluding those payments that become due
within 180 days.

         Deposit Insurance System

         Argentine Law No. 24,485 and Decree No. 540, as amended by Decree No.
1292/96 and Decree No. 1127/98, created a deposit insurance system for bank
deposits and delegated to the Argentine Central Bank the organization and
start-up of the deposit insurance system. The deposit insurance system has been
implemented through the creation of a fund named Fondo de Garantia de los
Depositos ("FGD") which is administered by Sedesa. The shareholders of Sedesa
are the Argentine government through the Argentine Central Bank, which holds at
least one share, and a trust constituted by the financial institutions
authorized by the Argentine Central Bank which wish to participate in the fund.
The Argentine Central Bank establishes the extent of participation by each
institution proportionally to the resources contributed by each such institution
to the FGD (Communique "A" 2337).

         The deposit insurance system that became effective covered all peso and
foreign currency deposits held in demand deposit accounts, savings accounts and
time deposits with a maturity of less than 90 days are insured for an amount up
to Ps. 10,000 and all time deposits with a maturity of 90 days or longer are
insured for up to Ps. 20,000. In November 1998, the amount of insurance for such
deposits was raised to Ps. 30,000 for all deposits and made uniform without
distinction of maturity dates. Deposits made after July 1, 1995 with an interest
rate 200 basis points

                                     -111-
<PAGE>

above the interest rate quoted by Banco de la Nacion Argentina for deposits with
equivalent maturities are not covered by this system. This guarantee shall be
made effective within 30 days from the revocation of the license of a financial
institution, subject to the outcome of the exercise by depositors of their
priority rights described under " -- Priority Rights of Depositors" below.

         The Argentine Central Bank may modify, at any time, and with general
scope, the sum of the mandatory deposit guarantee insurance according to the
consolidation of the financial system and any other elements that it may deem
appropriate.

         Decree No. 1292/96, enhanced Sedesa's functions to allow it to provide
equity capital or make loans to Argentine financial entities experiencing
difficulties and to institutions which buy such Argentine financial entities or
buy the deposits of such Argentine financial entities. As a result of such
decree, Sedesa has the flexibility to intervene in the restructuring of a
financial entity experiencing difficulties prior to bankruptcy.

         Priority Rights of Depositors

         According to section 49 e) of the Financial Institutions Law, as
amended by Law No. 25,780 dated September 8, 2003, in case of judicial
liquidation or bankruptcy of a financial entity, the holders of deposits in
pesos and foreign currency benefit from a general priority right to obtain
repayment of their deposits up to the amount set forth below, with priority rank
over all other creditors, with the exception of the following: (i) credits
secured by mortgage or pledge, (ii) credits from rediscounts and overdrafts
granted to financial entities by the Argentine Central Bank, according to
section 17 subsections b), c) and f) of the Argentine Central Bank Charter,
(iii) credits granted by the Banking Liquidity Fund created by Decree No. 32 of
December 26, 2001, secured by mortgage and pledge and (iv) certain labor
credits, including accrued interests until its total cancellation. Pursuant to
section 16 of Law No. 25,780 during the term of emergency set forth under the
Public Emergency Law No. 25,561 the Argentine Central Bank can grant rediscounts
and overdrafts to financial entities with liquidity and solvency problems,
included those entities under a restructuring process as contemplated in section
35bis of the Financial Institutions Law.

         The holders of the following deposits are entitled to the general
preferential right established by the Financial Institutions Law (following this
order of preference),

            -  deposits of individuals or legal entities up to Ps. 50,000 or the
               equivalent thereof in foreign currency, enjoying this preference
               only one person per deposit. 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 in connection with
               international trade.

According to the Financial Institutions Law, the preferences set forth in
previous paragraphs (i) and (ii) above, are not applicable to deposits held by
persons who are affiliates of the financial entity, either directly or
indirectly as determined by procedures that the Argentine Central Bank will
establish in the future.

         In addition, under section 53 of the Financial Institutions Law, the
Argentine Central Bank has an absolute priority over all other creditors of the
entity except as provided by the Financial Institutions Law.

         Financial Institutions with Economic Difficulties

         The Financial Institutions Law establishes that financial institutions,
including commercial banks such as the Bank, which evidence a cash reserve
deficiency, have not abided by certain technical standards, have not maintained
minimum net worth standards, or which solvency or liquidity is deemed to be
impaired by the Argentine Central Bank must submit a restructuring plan (a
"Restructuring Plan") to the Argentine Central Bank. Such Restructuring Plan
must be presented to the Argentine Central Bank on the date specified by the
Argentine Central Bank, which should not be later than 30 calendar days from the
date on which the request is made by the Argentine

                                     -112-
<PAGE>

Central Bank. In order to facilitate the implementation of a Restructuring Plan,
the Argentine Central Bank is authorized to provide a temporary exemption from
compliance with technical regulations and/or the payment of charges and fines
which arise from such noncompliance.

         The Argentine Central Bank may also, in relation to a Restructuring
Plan presented by a financial institution, require such financial institution to
provide guarantees or limit the distribution of profits, and appoint a
supervisor, to oversee such financial institutions' management, with the power
to veto decisions taken by the financial institution's corporate authorities.

         In addition, the Argentine Central Bank's charter authorizes the
Financial Superintendency within the Argentine Central Bank, subject only to the
prior approval of the president of the Argentine Central Bank, to suspend for up
to 30 days, in whole or in part, the operations of a financial entity if its
liquidity or solvency has been adversely affected. Notice of this decision must
be given to the board of directors of the Argentine Central Bank. In case at the
end of such suspension period the Financial Superintendency considers it is
necessary to renew it, it can only be authorized by the board of directors of
the Argentine Central Bank, for an additional period not to exceed 90 days.
During the suspension: (i) there is an automatic stay of claims, enforcement
actions and precautionary measures; (ii) any commitment increasing the financial
institution's liabilities is void, and (iii) acceleration of indebtedness and
interest accrual is suspended.

         If, in the judgment of the Argentine Central Bank, a financial
institution is in a situation which, under the Financial Institutions' Law,
would authorize the Argentine Central Bank to revoke the financial institution's
license to operate as such, the Argentine Central Bank may, prior to considering
such revocation, order a variety of measures, including (1) taking steps to
reduce, increase or sell the financial institution's capital; (2) revoking the
approval granted to the shareholders of the financial institution to own an
interest therein, giving a term for the transfer of such shares; (3) exclusion
and transfer of assets and liabilities; (4) constituting trusts with part or all
the financial institution's assets (5) granting of temporary exemptions to
comply with technical regulations and/or pay charges and fines arising from such
defective compliance; or (6) appointing a bankruptcy trustee and removing
statutory authorities.

         Furthermore, it is provided that, those acts which are authorized,
commissioned or decided by the Argentine Central Bank under section 35bis of the
Financial Institutions' Law, involving the transfer of assets and liabilities,
or which complement it, or are necessary to execute the restructuring of a
financial institution, as well as those related to the reduction, increase and
sale of equity, are not subject to any court authorization and cannot be deemed
inefficient in respect of the creditors of the financial institution which was
the owner of the excluded assets, even though its insolvency preceded such
exclusion.

         Dissolution and Liquidation of Financial Institutions

         The Argentine Central Bank must be notified of any decision to dissolve
a financial institution pursuant to the Financial Institutions' Law. The
Argentine Central Bank, in turn, must then notify a court of competent
jurisdiction which will determine who will liquidate the entity: the corporate
authorities or an appointed, independent liquidator. This determination is based
on whether or not sufficient assurances exist which indicate that such corporate
authorities are able to carry out liquidation properly.

         Pursuant to the Financial Institutions' Law, the Argentine Central Bank
no longer acts as liquidator of financial institutions. However, when:

         -        a restructuring plan has failed or is not considered viable;

         -        local and regulatory violations exist; or

         -        substantial changes have occurred in the entity's condition
                  since the original authorization was granted,

the Argentine Central Bank may decide to revoke a bank's license to operate as a
financial institution. In this case, the law allows judicial or extrajudicial
liquidation as in the case of voluntary liquidation described in the preceding
paragraph.

                                     -113-
<PAGE>

         Bankruptcy of a financial institution cannot be adjudicated until the
license is revoked by the Argentine Central Bank. No creditor, with the
exception of the Argentine Central Bank, may request the bankruptcy of the
former entity until 60 days have elapsed since the revocation of the license.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 5A. OPERATING RESULTS

GENERAL

         Substantially all of our operations and customers are located in
Argentina, and as a result we have been materially and adversely affected by the
2001 - 2002 economic crisis in Argentina. As a result, the Bank was forced to
restructure its foreign debt and its income generation capacity was reduced.
Given the continued instability and regulatory and economic changes that have
affected Argentina, the accounting information set forth in this annual report
may not be fully indicative of our anticipated results of operations or business
prospects after the dates indicated.

         The following discussion and analysis is intended to help understand
and assess the significant changes and trends in our historical results and
operations and the factors affecting our resources. You should read this section
in conjunction with our audited consolidated financial statements and their
related notes included in this annual report.

INFLATION ACCOUNTING ADJUSTMENTS

         As a result of the adoption of various regulations since 2002, in
addition to adjusting our financial statements for inflation until February
2003, as described in "Presentation of Financial Information" at the beginning
of this annual report, we have also been required to adjust some of our assets
and liabilities according to changes in various indexes. The following table
compares the rate of inflation, as measured by the WPI, the consumer price index
(the "CPI"), the CER and the CVS for the periods indicated.

<TABLE>
<CAPTION>
                                               FOR THE 12-MONTH PERIOD ENDED DECEMBER 31,
                                               -------------------------------------------
                                               2003                2002               2001
------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                 <C>
Inflation (1)
   Wholesale Price Index...............         2.03%             118.44%             (5.3)%
   Consumer Price Index................         3.66%              40.95%             (1.5)%
   CER.................................         3.66%              40.54%                -
   CVS.................................        15.85%               0.83%                -
------------------------------------------------------------------------------------------
</TABLE>

(1) Source:  INDEC.

         In the first five months of 2004, the WPI increased 3.9% and the CPI
increased 2.7%. Over the same period, the CER increased 2.1%. The CVS was
discontinued on April 1, 2004, having increased 7.9% in the first quarter of
2004.

CURRENCY COMPOSITION OF OUR BALANCE SHEET

         Until December 31, 2001, financial institutions in Argentina, including
the Bank, used both pesos and dollars for all types of transactions, with the
exception that only pesos could be used for the payment of salaries and taxes.
As a result, Banco Galicia raised deposits and funding and made loans in both
currencies. Our policy and Banco Galicia's policy was then to keep a net asset
position in foreign currency (i.e., to have more assets than liabilities
denominated in foreign currency).

         In 2002, together with asymmetric pesification and the measures taken
to compensate for it, the government instituted measures that modified the
yields of assets and the cost of liabilities that had been pesified. In general,
maximum and minimum fixed interest rates were established for pesified assets
and liabilities, respectively. In addition, the principal of those assets and
liabilities was adjusted by change in certain indexes based on consumer prices
(CER) or salaries (CVS). In addition, in most cases, but especially in the case
of public-sector assets,

                                     -114-
<PAGE>

maturities were extended. The terms and conditions of peso-denominated loans to
the public sector and of certain peso-denominated deposits were also modified.
See Item 4. "Information on the Company -- Main Regulatory Changes in 2002 and
2003."

         As a result of these measures, as of December 31, 2002, and December
31, 2003, our balance sheet showed the following interest rate and currency
mismatches:

      -  CER mismatch: The Bank's peso-denominated assets subject to adjustment
         by the CER (mainly secured Argentine government loans and certain
         government securities) exceeded its CER-adjusted peso-denominated
         liabilities (mainly restructured deposits and the advance to be
         provided by the Argentine Central Bank to purchase BODEN 2012 for
         hedging purposes). The recording of the borrowings from the Argentine
         Central Bank for liquidity support as CER-adjusted long-term
         peso-denominated liabilities in mid-2003 has partially mitigated the
         Bank's long CER-indexed peso position. See " -- Funding" below.

      -  Foreign-currency mismatch: The Bank's dollar-denominated assets (mainly
         BODEN 2012) exceeded its dollar-denominated liabilities (debt
         securities, borrowings from foreign banks and deposits in foreign
         branches and subsidiaries).

      -  Peso mismatch: The Bank's liabilities (voluntary deposits and the
         financial assistance from the Argentine Central Bank) exceeded its
         assets (mainly liquidity reserves and loans to the private sector), in
         each case denominated in pesos and bearing market interest rates. This
         mismatch was partially corrected with the recording in mid-2003 of the
         financial assistance from the Argentine Central Bank as long-term
         CER-adjusted liabilities.

         The net asset portfolios in CER-adjusted and foreign
currency-denominated assets are funded by peso-denominated liabilities and by
the Bank's shareholders' equity.

         The following table sets forth our assets and liabilities denominated
in foreign currency, in pesos and adjustable by the CER, at the dates indicated.

<TABLE>
<CAPTION>
                                                                  AS OF DECEMBER 31,
                                                       ----------------------------------------
                                                           2003          2002          2001
-----------------------------------------------------------------------------------------------
                                                       (In millions   (In millions of February
                                                        of pesos)     28, 2003, constant pesos)
<S>                                                    <C>            <C>           <C>
ASSETS
In pesos, unadjusted (1)                                  4,001.2       3,050.9       5,561.1
In pesos, adjusted by the CER                            10,237.0      10,503.3             -
In pesos, adjusted by the CVS                               317.1             -             -
In foreign currency                                       8,339.4      10,350.3      22,316.5
---------------------------------------------------------------------------------------------
TOTAL ASSETS                                             22,894.7      23,904.5      27,877.6
---------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
In pesos, unadjusted, including shareholders' equity      6,023.4       9,311.0       9,528.5
In pesos, adjusted by the CER                             8,979.3       4,803.0             -
In pesos, adjusted by the CVS                                   -             -             -
In foreign currency                                       7,892.0       9,790.5      18,349.1
---------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                        22,894.7      23,904.5      27,877.6
---------------------------------------------------------------------------------------------
</TABLE>

(1)  As of December 31, 2002, includes assets eligible to be adjusted by the CVS
in the form of loans to individuals totaling Ps. 356.1 million. The Bank began
to apply the CVS adjustment to the principal of these loans in November 2003.

         The Bank's inability to manage or hedge its mismatches has exposed it
to fluctuations in the exchange rate, inflation rate and market interest rates
in 2002 and 2003 and has generated losses to the Bank, reducing its net
financial income. Under inflation accounting rules, the inflation rate used to
restate financial statements for inflation (the WPI variation) is used to
determine the implicit cost of the Bank's shareholders' equity. This cost is
represented in our income statements mainly by the monetary loss from financial
intermediation.

                                     -115-
<PAGE>

         In addition, given that, as a result of the measures to compensate
banks for asymmetric pesification, the Bank's foreign currency-denominated
assets comprise mainly the compensatory and the hedge bonds, which accrue at
LIBOR, the yield on the Bank's foreign currency-denominated assets has been
lower than the cost of the Bank's foreign currency liabilities.

         In the context of significant and differential fluctuations in the
exchange rate, inflation rate and domestic interest rates, these mismatches have
been a source of potential losses for the Bank and they expose the Bank to
future potential losses.

         Due to the characteristics of the Argentine financial market, the lack
of hedge instruments and limited access to the international capital markets,
the Bank's capacity to modify these mismatches has been and remains limited.
Moreover, the Bank's ability to hedge such mismatches is expected to remain
limited in the near future. Although the Bank completed the restructuring of its
foreign debt in 2004 and has agreed on a payment plan with the Argentine Central
Bank for the financial assistance for liquidity support it received that is
consistent with the Bank's repayment capacity in Argentina's current economic
environment, the Bank will, for the foreseeable future, have limitations on its
ability to manage its assets and liabilities effectively so as to minimize risks
resulting from mismatches in terms of currencies and yields.

ARGENTINE ECONOMY IN 2003

         In 2003, the Argentine economy consolidated its recovery from the
recession starting in the second half of 1998, which had particularly
intensified with the political, institutional and economic crisis at the end of
2001 and the first half of 2002. This latter crisis resulted in a strong
deterioration of the real and monetary variables. During 2003, economic growth
was accompanied by lower inflation rates and lower interest rates and, in the
fiscal area, by a strong increase in fiscal revenue.

         The two agreements signed with the International Monetary Fund in
January 2003 and September 2003 helped to reduce uncertainty and to improve the
fiscal accounts. Also positive during the past year was the orderly political
transition in a year with presidential elections, after great institutional
instability in the previous two years. The new administration headed by
President Nestor Kirchner continued, in general, with the economic policies
pursued by the previous government.

         Continuing the recovery observed in the last two quarters of 2002, the
GDP showed a seasonally adjusted increase of 2.5% and 2.0% in the first and the
second quarters of 2003, respectively, with the growth during the first semester
being 6.7% compared to the prior year. In the second half of the year, GDP
growth accelerated. In the third and fourth quarters, GDP growth was 3.5% and
2.5%, respectively, in seasonally adjusted terms, with year-over-year growth in
the second semester of 10.7%.

         This strong increase in economic activity was fueled by recovery in
domestic demand. In fact, investment rebounded strongly, reaching in 2003 a
level 37.1% higher than the depressed levels of 2002. In addition, the increase
in total wages, generated by the improvement in labor market conditions and the
partial recovery in real wages, had a significant impact on private consumption,
which grew 8.5% in 2003. This trend gained pace in the second half of the year
when consumption grew at an annual rate of 11%.

         On the supply side, the sectors that showed the best performances were
again those benefiting from the change in relative prices of 2002, which favored
the tradable sector of the economy. Such change had only a very small correction
in 2003. In this regard, while the goods producing sector grew 14.4% on average
during 2003, the service sector only grew by 4.1%. Manufactures recorded a solid
performance, growing 15.8%, fueled mainly by import substitutes and exports. The
high starting level of idle installed capacity at the aggregate level (it was
60% at the end of 2002 and had reached 70.1% a year later) benefited the
manufacturing sector. The agricultural sector also showed solid performance in
2003, growing 6.9%, as so did construction, which grew on average 34.3% over the
same period.

         The strong economic growth had a favorable impact on the labor market.
The unemployment rate (including beneficiaries of the subsidy granted by the
government to unemployed heads of household through the

                                     -116-
<PAGE>

Heads of Household Plan) decreased from 17.8% in October 2002 to 14.3% in August
2003, as measured by the INDEC survey.

         Credit did not expand in 2003, generating a strong increase in the
economy's demand for money. This private-sector behavior allowed the Argentine
Central Bank to pursue an expansionary monetary policy.

         Inflation decelerated significantly during 2003. Consumer prices
increased 3.7%, and wholesale prices increased only 2.0%. This moderate increase
in prices is mainly explained by significant overall idle capacity, sustained
demand for money by the public, appreciation of the nominal exchange rate and
the government's refusal to allow an increase in utility tariffs.

         Despite the expansionary monetary policy pursued by the Argentine
Central Bank, the excess of foreign currency generated by the external sector
contributed to a 12.8% appreciation of the nominal exchange rate during the
year. The nominal exchange rate at year-end was Ps. 2.93 per U.S. dollar while
at the end of 2002 it was Ps. 3.36 per U.S. dollar. Domestic interest rates
reflected the significant improvement in the financial system's liquidity. In
effect, average interest rates on 30-day peso-denominated time deposits were
2.59% at the end of 2003 compared to 33.06% at the end of 2002. There was also a
strong decrease in the yield of the Lebac, which fell to 15.99% per annum at the
end of 2003 from 42.14% per annum in December 2002. At the same time, the
average maturity of the Lebac was extended to 361 days from 138 days in the
previous year.

         In the fiscal area, the improvement observed in the second half of 2002
continued during 2003, mainly as a result of a strong increase in tax revenues,
which grew 43.6%. This increase was attributable to the favorable impact of the
recovery on revenues from taxes related to the economic cycle, to the increase
in revenues from income-related taxes (principally because firms were not
allowed to adjust their financial statements for inflation) and to the
contribution of revenues from taxes on exports and from the tax on bank debits
and credits. The increase in tax revenues offset the Ps. 14,940 million
expansion in primary expenditures, of which Ps. 6,000 million are explained by
higher automatic transfers to the provinces given the current revenue-sharing
system, and allowed the government to achieve a fiscal surplus of Ps. 8,700
million (equivalent to 2.3% of GDP). This permitted the government to
comfortably meet the fiscal target agreed to with the IMF. After interest
payments of Ps. 6,917 million, the global fiscal result was a surplus of Ps.
1,778 million.

         The external sector showed an important current account surplus once
more in 2003, which resulted from a high trade surplus. During 2003, the current
account surplus amounted to US$7,941 million, similar to the level observed
during 2002. The trade surplus during the period amounted to US$14,746 million
despite the strong increase in imports.

ARGENTINE FINANCIAL SYSTEM

         During 2003, change in the financial system in Argentina was very
positive. Deposits and money market mutual funds recovered, and the financial
system's liquidity as a whole increased. Nonetheless, total credit to the
private sector continued to decrease, even though certain components fared
satisfactorily, especially during the second half of the year. Although the
change in deposits was positive, their growth was attenuated by a high tax
levied on bank debits and credits (which is not to be computed on account of
other taxes). This tax encourages individuals to hold cash as opposed to
deposits.

         During 2003, peso-denominated voluntary time deposits in the system
increased 84.6% to Ps. 34,308 million as of December 31, 2003, while
peso-denominated transactional deposits (or deposits held in current accounts
and savings accounts) increased 61.6% to Ps. 37,651 million. Therefore, total
voluntary deposits denominated in pesos amounted to Ps. 71,989 million as of
year-end 2003. Likewise, dollar-denominated voluntary deposits showed a strong
increase of 155.7% in the year, amounting to Ps. 4,749 million as of December
31, 2003. Total voluntary deposits in the system, denominated either in pesos or
dollars, reached Ps. 76,708 million (approximately 20.6% of GDP) at the end of
2003, which represented 75.3% growth, compared with 12.9% of GDP at the end of
2002 and with a maximum of 29.8% of GDP in 2000.

                                     -117-
<PAGE>

         In 2003, the average term of total voluntary time deposits increased
19.9%, from 44.5 days at the beginning of the year to 53.4 days at year-end,
reflecting a greater confidence in the financial system. Furthermore, during
2003, the voluntary deposits segment exceeding Ps. 1 million grew faster than
the retail deposit segment, signaling an improvement in the confidence of
wholesale investors.

         Growth in voluntary deposits was sharper in the first half of 2003 as a
result of the government-authorized release of a portion of the deposits
restructured during the 2001 - 2002 crisis. Most of these funds were attracted
by the financial system. During the second half of the year, total deposits
continued to increase but at slower growth rates. Over this period,
transactional deposits grew 39% while voluntary time deposits decreased by 2.6%.
This led transactional deposits to exceed voluntary time deposits at the end of
2003. This incongruous behavior can be explained principally by the decrease in
interest rates.

         Total deposits grew 32.8%, reaching Ps. 88,736 million at year-end.
These deposits include remaining restructured deposits or CEDROS and deposits
subject to amparo claims, net of the restructured deposits exchanged for
government bonds pursuant to Decree No. 1836/02. This exchange had not been
completed as of December 31, 2003. See Item 4. "Information on the Company --
Main Regulatory Changes in 2002 and 2003 -- Deposits."

         At the end of 2003, total loans to the private sector amounted to Ps.
30,900 million, which represented 8.3% of GDP, compared to the maximum of 23.3%
of GDP recorded in 1999. The volume of loans to the private sector has steadily
diminished since 1999. This drop became steeper in 2002 (31.0%), with an 11.9%
reduction in 2003. However, loan volume stabilized in the second half of the
year, thus increasing 0.6% during this period, mainly as a result of an increase
in consumer credit lines (personal loans and loans through credit cards) and
short-term commercial loans. Consumer credit lines increased 16.2% during that
period and commercial loans (advances in current accounts and promissory notes)
grew 3.85%. This increase went along with the expansion in economic activity and
the recovery of aggregate consumption, especially during the last half of 2003.
The volume of mortgage loans and loans collateralized by movable goods continued
to decrease during 2003. However, since the end of 2003, banks have launched
advertising campaigns to actively offer mortgage credit lines denominated in
pesos with terms ranging from five to 15 years.

         The strong growth of deposits and the continuing contraction of credit
fostered the increase in the financial system's liquidity, which reached high
levels, even compared with those of the convertibility period. At the end of the
year, the financial system's liquidity exceeded 28% of total deposits.

RESULTS OF OPERATIONS OF GRUPO GALICIA FOR THE FISCAL YEARS ENDING DECEMBER 31,
2003, DECEMBER 31, 2002 AND DECEMBER 31, 2001

GENERAL

         We discuss below our results of operations for our fiscal year ended
December 31, 2003, as compared with our results of operations for the fiscal
year ended December 31, 2002. We also discuss our results of operations for
fiscal year 2002 as compared with our results of operations for the fiscal year
ended December 31, 2001.

NET LOSS

         For fiscal year 2003, we recorded a net loss of Ps. 217.1 million
compared to a net loss after loss absorption (described below) of Ps. 1,471.5
million for fiscal year 2002. The lower net loss in 2003 was primarily
attributable to the following factors:

            -  a 67.0% reduction in financial expenses, from Ps. 4,560.4 million
               to Ps. 1,502.9 million;

            -  a 82.6% reduction in charges for provisions for losses on loans
               and other receivables, from Ps. 1,648.5 million to Ps. 286.4
               million;

            -  a 40.5% reduction in administrative expenses, from Ps. 947.5
               million to Ps. 563.4 million;

            -  a 99.0% reduction in the monetary loss from financial
               intermediation, from Ps. 1,437.7 million to Ps. 14.5 million;

                                     -118-
<PAGE>

            -  the generation of Ps. 143.0 million of miscellaneous income, net,
               compared to Ps. 429.6 million of miscellaneous losses for the
               same period in fiscal year 2002; and

            -  a 56.5% reduction in losses from equity investments, from Ps.
               52.0 million to Ps. 22.6 million.

         The decrease in net loss in 2003 was partially offset by a 71.0%
reduction in financial income, from Ps. 5,797.7 million to Ps. 1,681.9 million.

         In fiscal year 2002, we absorbed Ps. 1,370.0 million of net losses in
accordance with Argentine Central Bank Communique "A" 3800. This loss absorption
is explained under " -- Loss Absorption." After giving effect to the loss
absorption allowed under Communique "A" 3800, our net loss for fiscal year 2002
was Ps. 1,471.5 million.

<TABLE>
<CAPTION>
                                                                     GRUPO GALICIA
                                                 ----------------------------------------------------
                                                                   FISCAL YEAR ENDED
                                                 ----------------------------------------------------
                                                                      DECEMBER 31,
                                                 -----------------------------------------------------
                                                      2003                2002              2001
------------------------------------------------------------------------------------------------------
                                                 (in millions of    (in millions of February 28, 2003,
                                                  pesos, except              constant pesos,
                                                   percentages)            except percentages)
<S>                                              <C>                 <C>                 <C>
CONSOLIDATED INCOME STATEMENT
Financial income...............................    Ps.1,681.9        Ps.  5,797.7        Ps. 3,586.8
Financial expenses.............................       1,502.9             4,560.4            2,126.1
Net financial income...........................         179.0             1,237.3            1,460.7
Provision for losses on loans and other
   receivables ................................         286.4             1,648.5            1,008.5
Net income from services.......................         361.4               375.4              942.6
Monetary loss from financial intermediation....         (14.5)           (1,437.7)                 -
Administrative expenses........................         563.4               947.5            1,369.9
Monetary gain (loss) from operating expenses...           0.1                21.0                  -
Minority interest..............................          (9.6)              269.6              (22.2)
Income from equity in other companies..........         (22.6)              (52.0)              35.0
Miscellaneous income (loss), net ..............         143.0              (429.6)             386.0
Monetary gain (loss) from other transactions...          (3.5)             (163.1)                 -
Income before taxes............................        (216.5)           (2,775.1)             423.7
Income tax.....................................          (0.6)              (66.4)            (159.1)
Net income before absorption...................        (217.1)           (2,841.5)             264.6
Absorption subject to approval of annual
   shareholders' meeting.......................            -              1,370.0                  -
NET INCOME AFTER ABSORPTION....................    Ps. (217.1)       Ps. (1,471.5)       Ps.   264.6
Return on average assets.......................         (0.92)%             (5.90)%             0.90%
Return on average shareholders' equity.........        (14.19)             (60.51)              8.67
======================================================================================================
</TABLE>

         Net loss per share amounted to Ps. 0.199 in fiscal year 2003. For
fiscal year 2003, return on assets was a negative 0.92% and return on average
shareholders' equity was a negative 14.19%, compared with a negative 5.90%
return on assets and a negative 60.51% return on shareholders' equity in the
previous fiscal year.

                                     -119-
<PAGE>

FINANCIAL INCOME

      Our financial income was composed of the following:

<TABLE>
<CAPTION>
                                                                                 GRUPO GALICIA
                                                             --------------------------------------------------
                                                                               FISCAL YEAR ENDED
                                                             --------------------------------------------------
                                                                                  DECEMBER 31,
                                                             --------------------------------------------------
                                                                  2003                2002          2001
                                                                  ----                ----          ----
                                                            (in millions of   (in millions of February 28, 2003,
                                                                 pesos)                 constant pesos)
<S>                                                           <C>                 <C>            <C>
Income on loans and other receivables resulting from
    financial intermediation and premiums earned on
     reverse repos........................................    Ps.   924.9         Ps. 1,404.2    Ps. 3,310.9
Income from government and corporate securities, net......          129.2               601.0          158.0
Other(1)..................................................          627.8             3,792.5          117.9
                                                              -----------         -----------    -----------
TOTAL.....................................................    Ps. 1,681.9         Ps. 5,797.7    Ps. 3,586.8
                                                              -----------         -----------    -----------
</TABLE>

(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. Also includes CER adjustments in the amount of
      Ps. 576.8 million and Ps. 3,402.8 million for fiscal years 2003 and 2002,
      respectively, and a CVS adjustment in the amount of Ps. 35.0 million for
      fiscal year 2003.

      The following table shows our yields on interest-earning assets and cost
of funds:

<TABLE>
<CAPTION>
                                                                    GRUPO GALICIA, AS OF DECEMBER 31,
                                          ----------------------------------------------------------------------------------------
                                                      2003                      2002                                   2001
                                          ----------------------------------------------------------------------------------------
                                             AVERAGE                 AVERAGE       NOMINAL      REAL         AVERAGE
                                             BALANCE      RATE       BALANCE         RATE       RATE         BALANCE        RATE
                                             -------      ----       -------         ----       ----         -------        ----
                                         (in millions of pesos,       (in millions of February 28, 2003, constant pesos, except
                                              except rates)                                    rates)
<S>                                       <C>             <C>      <C>              <C>        <C>        <C>               <C>
INTEREST-EARNING ASSETS ............      Ps. 20,725.1    6.44%    Ps. 26,953.5     19.71%       3.43%    Ps. 27,254.2      13.98%
  Government securities.............           2,082.8    3.43          2,255.6     13.24       36.49          2,531.3      10.96
  Loans.............................          11,556.7    9.84         15,262.4     28.86      (26.18)        20,002.3      16.03
  Other (1).........................           7,085.6    1.77          9,435.5      6.47       43.42          4,720.6       6.90

INTEREST-BEARING LIABILITIES .......      Ps. 18,637.7    6.17%    Ps. 22,896.3     18.89%       7.84%    Ps. 24,047.3       8.42%
  Current accounts..................             215.6    1.39            194.6      8.99      (31.57)           739.9       7.14
  Saving accounts...................             613.1    0.55          1,451.8      0.63      (20.11)         2,421.6       1.58
  Time deposits.....................           3,608.3    7.13          6,371.5     20.95       16.06         14,250.3       9.74
  Argentine Central Bank (2)........           8,062.7    5.87          7,147.6     31.31      (39.83)           149.7       9.29
  Other financial entities..........           2,074.4    9.20          2,778.7      8.85       58.68          1,708.5       8.62
  Debt securities (includes
   negotiable obligations)..........           2,710.5    5.69          2,568.5      5.90       62.26          2,934.2       8.37
  Other ............................           1,353.1    5.03          2,383.6     13.82       31.19          1,843.1       7.54
SPREAD AND NET YIELD
Interest spread, nominal basis (3)..              0.27%                              0.82%      (4.41)%                      5.56%
Net yield on interest-earning
   assets (4).......................              0.89                               3.66       (6.41)                       6.54
Financial margin (5) ...............              0.86                               4.59                                    5.36
</TABLE>

(1)   For fiscal years 2002 and 2003, includes amounts corresponding to the
      compensatory bond and the hedge bond.

(2)   For fiscal years 2002 and 2003, includes the financial assistance from the
      Argentine Central Bank for transitory liquidity support and the advance
      granted by the Argentine Central Bank for the subscription 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. For fiscal years 2002 and 2003, interest
      rates include the CER adjustment.

(4)   Net interest earned divided by average interest-earning assets. For fiscal
      years 2002 and 2003, interest rates include the CER adjustment.

(5)   Represents net financial income, divided by average interest-earning
      assets.

                                     -120-
<PAGE>

      Fiscal Year 2003 Compared to Fiscal Year 2002

      For fiscal year 2003, our financial income was Ps. 1,681.9 million, a
71.0% decrease compared to Ps. 5,797.7 million in fiscal year 2002. The decrease
was the result of the lower yield on interest-earning assets and a lower average
volume of such assets. The average yield on interest-earning assets decreased
1,327 basis points to 6.44%. This decline is mainly attributable to the 1,902
basis-point decrease in the average yield on loans, which was due in turn to a
CER variation of 3.7% for fiscal year 2003 compared to a CER variation of 40.5%
for fiscal year 2002. Average interest-earning assets for fiscal year 2003 were
Ps. 20,725.1 million, 23.1% lower than the Ps. 26,953.5 million for fiscal year
2002. This decrease was the result of a decline in the average loan portfolio by
24.3%, a 24.9% decrease in the item "Others" and a 7.7% decrease in the net
position in government securities.

      The average loan portfolio for fiscal year 2003 was Ps. 11,556.7 million,
24.3% lower than the Ps. 15,262.4 million for fiscal year 2002. This reduction
was due to the Ps. 2,982.3 million decrease in loans to the private sector and
the Ps. 723.4 million decrease in loans to the public sector. The decrease in
average loans to the private sector was mainly due to significant borrower
repayments and prepayments and the securitization or sale of mortgage and
commercial loans as part of the Galicia capitalization and liquidity plan. See
Item 4. "Information on the Company -- Business Overview -- Banco Galicia --
Galicia Capitalization and Liquidity Plan." In addition, the variation in the
private- and public-sector loan portfolios reflects the restatement of the
figures for the 12 months of fiscal year 2002 in constant currency of February
28, 2003, while practically no net loan origination took place during fiscal
year 2003.

      Based on daily information published by the Argentine Central Bank, the
Bank's estimated loan market share in the Argentine financial system (on an
unconsolidated basis and excluding the regional credit-card companies' loan
portfolio) was 12.93% as of December 31, 2003, and 11.04% as of December 31,
2002.

      In fiscal year 2003, the average yield on total loans, including the CER
adjustment, was 9.84% compared to 28.86% in fiscal year 2002. During this
period, the private-sector loan portfolio accrued at an average 20.03% interest
rate and the public-sector loan portfolio accrued at an average 4.51% interest
rate. The yield on public-sector loans (mostly secured loans) was reduced by the
valuation rules issued by the Argentine Central Bank. Those secured loans
resulting from an exposure (in origin) to the Argentine federal government
accrued the CER adjustment plus a 4.0% average annual interest rate and those
resulting from an exposure (in origin) to the provincial governments accrued the
CER adjustment plus a 2.0% average annual interest rate. However, Argentine
Central Bank Communique "A" 3911 established that certain public-sector assets
had to be recorded at their present value calculated using a discount rate of
3.0% per annum. See Item 4. "Information on the Company -- Argentine Banking
System and Regulation -- Argentine Banking Regulation -- Valuation of Public
Sector Assets." The effect of adjusting the book value of secured loans in
accordance with this rule resulted in a Ps. 198.1 million loss for the Bank.
This loss decreased our financial income during fiscal year 2003.

      The average interest rate on peso-denominated private-sector loans
decreased by 345 basis points mainly due to the difference in the CER variation
(in fiscal year 2002, the CER increased 40.5% and, in fiscal year 2003, it
increased only 3.7%). This decrease was partially offset in fiscal year 2003 by
a gain of Ps. 102.7 million (end-of-period amount) corresponding to the
estimated difference resulting from the application of the CER to the loan
portfolio that should instead have been adjusted by reference to the CVS. On May
18, 2004, the date by which financial institutions had to opt into the
compensation regime laid down by the government for the negative effects of
asymmetric indexation (through, among other measures, Resolution No. 302/04 of
the Ministry of Economy), the Bank announced it would not participate in the
compensation regime and formally challenged the Ministry of Economy resolution.
In the Bank's opinion, that resolution is contrary to Law No. 25,796 by which
the government established compensation to financial institutions for the
negative effects of asymmetric indexation. See Item 4. "Information on the
Company -- Main Regulatory Changes in 2002 and 2003 -- Compensation to Financial
Institutions -- For Asymmetric Indexation and for Differences Related to Amparo
Claims."

      Our average position in government securities in fiscal year 2003 was Ps.
2,082.8 million, 7.7% lower than the Ps. 2,255.6 million for fiscal year 2002.
In addition, the average interest rate on those assets decreased from 13.2% to
3.4% over the same period. Our average position in government securities
decreased due to the acceptance by holders of Ps. 693.0 million in deposits with
the Bank of the Canje I, an offer made to depositors to exchange

                                     -121-
<PAGE>

their deposits for government bonds, which was completed in late December 2002.
See Item 4. "Information on the Company -- Main Regulatory Changes in 2002 and
2003 -- Deposits."

      The "Other" item is mainly comprised of compensatory bonds and hedge bonds
resulting from the compensation for asymmetric pesification to be received by
the Bank and recorded under the balance sheet account "Other Receivables from
Financial Intermediation," the balance of which was Ps. 4,629.6 million as of
December 31, 2003. These bonds are dollar-denominated. The Ps. 2,349.8 million
decrease in the average balance of "Other" mainly reflects reporting the
additional compensation to be received under "Government Securities" in fiscal
year 2003 rather than "Other," as previously, and the net effect of restating in
constant currency of February 28, 2003, the balances of these bonds in fiscal
year 2002 and the decrease in the exchange rate between the two periods.

      The average yield on "Other" decreased 470 basis points mainly due to the
lower variation of the CER in fiscal year 2003 (as previously explained). This
item includes the Bank's holdings of notes from the Galtrust I Financial Trust
(whose assets consist of secured loans originally extended to provincial
governments), the principal of which is adjusted by the CER.

      Fiscal Year 2002 Compared to Fiscal Year 2001

      For fiscal year 2002, financial income was Ps. 5,797.7 million, a 61.6%
increase from Ps. 3,586.8 million in the fiscal year 2001.

      In accordance with the provisions of Argentine Central Bank Communique "A"
3703, financial income does not include the gain obtained by revaluation of the
Bank's net asset foreign currency position as of December 31, 2001, from Ps.
1.00 per US$1.00 to Ps. 1.40 per US$1.00 as a result of the change in the
foreign exchange regime introduced on January 6, 2002, which implied a 40.0%
increase in the exchange rate. In accordance with the communique, this gain had
to be directly reflected in a specific shareholders' equity account ("Unrealized
Valuation Difference from the Net Asset Foreign Currency Position"), without
being recognized in the income statement. See " -- Loss Absorption." This
policy, which differs from Argentine GAAP standards, modified financial income
for fiscal year 2002 since a Ps. 1,451.3 million gain was not recorded in the
Bank's income statement.

      According to the data shown in the table above, financial income for
fiscal year 2002 was the result of an increase in the average yield on
interest-earning assets, partially offset by a decrease in the average volume of
those assets. The average rate on interest-earning assets rose 573 basis points
to 19.71%. This fluctuation was based on a 1,283 basis-point increase in the
average lending rate, which was mainly due to the accrual of the CER on the
pesified loan portfolio (mainly secured loans). The CER variation was 40.54%.
Average interest-earning assets amounted to Ps. 26,953.5 million, which
represented a 1.1% decrease from the Ps. 27,254.2 million in the year ended
December 31, 2001. This was mainly the result of a lower average loan portfolio,
which decreased by 23.7%. The decrease of the average loan portfolio was
partially offset by the 99.9% growth recorded in the item "Others."

      The average loan portfolio for fiscal year 2002 amounted to Ps. 15,262.4
million, 23.7% lower than Ps. 20,002.3 million in fiscal year 2001. This
decrease was the result of a Ps. 6,793.6 million decrease in the private-sector
loan portfolio, partially offset by a Ps. 2,054.1 million increase in the
public-sector loan portfolio (mainly secured loans). The increase in the
public-sector loan portfolio was the result of the pesification of the portfolio
at the Ps. 1.40 per US$1.00 exchange rate and of the adjustment of the
portfolio's principal by the CER. The decrease in the private-sector loan
portfolio was the result of the pesification of the portfolio at the Ps. 1.00
per US$1.00 exchange rate, significant customer repayments and prepayments and
the Bank's securitization or sale of private-sector commercial and mortgage
loans when the Galicia capitalization and liquidity plan was launched in the
amount of Ps. 638.0 million in constant pesos of February 28, 2003. See Item 4.
"Information on the Company -- Business Overview -- Banco Galicia -- Galicia
Capitalization and Liquidity Plan." In addition, these variations reflect the
restatement of fiscal years 2002 and 2001 in constant currency of February 28,
2003.

      Based on daily data prepared by the Argentine Central Bank, Banco
Galicia's estimated market share of all loans in the Argentine financial system,
excluding the loans of the four regional credit-card companies, was 11.04% as of
December 31, 2002, compared with 10.00% as of December 31, 2001.

                                     -122-
<PAGE>

      The average interest rate for total loans was 28.86% for fiscal year 2002,
including the CER adjustment. In this period, loans to the private sector
accrued at an average 20.82% interest rate, while loans to the public sector
recorded an average interest rate of 35.57%. Secured loans representing an
original exposure to the Argentine government accrued the CER adjustment plus an
annual average interest rate of 4.0%. Those secured loans that were originally
an exposure to the provincial governments accrued the CER plus an annual 2.0%
interest rate. The average rate was lower than the CER variation during the year
mainly due to the restatement of fiscal year 2002 balances for inflation.
Because of the regulatory changes described in other sections of this annual
report, private-sector pesified loans (excluding those mortgage loans for the
sole and permanent residence of the borrower of up to US$250,000 and certain
personal loans and pledge loans) accrued the CER plus an additional fixed
interest rate ranging from 3.5% to 8.0% depending on the type of loan, as
established by the Argentine Central Bank. Due to the successive changes in the
applicable rules and since these modifications had not been fully defined as of
December 31, 2002, mortgage loans for the sole and permanent residence of the
borrower of up to US$250,000 and personal loans and pledge loans, for which the
CVS adjustment plus an interest rate determined by the Argentine Central Bank
applied, accrued at the originally agreed interest rate. Private-sector loans
that were originally denominated in pesos (mainly credit card loans) bore market
interest rates.

      The 99.9% increase in the item "Others" mainly shows the incorporation of
the compensatory bonds and hedge bonds still to be received by the Bank as
compensation for asymmetric pesification. These bonds were recorded under "Other
Receivables from Financial Brokerage" for Ps. 7,098.6 million as of December 31,
2002, in constant pesos of February 28, 2003. Both bonds are dollar-denominated,
and their valuation tracked the increase in the value of the U.S. dollar against
the peso in fiscal year 2002. See " -- Consolidated Assets" below.

      The average balance of our net position in government securities was Ps.
2,255.6 million, 10.9% lower than in fiscal year 2001. The average yield on the
net position in government securities was 228 basis points higher than that
recorded in the prior year. The decrease in the average balance was mainly due
to the restatement for inflation of the prior-year balance. In addition, the
decrease was the result of the net effect of the Bank's participation in the
swap of government securities for secured loans in late 2001 and the increase in
the peso value of the net position in government securities not tendered in that
swap (since most were dollar-denominated securities, which were pesified at the
Ps. 1.40 per US$1.00 exchange-rate). The average net position in government
securities during fiscal year 2002 consisted mainly of Argentine Republic
External Notes, Bono Encaje, Fiscal Credit Certificates and that portion of the
compensatory bond that was actually credited to the Bank. The Argentine Republic
External Notes and the compensatory bond are dollar-denominated. The Bono Encaje
and the Fiscal Credit Certificates were pesified at the Ps. 1.40 per US$1.00
exchange-rate, and their principal was adjusted by the CER. In addition, during
September 2002, the Bank used its holdings of the Bono Encaje, amounting to Ps.
539.7 million, to acquire the bonds to be delivered to depositors who had chosen
to exchange their deposits for bonds as part of the Canje I. See Item 4.
"Information on the Company -- Main Regulatory Changes in 2002 and 2003 --
Deposits" and Item 4. "Information on the Company -- Selected Statistical
Information -- Government and Corporate Securities."

      Financial income also recognized a gain of Ps. 182.5 million due to
foreign exchange differences and foreign currency premiums (this gain does not
include the gain from the revaluation of our net asset foreign currency position
as of December 31, 2001, from peso-dollar parity to the Ps. 1.40 per US$1.00
exchange rate) and income from foreign exchange brokerage amounting to Ps. 53.0
million.

                                     -123-
<PAGE>

FINANCIAL EXPENSES

      Our financial expenses were composed of the following:

<TABLE>
<CAPTION>
                                                                 GRUPO GALICIA
                                                    ----------------------------------------
                                                               FISCAL YEAR ENDED
                                                    ----------------------------------------
                                                                  DECEMBER 31,
                                                    ----------------------------------------
                                                        2003          2002          2001
                                                        ----          ----          ----
                                                  (in millions of   (in millions of February
                                                       pesos)       28, 2003, constant pesos)
<S>                                                 <C>            <C>           <C>
Expenses from
  Interest on deposits............................. Ps.   228.6    Ps.  448.4    Ps. 1,495.5
  Debt securities .................................       154.2         281.0          234.9
  Contributions and taxes..........................        31.7          50.4           93.0
  Other (1)........................................     1,088.4       3,780.6          302.7
                                                    -----------    ----------    -----------
TOTAL.............................................. Ps. 1,502.9    Ps.4,560.4    Ps. 2,126.1
                                                    -----------    ----------    -----------
</TABLE>

(1)   Includes accrued interest on liabilities resulting from financial
      brokerage with banks and international entities and premiums payable on
      repos. For fiscal years 2003 and 2002, includes Ps. 187.5 million and Ps.
      1,734.6 million, respectively, of CER adjustments.

      Fiscal Year 2003 Compared to Fiscal Year 2002

      Financial expenses for fiscal year 2003 decreased by 67.4% to Ps. 1,502.9
million compared to Ps. 4,560.4 million for fiscal year 2002. The reduction in
financial expenses was the result of a 1,272 basis-point decrease in the average
cost of funds and of an 18.1% decrease in the average balance of
interest-bearing liabilities. Average interest-bearing liabilities for fiscal
year 2003 amounted to Ps. 18,637.7 million compared to Ps. 22,896.3 million for
fiscal year 2002. This decrease is explained, among other factors, by the
restatement of fiscal year 2002 figures in constant currency of February 28,
2003. Average interest-bearing deposits amounted to Ps. 4,437.0 million in
fiscal year 2003, 44.7% lower than the Ps. 8,017.9 million for fiscal year 2002.
This decrease was primarily the result of:

-     the strong decrease in the Bank's deposits, both of its Argentine and
      foreign operations, that took place during the first months of 2002;

-     the restructuring, completed during the last quarter of 2002, of Galicia
      Uruguay's deposits, which, in accordance with the restructuring proposal
      and depositor preferences, were partially replaced by negotiable
      obligations;

-     the completion during the third quarter of 2003 of the offer made by
      Galicia Uruguay to its customers to exchange its restructured deposits for
      different combinations of BODEN 2012 and/or new negotiable obligations
      issued by Galicia Uruguay;

-     the payment by Galicia Uruguay in January 2003 and September 2003 of the
      first installments under Galicia Uruguay's deposit restructuring schedule;

-     the decrease in the Bank's deposits in Argentina as a consequence of the
      judicial orders received by the Bank mandating the reimbursement of
      deposits;

-     the completion by late December 2002 of the Canje I (see Item 4.
      "Information on the Company -- Main Regulatory Changes in 2002 and 2003 --
      Deposits");

-     to a lesser extent, the lifting of restrictions on the availability of
      restructured deposits as established by Decree No. 739/03, as a result of
      which, between April 2003 and August 2003, the Bank retained approximately
      75% of the amount of restructured deposits that became freely available as
      well as of the maturity of the installments for the repayment of the
      remaining restructured deposits (see Item 4. "Information on the Company
      -- Main Regulatory Changes in 2002 and 2003 -- Deposits"); and

-     the appreciation of the peso against the U.S. dollar between 2002 and
      2003.

                                     -124-
<PAGE>

      Interest-bearing deposits held with the Bank in Argentina increased from
Ps. 2,535.7 million as of December 31, 2002, to Ps. 3,248.5 million as of
December 31, 2003. This growth was not sufficient to offset the factors outlined
above, however.

      Of the total average interest-bearing deposits for fiscal year 2003, Ps.
1,631.9 million were dollar-denominated deposits and Ps. 2,805.1 million were
peso-denominated compared with Ps. 3,938.5 million and Ps. 4,079.4 million,
respectively, in fiscal year 2002. The Bank's estimated market share of
"voluntary" deposits (current account and saving account deposits plus voluntary
time deposits) in the Argentine financial system only, based on daily
information published by the Argentine Central Bank, increased to 4.75% as of
December 31, 2003, compared to 4.34% as of December 31, 2002.

      The average cost of interest-bearing deposits was 5.95% in fiscal year
2003, 1,103 basis points lower than the 16.98% average cost for fiscal year
2002. Peso deposits accrued an 8.45% average interest rate (including the
adjustment of principal to reflect the variation of the CER) in fiscal year 2003
compared to a 30.34% average interest rate in fiscal year 2002. This decrease
was mainly the consequence of the decrease in the CER variation (as explained in
" -- Net Financial Income") and of the decrease in peso-offered interest rates
experienced by the whole market in 2003 (as a result of increased relative
exchange rate stability and an expansionary monetary policy). The cost of
dollar-denominated deposits was 1.64% in fiscal year 2003, 150 basis points
lower than the 3.14% for fiscal year 2002. This reduction was mainly
attributable to the restructuring of Galicia Uruguay's deposits, which was
approved by the Uruguayan courts in December 2002. From December 2002 until
December 2003, these deposits accrued interest at a 2.0% annual rate compared to
a higher market-based rate prior to the restructuring.

      The average balance of debt securities for fiscal year 2003 amounted to
Ps. 2,710.5 million, slightly greater than the Ps. 2,568.5 million for fiscal
year 2002. The average cost of debt securities was 5.69% in fiscal year 2003.
For the prior fiscal year, this cost was 5.90%.

      In fiscal year 2003, the item "Argentine Central Bank" recorded an average
balance that was Ps. 915.1 million greater than the Ps. 7,147.6 million of
fiscal year 2002 and an average cost of 5.87%, 2,544 basis points lower than the
31.31% interest rate for fiscal year 2002. The increase in the average balance
mainly reflects the addition of the supplemental advance from the Argentine
Central Bank to be granted to the Bank for the purchase of the hedge bond
corresponding to pesified assets of foreign branches and subsidiaries under the
provisions of Decree No. 2167/02. See Item 4. "Information on the Company --
Main Regulatory Changes in 2002 and 2003 -- Compensation to Financial
Institutions -- For Asymmetric Pesification and its Consequences."

      During fiscal year 2003, the average amount of outstanding financial
assistance owed by the Bank to the Argentine Central Bank for liquidity reasons,
excluding borrowings from the Argentine Central Bank used to repay debt with the
Banking Liquidity Fund, was Ps. 4,786.1 million compared with Ps. 4,878.5
million for fiscal year 2002. The higher amount recorded for fiscal year 2002
reflects the adjustment for inflation of 2002 amounts through February 28, 2003.
The average cost of this financial assistance was 5.83% for fiscal year 2003
compared to 28.25% for fiscal year 2002. The Bank obtained approval for the
voluntary restructuring of the debt owed to the Argentine Central Bank for
liquidity support in accordance with the terms of Decrees No. 739/03 and No.
1262/03. Therefore, on April 30, 2003, this financial assistance began to accrue
the CER adjustment plus a 3.5% annual interest rate. Prior to that date, this
financial assistance was a peso-denominated unadjusted liability accruing
interest at a rate equivalent to 80.0% of the monthly average interest rate on
30-day Lebac or the minimum term Lebac auctioned on the market.

      The borrowings from the Argentine Central Bank to repay debts with the
Banking Liquidity Fund amounted in average to Ps. 807.2 million in fiscal year
2003 compared with Ps. 484.3 million in fiscal year 2002. This debt is adjusted
by the CER and accrues at a 3.5% annual interest rate. The financial assistance
to be granted to the Bank by the Argentine Central Bank for the purchase of the
hedge bond is adjusted by the CER and accrues at a 2.0% annual interest rate.
The average balance of this liability was Ps. 2,472.0 million in fiscal year
2003 and Ps. 2,008.8 million in fiscal year 2002. This increase was due to the
addition of the advance to be granted to the Bank by the Argentine Central Bank
for the purchase of the hedge bond corresponding to pesified assets of foreign
branches and subsidiaries during the second half of 2002.

                                     -125-
<PAGE>

      During fiscal year 2003, debt with other financial institutions recorded
an average balance of Ps. 2,074.4 million, 25.3% lower than the Ps. 2,778.7
million of fiscal year 2002. The average cost was 9.20% for fiscal year 2003, 36
basis points higher than the 8.85% for fiscal year 2002. The decrease in the
average balance was mainly attributable to the appreciation of the peso and the
increase in interest rate was mainly attributable to the increase in the cost of
credit lines denominated in pesos.

      The decrease in the average balance of the item "Other Interest-Bearing
Liabilities" between fiscal year 2003 and the previous period is mainly
attributable to the repayment of repurchase agreements entered into with the
Argentine Central Bank and the repayment of a loan from the Banking Liquidity
Fund during 2002 with the proceeds of borrowings from the Argentine Central
Bank. In addition, the item "Other Interest-Bearing Liabilities" included the
average balances of loans granted to the Bank by Sedesa and the FFAEFyS, both
dollar-denominated and amounting, on average, to Ps. 190.5 million and Ps. 90.6
million, respectively, in fiscal year 2003, compared with Ps. 158.2 million and
Ps. 79.7 million, respectively, in fiscal year 2002.

      Financial expenses for fiscal year 2003 include a Ps. 150.2 million loss
for foreign-exchange quotation differences mainly reflecting the revaluation of
the Bank's foreign currency net position for the decrease in the exchange rate
from Ps. 3.36 as of December 31, 2002, to Ps. 2.93 as of December 31, 2003. This
loss was partially offset by a Ps. 57.9 million gain from foreign exchange
brokerage.

      Fiscal Year 2002 Compared to Fiscal Year 2001

      Financial expenses for fiscal year 2002 were Ps. 4,560.4 million, 113.2%
higher than Ps. 2,126.1 million for fiscal year 2001. This increase reflected a
1,049 basis point growth in the average interest rate of interest-bearing
liabilities, partially offset by a 5.0% decrease in their volume.

      Average interest-bearing liabilities amounted to Ps. 22,896.3 million in
comparison with Ps. 24,047.3 million for fiscal year 2001. This decline is to a
large extent the result of the restatement of the comparison base in constant
currency of February 28, 2003. In addition, this decline was the result of the
decrease in deposits during the first half of 2002, which was partially
compensated by: (1) the pesification of originally dollar-denominated deposits
at the exchange rate of Ps. 1.40 per US$1.00 and the adjustment of their
principal by the CER (the resulting restructured peso deposits are known as
"CEDROS"); (2) the valuation of dollar-denominated liabilities subject to
foreign law at the market exchange rate, which increased from Ps. 1.00 per
US$1.00 to Ps. 3.363 per US$1.00 at the close of fiscal year 2002, including
debt with foreign financial institutions, debt securities and deposits in
foreign branches and subsidiaries; (3) the increase in Argentine Central Bank's
financial assistance for liquidity support due to Bank's deposit loss in the
first half of 2002; (4) the addition of the Argentine Central Bank advance to be
used for the purchase of the hedge bond; and (5) the addition of
dollar-denominated loans granted to the Bank by Sedesa and the FFAEFyS when the
Galicia capitalization and liquidity plan was launched.

      Total interest-bearing deposits amounted to Ps. 8,017.9 million, 53.9%
lower than the Ps. 17,411.8 million of fiscal year 2001. This decrease was the
result of the decrease in the dollar-denominated deposits of foreign
subsidiaries, mainly during the first quarter of 2002, and in restructured
deposits (CEDROs). The decline in CEDROs resulted from court orders in response
to amparo claims requiring their reimbursement and the government's offer to
holders of restructured deposits to exchange such deposits for Argentine
government bonds. These decreases were compensated by the pesification of
deposits in Argentina originally denominated in U.S. dollars at the exchange
rate of Ps. 1.40 per US$1.00 and adjustment of their principal by the CER and by
the valuation of deposits in foreign branches and subsidiaries (mainly deposits
in Galicia Uruguay) at the market exchange rate. Galicia Uruguay's restructuring
of deposits into new deposits or negotiable obligations was approved by the
Uruguayan courts on December 23, 2002. As a result, fiscal year 2002 average
dollar-denominated interest-bearing deposits reflect practically all of Galicia
Uruguay deposits.

      Average peso-denominated time deposits amounted to Ps. 2,917.4 million in
fiscal year 2002. This amount mainly represents restructured deposits in
Argentina. As of December 31, 2002, total restructured deposits in Argentina
amounted to Ps. 735.4 million (principal only) and Ps. 73.6 million corresponded
to restructured deposits whereby their holders had exercised the option to
exchange them for Argentine government securities, pursuant to Decree No.
1,836/02 (Canje II). The Canje I was completed in December 2002, which in the
Bank's case, led to a decrease in CEDROs of Ps. 693.0 million in nominal terms
(principal only) in the last month of the year.

                                      -126-
<PAGE>

Furthermore, restructured deposits decreased during 2002 as a result of a
significant number of amparo claims that were filed against the Bank by deposit
holders.

      Banco Galicia's estimated market share of "voluntary" deposits in the
Argentine financial system only, based on daily information published by the
Argentine Central Bank, increased to 4.34% as of December 31, 2002, compared to
3.83% as of June 30, 2002.

      The average balance of debt securities in fiscal year 2002 was Ps. 2,568.5
million, a 12.5% decrease from fiscal year 2001. This decrease is the result of
the restatement for inflation of the 2001 balances, the reclassification of debt
corresponding to two commercial paper programs for a total amount of US$332.0
million into credit lines with foreign banks restructured in 2004 (and
recognized in the item "Others" in the table showing the yields on average
interest-earning assets and the cost of funds) and the restructuring of two
notes of the New York branch for an aggregate amount of US$200.0 million, since
the new securities were issued for a lower amount (US$115.8 million) as a
consequence of payments made in cash and the forgiveness of debt. See Item 4.
"Information on the Company -- Business Overview -- Banco Galicia --
Capitalization." These effects were partially offset by the fact that all of the
liabilities described in this paragraph are dollar-denominated and valued at the
market exchange rate.

      Debt with financial institutions amounted to Ps. 2,778.7 million in fiscal
year 2002. This amount mainly reflects the Bank's dollar-denominated debt with
foreign financial institutions. When compared with the average balance for
fiscal year 2001, total debt with financial institutions shows a 62.6% increase.
This increase resulted from the increase in the market exchange rate during 2002
and from the reclassification mentioned above.

      The average balance of financial assistance from the Argentine Central
Bank in fiscal year 2002 amounted to Ps. 7,147.6 million, as compared with Ps.
149.7 million in fiscal year 2001. This increase was due to the fact that the
Argentine Central Bank provided financial assistance to the Bank until April
2002 to counter the run on the financial system's and the Bank's deposits. The
average balance of financial assistance from the Argentine Central Bank for
liquidity support in fiscal year 2002 was Ps. 4,878.5 million, Ps. 484.3 million
of which corresponded to a loan to pay off debt owed to the Banking Liquidity
Fund. In addition, the increase results from incorporation of an average balance
of Ps. 1,847.8 million corresponding to the loan to be granted to the Bank by
the Argentine Central Bank to be used for the purchase of the hedge bond.

      The loans from Sedesa and the FFAEFyS, which are dollar-denominated
liabilities, with average balances of Ps. 158.2 million and Ps. 79.7 million,
respectively, in fiscal year 2002, resulting from the implementation of the
Galicia capitalization and liquidity plan, are shown under the item "Others."
The average balance of other interest-bearing liabilities was Ps. 2,383.6
million in fiscal year 2002, 29.3% higher than in fiscal year 2001. The increase
is primarily due to the fact that these liabilities are mainly
dollar-denominated.

      In fiscal year 2002, the 1,049 basis-point increase in the cost of funds
was mainly the result of the increase in the cost of interest-bearing deposits
and in the cost of financial assistance from the Argentine Central Bank.

      Restructured deposits (CEDROs) representing deposits originally
constituted in Argentina in dollars accrued the CER plus a 2.0% annual interest
rate during fiscal year 2002. CEDROs originally denominated in pesos accrued an
interest rate of 7.0%.

      The cost of financial assistance from the Argentine Central Bank is mainly
explained by the cost of the loans for liquidity support (excluding the advance
received to pay off debts with the Banking Liquidity Fund), which accrued at an
average interest rate of 28.25% during fiscal year 2002. The advance received to
pay off the debt to the Banking Liquidity Fund accrued the principal adjustment
by the CER plus an annual 3.5% interest rate. The loan to be received from the
Argentine Central Bank to purchase the hedge bond accrued the CER plus an annual
interest rate of 2.0%.

      The increases in the cost of funds mentioned above were mitigated by the
decrease in the cost of debt securities, reflecting the decrease in LIBOR and
the debt reduction obtained in the restructuring of the New York branch's debt
securities. In addition, the cost of dollar-denominated time deposits decreased
from 8.96% in fiscal

                                     -127-
<PAGE>

year 2001 to 3.49% in fiscal year 2002. This reduction mainly reflects the fact
that Galicia Uruguay time deposits accrued a 2.0% interest rate during 2002.

      The loan from Sedesa accrued at an interest rate equal to 180-day LIBOR
plus an annual 3.0%. The loan from the FFAEFyS accrued at an interest rate
equivalent to 180-day LIBOR plus an annual 4.0%, with a minimum rate of 8.07%
per annum.

NET FINANCIAL INCOME

      Fiscal Year 2003 Compared to Fiscal Year 2002

      In fiscal year 2003, our net financial income continued to be affected by
the consequences of the government's measures to resolve the 2001 - 2002 crisis.
Our net financial income was impacted in fiscal year 2003 by:

      (i)   mismatches between assets and liabilities denominated in different
            currencies generated by the government measures regarding asymmetric
            pesification of the financial system's assets and liabilities and
            those regarding the compensation for its effects. These measures are
            described elsewhere in this annual report. The Bank's inability to
            obtain or retain assets that accrue similar interest rates in the
            same currency or that are adjusted for similar indexes has resulted
            in significant losses for the Bank. In particular, the appreciation
            of the peso from Ps. 3.36 per US$1.00 as of December 31, 2002, to
            Ps. 2.93 per US$1.00 as of December 31, 2003, has resulted in a
            significant loss given the Bank's net asset position in foreign
            currency. However, the loss derived from the net position of the
            Bank in CER-adjusted assets was significantly reduced in the second
            quarter of fiscal year 2003 by the restructuring of the Bank's debt
            with the Argentine Central Bank for liquidity support into long-term
            CER-adjusted liabilities; and

      (ii)  accrual by the compensatory bond and hedge bonds, which represent
            most of our dollar-denominated assets, at LIBOR, which caused the
            yield of interest-earning foreign currency assets to be lower than
            the cost of interest-bearing foreign currency liabilities.

      Net financial income for fiscal year 2003 was Ps. 179.0 million, and the
net financial margin was 0.86%. In fiscal year 2002, net financial income was
Ps. 1,237.3 million and the net financial margin was 4.59%.

      In 2002, our net financial income mainly resulted from the gain generated
by the revaluation of our net asset position in foreign currency from Ps. 1.00
per U.S. dollar as of December 31, 2001, to Ps. 3.36 per U.S. dollar as of
December 31, 2002, partially offset by the losses generated by the mismatches
between assets and liabilities denominated in pesos (net liability position) and
between assets and liabilities adjusted by the CER (net asset position) and by
the negative net yield of the matched positions, particularly in foreign
currency.

      Fiscal Year 2002 Compared to Fiscal Year 2001

      The economic policy implemented by the government in 2002 meant compulsory
modification as of December 31, 2001 of the terms bank assets and liabilities
(including currency denomination, interest rate and maturity), and the
introduction of the adjustment by the CER of the principal of the pesified
assets and liabilities. As a result, the Bank's balance sheet in 2002 contained
mismatches in the different segments of assets and liabilities created by the
government's economic policy. Net financial income for fiscal year 2002 was the
consequence of these mismatches between assets and liabilities in terms of their
currency of denomination and in terms of whether they accrued only an interest
rate or a fixed interest rate determined by the government plus the CER,
variances in interest rate, exchange rate and the CER index over the fiscal year
and the Bank's inability to hedge these mismatches.

      Net financial income for fiscal year 2002 before the monetary gain or loss
from financial intermediation amounted to Ps. 1,237.3 million, representing a
4.59% financial margin, lower than the 5.36% financial margin in the year ended
December 31, 2001.

                                     -128-
<PAGE>

PROVISION FOR LOSSES ON LOANS AND OTHER RECEIVABLES

      Fiscal Year 2003 Compared to Fiscal Year 2002

      The provision for losses on loans and other receivables for fiscal year
2003 was substantially lower than that recorded in fiscal year 2002, amounting
to Ps. 286.4 million in fiscal year 2003 compared with Ps. 1,648.5 million for
fiscal year 2002.

      During 2003, the Bank's loan portfolio quality improved as shown by the
decrease in nonaccrual loans from 13.08% of its total loan portfolio to 10.73%
of the Bank's total loan portfolio a year later. Considering loans to the
private sector only, the Bank's nonaccrual portfolio as of December 31, 2003,
was 31.19% of the Bank's total loan portfolio compared to 35.47% as of December
31, 2002.

      The improvement in loan portfolio quality reflects the recovery of the
Argentine economy during 2003 and the progress made during the year in
restructuring the Bank's commercial loan portfolio.

      Due to the establishment of significant loan loss allowances, mainly
during 2002, the coverage of the nonaccrual loan portfolio, with allowances,
reached 90.61% and the loan loss allowances as a percentage of total loans
(excluding interbank loans) amounted to 9.86% as of December 31, 2003. As of
December 31, 2002, these ratios were 104.45% and 13.84%, respectively. A total
of Ps. 212.6 million of loans (included in the Argentine Central Bank's loan
classification as category "2.b") are being restructured. The coverage of
nonaccrual loans plus loans in this category with allowances for loan losses was
77.87% as of December 31, 2003.

      Fiscal Year 2002 Compared to Fiscal Year 2001

      Provision for losses on loans and other receivables for fiscal year 2002
reached Ps. 1,648.5 million, 63.5% higher than the Ps. 1,008.5 million in fiscal
year 2001.

      This increase reflects the significant deterioration in the quality of the
Bank's portfolio in comparison with previous years, resulting from Argentina's
unprecedented economic situation during 2002, as a result of the 2001 - 2002
crisis and the government's measures aimed at restructuring private-sector
debts. Within this context, Banco Galicia increased significantly its allowance
for loan losses and its coverage with allowances for its nonaccrual loan
portfolio. As of December 31, 2002, the nonaccrual loan portfolio represented
13.08% of total loans and 35.46% of total loans to the private sector. Due to
the establishment of significant loan loss provisions in fiscal year 2002, the
allowance for loan losses amounted, as of December 31, 2002, to Ps. 1,681.8
million, 60.1% higher than as of December 31, 2001, and the coverage of the
nonaccrual loan portfolio with allowances reached 104.45% at the end of fiscal
year 2002 and allowances as a percentage of total loans amounted to 13.66%. The
net charge to the income statement for loan losses (provisions charged to income
plus direct charge-offs net of recoveries) in fiscal year 2002 amounted to
10.37% of average total loans (before the allowance for loan losses) as compared
to 4.47% in fiscal year 2001.

      During 2001, the Bank's asset quality had already began to deteriorate as
a result of the long economic recession and its impact on large and medium
corporations.

                                     -129-
<PAGE>

NET INCOME FROM SERVICES

      Our net income from services consisted of:

<TABLE>
<CAPTION>
                                                                     GRUPO GALICIA
                                                     ----------------------------------------------
                                                                   FISCAL YEAR ENDED
                                                     ----------------------------------------------
                                                                      DECEMBER 31,
                                                     ----------------------------------------------
                                                          2003            2002             2001
                                                     -----------        ---------      ------------
                                                     (in millions of    (in millions of February 28,
                                                          pesos)           2003, constant pesos)
<S>                                                  <C>                <C>            <C>
Income from
  Credit cards.....................................    Ps. 260.9        Ps. 281.5      Ps.   581.0
  Deposits accounts................................         66.6             91.9            195.9
  Credit-related fees..............................         12.9             30.1             36.1
  Check collection.................................          7.5             10.3             19.9
  Collection services (taxes and utility bills) ...          6.6              7.0             13.9
  Foreign trade....................................         13.6             14.1             23.6
  Insurance........................................         22.0             32.8             59.9
  Other (1)........................................         41.7             48.4            226.4
                                                       ---------        ---------      -----------
TOTAL INCOME.......................................    Ps. 431.8        Ps. 516.1      Ps. 1,156.7
TOTAL EXPENSES.....................................    Ps.  70.4        Ps. 140.7      Ps.   214.1
                                                       ---------        ---------      -----------
NET INCOME FROM SERVICES...........................    Ps. 361.4        Ps. 375.4      Ps.   942.6
                                                       ---------        ---------      -----------
</TABLE>

(1) Includes fees from market making in government securities, investment
    banking activities, asset management, safe deposit boxes and cash
    management.

      Fiscal Year 2003 Compared to Fiscal Year 2002

      Net income from services amounted to Ps. 361.4 million in the 12 months of
fiscal year 2003, 3.7% lower than the Ps. 375.4 million recorded in fiscal year
2002. This decrease mainly reflects service prices increasing over fiscal year
2003 by less than the WPI that affected fiscal year 2002.

      Fiscal year 2003 income from credit cards of Ps. 260.9 million included
Ps. 174.1 million of income from the regional credit card companies. Income from
regional credit card operations for fiscal year 2003 increased 8.9% from Ps.
159.9 million for fiscal year 2002 due to a 6.5% increase in the average number
of cards managed in 2003 to 1,173.7 thousand from 1,101.7 thousand in 2002 and
due to significantly greater card usage in 2003. As of December 31, 2003, these
companies managed 1,179.2 thousand cards.

      Income from credit card operations not related to the regional credit card
companies was Ps. 86.8 million. The number of cards administered by the Bank
(excluding those administered by the regional credit card companies) amounted to
505.1 thousand as of December 31, 2003, compared to 498.6 thousand as of
December 31, 2002. However, income from the Bank's credit card operations not
related to the regional credit cards companies for fiscal year 2003 decreased
28.6% from the Ps. 121.6 million recorded in fiscal year 2002. This decrease was
mainly attributable to restatement of the 2002 figures for inflation, as in
nominal terms the credit card income of the Bank not related to the regional
credit card companies decreased only slightly. The decrease in nominal terms was
due to a 13.9% decrease in the average number of credit cards managed (from
585.3 thousand in 2002 to 503.7 thousand in 2003). This decline was partially
compensated by an increase in the use of such cards. The improved performance of
the credit card business of the regional companies in 2003 relative to that of
the Bank is attributable to an improvement in the competitive and economic
environment of the regions of Argentina in which the regional companies operate.

                                     -130-
<PAGE>

      The following table sets forth the number of credit cards outstanding on
the dates indicated:

<TABLE>
<CAPTION>
                                                                                                       % CHANGE
                                                                                              --------------------------
                                                              DECEMBER 31,                           DECEMBER 31,
                                              ---------------------------------------------   --------------------------
CREDIT CARDS (1)                                  2003            2002             2001        2003/2002      2002/2001
                                              ------------   -------------    -------------   -----------    -----------
<S>                                           <C>            <C>              <C>             <C>            <C>
VISA........................................       411,367         423,397          597,577         (2.84)%       (29.15)%
   "Gold"...................................        66,303          59,547           67,047         11.35         (11.19)
   International............................       218,041         231,374          301,061         (5.76)        (23.15)
   Domestic.................................       125,832         130,081          225,136         (3.27)        (42.22)
   "Business"...............................         1,191           2,395            4,333        (50.27)        (44.73)
AMERICAN EXPRESS............................        89,294          67,254          106,543         32.77%        (36.88)%
   "Gold"...................................        34,508          25,014           33,867         37.95         (26.14)
   International............................        54,786          42,240           72,676         29.70         (41.88)
MASTERCARD..................................         4,420           7,971           24,179        (44.55)%       (67.03)%
   "Gold"...................................           682           1,257            3,342        (45.74)        (62.39)
   MasterCard...............................         3,738           6,714           19,868        (44.33)        (66.21)
   Argencard................................             -               -              969             -        (100.00)
REGIONAL CREDIT CARD COMPANIES (2)..........     1,179,192       1,097,838        1,188,739          7.41%         (7.65)%
  Visa......................................       368,088         426,075          332,354        (13.61)         28.20
  Local Brands..............................       811,104         671,763          856,385         20.74         (21.56)
                                                             -------------    -------------   -----------    -----------
TOTAL ......................................     1,684,273       1,596,460        1,917,038          5.50%        (16.72)%
AMOUNT OF PURCHASES (in millions of Feb..28,
2003, constant Pesos).......................  Ps.  2,925.7   Ps.   2,423.7    Ps.   5,044.6         20.71         (51.95)
</TABLE>

(1) Issued by Banco Galicia and subsidiaries.

(2) Tarjeta Naranja, Tarjeta Comfiar, Tarjetas Cuyanas, Tarjetas del Mar and
    Tarjetas del Sur.

(3) For the six-month period ended December 31, 2000.

      The Bank's total deposit accounts amounted to 943.3 thousand as of
December 31, 2003, 9.1% lower than that as of December 31, 2002.

      The decrease in credit-related fees was mainly due to the decrease in the
volume of loan operations during all of 2002 and 2003 and to the effect of the
WPI in fiscal year 2002. Expenses from services were affected in fiscal year
2002 by a nonrecurring US$10.0 million charge in connection with the Bank's
prepayment of certain structured-note transactions.

      Fiscal Year 2002 Compared to Fiscal Year 2001

      Net income from services reached Ps. 375.4 million in fiscal year 2002,
60.2% lower than in the fiscal year 2001. This decrease mainly reflects that
fees for services did not increase in the same proportion as the price index
used to restate financial statements for inflation (the WPI) and a lower level
of activity.

      The table above shows that the decrease in net income from services was
mainly due to the decrease in fees from credit card activities, other fees and
fees from deposit accounts.

      Income from credit cards, totaling Ps. 281.5 million, included Ps. 159.9
million related to the regional credit card companies, which were managing
1,097.8 thousand cards as of December 31, 2002. Because of the significant
decrease in overall economic activity suffered by the Argentine economy during
most of 2002, that translated into higher unemployment and lower real wages and
lower consumption, credit card use showed a 52.0% decline when compared with
fiscal year 2001. The number of credit cards managed by these companies
decreased by 7.6% in fiscal year 2002.

      Excluding the regional credit card companies, the Bank's income from
credit cards was Ps. 121.6 million for fiscal year 2002. Use of these cards in
2002 was 50.7% lower than in 2001. The number of credit cards managed directly
by the Bank (excluding the cards of the regional companies) was 498,600 as of
December 31, 2002, compared with 728,300 recorded at December 31, 2001.

                                     -131-
<PAGE>

      The Bank's deposit accounts numbered 1.06 million as of December 31, 2002,
52.3% lower than a year earlier. This decline was due to the closing of accounts
denominated in foreign currency held at the Bank in Argentina, the pesification
of deposits that occurred in the financial system during the year and, to a
lesser extent, the closing of accounts by customers.

      The number of insurance policies (property, life and retirement)
administered by the Bank was 229,000 as of December 31, 2002, as compared to
289,000 as of December 31, 2001.

      The decline in credit-related fees reflects the decrease in the
private-sector loan portfolio.

      The decrease in other fees is related to the significant reduction in
investment banking, asset management, market-making in government securities and
lending to the government in fiscal year 2002.

      Expenses from services included nonrecurring expenses of US$10.0 million,
on account of payments in connection with structured-note transactions paid off
by the Bank prior to maturity.

MONETARY LOSS FROM FINANCIAL INTERMEDIATION

      Fiscal Year 2003 Compared to Fiscal Year 2002

      Our monetary loss from financial intermediation amounted to Ps. 14.5
million in fiscal year 2003 compared to Ps. 1,437.7 million in fiscal year 2002.
This decrease was the result of a lower increase in the WPI in fiscal year 2003
(2.03%), as compared with fiscal year 2002 (118.4%). In fact, the first half of
2002 was the period of higher inflation after the devaluation of the peso in
early 2002. The monetary loss from financial intermediation represents the net
effect of inflation on financial income and expenses, income and expenses from
services and loan loss provisions. Monetary loss from financial intermediation
plus the monetary effect on administrative expenses and on other income and
expenses, represents the loss caused by the exposure of the Bank's liquid
shareholders' equity (shareholders' equity less fixed assets and equity
investments) to inflation, measured by the variation of the WPI.

      In addition, the financial statements for fiscal year 2003 were adjusted
for inflation from January 1, 2003, through February 28, 2003, only. Therefore,
in addition to reflecting the substantial decrease in inflation between both
periods, monetary loss from financial intermediation for year 2003 included only
two months of adjustment.

      No monetary loss was recorded prior to 2002, as the adjustment for
inflation was not applicable at that time.

                                     -132-
<PAGE>

ADMINISTRATIVE EXPENSES

      The following table sets forth components of our administrative expenses:

<TABLE>
<CAPTION>
                                                                            GRUPO GALICIA
                                                     -----------------------------------------------------------
                                                                          FISCAL YEAR ENDED
                                                     -----------------------------------------------------------
                                                                            DECEMBER 31,
                                                     -----------------------------------------------------------
                                                             2003                2002                   2001
                                                     ---------------------    ---------             ------------
                                                                              (in millions of February 28, 2003,
                                                     (in millions of pesos)              constant pesos)
<S>                                                  <C>                      <C>                   <C>
Salaries and social security contributions.......          Ps. 198.3          Ps. 435.3             Ps.    597.4
Property-related expenses........................               70.1              100.0                    124.3
Personnel services...............................               15.7               23.6                     54.5
Advertising and publicity........................               20.0               15.3                     54.6
Amount accrued in relation to directors' and
  syndics' compensation..........................                1.9                3.2                     35.4
Electricity and communications...................               27.2               42.5                     70.3
Taxes............................................               29.8               57.8                     84.5
Other............................................              200.4              269.8                    348.9
                                                           ---------          ---------              -----------
TOTAL ...........................................          Ps. 563.4          Ps. 947.5              Ps. 1,369.9
                                                           ---------          ---------              -----------
</TABLE>

Fiscal Year 2003 Compared to Fiscal Year 2002

      Administrative expenses amounted to Ps. 563.4 million in fiscal year 2003,
40.5% lower than the Ps. 947.5 million recorded in fiscal year 2002.

      This decrease shows the full impact of the significant efforts made by the
Bank during 2002 to streamline its operational structure and reduce its
administrative expenses within the framework of the Galicia capitalization and
liquidity plan. This process was mainly concentrated in the second half of
fiscal year 2002. Between December 31, 2001, and December 31, 2003, the number
of branches in the Bank's branch network fell by 62; 61 branches were closed in
fiscal year 2002. The Galicia Ahora service centers were closed, and their
activity was consolidated into the branch network mainly during the second
quarter of 2002.

      In addition, the Bank's staff, excluding staff of consolidated companies,
decreased by 226 employees between December 31, 2002 and 2003, a 5.6% decrease
from the December 31, 2002, level. In fiscal year 2002, the Bank's staff,
excluding staff of consolidated companies, decreased by 1,804 employees through
voluntary retirement plans. Consolidated companies' staff increased by 24
employees, or 1.2%, during fiscal year 2003. Moreover, during 2002, the Bank
renegotiated all of its leases and supply contracts. Expenses related to
salaries and social security contributions totaled Ps. 198.3 million in fiscal
year 2003, 54.4% lower than in the previous period. This decrease was due to the
decrease in staff.

      Remaining administrative expenses totaled Ps. 365.1 million in fiscal year
2003, 28.7% lower than the Ps. 512.2 million of the prior fiscal year. All
components of the remaining administrative expenses showed a decrease as a
consequence of the cost-reduction initiatives implemented by the Bank, except
for advertising and publicity, which increased by 30.7%.

Fiscal Year 2002 Compared to Fiscal Year 2001

      In fiscal year 2002, administrative expenses totaled Ps. 947.5 million,
30.8% lower than the Ps. 1,369.9 million recorded in fiscal year 2001.

      In fiscal year 2002, Banco Galicia made significant progress in
streamlining its organizational structure and administrative expenses in order
to adapt to a context that had radically changed. This process mainly took place
during the second half of the year. The Bank reduced its branch network in
Argentina by 61 branches, equivalent to 21.1% of those existing as of December
31, 2001, and the Galicia Ahora service centers were closed and their

                                     -133-
<PAGE>

activity was consolidated into the branch network. Similarly, through voluntary
retirement plans, the Bank's staff, excluding staff of consolidated companies,
decreased by 1,804 people, or 30.7%, from December 31, 2001. During fiscal year
2002, the staff of companies consolidated by the Bank decreased by 581
employees, or 23.0%, as compared to fiscal year 2001, mainly representing a
reduction in the regional credit card companies' staff. In addition, these
companies also reduced their distribution network by 16 service centers, 15.5%
of those existing as of December 31, 2001. Moreover, the Bank renegotiated all
of its leases and supply contracts.

      Expenses related to salaries and social security contributions totaled Ps.
435.3 million, 27.1% lower than in fiscal year 2001. This amount includes Ps.
130.0 million on account of restructuring charges. Net of that amount, personnel
expenses for the period amounted to Ps. 288.2 million, 50.1% lower than in 2001.
This decrease was partially due to restating the fiscal year 2001 amounts for
inflation.

      Excluding salaries and social security contributions, remaining
administrative expenses totaled Ps. 512.2 million, 33.7% lower than in fiscal
year 2001. All components of this category suffered reductions. Personnel
services and directors' and syndics' fees were the items showing the greatest
percentage declines.

      The effect of inflation was a Ps. 21.0 million gain. Net of this gain,
administrative expenses amounted to Ps. 926.5 million, 32.4% lower than the Ps.
1,369.9 million of fiscal year 2001.

INCOME/(LOSS) FROM EQUITY INVESTMENTS

      In fiscal year 2003, we recorded a Ps. 22.6 million loss from equity
investments as compared to a loss of Ps. 52.0 million recorded in fiscal year
2002. The loss in fiscal year 2003 was mainly due to losses recorded by Aguas
Argentinas S.A. (Ps. 8.8 million), Tradecom International (Ps. 6.5 million),
Camino de las Sierras S.A. (Ps. 2.3 million) and Aguas Cordobesas S.A. (Ps. 0.9
million) .

      In fiscal year 2002, we recorded a loss from equity investments of Ps.
52.0 million. This loss was mainly due to losses recorded by Aguas Argentinas
(Ps. 25.5 million), Aguas Provinciales de Santa Fe S.A. (Ps. 17.5 million) and
Aguas Cordobesas (Ps. 6.9 million).

      In fiscal year 2001, income from equity investments was Ps. 35.0 million.
This amount included Ps. 26.2 million in income from the sale of the Bank's
stake in Banco Barclays e Galicia S.A., Ps. 9.7 million in income from Galicia
Capital Markets S.A. and Ps. 5.7 million in income from Banelco S.A. In
addition, a Ps. 4.8 million dividend from Aguas Argentinas and a Ps. 12.6
million loss from Correo Argentino S.A. were also included in this amount.

MISCELLANEOUS INCOME (LOSS), NET

      During fiscal year 2003, miscellaneous income, net (excluding the
associated monetary loss), amounted to Ps. 143.0 million compared to a Ps. 429.6
million loss in fiscal year 2002. The gain recorded in fiscal year 2003 was
mainly due to a net reversal of allowances for loan losses and other
contingencies in the amount of Ps. 185.4 million and to loan recoveries for Ps.
40 million. This income was partially offset by the application of the
provisions of Argentine Central Bank Communique "A" 3916, which established that
the deferred loss associated with the repayment by the Bank of restructured
deposits in their original currency or at the peso equivalent amount at the
market exchange rate (as a consequence of amparo claims) had to be amortized
beginning in April 2003, in 60 monthly consecutive installments. This
amortization totaled Ps. 77.9 million for the period from April 2003 to December
2003.

      In fiscal year 2002, the loss was mainly the result of the establishment
of allowances for contingencies related to the Bank's interests in nonfinancial
companies, the amortization of certain goodwill and the coverage of all
estimated restructuring expenses.

      In fiscal year 2001, miscellaneous net income amounted to Ps. 386.0
million, Ps. 342.8 million higher than the annualized net income of Ps. 43.2
million recorded in the second half of 2000. In fiscal year 2001, miscellaneous
net income principally included Ps. 289.3 million of income from government
securities that overcollateralized

                                     -134-
<PAGE>

repurchase transactions and Ps. 114.6 million corresponding to the reversal of
income tax provisions. These income tax provisions had been established in order
to afford income tax payments that could become due on income that might be
generated as a result of the difference between the market value and the book
value of government securities held in the investment account. Given that these
government securities were exchanged for secured loans with no quotation in
November 2001, the provision was reversed.

LOSS ABSORPTION

      Argentine Central Bank Communique "A" 3800 offered financial institutions
the option to absorb losses recorded during fiscal year 2002 with and up to
amounts recorded under the shareholders' equity accounts "Retained Earnings" and
"Unrealized Valuation Difference," subject to the approval by their boards of
directors and shareholders. The annual meeting of the Bank's shareholders, held
on April 30, 2003, approved the absorption by the Bank of the amounts mentioned
in the paragraph below.

      Under "Absorption subject to the approval of the shareholders' meeting,"
Ps. 1,370.0 million are shown, equivalent to 93.59% of Banco Galicia's gain from
the revaluation of its net asset foreign currency position as of December 31,
2001, from Ps. 1.00 to Ps. 1.40 per US$1.00. This gain amounted to Ps. 1,463.9
and was recorded by the Bank under the shareholders' equity account "Unrealized
Valuation Difference" in accordance with Argentine Central Bank Communique "A"
3703. This amount, together with Ps. 353.7 million in retained earnings, was
used by the Bank to absorb losses for the same amount.

      We absorbed losses for Ps. 1,370.0 million recorded as "Unrealized
Valuation Difference" since we did not have retained earnings.

