See All of This Company's Exhibits

EX-99.1 3 exhibit991_hsbcfy2023.htm EX-99.1 GRUPO FINANCIERO GALICIA SA - Recast audited financial statements of HSBC Argentina Holdings S.A. as of and for the year ended December 31, 2023.




















HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Consolidated financial statements for the fiscal year ended December 31, 2023, expressed in homogeneous currency as of September 30, 2024





















    HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)







    INDEX

    Composition of the Board of Directors and the Supervisory Committee



Consolidated financial statements for the fiscal year ended December 31, 2023, expressed in homogeneous currency as of September 30, 2024


Consolidated statement of financial position
Consolidated statement of income
Consolidated statement of changes in shareholders' equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Schedules to the consolidated financial statements


     Independent Auditors' Report

    



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.


Composition of the Board of Directors


Appointed by the Annual Ordinary General Shareholders' Meeting held on April 28, 2023, the Board of Directors was composed as follows:

Chairman:                              Juan Martin Parma

Vice-president:                        Gonzalo Fernandez Covaro

Regular Directors:                Brian McGuire

Alternate Directors:               Mabel Rosalia Rius
                                              
William Colquhoun

In accordance with the decision taken by the Annual Ordinary and Extraordinary Shareholders meeting held on December 6, 2024, the Board of Directors is composed by:

Chairman:                              Fabian Enrique Kon

Vice-president:                        Bruno Folino

Regular Directors::                Diego Hernan Rivas

Alternate Directors               Esteban Tresseras


Composition of the Supervisory Committee

Appointed by the Ordinary General Shareholders' Meeting held on April 28, 2023


Regular Syndics Santiago María Juan Antonio Nicholson
Juan Carlos Etchebehere
María Fraguas
Alternate Syndics Pablo Javier Venarotti
Carlos Marcelo Villegas
Juan Antonio Nicholson

In accordance with the decision taken by the Annual Ordinary and Extraordinary Shareholders meeting held on December 6, 2024, the composition of the Supervisory Committee is as follows:
                                              
Regular Syndics Antonio R. Garcés
José Luis Gentile
Omar Severini


Alternate Syndics Miguel Armando
María Matilde Hoenig
Fernando Noetinger



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

1
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Fiscal year No. 65 beginning January 1, 2023

Financial Statements for the fiscal year ended December 31, 2023

Expressed in Argentine pesos in homogeneous currency as of September 30, 2024

Legal address: Bouchard 557 - Piso 20 - Ciudad Autónoma de Buenos Aires

Main activity: Investment operations

Date of registration of the articles of incorporation with the Public Registry of Commerce: May 4, 1959

Date of registration in the Public Registry of Commerce of the last amendment to the bylaws:
October 6, 2014 and February 17, 2022.

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

Date on which the Company's term expires: February 5, 2058

Information on the Parent Company:

    Name: HSBC Latin America B.V.

    Legal address: 8 Canada Square, London, E14 5HQ, England, United Kingdom of Great Britain and

Northern Ireland
    
    Northern Ireland.

    Interest of the parent company in equity: 99.66%
    
    Percentage of votes of the parent company over equity: 99.66%

    Information on controlled entities in Note 5 to the consolidated financial statements

Equity Composition: (Note 8)



Quantity


Type, nominal value and number of votes
that each one grants

Subscribed,
integrated and
registered




$
1,184,364,392

ordinary book-entry shares of V/N $1 of 5 votes each

1,184,364,392







See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

2
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the fiscal year ended December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

ASSET
    12/31/2023

LIABILITIES
    12/31/2023





Cash and due from banks (Note 4.a), and Schedule III)
1,702,544,431,674

Deposits (Note 4.k)
3,923,573,266,246
Investments (Notes 4.b)
3,215,674,389,818

Debt Securities (Note 4.l)
164,472,155,899
Loans (Note 4.c)
1,452,650,436,317

Financial intermediation obligations (Note 4.m)
280,764,249,401
Finance leases receivables (Note 4.d), and Schedules IV)
8,360,015,199

Insurance Contract Liabilities (Note 4.n)
10,155,199,823
Service receivables (Note 4.e), and Schedules IV)
5,841,488,566

Trade payables (Note 4.o)
276,083,727
Other receivables (Note 4.f), and Schedules IV)
73,313,633,217

Social security and tax liabilities (Note 4.p)
48,424,714,316
Investments in Equity Instruments (Note 4.g)
1,099,273,216

Other liabilities (Note 4.q)
402,994,071,570
Property, plant and equipment (Note 4.h)
266,131,382,600



Intangible assets (Note 4.i)
50,348,341,770

 

Other assets (Note 4.j)
179,774,207,575






Technical commitments - Insurance (Note 4.r)
602,442,096,069



Provisions (Schedules II)
36,334,751,061



Total liabilities
5,469,436,588,111



Non-controlling Interest
208,869,151



SHAREHOLDERS’ EQUITY
1,486,092,142,689
Total assets
6,955,737,599,951

Total liabilities, non-controlling interest and
6,955,737,599,951



  Shareholders’ equity


The accompanying Notes and Schedules are an integral part of these consolidated financial statements.


