Argentine bank Banco Galicia's first quarter profits of 235mn pesos (US$57.5mn) soared 287% on 1Q10 thanks to strong growth in loans to the private sector, as well as lower exposure to public sector securities, according to its latest earnings statement, released late Wednesday (May 11).
The results are also explained by the decrease of its foreign debt, which was restructured in 2004, and the contribution from finance company CFA, which Galicia acquired from US insurer AIG (NYSE: AIG) in mid-2009.
The deal was approved by Argentine central bank BCRA in June 2010.
Galicia's net loans to the private sector were up 65% as of March 31, compared with the same time in 2010, to 23.2bn pesos. Growth in the period was mainly led by the corporate and consumer loan segments, the bank said.
The non-performing ratio of loans to the private sector decreased to 3.2% as of March 31, compared with 4.3% at the same time in 2010, with the coverage ratio rising to 140% from 126% a year ago.
Banco Galicia is the country's largest locally owned private sector bank and is the main asset of Argentine financial holding Grupo Financiero Galicia (Nasdaq: GGAL).
The bank's strong results helped the group boost its first quarter net profit more than fourfold compared with 1Q10, to 228mn pesos, according to the group's earnings results.
Contribution from the group's insurance units, which operate under the Sudamericana Holding name, also helped drive earnings in 1Q11.
To read the bank's full earnings release, in English, go to this link
To read the group's full earnings release, in English, go to this link