INCOME TAX

      In fiscal year 2003, income tax expense amounted to Ps. 0.6 million.

      In fiscal year 2002, income tax expense amounted to Ps. 66.4 million. This
expense is mainly due to the holding company beginning to apply the deferred tax
method in 2002. This implied the recognition of a deferred liability of Ps. 54.2
million and an income tax expense for the same amount. The tax provision of the
holding company was Ps. 5 million while the remaining income tax expense was
mainly due to the charges recorded by Galicia Factoring y Leasing S.A. (Ps. 1.8
million) and Galicia Valores S.A. (Ps. 3.4 million).

      During fiscal year 2002, the variation in our shareholders' equity was Ps.
1,464.8 million, while the reported net loss was Ps. 1,471.5 million. The Ps.
6.7 million difference is due to the fact that we began to apply the deferred
tax method in 2002, which implied the recognition of an adjustment to the
previous fiscal year's results for the same amount.

      In fiscal year 2001, the income tax expense totaled Ps. 159.1 million,
which represented an annual effective tax rate of 37.6%. The annualized income
tax charge for the second half of 2000 was Ps. 230.7 million, representing an
annual effective rate of 36.8%.

U.S. GAAP AND ARGENTINE BANKING GAAP RECONCILIATION

GENERAL

      We prepare our financial statements in accordance with Argentine Banking
GAAP. The more significant differences between Argentine Banking GAAP and U.S.
GAAP relate to the determination of the allowance for loan losses, the carrying
value of certain government securities and receivables for government securities
and recognition of deferred income taxes. For more detail on differences in
accounting treatment between Argentine Banking GAAP and U.S. GAAP through
December 31, 2003, see note 39 to our consolidated financial statements.

      The differences mentioned above do not include the reversal of the
adjustments to the financial statements for the effects of inflation required
under Argentine Banking GAAP, which were applicable mostly during 2002, as

                                     -135-
<PAGE>

the application of inflation accounting represents a comprehensive measure of
the effects of price-level changes in the Argentine economy and, as such, is
considered a more meaningful presentation than historical-based financial
reporting for U.S. GAAP purposes.

ALLOWANCES FOR LOAN LOSSES

      With respect to the determination of the allowance for loan losses, Banco
Galicia follows the rules of the Argentine Central Bank. Under these rules,
reserves are based on minimum reserve requirements established by the Argentine
Central Bank. U.S. GAAP requires that an impaired loan be generally valued at
the present value of expected future cash flows discounted at the loan's
effective rate or at the fair value of the collateral if the loan is collateral
dependent.

      For the purposes of analyzing its loan loss reserve under U.S. GAAP, Banco
Galicia divides its loan portfolio into performing and nonperforming commercial
and consumer loans.

Performing Commercial and Consumer Loans

      Performing loans are considered to be loans that are classified under the
Argentine Central Bank classification guidelines as:

            -     "Normal" and "Normal Performance"

            -     "Potential Risk" and "Improper Fulfillment"

      Banco Galicia performs analyses of historical losses from its performing
commercial and consumer loan portfolios in order to estimate losses for U.S.
GAAP purposes resulting from loan losses that had been incurred in the
performing loan portfolio at the balance sheet date but which had not been
individually identified.

      Banco Galicia estimates that, on average, it takes a period of up to one
year between the trigger of an impairment event and the identification of a loan
as being a probable loss. Therefore, Banco Galicia has concluded that the losses
incurred by the performing loan portfolio over the next year give a basis for
estimating the amount of loss at the balance sheet date. The Bank has collected
data on the amounts of losses that had been incurred on commercial loans and
consumer loans that were performing one year before. Using this data, the range
of estimated default probabilities and estimated losses given default yield the
following estimated SFAS 5 reserve for the performing commercial and consumer
loan portfolio:

<TABLE>
<CAPTION>
                                     DECEMBER 31, 2003           DECEMBER 31, 2002    DECEMBER 31, 2001
                                     -----------------           -----------------    -----------------
                                       HIGH       LOW             HIGH       LOW       HIGH       LOW
                                       ----       ---             ----       ---       ----       ---
                                   (in millions of pesos)   (in millions of February 28, 2003 constant pesos)
<S>                                <C>           <C>        <C>             <C>        <C>       <C>
Performing Commercial Loans.....      215.2      24.4            242.9       19.1      288.7      28.2
Performing Consumer Loans.......       23.2      20.0            111.3      102.4      207.6     183.2
                                      =====      ====            =====      =====      =====     =====
</TABLE>

Nonperforming Consumer Loan Portfolio

      The nonperforming consumer loan portfolio is comprised of loans falling
into the following classifications of the Argentine Central Bank:

            -     "Defective Fulfillment"

            -     "Difficulty in Recovery"

            -     "Uncollectible"

      For these loans, Banco Galicia has developed a range of loss projections
based on the default experience of nonperforming loans. Based on this data,
Banco Galicia has calculated a range of estimated loan losses for nonperforming
consumer loans:

                                     -136-
<PAGE>


<TABLE>
<CAPTION>
                                            DECEMBER 31, 2003          DECEMBER 31, 2002    DECEMBER 31, 2001
                                            -----------------          -----------------    -----------------
                                             HIGH       LOW              HIGH       LOW       HIGH       LOW
                                             ----       ---              ----       ---       ----       ---
                                         (in millions of pesos)   (in millions of February 28, 2003 constant pesos)
<S>                                      <C>           <C>        <C>            <C>        <C>       <C>
Non-Performing Consumer Loans...             84.6      74.4            Ps.248.7  Ps.228.4   Ps.389.2  Ps.333.5
                                             ====      ====            ========  ========   ========  ========
</TABLE>

Nonperforming Commercial Loans

      The nonperforming commercial loan portfolio is comprised of loans falling
into the following classifications of the Argentine Central Bank:

            -     "With Problems"

            -     "High Risk of Insolvency"

            -     "Uncollectible"

      For such nonperforming commercial loans, Banco Galicia applied the
procedures required by SFAS 114.

      For loans that were not collateral dependent, the expected future cash
flows to be received from the loans were discounted using the interest rate at
each balance sheet date for variable loans. Loans that were collateral
dependent, and for which there was an expectation that the loan balance would be
recovered via the exercise of collateral, were valued using the fair value of
the collateral. In addition, in order to assess the fair value of collateral,
Banco Galicia has discounted collateral valuations due to the extended period of
time that it can take to foreclose assets under the Argentine judicial system.

Summary

      The following table identifies the high and low of loan loss reserves for
the periods indicated.

<TABLE>
<CAPTION>
                                            DECEMBER 31, 2003           DECEMBER 31, 2002    DECEMBER 31, 2001
                                            -----------------           --------------------------------------
                                             HIGH        LOW             HIGH         LOW         HIGH          LOW
                                             ----        ---             ----         ---         ----          ---
                                          (in millions of pesos)   (in millions of February 28, 2003 constant pesos
<S>                                      <C>          <C>           <C>           <C>          <C>           <C>
Performing Commercial Loans...........   Ps.   215.2  Ps.    24.4   Ps.    242.9  Ps.    19.1  Ps.   288.7   Ps.    28.2
Performing Consumer Loans.............          23.2         20.0          111.3        102.4        207.6         183.2
Non-Performing Consumer Loans.........          84.6         74.4          248.7        228.4        389.2         333.5
Non-Performing Commercial Loans.......         953.7        953.7        1,031.5      1,031.5      1,208.1       1,208.1
                                         -----------  -----------   ------------  -----------  -----------   -----------
TOTAL.................................   Ps. 1,276.7  Ps. 1,072.5   Ps.  1,634.4  Ps. 1,381.4  Ps. 2,093.6   Ps. 1,753.0
                                         -----------  -----------   ------------  -----------  -----------   -----------
LOAN LOSS RESERVE UNDER U.S. GAAP.....         Ps. 1,117.2                   Ps. 1,634.0             Ps .1,944.6
                                               ===========                   ===========             ===========
</TABLE>

      As of December 31, 2001, Banco Galicia expected that the loan loss reserve
under U.S. GAAP would fall more toward the midpoint of the range after the
charge-offs of accumulated unsecured consumer loans and the increase of the loan
loss reserve under FAS 114 of the impaired loans. As of December 31, 2002, Banco
Galicia expected that the loan loss reserve under U.S. GAAP would fall more
toward the high end of the range due to the significant uncertainties associated
with the Argentine economic crisis. The reserve under U.S. GAAP would be in that
range due to the recording of substantial losses caused by the situation in
Argentina in 2002, partially offset by the decrease of the loan loss reserve of
the impaired loans under FAS 114 due to the effect of inflation. As of December
31, 2003, the Banco Galicia expected that that the loan loss reserve under U.S.
GAAP would fall more toward the midpoint of the range after the charge-offs of
accumulated unsecured consumer loans and the increase of the loan loss reserve
under FAS 114 of the impaired loans.

      In addition to assessing the reasonableness of the loan loss reserve as
described above, Banco Galicia makes an overall determination of adequacy of
each period's reserve based on such ratios as:

            -     Loan loss reserves as a percentage of nonaccrual loans

                                     -137-
<PAGE>

            -     Loan loss reserves as a percentage of total amounts past due

            -     Loan loss reserves as a percentage of past-due unsecured
                  amounts.

<TABLE>
<CAPTION>
                                          DECEMBER 31, 2003   DECEMBER 31, 2002    DECEMBER 31, 2001
                                          -----------------   -----------------    -----------------
<S>                                       <C>                 <C>                  <C>
Loan loss reserves as a percentage of
  nonaccrual loans.....................         85.98%             101.48%              136.89%
Loan loss reserves as a percentage of
  total amounts past due...............        110.50              133.65               185.93
Loan loss reserves as a percentage of
  past-due unsecured amounts...........        310.59              271.97               334.41
                                               ======              ======               ======
</TABLE>

CARRYING VALUE OF CERTAIN GOVERNMENT SECURITIES AND RECEIVABLES FOR GOVERNMENT
SECURITIES

      During the fiscal year ended December 31, 2001, and as a consequence of
Decree No. 1387/01, the Bank swapped, effective as of November 6, 2001, its
Argentine government debt instruments, under the promissory note/bond program of
the Argentine government. In accordance with this decree, the conversion for
Argentine Banking GAAP purposes was made at the nominal value, at a rate of
exchange of Ps.1.0 per US$1.00 and in the same currency as that of the converted
obligation. The Argentine Central Bank provided that the difference between the
nominal value of the secured loans and the book value of the instruments
exchanged (in the case of securities, classified and valued as "investment
accounts" or "for trading purposes," under Argentine Central Bank rules) must be
credited to income and added to the recorded amount included in "Loans to the
Non-Financial Public Sector" on a monthly basis in proportion to the term of
each of the secured loans received.

      In accordance with U.S. GAAP, satisfaction of one monetary asset (in this
case, a debt security) by the receipt of another monetary asset (in this case, a
secured loan) for the creditor is generally based on the market value of the
asset received in satisfaction of the debt. In this particular case, the secured
loan being received was significantly different in structure and in interest
rates than the debt securities swapped. Therefore, the fair value of the loans
was determined on the balance sheet date based on the contractual cash flows of
the loan received discounted at an estimated market value. The estimated fair
value of the loan received constitutes the cost basis of the asset. The
difference between the cost basis and amounts expected to be collected is
amortized on an effective yield basis over the life of the loan.

      In addition, the Bank had offered to exchange its loans to Argentine
provincial governments for secured loans pursuant to the same decree.
Subsequently, pursuant to Decree No. 1579/02 of August 28, 2002, the Bank
tendered its portfolio of loans to Argentine provincial governments for secured
loans issued by the FFDP with different terms and conditions. This swap had not
been completed at the date of preparation of the audited consolidated financial
statements as of December 31, 2002, included in this annual report. The Bank had
other loans to the Argentine provincial public sector that, in addition to the
loans already mentioned, were considered to be impaired under U.S. GAAP in
accordance with Statement of Financial Accounting Standards No. 114 as of that
date. Accordingly, the Bank established an allowance for loan losses on loans to
the Argentine provinces. In 2003, the Bank completed the exchange of Argentine
provincial government loans for bonds issued by the Argentine national
government (BOGAR). The Bank requested that the financial instrument it received
be Argentine national government secured loans (promissory notes) with the same
duration and maturity as the BOGAR. This exchange has been accounted for similar
to the 2001 swap, with the securities received (BOGAR) valued at estimated
market value upon receipt.

      Government securities and certain other securities that are included under
investment accounts under Argentine Central Bank rules are considered as
available for sale under U.S. GAAP.

      The compensatory bonds received or receivable by the Bank and the
compensation to be received in connection with asymmetric indexation should
initially be recognized at its market value, limited to the amounts of the loss
suffered by the Bank in connection with asymmetric pesification (i.e., the loss
generated by the pesification of certain assets at Ps. 1.0 per US$1.00 and of
certain liabilities at Ps. 1.40 per US$1.00) and with asymmetric indexation
(i.e., the loss generated by the adjustment of the principal of certain assets
by the variation of the CVS index, which was 16.81% in 2002 and 2003, and of the
principal of certain liabilities by the variation of the CER

                                     -138-
<PAGE>

index, which was 45.67% over the same period). After receipt, the compensatory
bond would be classified as an available for sale security and recognized at
market with the unrealized gain or loss recognized as a charge or credit to
equity through other comprehensive income. In connection with estimating the
fair value of the compensatory bond and of the compensation for asymmetric
indexation, the Bank used quoted market values. There has been low volumes of
activity in the trading of these securities. Therefore, the quoted market values
may not represent the price of an actual sale between a willing buyer and a
willing seller.

      In connection with the Bank's right (but not its obligation) to purchase
the hedge bond, under Argentine Banking GAAP, the Bank has recognized the right
to purchase the hedge bond (BODEN 2012) at its equivalent value as if the Bank
had the associated bond in its possession, and recognized the associated
liability to fund the hedge bond as if the Bank had executed the debt agreement
with the Argentine Central Bank. The receivable is denominated in U.S. dollars
and bears interest at Libor, while the liability to the Argentine Central Bank
is denominated in pesos and accrues interest at CER plus 2.0%, each retroactive
to February 3, 2002.

      Under U.S. GAAP, the right to purchase the hedge bond is not considered an
asset under Financial Accounting Standards Board Statement of Financial
Accounting Concepts No. 6, Elements of Financial Statements. Under this concepts
statement, assets are defined as "... probable future economic benefits obtained
or controlled by an entity as a result of past transactions or events." In
addition, one of the three essential characteristics of an asset is that an
entity can obtain the benefit and can control others' access to it. As of
December 31, 2003, and as of December 31, 2002, the Bank could not obtain the
benefit of the hedge bond until the transaction is approved by the Argentine
Central Bank and the Bank remits funds to the Argentine Central Bank. The
liability under U.S. GAAP would be recognized when the Bank actually enters into
the financing arrangement.

      As of December 31, 2003, under Argentine Banking GAAP, the Bank had
recorded under "Intangible Assets" the difference arising from the reimbursement
of restructured deposits at the market exchange rate pursuant to amparo claims
and the carrying value of these restructured deposits for Ps. 487.0 million. As
of December 31, 2002, the value of this difference was Ps. 446.8 million, which
had been recorded by the Bank under Argentine Banking GAAP under "Other
Receivables from Financial Brokerage." The receivable for differences related to
amparo claims does not represent an asset under U.S. GAAP.

FOREIGN CURRENCY TRANSLATION

      With respect to foreign currency exchange differences, the official
exchange rate between the U.S. dollar and the Argentine peso in Argentina was
one-to-one as of December 31, 2001. This rate was used to translate all U.S.
dollar - denominated assets and liabilities as of December 31, 2001 for
Argentine GAAP purposes. For U.S. GAAP purposes, foreign currency transactions
should be translated at the applicable rate at which those particular
transactions could be settled at the balance sheet date. In anticipation of an
announced devaluation, "exchange houses" in Argentina (used for limited personal
transactions and not for settling business transactions) started exchanging
dollars at 1.40 or more pesos to the dollar prior to December 31, 2001. Such
exchange houses were closed as of December 31, 2001. Through January 10, 2002,
no transactions were conducted in U.S. dollars and there was no exchangeability
between the peso and the dollar. Under Statement of Accounting Standards No. 52,
if the exchangeability between two currencies is temporarily lacking at the
balance sheet date, the first subsequent rate at which exchanges can be made is
used for translating foreign currency transactions. In this case, the January
11, 2002, exchange rate of Ps. 1.60 per US$1.00 was the first available rate
after year-end. Thus, that rate was used for U.S. GAAP purposes to translate
U.S. dollar - denominated assets and liabilities as of December 31, 2001.

      In addition, Banco Galicia's equity holdings in Argentine companies were
similarly adjusted under U.S. GAAP for the proportional effect of applying the
Ps. 1.60 per US$1.00 exchange rate to the U.S. dollar - denominated assets and
liabilities of such companies as of December 31, 2001.

      For subsequent years, market exchange rates were used, with no differences
arising between Argentine Banking GAAP and U.S. GAAP.

      Under Argentine Banking GAAP, certain costs such as set-up costs for
branches, termination costs, and Year 2000 compliance costs are deferred and
amortized. Under U.S. GAAP, these costs are expensed as incurred.

                                     -139-
<PAGE>

FINANCIAL GUARANTEES

      Effective January 1, 2003, we adopted FASB Interpretation No. 45,
"Guarantor's Accounting and Disclosures Requirements for Guarantees, including
Indirect Guarantees of Indebtedness of Others." As of December 31, 2003, the
Bank recognized a liability for the fair value of the obligations assumed.

      As of December 31, 2003, we maintained the following guarantees, which
arise from the Bank's operations:

<TABLE>
<CAPTION>
                                                                                 ESTIMATED
                                                                MAXIMUM          PROCEEDS          CARRYING
                                                               POTENTIAL      FROM COLLATERAL       AMOUNT
                                                                PAYMENTS         RECOURSE         LIABILITY
                                                               ---------      ---------------     ---------
                                                                           IN MILLIONS OF PESOS
<S>                                                            <C>            <C>                 <C>
Exchange of deposits with the financial system II              Ps. 165.4                  -        Ps. 69.7
Other financial guarantees                                          44.4            Ps. 3.0            11.7
                                                               ---------            -------       ---------
TOTAL                                                          Ps. 209.8            Ps. 3.0            81.4
                                                               =========            =======       =========
</TABLE>

      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 our payments under guarantees.

SUBSEQUENT EVENTS

      For purposes of U.S. GAAP, the following events constitute subsequent
events:

      -     The restructuring of the financial assistance for liquidity support
            granted to the Bank by the Argentine Central Bank for a principal
            amount of Ps. 5,647.1 million as of December 31, 2003, which was
            completed on February 3, 2004.

      -     The restructuring of the foreign debt of the Bank's head office in
            Argentina and its Cayman branch, the principal amount subject to
            restructuring being US$1,349.6 million as of December 31, 2003, and
            US$1,344.7 million as of the expiration date of the restructuring.

Financial Assistance Granted by the Argentine Central Bank for Liquidity Support

      In connection with the liquidity crisis in Argentina, the Argentine
Central Bank loaned Banco Galicia approximately Ps. 5.4 billion as of December
31, 2002. This loan was renewed monthly, with interest payable based on 64% of
the 30-day Lebac rate (short-term government rate).

      In order to be eligible for maturity extension, the financial institution
had to identify and pledge collateral that matched the cash requirements of the
outstanding loan and present its foreign debt restructuring proposal to the
Argentine Central Bank before July 31, 2003. Each of these submissions had to be
approved by the Argentine Central Bank. Subsequently, the Argentine Central Bank
amended the restructuring plan allowing the maturity date to be extended up to
120 months, subject again to providing acceptable collateral that matched the
cash requirements of the outstanding loan and to the financial institution
presenting an update of its foreign debt restructuring proposal. Moreover, each
of these submissions was again subject to approval by the Argentine Central
Bank.

      On November 28, 2003, the Financial System's Restructuring Unit (Unidad de
Reestructuracion del Sistema Financiero), the regulatory body responsible for
restructuring the Argentine financial system after the 2001 - 2002 crisis,
informed the Bank that it had authorized the Argentine Central Bank to extend
the maturity of the Bank's debt with the Argentine Central Bank for liquidity
support by up to 120 monthly installments in accordance with the repayment
schedule presented by the Bank to the Argentine Central Bank and under the
provisions of Decree No. 1262/03.

                                     -140-
<PAGE>

      On December 3, 2003, the Argentine Central Bank informed the Bank that,
through its Resolution No. 460/03, its board of directors had approved the terms
and conditions of the proposed restructuring of the foreign debt of the Bank's
head office and its Cayman branch.

      On February 3, 2004, the Argentine Central Bank informed the Bank that it
had approved the request made by the Bank under Decree No. 739/03 (modified by
Decree No. 1262/03) for the repayment of the debt for liquidity support under
the terms proposed by the Bank over a 92-month period.

      For U.S. GAAP purposes, the accounting for this transaction is effective
with the approval by the Argentine Central Bank on February 3, 2004. The Bank's
schedule comprises the repayment of the debt in 92 monthly installments
beginning in March 2004, with a fixed annual interest rate of 3.5%.

      Although this is a 2004 transaction, based on facts and circumstances, the
financial assistance granted by the Argentine Central Bank was deemed to be a
nontroubled debt restructuring since there are no concessions granted to the
Bank based on the guidelines established by EITF 02-4 and FAS 15. Accordingly,
the Bank followed EITF 96-19 to account for this restructuring, and no gain or
loss was recognized in the transaction.

      Under Argentine Banking GAAP, the restructuring was accounted for the
period ended December 31, 2003, and no gain or loss was recognized in the
transaction.

Restructuring of the Foreign Debt

      On May 18, 2004, the restructuring of the foreign debt of the Bank's head
office in Argentina and its Cayman branch was completed. At the expiration date
of the exchange offer made by the Bank to carry out the restructuring, the
aggregate principal amount of the Bank's debt subject to the restructuring
amounted to US$1,344.7 million. The Bank offered different options to
restructure its debt including the payment of cash, the exchange of cash or
BODEN 2012 as full consideration of debt, the issuance of new debt with
different features and maturities and the issuance of our preferred shares.
Management is presently evaluating the impact of the restructuring under U.S.
GAAP.

SUMMARY

      As a result of the above and other differences, net income and
shareholders' equity for Banco Galicia under Argentine Banking GAAP and U.S.
GAAP for the periods indicated were as follows:

<TABLE>
<CAPTION>
                                  NET INCOME (LOSS)          SHAREHOLDERS' EQUITY (DEFICIT)
                            -----------------------------   --------------------------------
                            ARGENTINE BANKING               ARGENTINE BANKING
                                  GAAP          U.S. GAAP        GAAP            U.S. GAAP
                            -----------------   ---------   -----------------   ------------
                                               (in millions of pesos)
<S>                        <C>                  <C>         <C>                 <C>
Fiscal year 2003.........      Ps.  (217.1)     Ps. 731.3      Ps. 1,462.3      Ps. (4,453.3)
                                  (in millions of February 28, 2003 constant pesos)
Fiscal year 2002.........         (1,471.5)         422.5          1,638.7          (5,422.3)
Fiscal year 2001.........            264.6       (8,638.4)         3,103.5          (5,887.8)
</TABLE>

      The significant differences that result between net income under U.S. GAAP
and that under Argentine Banking GAAP primarily reflect that under U.S. GAAP:

            -     significant losses were recognized in 2001 from the effects of
                  several government actions reflected at the end of that year.
                  With the improvement in the Argentine economy and business
                  environment, changes in estimated losses are reflected in 2002
                  and 2003.

            -     the recording of the effects of the right to receive the hedge
                  bond are not recognized, the effect of which varies
                  significantly in 2002 and 2003.

                                     -141-
<PAGE>

            -     the amounts receivable for the compensatory bond are reflected
                  at market values with changes in values being recognized in
                  the income statement, the effect of which varies significantly
                  in 2002 and 2003.

            -     much of the national and provincial public-sector debt
                  balances reflect market-value adjustments recognized from
                  exchange transactions. Accretion of the discount, considering
                  the amounts estimated to be collected, are recognized as
                  income after the exchange transaction occurs.

            -     the effect of the change in the Argentine peso exchange rate
                  at the end of 2001 is reflected in that year.

RESULTS BY SEGMENTS

GENERAL

      Banco Galicia is our most significant subsidiary. We also have an 87.5%
direct interest in Sudamericana Holding S.A. (in which Banco Galicia holds a
12.5% stake), an 87.5% direct participation in Net Investment S.A. (Banco
Galicia owns the remaining 12.5% stake) and an 87.5% direct interest in Galicia
Warrants S.A., where Banco Galicia holds the other 12.5%. On September 19, 2001,
we increased our participation in Sudamericana Holding S.A. to 87.5% from 37.5%,
obtaining control of Sudamericana Holding S.A. During 2001, we also acquired
87.5% of Galicia Warrants.

      Grupo Galicia's main segments are:

      -     the "Grupo Galicia" segment showing the holding company's specific
            income and expenses not attributable to its investments in
            subsidiaries, except for goodwill amortization;

      -     the "Insurance" segment, corresponding to Sudamericana Holding's
            consolidated results of operations (including the 12.5% interest
            owned by the Bank);

      -     the "Other Grupo's Businesses" segment representing the results of
            operations of Net Investment S.A. consolidated and Galicia Warrants
            S.A. (in both cases, including the results of the 12.5% interests of
            the Bank); and

      -     Banco Galicia's operating segments (see below).

      Our results by segment are shown in note 36 to our audited consolidated
financial statements. The column "Corporate Adjustments" comprises intercompany
transactions between Grupo Galicia and its consolidated subsidiaries that are
eliminated in our consolidated income statement and the results corresponding to
minority interests in Banco Galicia. For fiscal year 2002, this column also
includes the loss absorption made by Grupo Galicia. See " -- Results of
Operations of Grupo Galicia for the Fiscal Years Ending December 31, 2003,
December 31, 2002 and December 31, 2001 -- Loss Absorption."

      The operating segments employed by Banco Galicia's management for
operating decisions and for assessing performance are based on the following
criteria:

   -  the geographical location of each branch or business, or "unit";

   -  the similarity of the businesses conducted with or the services provided
      to Banco Galicia's customers; and

   -  the existence of homogeneous groups of customers to which products and
      services are provided.

      Banco Galicia's operating segments are:

      Buenos Aires Metropolitan Branches -- corresponds to business conducted
with customers in branches located in the Federal District and the greater
Buenos Aires area.

      Rest of the Country Branches -- corresponds to business conducted with
customers in branches located in Argentina but outside the Federal District and
the greater Buenos Aires area.

                                     -142-
<PAGE>

      Home Office -- corresponds to business conducted with customers in Banco
Galicia's home office and with the national and provincial public sectors.

      Regional Credit Cards -- corresponds to the results from Banco Galicia's
investments in the operating regional credit card companies and Tarjetas
Regionales S.A (the holding company for the regional credit card companies).

      International -- corresponds to the business of Galicia Uruguay, Banco
Galicia's foreign branches and other international subsidiaries.

      Other Financial Businesses -- corresponds to the business of Galicia
Capital Markets S.A., Galicia Valores S.A., Agro Galicia S.A. and Galicia
Factoring y Leasing S.A. In addition, this segment includes the results of the
equity investments of the Bank in financial-related companies not required to be
consolidated in which the Bank holds minority interests.

      Other Equity Investments -- corresponds to Banco Galicia's participation
in various infrastructure and public utility services companies.

      The net financial income of each unit is determined based on the financial
income and financial expenses generated by the assets and liabilities located in
each unit and through the use of transfer prices to compensate the lending unit
and to charge the borrowing unit, based on Banco Galicia's average margin by
currency and type of funds for the same period. Each unit is also allocated its
income from services, provisions for loan losses and other income generated by
the assets managed by such unit.

      The distribution of administrative expenses is made based on the
information arising from the cost system, which gathers the allocation of the
expenses by unit from the accounting system and appropriates to each unit the
cost of the support provided by the rest of the organization.

      Below is a discussion of our results of operations by segment for the
years ended December 31, 2003, 2002 and 2001, based on the existing Grupo
Galicia and Banco Galicia segments.

RESULTS BY SEGMENTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2003

      Grupo Galicia -- This segment, which comprises only the holding company
itself, posted a net loss of Ps. 20.1 million in fiscal year 2003, mainly due to
a Ps. 18.1 million net financial loss mainly attributable to the revaluation of
Grupo Galicia's US$43 million holdings of dollar-denominated Galicia Uruguay
negotiable obligations, from Ps. 3.36 per U.S. dollar as of December 31, 2002,
to Ps. 2.93 per U.S. dollar as of December 31, 2003.

      Insurance -- The insurance segment showed a Ps. 7.9 million net loss,
mainly due to: (1) the recording of earnings for Ps. 16.5 million from premiums
earned and other net charges; (2) the payment of claims in the amount of Ps.
12.8 million; (3) a Ps. 14 million loss from other income, which was in turn
mainly due to a Ps. 12.9 million increase in the amounts to be paid to Galicia
Retiro's customers in accordance with the plan previously agreed with its
customers to restructure its dollar-denominated annuities, (4) administrative
expenses of Ps. 15.6 million; (5) a Ps. 3.1 million net loss from services
mainly reflecting acquisition costs and (6) a Ps. 11.7 million loss from
inflation adjustment. These losses were partially offset by a Ps. 33.2 million
net financial income attributable to gains resulting from the pesification of
liabilities, CER adjustments and interest earned on deposits, government
securities and secured loans, net of interest on negotiable obligations.

      Other Grupo Businesses -- This segment, showing the results of Net
Investment S.A. and Galicia Warrants S.A., posted a Ps. 5.5 million net loss.
The negative results of this segment were attributable to Net Investment.
Galicia Warrants' net income amounted to Ps. 0.5 million in the 12 months ended
December 31, 2003. Galicia Warrants' net income was affected by a Ps. 0.4
million loss resulting from the appreciation of the exchange rate during 2003.
Net Investment showed a Ps. 6.1 million loss in fiscal year 2003, mainly due to
the poor performance of its operating subsidiaries, which generated a Ps. 3.0
million loss from equity investments, and due to the establishment by the
company of a Ps. 3.3 million valuation reserve on its interest in its subsidiary
Tradecom International.

                                     -143-
<PAGE>

      The results of the segments relating to the breakdown of the Bank's
operations were as follows:

      Buenos Aires Metropolitan Branches and Rest of the Country Branches -- In
aggregate, these two segments which recorded similar behaviors, showed a Ps.
84.1 million loss (Ps. 39.3 million and Ps. 44.8 million, respectively). These
segments' net losses were the consequence of low net financial income, as in the
previous fiscal year, and lower net fee income, which were not offset by lower
administrative expenses.

      These segments' net financial income was affected by a significant
decrease in average loans (the branches' loan portfolio is mainly comprised of
loans to the private sector, which decreased in average from Ps. 3,524.8 million
to Ps. 1,917.3 million for the two segments in aggregate in 2003); a decrease in
average deposits from Ps. 3,468.1 million to Ps. 3,092.5 million. The decrease
in average deposits was attributable to the same reasons that accounted for the
strong decrease in the Bank's deposits experienced mainly in 2002, as explained
under " -- Results of Operations of Grupo Galicia for the Fiscal Years Ending
December 31, 2003, December 31, 2002 and December 31, 2001 -- Financial
Expenses," including the restructuring of Galicia Uruguay's deposits, which are
included in these segments to the extent that the depositor is a client of a
metropolitan or rest of the country branch; and by the reduction in the
interest-rate spread for the Bank as a whole, which was mainly due to the
decrease in the lending rate (which was due, in turn, to the decrease in the CER
variation).

      As a consequence of the improvement in the quality of their loan
portfolios, in 2003 the branches' loan loss provisions were 78.8% lower than in
the previous fiscal year. This improvement reflects the better performance of
the Argentine economy as a whole in 2003.

      Fee income decreased 10.5% when compared with the prior fiscal year mainly
due to the effect of the restatement in real terms of the net fee income of the
prior fiscal year.

      Administrative expenses were 4.0% lower than in the prior fiscal year,
reflecting the Bank's cost containment policy. We ended fiscal year 2003 with
226 branches (compared to 227 in December 2002) and with 1,837 employees
(compared to 1,888 in December 2002).

      Home Office -- This segment showed a Ps. 71.0 million net loss in 2003, as
a consequence of a significant net financial loss, partially offset by
significant net other income, an increase in net fee income and a decrease in
loan loss provisions and administrative expenses.

      The Ps. 341.4 million net financial loss was mainly attributable to the
valuation of the Bank's portfolio of secured loans (recorded at the Home Office)
in accordance with the requirements of Argentine Central Bank Communique "A"
3911. See Item 4. "Information on the Company -- Argentine Banking System and
Regulation -- Argentine Banking Regulation -- Valuation of Public Sector
Assets". Application of this valuation rule meant for the Bank a Ps. 198.1
million loss, recorded as a lower financial income; a lower yield on secured
loans as a consequence of the decrease in the CER variation and by the
revaluation of the compensatory and hedge bonds (dollar-denominated BODEN 2012
also recorded at the Home Office) from Ps. 3.36 per U.S. dollar at December 31,
2002, to Ps. 2.93 at December 31, 2003, and net yield on the Bank's
dollar-denominated assets being negative due to the lower yield on the BODEN
2012 (LIBOR). These effects were not offset by a lower deposit cost and by the
significant (2,544 basis-point) decrease in the cost of Argentine Central Bank
borrowings. See " -- Results of Operations of Grupo Galicia for the Fiscal Years
Ending December 31, 2003, December 31, 2002 and December 31, 2001 -- Financial
Expenses."

      This segment's net income from services recovered its precrisis level
(year 2001), amounting to Ps. 48.5 million in 2003 compared to a net loss of Ps.
3.3 million in 2002. The net loss from services in 2002 included the payment of
extraordinary fees in connection with structured-note transactions. See " --
Results by Segments for the Fiscal Year Ending December 31, 2002 -- Home Office"
below.

      Home Office administrative expenses decreased 78.6% from the prior year as
a consequence of the Bank's efforts to cut costs and streamline operations.

                                     -144-
<PAGE>

      Both the Ps. 40.4 million gain from provisions for loan losses and the Ps.
267.0 million net other income were attributable to the net reversal of loan
loss reserves as a result of the improvement in the Argentine economy as a whole
and the progress made by the Bank in the restructuring of its commercial loan
portfolio, both leading to an asset quality improvement from the prior year. The
increase in net other income was also due to the net reversal of reserves for
other contingencies, partially offset by the Ps. 77.9 million amortization of
the deferred loss in connection with the payment of restructured deposits at
exchange rates higher than Ps. 1.4 per U.S. dollar, as required by judicial
orders (amparos) in accordance with Argentine Central Bank Communique "A" 3916.

      Regional Credit Cards -- The regional credit card companies recorded net
income of Ps. 49.4 million, reflecting the favorable effect on their results of
operations of the recovery of the Argentine economy's activity level and of the
appreciation of the peso during 2003.

      The appreciation of the peso during the year had a positive effect on
these companies' net financial income, which amounted to Ps. 55.5 million
(compared to a Ps. 17.2 million net financial loss in 2002) given their short
foreign-currency position.

      As a result of the improvement in the general economic environment and of
the resulting decrease in loan delinquency, loan loss provisions decreased 66.0%
from the prior year level. The nonaccrual-to-total loans ratio for these
companies reached 3.61% at the end of fiscal year 2003 from 19.12% a year
before.

      Growing economic activity resulted in an increase of these companies' loan
origination (which reduced the decrease in average loans when compared to that
observed in 2002) and in the volume of average credit cards managed by them
(from 1,107 thousand in 2002 to 1,173.7 thousand in 2003). In addition, the
improvement in the general economic environment led these companies' customers
to increase consumption as well as use of the cards managed by the regional
credit card companies. These positive developments were partially offset by the
failure of service prices to increase as much as the general level of prices. As
a result of the above these companies' net income from services increased 11.5%
from the prior fiscal year.

      In addition, administrative expenses decreased 9.9% reflecting these
companies' continuing cost containment efforts after the significant downsizing
of operations carried out in 2002.

      International -- This segment showed a Ps. 36.8 million profit. This
result is mainly attributable to the Ps. 186.5 million net financial income,
which mainly reflects the gain generated by the appreciation of the peso during
2003 since Galicia Uruguay was left, after asymmetric pesification, with a short
foreign-currency position for which the government compensated Banco Galicia in
Argentina. In addition, loan loss provisions decreased and net other income
showed a Ps. 65.7 million profit mainly due to the net reversal of loan loss
reserves, both as a consequence of the improvement in the quality of Galicia
Uruguay's loan portfolio generated by the overall improvement in the Argentine
economy and by the restructuring of the Galicia Uruguay loan portfolio achieved
during 2003. Administrative expenses for this segment decreased 58.6%,
reflecting a decrease in all expense components but particularly in taxes.

      Other Financial Businesses -- This segment showed a Ps. 31.0 million net
loss mainly attributable to the Ps. 23.4 million net other loss reflecting the
establishment of a valuation reserve by Galicia Capital Markets S.A. on its
holdings of subordinated notes issued by a trust whose assets were shares of an
Argentine private-sector company.

      Other Equity Investments -- This segment showed a Ps. 12.0 million loss as
a result of net other losses. The "Other Income" line shows the aggregate losses
generated by the Bank's interests in infrastructure and utility companies,
mainly Aguas Argentinas S.A., Caminos de las Sierras S.A. and Aguas Cordobesas
S.A. These companies were significantly affected by the changes that occurred in
the Argentine economy since 2002.

RESULTS BY SEGMENTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002

      Grupo Galicia -- This segment posted a net loss of Ps. 30.8 million in
fiscal year 2002, mainly attributable to a Ps. 168.5 million monetary loss from
financial intermediation and the recording of a Ps. 59.2 million deferred

                                     -145-
<PAGE>

tax liability that implied an income tax charge for the same amount in
accordance with applicable regulations for commercial companies. Net financial
income in 2002 was Ps. 206.3 million, mainly reflecting the gain associated with
the revaluation of Grupo Galicia's dollar-denominated deposits in Galicia
Uruguay (most of which were restructured at the end of 2002 as subordinated
negotiable obligations) and accrued interest (the exchange rate increased from
Ps. 1.0 per US $1.00 as of December 31, 2001, to Ps. 3.36 per US $1.00 as of
December 31, 2002. Administrative expenses amounted to Ps. 7.1 million,
remaining practically unchanged.

      Insurance -- The insurance segment showed a Ps. 2.2 million net loss,
mainly as a result of a Ps. 45.2 million net financial loss attributable to the
negative effect of inflation on the company's investments (monetary loss) and
the establishment of valuation reserves on these investments. Net income from
services recorded a Ps. 5.6 million loss, mainly as a result of acquisition
costs. In addition, administrative expenses increased from 2001 levels. These
losses and expenses were not compensated by greater net other income, which
amounted to Ps. 86.4 million, including premiums earned net of benefits, claims
and reinsurance costs.

      Other Grupo Businesses -- This segment showed a Ps. 8.5 million net loss,
mainly as a result of the poor operating performance of Net Investment S.A.'s
subsidiaries and Galicia Warrants, together with the losses recorded as "Other
Income," mainly resulting from Net Investments' equity interest in Tradecom
Intl.

      The results of the segments relating to the breakdown of the Bank's
operations were as follows:

      Buenos Aires Metropolitan Branches and Rest of the Country Branches -- The
two segments reflecting the results of the branches performed similarly. These
segments' net losses were the consequence of an extremely low net financial
income when compared to previous periods. These segments' net financial income
was affected by the significant decreases in deposit and loan volumes and by the
reduction in the interest-rate spread for the Bank as a whole. It should be
noted that the branches' portfolios are mainly private-sector loan portfolios,
which were pesified at parity (Ps. 1.0 per US $1.00) and most of which were
eligible to be adjusted not by the CER but by the CVS. The latter adjustment was
not applied by the Bank during 2002. In addition these segments' results were
affected by the deterioration of the quality of their loan portfolios as a
result of the unfavorable economic environment prevailing in Argentina during
most of 2002, which led to an increase in their loan loss provisions. These
factors were not offset by positive net income from services and lower
administrative expenses.

      Fee income decreased when compared with the prior fiscal year because
services prices did not track the increase in the general level of prices in
2002, especially the WPI, and therefore have fallen in real terms because fee
income was affected by the overall fall in the Bank's activity level in 2002.

      Administrative expenses fell significantly as a result of the cost
reduction plan implemented by the Bank in 2002, which involved closing branches
and reducing staffing levels. During 2002, 61 branches in Argentina were closed
(i.e., 21.1% of those existing as of December 31, 2001) and branch staff
decreased by 1,106 employees, 36.9% decrease from the December 31, 2001, staff
level.

      Home Office -- This segment showed a net loss in 2002, mainly as a result
of a monetary loss from financial intermediation for Ps. 1,252.5 million; the
significant charge for the establishment of the unallocated provisions of the
Bank and the recording of net other losses for Ps. 607.4 million, mainly
reflecting the provisions established by the Bank for contingencies related to
its interests in nonfinancial businesses and the amortization of certain
goodwill.

      The Ps. 1,964.2 million net financial income reflects the fact that the
Home Office segment concentrates the financial income attributable to all of the
public-sector assets held by the Bank, including secured loans and the
compensatory and the hedge bonds received or to be received by the Bank for the
effects of asymmetric pesification on both Banco Galicia (and its foreign
branches) and on Galicia Uruguay. Compensation for the effects of asymmetric
pesification on Galicia Uruguay's balance sheet was granted to the Bank in
Argentina and was therefore booked at the Home Office. It should be stressed
that public-sector assets were pesified at the Ps. 1.40 per U.S. dollar exchange
rate and accrued the CER adjustment. In addition, the compensatory bond and the
hedge bond are dollar denominated and, during 2002, the exchange rate increased
by approximately 240%, both factors explaining the Home Office's relatively high
financial income. Net financial income was positive despite the fact that this

                                     -146-
<PAGE>

segment's results are net of the cost of the Home Office's foreign debt (and the
corresponding valuation difference in 2002) and that of the Bank's liabilities
with the Argentine Central Bank.

      This segment's income from services, structurally lower than that of the
branches, was affected by the payment of extraordinary fees in connection with
structured-note transactions that were paid off by the Bank prior to maturity.

      In addition, this segment's administrative expenses increased due to the
fact that they include all of the restructuring charges (Ps. 131.1 million)
associated with the decrease in the Bank's overall staff in 2002.

      Regional Credit Cards -- The regional credit-card companies' results
showed a Ps. 336.3 million net loss in 2002.

      On one hand, these companies' results were affected by the decrease in
their level of activity caused by the recession, especially during the first
half of 2002, and by the decrease of services prices in real terms. This is
reflected in the Ps. 143.0 million income from services, that was 54.1% lower
than in 2001, being practically unchanged in nominal terms from the previous
year's figure.

      On the other hand, these companies net loss show the effects of the
adjustment of their balance sheet for inflation, which resulted in a monetary
loss of Ps. 261.9 million (shown under "Monetary Results of Other Income"), and
the devaluation of the peso during 2002 and the decrease in interest-rate
spreads, which account for the Ps. 17.2 million net financial loss. The negative
effect of the increase in the exchange rate, is a result of these companies'
consolidated short foreign currency position, which in turn was caused by the
fact that the loss caused to these companies by asymmetric pesification measures
were not compensated by the government. Net financial income was also affected
by the pesification of loans to the private sector at parity.

      In addition, provisions for loan losses were higher than in previous
years, given that these companies' customer base, pertaining to the lower-income
segment of the population, was particularly affected by the 2002 recession that
caused high unemployment rates and the fall in real income. However, the
deterioration in asset quality slowed by year-end. The streamlining of these
companies' operations (through reductions in their distribution network and
staff) is reflected in the 55.3% decrease of their consolidated administrative
expenses.

      International -- This segment showed a Ps. 1,849.1 million loss. This loss
is mainly attributable to the Ps. 1,521.7 million net financial loss, which
reflects the losses generated by the increase in the exchange rate during 2002.

      In addition this segment's results were affected by high loan loss
provisions reflecting the deterioration of the quality of its assets, mainly
loans granted to Argentine private-sector customers, the repaying capacity of
which was affected by the unfavorable economic environment prevailing in
Argentina during most of 2002, including the devaluation of the peso.

      Banco Galicia Uruguay's activities were suspended on February 13, 2002,
and Banco Galicia wound down most of its foreign-based units during 2002.

      Other Financial Businesses -- This segment's net loss was mainly due to
the Ps. 6.3 million monetary loss from financial intermediation, partially
offset by the profits generated by the Bank's investments in non-consolidated
financial-related companies such as Banelco and Visa, shown under "Other
Income." The remaining consolidated companies show a lower fee income, as
compared to the previous year's figure, as a result of lower levels of activity.

      Other Equity Investments -- This segment showed a Ps. 51.1 million loss as
a result of negative net other income. The "Other Income" line shows the
aggregate losses generated by the Bank's interests in infrastructure and utility
companies, mainly Aguas Argentinas S.A., Aguas Cordobesas S.A. and Aguas
Provinciales de Santa Fe S.A. These companies were significantly affected by the
changes that occurred in the Argentine economy in 2002, mainly the devaluation
of the currency, which increased the amount in pesos of these companies'
foreign-currency debts

                                     -147-
<PAGE>

together with the government's policy of not allowing utilities to increase
prices in the inflationary environment prevailing in Argentina during 2002,
especially in the first half of the year.

RESULTS BY SEGMENTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001

      Grupo Galicia -- This segment posted a Ps. 8.5 million net loss in fiscal
year 2001 compared to the Ps. 0.2 million annualized net loss accounted in the
six-month period ended in December 31, 2000. This performance was mainly
attributable to higher administrative expenses (Ps. 7.5 million vs. Ps. 4
million annualized) because the holding company structure became fully operative
in 2001. In addition, there was a decrease in net financial income (Ps. 1.2
million compared to Ps. 5.6 million annualized). This line shows the interest
earned by the company through its liquidity management, which is basically
obtained from Banco Galicia's cash dividend distribution.

      Insurance -- The insurance segment posted a net income of Ps. 0.2 million
mainly attributable to a Ps. 0.3 million net financial income, administrative
expenses of Ps. 20.5 million and net other income of Ps. 20.5 million (which
included income of Ps. 12.1 million from the sale of a small Uruguayan
subsidiary).

      Other Grupo Businesses -- The net loss of Ps. 2.1 million posted in fiscal
year 2001 can be mainly explained by net financial and fee income of Ps. 4.9
million and administrative expenses of Ps. 6.1 million. This poor performance
can be traced to Net Investment's loss in the first half of the year. However,
in the second six months of 2001, Net Investment reached breakeven.

      The results of the segments relating to the breakdown of the Bank's
operations were as follows:

      Buenos Aires Metropolitan Branches and Rest of the Country Branches -- The
drop in these two segments results were mainly attributable to a reduction in
financial spreads mainly in the last quarter of the year. The net average
financial margin for both segments amounted to 5.85% in 2001 compared to 6.15%
in 2000.

      Fee income grew because of a 5.5% increase in deposit fees, partially
generated by the increase in the number of saving and current accounts opened at
the branches. In addition, fees from foreign exchange brokerage increased
because of lack of confidence in the domestic currency which grew in the second
half of the year. Finally, insurance fees rose 38% in the Buenos Aires
metropolitan branches and 28.7% in the rest of the country branches.

      Administrative expenses grew in the Buenos Aires metropolitan branches due
to the incorporation of the branches acquired from ABN AMRO Bank Argentina (19
branches and 192 employees) in October 2001. This was partially compensated by a
36.9% reduction in communication expenses. In the rest of the country branches,
communication expenses dropped 35.2% and four branches were closed. Considering
the two segments, there was an aggregate net increase of 93 employees compared
to the prior year despite the new 192 employees from ABN AMRO Bank. Finally,
administrative expenses also rose due to an increase in the VAT tax and the
implementation of the tax on financial transactions effective April 2001.

      Home Office -- The growth in this segment's net income can be basically
explained by an increase in net financial income due to the Ps. 288.9 million
income from government securities that collateralized repurchase transactions.
Moreover, loan loss provisions rose as a consequence of the deterioration in
asset quality that resulted from the economic recession that Argentina was
experiencing since 1998. This resulted in an increase in the number of
medium-large companies entering Chapter 11 bankruptcy.

      Regional Credit Cards -- This segment's net loss can be explained by a
decrease in financial spreads during the last six months of 2001 and a
significant increase in administrative expenses.

      International -- The International segment showed an increase in net
financial income generated by a wider spread partially offset by higher
administrative expenses due to an increase in taxes. The other income line can
be traced to an extraordinary result from the sale of the 22.71% stake in Banco
Barclays e Galicia.

      Other Financial Businesses -- This segment's earnings were mainly related
to the fee income generated by Galicia Capital Markets S.A. and Galicia
Factoring y Leasing S.A. Both companies performed well despite the negative
economic conditions. For instance, Galicia Capital Markets completed
transactions with 50 clients and met its

                                     -148-
<PAGE>

annual income budget. Galicia Factoring reached Ps. 746.7 million volume from
its factoring product while the leasing product suffered a 8.92% decrease in
volume.

      Other Equity Investments -- The earnings of this segment were mainly
generated by the divestiture from Inversora en Distribucion de Entre Rios S.A.
The gain from that transaction was partially offset by the loss from Correo
Argentino S.A., where Banco Galicia held an 11.77% stake.

CONSOLIDATED ASSETS

      The structure and main components of our consolidated assets as of
December 31, 2003, were as follows:

<TABLE>
<CAPTION>
                                                           DECEMBER 31, 2003
                                                         ----------------------
                                                         (In millions of pesos)
<S>                                                      <C>
Cash and due from banks.............................         Ps.    826.2
Government and corporate securities.................              2,900.1
Loans to the nonfinancial public sector.............              7,800.6
Other loans, net....................................              3,183.2
Compensatory and hedge bonds to be received.........              4,629.6
Other assets........................................              3,555.0
                                                             ------------
TOTAL...............................................         Ps. 22,894.7
                                                             ============
</TABLE>

      Of our total assets as of December, 31, 2003, Ps. 22,707.8 million,
equivalent to 99.2%, corresponded to the Bank. The remaining 0.8% is
attributable mainly to Sudamericana Holding S.A. consolidated (Ps. 110.7
million). The composition of the Group's assets does not differ from that of the
Bank and has not shown significant changes from the prior fiscal year.

      The item "Cash and Due from Banks" mainly includes cash of Ps. 400.7
million and Ps. 360.1 million held at the Argentine Central Bank. The cash and
the balance held at the Argentine Central Bank are computable for meeting the
minimum cash requirements set by the Argentine Central Bank and explained under
Item 5. "Operating and Financial Review and Prospects -- Item 5B. Liquidity and
Capital Resources -- Liquidity."

      Our holdings of government securities as of December 31, 2003, are shown
under Item 4. "Information on the Company -- Selected Statistical Information --
Government and Corporate Securities." This item includes Ps. 1,610 million of
compensatory BODEN 2012, which corresponds to that part of the compensatory bond
already received by the Bank.

      The difference between the amount of BODEN 2012 actually received and the
total compensation amount calculated by the Bank, has been recorded under the
"Other Receivables from Financial Brokerage -- In Foreign Currency --
Compensation to be Received from the National Government" account as a right to
receive BODEN 2012 for an amount of Ps. 4,629.6 million (US$1,530.7 million on
account of principal and US$47.8 million on account of interest). This amount
comprises both the portion of the compensatory bond still to be received and all
of the hedge bond (Ps. 1,013.9 million and Ps. 3,615.7 million, respectively).
If bonds not yet received were recognized under the caption "Government and
Corporate Securities," this item would represent 32.9% of our total assets.

      In December 2002, the Bank originally calculated that it should receive
US$2,254.0 million of face value of BODEN 2012. On October 30, 2003, the
Argentine Central Bank made certain observations to certain criteria applied and
to the inclusion of certain items, by means of which it would modify the final
amount of such compensation. In December 2003, the Bank accepted and recognized
in its financial statements a US$53.9 million adjustment to the carrying amount
of the compensation to be received, which resulted in a Ps. 163.2 million
(equivalent to US$55.6 million on account of principal and interests) decrease
in the Bank's assets. As of December 31, 2003, the amount of compensation
claimed by the Bank amounted to US$2,200.0 million. After having examined the
file where the observations are made, in order to know the grounds on which the
remaining observations were based, the Bank has answered these observations,
clarifying its position and requesting that observations be rectified. The
Argentine Central Bank is currently in the process of reviewing the Bank's
position.

                                     -149-
<PAGE>

      As of December 31, 2003, total loans amounted to Ps. 10,983.8 million, of
which Ps. 10,934.8 million corresponded to the Bank and the remaining amount to
secured loans held by Sudamericana Holding S.A. Total loans represented 48.0% of
total assets, and continued representing our most important asset. As of that
date, the Bank's loan portfolio contained Ps. 7,751.4 million of secured loans
to the Argentine public sector valued in accordance with Argentine Central Bank
Communique "A" 3911. For more information on the Bank's loan portfolio, see Item
4. "Information on the Company -- Selected Statistical Information -- Loan
Portfolio."

      In connection with the restructuring of the financial assistance for
liquidity support it received from the Argentine Central Bank described under
Item 5. "Operating and Financial Review and Prospects -- Funding" and approved
by the Argentine Central Bank on February 3, 2004, the Bank has granted the
Argentine Central Bank, as collateral for repayment, secured loans with a book
value of Ps. 6,837.5 million as of December 31, 2003, valued in accordance with
Argentine Central Bank Communique "A" 3911.

      "Other Assets" mainly comprises:

      -     Ps. 915.7 million corresponding to bank premises and equipment,
            miscellaneous assets and intangible assets.

      -     Ps. 646.1 million of the Bank's holdings of debt securities and
            subordinated notes issued by the Galtrust I Financial Trust, as a
            result of the securitization of loans to the provincial public
            sector in late 2000, recorded in the balance sheet under the caption
            "Other Receivables from Financial Brokerage."

      -     Ps. 487.0 million corresponding to the recording (as an intangible
            asset pursuant to Argentine Central Bank Communique "A" 3916) of the
            right to receive compensation for the difference between the amount
            paid to depositors who filed legal actions (amparo claims) and
            collected their deposits as originally denominated in U.S. dollars
            or at the free market exchange rate and the amount established by
            the pesification rules (conversion at the exchange rate of Ps. 1.40
            per U.S. dollar plus the CER adjustment and accrued interest).

      -     Ps. 274.7 million (recorded under the balance sheet item "Other
            Receivables from Financial Brokerage") corresponding to the Bank's
            interest in the funds jointly formed by the Bank with other
            private-sector banks in order to facilitate the recovery of the
            assets of former banks Almafuerte and Mendoza, in whose
            restructuring Banco Galicia took part. The fund's assets, made up of
            national government securities, were exchanged for secured loans in
            late 2001.

      -     Ps. 185.8 million (recorded under the balance sheet item
            "Miscellaneous Receivables") of secured loans granted as collateral
            for the assistance received from the FFAEFyS, as part of the
            implementation of the Galicia capitalization and liquidity plan.

      -     Ps. 118.4 million (recorded under the balance sheet item "Other
            Receivables from Financial Brokerage") of the Bank's holdings of
            subordinated notes issued by the "Galicia Mortgage Loans Financial
            Trust" as part of the implementation of the Galicia capitalization
            and liquidity plan.

      -     Ps. 102.8 million corresponding to the recording (under the balance
            sheet item "Other Receivables from Financial Brokerage") of the
            estimated value of the compensation for the difference that arises
            from the exclusion of certain loan portfolios from the system of
            adjustment by the CER, which portfolios remained subject to the
            application of the CVS. On May 18, 2004, the deadline for financial
            institutions to opt into the compensation regime established by the
            government, the Bank did not request to do so but rather restated
            its right to be compensated for the negative effects of asymmetric
            indexation, formally challenging the regulations implementing the
            compensation regime.

      -     Ps. 87.1 million of equity interests in companies not consolidated.

      -     Ps. 68.7 million (recorded under the balance sheet item "Other
            Receivables from Financial Brokerage") of our holding of debt
            securities and subordinated notes issued by the Galtrust II and V
            Financial Trusts created in late 2001 as a result of the
            securitization of part of the Bank's mortgage loan portfolio.

                                     -150-
<PAGE>

      -     Ps. 40.5 million (recorded under the balance sheet item "Other
            Receivables from Financial Brokerage") of subordinated notes issued
            by the Secured Loans Trust as part of the implementation of the
            Galicia capitalization and liquidity plan and held by the Bank.

                                     -151-
<PAGE>

EXPOSURE TO THE ARGENTINE PUBLIC SECTOR

      The following table shows our total net exposure to the Argentine public
sector, both national and provincial. This exposure mainly consists of exposure
of the Bank.

<TABLE>
<CAPTION>
                                                                As of December 31, 2003
                                                                -----------------------
                                                                 (in millions of pesos)
<S>                                                             <C>
NET POSITION IN GOVERNMENT SECURITIES.........................        Ps.  2,898.4
    Trading and investment accounts...........................             1,209.8
    Fiscal Credit Certificate ................................                78.6
    Compensatory bond.........................................             1,610.0
OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE..........        Ps.  5,664.6
    Compensatory bond.........................................             1,013.9
    Hedge bond................................................             3,615.7
    Galtrust I Financial Trust................................               646.1
    Special Funds Former Almafuerte and Mendoza Banks.........               245.6
    Secured Loans Trust.......................................                40.5
    CER/CVS Difference........................................               102.8
LOANS.........................................................        Ps.  7,991.0
    Provinces -- financial sector ............................               190.4
    Secured loans.............................................             7,800.6
MISCELLANEOUS RECEIVABLES.....................................        Ps.    185.8
    Secured loans granted as guarantee of the FFAEFyS loan....               185.8
INTANGIBLE ASSETS.............................................        Ps.    487.0
    Difference for payment of Amparo Claims (2)...............               487.0
                                                                      ------------
TOTAL ASSETS (1) .............................................        Ps. 17,226.8
                                                                      ============
LIABILITIES WITH THE ARGENTINE CENTRAL BANK                                8,199.2
                                                                      ============
NET EXPOSURE                                                               9,027.6
                                                                      ============
</TABLE>

(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.

(2)   Net of amortization.

      Our total net exposure to the Argentine public sector as of December 31,
2003, amounted to Ps. 9,027.5 million, representing 39.4% of our total assets.

OFF-BALANCE SHEET ARRANGEMENTS

      Our off-balance sheet risk mainly arises from the Bank's activities.

      In the normal course of its business, the Bank is party to financial
instruments with off-balance sheet risk in order to meet the financing needs of
its customers. These instruments expose the Bank to credit risk in addition to
amounts recognized in our consolidated balance sheets. These financial
instruments include commitments to extend credit, standby letters of credit,
guarantees granted and acceptances.

COMMITMENTS TO EXTEND CREDIT, STAND-BY LETTERS OF CREDIT AND GUARANTEES GRANTED

      Guarantees granted are surety guarantees in connection with transactions
between two parties. Standby letters of credit and guarantees granted are
conditional commitments issued by the Bank to guarantee the performance of a
customer to a third party. Acceptances are conditional commitments for foreign
trade transactions.

      Commitments to extend credit are agreements to lend to a customer at a
future date, subject to meeting certain contractual terms. Commitments generally
have fixed expiration dates or other termination clauses and may

                                     -152-
<PAGE>

require payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, total commitment amounts do not necessarily represent
actual future cash requirements of the Bank. The Bank evaluates each customer's
creditworthiness on a case-by-case basis.

      The Bank uses the same credit policies in making commitments, conditional
obligations and guarantees as it does for granting loans. In the opinion of
management, the Bank's outstanding commitments and guarantees do not represent
unusual credit risk.

      The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit,
standby letters of credit, guarantees granted and acceptances is represented by
the contractual notional amount of those investments.

      The Bank's credit exposure related to these items as of December 31, 2003,
is summarized below:

<TABLE>
<CAPTION>
                                             DECEMBER 31,
                                        ----------------------
                                                 2003
                                        ----------------------
                                        (In millions of pesos)
<S>                                     <C>
Commitments to extend credit...                Ps. 220.9
Standby letters of credit......                     10.9
Guarantees granted.............                    234.4
Acceptances....................                     22.4
</TABLE>

      On March 25, 2004, a guaranty for Ps. 7.3 million granted by the Bank in
favor of the Argentine government in connection with Correo Argentino's contract
with the Argentine government was called. The related claim has been proved as a
possible claim in the reorganization proceedings involving Correo Argentino.
This claim is fully covered by an allowance. The Bank will pay this guaranty as
provided in accordance with conditions to be established by the National
Communications Commission, as applicable.

      In addition to the above commitments, as of December 31, 2003, available
purchase limits for credit card holders amounted to Ps. 2,675.1 million.

      The credit risk involved in issuing letters of credit and granting
guarantees is essentially the same as that involved in extending loan facilities
to customers. In order to grant guarantees to its customers, the Bank may
require counter guarantees. As of December 31, 2003, these counter guarantees,
classified by type, were as follows:

<TABLE>
<CAPTION>
                                       DECEMBER 31,
                                  ----------------------
                                           2003
                                  ----------------------
                                  (In millions of pesos)
<S>                               <C>
Preferred counter guarantees...          Ps. 53.6
Other counter guarantees.......              97.7
</TABLE>

      See note 29 to our audited consolidated financial statements.

                                     -153-
<PAGE>

OTHER

      The Bank accounts for checks drawn on it and other banks, as well as other
items in the process of collection, such as notes, bills and miscellaneous
items, in memorandum accounts until the related item clears or is accepted. In
management's opinion, the risk of loss on these clearing transactions is not
significant. The amounts of clearing items in process as of December 31, 2003,
were as follows:

<TABLE>
<CAPTION>
                                               DECEMBER 31,
                                          ----------------------
                                                  2003
                                          ----------------------
                                          (In millions of pesos)
<S>                                       <C>
Checks drawn on the Bank................       Ps. 109.2
Checks drawn on other banks.............           162.4
Bills and other items for collection....           327.0
</TABLE>

      With respect to fiduciary risk, in fiscal year 2000, the Bank was
appointed as trustee under four trust agreements to guarantee obligations
arising from various contracts between the parties. As of December 31, 2003, the
trust funds amounted to Ps. 72.8 million.

      In addition, the Bank has securities in custody, mainly related to its
activity as a mutual fund depositary. As of December 31, 2003, these securities
amounted to Ps. 5,412.7 million.

      See note 29 to our audited consolidated financial statements.

SECURITIZATION OF ASSETS

      In the normal course of business, the Bank has used the securitization of
assets as a source of funding. In addition, in 2002, within the framework of the
Galicia capitalization and liquidity plan, the Bank securitized mortgage loans
and secured loans in order to restore the Bank's liquidity, which had been
adversely affected by the deposit run of late 2001 and early 2002.

      The securitization of assets basically involves a company selling assets
to a trust and the trust funding the purchase by issuing securities that are
sold to third parties. A trust is a special-purpose entity, not an operating
entity; typically, a trust is set up for the single purpose of completing the
securitization transaction, has a limited life and no employees.

      -     Galtrust I Individual Financial Trust

      On October 20, 2000, the Bank securitized a group of loans that had been
made to the provinces of Argentina and collateralized by tax revenues shared by
the national government and the provinces. The Bank transferred the ownership of
these loans to the Galtrust I Financial Trust. The trust issued, in turn, class
A debt securities with a face value of US$100.0 million, class B debt securities
with a face value of US$200.0 million and participation certificates
(subordinated notes) with a face value of US$200.0 million. Third-party
investors purchased Ps. 46.9 million (in historical currency) of the class B
debt securities, and the Bank retained the remainder of the certificates. As of
December 31, 2003, the Bank held debt securities and subordinated notes totaling
an aggregate amount of Ps. 646.1 million. The trustee is First Trust of New
York, National Association, acting through its permanent representative office
in Argentina.

      -     Galtrust II, III, IV and V Individual Financial Trusts

      At a meeting held on December 6, 2001, the Bank's board of directors
approved the creation of a program for the securitization of loans and the
issuance of debt securities and/or certificates of participation by various
Galtrust financial trusts. The CNV approved the program on April 6, 2000, for a
face value of up to US$1,000 million and authorized the Bank's participation as
originator, trustor and manager of the program.

                                     -154-
<PAGE>

      Four financial trusts, Galtrust II, III, IV and V - Letras Hipotecarias,
were set up under this program. Certificates of participation and debt
securities were then issued under the trusts. In December 2001, the Bank
transferred ownership of mortgage loans totaling Ps. 521.3 million to the
Galtrust II, III, IV and V - Letras Hipotecarias financial trusts.

      The Bank retained 100% of the certificates of participation. The remaining
class A and class B debt securities were subscribed for by the Bank and by
Hartford Seguros de Vida S.A.

      As of December 26, 2002, the Galtrust III and IV financial trusts were
terminated. As of December 31, 2003, the Bank held certificates of participation
and debt securities of the Galtrust II and V financial trusts for Ps. 68.8
million. The trustee for each trust is First Trust of New York, National
Association, acting through its permanent representative office in Argentina.

      -     Trusts set up as part of the Galicia capitalization and liquidity
            plan

      As part of the implementation of the Galicia capitalization and liquidity
plan, the Galicia Mortgage Loans Financial Trust was created in May 2002. The
Bank transferred Ps. 312.8 million of mortgage loans to the trust and received
in exchange Ps. 234.6 million in cash and Ps. 78.2 million in certificates of
participation (in May 2002 currency). The trustee is ABN AMRO Bank Argentine
Branch. Thirteen domestic financial institutions subscribed for the trust's debt
securities. The Bank is obligated to replace the loans in the trust under
certain circumstances. As of December 31, 2003, the Bank held certificates of
participation totaling Ps. 118.4 million.

      Also as part of the implementation of the Galicia capitalization and
liquidity plan, the Secured Loans Trust was created. The parties to the trust
are Banco de la Provincia de Buenos Aires as beneficiary and BAPRO Mandatos y
Negocios S.A. as trustee. The Bank transferred Ps. 108 million of secured loans
to the trust and received in exchange Ps. 81 million in cash and Ps. 27 million
in certificates of participation. As of December 31, 2003, the Bank held
certificates of participation totaling Ps. 40.5 million.

      See note 34 to our audited consolidated financial statements.

FUNDING

      Traditionally, we have had three principal funding sources: customer
deposits (consisting of current accounts, savings accounts and time deposits
generated by the Bank's branch network), credit lines from banks and
multilateral agencies and funds obtained through issuances of medium- and
long-term securities in international financial markets.

      Our ability to raise funds in local and international financial markets
declined substantially during 2001, practically disappeared by late 2001 and
remained substantially limited during 2003 (except for our ability to raise
short-term deposits in the Argentine market). Other Argentine companies faced
similar problems. This difficulty stemmed from the Argentine government solvency
crisis, the sovereign's default on its debt and other consequences of the
Argentine crisis.

      As a consequence of the 2001 - 2002 liquidity crisis, the Argentine
Central Bank provided liquidity support to financial institutions, including us,
in the form of short-term loans or rediscounts. These funds were the only source
of funding for the Bank from late 2001 until April 2002. As of December 31,
2003, liabilities owed by the Bank to the Argentine Central Bank on account of
rediscounts for liquidity support amounted to Ps. 5,663.1 million. In accordance
with Decrees No. 739/03 and No. 1262/03, these borrowings were restructured into
a long-term liability with principal adjusted by CER plus a 3.5% annual interest
rate. In addition, as a result of the compensation measures undertaken by the
government, as of December 31, 2003, our balance sheet included Argentine
Central Bank loans for Ps. 2,536.1 million to fund the acquisition of the hedge
bond (BODEN 2012).

      In November 2001, after the government restructured public-sector
indebtedness with domestic creditors (including government securities) into
secured loans and in the context of the financial system's increasing reliance
on financial assistance from the Argentine Central Bank, the government (through
Decrees No. 1523/01 and No.

                                     -155-
<PAGE>

1526/01) permitted the Argentine Central Bank to grant financial assistance to
financial institutions for liquidity support collateralized by those secured
loans, without the term and amount limits that were previously imposed. (Under
the convertibility system, the Argentine Central Bank was precluded from lending
to a financial institution except for 30-day rediscounts or advances for
transitory liquidity support secured by government securities up to the amount
of the financial institution's shareholders' equity.)

      In order to reduce the maturity mismatches faced by financial institutions
that were simultaneously debtors (for having received financial assistance for
liquidity support from the Argentine Central Bank during the 2001 - 2002 crisis)
and creditors (as holders of public-sector debt instruments) of the Argentine
public sector, the Argentine government established a voluntary procedure in
March 2003 for restructuring the financial assistance received from the
Argentine Central Bank during the 2001 - 2002 crisis. In accordance with Decree
No. 739/03, these borrowings were to be restructured into liabilities maturing
in up to 70 months, with principal adjusted by the CER plus a 3.5% annual
interest rate, and were to be collateralized by secured loans in an amount equal
to at least 125% of the debt owed. The amortization schedule would be based on
the cash proceeds of assets granted as collateral, the minimum amortization
established by the decree and the maximum number of installments allowed by it.
Subsequently, Decree No. 1262/03, dated May 22, 2003, extended the maximum
number of installments to 120 months, if approved by the URSF. These rules are
known as the "matching" rules.

      Beginning on April 30, 2003, the Bank began to account for the financial
assistance for liquidity support from the Argentine Central Bank in accordance
with the matching rules (i.e., principal was adjusted by the CER and the
interest rate accrued was CER plus 3.5% per annum). Up to April 29, 2003, such
liability had been a peso-denominated monthly revolving facility whose cost was
tied to the interest rate of the Lebac (equivalent to 64.0% of the interest rate
on the 30-day Lebac or the minimum term Lebac auctioned). During 2002, the
Argentine Central Bank financial assistance for liquidity support accrued at an
average interest rate of 28.25%. The interest rate accrued in April 2003 was
6.50% per annum.

      On November 27, 2003, the URSF authorized the Argentine Central Bank to
extend the maturity of the Bank's debt with the Argentine Central Bank for
liquidity support in accordance with the repayment schedule presented by the
Bank to the Argentine Central Bank and the provisions of Decree No. 1262/03. On
February 3, 2004, the Argentine Central Bank approved the request made by the
Bank to adhere to the regime established by Decree No. 739/03, as modified by
Decree No. 1262/03, as well as the amortization schedule proposed by the Bank.
That schedule contemplates repayment in 92 monthly installments beginning in
March 2004.

      As a result of the liquidity crisis experienced by the Bank in late 2001
and early 2002, the Bank defaulted on its foreign debt in June 2002. As of
December 31, 2003, the foreign debt of the Bank's head office in Argentina and
its Cayman branch was in the process of being restructured in order to extend
its maturity and to reduce its interest rate. The restructuring process was
completed on May 18, 2004.

      Below is a breakdown of our funding as of the dates indicated:

<TABLE>
<CAPTION>
                                                      DECEMBER 31,                           DECEMBER 31,
                                                 ----------------------   --------------------------------------------------
                                                         2003                      2002                       2001
                                                 ----------------------   -----------------------   ------------------------
                                                 (In millions of pesos)   (In millions of February 28, 2003, constant pesos)
<S>                                              <C>                      <C>                       <C>
Deposits (1)...................................   Ps.  5,584.0                   Ps. 5,242.0             Ps. 13,690.5
    Restructured deposits......................          561.4                       1,335.1                       --
Credit Lines (1)
    Argentine Central Bank
          For liquidity support................        5,663.1                       5,630.2                  3,431.0
          Advance to purchase the hedge bond(2)        2,536.1                       2,489.9                       --
    Other banks and international entities.....        3,017.1                       4,096.4                  2,060.8
Debt securities (1)............................        2,565.5                       3,735.7                  1,871.9
Shareholders' equity ..........................        1,462.3                       1,551.7                  3,090.3
                                                  ------------                  ------------             ------------
TOTAL FUNDING..................................   Ps. 20,828.1                  Ps. 22,745.9             Ps. 24,144.5
                                                  ------------                  ------------             ------------
</TABLE>

(1)   Includes accrued interest and exchange differences payable, as well as the
      CER adjustment where applicable.

(2)   Borrowings expected to be incurred for the purchase of the hedge bond.

                                     -156-
<PAGE>

      As of December 31, 2003, our most significant source of funding was
financial assistance from the Argentine Central Bank. This represented 39.4% of
our funding compared to 35.7% as of December 31, 2002. At the end of 2003,
financial assistance for liquidity support represented 27.2% of total funding
compared to 24.7% a year before. The relative weight of such financial
assistance at the end of fiscal years 2003 and 2002 was substantially higher
than the 14.2% as of December 31, 2001. This resulted from the receipt in the
first months of 2002 until the implementation of the Galicia capitalization and
liquidity plan of additional financial assistance from the Argentine Central
Bank. In addition, in 2002, total financial assistance from the Argentine
Central Bank increased substantially due to the incorporation into our balance
sheet of the advance to fund the purchase of the hedge bond.

      Until December 2001, customer deposits had been our most important funding
source, accounting for 56.7% of total funding as of December 31, 2001. As of
December 31, 2003, our deposits represented 26.8% of our total funding. Our
deposit base, like that of all other banks in Argentina, was significantly
affected by the systemic run on deposits throughout 2001, by the Argentine
crisis at the end of the year and by various regulations implemented by the
Argentine government in recent years, as explained in this annual report. As of
December 31, 2003, our deposits were 6.5% higher than the level of December 31,
2002. Nearly all of this increase occurred in peso-denominated transactional
deposits (deposits in current and savings accounts) and short-term time
deposits.

      For more information on deposits, see Item 4. "Information on the Company
-- Selected Statistical Information -- Composition of Deposits."

      We also traditionally funded our operations with credit lines from banks
and international agencies. As of December 31, 2003, these credit lines amounted
to Ps. 3,017.1 million compared with Ps. 4,096.4 million and Ps. 2,060.8 million
as of December 31, 2002, and December 31, 2001, respectively. The variations in
these amounts mainly reflect variations in the exchange rates at which
dollar-denominated amounts were translated into pesos at the close of the
relevant balance sheet dates. See Item 3. "Key Information -- Exchange Rate
Information." As of December 31, 2003 and 2002, these credit lines mostly
represented credit lines from foreign banks in payment default that were subject
to restructuring, which was completed on May 18, 2004. See " -- Contractual
Obligations" below.

      In the past, we had also funded our operations in international and local
financial markets through the issuance of debt securities (dollar-denominated
negotiable obligations, medium-term notes and U.S. commercial paper).
Dollar-denominated funds raised in the capital markets have been an important
part of our funding, with Ps. 2,565.5 million in dollar-denominated debt
securities outstanding as of December 31, 2003, as compared with Ps. 3,735.7
million and Ps. 1,871.9 million outstanding as of December 31, 2002, and
December 31, 2001, respectively. The variations in these amounts mainly reflect
variations in the exchange rates at which dollar-denominated amounts were
translated into pesos at the close of the relevant balance sheet dates. See Item
3. "Key Information -- Exchange Rate Information." As of December 31, 2003, Ps.
1,242.3 million (principal only), including the negotiable obligations issued
pursuant to the restructuring of our New York branch in mid-2002 and the
negotiable obligations issued to settle the restructuring of Galicia Uruguay's
deposits agreed to in late 2002, was current and not included in the Bank's
foreign debt restructuring. The remainder of our debt securities outstanding as
of December 31, 2003, was in payment default and subject to restructuring. The
restructuring of the Bank's foreign debt, which did not include negotiable
obligations issued by the regional credit card companies, was completed on May
18, 2004. See " -- Contractual Obligations" below.

      Although deposits recovered in the latter half of 2002 and 2003, most of
the traditional medium- and long-term sources of financing we customarily rely
upon, especially external sources, remain unavailable to us.

      On May 31, 2004, the Bank was rated A3 by Standard & Poor's on its local
ratings scale for short-term obligations. In accordance with applicable rules,
this rating enabled the Bank, after a period of more than two years, to raise
deposits from local pension funds once more. This rating also facilitates
deposit raising among other domestic institutional investors. On June 28, 2004,
the Bank's long-term debt was rated BBB- by Standard & Poor's on its local
ratings scale.
                                     -157-

<PAGE>

CONTRACTUAL OBLIGATIONS

      In connection with our operating activities, we enter into certain
contractual obligations. Our main contractual obligations are contractual
obligations of the Bank.

      The following tables show the principal amounts of our contractual
obligations and their contractual interest rates (mainly representing
contractual obligations of the Bank) as of December 31, 2003.

<TABLE>
<CAPTION>
                                                    ANNUAL                                LESS
                                                   INTEREST                               THAN      1 TO 3      3 TO 5     OVER 5
                                      MATURITY       RATE          TOTAL     PAST DUE    1 YEAR      YEARS      YEARS       YEARS
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
                                                                    (In millions of pesos)
<S>                                   <C>       <C>             <C>         <C>         <C>       <C>          <C>       <C>
Banco Galicia - 9% Notes Due 2003...      2003             9.0% Ps.   566.0 Ps.  566.0         -           -           -         -
Banco Galicia - Step Up Floating
  Rate Notes Due 2002 ..............      2002             3.9%       413.8      413.8         -           -           -         -
Banco Galicia - 4th Series
  Floating Rate Notes Due 2005 .....      2005             4.0%       130.3       65.1  Ps. 32.6  Ps.   32.6           -         -
Banco Galicia - 5th Series
  Floating Rate Notes Due 2005 .....      2005             4.0%        31.3       15.7       7.8         7.8           -         -
Banco Galicia - 7.875% Notes Due
  2007 (1)..........................      2007             7.9%       213.0          -         -       142.0  Ps.   71.0         -
Banco Galicia - 7th Series
  Floating Rate Notes Due 2007 (1)..      2007  Libor + 400 bp        126.6          -         -        84.4        42.2         -
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
Galicia Uruguay - Negotiable
  Obligations (2) (3)...............   Various             2.0%       902.7          -     123.1       260.9       184.6 Ps.  334.1
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
Negotiable Obligations - Tarjetas
  del Mar...........................      2002            14.9%         0.5        0.5         -           -           -          -
Negotiable Obligations - Tarjeta
  Naranja...........................      2002            16.5%         2.7        2.7         -           -           -          -
Negotiable Obligations - Tarjetas
  Cuyanas...........................      2002            16.0%         6.3        6.3         -           -           -          -
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
Banco Galicia - Foreign Banks'
  Dollar-denominated Syndicated
  Loan .............................      2002             7.9%       733.3      733.3         -           -           -          -
Banco Galicia - Foreign Banks'
  Dollar-Denominated Syndicated
  Loan .............................      2002             7.0%       240.5      240.5         -           -           -          -
Banco Galicia - International
  Finance Corporation Loan .........      2002             4.8%       718.6      718.6         -           -           -          -
Banco Galicia - International
  Finance Corporation Loan .........      2008  Libor + 327 bp        190.6       71.2      29.0        40.7        39.7       10.0
Banco Galicia - International
  American Investment Corp. Loans ..   Various             5.1%       203.8      139.5      21.6        34.1         6.9        1.7
Banco Galicia -  FMO Loans .........   Various             4.8%        56.6       26.6       8.0        11.0        11.0          -
Banco Galicia - BICE Loans..........   Various         Various        193.4       29.3      61.2        72.0        27.4        3.5
Cayman Branch - Trade and Financial
  Loans ............................   Various             3.8%       557.7      258.0     299.7           -           -          -
Banco Galicia - Other Financial
  Loans.............................   Various         Various         33.5        1.5       0.8        21.7         9.5          -
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
Argentine Central Bank - Assistance
  for Liquidity Support.............      2011         CER+3.5%     5,647.1          -     258.1       732.3       929.8    3,726.9
Argentine Central Bank - Advance
  to Purchase the Hedge Bond (4) ...      2012         CER+2.0%     2,442.8          -         -       610.7       610.7    1,221.4
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
Loan from SEDESA (5) ...............      2007  Libor + 300 bp        189.2          -         -           -       189.2          -
Peso-Den. Loan from the FFAEFyS.....      2008        CER+8.07%        33.5          -       6.7        13.4        13.4          -
Dollar-Den. Loan from the FFAEFyS
  (5)...............................      2005             8.1%        70.3          -      46.9        23.4           -          -
Non-Delivery Forwards ..............        --              --         99.6       96.8       2.8           -           -          -
Backed Letters of Credit............        --              --         15.6       15.6         -           -           -          -
                                      --------  --------------  ----------- ----------  --------  ----------  ---------- ----------
TOTAL...............................                            Ps.13,819.3 Ps.3,401.0  Ps.898.3  Ps.2,087.0  Ps.2,135.4 Ps.5,297.6
                                      ========  ==============  =========== ==========  ========  ==========  ========== ==========
</TABLE>

Principal only (does not include interest).

(1)   Issued in 2002 as part of the restructuring of the debt of the Bank's
      former New York branch.

(2)   Issued in 2002 as part of the restructuring of Galicia Uruguay's deposits.

(3)   Excludes subordinated negotiable obligations for US$43 million held by the
      holding company.

(4)   The terms and conditions of the advance to be requested to the Argentine
      Central Bank to purchase the hedge bond were established by Decree No.
      905/02.

(5)   Granted as part of the Galicia capitalization and liquidity plan.

      In the table above, the principal amounts of the Bank's obligations with
foreign creditors and local creditors contractually in payment default as of
December 31, 2003, are shown under the heading "Past Due."

                                     -158-
<PAGE>

      In the following table, all of the principal amount of the Bank's
contractual obligations where a payment default was incurred is shown under the
heading "Past Due/Callable."

<TABLE>
<CAPTION>
                                                   ANNUAL                                  LESS
                                                  INTEREST                  PAST DUE/     THAN 1    1 TO 3      3 TO 5      OVER 5
                                      MATURITY      RATE          TOTAL     CALLABLE       YEAR      YEARS       YEARS       YEARS
                                      -------- --------------  ----------- ----------    -------- ----------  ----------  ----------
<S>                                   <C>      <C>             <C>         <C>           <C>      <C>         <C>         <C>
Banco Galicia - 9% Notes Due 2003 (1)     2003            9.0% Ps.   566.0 Ps.  566.0           -          -           -           -
Banco Galicia - Step Up Floating
 Rate Notes Due 2002 (1)............      2002            3.9%       413.8      413.8           -          -           -           -
Banco Galicia - 4th Series Floating
 Rate Notes Due 2005 (1)............      2005            4.0%       130.3      130.3           -          -           -           -
Banco Galicia - 5th Series Floating
 Rate Notes Due 2005 (1)............      2005            4.0%        31.3       31.3           -          -           -           -
Banco Galicia - 7.875% Notes Due
 2007 (2)...........................      2007            7.9%       213.0          -           -      142.0  Ps.   71.0           -
Banco Galicia - 7th Series Floating
 Rate Notes Due 2007 (2)............      2007 Libor + 400 bp        126.6          -           -       84.4        42.2           -
                                      -------- --------------  ----------- ----------    -------- ----------  ----------  ----------
Galicia Uruguay - Negotiable
  Obligations (3) (4)...............   Various            2.0%       902.7          -       123.1      260.9       184.6  Ps.  334.1
                                      -------- --------------  ----------- ----------    -------- ----------  ----------  ----------
Negotiable Obligations - Tarjetas
 del Mar............................      2002           14.9%         0.5        0.5           -          -           -           -
Negotiable Obligations - Tarjeta
 Naranja............................      2002           16.5%         2.7        2.7           -          -           -           -
Negotiable Obligations - Tarjetas
 Cuyanas............................      2002           16.0%         6.3        6.3           -          -           -           -
Banco Galicia - Foreign Banks'
Dollar-denominated Syndicated Loan
 (1)................................      2002            7.9%       733.3      733.3           -          -           -           -
Banco Galicia - Foreign Banks'
Dollar-Denominated Syndicated Loan
 (1)................................      2002            7.0%       240.5      240.5           -          -           -           -
Banco Galicia - International
 Finance Corporation Loan (1).......      2002            4.8%       718.6      718.6           -          -           -           -
Banco Galicia - International
 Finance Corporation Loan (1).......      2008 Libor + 327 bp        190.6      190.6           -          -           -           -
Banco Galicia - International
American Investment Corp. Loans (1).   Various            5.1%       203.8      203.8           -          -           -           -
 Banco Galicia -  FMO Loans (1).....   Various            4.8%        56.6       56.6           -          -           -           -
Banco Galicia - BICE Loans..........   Various        Various        193.4       29.3        61.2       72.0        27.4         3.5
Cayman Branch - Trade and Financial
 Loans (1)..........................   Various            3.8%       557.7      557.7           -          -           -           -
Banco Galicia - Other Financial
 Loans..............................   Various        Various         33.5        3.7(1)        -       20.3         9.5           -
                                      -------- --------------  ----------- ----------    -------- ----------  ----------  ----------
Argentine Central Bank - Assistance
 for Liquidity Support..............      2011        CER+3.5%     5,647.1          -       258.1      732.3       929.8     3,726.9
Argentine Central Bank - Advance to
 Purchase the Hedge Bond............      2012        CER+2.0%     2,442.8          -           -      610.7       610.7     1,221.4
                                      -------- --------------  -----------  ---------    -------- ----------  ----------  ----------

Loan from SEDESA....................      2007 Libor + 300 bp        189.2          -           -          -       189.2           -
Peso-Denominated Loan from FFAEFyS..      2008       CER+8.07%        33.5          -         6.7       13.4        13.4           -
Dollar-Denominated Loan from
 FFAEFyS............................      2005            8.1%        70.3          -        46.9       23.4           -           -
Non-Delivery Forwards...............        --             --         99.6       96.8(1)      2.8          -           -           -
Backed Letters of Credit (1)........        --             --         15.6       15.6           -          -           -           -
                                      -------- --------------  ----------- ----------    -------- ----------  ----------  ----------
TOTAL...............................                           Ps.13,819.3 Ps.3,997.4    Ps.498.8 Ps.1,959.4  Ps.2,077.8  Ps.5,285.9
                                      ======== ==============  =========== ==========    ======== ==========  ==========  ==========
</TABLE>

Principal only (does not include interest).

(1)   As of December 31, 2003, included in the Bank's foreign debt restructuring
      completed on May 18, 2004.

(2)   Issued in 2002 as part of the restructuring of the debt of the Bank's
      former New York branch.

(3)   Issued in 2002 as part of the restructuring of Galicia Uruguay's deposits.

(4)   Excludes subordinated negotiable obligations for US$43 million held by the
      holding company.

      The principal amount of debt of the Bank's head office in Argentina and
its Cayman branch subject to restructuring as of December 31, 2003, included in
the tables above was Ps. 3,958.6 million.

      The following table shows the principal amount, maturity and contractual
interest rate of the contractual obligations assumed by the Bank as a result of
the restructuring of the foreign debt mentioned in the previous paragraph. These
contractual obligations are dollar-denominated. The U.S. dollar amounts have
been translated into pesos at the Argentine Central Bank exchange rate at the
close of May 18, 2004, the date of the restructuring's settlement.