3
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

CONSOLIDATED STATEMENT OF INCOME
for the fiscal year ended December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)



12/31/2023


Net interest income (Note 5.a))
1,592,682,451,207
Insurance Business Result (Note 5.b))
(79,350,123,624)
Commissions and fees for services (Note 5.c))
108,351,486,840
Accrued claims
(7,714,773,078)
Commissions lost (Note 5.d))
(12,446,036,693)
Administrative and Personnel Expenses (Schedule V)
(495,190,284,196)
Other expenses (Note 5.e))
(258,274,769,432)
Operating income
848,057,951,023


Income from equity instruments (Note 5.i))
1,229,309
Impairment charge (Note 5.f))
(46,346,766,383)
Financial expense (Note 5.g)
(707,908,902,151)
Other income, net (Note 5.h))
502,114,385,805
Income before income tax
595,917,897,603


Income tax charge
(204,136,506,215)
Non-controlling interest
(18,842,490)


Profit for the fiscal year
391,762,548,898

The accompanying Notes and Schedules are an integral part of these consolidated financial statements.



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


4
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the fiscal year ended December 31, 2023 expressed in homogeneous currency as of
September 30, 2024
(in Argentine pesos)

Item
Owners' contributions
Accumulated Incomes
Total Shareholder´s Equity
Capital Stock
Capital Adjustment
Reserves
Retained Earnings
Total
(Note 8)
Legal
Voluntary
Total
 
Reserve
Reserve
$
Balances at beginning of the fiscal year
1,184,364,392
711,874,210,297
33,489,407,631
222,358,946,692
255,848,354,323
167,759,915,868
423,608,270,191
1,136,666,844,880
Dividends distribution (1)
-
-
-
-
-
(42,337,251,089)
(42,337,251,089)
(42,337,251,089)
Legal Reserve (1)
-
-
5,138,526,004
-
5,138,526,004
(5,138,526,004)
-
-
Voluntary Reserve (1)
-
-
-
79,652,485,504
79,652,485,504
(79,652,485,504)
-
-
Profit for the fiscal year
-
-
-
-
-
391,762,548,898
391,762,548,898
391,762,548,898
Balances as of 12.31.23
1,184,364,392
711,874,210,297
38,627,933,635
302,011,432,195
340,639,365,831
432,394,202,170
773,033,568,000
1,486,092,142,689


(1)According to the Annual Ordinary General Shareholders' Meeting held on April 28, 2023.

The accompanying Notes and Schedules are an integral part of these consolidated financial statements.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


5
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444
CONSOLIDATED STATEMENT OF CASH FLOWS
for the fiscal year ended December 31, 2023, expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

 
    12/31/2023
CHANGES IN CASH & CASH EQUIVALENTS
 
Cash and cash equivalents at the beginning of the year
4.691.570.633.006
Cash and cash equivalents at the end of the year (Note 3.4)
4.918.218.821.492
NET INCREASE IN CASH & CASH EQUIVALENTS
226.648.188.486
 
 
CAUSES OF CHANGES IN CASH & CASH EQUIVALENTS
Operating income for the year
391.762.548.898
CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net increases/decreases from operating activities:
 
Increase in loans
485.282.877.685
Increase in finance lease receivables
11.340.162.789
Decrease in receivables for services
(1.294.733.326)
Increase in other receivables
14.357.940.785
Increase in equity instruments
453.067.555
Decrease in other assets
(21.110.996.412)
Decrease in deposits
(833.005.543.273)
Increase in debt securities
52.276.561.378
Increase in financial intermediation obligations
(83.078.555.172)
Decrease in obligations generated by insurance activity
1.372.735.226
Increase in trade payables
(88.077.347)
Increase in social security and tax liabilities
(194.926.433.855)
Decrease in other liabilities
91.353.268.481
Decrease technical commitments
139.325.655.115
Decrease in provisions
201.210.272.710
Net cash flows provided by operating activities
255.230.751.237
CASH FLOWS FROM INVESTMENT ACTIVITIES:
 
Increase in property, plant and equipment
9.002.343.125
Increase in intangible assets
4.752.345.213
Net cash flows provided by investing activities
13.754.688.338
CASH FLOWS FROM FINANCING ACTIVITIES
 

Dividends payment
(42.337.251.089)

Net cash flows provided by financing activities
(42.337.251.089)

NET INCREASE IN CASH & CASH EQUIVALENTS
226.648.188.486

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

6
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)
NOTE 1 - MAIN ACTIVITY

Main activity

The Company was incorporated on May 4, 1959 for the purpose of developing investment operations.

HSBC Argentina Holdings S.A. Capital structure as of December 31, 2023 isas follows:

a) HSBC Latin America BV holds1,180,367,030 ordinary shares with a par value of $1 each and five votes per share, and

b) HSBC Participaciones (Argentina) S.A. holds3,997,362 shares with a par value of $1 each and five votes per share.


NOTE 2 - CONSOLIDATION

The consolidated financial statements were prepared following the procedures established by Technical Resolution No. 21 of the Argentine Federation of Professional Councils of Economic Sciences (“F.A.C.P.C.E.”), which consists of the line-by-line accumulation of the financial statements of HSBC Argentina Holdings S.A. (currently GGAL Holdings S.A.) and its subsidiaries as of December 31, 2023, and for the fiscal year then ended. In the consolidation process, balances and transactions between consolidated entities were eliminated, as well as intercompany results contained in assets balances.

The consolidated subsidiaries (directly and indirectly) are as follows:


                   Companies           
Financial statements for the
       Fiscal year/period ended on
% of total interest in the
          capital and votes       

12/31/2023
12/31/2023





HSBC Bank Argentina S.A.
12/31/2023
     99.98
HSBC Seguros de Vida (Argentina) S.A.
12/31/2023
(1) 99.99
HSBC Seguros de Retiro (Argentina) S.A.
12/31/2023
(1) 99.99
HSBC Participaciones (Argentina) S.A.
12/31/2023
      99.43
HSBC Global Asset Management Argentina
S.A. Sociedad Gerente de F.C.I.
12/31/2023
(1) 99.99
(1) Through a controlled company.

For the purpose of consolidating its financial statements the Company used its subsidiaries´ financial statements which have been prepared by applying similar accounting standards related to the recognition and measurement of assets, liabilities and income, and have been adjusted in case of significant differences in accounting policies between companies.

The financial statements of HSBC Bank Argentina S.A., HSBC - Seguros de Vida (Argentina) S.A. and HSBC - Seguros de Retiro (Argentina) S.A. have been prepared on the basis of the measurement and presentation standards established by the Argentine Central Bank (BCRA) for the Bank and by the Argentine Superintendency of Insurance (SSN) for the Insurance companies, which differ, in certain aspects, from the accounting principles generally accepted in Argentina.




See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

7
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 2 - CONSOLIDATION PROCEDURE (cont.)

The differences with accounting principles generally accepted in Argentina have been adjusted for the purpose of preparing the consolidated financial statements as of December 31, 2023 of HSBC Argentina Holdings S.A. (currently GGAL Holdings S.A.) and are disclosed in the notes to the separate financial statements of such subsidiaries.

The Company does not present the statement of financial position with the classification of assets and liabilities into current and non-current, since the financial statements of the controlled companies HSBC Bank Argentina S.A., HSBC Seguros de Vida (Argentina) S.A. and HSBC Seguros de Retiro (Argentina) S.A. have been prepared on the basis of the presentation standards established by the Argentine Central Bank (BCRA) and the Argentine Superintendency of Insurance (SSN), respectively, which do not require the presentation of assets and liabilities according to such classification.

NOTE 3 - BASIS FOR PREPARATION

These consolidated financial statements have been prepared in accordance with the provisions of the General Companies Act, the regulations of the Superintendency of Corporations and the Accounting principles generally accepted in Argentina.

The most relevant accounting standards applied by the Company were as follows:

3.1) Measurement Unit

Accounting principles generally accepted in Argentina establish that the financial statements must be prepared recognizing changes in the purchasing power of the currency, in accordance with the regulations of Technical Resolutions (RT) No. 6 and No. 17, as amended by RT No. 39 and Interpretation No. 8, standards issued by the FACPCE. These standards establish that the application of the inflation adjustment must be made in the event of high inflation, which is characterized, among other considerations, when the cumulative inflation rate over three years reaches or exceeds 100%.

Cumulative inflation over three years was above 100%. It is for this reason that, in accordance with the aforementioned professional accounting standards, the Argentine economy should have been considered as hyperinflationary as of July 1, 2018. The FACPCE has confirmed this situation with the Resolution of its Board of Governors (JG) 539/18.

In turn, Law No. 27,468 (Official Bulletin 04/12/2018) amended Article 10° of Law No. 23,928, as amended, establishing that the repeal of all legal or regulatory rules that defined or authorized the indexation by prices, monetary restatement, cost variation or any other form of repotentiation of debts, taxes, prices or tariffs of goods, works or services, did not include the financial statements, with respect to which the provisions of Article 62 of the General Companies Act No. 19,550 (T.O. 1984), as amended, will continue to apply. In addition, the aforementioned law repealed Executive Order No. 1269/2002 of July 16, 2002, as amended, and delegated to the National Executive Power (PEN), through its controlling agencies, to establish the date as from which the aforementioned regulations will take effect in relation to the financial statements submitted to them.


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

8
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS FOR PREPARATION (CONT.)

3.1) Measurement Unit (Cont.)


Therefore, by means of its General Resolution 10/2018 (Official Bulletin 12/28/2018), the Superintendency of Corporations (IGJ) provided that financial statements corresponding to complete fiscal years or interim periods should be filed before said Agency expressed in homogeneous currency. In addition, by means of said resolution, it determined that, for the purposes of the restatement of the financial statements, the following shall apply the standards issued by the FACPCE.

The Company's management has restated these consolidated financial statements as of December 31, 2023 to constant currency as of September 30, 2024.

The Company expects to file a Form 6-K in May 2025. According to SEC rules, the Company will incorporate by reference into the Form 6-K its latest unaudited consolidated condensed interim financial statements as of and for the nine months ended September 30, 2024. These unaudited consolidated condensed interim financial statements were presented in current Argentine pesos at the end of the reporting period (September 30, 2024) in accordance with IAS 29. As a result, the Company is required to recast its Audited Consolidated Financial Statements, which will also be incorporated by reference in the Form 6-K, to measure them in equivalent purchasing power units as of September 30, 2024, the most recent financial period incorporated by reference in the Registration Statement, in accordance with IAS  29 (the “Recast Audited Consolidated Financial Statements”).

The National Consumer Price Index as of September 30, 2024 was 7,122.2 and the cumulative variation in prices for the nine-month period then ended was 202 %.