                                     -159-
<PAGE>

<TABLE>
<CAPTION>
                                                  ANNUAL                      PAST DUE  LESS THAN   1 TO 3    3 TO 5     OVER 5
      AS OF MAY 18, 2004           MATURITY   INTEREST RATE       TOTAL      /CALLABLE   1 YEAR      YEARS     YEARS     YEARS
--------------------------------   --------  ----------------  -----------   ---------  ---------  --------  --------  ----------
                                                                           (In millions of pesos)
<S>                                <C>       <C>               <C>           <C>        <C>        <C>       <C>       <C>
NEW DEBT ISSUED

 BONDS

 Floating Rate Notes Due 2010...     2010    Libor + 350 b.p.      1,025.1          -          -      128.2     512.6       384.3
 Step-Up Notes Due 2014.........     2014          3.0% - 7.0%     1,350.6          -          -          -         -     1,350.6
 Subordinated Notes Due 2019....     2019                11.0%       634.0          -          -          -         -       634.0

LOANS

 Floating Rate Loans Due 2010...     2010    Libor + 350 b.p.        136.6          -          -       17.1      68.2        51.3
 Step-Up Loans Due 2014.........     2014          3.0% - 7.0%       279.0          -          -          -         -       279.0
 Floating Rate Loans Due 2014...     2014     Libor + 85 b.p.        254.8          -          -          -         -       254.8
 Subordinated Loans Due 2019....     2019     Libor + 78 b.p.         34.3          -          -          -         -        34.3
 Trade Debt.....................     2005    Libor + 100 b.p.         77.3          -       45.1       32.2         -           -
TOTAL NEW DEBT ISSUED...........                               PS. 3,791.7          -   PS. 45.1   Ps.177.5  Ps.580.8  Ps.2,988.3

NOT RESTRUCTURED

 9% Notes Due 2003..............     2003                 9.0%        62.6       62.6          -          -         -           -
 Floating Rate Notes Due 2005...     2005                 4.0%         2.6        2.6          -          -         -           -
 Step Up Floating Rate Notes Due
 2002...........................     2002                 3.9%         1.5        1.5          -          -         -           -
TOTAL NOT RESTRUCTURED..........                                      66.7   Ps. 66.7          -          -         -           -
                                   --------  ----------------  -----------   --------   --------   --------  --------  ----------
TOTAL...........................                               Ps. 3,858.4   Ps. 66.7   Ps. 45.1   Ps.177.5  Ps.580.8  Ps.2,988.3
                                   ========  ================  ===========   ========   ========   ========  ========  ==========
</TABLE>

Amounts converted into pesos by using the exchange rate as of May 18, 2004 (Ps.
2.9057 per U.S. dollar). Principal only. Does not include interest.

      As of December 31, 2003, the total amount of negotiable obligations in the
Bank's balance sheet included Ps. 9.5 million in principal of negotiable
obligations of the regional credit card companies, mainly representing
dollar-denominated negotiable obligations of these companies issued under
Argentine law and maturing in 2002 that had not been refinanced as of December,
31 2003.

      As of December 31, 2003, Banco Galicia owed US$221.6 million to Galicia
Uruguay. This debt was restructured in August 2003. See Item 4. "Information on
the Company -- Business Overview -- Banco Galicia -- Banco Galicia Uruguay S.A.
and Banco de Galicia (Cayman) Ltd." Being an intercompany transaction, this
amount is eliminated from the Bank's consolidated deposits.

OTHER COMMITMENTS

      The Bank is responsible for 14.53% of the financial debt of Correo
Argentino if the contract between Correo Argentino and the Argentine government
is terminated for any cause, including the bankruptcy of Correo Argentino. The
Argentine government rescinded the contract with Correo Argentino on November
19, 2003. On December 16, 2003, an Argentine court declared Correo Argentino
bankrupt. That decision has been appealed. As of the date of this annual report,
no claims from Correo Argentino's financial creditors have been received. The
Bank has provisioned the estimated amount of this contingency for Ps. 61.6
million.

      As a shareholder of the water-supply concessionaires Aguas Argentinas
S.A., Aguas Provinciales de Santa Fe S.A. and Aguas Cordobesas S.A., Banco
Galicia has committed, along with the other shareholders, to provide financial
support to these companies if they were unable to fulfill the commitments they
have undertaken with international financial bodies. The Inter-American
Development Bank requested that the shareholders of Aguas Argentinas S.A. and
Aguas Provinciales de Santa Fe S.A. grant loans to those companies. On February
18, 2003, assistance was granted to Aguas Argentinas S.A. in the amount of
US$0.6 million. On November 3, 2003, at the request of the International
Financial Corporation, a loan was granted to Aguas Provinciales de Santa Fe S.A.
for US$0.3 million.

                                     -160-
<PAGE>

      See note 3 to our audited consolidated financial statements.

OTHER COMMITMENTS -- OPERATING LEASES

      As of December 31, 2003, we leased certain properties used as a part of
our distribution network. The estimated future lease payments in connection with
these properties is as follows:

<TABLE>
<CAPTION>
     Year                  In millions of pesos (1)
--------------             ------------------------
<S>                        <C>
     2004                            9.1
     2005                            8.1
     2006                            6.7
     2007                            4.6
     2008                            2.9
2009 and after                       2.7
                                   -----
    TOTAL                           34.1
                                   -----
</TABLE>

(1) Future lease payments include the CER adjustment until December 31, 2003,
only.

CRITICAL ACCOUNTING POLICIES

      We believe the following critical accounting policies applied by us and
our main subsidiary, Banco Galicia, affect our more significant judgments and
estimates used in the preparation of our audited consolidated financial
statements.

ALLOWANCE FOR LOAN LOSSES

      Banco Galicia's allowance for loan losses is maintained in accordance with
Argentine Central Bank rules. Under such rules, a minimum allowance for loan
losses is calculated primarily based upon the classification of Banco Galicia's
commercial loan borrowers and upon delinquency aging (or the number of days the
loan is past due) for Banco Galicia's individual loan borrowers (including
commercial loans of less than Ps. 200,000). Although we are required to follow
the methodology and guidelines for determining the loan loss allowance as set
forth by the Argentine Central Bank, we are allowed to establish additional
allowances for loan losses. The determination of the allowance for loan losses
requires a significant degree of judgment.

      For commercial loans, we are required to classify all of Banco Galicia's
commercial loan borrowers. In order to perform the classification, we must
consider the management and operating history of the borrower, the present and
projected financial situation of the borrower, the borrower's payment history
and ability to service the debt, the capability of the borrower's internal
information and control systems and the risk in the sector in which the borrower
operates. We apply the Argentine Central Bank minimum loss percentages to Banco
Galicia's commercial loan borrowers based on the loan classification and the
nature of the collateral, or guarantee, of the loan. In addition, based on the
overall risk of the portfolio, we consider whether or not additional loan loss
reserves in excess of the minimum required are warranted.

      For Banco Galicia's consumer loan portfolio, we classify loans based upon
delinquency aging, consistent with the requirements of the Argentine Central
Bank. Minimum loss percentages required by the Argentine Central Bank are also
applied to the totals in each loan classification.

      Pursuant to Argentine Central Bank Communique "A" 3918, between March 31
and December 31, 2003, the loan loss reserve for debtors with a total
indebtedness with the whole financial system of up to Ps. 5 million was
established exclusively based upon delinquency aging (i.e., in the same manner
as consumer loans). In accordance with the communique, between December 1, 2001,
and March 31, 2003, the number of days such loans had been past due was computed
taking one day for every three days past due in the period from December 1,
2001, to March 31, 2003. This treatment was also provided to the portfolio of
commercial loans of up to Ps. 200.000, which under the previous rules were
already automatically classified according to their delinquency aging.

      In addition, Banco Galicia has significant amounts of outstanding loans to
the Argentine government. These loans require no allowance for loan losses under
Argentine Central Bank rules. Given the current situation in

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Argentina, realization of these loans at their contractual maturity is
uncertain. In 2003, the Argentine government issued regulations that permit the
Bank under certain circumstances (with which the Bank has complied) to apply a
portion of the proceeds of these loans to repay debt for liquidity support owed
to the Argentine Central Bank. Thus, the Bank plans to offset some of the
Argentine government loans against amounts due to the Argentine Central Bank.

GOVERNMENT SECURITIES AND OTHER ACCOUNTS RECEIVABLE WITH THE GOVERNMENT

      Argentine Banking GAAP regarding investments in government securities
allows banks to classify their portfolio of government securities into two
balance sheet categories: trading and investing securities.

Government Securities in Investment Accounts Including the BODEN 2012 Received
as Compensatory Bonds

      We carry government securities in investment accounts at their cost plus
accretion of discount or amortization of premiums and accrued interest, as
applicable. For government securities previously included in trading accounts,
the cost value is their closing market value as of the day before their transfer
to an investment account.

      The BODEN 2012 received as compensatory bonds are classified as securities
in "Investment Accounts" at par value based upon Argentine Banking GAAP,
notwithstanding that the estimated market value of such bonds is significantly
lower than par value. As of June 25, 2004, BODEN 2012 were trading at
approximately 66.90% of par value.

      As market conditions change, adjustments to the estimated market value of
the BODEN 2012 are not reflected in our financial position. Future sales or
settlements of the BODEN 2012 will reflect the market conditions at the time and
may result in a significant gain or loss that represents the difference between
the settlement amount and the then carrying value.

      Effective January 7, 2003, Argentine Central Bank Communique "A" 3857
restricted the possibility of classifying securities as holdings in investment
accounts to those existing in the Bank's portfolio as of December 31, 2002,
except for the compensatory bond received.

Other Accounts Receivable with the Government -- Compensatory and Hedge Bonds
and CER/CVS Difference

      The right to receive BODEN 2012 as compensatory and hedge bonds is
recorded as "Other Receivables Resulting from Financial Intermediation" and is
being recognized at par value of the BODEN 2012 to be issued, notwithstanding
that the estimated market value of the bonds linked to this right is
significantly below that carrying value. As stated above, as of June 25, 2004,
BODEN 2012 were trading at approximately 66.90% of par value.

      The settlement of the right to receive BODEN 2012 as compensatory and
hedge bonds is subject to the approval by the Argentine Central Bank. It is
reasonably possible that the ultimate delivery of the BODEN 2012 and the related
commitment to fund the purchase through Argentine Central Bank borrowings will
be materially different from the amounts recorded at December 31, 2003.

      In accordance with Law No. 25,796, the Bank has recorded the estimated
amount of the compensation for the negative effects on its equity derived from
the application of the CER to deposits originally denominated in foreign
currency and converted into pesos and from the application of the CVS to certain
loans under "Other Receivables Resulting from Financial Brokerage." The Bank has
recorded the estimated amount of the assets to be received at technical value
increased on the basis of interest accrued under these assets' terms and
conditions.

Trading Securities and Derivatives

      We carry assets and liabilities related to our government and other
securities and derivative trading portfolios at their estimated fair value.
These amounts are based on either quoted market prices or estimated values
derived by the Bank utilizing dealer quotes. As market conditions change,
adjustments to the fair value of securities

                                     -162-
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and derivatives will be made to reflect those conditions. Future sales of these
securities will reflect the market conditions at the time and may differ
significantly from the estimated fair market value at the balance sheet date.

SECURED LOANS

      Within the framework of Decree No. 1387/01, the Bank participated on
November 6, 2001, in the exchange of Argentine public-sector debt instruments
(securities and loans) issued by the national and provincial governments under
the promissory note/bond program for new loans called secured loans. The main
differences between the instruments received and those exchanged consisted of an
extension of the amortization term, which is three years for securities
originally maturing up to December 31, 2010, and a reduction of the interest
rate, which is 70% of the contractual rate, with a maximum rate of 7% per annum
for fixed-rate transactions and a rate equal to Libor plus 3% for floating-rate
loans. As provided under the decree, the conversion was made at the nominal
value, at an exchange rate of Ps. 1.0 per U.S. dollar and in the same currency
as that of the converted obligation.

      The Argentine Central Bank has provided that the gain arising from the
difference between the carrying value of the secured loans and the book value of
the securities exchanged must be recorded in an asset adjustment account and
credited to income on a monthly basis in proportion to the term of each of the
secured loans received.

      In accordance with Decree No. 644/02, dated April 18, 2002,
dollar-denominated secured loans were converted into pesos at the exchange rate
of Ps. 1.40 per U.S. dollar, as provided by section 1 of Decree No. 471/02, and
new fixed interest rates to be accrued by those secured loans were established
by section 3 of that decree.

      On March 28, 2003, the Argentine Central Bank released Communique "A"
3911, which established that secured loans and government securities not subject
to the minimum capital requirement to cover market risk (mainly government
securities not listed on stock exchanges), promissory notes issued by the FFDP
and other financings to the public sector held in financial institution
portfolios on or after March 28, 2003, must be carried at the lower of "present
value" and cost basis plus accrued interest. "Present value" is defined as the
"net present value" of a cash flow structure under contracted terms discounted
at the rate established by the communique, which for 2003 was 3.0% per annum.
See Item 4. "Information on the Company -- Argentine Financial System and
Regulation -- Argentine Banking Regulation -- Valuation of Public Sector
Assets."

Provincial Secured Loans

      Decree No. 1579/02, dated August 28, 2002, established a new restructuring
of provincial government debt. The restructuring consisted of a voluntary
exchange of provincial government debt for bonds (BOGAR) or loans (promissory
notes) issued by the FFDP and secured by the federal government's tax receipts
shared with the provinces, with a 16-year term, a 2% fixed annual interest rate
and amortization in 156 consecutive monthly installments beginning on March 4,
2005.

      The Bank tendered its entire portfolio of loans to provincial governments
and opted to receive promissory notes. The Bank received BOGAR for the
provincial debt for which the exchange had been completed at the close of the
fiscal year despite having opted to receive promissory notes. As of the date of
this annual report, the Bank had not yet received the promissory notes.

      Provincial secured loans are also valued in accordance with the provisions
of Argentine Central Bank Communique "A" 3911.

GOODWILL

      Goodwill is carried at cost less accumulated amortization. The carrying
amount of goodwill is analyzed for impairment based on estimates of future
undiscounted cash flows generated by the business acquired. Because of the
economic conditions in Argentina and their effect on the estimated cash flows of
our acquired businesses that have goodwill, adjustments for impairment of
goodwill increased in 2002. Given these adjustments and the improvement in the
overall Argentine economic situation in 2003, adjustments for impairment were
not made in 2003. Further goodwill impairment may be possible in the short term.

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INTANGIBLE ASSETS

      Effective March 2003, Argentine Central Bank Communique "A" 3916
established that the difference resulting from compliance by the Bank with court
decisions made in connection with amparo claims challenging the applicability of
regulations on deposits with the financial system within the framework of the
provisions of Law No. 25561, Decree No. 214/02 and supplementary rules should
also be recorded under this caption, the amortization of which should take place
in a maximum of 60 equal, consecutive monthly installments beginning in April
2003.

REPOSSESSED ASSETS AND REAL ESTATE HELD FOR SALE

      We carry our repossessed asset portfolio and real estate held for sale at
the lower of their carrying value or fair market value. Our estimates of fair
market values of such repossessed assets and real estate held for sale consider
external and internal appraisals. These appraisals are based on assumptions on
market conditions and presume an ability to dispose of the assets in a
reasonable time period. Should our assumptions regarding market conditions
change, we would adjust our estimates of the fair value of our repossessed asset
portfolio accordingly.

OTHER RECEIVABLES FROM FINANCIAL BROKERAGE AND MISCELLANEOUS RECEIVABLES

      We carry other receivables from financial brokerage and miscellaneous
receivables net of allowances for uncollectible amounts. Our judgment regarding
the ultimate collectibility is performed on an account-by-account basis and
considers our assessment of the borrower's ability to pay based on factors such
as the borrower's financial condition, past payment history, guarantees and
past-due status. Under the current situation in Argentina, the settlement of
amounts due from and due to third parties has slowed significantly. Given this
situation, it is likely that we will increase our allowances for some of the
amounts due us.

EQUITY INVESTMENTS IN OTHER COMPANIES

      We carry these investments at the equity method where a significant
influence in the corporate decision-making process exists. In other cases, the
equity investment is carried at the lower of cost plus dividends or the equity
method value. These balances may be adjusted considering the effects of the new
economic environment on the financial statements of these corporations.

ADVANCE TO PURCHASE THE HEDGE BOND

      In connection with the Bank's right to purchase the hedge bond, the Bank
has recognized the associated liability to fund the hedge bond as if the Bank
had executed the debt agreement with the Argentine Central Bank. This liability
to the Argentine Central Bank is denominated in pesos and accrues interest at
CER plus 2.0%, retroactive to February 3, 2002, as provided by Decree No.
905/02.

U.S. GAAP - CRITICAL ACCOUNTING POLICIES

      The above critical accounting policies for Argentine Banking GAAP are key
accounting policies on which our financial condition and results of operations
under U.S. GAAP are dependent. Such key accounting policies involve complex
matters or are based on subjective judgments or decisions. Additional
information in connection with certain key accounting policies for U.S. GAAP
purposes follows.

ALLOWANCE FOR LOAN LOSSES

      The allowance for loan losses represents the estimate of probable losses
in the loan portfolio. Determining the allowance for loan losses requires
significant management judgments and estimates including, among others,
identifying impaired loans, determining customers' ability to pay and estimating
the fair value of underlying collateral or the expected future cash flows to be
received. Actual events will likely differ from the estimates and assumptions
used in determining the allowance for loan losses. Because of the uncertain
economic situation in Argentina and its effect on Banco Galicia's customers, it
is at least reasonably possible that additional provisions for loan losses will
be required in the future.

                                     -164-
<PAGE>

      The resolution of the allowance for the outstanding secured loans and
other loans to the Argentine provinces is subject to the economic and political
situation in Argentina, including the ability of Argentina to repay or refinance
its foreign debt and its ability to obtain additional liquidity from the
International Monetary Fund or other sources. In addition, the ability of the
Bank to offset outstanding secured loans against outstanding debt with the
Argentine Central Bank will affect the carrying amount and the ultimate
realization of the secured loans.

      Should secured loans be available to offset debt due to the Argentine
Central Bank or other Argentine government entities, some or all of the
provisions for loan losses previously recognized may be reversed.

FAIR VALUE ESTIMATES

      Quoted market price in active markets is the most reliable measure of fair
value.

      During 2001, and as a consequence of Decree No. 1387/01, the Bank swapped
effective as of November 6, 2001, its Argentine government debt instruments
under the promissory note/bond program for secured loans. An estimate of the
fair value of the loans received was made absent observable quoted market prices
for such loans. These loans are subject to the allowance for loan losses process
described above.

      In addition, as of December 31, 2002, the Bank offered to exchange certain
loans to Argentine provincial governments for loans or securities issued by the
FFDP as explained under " -- Critical Accounting Policies -- Secured Loans --
Provincial Secured Loans." The Bank tendered in the exchange under Decree No.
1579/02 its entire portfolio of loans to provincial governments and opted to
receive promissory notes. The Bank received BOGAR for the provincial debt for
which the exchange had been completed as of December 31, 2003. As of the date of
this annual report, the Bank had not yet received the promissory notes.

      As of December 31, 2003, under U.S. GAAP purposes and in accordance with
Statement of Financial Accounting Standards No. 115, satisfaction of one
monetary asset (in this case a loan) by the receipt of another monetary asset
(in this case BOGAR) for the creditor is generally based on the market value of
the asset received in satisfaction of the debt. In this particular case, the
BOGAR being received is significantly different in structure and interest rates
than the loans swapped. Therefore, such amounts should initially be recognized
at their market value. The estimated fair value of the securities received will
constitute the cost basis of the asset.

      Under U.S. GAAP, these BOGAR are classified by the Bank as available for
sale securities and recognized at market with the realized gain or loss from
changes in market values recognized as a charge or credit to equity through
other comprehensive income. In connection with estimating the fair value of the
BOGAR, the Bank used quoted market values. There has been limited activity in
the trading of these securities, and, as such, the quoted market values may not
represent the price of an actual sale between a willing buyer and a willing
seller or amounts at which the BOGAR will ultimately be realized.

      Banco Galicia carries, for U.S. GAAP purposes, its compensatory bond and
its receivable for the compensatory bond as well as its receivable for the
asymmetric indexation compensation at the underlying fair market value of the
securities to be received. These estimated fair market values are based on
quoted market prices (as quoted on the MAE, the Argentine over-the-counter
market). These fair market value quotations are based on relatively low trading
volumes, and the Bank's carrying value may not be representative of the value
the Bank would receive if it disposed of these securities or receivables at the
year-end date. Furthermore, it is likely that the fair market values will
fluctuate as economic conditions and other factors change in Argentina and it is
reasonably possible that the realization and short-term carrying values of these
securities will differ significantly from their carrying value at December 31,
2003.

      Through Law No. 25,561 and Decrees No. 424/01, 1005/01 and 1226/01, the
Argentine national government permitted taxpayers to meet their tax obligations
with public-debt securities. The Bank took advantage of this opportunity by
allocating Argentine Republic External Notes, which were part of its portfolio,
to the payment of its tax obligations in fiscal year 2002 and part of fiscal
year 2003.

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<PAGE>

      Under U.S. GAAP, Argentine Republic External Notes are classified as
available for sale securities and recorded at market value, the respective
unrealized gain or loss being charged to the results for the year or to equity
through "Other Comprehensive Income," depending on whether it represents an
"other than temporary decline" in their value or not. These notes are and were
in default as of December 31, 2003. There are no published market values for
these securities. Virtually no trades of these securities occurred in 2003, nor
could the Bank use these securities to extinguish tax liabilities.

      For U.S. GAAP purposes as of December 31, 2003, the "fair value" of these
securities is considered the carrying value assigned to Argentine Republic
External Notes by the Argentine Central Bank for purposes of collateral values
for its debt to purchase the hedge bond, and the Bank believes this is a
reasonable estimate of their fair value. It is reasonably possible that the
amounts realized in an actual sale will differ significantly from the estimated
fair value.

      Banco Galicia holds retained interests in securitization trusts. Those
investments are carried at estimated fair market value. Determining fair market
values of such investments requires estimating future cash flows and applying a
discount rate to those cash flows. Such estimates do not purport to represent
what those securities could be sold for at the balance sheet date or what those
securities will be settled for. Changes in the values of such securities are
common. The values are affected by the performance of the underlying loans in
the trust and changes in estimated discount rates and other assumptions.
Discount rates are subject to significant fluctuations as affected by, among
other things, the economic and political situation in Argentina. Therefore, it
is reasonably possible that the estimated fair market value of those securities
will change in the near term in amounts that are material to the Bank's
financial statements.

IMPAIRMENT OF ASSETS OTHER THAN LOANS

      Certain assets, such as goodwill, equity investments, securities available
for sale and premises and equipment, are subject to an impairment review. Asset
impairment charges require considerable judgment and are recorded when market
value declines below the carrying value, other than temporary declines, or where
the cost of the asset is deemed to not be recoverable. Banco Galicia's assets
may be subject to further impairment charges in the short term.

DEFERRED TAX ASSET VALUATION ALLOWANCE

      Deferred tax assets and liabilities are recorded for the estimated future
tax effects of temporary differences between the carrying amounts of assets and
liabilities recorded for accounting and tax reporting purposes and for the
future tax effects of net operating loss carryforwards. We had a significant
amount of deferred tax assets as of December 31, 2001, December 31, 2002, and
December 31, 2003, and the carrying amounts of those deferred tax assets are
subject to management's judgment based on available evidence that realization is
more likely than not and they are reduced, if necessary, by a valuation reserve.
Based on the generation of significant tax losses in the last two years and on
the uncertainty with respect to the generation of taxable income in the near
term, a valuation reserve on the net deferred tax assets, except those
associated with certain of the Bank's subsidiaries for which realization is more
certain than not, has been recognized.

      In the event that all or part of our net deferred tax assets in the future
become realizable under U.S. GAAP, an adjustment to our deferred tax assets
would be credited to income tax expense in the period the determination was
made.

ASSETS NOT RECOGNIZED UNDER U.S. GAAP

      Under U.S. GAAP, the right to purchase the hedge bond is not considered an
asset under Financial Accounting Standards Board Statement of Financial
Accounting Concepts No. 6, Elements of Financial Statements. Under this concepts
statement, assets are defined as "... probable future economic benefits obtained
or controlled by an entity as a result of past transactions or events." In
addition, one of the three essential characteristics of an asset is that an
entity can obtain the benefit and can control others' access to it. As of
December 31, 2003, and as of December 31, 2002, the Bank could not obtain the
benefit of the hedge bond until the transaction is approved by the

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Argentine Central Bank and the Bank remits funds to the Argentine Central Bank.
The liability under U.S. GAAP would be recognized when the Bank actually enters
into the financing arrangement.

         As of December 31, 2003, under Argentine Banking GAAP, the Bank had
recorded under "Intangible Assets" the difference arising from the reimbursement
of restructured deposits at the market exchange rate pursuant to amparo claims
and the carrying value of these restructured deposits for Ps. 487.0 million. As
of December 31, 2002, the value of this difference was Ps. 446.8 million, which
had been recorded by the Bank under Argentine Banking GAAP under "Other
Receivables from Financial Brokerage." The receivable for differences related to
amparo claims does not represent an asset under U.S. GAAP.

ITEM 5B. LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY

         As a financial holding company, we generate our net earnings/losses
within our operating subsidiaries, including Banco Galicia, our main operating
subsidiary. Until 2001, the Bank was the primary source of funds available to
the holding company in the form of dividends.

         The Bank's dividend-paying ability was impaired by the effects of the
Argentine economic crisis since late 2001 on its income-generation capacity. In
addition, like other financial institutions operating in Argentina, the Bank was
prohibited from paying dividends by the Argentine Central Bank. Resolution No.
81/02 of the board of directors of the Argentine Central Bank prohibits the Bank
from paying dividends for as long as financial assistance from the Argentine
Central Bank is outstanding. In addition, the loan agreements entered into by
the Bank as part of its foreign debt restructuring limit the Bank's ability to
pay dividends on its capital stock. See Item 8. "Financial Information --
Dividend Policy and Dividends -- Dividend Policy."

         Our holding company has not received dividends from the Bank since
October 2001. See Item 8. "Financial Information -- Dividend Policy and
Dividends -- Dividends."

         The extent to which a banking subsidiary may extend credit or otherwise
provide funds to the holding company is limited by Argentine Central Bank rules.
For a description of these rules, see Item 4. "Information on the Company --
Argentine Banking System and Regulation -- Argentine Banking Regulation --
Lending Limits."

         Our current policy is to retain earnings to pay for our operating
expenses and to support the growth of our business. As of December 31, 2003, we
had cash and due from banks of Ps. 1.16 million and short-term investments of
Ps. 21.54 million.

         Our holding company holds US$43 million of subordinated negotiable
obligations issued by Galicia Uruguay and US$100 million of subordinated
negotiable obligations issued by Banco Galicia in exchange for the 149 million
preferred shares issued by us in connection with the Bank's foreign debt
restructuring. Both of these debt instruments pay semiannual interest. We use
these interest payments to pay our operating expenses.

         Our holding company does not have any financial debt outstanding.

         Each of our subsidiaries is responsible for its own liquidity
management.

         During 2001 and especially as a result of the outbreak of the Argentine
crisis in late 2001 and the perpetuation of a crisis environment in 2002, like
most Argentine companies, the Bank became unable to fund itself in the local and
international financial capital markets. The Bank's ability to raise funds in
the local and international markets declined substantially during 2001,
practically disappeared by late 2001 and remained substantially limited during
2002 and 2003, except for its ability to raise short-term deposits in the
Argentine market.

         The default on most of the Bank's outstanding debt obligations in 2002,
coupled with other effects of the Argentine crisis on us, including the overall
deterioration of our loan portfolio, severely impacted our financial condition.
As described under Item 4. "Information on the Company -- Business Overview --
Banco Galicia --

                                     -167-
<PAGE>
Galicia Capitalization and Liquidity Plan" and Item 4. "Information on the
Company -- Business Overview -- Banco Galicia -- Banco Galicia's Strategy," to
address its constraints and maintain its viability during this difficult period,
the Bank ceased payments on its financial debt obligations and implemented the
Galicia capitalization and liquidity plan in 2002. The plan's measures were
aimed at restoring the Bank's liquidity in the short term, at significantly
reducing operating costs (including streamlining its operations) and at
restructuring its foreign debt, including deposits of foreign branches and
subsidiaries, in a manner consistent with the Bank's repayment capacity in the
post-crisis financial environment. In 2002, the Bank restructured the financial
debt of its former New York branch and the deposits of Galicia Uruguay. In
addition, the Bank focused on maximizing collections from its existing loan
portfolio. In 2003, the Bank continued to focus on cost control and maximizing
collections from its existing loan portfolio and on seeking to restructure the
foreign indebtedness of the Bank's head office in Argentina and that of its
Cayman branch, as well as the Bank's debt with the Argentine Central Bank, as
described in this annual report. In the second half of 2002, the Bank's deposits
began to increase, a trend that continued in 2003. As a result, the Bank's
liquidity increased in 2002 and 2003, but was nevertheless insufficient to cover
its operating expenses and financial commitments in accordance with their
contractual terms. On May 18, 2004, the Bank completed its foreign debt
restructuring.

         In light of economic conditions in Argentina, it is unlikely that any
long-term financing will be available to us or to the Bank for the foreseeable
future. Management believes that in 2004 our holding company will fund its cash
needs arising from capital expenditures and financial commitments with cash
derived from our operations and the proceeds of the Galicia Uruguay and Banco
Galicia securities described above and that in 2004 Banco Galicia will fund its
cash needs arising from capital expenditures and financial commitments (after
the recent restructuring) at their current contractual maturity with the cash
derived from its operations, mainly by means of growth of its deposit base,
liquidity reserves and proceeds from its loan portfolio and government
securities. At the same time, the Bank will continue to focus on cost control.

         As of December 31, 2003, on a consolidated basis, we had Ps. 826.2
million in available cash (defined as total cash on hand and cash equivalents).

         Galicia Uruguay's activities were suspended in 2002 and remain
suspended as of the date of this annual report, and Galicia Cayman is in
provisional liquidation. See Item 4. "Information on the Company -- Business
Overview -- Banco Galicia -- Banco Galicia Uruguay S.A. and Banco de Galicia
(Cayman) Ltd." Galicia Uruguay's consolidated liquidity amounted as of December
31, 2003, to Ps. 17.6 million of cash, mainly comprising deposits at the Central
Bank of Uruguay and short-term placements in correspondent banks. These funds
were not available to us on a consolidated basis because they were reserved for
the payment of Galicia Uruguay's and Galicia Cayman's restructured deposits.

         For a discussion of the Bank's liquidity management, see " -- Banco
Galicia (Unconsolidated) Liquidity Management" below.

CONSOLIDATED CASH FLOWS

         Our consolidated statements of cash flows were prepared using the
measurement methods prescribed by the Argentine Central Bank, but in accordance
with the presentation requirements of Statement of Financial Accounting
Standards No. 95, Statement of Cash Flows (SFAS 95). SFAS 95 establishes
specific presentation requirements and additional disclosures but does not
provide guidance with respect to inflation-adjusted financial statements. In our
cash flow statements, the effect of inflation restatements and foreign exchange
gains and losses on cash flow related to financing and operating activities has
been included in the line item "Monetary Loss," and the effect of inflation on
cash balances has been included in a separate line item after cash flows from
investing activities. See our consolidated cash flow statements as of and for
the fiscal years ended December 31, 2003, and December 31, 2002, included in
this annual report.

         At the close of fiscal year 2003, our available cash (and cash
equivalents) had increased in the amount of Ps. 249.3 million from Ps. 576.8
million of available cash (and cash equivalents) at the close of the prior
fiscal year, representing an increase of 43.2%. This increase occurred despite
our Ps. 217.1 million net loss for fiscal year 2003.

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<PAGE>

         The increase in our available cash in fiscal year 2003 is explained by
the following changes, classified by type of cash-providing or cash-using
activity:

         -        the net use of cash by operating activities in the amount of
                  Ps. 409.8 million. This amount results from adding or
                  subtracting to the Ps. 217.1 million net loss for the fiscal
                  year (i) all of the income statement items that did not
                  represent a decrease or increase, respectively, in cash and
                  (ii) all transactions related to operating activities that
                  involve an increase or a decrease in cash. During 2003, the
                  items that did not represent a decrease in cash available and
                  that therefore must be added to the fiscal year net loss were
                  (i) depreciation and amortization of fixed assets and
                  intangible assets for Ps. 215.9 million; (ii) an increase in
                  allowances for loans and other losses, net of reversals, for
                  Ps. 118.9 million; and (iii) the Ps. 102.7 million increase in
                  assets in connection with the recording of the compensation
                  for asymmetric indexation. The items that did not represent an
                  increase in cash and that therefore must be subtracted to the
                  fiscal year's net loss were (i) a Ps. 324.1 million increase
                  in assets due to the CER adjustment accrued and (ii) the Ps.
                  90.2 million decrease in the receivable for the compensatory
                  bond related to the adjustment that the Bank made to the
                  carrying value of compensation to be received for asymmetric
                  pestification. In addition, the following items generated cash
                  movements: Ps. 309.2 million was used to increase government
                  securities (Lebac), and Ps. 33.6 million was provided in
                  connection with the decrease in other assets net of the
                  decrease in other liabilities, primarily representing interest
                  on these assets and liabilities and fees collected or paid,
                  respectively.

         -        the net generation of cash by investing activities in the
                  amount of Ps. 695.6 million, mainly attributable to the net
                  effect of: (i) the increase in available cash for Ps. 800.5
                  million as a result of a net decrease in the Bank's loan
                  portfolio, reflecting primarily a decrease in Galicia
                  Uruguay's loan portfolio ; and (ii) a Ps. 90.9 million net use
                  of cash applied to an increase in fixed assets.

         -        the net use of cash by financing activities in the amount of
                  Ps. 31.6 million, mainly attributable to: (i) a Ps. 782.7
                  million increase in cash generated by an increase in deposits.
                  This increase is net of the payment by Galicia Uruguay and
                  Galicia Cayman, during 2003, of the first and second
                  installments contemplated in the deposit restructuring
                  agreements reached with depositors; (ii) a Ps. 537.1 million
                  amortization of long term indebtedness, reflecting mainly the
                  payments by Galicia Uruguay of negotiable obligations issued
                  by this company to restructure its deposits, which payments
                  corresponded to the above mentioned first and second
                  installments contemplated in the deposit restructuring
                  agreement reached with depositors, the payment made by Galicia
                  Uruguay to settle the exchange offered to customers in 2003 of
                  restructured deposits for different alternatives, including a
                  cash payment; and (iii) payments made by the Bank's Argentine
                  operation in connection with the financial assistance for
                  liquidity support owed to the Argentine Central Bank, mainly
                  corresponding to the payment of interest, in the amount of Ps.
                  252.6 million.

         Fiscal year 2002 Compared to Calendar 2001

         As of December 31, 2002, our available cash (and cash equivalents)
amounted to Ps. 576.8 million, Ps. 563.1 million lower than the Ps. 1,139.9
million as of December 31, 2001. The decrease in our available cash in fiscal
year 2002 is explained by the following changes, classified by type of
cash-providing or cash-using activity:

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         -        the use of cash by operating activities in the amount of Ps.
                  936.3 million. This amount results from net losses of Ps.
                  1,471.5 million during the fiscal year, to which the following
                  noncash income statement items must be added: (i) the Ps.
                  2,081.7 million increase in allowances for loans and other
                  losses, net of reversals, primarily due to the deterioration
                  of our loan portfolio; (ii) the monetary loss amounting to Ps.
                  1,579.8 million due to the effect of inflation on our net
                  liquid asset position and to the high inflation rate of the
                  year (approximately 118.44%); and (iii) a Ps. 419.1 million
                  increase in other assets. In addition, the following noncash
                  items must be deducted: (ii) the absorption of losses with the
                  balance of the Unrealized Valuation Difference account, for
                  Ps. 1,370.0 million; (ii) the recording of unrealized foreign
                  exchange gains for Ps. 516.9 million, (iii) the Ps. 1,630.6
                  million increase in assets due to the CER adjustment accrued;
                  and (iv) a Ps. 254.4 million decrease in other liabilities.

         -        the generation of cash by investing activities in the amount
                  of Ps. 2,616.3 million, substantially all of which were
                  attributable to the collection of loans. The Bank
                  significantly reduced its loan origination activities in 2002
                  due to the economic crisis in Argentina and its lack of
                  funding sources.

         -        the use of cash by financing activities in the amount of Ps.
                  1,555.8 million. This amount was mainly attributable to: (i) a
                  Ps. 6,016.7 million net decrease in our deposits, reflecting
                  payments on deposits; (ii) a Ps. 3,397.1 million net increase
                  in funds from short-term borrowings, mainly reflecting net
                  proceeds from the Argentine Central Bank financial assistance;
                  and (iii) a Ps. 1,112.5 million net increase in repurchase
                  agreements, also reflecting an increase in borrowings from the
                  Argentine Central Bank.

BANCO GALICIA CONSOLIDATED LIQUIDITY GAPS

         Liquidity risk is the risk that liquid assets are not available for the
Bank to meet financial commitments at contractual maturity, take advantage of
potential investment opportunities, and meet demand for credit.

         To monitor and control liquidity risk, the Bank monitors and
systematically calculates the gaps between financial assets and liabilities
maturing within set time intervals based on contractual maturity. All of the
deposits in current accounts and other demand deposits and deposits in savings
accounts are included in the first time interval. These figures are used to
simulate different liquidity crisis scenarios based on assumptions stemming from
historical experience.

         As of December 31, 2003, the gaps between maturities of the Bank's
financial assets and liabilities based on contractual maturity were as follows:

<TABLE>
<CAPTION>
                                                                              AS OF DECEMBER 31, 2003 (1)
                                              -------------------------------------------------------------------------------------
                                               LESS THAN                                  OVER 10         UNDER
                                                ONE YEAR    1 - 5 YEARS  5 - 10 YEARS      YEARS      RESTRUCTURING        TOTAL
                                                --------    -----------  ------------      -----      -------------        -----
                                                                       (in millions of pesos, except ratios)
<S>                                           <C>           <C>          <C>            <C>           <C>               <C>
ASSETS
 Cash and Due from Banks...................   Ps.   660.6             -             -             -              -      Ps.   660.6
 Argentine Central Bank - Escrow Accounts..         227.5             -             -             -              -            227.5
 Overnight Placements......................          15.2             -             -             -              -             15.2
 Loans.....................................       2,052.8   Ps. 1,336.3   Ps. 5,183.7   Ps. 2,053.9              -         10,626.7
 Government Securities.....................         375.1       3,041.0       3,033.6             -   Ps.    819.1 (2)      7,268.8
 Corporate Debt Securities.................          88.3             -             -           5.0            8.8            102.1
 Financial Trusts (Galtrust I, II and V -
   Galicia Mortgage Loans Trust)...........           3.6         181.1         352.7         321.2              -            858.6
 Financial Trusts (Special Fund Former
   Almafuerte and Mendoza Banks)...........             -         271.0             -             -              -            271.0
 Assets under Financial Lease..............           8.9          13.1           2.5             -              -             24.5
 Secured Loans Granted as Collateral of
   the FFAEFyS Loan........................             -             -         173.6             -              -            173.6
   TOTAL ASSETS............................   Ps. 3,432.0   Ps. 4,842.5   Ps. 8,746.1   Ps. 2,380.1   Ps.    827.9      Ps.20,228.6
LIABILITIES
 Saving Accounts...........................   Ps. 1,121.6             -             -             -              -      Ps. 1,121.6
</TABLE>

                                     -170-
<PAGE>

<TABLE>
<CAPTION>
                                                                            AS OF DECEMBER 31, 2003 (1)
                                            -------------------------------------------------------------------------------------
                                             LESS THAN                                      OVER 10       UNDER
                                              ONE YEAR     1 - 5 YEARS    5 - 10 YEARS       YEARS     RESTRUCTURING       TOTAL
                                              --------     -----------    ------------       -----     -------------       -----
                                                                  (in millions of pesos, except ratios)
<S>                                         <C>            <C>            <C>               <C>        <C>              <C>
Demand Deposits..........................       1,035.7              -               -             -              -         1,035.7
Time Deposits............................       1,893.7    Ps.   550.0     Ps.   412.1             -              -         2,855.8
Restructured Deposits and CEDROS.........         320.5          164.8            72.0             -              -           557.3
Lines of Credit - Domestic Banks.........           3.9           29.8               -             -              -            33.7
Argentine Central Bank ..................         258.1        2,883.5         4,948.4             -              -         8,090.0
Negotiable Obligations...................         123.6          786.4           461.4             -              -         1,371.4
Foreign Debt being Restructured .........             -              -               -             -    Ps. 3,958.6(3)      3,958.6
Other Borrowings.........................          48.0           99.4             3.5             -              -           150.9
Creditors Resulting from Assets under
Financial Leases.........................           7.4            8.2             2.5             -              -            18.1
Other Liabilities (4)....................         376.5          319.5             6.6             -           38.8(5)        741.4
  TOTAL LIABILITIES......................   Ps. 5,189.0    Ps. 4,841.6     Ps. 5,906.5             -    Ps. 3,997.4     Ps.19,934.5
                                            -----------    -----------     -----------       -------    -----------     -----------
Asset / Liability Gap....................      (1,757.0)           0.9         2,839.6       2,380.1       (3,169.5)          294.1
Cumulative Gap...........................      (1,757.0)      (1,756.1)        1,083.5       3,463.6          294.1           294.1
Ratio of Cumulative Gap to Cumulative
  Liabilities............................         (33.9)%        (17.5)%           6.8%         21.7%           1.5%
Ratio of Cumulative Gap to Total
  Liabilities............................          (8.8)%         (8.8)%           5.4%         17.4%           1.5%
                                            -----------    -----------     -----------       -------    -----------     -----------
</TABLE>

(1)  Principal only. Does not include interest.

(2)  Represents the Bank's holdings of Argentine Republic External Notes,
     currently comprised in the sovereign'sdebt restructuring.

(3)  Aggregate principal amount of foreigndebt of the Bank's head office in
     Argentina and of its Cayman branch subject to restructuring, which was
     completed on May 18, 2004.

(4)  Includes debt with a local bank (Banco de Inversion y Comercio Exterior),
     debt with Sedesa and the FFAEFyS, debt with retailers due to credit card
     operations, negotiable obligations of the regional credit card companies
     and miscellaneous liabilities.

(5)  Includes debt with Banco de Inversion y Comercio Exterior and negotiable
     obligations of the regional credit card companies.

         In the table above, assets and liabilities in payment default as of
December 31, 2003, were included in the column under the heading "under
restructuring," including the Bank's foreign debt, the restructuring of which
was completed on May 18, 2004.

         The Bank has established a limit for the ratio of "cumulative gap" to
"total liabilities" of 25% for the "less than one year" negative gap. The table
above shows that the Bank was in compliance with this limit as of December 31,
2003. It should be noted that the restructuring of the foreign debt of the
Bank's head office and its Cayman branch, completed on May 18, 2004, does not
affect this ratio because the new debt issued by the Bank is long-term debt
maturing in more than one year, except for US$26.6 million in trade debt, which
is to be repaid over 12 months beginning in June 2004, and debt that did not
participate in the restructuring (US$22.9 million in aggregate principal as of
May 18, 2004). The latter is not expected to generate material cash payments in
2004.

BANCO GALICIA (UNCONSOLIDATED) LIQUIDITY MANAGEMENT

         The following discussion of the Bank's liquidity management excludes
the consolidated companies.

         Banco Galicia's policy is to maintain a level of liquid assets that
allows it to meet financial commitments at contractual maturity, to take
advantage of potential investment opportunities and to meet demand for credit.
To set the appropriate level, forecasts are made based on historical experience
and analysis of possible scenarios. This enables management to project funding
needs and alternative funding sources, as well as excess liquidity and placement
strategies for such funds.

         As of December 31, 2003, the Bank's liquidity structure in Argentina
was as follows:

<TABLE>
<CAPTION>
                                                  AS OF DECEMBER 31, 2003
                                                  -----------------------
                                                   (in millions of pesos)
<S>                                               <C>
Legal Requirement......................                   Ps. 777.0
Excess Liquidity.......................                       177.5
                                                          ---------
TOTAL LIQUIDITY (1) ...................                   Ps. 954.5
                                                          =========
</TABLE>

(1) Excludes cash of Galicia Uruguay, the Cayman branch and related companies.

                                     -171-
<PAGE>

         Legal liquidity refers to the "minimum cash requirements" set by
regulations of the Argentine Central Bank minus the permitted reduction in the
requirement in the amount of the balance of the "Special Fund Former Almafuerte
and Mendoza Banks" (Argentine Central Bank Resolution No. 36/03).

         Excess liquidity consists of overnight placements in foreign banks,
checks purchased, short-term loans to prime companies, Lebac (in each case for
the last three items, with an average life not exceeding 30 days) and the
balances held at the Argentine Central Bank in excess of the minimum cash
requirements.

         The legal requirements comprised the minimum cash requirements and the
"minimum placement requirements" until November 2003, when Argentine Central
Bank Communique "A" 4032 repealed the latter and unified the minimum cash
requirements for peso- and dollar-denominated assets and liabilities. At the
close of fiscal year 2003, the percentages of the minimum cash requirements
applicable by virtue of Argentine Central Bank Communique "A" 4051 were as
follows:

         -        demand deposits: 20%

         -        time deposits and CEDROs (by remaining maturity): up to 29
                  days: 18%; from 30 to 59 days: 14%; 60 to 89 days: 10%; 90 to
                  179 days: 5%; 180 to 365 days: 3%; and more than 365 days: 0%.

         The assets computable for compliance with this requirement are
technical cash, which comprises bills and coins, the balances of peso- and
dollar-denominated deposit accounts at the Argentine Central Bank and the escrow
accounts held at the Argentine Central Bank in favor of clearinghouses.

         The Bank's management has defined a total liquidity objective, which
was determined based on the analysis performed on the behavior of the Bank's
deposits during the crisis that affected the financial system at the end of 2001
and during the first half of 2002 (considered as the "worst-case" scenario). Two
liquidity levels were defined: "operational liquidity" (to address the Bank's
daily operations) and "additional liquidity" (excess amount available at any
possible crisis). Deposits were classified into "wholesale deposits" (deposits
raised by the trading desk) and "retail deposits."

         "Operational liquidity" was established at 7% of retail demand deposits
and term deposits maturing in less than 10 days, plus the balance in the escrow
accounts held at the Argentine Central Bank and balances in correspondent banks.

         "Additional liquidity" is variable depending on the remaining maturity
of total deposits, including CEDROs. As a result of the analysis performed, the
Bank defined a floor for "additional liquidity" at 60% of the necessary funds to
bear the worst-case scenario. "Additional liquidity" included in the table above
amounted to Ps. 718.3 million, reaching 66.7% of the worst-case scenario
percentage in excess of the policy determined by the Bank.

CAPITAL

         Our capital adequacy is not under the supervision of the Argentine
Central Bank.

         Our capital management policy is designed to ensure prudent levels of
capital.

         We, as well as our controlled companies, except for Banco Galicia and
the affiliates of Sudamericana Holding S.A. mentioned in the paragraph below,
are regulated by the Commercial Companies' Law. That statute provides that the
capital of a corporation cannot be less than Ps. 12,000.

         The insurance companies held by Sudamericana Holding S.A. are Galicia
Vida Compania de Seguros S.A., Galicia Retiro Compania de Seguros S.A., Galicia
Patrimoniales Compania de Seguros S.A. and Instituto de Salta Compania de
Seguros de Vida S.A. These companies meet the minimum capital requirements set
by General Resolution No. 25,804 of the National Insurance Superintendency. See
Item 4. "Information on the Company -- Minimum Capital Requirements of
Nonbanking Companies."

                                     -172-
<PAGE>

         As of December 31, 2003, the computable capital of the companies held
by Sudamericana Holding S.A. exceeded the minimum requirement of Ps. 11.7
million by Ps. 19.6 million, representing an excess of approximately 167%.

         Sudamericana Holding S.A. also holds interests in Medigap Salud S.A.
(formerly, Hartford Salud S.A.) and Sudamericana Asesores de Seguros S.A. Both
companies are regulated by the Commercial Companies' Law. Sudamericana Asesores
de Seguros S.A. is also regulated by the National Insurance Superintendency.

         The following table analyzes our capital resources as of the dates
indicated.

<TABLE>
<CAPTION>
                                                                         GRUPO GALICIA
                                                   -------------------------------------------------------
                                                                      AS OF DECEMBER 31,
                                                   -------------------------------------------------------
                                                         2003                      2002           2001
                                                         ----                      ----           ----
                                                   (in millions of              (in millions of February
                                                     pesos, except              28, 2003, constant pesos,
                                                   ratios, multiples            except ratios, multiples
                                                    and percentages)                and percentages)
<S>                                                <C>                         <C>             <C>
Shareholders' Equity ..........................       Ps. 1,462.3              Ps. 1,638.7     Ps. 3,103.5
Shareholders' Equity as a Percentage of Total
  Assets ........................................            6.39%                    6.86%          11.13%
Total Liabilities as a Multiple of Total                    14.66x
  Shareholders'  Equity..........................                                    13.59x           7.98x
Tangible Shareholders' Equity(1) as a                        3.21%
Percentage of Total Assets.......................                                     5.51%           9.35%
Total Capital Ratio..............................               -                        -               -
Excess Capital over Required Minimum Capital.....               -                        -               -
                                                      -----------              -----------     -----------
</TABLE>

(1) Tangible shareholders' equity represents shareholders' equity minus
intangible assets.

         The Argentine Central Bank supervises the capital adequacy of Banco
Galicia on an unconsolidated basis and consolidated with its significant
subsidiaries, Galicia Uruguay and the five regional credit card companies that
Banco Galicia controls. The Argentine Central Bank's minimum capital requirement
regime was suspended during the whole of 2002. In June 2003, the Argentine
Central Bank issued a new minimum capital requirement regime, which became
effective on January 1, 2004. The Bank has been in compliance with this new
capital adequacy regime in 2004. See Item 4. "Information on the Company --
Argentine Banking System and Regulation -- Argentine Banking Regulation --
Capital Adequacy Requirements." For more information on Banco Galicia's capital
adequacy, see Item 4. "Information on the Company -- Selected Statistical
Information -- Regulatory Capital."

CAPITAL EXPENDITURES

         For a description of our capital investments and capital expenditures
in 2003 and our capital commitments for 2004, see Item 4. "Information on the
Company -- Capital Investments and Divestitures."

                                     -173-
<PAGE>

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

OUR BOARD OF DIRECTORS

         Our ordinary shareholders' meeting took place on April 22, 2004. The
following table sets out the members of our board of directors as of April 22,
2004, all of whom are resident in Buenos Aires, Argentina, the positions they
hold within Grupo Galicia, their dates of birth, their principal occupations and
when their terms end.

<TABLE>
<CAPTION>
                                                                                        PRINCIPAL           CURRENT
         NAME                        POSITION                   DATE OF BIRTH          OCCUPATION          TERM ENDS
----------------------    -------------------------------     -----------------       -------------      --------------
<S>                       <C>                                 <C>                     <C>                <C>
Antonio Garces            Chairman of the Board and Chief     May 30, 1942            Banker             April 23, 2005
                          Executive Officer
Federico Braun            Vice-Chairman                       February 4, 1948        Businessman        April 23, 2005
Abel Ayerza               Director                            May 27, 1939            Businessman        April 23, 2006
Eduardo J. Zimmermann     Director                            January 3, 1931         Businessman        April 23, 2006
Silvestre Vila Moret      Director                            April 26, 1971          Businessman        April 23, 2005
Marcelo L.S. Tonini       Director                            March 11, 1931          Businessman        April 23, 2006
Pablo Gutierrez           Alternate Director                  December 9, 1959        Banker             April 23, 2006
Pedro Richards            Alternate Director                  November 14, 1952       Businessman        April 23, 2006
Maria Ofelia              Alternate Director                  December 30, 1920       Businesswoman      April 23, 2005
Hordenana de Escasany
Luis Sila Monsegur        Alternate Director                  August 15, 1936         Accountant         April 23, 2005
Alejandro Maria Rojas     Alternate Director                  July 17, 1937           Attorney           April 23, 2005
Lagarde
Sergio Grinenco           Alternate Director                  May 26, 1948            Banker             April 23, 2006
</TABLE>

         Antonio Roberto Garces: Mr. Garces obtained a degree in national public
accounting at the Universidad de Buenos Aires. He has been associated with the
Bank since 1959. Mr. Garces is also the president of Banco Galicia and Gal
Mobiliaria S.A. de Ahorro para Fines Determinados and a lifetime trustee of the
Fundacion Banco de Galicia y Buenos Aires.

         Federico Braun: Mr. Braun obtained a degree in industrial engineering
at the School of Engineering of the Universidad de Buenos Aires. He was
associated with the Bank from 1984 to 2002. Mr. Braun is president of Codigo
S.A., Batel Forestal S.A., Campos de la Patagonia S.A., Garabi Forestal S.A.,
Martseb S.A., Pablo Lafont S.A., Estancia Anita S.A., and S.A. Importadora y
Exportadora de la Patagonia; vice president of Club de Campo "Los Pinguinos"
S.A., Inmobiliaria y Financiera "La Josefina" S.A., Asociacion de Supermercados
Unidos and Mayoristanet.com S.A.; a Director of Asociacion Empresaria Argentina
and a lifetime trustee of the Fundacion Banco de Galicia y Buenos Aires.

         Abel Ayerza: Mr. Ayerza obtained a degree in business administration at
the Universidad Catolica Argentina. He was associated with the Bank from 1966 to
2002. Mr. Ayerza is president of Aygalpla S.A. and a lifetime trustee (and
second vice president) of the Fundacion Banco de Galicia y Buenos Aires.

         Eduardo Jesus Zimmermann: Mr. Zimmermann obtained a degree in banking
management at the Universidad Argentina de la Empresa. He was associated with
the Bank from 1958 to 2002, including his service as a member of the Bank's
board of directors from 1975 to 2002. Mr. Zimmermann is a lifetime trustee of
the Fundacion Banco de Galicia y Buenos Aires.

         Silvestre Vila Moret: Mr. Vila Moret studied banking administration at
the Universidad Catolica Argentina. He was associated with the Bank from 1997 to
2002. Mr. Vila Moret is president of Inversora en Servicios S.A. and vice
president of El Benteveo S.A. Mr. Vila Moret is the grandson of Maria Ofelia
Hordenana de Escasany.

                                     -174-
<PAGE>

         Marcelo Lorenzo Silvio Tonini: Mr. Tonini obtained a degree in banking
management at the Universidad Argentina de la Empresa. He held a variety of
positions at Banco Galicia beginning in 1963, including serving as a member of
the board of directors of the Bank from 1985 to 1998. Currently, Mr. Tonini is
president of Maradona S.A. and a lifetime trustee of the Fundacion Banco de
Galicia y Buenos Aires.

         Pablo Gutierrez: Mr. Gutierrez obtained a degree in business
administration from the Universidad de Buenos Aires. Since 1985, he has been
associated with Banco Galicia, where he serves as the head of the finance
division. Mr Gutierrez is also vice president of Galicia Valores S.A. Sociedad
de Bolsa, Galicia Pension Fund Ltd., Argenclear S.A. and Agrogalicia S.A. and
alternate director of Sudecor Valores S.A.

         Pedro A. Richards: Mr. Richards obtained a degree in economics from the
Universidad Catolica Argentina and holds a master of science in management from
the Sloan School of Management at the Massachusetts Institute of Technology. He
was a director of the National Development Bank (BANADE). He has been associated
with Banco Galicia since 1990. He was a member of the board of directors of
Galicia Capital Markets S.A. between 1992 and 1994. Since August 2000, he has
been our managing director. Mr. Richards is also vice president of Sudamericana
Holding S.A, Galicia Warrants S.A. and Net Investment S.A.

         Maria Ofelia Hordenana de Escasany: Mrs. Hordenana de Escasany held a
variety of positions at various subsidiaries of Banco Galicia. Currently, she is
president of the Fundacion Banco de Galicia y Buenos Aires and Santamera S.A.
and vice president of Santa Ofelia S.A.

         Luis Sila Monsegur: Mr. Monsegur obtained a degree in national public
accounting at the Universidad de Buenos Aires. He held a variety of positions at
Banco Galicia from 1962 to 1992 and is an alternate trustee of the Fundacion
Banco de Galicia y Buenos Aires.

         Alejandro Maria Rojas Lagarde: Mr. Rojas Lagarde obtained a degree in
law at the Universidad de Buenos Aires. He held a variety of positions at Banco
Galicia beginning in 1963. From 1965 to January 2000, he was responsible for the
general counsel office of Banco Galicia. Currently, he is a lifetime trustee of
the Fundacion Banco de Galicia y Buenos Aires and a director of Santiago Salud
S.A.

         Sergio Grinenco: Mr. Grinenco obtained a degree in economics at the
Universidad Catolica Argentina and a master's degree in business administration
from Babson College in Wellesley, Massachusetts. He has been associated with the
Bank since 1977. Mr. Grinenco is vice president of Banco Galicia, liquidator of
Galicia Equity Analysis S.A. "En Liquidacion" and a director of Galicia Valores
S.A. Sociedad de Bolsa and Galicia Capital Markets S.A.. Mr. Grinenco is also an
alternate trustee of the Fundacion Banco de Galicia y Buenos Aires.

         Our board of directors may consist of between three and nine permanent
members; currently it has six members. In addition, the number of alternate
directors -- individuals to act in the temporary or permanent absence of a
director -- has been set at six. The directors and alternate directors are
elected by the shareholders at our annual general shareholders' meeting.
Directors and alternate directors may be elected for either a two-or three-year
term.

         Some of our directors are directors of Banco Galicia. Some members of
our board of directors may serve on the board of directors of any subsidiary we
establish in the future.

         Three of our directors are members of the families that are controlling
shareholders of Grupo Galicia.

FUNCTIONS OF OUR BOARD OF DIRECTORS

         Members of our board of directors serve on the following committees:

         Audit Committee: In compliance with CNV rules regarding the composition
of the audit committee of companies listed in Argentina, which require that the
audit committee be comprised of at least three directors, with a majority of
independent directors, the board of directors established an audit committee
with three members. The ordinary shareholders' meeting held on April 22, 2004,
elected Messrs. Eduardo Zimmermann, Marcelo L. S. Tonini and Abel Ayerza as
members of the audit committee. Messrs. Zimmermann and Tonini are independent
directors

                                     -175-
<PAGE>

under the CNV requirements and as defined by the new Nasdaq rules that become
applicable to foreign private issuers like us July 31, 2005. The third member,
Mr. Ayerza, a nonindependent director, was appointed to the audit committee by
our board of directors. All three members of the audit committee are financially
literate and have extensive managerial experience. The board of directors has
determined that Mr. Tonini is the financial expert serving on its audit
committee.

         The audit committee is primarily responsible for (i) expressing an
opinion on the board of directors' proposed independent auditor and ensuring
that independence criteria are met; (ii) supervising the reliability of our
internal control system, including the accounting system, and of external
reporting of financial or other information; (iii) verifying compliance with the
applicable conduct rules; (iv) issuing an opinion on related party transactions
and disclosing any transaction where a conflict of interest exists with
corporate governance bodies and controlling shareholders; and (v) reviewing the
annual working plan of our internal and independent auditors, and issuing an
opinion thereof. The audit committee has access to all information and
documentation that it requires and is broadly empowered to fulfill its duties.
For 2004, the audit committee has scheduled at least eight meetings.

         Committee for Information Integrity: This committee was established in
response to the U.S. Sarbanes-Oxley Act of 2002. The responsibility of this
committee is to review and approve controls over the public disclosure of
financial and related information, and other procedures necessary to enable our
chief financial officer and chief executive officer to provide their
certifications of the annual report that is filed with the U.S. Securities and
Exchange Commission. The members are Messrs. Antonio Garces, Pedro Richards,
Jose Luis Gentile and Adrian Enrique Pedemonte. In addition, at least one of the
members of this committee attends all of the meetings of the Bank's committee
for information integrity.

OUR SUPERVISORY COMMITTEE

         Our bylaws provide for a supervisory committee consisting of three
members who are called "syndics" and three alternate members who are called
"alternate syndics." In accordance with the Argentine Companies Law and our
bylaws, the syndics and alternate syndics are responsible for ensuring that all
of our actions are in accordance with applicable Argentine law. Syndics and
alternate syndics are elected by the shareholders at the annual general
shareholders' meeting. Unlike directors, syndics and alternate syndics do not
have management functions. Syndics are responsible for, among other things,
preparing a report to shareholders analyzing our financial statements for each
year and recommending to the shareholders whether to approve such financial
statements. Alternate syndics act as alternates in the temporary or permanent
absence of a syndic. Currently, there are three syndics and three alternate
syndics. Syndics and alternative syndics are elected for a one-year term.

         The following table shows the members of our supervisory committee.
Each of our syndics was appointed at the ordinary shareholders' meeting held on
April 22, 2004.

<TABLE>
<CAPTION>
                                                         PRINCIPAL           CURRENT TERM
       NAME                        POSITION              OCCUPATION              ENDS
------------------             ----------------      -----------------      --------------
<S>                            <C>                   <C>                    <C>
Adolfo Melian                  Syndic                Lawyer                 April 22, 2005
Norberto Corizzo               Syndic                Public Accountant      April 22, 2005
Luis O. Oddone                 Syndic                Public Accountant      April 22, 2005
Miguel N. Armando              Alternate Syndic      Lawyer                 April 22, 2005
Alejandro H. Massa             Alternate Syndic      Public Accountant      April 22, 2005
Miguel C. Maxwell              Alternate Syndic      Public Accountant      April 22, 2005
</TABLE>

         Adolfo Hector Melian: Mr. Melian obtained a law degree at the
Universidad de Buenos Aires. He has been associated with the Bank since 1970. He
served as counsel to the Bank's board of directors until 1975. Mr. Melian is
also a syndic of Banco Galicia and Tarjetas del Mar S.A., a lifetime trustee of
the Fundacion Banco de Galicia y Buenos Aires and an alternate syndic of
Tarjetas Cuyanas S.A., Tarjetas Regionales S.A. and Tarjeta Naranja S.A.

         Norberto Daniel Corizzo: Mr. Corizzo obtained a degree in national
public accounting at the Universidad de Buenos Aires. He has been associated
with the Bank since the 1977. Mr. Corizzo is also syndic of Banco Galicia,

                                     -176-
<PAGE>

Tarjetas Regionales S.A., Tarjetas del Mar S.A., Tarjeta Naranja S.A., Tarjetas
Cuyanas S.A., Sudecor Valores S.A. Sociedad de Bolsa, Galicia Capital Markets
S.A., Galicia Valores S.A. Sociedad de Bolsa, Galicia Factoring y Leasing S.A.,
Agro Galicia S.A., Net Investment S.A. and Banco Galicia Uruguay S.A.

         Luis Omar Oddone: Mr. Oddone obtained a degree in national public
accounting at the Universidad de Buenos Aires. Mr. Oddone is president of La
Cigarra S.A., vice president of Scharstorf S.A., syndic of Net Investment S.A.,
Tradecom Argentina S.A., Tarjetas Regionales S.A, Tarjetas del Mar S.A.,
Tarjetas Cuyanas S.A., Tarjeta Naranja S.A. and various other Argentine
corporations and an alternate syndic of Banco Galicia.

         Miguel Norberto Armando: Mr. Armando obtained a law degree at the
Universidad de Buenos Aires. He was first elected a syndic of the Bank in 1986.
Mr. Armando is also a director of Arnoar S.A. and an alternate syndic of Banco
Galicia, EBA Holding S.A. and Tarjetas del Mar S.A.

         Alejandro H. Massa: Mr. Massa obtained a degree in national public
accounting at the Universidad de Buenos Aires in 1978. Mr. Massa is a partner at
Deloitte & Co. S.R.L. He is a syndic of numerous companies, including Met AFJP
Sudamericana Holdings S.A. and its subsidiaries, Net Investment S.A. and Galicia
Warrants S.A., and an alternate syndic of Tarjetas Regionales S.A.

         Miguel C. Maxwell: Mr. Maxwell obtained a degree in national public
accounting at the Universidad de Buenos Aires in 1979. Mr. Maxwell has been a
partner at Deloitte & Co. S.R.L. since 1986. He is a syndic of numerous
companies, including Cobranzas Regionales S.A., Galicia Capital Markets S.A.,
Galicia Factoring y Leasing S.A., Galicia Retiro Cia. de Seguros S.A., Galicia
Vida Cia de Seguros S.A., Galicia Warrants S.A., Net Investment S.A.,
Sudamericana Holding S.A. and Tarjetas Regionales S.A.

COMPENSATION OF DIRECTORS

         We do not intend to pay fees to the members of our board of directors
who are also members of the board of directors of Banco Galicia. Currently, the
only compensation paid to the members of our board of directors who are also
members of the board of directors of Banco Galicia is paid by Banco Galicia for
their services to Banco Galicia. We intend to pay a nominal fee to those members
of our board of directors who are not members of the board of directors of Banco
Galicia as compensation for their services. Because we recorded a loss this
fiscal year, we did not pay any fees to such directors this year. For a
description of the amounts to be paid to the board of directors of Banco
Galicia, see " -- Compensation of Banco Galicia's Directors" below.

         We do not maintain a stock-option, profit-sharing or pension plan or
any other retirement plan for the benefit of our directors, nor do our directors
qualify for benefits upon termination of employment.

         In connection with the Bank's foreign debt restructuring, we agreed to
limit the amounts paid to the members of our board of directors during any
fiscal year and agreed not to make any payments to our management in excess of
market compensation. See Item 10. "Additional Information -- Material
Contracts."

MANAGEMENT OF GRUPO GALICIA

         Grupo Galicia's organizational structure consists of a managing
director, who reports to the board of directors, and two managers who report
directly to the managing director, the financial and accounting manager and the
investor relations manager.

         The managing director's main function is implementing policies defined
by our board of directors and to oversee the financial and accounting department
and investor relations.

         The financial and accounting manager is mainly responsible for
assessing current and potential investments, (e.g., suggesting whether we should
invest or divest our position in various companies or businesses). His
department also plans and coordinates our administrative services and financial
resources in order to ensure their proper management. His department is also
responsible for meeting requirements set by several controlling bodies,

                                     -177-
<PAGE>

complying with information requirements and for internal controls and budgeting.
Our financial and accounting manager is Jose Luis Gentile, who was born March
15, 1956.

         The investor relations manager is in charge of the functions related to
communication channels and services to local and foreign institutional investors
as well as retail investors and research analysts and follow-up of their
opinions. He prepares periodic reports with respect to our capital stock,
evolution of and trading volume. Our investor relations manager is Pablo Eduardo
Firvida, who was born March 17, 1967.

         We do not maintain a stock-option, profit-sharing or pension plan or
any other retirement plan for the benefit of our management, nor does our
management qualify for benefits upon termination of employment.

BOARD OF DIRECTORS OF BANCO GALICIA

         The ordinary and extraordinary shareholders' meeting held on April 29,
2004, established the size of the Bank's board of directors at eight members and
five alternate directors. The following table sets out the members of our board
of directors as of April 29, 2004, all of whom are resident in Buenos Aires,
Argentina, the years of appointment, position currently held by each of them,
their dates of birth, their principal occupations and when their term ends. The
business address of the members of the board of directors is Tte. General J. D.
Peron 407, (C1038AAI) Buenos Aires, Argentina.

<TABLE>
<CAPTION>
                               YEAR OF             PRINCIPAL                  DATE OF         CURRENT
          NAME               APPOINTMENT           POSITION                    BIRTH         OCCUPATION        TERM ENDS
------------------------     -----------   -------------------------     ------------------  ----------    -----------------
<S>                          <C>           <C>                           <C>                 <C>           <C>
                                           Chairman of the Board and
Antonio R.  Garces           2001          Chief Executive Officer       May 30, 1942        Banker        December 31, 2005

                                           Vice-Chairman and Chief
Sergio Grinenco              2003          Financial Officer             May 26, 1948        Banker        December 31, 2005

Enrique M.  Garda
Olaciregui                   2003          Director and Secretary        April 29, 1946      Banker        December 31, 2004

Daniel A.  Llambias          2004          Director                      February 8, 1947    Banker        December 31, 2006

Luis M.  Ribaya              2003          Director                      July 17, 1952       Banker        December 31, 2004

Guillermo J.  Pando          2003          Director                      October 23, 1948    Banker        December 31, 2004

Eduardo O. Del Piano (1)
(2)                          2004          Director                      May 12, 1938        Accountant    December 31, 2006

Pablo M.  Garat (1) (2)      2004          Director                      January 12, 1953    Lawyer        December 31, 2006

Guillermo A.  Laje           2003          Alternate Director            September 26, 1956  Banker        December 31, 2005

Eduardo A.  Fanciulli        2004          Alternate Director            April 10, 1951      Banker        December 31, 2006

Juan C.  Fossatti            2003          Alternate Director            September 11, 1955  Banker        December 31, 2005

Osvaldo H.  Canova (1)       2004          Alternate Director            December 8, 1934    Accountant    December 31, 2006

Julio P.  Naveyra (1)        2004          Alternate Director            March 24, 1941      Accountant    December 31, 2006
</TABLE>

---------------------

(1) Authorization from the Argentine Central Bank to assume their positions is
pending.

(2) In accordance with the rules of the CNV, and pursuant to the classifications
adopted by the CNV, Messrs. Eduardo O. Del Piano and Pablo M. Garat are
independent and were elected at the ordinary shareholders' meeting held on April
29, 2004, as members of the audit committee. Messrs. Del Piano and Garat are
also independent in accordance with the new Nasdaq rules.

         The following are the biographies of the members of the board of
directors of the Bank:

         Antonio Roberto Garces: Mr. Garces obtained a degree in national public
accounting at the Universidad de Buenos Aires. He has been associated with the
Bank since 1959. Mr. Garces is also the president of Gal Mobiliaria S.A. de
Ahorro para Fines Determinados and Grupo Galicia and a lifetime trustee of the
Fundacion Banco de Galicia y Buenos Aires.

         Sergio Grinenco: Mr. Grinenco obtained a degree in economics at the
Universidad Catolica Argentina and a master's degree in business administration
from Babson College in Wellesley, Massachusetts. He has been

                                     -178-
<PAGE>

associated with the Bank since 1977. Mr. Grinenco is vice president of Banco
Galicia, liquidator of Galicia Equity Analysis S.A. "En Liquidacion" and a
director of Galicia Valores S.A. Sociedad de Bolsa and Galicia Capital Markets
S.A.. Mr. Grinenco is also an alternate trustee of the Fundacion Banco de
Galicia y Buenos Aires.

         Enrique M. Garda Olaciregui: Mr. Garda Olaciregui obtained a degree in
law at the Universidad del Salvador, a master degree in finance from Universidad
del CEMA and a master degree in Management Law at the Universidad Austral. He
has been associated with the Bank since 1970. Mr. Garda Olaciregui is also an
alternate trustee of the Fundacion Banco de Galicia y Buenos Aires.

         Daniel Antonio Llambias: Mr. Llambias obtained a degree in national
public accounting at the Universidad de Buenos Aires. He has been associated
with the Bank since 1964. Mr. Llambias is president of Galicia Factoring y
Leasing S.A., Sudecor Valores S.A., Galicia Capital Markets S.A. and Agro
Galicia S.A. He is also a director of Gal Mobiliaria S.A. de Ahorro para Fines
Determinados and Galicia Valores S.A. Sociedad de Bolsa, delegate of the
shareholders meeting's of Automovil Club, and an alternate trustee of the
Fundacion Banco de Galicia y Buenos Aires.

         Luis Maria Ribaya: Mr. Ribaya obtained a law degree from the
Universidad de Buenos Aires. He has been associated with the Bank since 1971.
Mr. Ribaya is the president of Argencontrol S.A. and Galicia Valores S.A.
Sociedad de Bolsa, vice president of Sudecor Valores S.A., president of Mercado
Abierto Electronico S.A., a director of Galicia Capital Markets S.A. and Agro
Galicia S.A., and an alternate trustee of the Fundacion Banco de Galicia y
Buenos Aires.

         Guillermo Juan Pando: Mr. Pando has been associated with the Bank since
1969. He is president of Tarjetas Regionales S.A., Galicia Pension Fund Ltd. and
Galicia Warrants S.A., vice president of Gal Mobiliaria S.A. Sociedad de Ahorro
para Fines Determinados, a director of Agro Galicia S.A., Galicia Capital
Markets S.A., Galicia Factoring y Leasing S.A., Tarjetas del Mar S.A., a
liquidator of Galicia Equity Analysis S.A. "En Liquidacion," alternate director
of Electrigal S.A. and Distrocuyo S.A. and an alternate trustee of the Fundacion
Banco de Galicia y Buenos Aires.

         Eduardo Oscar Del Piano: Mr. Del Piano obtained a degree in national
public accounting at the Universidad de Buenos Aires. He has been associated
with the Bank since 2004. Mr. Del Piano is also an independent auditor of
Fundacion Sociedad Rural, Sociedad Rural Argentina, Establecimientos Ortopedicos
Argentina S.A., Sanatorio Otamendi Miroli S.A., Fundacion Jose Maria Aragon,
Asociacion Argentina de Polo, Asociacion Argentina de Ortopedia y Traumatologia
and syndic of Servicios de Salud S.A., CCI Construcciones S.A., La Rural de
Palermo S.A. and OGDEN-Rural S.A.

         Pablo Maria Garat: Mr. Garat obtained a degree in law at the
Universidad de Buenos Aires. He has been associated with the Bank since 2004.
Mr. Garat has been an official representative of the Province of Tierra del
Fuego, advisor to the Argentine Senate, and he currently develops its
professional independent activity at his own law firm.

         Guillermo A. Laje: Mr. Laje joined the Bank in September 1997. Prior to
such time, he has been employed at the former Banco Frances del Rio de la Plata
since 1983. Mr. Laje is president of Sudamericana Holding S.A., vice president
of Tarjetas Regionales S.A. and Visa Argentina S.A., and a director of Banelco
S.A., Tarjetas Cuyanas S.A. and Tarjeta Naranja S.A.

         Eduardo Antonio Fanciulli: Mr. Fanciulli obtained a degree in business
administration from the Universidad de Buenos Aires. He has been associated with
the Bank since 1983. Mr. Fanciulli is a director of Galicia Capital Markets S.A.
and Galicia Factoring y Leasing S.A.

         Juan Carlos Fossatti: Mr. Fossatti obtained a law degree from
Universidad de Buenos Aires, he graduated as Doctor at the Universidad de la
Republica de la Ciudad de Montevideo (Uruguay). He has been associated with the
Bank since the June 6, 2002, when he was elected at the annual shareholders'
meeting. Mr. Fossatti is also a director of Tierras del Bermejo S.A. and
Barlocher do Brazil S.A. (Sao Paulo - Brazil).

         Osvaldo Hector Canova: Mr. Canova obtained a degree in accounting at
the Universidad de Buenos Aires. He has been associated with the Bank since
2004. Mr. Canova has been a member of Harteneck, Lopez y Cia. (now
PricewaterhouseCoopers) and Mcduliffe, Turquan Young. Mr. Canova is also
alternate director of Telecom Argentina S.A.

                                     -179-
<PAGE>

         Julio Pedro Naveyra: Mr. Naveyra obtained a degree in accounting at the
Universidad de Buenos Aires. He has been associated with the Bank since 2004.
Mr. Naveyra has been a member of Harteneck, Lopez y Cia. (now
PricewaterhouseCoopers). He is also syndic of S.A. La Nacion, Supermercados
Makro S.A., IDEA S.A. and Transener S.A. and director of Telecom Personal S.A.,
Publicom S.A. Gas Ban S.A. and Telecom Argentina S.A.

FUNCTIONS OF THE BOARD OF DIRECTORS OF BANCO GALICIA

         The board of directors may consist of three to nine permanent members.
In addition, there can be one or more alternate directors who can act during the
temporary or permanent absence of a director. Currently, there are five
alternate directors. As of the date of this annual report, six directors and two
of the five alternate directors were engaged on a full time basis in the
day-to-day operations of the Bank. Messrs. Fossatti, Del Piano, Garat, Canova
and Naveyra are not employees of the Bank.

         The Bank's board of directors meets formally twice each week and
informally on a daily basis. The board of directors is responsible for all of
the major decisions, including those relating to credit, the Bank's securities
portfolio, the design of the branch network and entering into new businesses.

         Members of the Bank's board of directors serve on the following
committees:

         Risk Management Committee: This committee establishes general limits
(regulatory and internally determined by the Bank), and verifies its compliance
on credit risk, cross-border exposure, currency risk, interest-rate risk,
liquidity, market exposure and securities position, among others. This committee
meets at least once every two months. Six directors and the risk management
manager are members of the risk management committee.

         The Credit Committee: This committee is composed of four directors and
the manager of the credit division (or, alternatively, the manager of the
corporate credit department). The following officers participate on this
committee depending on the type of account under analysis: (i) the manager of
the wholesale banking division (or, alternatively, the managers of the corporate
banking, middle market banking or corporate recovery departments) in the case of
corporate customers; (ii) the manager of the retail banking division (or,
alternatively, the manager of the retail credit division) in the case of
individuals; and (iii) the manager of the treasury division (or, alternatively,
the managers of the financial operations or financial institutions relations
departments) in the case of financial institutions. The committee meets four
days a week with a quorum of at least one director. The committee's function is
to approve, classify and establish which customers qualify for credit exentions
for amounts of more than Ps. 3.5 million in the case of corporate customers; for
amounts of more than Ps. 1.0 million in the case of individuals; and for any
amount in the case of financial institutions (both domestic and foreign) and
related parties.

         Financial Risk Policy Committee (Comision de Posicion Financiera): The
members of this committee are six directors, and the managers of the retail
banking, the risk management and the treasury divisions. The committee is
responsible for analyzing the development of the Bank's business from a
financial point of view, focusing on fund-raising and placement of assets. This
committee is in charge of the follow-up and control of liquidity and
interest-rate and currency gaps. The committee is responsible for creation of
the Bank's policies related to each of these areas. The committee meets at least
once every fifteen days.

         Systems Committee: This committee is composed of six directors and the
managers of the retail banking, operations, organization, wholesale banking,
treasury and system divisions. The committee is in charge of supervising and
approving new systems development plans and budgets. It is also responsible for
supervising systems budget controls and approving the general design of the
Bank's systems. This committee also supervises the quality of the Bank's
systems. This committee meets at least once every three months.

         Audit Committee: In accordance with Argentine Central Bank rules, the
Bank's current audit committee is comprised of two nonindependent directors and
the Bank's internal auditor. Messrs. Sergio Grinenco, Daniel Llambias and Luis
Alberto Diaz are the current members of the Bank's audit committee.

         In order to comply with the CNV rules regarding the composition of the
audit committee of companies listed in Argentina, which require that the audit
committee be comprised of at least three directors, with a majority

                                     -180-
<PAGE>

of independent directors, the ordinary shareholders' meeting held on April 29,
2004, elected Messrs. Eduardo O. Del Piano and Pablo M. Garat as independent
directors to the board of directors and appointed them as members of the audit
committee. The third member, Mr. Daniel Llambias, a non-independent director,
was appointed to the audit committee by the Bank's board of directors. This new
audit committee will begin its functions and will replace the existing audit
committee, subject to the new independent directors being approved by the
Argentine Central Bank and subject to the resolution of the current
inconsistency between Argentine Central Bank and CNV requirements relating to
the formation of audit committees, which the Bank expects in the near future.

         The audit committee is primarily responsible for (i) expressing an
opinion on the board of directors' proposed independent auditor and ensuring
that independence criteria are met; (ii) supervising the reliability of the
Bank's internal control system, including the accounting system, and of external
reporting of financial or other information; (iii) verifying compliance with the
applicable conduct rules; (iv) issuing an opinion on related party transactions
and disclosing any transaction where a conflict of interest exists with
corporate governance bodies and controlling shareholders; and (v) reviewing the
annual working plan of the Bank's internal and independent auditors, and issuing
an opinion thereof. The audit committee has access to all information and
documentation that it requires and is broadly empowered to fulfill its duties.
The audit committee meets at least once a month.

         Committee for the Control and Prevention of Money Laundering (CCP): The
committee is responsible for establishing the institution's general guidelines
with respect to the prevention and control of money laundering, in accordance
with applicable rules. It is composed of three directors, the managers of the
risk management, treasury and operations divisions and the Bank's internal
auditor. The committee is scheduled to meet at least once every two months. The
committee's primary responsibility is to provide general objectives and policies
to control and prevent money laundering.

         Committee for Information Integrity: This committee was established in
response to the U.S. Sarbanes-Oxley Act of 2002. The responsibility of this
committee is to review and approve controls over the public disclosure of
financial and related information and other procedures necessary to enable Grupo
Galicia's chief financial officer and chief executive officer to provide their
certifications of the annual report that is filed with the U.S. Securities and
Exchange Commission. The members include three directors (including the chief
financial officer), the chief information officer, the Bank's internal auditor,
the managers of the wholesale banking, retail banking and treasury divisions and
other key officers of the Bank. A representative of the Bank's supervisory
committee is also a member of this committee. In addition, a member of Grupo
Galicia's committee for information integrity attends meetings of this
committee.

BANCO GALICIA'S EXECUTIVE OFFICERS

         In May 2003, Banco Galicia implemented a new corporate organizational
structure, and in May 2004, the credit division was created. The new structure
does not include the position of chief executive officer, which had been created
in 2002, whose functions returned to the board of directors.

         The following divisions report to the board of directors:

                DIVISION                  MANAGER

                Treasury                  Pablo Gutierrez

                Wholesale Banking         Daniel Antonio Llambias (in charge)

                Retail Banking            Guillermo A. Laje

                Operations                Guillermo Pedro Desimoni

                Organization              Benito Silva

                Systems                   Miguel Angel Pena

                Human Resources           Enrique Carlos Behrends

                Credit                    Juan Carlos L'Afflitto

                                     -181-
<PAGE>

         Treasury: This division is responsible for planning the use of funds
and for establishing and applying the Bank's funding and liquidity policy within
the parameters established by the risk management board. It also manages the
trading desk, ensuring the correct execution of transactions. The following
areas report to the manager of the treasury division: financial operations,
asset management, asset and liability management, and relations with financial
institutions.

         Wholesale Banking: This division is responsible for managing the Bank's
business relating to the provision of financial services to corporate customers
and relations with correspondent banks and multilateral credit agencies. The
areas reporting to wholesale banking are: corporate banking, middle market
banking, corporate recovery, international, investment banking, international
businesses, capital markets and wholesale marketing.

         Retail Banking: This division is responsible for managing the Bank's
business relating to the provision of financial services to individuals. The
areas reporting to the retail banking manager are: private banking, consumer
banking, insurance, traditional distribution channels, alternative distribution
channels, credit retail, marketing and quality.

         Operations: This division is responsible for the processing and control
of transactions arising in the Bank's daily operations and for the Bank's
administrative services (purchases, maintenance and management of the Bank's
physical infrastructure, etc.). The following areas report to the operations'
manager: administrative services, centralized operations and traditional
channels operations.

         Organization: This division is responsible for the design of the Bank's
organizational structure and of the different processes and procedures that make
up the Bank's operations. It is also responsible for ensuring the permanent
update of the Bank's processes and procedures and for providing the Bank on an
ongoing basis of an updated internal regulatory framework on this respect.

         Systems: This division is responsible for developing and maintaining
the operational systems of the Bank. It is also responsible for ongoing system
upgrading and for their efficiency and quality.

         Human Resources: This division is responsible for ensuring that the
Bank's management of human resources is in line with its overall strategy, both
over the short and long term, through human resources policies and programs and
through provision of specialized advice to the Bank's various business units.
This division is also responsible for the appointment, promotion and
reassignment of the Bank's human resources by means of establishing and applying
hiring, training, development, compensation and benefits policies for the Bank's
staff. In addition, the division manages the internal communications channel and
relations with the Bank's employees and unions.

         Credit: This division is responsible for defining credit risk
management policies, verifying compliance with these policies, and developing
the credit risk measurement and evaluation methods to be applied to the
different risk products. It is also responsible for approving credit extensions
while ensuring that the credit quality of the Bank's loan portfolio is preserved
and generating the information in connection with credit risk required by the
board of directors and by the regulatory authorities.

         In addition, the internal auditor, the chief financial officer, the
general counsel, the risk management manager, the chief information officer and
the institutional affairs manager report to the chairman of the board and or to
the vice-chairman. Mr. Sergio Grinenco is the chief financial officer. Mr. Luis
Alberto Diaz is the Bank's internal auditor. Mr. Enrique Mariano Garda
Olaciregui is responsible for the general counsel's office. Mr. Raul Hector
Seoane is the chief information officer. Mr. Eduardo Antonio Fanciulli is
responsible for the risk management division. Mr. Diego Francisco Videla is
responsible for institutional affairs.

         The following are the biographies of the Bank's senior executive
officers mentioned above not provided in the section " -- Board of Directors of
Banco Galicia" or " -- Our Board of Directors" above.

         Luis Alberto Diaz: Mr. Diaz was born April 11, 1945. He obtained a
degree in national public accounting from the Universidad de Buenos Aires. He
has been associated with the Bank since 1965.

                                     -182-
<PAGE>

         Raul Hector Seoane: Mr. Seoane was born July 18, 1953. He obtained a
degree in economics from the Universidad de Buenos Aires. He has been associated
with the Bank since 1988.

         Diego Francisco Videla: Mr. Videla was born November 7, 1947. He has
been associated with the Bank since 1997. Prior to such time, he acted as
advisor in the privatization of the Banco de la Provincia de Misiones S.A. Mr.
Videla is a voting member of Fundacion Policia Federal Argentina, Fundacion
Escuela de Guerra Naval Argentina and counselor of Fundacion Fides.

         Pablo Gutierrez: Mr. Gutierrez was born December 9, 1959. He obtained a
degree in Business Administration from the Universidad de Buenos Aires. He has
been associated with Banco Galicia since 1985. Mr. Gutierrez is also vice
president of Galicia Valores S.A. Sociedad de Bolsa, Galicia Pension Fund Ltd.,
Argenclear S.A. and Agro Galicia S.A. and alternate director of Grupo Galicia
and Sudecor Valores S.A.

         Guillermo Pedro Desimoni: Mr. Desimoni was born August 20, 1960. He
obtained a degree in computer science from the Universidad de Belgrano, a master
in business administration from IAE-Austral University, and a master in finance
from the Universidad de San Andres. He has been associated with the Bank since
1996. Mr. Desimoni is an alternate director of Tarjeta Naranja S.A. and Tarjetas
Cuyanas S.A.

         Miguel Angel Pena: Mr. Pena was born January 22, 1962. He obtained a
degree in information systems from the Universidad Nacional Tecnologica. He has
been associated with the Bank since 1994. Mr. Pena is director of Tarjeta
Naranja S.A. and alternate director of Tarjetas Regionales S.A., he is also a
voting member of the ONG- Usuaria (Asociacion Argentina de Usuarios de la
Informatica y las Comunicaciones).

         Enrique Carlos Behrends: Mr. Behrends was born January 31, 1946. He
obtained a degree in sociology from the Universidad del Salvador. Mr. Behrends
has been associated with the Bank since 1987. Prior to such time, he worked at
Arthur Andersen, Coopers & Lybrand and Ernst & Young.

         Benito Silva: Mr. Silva was born May 20, 1944. He received a bachelor's
degree in operational research from the Argentine Ministry of Defense. He has
been associated with the Bank since 1989. Prior to such time, he was employed
with financial institutions since 1960. Mr. Silva is a director of Compensadora
Electronica S.A. ("Coelsa"), and alternate director of Tarjetas Regionales S.A.
and Tarjetas Cuyanas S.A.