In accordance with Argentine professional accounting standards, the financial statements of an entity in a context of high inflation must be presented in terms of the measuring unit in effect at the date of such financial statements. All amounts included in the balance sheet, which are not reported in terms of the unit of measure at the date of the financial statements, should be restated by applying a general price index. All items of the income statement should be stated in terms of the unit of measurement restated at the date of the consolidated financial statements, applying a general price index from the date on which the revenues and expenses were originally recognized.

The restatement of opening balances was calculated considering the indexes established by the FACPCE based on the price indexes published by the National Institute of Statistics and Census (INDEC, Instituto Nacional de Estadística y Censos).

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

9
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.1) Measurement Unit (Cont.)

The main procedures used for the restatement were as follows:

- Monetary assets and liabilities that were recorded at the closing currency of the balance sheet were not restated, since they were already restated at the date of the consolidated financial statements;
- Non-monetary assets and liabilities that are carried at cost at the balance sheet date and the items of equity are restated by applying the corresponding adjustment factors;
- All items in the statement of income are restated by applying the corresponding adjustment factors;
- The gain or loss on the net monetary position is included in the net income of the reporting fiscal year, disclosing this information in a separate line item.

In the initial application of the restatement method, the equity accounts were restated as follows:

Component
Date of origin
Capital
Date of subscription
Profit reserves
Date of beginning of comparative period
Dividends distribution
Date of approval by assembly


3.2) Disclosure

The consolidated financial statements are presented in accordance with the disclosure criteria established by the Technical Resolutions of the FACPCE, without the disclosure of comparative periods.

As discussed in Note 3.1), the Company prepared the accompanying consolidated financial statements for Grupo Financiero Galicia S.A. to comply with Rule 3-05 of Regulation S-X. As a consequence, the consolidated interim financial statements do not include comparative information as required by the accounting principles generally accepted in Argentina.

3.3) Comparative information

These consolidated financial statements have been prepared for the sole purpose of Grupo Financiero Galicia S.A. to comply with Rule 3-05 of Regulation S-X. As a consequence, the consolidated financial statements do not include comparative information as required by the accounting principles generally accepted in Argentina. 



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

10
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)


3.4) Measurement

The main measurement criteria used in the preparation of the consolidated financial statements are detailed below:

a) Assets and liabilities in local currency

Monetary assets and liabilities are expressed in the closing currency.

b) Assets and liabilities in foreign currency

Assets and liabilities denominated in foreign currency, and detailed in Schedule III, have been valued in Argentine pesos using the exchange rate of the Banco de la Nación Argentina in effect at the end of the fiscal year. Exchange differences generated in each fiscal year have been charged to “Exchange differences generated by assets” and “Exchange differences generated by liabilities”, included in the line “Financial gains/losses” in the Consolidated Statement of Income.

c) Financial assets

c) 1. Debt instruments

The Company considers as debt instruments those instruments that are considered financial liabilities for the issuer, such as loans, public and private securities, bonds and accounts receivable from customers.
These consolidated financial instruments are initially recognized at fair value plus incremental and directly attributable transaction costs and are subsequently measured at amortized cost. The amortized cost of a financial asset is equal to its acquisition cost less accumulated amortization plus accrued interest (calculated using the effective interest method), net of any impairment loss.
The Company has classified loans, finance leases receivables and other receivables related to financial activities in this category.
These financial instruments are initially recognized at fair value plus incremental and directly attributable transaction costs and are subsequently measured at amortized cost. The amortized cost of a financial asset is equal to its acquisition cost less accumulated amortization plus accrued interest (calculated using the effective interest method), net of any impairment loss.


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

11
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 2. Definition of default and credit impairment
Expected Credit Losses (“ECL”) are measured based on the risk of default over two different time horizons. These time horizons will depend on whether the credit risk of the borrower of the instrument has increased significantly since such exposure was recognized by the company (granting of the credit instrument). For the retail portfolio, the steps can be summarized as follows:
Stage 1: Represents products without impairment, their expected loss is recognized for the next 12 months (or the time to completion if less than 12 months).
Stage 2: Represents products that are more than 30 days past due or have suffered some type of significant deterioration, which is determined by a cut off score. Your expected loss is accounted for over the remaining life of the product.
Stage 3: Represents customers in default, i.e. the default must be equal to or greater than 90 days, except for restructured instruments, they will be in this stage from their origin, regardless of the number of days past due. The expected loss is accounted for over the remaining life of the product.
For the wholesale portfolio, there are the following stages:
Stage 1: Represents products without impairment, their expected loss is recognized for the next 12 months (or the time to completion if less than 12 months).
Stage 2: Represents products with a significant increase in credit risk. The expected loss is accounted for over the remaining life of the product.
Conditions applicable for products to be considered as Stage 2:
•Significant impairment in the probability of future default conditional on macroeconomic projections. Applies per product.
•Subjective evaluation of customer impairment through Watch Lists. Applies per customer.
•More than 30 days past due. Applies per product.
•Change between the original credit rating and the current rating internally referred to as CRR - Customers Risk Rating. Applies per product.
•Instruments originating under CRR 8.3 will be triggered in Stage 2 regardless of any of the other triggers.
Stage 3: Represents customers in default (classified as CRR 9/10), their expected loss is accounted for the remaining life of the product on an individual basis.

Although there is no single concept of Default, the Company defines it objectively as the total or partial inability of a customer to honor the legal commitments assumed with the Company in accordance with the terms originally agreed in the credit instrument(s) granted to it in a timely manner.
In the case of the wholesale portfolio, although objective default criteria are applied, subjective criteria are also used to determine the risk of future default of a client even before any of the objective criteria are present (e.g., more than 90 days past due). The subjective criteria are based on an analysis of the customer's risk of default by virtue of the credit impairment suffered by the customer. In view of this, there can




See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

12
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 2. Definition of default and credit impairment (Cont.)

be cases in which none of the objective criteria are present but the case is still considered to be in default.
Objective Non-Compliance Criteria:
    More than 90 days past due;
    Filing in reorganization proceedings;
    Bankruptcy petition filed by the debtor itself;
    Bankruptcy petition of the debtor filed by a third party; and
    Reliable information from the client of its inability to meet the obligations contracted with the company.
Subjective Non-compliance Criteria:
The subjective default criteria make it possible to determine the probability that the customer will default on its obligations in the short term, and are indicative of the level of credit impairment suffered by the customer and of the increase in the probability of default.
Some of them are:
    Rejected checks in the financial system;
    BCRA Rating 2 or higher in another financial entity;
    Unpaid social security obligations for 1 or more periods;
    Repeated treatment of the case in the Early Warning committee;
    Request for refinancing or debt restructuring.
It is important to clarify that the above list is merely enunciative. The presence of any of the subjective default criteria will be an indication of the impairment of the customer's credit situation, increasing the expectation of future credit losses due to partial or total default on obligations.
Their repeated or joint presence and the specific analysis of the case may lead to classify the case as highly impaired and at risk of future non-compliance (Stage 3).
c) 3. Measurement of Expected Credit Losses (ECL) -
Purchased or originated credit-impaired financial assets are those financial assets that are impaired upon initial recognition. ECLs of this type of financial instruments are always measured over the lifetime of the asset (Stage 3).
ECLs are measured on a 12-month basis or over the lifetime of the instrument, depending on whether there has been a significant increase in credit risk since initial recognition or whether an asset is considered credit-impaired. ECLs are the discounted product of Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD), defined as follows:
•The PD represents the probability that a debtor will default on its financial obligation, either during the next 12 months or during the remaining life (Lifetime PD) of the financial asset.




See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

13
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
•c) 3. Measurement of Expected Credit Losses - techniques (Cont.)
•The EAD is based on the amounts that the company expects to be due at default, during the next 12 months or during the remaining life of the instrument (Lifetime EAD).
•LGD represents the company's expectation of the amount of loss on a defaulted exposure. LGD varies depending on the type of counterparty, the type and age of the complaint and the availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of Exposure At Default (EAD) and is calculated on a 12-month basis or over the lifetime of the instrument, where 12-month LGD is the percentage loss expected to be incurred if the default occurs in the next 12 months and lifetime LGD is the percentage loss expected to be incurred if the default occurs over the remaining lifetime of the financial instrument.
•The ECL is determined by projecting the PD, LGD and EAD for each future month and for each individual exposure or group segment. These three items are multiplied and adjusted for the probability of survival (i.e., the exposure has not been precanceled or defaulted in a previous month). This effectively calculates a ECL for each future month, which is then discounted to the filing date and aggregated. The discount rate used in the calculation of the ECL is the original effective interest rate or an approximation thereof.
•The Lifetime PD is developed by applying a maturity profile to the current 12-month PD. The maturity profile analyzes how defaults develop in a portfolio from the point of initial recognition and over the lifetime of the loans. The maturity profile is based on observed historical information and is assumed to be the same across all assets within a portfolio and credit rating band.
•The 12-month and Lifetime EAD are determined based on the expected payout profile, which varies by product type:
•For non-revolving products it is based on the contractual payments due from the borrower over a 12-month or Lifetime period. This will also be adjusted for any expected overpayments, prepayments or refinancing.
•For revolving products, the EAD is estimated by considering the drawn balance (consumed limit) and adding a “credit conversion factor” that calculates how much the debt balance increases at the time of default. These assumptions vary by product type and consumption band of the current limit, based on analysis of recent defaults information.
•The 12-month and Lifetime LGDs are determined based on factors affecting post-default recoveries. These vary according to the type of product.
•For guaranteed products, it is based primarily on the type of guarantee and projected guarantee values, historical discounts to market/book values due to forced sales, replacement time and observed recovery costs.
•For unsecured products, LGDs are generally set at the product level due to the limited differentiation in recoveries obtained among different obligors. These LGDs are influenced by collection strategies, including sales and debt pricing. The Company includes forward-looking economic information in the determination of 12-month and Lifetime PD, EAD and LGD.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