         Juan Carlos L'Afflitto: Mr. L'Afflitto was born September 15, 1958. He
received a degree in national public accounting at the Universidad de Buenos
Aires. He has been associated with the Bank since 1986. Prior to such time, he
worked at Morgan, Benedit y Asociados, where he acted as advisor and accountant.
He has been a professor of "financial statements analysis" at the Universidad
Catolica Argentina until 1990.

BANCO GALICIA'S SUPERVISORY COMMITTEE

         Banco Galicia's bylaws provide for a supervisory committee consisting
of three members ("syndics") and three alternate members ("alternate syndics").
Pursuant to Argentine Law and to the provisions of the Bank's bylaws, syndics
and alternate syndics are responsible of ensuring that all of the Bank's actions
are in accordance with applicable Argentine law. Unlike directors, syndics and
alternate syndics do not participate in business management and cannot have
managerial functions of any type. Syndics are responsible for, among other
things, the preparation of a report to the shareholders analyzing the Bank's
financial statements for each year and the recommendation to the shareholders as
to whether to approve such financial statements. Syndics and alternate syndics
are elected at the ordinary shareholders' meeting for a one-year term and they
can be reelected. Alternate syndics act as alternates in the temporary or
permanent absence of a syndic.

         The table on the following page shows the composition of Banco
Galicia's supervisory committee as they were reelected by the annual
shareholders' meeting held on April 29, 2004.

                                     -183-
<PAGE>

<TABLE>
<CAPTION>
                                   YEAR OF                                  PRINCIPAL           CURRENT
         NAME                    APPOINTMENT               POSITION        OCCUPATION          TERM ENDS
         ----                    -----------               --------        ----------          ---------
<S>                              <C>                   <C>                 <C>             <C>
Adolfo Hector Melian                 2004              Syndic              Lawyer          December 31, 2004
Norberto Daniel Corizzo              2004              Syndic              Accountant      December 31, 2004
Ricardo Adolfo Bertoglio             2004              Syndic              Accountant      December 31, 2004
Fernando Noetinger                   2004              Alternate Syndic    Lawyer          December 31, 2004
Luis O. Oddone                       2004              Alternate Syndic    Accountant      December 31, 2004
Miguel N. Armando                    2004              Alternate Syndic    Lawyer          December 31, 2004
</TABLE>

         For the biographies of Messrs. Adolfo Hector Melian, Norberto D.
Corizzo, Luis Omar Oddone and Miguel Norberto Armando, see " -- Our Supervisory
Committee" above.

         Ricardo Adolfo Bertoglio: Mr. Bertoglio obtained a degree in national
public accounting at the Universidad de Buenos Aires. He has been associated
with the Bank since 2002. Mr. Bertoglio is also president of Plasmer S.A.

         Fernando Noetinger: Mr. Noetinger obtained a law degree at the
Universidad de Buenos Aires. He has been associated with the Bank since 1987.
Mr. Noetinger is also president of Arnoar S.A., Hijos de Ybarra S.A. and
Promoactiva S.A., syndic of Dona Ines S.A. and alternate syndic of EBA Holding
S.A. and Tarjetas del Mar S.A.

COMPENSATION OF BANCO GALICIA'S DIRECTORS

         Those members of the Bank's board of directors who perform technical
and administrative functions through their participation on committees receive
an honorarium in accordance with section 25 subsection 2 of the Bank's bylaws.
Section 39 subsection 2 of the Bank's bylaws establishes a variable compensation
that consists of an incentive compensation that does not exceed 6.0% of the
Bank's pre-tax net income. For fiscal year 2003, the ordinary shareholders'
meeting held on April 29, 2004, approved remuneration for the board of directors
corresponding to technical and administrative functions for participation in
special committees, in the amount of Ps. 1,883,751.54, an amount that includes
the salaries of the directors that are also employees and the honorarium for
technical and administrative functions for the directors that exercised such
functions. The variable compensation for the fiscal years ended December 31,
2003 and 2002, and for the six-month period ended December 31, 2001, was null.

         In addition, as a result of the financial assistance that the Bank
received from the Argentine Central Bank, in fiscal year 2002, it was prohibited
from paying any cash dividends or making any distribution on or in respect of
its capital stock, transfer profits abroad, paying fees or any bonuses or
variable compensations tied to the Bank's results, or granting financial
assistance to related parties, for as long as such assistance is outstanding.

         The Bank does not maintain a stock-option, profit-sharing or pension
plan or any other retirement plan for the benefit of its directors, nor do its
directors qualify for benefits upon termination of employment.

COMPENSATION OF BANCO GALICIA'S OFFICERS

         While the compensation of the members of the board of directors is
established in the Bank's bylaws and decided at the shareholders' meetings, it
is the board of directors who establishes the policy for compensation of the
Bank's personnel. Compensation for the Bank's managers includes a fixed portion
and a variable portion determined by the Bank's overall results, the performance
of the unit for which the manager is responsible and the manager's individual
performance. The variable compensation was not applicable for the fiscal years
ended December 31, 2003 and 2002, and for the six-month period ended December
31, 2001.

         In addition, as a result of the financial assistance that the Bank
received from the Argentine Central Bank, in fiscal year 2002, it was prohibited
from paying any cash dividends or making any distribution on or in respect o its
capital stock, transferring profits abroad, paying fees or any bonuses or
variable compensations tied to the Bank's results, or granting financial
assistance to related parties, for as long as such assistance is outstanding.

                                     -184-
<PAGE>

         On November 4, 1999, the Bank, in its capacity as grantor, entered into
a framework trust agreement with First Trust of New York, in its capacity as
trustee, to implement a bonus program in favor of certain members of the senior
management of the Bank and its controlled or related companies. This program was
to be reviewed from time to time by the Bank's board of directors. The program's
purpose was to reward and foster productivity and reward management's permanence
at the Bank. Rewards under this program consisted of our shares or ADSs.

         The grantor transferred to each trust pertaining to the program, as
fiduciary property, certain amounts of money that were to be determined in each
case pursuant to its own criteria, which were to be invested by the trustee in
our shares or ADSs. The trustee was to administer such shares or ADSs for the
benefit of the staff appointed as beneficiaries in each trust. The trustee was
to hold title to such shares until the moment on which they shall be given to
the beneficiaries as their full property in accordance with the provisions set
forth in each corresponding trust.

         The amount transferred by the grantor to the trustee on November 4,
2000 was US$4.0 million, which have been applied to the purchase of 855,442
shares and 189,116 ADSs of Grupo Galicia.

         The Galicia 2004 Trust was established with 855,442 shares and
31,446.60 ADSs of Grupo Galicia. Moreover, 46 people holding managerial
positions at the Bank and at GCM have been appointed as beneficiaries of this
trust, having been assigned 855,442 shares and 28,046.60 ADSs. The 3,400 ADSs of
Grupo Galicia not assigned to the trust returned to the grantor. The remaining
157,669.40 ADSs of Grupo Galicia were assigned to the Galicia 2005 Trust. The
Galicia 2004 trust was terminated on June 15, 2003.

         The Bank does not maintain a stock-option, profit-sharing or pension
plan or any other retirement plan for the benefit of its officers, nor do its
officers qualify for benefits upon termination of employment.

EMPLOYEES

         As of December 31, 2003, Grupo Galicia had 6,035 employees, of whom
eight were employed by the holding company, 3,831 by Banco de Galicia y Buenos
Aires S.A., 40 by Galicia Uruguay, and 2,156 by the other companies required to
be consolidated. Grupo Galicia's management considers its relations with its
employees to be very good.

         As of December 31, 2003, approximately 8.0% of Banco Galicia's
employees were affiliated with the national bank union. Banco Galicia has not
experienced a strike by its employees since 1973. The Bank believes that its
relationship with its employees has developed within normal and satisfactory
parameters despite the environment created by economic conditions in Argentina
and, especially, the condition of Argentina's financial system during fiscal
year 2002.

         By virtue of the aforementioned situation, in 2002 strategies were
created and implemented by the Bank to adapt personnel structures and costs to
the prevailing business climate and prospects. Voluntary working hours
reduction, temporary licensing and voluntary retirement plans were implemented,
which made it possible to overcome the crisis and the transition to the
reduction in Banco Galicia's staff contemplated by the Galicia capitalization
and liquidity plan. These measures led the Bank to participate, during June
2002, in negotiations with the Banking Association (the Argentine banking
employees' labor union) at the Ministry of Labor. As a result of those
negotiations, an agreement was reached and carried out satisfactorily and with
no adverse effect on the Bank's plans.

         During 2003 the Human Resources Division placed special emphasis on
working on the consequences of the restructuring process. In this regard,
functions and appointments were reallocated so as to adjust the current staff to
the new structure. This process continued at the close of the fiscal year. In
addition, a reassessment of positions and a determination of key positions and
staff critical for the development of the Bank's activities took place.

         In 2003, the Bank maintained to the extent possible, staff training
programs geared toward increasing the staff's efficiency and proficiency. Even
though some high-cost programs were discontinued, the training activities
contemplated in the "Generacion Galicia" program aimed at branch employees were
strengthened. Within the "Generacion Galicia" distance training system, which
involves 1,900 people from the branch network, 12,500 courses were offered,
equivalent to 35,000 man-hours of training. Within the face-to-face training
mode, specially

                                     -185-
<PAGE>

aimed at meeting the business needs (launching of new products and services,
servicing of customers from the agribusiness sector, risk training, etc.) as
well as the administrative needs derived from organizational changes, courses
for a total of 8,000 hours were offered, which were taken by 558 people.

         Due to the above-mentioned circumstances, during 2002 the variable
compensation plans included in the Results Association Program (Programa de
Asociacion a Resultados) were suspended, as well as the incorporation of new
beneficiaries to the Pre-Retirement Program previously in force.

         Grupo Galicia will continue its current policy of monitoring both wage
levels and labor conditions in the financial industry in order to be
competitive. Grupo Galicia does not maintain any pension, profit-sharing or
retirement programs for its employees.

         The Fundacion Banco de Galicia y Buenos Aires is an Argentine nonprofit
organization that provides various services to Banco Galicia employees. The
various activities of the Fundacion include, among others, managing the medical
services of Banco Galicia employees and their families, purchasing school
materials for the children of Banco Galicia employees and making donations to
hospitals and other charitable causes, including cultural events. The Fundacion
has a board of lifetime trustees, certain members of which are members of our
board of directors and supervisory committee. Members and alternate members of
the board of trustees do not receive remuneration for their services as
trustees.

SHARE OWNERSHIP

         For information on the share ownership of our directors and executive
officers as of December 31, 2003, see Item 7. "Major Shareholders and Related
Party Transactions -- Major Shareholders."

                                     -186-
<PAGE>

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

         Our controlling shareholders are members of the Escasany, Ayerza and
Braun families and the Fundacion Banco de Galicia y Buenos Aires. As of May 31,
2004, the controlling shareholders owned 100% of our class A shares, through EBA
Holding, which in turn owns 22.7% of our total outstanding shares, 23.7% of our
class B shares and 9.9% of our preferred shares, as more fully set forth in the
tables below.

         Based on information that is publicly available to us, the table below
sets forth, as of May 31, 2004, the number of our class A, class B and preferred
shares held by holders of more than 5% of each class of shares and the
percentage of each class of shares held by such holder, and the percentage of
votes that each class of shares represent as a percentage of the total possible
votes of Grupo Galicia.

         CLASS A SHARES

<TABLE>
<CAPTION>
                                                                                          % OF
                                                                                         CLASS A          % OF
                      NAME                                 CLASS A SHARES                SHARES        TOTAL VOTES
<S>                                               <C>                                    <C>           <C>
EBA Holding S.A...............................    281,221,650 class A shares              100             63.4
</TABLE>

         CLASS B SHARES

<TABLE>
<CAPTION>
                                                                                         % OF
                                                                                        CLASS B           % OF
                      NAME                                 CLASS B SHARES               SHARES         TOTAL VOTES
<S>                                               <C>                                   <C>            <C>
Members of the controlling shareholders.......    192,275,547 class B shares             23.7              8.7
The Bank of New York(1).......................    323,124,610 class B shares             39.8             14.6
Banco Santander Central Hispano(2)............    82,741,540 class B shares              10.2              3.7
Grantham, Mayo, Van Otterloo & Co.(3).........    60,928,900 class B shares               7.5              2.7
</TABLE>

         PREFERRED SHARES

<TABLE>
<CAPTION>
                                                                                         % OF
                                                                                       PREFERRED          % OF
                   NAME                                PREFERRED SHARES                 SHARES        TOTAL VOTES(4)
<S>                                               <C>                                  <C>            <C>
Members of the controlling shareholders.......    14,737,981 preferred shares             9.9               -
Deutsche Bank (5).............................    12,750,895 preferred shares             8.6               -
Bank of America Securities Ltd. (6)...........    10,003,783 preferred shares             6.7               -
</TABLE>

--------------------------

(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,
         22W, New York 10286, and the country of organization is the United
         States.

(2)      Information is based on a Schedule 13 G filed by Banco Santander
         Central Hispano date February 16, 2001 However, we have confirmed the
         mentioned amount with our files based on information provided by third
         party companies. The address for Banco Santander Central Hispano is
         Plaza de Canalejas 28014, Madrid, Spain, and the country of
         organization is the Kingdom of Spain.

(3)      Information is based on a Schedule 13 F filed by Grantham, Mayo Van
         Otterloo & Co. dated March 31, 2004. The address for Grantham, Mayo Van
         Otterloo & Co. is 40 Rowes Wharf, Boston, MA 02110, and the country of
         organization is the United States.

(4)      The preferred shares are nonvoting shares. Upon conversion of the
         preferred shares into class B shares on May 13, 2005, the preferred
         shares will have one vote per share.

(5)      Information is based on Caja de Valores's S.A. files. The address for
         Deutsche Bank is Avenue of the Americas 1251, New York, and the country
         of organization is the United States.

(6)      Information is based on Caja de Valores's S.A. files. The address for
         Bank of America Securities Ltd. is Canada Square 5 London, and the
         country of organization is United Kingdom.

                                     -187-
<PAGE>

         Based on information that is publicly available to us, the table below
sets forth, as of May 31, 2004, the shareholders that either directly or
indirectly have more than 5% of the votes or the shares of Grupo Galicia.

<TABLE>
<CAPTION>
                                                                                          % OF              % OF
                     NAME                                  TOTAL SHARES               TOTAL CAPITAL      TOTAL VOTES
<S>                                                 <C>                               <C>                <C>
MEMBERS OF THE CONTROLLING SHAREHOLDERS:
EBA Holding S.A...............................      281,221,650 Class A shares            22.7              63.4
Eduardo Jose Escasany.........................      15,494,498 Class B shares              1.2 (2)           0.7 (3)
Maria Ofelia Escasany.........................       6,058,655 Class B shares              0.5 (2)           0.3 (3)
Adela M. Ayerza de Gutierrez..................       4,598,483 Class B shares              0.4 (2)           0.2 (3)
                                                     422,194 Preferred Shares              0.0               0.0
Maria Teresa Ayerza...........................           0 Class B shares                  0.0 (2)           0.0 (3)
Abel Ayerza...................................           0 Class B shares                  0.0 (2)           0.0 (3)
Fundacion Banco de Galicia y Buenos Aires.....           0 Class B shares                  0.0 (2)           0.0 (3)
OTHERS:
The Bank of New York(1).......................      323,124,610 Class B shares            26.0              14.6
Banco Santander Central Hispano...............      82,741,540 Class B shares              6.7               3.7
</TABLE>

---------------------------

(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.

(2)      Represents such holder's percentage ownership in our total capital
         stock. Such holder's ownership interest represented directly by its
         class B shares and preferred shares, together with its indirect
         ownership interest in the class A shares is as follows: Eduardo Jose
         Escasany 4.7%, Maria Ofelia Escasany 2.9%, Adela Maria Ayerza de
         Gutierrez 2.3%, Maria Teresa Ayerza 1.9%, Abel Ayerza 1.9%, and the
         Fundacion Banco de Galicia y Buenos Aires 1.8%.

(3)      Represents such holder's voting percentage in the total possible votes
         of our shares. Such holder's voting interest represented directly by
         its class B shares, together with its indirect ownership interest in
         the class A shares is as follows: Eduardo Jose Escasany 10.4%, Maria
         Ofelia Escasany 7.0%, Adela Maria Ayerza de Gutierrez 5.4%, Maria
         Teresa Ayerza 5.2%, Abel Ayerza 5.2%, and the Fundacion Banco de
         Galicia y Buenos Aires 5.0%.

         Members of the three controlling families have historically owned the
majority of the issued share capital of Banco Galicia since 1959. Members of the
Escasany family have been on the board of directors of Banco Galicia since 1923.
The Ayerza and Braun families have been represented on the board of directors of
Banco Galicia since 1943 and 1947, respectively. Currently, there are no members
of these families on the Bank's board of directors, but there is one member of
each family on our board of directors.

         On September 13, 1999, the controlling shareholders of Banco Galicia
formed EBA Holding S.A., an Argentine corporation, which is 100% owned by our
controlling shareholders. EBA Holding holds 100% of our class A shares. Grupo
Galicia's capital structure consists of class A shares, each of which is
entitled to 5 votes, class B shares, each of which is entitled to 1 vote, and
nonvoting preferred shares, each of which is convertible into class B shares on
May 13, 2005.

         Currently, EBA Holding only has class A shares outstanding. EBA
Holding's bylaws provide for certain restrictions on the sale or transfer of its
class A shares. While the class A shares of EBA Holding may be transferred to
any other class A shareholder of EBA Holding, any transfer of such class A
shares to third parties would automatically result in the conversion of the sold
shares into class B shares, having one vote per share, of EBA Holding. In
addition, EBA Holding's bylaws contain rights of first refusal, buy-sell
provisions and tag-along rights.

         A public shareholder of Banco Galicia, who indirectly owns in excess of
5% of the outstanding capital stock of Banco Galicia, has granted a right of
first refusal for the purchase of all or part of its shares to certain of our
controlling shareholders in the event such public shareholder decides to sell
all or part of its Banco Galicia shares.

         As of May 31, 2004, we had outstanding 811,185,367 class B shares
(323,124,610 of which were evidenced by 32,312,461 ADSs) and 149,000,000
preferred shares. As of March 31, 2004, we had 59 identified United States
record shareholders, of which 31 held our class B shares and 28 held our ADSs.
Such United States

                                     -188-
<PAGE>

holders, in the aggregate, held approximately 130.9 million of our class B
shares, directly or through ADSs, representing approximately 10.5% of our total
outstanding capital stock as of May 31, 2004.

         At May 31, 2004, we had 52 identified United States record shareholders
of our preferred shares. Such United States holders, in the aggregate, held
directly 35,616,647 of our preferred shares, representing approximately 2.9% of
our total outstanding capital stock as of May 31, 2004.

RELATED PARTY TRANSACTIONS

         Grupo Galicia is not party to any transactions with, and has not made
any loan to, any of its directors, key management personnel or other related
persons, nor are there any proposed transactions with such persons.

         The directors of Banco Galicia have been involved in certain credit
transactions with Banco Galicia as permitted by Argentine law. The Argentine
Commercial Companies Law and the Argentine Central Bank's regulations allow
directors of a limited liability company to enter into a transaction with such
company if such transaction follows prevailing market conditions. Additionally,
lending to persons or entities affiliated with Banco Galicia is subject to the
regulations of the Argentine Central Bank. Such regulations set limits on the
amount of credit that can be extended to affiliates based on, among other
things, a percentage of the Bank's Adjusted Shareholders' Equity. See Item 4.
"Information on the Company -- Argentine Banking System and Regulation --
Argentine Banking Regulation -- Lending Limits."

         Banco Galicia is required by the Argentine Central Bank to present to
its board of directors, on a monthly basis, a list of the outstanding amount of
credit advanced to directors, controlling shareholders, officers and other
related entities which is transcribed in the minute books of the board of
directors. The Argentine Central Bank's rules establish that loans to directors,
controlling shareholders, officers and other related entities must be granted on
an equal basis with respect to rates, tenor and guarantees as loans granted to
the general public.

         In 2002 this practice was suspended, given that as a result of the
financial assistance that the Bank had received from the Argentine Central Bank,
through its Resolution No. 81, the Argentine Central Bank prohibited the Bank
from paying any cash dividends or making any distribution on or in respect of
its capital stock, transfer profits abroad, paying fees or any bonuses or
variable compensations tied to the Bank's results, or granting financial
assistance to related parties, for as long as such assistance is outstanding.

         As of May 31, 2004, the latest period for which information is
available, an aggregate of Ps. 94.5 million in financial assistance granted by
the Bank (equity participations and credit, including guarantees granted) was
outstanding to related parties. Related parties include our directors and the
directors of Banco Galicia, our senior officers and senior officers of Banco
Galicia and our controlling shareholders (and any entities directly or
indirectly affiliated with any of these parties that are not required to be
consolidated). The total amount of this financial assistance was distributed
among 167 individuals and 44 companies, with the average amount of financial
assistance being Ps. 0.5 million. The single largest amount of financial
assistance outstanding as of May 31, 2004, was Ps. 18.3 million for Marin S.A.,
a holding company.

         As of December 31, 2003, the aggregate amount of financial assistance
granted by the Bank to related parties was Ps. 129.5 million. This was
distributed among 159 individuals and 50 companies, with the average amount of
financial assistance being Ps. 0.6 million. The single largest amount of
financial assistance outstanding as of December 31, 2003, was Ps. 30.7 million
for Freddo S.A., a company in the food industry whose shares the Bank received
through a trust as payment on a defaulted debt.

         As of December 31, 2002, the aggregate amount of financial assistance
granted by the Bank to related parties was Ps. 138.3 million. This was
distributed among 133 individuals and 40 companies, with the average amount of
financial assistance being Ps. 0.8 million. The single largest amount of
financial assistance outstanding as of December 31, 2002, was Ps. 29.2 million
for Inversora en Servicios S.A., a holding company with participations in
electricity generation and transportation.

                                     -189-
<PAGE>

         As of December 31, 2001, the aggregate amount of financial assistance
granted by the Bank to related parties was Ps. 240.8 million. This was
distributed among 140 individuals and 48 companies, with the average amount of
financial assistance being Ps. 1.4 million. The single largest amount of
financial assistance outstanding as of December 31, 2001, was Ps. 46.6 million
for Hidroelectrica Diamante S.A., a power generation company in which the Bank
indirectly holds a minority interest.

         Throughout this period, all financial assistance was granted to related
parties on terms as favorable to the Bank as those granted to unaffiliated
persons.

         The Bank and Grupo Galicia have executed a trademark license agreement
under which the Bank has authorized Grupo Galicia to use the word "Galicia" in
its corporate name and has authorized Grupo Galicia's direct or indirect
subsidiaries to use in their corporate names the Bank's registered trademarks,
including the word "Galicia," in promoting their products and services. The
trademark license agreement has a 10-year term, commencing as of July 1, 2000,
and provides for payment of an annual royalty of Ps. 722,000.

ITEM 8. FINANCIAL INFORMATION

         We have elected to provide the financial information set forth in Item
18 of this annual report.

LEGAL PROCEEDINGS

         We are party to the following legal proceedings:

         (i) Theseus S.A. and Lagarcue S.A. v. Grupo Financiero Galicia S.A.
Summary Proceeding: The suit is seeking to have Decree No. 677/01 and
Resolutions No. 400/02, 401/02 and 402/02 of the CNV declared unconstitutional
and, therefore, not allow Grupo Galicia the use of the measures provided for
thereunder. An injunction was initiated on September 26, 2003 demanding an order
which would require that Grupo Galicia, in the event that Grupo Galicia becomes
the owner of more than 95% of Banco Galicia (a situation that is not verified as
of the date of this annual report), does not use the regime permitting for the
exclusion of minority shareholders against Theseus S.A. and Lagarcue S.A.
provided for by the above Rules when there is an almost complete ownership. The
injunction was appealed and has been in a review process since November 2003.
Because the proceeding is a summary proceeding, it is expected to be resolved in
the near future. It should be noted that the matter, in itself, is not
monetarily measurable.

         (ii) Theseus S.A. et al. v. Banco de Galicia y Buenos Aires S.A. and
Grupo Financiero Galicia S.A. Ordinary Proceeding: This suit was filed on March
11, 2003. The proceeding's purpose is to have the court "declare null the
corporate legal act done by Grupo Galicia with the cooperation of Banco Galicia
pursuant to which there was an exchange of class B shares of Banco Galicia for
class B shares of Grupo Galicia." Banco Galicia and Grupo Galicia have answered
the claim, arguing in defense, among other things, that there was not one act of
exchange of shares but rather as many legal acts (exchange agreements) as there
were shareholders who tendered their Banco Galicia shares to receive shares of
Grupo Galicia (i.e., 3,172 legal acts). Therefore, in order to nullify all of
the exchange contracts, it would be necessary that every single person who
tendered shares be named in the suit, not just Banco Galicia and Grupo Galicia.
The material effect that the suit could have, if it were successful, which is
considered unlikely, is not monetarily measurable, since these additional
defendants have not been included in the suit. Currently, this suit is in the
discovery stage.

BANCO GALICIA

         In response to legal proceedings, Banco Galicia has made reserves to
cover (i) various types of claims filed by customers against Banco Galicia
(e.g., claims for thefts from safe deposit boxes, the cashing of checks that had
been fraudulently altered, discrepancies related to deposit and payment services
rendered to its customers by the Bank, etc.) and (ii) estimated amounts payable
under labor related lawsuits filed against Banco Galicia by former employees.
Please refer to the captions "Litigation" and "For Severance Payments" in note
12 to our audited consolidated financial statements for additional information
concerning Banco Galicia's reserves to cover these potential liabilities.

                                     -190-
<PAGE>

         Additionally, the Bank is subject to court orders in connection with
"amparo" claims, mandating the reimbursement of deposits in connection with the
establishment, in December 2001, of the so called "corralito" and the compulsory
conversion into pesos and rescheduling of bank deposits implemented by the
Argentine government at the beginning of 2002. The amount that the Bank has had
to pay to comply with these court orders has been significant, as disclosed in
our audited consolidated financial statements. As of December 31, 2003 the court
orders demanding payment as a consequence of such legal actions amounted up to
Ps. 17.5 million and US$553.2 million and the Bank had paid, as of such date,
Ps. 803.7 million and US$100.7 million.

         Criminal proceedings have been initiated against various directors and
managers of Banco Galicia as a result of the emergency economic legislation
issued toward the end of 2001 which imposed restrictions on the Bank's dealings
with its clients. None of the proceedings thus far have found grounds or
evidence sufficient to direct a judgment against any director or manager of the
Bank. As of the date hereof, no adverse monetary judgments have been obtained
and according to the Bank's outside lawyers it is not expected that there will
be any adverse judgments in the future.

         As a result of the Bank's decision in May 2002 to suspend payments on
its dollar-denominated foreign debt governed by foreign law, various creditors
instituted legal proceedings in order to recover their lendings. Such
dollar-denominated foreign debt was restructured in May 2004 with the
participation of a high percentage of creditors. As of the date hereof, the
board of directors of the Bank does not believe that an adverse result in such
proceedings in the aggregate would have a material adverse effect on the Bank or
its operations.

         Banco Europeo para America Latina S.A. ("BEAL") has begun a legal
proceeding against the Bank seeking the recovery of US$11 million in connection
with the compulsory conversion into pesos of three forward currency contracts.
Dollar amounts subject to these forward contracts were converted into pesos in
accordance with Decree No. 214/02, Decree No. 992/02 and Argentine Central Bank
Communique "A" 3967. The Bank has paid BEAL all outstanding amounts due under
the contracts as provided for by the above mentioned regulation. In the suit,
BEAL claims that the Bank made only a partial payment and contests the
compulsory conversion of the original contract amounts. As of the date hereof,
the Bank has answered the complaint. The Camara Nacional de Apelaciones en lo
Comercial (the National Commercial Appeals Chamber) has ruled that it does not
have the jurisdictional competence to adjudicate the proceeding and has ordered
that it be sent to the Justicia Federal Civil y Comercial de la Capital Federal
(The Federal Civil and Commercial Judiciary of the Argentine Federal Capital).
Management does not consider such claim or the potential result thereof to be
material.

         Bank of America N.A. has sued the Argentine government over the
constitutionality of Decree No. 992/02 and relevant regulations issued
thereunder. Banco Galicia and the Argentine Central Bank have been named as
third parties in connection with a transaction involving futures contracts
subject to Argentine Law, which the Bank settled in compliance with such Decree,
as it was obligated to, and for which Bank of America N.A. is claiming payment,
in the event the above decree is found unconstitutional, of US$8.1 million. At
its current stage, it is not expected that the proceeding would have a material
adverse effect on the Bank.

DIVIDEND POLICY AND DIVIDENDS

DIVIDEND POLICY

         We may only declare and pay dividends out of our retained earnings
representing the profit realized on our operations and investments. The
Argentine Commercial Companies Law and our bylaws state that no profits may be
distributed until prior losses are covered. Dividends paid on our class A
shares, class B shares and preferred shares will equal one another on a per
share basis.

         As required by the Argentine Commercial Companies Law, 5% of our net
income is allocated to a legal reserve until the reserve equals 20% of our
outstanding capital. The payment of cash dividends will not be affected by the
legal reserve as long as such reserve is covered by our subsidiaries' retained
earnings. Dividends may not be paid if the legal reserve has been impaired until
it reaches the required level. The legal reserve is not available for
distribution to shareholders.

                                     -191-
<PAGE>

         As a holding company, our principal source of cash from which to pay
dividends on our shares is dividends or other intercompany transfers from our
subsidiaries, primarily Banco Galicia. Due to the Argentine crisis described in
this annual report and the impact on our subsidiaries, as well as the dividend
restrictions contained in the Bank's loan agreements as described below, our
ability to distribute cash dividends to our shareholders has been materially and
adversely affected.

         Our ability to pay dividends to our shareholders in the future will
principally depend on (1) our net income (on a consolidated basis), (2)
availability of cash and (3) applicable legal requirements. Holders of our ADSs
will be entitled to receive any dividends payable in respect of our underlying
class B shares. We will pay cash dividends to the ADS depositary in pesos,
although we reserve the right to pay cash dividends in any other currency,
including dollars. The ADS deposit agreement provides that the depositary will
convert cash dividends received by the ADS depositary in pesos to dollars and,
after deduction or upon payment of fees and expenses of the ADS depositary, will
make payment to holders of our ADSs in dollars.

         Under the loan agreements entered into by the Bank in connection with
its foreign debt restructuring, the Bank may only pay dividends on its capital
stock if there is no event of default under the loan agreements and only after
the aggregate principal amount of the long term instruments and medium term
instruments (together, the "senior debt") issued in its foreign debt
restructuring is equal to or less than 50% of the originally issued senior debt.
If the Bank is able to pay dividends, it is required to repay US$2 of the long
term instruments issued in its foreign debt restructuring for each US$1 of
dividends paid on its capital stock.

         In light of the restrictions on Banco Galicia's ability to make
distributions and the Argentine situation, Grupo Galicia's current policy is to
retain its earnings to pay for its operating expenses and to support the growth
of the Group's business. Accordingly, the board of directors of Grupo Galicia
does not plan to pay dividends in the foreseeable future.

DIVIDENDS

         We did not pay any dividends in fiscal years 2002 and 2003 since Banco
Galicia did not post any income that could be distributed and since the Bank is
prohibited from paying any cash dividends or making any capital contributions to
its affiliates or subsidiaries for so long as the Argentine Central Bank's
financial assistance is outstanding. Furthermore, Argentine Central Bank
Communique "A" 3785 further restricted the distribution of cash dividends by
establishing that the Bank should adjust its earnings to be distributed as cash
dividends with the difference between the market value and the carrying value of
the compensatory and hedge bonds after netting the legal reserve and other
reserves established by the Bank's bylaws.

         In addition, cash and deposits we maintained on deposit at Galicia
Uruguay that may have otherwise been available for distribution or to pay our
operating expenses, was restructured and converted into (i) subordinated
negotiable obligations for US$43 million, (ii) negotiable obligations for US$2.5
million and (iii) a savings account available on demand for US$1.4 million. In
September 2003 Grupo Galicia exchanged US$1.26 million of the US$2.5 million
negotiable obligations for BODEN 2012 under an exchange offer made by Galicia
Uruguay.

         Net losses per share and per American depositary share was Ps. 0.199
and Ps. 1.99, respectively, for the year ending December 31, 2003. Each American
depositary share represents 10 common shares.

         Grupo Galicia did not pay dividends for the fiscal year ended in
December 2001. The last cash dividend Grupo Galicia has received from Banco
Galicia was in October 2001 for Ps. 116.4 million.

SIGNIFICANT CHANGES

         On May 18, 2004, the restructuring of the foreign debt of the Bank's
head office and of its Cayman Branch was completed. At the expiration date of
the exchange offer made by the Bank to carry out the restructuring, the
aggregate principal amount of the Bank's debt subject to the restructuring
amounted to US$1,344.7 million, lower than the US$1,349.6 million as of December
31, 2003, and the US$1,365.5 million as of December 31, 2002. The decrease was
the consequence of repayments made by borrowers of past-due loans owed by them
to the Bank, by

                                     -192-
<PAGE>

using existing notes (9% Notes due 2003 and Step Up Floating Rate Notes due
2002) subject to the restructuring. Creditors holding US$1,320.9 million in
aggregate principal amount of the Bank's debt participated in the restructuring,
representing 98.2% of all of the Bank's debt that was subject to the
restructuring. This percentage was higher than the minimum percentage
established by the Bank to complete the exchange offer.

         We approved a capital increase through the issuance of up to 149
million preferred shares, each of them mandatorily convertible into one of our
class B shares on May 13, 2005, the first anniversary date of issuance (or, if
earlier, on the occurrence of a change of control of Grupo Galicia). As a result
of the exercises made by the existing shareholders in our preemptive rights
offering, the Bank's creditors opting for the equity participation offer in the
restructuring of the foreign debt of the Bank's head office and its Cayman
branch received 87.8 million preferred shares and US$30 million in cash and we
received approximately US$100 million of subordinated bonds in exchange for
those shares and cash. We issued the 149 million preferred shares on May 13,
2004.

         No other significant changes have occurred since the date of the annual
financial statements included in this annual report.

ITEM 9. THE OFFER AND LISTING

SHARES AND ADSs

         Our class B shares are listed on the Buenos Aires Stock Exchange and
the Cordoba Stock Exchange under the symbol "GGAL." Our ADSs, each representing
ten class B shares, are listed on the Nasdaq SmallCap Market, under the symbol
"GGAL." Our ADSs have been listed on Nasdaq SmallCap Market since August 2002.
Previously, our ADSs were listed on the Nasdaq National Market since July 24,
2000.

         On May 13, 2004, we issued our preferred shares in connection with the
foreign debt restructuring of the Bank. Our preferred shares are automatically
convertible into class B shares on May 13, 2005. Our preferred shares are listed
on the Buenos Aires Stock Exchange and the Cordoba Stock Exchange under the
symbol "GGAL6."

         The following tables present for the periods indicated the high and low
prices and the average trading volume of our class B shares and preferred shares
on the Buenos Aires Stock Exchange as reported by the Buenos Aires Stock
Exchange and the high and low prices and the average trading volume of our ADSs
on Nasdaq as reported by the Nasdaq National Market and the Nasdaq Small Cap
market. There has been low trading volume of our class B shares on the Cordoba
Stock Exchange. The following prices have not been adjusted for any stock
dividends and/or stock splits.

                                     -193-
<PAGE>

GRUPO GALICIA - CLASS B SHARES - BUENOS AIRES STOCK EXCHANGE (IN PESOS)

<TABLE>
<CAPTION>
                                                                                                 AVERAGE DAILY
                                                                                               VOLUME IN THOUSAND
CALENDAR YEAR                                                    HIGH         LOW                CLASS B SHARES
                                                                 ----         ---                --------------
<S>                                                              <C>          <C>              <C>
       2000 (from July 24)..................................     1.78         1.15                    940.6
                   2001(1)..................................     2.19         0.40                  2,908.7
                      2002..................................     0.74         0.12                  3,358.0
                      2003..................................     2.02         0.69                  4,175.3

TWO MOST RECENT FISCAL YEARS

                      2002
                          First Quarter.....................     0.74         0.26                  3,828.2
                          Second Quarter....................     0.44         0.12                  1,724.4
                          Third Quarter.....................     0.29         0.20                  2,431.5
                          Fourth Quarter....................     0.71         0.30                  5,396.5

                      2003
                          First Quarter.....................     0.84         0.69                  3,003.0
                          Second Quarter....................     1.36         0.76                  4,310.7
                          Third Quarter.....................     1.49         1.10                  4,634.3
                          Fourth Quarter....................     2.02         1.45                  4,740.7

                      2004
                          First Quarter.....................     2.61         1.96                  5,199.9
                          Second Quarter (through June 25)..     2.39         1.42                  6,163.2

MOST RECENT SIX MONTHS
January 2004................................................     2.61         2.10                  5,406.9
February 2004...............................................     2.50         1.96                  5,931.3
March 2004..................................................     2.55         2.33                  4,375.0
April 2004 (2)..............................................     2.39         1.98                  3,855.9
May 2004....................................................     1.94         1.42                  8,596.2
June 2004 (through June 25).................................     1.74         1.42                  5,895.4
</TABLE>

---------------------------
(1) On March 23, 2001, our class B shares began trading ex-dividend. The value
of each class B share was reduced by the amount of the stock dividend of Ps.
0.0296 per class B share.

(2) On April 28, 2004, our class B shares began trading ex-coupon, which coupon
related to the right to subscribe for the preferred shares as part of the
preemptive rights offering. The value of each class B share was reduced by the
value of the coupon of Ps. 0.101 per class B share.

                                     -194-
<PAGE>

GRUPO GALICIA - PREFERRED SHARES - BUENOS AIRES STOCK EXCHANGE (IN PESOS)

<TABLE>
<CAPTION>
                                                                                             AVERAGE DAILY
                                                                                           VOLUME IN THOUSAND
                                                               HIGH         LOW              CLASS B SHARES
                                                               ----         ---              --------------
<S>                                                            <C>          <C>            <C>
May 2004 (from May 13) ...................................     1.56         1.34                    431.4
June 2004 (through June 25) ..............................     1.59         1.29                    301.5
</TABLE>

GRUPO GALICIA - ADSs - NASDAQ NATIONAL MARKET / NASDAQ SMALL CAP MARKET (IN US$)

<TABLE>
<CAPTION>
                                                                                              AVERAGE DAILY
                                                                                            VOLUME IN THOUSAND
CALENDAR YEAR                                                HIGH         LOW                      ADRs
                                                             ----         ---                      ----
<S>                                                         <C>          <C>                <C>
2000 (from July 24).............................            17.69        11.88                    192.7
           2001 (1).............................            22.00         3.13                    672.9
               2002.............................             3.45         0.22                    242.8
               2003.............................             6.73         2.05                    238.1

TWO MOST RECENT FISCAL YEARS

                       2002
                           First Quarter................     3.45         1.03                    398.6
                           Second Quarter...............     1.50         0.22                    243.0
                           Third Quarter................     0.76         0.26                    172.9
                           Fourth Quarter...............     2.07         0.70                    166.3

                       2003
                           First Quarter................     2.90         2.05                    110.3
                           Second Quarter...............     4.90         2.51                    339.4
                           Third Quarter................     5.08         3.84                    231.4
                           Fourth Quarter...............     6.73         5.00                    266.7

                       2004
                           First Quarter................     8.85         6.81                    294.6
                           Second Quarter (through June
                           25)..........................     8.51         4.83                    315.1

MOST RECENT SIX MONTHS
January 2004............................................     8.85         7.09                    364.4
February 2004...........................................     8.44         6.81                    316.5
March 2004..............................................     8.83         7.76                    215.9
April 2004..............................................     8.51         7.11                    223.7
May 2004................................................     7.14         4.95                    508.3
June 2004 (through June 25).............................     5.84         4.83                    207.1
</TABLE>

-----------------------

         (1) On March 27, 2001, our ADSs began trading ex-dividend. The value of
each ADS was reduced by the amount of the stock dividend of US$0.2835 per ADS.

                                     -195-
<PAGE>

         The following tables present for the periods indicated the high and low
prices and the average trading volume of the Banco Galicia Class B shares on the
Buenos Aires Stock Exchange as reported by the Buenos Aires Stock Exchange and
the high, low and period-end sales price and the average trading volume of the
Banco Galicia ADSs on the Nasdaq National Market as reported by the Nasdaq
National Market. Banco Galicia's ADSs (trading symbol BGALY) were delisted from
the Nasdaq National Market on July 31, 2000. Banco Galicia Class B shares
continue to be listed on the Buenos Aires Stock Exchange but with very low
trading volume.

BANCO GALICIA - CLASS B SHARES - BUENOS AIRES STOCK EXCHANGE (IN PESOS)

<TABLE>
<CAPTION>
                                                                                              AVERAGE DAILY TRADING
                                                                                               VOLUME ( IN THOUSAND
CALENDAR YEAR                                  HIGH               LOW                             CLASS B SHARES)
-------------                                  ----               ---                             ---------------
<S>                                          <C>               <C>                            <C>
1999  ....................................       4.78              1.90                               573.38
2000  ....................................       4.95              1.99                               322.61
2001  ....................................       3.16              1.39                                14.27
2002  ....................................       1.63              0.45                                 0.96
2003  ....................................       3.85              1.58                                 1.06

TWO MOST RECENT FISCAL YEARS

2002
      First Quarter.......................   Ps. 1.63          Ps. 0.80                                 1.27
      Second Quarter......................       0.70              0.45                                 0.19
      Third Quarter.......................       0.45              0.45                                 0.23
      Fourth Quarter......................       1.60              0.53                                 2.17

2003
      First Quarter.......................   Ps. 1.90          Ps. 1.58                                 0.95
      Second Quarter......................       2.75              1.90                                 1.52
      Third Quarter.......................       2.70              2.20                                 0.99
      Fourth Quarter......................       3.85              2.73                                 0.82

2004
      First Quarter.......................   Ps. 5.10          Ps. 3.70                                 1.12
      Second Quarter (through June 25)....       5.00              3.85                                 0.56

MOST RECENT SIX MONTHS

December 2003.............................   Ps. 3.85          Ps. 3.00                                 0.39
January 2004..............................       5.10              3.70                                 0.99
February 2004.............................       4.90              4.50                                 0.39
March 2004................................       5.00              4.50                                 1.89
April 2004................................       5.00              5.00                                 0.01
May 2004..................................       4.75              4.20                                 0.84
June 2004 (through June 25)...............       4.60              3.85                                 0.78
</TABLE>

                                     -196-
<PAGE>

BANCO GALICIA - ADSs - NASDAQ NATIONAL MARKET (IN US$)

<TABLE>
<CAPTION>
                                                                                             AVERAGE DAILY TRADING
                                                                                        VOLUME (IN THOUSANDS OF CLASS B
CALENDAR YEAR                                HIGH                LOW                               SHARES)(1)
-------------                                ----                ---                               ----------
<S>                                        <C>                 <C>                      <C>
1999................................       US$21.90            US$ 9.19                              2,706.15
2000................................          22.44               12.75                              1,889.97
</TABLE>

--------------------------
(1) One ADS equaled four class B shares.

ARGENTINE SECURITIES MARKET

         The principal and oldest exchange for the Argentine securities market
is the BASE. Securities listed on the BASE include corporate equities and bonds
and government securities. Bonds listed on the BASE may also be listed on the
MAE. As a result of an agreement between the Buenos Aires Stock Market and the
Argentine OTC Market, equity securities are traded exclusively on the BASE and
debt securities (both public and private) are traded on both the Argentine OTC
Market and the BASE.

         The Buenos Aires Stock Market (the "MERVAL"), which is affiliated with
the BASE, is the largest stock market in Argentina. The MERVAL is a corporation
whose 147 shareholder members are the only individuals and entities authorized
to trade, either as principal or as agent, in the securities listed on the BASE.
Trading on the BASE is conducted by continuous open outcry, or the traditional
auction system, from 11:00 a.m. to 5:00 p.m. each business day of the year.
Trading on the BASE is also conducted through SINAC. SINAC is a computer trading
system that permits trading in debt securities and equity securities from 11:00
a.m. to 6:00 p.m. SINAC is accessed by brokers directly from workstations
located at their offices. Currently, all transactions relating to listed
negotiable obligations and listed government securities can be effected on
SINAC. In addition, a substantial over-the-counter market exists for private
trading in listed debt securities and, prior to the agreement, equity
securities. Such trades are reported on the Argentine OTC Market, an electronic
OTC reporting system.

         Although companies may list all of their capital stock on the BASE, in
most cases a continuing block is retained by the controlling shareholders. This
results in only a relatively small percentage of most companies' stock being
available for active trading by the public on the BASE. Even though individuals
have historically constituted the largest group of investors in Argentina's
equity markets, in recent years, banks and insurance companies have shown an
interest in these markets. Argentine pension funds also represent an increasing
percentage of BASE trading activity. As of May 31, 2004, such pension funds'
participation represented approximately 5.1% of market capitalization. Argentine
mutual funds (fondos communes de inversion), by contrast, continue to have very
low participation in the market. Although 108 companies had equity securities
listed on the BASE as of May 31, 2004, the 10 most-traded domestic companies on
the exchange accounted for approximately 87% of total trading value. Our shares
were the most-traded shares on the BASE in May 2004, with a 29.6% share of
trading volume.

         The Cordoba Stock Exchange is another important stock market in
Argentina. Securities listed on the Cordoba Stock Exchange include both
corporate equities and bonds and government securities. Through an agreement
with BASE, all of the securities listed on the BASE are authorized to be listed
and subsequently traded on the Cordoba Stock Exchange. Thus, many transactions
that originate on the Cordoba Stock Exchange relate to companies listed on the
BASE and such trades are subsequently settled in Buenos Aires.

MARKET REGULATIONS

         The CNV oversees the regulation of the Argentine securities markets and
is responsible for authorizing public offerings of securities and supervising
intermediaries, public companies and mutual funds. Argentine pension funds and
insurance companies are regulated by separate government agencies while
financial institutions are regulated mainly by the Argentine Central Bank. The
Argentine securities markets are governed generally by Law No. 17,811, as
amended, which created the CNV and regulates stock exchanges, market operations
and public offering of securities.

                                     -197-
<PAGE>

         In compliance with the provisions of Law No. 20,643 and the Decrees No.
659/74 and No. 2220/80, most debt and equity securities traded on the exchanges
and the Argentine OTC Market must, unless otherwise instructed by the
shareholders, be deposited by the shareholders in Caja de Valores S.A., which is
a corporation owned by the BASE, the Buenos Aires Stock Market and certain
provincial exchanges. Caja de Valores is the central securities depository of
Argentina which provides central depository facilities for securities and acts
as a transfer and paying agent in connection therewith. It also handles
settlement of securities transactions carried out by the BASE and operates the
computerized exchange information system.

         There is a relatively low level of regulation of the market for
Argentine securities and investors' activities in that market, and enforcement
of existing regulatory provisions has been extremely limited. Furthermore, there
may be less publicly available information about Argentine companies than is
regularly published by or about companies in the United States and certain other
countries. However, the CNV has taken steps to strengthen disclosure and
regulatory standards for the Argentine securities market, including the issuance
of regulations prohibiting insider trading and requiring insiders to report on
their ownership of securities, with associated penalties for noncompliance.

         In order to improve Argentine securities market regulation, Decree No.
677/01, "Capital Transparency and Best Practices," was promulgated and took
effect June 1, 2001. This decree has come to be regarded as the financial
consumer's "bill of rights." Its objective is to provide transparency and
protection to participants in the capital markets. The decree applies to
individuals and entities that participate in the public offering of securities
and as well as to stock exchanges. Among its key provisions, the decree broadens
the definition of "security"; governs the treatment of negotiable securities,
obligates publicly listed companies to form audit committees composed of three
or more members of the board of the directors, the majority of whom must be
independent under CNV regulations; authorizes market-stabilization transactions
under certain circumstances; governs insider trading, market manipulation and
securities fraud; and regulates going-private transactions and acquisitions of
voting shares, including controlling stakes in public companies.

         In order to offer securities to the public in Argentina, an issuer must
meet certain requirements of the CNV regarding assets, operating history,
management and other matters, and only securities for which an application for a
public offering has been approved by CNV may be listed on the corresponding
stock exchange. This approval does not imply any kind of certification of
assurance related to the merits of the quality of the securities, or the
solvency of the issuer. Issuers of listed securities are required to file
unaudited quarterly financial statements and audited annual financial
statements, as well as various other periodic reports, with the CNV and the
corresponding stock exchange.

ITEM 10. ADDITIONAL INFORMATION

DESCRIPTION OF OUR BYLAWS

GENERAL

         Set forth below is a brief description of certain provisions of Grupo
Galicia's bylaws and Argentine law and regulations with regard to Grupo
Galicia's capital stock. Your rights as a holder of our capital stock are
subject to Argentine corporate law, which may differ from the corporate laws of
other jurisdictions. This description is not purported to be complete and is
qualified in its entirety by reference to Grupo Galicia's bylaws, Argentine law
and the rules of the Buenos Aires Stock Exchange, the Cordoba Stock Exchange as
well as the National Securities Commission (Comision Nacional de Valores, the
"CNV"). A copy of Grupo Galicia's bylaws has been filed with and can be examined
at the CNV in Buenos Aires and the SEC in Washington, D.C.

         Grupo Galicia was incorporated on September 14, 1999, as a stock
corporation (sociedad anonima) under the laws of Argentina and registered on
September 30, 1999, with the Argentine Superintendency of Companies (Inspeccion
General de Justicia) under corporate registration number 14,519 of Book 7,
Volume of Stock Corporations. Our domicile is in Buenos Aires, Argentina. Under
our bylaws, the duration of Grupo Galicia is until June 30, 2100. This duration
may be extended by resolution taken at a general extraordinary shareholders'
meeting.

                                     -198-
<PAGE>

         During the shareholders' meeting held on April 23, 2003, we decided not
to adhere to the "Optional Statutory System for the Mandatory Acquisition of
Shares in a Public Offering" regime in compliance with Decree No. 677/01, which
requires a company to announce whether it has adopted this regime.

OUTSTANDING CAPITAL STOCK

         The total subscribed and paid in share capital of Grupo Galicia as of
December 31, 2003 amounted to Ps. 1,092,407,017. The outstanding capital stock
of Grupo Galicia consists of class A ordinary shares (the "class A shares") and
class B ordinary shares (the "class B shares"), each with a par value of Ps.
1.00. The following table presents the number of our shares outstanding as of
December 31, 2003, and the voting interest that the shares represent.

<TABLE>
<CAPTION>
                                                                            AS OF DECEMBER 31, 2003
                                                               NUMBER                   % OF
SHARES                                                       OF SHARES             CAPITAL STOCK   % OF VOTING RIGHTS
------                                                       ---------             -------------   ------------------
<S>                                                       <C>                      <C>             <C>
Class A shares                                              281,221,650                 25.7%             63.4%
Class B shares                                              811,185,367                 74.3%             36.6%
                                                          -------------                -----             -----
Total                                                     1,092,407,017                100.0%            100.0%
                                                          =============                =====             =====
</TABLE>

         No further class A shares are allowed to be issued.

         As part of the Bank's foreign debt restructuring, on May 13, 2004, we
issued 149 million preferred shares, with Ps. 1.00 par value, representing 12%
of our total capital stock, on a fully diluted basis. The preferred shares are
non voting shares, with preference in the event of the liquidation of Grupo
Galicia and will be automatically and mandatorily converted into class B shares
on May 13, 2005. As payment for the issuance of the shares, we received US$100
million of the Bank's subordinated bonds. After giving effect to the issuance of
the preferred shares, we have a total of 1,241,407,017 shares outstanding. The
following table represents the number of our shares outstanding as of June 30,
2004, and the voting interest that the shares represent.

<TABLE>
<CAPTION>
                                                                        AS OF JUNE 30, 2004
                                                         NUMBER                     % OF
SHARES                                                 OF SHARES               CAPITAL STOCK      % OF VOTING RIGHTS
------                                                 ---------               -------------      ------------------
<S>                                                  <C>                       <C>                <C>
Class A shares..............................           281,221,650                  22.7%                 63.4%
Class B shares..............................           811,185,367                  65.3%                 36.6%
                                                                                   -----                 -----
Preferred shares (1)........................           149,000,000                  12.0%                  0.0%
                                                     =============                 -----                 -----
Total.......................................         1,241,407,017                 100.0%                100.0%
                                                     =============                 -----                 -----
</TABLE>

----------------------------
(1) Once the preferred shares are converted to class B shares, the voting rights
of the class A shares will be 59.4% and of the class B shares 40.6%.

REGISTRATION AND TRANSFER

         The class B shares are book-entry common shares held through Caja de
Valores S.A. Caja de Valores maintains a stock registry for Grupo Galicia and
only those persons listed in such registry will be recognized as shareholders of
Grupo Galicia. Caja de Valores periodically delivers to Grupo Galicia a list of
the shareholders at certain date.

         The class B shares are transferable on the books of Caja de Valores.
Caja de Valores records all transfers in Grupo Galicia's registry. Within 10
days of such transfer, Caja de Valores is required to confirm the registration
of transfer with the transferor.

         Of the 149 million preferred shares recently issued 138 million shares
are in the form of a Global Certificate deposited in Caja de Valores and about
11 million shares are certificated shares corresponding to US Persons and Grupo
Galicia maintains the registry and records all transfers.

                                     -199-
<PAGE>

VOTING RIGHTS

         At shareholders' meetings, each class A share is entitled to five votes
and each class B share is entitled to one vote. However, class A shares are
entitled to only 1 vote in certain matters, such as:

         -        a merger or spin-off in which Grupo Galicia is not the
                  surviving corporation, unless the acquirer's shares are
                  authorized to be publicly offered or listed on any stock
                  exchange;

         -        a transformation in Grupo Galicia's legal corporate form;

         -        a fundamental change in Grupo Galicia's corporate purpose;

         -        a removal of Grupo Galicia's domicile outside Argentina;

         -        a voluntary termination of Grupo Galicia's public offering or
                  listing authorization;

         -        a continuation of Grupo Galicia following a delisting or a
                  mandatory cancellation of its public offering or listing
                  authorization;

         -        a total or partial recapitalization of the statutory capital
                  of Grupo Galicia following a loss; or

         -        the appointment of syndics.

         All distinctions between our class A shares and our class B shares will
be eliminated upon the occurrence of any of the following change of control
events:

         -        EBA Holding sells 100% of its class A shares;

         -        EBA Holding sells a portion of its Grupo Galicia class A
                  shares to a third person who, when aggregating all Grupo
                  Galicia class A shares with Grupo Galicia 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.

         On June 5, 2000, our board of directors passed a resolution to clarify
that any transfer by EBA Holding, including by way of a sale, exchange, gift,
assignment of voting rights, spin-off or merger of EBA Holding, which results in
a transfer of Grupo Galicia to any entity or individual, would trigger a change
of control event. In addition, the board of directors clarified that if EBA
Holding were to transfer a portion of its Grupo Galicia class A shares with 5
votes to a transferee, all distinctions between our class A shares and our class
B shares will be eliminated if, when aggregating the 5 votes to the votes of the
other shares that such transferee may have or acquire in the future, such
transferee acquires more than 50% of all of the outstanding votes of Grupo
Galicia.

         Our board of directors also clarified that when two or more persons act
or agree to act in concert or through entities which are under common control
with such persons, such persons would be treated as one person.

         In addition, on July 2001, the limitation on selling class B shares
belonging to the control group was canceled.

LIMITED LIABILITY OF SHAREHOLDERS

         Shareholders are not liable for our obligations. Shareholders'
liability is limited to the payment of the shares for which they subscribe.
However, shareholders who have a conflict of interest with us and do not abstain
from voting may be held liable for damages to us. Also, shareholders who
willfully or negligently vote in favor of a resolution that is subsequently
declared void by a court as contrary to Argentine law or our bylaws may be held
liable for damages to us or to third parties, including other shareholders,
resulting from such resolutions.

                                     -200-
<PAGE>

DIRECTORS

         Our bylaws provide that the board of directors shall be composed by at
least three and at most nine members, as decided at a general ordinary
shareholders' meeting. To be appointed to our board of directors, such person
must have been presented as a candidate by shareholders who represent at least
10% of the voting rights of Grupo Galicia, at least three business days before
the date the general ordinary shareholders' meeting is to be held.

         At each annual shareholders' meeting, the term of one third of the
members of our board of directors (no fewer than three directors) expires and
their successors are elected to serve for a term of three years. This system of
electing directors is intended to help maintain the continuity of the board.
Alternate directors replace directors until the following general ordinary
shareholders' meeting is held. Directors may also be replaced by alternate
directors if a director will be absent from a board meeting. The board of
directors is required to meet at least once every month and anytime any one of
the directors or syndics requests.

         Our bylaws state that the board of directors may decide to appoint an
executive committee and/or a delegate director.

APPOINTMENT OF DIRECTORS AND SYNDICS BY CUMULATIVE VOTING

         The Argentine Companies Law provides for the use of cumulative voting
to enable minority shareholders to appoint members of the board of directors and
syndics. Upon the completion of certain requirements, shareholders are entitled
to appoint up to one third of the vacancies to be filled on the board of
directors by cumulative voting. Each shareholder voting cumulatively has the
number of votes resulting from multiplying the number of votes to which such
shareholder would normally be entitled by the number of vacancies to be filled.
Such shareholder may apportion his votes or cast all such votes for one or a
number of candidates not exceeding one third of the vacancies to be filled.

COMPENSATION OF DIRECTORS

         The Argentine Commercial Companies Law and the CNV establish rules
regarding the compensation of the directors. The maximum amount of aggregate
compensation that the members of the board of directors may receive, including
salaries and other compensation for the performance of permanent technical and
administrative services, may not exceed 25.0% of profits of each fiscal year.
Said maximum amount shall be limited to 5.0% when no dividends are distributed
to the shareholders and shall be increased proportionately to the dividend
distribution until the 25.0% limit is reached when all profits are distributed.

         The Argentine Commercial Companies Law provides that aggregate director
compensation may exceed the maximum percentage of adjusted net income in any one
year when the Company's profits are nonexistent or too small as to allow payment
of a reasonable compensation to Board members which have been engaged in
technical or administrative services to the Company, provided that such proposal
is described in the notice of the agenda for the ordinary shareholders' meeting
and is approved by a majority of Grupo Galicia's shareholders present at such
shareholders' meeting.

         Besides the legal regulations described above, the bylaws of Grupo
Galicia dictate that the Board members are to be compensated according to the
best practices and national and international market standards to compensate
directors with similar duties and responsibilities.

SYNDICS

         Our bylaws, in accordance with Argentine law, provide for the
maintenance of a supervisory committee whose members are three permanent syndics
and three alternate syndics. Syndics are elected for a one-year term and may be
reelected. Alternate syndics replace permanent syndics in case of absence. For
the appointment of syndics, each of our class A shares and class B shares has
only one vote. Fees for syndics are established by the shareholders at the
annual ordinary shareholders' meeting. Their function is to oversee the
management of the company, to control the legality of the actions of the board
of directors, to attend all board of directors' meetings, to

                                     -201-
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attend all shareholders' meetings, to prepare reports for the shareholders on
the financial statements with their opinion, and to provide information
regarding the company to shareholders that represent at least 2% of the capital
stock. Syndics' liabilities are joint and several and unlimited for the
nonfulfillment of their duties. They are also jointly and severally liable,
together with the members of the board of directors, if the proper fulfillment
of their duties as syndics would have avoided the damage or the losses caused by
the members of the board of directors.

SHAREHOLDERS' MEETINGS

         Shareholders' meetings may be ordinary meetings or extraordinary
meetings. An annual ordinary shareholders' meeting is required to be held in
each fiscal year to consider the matters outlined in Article 234 of the
Argentine Commercial Companies Law, including:

         -        approval of Grupo Galicia's 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.

         Extraordinary shareholders' meetings may be called at any time to
discuss matters beyond the competence of the ordinary meeting, including but not
limited to amendments to the bylaws, matters related to the liquidation of the
Company, limitation of the shareholders' preemptive rights to subscribe new
shares, issuance of bonds and debentures, transformation of the corporate form,
the merger into another company and spin-offs, early winding-up, change of the
company's domicile to outside Argentina, total or partial repayment of capital
for losses, a substantial change in the corporate purpose set forth in the
bylaws.

         Shareholders' meetings may be convened by the board of directors or by
the syndics. A shareholder or group of shareholders holding at least 5.0% in the
aggregate of Grupo Galicia's capital stock may request the board of directors or
the syndics to convene a general shareholders' meeting to discuss the matters
indicated by the shareholder.

         Once a meeting has been convened with an agenda, the agenda limits the
matters to be passed-on at such meeting and no other matters may be passed-on.

         Additionally, the bylaws provide that any shareholder holding at least
5% in the aggregate of Grupo Galicia capital stock may present, in writing, to
the board of directors, before February 28 of each year, proposals of items to
be included in the agenda at the annual general ordinary shareholders' meeting.
The board of directors is not bound to include such items in the agenda.

         Class B shares represented by ADSs will be voted or caused to be voted
by the Depositary in accordance with instructions of the holders of such ADSs.

         Notice of each shareholders' meeting must be published in the Boletin
Oficial (Official Gazette) of the Republic of Argentina in the city of Buenos
Aires, and in a widely circulated newspaper in the country's territory, at least
twenty days prior to the meeting but not more than forty-five days prior to the
date on which the meeting is to be held. The board of directors will determine
the appropriate publication of notices outside Argentina in accordance with the
requirements of the jurisdictions and exchanges on which Grupo Galicia's shares
are traded. In order to attend a meeting and to be listed on the meeting
registry, shareholders must submit evidence of their book-entry share account
held at Caja de Valores at least three business days prior to the scheduled
meeting date without counting the meeting day.

                                     -202-
<PAGE>

         The quorum for ordinary meetings consists of a majority of stock
entitled to vote, and resolutions may be adopted by the affirmative vote of 50%
plus one vote (an "absolute majority") of the votes present. If no quorum is
present at the first meeting, a second meeting may be called at which the
shareholders present, whatever their number, shall constitute a quorum.
Resolutions are to be adopted by an absolute majority of the votes present. The
second meeting may be convened to be held one hour later on the same day as the
first meeting had been called for, provided that it is an ordinary shareholders'
meeting, or within thirty days of the date for which the first ordinary meeting
was called.

         The quorum for extraordinary shareholders' meetings consists of 60% of
stock entitled to vote, and resolutions may be adopted by an absolute majority
of the votes present. If no quorum is present at the first meeting, a second
meeting may be called at which the shareholders present, whatever their number,
shall constitute quorum. Resolutions are to be adopted by an absolute majority
of the votes present. The second meeting has to be convened to be held within
thirty days of the date for which the first extraordinary meeting was called,
and the notice must be published for three days, at least eight before the date
of the second meeting. Some special matters require a favorable vote of the
majority of all the stock holding voting rights, the class A shares being
granted the right to only 1 vote each. The special matters are described in " --
Voting Rights" above.

DIVIDENDS

         Dividends may be lawfully paid and declared only out of our retained
earnings representing the profit realized on our operations and investments
reflected in our annual financial statements according to Argentine GAAP as
approved at our annual general shareholders' meeting. No profits may be
distributed until prior losses are covered. Dividends paid on our class A shares
and class B shares will equal one another on a per-share basis.

         As required by the Argentine Commercial Companies Law, 5% of our net
income is allocated to a legal reserve until the reserve equals 20% of our
outstanding capital. The payment of cash dividends will not be affected by the
legal reserve as long as such reserve is covered by our subsidiaries' retained
earnings. Dividends may not be paid if the legal reserve has been impaired. The
legal reserve is not available for distribution to shareholders.

         Our board of directors submits our financial statements for the
previous fiscal year, together with reports prepared by our supervisory
committee, to our shareholders for approval at the general ordinary
shareholders' meeting. The shareholders, upon approving the financial
statements, determine the allocation of Grupo Galicia's net income.

         Our board of directors is allowed by law and by our bylaws to decide to
pay anticipated dividends on the basis of a balance sheet especially prepared
for purposes of paying such dividends.

         Under CNV regulations and our bylaws, cash dividends must be paid to
shareholders within 30 days of the shareholders' meeting approving the dividend.
Payment of dividends in shares requires authorization from the CNV, the Buenos
Aires Stock Exchange and the Cordoba Stock Exchange, whose authorizations must
be requested within 10 business days after the shareholders' meeting approving
the dividend. Grupo Galicia must make distribution of the shares available to
shareholders not later than three months after receiving authorization to do so
from the CNV.

         Shareholders may no longer claim the payment of dividends from Grupo
Galicia once three years have elapsed from the date on which the relevant
dividends were made available to such shareholders.

CAPITAL INCREASES AND REDUCTIONS

         We may increase our capital upon resolution of the general ordinary
shareholders' meeting. All capital increases must be reported to the CNV,
published in the Boletin Oficial (Official Gazette) and registered with the
Public Registry of Commerce. Capital reductions may be voluntary or mandatory.
Voluntary reduction of capital must be approved by an extraordinary
shareholders' meeting after the corresponding authorization by the Buenos Aires
Stock Exchange, the Cordoba Stock Exchange and the CNV and may take place only
after notice of such reduction has been published and creditors have been given
an opportunity to obtain payment or guarantees for their

                                     -203-
<PAGE>

claims or attachment. Reduction of capital is mandatory when losses have
exceeded reserves and more than 50% of the share capital of the company.

PREEMPTIVE RIGHTS

         Under Argentine law, it is mandatory that a shareholder of ordinary
shares of any given class have a preemptive right, proportional to the number of
shares he or she owns, to subscribe for shares of capital stock of the same
class or of any other class if the new subscription offer does not include all
classes of shares. Shareholders may only decide to suspend or limit preemptive
rights by supermajority at an extraordinary shareholders' meeting and only in
exceptional cases. Shareholders may waive their preemptive rights only on a
case-by-case basis.

         In the event of an increase in Grupo Galicia's capital, holders of
class A shares and class B shares have a preemptive right to subscribe for any
issue of class B shares in an amount sufficient to maintain the proportion of
capital then held by them. Holders of class A shares are entitled to subscribe
for class B shares because no further class A shares carrying five votes each
are allowed to be issued in the future. Under Argentine law, companies are
prohibited from issuing stock with multiple voting rights after they have been
authorized to make a public offering of securities. Our bylaws do not grant
preemptive rights to preferred shares.

         Preemptive rights are exercisable following the last publication of
notice of shareholders' opportunity to exercise preemptive rights in the
Official Gazette and an Argentine newspaper of wide circulation for a period of
30 days, provided that such period may be reduced to no less than 10 days if so
approved by an extraordinary shareholders' meeting.

         Shareholders who have exercised their preemptive rights and indicated
their intention to exercise additional preemptive rights are entitled to
additional preemptive rights ("accretion rights"), on a pro rata basis, with
respect to any unsubscribed shares, in accordance with the terms of the
Argentine Commercial Companies Law. Class B shares not subscribed for by
shareholders through exercise of their preemptive or accretion rights may be
offered to third parties.

         Holders of ADSs may be restricted in their ability to exercise
preemptive rights if a registration statement relating to such rights has not
been filed or is not effective if an exemption from registration is not
available.

APPRAISAL RIGHTS

         Whenever the shareholders of Grupo Galicia approve:

         -        a merger or spin-off in which Grupo Galicia is not the
                  surviving corporation, unless the acquirer's shares are
                  authorized to be publicly offered or listed on any stock
                  exchange,

         -        a transformation in Grupo Galicia's legal corporate form,

         -        a fundamental change in Grupo Galicia's corporate purpose,

         -        a change of Grupo Galicia's domicile to be outside Argentina,

         -        a voluntary termination of Grupo Galicia's public offering or
                  listing authorization,

         -        a continuation of Grupo Galicia following a delisting or a
                  mandatory cancellation of its public offering or listing
                  authorization, or

         -        a total or partial recapitalization of the statutory capital
                  of Grupo Galicia following a loss,

any shareholder that voted against such action or did not attend the relevant
meeting may exercise the right to have its shares canceled in exchange for the
book value of its shares, determined on the basis of Grupo Galicia's latest
balance sheet prepared in accordance with Argentine laws and regulations,
provided that such shareholder exercises its appraisal to rights within the
periods set forth below.

                                     -204-
<PAGE>

         There is, however, doubt as to whether holders of ADSs, will be able to
exercise appraisal rights with respect to class B shares represented by ADSs.

         Appraisal rights must be exercised within 5 days following the
adjournment of the meeting at which the resolution was adopted, in the event
that the dissenting shareholder voted against such resolutions, or within 15
days following such adjournment if the dissenting shareholder did not attend
such meeting and can prove that he was a shareholder on the date of such
meeting. In the case of merger or spin-off involving an entity authorized to
make a public offering of its shares, appraisal rights may not be exercised if
the shares to be received as a result of such transaction are listed on any
stock exchange. Appraisal rights are extinguished if the resolution giving rise
to such rights is overturned at another shareholders' meeting held within 75
days of the meeting at which the resolution was adopted.

         Payment on the appraisal rights must be made within one year of the
date of the shareholders' meeting at which the resolution was adopted, except
where the resolution was to delist Grupo Galicia's capital stock, in which case
the payment period is reduced to 60 days from the date of the related
resolution.

PREFERRED STOCK

         According to the Argentine Commercial Companies Law and our bylaws, an
ordinary shareholders' meeting may approve the issuance of preferred stock. Such
preferred stock may have a fixed dividend, cumulative or not cumulative, with or
without additional participation in Grupo Galicia's profits, as decided by
shareholders at a shareholders' meeting when drawing the conditions of the
issuance. They may also have other preferences, like a preference in the
liquidation of the Company.

         The holders of preferred stock shall not be entitled to voting rights.
Notwithstanding the foregoing, in the event that no dividends are paid to such
holders for their preferred stock, and for as long as such dividends are not
paid, the holders of preferred stock shall be entitled to voting rights. Holders
of preferred stock are also entitled to vote on certain special matters, such as
the transformation of the corporate form, the merger into another company and
spin-offs (when Grupo Galicia is not the surviving entity and the surviving
entity is not listed on any stock exchange), early winding-up, a change of Grupo
Galicia's domicile to outside Argentina, total or partial repayment of capital
for losses and a substantial change in the corporate purpose set forth in the
bylaws or in the event the preferred stock is traded on stock exchanges and such
trading is suspended or terminated.

CONFLICTS OF INTEREST

         As a protection to minority shareholders, under the Argentine
Commercial Companies Law, a shareholder is required to abstain from voting on
any resolution in which its direct or indirect interests conflict with that of
or are different than that of Grupo Galicia. In the event such shareholder votes
on such resolution, and such resolution would not have been approved without
such shareholder's vote, the resolution may be declared void by a court and such
shareholder may be liable for damages to the company as well as to any third
party, including other shareholders.

REDEMPTION OR REPURCHASE

         According to Decree No. 677/01, a sociedad anonima may acquire the
shares issued by it, provided that the public offering and listing thereof has
been authorized, subject to the following terms and conditions and those set
forth by the CNV. The CNV has not yet issued its regulations. The above
mentioned conditions are: (a) the shares to be acquired shall be fully paid up;
(b) there shall be a resolution signed by the board of directors to such effect;
(c) the acquisition shall be made out of net profits or free or voluntary
reserves; and (d) the total amount of shares acquired by the company, including
previously acquired shares, shall not exceed 10% of the capital stock or such
lower percentage determined by the CNV. The shares acquired by the company in
excess of such limit shall be disposed of within the term of 90 days after the
date of the acquisition originating such excess.

         The shares acquired by the company shall be disposed of by the company
within the maximum term of three years counted as from the date of acquisition
thereof. Upon disposing of the shares, the company shall make a

                                     -205-
<PAGE>

preemptive offer thereof. Such an offer will not be obligatory if the shares are
used in connection with a compensation plan or program for the company's
employees or if the shares are distributed among all shareholders pro rata their
shareholdings. If shareholders do no exercise, in whole or in part, their
preemptive rights, the sale shall be made at a stock exchange.

LIQUIDATION

         Upon liquidation of Grupo Galicia, one or more liquidators may be
appointed to wind up the company. If no such appointment is made, our board of
directors will act as liquidator. All outstanding common shares will be entitled
to participate equally in any distribution upon liquidation.

         In the event of a liquidation, in Argentina as well as in any other
country, the assets of Grupo Galicia shall first be applied to satisfy its debts
and liabilities.

OTHER PROVISIONS

         The bylaws are governed by Argentine law and the ownership of any kind
of Grupo Galicia's shares represents acceptance of its bylaws and submission to
the exclusive jurisdiction of the ordinary commercial courts of Buenos Aires for
any claim or dispute related to the company, its shareholders, directors and
members of the supervisory committee.

EXCHANGE CONTROLS

         From 1989 to November 30, 2001, there were no foreign exchange controls
preventing or restricting the conversion of pesos into U.S. dollars and
transfers abroad. However, on December 3, 2001, the government introduced
controls over the foreign exchange market and on transfers of foreign currency
abroad. In late 2002 and during 2003, controls over the foreign exchange market
and capital movements were lifted to a large extent. As of the date of this
annual report, certain controls still remain.

         In particular, access to the foreign market is limited to a monthly
U.S. dollar amount for all Argentine residents and transfers of foreign exchange
abroad by financial institutions, such as the Bank, with outstanding
indebtedness with the Argentine Central Bank for liquidity support, is subject
to the prior authorization of the Argentine Central Bank. Such prior
authorization is not required for payments in connection with the foreign debt
of the Bank's head office in Argentina and its Cayman Branch, which was
restructured on May 18, 2004, given that such restructuring was approved by the
Argentine Central Bank.

         See Item 4. "Information on the Company -- Main Regulatory Changes in
2002 and 2003 -- Foreign Exchange Market."

TAXATION

         The following is a summary of certain U.S. Federal income and Argentine
tax matters that may be relevant with respect to the acquisition, ownership and
disposition of ADSs or class B shares. Currently, there is no tax treaty between
the United States and Argentina.

ARGENTINE TAXES

         Taxation of Dividends

         In general, dividend payments on the ADSs or ordinary shares, whether
in cash, property, or stock, are not subject to Argentine withholding tax or
other taxes.

         There is an exception under which a 35% tax ("equalization tax") will
be imposed on certain dividends approved by the registrant's shareholders.

                                     -206-
<PAGE>

         The equalization tax will be applied only to the extent that
distributions of dividends exceed the taxable income of the company increased by
nontaxable dividends received by the distributing company in prior years and
reduced by Argentine income tax paid by the distributing company.

         In this situation the equalization tax will be imposed as a withholding
tax on the shareholder receiving the dividend. Dividends distributions made in
property (other than cash) will be subject to the same tax rules as cash
dividends. Stock dividends are not subject to Argentine taxation.

         Taxation of Capital Gains

         Pursuant to Decree No. 2,284/91 (the "Deregulation Decree"), capital
gains derived by nonresident individuals or foreign companies from the sale,
exchange or other disposition of ADSs or class B shares are not currently
subject to income tax.

         Only applicable to shares not listed in a stock exchange and beginning
January 1, 2001, capital gains from the sale, exchange or other dispositions of
shares not listed in a stock exchange, will be subject to income tax when
derived by individuals domiciled in Argentina.

         In addition, in the case of legal entities or permanent organizations
incorporated or domiciled abroad that, pursuant to its bylaws, charters,
documents or the applicable regulatory framework, that have as its principal
activity investing outside of the jurisdiction of their incorporation or
domicile, or are generally restricted from doing business in its country of
incorporation, it will be assumed, without any proof to the contrary being
admitted, that the seller is an individual domiciled in Argentina. Such legal
entities will be subject to income tax imposed as a withholding tax on the
seller receiving the payment (for payments made beginning April 30, 2001) at the
rate of 17,50% (that is, 35% on 50% of the amount of the payment), but the
foreign party may choose instead to pay a tax of 35% on the net gain realized on
the sale. In such situation, the Deregulation Decree will not be applicable.

         On July 3, 2003, the Government Chief Counsel (Procurador del Tesoro)
issued an opinion that the provisions of the income tax law that taxed capital
gains arising from unlisted shares obtained by resident individuals or "offshore
companies," as defined by the Argentine Income Tax Law, are no longer in force
because they have been implicitly abrogated. The validity of this opinion is
difficult to assess. Opinions of the Government Chief Counsel are binding upon
all government attorneys, including attorneys of the Argentine Tax
Administration.

         Transfer Taxes

         No Argentine transfer taxes are applicable on the sale or transfer of
ADSs or class B shares.

         Tax on Minimum Notional Income

         The tax reform in force since 1999 reinstituted a tax on assets on
Argentine companies that will be in effect during 10 years, unless that term is
extended by future legislation.

         This tax is similar to the asset tax that was previously in effect in
Argentina from 1990 to 1995. It applies at a general rate of 1% on a broadly
defined asset base encompassing most of the taxpayer's gross assets at the end
of any fiscal year ending after December 31, 1998.

         Specifically the Law establishes that banks, other financial
institutions and insurance companies will consider a basis of imposition of 20%
of the value of taxable assets.

         A company's asset tax liability for a tax year will be reduced by its
income tax payments, and asset tax payments for a tax year can be carried
forward to be applied against the company's income tax liability in any of the
following ten tax years.

                                     -207-
<PAGE>

         Personal Assets Tax

         Individuals domiciled in Argentina will be subject to a 0.5% annual tax
in respect of assets located in Argentina and abroad for assets not exceeding
Ps. 200,000. For assets exceeding Ps. 200,000 the tax rate is 0.75%. The tax
will be levied on the difference between the total value of the taxpayer's
assets at each December 31st and a nontaxable threshold of Ps. 102,300.
Individuals domiciled abroad will pay the tax only in respect of the assets they
hold in Argentina. In the case of individuals domiciled abroad, the tax will be
paid by the individuals or legal entities domiciled in Argentina which as of
December 31st of each year hold the joint ownership, possession, use, enjoyment,
deposit, safekeeping, custody, administration or tenure of the assets located in
Argentina subject to the tax belonging to the individuals domiciled abroad. In
such case the annual nontaxable amount of Ps. 102,300 will not be deductible.
When the direct ownership of negotiable bonds, government securities and certain
other investments, except shares issued by companies ruled by Law No. 19,550
(Commercial Companies Law), corresponds to companies domiciled abroad in
countries that do not enforce registration systems for private securities (with
the exception of insurance companies, open-end investment funds, pension funds
or banks and financial entities with head offices in countries that have adopted
the international banking supervision standards laid down by the Basel Committee
on Banking Supervision) or that pursuant to its bylaws, charter, documents or
the applicable regulatory framework, have as its principal activity investing
out of the jurisdiction of its organization or domicile, or are generally
restricted from doing business in its country of incorporation, it will be
assumed, without any proof to the contrary being admitted, that those assets
belong ultimately to individuals and therefore the system for paying the tax for
such individuals domiciled abroad is applicable to them. The annual nontaxable
amount of Ps. 102,300 will not be deductible and the tax will not have to be
paid when it is less than Ps. 256. The regulations for applying these
requirements have not yet been issued. In the case of government securities or
bonds the personal assets tax will be applied at the rate of 1.5%.

         There is an exception pursuant to a recent tax reform that was
published in the Official Gazette as Law No. 25,585, which went into effect on
December 31, 2002. This tax reform introduced a mechanism to collect the
personal assets tax on shares issued by companies ruled by Law No. 19,550, which
ownership belongs to individuals domiciled in Argentina or abroad and companies
or legal entities domiciled abroad. In the case of companies or legal entities
domiciled abroad, it will be assumed, without any proof to the contrary being
admitted, that those shares belong ultimately to individuals domiciled abroad.

         The tax will be assessed and paid by those companies ruled by Law No.
19,550 at the rate of 0.5% on the value of the shares or equity interest. The
valuation of the shares, whether listed or not, must be made according to their
proportional equity value. In such case the annual nontaxable amount of Ps.
102.300 will not be deductible. These companies may eventually seek
reimbursement from the direct owner of its shares in respect of any amounts paid
to the Argentine tax authorities as personal assets tax. Grupo Galicia has
sought reimbursement for the amount paid corresponding to December 31, 2002. The
board of directors submitted the decision on how to proceed with respect to
fiscal year 2003 to the annual shareholders' meeting held April 22, 2004. At
that meeting, our shareholders voted to suspend all claims on our shareholders
for amounts unpaid for fiscal year 2002 and to have us absorb the amounts due
for fiscal year 2003 onward when not withheld from dividends.

         Other Taxes

         There are no Argentine federal inheritance, succession or gift taxes
applicable to the ownership, transfer or disposition of ADSs or class B shares.
There are no Argentine stamp, issue, registration or similar taxes or duties
payable by holders of ADSs or class B shares.

         Deposit and Withdrawal of Class B Shares in Exchange for ADSs

         No Argentine tax is imposed on the deposit or withdrawal of class B
shares in exchange for ADSs.

UNITED STATES TAXES

         The following summary of U.S. Federal income taxes describes certain
U.S. Federal income tax consequences of the ownership of class B shares or ADSs
(which are evidenced by American Depositary Shares,

                                     -208-
<PAGE>

"ADSs"), as such securities are set forth in the documents or the forms thereof,
relating to such securities as in existence on the date hereof, but it does not
purport to address all of the tax considerations that may be relevant to a
decision to purchase, own or dispose of class B shares or ADSs. This summary
assumes that the class B shares or ADSs will be held as capital assets and does
not address tax consequences to all categories of investors, some of which (such
as dealers or traders in securities or currencies, real estate investment
trusts, regulated investment companies, grantor trusts, tax-exempt entities,
banks, insurance companies, persons that received Class B Shares or ADSs as
compensation for the performance of services, persons owning (or are deemed to
own for U.S. tax purposes) at least 10% or more (by voting power or value) of
the shares of Grupo Galicia, investors whose functional currency is not the U.S.
dollar and persons that will hold the ordinary shares or ADSs as part of a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
for U.S. tax purposes) may be subject to special tax rules. Moreover, this
summary does not address the U.S. federal estate and gift or alternative minimum
tax consequences of the acquisition, ownership and disposition of Class B Shares
or ADSs.

         This summary (i) is based on the tax laws of the United States as in
effect on the date of this annual report and on United States Treasury
Regulations in effect as of the date of this annual report, as well as judicial
and administrative interpretations thereof available on or before such date and
(ii) is based in part on representations of the Depository and the assumption
that each obligation in the Deposit Agreement and any related agreement will be
performed in accordance with its terms. All of the foregoing are subject to
change, which change could apply retroactively and could affect the tax
consequences described below.

         The U.S. Treasury Department has expressed concern that depositaries
for American depositary receipts, or other intermediaries between the holders of
shares of an issuer and the issuer, may be taking actions that are inconsistent
with the claiming of U.S. foreign tax credits by U.S. holders of such receipts
or shares. Accordingly, the U.S. foreign tax credit analysis described below
could be affected by future actions that may be taken by the U.S. Treasury
Department.

         For purposes of this summary, a "U.S. Holder" is a beneficial owner of
class B shares or ADSs who, for U.S. Federal income tax purposes, is (i) a
citizen or resident of the United States, (ii) a corporation or partnership
organized in or under the laws of the United States or any state thereof
(including the District of Columbia), (iii) an estate the income of which is
subject to U.S. Federal income taxation regardless of its source, or (iv) a
trust if such trust validly elects to be treated as a United States person for
United States federal income tax purposes or if (a) a United States court can
exercise primary supervision over its administration and (b) one or more United
States persons have the authority to control all of the substantial decisions of
such trust. A "Non-U.S. Holder" is a beneficial owner of class B shares or ADSs
other than a U.S. Holder.

         If a partnership (or any other entity treated as a partnership for U.S.
federal income tax purposes) holds class B shares or ADSs, the tax treatment of
the partnership and a partner in such partnership will generally depend on the
status of the partner and the activities of the partnership. Such a partner or
partnership should consult its tax advisor as to its tax consequences.

         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

         In general, for U.S. Federal income tax purposes holders of ADSs will
be treated as the owners of the ADSs evidenced thereby and of the class B shares
represented by such ADSs.

         Taxation of Cash Dividends and Distribution of Stock

         Subject to the discussion below under "Passive Foreign Investment
Company Considerations," for U.S. Federal income tax purposes, distributions by
the Company of cash or property (other than certain distributions, if any, of
Class B Shares or ADSs distributed pro rata to all shareholders of the Company,
including holders of ADSs) made with respect to the Class B Shares, represented
by ADSs, before reduction for any Argentine taxes withheld therefrom, will
constitute dividends to the extent of the registrant's current and accumulated
earnings and profits,

                                     -209-
<PAGE>

and will be included in the gross income of a U.S. Holder as dividend income.
Subject to the discussion below under "Passive Foreign Investment Company
Considerations," noncorporate U.S. Holders generally may be taxed on
distributions on ADSs (or shares that are readily tradable on an established
securities market in the United States at the time of such distribution) at the
lower rates applicable to long-term capital gains for taxable years beginning on
or before December 31, 2008 (i.e., gains from the sale of capital assets held
for more than one year). Noncorporate U.S. Holders that do not meet a minimum
holding period requirement during which they are not protected from the risk of
loss with respect to such ADSs (or shares), that elect to treat the dividend
income as "investment income" pursuant to Section 163(d)(4)(B) of the Code or
that receive dividends with respect to which they are obligated to make related
payments, will not be eligible for the reduced rates of taxation. Such dividends
will not be eligible for the dividends received deduction generally allowed to
corporations under the Internal Revenue Code of 1986, as amended (the "Code").
Subject to the discussion below under "Passive Foreign Investment Company
Considerations," if distributions with respect to the Class B Shares exceed the
registrant's current and accumulated earnings and profits, the excess would be
treated first as a tax-free return of capital to the extent of such U.S.
Holder's adjusted tax basis in the ADSs, which represent Class B Shares. Any
amount in excess of the amount of the dividend and the return of capital would
be treated as capital gain. The Company does not maintain calculations of its
earnings and profits under U.S. federal income tax principles. Dividends paid in
pesos will be included in the gross income of a U.S. Holder in an amount equal
to the U.S. dollar value of the pesos on the date of receipt, which, in the case
of ADSs, is the date they are received by the depositary. The amount of any
distribution of property other than cash will be the fair market value of such
property on the date of distribution. Any gains or losses resulting from the
conversion of pesos between the time of the receipt of dividends paid in pesos
and the time the pesos are converted into U.S. dollars will be treated as
ordinary income or loss, as the case may be, of a U.S. Holder. Dividends
received by a U.S. Holder with respect to the Class B Shares or ADSs will be
treated as foreign source income, which may be relevant in calculating such
holder's foreign tax credit limitation. Subject to certain conditions and
limitations, Argentine tax withheld on dividends may be deducted from taxable
income or credited against a U.S. Holder's U.S. Federal income tax liability.
The limitation on foreign taxes eligible for credit is calculated separately
with respect to specific classes of income. For this purpose, dividends
generally will constitute foreign source "passive income" (or in the case of
certain holders, "financial services income") for U.S. foreign tax credit
purposes.

         Subject to the discussion below under "Backup Withholding and
Information Reporting Requirements," a Non-U.S. Holder generally will not be
subject to U.S. Federal income or withholding tax on dividends received on Class
B Shares or ADSs, unless such income is effectively connected with the conduct
by the Non-U.S. Holder of a trade or business in the United States.

         Taxation of Capital Gains

         Subject to the discussion below under "Passive Foreign Investment
Company Considerations," U.S. Holders that hold ADSs as capital assets will
recognize capital gain or loss for U.S. Federal income tax purposes upon a sale
or exchange of such ADSs in an amount equal to the difference between such U.S.
Holder's adjusted tax basis in the Class B Shares or ADSs and the amount
realized on their disposition. In the case of a noncorporate U.S. Holder, the
maximum marginal U.S. Federal income tax rate applicable to such gain will be
lower than the maximum marginal federal income tax rate for ordinary income
(other than certain dividends) if the U.S. Holder's holding period for the Class
B Shares or ADSs exceeds one year (i.e., long-term capital gains). Gain or loss,
if any, recognized by a U.S. Holder generally will be treated as United States
source income or loss for U.S. foreign tax credit purposes. Certain limitations
exist on the deductibility of capital losses for U.S. Federal income tax
purposes.

         The initial tax basis of the Class B Shares to a U.S. Holder is the
U.S. dollar value of the pesos denominated purchase price determined on the date
of purchase. If the Class B Shares are treated as traded on an "established
securities market," a cash basis U.S. Holder (or, if it elects, an accrual basis
U.S. Holder) will determine the dollar value of the cost of such Class B Shares
by translating the amount paid at the spot rate of exchange on the settlement
date of the purchase.

         With respect to the sale or exchange of Class B Shares, the amount
realized generally will be the U.S. dollar value of the payment received
determined on (i) the date of receipt of payment in the case of a cash basis
U.S. Holder and (ii) the date of disposition in the case of an accrual basis
U.S. Holder. If the Class B Shares are treated as traded on an "established
securities market," a cash basis taxpayer (or, if it elects, an accrual basis
taxpayer) will

                                     -210-
<PAGE>

determine the U.S. dollar value of the amount realized by translating the amount
received at the spot rate of exchange on the settlement date of the sale.

         Subject to the discussion below under "Backup Withholding Tax and
Information Reporting Requirements," a Non-U.S. Holder generally will not be
subject to U.S. Federal income or withholding tax on gain realized on the sale
or exchange of Class B Shares or ADSs unless (i) such gain is effectively
connected with the conduct by the Non-U.S. Holder of a trade or business in the
United States or (ii) in the case of gain realized by an individual Non-U.S.
Holder, the Non-U.S. Holder is present in the United States for 183 days or more
in the taxable year of the sale or exchange and certain other conditions are
met.

         Passive Foreign Investment Company Considerations

         A Non-United States corporation will be classified as a "passive
foreign investment company," or a PFIC, for U.S. federal income tax purposes in
any taxable year in which, after applying certain look-through rules, either (1)
at least 75 percent of its gross income is "passive income" or (2) at least 50
percent of the average value of its gross assets is attributable to assets that
produce "passive income" or is held for the production of passive income.
Passive income for this purpose generally includes dividends, interest,
royalties, rents and gains from commodities and securities transactions, other
than certain income derived in the active conduct of a banking business.

         Based on certain estimates of its gross income and gross assets and the
nature of its business, the Company believes that it will not be classified as a
PFIC for the taxable year ended December 31, 2003. The Company's status in
future years will depend on its assets and activities in those years. The
Company has no reason to believe that its assets or activities will change in a
manner that would cause it to be classified as a PFIC, but there can be no
assurance that the Company will not be considered a PFIC for any taxable year.
If the Company were a PFIC, a U.S. Holder of Class B Shares or ADSs generally
would be subject to imputed interest charges and other disadvantageous tax
treatment (including the denial of the taxation of certain dividends at the
lower rates applicable to long-term capital gains, as discussed above under
"Taxation of Cash Dividends and Distribution of Stock") with respect to any gain
from the sale or exchange of, and certain distributions with respect to, the
Class B Shares or ADSs.

         If the Company were a PFIC, a U.S. Holder of Class B Shares or ADSs
could make a variety of elections that may alleviate certain of the tax
consequences referred to above, and one of these elections may be made
retroactively. However, it is expected that the conditions necessary for making
certain of such elections will not apply in the case of the Class B Shares or
ADSs. U.S. Holders should consult their own tax advisors regarding the tax
consequences that would arise if the Company were treated as a PFIC.

         Backup Withholding and Information Reporting

         United States backup withholding tax and information reporting
requirements generally apply to certain payments to certain noncorporate holders
of stock.

         Information reporting generally will apply to payments of dividends on,
and to proceeds from the sale or redemption of, Class B Shares or ADSs made
within the United States to a holder of Class B Shares or ADSs (other than an
"exempt recipient," including a corporation, a payee that is not a United States
person that provides an appropriate certification and certain other persons).

         A payor will be required to withhold backup withholding tax from any
payments of dividends on, or proceeds from the sale or redemption of, Class B
Shares or ADSs within the United States to a holder (other than an exempt
recipient such as a corporation or a payee that is not a United States person
and that provides an appropriate certification) if such Holder fails to furnish
its correct taxpayer identification number or otherwise fails to comply with, or
establish an exemption from, such backup withholding tax requirements. The
backup withholding tax rate is 28% through 2010. In the case of such payments
made within the United States to a foreign simple trust, foreign grantor trust
or a foreign partnership (other than payments to a foreign simple trust, a
foreign grantor trust or a foreign partnership that qualifies as a "withholding
foreign trust" or a "withholding foreign partnership" within the meaning of
certain Treasury Regulations and payments to a foreign simple trust, a foreign
grantor trust or a foreign partnership that are effectively connected with the
conduct of a trade or business in the United States), the beneficiaries

                                     -211-
<PAGE>
of the foreign simple trust, the persons treated as the owners of the foreign
grantor trust or the partners of the foreign partnership, as the case may be,
will be required to provide the certification discussed above in order to
establish an exemption from backup withholding tax and information reporting
requirements. Moreover, a payor only may rely on a certification provided by a
payee that is not a United States person only if such payor does not have actual
knowledge or a reason to know that any information or certification stated in
such certificate is incorrect.

         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.

MATERIAL CONTRACTS

         In connection with the Bank's foreign debt restructuring, we entered
into the registration rights agreement and corporate governance/financial
reporting agreement (the "Grupo Galicia agreement") as described in Item 4.
"Information on the Company -- Business -- Banco Galicia -- Galicia
Capitalization and Liquidity Plan -- Restructuring of the Foreign Debt of the
Bank's head office in Argentina and its Cayman Branch," and copies of which are
filed as exhibits to this annual report.

         Under the Grupo Galicia agreement, in addition to agreeing to provide
financial and other information to the lenders under the Bank's loan agreements,
we agreed that for so long as any amounts payable under the loan agreements
remain outstanding, we will, by November 18, 2004, cause our audit committee of
our board of directors to have at least three members, a majority of which shall
be "independent directors" (as such term is defined in NASDAQ Stock Market Inc.
Rule 4350(d)(2)(A)), and comply with certain provisions of the U.S. Sarbanes
Oxley Act of 2002 relating to granting of personal loans to executives,
implementing internal controls and a code of ethics and providing certifications
from our chief executive officer and chief financial officer.

         We also agreed that we will not pay fees to the members of our board of
directors during any fiscal year, or enter into agreements or any other kind of
transactions pursuant to which we will pay fees, salaries, retainers or any
other kind of compensation to the members of our board of directors during any
fiscal year, if the aggregate amount of fees, salaries, retainers or other
compensation during such fiscal year would exceed US$1.5 million or make any
payment to our management in excess of market compensation.

         In addition, each year, we agree to inform the lenders under the loan
agreements as to whether a change of control has occurred. If a change of
control, as defined in the Grupo Galicia agreement, occurs, it may trigger an
event of default under the Bank's loan agreements.

         In connection with its foreign debt restructuring, the Bank entered
into various restructured loan agreement with its bank creditors, a form of
which is filed as an exhibit to this annual report, and into an indenture with
The Bank of New York, acting as trustee, pursuant to which the bond instruments
were issued. A copy of the indenture is filed as an exhibit to this annual
report. These new loan agreements and/or indenture include a number of
significant covenants that, among other things, restrict the Bank's ability to:
pay dividends on stock or purchase stock (see Item 8. "Financial Information --
Dividend Policy and Dividends -- Dividend Policy"); make certain types of
investments; use the proceeds of the sale of certain assets or the issuance of
debt or equity securities; engage in certain transactions with affiliates; and
engage in businesses activities unrelated to the Bank's current business. In
addition, certain of these agreements also require the Bank to maintain
specified financial ratios and to comply with certain reporting and
informational requirements.

DOCUMENTS ON DISPLAY

      We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. In accordance with these requirements, we file
reports and other information with the United States Securities and Exchange
Commission. These materials, including this annual report and its exhibits, may
be inspected and printed or copied for a fee at the SEC'S Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information
about the operation of the Public Reference Room by calling the SEC at (202)
942-8090.

                                     -212-
<PAGE>
These material are also available on the SEC's website at http://www.sec.gov.
Material submitted by us can also be inspected at the offices of The Nasdaq
Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1506.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

GENERAL

         Market risks faced by the Group are the risks arising from the
fluctuations in interest rates and in foreign exchange rates. Market risk for
Grupo Galicia arises mainly from the operations of Banco Galicia in its capacity
as a financial intermediary. Grupo Galicia's subsidiaries and equity investees
other than Banco Galicia are also subject to market risk. However, the amount of
these risks are not significant and are not discussed below. Grupo Galicia's
policy regarding these risks is applied at the level of its operating
subsidiaries.

         At Banco Galicia, the process of establishing the consolidated Bank
risk tolerance and practices is carried out under the direction of the board of
directors and the supervision of the risk management committee and the financial
risk policy committee ("Comite de Posicion Financiera"). The board of directors
delegates risk policy definition and supervision to these committees, the risk
management division, the treasury division and the credit division, and specific
risk supervision and management functions to senior officers of the treasury
division (liquidity management and market risks), the credit division (credit
risk) and the risk management division (operational risk). The above mentioned
committees are the most senior corporate forums for supervising and monitoring
risk management practices and compliance. See Item 6. "Directors, Senior
Management and Employees -- Functions of the Board of Directors of Banco
Galicia."

         The risk management's division's mission is to assure that the Bank's
board of directors and executive authorities are fully aware of all of the risks
to which Banco Galicia is exposed. For this, it participates in the design of
the necessary policies to achieve a proper global risk management, reviews on an
ongoing basis the different risk exposures and monitors compliance across the
Bank with the established risk standards.

         The treasury division is responsible for managing liquidity and market
risks. Until November 2001, it presented to the financial risk policy committee,
on bimonthly basis, a report containing the information necessary to assess and
control market risk. The crisis situation in late 2001 altered the frequency of
such presentations. Currently these presentations are made on a weekly basis.

         The review of such information provides the Bank with a view of the
environment in which it operates and of its exposure to market risk. Based on
this review the committee formulates recommendations and actions.

         Before 2002, the interest rate, cash flow and currency mismatches in
the Bank's balance sheets were the result of the Bank's risk management
decisions, limited to a certain extent by the unavailability of hedging
instruments in the local market and to a limited availability of such
instruments in the international market.

         The economic policy implemented by the Argentine government in 2002
meant the compulsory modification by the government of most of the contracts
outstanding between economic agents, which, among others, radically modified the
currency of denomination of bank assets and liabilities, their maturity and
their interest rates from those outstanding as of December 31, 2001. In addition
the adjustment by the CER or the CVS indices of principal of pesified assets or
liabilities was introduced. As a result of these measures, currently the Bank's
balance sheet shows interest rate, cash flow and currency mismatches between
assets and liabilities, that have been created by the economic policy of the
Argentine government in 2002. These mismatches are currently, to a large extent,
beyond the Bank's control. See Item 5. "Operating and Financial Review and
Prospects -- Item 5A. Operating Results -- Currency Composition of our Balance
Sheet."

         Liquidity management is discussed in Item 5. "Operating and Financial
Review and Prospects -- Item 5B. Liquidity and Capital Resources -- Liquidity."

                                     -213-
<PAGE>

         Credit risk management is discussed in Item 4. "Information on the
Company -- Selected Statistical Information -- Credit Review Process" and the
other sections under Item 4. "Information on the Company -- Selected Statistical
Information" describing the Bank's loan portfolio and loan loss experience.

INTEREST RATE RISK

         Interest-rate risk (including the risk derived from the adjustment of
principal by CER of certain of the Bank's assets and liabilities) is the effect
on the Bank's net interest income of the fluctuations of market interest rates
and of the CER variations (linked to the variation of the consumer price index).
Sensitivity to interest rate and CER fluctuations arises in the Bank's normal
course of business as the repricing characteristics of its interest-earning
assets do not necessarily match those of its interest-bearing deposits and other
borrowings. The repricing structure of assets and liabilities is matched when an
equal amount of assets and liabilities reprice for any given period. Any excess
of assets or liabilities over these matched items results in a gap or mismatch.

         Banco Galicia aims to minimize the impact of interest rate changes
(including CER fluctuations) on its net interest income.

         The Bank monitors the repricing structure of interest-earning assets
and interest-bearing liabilities, using such methods as gap analysis, rate-shock
analysis and net-present-value analysis together with gap-duration analysis.
Interest-rate gap reports are used basically for measuring risk in the short
term.

         As of December 31, 2003, the Bank's interest-earning assets and
interest-bearing liabilities, taking into account the different segments of
interest-earning assets and interest-bearing liabilities, and the total mismatch
in each one of the segments, was as follows:

<TABLE>
<CAPTION>
                                                                         AS OF DECEMBER 31, 2003
                                            ----------------------------------------------------------------------------------
                                            PAST DUE /        LESS THAN                                  OVER 10
                                             CALLABLE         ONE YEAR     1 - 5 YEARS  5 - 10 YEARS      YEARS           TOTAL
                                             --------         --------     -----------  ------------      -----           -----
                                                                            (in millions of pesos)
<S>                                         <C>              <C>           <C>          <C>            <C>             <C>
ASSETS
PESOS - ADJUSTABLE BY CER..............              -       Ps.   350.5   Ps. 1,524.8   Ps. 5,496.8   Ps. 2,318.8     Ps. 9,690.9
  Government Securities ...............              -              78.6           5.6             -             -            84.2
  Financial Trusts (Galtrust I, Secured
    Loans, Special Funds Almafuerte and
    Mendoza Banks)......................             -                 -         389.9         255.0         312.7           957.6
  Loans.................................             -             271.9       1,129.3       5,068.2       2,006.1         8,475.5
  Other.................................             -                 -             -         173.6             -           173.6
PESOS - ADJUSTABLE BY CVS...............             -              35.5         164.9         184.4          55.5           440.3
  Loans................................              -              35.5         105.2          89.3          47.4           277.4
  Financial Trusts (Galtrust II and V -
    Mortgage Trust)....................              -                 -          59.7          95.1           8.1           162.9
PESOS..................................              -           1,603.1          44.6           6.5           5.2         1,659.4
  Government Securities................              -             294.4             -             -             -           294.4
  Corporate Debt Securities............              -              22.3             -             -           5.0            27.3
  Financial Trust......................              -               3.6             -             -             -             3.6
  Loans................................              -           1,218.8          31.5           4.0           0.2         1,254.5
  Other Credits........................              -              64.0          13.1           2.5             -            79.6
DOLLARS................................      Ps. 827.9             528.2       3,123.8       3,069.8           0.3         7,550.0
  Overnight ...........................              -              15.2             -             -             -            15.2
  Government Securities................          819.1 (1)           2.4           2.9           2.9             -           827.3
  Compensatory and Hedge Bonds to be
     Received..........................              -                 -       3,032.5       3,030.7             -         6,063.2
  Corporate Debt Securities............            8.8               6.9             -             -             -            15.7
  Loans................................              -             499.7          85.9          33.6             -           619.2
  Other Credits........................              -               4.0           2.5           2.6           0.3             9.4
                                             ---------       -----------   -----------   -----------   -----------     -----------
TOTAL ASSETS...........................      Ps. 827.9       Ps. 2,517.3   Ps. 4,858.1   Ps. 8,757.5   Ps. 2,379.8     Ps.19,340.6
</TABLE>

                                     -214-
<PAGE>

<TABLE>
<S>                                        <C>            <C>            <C>            <C>            <C>             <C>
LIABILITIES
PESOS - ADJUSTABLE BY CER................            -    Ps.   647.6    Ps. 3,141.6    Ps. 5,050.8    Ps.     6.6     Ps.  8,846.6
  Time Deposits..........................            -          326.4          164.8           72.0              -            563.2
  Other Financing........................            -           63.1           93.3            3.5              -            159.9
  Lines of Credit from Domestic Banks....            -              -              -           26.9            6.6             33.5
  Argentine Central Bank.................            -          258.1        2,883.5        4,948.4              -          8,090.0
PESOS....................................            -        2,637.4            0.5              -              -          2,637.9
  Demand Deposits .......................            -          876.4              -              -              -            876.4
  Time Deposits..........................            -        1,515.4            0.5              -              -          1,515.9
  Restructured Deposits (CEDROs).........            -              -              -              -              -                -
  Negotiable Obligations.................            -              -              -              -              -                -
  Lines of Credit from Domestic Banks ...            -          245.6              -              -              -            245.6
  Argentine Central Bank.................            -              -              -              -              -                -
  Other Liabilities......................            -              -              -              -              -                -
DOLLARS..................................  Ps. 3,997.4    Ps.   916.6    Ps. 1,672.7    Ps.   876.0              -     Ps.  7,462.7
  Demand Deposits .......................            -          278.6              -              -              -            278.6
  Time Deposits..........................            -          372.4          549.5          412.1              -          1,334.0
  Lines of Credit from Domestic Banks....         38.8(3)         4.4            6.1              -              -             49.3
  Foreign Debt being Restructured -
    Negotiable Obligations...............      1,141.0(2)       123.6          786.4          461.4              -          2,512.4
  Foreign Debt being Restructured -
   Lines of Credit ......................      2,817.6(2)       130.2          322.5              -              -          3,270.3
  Other Liabilities .....................            -            7.4            8.2            2.5              -             18.1
                                           -----------    -----------    -----------    -----------    -----------     ------------
TOTAL LIABILITIES........................  Ps. 3,997.4    Ps. 4,201.6    Ps. 4,814.8    Ps. 5,926.8    Ps.     6.6     Ps. 18,947.2

Asset / Liability Gap....................  Ps.(3,169.5)   Ps.(1,684.3)   Ps.    43.3    Ps. 2,830.7    Ps. 2,373.2     Ps.    393.4
Cumulative Gap...........................     (3,169.5)      (4,853.8)      (4,810.5)      (1,979.8)         393.4
Ratio of Cumulative Gap to Cumulative
  Liabilities ...........................       (79.29)%       (59.20)%       (36.97)%       (10.45)%         2.08%
Ratio of Cumulative Gap to Total
  Liabilities............................       (16.73)%       (25.62)%       (25.39)%       (10.45)%         2.08%

Asset / Liability Gap CER................            -         (297.1)      (1,616.8)         446.0        2,312.2            844.3
Asset / Liability Gap CVS................            -           35.5          164.9          184.4           55.5            440.3
Asset / Liability Gap Interest Rate Pesos            -       (1,034.3)          44.1            6.5            5.2           (978.5)
Asset / Liability Gap Interest Rate......
  Dollars ...............................     (3,169.5)        (388.4)       1,451.1        2,193.8            0.3             87.3

Other Peso-denominated Assets............            -        2,599.2              -              -              -          2,599.2
Other Dollar-denominated Assets..........            -          768.0              -              -              -            768.0
Other Peso-denominated Liabilities.......            -        1,843.8              -              -              -          1,843.8
Other Dollar-denominated Liabilities.....            -          564.0                                                         564.0
Total Assets.............................        827.9        5,884.5        4,858.1        8,757.5        2,379.8         22,707.8
Total Liabilities........................      3,997.4        6,609.4        4,814.8        5,926.8            6.6         21,355.0
GAP......................................  Ps.(3,169.5)   Ps.  (724.9)   Ps.    43.3    Ps. 2,830.7    Ps. 2,373.2     Ps.  1,352.8
                                           ===========    ===========    ===========    ===========    ===========     ============
</TABLE>


Principal only. Does not include interest.

(1) Represents the Bank's holdings of Argentine Republic External Notes,
currently included in the sovereign's debt restructuring.

(2) Aggregate principal amount of foreign debt of the Bank's head office in
Argentina and of its Cayman Branch subject to restructuring as of December 31,
2003, which restructuring was completed as of May 18,2004.

(3) Includes the Bank's debt with the BICE and negotiable obligations of the
regional credit card companies.

         In the table above, assets and liabilities in payment default as of
December 31, 2003, are shown under a separate column under the heading "past
due/callable," including the Bank's foreign debt, whose restructuring was
completed on May 18, 2004.

         In the table above, the item "Argentine Central Bank" comprises: (i)
the financial assistance for liquidity support granted to the Bank by the
Argentine Central Bank, for a principal amount (including the CER adjustment) of
Ps. Ps 5,647.1 million. This liability accrues at the CER plus a 3.5% fixed
annual interest rate, and its principal will be amortized in 92 monthly
installments beginning March 2004; and (ii) the borrowings to be incurred with
the Argentine Central Bank to purchase the hedge bond, for a principal amount
including the CER adjustment of Ps. 2.,442.9 million, which accrues interest at
an annual 2% fixed rate, and the principal of which will be amortized in 8
annual installments between 2005 and 2012.

         To complement gap analysis, but with a longer term perspective, the
Bank uses the following methods to obtain different measures of the impact of a
change in interest rates and in the CER adjustment on the Bank:

                                     -215-
<PAGE>

         (i) net present-value / gap duration analysis: first the net present
value method is used to obtain the economic value of the Bank's assets and
liabilities, by: a) valuing assets and liabilities with a market quotation, when
available, at their market value; and b) calculating the net present value of
financial assets and liabilities by using market interest rates, when available,
to discount the cash flows of financial assets and liabilities with similar
credit risk, collateral and maturity. When not available, interest rates and the
CER adjustment estimated by the Bank were used. This results from the situation
of the financial markets in Argentina as of the date of preparation of this
information for fiscal year 2003 and for fiscal year 2002 not having normalized
sufficiently for market interest rates to be available for the different types
of exposures in the Bank's balance sheet.

         Second, the individual "duration" of each financial asset and liability
is determined. Subsequently individual durations are weighted by the net present
value of the corresponding asset or liability. The weighted net duration of the
Bank's shareholders' equity (net portfolio) is obtained. This measurement allows
the determination of the variation of the economic value of the Bank's net
portfolio for a given variation (typically 50 or 100 basis points) in market
interest rates. The lower the weighted net duration of shareholders' equity, the
lower the exposure to changes in market interest rates.

         (ii) Rate shock analysis: this method enables the Bank to measure the
impact of given interest-rate and CER variations (typically 50 or 100 basis
points) on the Bank's year-one net financial income. The method assumes that
interest-rate movements from December 31, 2003, levels are immediate and of the
same magnitude and direction, while the structure and volume of assets and
liabilities remains unchanged.

         The following discussion about Banco Galicia's management of
interest-rate rate risk contains forward-looking statements that involve risk
and uncertainties. Actual results could differ from those projected in the
forward-looking statements.

         The table below measures as of December 31, 2003, the net present
values of the Bank's net portfolio for various interest-rate scenarios, as well
as the absolute and percentage changes from the net present value of this
portfolio corresponding to the December 31, 2003, interest rate levels. The
table also shows the Bank's year-one net interest income generated for various
interest-rate scenarios, as well as the absolute and percent changes from
amounts generated by the December 31, 2003 interest rate levels. The same is
presented as of December 31, 2002, only, given that information prior to 2002
has lost relevance given the radical changes experienced by the Argentine
regulatory, macroeconomic and financial system's environments after December 31,
2001.

         For December 31, 2003 and 2002 the breakdown of the Bank's net
portfolio into trading and nontrading portfolios is not presented, as: (i) the
Bank had an immaterial trading portfolio in 2002, as a result of the Bank's
participation in the public-sector debt swaps of government securities for
secured loans and of the overall Argentine financial markets situation at the
end of that year; and (ii) its trading portfolio as of December 31, 2003 was low
and substantially made of short-term securities (Lebac).

         The tables below show that the weighted net duration of the Bank's
shareholders' equity as of December 31, 2003, was approximately 30.0 as compared
to approximately 320.0 as of December 31, 2002. This indicates that, as of
December 31, 2003, a 100-basis-point increase in interest rates would result in
30.0% decline in the net present value of the Bank's shareholders' equity, while
a decrease of 100 basis points would have the opposite effect.

                                     -216-
<PAGE>

<TABLE>
<CAPTION>
                                                                            AS OF DECEMBER 31, 2003
                                          ----------------------------------------------------------------------------------------
NET PORTFOLIO                                              FAIR VALUE                                NET INTEREST INCOME (1)
----------------------------------------------------------------------------------------------------------------------------------
                                                        ABSOLUTE                                         ABSOLUTE
CHANGE IN INTEREST RATES IN BASIS
POINTS (RATE SHOCK)                         AMOUNT      VARIATION         % CHANGE        AMOUNT         VARIATION        % CHANGE
-------------------                         ------      ---------         --------        ------         ---------        --------
                                                                 (in millions of pesos, except percentages)
<S>                                      <C>            <C>               <C>           <C>              <C>              <C>
200................................      Ps.  441.4     Ps.(570.4)         (56.37)%     Ps. 129.5         Ps. 4.1            3.27%
150................................           571.5        (440.3)         (43.52)          128.5             3.1            2.47
100................................           709.5        (302.3)         (29.88)          127.5             2.1            1.67
50.................................           856.1        (155.7)         (15.39)          126.4             1.0            0.80
Static.............................         1,011.8             -               -           125.4               -               -
(50)...............................         1,170.8         159.0           15.71           124.5            (0.9)          (0.72)
(100)..............................         1,340.0         328.2           32.44           123.6            (1.8)          (1.44)
(150)..............................         1,503.7         491.9           48.62           116.8            (8.6)          (6.86)
(200)..............................         1,662.1         650.3           64.27           110.3           (15.1)         (12.04)
                                         ==========     =========          ======       =========         =======          ======
</TABLE>

(1) Net interest income of the first year.

<TABLE>
<CAPTION>
                                                                            AS OF DECEMBER 31, 2002
                                          ----------------------------------------------------------------------------------------
NET PORTFOLIO                                              FAIR VALUE                                NET INTEREST INCOME (1)
----------------------------------------------------------------------------------------------------------------------------------
                                                         ABSOLUTE                                         ABSOLUTE
CHANGE IN INTEREST RATES IN BASIS
POINTS (RATE SHOCK)                         AMOUNT      VARIATION         % CHANGE        AMOUNT         VARIATION        % CHANGE
-------------------                         ------      ---------         --------        ------         ---------        --------
                                                    (in millions of February 28, 2003 constant pesos, except percentages)
<S>                                       <C>           <C>               <C>           <C>              <C>              <C>
200................................       Ps.(531.3)    Ps.(629.2)        (642.70)%     Ps. 200.8        Ps.(69.6)         (25.74)%
150................................          (398.1)       (496.0)        (506.64)          218.3           (52.1)         (19.27)
100................................          (232.0)       (329.9)        (336.98)          235.7           (34.7)         (12.83)
50.................................           (66.6)       (164.5)        (168.03)          253.2           (17.2)          (6.36)
Static.............................            97.9             -               -           270.4               -               -
(50)...............................           250.0         152.1          155.36           288.8            18.4            6.80
(100)..............................           401.1         303.2          309.70           307.2            36.8           13.61
(150)..............................           553.8         455.9          465.68           324.3            53.9           19.93
(200)..............................           877.1         779.2          795.91           338.0            67.6           25.00
                                          =========     =========         =======       =========        ========          ======
</TABLE>

(1) Net interest income of the first year.

         As of December 31, 2003, the weighted net duration of the Bank's
shareholder's equity was approximately 30.0, showing a significant decrease from
December 31, 2002. The decrease is mainly attributable to an increase in the
duration of liabilities reflecting the restructuring of: (i) the Bank's debt for
liquidity support owed to the Argentine Central Bank; and (ii) the foreign debt
of the Bank's head office and that of the Cayman Branch completed in May 18,
2004. In the previous fiscal year, both debts were considered callable.

         As of December 31, 2002, the weighted net duration of the Bank's
shareholder's equity shows a significant increase as compared to the 6.0%
duration as of December 31, 2001. This increase is mainly attributable to the
low duration assigned to the Bank's liabilities as of December 31, 2002. The low
duration of the Bank's liabilities as of December 31, 2002, reflects the
following assumptions: (i) the financial assistance received from the Argentine
Central Bank for liquidity support was considered a 30-day revolving facility,
in accordance with the Argentine Central Bank rules regarding financial
assistance received by banks for liquidity support and given that the measures
from the government to restructure the assistance received by banks during the
2001 and 2002 crisis into long term debt were issued after the close of fiscal
year 2002; and (ii) the aggregate of the Bank's debt subject to renegotiation
was treated as callable. It should be considered also that this high duration
applies, unlike previous fiscal years, to a low shareholders' equity net present
value, mainly attributable to the Bank's exposure to the Argentine public
sector.

                                     -217-
<PAGE>

FOREIGN EXCHANGE RATE RISK

         Exchange-rate sensitivity is the relationship between the fluctuations
of exchange rates and the Bank's net financial income resulting from the
revaluation of the Bank's assets and liabilities denominated in foreign
currency. The impact of variations in the exchange rate on the Bank's net
financial income depends on whether the Bank has a net asset foreign currency
position (the amount by which foreign currency denominated assets exceed foreign
currency denominated liabilities) or a short foreign currency position (the
amount by which foreign currency denominated liabilities exceed foreign currency
denominated assets). In the first case an increase/decrease in the exchange rate
derives in a gain/loss, respectively. In the second case, an increase/decrease
derives in a loss/gain, respectively.

         Until December 31, 2001, Banco Galicia aimed at minimizing the impact
of foreign exchange rate fluctuations on its financial results by closely
matching assets and liabilities not denominated in pesos, while keeping a net
asset position in foreign currency (Banco Galicia's position in currencies other
than dollars was always insignificant, therefore in the paragraphs below foreign
currency positions largely represent U.S. dollar positions).

         As of December 31, 2003 and 2002, the Bank's position in foreign
currency was to a large extent the result of the measures taken by the Argentine
government during 2002, mainly the compulsory asymmetric pesification of certain
assets and liabilities which changed the currency denomination of Bank's balance
sheets components and the compensation for the effects of the former, through
dollar-denominated bonds (BODEN 2012), in the case of the Bank. As of December
31, 2003, Banco Galicia had a net asset foreign currency position of Ps. 291.6
million (US$99.4 million), and as of December 31, 2002 it had a net asset
foreign currency position of Ps. 378.5 million (US$111.6 million). Its net asset
foreign currency position exposes the Bank to losses if the peso appreciates (a
decrease in the exchange rate of the peso vis-a-vis the U.S. dollar). The Bank
does not have the ability to significantly modify its foreign currency position,
due to the characteristics of the Argentine financial markets, the lack of hedge
instruments in the local market and the limited access to the international
capital markets.

         The following tables contain information on Banco Galicia's sensitivity
to exchange-rate risk that constitute forward-looking statements that involve
risk and uncertainties. Actual results could differ from those projected in the
forward-looking statements.

         The tables below show the effects of changes in the exchange rate of
the peso vis-a-vis the U.S. dollar on the value of the Bank's foreign currency
net asset position as of December 31, 2003 and 2002. For December 31, 2003 and
2002, the breakdown of the Bank's foreign currency net asset position into
trading and nontrading was not presented as the Bank had an immaterial foreign
currency trading portfolio as a result of its participation in the public-sector
debt swap performed in November 2001 and of the situation of the Argentine
financial and securities markets during 2002 and 2003.

<TABLE>
<CAPTION>
                                                                               VALUE OF FOREIGN CURRENCY NET POSITION AS
                                                                                           OF DECEMBER 31, 2003
----------------------------------------------------------------------------------------------------------------------------
PERCENTAGE CHANGE IN THE VALUE OF THE PESO RELATIVE TO THE DOLLAR (1)        AMOUNT         ABSOLUTE VARIATION      % CHANGE
---------------------------------------------------------------------        ------         ------------------      --------
                                                                           (in millions of February 28, 2003 constant pesos,
                                                                                            except percentages)
<S>                                                                         <C>             <C>                     <C>
40%..........................................                               Ps. 408.2            Ps. 116.6             40.0%
30%..........................................                                   379.1                 87.5             30.0
20%..........................................                                   349.9                 58.3             20.0
10%..........................................                                   320.8                 29.2             10.0
Static.......................................                                   291.6                    -                -
(10)%........................................                                   262.4                (29.2)           (10.0)
(20)%........................................                                   233.3                (58.3)           (20.0)
(30)%........................................                                   204.1                (87.5)           (30.0)
(40)%........................................                                   175.0               (116.6)           (40.0)
                                                                            =========            =========            =====
</TABLE>

(1) Devaluation / (Revaluation).

                                     -218-
<PAGE>
\
<TABLE>
<CAPTION>
                                                                              VALUE OF FOREIGN CURRENCY NET POSITION AS OF
                                                                                            DECEMBER 31, 2002
----------------------------------------------------------------------------------------------------------------------------
PERCENTAGE CHANGE IN THE VALUE OF THE PESO RELATIVE TO THE DOLLAR (1)         AMOUNT        ABSOLUTE VARIATION      % CHANGE
---------------------------------------------------------------------         ------        ------------------      --------
                                                                            (in millions of February 28, 2003 constant pesos,
                                                                                            except percentages)
<S>                                                                         <C>             <C>                     <C>
40%..........................................                               Ps. 529.9            Ps. 151.4             40.0%
30%..........................................                                   492.1                113.6             30.0
20%..........................................                                   454.2                 75.7             20.0
10%..........................................                                   416.4                 37.9             10.0
Static.......................................                                   378.5                    -                -
(10)%........................................                                   340.7                (37.8)           (10.0)
(20)%........................................                                   302.8                (75.7)           (20.0)
(30)%........................................                                   265.0               (113.5)           (30.0)
(40)%........................................                                   227.1               (151.4)           (40.0)
                                                                            =========            =========            =====
</TABLE>

(1) Devaluation / (Revaluation).

         The decrease in the Bank's net asset foreign currency position as of
December 31, 2003 from that as of December 31, 2002, when expressed in pesos,
was mainly attributable to the appreciation of the peso vis-a-vis the U.S.
dollar during 2003, reflected by a decrease in the exchange rate from Ps. 3.36
per U.S. dollar as of December 31, 2002, to Ps. 2.93 as of December 31, 2003.
When expressed in U.S. dollars the net asset position was substantially the
same, given that the decrease in the Bank's dollar-denominated assets resultant
from the recognition of a lower compensation to be received for asymmetric
pesification following observations by the Argentine Central Bank to the
determination of the compensation made by the Bank, for US$53.9 million in
nominal value of BODEN 2012, was compensated by the payment of
dollar-denominated liabilities mainly representing liabilities of Galicia
Uruguay, which payments were contemplated by the restructuring schedule agreed
with depositors in 2002 (and the exchange offer carried in 2003) and made by
using pesos.

         As of December 31, 2002 the Bank had a net asset position in foreign
currency of US$111.6 million. The December 31, 2001 position, reflected a
situation prior to the devaluation of the peso (January 2002). The December 31,
2002 position was mainly attributable to the recording of the compensation for
the effects of asymmetric pesification of certain assets and liabilities
through, in the case of the Bank, dollar-denominated bonds (BODEN 2012), given
that asymmetric pesification, had left the Bank with an involuntary short
foreign currency position. In accordance with the compensation rules applicable,
the total amount of compensation in the Bank's books (compensatory and hedge
bonds) as of December 31, 2002, was Ps. 7,792.0 million, reflecting US$2,254.0
million of face value of BODEN 2012. As of that date, this amount was subject to
review by the Argentine Central Bank.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

         Not applicable.

                                     -219-
<PAGE>

                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

         As of the date of this annual report, payment defaults remain on the
following foreign debt of the Bank's head office in Argentina as a result of
certain holders not participating in the foreign debt restructuring of the Bank
which was completed on May 18, 2004:

         -        9% Notes due 2003 issued under the Indenture dated November 8,
                  1993, among the Bank, The Bank of New York, as trustee,
                  co-registrar, principal paying agent and registrar. As of June
                  30, 2004, the total principal amount in default is US$20.9
                  million and the total accrued and unpaid interest is US$4.8
                  million.

         -        Floating Rate Notes issued under the a global medium term note
                  program and a purchase agreement, dated June 7, 2001, among
                  the Bank, Santander Central Hispano Investment Securities Inc,
                  New York, as arranger and syndication agent, Banco Santander
                  Central Hispano S.A., acting through its New York branch, as
                  administrative and PRI Agent, the initial purchasers and The
                  Bank of New York, New York, as principal paying agent. As of
                  the date of this annual report, the total principal amount in
                  default is US$0.9 million and the total accrued and unpaid
                  interest as of June 30, 2004, is US$0.091 million.

         The Bank's head office in Argentina is currently in the process of
restructuring a US$10.0 million loan under the loan agreement dated December 12,
2001, between the Bank and Banco de Inversion y Comercio Exterior S.A., a
domestic bank. As of the date of this annual report, the total principal amount
in payment default is US$10.0 million and the total accrued and unpaid interest
as of June 30, 2004 is US$1.4 million.

         In addition, an aggregate of Ps. 9.5 million in total principal amount
of negotiable obligations issued by the regional credit card companies in which
the Bank's holds controlling interests is in payment default.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS

         Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

         In April 2003, we formed a working group consisting of members of
senior management of various business areas and key corporate functions of Grupo
Galicia and its main subsidiaries, to evaluate our internal controls and to
propose and implement improvements to the extent any weaknesses were identified.
In conducting its review and developing an action plan, the working group
utilized the methodology proposed by the Committee of Sponsoring Organizations
of the Treadway Commission, a private-sector organization dedicated to improving
the quality of financial reporting through business ethics, effective internal
controls and corporate governance.

         As part of this evaluation, we and each of our principal subsidiaries
focused on the following areas: corporate governance, business ethics,
production and gathering of information, audit committees, auditing, risk
administration, fraud prevention, management, business planning, information
technology, internal control, law and regulation and U.S. GAAP requirements.

         During 2003, we took the following actions to improve our internal
controls in response to the working group's recommendations:

         -        We formed committees for information integrity at the holding
                  company and at the Bank as well as at the other main operating
                  subsidiaries levels and developed responsibilities and
                  guidelines for each committee of each company.

                                     -220-
<PAGE>

         -        We established the audit committee at the holding company
                  level and developed its functions and the related guidelines.

         -        We documented the procedures for identifying risks and
                  implemented a risk-balanced scorecard at the Bank.

         -        We updated the job descriptions and functions of key personnel
                  at the holding company, the Bank and the insurance companies.
                  (We are in the process of updating the job descriptions and
                  functions of key personnel at the regional credit card
                  companies).

         -        We began the process of modifying the Bank's existing code of
                  ethics for the holding company and its principal subsidiaries
                  in order to comply with the requirements of section 406 of the
                  Sarbanes-Oxley Act of 2002.

         -        We reviewed and improved the procedures contemplated by the
                  Bank's business contingency plan.

         -        We defined the procedures for documenting the management
                  meetings at the holding company and its main operating
                  subsidiaries comprising Grupo Galicia.

         We conducted an evaluation of the effectiveness of the design and
operation of our disclosure and controls and procedures as of December 31, 2003
under the supervision and participation of our senior management, including our
chief executive officer and chief financial officer pursuant to Rules 13a-15 and
15d-15 under the Securities Exchange Act of 1934. Based on this evaluation, our
chief executive officer and chief financial officer have concluded that, as of
December 31, 2003, our disclosure controls and procedures are effective in
ensuring that all material information we are required to disclose in the
reports we file under the Securities Exchange Act is gathered and communicated
to our management, including our chief executive officer and chief financial
officer, in a timely fashion, and that information required to be disclosed in
this annual report or our other reports to be filed under the Securities
Exchange Act is timely recorded, processed, summarized and reported.

         Since December 31, 2003, there have been no significant changes in our
internal controls (including any corrective actions with regard to significant
deficiencies and material weaknesses) or in other factors that could
significantly affect these controls.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

         Our board of directors has determined that Mr. Marcelo L. S. Tonini is
an audit committee financial expert.

ITEM 16B. CODE OF ETHICS

         We have adopted a corporate code of ethics for our holding company and
our main subsidiaries in accordance with the requirements of section 406 of the
Sarbanes-Oxley Act of 2002. We have posted a copy of our code of ethics on our
website, http://www.gfgsa.com.

ITEM 16C. PRINCIPAL ACCOUNTANTS' FEES AND SERVICES

         The following table sets forth the total remuneration billed to Grupo
Galicia and its subsidiaries by its independent registered public accounting
firm, PricewaterhouseCoopers, during the fiscal years ended December 31, 2002
and 2003. While Net Investment and Galicia Warrants used the services of a local
accounting firm, amounts paid to this firm were minimal in the two reported
fiscal years.

                                     -221-
<PAGE>

<TABLE>
<CAPTION>
                                                   2002                2003
                                                    (In thousands of pesos)
<S>                                                <C>                 <C>
Audit fees.............................            2,319               2,336

Audit related fees.....................                -                 714

Tax fees...............................               18                   1

All other fees.........................              372                 646
                                                   -----               -----
             TOTAL                                 2,709               3,697
                                                   -----               -----
</TABLE>

AUDIT FEES

         Audit fees are mainly the fees billed in relation with professional
services for auditing our consolidated financial statements for the fiscal years
2002 and 2003 and for the review of our interim financial statements, for local
purposes, and our annual report on Form 20-F.

AUDIT-RELATED FEES

         Audit-related fees are fees billed for professional services related to
the review of our consolidated financial statements, other than the services
included under "audit fees" in each of the years 2002 and 2003. Audit-related
fees are mainly fees associated with Banco Galicia's debt restructuring.

TAX FEES

         Tax fees are fees billed with respect to tax compliance, advice and
planning. Prior to the fiscal year ended December 31, 2003, we conducted our tax
compliance work in-house.

ALL OTHER FEES

         All other fees include fees paid for professional services other than
the services reported above under "audit fees," "audit related fees" and "tax
fees" in each of the fiscal periods above.

AUDIT COMMITTEE PREAPPROVAL

         Commencing with the fiscal year ending December 31, 2004, our audit
committee will be required to preapprove all audit and nonaudit services to be
provided by our independent registered public accounting firm.

                                     -222-
<PAGE>

                                    PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

Report of the Independent Registered Public Accounting Firm as of and for the
fiscal years ended December 31, 2003, 2002 and 2001

Consolidated Balance Sheets as of December 31, 2003 and 2002

Consolidated Statements of Income for the years ended December 31, 2003, 2002
and 2001

Consolidated Statements of Cash Flows for the years ended December 31, 2003,
2002 and 2001

Consolidated Statements of Changes in Shareholders' Equity for the years ended
December 31, 2003, 2002 and 2001

Notes to the Consolidated Financial Statements

You can find our audited consolidated financial statements on pages F-1 to F-109
of this annual report.

ITEM 19. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT                                 DESCRIPTION
-------                                 -----------
<S>       <C>
1.1       English translation of estatutos sociales (bylaws)

2.1       Indenture, dated as of May 18, 2004, among the Bank, The Bank of New
          York and Banco Rio de la Plata S.A.

4.1       Form of restructured loan facility (as evidenced by the note purchase
          agreement, dated as of April 27, 2004, among the Bank, Barclays Bank
          PLC, the holders party thereto and Deutsche Bank Trust Company
          Americas)

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."

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 906 of the Sarbanes
          Oxley Act of 2002

13.2      Certification of the principal executive officer required pursuant to
          18 U.S.C. Section 1350, as adopted pursuant to 906 of the Sarbanes
          Oxley Act of 2002

99.1      Registration Rights Agreement dated as of May 18, 2004, executed and
          delivered by Grupo Galicia for the benefit of certain holders of
          preferred shares
</TABLE>

                                     -223-
<PAGE>

<TABLE>
<S>       <C>
99.2      Agreement, dated as of April 27, 2004, among Grupo Galicia, the
          International Finance Corporation, the Inter-American Investment
          Corporation, Commodity Credit Corporation and Deutsche Bank Trust
          Company Americas
</TABLE>

                                     -224-
<PAGE>

                                    SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.

                                          GRUPO FINANCIERO GALICIA S.A.

                                          By: /s/ Antonio Garces
                                             -------------------------
                                            Name: Antonio Garces
                                            Title: Chairman of the Board, Chief
                                                   Executive Officer

         Date: July 13, 2004

                                     -225-
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                   PAGE
                                                                                                                   ----
<S>                                                                                                                <C>
Report of the Independent Registered Public Accounting Firm as of and for the fiscal years ended December 31,
2003, 2002, and 2001............................................................................................    F-2

Consolidated Balance Sheets as of December 31, 2003 and 2002 ...................................................    F-4

Consolidated Statements of Income for the years ended December 31, 2003, 2002 and
2001............................................................................................................    F-7

Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001......................    F-9

Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31,
2003, 2002 and 2001.............................................................................................   F-11

Notes to the Consolidated Financial Statements..................................................................   F-12
</TABLE>

                                       F-1
<PAGE>

           REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Chairman and Directors of
Grupo Financiero Galicia S.A.

We have audited the consolidated balance sheets of Grupo Financiero Galicia S.A.
and subsidiaries at December 31, 2003 and 2002 and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each of
the three years ended December 31, 2003, 2002 and 2001, as well as their
accompanying notes 1 to 40. These consolidated financial statements and notes
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and the auditing standards generally
accepted in Argentina and performed the auditing procedures required by the
Banco Central de la Republica Argentina (the "Argentine Central Bank"). Those
standards require that we plan and perform an audit to obtain reasonable
assurance as to whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As mentioned in Note 2 and 38, the accompanying consolidated financial
statements have been prepared in accordance with accounting rules prescribed by
the Argentine Central Bank, which differ in certain respects from, and is a
comprehensive basis of accounting other than, Argentine generally accepted
accounting principles applicable to enterprises in general.

Accounting rules prescribed by Argentine Central Bank vary in certain
significant respects from accounting principles generally accepted in the United
States of America. Information relating to the nature and effect of such
differences is presented for the years ended December 31, 2003, 2002 and 2001,
in Notes 27 and 39 to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Grupo Financiero
Galicia S.A. and subsidiaries at December 31, 2003 and 2002, and the results of
operations, changes in shareholders' equity and cash flows for the years ended
December 31, 2003, 2002 and 2001, in conformity with accounting rules prescribed
by the Argentine Central Bank.

In our audit report dated February 17, 2004, we stated we had a substantial
doubt regarding the Company's ability to continue as a going concern due to the
following uncertainties that affected the Company's most significant subsidiary
(Banco de Galicia y Buenos Aires S.A., the "Bank"), comprising approximately
99.2% of the Company's total assets: (i) the restructuring of the financial
system as a whole and the measures designed by the government to stay the
economic downturn (ii) the success of the Bank's rehabilitation and
restructuring plan to allow the Company to continue its operations and meet its
solvency and liquidity ratios required by the Argentine Central Bank (iii) the
recoverability of the Company's assets and the settlement of the Company's
liabilities. As mentioned in note 1 to the accompanying consolidated financial
statements, during 2003 an improvement took place in the Argentine economy,
which put an end to the economic recession that had started in the second half
of 1998. The financial system has gradually recovered its liquidity levels,
recording an increase in deposits and in some types of borrowings, as well as
the measures taken by the government had stabilized the financial system. In
February, 2004 the Bank restructured its Argentine Central Bank debt and in May
2004, the Bank settled the restructuring of its foreign debt. Accordingly, our
present opinion on the 2003 financial statements is different from that
expressed in our previous report.

                                       F-2
<PAGE>

The quality of the Group's financial condition and results of operations depend
to a significant extent on macroeconomic and political conditions prevailing
from time to time in Argentina. The political and economic crisis of late 2001
and early 2002 in Argentina, and the Argentine government's actions to address
such crisis, as mentioned in Note 1 and 39 have had a significant adverse effect
on the Group's business activity. Currently, the Group is significantly
dependent on the Argentine Government's ability to perform on its obligations to
the Bank and to the entire financial system in Argentina, in connection with
Federal secured loans, federal government securities and on its obligation to
approve and deliver government securities under various laws and regulations.

                                                          PricewaterhouseCoopers

Buenos Aires, Argentina
February 17, 2004, except for note 1 and 37 as to which the date is June 17,
2004.

                                       F-3
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2003 AND 2002
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                           ------------------------------------
                                                                                 2003               2002
                                                                           ----------------   -----------------
<S>                                                                        <C>                <C>
ASSETS
A. Cash and due from banks
     Cash...............................................................   Ps.      400,699   Ps.       250,219
     Banks and correspondents...........................................            424,603             325,995
     Other..............................................................                848                 624
                                                                           ----------------   -----------------
                                                                           Ps.      826,150   Ps.       576,838

B. Government and corporate securities
     Holdings of investment account securities..........................          2,485,120           1,672,922
     Holdings of trading securities.....................................            327,911               7,680
     Unlisted government securities.....................................             86,227             146,678
     Investments in listed corporate securities.........................              2,950               9,436
     Allowances.........................................................             (2,107)             (6,874)
                                                                           ----------------   -----------------
                                                                           Ps.    2,900,101   Ps.     1,829,842

C.  Loans
      To the non-financial government sector............................          7,800,551           7,690,022
      To the financial sector...........................................            194,692             134,809
      To the non-financial private sector and residents abroad                    4,165,829           4,539,168
        Overdrafts......................................................            218,902             226,985
        Notes...........................................................          1,387,766           1,544,264
        Mortgage loans..................................................            719,593             863,962
        Pledge loans....................................................             54,644             191,534
        Consumer loans..................................................             55,175             119,985
        Credit card loans...............................................            818,837             584,944
        Others..........................................................            390,912             412,039
        Accrued Interest, adjustment  and quotation differences
          receivable....................................................            523,080             608,477
        Document interest...............................................             (2,485)           (10,832)
        Unallocated collections.........................................               (595)             (2,190)
      Allowances........................................................         (1,177,315)         (1,681,836)
                                                                           ----------------   -----------------
                                                                           Ps.   10,983,757   Ps.    10,682,163

D. Other receivables resulting from financial brokerage
   Argentine Central Bank...............................................             69,846              55,908
   Amounts receivable for spot and forward sales to be settled..........                  -               1,922
   Securities receivable under spot and forward purchases to be
     settled............................................................                138                 675
   Unlisted negotiable obligations......................................            103,792             132,317
   Compensation to be received from the national government.............          4,629,595           7,098,505
   Other................................................................          1,496,046           2,010,712
   Allowances...........................................................           (102,008)            (44,337)
                                                                           ----------------   -----------------
                                                                           Ps.    6,197,409   Ps.     9,255,702
</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                       F-4
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                        AS OF DECEMBER 31, 2003 AND 2002
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                      -------------------------------------
                                                                            2003                 2002
                                                                      ----------------     ----------------
<S>                                                                   <C>                  <C>
ASSETS (CONTINUED)
E. Assets under financial leases
   Assets under financial leases...................................   Ps.       29,418     Ps.       25,102
   Allowances......................................................             (4,806)              (2,460)
                                                                      ----------------     ----------------
                                                                      Ps.       24,612     Ps.       22,642

F. Equity investments in other companies
   In financial institutions.......................................              3,009                3,486
   Other  .........................................................            141,916              153,609
   Allowances......................................................            (57,858)             (52,841)
                                                                      ----------------     ----------------
                                                                      Ps.       87,067     Ps.      104,254

G. Miscellaneous receivables
   Debtors for sale of assets......................................                185                  661
   Other...........................................................            456,887              360,605
   Accrued interest, adjustment on debtors for sale of assets
     receivable....................................................                 40                    2
   Other accrued interest receivable...............................             67,055                  166
   Allowances......................................................            (53,877)             (29,375)
                                                                      ----------------     ----------------
                                                                      Ps.      470,290     Ps.      332,059

H. Fixed assets....................................................            517,532              570,475

I. Miscellaneous assets............................................            158,098              184,762

J. Intangible assets
   Goodwill........................................................            139,681              170,384
   Organization and development expenses...........................            587,376              151,564
                                                                      ----------------     ----------------
                                                                      Ps.      727,057     Ps.      321,948

K. Unallocated items...............................................              2,592               23,833
                                                                      ----------------     ----------------
            TOTAL ASSETS...........................................   Ps.   22,894,665     Ps.   23,904,518
                                                                      ================     ================
</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                       F-5
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                        AS OF DECEMBER 31, 2003 AND 2002
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                           ---------------------------------
                                                                                 2003             2002
                                                                           ---------------   ---------------
<S>                                                                        <C>               <C>
   LIABILITIES AND SHAREHOLDERS' EQUITY

L. Deposits
   Non-financial government sector.....................................    Ps.      12,412   Ps.       7,826
   Financial sector....................................................             19,460             2,946
   Non-financial private sector and residents abroad...................          5,552,119         5,198,588
     Current accounts..................................................          1,163,703           723,354
     Saving accounts...................................................            818,888           563,868
     Time deposits.....................................................          2,838,480         2,423,155
     Investment accounts...............................................                184                 -
     Other.............................................................            533,626         1,110,963
     Accrued interest, adjustment  and quotation differences
       payable ........................................................            197,238           377,248
                                                                           ---------------   ---------------
                                                                           Ps.   5,583,991   Ps.   5,209,360

M. Other liabilities resulting from financial brokerage
   Argentine Central Bank                                                        8,132,902         8,106,063
         Liquidity assistance loans ...................................          5,579,978         5,449,880
         Other.........................................................          2,552,924         2,656,183
   Banks and international entities....................................          2,735,480         3,184,709
   Unsubordinated negotiable obligations...............................          2,392,909         3,464,539
   Amounts payable for spot and forward purchases to be settled........                  -             2,133
   Securities to be delivered under spot and forward sales to be
     settled...........................................................             99,604           124,530
   Loans from domestic financial institutions..........................            131,763           201,271
   Other  .............................................................          1,003,865         1,008,481
   Accrued interest, adjustment and quotation differences
     payable...........................................................            602,898           279,242
                                                                           ---------------   ---------------
                                                                           Ps.  15,099,421   Ps.  16,370,968

N. Miscellaneous liabilities
   Dividends payable...................................................                 46                46
   Directors' and Syndics' fees payable................................              1,347             2,213
   Other...............................................................            232,246           254,485
   Accrued adjustments and interest payable............................              1,827                 6
                                                                           ---------------   ---------------
                                                                           Ps.     235,466   Ps.     256,750

O. Provisions..........................................................            414,875           334,559
P. Unallocated items...................................................              2,638            10,438
Q. Minority interests..................................................             95,937            83,806
                                                                           ---------------   ---------------
               TOTAL LIABILITIES.......................................    Ps.  21,432,328   Ps.  22,265,881
                                                                           ---------------   ---------------

   SHAREHOLDERS' EQUITY ...............................................          1,462,337         1,638,637
                                                                           ---------------   ---------------
         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY....................    Ps.  22,894,665   Ps.  23,904,518
                                                                           ===============   ===============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                              financial statements

                                       F-6
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,
                                                                        -----------------------------------------------
                                                                            2003              2002            2001
                                                                        -------------    -------------   --------------
<S>                                                                     <C>              <C>             <C>
A. Financial income
   Interest on cash and due from banks...............................   Ps.        68    Ps.     2,369   Ps.     63,735
   Interest on loans granted to the financial sector.................         101,107           86,822           96,351
   Interest on overdrafts............................................          38,801          136,840          256,464
   Interest on notes.................................................         192,816          220,811        1,387,693
   Interest on mortgage loans........................................          94,832          125,421          443,423
   Interest on pledge loans..........................................          11,714           59,692           91,594
   Interest on credit card loans.....................................         127,522          177,204          366,458
   Interest on other loans...........................................          28,888          116,417          375,232
   Interest income from other receivables resulting from
     financial brokerage.............................................          98,663          227,978          109,286
   Net income from government and corporate securities...............         129,165          604,772          157,903
   Net income from secured loans - Decree No. 1387/01................         222,927          223,730           71,485
   Consumer price index adjustment (CER/CVS).........................         611,782        3,402,790                -
   Others............................................................          23,657          412,825          167,173
                                                                        -------------    -------------   --------------
                                                                        Ps. 1,681,942    Ps. 5,797,671   Ps.  3,586,797

B. Financial expenses
   Interest on current accounts......................................           3,039           17,565           52,810
   Interest on savings accounts......................................           3,045            8,144           37,298
   Interest on time deposits.........................................         201,766          291,851        1,321,532
   Interest on loans from the financial sector.......................           6,756           26,478           15,828
   Interest expense from other liabilities resulting from
     financial brokerage.............................................         340,567          653,039          433,847
   Other interest ...................................................         408,764        1,605,374           85,598
   Net loss on options...............................................               -              263            1,142
   Consumer price index adjustment...................................         187,532        1,734,648                -
   Others............................................................         351,435          223,043          178,075
                                                                        -------------    -------------   --------------
                                                                        Ps. 1,502,904    Ps. 4,560,405   Ps.  2,126,130

C. Gross brokerage margin............................................         179,038        1,237,266        1,460,667

   Loan loss provision ..............................................         286,428        1,648,576        1,008,514

D. Income from services
   In relation to lending transactions...............................         136,075          142,397          329,720
   In relation to borrowing transactions.............................         116,165          149,885          262,849
   Other commissions.................................................           9,347           14,412          102,185
   Other.............................................................         170,170          209,331          462,042
                                                                        -------------    -------------   --------------
                                                                        Ps.   431,757    Ps.   516,025   Ps.  1,156,796

E. Expenses for services
   Commissions.......................................................          35,237          100,356          104,698
   Other.............................................................          35,121           40,283          109,395
                                                                        -------------    -------------   --------------
                                                                        Ps.    70,358    Ps.   140,639   Ps.    214,093
</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                       F-7
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                            DECEMBER 31,
                                                                          -----------------------------------------------
                                                                              2003             2002             2001
                                                                          ------------     -------------    -------------
<S>                                                                       <C>              <C>              <C>
F. Monetary result of financial brokerage.............................    Ps.  (14,506)    Ps.(1,437,745)   Ps.         -

G. Administrative expenses
   Personnel expenses.................................................         243,501           496,025          699,622
   Directors' and syndics' fees.......................................           1,917             3,236           35,427
   Other fees.........................................................          21,294            28,026           25,245
   Advertising and publicity..........................................          20,020            15,369           54,531
   Taxes..............................................................          29,806            57,761           84,513
   Other operating expenses...........................................         204,599           290,204          373,238
   Other..............................................................          42,227            56,893           97,413
                                                                          ------------     -------------    -------------
                                                                          Ps.  563,364     Ps.   947,514    Ps. 1,369,989

H. Monetary result of operating expenses..............................    Ps.       84     Ps.    21,001    Ps.         -

   Net (loss)/income from financial brokerage.........................        (323,777)       (2,400,182)          24,867

I. Minority interests.................................................          (9,586)          269,572          (22,159)

J. Miscellaneous income
   Net loss on long-term investments..................................               -                 -           34,958
   Penalty interest...................................................           3,183             6,252            6,989
   Loans recovered and allowances reversed............................         563,838            38,130           83,927
   Other..............................................................          97,805           245,900          603,572
   Consumer price index adjustment (CER)..............................          54,381             1,125                -
                                                                          ------------     -------------    -------------
                                                                          Ps.  719,207     Ps.   291,407    Ps.   729,446
K. Miscellaneous losses
   Net loss on long-term investments..................................          22,570           134,988                -
   Penalty interest and Charges in favor of the Argentine
     Central Bank.....................................................             125               646              108
   Loan loss provision from miscellaneous receivables and other
     provisions.......................................................         341,081           449,288           83,507
   Other..............................................................         233,193           187,887          224,947
   Consumer price index adjustment....................................           1,827                22                -
                                                                          ------------     -------------    -------------
                                                                          Ps.  598,796     Ps.   772,831    Ps.   308,562

L. Monetary Result of other operations................................    Ps.   (3,517)    Ps.  (163,090)   Ps.         -

   Net (loss)/income before tax.......................................        (216,469)       (2,775,124)         423,592

M. Income tax.........................................................             590            66,421          159,052
                                                                          ------------     -------------    -------------
   Net (loss)/income for the period before the Absorption.............    Ps. (217,059)    Ps.(2,841,545)   Ps.   264,540

N. Absorption subject to the Approval of the Annual
     Shareholders Meeting (*).........................................               -         1,370,034                -
                                                                          ------------     -------------    -------------
   Net (loss)/income for the year.....................................    Ps. (217,059)    Ps.(1,471,511)   Ps.   264,540
                                                                          ============     =============    =============
   Net Income per common share before the absorption (basic and
     assuming full dilution)..........................................          (0.199)           (2.601)           0.242

   Net Income per common share after the absorption (basic and
     assuming full dilution)..........................................          (0.199)           (1.347)           0.242
</TABLE>

(*) Effect on the foreign currency position compensation.

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                       F-8
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                             DECEMBER 31,
                                                                         -------------------------------------------------
                                                                              2003              2002              2001
                                                                         -------------     -------------     -------------
<S>                                                                      <C>               <C>               <C>
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income/ (loss)....................................................   Ps.  (217,059)    Ps.(1,471,511)    Ps.   264,540
Adjustments to reconcile net income to net cash from
Operating activities:
Depreciation of bank premises and equipment and
Miscellaneous assets..................................................          52,496            65,776            63,541
Amortization of intangible assets.....................................         163,390           168,622           110,927
(Decrease)/Increase in allowances for loan and other losses,
net of reversals......................................................         118,920         2,081,741         1,053,809
Equity loss of unconsolidated subsidiaries............................           8,095            51,971           (11,588)
Loss (gain) on sale of premises and equipment.........................          11,486           (59,948)            7,699
Accretion of discount on available-for-sale securities................               -                 -          (181,710)
(Gain) Loss on sales of available-for-sale securities.................               -                 -            (2,076)
Decrease (Increase) in government securities-trading..................        (309,201)                -        (1,324,493)
Decrease in other assets..............................................          55,304           419,125           388,762
(Decrease)/Increase in other liabilities..............................         (21,700)         (254,395)        2,202,544
Absorption subject to the Approval of the Annual Shareholders
Meeting (*)...........................................................               -        (1,370,034)                -
Monetary loss.........................................................          17,939         1,579,834                 -
Compensation for the "asymmetric indexation" (CER/CVS) ...............        (102,705)                -                 -
Adjustment of Compensatory Bond to be received........................          90,243                 -                 -
Consumer price index adjustment (CER/CVS) ............................        (324,073)       (1,630,582)                -
Unrealized foreign exchange gain / (loss).............................          47,018          (516,888)                -
                                                                         -------------     -------------     -------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES...................   Ps.  (409,847)    Ps.  (936,289)    Ps. 2,571,955

CASH PROVIDED BY INVESTING ACTIVITIES:
Increase in equity investments in other companies.....................                                             (58,194)
Decrease in loans, net................................................         800,522         2,613,642         1,044,492
Cash dividends and capital repayments of available-for-sale
securities............................................................               -                 -            51,088
Sales of investments in other companies...............................               -                 -            59,912
Purchase of available-for-sale securities.............................               -                 -          (412,997)
Proceeds on available-for-sale securities.............................               -                 -           201,428
Increase in deposits at the Argentine Central Bank....................         (13,938)          (18,989)        2,986,339
Additions to bank premises and equipment, miscellaneous,
and intangible assets.................................................        (124,469)          (64,280)         (424,735)
Proceeds of sales of premises and equipment...........................          33,520            85,934            41,880
                                                                         -------------     -------------     -------------
NET CASH PROVIDED BY INVESTING ACTIVITIES.............................   Ps.   695,635     Ps. 2,616,307     Ps. 3,489,213

CASH PROVIDED BY FINANCING ACTIVITIES:
Cash dividends........................................................               -                 -           (81,808)
Capital increase......................................................               -                 -            12,135
Increase/(Decrease) in deposits, net..................................         782,718        (6,016,672)       (6,088,418)
Borrowings under credit facilities - long term........................        (537,074)          (48,755)        3,970,480
Payments on credit facilities - long term.............................               -                 -        (2,963,251)
(Decrease)/Increase in short-term borrowings, net....................        (252,600)        3,397,137        (1,059,557)
(Decrease)/Increase in repurchase agreements.........................         (24,601)        1,112,462           (77,193)
                                                                         -------------     -------------     -------------
NET CASH USED IN  FINANCING ACTIVITIES................................   Ps.   (31,557)    Ps.(1,555,828)    Ps.(6,287,612)
</TABLE>

(*) Effect on the foreign currency position compensation.

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                      F-9
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                ------------------------------------------------
                                                                     2003             2002             2001
                                                                -------------   --------------    --------------
<S>                                                             <C>             <C>               <C>
INCREASE IN CASH AND CASH EQUIVALENTS NET..................     Ps.   254,231   Ps.    124,190    Ps.   (226,444)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR.....           576,838        1,139,854         1,366,298

MONETARY EFFECT ON CASH AND CASH EQUIVALENT................            (4,919)        (687,206)                -
                                                                -------------   --------------    --------------
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR...........     Ps.   826,150   Ps.    576,838    Ps.  1,139,854

SUPPLEMENTAL DISCLOSURES RELATIVE TO CASH FLOWS:
Interest paid..............................................     Ps.   621,162   Ps.    823,377    Ps.  1,226,239
Income tax paid............................................     Ps.         -   Ps.          -    Ps.     63,238
Presumptive minimum income tax.(*).........................     Ps.    48,436   Ps.     14,773    Ps.          -
</TABLE>

The transfer of loans to the "Galtrust II, III, IV and V" Financial Trusts
during the year ended December 31, 2001 of Ps. 525,839, and the swap of
government debt instruments into "Secured Loans" amounting to Ps. 8,265,467 did
not require the movement of cash.

For the fiscal years ended December 31, 2003 and 2002, Ps. 4,966,460 and
Ps. 7,098,505 for the compensation to be received from the national government
and Ps. 3,502,523 and Ps. 2,489,864 respectively advance to be requested from
the Argentine Central Bank for the subscription of the Hedge Bond, did not
require the movement of cash.

The swap of provincial loans into secured bonds ("BOGAR"), which as of December
31, 2003 amounted to Ps. 3,473,661, did not required the movement of cash.

(*) The PMIT 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-10
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                     ADJUSTMENTS
                                                                          TO           PROFIT RESERVES
                                                           PAID IN   SHAREHOLDERS'      ---------------
                                            CAPITAL STOCK  CAPITAL      EQUITY       LEGAL      OTHER
                                            ------------- ---------  ------------  --------- -----------
<S>                                         <C>           <C>        <C>           <C>       <C>
BALANCE AT DECEMBER 31, 2000                Ps.1,092,407  Ps.79,251  Ps.1,410,048  Ps. 1,961 Ps.  40,630

Distribution of retained earnings
Approved by the shareholders' meeting
on March 15, 2001:
  - Legal reserve                                      -          -             -     14,305           -
  - Reserve provided by the Bylaws                     -          -             -          -     198,311
  - Cash Dividend                                      -          -             -          -           -
Net income for the year                                -          -             -          -           -
                                            ------------  ---------  ------------  --------- -----------
BALANCE AT DECEMBER 31, 2001                Ps.1,092,407  Ps.79,251  Ps.1,410,048  Ps.16,266 Ps. 238,941
                                            ============  =========  ============  ========= ===========
Adjustment retained earnings                           -          -             -          -           -
Distribution of retained earnings
Approved by the shareholders' meeting
on June 3, 2002:
  - Legal reserve                                      -          -             -     13,227           -
  - Reserve provided by the Bylaws                     -          -             -          -     253,398
Net loss for the year before the
absorption                                             -          -             -          -           -
Absorption subject to the approval of
the Annual Shareholders Meeting (*)                    -          -             -          -           -
Transfer to net loss of the absorption,net             -          -             -          -           -
Net loss after the absorption                          -          -             -          -           -
                                            ------------  ---------  ------------  --------- -----------
BALANCE AT DECEMBER 31, 2002                Ps.1,092,407  Ps.79,251  Ps.1,410,048  Ps.29,493 Ps. 492,339
                                            ============  =========  ============  ========= ===========
Adjustment retained earnings                           -          -             -          -           -
Absorption approved by the
shareholders' meeting on April 23, 2003                -          -             -          -    (492,339)
Net loss for the year                                  -          -             -          -           -
                                            ------------  ---------  ------------  --------- -----------
BALANCE AT DECEMBER 31, 2003                Ps.1,092,407  Ps.79,251  Ps.1,410,048  Ps.29,493 Ps.       -
                                            ============  =========  ============  ========= ===========

<CAPTION>
                                             UNREALIZED                        TOTAL
                                              VALUATION     ACCUMULATED    SHAREHOLDERS'
                                            DIFFERENCE(*)     DEFICIT         EQUITY
                                            -------------  -------------   -------------
<S>                                         <C>            <C>             <C>
BALANCE AT DECEMBER 31, 2000                Ps.         -  Ps.   286,104   Ps. 2,910,401

Distribution of retained earnings
Approved by the shareholders' meeting
on March 15, 2001:
  - Legal reserve                                       -        (14,305)              -
  - Reserve provided by the Bylaws                      -       (198,311)              -
  - Cash Dividend                                       -        (71,370)        (71,370)
Net income for the year                                 -        264,540         264,540
                                            -------------  -------------   -------------
BALANCE AT DECEMBER 31, 2001                Ps.         -  Ps.   266,658   Ps. 3,103,571
                                            =============  =============   =============
Adjustment retained earnings                            -          6,577           6,577
Distribution of retained earnings
Approved by the shareholders' meeting
on June 3, 2002:
  - Legal reserve                                       -        (13,227)              -
  - Reserve provided by the Bylaws                      -       (253,398)              -
Net loss for the year before the
absorption                                              -     (2,841,545)     (2,841,545)
Absorption subject to the approval of
the Annual Shareholders Meeting (*)             1,370,034              -       1,370,034
Transfer to net loss of the absorption,net     (1,370,034)     1,370,034               -
                                                           -------------   -------------
Net loss after the absorption                           -     (1,471,511)     (1,471,511)
                                            -------------  -------------   -------------
BALANCE AT DECEMBER 31, 2002                Ps.         -  Ps.(1,464,901)  Ps. 1,638,637
                                            =============  =============   =============
Adjustment retained earnings                            -         40,759          40,759
Absorption approved by the
shareholders' meeting on April 23, 2003                 -        492,339               -
Net loss for the year                                   -       (217,059)       (217,059)
                                            -------------  -------------   -------------
BALANCE AT DECEMBER 31, 2003                Ps.         -  Ps.(1,148,862)  Ps. 1,462,337
                                            =============  =============   =============
</TABLE>

(*) Effect on the foreign currency position compensation

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                      F-11
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

1. BASIS OF PRESENTATION, ACQUISITIONS, ESTIMATES AND UNCERTAINTIES

Grupo Financiero Galicia S.A. ("Grupo Galicia", the "Company" or "the Group") is
a corporation organized under the laws of Argentina that acts as a holding
company for Banco de Galicia y Buenos Aires S.A. ("Banco Galicia" or the "Bank")
and its subsidiaries. Grupo Galicia was formed by the controlling shareholders
of the Bank on September 14, 1999 to consummate an exchange of shares with the
shareholders of Banco Galicia and establish Grupo Galicia as the Bank's holding
company. Grupo Galicia was formed with two classes of shares: Class A shares,
which are entitled to 5 votes per share, and Class B shares, which are entitled
to 1 vote per share. To effect the exchange, Grupo Galicia offered to exchange
Grupo Galicia Class B shares for all outstanding Banco Galicia Class B shares on
a 2.5-for-1 basis and to exchange Grupo Galicia ADSs for all outstanding Banco
Galicia ADSs on a 1-for-1 basis. The controlling shareholders retained all the
Class A shares. As a result of the exchange, which was consummated on July 26,
2000, the Company became holder of 93.23% of the Bank's capital stock, and the
remaining 6.77% remained as a minority interest in the Bank. At December 31,
2003 and 2002 the Company's interest in Banco Galicia was 93.59% as a result of
open market purchases.

Banco Galicia is a private-sector commercial bank organized under the laws of
Argentina which provides general banking services, mainly through its Argentine
branches, to corporate and retail customers. As of December 31, 2001, Banco
Galicia provided banking services through its branches in the United States (New
York City) and Grand Cayman Island. As a consequence of the prolonged economic
crisis that Argentina was suffering, that worsened in December 2001, and of the
economic policy measures adopted by the government in 2002, the New York branch
was closed as of January 30, 2003. The Bank's services included, until December
31, 2001, accepting deposits and granting loans in Argentine pesos and U.S.
dollars. The end of the Convertibility regime in early 2002, the devaluation of
the currency and the measures adopted by the government in 2002 have restricted
Argentine banks' operations in U.S. dollars.

As a result of the political and economic crisis that Argentina experienced in
late 2001 and in 2002 and the material and adverse effect that such crisis has
had on the Bank and other financial institutions in Argentina, the Bank's future
business activities, as well as the levels of such business activities may
differ substantially from pre-crisis periods.

Grupo Galicia consolidates the financial statements of Banco Galicia and its
subsidiaries and all entities over which it has direct or indirect control. The
consolidated financial statements also include Net Investment S.A. (and its
subsidiaries), Sudamericana Holding S.A. (and its subsidiaries), Banco de
Galicia Uruguay S.A. (and its subsidiaries), Galicia Capital Markets S.A. (and
its subsidiaries), Galicia Factoring y Leasing S.A., Galicia Warrants S.A.,
Galicia Valores S.A. Sociedad de Bolsa, AgroGalicia S.A., and Tarjetas
Regionales S.A.(and its subsidiaries). All significant intercompany transactions
have been eliminated in consolidation.

The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities, as of the financial statement
dates, and the reported amounts of revenues and expenses during the reporting
periods. Since management's judgment involves making estimates concerning the
likelihood of future events, the actual results could differ from those
estimates, which will have a positive or negative effect on future period
results.


                                      F-12
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


ARGENTINE ECONOMIC SITUATION AND ITS IMPACT ON GRUPO GALICIA'S ECONOMIC AND
FINANCIAL POSITION

During 2003 a significant improvement occured in the Argentine economy, which
ended the economic recession that had started in the second half of 1998. The
economic recession reached crisis proportions at the end of 2001 and for much of
2002. In 2003, interest rates fell and the foreign exchange market stabilized.
The financial system has gradually recovered its liquidity levels, recording an
increase in deposits and in some types of borrowings.

Furthermore the Argentine Central Bank has approved a number of measures to
facilitate access to credit by the private sector. Minimum cash requirements
have been reduced by approximately 50% compared to the previous period and the
rules on ratings of borrowers, collateral and minimum capital requirements for
covering credit risks have been reduced.

In spite of the change in the economic trends mentioned above, a situation
characterized by high levels of unemployment and a major external public and
private debt burden as well as country risk indicators far above normal average
recorded by developing countries still persists. The national government's
ability to meet its foreign debt obligations continues to be impaired. A
favourable outcome of the restruturing negotiations of the public debt will be
essential to reducing uncertainty of the fiscal outlook over the next few years.

To confront the crisis that started at the end of 2001, the government issued a
number of measures to restrict the availability and circulation of cash and the
transfer of foreign currency abroad.

On January 6, 2002, Law No. 25,561 (Public Emergency and Exchange System Reform
Law) was encated. This Law involved profound changes to the prevailing economic
model and the amendment of the Convertibility Law in force since March 1991. On
February 3, 2002, the government announced new economic measures through Decree
No. 214, complemented by Decree No. 410 dated March 1, 2002, Decree No. 260
dated February 8, 2002, and Decree No. 905/02 dated May 31, 2002, substantially
modifying some of the measures implemented by the Public Emergency and Exchange
System Reform Law.

Subsequently, decrees and regulations were issued which introduced other
amendments, as described below:

FOREIGN EXCHANGE SYSTEM

On February 8, 2002 Decree No. 260 was issued, establishing beginning on
February 11, 2002 a single free exchange market system, through which all
transactions involving the exchange of foreign currency are to be traded at
exchange rates to be freely agreed. Controls and restrictions have been imposed
and subseqently gradually relaxed.

As summarized by Argentine Central Bank Communication No. 47888, foreign
exchange regulations in force as of December 31, 2003 are as follows.

a) Foreign currency arising from exports of goods and services must be
liquidated on the foreign exchange market within certain periods.

b) Foreign currency arising from indebtedness incurred abroad by the financial
and non-financial private sectors in connection with bonds, financial loans and
lines of credit of a financial nature,


                                      F-13


<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

must be brought in and liquidated on the domestic foreign exchange market and
must have a minimum maturity of 180 calendar days.

c) New imports of goods may be fully prepaid, independently of the type of good.
Debts arising from import transactions may also be prepaid, irrespective of
contractual maturity.

d) No restriction exists on payments abroad for services provided by
non-resident individuals, irrespective of the type of service.

e) Access to the foreign exchange market is permitted for interest payments to
foreign creditors at maturity, up to 15 calendar days prior to the due date of
each interest installment. Payments of Interest accrued but not yet due on debts
of the non-financial private sector with foreign creditors subject to
restructuring are also allowed.

f) Free access to the foreign exchange market is permitted for remittance of
profits and dividends abroad, provided they correspond to audited financial
statements for closed periods.

g) Free access to the foreign exchange market is permitted for payment of
principal amounts due on financial debts, except for financial institutions
having opted for restructuring, under the provisions of Decree No.739/03,
financial assistance granted to them by the Argentine Central Bank for liquidity
support, which must comply with the provisions of Argentine Central Bank
Communique "A" 3940 and obtain Argentine Central Bank's approval to the
restructuring terms of their foreign debt.

h) Non-residents are permitted free access to the foreign exchange market to
acquire foreign currency for up to US$ 5,000 per month. Nonresidents may
transfer foreign currency obtained in Argentina in connection with payments on
principal of government securities in foreign currency.

i) Residents may access the exchange market to acquire foreign currency for up
to US$ 500,000 per month.

j) No restrictions exist on futures and forward foreign exchange contracts
provided that they are settled in local currency in Argentina. Also, no
restrictions exist, subject to certain conditions, on certain arrangements and
transfers abroad in connection with currency, interest rate and commodity price
hedge transactions.

As established by Argentine Central Bank Communique "A" 3969, financial
institutions' maximum holdings of foreign currency, mainly comprised of holdings
of gold, cash and due from banks, other liquid investments in foreign currency
held in Argentina and/or abroad and forward transactions, are limited to the
equivalent of 10% of the adjusted shareholders' equity ( or computable
regulatory capital) as of November 30, 2001.

LOANS AND OTHER FINANCINGS

Law No. 25,561 and Decree No. 214/02 and complementary rules and amendments,
converted into pesos loans granted by the Argentine financial system in US
dollars or any other foreign currency, governed by Argentine legislation,
according to the following guidelines: (i) loans to the non-financial private
sector, were converted at the Ps. 1 = US$ 1 parity or its equivalent in any
other foreign currency; (ii) loans to the non-financial public sector were
converted at the Ps. 1.40 = US$ 1 parity or its equivalent in any other foreign
currency; and (iii) loans to the financial sector were converted at the Ps. 1.40
= US$ 1 parity or its equivalent in any other foreign currency.


                                      F-14


<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


Those measures contemplated the application of the Reference Stabilization Index
(CER) to all loans converted into pesos and a maximum interest rate determined
by the Argentine Central Bank became applicable to these loans, except for those
to which the salary variation index (CVS) was applied from October 1, 2002 to
March 31, 2004, namely:

- Mortgage loans secured by family residences originally agreed for up US$
  250,000.

- Personal loans originally agreed for up to US$12,000.

- Pledge consumer loans originally agreed for up to US$30,000.

The lower between the contractual interest rate in force as of February 3, 2002
and that determined by the Argentine Central Bank must be applied to these
loans.

The CVS is an index that measures the daily rate of change derived from the
monthly change in the Salary Index (IS), while the CER is an index that measures
the daily rate of change derived from the monthly change in the Consumer Price
Index (CPI) published by the National Institute of Statistic and Census (INDEC).

Since early 2002, as a result of the economic crisis, the Bank began to
restructure its commercial loan portfolio. This restructuring process is in its
final stage. Loans subject to restructuring have been considered in the Bank's
calculation of its loan loss reserve.

DEPOSITS AND OBLIGATIONS WITH THE PUBLIC AND PRIVATE SECTORS

Law No. 25,561 and Decree No. 214/02 established that all deposits denominated
in US dollars or any other currency placed with the financial system had to be
converted into pesos at the Ps. 1.40 = US$ 1 parity. These rules also
established that financial institutions's obligations were to be settled in
pesos and that the CER and a minimum interest rate were to be applied to
deposits coverted into pesos.

Restrictions imposed in early December 2001 on the availability of deposits
(known as the "corralito") were maintained for balances in peso-denominated
current accounts and savings accounts, with certain exceptions, and it was
established that time deposits both peso- and US dollar-denominated and US
dollar-denominated deposits in savings accounts and current accounts would be
restructured and reimbursed in peso-denominated installments, with the amounts
and due dates depending on the balances recorded. This restructuring was
regulated by Resolution No.6/02 of the Ministry of Economy.

The National Executive Branch established the possibility for depositors to
exercise the option to exchange their restructured deposits originally arranged
in foreign currency for peso- and US dollar-denominated government securities,
with the national government being responsible for crediting the bonds.
Restructured deposits for which no option had been exercised were registered
with Caja de Valores S.A. Those restructured deposits (known as CEDROS) are
negotiable securities listed on Argentine stock exchanges and may be negotiated
on self-regulated markets of Argentina.

Subsequently, holders of CEDROS were given the option to exchange them for new
US dollar-denominated government securities or peso-denominated time deposit
certificates issued by financial institutions, together with an option to
convert them to original currency raised by the national government (this
exchange was known as Canje II or "Exchange of deposits with the financial
system II"). Furthermore, deposits restructured as of May 31, 2002 for up to Ps.
7,000 plus the CER adjustment and

                                      F-15

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

accrued interest, or up to Ps. 10,000, plus the CER adjustment and interest
accrued as from October 1, 2002, at the option of each financial institution,
were reimbursed.

Lastly, holders of deposits originally placed in US dollars and subsequently
converted into pesos were allowed to request that financial institutions
reimburse them for their deposits or settle their certificates fully or
partially, based on a schedule established according to the original amount of
those deposits, plus a national government bond for the difference between the
technical value of those placements and the market exchange rate at the date of
the request of the reimbursement.

As of December 31, 2003, the principal amount of restructured deposits and
CEDROS amounted to Ps. 301,813, while restructured deposits exchanged for
national government bonds, which bonds had not yet been delivered to the Bank by
the Ministry of Economy and, therefore, had not been delivered to customers,
amounted to Ps. 79,089.

PUBLIC-SECTOR DEBT

Decree No. 1387/01 dated November 1, 2001 established the possibility of
financial institutions to exchange public-sector debt instruments and loans
under the Promissory Note/Bond program for new loans called Secured Loans.
Conversion was made at face value and at a one-to-one rate, in the same currency
as that of the exchanged public-sector obligation.

Decree No. 471, dated March 8, 2002, established that the obligations of the
national, provincial and municipal public sectors outstanding as of February 3,
2002, and denominated in US dollars or any other currency, governed by Argentine
law, were to be converted into pesos at an exchange rate of Ps. 1.40 per US
dollar, or its equivalent in other foreign currency, with their principal
adjusted by the CER.

The obligations of the national public sector converted into pesos as explained
above accrue interest at rates ranging from 2% to 5%, depending on the
characteristics of the original debt.

Decrees Nos. 644/02 and 79/03 established the steps to be taken by financial
institutions to accept the new terms and conditions for receiving principal
and/or interest payments on the secured loans. If financial institutions were to
reject those terms and conditions, their situation will revert to the moment
prior to the exchange.

On August 27, 2002, Decree No. 1579/02, instructed the Fiduciary Fund for
Provincial Development to assume provincial debt instruments (government
securities, bonds, treasury bills or loans) that were to be voluntarily
converted into bonds ("BOGAR") or loans (promissory notes) secured by the
federal tax collection, under the terms established by such Decree.

Through Resolutions Nos. 539/02 and 611/02 dated October 25 and November 12,
2002, respectively, the Ministry of Economy established the unified calculation
method applicable to debts encompassed by the conversion regime laid down by
Decree No. 1579/02, and set a time limit for financial institutions having made
offers to convert provincial public debt within the framework of Decree No.
1387/01 and complementary rules to declare their intention to withdraw those
offers.

On November 19, 2002, the ministry of Economy issued Resolution No. 624/02,
establishing the provincial public debt eligible to be exchanged for secured
bonds and loans issued by the Fiduciary Fund for Provincial Development.


                                      F-16


<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


OTHER ASSETS AND LIABILITIES

As established by the aforementioned Decree No. 410 and complementary rules,
futures and option contracts, including those registered in self-regulated
markets and the accounts exclusively earmarked for the operations of those
markets, were not converted into pesos at the Ps. 1 = US$ 1 exchange rate as
established by Section 1 of Decree No. 214, except for those governed by
Argentine law and agreed before January 5, 2002, where at least one of the
parties must be a financial institution, and having been settled as of June 12,
2002. These were converted into pesos at Ps. 1.40 per US dollar.

Decree No. 410 also established that:

            a) Fiscal credit certificates issued in US dollars or any other
            foreign currency within the framework of Decrees No. 979/01, 1005/01
            and 1226/01 and in force at February 3, 2002, were converted into
            pesos at the exchange rate of Ps. 1.40 per US$ 1 or its equivalent
            in any other foreign currency.

            b) The balances of financial institutions' accounts in US dollars or
            any other currencies at the close of operations at February 1, 2002,
            which may be computed to comply with liquidity reserve requirements,
            except for legal tender currency available and the amount equivalent
            to the balances of accounts earmarked exclusively for the operations
            on self-regulated futures and options markets, were converted into
            pesos at the exchange rate of Ps. 1.40 per US$ 1.

            The same treatment has been accorded to the amounts contributed by
            financial institutions to the Bank Liquidity Fund established by
            Decree No. 32/01 and to the debts financial institutions have with
            that Fund.

REORGANIZATION AND BANKRUPTCY PROCEEDINGS

On January 30, 2002, Law No. 25,563 on reorganization and bankruptcy proceedings
was enacted, which declared a production and credit emergency generated by the
crisis that affected Argentina, and postponed all judicial and out-of court
foreclosures, as well as all petitions for bankruptcy until December 10, 2003.
Subsequently, Law No. 25,820 was promulgated, which extended the public
emergency until December 31, 2004.

On February 4, 2003, Decree No. 204/2003 was issued, which created Legal
Emergency Units responsible for mediating between debtors and creditors within a
term of 90 days as from February 6, 2003.

This rule did not suspend or interrupt the legal time limits or foreclosures
made extrajudicially or in execution of judgment, as regulated by current norms.

Under Law No. 25,737, enacted on May 8, 2003, auctions of property being the
sole family residence of debtors were suspended for a term of 90 days,
irrespective of the origin of the obligation.