14
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 4. Forward-looking information considered in expected credit loss models
Sensitivity Analysis
Wholesale Portfolio:
The current models (three of them according to segmentation by economic activity) for calculating PD consist of four variables each. Based on their sensitivity analysis, a behavior is verified that implies that if the value of each variable deviates by one standard deviation (in an adverse manner) with respect to the historical mean of the PD variable, it can be determined that:
Within the primary sectors model: the negative variations of Government Expenditure increase by 0.8%, while the price of commodities and the External Debt in dollars 0.3% and the Monetary Policy Rate by 0.5%.
On the other hand, in secondary sectors, the negative variations in Imports, the Merval and the U.S. Short Term Rate increase the PD by 0.3% and the Government External Debt in dollars by 0.2%.
Finally, for the tertiary sector model, negative variations of one standard deviation in Brazil's GDP, Oil Price and US Long-Term Rate increase by 0.2% and Argentina's GDP by 0.3%.
It is important to mention that, being a multivariate model, the total increase in PD does not correspond to the result of the sum of the movements of the variables taken individually.
Retail Portfolio:
The model currently used is the Vasicek Model. It uses a single independent variable, which is the change in GDP (Argentina's GDP at constant 2004 prices). This variation is measured annually and, to avoid seasonality, the annual average of the following four quarters (FMA “Forward Moving Average”) is calculated.
The model prediction tells us that a positive variation of 1% of GDP generates a drop in PD of 0.23%. In terms of Forward Economic Guidance (FEG), assuming that the distribution of portfolio arrears ranges remains constant over time, a positive GDP variation of 1% results in a variation of the FEG impact of thousands of Argentine pesos 80,000.
c) 5. Maximum exposure to credit risk
The following is an analysis of the exposure to credit risk of financial instruments for which allowances for expected credit losses were recognized. The gross carrying amount of the financial assets included in the table below represents the maximum exposure to credit risk of such assets.


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

15
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 5. Maximum exposure to credit risk (Cont.)

December 31, 2023


 Stage 1
 Stage 2
 
 Stage 3

                Total
Gross carrying amount
1,050,104,464
97,752,217
30,840,622
1,178,697,303
 
 
 
 
 
Allowance for impairment risk
(5,183,061)
(3,326,465)
(10,679,847)
(19,189,373)
 
 
 
 
 
Net carrying amount
1,044,921,403
94,425,752
20,160,775
575,207,121

December 31, 2023

 
Stage 1
Stage 2
Total

 
 

Loans to the financial sector
26,031,498
30,985
26,062,483

Gross carrying amount
26,031,498
30,985
26,062,483

Allowance for impairment risk
(303,208)
(369)
(303,577)

Net carrying amount
25,728,290
30,616
25,758,906

 
Stage 1
Stage 2
Total


Other financial assets
60,367,086
-
60,367,086
Gross carrying amount
60,367,086
-
60,367,086
Other financial assets
(1,761,898)
-
(1,761,898)
Net carrying amount
58,605,188
-
58,605,188


The caption “Other financial assets” includes the financing for the sale of the shareholding of Prisma Medios de Pagos S.A. On December 26, 2023, the Company received a notification from the BCRA requesting that, as from December 2023, the method of calculating the ECL applicable to these exposures be modified by using an individual analysis instead of using the calculation based on parameters (PD and LGD) arising from collective calculation models.

The Company proceeded to perform the recalculation based on the preparation of 3 scenarios with different probabilities. Based on this methodology, the ECL increased by thousands of Argentine pesos 790,197.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

16
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 5. Maximum exposure to credit risk (Cont.)

Consequently, the total amount for this concept, calculated following BCRA guidelines, amounted to thousands of Argentine pesos 538,030 as of December 31, 2023.

c) 6. Guarantees and other credit enhancements

Financial guarantee contracts: Financial guarantee contracts are those contracts requiring the issuer to make specific payments to reimburse the holder for the loss incurred when a specific debtor does not comply with its payment obligation on maturity, in accordance with the original or amended terms of a debt instrument.

In accordance with the provisions of the BCRA's Ordered Text of Guarantees, guarantees received are classified as follows:

•Preferred “A” (self-liquidating).
•Preferred “B” (real: mortgages and pledges).
•Other guarantees (bonds and sureties).
The company, for the management of guarantees, has a specific area dedicated to the review of legal compliance and correct instrumentation of the guarantees received, including texts, signatures and powers, as well as the registration of the guarantees within internal systems. The main assets admitted as collateral by the Company are the following: real property, automobiles, bonds, sureties, guarantees, liquid
funds and “stand-by” letters of credit. Depending on the type of guarantees, guarantors may be individuals or legal entities (in the case of mortgages, pledges, sureties, guarantees and liquid funds) and first level international financial institutions (in the case of stand-by letters of credit).

The company monitors collateral related to financial assets considered credit-impaired since it is more likely that such collateral will be called upon to mitigate potential credit losses. Impaired loans in connection with
finance leases are the following:
Impaired loans
Total exposure
Allowance for
impairment risk
Book value
Fair value of the
guarantee
Leasing
43,720,890
(25,276,234)
18,444,656
43,720,890
Total impaired lease receivables
43,720,890
(25,276,234)
18,444,656
43,720,890



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

17
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)
c) Financial assets (Cont.)
c).7. Allowance for impairment
The allowance for impairment recognized in the fiscal year is affected by a variety of factors, as described below:
•Transfers between Stage 1 and Stage 2 or 3 due to financial instruments experiencing significant increases (or decreases) in credit risk or becoming impaired during the fiscal year, and the resulting “step-up” (or “step-down”) between 12-month and Lifetime ECLs;
•Additional allocations for new financial instruments recognized during the fiscal year, as well as de-recognitions for financial instruments derecognized during the fiscal year;
•Impact on the measurement of ECL of changes in PD, EAD and LGD during the fiscal year, derived from the periodic updating of inputs to the models;
•Impacts on ECL measurement due to changes in models and assumptions;
•Impacts due to the passage of time as a result of discounting the present value;
•Local currency translations for assets denominated in foreign currencies and other movements; and
•Financial assets derecognized during the fiscal year and application of allowances related to assets derecognized during the fiscal year. The following tables explain the changes in the allowance for credit risk between the beginning and the end of the fiscal year due to the factors indicated below:




 Stage 1
 Stage 2
 Stage 3
 Total
Retail portfolio
 
 
 12-month ECL
 ECL Lifetime
 ECL Lifetime
 Total
Allowance for impairmentas of 12.31.2022
 
 
(17,049,818,834)
(20,072,785,091)
(4,015,016,623)
(41,137,620,547)
Inflation Effect
 
 
11,574,723,231
13,626,944,211
2,725,700,890
27,927,368,332
Movements with P&L impact
 
 
1,764,103,356
(1,764,103,356)
                            -
                            -
Transfers:
 
 
                            -
4,154,929,923
(4,154,929,923)
                            -
 
 
-
(350,285,186)
350,285,186
-
   Transfers from Stage 1 to Stage 2
 
 
(9,031,394,635)
9,031,394,635
                             -
                             -
   Transfers from Stage 2 to Stage 3
 
 
(4,727,923,749)
                             -
                             -
(4,727,923,749)
   Transfers from Stage 3 to Stage 2
 
 
4,954,724,482
(4,105,179,746)
4,716,994
854,261,729
   Transfers from Stage 2 to Stage 1
 
 
(334,882,386)
(16,185,959,836)
(12,162,363,928)
(28,683,206,151)
New financial assets originated or purchased
 
 
(167,312)
(1,413,082)
(36,285)
(1,616,679)
Changes in PD/LGD/EAD
 
 
(7,375,540,245)
(9,220,616,649)
(15,962,327,955)
(32,558,484,849)
Changes in model assumptions and methodologies
 
 
330,455,669
1,173,180,921
5,333,688,588
6,837,325,178
Exchange rate difference and other transactions
 
 
                             -
                             -
8,436,390,186
8,436,390,186
Total transactions charged to income
 
 
(12,520,180,179)
(14,493,276,607)
(3,481,564,914)
(30,495,021,700)
Other movements with no P&L impact
 
 
 
 
 
 
Financial assets derecognized
 
 
330,455,669
1,173,180,921
5,333,688,588
6,837,325,178
Derecognitions (write-offs)
 
 
                            -
                            -
8,436,390,186
8,436,390,186
Allowance for impairment as of 12.31.2023
 
 
(12,520,180,179)
(14,493,276,607)
(3,481,564,914)
(30,495,021,700)

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

18
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS FOR PREPARATION (CONT.)

3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 7. Allowance for impairment (Cont.)
 
 Stage 1
 Stage 2
 Stage 3
 Total
Wholesale portfolio
 12-month ECL
 ECL Lifetime
 ECL Lifetime
 Total
Allowance for impairment as of 12.31.2022
(7,074,271,480)
(2,667,145,658)
(17,588,805,955)
(27,330,223,093)
Inflation effect
4,802,557,076
1,810,662,506
11,940,628,925
18,553,848,507
Movements with P&L impact
                             -
                        -
                               -
                               -
Transfers:
                             -
                        -
                               -
                               -
   Transfers from Stage 1 to Stage 2
718,617,914
(718,617,914)
                               -
-
   Transfers from Stage 2 to Stage 3
- 
(172,220,677)
172,220,677
-
   Transfers from Stage 2 to Stage 1
(268,050,241)
268,050,241
- 
-
New financial assets originated or purchased
(2,129,644,188)
- 
- 
(2,129,644,188)
Changes in PD/LGD/EAD
45,200,495
(223,337,572)
(940,911,297)
(1,119,048,375)
Changes in model assumptions and methodologies
496,187,456
(1,120,912,999)
(699,510,057)
(1,324,235,600)
Exchange rate difference and other transactions
(1,889,720,536)
(516,494,720)
(7,510,919,989)
(9,917,135,245)
Total transactions charged to income
(3,027,409,100)
(2,483,533,641)
(8,979,120,665)
(14,490,063,407)
Other movements with no P&L impact





Financial assets derecognized
116,062,243
13,552,287
2,050,527,700
2,180,142,230
Derecognitions (write-offs)
                           -
                      -
1,896,923,023
1,896,923,023
Allowance for impairment as of 12.31.2023
(5,183,061,261)
(3,326,464,506)
(10,679,846,974)
(19,189,372,741)

c) 8. Financial assets derecognition policy (bad debts)
The company derecognizes financial assets, in whole or in part, when it has exhausted all recovery efforts and has concluded that there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include (i) the cessation of enforcement activity and (ii) when the company's method of recovery is given by the enforcement of the collateral and the value of the collateral is such that there is no reasonable expectation of full recovery.
The company may derecognize financial assets that are still subject to performance activities. The outstanding contractual amounts receivable for such assets derecognized during the fiscal year ended December 31, 2023 amount to Argentine pesos 10,333,313,209. The Company seeks to recover amounts that are legally due in full, but have been partially derecognized because there is no reasonable expectation of full recovery.