Financial institutions have voluntarily extended the mortgage foreclosure
suspension period that expired on September 2, 2003, in order to find a proper
solution for all parties.

Law No. 25,798, regulated by Decree No. 1284/03, established a system for the
refinancing of mortgage loans for up to Ps. 100,000, intended for the
acquisition of sole family residences, past due as from January 1, 2001.
However, adherence to this system is optional for creditors being


                                      F-17

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

financial institutions governed by Law No. 21,526. The Bank decided not to
adhere to this mortgage loan refinancing system.

SUSPENSION OF THE APPLICATION OF SECTION 94, SUBSECTION 5 AND SECTION 206 OF LAW
NO. 19,550 (COMMERCIAL COMPANIES' LAW)

Decree No. 1269/02 suspended until December 10, 2003 the application of Section
94, subsection 5 of Law No. 19,550, which establishes that a company must be
dissolved following loss of its corporate capital. Section 206, which
establishes the mandatory capital reduction when losses exceed reserves and 50%
of capital was also suspended until that date. In accordance with Decree
No. 1293/03, these measures will remain in effect until December 10, 2004.

LEGAL ACTIONS REQUESTING PROTECTION OF CONSTITUTIONAL GUARANTEES

As a result of the measures adopted by the government in relation to the
pesification and restructuring of deposits, since December 2001, a significant
number of complaints have been filed against the National State and/or financial
institutions by individuals and legal entities.

As of December 31, 2003, court orders received by the Bank mandating the
reimbursement of deposits in their original currency or at the market exchange
rate amounted to Ps. 17,497 and US$ 553,210. In compliance with court orders
requiring the reimbursement of deposits under penalty of search and/or seizure
and/or crimes involving illegal retention of deposits and/or disobedience, the
Bank has paid the amounts of Ps. 803,746 and US$ 100,740 in connection with the
disputed amounts.

In February of 2002, Decree No. 214/02 established the mandatory conversion of
all deposits in US Dollars or other foreign currencies in the Argentine
financial system into pesos at the exchange rate of Ps. 1.40 per US$ 1.00.
Decree No. 214/02 also allowed for the entire withdrawal of pensions in cash and
other exceptions.

Certain rules, such as Decree No. 320/02, Law No. 25,587 and Decree No. 1316/02
attempted to suspend the execution of precautionary measures and final
judgments, except for certain cases where life, health or physical integrity of
individuals were at risk, or if the claimant was an individual of 75 years of
age or more. However, those rules have been declared unconstitutional by most
courts and, therefore, the application of penalties of search and/or seizure to
seek payment of deposits has not been completely suspended.

Furthermore, Decrees Nos. 494/02, (published in the Boletin Oficial (Official
Gazette) on March 13, 2002), No. 905/02, No. 1836/02 and No. 739/03 established
the possibility for depositors to receive US dollar national government bonds in
exchange for restructured deposits, under the terms and in the manner prescribed
therein.

The difference between the amount paid as a result of the above-mentioned court
orders and the amount resulting from converting deposits at the Ps. 1.40 per US
dollar exchange rate, adjusted by applying the CER and interest accrued at the
payment date, amounted to Ps. 564,900 as of December 31, 2003. This difference
had been recorded the previous year in "Other Receivables Resulting from
Financial Brokerage" in the amount of Ps. 446,756 as of December 31, 2002. As of
December 31, 2003 this difference has been recognized in Intangible Assets, net
of related amortization, as called for by Argentine Central Bank Communique "A"
3916, in the amount of Ps. 487,020.


                                      F-18

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


The Bank has repeatedly reserved its right to claim compensation for damages
caused by the reimbursement of deposits in US dollars or their equivalent in
pesos at the market exchange rate, decreed under precautionary measures or
judgments issued by courts, and which have not been included by the government
in the calculation of the compensation to financial institutions. The method of
accounting for that compensation as a deferred loss, envisaged by the Argentine

Central Bank in the aforementioned Communique "A" 3916, does not affect the
legitimacy of the rights. The Bank has reserved its rights for such purposes.

On December 30, 2003, the Bank formally requested from the National Executive
Branch, with a copy to the Ministry of Economy and the Argentine Central Bank,
compensation for damage suffered by the Bank as a result of the "asymmetric
pesification" and especially that deriving from the negative effect on assets
and liabilities caused by court decisions which, sustaining legal actions filed
by depositors, ordered the Bank to reimburse deposits at an exchange rate
greater than the Ps.1.40= US$ 1.00 exchange rate. In this connection,
compensation for amounts paid in compliance with final court decisions was
requested, without prejudice to such other amounts as may be ordered to be paid
upon the issue of new final court decisions that cause the Bank to seek
liquidated damages.

The Argentine Supreme Court of Justice ruled on the case "Province of San Luis
against the Argentine National Government" declaring article 2 of Decree No.
214/02 unconstitutional. At the date of these financial statements, the Supreme
Court had not yet ruled on certain cases involving US dollar deposits of
individual savers. Although the criterion to be followed by the Supreme Court in
ruling on these cases will not be mandatory for the lower courts, it is an
indication of possible rulings in similar cases to be heard by the courts.

COMPENSATION TO FINANCIAL INSTITUTIONS

Decree No. 214/02 provides for the issue of a bond payable with the funds of the
national treasury to cover the deficit in the financial system arising from the
imbalance generated by the devaluation and the asymmetric conversion into pesos
of assets and liabilities explained above.

In accordance with the provisions of Law No. 25,561 and Decrees Nos. 214/02,
320/02, 410/02, 471/02, 704/02, 905/02, 992/02 and their amendments and
complementary rules, and of Argentine Central Bank Communiques "A" 3467, 3507,
3561, 3648 and their amendments and complementary rules, a significant portion
of foreign currency assets and liabilities that formed part of financial
institutions' net foreign currency position as of December 31, 2001, were
converted into pesos at different exchange rates.

In June 2002, Decree No. 905/02 established a new method of calculating the
amount of the compensation to be received by financial institutions, which
replaced the provisions of Decree No. 494/02.

Sections 28 and 29 of Decree No. 905/02 established the restoration of financial
institutions' equity at the time of the conversion into pesos by means of
compensating financial institutions for:

1) the losses arising from the conversion into pesos of a large portion of their
obligations at the exchange rate of Ps. 1.40 per US dollar, which is higher than
the exchange rate of Ps. 1 per US dollar applied for the conversion into pesos
of certain receivables in foreign currency, by means of a peso-denominated
compensatory bond due 2007.


                                      F-19

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

2) the short foreign currency positions after the mandatory conversion into
pesos of a portion of financial institutions' assets and liabilities, by
converting the compensatory bond originally issued in pesos into a
dollar-denominated bond and, if necessary, through the issuance of a
dollar-denominated hedge bond. To this end, the issuance of national government
bonds in US dollars, accruing interest at Libor and maturing in 2012 (BODEN
2012) was established.

Argentine Central Bank Communique "A" 3650 and complementary rules established
the procedure that financial institutions were to use to calculate the
compensatory and hedge bonds, based on the foreign currency balances as of
December 31, 2001 disclosed in their audited financial statements. With regards
to foreign branches and subsidiaries, this compensation has been restricted to
the negative effects of the mandatory conversion into pesos of secured loans
granted to the public sector.

This method of determining the amount of the compensatory and hedge bonds, which
does not contemplate certain assets and liabilities converted into pesos due to
the application of Decree No. 214/02, corresponding to foreign branches and
subsidiaries and controlled entities engaged in complementary activities, was
contrary to the objectives of Decrees No. 214/02 and No. 905/02, and is
detrimental to the Bank. The Bank also believes that the rule was an arbitrary
act in the light of the fact that identical economic acts are included or
excluded from the compensation, depending on whether they are performed directly
by the Bank or through a subsidiary, or whether the receivable originated abroad
is of a public or a private origin.

Through a letter dated September 16, 2002 sent to the Ministry of Economy and to
the Argentine Central Bank, the Bank formally protested against the procedure
used, reiterating prior presentations, and left express evidence that "it will
not accept or approve the validity of any system that may lead to losses of its
assets, which are not fully compensated, or to the exclusion from the
compensation of assets and liabilities corresponding to branches, subsidiaries
and controlled entities engaged in complementary activities that form part of
the consolidated assets of Banco de Galicia y Buenos Aires S.A." The Bank also
reserved its right to appeal before a federal court for damages caused by those
measures and by the facts or omissions that may be attributable to the national
government which may affect the guarantees of inviolability of private property
and tax equality. The Argentine Central Bank Communiques mentioned above set
July 29, 2002 as the deadline for complying with the reporting requirements, so
that each institution could report the amount of compensatory and hedge bonds to
which it was entitled. The Bank complied with this requirement. However, during
September 2002, the Argentine Central Bank released Communique "A" 3716, which
established changes in the compensation calculation method. This led to a new
presentation being made on September 16, 2002. The amount determined in line
with applicable regulations was US$ 787,541 in respect of compensation and US$
618,229, in respect of hedge of the short foreign currency position.

On October 28, 2002, Decree No. 2167/02 amended Section 29 of Decree No. 905/02,
including in the calculation of the compensation the assets recorded at foreign
branches and subsidiaries to which Decree No. 214/02 and supplementary rules was
applicable, but did not contemplate any modification regarding assets and
liabilities recorded at controlled companies engaged in complementary
activities, which were also affected by the provisions of the Decree and still
continue to be excluded from such compensation. As such, the statements made in
connection with companies are still valid. Through Communiques "A" 3805 and "A"
3825, the Argentine Central Bank ruled the amendments established by Decree No.
2167/02, establishing a new reporting requirement, the deadline of which was
December 23, 2002.

                                      F-20

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

A total amount of US$ 2,254,027 of face value of BODEN 2012 was determined by
the Bank as the amount due for compensatory and hedge bonds as of December 31,
2002.

Within the process for the determination of the compensation amount, on October
30, 2003, the Argentine Central Bank sent a letter to the Bank in which it
formulated observations to certain criteria and to he computation of certain
items, that would modify the final amount of the


compensation. The Bank accepted and recognized an adjustment to the original
face value of the compensation of US$ 53,946, from which it could be inferred
that the final compensation amount receivable would be US$2,200,081 of face
value of BODEN 2012. The Bank has requested and has been granted authorization
to examine the records detailing other formulated observations that the Bank did
not agree with.

After having analyzed the documents furnished by the Argentine Central Bank, on
April 12, 2004, the Bank sent a written reply to the Argentine Central Bank
addressing the observations made and resolution was formally requested. Such
rectification is still pending definition by the Argentine Central Bank together
with the complementary regulations released by Communique "A" 4122 and "A" 4130
dated March 26 and April 26, 2004, respectively. In the letter, the Bank also
responded the observations on current account and credit card debit balances,
challenging the observations made by the Argentine Central Bank and filing the
pertinent motion for reconsideration.

In the opinion of the Bank's legal advisors, the determination of the
compensation amount, which is still in the process of being finalized, has been
made by the Bank on the basis of a proper interpretation of applicable
legislation. At the date of these financial statements, no resolution had yet
been issued by the Argentine Central Bank. The Bank recognized a provision in
connection with the pending dispute in "Provisions for Other Contingencies."

As of December 31 , 2003, Ps. 4,629,595 on account of compensation to be
received was recorded in "Other Receivables Resulting from Financial Brokerage -
Compensation to be Received from the National Government." The securities
received on account of compensation, after the use of a portion of those
securities for settlement of deposits of Banco de Galicia Uruguay S.A., were
recorded in "Government Securities - Holdings in Investment Accounts" for Ps.
1,609,982.

The Ps. 1,676,860 advance to be requested to the Argentine Central Bank for the
purchase of the hedge bond, including the effect of Decree No. 2167/02, was
recorded under "Other Liabilities Resulting from Financial Brokerage-Advances
for the Acquisition of National Government Bonds LIBOR 2012 in US dollars." This
advance, including CER principal adjustment and accrued interest amounting to
Ps. 859,286, totaled Ps. 2,536,146.

The conditions for financing the purchase of the BODEN 2012 corresponding to the
hedge bond have been specified in Section 29, subsection g of Decree No. 905/02
and contemplates the delivery by financial institutions of assets as security
for at least 100 % of the advance received.

COMPENSATION FOR APPLICATION OF THE CER/CVS

Law No. 25,796 established compensation to financial institutions for the
negative effects on their equity derived from the application of the CER to
deposits originally denominated in foreign currency and converted into pesos,
and from the application of the CVS to certain loans. This compensation will be
paid through the delivery of peso-denominated national government bonds maturing
2013 (BODEN 2013).

                                      F-21

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

Decree No. 117/04 (published in the Official Gazette on January 26, 2004)
regulated the application of Law No. 25,796.

Through Communique "A" 4114, the Argentine Central Bank regulated the reporting
requirements for determining the compensation amount. As this compensation was
optional, financial institutions were required to state their adherence by an
established deadline through a letter signed by their legal representative;
failure to submit this letter caused financial institutions to be considered to
have waived their right to compensation. Such deadline was May 18, 2004 as laid
down by Argentine Central Bank Communique "A" 4136.

To receive compensation, financial institutions were required to report on the
following: (i) principal and interest balances as of January 31, 2002 of the
portfolios subject to the application of the CVS by line of credit (mortgage,
pledge and personal loans), plus interest accrued at contractual rates from
January 31, 2002 up to and including February 2, 2002, net of settlements made
on January 2, 2002, loan loss allowances as of December 31, 2001, and a 5%
re-collectibility factor; (ii) the percentage they wished to subject to this
regime, which would be the same for all lines of credit; (iii) the weighted
average of the interest rates applied to each of the lines of credit, as of
February 3, 2002; and (iv) the weighted average life of the credit portfolio
segregated by line, as of February 3, 2002.

The Finance Secretariat of the Ministry of Economy was appointed to perform the
calculation of compensation based on the data reported, for which it was to
compare the principal balance adjusted by applying the CER, plus a 2% annual
interest rate, to that resulting from adjusting the debt by applying the CVS at
the average interest rate established for the line. If a positive difference was
obtained, compensation shall be provided by the government, otherwise, the
negative difference shall be reimbursed by the financial institution.

Based on the guidelines established in Law No. 25,796, the Bank has recorded the
estimated compensation in the amount of Ps. 102,705 as of December 31, 2003,
under "Other Receivables Resulting from Financial Brokerage," taking into
account a full option.

On May 3, 2004, through its Resolution No. 302/04, the Ministry of Economy
approved the calculation method to be used by the Finance Secretariat to
determine the face value of the BODEN 2013 to be delivered to financial
institutions adhering to the compensation regime created by Law No. 25,796. This
resolution and Argentine Central Bank Communique "A" 4136 have regulated the
compensation regime in a way that, in the opinion of the Bank, is contrary to
the provisions of Law No. 25,796. For this reason, on May 6, 2004 the Bank made
a presentation to the National Executive Branch, the Ministry of Economy and the
Argentine Central Bank, maintaining the claim made on December 30, 2003 and
supplementing its grounds. On May 18, 2004, the deadline for financial
institutions' to adhere to the compensation regime, the Bank did not request to
participate in such compensation regime and made another presentation to the
Ministry of Economy and the Argentine Central Bank, reiterating its request for
compensation for the negative effects on its financial condition derived from
the application of the CVS to certain pesified assets and the unequal
application of the CER to certain liabilities, and challenging Resolution No.
302/04 of the Ministry of Economy, under the terms of Section 24 of Law No.
19,549. As a consequence the Bank will fully provissioned the estimated
compensation above mentioned.


                                      F-22
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


TREATMENT OF EXTRAORDINARY ASSISTANCE TO FINANCIAL INSTITUTIONS BY THE ARGENTINE
CENTRAL BANK

Decree No. 739/03 issued on March 28, 2003, established a voluntary procedure
for the restructuring of the extraordinary financial assistance for liquidity
support granted by the Argentine Central Bank to financial institutions during
the 2001 and 2002 economic crisis. The basic purpose was to harmonize the cash
flows of those financial institutions that are simultaneously debtors (for
having received financial assistance from the Argentine Central Bank)
and creditors (for their holdings of public sector debt instruments) of the
public sector.

Section 9 of the above-mentioned Decree provided that the balances due will be
amortized in pesos in the same number of installments as the assets granted as
collateral for the financial assistance received, without exceeding 70
installments. In this connection, Communique "A" 3941 established a minimum
accumulated amortization schedule and a monthly repayment of at least 0.90% of
the adjusted balance. Mandatory and voluntary accelerated amortization is
envisaged when the rate of interest earned on the assets granted as collateral
exceeds 3.5% per annum.

Financial assistance subject to this repayment system shall be collateralized by
secured loans to the national government originated under Decree No. 1646/01,
secured loans and bonds issued within the framework of Decree No. 1579/02, or
bonds issued under Decrees No. 905/02, No. 1836/02 and No. 739/03.

The Argentine Central Bank shall modify the above-mentioned repayment conditions
when the Unit for the Restructuring of the Financial System (URSF, created under
Decree No. 1262/03) so establishes it, subject to the following conditions:

-     The average life of the assets granted as collateral for the financial
      assistance received exceeds 70 months.

-     The financial institution falls under the provisions of sections 34 and 35
      bis of the Financial Institutions Law and has adopted a reorganization
      plan approved by the URSF.

In this case, repayment shall be made in the same number of installments as that
of the assets granted as collateral for the financial assistance received, with
a maximum of 120 installments, and a minimum monthly amortization of 0.40%.
Also, upon occurrence of an event of default, the URSF has the right to
accelerate the maturiry of such financial assistance.

The financial institutions that wish to enter into this repayment system were
required to have normalized the situation of their foreign debt before December
5, 2003, under the terms of section 1 of Argentine Central Bank Communique "A"
3940.

The Bank has met these requirements. On November 25, 2003, a base agreement was
reached with the members of an "ad hoc" creditors committee regarding the
proposed terms for the restructuring of the debt in foreign currency subject to
foreign legislation (foreign debt) of the Bank's head office and cayman branch.
In accordance with Argentine Central Bank Communique "A" 3940, this was a
necessary requirement for the Bank to restructure the financial assistance for
liquidity support owed to the Argentine Central Bank, as established by Decree
No. 1262/03.

On December 3, 2003, through Resolution No. 460/03, the Board of Directors of
the Argentine Central Bank notified the Bank of the approval of the terms and
conditions of the Bank's proposal.


                                      F-23


<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


On February 3, 2004, the Argentine Central Bank informed the Bank that it had
approved the Bank's request for repayment of debt with the Argentine Central
Bank for liquidity support, as called for by Decree No. 739/03, and extended
through Decree No. 1262/03, as well as the amortization schedule proposed, on
the basis of the minimum amortization period established by applicable
regulations and of the cash flow provided by the assets eligible for collateral
for repayment of the debt. On March 2, 2004, the first installment was paid.

SITUATION OF THE BANK

The situation described above affected the Bank in the form of a lack of
liquidity as a result of the drop in deposits, which was so significant that it
made it necessary for the Bank to request financial assistance from the
Argentine Central Bank.

On March 21, 2002, the Bank submitted to the Argentine Central Bank the Galicia
Capitalization and Liquidity Plan, a regularization and rehabilitation plan (the
"Plan") which contemplated: (i) the immediate restoration of the Bank's
liquidity levels, including the supply of the necessary resources to achieve a
solid cash position in order to enable the Bank to reimburse a significant
portion of its demand deposits without requiring any financial assistance from
the Argentine Central Bank; (ii) an increase in the Bank's capitalization in the
context of the restructuring of its foreign debt; (iii) the orderly winding-down
of its operating units abroad; and (iv) the streamlining of the Bank's operating
structure and a significant reduction of its administrative expenses in order to
adapt to levels of activity significantly lower than experienced in the
pre-crisis period. The Plan also included temporary exemption from compliance
with the pertinent technical ratios and the reduction of the charges or fines
arising from any non-compliance incurred or to be incurred, before implementing
the plan, pursuant to the Financial Institutions Law (Law No. 21,526). This Plan
was approved by the Board of Directors of the Argentine Central Bank on May 3,
2002.

As described below, to date, the Bank has complied with the following components
of the Plan: the restoration of its liquidity levels; the streamlining of its
operations with the consequent reduction of its administrative expenses; the
orderly winding-down of its operating units abroad, the restructuring of its
foreign debt; and the increase in its capitalization tied to this restructuring.
As regards the restructuring of its foreign debt, the Bank managed to refinance
the liabilities of its New York Branch (currently closed) and the deposits of
Banco de Galicia Uruguay S.A. in July and December 2002, respectively, the
deposits of Banco de Galicia (Cayman) Limited (in provisional liquidation) in
July 2003, and the foreign debt of the head office in Argentina and its cayman
branch in May 2004. Furthermore, with the approval of the Argentine Central
Bank, the Bank restructured its debt with Banco de Galicia Uruguay S.A., the
principal amount of which was US$ 399.5 million, in August 2003.

Liquidity

The initial increase in the Bank's liquidity, after the launch of the Plan, was
a result of:

-     Securitization (and/or sale) of mortgage and commercial loan portfolio for
      a total amount of Ps. 400,000, during April 2002.

-     A loan from Seguros de Depositos S.A. (SEDESA) for the US dollar
      equivalent of Ps. 200,000, converted at the exchange rate prevailing on
      the day prior to that of the disbursement, for a term of five years and at
      an interest rate of 180-day LIBOR plus 300 basis points, which was
      subscribed on March 21, 2002.


                                      F-24
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


-     A loan from the Fiduciary Fund for the Assistance to Financial
      Institutions and Insurance Companies for the US dollar equivalent of Ps.
      100,000, converted at the exchange rate prevailing on the day prior to
      that of the disbursement, for a three year term and an interest rate of
      180-day LIBOR plus 400 basis points, with a floor of 8.07%, which was
      subscribed on April 30, 2002. As collateral for the loan, the Bank
      assigned secured loans for Ps. 185,500.

In addition, the Bank refinanced a debt of Ps. 574,000 with the Bank Liquidity
Fund by extending its maturity to February 2005, which was settled after the
implementation of the Plan with financial assistance provided by the Argentine
Central Bank under the same conditions as those of the original debt on May 9,
2002.

After the initial strengthening of the Bank's liquidity levels within the
framework of the renegotiation of its debt and after the implementation of the
Plan, the Bank's liquidity levels stabilized and were restored, and no further
financial assistance was required from the Argentine Central Bank.

Reduction of expenses

Within the framework of the Plan the Bank made significant progress in adapting
its corporate structure and administrative expenses to the lower levels of
activity recorded in 2002 and to the new regulations issued during that year.

To this end, during 2002, the number of branches of the Bank was reduced by 61
branches, equivalent to 21.1% of its branch network at December 31, 2001, and
the Galicia Ahora network, which at that date consisted of 118 customer service
centers, was fully absorbed by the branch network. Furthermore, through
voluntary retirement plans, for a cost of approximately Ps. 130 million, the
Bank's headcount was reduced by 1,996 employees by June 30, 2003, which is
equivalent to 34% of the headcount as of December 31, 2001. The Bank has also
renegotiated all rental contracts and contracts with system, communication and
other suppliers.

New York Branch and operating units abroad

According to the guidelines of the Plan, during fiscal 2002 the debt of the New
York Branch was restructured, as a necessary step for its orderly closing, which
took place on January 30, 2003.

The "Restructuring Plan" was submitted to the Office of the Comptroller of the
U.S. Treasury ("OCC") on March 22, 2002. This Plan contemplated the voluntary
and orderly termination of the operations of the New York Branch and its
subsequent closing, after: (i) payment of small deposits with the Branch; (ii)
the renegotiation of its obligations with third parties; and (iii) the transfer
of the renegotiated debts to the head office in Argentina. As of March 31, 2002,
the New York Branch had obligations with third parties for a total amount of
approximately US$ 328 million. At the end of fiscal year 2002, the New York
Branch had restructured all its obligations with third parties.

The restructuring of the New York Branch's debt consisted in rescheduling its
commercial debt amounting to US$51 million in the short term paying 20% of it in
cash and transferring the remaining 80% to the head office in Argentina. At the
date of these financial statements the total amount of that debt had been
settled. Also, of the total financial debt of approximately US$ 237 million, US$
125.5 million was restructured at the Head Office for a 5 year term, with a
grace period of 2 years, US$ 68.9 million was paid in cash and a debt reduction
of US$42.6 million was granted. Of total deposits of US$30 million, the Branch
paid in cash deposits for low amounts


                                      F-25
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


totaling US$ 12.5 million, and rescheduled US$ 17 million at the head office in
Argentina. The rest of obligations and contingencies for letters of credit were
transferred to the head office in Argentina.

Furthermore, within the framework of the Plan, the representative offices at Sao
Paulo (Brazil) and London (United Kingdom), as well as Galicia y Buenos Aires
Securities (UK) Ltd., the securities house controlled by the Bank and organized
in the United Kingdom, were closed in September 2002.

Restructuring of the foreign debt of the head office in Argentina and its Cayman
branch

During 2002 and 2003, formal negotiations were carried out with the members of
an "ad hoc" creditors committee, composed of the Bank's main bank and
multilateral creditors in order to restructure the foreign debt of the Bank's
head office in Argentina and its Cayman branch, for a total principal amount of
US$ 1,365 million. On November 25, 2003, the Bank reached a non-binding
agreement in principle on the terms of the proposal for the restructuring of
that debt.

Through Resolution No. 460/03 dated November 27, 2003, the Board of Directors of
the Argentine Central Bank approved the terms and conditions of the non-binding
agreement reached with the "ad hoc" creditors committee.

In accordance with Argentine Central Bank Communique "A" 3940, this approval was
a necessary requirement for the Bank to be able to restructure the financial
assistance received from the Argentine Central Bank for liquidity support, as
established by Decrees No. 739/03 and No. 1262/03.

The restructuring of the Bank's "9% Negotiable Obligations Due 2003", "Step Up
Floating Rate Negotiable Obligations Due 2002", and of the Bank's foreign debt
with bank and multilateral credit entities (the bank creditors) was made up of
two stages.

First, the Bank offered its bondholders and bank creditors the ability to
exchange their existing debt for units comprised of a new long-term debt
instrument maturing in 2014 and a new subordinated debt instrument maturing in
2019 in a par-for-par first step exchange offer. The bondholders and bank
creditors were then given the option to participate in a second step to the
exchange, in which they could receive for their units:

- cash (at a discount) (the "cash offer");

- BODEN 2012 (at a discount) (the "BODEN offer");

- new long-term debt instruments (at par); or

- new medium-term debt instruments (at par) and up to 149 million preferred
shares of our preferred shares (or, instead of such shares, cash, if any, paid
to us by existing shareholders electing to subscribe for our preferred shares in
a preemptive rights offering) (the "equity participation option").

In addition, creditors that agreed to sign firm commitments to the Bank for new
trade facilities in an aggregate principal amount up to US$ 35 million were
permitted to elect to receive new medium-term debt instruments maturing in 2010
(at par) (the "new money option").

Each of the optional second-step offers was subject to proration.


                                      F-26
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

To make the Bank's foreign debt restructuring possible under the above mentioned
structure, as requested by the Bank's creditors:

-     The Group approved a capital increase through the issuance of up to 149
      million preferred shares each of them mandatorily convertible into one
      class B share of Grupo Galicia on May 13, 2005, the first anniversary date
      of issuance (or, if earlier, on the occurrence of a change of control of
      Grupo Galicia). As a result of the exercises made by the existing
      shareholders in our preemptive rights offering, creditors opting for the
      equity participation offer received 87.8 million preferred shares and
      US$30 million in cash and we received approximately US$100 million of
      subordinated bonds in exchange for those shares and cash. We issued the
      149 million preferred shares on May 13, 2004.

-     The Group's controlling shareholders assigned part of their preemptive and
      accretion rights to a trust. In addition to EBA Holding, a 25.74%
      shareholder of Grupo Galicia, which assigned 100% of its preemptive and
      accretion rights to the trust, certain other shareholders of Grupo
      Galicia, collectively representing 19.52% of the shares of Grupo Galicia,
      also assigned 50% of their preemptive and accretion rights to the trust.

-     We entered into a registration rights agreement for the benefit of the
      holders of our preferred shares in the United States in which we agreed
      to: (i) file a shelf registration statement with the U.S. Securities and
      Exchange Commission covering the resale of those restricted preferred
      shares within 270 days of the expiration date of the exchange offer; (ii)
      use our reasonable best efforts to cause the shelf registration statement
      to become effective within 360 days of the offer's expiration date; and
      (iii) use our reasonable best efforts to keep the shelf registration
      statement effective from on or before June 1, 2005, until the date on
      which all of the restricted preferred shares have been sold under the
      shelf registration statement or September 1, 2005, whichever comes first.

-     We entered into an agreement with the Bank's bank creditors in which we
      agreed to maintain certain corporate governance standards and to provide
      them with certain financial information and reports on a quarterly and
      annual basis.

Creditors holding US$ 1,320.9 million of the Bank's debt participated in the
restructuring, representing 98.2% in aggregate principal amount of all debt that
was subject to the restructuring. As a result of the elections made by creditors
in the second step of the restructuring, the only election that was
oversubscribed was the equity participation offer and, therefore, the equity
participation offer was subject to a proration factor of approximately 45.6%.

In addition, in accordance with the terms of the Bank's foreign debt
restructuring, the Bank made a US$15.5 million cash payment for interest accrued
until April 30, 2002, and applied US$42.4 million not used in the cash offer to
prepay at par (plus capitalized interest) long-term instruments to be delivered
to creditors participating in the restructuring.

Based on the final amounts validly tendered, on May 18, 2004, the Bank:

- paid US$13.6 million to creditors participating in the cash offer;

- transferred US$36.9 million of nominal value of BODEN 2012 to creditors
participating in the BODEN offer; and

- issued the following new debt instruments:

            -     US$ 648.5 million of long-term dollar-denominated debt
                  instruments, of which US$ 464.8 million were
                  dollar-denominated negotiable obligations due 2014 issued
                  under the indenture.


                                      F-27
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

            -     US$ 399.8 million of medium-term dollar-denominated debt
                  instruments, of which US$ 352.8 million were
                  dollar-denominated negotiable obligations due 2010 issued
                  under the indenture.

            -     US$ 230.0 million of subordinated dollar-denominated debt
                  instruments, of which US$ 218.2 million were
                  dollar-denominated negotiable obligations due 2019 issued
                  under the indenture.

The Bank also restructured trade debt for a principal amount of US$ 25.3 million
in exchange for US$ 26.6 million of new trade debt to be repaid in 12 equal,
consecutive monthly installments beginning in June 2004.

In addition, the Bank entered into a new trade facility agreement for US$ 35
million with creditors participating in the new money option.

Through its Resolution No.152/04, dated may 14, 204, the Board of Directors of
the Argentine Central Bank approved the economic terms of the Bank's foreign
debt restructuring.

Capitalization.

The Plan contemplated the capitalization of the Bank as an integral part of the
restructuring of its external debt. The Bank proposed to the Argentine Central
Bank a capitalization increase of up to US$ 300 million.

In this connection, the Meeting of Shareholders of the Bank held on September
30, 2003 approved the creation of a global debt program under Argentine Law for
the issuance and public offering of negotiable obligations, not convertible into
shares. In addition, the shareholders resolved that the negotiable obligations
issued under the Program could be subordinated in order to be computed as
capital for Argentine Central Bank regulatory purposes, only and not as capital
stock.

This Program was authorized by Resolution No. 14708 of the National Securities
Commission (CNV) dated December 29, 2003, and authorization to issue up to US$
1,400 million or its equivalent in other currencies, was provided on April 23,
2004, through CNV Resolution No. 14773.

As a result of the restructuring of the foreign debt of the Bank's head office
in Argentina and that of its Cayman branch, the Bank increased its
capitalization in the amount of US$ 278.9 million, as a consequence of : (i) the
exchange of debt subject to restructuring for cash and BODEN 2012 at a discount
and the capitalization of interest at a rate lower than the contractual rate
recorded in the Bank's books, which generated in aggregate a US$ 48.9 million
increase in shareholders' equity; and (iii) the issuance of US$ 230.0 million of
subordinated debt computable as supplemental capital in accordance with
Argentine Central Bank's capital adequacy rules.

As a result of the restructuring of the New York Branch, in 2002, the Bank had
increased its capitalization by US$ 42.6 million, as a result of the exchange of
old debt for new debt or cash at a discount.

CLAIMS DUE TO FOREIGN EXCHANGE DIFFERENCES ARISING FROM THE REPAYMENT OF
FINANCIAL ASSISTANCE DURING THE EXCHANGE HOLIDAYS THAT TOOK PLACE IN JANUARY
2002

During December 2001, the Bank received financial assistance in pesos from the
Argentine

                                      F-28
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

Central Bank to cover a temporary lack of liquidity. This assistance was repaid
applying resources in US dollars granted by the Bank Liquidity Fund (BLF) on
January 2 and 4, 2002.

At the date those funds were credited, the Argentine Central Bank had declared
an exchange holiday.

Before the markets were reopened, Law No. 25,561 was enacted on January 6, 2002,
which repealed the convertibility system and fixed the new exchange rate at
Ps.1.40 per US dollar.

As a result of the aforementioned rules, during the exchange holiday the Bank
was unable to perform foreign exchange operations. Accordingly, the funds in US
dollars credited by the BLF on January 2 and 4, 2002 had to remain in US dollars
until the markets were reopened. At the date markets were reopened, as provided
by the rules in force, the US dollar was sold at Ps.1.40 per US$ 1.00.

For this reason, management's view is that, when the Argentine Central Bank
allocated US$ 410,000 to the Bank to repay the financial assistance provided,
based on the exchange rate at the date of payment of Ps. 1.40 per US dollar, the
Argentine Central Bank should have paid Ps. 574,000 instead of Ps. 410,000.

In view of the above, the return of the difference of Ps. 164,000 in values as
of January 2002 to the Bank for the restoration of its equity for an equivalent
amount should be considered. This matter is still pending and the Bank has not
recognized the effect of the aforementioned difference.

SITUATION OF BANCO GALICIA URUGUAY S.A. AND BANCO DE GALICIA (CAYMAN) LTD. (IN
PROVISIONAL LIQUIDATION)

The situation described above also significaly impacted controlled companies
Banco Galicia Uruguay S.A. and Banco de Galicia (Cayman) Limited (in provisional
liquidation).

On February 6, 2002, Banco Galicia Uruguay S.A. (Galicia Uruguay) submitted a
letter to the Central Bank of Uruguay in order to: (i) inform the Central Bank
of Uruguay of its temporary lack of liquidity, which prevented Galicia Uruguay
from continuing to meet the withdrawal demand of deposits; (ii) request
financial assistance from the Central Bank of Uruguay to be able to preserve its
ability to reimburse all deposits in an orderly manner and face the withdrawal
of funds generated by the developments that had ocurred in Argentina; and (iii)
request the authorization of the Central Bank of Uruguay to temporarily suspend
its operations.

On February 13, 2002 the Central Bank of Uruguay resolved to appoint an
intervenor to oversee Galicia Uruguay's management and temporarily suspended all
its activities for a term of 90 days, which was subsequently extended through
March 31, 2004. The Central Bank of Uruguay has again postponed Galicia
Uruguay`s intervention and suspension of activities until the measures agreed
upon between Galicia Uruguay and the Uruguayan and Argentine regulatory
authorities, described below, are implemented.

On June 10, 2002, Galicia Uruguay submitted to the Central Bank of Uruguay a
proposal for the restructuring of its debt in respect of deposits. The proposal
consisted of an initial cash payment in US dollars equivalent to 3% of the
credit balance of each creditor, and for the remaining balances, at the
creditor's election, a time deposit or negotiable obligations issued by Galicia
Uruguay, maturing in September 2011, to be amortized in nine annual and
consecutive

                                      F-29
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

installments, the first two installments for 15% of the balance, and
the following ones, for 10% of the balance, at a fixed interest rate of 2% per
annum.

On June 20, 2002, a letter was presented before the Central Bank of Uruguay
offering a pledge on Galicia Uruguay's commercial loan portfolio as guarantee of
payment of the negotiable obligations and time deposits to be issued under the
restructuring proposal.

On July 18, 2002, the Central Bank of Uruguay informed Galicia Uruguay that it
would not object to any proposal the latter could make to its depositors
provided at least a 75% adherence is obtained. This percentage represents the
majority legally required to achieve an out-of-court reorganization plan,
pursuant to Uruguayan legislation (Section 29 and subsequent sections of Law
2230 of June 2, 1893).

Acceptance by depositors represented deposits for US$ 930,000, out of a total
amount of US$ 1,176,000, corresponding to holders of 7,067 accounts out of a
total of 12,271. Measured in terms of deposits, this represented a percentage of
acceptance of more than 79% of total deposits, which exceeded the legal majority
required.

On December 23, 2002, the Court of Montevideo hearing the case approved the
reorganization plan requested by Galicia Uruguay, making it binding for all
creditors.

In accordance with a resolution adopted by the Central Bank of Uruguay, as from
January 9, 2003, Galicia Uruguay implemented a payment program, which
contemplates the reimbursement of 100% of deposits in US dollars plus interest
to investors. As agreed, the first step consisted of an initial payment of 3% in
cash to each holder of time and savings accounts and demand deposits as of
February 13, 2002, as well as the delivery of transferable rescheduled time
deposit certificates, as the case may be, issued by Galicia Uruguay.

On June 17, 2003 the Galicia Uruguay opened a period in which it received
expressions of interest from customers for different alternatives of exchanging
their deposits restructured in 2002 (such as time deposits or negotiable
obligations) for different proportions of BODEN 2012 and/or new negotiable
obligations to be issued by Galicia Uruguay. The purpose of this exchange was to
voluntarily modify the profile of the debt already restructured to satisfy the
preferences of customers for different combinations of liquidity and return, and
to improve the distribution of cash flows over time. The term for this voluntary
exchange expired on July 24, 2003. Galicia Uruguay depositors exercised those
options in a total amount of US$ 185 million, which included opting to receive
BODEN 2012 for US$ 136 million, in addition to new negotiable obligations to be
issued by Galicia Uruguay.

Through Resolution No.338, the Board of Directors of the Argentine Central Bank
approved the terms and conditions for the restructuring of the debt of US$ 399.5
million (principal) that the Bank owed to Galicia Uruguay, as well as the
transfer to Galicia Uruguay of cash for US$ 72.1 million (principal) and BODEN
2012 of US$ 137 million (face value), in payment of the first principal
installment and interest thereon due at August 15, 2003. The terms and
conditions approved by the Argentine Central Bank were: (i) a payment of US$
40.9 million and of US$ 137 million of face value of BODEN 2012 on the principal
balance on August 15, 2003, and (ii) the settlement of the remaining balance of
approximately US$ 221.6 million in 8 annual consecutive installments, with
accrued interest falling due in August of each year.

                                      F-30
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

Under Resolution No. 338, interest paid on August 15, 2003 was set at US$ 31.2
million, which resulted from applying the contractual rate until December 31,
2002 and thereafter, LIBOR plus 150 basis points.

During the first days of September 2003, as scheduled, Galicia Uruguay began to
pay the second installment envisaged in the original restructuring schedule,
with the amendments introduced by the exchange offer. At the same time, Galicia
Uruguay began to settle the exchange offer, primarily on the basis of BODEN 2012
for US$ 137 million (face value).

On December 9, 2003, Galicia Uruguay commenced a period in which it solicited
expressions of interest from its customers to participate in a second voluntary
exchange of all restructured deposits and negotiable obligations or certificates
issued by Galicia Uruguay or its subsidiary, Banco de Galicia (Cayman) Ltd. to
restructure deposits. This voluntary exchange offer contemplated a cash advance,
equivalent to an advance of the installment that should be paid in September
2004, and the delivery of BODEN 2012 for the remaining balance. The exchange was
limited to US$ 300 million. The February 13, 2004 deadline for presenting those
opinions was extended until February 20, 2004. The deadline for the exchange was
March 15, 2004. Galicia Uruguay settled with its customers for a total amount of
around US$ 206 million. In addition, on April 2, 2004, Banco de Galicia y Buenos
Aires S.A. transferred to Galicia Uruguay BODEN 2012 for US$170 million (face
value), which were first allocated to the early amortization of principal amount
of installments for US$ 111.5 million on the debt held through the Cayman Branch
with Galicia Uruguay.

In order to assist Galicia Uruguay in complying with obligations arising from
the reorganization plan approved, the Central Bank of Uruguay authorized the
creation of a trust to hold assets of Galicia Uruguay, the proceeds of which
will be used for the repayment of the obligations under the agreement.

The Central Bank of Uruguay resolved that, concurrently with the implementation
of the trust, Galicia Uruguay S.A's intervention will be lifted and its board of
directors restored. Given that the license to operate as a domestic commercial
bank, which is granted by the Central Bank of Uruguay, is not necessary to such
effects, such license will be revoked. However, Galicia Uruguay will retain the
authorization that had been granted to it by the Executive Branch of the
Uruguayan government. Adoption of this resolution by the Central Bank of Uruguay
does not modify any current terms or depositors and bondholders' rights.

At the beginning of 2002, the situation of Galicia Uruguay affected its
subsidiary Banco de Galicia (Cayman) Ltd. (in provisional liquidation) because
one of its main assets was a deposit for US$ 79.5 million in Galicia Uruguay.
Consequently, at the request of Banco de Galicia (Cayman) Ltd., on July 18, 2002
the authorities in the Cayman Islands appointed a provisional liquidator in
order to reach a voluntary restructuring agreement between Banco de Galicia
(Cayman) Ltd. and its creditors, as an alternative to its liquidation.

At the end of May 2003, Banco de Galicia (Cayman) Ltd. (in provisional
liquidation) and the provisional liquidator completed the debt restructuring
plan and with the authorization of the court in the Cayman Islands ("the Court")
they distributed the plan to all creditors for their consideration. The
restructuring plan will be in force until April 30, 2012. While this plan
remains in effect, the subsidiaries' assets will be administered by the
liquidators for the benefit of the creditors.

On May 29, 2003 the restructuring proposal made to creditors was submitted to
the Court. The terms of this proposal were as follows: an initial cash payment
of 5% of the amount of the debt (principal and interest) due as of July 18,
2002, plus a transferable debt certificate for 95% of the amount of the debt
(principal and interest) due as of July 18, 2002. The conditions of this


                                      F-31
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

certificate are as follows: (i) amortization of principal in nine annual
consecutive installments, the first two for 15% of the principal and the
remaining for 10%, payable as from September 21st of each year; (ii) interest at
2% per annum (plus 1% provided that the entity still has assets following
reimbursement to all its creditors according to the proposed plan and repayment
of the subordinated loan described below); (iii) the certificate shall accrue
interest as from the date of the agreement; and (iv) interest shall be payable
annually together with the principal, calculated on the remaining balance. After
the debt with all Class A creditors has been repaid, the remaining assets of
Banco de Galicia (Cayman) Limited (in provisional liquidation) shall be
allocated to the repayment of the US$ 2.9 million debt held with Galicia Pension
Fund Ltd. (a subsidiary of Banco de Galicia (Cayman) Ltd. (in provisional
liquidation), which is subordinated to the repayment of the debt with all Class
A creditors. Furthermore, a subordinated loan for US$1.2 million was obtained
from the Group, which shall be repaid after the debt with all creditors
according to the proposed plan has been amortized.

On July 10, 2003 a creditors' meeting was held in order to consider and approve
fully or partially the repayment plan proposed by Banco de Galicia (Cayman) Ltd.
At that meeting, that plan was approved without modifications by creditors who,
in number and amount of receivables represented 99.7% of the total number of
votes issued. The degree of acceptance of the proposed plan exceeded the legal
majority of at least 50% of the number of creditors and 75% of total receivables
corresponding to the votes cast. With the approval of the proposed plan by the
Court in the Cayman Islands and its registration with the Company Record of that
jurisdiction, both of them having taken place on July 16, 2003, the proposed
plan came into force as from that date and is mandatory for all creditors.

This initial payment was made on August 8, 2003. The first installment (15%) was
paid in the middle of September 2003.

In accordance with the Plan, Banco de Galicia (Cayman) Ltd. commenced voluntary
liquidation and surrendered its banking license effective December 31, 2002.

EFFECTS OF DECREE NO.214/02 AND COMPLEMENTARY RULES ON BANCO GALICIA URUGUAY
S.A. AND BANCO DE GALICIA (CAYMAN) LTD. (IN PROVISIONAL LIQUIDATION)

The developments described in the section entitled "Compensation to financial
institutions" proved financially detrimental to Galicia Uruguay, due to the
devaluation of the Argentine currency and the mandatory conversion into pesos,
at different exchange rates, of a portion of its receivables in foreign currency
subject to Argentine law.

Such losses have been generated by the fact that, as mentioned earlier, Decree
No.905/02 excluded from the calculation of the compensatory and the hedge bonds
the assets converted into pesos owned by companies engaged in complementary
activities and controlled by the Bank, and by foreign branches and subsidiaries.
In other words, the objective envisaged in Section 7 of Decree No. 214/02, which
consisted in "establishing the issuance of a bond to cover the imbalance in the
financial system", has only been partially met in the case of the Bank.
Subsequently, Decree No. 2167/02 and Argentine Central Bank Communique "A" 3805
corrected that omission by complementing the calculation of the compensation,
allowing the assets recorded at foreign branches or subsidiaries covered by
Decree No. 214/02 to be included in that calculation (see section entitled
"Compensation to financial institutions" above).

Within this context, the Bank agreed with Galicia Uruguay to perform the
necessary acts

                                      F-32
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

to provide the latter, where applicable and subject to the prior authorization
of the Argentine Central Bank, with the necessary funds for it to be able to
reimburse all restructured deposits.

Subsequently, the two financial institutions complemented that agreement through
another agreement which explained the legal effects, whether direct or indirect,
of the declarations and covenants contained in the agreement, and that the
fulfillment of the commitments undertaken is subject to the normalization of the
economic and financial situation of the Bank and to the repayment of the
financial assistance granted to it by the Argentine Central Bank. These
circumstances are mentioned in section 52 of Resolution No. 281 issued by that
body.

2. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies and financial statement presentation conform to the
rules of the Argentine Central Bank which prescribes the generally accepted
accounting principles for all banks in Argentina (the "Argentine Banking GAAP")
that differs in certain respects from generally accepted accounting principles
of Argentina applicable to enterprises in general ("Argentine GAAP") (see note
38).

Certain of the required disclosures of the Argentine Central Bank have not been
presented herein since they are not material to the accompanying financial
statements. In addition, certain presentations and disclosures including the
statements of cash flows have been included in the accompanying financial
statements to comply with the Securities and Exchange Commission's regulations
for foreign registrants.

The consolidated financial statements of Banco Galicia as of December 31, 2001
have been adapted to the same period of time of Grupo Galicia's financial
statements.

The following is a summary of significant policies followed in the preparation
of the consolidated financial statements.

2.1 UNIT OF MEASUREMENT

The financial statements corresponding to the Argentine operations have been
adjusted for inflation up to August 31, 1995. As from that date, in line with
professional accounting standards and the regulatory bodies, the financial
statements have been prepared without recognizing the changes in the purchasing
power of the currency up to December 31, 2001. In line with Argentine Central
Bank Communique "A" 3702, Resolution No. 240/02 of the Argentine Federation of
Professional Councils in Economic Sciences (F.A.C.P.C.E.) and Resolution No.
415/02 of the CNV, the recognition of the effects of inflation has been resumed
in these financial statements since January 1, 2002. For comparative purposes
prior periods presented have been restated applying the WPI rate from the period
January 1, 2002 to February 28, 2003 (approximately 120.35%).To this end, the
restatement method established by that Communique, which is in accordance with
the guidelines of Technical Pronouncement No. 6 of the F.A.C.P.C.E. has been
followed, considering that the accounting measurements originated prior to
December 31, 2001 are stated in the currency value as of that date.

On March 25, 2003, Decree No. 664/03 rescinded the requirement that financial
statements be prepared in constant currency, effective for periods on or after
March 1, 2003 and, on April 8, 2003, the Argentine Central Bank issued the
Communique "A" 3921 and the CNV issued resolution No. 443/03 discontinuing
inflation accounting as of March 1, 2003.

                                      F-33
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

The Company has discontinued the application of that method and therefore, it
did not recognized the effects of the variations in the purchasing power of the
currency originated since March 1, 2003.

Under professional accounting standards, application of that method remained in
effect until September 30, 2003. Resolution MD No. 41/03 of the Professional
Council in Economic Sciences of the Autonomous City of Buenos Aires
(C.P.C.E.C.A.B.A.) established the discontinuation of the recognition of the
changes in the purchasing power of the currency since October 1, 2003. During
the March-September 2003 period, a deflation rate of approximately 2% was
recorded.

2.2 FOREIGN CURRENCY

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

Assets and liabilities valued in foreign currencies other than the US dollar
will be converted into U.S. dollars using the exchange rates communicated by the
Argentine Central Bank's trading desk.

For financial reporting purposes, these assets and liabilities are then
translated into pesos at the U.S. dollar to Argentine peso exchange rate set by
the Argentine Central Bank.

2.3 GOVERNMENT AND CORPORATE SECURITIES

Government securities mainly represent obligations of the Argentine and U.S.
governments. Corporate securities included in this caption consist of quoted
corporate equity securities and quoted debt securities. Corporate equity and
debt securities are considered as held for trading purposes.

Realized and unrealized gains and losses on sales and interest income on
government and corporate securities are included as "Net Income from Government
and Corporate Securities" in the accompanying income statements.

VALUATION OF GOVERNMENT SECURITIES UNDER ARGENTINE BANKING GAAP

The Argentine Central Bank established the categories in which banks would be
able to classify Argentine government securities listed on local or foreign
markets and the accounting valuation for the securities in each of these
categories. The categories established by the Argentine Central Bank were the
following: "investment account" and "held for trading".

Trading securities are marked to market, and any difference between book value
and their market price is recognized as a gain or loss in the income statement.

Through Communiques "A" 3021 and "A" 3039, the Argentine Central Bank
established that, effective March 1, 2000, investment account securities had to
be valued at their acquisition cost increased at the end of each service period
by the corresponding coupon rate. Through Communique "A" 3278, the Argentine
Central Bank established that, effective June 1, 2001, the holdings incorporated
as investment securities had to be valued at their acquisition cost increased by
accruing their internal rate of return over the period elapsed since the date of
inclusion of the securities in the investment account category.

                                      F-34
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

If the aforementioned value of the security at the last day of each month is
greater than the market value plus 20%, then the value of the security must be
written down to the market value plus 20%.

These holdings include BODEN 2012, received within the framework of Sections 28
and 29 of Decree No. 905/02 (see Note 1) recorded at their technical value. The
treatment of the difference exceeding 20% between the market value and the
carrying value mentioned above does not apply to these securities.

Effective January 7, 2003, Argentine Central Bank Communique "A" 3857 restricted
the possibility of classifying securities as holdings in investment accounts, to
those existing in the Bank's portfolio as of December 31, 2002.

Unlisted government securities are valued at cost plus income accrued up to the
end of the year, where applicable.

SECURED LOANS

Within the framework of Decree No.1387/01, the Bank has participated, on
November 6, 2001, in the exchange of Argentine public-sector debt securities and
loans, under the Promissory Note/Bond program, for new loans called "secured
loans". The main differences between the instruments received and those
exchanged consisted of an extension of the amortization term which was 3 years
for securities originally maturing up to December 31, 2010 and a reduction of
the interest rate, which was set at 70% of the contractual rate, with a maximum
rate of 7% per annum for fixed-rate transactions and a Libor rate plus 3% for
floating rate loans. As established by section 20 of the above mentioned decree,
the conversion was made at the nominal value, at a rate of exchange of Ps.1.0 =
US$ 1.0 and in the same currency as that of the converted obligation.

The Argentine Central Bank provided that the gain arising from the difference
between the carrying value of the secured loans and the book value of the
securities exchanged must be recorded in an asset adjustment account and
credited to income on a monthly basis, in proportion to the term of each of the
secured loans received.

Had the position of government securities classified in investment accounts and
presented for their exchange been valued according to professional accounting
standards, shareholders' equity would have decreased by Ps. 446,888 at the
exchange date (November 5, 2001).

In accordance with Decree No. 644 dated April 18, 2002, the principal changes
are as follows:

-     The conversion into pesos of the secured loans originally denominated in
      US dollars at the exchange rate of Ps. 1.40 per US dollar, as established
      by Section 1 of Decree No. 471/02.

-     The new interest rates to be accrued by those secured loans, as
      established by Section 3 of Decree No. 471/02 (see Note 1).

On March 28, 2003, the Argentine Central Bank released Communique "A" 3911,
which substantially modified the accounting criterion for secured loans to the
public sector. Communique "A" 3911 established that secured loans and government
securities not subject to the minimum capital requirement to cover market risk
(mainly government securities not listed on stock exchanges), promissory notes
issued by the Fiduciary Fund for Provincial Development and other financing to
the public sector held in financial institution portfolios on or after March 28,

                                      F-35
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

2003, must be carried at the lower of "present value" and cost basis plus
accrued interest. The "present value" is defined as the "net present value" of a
cash flow structure under contractual terms discounted at the rate of 3% set by
the Argentine Central Bank through December 2003.

The Bank has recorded in "Financial Expenses - Other" a loss of Ps.198,088 as a
result of the application of Communique "A" 3911.

PROVINCIAL SECURED LOANS

Decree No.1579, dated August 28, 2002, established a restructuring of provincial
government debt. The restructuring consisted of a voluntary exchange of
provincial government debt for bonds (BOGAR) or loans (Promissory Notes), issued
by the Fiduciary Fund for Provincial Development ("FFDP") and secured by the
federal government's tax receipts shared with the provinces, with a 16-year
term, a 2% fixed annual interest rate and amortization in 156 monthly and
consecutive installments beginning on March 4, 2005.

The Bank tendered in the exchange under Decree No.1579/02 all of its portfolio
of loans to provincial governments and pursuant to the option provided by
section 3, subsection k of the Decree, opted to receive promissory notes. As of
December 31, 2003, the Bank had recorded in its balance sheet provincial secured
loans, valued in accordance with Argentine Central Bank's Communique "A" 3911,
in the amount of Ps.3,473.7 million. This amount included Ps.22.0 million of a
loan for which the exchange was pending completion as of December 31, 2003. The
Bank received BOGAR for the provincial debt for which the exchange had been
completed at the close of the fiscal year, despite having opted to receive
promissory notes. At the date hereof the Bank had not yet received the
Promissory Notes.

2.4 LOANS TO THE NON-FINANCIAL PRIVATE SECTOR

On July 25, 2003, through Communique "A" 3987, the Argentine Central Bank
authorized financial institutions to grant loans adjustable by CER, for the
purpose of increasing peso-denominated loan origination, both medium-and-long
term.

The Argentine Congress enacted Law No. 25,796, which was sent to the National
Executive Branch for its promulgation. This Law amends Law No. 25,713,
establishing the application of the CVS for the index-adjustment of loans
subject to this coefficient until March 31, 2004. As from April 1, 2004 no
adjusting index will be applied to financing subject to CVS.

This Law also contemplates compensating financial institutions for the negative
effects on their equity derived from the application of the CER to all deposits
denominated in foreign currency and converted into pesos, and from the
application of the CVS to certain loans in accordance with the above-mentioned
regulations. This compensation is to be paid through the delivery of BODEN 2013.
( See note 1 Compensation CER/CVS).

2.5 INTEREST INCOME (EXPENSE) RECOGNITION

Generally, interest income is recognized on an accrual basis using the linear
(effective interest) method. For loans and deposits denominated in pesos, with
maturities greater than 92 days, interest is recognized on a compounded basis,
which provides for an increasing effective rate over the life of the loan or
deposit.

                                      F-36
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

The Bank suspends the accrual of interest generally when the related loan is
past due and the collection of interest and principal is in doubt. The
suspension of interest corresponds to the loans classified as "with problems"
and "deficient performance", or below under the Argentine Central Bank's
classification rules. Accrued interest remains on the Bank's books and is
considered to be part of the loan balance when determining the allowance for
loan losses. Interest is recognized on a cash basis after reducing the balance
of accrued interest, if applicable.

As indicated in Note 1, for lending and borrowing transactions originally
carried out in foreign currency and converted into pesos, the adjustment from
the application of the CER or CVS was accrued at year end, where applicable.

2.6 ALLOWANCE FOR LOAN LOSSES AND PROVISION FOR CONTINGENCIES

The Bank provides for estimated future possible losses on loans and the related
accrued interest generally through the establishment of an allowance for loan
losses. The allowance charged to expense is determined by management based upon
loan classification, actual loss experience, current and expected economic
conditions, delinquency aging, and an evaluation of potential losses in the
current loan portfolio with specific attention to loans where any evidence that
may negatively affect the Bank's ability to recover the loan and accrued
interest is known.

Related to debtor's classification according to the execution grade, and
pursuant to Communique "A" 3918 of the Argentine Central Bank from March 31,
2003, to December 31, 2003, the loan loss reserve for debtors with total
indebtedness equal to or lower than Ps.5 million with all Argentine financial
institutions should be reserved exclusively based upon its past due performance.
The past due performance between, December 1, 2001 and March 31, 2003, should be
computed based on one day for every three days past due.

2.7 INVESTMENTS IN OTHER COMPANIES

Investments in Other Companies include equity investments in companies where a
minority interest is held, including investments in infrastructure companies and
utilities.

Under Argentine Banking GAAP, the equity method is used to account for
investments where a significant influence in the corporate decision making
process exists. Significant influence is considered to be present if one of the
following applies:

-     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.

                                      F-37
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

Permanent equity investments in companies where corporate decision are not
influenced, in terms of the criteria listed above, are accounted for at the
lower of cost or share of net book value of the investee.

2.8 FIXED ASSETS AND MISCELLANEOUS ASSETS

Fixed assets and miscellaneous assets are valued at cost restated. Depreciation
of those properties, which were subject to the technical revaluation, is
reflected in the statements of income.

The depreciation of fixed assets and miscellaneous assets is calculated, where
appropriate, based on the revalued amounts of such assets using the
straight-line method at rates based on the estimated useful lives of the related
assets. The estimated useful lives are 50 years for properties, 10 years for
furniture and fixtures and 5 years for others. Leasehold improvements are
amortized using the straight-line method over the shorter of the lease term or
the estimated useful life of the asset.

The cost of maintenance and repairs is charged to income. The cost of
significant renewals and improvements is added to the carrying amount of the
respective fixed assets. The carrying amounts and accumulated depreciation
allowances for assets sold or retired are eliminated from the respective
accounts and gains or losses realized on disposition are reflected in the
statements of income.

2.9 INTANGIBLE ASSETS

Intangible assets are valued at cost restated and are amortized on a
straight-line basis over 120 months for goodwill and over a range of 60 months
for organization and development costs. Under Argentine Banking GAAP, goodwill
is no longer recognized as an asset when it is estimated that amounts of future
income will not be sufficient to absorb the amortization of goodwill or when
there are other reasons to presume that the amount of an investment that has
been made will not be recovered in full.

Effective March 2003, Argentine Central Bank Communique "A" 3916 established
that the difference resulting from compliance with court decisions made in
lawsuits filed challenging the applicability of current regulations to deposits
with the financial system, within the framework of the provisions of Law No.
25,561, Decree No. 214/02 and supplementary rules, should also be recorded under
this caption, the amortization of which should take place in a maximum of 60
equal, monthly and consecutive installments as from April 2003 (See Note 1).

2.10 SHAREHOLDERS' EQUITY

Shareholders' Equity accounts have been restated following the procedure
mentioned in section 2.1, except for "Capital Stock" and "Paid in Capital"
accounts, which have been stated at their original values. The adjustment
stemming from the restatement of these accounts was allocated to the
"Adjustments to Shareholders' Equity" account.

Income and expense accounts have been restated.

Monetary results of exposure to inflation were determined as follows:

                                      F-38
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

a.    "Monetary result of financial brokerage" includes the result of exposure
      to inflation generated by assets and liabilities related to the usual
      period of brokerage activity between the supply and demand of financial
      resources.

b.    "Monetary result of operating expenses" includes the result of exposure to
      inflation generated by monetary assets and liabilities in pesos, related
      to administrative expenses, pursuant to Argentine Central Bank Communique
      "A" 3702.

c.    "Monetary result of other operations" includes the result of exposure to
      inflation generated by assets and liabilities not related to the financial
      brokerage activity.

      The income statement and statement of changes in shareholders' equity have
      been disclosed in accordance with Communique "A" 3800 of the Argentine
      Central Bank. At the referendum of the shareholder's meeting, the Bank
      absorbed the loss for the fiscal year 2002, up to the limit of the
      balances recorded in retained earnings and unrealized valuation difference
      arising from the net foreign currency position.

2.11 PRESUMPTIVE MINIMUM INCOME TAX AND INCOME TAX

Effective 1998 and for a ten year period a presumptive minimum income tax (PMIT)
was established as a complementary component of the income tax obligation. PMIT
consists in a minimum taxation, which assesses at the tax rate of 1% of certain
productive assets. Ultimately, the tax obligation will be the highest of PMIT
and income tax. For financial entities, the taxable basis will be 20% of their
computable assets. If in a fiscal year, PMIT obligation exceeds income tax
liability, the surplus will be available as a credit against future income tax.

During 2003 and 2002, Banco Galicia incurred tax losses. Therefore, the Bank was
required to pay PMIT.

During the year, Grupo Galicia and its non-bank subsidiaries adopted the
deferred tax method.

2.12 STATEMENTS OF CASH FLOWS

The consolidated statements of cash flows were prepared using the measurement
methods prescribed by the Argentine Central Bank, but in accordance with the
presentation requirements of Statement of Financial Accounting Standards No. 95:
Statement of Cash Flows ("SFAS No. 95"). SFAS 95 establishes specific
presentation requirements and additional disclosures but does not provide
guidance with respect with the inflation adjusted financial statements. The
effect of inflation restatements and foreign exchange gains and losses on cash
flows related to financing and operating activities has been included in the
line item "Monetary Loss", and the effect of inflation on cash balances has been
included in a separate line item after cash flows from investing activities.

3. RESTRICTED ASSETS

In accordance with Argentine Central Bank regulations, the Bank is required to
maintain average monthly assets Those assets computable for compliance with
minimum cash requirements are cash and Argentine Central Bank accounts.

The required daily averages calculated on a monthly basis for the month ending
on each balance sheet date were as follows:

                                      F-39
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                DECEMBER 31,
                                                                      ------------------------------
                                                                          2003              2002
                                                                      ------------     -------------
<S>                                                                   <C>              <C>
Peso balances....................................................     Ps.  445,143     Ps.   135,893
Foreign currency balances........................................          319,192            42,557
</TABLE>

Certain of the Group's other assets are pledged or restricted from use under
various agreements. The following assets were restricted at each balance sheet
date:

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                ---------------------------
                                                                                    2003           2002
                                                                                ------------  -------------
<S>                                                                             <C>           <C>
Funds and securities pledged under various arrangements.............            Ps.  295,814  Ps.   196,440
Share on equity investments (*)  ....................................                 51,554         51,552
Deposits in the Argentine Central Bank, frozen under Argentine
Central Bank regulations.............................................                  4,277          4,732
Loans granted as collateral..........................................              5,848,789      5,755,706
Certificates of deposits.............................................                      -            438
Real property and loans pledged as collateral-Banco Galicia Uruguay
S.A(**). ............................................................                821,777              -
                                                                                ------------  -------------
Total................................................................           Ps.7,022,211  Ps. 6,008,868
                                                                                ============  =============
</TABLE>

(*) Shares whose transferability is subject to the prior approval of the
National or Provincial authorities, as applicable, under the terms of the
concession contracts signed.

(**) At the request of creditors of Banco Galicia Uruguay S.A., a restraining
order has been issued enjoining this entity from disposing of its real property.
Under a security interest agreement signed on July 24, 2003 and registered with
the Registry of Movable Property - Pledge Division - Montevideo - Uruguay, on
August 5, 2003, the rights to collect debts from all debtors have been pledged
as collateral in favor of the holders of transferable time deposit certificates
and/or negotiable obligations issued incompliance with the debtor reorganization
plan approved. All the Banco Galicia Cayman Limited's (in provisional
liquidation) assets will be administered by the liquidators for the benefit of
creditors until the reorganization plan is complete.

The Bank has granted a senior pledge on all its shares in Correo Argentino S.A.,
in favour of the International Finance Corporation, the Inter American
Development Bank (the "IDB") and a syndicate of local institutions, as
collateral for financing granted to that company. The Argentine Central Bank
through Resolution No. 408 dated September 9, 1999 authorized this transaction.
Under the sponsorship contract, the Bank is liable for 14,53% of the financial
debt held by Correo Argentino S.A. with its financial creditors, in the event of
early termination of the concession for any reason or title, including
bankruptcy.

On November 19, 2003, the national government rescinded the concession contract
awarded to Correo Argentino S.A.. On December 16, 2003, this company was
declared bankrupt. This is not a final judgment, so it has been appealed.

At the date of these financial statements, no claims have been received from the
financial creditors. The Bank has provided for the amount it estimates it will
be required to pay for this contingency.

                                      F-40
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

On March 25, 2004, the guarantee for Ps. 7,265 provided in favour of the
national government as security for compliance with the concession of Correo
Argentino S.A. was called. The related claim has been proved as a possible claim
in the reorganization proceedings involving Correo Argentino S.A. After the
guarantee has been actually paid, the pertinent filing will be made in the
records of the case. The claim has been fully covered by an allowance. The Bank
will pay the guarantee under the conditions established by the National
Communications Commission.

As a shareholder of the concessionaires of the water supply services, Aguas
Argentinas S.A., Aguas Provinciales de Santa Fe S.A. and Aguas Cordobesas S.A.,
Banco Galicia and the other shareholders have committed to provide financial
support to those companies if they were unable to fulfill the commitments they
have undertaken with international financial bodies.

The IDB requested that the shareholders of Aguas Argentinas S.A. and Aguas
Provinciales de Santa Fe S.A. grant loans to those companies. In February 2003,
assistance was granted to Aguas Argentinas S.A. in the amount of US$ 598. On
November 5, 2003 a loan equivalent to US$ 329 was granted to Aguas Provinciales
de Santa Fe S.A., under the terms of the contract signed with the International
Finance Corporation.

4.    INTEREST-BEARING DEPOSITS WITH OTHER BANKS

At December 31, 2003 and 2002, the overnight foreign bank interest-bearing
deposits included in loans amounted to Ps.172,360 and Ps.158,273, respectively.

5.    GOVERNMENT AND CORPORATE SECURITIES

The government and corporate securities classification set forth below was
determined in accordance with Argentine Banking GAAP.

Government and corporate securities consist of the following at the respective
balance sheet dates:

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                     --------------------------------------
                                                                            2003                 2002
                                                                     -----------------     ----------------
<S>                                                                  <C>                   <C>
Government Securities
Quoted:
Carried at market value
Held for trading purposes:
   Government Bonds.............................................     Ps.        14,823     Ps.        3,247
   Argentine Treasury Bonds.....................................                 3,142                2,129
   Argentine Central Bank Bonds.................................               305,500                    -
   Others.......................................................                 4,446                2,304
   Less: Provision for devaluation..............................                  (341)                (394)
                                                                     -----------------     ----------------
Total trading securities........................................     Ps.       327,570     Ps.        7,286
                                                                     -----------------     ----------------
Carried at amortized cost
Held for investment purposes
   Government Bonds.............................................             1,609,982              693,471
   Argentine Treasury Bonds.....................................               875,138              979,451
                                                                     -----------------     ----------------
Total investment securities.....................................     Ps.     2,485,120     Ps.    1,672,922
                                                                     -----------------     ----------------
Unquoted
   Fiscal Credit Certificate (*) ...............................                78,575              106,336
   Government Bonds.............................................                 6,949                6,258
   Others.......................................................                   703               34,084
                                                                     -----------------     ----------------
Total Unquoted securities.......................................                86,227              146,678
                                                                     =================     ================
Total government securities.....................................     Ps.     2,898,917     Ps.    1,826,886
                                                                     =================     ================
Corporate Securities
   Corporate shares ............................................                     -                  256
   Negotiable obligations (quoted)..............................                 2,950                9,180
   Less: Provision for devaluation .............................                (1,766)              (6,480)
                                                                     -----------------     ----------------
Total corporate securities......................................     Ps.         1,184     Ps.        2,956
                                                                     =================     ================
Total government and corporate securities.......................     Ps.     2,900,101     Ps.    1,829,842
                                                                     =================     ================
</TABLE>

(*) Government securities collateralized by future tax payments.

                                      F-41
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

6.    LOANS

The lending activities of the Bank consist of the following:

- Loans to the non-financial public sector: represent loans to the federal and
provincial governments of Argentina.

- Loans to the financial sector: represent loans to banks and financial
entities.

- Loans to the non-financial private sector and residents abroad: include the
following types of lending:

      Overdrafts - short-term obligations drawn on by customers through
      overdrafts. Also, prefinancing of exporters and other customers in
      connection with documents evidencing the future receipt of cash.

      Notes - endorsed promissory notes, discounted and purchased bills and
      factored loans.

      Mortgage loans - loans to purchase or improve real estate and
      collateralized by such real estate or commercial loans secured by real
      estate.

      Pledge loans - loans where collateral is pledged as an integral part of
      the loan document.

      Credit card loans - loans to credit cards holders.

      Consumer loans - loans to individuals.

      Others - includes mainly placements in foreign banks - short-term
      deposits in foreign banks.

Under Argentine Banking GAAP, the Group must disclose the composition of the
loan portfolio by non-financial public sector, financial sector and
non-financial private sector and residents abroad. Additionally, the type of
guarantee on non-financial private sector loans, which corresponds to the type
of collateral, pledged on the loans (preferred guarantees relate to a recorded
right of first lien), is also required to be disclosed. The classification of
the loan portfolio in this regard was as follows:

<TABLE>
<CAPTION>
                                                                                DECEMBER 31,
                                                                   ---------------------------------------
                                                                          2003                  2002
                                                                   ------------------   ------------------
<S>                                                                <C>                  <C>
Non-financial public sector....................................    Ps.      7,800,551   Ps.      7,690,022
Financial sector (Argentine) ..................................               194,692              134,809
Non-financial private sector and residents abroad                           4,165,829            4,539,168
    - With preferred guarantees................................             1,228,811            1,514,400
    - With other guarantees....................................               697,781              523,026
    - Unsecured................................................             2,239,237            2,501,742
                                                                   ------------------   ------------------
                                                                           12,161,072           12,363,999
                                                                   ------------------   ------------------
Allowance for loan losses (See Note 7).........................            (1,177,315)          (1,681,836)
                                                                   ------------------   ------------------
Total..........................................................    Ps.     10,983,757   Ps.     10,682,163
                                                                   ==================   ==================
</TABLE>

The Bank also records its loan portfolio by industry segment. The following
industry segments comprised the most significant loan concentrations at December
31, 2003 and 2002, respectively:

                                      F-42
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                                    -----------------
                                                                    2003        2002
                                                                    -----       -----

<S>                                                                 <C>         <C>
Financial services industry............................              2.94%        1.09%
Public sector..........................................             64.14%       62.20%
Agriculture and livestock..............................              3.20%        3.76%
Consumer...............................................             10.35%        8.95%
</TABLE>

The Bank granted loans to the Bank's related parties including related officers
and consolidated companies. The total loans outstanding at December 31, 2003
amounted Ps.93,364 and the change from December 31, 2002 to December 31, 2003
reflects payments amounting to Ps.33,432 and advances of Ps. 17,046.
Furthermore, there were adjustments of CER and foreign exchange difference of
Ps.3,103 on the above-mentioned portfolio between those dates.

On July 18, 2003, the Group granted Banco de Galicia (Cayman) Limited a loan for
US$1,200.

Such loans were made in the ordinary course of business at normal credit terms,
including interest rate and collateral requirements, and, in management's
opinion, represent normal credit risk.

7.    ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses for the fiscal years ended
December 31, 2003, 2002 and 2001, was as follows:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31,
                                                        ----------------------------------------------------
                                                             2003              2002               2001
                                                        --------------    ---------------    ---------------
<S>                                                     <C>               <C>                <C>
Balance at beginning of year.....................       Ps.  1,681,836    Ps.   1,050,283    Ps.     596,026

Provision charged to income .....................              217,057          1,599,518            922,009

Prior allowances reverse ........................             (402,049)                 -             (2,019)

Inflation and foreign exchange effect............              (52,230)          (662,263)                 -

Loans charged off................................             (267,299)          (305,702)          (465,733)
                                                        --------------    ---------------    ---------------
Balance at end of the year.......................       Ps.  1,177,315    Ps.   1,681,836    Ps.   1,050,283
                                                        ==============    ===============    ===============
</TABLE>

The inflation effect represents the monetary gain from incurring allowance for
loan losses adjusted to constant pesos of February 28, 2003.

Certain loans, principally small loans, are charged directly to income and are
not reflected in the activity in the allowance for loan losses. The "Loan loss
provision" in the accompanying income statements includes:

                                      F-43
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                           -------------------------------------------------
                                                                2003             2002             2001
                                                           -------------  -----------------  ---------------
<S>                                                        <C>            <C>                <C>
Provisions charged to income............................   Ps.   217,057  Ps.     1,599,518  Ps.     922,009

Direct charge-off.......................................          14,020             16,123           42,152

Other receivables losses................................          52,913             30,249           43,628

Financial leases........................................           2,438              2,686              725
                                                           -------------  -----------------  ---------------
                                                           Ps.   286,428  Ps.     1,648,576  Ps.   1,008,514
                                                           =============  =================  ===============
</TABLE>

Prior year allowances that have been reversed in the amount of Ps. 402,049 are
included under the caption "Miscellaneous Income" in the accompanying statement
of income.

The Bank has entered into certain troubled debt restructuring agreements with
customers. The Bank eliminates any differences between the principal and accrued
interest due under the original loan and the new loan amount through a charge
against the allowance for loan losses. Loans under such agreements amounted to
Ps.92,148, Ps. 44,862 and Ps.47,628 at December 31, 2003, 2002 and 2001,
respectively.

8.    OTHER RECEIVABLES RESULTING FROM FINANCIAL BROKERAGE

The composition of other receivables from financial brokerage, by type of
guarantee, is as follows:

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                       ---------------------------------------
                                                                              2003                 2002
                                                                       ------------------    -----------------
<S>                                                                    <C>                   <C>
Preferred guarantees, including deposits with
The Argentine Central Bank.........................................    Ps.         72,847    Ps.        59,298
Other guarantees...................................................                 2,423               10,328
Unsecured (1) (2) .................................................             6,224,147            9,230,413
Less:  Allowance for doubtful accounts.............................              (102,008)             (44,337)
                                                                       ------------------    -----------------
                                                                       Ps.      6,197,409    Ps.     9,255,702
                                                                       ==================    =================
</TABLE>

(1)   Includes Ps.4,629,595 and Ps.7,098,505 December 31, 2003 and 2002,
      respectively, of "Compensation to be received from the National
      Government".

(2)   In July 28, 2003 the Bank received US$465,587 (face value) of BODEN 2012
      related to the compensation to be received. Additionally, and in relation
      to the process for the determination of the compensation amount, on
      October 30, 2003, the Argentine Central Bank sent a letter to the Bank in
      which it formulated observations on certain criteria and the computation
      of certain items that would modify the final amount of the compensation.
      The Bank has accepted and recognized in its financial statements an
      adjustment to the original face value of US$ 53,946. (See Note 1)

At December 31, 2003 and 2002 the Company did not have any outstanding forward
contracts.

                                      F-44

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

The breakdown of the caption "other" included in the balance sheet was as
follows:

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                ---------------------------
                                                                                    2003          2002
                                                                                ------------   ------------
<S>                                                                             <C>            <C>
Mutual funds ...............................................................    Ps.   24,052   Ps.   26,355
Galtrust I .................................................................         646,143        686,160
Other financial trust participation certificates ...........................         430,703        459,739
Accrued commissions ........................................................          12,441         14,284
Compensation to be received related to the payment of deposits .............               -        446,756
Others .....................................................................         382,707        377,418
                                                                                ------------   ------------
                                                                                Ps.1,496,046   Ps.2,010,712
                                                                                ============   ============
</TABLE>



9.    EQUITY INVESTMENTS IN OTHER COMPANIES

The Bank accounted for its investment in Banelco S.A. and Galicia Advent Private
Equity Fund Limited under the equity method. The remaining investments have been
accounted for under the cost addition dividends method.

Equity investments in other companies held by the Bank consisted of the
following at the respective balance sheet dates:

<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                         -------------------------------------
                                                               2003                2002
                                                         -----------------   -----------------
<S>                                                      <C>                 <C>
IN FINANCIAL INSTITUTIONS, SUPPLEMENTARY AND
AUTHORIZED ACTIVITIES
Banelco S.A...........................................   Ps.         5,605   Ps.        10,468
Visa Argentina S.A....................................                 951                 951
Mercado de Valores de Buenos Aires S.A................               6,186               5,923
Banco Latinoamericano de Exportaciones S.A............               1,542               1,790
Galicia Advent Private Equity Fund Ltd................                   -               7,604
Other.................................................               2,260               2,832
                                                         -----------------   -----------------
TOTAL FINANCIAL INSTITUTIONS, SUPPLEMENTARY AND
AUTHORIZED ACTIVITIES.................................   Ps.        16,544   Ps.        29,568
                                                         -----------------   -----------------
IN NON-FINANCIAL INSTITUTIONS
Aguas Argentinas S.A..................................   Ps.        23,370   Ps.        23,370
Inversora Diamante S.A................................              12,944              12,944
Inversora Nihuiles S.A................................              15,750              15,750
Electrigal S.A........................................               5,455               5,455
Aguas Provinciales de Santa Fe S.A....................              10,771              10,771
A.E.C. S.A............................................               6,139               6,139
Aguas Cordobesas S.A..................................               8,911               8,911
Correo Argentino S.A..................................              27,460              27,460
Caminos de la Sierra S.A..............................               4,428               4,428
Tradecom International N.V............................               9,798              10,669
Other.................................................               3,355               1,630
                                                         -----------------   -----------------
TOTAL IN NON-FINANCIAL INSTITUTIONS ..................   Ps.       128,381   Ps.       127,527
                                                         -----------------   -----------------
ALLOWANCES............................................   Ps.       (57,858)  Ps.       (52,841)
                                                         -----------------   -----------------
TOTAL EQUITY INVESTMENTS IN OTHER COMPANIES...........   Ps.        87,067   Ps.       104,254
                                                         =================   =================
</TABLE>


                                      F-45
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

10.   FIXED ASSETS AND INTANGIBLE ASSETS

The major categories of Grupo Galicia's premises and equipment and accumulated
depreciation, as of December 31, 2003 and 2002 were as follows:

<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                         -------------------------------------
                                                               2003                2002
                                                         -----------------   -----------------
<S>                                                      <C>                 <C>
Land and buildings....................................   Ps.     551,755     Ps.       555,336
Furniture and fixtures................................           125,518               131,649
Machinery and equipment...............................           195,029               200,789
Vehicles..............................................               440                   730
Others................................................             6,186                 7,624
Accumulated depreciation..............................          (361,396)             (325,653)
                                                         ---------------     -----------------
                                                         Ps.     517,532     Ps.       570,475
                                                         ===============     =================
</TABLE>


Depreciation expenses of the years ended December 31, 2003, 2002 and 2001, was
Ps.50,542, Ps.63,357 and Ps. 61,660, respectively.

The major categories of intangible assets as of December 31, 2003 and 2002 were
as follows:

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,
                                                                              ----------------------------------
                                                                                   2003              2002
                                                                              --------------   -----------------
<S>                                                                           <C>              <C>
Goodwill, net of accumulated amortization of Ps.135,718 and Ps.108,837
respectively.............................................................     Ps.    139,681   Ps.       170,384
Organization and development expenses, net of accumulated
amortization of Ps.198,267 and Ps.236,222 respectively..................            100,356             151,564
Legal actions related to the payment of deposits, net of
accumulated amortization of Ps.77,880 (see Note 2.9).....................            487,020                   -
                                                                              --------------   -----------------
                                                                              Ps.    727,057   Ps.       321,948
                                                                              ==============   =================
</TABLE>

Total amortization expenses of the years ended December 31, 2003, 2002 and 2001,
was Ps.163,390, Ps.168,622 and Ps.110,927, respectively.

Organization and development expenses included software and the related
implementation services purchased from third parties, with a net book value of
Ps.86,055 and Ps.127,816 at December 31, 2003 and 2002, respectively.

The table below shows the components of goodwill by type of activity for the
periods presented.

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                              ----------------------------------
                                                                    2003              2002
                                                              ----------------  ----------------
<S>                                                           <C>               <C>
Investment.................................................   Ps.        9,153  Ps.       16,992
Banking....................................................             81,740            94,559
Regional Credit Card issuing companies.....................             48,788            58,833
                                                              ----------------  ----------------
                                                              Ps.      139,681  Ps.      170,384
                                                              ================  ================
</TABLE>


                                      F-46
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

11.   MISCELLANEOUS ASSETS

Miscellaneous assets consisted of the following as of December 31, 2003 and
2002:

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                              ----------------------------------
                                                                    2003              2002
                                                              ----------------  ----------------
<S>                                                           <C>               <C>
Construction in progress................................      Ps.       66,831  Ps.       56,428
Deposits on fixed asset purchases.......................                 1,284             1,876
Stationery and supplies.................................                 2,254             4,025
Real estates properties held for sale...................                28,493            57,664
Assets acquired through foreclosures....................                     -               726
Others..................................................                59,236            64,043
                                                              ----------------  ----------------
                                                              Ps.      158,098  Ps.      184,762
                                                              ================  ================
</TABLE>

12.   OTHER ALLOWANCES AND RESERVES

Allowances on other assets and reserves for contingencies were as follows:


<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                           --------------------------------------
                                                                                  2003                2002
                                                                           ------------------  ------------------
<S>                                                                        <C>                 <C>
Allowances against asset accounts:
   Government and Corporate securities..................................   Ps.          2,107  Ps.          6,874
   Other receivables resulting from financial brokerage, for collection
    risk (a) ...........................................................              102,008              44,337
   Assets under financial leases (a)....................................                4,806               2,460
   Equity investments in other companies  (b) ..........................               57,858              52,841
   Miscellaneous receivables, for collection risk (a) ..................               53,877              29,375

Reserves for contingencies:
   For severance payments (c)...........................................                1,413              11,074
   Litigations (d)  ....................................................               19,329              25,030
   Related to commitments undertaken with public services
    companies (e).......................................................               92,000              92,802
   Claims related to pesification disputes and other contingencies (f)..              235,525             144,702
   Sundry liabilities arising from credit card activities (g) ..........               20,542              16,388
   Other commitments (h) ...............................................               46,066              44,563
                                                                           ------------------  ------------------
   Total reserves for contingencies.....................................   Ps.        414,875  Ps.        334,559
                                                                           ==================  ==================
</TABLE>

(a) Based upon an assessment of debtors' performance, 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
relating to terminated 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) See note 3 - Restricted Assets.


                                      F-47
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

(f) Includes allowances for Ps.180,000 to cover the probable effect from an
unfavorable resolution of matters challenged by the Argentine Central Bank
related to the amounts due for compensatory and hedge bonds, which are still
being discussed..

(g) Reserves for rewards to be given under a credit card reward program, for a
guarantee of credit card receivables and for the estimated liability for the
insurance of the payment of credit card balances in the event of the death of
the credit card holder.

(h) Represents the contingent commitments related to clients in categories other
than the "normal" categories under Argentine Banking GAAP.

13.   OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE- ARGENTINE CENTRAL
      BANK

The Bank borrows funds under various credit facilities obtained from the
Argentine Central Bank for specific purposes as follows:

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,
                                                                              -----------------------------------
                                                                                    2003               2002
                                                                              ----------------   ----------------
<S>                                                                           <C>                <C>
DESCRIPTION
Long-term liabilities:
   Advances for the acquisition of national government bonds in U.S.
    Dollars (*).......................................................        Ps.    2,442,849   Ps.    2,445,379
   Argentine Central Bank's liquidity loans (**)......................               5,579,978            783,704
   Other Argentine Central Bank obligations...........................                       -              1,834
                                                                              ----------------   ----------------
Total long-term liabilities...........................................        Ps.    8,022,827   Ps.    3,230,917
Short-term liabilities:
   Argentine Central Bank's liquidity loans (**)......................                       -          4,666,176
   Other Central Bank Obligations.....................................                     777                 15
                                                                              ----------------   ----------------
Total short-term liabilities..........................................        Ps.          777   Ps.    4,666,191
                                                                              ----------------   ----------------
Accrued interest......................................................                 109,298            208,955
                                                                              ----------------   ----------------
                                                                              Ps.    8,132,902   Ps.    8,106,063
                                                                              ================   ================
</TABLE>

(*)   Advance for the hedge bond accrued interest was Ps.93,297 and Ps.44,485 at
      December 31, 2003 and 2002, respectively. The maturity related to this
      advance will be determined when the hedge bond is received.

(**)  As of December 31, 2002 the Argentine Central Bank liquidity loans were
considered short-term liabilities, as they were renewed monthly. Decree No.
739/02 established the methodology to pay the advances received from the
Argentine Central Bank, and pursuant to Decree No. 1262/03, the amortization
shall be made in the same number of installments of the assets granted as
collateral for the rediscounts received, with a maximum of 120 installments. For
that reason, as of December 31, 2003, Argentine Central Bank liquidity loans are
considered as a long-term liability. The financial institutions that wish to
avail themselves of this special assistance amortization system must have
normalized their foreign debt situation before December 5, 2003, under the terms
of section 1 of Communique "A" 3940.

As of December 31, 2003, maturities of the Argentine Central Bank's liquidity
loans for each of the following six fiscal years and thereafter are as follows:


                                      F-48
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<S>                                                                       <C>
 2004............................................................         Ps.            255,000
 2005............................................................                        340,201
 2006............................................................                        383,359
 2007............................................................                        431,984
 2008............................................................                        486,773
 2009............................................................                      2,235,046
Thereafter.......................................................                      1,447,615
                                                                          ----------------------
                                                                          Ps.          5,579,978
                                                                          ======================
</TABLE>

14.   OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE- BANKS AND
      INTERNATIONAL ENTITIES, AND LOANS FROM DOMESTIC FINANCIAL INSTITUTIONS.

The Bank also borrows funds under different credit arrangements from local and
foreign banks and international lending agencies as follows:

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                          ------------------------------------
                                                                2003               2002
                                                          -----------------  -----------------
<S>                                                       <C>                <C>
DESCRIPTION
  BANK AND INTERNATIONAL ENTITIES
   Long term liabilities:
       Compania Interamericana de Inversiones...........  Ps.       203,844  Ps.       235,768
       International Finance Corporation (I.F.C.).......            909,230          1,051,619
       Nederlands Financierings Maatschappij Voor
       Ontwikkeling Slande N.V  (F.M.O.) ...............             56,588             65,450
       Other foreign banks..............................            334,062            283,066
                                                          -----------------  -----------------
                   Total long-term liabilities..........  Ps.     1,503,724  Ps.     1,635,903

    Short-term liabilities:
       Other lines of credit from foreign banks (1).....          1,231,756          1,548,806
                                                          -----------------  -----------------
TOTAL BANK AND INTERNATIONAL ENTITIES...................  Ps.     2,735,480  Ps.     3,184,709
                                                          -----------------  -----------------
  DOMESTIC AND FINANCIAL INSTITUTIONS
   Long term liabilities:
       BICE (Banco de inversion y Comercio Exterior)....            106,404            138,341
       Other lines of domestic banks....................                307             14,911
                                                          -----------------  -----------------
                   Total long term liabilities .........  Ps.       106,711  Ps.       153,252

  Short-term liabilities:
       Other lines of credit from domestic
            banks (1) ..................................             25,052             48,019
                                                          -----------------  -----------------
TOTAL DOMESTIC AND FINANCIAL INSTITUTIONS...............  Ps.       131,763  Ps.       201,271
                                                          -----------------  -----------------

TOTAL...................................................  Ps.     2,867,243  Ps.     3,385,980
                                                          =================  =================
</TABLE>

(1) Short term debt in default.

Accrued interest on the above liabilities was Ps.282,746, and Ps.133,397 at
December 31, 2003 and 2002, respectively, which are included in "Other" under
the caption "Other Liabilities Resulting from Financial Brokerage" in the
accompanying balance sheet.

Loans from Banco de Inversion y Comercio Exterior (BICE) for financing
investment projects, increasing the export capacity and financing the Global
Multisectorial Credit Program carry interest at floating rates for approximately
5.17% for loans in dollars with maturity of 4 years and CER + 4% for borrowing
in pesos, with maturities ranging between 1 and 10 years.


                                      F-49
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


The remaining long term debt with a balance of Ps. 1,503.7 million along with
short term debt amounting to Ps. 1,231.8 million at December 31, 2003 have been
restructured by the Bank and its creditors on May 18, 2004.

As of December 31, 2003, maturities of the above long-term loans for each of the
following five fiscal years and thereafter were as follows:

<TABLE>
<S>                                                                       <C>
 Callable (1).......................................................      Ps.   1,503,724
 2004..............................................................                40,761
 2005..............................................................                27,520
 2006..............................................................                18,586
 2007..............................................................                13,628
 2008..............................................................                 4,053
Thereafter.........................................................                 2,163
                                                                          ---------------
                                                                          Ps.   1,610,435
                                                                          ===============
</TABLE>

(1) This amount was subject to a restructuring process.

As of December 31, 2003 the Bank did not have any unused lines of credit.

15.   OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE - NEGOTIABLE
      OBLIGATIONS

The Board of Directors is authorized to determine all of the conditions of each
issuance of negotiable obligations, including timing, currency, price, manner
and payment terms. The amounts outstanding and the terms corresponding to
outstanding negotiable obligations at the dates indicated were as follows:

<TABLE>
<CAPTION>
                                                             ANNUAL             DECEMBER 31,
                                                            INTEREST  -------------------------------
                                                  MATURITY    RATE         2003             2002
                                                  --------  --------  --------------    -------------
<S>                                               <C>        <C>      <C>               <C>
LONG-TERM LIABILITIES:
5th Series Floating Rate Notes Due 2005              2005     4.00%   Ps.     31,213    Ps.    36,066
  (Semi-annual interest, principal payable
  every six months) ...........................
4th Series Floating Rate Notes Due 2005              2005     4.00%          130,077          150,299
  (Semi-annual interest, principal payable
  every six months) ...........................
9% Notes Due 2003                                    2003     9.00%          565,987          677,859
  (Semi-annual interest, principal payable at
maturity) .....................................
Step Up Floating Rate Notes Due 2002                 2002     3.88%          413,846          508,848
  (Semi-annual interest, principal payable
every year beginning in August, 2005) .........
6th Series 7.875% Notes Due 2007 (*)                 2007     7.88%          213,038          246,402
  (Semi-annual interest, principal payable
every year beginning in August, 2005) .........
7th Series Floating Rate Notes Due 2007 (*)          2007     5.15%          126,591          146,415
  (Semi-annual interest, principal payable at
maturity) .....................................
Banco Galicia Uruguay S.A. (issued to             Various     2.00%          902,686        1,569,412
restructure deposits) .........................
                                                                      --------------    -------------
Total long-term liabilities....................                       Ps.  2,383,438    Ps. 3,335,301
                                                                      ==============    =============

</TABLE>

                                      F-50
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<S>                                               <C>      <C>        <C>      <C>         <C>
SHORT-TERM LIABILITIES:

Tarjetas del Mar
  (Interest fixed, principal payable at
maturity)............. ......................        2002    14.92%   Ps.        494(1) Ps.    21,031
Tarjeta Naranja
  (Interest fixed, principal payable at
maturity)............. ......................        2002    16.46%            2,709(2)       100,114
Tarjetas Cuyanas
  (Interest fixed, principal payable at
maturity)............. ......................        2002    15.96%            6,268(3)         7,539
Tarjeta Comfiar 9th Series
  (Interest fixed, principal payable at
maturity)............. ......................        2002    16.22%                -              554
                                                                      --------------    -------------
Total short-term liabilities................                                  9,471          129,238
                                                                      --------------    -------------
                                                                      Ps.  2,392,909    Ps. 3,464,539
                                                                      ==============    =============
</TABLE>

(*) Issued in connection with the New York Branch foreign debt restructuring.

(1) Includes 9th Series with an annual interest rate of 14.92%

(2) Includes 9th Series and 10th Series with an annual interest rate of 16.77%,
    14.92%, respectively.

(3) Includes 13th Series with an annual interest rate of 15.96%.

Short-term negotiable obligations are in the process of being restructured.

Interest and principal on all of the above debt securities are payable in U.S.
dollars.

Accrued interest on the above liabilities for Ps. 172,611 and Ps.116,929 at
December 31, 2003 and 2002, respectively, was included in "Other" under the
caption "Other Liabilities Resulting from Financial Brokerage " in the
accompanying balance sheet.

Long-term maturities correspond to negotiable obligations at December 31, 2003
are as follows:

<TABLE>
<S>                                   <C>
Callable(1).....................          1,141,123
2004............................            123,066
2005............................            283,244
2006............................            204,053
2007............................            204,053
2008............................             93,776
2009............................            108,441
2010............................            108,441
2011............................            117,241
                                      -------------
Total...........................      Ps. 2,383,438
                                      =============
</TABLE>
(1)   The Ps. 1,141,123 corresponding to the Fourth and Fifth series and Sixth
      series were subject to a restructuring process as of December 31, 2003.


                                      F-51
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

16.   DIRECTORS' AND SYNDICS' FEES

The breakdown of the caption "Directors' and Syndics' Fees" in the income
statement is as follows:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                    -------------------------------------
                                                       2003          2002         2001
                                                    -----------   ----------    ---------
<S>                                                 <C>           <C>           <C>
GFG directors' fees...............................  Ps.       -   Ps.     77    Ps.   132
GFG syndics' fees.................................          123           77          132
Banco Galicia directors' statutory fees...........            -            -       23,339
Banco Galicia directors' administrative fees......          200        1,984        5,672
Banco Galicia syndics' fees.......................          410          390          487
Subsidiary companies directors' and syndics'
fees..............................................        1,184          708        5,665
                                                    -----------   ----------    ---------
                                                    Ps.   1,917   Ps.  3,236    Ps.35,427
                                                    ===========   ==========    =========
</TABLE>

17.   CONTRIBUTIONS TO THE SOCIAL SERVICES INSTITUTE FOR BANKING EMPLOYEES

Effective July 1, 1996, Decree No. 263/96 of the National Executive Power
reduced to 1% and effective July 1, 1997 Decree No. 915/96 eliminated the 2%
contribution on interest and fees that banks previously had to make to the ISSB,
pursuant to article 17 of Law No. 19,322. Banco de Galicia y Buenos Aires S.A.
has determined the aforementioned contributions in accordance with these
regulations. The bank employee union (the "Banking Association") brought legal
action calling for a stay against the National Executive Power - Ministry of
Public Works and Services, with a view to having article 1 of Decree 263/96
declared null and unconstitutional, and got a favorable ruling from the Federal
Court dealing with Administrative Litigation Matters, Panel I. The National
Supreme Court of Justice declared out of order an extraordinary appeal made by
the National Executive Branch on November 4, 1997. Therefore, the ruling in
favor of the Banking Association became firm.

Although in the opinion of the legal counsel of the financial institutions this
ruling is not opposable against the banks because they were not a party to the
aforementioned legal action, the juridical uncertainty still subsists. In April
1998, the Bank Employees' Health Care System (OSBA) made a final claim, which
was refuted from the administrative angle before OSBA, the Federal Public
Revenue Authority (AFIP) and the National Social Security Administration.

Furthermore, the Banking Association brought legal action calling for a stay
before the First Instance No. 5 Federal Social Security Court, and the request
for a precautionary measure was granted ordering the OSBA not to bring legal
actions for tax collection or make verifications on the grounds of article 17,
clause f) of Law No. 19,322 until a final judgment is issued about whether this
supposed claim is applicable. This latter measure is firm and was confirmed by
the National Social Security Court (Panel II). In this connection, OSBA filed an
extraordinary appeal with the National Supreme Court of Justice, which was
dismissed by the Court on November 21, 2000.

Furthermore, OSBA has brought a legal action against all institutions in the
financial system, before the Federal Court dealing with Administrative
Litigation Matters, and the complaint has already been answered. The trial of
the case has been ordered.

Considering that a risk exists as to the interpretations that courts may make of
this dispute, the

                                      F-52
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

Bank has agreed to a settlement regarding those disputed or
doubtful rights, without this involving any recognition of rights. This
settlement has been approved by the Federal Court of First Instance on
Administrative Litigation Matters No. 4, in the case identified above, which
will reduce the potential risk to which the Bank would be exposed if an
unfavorable resolution were to be issued.

18.   BALANCES IN FOREIGN CURRENCY

The balances of assets and liabilities denominated in foreign currencies
(principally in U.S. dollars) are as follows:

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                         --------------------------------------
                                                                                2003                2002
                                                                         ------------------  ------------------
<S>                                                                      <C>                 <C>
ASSETS:
   Cash and due from banks............................................   Ps.        379,903  Ps.        285,133
   Government and corporate securities................................            2,505,881           1,682,920
   Loans..............................................................              702,501             973,397
   Other receivables resulting from financial brokerage...............            4,716,234           7,335,513
   Equity investments in other companies..............................                3,047              21,675
   Miscellaneous receivables..........................................               15,760              23,747
   Bank premises and equipment........................................               12,770              16,140
   Intangible assets..................................................                    3               1,994
   Miscellaneous assets...............................................                2,014               2,395
   In process items...................................................                1,331               7,404
                                                                         ------------------  ------------------
TOTAL ................................................................   Ps.      8,339,444  Ps.     10,350,318
                                                                         ==================  ==================
LIABILITIES:
   Deposits...........................................................   Ps.      1,656,541  Ps.      2,087,972
   Other liabilities resulting from financial brokerage...............            6,217,182           7,680,975
   Sundry liabilities.................................................               18,278              20,060
   In process items...................................................                    -               1,462
                                                                         ------------------  ------------------
TOTAL.................................................................   Ps.      7,892,001  Ps.      9,790,469
                                                                         ==================  ==================
</TABLE>


19.   TRANSACTIONS WITH RELATED PARTIES

Grupo Galicia entered into certain transactions with controlled and
equity-method subsidiaries during the fiscal years ended December 31, 2003, 2002
and 2001, with the following revenues and expenses:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                        --------------------------------------------
                                                           2003            2002             2001
                                                        ----------      -----------     ------------
<S>                                                     <C>             <C>             <C>
Revenues recognized..................................   Ps.  2,974      Ps.  14,513     Ps.  312,041
Expenses incurred....................................          797              944          157,733
</TABLE>


                                      F-53
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

20.   BREAKDOWN OF CAPTIONS INCLUDED IN THE INCOME STATEMENT

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                     ----------------------------------------------
                                                         2003             2002             2001
                                                     ------------     ------------     ------------
<S>                                                  <C>              <C>              <C>
FINANCIAL INCOME
Interest income resulting from financial
brokerage:
Interest on structured notes...................                 -                -           81,620
Interest on purchased certificates
of deposits ...................................            11,839           38,748              249
Compensatory Bond..............................            70,340          132,691                -
Additional interest on current accounts and
special accounts with the Argentine Central
Bank...........................................             4,294           20,515                -
Other..........................................            12,190           36,024           27,417
                                                     ------------     ------------     ------------
                                                     Ps.   98,663     Ps.  227,978     Ps.  109,286
                                                     ============     ============     ============
OTHER
Premiums on reverse repos transactions.........                 -                -           48,851
Difference in quotation of gold and foreign
currency transactions..........................            12,613          380,479           46,716
Premiums on foreign currency transactions......                 -            2,420           63,727
Interest on pre-export and export financing....             7,580           22,988                -
Other..........................................             3,464            6,938            7,879
                                                     ------------     ------------     ------------
                                                     Ps.   23,657     Ps.  412,825     Ps.  167,173
                                                     ============     ============     ============
FINANCIAL EXPENSES
Interest expense resulting from financial
brokerage:
Discounts on negotiable obligations............               672            4,152           44,499
Interest on negotiable obligations.............           139,595          234,177          157,074
Interest on other liabilities resulting from
financial brokerage from other banks and
international entities.........................           200,300          414,710          232,274
                                                     ------------     ------------     ------------
                                                     Ps.  340,567     Ps.  653,039     Ps.  433,847
                                                     ============     ============     ============
OTHER INTEREST:
Interest on Central Bank loans ................                15           49,676            3,168
Interests on liquidity assistance loans .......           336,305        1,377,069           10,707
CER adjustment on Central Bank advances .......            50,442           46,973                -
Other..........................................            22,002          131,656           71,723
                                                     ------------     ------------     ------------
                                                     Ps.  408,764     Ps.1,605,374     Ps.   85,598
                                                     ============     ============     ============
OTHER:
Contributions to the deposit insurance system..            12,715           20,398           34,443
Premiums on repo transactions..................                 -          141,478           78,785
Contributions and taxes on financial income....            18,939           30,046           58,596
Difference in quotation of gold and foreign
currency.......................................           111,182                -                -
Valuation adjustment to Public Sector Loans ...           198,088                -                -
Charge for impairment of loans.................            10,511           28,325                -
Other..........................................                 -            2,796            6,251
                                                     ------------     ------------     ------------
                                                     Ps.  351,435     Ps.  223,043     Ps.  178,075
                                                     ============     ============     ============

</TABLE>
                                      F-54
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                     ----------------------------------------------
                                                         2003             2002             2001
                                                     ------------     ------------     ------------
<S>                                                  <C>              <C>              <C>

INCOME FROM SERVICES
Others
Commissions on credit cards......................         126,441          142,258          300,244
Safety rental....................................           5,111            5,079            7,388
Other............................................          38,618           61,994          154,410
                                                     ------------     ------------     ------------
                                                     Ps.  170,170     Ps.  209,331     Ps.  462,042
                                                     ============     ============     ============
EXPENSES FOR SERVICES
Others
Gross revenue taxes..............................    Ps.   13,340     Ps.   17,794     Ps.   41,954
Linked with credit cards.........................          17,275           14,029           32,102
Other............................................           4,506            8,460           35,339
                                                     ------------     ------------     ------------
                                                     Ps.   35,121     Ps.   40,283     Ps.  109,395
                                                     ============     ============     ============
ADMINISTRATIVE EXPENSES
Other operating expenses
Rentals..........................................          19,577           36,532           62,499
Electricity and communications...................          27,234           42,507           70,088
Amortization of organization and development
expenses.........................................          59,547           85,025           80,722
Depreciation of bank premises and equipment......          50,542           63,357           61,660
Maintenance and repair expenses..................          22,724           26,882           45,239
Other operating expenses.........................          24,975           35,901           53,030
                                                     ------------     ------------     ------------
                                                     Ps.  204,599     Ps.  290,204     Ps.  373,238
                                                     ============     ============     ============
MISCELLANEOUS INCOME
Interest on miscellaneous receivables............           6,922           23,377          298,138
Premiums and commissions on insurance business...          44,422          183,743          171,039
Reversal of income tax provision.................               -                -          103,842
Other............................................          46,461           38,780           30,553
                                                     ------------     ------------     ------------
                                                     Ps.   97,805     Ps.  245,900     Ps.  603,572
                                                     ============     ============     ============
MISCELLANEOUS LOSSES
Claims...........................................             775            3,761           10,539
Amortization of difference re.court resolutions..          77,880                -                -
Amortization of goodwill.........................          25,963           83,598           30,205
Commissions and expenses on insurance business...          52,367           96,321          148,253
Other............................................          76,208            4,207           35,950
                                                     ------------     ------------     ------------
                                                     Ps.  233,193     Ps.  187,887     Ps.  224,947
                                                     ============     ============     ============
</TABLE>

21.   INCOME TAXES

The income tax amounts estimated for the fiscal years ended December 31, 2003,
2002 and 2001, amounted to Ps.590, Ps.66,421 and Ps.159,052, respectively. The
statutory income tax rate at December 31, 2003, 2002 and 2001 was 35%. At
December 31, 2003 the Group had tax loss carryforwards in the approximate amount
of Ps.3,485,806 that may reduce future year's taxable income for income tax
purposes. Such tax loss carryforwards expire over in the following ten years.

At December 31, 2003, PMIT available to credit future income tax amount to
Ps.50,467. Such PMIT expire over the following ten years.

22.   SHAREHOLDERS' EQUITY AND RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF
      PROFITS

The distribution of retained earnings in the form of dividends is governed by
the Commercial Companies Law and Resolution No. 290/97 of the CNV. These laws
oblige Grupo Galicia to

                                      F-55
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

transfer 5% of its net income to a legal reserve until the reserve reaches on
amount equal to 20% of the company's capital stock. Argentine Central Bank rules
require 20% of the profits shown in the income statement plus (less) prior year
adjustments to be allocated to a legal reserve. This proportion applies
regardless of the ratio of the legal reserve to the capital stock.

Furthermore, as a result of the facts described in Note 1, through Resolution
No. 81 dated February 8, 2002, the Argentine Central Bank established that for
as long as the financial assistance owed to the Argentine Central Bank is
outstanding, the Bank may not distribute dividends or any other return on
capital in cash, remit profits or make payments for fees, interests or
compensation related to results.

Furthermore, Argentine Central Bank Communique "A" 3574 provided for the
suspension of the distribution of profits until the criteria for valuing the
shareholders' equity of the Bank are defined, which include the known effects of
Law No. 25,561 and supplementary provisions.

Communique "A" 3785 provides that financial institutions which receive in
compensation national government bonds within the framework of Sections 28 and
29 of Decree No. 905/02, may record them at their technical value; while using
this procedure, financial institutions may not distribute cash dividends, except
for the amount of profits in excess of the difference between the carrying value
and the market value of those bonds, net of the pertinent appropriation to legal
reserve and to the reserve established by the bank's by-laws, and the same
treatment will be given to those institutions which decide to exchange the
compensating bonds for promissory notes issued by the national government.

The "Adjustments to Shareholders' Equity" caption in the statement of changes in
shareholders' equity represents:

-     the balance of the 1981 technical valuation of fixed assets of the Bank
      and its equity investees, available to absorb losses on the disposal or
      devaluation of such fixed assets;

-     the inflation adjustment related to capital stock at the beginning of each
      period, adjusted to constant pesos of August 31, 1995. Capital stock
      maintains its nominal (par) value at each balance sheet date;

-     the inflation adjustment related to the increase in capital stock from
      stock distributions (adjustments to capital). The adjustment represents
      the effect of inflation from the stock distribution date to the end of
      each period, and is restated in constant pesos as of August, 31, 1995;

-     the inflation adjustment related to capital stock at the beginning of each
      period, adjusted to constant pesos of February 28, 2003. Capital stock
      maintains its nominal (par) value at each balance sheet date; and

-     the inflation adjustment related to the increase in capital stock from
      stock distributions (adjustments to capital). The adjustment represents
      the effect of inflation from the stock distribution date to the end of
      each period, and is restated to constant pesos as of February 28, 2003.

The composition of "Adjustments to Shareholders' Equity" is as follows:

                                      F-56
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                       DECEMBER         DECEMBER
                                                         2003             2002
                                                     ------------     ------------
<S>                                                  <C>              <C>
Inflation  to:
- capital stock                                         1,314,673        1,314,673
- paid- in- capital                                        95,375           95,375
                                                        ---------        ---------
                                                        1,410,048        1,410,048
</TABLE>

Until December 2001, the Bank has annually distributed shares of common stock to
its then-current shareholders in proportion to their holdings. Such
distributions of stock are characterized under Argentine law as capitalization
of retained earnings and capitalization of adjustments to capital. The
shareholders must approve such distributions of stock.

23.   MINIMUM CAPITAL REQUIREMENTS

The capital adequacy of Grupo Galicia is not under the supervision of the
Argentine Central Bank. Grupo Galicia has a minimum capital requirement from the
Commercial Companies Law of Ps.12.

Under the Argentine Central Bank regulations, the Bank is required to maintain
minimum levels of capital, as defined ("minimum capital"). The minimum capital,
is based upon risk-weighted assets, and the balances of Bank premises and
equipment, intangible assets and unquoted equity investments. The required
minimum capital and the Bank's capital calculated under Argentine Central Bank
requirements were as follows:

<TABLE>
<CAPTION>
                                                                                  SHAREHOLDERS' EQUITY AS
                                  MINIMUM CAPITAL         SHAREHOLDERS' EQUITY    A % OF MINIMUM CAPITAL
                                -------------------       --------------------    ----------------------
<S>                             <C>                       <C>                     <C>
December 31, 2003.............  Ps.               -       Ps.               -                         -
December 31, 2002 ............                    -                         -                         -
December 31, 2001 ............            1,879,896                 2,675,371                    142.31
</TABLE>

As of December 31, 2003 and 2002, the Argentine Central Bank had suspended the
regulation requiring minimum levels of capital.

As called for by Argentine Central Bank Communique "A" 3986, effective January
2004, financial institutions were to comply with regulations on minimum capital
which had been suspended until that time. That Communique provided that
effective January 2004, an "alpha 1 " coefficient was to be applied to
temporarily reduce the minimum capital requirement to cover credit risk
attaching to holdings in investment accounts and financing granted to the
national non-financial public sector until May 31, 2003. It also provided for
the application of an "alpha 2" coefficient effective January 2004, to
temporarily reduce the minimum capital requirement to cover interest rate risk.

A non-material breach of regulations on spreading and rating of credit risk was
detected, which would have resulted in a higher minimum capital ratio being
required to cover credit risk had the Argentine Central Bank not suspended the
regulation requiring minimum levels of capital.

As of January, 2004 the Bank was in compliance with the regulation requiring
minimum levels of capital.


                                      F-57
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

24.   EARNINGS PER SHARE

Stock distributions (see note 22 and 32) were declared to shareholders in 2001.
Accordingly, all common share data include the effects of such distributions.
Earnings per share are based upon the weighted average of common shares
outstanding in the amount of 1,092,407 shares of Grupo Galicia common stock for
the years ended December 31, 2003, 2002 and 2001 of Grupo Galicia.

Earnings per share for the 3 years ended December 31, 2003, 2002 and 2001 are
(0.199), (1.347) and 0.242, respectively.

At December 31, 2003, 2002 and 2001, there were no convertible subordinated
negotiable obligations outstanding and therefore for the purposes of calculating
earnings per share Grupo Galicia had a simple capital structure.

25.   CONTRIBUTION TO THE DEPOSIT INSURANCE SYSTEM

Pursuant to its Communique "A" 2337, the Argentine Central Bank established
rules for applying the deposit insurance system and the way of settling the
related contributions. Furthermore, the National Executive Branch through Decree
No.1127/98 dated September 24, 1998, extended this insurance system to cover
demand deposits and time deposits of up to Ps.30 stated either in pesos or in
foreign currency. This system does not cover the deposits made by financial
institutions (including the time deposit certificates acquired through a
secondary transaction), the deposits made by persons related to the Bank, either
directly or indirectly, deposits of securities, acceptances or guarantees and
those set up after July 1, 1995 at an interest rate exceeding the one that the
Argentine Central Bank regularly establishes based on a daily survey conducted
by it. Nor does this system cover deposits whose ownership has been acquired
through endorsement and placement, which offer incentives in addition to the
interest rate. The system has been implemented through the creation of the
Deposit Insurance Fund, which is managed by a company called Seguros de
Depositos S.A. (SEDESA). The shareholders of SEDESA are the Argentine Central
Bank and the financial institutions in the proportion determined for each one by
the Argentine Central Bank based on the contributions made to said fund.

Through Communique "A" 3068, the Argentine Central Bank reduced the normal
contribution to the Deposit Insurance Fund, which amounted to 0.03%, to 0.015%,
provided that the financial institution arranges with SEDESA 36-month loans, to
be earmarked for the Deposit Insurance Fund. Interest on these loans has been
determined on the basis of the yield obtained by the aforesaid Fund on its
placements.

As of September 2000, Argentine Central Bank Communique "A" 3153 eliminated the
above-mentioned loan and the normal contribution of 0.015% on items comprised in
the calculation basis remained in force. As of December 2001, Argentine Central
Bank Communique "A" 3358 resolved to increase the contribution to 0.03%.

The Bank recognized contributions amounting to Ps.12,715, Ps.20,398 and
Ps.34,443 for the fiscal years ended December 31, 2003, 2002 and 2001,
respectively, under the account captioned "Financial Expenses - Contribution to
the Deposit Insurance System".


                                      F-58
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

26.   EMPLOYEE BENEFIT PLANS

Neither the Bank nor its subsidiaries maintain pension plans for their
personnel. The Bank is obligated to pay employer contributions to the National
Pension Plan System, determined on the basis of the total monthly payroll.

These expenses aggregated Ps.16,152, Ps.17,021 and Ps.37,578 for the fiscal
years ended December 31, 2003, 2002 and 2001, respectively.

On November 19, 2001, the beneficiaries of the Galicia 2004 Trust were
designated, as stipulated in the "Framework Trust Agreement" signed on November
4, 1999, to implement an incentive program in favor of certain executives of the
Bank and its controlled or related companies. Of the total amount of Ps.4,000
transferred to the trustee by the Galicia 2004 Trust, which were used for the
purchase of shares of Grupo Financiero Galicia S.A., 855,442 shares and 189,116
ADSs were acquired. The amount transferred has been expensed as incurred.

Shares and ADS of 855,442 and 28,046.60 respectively, were awarded to certain
executives. 3,400 ADSs that were not awarded returned to the trustor. The
remaining balance of 157,669.40 ADSs was used to create the Galicia 2005 Trust.

On June 15,2003, the Galicia 2004 Trust was terminated in advance, the shares
and ADSs having been delivered to the beneficiaries designated.

27.   INCOME STATEMENTS AND BALANCE SHEETS

The presentation of financial statements according to the Argentine Central Bank
rules differs significantly from the format required by the Securities and
Exchange Commission under Rules 210.9 to 210.9-07 of Regulation S-X (Article 9).
The income statements presented below discloses the categories required by
Article 9:

                                      F-59

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


<TABLE>
<CAPTION>
                                                                            DECEMBER 31,
                                                           -----------------------------------------------
                                                              2003             2002              2001
                                                           -----------     -------------     -------------
<S>                                                        <C>             <C>               <C>
INTEREST INCOME:
Interest and fees on loans (*) ......................      Ps. 968,086     Ps. 4,419,516     Ps. 3,212,789
Interest and dividends on investment securities:
Tax-exempt...........................................           32,504              (232)          211,852
Interest on interest bearing deposits with
other banks .........................................               68             2,370            63,735
Interest on other receivables from financial
brokerage ...........................................           93,060           598,868           213,156
Interest on securities and foreign exchange
purchased under agreements to resell ................                -                 -            48,851
Government securities and other trading gains, net ..          243,850           298,868            65,668
                                                           -----------     -------------     -------------
Total interest income ...............................        1,337,568         5,319,390         3,816,051
                                                           -----------     -------------     -------------
INTEREST EXPENSE
Interest on deposits ................................          263,760         1,361,237         1,479,498
Interest on securities sold under agreements
to repurchase .......................................                -           141,478            79,116
Interest on short-term liabilities from
financial intermediation ............................          417,644         1,461,699           179,523
Interest on long-term liabilities from
financial intermediation ............................          468,658         1,361,668           287,236
Monetary Loss from financial intermediation .........           14,506         1,437,745                 -
                                                           -----------     -------------     -------------
Total interest expense ..............................        1,164,568         5,763,827         2,025,373
                                                           -----------     -------------     -------------
Net interest income /(expense) ......................          173,000          (444,437)        1,790,678
                                                           -----------     -------------     -------------
Allowance for loan losses Net .......................         (168,277)        1,615,246           938,616
                                                           -----------     -------------     -------------
Net interest income /(expense) after provision
for loan losses .....................................          341,277        (2,059,683)          852,062
                                                           -----------     -------------     -------------
</TABLE>

(*) Includes adjustments of the consumer price index


                                      F-60

<PAGE>
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                               --------------------------------------------------
                                                   2003               2002              2001
                                               --------------   ----------------   --------------
<S>                                            <C>              <C>                <C>
NON-INTEREST INCOME:
Service charges on deposit accounts..........  Ps.     68,048   Ps.       91,257   Ps.    182,300
Credit card service charges and fees.........         194,483            190,497          300,136
Other commissions............................         206,327            240,418          621,145
Income from equity in other companies........               -                  -           34,958
Premiums and commissions on insurance
business.....................................          44,422            183,743          171,039
Foreign currency position compensation.......               -          1,370,034                -
Other........................................         206,165            362,589          269,794
Monetary gain (loss) on other transactions...          (3,517)          (163,090)               -
                                               --------------   ----------------   --------------

Total non-interest income....................  Ps.    715,928   Ps.    2,275,448   Ps.  1,579,372
                                               --------------   ----------------   --------------
NON-INTEREST EXPENSE:
Commissions..................................          54,063            117,764          172,139
Salaries and social security charges.........         198,288            436,324          597,357
Fees and external administrative services....          63,077             84,629          131,956
Depreciation of bank premises and equipment..          50,542             63,357           61,660
Personnel services...........................          15,665             22,573           54,598
Rentals......................................          19,577             36,532           62,499
Electricity and communications...............          27,234             42,507           70,088
Advertising and publicity....................          20,020             15,369           54,531
Taxes........................................          74,825            126,099          219,967
Amortization of organization and
development expenses.........................          59,547             85,025           80,722
Loss from equity in other companies..........          22,570             51,971                -
Maintenance and repair expenses..............          22,724             26,882           45,239
Minority interest............................           9,586           (269,572)          22,159
Commissions and expenses on insurance
business.....................................          59,725            103,391          148,253
Amortization of "Amparo claims"..............          77,880                  -                -
Other Provisions and reserves................         308,081            441,949           39,226
Other........................................         190,354            257,056          247,448
Monetary result from operating expenses......             (84)           (21,001)               -
                                               --------------   ----------------   --------------

Total non-interest expense...................  Ps.  1,273,674   Ps.    1,620,855   Ps.  2,007,842
                                               --------------   ----------------   --------------
Income before tax expense....................        (216,469)        (1,405,090)         423,592
Income tax expense...........................            (590)           (66,421)        (159,052)
                                               --------------   ----------------   --------------
Net income ..................................  Ps.   (217,059)  Ps.   (1,471,511)  Ps.    264,540
                                               ==============   ================   ==============
</TABLE>

Certain categories of income and expense maintained by the Bank have been
presented in the Article 9 income statement in a manner which warrants further
discussion as follows:

- Income from trading activities, net: until late 2001, the Bank actively traded
its government securities portfolio and does not distinguish in its accounting
records between interest and realized and unrealized gains and losses on such
securities. This caption is included as a component of interest income.

- Provision for loan losses: this balance includes direct charge offs plus the
allowance for losses on loans and other receivable charged to the allowance for
loan losses, less loan loss allowances reversed and bad debts recovered.

                                      F-61
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


Argentine Central Bank rules also require certain classifications of assets and
liabilities which are different from those required by Article 9. The following
balance sheet presents Grupo Galicia's balance sheet at December 31, 2003 and
2002 as if they had followed Article 9 balance sheet disclosure requirements.


<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                       ---------------------------------------
                                                              2003                  2002
                                                       ------------------     ----------------
<S>                                                    <C>                    <C>
ASSETS:
   Cash and due from banks..........................   Ps.        836,010     Ps.      594,031
   Interest-bearing deposits in other banks.........              172,360              158,273
   Trading account assets...........................              328,754               35,471
   Available for sale securities....................            7,086,882            3,097,787
   Loans............................................            8,566,310           12,252,843
   Allowances for loan losses.......................           (1,183,726)          (1,687,303)
   Fixed assets.....................................              517,532              570,475
   Compensatory and hedge bonds to be received......            4,629,595            7,098,505
   Other assets.....................................            2,156,089            2,069,128
                                                       ------------------     ----------------
        Total assets................................   Ps.     23,109,806     Ps.   24,189,210
                                                       ==================     ================

LIABILITIES AND SHAREHOLDERS' EQUITY:
   Deposits.........................................   Ps.      5,520,610     Ps.    5,161,638
   Short-term borrowing.............................            1,376,354            6,601,209
   Other liabilities................................            2,222,993            2,013,988
   Long-term debt...................................           12,016,700            8,355,373
   Commitments and contingent liabilities...........              414,875              334,559
   Minority interest in Consolidated Subsidiaries...               95,937               83,806
   Common stock.....................................            1,092,407            1,092,407
   Other shareholders' equity.......................              369,930              546,230
                                                       ------------------     ----------------
        Total liabilities and shareholders' equity..   Ps.     23,109,806     Ps.   24,189,210
                                                       ==================     ================
</TABLE>

The carrying value and market value of each classification of available-for-sale
securities in the Article 9 balance sheet, were as follows.

<TABLE>
<CAPTION>
                                                   DECEMBER 31, 2003                                DECEMBER 31, 2002
                                   -----------------------------------------------  -----------------------------------------------
                                                       UNREALIZED                                       UNREALIZED
                                   CARRYING VALUE  GAINS/(LOSSES)(3)  MARKET VALUE  CARRYING VALUE  GAINS/(LOSSES)(3)  MARKET VALUE
                                   --------------  -----------------  ------------- --------------  -----------------  ------------
<S>                                <C>             <C>                <C>           <C>             <C>                <C>
Argentine External Bills (1)...    Ps.    875,138  Ps.             -  Ps.  496,142  Ps.    979,451  Ps.             -  Ps.  979,451
BODEN 2012 - Compensatory
Bond...........................         1,609,982            113,076     1,036,640         693,471            (20,307)      291,451
Fiscal Credit Certificate (2)..            78,575                  -        78,575         106,336                  -       106,336
BODEN  2012....................                 -                  -             -           4,539             (1,129)        3,410
BOGAR..........................         3,473,661            244,724     2,116,497                                  -
GalTrust I.....................           646,143           (134,657)      254,835         686,160              6,888       436,397
Other securities...............           403,383                  -       403,383         627,830                  -       627,830
                                   --------------  -----------------  ------------  --------------  -----------------  ------------
       TOTAL...................    Ps.  7,086,882  Ps.       223,143  Ps.4,386,072  Ps.  3,097,787  Ps.       (14,548) Ps.2,444,875
                                   ==============  =================  ============  ==============  =================  ============
</TABLE>

(1) As of December 31, 2002, these instruments can be used to repay taxes,
    including value-added tax.

(2) These instruments can be used to repay taxes, including value-added tax

(3) For U.S. GAAP purposes losses considered to be other than temporary or
    fluctuation in the exchange rates of US dollar available for sale
    securities were charged to income statement and the quotation differences
    were recognized as unrealized gain / (losses) in the other comprehensive
    income.

                                      F-62
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)



The maturities at December 31, 2003 of the government securities
available-for-sale and the GalTrust I, securities included in the Article 9
balance sheet were as follows:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31, 2003
                              ---------------------------------------------------------------------------------------------------
                                                                                MATURING AFTER   MATURING AFTER
                                                   Past       MATURING WITHIN    1 YEAR BUT        5 YEARS BUT     MATURING AFTER
                              CARRYING VALUE   Due/callable       1 YEAR        WITHIN 5 YEARS   WITHIN 10 YEARS      10 YEARS
                              --------------   ------------   ---------------   --------------   ---------------   --------------
<S>                           <C>              <C>            <C>               <C>              <C>               <C>
Argentine External
Bills ......................  Ps.    875,138        875,138   Ps.           -   Ps.          -   Ps.           -   Ps.          -
BODEN 2012 - Compensatory
Bond .......................       1,609,982              -            48,424          780,779           780,779                -
Fiscal Credit
Certificate ................          78,575              -            78,575                -                 -                -
GalTrust I .................         646,143              -                 -          118,891           214,519          312,733
BOGAR ......................       3,473,661              -                 -          639,154         1,153,255        1,681,252
Other securities ...........         403,383              -           403,383                -                 -                -
                              --------------        -------   ---------------   --------------   ---------------   --------------
TOTAL ......................  Ps.  7,086,882        875,138   Ps.     530,382   Ps.  1,538,824   Ps.   2,148,553   Ps.  1,993,985
                              ==============        =======   ===============   ==============   ===============   ==============
</TABLE>

28.   OPERATIONS BY GEOGRAPHICAL SEGMENT

The main financial information, classified by country where transactions
originate, is shown below. Most of the transactions originated in the Republic
of Uruguay were with Argentine citizens and enterprises, and were denominated in
U.S. dollars. Transactions between different geographical segments have been
eliminated for the purposes of this note.

                                      F-63
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)



<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                       ---------------------------------------------
                                                                           2003            2002            2001
                                                                       -------------   -------------   -------------
<S>                                                                    <C>             <C>             <C>
Total revenues:(*)
   Republic of Argentina ............................................  Ps. 2,608,884   Ps. 6,082,083   Ps. 5,119,784
   Republic of Uruguay ..............................................        213,318         355,327         213,580
   U.S.A ............................................................              -         173,887         138,637
   Grand Cayman Island ..............................................         10,704          (6,194)            855
   United Kingdom ...................................................              -               -             183
Net income (loss), net of monetary effects allocable to each country:
   Republic of Argentina ............................................       (137,834)     (1,475,844)        292,826
   Republic of Uruguay ..............................................        (63,380)        (75,584)        (35,786)
   U.S.A ............................................................              -         128,900          56,930
   Grand Cayman Island ..............................................        (15,845)        (48,983)        (47,610)
   United Kingdom ...................................................              -               -          (1,820)
Total assets:
   Republic of Argentina ............................................     21,931,206      22,402,237      23,891,523
   Republic of Uruguay ..............................................        908,137       1,302,557       2,875,250
   U.S.A ............................................................              -          15,724       1,106,533
   Grand Cayman Island ..............................................         55,322         184,000             749
   United Kingdom ...................................................              -               -           3,572
Fixed assets
   Republic of Argentina ............................................        504,742         554,335         611,626
   Republic of Uruguay ..............................................         12,790          16,140          11,958
   U.S.A ............................................................              -               -             619
   United Kingdom ...................................................              -               -              91
Miscellaneous assets
   Republic of Argentina ............................................        156,084         182,367         231,676
   Republic of Uruguay ..............................................          2,014           2,395           1,624
Goodwill
   Republic of Argentina ............................................        139,681         168,719         273,897
   Republic of Uruguay ..............................................              -           1,665           4,742
Other intangible assets
   Republic of Argentina ............................................        587,373         151,235         217,311
   Republic of Uruguay ..............................................              3             329             456
   U.S.A ............................................................              -               -           1,137
   Grand Cayman Island ..............................................              -               -               4
Geographical segment assets as a percentage of total assets
   Republic of Argentina ............................................          95.79%          93.71%          85.70%
   Republic of Uruguay ..............................................           3.97%           5.45%          10.31%
   U.S.A ............................................................              -            0.07%           3.97%
   Grand Cayman Island/United Kingdom ...............................           0.24%           0.77%           0.02%
</TABLE>

(*) The caption Revenues includes financial income, income from services and
    miscellaneous income.

29.   FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank has been party to financial instruments with off-balance sheet risk in
the normal course of its business to meet the financing needs of its customers.
These instruments expose the Bank to credit risk above and beyond the amounts
recorded in the consolidated balance sheets. These financial instruments include
commitments to extend credit, standby letters of credit, guarantees granted and
acceptances. Guarantees granted are surety guarantees in connection with
transactions between two parties.

The Bank uses the same credit policies in making commitments, conditional
obligations and guarantees as it does for granting loans. In the opinion of
management, the Bank's outstanding commitments and guarantees do not represent
unusual credit risk.

The Bank's exposure to credit loss in the event of non-performance by the
counterparty to the financial instrument for commitments to extend credit,
standby letters of credit, guarantees granted and acceptances is represented by
the contractual notional amount of those investments.

                                      F-64
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

A summary of the credit exposure related to these items is shown below:

<TABLE>
<CAPTION>
                                        DECEMBER 31,
                                   ----------------------
                                      2003        2002
                                   ----------  ----------
<S>                                <C>         <C>
Commitments to extend credit ...  Ps. 220,913 Ps. 171,041
Standby letters of credit ......       10,925      49,011
Guarantees granted .............      234,416     270,940
Acceptances ....................       22,354     105,760
</TABLE>

Commitments to extend credit are agreements to lend to a customer at a future
date, subject to the meeting of the contractual terms. Commitments generally
have fixed expiration dates or other termination clauses and may require payment
of a fee. Since many of the commitments are expected to expire without being
drawn upon, total commitment amounts do not necessarily represent actual future
cash requirements of the Bank. The Bank evaluates each customer's
creditworthiness on a case-by-case basis. In addition to the above commitment,
at December 31, 2003 and 2002 the available purchase limits for credit card
holders amounted to Ps.2,675,142 and Ps.1,103,310, respectively.

Standby letters of credit and guarantees granted are conditional commitments
issued by the Bank to guarantee the performance of a customer to a third party.

Acceptances are conditional commitments for foreign trade transactions.

The credit risk involved in issuing letters of credit and granting guarantees is
essentially the same as that involved in extending loan facilities to customers.
In order to grant guarantees to its customers, the Bank may require counter
guarantees. These financial customer guarantees are classified, by type, as
follows:

<TABLE>
<CAPTION>
                                         DECEMBER 31,
                                   ----------------------
                                      2003        2002
                                   ----------  ----------
<S>                                <C>         <C>
Preferred counter guarantees..     Ps. 53,563  Ps. 152,648
Other counter guarantees .....         97,676       44,071
</TABLE>

The Bank accounts for checks drawn on it and other banks, as well as other items
in process of collection, such as notes, bills and miscellaneous items, in
memorandum accounts until such time as the related item clears or is accepted.
In management's opinion, the risk of loss on these clearing transactions is not
significant. The amounts of clearing items in process were as follows:

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                    ------------------------
                                                        2003        2002
                                                    -----------  -----------
<S>                                                 <C>          <C>
Checks drawn on the Bank .............              Ps. 109,164  Ps.  78,463
Checks drawn on the other Bank .......                  162,396      128,348
Bills and other items for collection..                  326,994      273,963
</TABLE>

As regards the fiduciary risk, during the fiscal year 2000, the Bank was
appointed as trustee under four trust agreements to guarantee compliance with
the obligations arising from different contracts between the parties.

At December 31, 2003 and 2002 the trust funds amounted to Ps.72,832 and
Ps.77,175, respectively.

                                      F-65
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

In addition, the Bank has securities in custody, mainly related to its activity
as mutual fund depositary institution. At December 31, 2003 and 2002, these
securities amounted to Ps.5,412,706 and Ps.6,478,044, respectively.

30.   DERIVATIVE FINANCIAL INSTRUMENTS

At December 31, 2003 and 2002 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.

<TABLE>
<CAPTION>
                                         MEMORANDUM ACCOUNTS           FAIR VALUE
                                      ------------------------  -------------------------
                                            DECEMBER 31,              DECEMBER 31,
                                      ------------------------  -------------------------
                                         2003         2002         2003          2002
                                      -----------  -----------  -----------  ------------
<S>                                   <C>          <C>          <C>          <C>
Option contracts:
Written call options                  Ps.       -  Ps.  11,966  Ps.       -  Ps.   11,966
Written put options (1)                   165,411            -       69,668             -
Purchased call options                          -        2,521            -         2,521
</TABLE>

(1) As established by Section 4, subsect. a and Section 6 of Decree No. 1836/02
and Argentine Central Bank Communique "A" 3828, in view of the "Exchange of
deposits with the financial system II", the Bank granted an option to sell
coupons to the holders of restructured deposits certificates who had opted to
receive BODEN 2013, BODEN 2006, BODEN 2012 or BODEN 2005 in lieu of payment of
those certificates.

In addition the Bank is exposed to credit risk on these instruments. The Bank
would have credit losses in the event of non-performance by the counter-parties
that issued the financial instruments. The credit exposure of derivative
contracts is represented by the sum of the positive fair value of the individual
contracts at the reporting date.

In order to reduce its counter-party credit risk the Bank performs a credit
analysis of each counter-party and does not exceed the exposure limits
established by the Board of Directors.

The exercise price will be equal to that resulting from converting to pesos the
face value of each coupon in US dollars at a rate of Ps.1.40 per US 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 US dollars at the buying exchange rate
quoted by Banco de la Nacion Argentina (Banco Nacion) on the payment date of
that coupon.

31.   DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Accounting Standards No. 107 ("SFAS") "Disclosures about Fair Value of
Financial Instruments" requires disclosures of estimates of fair value of
financial instruments. These estimates were made at the end of December 2003 and
2002. Because many of the Bank's financial instruments do not have a ready
trading market from which to determine fair value, the disclosures are based
upon significant estimates regarding economic and current market conditions and
risk characteristics. Such estimates are subjective and involve matters of
judgment and, therefore, are not precise and may not be reasonably comparable to
estimates of fair value for similar instruments made by other financial
institutions.

                                      F-66
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

The estimated fair values do not include the value of assets and liabilities not
considered financial instruments.

In order to determine the fair value, cash flows were discounted for each
category or group of loans having similar characteristics, based on credit risk,
guarantees and/or maturities, using rates offered for similar loans by the Bank
at December 31, 2003 and 2002, respectively.

Due to the uncertainties derived from the economic crisis existing in Argentina
at the end of 2001 and the economic policy measures taken by the government to
confront this crisis, the future actual results could differ from the
evaluations and estimates made at the date of the preparation of this
quantitative analysis and these differences could be significant. Therefore, the
following fair values estimated under FAS 107 must be considered in light of
these circumstances.

<TABLE>
<CAPTION>
                                                                  2003                          2002
                                                      ----------------------------  ----------------------------
                                                       Book Value     Fair Value      Book Value    Fair Value
                                                      -------------  -------------  -------------  -------------
<S>                                                   <C>            <C>            <C>            <C>
      DERIVATIVE ACTIVITIES: (SEE NOTE 30)
Assets .............................................  Ps.         -  Ps.         -  Ps.         -  Ps.         -
Liabilities ........................................              -              -              -              -

            NON DERIVATIVE ACTIVITIES:

Assets:
Cash and due from banks (1) ........................  Ps.   826,150  Ps.   826,150  Ps.   576,838  Ps.   576,838
Government securities (2)
     Trading .......................................        327,911        327,911          4,725          4,725
     Unlisted Securities ...........................         86,227         86,227        149,239        149,239
     Investment ....................................      2,485,120      1,532,782      1,672,922      1,270,901
Loans (3) ..........................................     10,983,757      8,551,264     10,682,163      8,055,776
Compensatory and hedge Bond to be received (4) .....      4,629,595      2,980,996      7,098,505      3,090,739
Others (5) .........................................      1,838,660      1,307,585      2,390,496      2,072,648

Liabilities:
Deposits (6) .......................................  Ps. 5,583,991  Ps. 5,183,739  Ps. 5,209,360  Ps. 4,430,129
Other liabilities resulting from financial
Intermediation :
Argentine Central Bank (7) .........................      8,132,902      5,804,241      8,132,792      7,652,655
Banks and international entities and Loans from
Domestic Financial Institutions (8) ................      3,149,989      1,308,103      7,100,825      2,575,397
Negotiable obligations (9) .........................      2,565,520      2,150,256              -              -

Others (10) ........................................      1,251,010      1,123,042      1,137,351      1,137,350
</TABLE>

The following is a description of the estimating techniques applied:

      (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
            at December 31, 2003 and 2002 are a reasonable estimate of fair
            value.

      (2)   GOVERNMENT SECURITIES: Government securities held for trading
            purposes and government securities available for sale are carried at
            fair value. The fair value of the Bank's government securities held
            for investment have been estimated using the quoted market value.
            The book values at December 31, 2003 and 2002 of bonds such as
            Fiscal Credit Certificate, are a reasonable estimates their
            respective fair values.

      (3)   LOANS: In order to determine the fair value of loans, the portfolio
            was segregated by loan type, repricing characteristics and credit
            quality. For performing loans, contractual cash flows of loans were
            discounted at estimated market rates. For non-performing loans,
            expected cash flows were discounted using an estimated rate
            considering the time of collection. The value of collateral was
            considered in the estimation of cash flows.

      (4)   COMPENSATORY AND HEDGE BONDS TO BE RECEIVED: in connection with
            estimating the fair value of the compensatory bonds, the Bank used
            quoted market values.

                                      F-67
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

      (5)   OTHERS: Includes other receivables from financial brokerage and
            equity investments in other companies. A majority of the items
            included under "Other Receivables from Financial Brokerage" are
            short-term in nature and do not possess significant risk although
            the fair value of the forward purchases of government securities
            held for investment purposes is the quoted market value of the
            underlying government securities. Also included under this caption
            are the Galtrust I debt securities and trust certificates. Equity
            investments in companies where significant influence is exercised
            are not within the scope of SFAS No. 107. Equity investments in
            other companies are carried at market value less costs to sell. The
            book value of unquoted equity securities is believed by management
            to approximate fair value. Also, includes compensation for the
            application of the CER/CVS. The fair value of the bonds to be
            received have been estimated using the quoted market value.

      (6)   DEPOSITS: The fair value of deposit liabilities on demand and
            savings account deposits is similar to its book value. The fair
            value of term deposits was estimated at the expected future cash
            flows discounted at the estimated market rates at year-end,
            following management's expectations.

      (7)   ARGENTINE CENTRAL BANK: At December 31, 2003 and 2002 "Argentine
            Central Bank" includes the advance to be requested to the Argentine
            Central Bank for the subscription of the hedge bond. At December 31,
            2002, includes Argentine Central Bank's short term loans for
            liquidity support which where restructured during 2003. At December
            31, 2003, this caption included the restructured Argentine Central
            Bank loans for liquidity support. The fair value was estimated at
            the expected future cash flows discounted at the estimated market
            rates at year-end.

      (8)   BANKS AND INTERNATIONAL ENTITIES AND LOANS FROM DOMESTIC FINANCIAL
            INSTITUTIONS: Includes credit lines borrowed under different credit
            arrangements from local and foreign entities. These lines of credit
            were being restructured as of December 31, 2003. Where a market
            exists in the Bank's debt, the quoted market prices have been taken
            as a best estimate of fair value. When no quoted market prices are
            available, the estimated fair value has been calculated by
            discounting the contractual cash flows of these liabilities at
            estimated market rates.

      (9)   NEGOTIABLE OBLIGATIONS: The fair value of the negotiable obligations
            were determined based on quoted market prices. When no quoted market
            prices are available, the estimated fair value has been calculated
            by discounting the contractual cash flows of these liabilities at
            estimated market rates.


      (10)  OTHERS: Includes other liabilities resulting from financial
            brokerage the carrying values of which at December 31, 2003 are a
            reasonable estimate of fair value. As of December 31, 2002, also
            includes the New York branch debt securities which fair value was
            determined based upon a discounted cash flow, applying estimated
            current market rates for the remaining terms of the debt securities.

32.   CASH DIVIDENDS

On March 15, 2001, the shareholders of Grupo Galicia approved a cash dividend of
Ps.71,369.

Argentine Central Bank Communique "A" 3785 dated October 29, 2002 restricted the
distribution of cash dividends. Such rule establishes that the Bank should
adjust its earnings to be distributed as cash dividends with the difference
between the market value and the carrying value of the compensatory and hedge
bonds after netting the legal reserve and other reserves established by the
Bank's by-laws.( see note 22)


                                      F-68
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)

33.   PREFERRED LIABILITIES OF THE FORMER BANCO ALMAFUERTE COOP. LTDO., BANCO
      MENDOZA S.A. AND BANCO MERCOBANK S.A.

Former Banco Almafuerte Coop. Ltdo

During the years ended June 30, 1999, 2000 and December 31, 2000 and 2001, the
Bank acquired certain interest in a trust sponsored by SEDESA, the Argentine
deposit insurance authority. The trust holds the assets of three failed
Argentine banks. The Bank acquired the interests in exchange for the assumption
of the deposit liabilities of the failed banks. The Bank's interest in the trust
consists of preferred certificates A, and subordinated certificates C, whose
payments are guaranteed by SEDESA. At December 31, 2003 and 2002, trust
certificates were recorded at an amount of Ps.20,144 and Ps.22,236,
respectively, in the consolidated financial statements.

Furthermore, a fund was created for a total amount of US$266,667 to which Banco
de Galicia y Buenos Aires S.A. contributed 45%, US$120,000. This fund, which as
of December 31, 2003 amounted to Ps.245,595 due to its conversion into pesos as
established by Decree 471, may be computable for meeting the Minimum Liquidity
Requirements, as authorized by the Argentine Central Bank. At December 31, 2002,
it amounted to Ps.172,381.

Former Banco Mendoza S.A.

On May 11, 1999, a special fund was set up by Banco de Galicia y Buenos Aires
S.A., Banco de la Nacion Argentina, HSBC Bank Argentina S.A., BBV Banco Frances
S.A. and Banco Credicoop Cooperativo Limitado, as authorized by the Argentine
Central Bank's Board of Directors in points 10 and 13 of its Resolution
N(degree) 179 dated April 16, 1999. This fund was created for a total amount of
US$470,000; Banco de Galicia y Buenos Aires S.A. contributed 10.64%, US$50,000.

On December 19, 2003 the above-mentioned fund was terminated, the Bank receiving
secured loans for Ps.95,167, Treasury Bills in US dollars due March 15, 2002 for
Ps.818 and the remainder in cash. At the end of the same period of the previous
year, the fund totaled Ps.71,685.

Former Banco Mercobank S.A

On January 5, 2001, the Bank assumed certain preferred liabilities corresponding
to 3 (three) branches of the former Banco Mercobank S.A.-

This transaction was conducted under the terms of the "Transfer Contract" and
the "DIAGONAL Trust Agreement" signed by and between the former Banco Mercobank
S.A., Banco de Galicia y Buenos Aires S.A. and other institutions which took
part in the process involving the assumption of the liabilities of the above
mentioned bank, as called for by resolution No. 19 adopted by the Board of
Directors of the Argentine Central Bank on January 5, 2001, within the framework
of article 35 bis, section II, clauses a) and b) of the Financial Institutions
Law. As a counterpart, the Bank has received an interest in the class A
certificate of the DIAGONAL Trust (consisting of certain assets pertaining to
the former Banco Mercobank S.A.) and payments from SEDESA. As of December 31,
2003, the amount of that interest, net of provisions, was Ps.1,449. At the end
of the same period of the previous year, it amounted to Ps.1,676.

                                      F-69
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


34.   TRUST ACTIVITIES

"GALTRUST I" INDIVIDUAL FINANCIAL TRUST

On October 20, 2000 the Bank securitized a group of loans that were granted to
the Argentine Provinces. The taxation revenues from the local provinces
collateralize these loans. The Bank transferred the ownership of the loans to a
trust Galtrust I. In turn the trust issued Class "A" Debt Securities with a face
value of Ps.100,000, Class "B" Debt Securities with a face value of Ps.200,000
and Financial Trust Participation Certificates with a face value of Ps.200,000.
Ps46,922 of the class B Debt Securities were sold to third party invertors and
the remainder of the certificates was retained by the bank.

Under this global program, the Bank transferred the trust ownership of loans
amounting Ps.1,070,855 granted to Argentine provinces collateralized by the
federal tax sharing corresponding to those Provinces and reserve investments for
Ps.16,953, to the GalTrust I Financial Trust in exchange for cash and retained
interest in the trust in the form of Class "A" Debt Securities, Class "B" Debt
Securities and Financial Trust Participation Certificates.

As of December 31, 2001 all class A debt securities were cancelled.

As of December 31, 2003 and 2002, those securities were held in the Bank's
portfolio for Ps.646,143 and Ps.686,160, respectively.

"GALTRUST II, III, IV AND V" INDIVIDUAL FINANCIAL TRUSTS

At the meeting held on December 6, 2001, the Board of Directors of Banco de
Galicia y Buenos Aires S.A. approved the creation of the Universal Program for
the Securitization of Loans for the issue of debt securities and/or certificates
of participation in Galtrust Financial Trusts. This program was approved by the
National Securities Commission ("the CNV") through its resolution No. 13,334
dated April 6, 2000, for a face value of up to US$ 1,000,000 thousand (the
"Program") and authorized the Bank's participation as originator, trustor and
manager of that program.

The trustee of the trusts is First Trust of New York, National Association,
through its permanent representation in Argentina. Four financial trusts,
"Galtrust II, III, IV and V - Letras Hipotecarias", were set up under the
above-mentioned program and Certificates of Participation and Debt Securities
were issued under those trusts.

In December 2001, the Bank transferred the trust ownership of mortgage loans
amounting to Ps.525,839 to the Galtrust II, III, IV and V - Letras
Hipotecarias.

The Bank subscribed Certificates of Participation for a face value of Ps.136,839
thousand, in which it had a 100% interest and the remaining Class A and Class B
Debt Securities were subscribed for by the Bank .

As December 26, 2002 the Galtrust III and IV financial trusts were terminated.

As of December 31, 2003 and 2002, the Bank held Certificates of Participation
and Debt Securities in its portfolio for Ps.68,772 and Ps.82,150, respectively.

                                      F-70
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


GALICIA MORTGAGE LOANS AND SECURED LOANS TRUSTS

As part of the implementation of the Galicia Capitalization and Liquidity Plan,
during April 2002, the "Galicia Mortgage Loans Financial Trust" was created,
under which mortgage loans for Ps.312,774 were transferred, receiving in
exchange Ps.234,580 in cash and certificates of participation for Ps.78,194. The
trustee is ABN AMRO Bank Argentine Branch, along with thirteen domestic
financial institutions acting as subscribers. In addition, the Bank has
guaranteed the loans transfered to this trust.

The Secured Loans Trust has been created and the parties involved are Banco de
la Provincia de Buenos Aires as beneficiary and BAPRO Mandatos y Negocios S.A.,
as trustee. Under this Trust, secured loans for Ps.108,000 were transferred and
Ps.81,000 in cash and certificates of participation for Ps.27,000 were received
in exchange. As of December 31, 2003 the amounts of the participation
certificates in "Galicia Mortgage Loans Financial Trust" were Ps.118,396 and the
participation certificates of the "Secured Loans Trust" were Ps.40,494.

35.   REGIONAL CREDIT CARD COMPANIES

Tarjetas Regionales S.A. is a holding company, which as of December 31, 2001,
was wholly owned by Grupo Financiero Galicia S.A. through its subsidiaries Banco
Galicia Uruguay S.A. and Banco de Galicia y Buenos Aires S.A.

The December 31, 2003 financial statements of Tarjetas Regionales S.A., which
were used for consolidation purposes, have in turn been consolidated on a
line-by-line basis with those of Tarjeta Naranja S.A., Tarjetas Cuyanas S.A.,
Tarjeta Comfiar S.A. and Tarjetas del Mar S.A., in which Tarjetas Regionales
S.A. holds a controlling interest.

The percentages directly held in those companies' capital stock are as follows:

<TABLE>
<CAPTION>
                                                  December 2003  December 2002
<S>                                               <C>            <C>
Tarjetas Cuyanas S.A.                                 60%             60%
Tarjetas del Mar S.A.                                100%            100%
Tarjeta Naranja S.A.                                  80%             80%
Tarjeta Comfiar S.A.                                  60%             60%
</TABLE>

The percentages indirectly held in those companies' capital stock through the
controlled entity Tarjeta Naranja S.A. are as follows:

<TABLE>
<S>                                                    <C>           <C>
Tarjeta Comfiar S.A.                                   32%           32%
</TABLE>

In addition, Tarjeta Naranja S.A. financial statements have been consolidated
with the financial statements of Cobranzas Regionales S.A., in which it holds
66.4% of voting stock. Furthermore, Tarjeta Comfiar S.A. and Tarjetas Cuyanas
S.A. hold a 21.3% and 12.3% interest in that company's capital stock and voting
rights.

- Tarjetas Cuyanas S.A.:

On May 23 and October 31, 2002, that company entered into two agreements for the
redemption of its Negotiable Obligations through the issue of debt certificates.

At the end of the year ended December 31, 2003, holders of negotiable
obligations adhered to the exchange of negotiable obligations for debt
certificates in the amount of approximately US$5,000 and US$1,450, respectively,
the residual value amounting to US$2,880 at year end. As of


                                      F-71
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                   (Expressed in thousands of Argentine pesos)


December 31, 2003, the Company has valued these debts at approximately Ps.
6,459, a figure obtained by applying the present value method to the future
discounted cash flows, as established by CNV Resolution No. 434/03.

For purposes of applying the valuation method mentioned above, Tarjetas Cuyanas
S.A. has taken as a premise for the agreement entered into on May 23, 2002 a
nominal annual discount rate of 11% and a cash flow made up of 5% of the monthly
collections of receivables derived from the use of credit cards for a term of 8
years, counted as from the earlier of June 1, 2002 or until the full
amortization of the subscribed certificates, and for the agreement entered into
on October 31, 2002, a nominal annual discount rate of 11% and a cash flow made
up of 1.75% of the monthly collections of receivables derived from the use of
credit cards for a term of 7 years and 7 months, counted as from the earlier of
November 1, 2002 or until the full amortization of the subscribed certificates.

The above-mentioned cash flows are made up of:

a) receivables derived from the use of credit cards;

b) consumer loans granted by the Company to the holders of credit cards issued
   it; and

c) refinancing of receivables mentioned in a) and b).

As a result of the above-mentioned transactions and of certain payments made,
Tarjetas Cuyanas S.A. records due and payable negotiable obligations which
amount to approximately US$ 3,337 as of December 31, 2003, of which US$ 3,180
are in the hands of the minority shareholders, with whom the issuance of a new
series in pesos is being negotiated for a term of one year, converting the
nominal values due at a conversion rate of $1.9 per US dollar. As of December
31, 2003, Tarjetas Cuyanas S.A. had valued this debt at approximately Ps. 6,268
which represent the redemption value estimated by the management of Tarjetas
Cuyanas S.A. on the basis of the negotiations carried out so far. If this debt
were to be valued at the free US dollar exchange rate, an additional loss of
approximately Ps. 3,523 would be generated at year end. The maximum risk
attaching to the situations described above in relation to the financial
statemwnts of Tarjetas Regionales S.A. and Banco de Galicia y Buenos Aires S.A.
amounts to approximately Ps. 2,114.

- Tarjetas del Mar S.A.:

As of December 31, 2003, the debt certificates issued by Tarjetas del Mar S.A.
and accepted by most holders of obligations in order to redeem negotiable
obligations amounted to US$ 15,000 (face value).

The operation schedule proposed is the following: (i) Tarjetas del Mar S.A.
issues a debt certificate for US$15,000, payable within 10 years in 10 annual
and consecutive installments; (ii) Tarjetas del Mar S.A. exchanges with Banco de
Galicia (Cayman Branch) its own debt certificate for a certificate issued by
Tarjeta Naranja S.A., which is held by that subsidiary; and (iii) Tarjetas del
Mar S.A. offers the holders of its Negotiable Obligations to exchange them for
the debt certificate issued by Tarjeta Naranja S.A. The Argentine Central Bank
has not made any observations in relation to this procedure, concerning matters
within its field of competence.

As of December 31, 2003, the balance of the Global Negotiable Obligation Program
issued by Tarjetas del Mar S.A., which continue to be due and payable is
equivalent to an amount of US$ 842. Tarjetas del Mar S.A.'s Board of Directors
has valued the negotiable obligations as of December 31, 2003 as follows: US$
662 (face value) at the exchange rate of US$1 = Ps.1, plus CER, and US$ 180
(face value) at the exchange rate of US$1 = Ps.1.40. If all the due and payable
negotiable obligations as of December 31, 2003 were to be valued at the


                                      F-72
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


free US dollar exchange rate, an additional loss of approximately Ps. 1,251
would be generated as of year end.

The maximum risk attaching to the situations described above in relation to the
financial statements of Tarjetas Regionales S.A. and Banco de Galicia y Buenos
Aires S.A. amounts to approximately Ps. 1,251.

- Tarjeta Comfiar S.A.:

On August 4, 2003 Tarjeta Comfiar S.A. requested from the CNV and the Buenos
Aires Stock Exchange the delisting from the public offering regime and the
revocation of the approval of the short and medium-term Global Negotiable
Obligation Issue Program for up to US$ 50,000, as it was not this company's
intention to issue new negotiable obligations and it had no outstanding
negotiable obligations.

The Buenos Aires Stock Exchange revoked the approval of the mentioned global
program through a letter dated August 8, 2003 and the CNV authorized the
delisting from the public offering regime through Resolution No. 14619 dated
September 11, 2003

As of December 31, 2003, its liabilities for negotiable obligations have been
settled.

- Tarjeta Naranja S.A.:

On May 23, 2002, the Tarjeta Naranja S.A. executed two agreements for the
redemption of negotiable obligations and the issuance of debt certificates in US
dollars secured by a trust. As of December 31, 2003, holders of negotiable
obligations had adhered to this agreement in the amount of US$ 69,577, the
residual value of those negotiable obligations amounting to US$ 46,028 at year
end, due to amortization for the year.

The debt certificates have been valued by determining the present value of the
cash flow involved, converted at the exchange rate prevailing on the transaction
date, assuming a discount rate equivalent to an annual effective rate of 11% as
a premise. The application of the present value method to this financial debt,
recommended by Technical Pronouncement No. 17 of the Argentine Federation of
Professional Councils in Economic Sciences and approved by the Professional
Council in Economic Sciences of the Province of Cordoba, results in US$ 42,300
which, valued at the year-end exchange rate represents Ps. 123,940 (including
principal and accrued interest.

The overdue balance of the Global Negotiable Obligation Program not collected by
their holders as of December 31, 2003 amounts to US$ 1,954.

In view of the Tarjeta Naranja S.A.'s expectations for the method of redemption
of these obligations, either by means of the adherence to the agreement or by
redeeming them in cash, such obligations have been valued as follows: 50%, that
is US$ 977, are expected to be redeemed in cash applying the US$1=$1 exchange
rate, plus CER, and the remaining 50% is expected to be exchanged for debt
securities, so they were valued applying the same procedure as that described
above for debt certificates, a present value of US$ 896 being determined which,
applying the exchange rate in force at year end, represents a liability of Ps.
2,626. If all the due and payable negotiable obligations amounting to US$ 1,954
as of December 31, 2003 were to be valued applying the free US dollar exchange
rate, an additional loss of approximately Ps. 1,676 would be generated at year
end.

                                      F-73

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

The maximum risk attaching to the situations described above, which could have
an impact on the consolidated financial statements of Tarjetas Regionales and
Banco de Galicia y Buenos Aires S.A., amounts to approximately Ps. 1,341.

On February 6, 2003 the Board of Directors of Tarjeta Naranja S.A. approved the
issuance of Debt Certificates secured by a Trust Series II for US$ 15,000 with
similar characteristics to the Agreement entered into on May 23, 2002 for the
redemption of negotiable obligations Series XXVII. On February 7, 2003 that
Agreement was entered into and fully subscribed. This debt is being settled in
monthly installments with 1% of collections since February 1, 2003, over 8 years
counted as from the earlier of that date or until the full amortization of the
certificates subscribed.

At year end, the residual value of those certificates amounted to US$ 11,350.

Those debt certificates were valued by determining the present value of the
discounted cash flows, converted at year-end exchange rate assuming a discount
rate equivalent to an annual effective rate of 11% as a premise. The application
of the present value method to this financial debt, established by Technical
Pronouncement No. 17 of the Argentine Federation of Professional Councils in
Economic Sciences and approved by the Professional Council in Economic Sciences
of the Province of Cordoba, results in a present value of US$ 10,286 (principal)
and US$ 19 (interest) which, valued at year-end exchange rate represents a
principal amount of Ps. 30,137 plus interest for Ps. 56.

- Restructuring of the debt held by the credit card companies with Banco de
Galicia y Buenos Aires S.A.:

On June 26, 2003, the minority shareholders of Tarjeta Naranja S.A. undertook to
make an irrevocable contribution of Ps. 5,000 subject to the conditions
precedent that the majority shareholder makes an irrevocable contribution of Ps.
20,000 under the same conditions and agrees with Banco Galicia y Buenos Aires
S.A. to restructure the liabilities held with that entity. On July 18, 2003,
Tarjeta Naranja S.A. paid Banco de Galicia y Buenos Aires S.A. all interest
accrued at that date on the bank debt of Ps. 80,000. This debt fell due on
February 12, 2003.

On August 4, 2003, Banco de Galicia y Buenos Aires S.A. approved the
restructuring of Tarjetas Cuyanas S.A.'s financial debt of Ps. 10,000. The
conditions for restructuring this financial debt are the following: a term of
one year, interest payable at the Survey rate established by the Argentine
Central Bank , plus an annual rate of 2%. At year end, the balance, net of early
settlements, amounted to Ps. 9,175.

On January 15, 2004 the Argentine Central Bank was informed and made no
observations on the proposal for the restructuring of the financial liabilities.
of Tarjeta Naranja S.A., Tarjeta Comfiar S.A., merged into Tarjeta Naranja S.A.
as from January 1, 2004, and Tarjetas del Mar S.A. held with Banco de Galicia y
Buenos Aires S.A. Such proposal is subject to the merger between Tarjeta Naranja
S.A. and Tarjetas del Mar S.A., a corporate reorganization that must be dealt
with and approved by the respective Meetings of Shareholders and consummated
before June 30, 2004.

On January 28, 2004 the Meeting of Shareholders and the Board of Directors of
Tarjeta Naranja S.A. approved the "Debt Restructuring Plan", consisting of the
renegotiation of the terms and conditions of the outstanding debt with Banco de
Galicia y Buenos Aires S.A. and Banco de

                                      F-74

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


Galicia y Buenos Aires S.A. - Cayman Branch and the acceptance of irrevocable
contributions for Ps. 25,000. This Plan is summarized as follows:

Debt for Series XXVII negotiable obligations for US$ 8,842 plus interest: the
proposal to make irrevocable contributions for Ps. 25,000 on account of future
subscriptions of shares submitted by Banco de Galicia y Buenos Aires S.A. and
the minority shareholders of Tarjeta Naranja S.A. was accepted. The balance will
be fully repaid by Tarjeta Naranja S.A..

Tarjeta Naranja S.A. issued peso-denominated Debt Securities ("TD") for Ps.
167,000 secured by a Trust, payable over a maximum term of six years and a half,
with monthly amortization of principal and monthly interest payments on balances
due, at an adjusted Survey Rate improved by 2 % ("Trust III"). The trust
guarantee is the higher of 2 % of the monthly cash flows of Tarjeta Naranja
S.A., or 1.28205% of the face value of TD plus interest.

Tarjeta Naranja S.A. transfered the TD to a new trust ("Trust IV"), which issued
two Certificates of Participation ("TP"), one "TP A" for Ps. 100,000 and another
"TP B" for Ps. 67,000. The method of servicing under this Trust IV is subject to
the same conditions as those stipulated under Trust III.

The "TP A" will be exchanged for past due and outstanding loans granted by Banco
de Galicia y Buenos Aires S.A. to Tarjeta Naranja S.A. and Tarjeta Comfiar S.A.
(already merged into Tarjeta Naranja S.A.) for Ps. 100,000 (including principal
and interest on both loans).

The debt of US$ 22,423 plus interest held by Tarjeta Comfiar S.A. (already
merged into Tarjeta Naranja S.A.) with Banco de Galicia y Buenos Aires S.A. -
Cayman Branch was settled as follows: i) Banco de Galicia y Buenos Aires S.A.
granted Tarjeta Naranja S.A., a peso-denominated loan for Ps. 67,000, and ii)
the balance will be fully repaid by Tarjeta Naranja S.A..

This Ps. 67,000 loan granted to Tarjeta Naranja S.A. was repaid to Banco de
Galicia y Buenos Aires S.A. through the delivery of "TP B".

At the same time, Tarjetas del Mar S.A. restructured its debt with Banco de
Galicia y Buenos Aires S.A and Banco de Galicia y Buenos Aires S.A - Cayman
Branch, an outstanding debt of around Ps. 12,000 continuing to be held by Banco
de Galicia y Buenos Aires S.A. after an irrevocable capital contribution of Ps.
51,000 has been made. As part of this agreement, Tarjeta Naranja S.A. and
Tarjetas del Mar S.A. will jointly and severally assume the commitment to repay
the debt.

On September 15, 2003, the Board of Directors of Tarjeta Comfiar S.A. and
Tarjeta Naranja S.A. signed a preliminary merger agreement involving the two
companies, whereby Tarjeta Comfiar S.A. would merge into Tarjeta Naranja S.A..
Under this agreement, as from January 1, 2004 these companies shall jointly
conduct the corporate business to take greater advantage of existing resources.
The Preliminary Merger Agreement was approved by the Extraordinary Meetings of
Shareholders of the two companies held on October 2, 2003.

The Final Merger Agreement was signed on November 14, 2003. Since that date, the
Board of Directors of Tarjeta Naranja S.A. has assumed responsibility for the
administration and representation of Tarjeta Comfiar S.A..

As a result of the merger process mentioned above, effective January 1, 2004
Tarjeta Naranja S.A. absorbed Tarjeta Comfiar S.A., which was dissolved without
being liquidated to continue with the business activities carried out by it
until that time under the name of Tarjeta Naranja S.A.,

                                      F-75

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


under the preliminary merger agreement, assuming all contingent rights and
obligations of the merged company.

36. SEGMENT REPORTING

The Bank has disclosed its segment information in accordance with the Statement
of Financial Accounting Standards No. 131, "Disclosures about Segment of an
Enterprise and Related Information". This standard establishes standards for
reporting information about operating segments. Operating segments are defined
as components of an enterprise about which separate financial information is
available and which is regularly reviewed by the chief operating decision maker
in deciding how to allocate resources and in assessing performance. Reportable
segments consist of one or more operating segments with similar economic
characteristics, distribution systems and regulatory environment. The
information provided for Segment Reporting is based on internal reports used by
management.

The following summarizes the aggregation of Grupo Galicia's operating segments
into reportable segments:

Grupo Galicia: this segment includes the income and expenses related to the
Holding Company, not attributable to its investments.

Insurance: includes the results of Grupo Galicia's equity interest in the
insurance companies. At December 31, 2003 and 2002, Grupo Galicia maintained,
through its subsidiary Sudamericana Holding S.A., controlling interests in
Galicia Vida Compania de Seguros S.A., Galicia Retiro Compania de Seguros S.A.,
Instituto de Salta Seguros de Vida S.A., Galicia Patrimoniales Compania de
Seguros S.A., Sudamericana Asesores de Seguros S.A. and Medigap Salud S.A.

Other Group's Businesses: this segment includes the results of the business of
Galicia Warrants S.A. and Net Investment S.A. and its subsidiaries.

Buenos Aires Metropolitan branches: corresponds to the results of operations
conducted with large corporations, small and medium-sized companies and
individuals in branches located in the Federal Capital and Greater Buenos Aires
(where the relatively greater economic activity occurs).

Branches throughout the rest of the country: this segment includes the results
of operations with large corporations, small and medium-sized companies and
individuals in the branches located in the rest of the country.

Home office: includes the results of operations with customers (large
corporations, small and medium-sized companies and individuals) located in it,
as well as the results of operations with the national and provincial public
sectors.

Regional credit card companies: includes the results of the Bank's equity
interests in the regional credit card companies. At December 31, 2003 and 2002,
the Bank maintained, through its subsidiary Tarjetas Regionales S.A.,
controlling interests in Tarjeta Naranja S.A. (80%) in the province of Cordoba,
Tarjetas Cuyanas S.A. (60%) in the province of Mendoza, Tarjeta Comfiar (92%) in
the Province of Santa Fe, and Tarjetas del Mar (100% in 2003 and 2002,
respectively) in the Province of Buenos Aires.

                                      F-76

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


International: the results of operations conducted through Banco Galicia Uruguay
S.A., Banco de Galicia (Cayman) Ltd., the New York and Cayman branches, except
for the operations carried out with customers located in some of the regions
mentioned above.

Other financial business: This segment mainly includes the results of the
business of Galicia Capital Markets S.A., Galicia Valores S.A. Sociedad de
Bolsa, Agro Galicia S.A. and Galicia Factoring y Leasing S.A.

Other equity investments: Includes the results of the capital expenditures made
by the Bank as minority interest in a variety of infrastructure and public
utility service companies, such as Aguas Argentinas S.A., Correo Argentino S.A.,
Inversora Nihuiles S.A., Inversora Diamante S.A., etc.

Overhead and corporate adjustments: Includes the results of the operations that
can not be allocated to the segments above and the results of the operations
conducted between the aforementioned segments.

                                      F-77
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

The Group evaluates segment performance based on net income. The table below
shows the segment information for continuing operations for the fiscal years
ended December 31, 2003, 2002 and 2001:

                                  GRUPO GALICIA
<TABLE>
<CAPTION>
                                                  Buenos Aires    Rest of the
                                       Grupo      Metropolitan     Country                    Regional Credit   Interna-
 YEAR ENDED DECEMBER 31, 2003:        Galicia       Branches       Branches     Head Office       Cards         tional
--------------------------------      -------     ------------    ----------    -----------   ---------------  ---------
<S>                                   <C>         <C>             <C>           <C>           <C>              <C>
Net Financial Income                  (18,124)        60,872         49,962       (341,395)        55,456        186,504
Net Income from Services                    -        135,074         73,412         48,472        159,514            482
Provision for Loan Losses                   -         55,148         48,268        (40,434)        35,954        186,100
Monetary Results                       (1,126)             -              -        (13,257)             -              -
Operating Income                      (19,250)       140,798         75,106       (265,746)       179,016            886
Operating Expenses                      4,766        192,973        133,007         81,445        102,301         30,971
Monetary results of operating
 expenses                                   1              -              -             83              -              -
Other Income (Loss)                     3,885         12,858         13,079        267,023         (4,467)        65,707
Monetary results of other income            8              -              -          9,103           (592)           (16)
Minority Interest                           -              -              -              -        (22,219)         1,162
Pre-tax Income                        (20,122)       (39,317)       (44,822)       (70,982)        49,437         36,768
Income tax provision                       17              -              -              -              -              -
Net Income                            (20,139)       (39,317)       (44,822)       (70,982)        49,437         36,768
Foreign currency position
 compensation
 Net Income as a
 Percentage of Consolidated Net
 Income                                     9%            18%            21%            32%           (23%)          (17%)
Average Loans                               -        941,002        976,312        488,360        429,504      1,132,046
Average Deposits                            -      1,805,663      1,286,810      1,321,546              -        806,981

<CAPTION>
                                                                                               Overhead
                                                                                                 and
                                  Other Financial  Other Equity     Insurance  Other Group's  Corporate     Consolidated
 YEAR ENDED DECEMBER 31, 2003:       Businesses    Investments      Business    Businesses    Adjustments      Total
--------------------------------  ---------------  ------------     ---------  -------------  -----------   ------------
<S>                               <C>              <C>              <C>        <C>            <C>           <C>
Net Financial Income                   (3,313)              -         33,226        (672)       156,522        179,038
Net Income from Services                2,053               -         (3,103)      3,985        (58,490)       361,399
Provision for Loan Losses               1,392               -              -           -              -        286,428
Monetary Results                         (123)              -              -           -              -        (14,506)
Operating Income                       (2,775)              -         30,123       3,313         98,032        239,503
Operating Expenses                      4,529               -         15,564       5,226         (7,418)       563,364
Monetary results of operating
 expenses                                   -               -              -           -              -             84
Other Income (Loss)                   (23,378)        (11,958)       (10,203)     (3,632)      (188,503)       120,411
Monetary results of other income         (376)              -        (11,673)         29              -         (3,517)
Minority Interest                          34               -              1           -         11,436         (9,586)
Pre-tax Income                        (31,024)        (11,958)        (7,316)     (5,516)       (71,617)      (216,469)
Income tax provision                        -               -            573           -              -            590
Net Income                            (31,024)        (11,958)        (7,889)     (5,516)       (71,617)      (217,059)
Foreign currency position
 compensation
 Net Income as a
 Percentage of Consolidated Net
 Income                                    14%              6%             4%          3%            33%           100%
Average Loans                               -               -              -           -              -      3,967,224
Average Deposits                            -               -              -           -        (11,268)     5,209,732
</TABLE>

                                      F-78

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                Buenos Aires   Rest of the
                                    Grupo       Metropolitan     Country                    Regional Credit    Interna-
 YEAR ENDED DECEMBER 31, 2002:     Galicia       Branches        Branches    Head Office        Cards           tional
--------------------------------   --------     ------------    ----------   -----------    ---------------    ---------
<S>                                <C>          <C>            <C>           <C>            <C>               <C>
Net Financial Income                206,275          69,959         80,291     1,964,187          (17,248)    (1,521,688)
Net Income from Services                 (2)        149,467         83,456        (3,341)         143,045         (2,485)
Provision for Loan Losses                 -         238,834        249,845       822,151          105,770        231,942
Monetary Results                   (168,482)              -              -    (1,252,484)               -              -
Operating Income                     37,791         (19,408)       (86,098)     (113,789)          20,027     (1,756,115)
Operating Expenses                    7,130         198,983        140,679       380,298          113,537         74,834
Monetary results of
 operating Expenses                     229           5,608          3,964        11,200                -              -
Other Income (Loss)                  (2,817)          6,972          7,586      (607,376)         (57,631)       (88,348)
Monetary Results of other
 Income                                 403           1,579          1,479       115,919         (261,875)        (2,128)
Minority Interest                         -               -              -             -           77,089         73,033
Pre-tax Income                       28,476        (204,332)      (213,748)     (974,344)        (335,927)    (1,848,392)
Income tax provision                 59,244               -              -             -              397            685
Net Income                          (30,768)       (204,232)      (213,748)     (974,344)        (336,324)    (1,849,077)
Absorption of Losses                      -               -              -             -                -              -
Net Income                          (30,768)       (204,232)      (213,748)     (974,344)        (336,324)    (1,849,077)
Net Income as a percentage of
 Consolidated Net Income                  1%              7%             8%           34%              12%            65%
Average Loans                             -       1,825,997      1,698,762     9,186,731          315,175      2,235,743
Average Deposits                          -       2,068,766      1,399,324     3,200,220                -      2,289,351

<CAPTION>
                                                                                                    Overhead
                                                                                                       and
                                 Other Financial  Other Equity     Insurance     Other Group's      Corporate       Consolidated
YEAR ENDED DECEMBER 31, 2002:       Businesses     Investments      Business       Businesses      Adjustments          Total
------------------------------   ---------------  ------------     ---------     -------------     -----------      ------------
<S>                              <C>              <C>              <C>           <C>               <C>              <C>
Net Financial Income                    7,379              -         (45,179)         1,338           491,952          1,237,266
Net Income from Services                8,294              -          (5,639)         5,308            (2,717)           375,386
Provision for Loan Losses                  34              -               -              -                 -          1,648,576
Monetary Results                      (16,779)             -               -              -                 -         (1,437,745)
Operating Income                       (1,140)             -         (50,818)         6,646           489,235         (1,473,669)
Operating Expenses                     10,614              -          23,093          7,452            (9,106)           947,514
Monetary results of
 operating Expenses                         -              -               -              -                 -             21,001
Other Income (Loss)                    12,413        (51,143)         86,400         (4,636)          217,156           (481,424)
Monetary Results of other
 Income                                (1,336)             -         (14,703)        (2,428)                -           (163,090)
Minority Interest                        (133)             -              19              -           119,564            269,572
Pre-tax Income                           (810)       (51,143)         (2,195)        (7,870)          835,061         (2,775,124)
Income tax provision                    5,448              -               -            647                 -             66,421
Net Income                             (6,258)       (51,143)         (2,195)        (8,517)          835,061         (2,841,545)
Absorption of Losses                        -              -               -              -         1,370,034          1,370,034
Net Income                             (6,258)       (51,143)         (2,195)        (8,517)        2,205,095         (1,471,511)
Net Income as a percentage of
 Consolidated Net Income                    -              2%              -              -               (29%)              100%
Average Loans                               -              -               -              -                 -         15,262,408
Average Deposits                            -              -               -              -           (84,856)         8,872,805
</TABLE>

                                      F-79
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                Buenos Aires   Rest of the
                                    Grupo       Metropolitan     Country                    Regional Credit    Interna-
 YEAR ENDED DECEMBER 31, 2001:     Galicia       Branches        Branches    Head Office        Cards           tional
--------------------------------   --------     ------------    ----------   -----------    ---------------    ---------
<S>                                <C>          <C>            <C>           <C>            <C>                <C>
Net Financial Income                  1,177         475,432       301,543       806,448          111,355         147,720
Net Income from Services                 (4)        315,989       172,652        94,182          311,368          19,473
Provision for Loan Losses                 -         213,374       178,814       440,309          151,415          24,602
Operating Income                      1,173         578,047       295,381       460,321          271,308         142,591
Operating Expenses                    7,465         498,500       339,456       167,312          253,871          76,697
Other Income (Loss)                  (2,170)         29,493        50,009        22,037             (180)         22,005
Minority Interest                         -               -             -             -           (4,383)          3,975
Pre-tax Income                       (8,462)        109,040         5,934       315,046           12,874          91,874
Income tax provision                      -          44,408         2,416       128,306           21,994           2,126
Net Income                           (8,462)         64,632         3,518       186,740           (9,120)         89,748
Net Income as a percentage of
 Consolidated Net Income                 (3%)            24%            1%           71%              (4%)            34%
Average Loans                             -       4,024,465     3,655,436     9,146,485          932,477       2,243,302

Average Deposits                          -       7,943,033     5,010,525     4,570,454                -       1,187,852

<CAPTION>
                                                                                                    Overhead
                                                                                                       and
                                 Other Financial  Other Equity     Insurance     Other Group's      Corporate       Consolidated
YEAR ENDED DECEMBER 31, 2001:       Businesses     Investments      Business       Businesses      Adjustments          Total
------------------------------   ---------------  ------------     ---------     -------------     -----------      ------------
<S>                              <C>              <C>              <C>           <C>               <C>              <C>
Net Financial Income                     (634)             -          10,572            308          (393,254)         1,460,667
Net Income from Services               43,913              -         (10,251)         4,618            (9,237)           942,703
Provision for Loan Losses                   -              -               -              -                 -          1,008,514
Operating Income                       43,279              -             321          4,926          (402,491)         1,394,856
Operating Expenses                     29,672              -          20,486          6,104           (29,574)         1,369,989
Other Income (Loss)                     5,341         (3,281)         20,450           (531)          277,711            420,884
Minority Interest                        (249)             -             (99)            42           (21,445)           (22,159)
Pre-tax Income                         18,699         (3,281)            186         (1,667)         (116,651)           423,592
Income tax provision                    3,561              -               -            483           (44,242)           159,052
Net Income                             15,138         (3,281)            186         (2,150)          (72,409)           264,540
Net Income as a percentage of
 Consolidated Net Income                    6%            (1%)             -             (1%)             (27%)              100%
Average Loans                               -              -               -              -                 -         20,002,165

Average Deposits                            -              -               -              -           (98,627)        18,613,237
</TABLE>

                                      F-80

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

37. SUBSEQUENT EVENTS

- On January 30, 2004, the Argentine Central Bank released Communique "A" 4084
establishing a change of criterion for the valuation of assets delivered to the
public sector.

The most significant changes include the treatment applicable to assets
delivered as collateral for advances granted by the Argentine Central Bank for
the subscription of the bonds envisaged in sections 10, 11 and 12 of Decree No.
905/02. At the Bank's option, these assets may be excluded from the treatment
foreseen in Communique "A" 3911 described in Note 2. In this case, those assets
are to be recorded at the value admitted for purposes of the creation of
guarantees, under the terms of section 15 of the above-mentioned Decree and
Argentine Central Bank Communiques "A" 3717 and "A" 3756.

Communique "A" 4084 also contemplates that effective January 2004 past due and
unpaid instruments issued by the public sector are to be recorded at the lower
of the carrying value at March 31, 2004 or the value resulting from applying to
the face value of those instruments, net of retirements or of those converted
into tax options, as the case may be, the lower percentage resulting from
applying the net present value method to promissory notes and bonds issued by
the Fiduciary Fund for Provincial Development.

It has also been established that interest accrued since December 2001 on the
public debt instruments eligible for the sovereign debt restructuring agreement
must be derecognized.

The Bank has opted to value the assets used as collateral detailed below at the
value admitted for purposes of providing the collateral.

1) 579,902 (face value) secured bonds (BOGAR), issued within the framework of
Decree No. 1579/02 offered as collateral for the advance to be requested from
the Argentine Central Bank for the subscription of the hedge bond mentioned in
Note 1 and the exchange of deposits with the financial system, as established by
Decree No. 1836/2002;

2) 153,331 Series 75 (VBY4) Argentine Republic External Notes (face value) at
Badlar rate, and 127,141 Series 74 (VEY4) Argentine Republic External Notes
(face value) at Survey rate, offered as collateral for the advance to be
requested from the Argentine Central Bank for the subscription of the hedge bond

The analysis performed by the Bank showed that the adjustment mentioned in the
fourth paragraph of this Note, established in section 5 of Communique "A" 4084,
is not applicable for purposes of estimating the effects on the valuation of the
instruments mentioned in point 2) above.

- On January 2, 2004, the Ordinary and Extraordinary Meeting of Shareholders of
Grupo Financiero Galicia S. A. resolved to approve a capital increase for up to
Ps. 149,000, taking it to Ps.1,241,407 under the terms of section 188, paragraph
2, of the Commercial Companies Law. This capital increase was intended for the
acquisition or receipt as a contribution of subordinated negotiable obligations
for up to US$ 100,000, or other debt securities to be issued by Banco de Galicia
y Buenos Aires S.A., or other instruments representing receivables from the
Bank, to be issued in exchange for the latter's due and payable debt under the
terms of the restructuring of the foreign debt carried out by Banco de Galicia y
Buenos Aires S.A.

To make the Bank's foreign debt restructuring possible, the Group approved a
capital increase through the issuance of up to 149 million preferred shares,
each of them mandatorily convertible into one of class

                                      F-81

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

B shares on May 13, 2004, the first anniversary date of issuance (or, if
earlier, on the occurrence of a change of control of Grupo Galicia). As a result
of the exercises made by the existing shareholders in the preemptive rights
offering, creditors opting for the equity participation offer received 87.8
million preferred shares and US$ 30 million in cash and the Group received
approximately US$100 million of subordinated bonds in exchange for those shares
and cash. The controlling shareholders assigned part of their preemptive and
accretion rights to a trust established for the benefit of the Bank's creditors.

On May 18, 2004, the date of expiration of the period established for the
CER/CVS compensation, the Bank did not request to participate in such
compensation regime and made a new presentation before the Ministry of Economy
and the Argentine Central Bank, restating its right to be compensated for the
negative effects of the asymmetric indexation and formally challenging
Resolution No. 302/04 of the Ministry of Economy.

The Bank settled the restructuring of its foreign debt, on May 18, 2004 (See
note 1 - Situation of the Bank).

- As of May 18, 2004, maturities of the restructured debt of the Bank's head
office in Argentina and its cayman branch were as follows:

<TABLE>
<S>                                                             <C>
2004..........................................................  Ps.    45,145
2005..........................................................         32,246
2006..........................................................        145,212
2007..........................................................        290,425
2008..........................................................        290,425
2009..........................................................        290,425
Thereafter....................................................      2,697,805
                                                                -------------
                                                                Ps. 3,791,683
                                                                =============
</TABLE>

38. DIFFERENCES BETWEEN ARGENTINE CENTRAL BANK RULES AND PROFESSIONAL ACCOUNTING
STANDARDS

The Group's accounting policies and financial statement presentation generally
conform to the rules prescribed by the Argentine Central Bank which prescribes
the reporting and disclosure policies for all banks in Argentina.

These rules differ in certain respects from generally accepted accounting
principles in Argentina ("Argentine GAAP"). The rules of the Argentine Central
Bank allow for certain of the Bank's investments in government securities to be
carried at amortized cost, whereas Argentine GAAP, applicable to enterprises in
general, requires such securities to be accounted for at market value.

Effective January 1, 2003 the Consejo Profesional de Ciencias Economicas de la
Ciudad Autonoma de Buenos Aires (CPCECABA) issued Technical Pronouncements No.
16 to 21 and amended Technical Pronouncements No. 4 to 11 and No. 14. Those new
and amended pronouncements resulted in new differences between Argentine Central
Bank accounting rules and Argentine GAAP.

INVESTMENT SECURITIES

As of December 31, 2003 and 2002, the Group hads classified as investment
securities, the portion of its BODEN 2012, received in compensation from the
Argentine Central Bank. These securities are recorded at technical value and
increased on the basis of interest accrued under the relative terms and
conditions, and the balance in foreign currency is converted into pesos at the
reference exchange rate published by the Argentine Central Bank on the last
business day of the fiscal year. Under Argentine GAAP applicable

                                      F-82

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

to enterprises in general, these securities should be marked to market with the
resulting gain or loss reflected in the income statement. There has been limited
activity in the trading of these securities and as such, the quoted market
values may not represent the price of an actual sale between a willing buyer and
a willing seller.

COMPENSATION TO BE RECEIVED FROM THE NATIONAL GOVERNMENT

As of December 31, 2003, the Group has accounted for BODEN 2012, recognizing the
right to receive in compensation from the Argentine Central Bank, as
"Compensation to be Received from the National Government," under "Other
Receivables Resulting from Financial Brokerage". These assets are recorded at
technical value increased on the basis of interest accrued under the relative
terms and conditions, and the balance in foreign currency is converted into
pesos at the exchange rate published by the Argentine Central Bank on the last
business day of the fiscal year. In accordance with Law 25796, the Bank has
recorded the estimated amount of the compensation for the negative effects on
their equity derived from the application of the CER to deposits originally
denominated in foreign currency and converted to pesos, and from the application
of the CVS to certain loans under "Other Receivables Resulting from Financial
Brokerage". The Bank has recorded the estimated amount of the asset to be
received at technical value increased on the basis of interest accrued under the
relative terms and conditions. Under Argentine GAAP,these assets should be
accounted for at the market value of the securities to be received with the
resulting gain or loss reflected in the income statement. There has been limited
activity in the trading of these securities and as such, the quoted market
values may not represent the price of an actual sale between a willing buyer and
a willing seller.

SECURED LOANS

On November 6, 2001, the Group presented its offer in connection with the
exchange of Argentine government securities for secured loans, as established by
Decree No. 1387/01 issued by the Argentine government. The inception value of
the secured loans was determined taking into account the exchange ratio
established by the Ministry of Economy (face value plus interest accrued until
November 6, 2001, less coupons receivable until November 30, 2001), whereas the
securities delivered in exchange were written off at their book value, net of
the servicing of principal and interest receivable between November 6 and 30,
2001. Under Argentine GAAP, that exchange should be accounted for at the market
value of the securities exchanged with the resulting gain or loss reflected in
the income statement.(see description in note 2.3)

ACCOUNTING DISCLOSURE OF EFFECTS GENERATED BY COURT DECISIONS ON DEPOSITS

As of December 31, 2003, Grupo Financiero Galicia carries an asset for Ps.
166,218 (original value of US$ 192,799 net of accumulated amortization of US$
26,580) under "Intangible assets - Organization and development expenses", for
the differences resulting from compliance with court decisions on reimbursement
of deposits within the framework of Law No. 25,561, Decree No. 214/02 and
complementary rules, as established by Argentine Central Bank Communique "A"
3916, which is being amortized over 60 months. Under professional accounting
standards, such asset is to be recorded as a receivable and valued on the basis
of the best estimate of the amount recoverable.

CONVERSION OF FINANCIAL STATEMENTS

The conversion to pesos of the financial statements of foreign branches for
purposes of consolidation with the Bank's financial statements differs from
applicable professional accounting standards (Technical Pronouncement No. 18).
These standards require that:

                                      F-83

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

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

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

The application of this criterion, with the exception of point (a) above does
not have a significant impact on the Bank's financial statements.

ALLOWANCE FOR LOAN LOSSES - NON-FINANCIAL PUBLIC SECTOR

Under Argentine Central Bank rules, banks must maintain reserves for loan losses
in an amount appropriate to cover the risks underlying each bank, with exception
to the public sector. Under Argentine GAAP, these loans should be provisioned
according to the risk underlying this portfolio.

39. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ARGENTINE CENTRAL BANK RULES AND
UNITED STATES ACCOUNTING PRINCIPLES

The following is a description of the significant differences between Argentine
Banking GAAP and those applicable in the United States under generally accepted
accounting principles ("U.S. GAAP"). References below to "SFAS" are to United
States Statements of Financial Accounting Standards.

The differences below do not include the reversal of the adjustments to the
financial statements for the effects of inflation required under Argentine
Banking GAAP, as the application of inflation accounting represents a
comprehensive measure of the effects of price level changes in the Argentine
economy and as such, is considered a more meaningful presentation than
historical-based financial reporting for U.S. GAAP purposes.

a. INCOME TAX

Argentine Central Bank regulations do not require the recognition of deferred
tax assets and liabilities and therefore income taxes are recognized on the
basis of amounts due in accordance with Argentine tax regulations. This method
was applied to Banco Galicia. However, the Group and the Group's non-bank
subsidiaries applied the deferred income tax method. As a result, the Group's
non-bank subsidiaries recognized a deferred tax asset.

For the purposes of U.S. GAAP reporting, the Group applies SFAS No. 109
"Accounting for Income Taxes". Under this method, income taxes are recognized
based on the liability method whereby deferred tax assets and liabilities are
established for temporary differences between the financial reporting and tax
bases of the Group's assets and liabilities. Deferred tax assets are recognized
if it is more likely than not that such assets will be realized.

                                      F-84

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

Deferred tax assets (liabilities) are summarized as follows:

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31, 2003
                                                                 ----------------------------------------------------
                                                                   SFAS 109
                                                                  applied to     SFAS 109 applied
                                                                Argentine GAAP     to U.S. GAAP
                                                                   balances         adjustments          SFAS 109
                                                                --------------   ----------------     ---------------
<S>                                                             <C>              <C>                  <C>
Deferred tax assets
Allowance for loan losses - private sector....................          3,526             (21,029)            (17,503)
Allowance for loan losses - public sector.....................              -             611,965             611,965
Compensation and hedge bonds..................................       (881,190)            892,732              11,542
Impairment of intangible assets...............................              -               3,773               3,773
Liabilities...................................................         (7,911)                  -              (7,911)
Impairment of real estate properties..........................              -              23,016              23,016
Loss carry forward............................................        886,519                   -             886,519
Provision for contingencies...................................        161,210                   -             161,210
Other.........................................................        (11,756)            149,214             137,458
                                                                 ------------     ---------------     ---------------
Total gross deferred tax assets...............................   Ps.  150,398     Ps.   1,659,671     Ps.   1,810,069
Deferred tax liabilities:
Depreciation of fixed assets..................................   Ps.   18,891     Ps.           -     Ps.      18,891
Amortization of intangible assets.............................         25,508              (2,776)             22,732
                                                                 ------------     ---------------     ---------------
Total gross deferred tax liabilities..........................   Ps    44,399     Ps.      (2,776)    Ps.      41,623
                                                                 ------------     ---------------     ---------------
Net deferred income tax asset before valuation allowance .....   Ps.  194,797     Ps    1,656,895     Ps.   1,851,692
                                                                 ------------     ---------------     ---------------
Valuation allowance ..........................................       (156,445)         (1,656,895)         (1,813,340)
                                                                 ------------     ---------------     ---------------
Net deferred income tax.......................................   Ps.   38,352     Ps.           -     Ps.      38,352
                                                                 ------------     ---------------     ---------------
</TABLE>

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31, 2002
                                                                 ----------------------------------------------------
                                                                   SFAS 109
                                                                  applied to     SFAS 109 applied
                                                                Argentine GAAP     to U.S. GAAP
                                                                   balances         adjustments          SFAS 109
                                                                --------------   ----------------     ---------------
<S>                                                             <C>              <C>                  <C>
Deferred tax assets
Allowance for loan losses - private sector....................        294,369             (16,728)            277,641
Allowance for loan losses - public sector.....................              -             527,363             527,363
Compensation and hedge bonds..................................     (1,271,222)          1,472,173             200,951
Impairment of intangible assets...............................              -              10,888              10,888
Impairment of fixed assets and foreclosed assets..............              -              23,504              23,504
Liabilities...................................................         35,291                   -              35,291
Provision for contingencies...................................        128,941                   -             128,941
Other.........................................................         (9,321)             15,561               6,240
Loss carry forward............................................      1,230,668                   -           1,230,668
                                                                 ------------     ---------------     ---------------
Total gross deferred tax assets...............................   Ps.  408,726     Ps.   2,032,761     Ps.   2,441,487
Deferred tax liabilities:
Depreciation of fixed assets..................................   Ps.   (1,612)    Ps.           -     Ps.      (1,612)
Amortization of intangible assets ............................         (2,657)                (78)             (2,735)
Foreign exchange loss ........................................        (54,132)                  -             (54,132)
                                                                 ------------     ---------------     ---------------
Total gross deferred tax liabilities..........................   Ps.  (58,401)    Ps.         (78)    Ps.     (58,479)
                                                                 ------------     ---------------     ---------------
Net deferred income tax asset before valuation allowance .....   Ps.  350,325     Ps.   2,032,683     Ps.   2,383,008
                                                                 ------------     ---------------     ---------------
Valuation allowance...........................................       (404,457)         (2,032,683)         (2,437,140)
                                                                 ------------     ---------------     ---------------
Net deferred income tax.......................................   Ps.  (54,132)    Ps.           -     Ps.     (54,132)
                                                                 ------------     ---------------     ---------------
</TABLE>

                                      F-85

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31, 2001
                                                                -----------------------------------------------------
                                                                   SFAS 109
                                                                  applied to     SFAS 109 applied
                                                                Argentine GAAP     to U.S. GAAP
                                                                   balances         adjustments          SFAS 109
                                                                --------------   ----------------     ---------------
<S>                                                             <C>              <C>                  <C>
Deferred tax assets
Allowance for loan losses - private sector....................        102,410             337,946             440,356
Allowance for loan losses - public sector.....................              -           2,157,267           2,157,267
Amortization of intangible assets                                       9,274              37,291              46,565
Impairment of intangible assets...............................              -              34,493              34,493
Allowance for equity in other companies.......................              -              23,175              23,175
Foreign exchange loss.........................................              -             598,296             598,296
Liabilities...................................................         15,406                   -              15,406
Provision for contingencies...................................         23,132                   -              23,132
Other.........................................................         20,304              (1,665)             18,639
Loss carry forward............................................        235,471                   -             235,471
                                                                 ------------     ---------------     ---------------
Total gross deferred tax assets...............................   Ps.  405,997     Ps.   3,186,803     Ps.   3,592,800
Deferred tax liabilities:
Investments...................................................   Ps.  (51,889)    Ps.      57,534     Ps.       5,645
Depreciation of fixed assets..................................        (16,202)                  -             (16,202)
                                                                 ------------     ---------------     ---------------
Total gross deferred tax liabilities..........................   Ps.  (68,091)    Ps.      57,534     Ps.     (10,557)
                                                                 ------------     ---------------     ---------------
Net deferred income tax asset before valuation allowance .....   Ps.  337,906     Ps.   3,244,337     Ps.   3,582,243
                                                                 ------------     ---------------     ---------------
Valuation allowance...........................................       (337,906)         (3,244,337)         (3,582,243)
                                                                 ------------     ---------------     ---------------
Net deferred income tax.......................................   Ps.        -     Ps.           -     Ps.           -
                                                                 ------------     ---------------     ---------------
</TABLE>

The following table accounts for the difference between the actual tax provision
and the amounts obtained by applying the statutory income tax rate in Argentina
to income before income tax, calculated on the basis of U.S. GAAP for the years
ended December 31, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                      ----------------------------------------------
                                                                          2003            2002              2001
                                                                      ------------    -------------    -------------
<S>                                                                   <C>             <C>              <C>
Statutory 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.  242,530    Ps.   171,120    Ps.(2,948,886)
Tax exempt income..................................................       (827,978)      (1,249,801)        (469,426)
Reversal of deferred income taxes under U.S. GAAP..................              -                -            9,049
Reversal of deferred tax set-up under Argentine GAAP...............              -                -           44,869
Valuation allowance (1)............................................        623,800        1,145,103        3,582,243
Other..............................................................              -                -           (4,880)
                                                                      ------------    -------------    -------------
Actual tax provision under U.S. GAAP...............................   Ps.   38,352     Ps.   66,422    Ps.   212,969
                                                                      ============    =============    =============
</TABLE>

(1) Valuation Allowance: For the years ended 2002 and 2001, there was
substantial doubt of the Group's ability to continue as a going concern. For
the year ended 2003 the Group had significant accumulated tax losses and
uncertainties with respect to the generation of taxable income in the near term.
This situation constitutes significant negative evidence under FAS 109 as to the
realizability of deferred tax assets and thus, a valuation allowance would be
required for all deferred tax assets that are not assured of realization by
either (1) carryback to prior years or (2) reversal of existing taxable
temporary differences. For the years 2002 and 2001 the Group provided a full
reserve of its deferred tax assets after netting the future reversal of
temporary differences. Based on the Argentine Income Tax Law there

                                      F-86

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

are no provisions that allow the Company to carryback tax losses to prior years.
For the year ended 2003, the deferred tax asset of the credit card issuing
companies was not reserved due to the fact that those companies had started
generating income tax. Following the same principle above mentioned, the Group
fully reserved its PMIT carryforward.

b. COMMISSIONS ON LOANS

Under Argentine Banking GAAP, the Bank does not defer certain loan origination
costs relating to credit cards. In accordance with U.S. GAAP under SFAS 91, loan
origination fees net of certain direct loan origination costs should be
recognized over the life of the loan as an adjustment of yield.

c. INTANGIBLE ASSETS

Included in organization and development costs of the Bank are costs for
compensation and severance payments to Bank employees as part of restructurings.
These items are being amortized over 60 months. For U.S. GAAP purposes, these
costs are expensed as incurred.

The Bank amortizes deferred expenses for setting up branches over the related
lease agreements, a maximum of 60 months. Subsequent to the year ended June 30,
1999, in accordance with SOP 98-5 effective for fiscal years beginning after
December 15, 1998, such start-up costs should be expensed as incurred.

Goodwill recorded on the purchase of regional credit card companies is being
amortized in 10 years for Argentine Banking GAAP purposes. Before the issuance
of SFAS 142 under U.S. GAAP, a 5 year amortization period was elected to
represent the period benefited by the intangible asset in accordance with APB
17. For the purposes of U.S. GAAP, goodwill is reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Such evaluation is based on various analyses including
undiscounted cash flow projections that consider circumstances that occurred
subsequent to December 31, 2001. For the reconciliation to U.S. GAAP, the Group
has recorded an impairment of goodwill in its financial statements as of
December 31, 2001.

For fiscal years beginning after December 15, 2001, SFAS 142 supersedes APB 17.
This statement establishes that goodwill must no longer be amortized but rather
must be tested for impairment at least annually or whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Amortization expenses, under Argentine Banking GAAP have been
reversed for U.S. GAAP purposes.

Under U.S. GAAP SOP 98-1, effective for fiscal years beginning after December
15,1998, defines three stages for the costs of computer software developed or
obtained for internal use: the preliminary project stage, the application
development stage and the post-implementation operation stage. Only the second
stage costs should be capitalized. Under Argentine Banking GAAP, the Bank
capitalized costs relating to all three of the stages of software development.

Before the issuance of SAB 103, the Group, following the guidelines established
by article 202 of the Commercial Companies Law, has deducted from the Share
Issuance Premiums the organizational costs related to the exchange offer and the
issuance of shares conducted in July 2000. Under U.S. GAAP and following the
guidelines established by SAB 50, the organizational costs such as legal,
printing and other costs related to the exchange offer and the issuance of
shares are considered to be an intangible asset and a 5 year amortization period
was elected to represent the period benefited by the intangible asset. The audit
fees related to this these transactions have been expensed, in accordance with
U.S. GAAP.


                                      F-87

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

In May 2003, the SEC issued SAB 103 related to the appropiate accounting
treatment for costs incurred to register securities issued for the formation of
one-bank holding companies which supersed SAB 50. Under SAB 103 exchange offer
costs should be expensed as incurred as mentioned in SOP 98-5 "Reporting on the
Costs of Start-Up Activities". Therefore the remaining outstanding balance
related to the Exchange Offer costs have been expensed in the fiscal year ended
december 31, 2003.

d. LOAN LOSS RESERVES

The Bank's accounting for its loan loss reserve differs in some respects with
practices of U.S. based banks. The most significant differences follow:

      (i) LOAN CHARGE OFFS AND RECOVERIES

The Bank records recoveries on previously charged-off loans directly to income
and records the amount of charged-off loans in excess of amounts specifically
allocated as a direct charge to the income statement. The Bank does not
partially charge off troubled loans until final disposition of the loan, rather,
the allowance is maintained on a loan-by-loan basis for its estimated settlement
value. The banking industry practice in the United States is to account for all
charge off and recovery activity through the allowance for loan loss account.
Further, loans are generally charged to the allowance account when all or part
of the loan is considered uncollectible. In connection with loans in judicial
proceedings, resolution through the judicial system may span several years.
Loans in judicial proceedings, greater than three years at December 31, 2003,
2002 and 2001, amounted to Ps. 195,003, Ps. 323,104 and Ps. 335,431,
respectively. Under US GAAP purposes these loans were totally provisioned. The
Bank also classified loans, many of which are in judicial proceedings as
uncollectible, which amounted Ps.324,900, Ps. 198,200 and Ps. 217,500 as of
December 31, 2003, 2002 and 2001, respectively, as uncollectible, although the
Bank may hold preferred guarantees. Under U.S. GAAP these loans had been charged
off.Therefore the balance of loans and allowance for loan losses would be
decreased by these amounts. The Bank's practice does not affect the accompanying
statements of income as the Bank's reserve contemplates all losses inherent in
those troubled loans.

      (ii) LOANS - NON-FINANCIAL NATIONAL PUBLIC SECTOR

During the fiscal year ended December 31, 2001, and as a consequence of Decree
No. 1387/01, effective as of November 6, 2001, the Bank swapped part of its
Argentine public-sector debt instruments, under the Promissory Note/Bond
program, for secured loans.

As established by article 20 of the above mentioned decree, the conversion was
made at the nominal value, at a rate of exchange of Ps. 1.0 = US$ 1.0 and in the
same currency as that of the converted obligation.

The Argentine Central Bank provided that the difference between the nominal
value of the secured loans and the book value of the public-sector debt
instruments exchanged (in the case of securities, classified and valued as
"investment accounts" or "for trading purposes", under Argentine Central Bank
rules) must be credited to income and added to the recorded amount included in
"Loans - To the non-financial public sector" on a monthly basis, in proportion
to the term of each of the secured loans received.

In accordance with U.S. GAAP, specifically in the Emerging Issues Task Force No.
01-07 ("EITF 01-07"), satisfaction of one monetary asset (in this case a loan or
debt security) by the receipt of another monetary asset (in the case a secured
loan) for the creditor is generally based on the market value of the asset
received in satisfaction of the debt (an extinguishment). In this particular
case, the secured loan being received is significantly different in structure
and in interest rates than the debt securities

                                      F-88

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


swapped. Therefore, the fair value of the loans was determined on the balance
sheet date based on the contractual cash flows of the loan received discounted
at an estimated market rate. The estimated fair value of the loan received will
constitute the cost basis of the asset. Any difference between the old asset and
the fair value of the new asset is recognized as a gain or loss. The difference
between the cost basis and amounts expected to be collected will be amortized on
an effective yield basis over the life on the loan.

      (iii) LOANS / BONDS - NON-FINANCIAL PROVINCIAL PUBLIC SECTOR

As of December 31, 2002, the Group offered to exchange certain loans to
Argentine provincial governments for loans or securities of the Argentine
national government, however the exchange had not been finalized until 2003.
These loans were considered to be impaired under U.S. GAAP in accordance with
Statement of Financial Accounting Standards No. 114. Accordingly, the Group
established an allowance for loan losses on loans to Argentine provinces as of
December 31, 2002.

In 2003, the Bank tendered in the exchange under Decree No.1579/02 all of its
portfolio of loans to provincial governments and pursuant to the option provided
by section 3, subsection k of the Decree, opted to receive promissory notes and
therefore recorded in its balance sheet provincial secured loans, valued in
accordance with Argentine Central Bank Communique "A" 3911, in the amount of
Ps.3,473.7 million. This amount included Ps.22.0 million of a loan for which the
exchange was pending completion as of December 31, 2003. The Bank received BOGAR
for the provincial debt for which the exchange had been completed at the close
of the fiscal year, despite having opted to receive promissory notes. At the
date of these financial statements the Bank had not yet received the promissory
notes.

As of December 31, 2003 for U.S. GAAP purposes and in accordance with EITF
01-07, satisfaction of one monetary asset (in this case a loan) by the receipt
of another monetary asset (in this case BOGAR) from the creditor is generally
based on the market value of the asset received in satisfaction of the debt. In
this particular case, the BOGAR being received is significantly different in
structure and in interest rates than the loans swapped. Therefore, such amounts
should initially be recognized at their market value. The estimated fair value
of the securities received will consitute the cost basis of the asset. Any
difference between the old asset and the fair value of the new asset is
recognized as a gain or loss. The difference between the cost basis and the
amount expected to be collected will be amortized on an effective yield basis
over the life of the bond.

These BOGAR are classified by the Bank for US GAAP purposes, as available for
sale securities and subsequently recognized at market with the unrealized gain
or loss recognized as a charge or credit to equity through other comprehensive
income. In connection with estimating the fair value of the BOGAR, the Bank used
quoted market values. There has been limited activity in the trading of these
securities and as such, the quoted market values may not represent the actual
price in a sale between a willing buyer and a willing seller.

      (iv) IMPAIRED LOANS - NON-FINANCIAL PRIVATE SECTOR AND RESIDENTS ABROAD

For the purposes of reporting under U.S. GAAP, the Bank adopts Statement of
Accounting Standards No.114, "Accounting for Creditors for Impairment of a Loan"
("SFAS 114") as amended by Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures" ("SFAS 118"). SFAS 114, as amended, requires that the carrying
value of an impaired loan be based on the present value of expected future cash
flows discounted at the loan's effective interest rate or the fair value of the
collateral, if the loan is collateral dependent. Under SFAS 114, a loan is
considered impaired when, based on current information, it is probable that the
borrower will be unable to pay contractual interest or principal payments as
scheduled in the loan agreement.

                                      F-89

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


SFAS 114 applies to all loans except smaller-balance homogeneous consumer loans,
loans carried at fair value or the lower of cost or fair value, debt securities,
and leases.

The Bank applies SFAS 114 to all commercial loans classified as " With
problems", "Insolvency Risks" and "Uncollectible" or commercial loans more than
90 days past due. The Bank specifically calculates the present value of
estimated cash flows for commercial loans in excess of Ps.200,000 and more than
90 days past due. For commercial and other loans in legal proceedings, loans in
excess of Ps.200,000 are specifically reviewed either on a cash-flow or
collateral-value basis, both considering the estimated time to settle the
proceedings.

The following information relates to the Bank's impaired loans:

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                   ------------------------------------------------------
                                                                       2003               2002               2001
                                                                   --------------    ---------------    -----------------
<S>                                                                <C>               <C>                <C>
Total impaired loans............................................   Ps.  1,852,711    Ps.   2,231,097    Ps.   2,941,136

Average impaired loans during the year..........................        2,110,583          2,991,688          2,612,698

Total not impaired loans under US GAAP..........................           49,492            104,244                  -

Cash payments received for interest on impaired loans,
  Recognized as income..........................................            3,339              1,660              3,211

Allowance for impaired loans under SFAS 114.....................          953,767          1,031,492          1,282,773
</TABLE>

In addition, the Bank has performed a migration analysis for consumer loans and
all performing commercial loans following the SFAS 5 considerations, as detailed
in, "Loan loss reserves under U.S. GAAP", in the selected statistical
information.

As of December 2002, the result of the migration analysis, showed that the Bank
has provided for loan losses in excess of this analysis for Ps.112,976. For U.S.
GAAP purposes, this amount of provision has been reversed.

As of December 31, 2003 and 2001, the result of the migration analysis, shows
that the bank provided for loan losses towards the range established by the
analysis described above .

      (v) CREDIT CARD LOANS

The Group establishes its reserve for credit card loans based on the past due
status of the loan. All loans greater than 180 days have been reserved at 50%,
in accordance with the rules established by the Argentine Central Bank. Under
U.S. GAAP, loans greater than 180 days past due should be charged off. As a
result, under U.S. GAAP the charge offs of the credit card portfolio has been
increased as of December 31, 2003, 2002 and 2001, by Ps. 4,985 , Ps. 31,928 and
Ps. 71,613, respectively.

e. GOVERNMENT SECURITIES AND OTHER INVESTMENTS

      (i) INVESTMENT SECURITIES

The Bank's government securities and certain other securities that are included
under the caption "investment accounts" under Argentine Central Bank rules, are
considered as "available for sale" under U.S. GAAP.


                                      F-90

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

The gross gain on the sales of government securities considered as "available"
for sale" under U.S. GAAP amounted to Ps.2,091 for the fiscal year ended
December 31, 2001; and the gross losses on sales from government securities
classified as "available for sale" under U.S. GAAP amounted to Ps.(15) for the
fiscal year ended December 31, 2001.

As of December 31, 2003 and 2002 there were no sales of government securities
considered as "available for sale" under U.S. GAAP.

Argentine Republic External Notes

Under US GAAP, Argentine Republic External Notes are classified as available for
sale securities and recorded at market value, with the respective gain or loss
being charged to the results for the year or to equity through "Other
Comprehensive Income," depending on whether it represents an "other than
temporary decline" in their value or not. The Bank determined that the carrying
values as of December 31, 2002 and 2001 were a reasonable estimate of their
market values primarily from their ability and practice of offsetting amounts
against taxes, including value-added taxes.

Subsequently, during the fiscal year ended December 31, 2003, the national
government suspended the regime that granted taxpayers the possibility of
meeting their tax obligations with public debt securities. The Bank concluded
that these obligations were impaired and an other than temporaly loss amounting
to 378,996 was recognized.

In order to estimate fair value of these securities the Bank considered the
collateral value assigned to Argentine Republic External Notes by the Argentine
Central Bank for purposes of extending credit for the purchase of BODEN 2012.

      (ii) HEDGE BONDS ISSUED IN CONNECTION WITH THE COMPENSATION FOR FOREIGN
      CURRENCY POSITION, COMPENSATORY BONDS RECEIVED AND TO BE RECEIVED IN
      CONNECTION WITH THE COMPENSATION FOR "ASYMMETRIC PESIFICATION" AND
      COMPENSATION TO BE RECEIVED IN CONNECTION WITH THE ASYMMETRIC INDEXATION.

Argentine Central Bank's Communique "A" 3650 established the regulations
necessary to implement the provisions of Decree No.905/02 in connection with the
compensation of the negative effects of the conversion into pesos at different
exchange rates of financial institutions' assets and liabilities and the
resulting foreign currency mismatches left in their respective balance sheets.
The Bank informed the Central Bank in three communications each following the
applicable Communique issued by the Argentine Central Bank of the amount of
bonds it believed it was entitled to under rules issued by the Argentine Central
Bank (the last correspondence being January 2003). The amount of compensation so
determined amounted to US$ 1,021.8 million (compensatory bond) and US$1,232.2
million (hedge bond). The Argentine Central Bank deposited in October 2002
compensatory bonds in the amount of US$ 200.8 million to the account of the
Bank. The amount of the hedge bond to be subscribed and compensatory bonds not
received are included as "Other Receivables Resulting from Financial Brokerage -
Compensation to be Received from the National Government." In order to purchase
the subscribed hedge bond, the Bank may enter into a credit agreement with the
Argentine Central Bank, with interest payable at CER plus 2%. In the case of the
hedge bond and the related financing to be obtained from the Argentine Central
Bank, the transaction is retroactive to February 3, 2002. The Bank can withdraw
its request to purchase the hedge bonds prior to the approval of the Argentine
Central Bank and prior to the execution of the transaction.


                                      F-91

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


In connection with the Bank's right (but not the obligation) to purchase the
hedge bond, the Bank has recognized the right to purchase the hedge bond at
their equivalent value as if the Bank had the associated bonds in their
possession, and recognized the associated liability to fund the hedge bonds as
if the Bank had executed the debt agreement with the Argentine Central Bank. The
receivable is denominated in U.S. dollars bearing interest at Libor whereas the
liability to the Argentine Central Bank is denominated in pesos with interest
being accrued at CER plus 2%, each retroactive to February 3, 2002.

Under U.S. GAAP, the right to purchase the hedge bond is not considered an asset
under Financial Accounting Standards Board Statement of Concepts No,, 6 Elements
of Financial Statements (CON 6). Under CON 6, assets are defined as "...probable
future economic benefits obtained or controlled by an entity as a result of past
transactions or events". In addition, one of the three essential characteristics
of an asset include that an entity can obtain the benefit and controls others'
access to it. As of December 31, 2003, the Bank cannot obtain the benefit of the
hedge bond to be purchased until such time as the transaction becomes approved
by the Argentine Central Bank and the Bank remits funds to the Argentine Central
Bank. The liability under U.S. GAAP would be recognized when the Bank enters
into the financing arrangement.

In connection with the compensatory bonds received or receivable by the Bank,
such amounts should initially be recognized at their market value (limited to
the amounts of the loss suffered by the Bank in connection with the" asymmetric
pesification and asymmetric indexation"). Compensatory bonds in the Bank's
possession are classified as available for sale and are carried at estimated
market value with the unrealized gain or loss recognized as a charge or credit
to equity through other comprehensive income. In connection with estimating the
fair value of the compensatory bonds, the Bank used quoted market values. There
has been limited activity in the trading of these securities and as such, the
quoted market values may not represent the actual price in a sale between a
willing buyer and a willing seller.

Under US GAAP, the activity of the compensation bonds have been reflected in the
year results considering that the compensation bonds were adjusted to its market
value. The activity includes (1) the effect of the exchange rate between the
argentine pesos and the US dollars, (2) the cancellation of certain bonds
related to the disputes with the Central Bank and (3) the payments made in
satisfaction to the deposits held in Uruguay.

f. ITEMS IN PROCESS OF COLLECTION

The Bank does not give accounting recognition to checks drawn on the Bank or
other banks, or other items to be collected until such time as the related item
clears or is accepted. Such items are recorded by the Bank in memorandum
accounts. U.S. banks, however, account for such items through balance sheet
clearing accounts at the time the items are presented to the Bank.

The Group's assets and liabilities would be increased by approximately
Ps.598,544, Ps.480,774 and Ps.2,569,673, had U.S. GAAP been applied at December
31, 2003, 2002 and 2001, respectively.

g. DERIVATIVE INSTRUMENTS

Under Argentine Central Bank rules, the Bank accounts for derivatives in
memorandum accounts off the balance sheet.

Under U.S. GAAP, the Bank accounts for derivative financial instruments in
accordance with SFAS 133 as amended by SFAS 137, SFAS 138 and SFAS 149.


                                      F-92

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

SFAS No. 133 establishes the standards of accounting and reporting derivative
instruments, including certain derivative instruments instead within contracts
(collectively referred to as derivatives) and hedging activities. This Statement
requires institutions to recognize all derivatives in the balance sheet, whether
as assets or liabilities, and to measure those instruments at their fair value.
If certain conditions are met, a derivative may be specifically designated as
(a) a hedge for the exposure to changes in the fair value of a recorded asset or
liability or unrecorded firm commitment, (b) a hedge for the exposure. If such a
hedge designation is achieved then special hedge accounting can be applied for
the hedged transactions, that will reduce the volatility in the income statement
to the extent that the hedge is effective. In order for hedge accounting to be
applied the derivative and the hedged item must meet strict designation and
effectiveness tests.

As of December 31, 2001 the Group had not designated any of its derivatives as
fair value, cash flow or foreign currency hedges in accordance with the
provisions of SFAS 133. Therefore, under the provisions of SFAS 133, the
derivatives were accounted for at fair value in the balance sheet and the
unrealized gains and losses on those derivatives were accounted for in the
income statement.

As of December 31, 2002, the book value of the option contracts, is believed by
management to approximate fair value.

As of December 31, 2003, the Group has no derivative contracts under U.S. GAAP.
The written put options mentioned in note 30 to these financial statements are
considered a guarantee for U.S. GAAP purposes and it had been valuated under FIN
45. ( see note 30 and 39.p. )

h. FORWARD CONTRACTS IN FOREIGN CURRENCY

Apart from the valuation differences for derivative financial instruments that
have been discussed above the Bank accounts for forward foreign currency
contracts by recognizing a receivable and a payable for the currencies for which
it will make a gross settlement.

The Bank's assets and liabilities would be decreased by approximately Ps.138,
Ps.675 and Ps. 376,026 had U.S. GAAP been applied as of December 31, 2003, 2002
and 2001, respectively.

i. COMPENSATION RELATED TO THE PAYMENT OF DEPOSITS

Financial institutions have asked to the government that they be compensated for
the losses generated from the payment of deposits pursuant to judicial orders at
the free market exchange rate, which was greater than that established by the
government for conversion into pesos the financial institutions' assets and
liabilities.

Through Communique "A" 3916, the Argentine Central Bank allowed the recording of
an intangible asset for the difference between the amount paid by financial
institutions pursuant to judicial orders and the amount resulting from the
conversion into pesos of the dollar balance of the deposits reimbursed at the
Ps.1.40 per US dollar exchange rate (adjusted by CER and interest accrued until
the date of the reimbursement). The corresponding amount must be amortized over
60 months beginning April 2003. As of December 31, 2003, the amount recorded
under "Intangible Assets", net of accumulated amortization, was Ps.487,020. As
of December 31, 2002, this difference has been recorded under "Other Receivables
resulting from Financial Brokerage amounting to Ps.446,756.

As of the date of preparation of these financial statements, the Supreme Court
has not taken any measures to compensate for the relative issues.

                                      F-93

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


Under U.S. GAAP, the right to obtain this compensation is not considered an
asset under Financial Accounting Standards Board Statement of Concepts No. 6
Elements of Financial Statements (CON 6). Under CON 6, assets are defined as
"...probable future economic benefits obtained or controlled by an entity as a
result of past transactions or events". In addition, one of the three essential
characteristics of an asset include that an entity can obtain the benefit and
controls others' access to it. As of December 31, 2003, the Bank cannot obtain
the benefit of the compensation until such time as the compensation becomes
approved by the national government and the Argentine Central Bank.

j. TRANSFERS OF FINANCIAL ASSETS

Financial trust "Galtrust I"

The financial trust "Galtrust I" was created in October 2000 in connection with
the securitization of provincial loans for a total amount of Ps.1,102 million.
The securitized loans were from the portfolio of loans granted to provincial
governments, guaranteed by the federal tax revenues shared with the provincial
governments. This trust was recorded under Argentine Central Bank rules in the
"Other Receivables from Financial Brokerage", account in the financial
statements and its balance as of December 31, 2003, 2002 and 2001, was Ps.646
million, Ps.686 million and Ps.652 million, respectively. The Bank considers
this transaction as a sale under U.S. GAAP, in accordance with FAS 140. Galtrust
I debt securities and certificates retained by the Bank are considered as
"available for sale securities" under U.S. GAAP and the unrealized gains
(losses) on these securities are reported as an adjustment to shareholders'
equity, unless unrealized losses are deemed to be other than temporary in
accordance with Emerging Issues Task Force No. 99-20. The unrealized loss on the
retained interests at December 31, 2001 has been deemed to be other than
temporary and such loss has been charged to income. The retained interests were
initially recorded based on their allocated book value using the fair value
allocation method.

During 2002, the portfolio of loans included in and the related retained
interest in Galtrust I were subject to the pesification described in Note 1. As
a result the retained interest in the trust was converted to pesos at an
exchange rate of 1.40 to 1 and the interest rate for their debt securities
changed to CER plus 2%. During 2003 Galtrust I had swapped its provincial loans
for Secured Bonds (BOGAR). (See Note 39 d.iii)

For purposes of estimating the fair value of the retained interests in the
securitization trusts valuation models were used which consider certain
assumptions in estimating future cash flows and a rate under which the cash
flows are discounted.

The significant assumptions include:

Cumulative prepayment rate estimated based on the prepayment history of similar
loans. This rate was equivalent to 1.52% as of October 2000, December 31, 2000,
December 31, 2001 and December 2002.

As of December 31, 2001, there had been no experience of losses on these loans.
The credit risk reflected by the subordination of the B and C note was taken
into account in the discount rate applied by the Bank. The discount rates used
as of December 2003, 2002 and 2001 were as follows:


                                      F-94

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


<TABLE>
<CAPTION>
                                             DECEMBER 31,    DECEMBER 31,     DECEMBER 31,
                                                2003            2002             2001
      DISCOUNT RATE FOR:                        ----            ----             ----
<S>                                          <C>             <C>              <C>
Galtrust I Class B Debt Securities                11%(c)            7%(b)         39.2 %(a)
Galtrust I Participation Certificates           11.5%(c)            7%(b)         39.2 %(a)
</TABLE>

(a)   As of December 31, 2001, the rate is based upon the Bank's estimate of
      comparable rates of discount used in similar rated bonds in Argentina.

(b)   As of December 31, 2002, the discount real rate used is based on CER plus
      700 basis points (no similar bonds existed at December 31, 2002).

(c)   As of December 31, 2003, the rate is based upon the Bank's estimate of
      comparable internal rates of return of other CER-adjusted bonds.

As of December 31, 2003 , if the discount rate used above was to increase by 300
and 600 basic points the value of these securities would have decreased by
Ps.50,467 and Ps.88,383, respectively.

Financial trust "Galtrust II, III, IV, V" and "Galicia Mortgage Loans"

As described in Note 34 of the Group's financial statements, on December 17,
2001 and April 2002, the Bank entered into securitization transactions where the
Bank established five different trusts and transferred to the trusts ownership
of mortgage loans in exchange for debt securities and residual interests in the
trusts.

These transfers would not be considered as a sale for U.S. GAAP purposes. For
Argentine Banking GAAP purposes, these retained interests are accounted for at
cost plus accrued interest for the debt securities, and the equity method is
used to account for the residual interest in the trusts. For U.S. GAAP purposes,
these trusts would not qualify as "Qualified Special Purpose Entities" under
SFAS 140. Therefore, and following the guidelines of EITF Topic D-14 and EITF
90-15, these trusts should be reconsolidated. Accordingly, the Group value these
loans under SFAS 5, for purposes of determining its loan loss reserve.

On December 26, 2002 the "Galtrust III and IV" financial trusts were terminated,
and the loan portfolio of those trusts have been incorporated to the Bank's loan
portfolio. The Bank has performed a migration analysis for these consumer loans,
which shows that the book value is a reasonable estimate of it's fair value.

Financial Trust "Secured Loans"

As part of the implementation of the Galicia Capitalization and Liquidity Plan,
these "Secured Loans" trust was created. Under this trust, secured loans for Ps.
108,000 were transferred, and Ps.81,000 in cash and certificate of participation
for Ps. 27,000 were received in exchange.

This transfer would not be considered as a sale for US GAAP purposes. Under
Argentine Banking GAAP, the certificates of participation are accounted for by
the equity method. For US GAAP purposes, this trust would not qualify as
"Qualified Special Purpose Entity" under SFAS 140. Therefore, and following the
guidelines of EITF Topic D-14 and EITF 90-15, this trust should be
reconsolidated, at its book value before the transfer to the trust (see Note
39.d.(ii))

                                      F-95

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


k. ACCEPTANCES

Under Argentine Banking GAAP, acceptances are accounted for in memorandum
accounts. Under U.S. GAAP, third party liability for acceptances should be
included in "Other Receivables Resulting from Financial Brokerage" representing
Bank customers' liabilities on outstanding drafts or bills of exchange that have
been accepted by the Bank. Acceptances should be included in "Other Liabilities
Resulting from Financial Brokerage" representing the Bank's liability to remit
payment upon the presentation of the accepted drafts or bills of exchange.

The Group's assets and liabilities would be increased by approximately
Ps.22,354, Ps.105,760 and Ps.154,668, had U.S. GAAP been applied as of December
31, 2003, 2002 and 2001, respectively.

l. YEAR 2000 COSTS

Under Argentine Banking GAAP, costs related to the Year 2000 project have been
capitalized. Under U.S. GAAP costs relating to the Year 2000 project arising
from the modification of existing systems are expensed as incurred.

m. FOREIGN EXCHANGE DIFFERENCE

At December 31, 2001, the official exchange rate between the U.S. dollar and the
Argentine peso was 1 to 1 and for Argentine Banking GAAP purposes, this rate was
used to translate all U.S. dollar denominated assets and liabilities at December
31, 2001.

For U.S. GAAP purposes, foreign currency transactions should be translated at
the applicable rate at which those particular transactions could be settled at
the balance sheet date. In anticipation of an announced devaluation, "exchange
houses" in Argentina (used for limited personal transactions and not for
settling business transactions) started exchanging dollars at 1.4 or more pesos
to the dollar prior to December 31, 2001. Such exchange houses were closed at
December 31, 2001. Through January 10, 2002, no transactions were conducted in
U.S. dollars and there was no exchangeability between the peso and the dollar.
Under Statement of Accounting Standards No. 52, if the exchangeability between
two currencies is temporarily lacking at the balance sheet date, the first
subsequent rate at which exchanges could be made is used for translating foreign
currency transactions. In this case, the January 11, 2002, exchange rate of
Ps.1.6 = US$ 1.0 was the first available rate after year end and thus that rate
was used for U.S. GAAP purposes to translate U.S. dollar denominated assets and
liabilities at December 31, 2001.

In addition, the Group's equity holdings in Argentine companies were similarly
adjusted for its proportional effect of applying the Ps.1.6 = US$ 1 exchange
rate to the U.S. dollar denominated assets and liabilities of such companies at
December 31, 2001.

As of December 31, 2003 and 2002 under Argentine Banking GAAP, foreign currency
assets and liabilities are stated in pesos, using the U.S. dollar rate of
exchange set by the Argentine Central Bank prevailing at the close of operations
on the last business day of each month.

n. IMPAIRMENT OF REAL ESTATE PROPERTIES AND FORECLOSED ASSETS

In accordance with Statement of Accounting Standards No. 144, "Impairment of
Long-lived Assets", such assets are subject to: recognition of an impairment
loss if the carrying amounts of those assets are not

                                      F-96

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

recoverable from their undiscounted cash flows and an impairment loss measured
as the difference between the carrying amount and fair value of the assets.

The Group evaluates potencial impairment loss relating to long-lived assets by
comparing their unamortized carrying amounts with the undiscounted future
expected cash flows genereted by the assets over the remaining life of the
assets. If the sum of the expected future undiscounted cash flows is less than
the carrying amount of the asset, a loss is recognized for the difference
between the fair value and carrying value of the assets. Testing whether an
asset is impaired, and measuring the impairment loss is performed for asset
groupings at the lowest level for which there are indentifiable cash flow that
are largely independent of the cash flows generated by other asset groups.

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. In 2002,
the Group determined that the uncertainty of the Argentine economic situation
had a significant impact on the recoverability of its long-live assets and
evaluated its properties for impairment. An impairment loss was recorded in
2002.

Foreclosed assets are carried at the lower of cost or market. In 2002, the Group
recorded a valuation allowance reflecting a decrease in the market values of its
foreclosed properties.

In 2003, no additional impairment were recorded in real estate properties and
foreclosed assets. The amortization in 2003 of these assets impaired in 2002
under Argentine GAAP, has loan reversed for U.S. GAAP purposes.

o. EQUITY INVESTMENTS IN OTHER COMPANIES

Under Argentine Banking GAAP, the equity investments in controlled companies are
accounted for under the equity method. The remaining investments have been
accounted for under the cost method, taking their equity method value as a limit
in book value.

For U.S. GAAP purposes, under SAB 59, the Group should determine if any
indicators are present that may indicate the fair value of the investment has
been negatively impacted during the fiscal year. If it is determined that the
fair value of an investment is less than the related company's value, an
impairment of the investment must be recognized.

As of December 31, 2003, the Group evaluated their investments and determined
that the estimated fair value of certain investments was lower than the
respective book value. Furthermore, based on all available evidence the Group
concluded that the carrying amount of the investment will not be recoverable
within a reasonable period of time. As a consequence, the impairment was deemed
other than temporary.

p. GUARANTEES

Financial guarantee - Exchange of deposits with the financial system II

Pursuant to the decree 1836/02 and the Argentine Central Bank communique "A"
3828, the Bank entered into and exchange offer to exchange restructured deposit
certificates ("RDC") for BODEN 2005, 2006, 2012 and 2013. The BODEN offered to
the holders of the RDC are unsecured government bonds denominated in US dollars.
As a part of the restructuring, the Bank offered to guarantee the payment of the
BODEN to the holders of the RDC at a price equal to Ps 1.40 per US dollar
adjusted by applying the accumulated CER from February 3, 2002 to the expiration
date of the BODEN. The price cannot exceed the Argentine pesos per US dollar
free exchange rate at the expiration date of the BODEN.

                                      F-97

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


Other Financial Guarantees

During 2003 the Company entered into different agreements to guarantee lines of
credit of customers amounting to Ps. 222,324. The Bank guarantees the quarterly
amortization of the debt. As of December 31, 2003 guarantees granted by the Bank
amounted to Ps. 44,395.

As of December 31, 2003, the Group maintains the following guarantees:

<TABLE>
<CAPTION>
                                                                          ESTIMATED
                                                       MAXIMUM            PROCEEDS         CARRYING
                                                      POTENTIAL        FROM COLLATERAL      AMOUNT
                                                      PAYMENTS            RECOURSE         LIABILITY
                                                     -----------       ---------------    ------------
<S>                                                  <C>               <C>                <C>
Exchange of deposits with the financial system II    Ps. 165,411                  -       Ps.   69,668
Other Financial guarantees                           Ps.  44,395         Ps.  3,040       Ps.   11,742
                                                     -----------         ----------       ------------
                                                     Ps. 209,806         Ps.  3,040       Ps.   81,410
                                                     ===========         ==========       ============
</TABLE>

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.

Under Argentine Banking GAAP, the Bank provisioned the guarantees that are
probable to be honored. The amount provided under Argentine GAAP amounted to Ps.
9,651.

Under US GAAP, effective January 1, 2003 the Bank adopted FASB interpretation
No. 45 "Guarantor's Accounting and Disclosures Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others". As of December 31,
2003, the Bank recognized a liability for the fair value of the obligations
assumed. The additional amount to be recognized for US GAAP amounted to
Ps.71,759.

q. MINORITY INTEREST

The minority interest represents the effect of the US GAAP adjustments in the
Group,s consolidated subsidiaries. For US GAAP purposes the shareholders' equity
is negative. Therefore, the effect of the US GAAP adjustments related to the
minority interest is recognized up to the amount reflected in minority interest
for Argentine Banking GAAP.

FINANCIAL ASSISTANCE GRANTED BY THE ARGENTINE CENTRAL BANK

In connection with liquidity crisis in Argentina, the Argentine Central Bank
loaned Banco Galicia approximately 5.4 billion pesos at December 31, 2002. This
loan was renewed monthly, with interest payable based on 64% of the 30-day Lebac
rate (short term government rate).

In March, 2003, the Argentine Central Bank, granted a voluntary restructuring
plan whereupon financial institutions could extend the due date of the debt for
a period of 70 months. In addition, the interest rate on outstanding debt
automatically became CER (equivalent to the consumer price index) plus 3.5%
whether or not a financial institution participated in the restructuring. The
requirements to be eligible for maturity extension was that the financial
institution identified and pledged collateral that matched the cash requirements
of the outstanding loan and that the financial institution before July 31, 2003,
present their foreign debt restructuring proposal to the Central Bank. Each of
these submissions must be

                                      F-98

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


approved by the Central Bank. Subsequently, the Argentine Central Bank amended
the restructuring plan that allowed the maturity date to extend up to 120
months, subject again to providing acceptable collateral that matched the cash
requirements of the outstanding loan and that the financial institution present
their foreign debt restructuring proposal be updated. Each of these actions had
to be approved by the Central Bank to become effective.

On November 28, 2003, the Financial System's Restructuring Unit (Unidad de
Reestructuracion del Sistema Financiero, ), the regulatory body responsible for
restructuring the Argentine financial system post crisis, informed the Bank that
it had authorized the Argentine Central Bank to extend the maturity of the
Bank's debt with the Argentine Central Bank for liquidity support by up to 120
monthly installments in accordance with the repayment schedule presented by the
Bank to the Argentine Central Bank and under the provisions of Decree No.
1262/03.

On December 3, 2003, the Argentine Central Bank informed the Bank that, through
its Resolution No. 460/03, the Board of Directors of the Argentine Central Bank
had approved the terms and conditions of the proposed restructuring of the head
office's and the Cayman Branch's foreign debt.

On February 3, 2004, the Argentine Central Bank informed the Bank that it had
approved the request made by the Bank under Decree No.739/03, and modified by
Decree No.1262/03, for the repayment of the debt for liquidity support under the
terms proposed by the Bank over a 92 month period. Therefore, the schedule to
repay the debt in 92 monthly installments began March 2004.

For US GAAP purposes the accounting for this transaction is effective with the
approval by the Central Bank on February 3, 2004. The Bank's schedule comprises
the repayment of the debt in 92 monthly installments beginning in March 2004,
with a fixed annual interest rate of 3.5%.

Although this is a 2004 transaction, based on facts and circumstances the
financial assistance granted by the Argentine Central Bank was deemed to be a
non trouble debt restructuring since there are no concessions granted to the
Bank based on the guidelines established by the EITF 02-4 and FAS 15.
Accordingly, the Bank followed EITF 96-19 and is presently evaluating the impact
of the restructuring under U.S. GAAP.

Under Argentine Banking GAAP the restructuring was accounted for the period
ended December 31, 2003 and no gain or loss was recognized in the transaction.

RESTRUCTURING OF THE FOREIGN DEBT

On May 18, 2004, the restructuring of the foreign debt of the Bank's head office
and of its Cayman Branch was completed. At the expiration date of the exchange
offer made by the Bank to carry out the restructuring, the aggregate principal
amount of the Bank's debt subject to the restructuring amounted to US$1,344.7
million. The Bank offered different options to restructure its debt including
the payment of cash, the exchange of BODEN as full consideration of debt, the
issuance of new debt with different features and maturities and the issuance of
shares. Management is presently evaluating the impact of the restructuring under
US GAAP.
                                      F-99

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)



CONSOLIDATED NET INCOME

<TABLE>
<CAPTION>
                                                                                                      DECEMBER 31,
                                                                                 --------------------------------------------------
                                                                                      2003               2002             2001
                                                                                 --------------     ---------------   -------------
<S>                                                                              <C>                <C>               <C>
Net income as stated..........................................................   Ps.   (217,059)    Ps.  (1,471,511)  Ps.   264,540
Loan origination fees and costs:
   Credit card costs (Note 39b.)..............................................              (46)            (11,257)          3,660
Intangible assets(Note 39c.):
   Capitalized costs for compensation to Bank employees.......................                -                   -             302
   Amortization of deferred expenses for setting up of branches...............            9,290              31,747          11,525
   Goodwill amortization......................................................           32,701              34,108         (18,111)
   Goodwill impairment........................................................            4,705              67,443         (98,552)
Year 2000 costs (Note 39l.)...................................................           17,288               3,006           3,006
Software costs (Note 39c.)....................................................            2,285               6,709          (1,574)
Equity investments in other companies - Impairment (Note 39o.)................          (37,879)                  -               -
Loss on exchange of National Public Debt (Note 39d(ii)).......................          176,778           2,040,693      (3,359,413)
Provincial  Public Debt (Note 39d(iii)).......................................         (344,900)            986,584      (2,243,571)
Loan impairment - private sector (Note 39d(iv))...............................          (14,652)            973,665        (871,853)
Loan impairment - credit cards (Note 39d(v)) .................................           26,943              39,685         (71,613)
Derivative instruments (Note 39g).............................................                -                (945)        (17,317)
Amortization of organization costs on exchange offer (Note 39c)...............           15,433              (4,687)         (4,687)
Organization costs related to the exchange offer (Note 39c)...................           24,804)                  -               -
Impairment / loss on available for Sale securities (Note 39j).................                -             303,983        (559,859)
Government Securities:
  Compensatory Bond  received (Note 39e(ii))..................................         (305,832)           (381,716)              -
  Compensatory Bond to be received (Note 39e(ii)).............................        1,250,872          (1,587,482)              -
  Hedge Bond (Note 39e(ii))...................................................          616,258          (1,769,948)              -
  Compensation related to the payment of deposits (Note 39i)..................          (40,264)           (446,756)              -
Impairment of other available for sale Securities (Note 39e(i)) ..............         (377,867)                  -               -
Foreign exchange difference (Note 39m)........................................                -           1,709,414      (1,709,414)
Foreign exchange difference in equity investments in other companies
 (Note 39m.)..................................................................                -              67,472         (67,472)
Impairment of real estate properties  and foreclosed assets (Note
 39n.)........................................................................                -             (67,155)              -
Real estate properties asset amortization (Note 39n.).........................            1,395                   -               -
Recognition for the fair value of obligations assumed under Financial
 guarantee issued (Note 39p)..................................................          (71,759)                  -               -
Reversal of deferred taxes under Argentine GAAP (Note 39a)....................           38,942                   -         (44,869)
Deferred taxes, net (Note 39a)................................................                -                   -          (9,049)
Presumptive minimum income tax (Note 39a).....................................          (38,663)            (11,804)              -
Minority interest (Note 39q)..................................................           12,131             (88,756)        155,970
                                                                                 --------------     ---------------   -------------
Net income (loss) in accordance with U.S. GAAP................................          731,296             422,492      (8,638,351)
Basic net income (loss) per share in accordance with U.S. GAAP (Note 24)......            0.669               0.387          (7.908)
Average number of shares outstanding (in thousands) (Note 24).................        1,092,407           1,092,407       1,092,407
Diluted net income (loss) per share in accordance with U.S. GAAP (Note 24)....            0.669               0.387          (7.908)
                                                                                 --------------     ---------------   -------------
</TABLE>

                                      F-100

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

CONSOLIDATED SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                      DECEMBER 31,
                                                                                 --------------------------------------------------
                                                                                      2003               2002             2001
                                                                                 --------------     ---------------   -------------
<S>                                                                              <C>                <C>               <C>
Shareholders' equity as stated................................................   Ps   1,462,337     Ps.   1,638,637   Ps. 3,103,570
Loan origination fees and costs (Note 39b.)...................................            1,755               1,801          13,058
Intangible assets (Note 39c.):
  Amortization of deferred expenses for setting up of branches................          (13,122)            (22,412)        (54,159)
  Goodwill amortization.......................................................            7,930             (24,771)        (43,254)
  Goodwill impairment.........................................................          (10,779)            (15,484)        (98,552)
  Software costs..............................................................             (141)             (2,426)         (9,136)
Equity investments in other companies - Impairment (Note 39o.)................          (37,879)                  -               -
Loss on exchange of National Public Debt(Note 39d(ii))........................       (1,141,943)         (1,318,721)     (3,359,413)
Provincial Public Debt (Note 39d(iii))........................................       (1,357,163)         (1,256,987)     (2,243,571)
Loan impairment - private sector (Note 39d(iv))...............................           65,068              79,720        (893,945)
Loan impairment - credit cards (Note 39d(v))..................................           (4,985)            (31,928)        (71,613)
Government securities:
  Compensatory Bond received (Note 39e(ii))...................................         (573,342)           (402,021)              -
  Compensatory Bond to be received (Note 39e(ii)).............................         (336,610)         (1,587,482)              -
  Hedge Bond (Note 39e(ii))...................................................       (1,153,690)         (1,769,948)              -
  Compensation related to the payment of deposits (Note 39i.).................         (487,020)           (446,756)              -
 Impairment of  available-for-sale securities (Note 39e(i))...................         (378,996)             (1,129)              -
Derivative instruments (Note 39g).............................................                -                   -             945
Amortization of organization costs related to the exchange offer (Note 39c) ..                -             (15,433)        (10,746)
Organization costs related to the exchange offer (Note 39c)...................                -              24,804          24,804
Unrealized gain or loss on Galtrust I securities (Note 39j)...................         (391,308)           (249,764)       (560,634)
Unrealized gain or loss on Galtrust II, III, IV, V securities (Note 39j)......                -                   -         (57,534)
Minority interest (Note 39q)..................................................           95,937              83,806         172,562
Year 2000 costs (Note 39l)....................................................           (3,005)            (20,293)        (23,299)
Foreign exchange difference (Note 39m)........................................                -                   -      (1,709,414)
Foreign exchange in Equity (Note 39m) ........................................                -                   -         (67,472)
Impairment of real estate properties and foreclosed assets (Note 39n).........          (67,155)            (67,155)              -
Real Estate properties amortization (Note 39(n))..............................            1,395                   -               -
Presumptive minimum income tax (Note 39a) ....................................          (50,467)            (11,804)              -
Recognition for the fair value of obligations assumed under Financial
 guarantees issued (Note 39p).................................................          (71,759)                  -               -
Deffered Income tax of credit card companies ( Note 39a.).....................           38,942                   -               -
Prior income tax adjustments (Note 39a).......................................          (47,336)             (6,577)              -
                                                                                 --------------     ---------------   -------------
Consolidated shareholders' equity (deficit) in accordance with U.S. GAAP......   Ps  (4,453,336)    Ps.  (5,422,323)  Ps.(5,887,803)
                                                                                 ==============     ===============   =============
</TABLE>

                                      F-101

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

Roll forward analysis of shareholders' equity under U.S. GAAP at December 31,
2003, 2002 and 2001:

                                  GRUPO GALICIA

<TABLE>
<CAPTION>


                                                                                 ADJUSTMENTS
                                                                                     TO             PROFIT RESERVES
                                                     CAPITAL          PAID      SHAREHOLDERS'   ------------------------
                                                      STOCK        IN CAPITAL      EQUITY         LEGAL         OTHER
                                                   -------------   ----------   -------------   ----------   -----------
<S>                                                <C>             <C>          <C>             <C>          <C>
Balance at December 31, 2000....................   Ps. 1,092,407   Ps. 86,568   Ps. 1,418,854   Ps.  1,961   Ps.  40,630
                                                   =============   ==========   =============   ==========   ===========

Distribution of retained earnings:
Legal reserve...................................               -            -               -       14,305             -
Reserve provided by the By-Laws.................               -            -               -            -       198,311
Cash dividends..................................               -            -               -            -             -
Unrealized appreciation of available-for-
  sale securities, net of tax and minority
  interest......................................               -            -               -            -             -
Net loss for the year under U.S. GAAP...........               -            -               -            -             -
                                                   -------------   ----------   -------------   ----------   -----------
Balance at December 31, 2001....................   Ps. 1,092,407   Ps. 86,568   Ps. 1,418,854   Ps. 16,266   Ps. 238,941
                                                   =============   ==========   =============   ==========   ===========

Distribution of retained earnings:
Legal reserve...................................               -            -               -       13,227             -
Reserve provided by the By-Laws.................               -            -               -            -       253,398
Unrealized appreciation of available-for-sale
  securities, net of minority interest..........               -            -               -            -             -
Net income for the year under U.S. GAAP.........               -            -               -            -             -
                                                   -------------   ----------   -------------   ----------   -----------
Balance at December 31, 2002....................   Ps. 1,092,407   Ps. 86,568   Ps. 1,418,854   Ps. 29,493   Ps. 492,339
                                                   =============   ==========   =============   ==========   ===========

Distribution of retained earnings:
Unrealized appreciation of available-for-sale
  securities, net of tax and minority interest..               -            -               -            -             -
Absorption approved by the shareholders
  meeting on April 23, 2003.....................                                                                (492,339)
Net income for the year under U.S. GAAP.........               -            -               -            -             -
                                                   -------------   ----------   -------------   ----------   -----------
Balance at December 31, 2003....................   Ps. 1,092,407   Ps. 86,568   Ps. 1,418,854   Ps. 29,493   Ps.       -
                                                   =============   ==========   =============   ==========   ===========

<CAPTION>
                                                           OTHER                            TOTAL
                                                        COMPREHENSIVE     RETAINED       SHAREHOLDERS'
                                                        INCOME (LOSS)     EARNINGS          EQUITY
                                                        -------------  --------------    --------------
<S>                                                     <C>            <C>               <C>
Balance at December 31, 2000....................        Ps. (187,392)  Ps.    239,034    Ps.  2,692,062
                                                        ============   ==============    ==============

Distribution of retained earnings:
Legal reserve...................................                   -          (14,305)                -
Reserve provided by the By-Laws.................                   -         (198,311)                -
Cash dividends..................................                   -          (71,370)          (71,370)
Unrealized appreciation of available-for-
  sale securities, net of tax and minority
  interest......................................             129,856                -           129,856
Net loss for the year under U.S. GAAP...........                   -       (8,638,351)       (8,638,351)
                                                        ------------   --------------    --------------
Balance at December 31, 2001....................         Ps. (57,536)  Ps. (8,683,303)   Ps. (5,887,803)
                                                        ============   ==============    ==============

Distribution of retained earnings:
Legal reserve...................................                   -          (13,227)                -
Reserve provided by the By-Laws.................                   -         (253,398)                -
Unrealized appreciation of available-for-sale
  securities, net of minority interest..........              42,988                -            42,988
Net income for the year under U.S. GAAP.........                   -          422,492           422,492
                                                        ------------   --------------    --------------
Balance at December 31, 2002....................         Ps. (14,548)  Ps. (8,527,436)   Ps. (5,422,323)
                                                        ============   ==============    ==============

Distribution of retained earnings:
Unrealized appreciation of available-for-sale
  securities, net of tax and minority
  interest......................................             237,691                -           237,691
Absorption approved by the shareholders
meeting on April 23 ,2003                                          -          492,339                 -
Net income for the year under U.S. GAAP.........                   -          731,296           731,296
                                                        ------------   --------------    --------------
Balance at December 31, 2003....................         Ps. 223,143   Ps. (7,303,801)   Ps. (4,453,336)
                                                        ============   ==============    ==============
</TABLE>

COMPREHENSIVE INCOME

SFAS 130 "Reporting Comprehensive Income" establishes standards for reporting
and the display of comprehensive income and its components (revenues, expenses,
gains and losses) in the financial statements. Comprehensive income is the total
of net income and all transactions, and other events and circumstances from
nonowner sources.

The following disclosure presented for the fiscal years ended December 31, 2003,
2002 and 2001, shows all periods restated to conform with SFAS 130.

                                      F-102

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

<TABLE>
<CAPTION>
                                                                               DECEMBER 31,
                                                            --------------------------------------------------
                                                                 2003             2002              2001
                                                            -------------     -------------     --------------
<S>                                                         <C>               <C>               <C>
INCOME STATEMENT

Financial Income........................................    Ps. 2,752,014     Ps. 3,983,096     Ps.  3,569,476
Financial Expenditures..................................        1,502,904         4,560,405          2,125,354
Net Financial Income....................................        1,249,110          (577,309)         1,444,122
Provision for Loan Losses...............................          274,550           928,855          6,370,913
Income from Services....................................          431,695           511,848          1,160,456
Expenditures from Services..............................           70,358           140,640            214,093
Monetary result of financial brokerage..................          (68,840)        2,887,239                  -
Administrative Expenses.................................          541,954         1,017,223          1,478,081
Monetary result of operating expenses...................             (439)           60,331                  -
Net Income (Loss) from Financial Brokerage..............          724,664           795,391         (5,458,509)
Minority Interests......................................            2,545           180,815            133,809
Miscellaneous Income....................................          719,207           291,407            661,975
Miscellaneous Losses....................................          745,644           729,082          3,762,657
Monetary results of other operations....................           (7,828)          (49,617)                 -
Net Income (Loss) before Income tax.....................          692,944           488,914         (8,425,382)
Income Tax..............................................           38,352           (66,422)          (212,969)
                                                            -------------     -------------     --------------
NET INCOME (LOSS) UNDER U.S. GAAP.......................          731,296           422,492         (8,638,351)
                                                            -------------     -------------     --------------
Other comprehensive income (loss):

    Unrealized gains (losses) on securities.............          237,691            42,988            129,856
                                                            -------------     -------------     --------------
OTHER COMPREHENSIVE INCOME (LOSS) ......................          237,691            42,988            129,856
                                                            -------------     -------------     --------------

COMPREHENSIVE INCOME (LOSS).............................    Ps.   968,987     Ps.   465,480     Ps. (8,508,495)
                                                            =============     =============     ==============
</TABLE>

EITF 03-01 "DISCLOSURE FOR INVESTMENTS IN AN UNREALIZED LOSS POSITION THAT ARE
NOT OTHER-THAN-TEMPORARY IMPAIRED"

The following table shows the Bank's investments' gross unrealized losses and
fair value, aggregated by available for sale categories and length of time that
individual securities have been in a continuous unrealized loss position, at
December 31, 2003.

<TABLE>
<CAPTION>
                                 LESS THAN 12 MONTHS                12 MONTHS OR MORE                        TOTAL
                                 -------------------                -----------------                        -----
Description of Securities    Fair Value   Unrealized Losses    Fair Value     Unrealized Losses    Fair Value     Unrealized Losses
-------------------------    ----------   -----------------    ----------     -----------------    ----------     -----------------
<S>                          <C>          <C>                  <C>            <C>                  <C>            <C>
       Galtrust I                -               -             Ps. 254,835      Ps. (134,657)      Ps. 254,835       Ps. (134,657)
</TABLE>

The Galtrust I securities represents debt securities and trust certificates
relating to the Bank's ownership in Galtrust I. The Bank estimates the market
value of these securities using a discounted cash flow analysis as quoted market
prices are not available.

                                     F-103

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

CONCENTRATION OF RISK - TOTAL EXPOSURE TO THE PUBLIC SECTOR - ARGENTINE
GOVERNMENT AND PROVINCES

The Group has significant exposure to the Argentine national government and
provinces in the form of government securities, secured loans and other debt
obligations. As of December 31, 2003 and 2002, the Group had the following loans
outstanding:

<TABLE>
<CAPTION>
                                                          DECEMBER 31, 2003                   DECEMBER 31, 2002
                                                  -------------------------------      ---------------------------------
                                                    ARGENTINE                            ARGENTINE
                                                     BANKING                              BANKING
                                                      GAAP           U.S. GAAP              GAAP             U.S. GAAP
                                                  --------------    -------------      --------------      -------------
<S>                                               <C>               <C>                <C>                 <C>
Argentine national government loans               Ps.  4,517,328    Ps. 3,472,063      Ps.  4,014,031      Ps. 2,763,396

Argentine provincial debt                              3,473,661        2,116,498           3,810,484          2,553,496

Other Argentine public-sector receivables                471,844          375,166             397,390            329,305

Galtrust I (securitization of Provincial Loans)          646,143          254,835             686,160            436,396

Compensatory bond received                             1,609,982        1,036,640             693,471            291,450

Bonds to be received (1) (2)                           4,732,300          525,854           7,098,505          1,251,211

Compensation to be received
related to the payment of deposits                       487,020                -             446,756                  -

Other (3)                                              1,288,375          909,379           1,132,579          1,131,450
                                                  --------------    -------------      --------------      -------------
Total                                             Ps. 17,226,673    Ps. 8,690,435      Ps. 18,279,376      Ps. 8,756,705
                                                  ==============    =============      ==============      =============
</TABLE>

(1)   The advance to be requested from the Argentine Central Bank for the
      subscription of the hedge bond, was recorded in "Other Liabilities
      Resulting from Financial Brokerage - Other", for Ps.2,536,146 plus the
      contingent liability mentioned in Note 12(e) as of December 31, 2003. The
      above mentioned advance was Ps. 2.489.864 as of December 31, 2002. Under
      U.S.GAAP, the hedge bond and that advance have been eliminated.

(2)   Includes the compensatory bond to be received related to the asymetric
      pesification and indexation and the hedge bond, net of unfavorable effects
      on resolution of matters challenged by the Argentine Central Bank, which
      are in process.

(3)   Includes bonds such as Fiscal Credit Certificates, Argentine Republic
      External Notes and national government bonds.

RISKS AND UNCERTAINTIES

The prospects of the Argentine economy and exchange markets that existed at the
end of 2001 were widely uncertain. The increasing public sector deficit, the
contracting economy and rumors and predictions that Argentina was abandoning the
one-to-one currency parity policy, as well as the impending default on the
country's external obligations, contributed to a great uncertainty as to the
future of Argentina and its economy. Significant measures were put in place in
December 2001, such as the freezing of bank deposits and the introduction of
exchange controls that restricted capital outflows.

Subsequent measures put forth by the Argentine government added to the
uncertainty, as many government decrees were issued, then subsequently changed,
modified or repealed. Other decrees lacked specific and substantive guidance for
implementing the new rules. Still others were being challenged in the Argentine
judicial courts.

                                      F-104

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

The quality of our financial condition and results of operations depend to a
significant extent on macroeconomic and political conditions prevailing from
time to time in Argentina. Risks and uncertainties facing the Group that are
generally the result of the recent economic crisis and the resulting government
actions, include the fact that a majority of the Bank's assets are concentrated
in Argentine public-sector debt instruments.

As of December 31, 2003, the Bank's exposure to the Argentine public sector,
including the compensatory and hedge bonds represented approximately 75.6% of
total assets. Although the Bank's exposure to the Argentine public sector
consists mostly of performing assets, the realization of the Bank's assets, its
income and cash flow generation capacity and future financial condition may be
dependent on the Argentine government's ability to successfully restructure its
foreign debt, and on its ability to establish an economic policy that is
successful in promoting sustainable economic growth in the long run.

The Bank is entitled to receive compensation from the Argentine government for
compensatory and hedge bonds and for the asymetric indexation compensation in
the amount of Ps. 2,016,154, net of associated borrowings from the Argentine
Central Bank. The receipt of the hedge bond is contingent upon the Bank
providing adequate and acceptable collateral to the Argentine Central Bank.
Should the Bank be unable to provide collateral acceptable to the Argentine
Central Bank, the carrying amounts of the "Compensation to be Received from the
National Government" would be affected.

As described in Note 1, the receipt of these bonds is subject to the approval of
the Argentine Central Bank. It is possible that the Argentine Central Bank will
alter the compensatory and hedge Bonds or the asymmetric indexation compensation
to what the Bank claims it is entitled in amounts that could be material to
Grupo Galicia. In addition, the market value of the bonds received or to be
received will fluctuate significantly as the market for such bonds develops more
fully. Therefore, the ultimate settlement of these bonds may differ
significantly from the carrying value, at December 31, 2003 or any future date.

For the foreseeable future, the Bank will have limitations on its ability to
manage effectively its assets and liabilities so as to minimize risks resulting
from mismatches in terms of currencies, maturities and yields (the asymmetric
pesification was accompanied by the modification by the government of the yields
of the assets, the cost of the liabilities pesified, fixed maximum and minimum
interest rates were established for assets and liabilities pesified). It is
reasonably possible that the values of the Bank's assets and liabilities
denominated in foreign currency will change in short-term in amounts that are
material to the Bank.

The current economic situation in Argentina makes it difficult to predict
whether the Bank will be able to implement its business strategy, including
increasing fee income so as to generate sufficient revenue to cover expenses.
Demand for fee-related products and services is increasing in Argentina,
together with the improved situation of the economy, but the economy as a whole
and the relevant markets have not stabilized enough to be certain that demand
will continue to increase. Therefore, there can be no assurance that the Bank's
new business strategy will in fact be successful or whether continuing or new
events in Argentina will not adversely affect the Argentine economy as to call
into question its ability to successfully implement its business strategy and
fully regain financial stability.

In addition, the Bank recorded an intangible asset, the amount of which as of
December 31, 2003, was Ps. 487.0 million, net of the amortization mandated by
the Argentine Central Bank, on account of its right to receive compensation for
having had to make payments in compliance with court resolutions, to reimburse
its customers for the difference between the deposits converted into pesos and
their value at the free US dollar exchange rate (see Note 1.). It is not
possible to determine the final amounts to be

                                     F-105

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

applied to those deposits converted into pesos, or whether the amounts already
paid will be recovered by that Bank.

On the other hand, Banco de Galicia y Buenos Aires S.A. continues with the
restructuring process involving certain financing of its private sector
portfolio, mainly corresponding to concessionaires of public utility services.
At the date of issue of this report, it is not possible to foresee the impact on
the classification of debtors and the levels of allowances set up, which could
derive from the outcome of that process.

Regarding to Galicia Uruguay, it has completed the restructuring of its deposits
during 2002. In early January and September 2003, Galicia Uruguay paid the first
and second installments, respectively, contemplated in the deposit restructuring
agreement, and on September 2003 and March 2004, Galicia Uruguay settled two
offers to exchange restructured deposits for cash, new negotiable obligations to
be issued by Galicia Uruguay and BODEN 2012. As a result of the foregoing, the
amount of indebtedness of Galicia Uruguay with its depositors has declined
substantially. In addition, Galicia Uruguay has received authorization from the
Central Bank of Uruguay to create a trust which will receive its assets,
including the aforementioned BODEN 2012, to secure the repayment of its
indebtedness with its depositors. However, the failure by Galicia Uruguay to
honor its restructured liabilities on a timely basis would likely have a
significant negative impact on the Bank's operations in Argentina, with a loss
of reputation, customers and deposits, given that the two banks share their
customer base to a large extent, and our financial condition and results of
operations would likely be materially and adversely affected.

U.S. GAAP ESTIMATES

Valuation reserves, impairment charges and estimates of market values on assets,
as established by the Group for U.S. GAAP purposes are subject to significant
assumptions of future cash flows and interest rates for discounting such cash
flows. Losses on the exchange of government and provincial bonds, and on
retained interests in securitization trusts were significantly affected by
higher discount rates at December 31, 2003, 2002 and 2001. Should the discount
rates change in the future years, the carrying amounts and charges to income and
shareholders' equity will also change. In addition, as estimates to future cash
flows change, so to will the carrying amounts which are dependent on such cash
flows. It is possible that changes to the carrying amounts of loans, investments
and other assets will be adjusted in the near term in amounts that are material
to the Group's financial position and results of operations.

40. PARENT ONLY FINANCIAL STATEMENTS

The following are the unconsolidated balance sheets of Grupo Financiero Galicia
SA at December 31, 2003 and 2002 and the related unconsolidated statements of
income, and cash flows for the fiscal years ended December 31, 2003 and 2002.

                                     F-106

<PAGE>
                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)

BALANCE SHEET (PARENT COMPANY ONLY)

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                         --------------------------------
                                                                             2003               2002
                                                                         -------------      -------------
<S>                                                                      <C>                <C>
ASSETS
A. Cash and due from banks
Cash..................................................................   Ps.       932      Ps.     1,027
Banks and correspondents..............................................             231                266
Other.................................................................               1                  -
                                                                         -------------      -------------
                                                                                 1,164              1,293
                                                                         =============      =============
D. Other receivables resulting from financial brokerage
Unlisted negotiable obligations.......................................         126,792            149,993
Other receivables not included in the debtor classification
  Regulations.........................................................             190                  -
Other receivables included in the debtor classification
  Regulations.........................................................          21,338             34,891
Accrued interest receivable included in the debtor
  Classification regulations..........................................              19                317
                                                                         -------------      -------------
                                                                               148,339            185,201
F. Equity investment in other companies
In financial institutions.............................................       1,306,397          1,452,186
Other.................................................................          30,962             39,337
                                                                         -------------      -------------
                                                                             1,337,359          1,491,523
G. Miscellaneous receivables
Other accrued interest receivables....................................              94                  -
Other.................................................................          10,089                195
                                                                         -------------      -------------
                                                                                10,183                195

H. Fixed assets.......................................................           3,339              3,552

J. Intangible assets
Goodwill..............................................................           6,947             13,677
Organization and development expenses.................................              92                164
                                                                         -------------      -------------
                                                                                 7,039             13,841

                                                                         -------------      -------------
                  TOTAL ASSETS........................................   Ps. 1,507,423      Ps. 1,695,605
                                                                         =============      =============
</TABLE>

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                         --------------------------------
                                                                             2003               2002
                                                                         ------------       -------------
<S>                                                                      <C>                <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

M. Miscellaneous liabilities
Directors and syndics fees payable....................................   Ps.        60      Ps.       121
Other.................................................................          45,026             56,847
                                                                         -------------      -------------
                                                                                45,086             56,968
                                                                         -------------      -------------
         TOTAL LIABILITIES............................................   Ps.    45,086      Ps.    56,968
SHAREHOLDERS' EQUITY .................................................   Ps. 1,462,337      Ps. 1,638,637
                                                                         -------------      -------------
        TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY....................   Ps. 1,507,423      Ps. 1,695,605
                                                                         =============      =============
</TABLE>

                                     F-107

<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


STATEMENT OF INCOME (PARENT COMPANY ONLY)

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                         ---------------------------------
                                                                             2003                2002
                                                                         ------------       --------------
<S>                                                                      <C>                <C>
A. Financial income
Interest on Notes.....................................................   Ps.        -       Ps.         75
Interest income from other receivables resulting from financial
  brokerage...........................................................          2,338                7,096
Net income from government and corporate securities...................              -                   11
Adjustment by application of adjusting index..........................              -                  446
Other.................................................................            126              198,649
                                                                         ------------       --------------
                                                                         Ps.    2,464       Ps.    206,277
B. Financial expenses
Interest on current accounts..........................................              -       Ps.          1
Net income from government and corporate securities...................   Ps.    1,367                    -

Other.................................................................         19,221                    -
                                                                         ------------       --------------
                                                                         Ps.   20,588       Ps.          1

Gross brokerage margin................................................        (18,124)             206,276

E. Expenses for services

Commissions...........................................................              -       Ps.          2
                                                                         ------------       --------------
                                                                         Ps.        -       Ps.          2

Monetary loss from financial intermediation...........................   Ps.   (1,126)      Ps.   (168,482)

G. Administrative expenses
Personnel expenses....................................................   Ps.      754       Ps.      1,128
Directors and syndics fees............................................            123                  153
Other fees............................................................          2,181                3,085
Taxes.................................................................            693                  649
Other operating expenses..............................................            369                1,865
Other.................................................................            646                  250
                                                                         ------------       --------------
                                                                         Ps.    4,766       Ps.      7,130

Monetary gain from operating expenses.................................   Ps.        1       Ps.        229

Net income from financial brokerage                                      Ps.  (24,015)      Ps.     30,891

H. Miscellaneous income

Other.........................................                                  8,935                  598
                                                                         ------------       --------------
                                                                         Ps.    8,935       Ps.        598
I. Miscellaneous losses
Net income on long term investments (1)...............................   Ps.  194,947       Ps.  1,439,914
Other.................................................................          7,023                4,245
                                                                         ------------       --------------
                                                                         Ps.  201,970       Ps.  1,444,159

Monetary gain (loss) on other transactions............................   Ps.        8       Ps.        403

Income tax............................................................   Ps.       17       Ps.     59,244
                                                                         ------------       --------------
Net income for the period.............................................   Ps. (217,059)      Ps. (1,471,511)
                                                                         ============       ==============
</TABLE>

(1) Includes the foreign currency position compensation.


                                     F-108
<PAGE>

                 GRUPO FINANCIERO GALICIA S.A. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE FISCAL YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                  (Expressed in thousands of Argentine pesos)


STATEMENT OF CASH FLOWS (PARENT COMPANY ONLY)

<TABLE>
<CAPTION>
<S>                                                                      <C>                <C>
                                                                                   DECEMBER 31,
                                                                         --------------------------------
                                                                             2003               2002
                                                                         ------------       -------------

CHANGES IN CASH
Cash at the beginning of the period...................................   Ps.    1,293       Ps.       357
Increase / (decrease) in cash.........................................           (129)                936
                                                                         ------------       -------------
CASH AT END OF PERIOD                                                           1,164               1,293

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Less:
Operating expenses paid...............................................         (7,118)             (8,430)
Plus:
Other operating income received.......................................          3,382               7,000
                                                                         ------------       -------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.......................         (3,736)             (1,430)

OTHER SOURCES OF CASH
Increase in short-term debts..........................................              -                 399
Increase in short-term investment.....................................         17,104             162,558
Other sources of cash.................................................            357               4,509
                                                                        -------------        ------------
OTHER SOURCES OF CASH.................................................         17,461             167,466

OTHER USES OF CASH
Increase in short-term loans..........................................              -              (1,452)
Increase in fixed assets..............................................              -                 (20)
Increase in long-term investments.....................................        (11,096)             (4,220)
Other uses of cash....................................................         (2,758)           (159,408)
                                                                        -------------        ------------
TOTAL OTHER USES OF CASH..............................................        (13,854)           (165,100)
                                                                        -------------        ------------
INCREASE / (DECREASE) IN CASH........................................   Ps.      (129)       Ps.      936
                                                                        =============        ============
</TABLE>

NEW AUTHORITATIVE PRONOUNCEMENTS

The Financial Accounting Standards Board ("FASB") has issued certain Statements
of Financial Accounting Standards ("SFAS") which are applicable to the Group,
but are not yet required and have not yet been adopted.

In December 2003, the FASB issued a revision to Interpretation No.46,
"Consolidation of Variable Interest Entities", or "Interpretation 46R."
Interpretation 46R provides additional guidance. The Bank is presently
evaluating the impact of the new interpretation, however, management does not
expect that the adoption will have a material impact on its results of operation
on financial position.

In April 2003, the FASB issued SFAS 149, " Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments and for hedging
activities under SFAS 133. The adoption of SFAS 149 did not have a material
impact on the Bank's consolidated results of operations or financial position.

In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. The
adoption of SFAS 150 did not have a material impact on the Bank's consolidated
results of operation or financial position.

                                     F-109