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


19
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)
3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 9. Changes in financial assets
The company sometimes modifies the contractual terms of financing granted to customers due to commercial renegotiations, or in the case of distressed loans, in order to maximize recovery.
Such restructuring activities include extended payment term agreements, grace periods and payment forgiveness. Restructuring policies and practices are based on indicators or criteria that, in management's judgment, indicate that payment is likely to continue. These policies are kept under continuous review.
The risk of default of such assets, after modification, is assessed at the reporting date and compared to the risk under the original terms at initial recognition, when the modification is not material and, therefore, does not result in the derecognition of the original asset. The company monitors the subsequent performance of the modified assets. The company may determine that the credit risk has significantly improved after the restructuring, such that the assets are moved from Stage 3 or Stage 2 (Lifetime ECL) to Stage 1 (12-month ECL). This is only the case for assets that have performed in accordance with the new terms for six consecutive months or more. The gross carrying amount of such assets held as of December 31, 2023 is Argentine pesos 3,610,965,768.
The company continues to monitor whether there is a subsequent significant increase in credit risk in relation to such assets through the use of specific models for modified assets.



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

20
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)
3.4) Measurement (Cont.)

c) Financial assets (Cont.)
c) 10. Leases - Leasing
Initial measurement the Company uses the interest rate implicit in the lease to measure the net investment. This is defined in such a way that the initial direct costs are automatically included in the net lease investment.
Initial direct costs, other than those incurred by manufacturers or dealers, are included in the initial measurement of the net lease investment and reduce the amount of revenue recognized over the lease term. The interest rate implicit in the lease is defined in such a way that the initial direct costs are automatically included in the net investment in the lease; and there is no need to add them separately.
The difference between the gross amount receivable and the present value represents the finance income recognized over the lease term. Finance income from leases is recorded in income for the fiscal year. Impairment losses are recognized in income for the fiscal year.
The Company uses the criteria described above to determine whether there is objective evidence that an impairment loss has occurred in the case of loans carried at amortized cost.

d) Other receivables and payables

Other receivables and payables have been measured at the best possible estimate of the receivable amounts and payable at maturity, respectively. They are not subject to adjustment clauses and do not accrue interest.



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

21
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - ACCOUNTING STANDARDS APPLIED (Cont.)

3.4) Measurement (Cont.)

e) Property, plant and equipment

Property, plant and equipment as of December 31, 2023 are valued at homogeneous currency, having restated their value in the currency of September 30, 2024, applying the inflation adjustment method established in accordance with Resolution No. 10/2018 of the IGJ (see Note 2.1). Depreciation is calculated using the straight-line method by applying annual rates to the adjusted value sufficient to extinguish their values at the end of their estimated useful lifetimes.

Property, plant and equipment were measured at acquisition or construction cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Cost includes expenses directly attributable to the acquisition or construction of these items.
Subsequent costs are included in the value of the asset or recognized as a separate asset, as appropriate, if and only if it is probable that they will generate future economic benefits for the Company, and their cost can be reasonably measured. The book value of the asset being replaced is derecognized and the new asset is depreciated by the number of years of useful lifetime remaining at the time of the improvement.
Repair and maintenance expenses are recognized in the statement of income in the fiscal year in which they are incurred. Depreciation of these assets is calculated using the straight-line method, applying annual rates sufficient to extinguish their values at the end of their estimated useful lifetimes. In the event that an asset includes significant components with different useful lifetimes, they are recognized and depreciated as separate items.
The useful life of each of the items comprising property, plant and equipment are detailed below:
Concept
Useful Lifetime
Land
No depreciation
Work in progress
No depreciation
Buildings
50 years
Machines and systems
5 years
Furniture and fixtures, tools, other equipment and vehicles
5 years

The residual values of property, plant and equipment, useful lifes and depreciation methods are reviewed and adjusted if necessary, at the closing date of each fiscal year or when there are indications of impairment.
The book value of property, plant and equipment is reduced immediately to its recoverable amount when the carrying amount exceeds the estimated recoverable amount. Gains and losses on the sale of property, plant and equipment are calculated by comparing the proceeds obtained with the book value of the respective asset and are included in the Statement of Income.
The value of property, plant and equipment, as a whole, does not exceed their estimated recoverable value.


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

22
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS FOR PREPARATION (Cont.)

3.4) Measurement (Cont.)

f) Intangible assets

Licenses:

Licenses acquired are initially valued at cost. They have been classified as intangible assets with definite useful lifetime, being amortized on a straight-line basis over the license period, which does not exceed 5 years.

Software

Development, acquisition or implementation costs initially recognized as an expense for a fiscal year are not subsequently recognized as a cost of the intangible asset. Costs incurred in the development, acquisition or implementation of software, recognized as intangible assets, are amortized using the straight-line method over their estimated useful lifes, over a period not exceeding 5 years. Costs associated with software maintenance are recognized as an expense when incurred. Development, acquisition and implementation costs that are directly attributable to the design and testing of software controlled by the Company are recognized as assets.
Impairment of non-financial assets
Assets with indefinite useful lifetime are not subject to amortization and are subject to annual impairment tests. In contrast to the previous assumption, those assets that are depreciable are tested for impairment when events or circumstances occur that indicate that their book value may not be recovered or, at a minimum, on an annual basis.
Impairment losses are recognized when the book value exceeds the recoverable value. The recoverable value of assets corresponds to the higher of the net amount that would be obtained from their sale or their value in use. For purposes of the impairment test, assets are grouped at the lowest level at which they generate identifiable cash flows (cash generating units). The book value of non-financial assets other than goodwill on which impairment has been recorded are reviewed at each reporting date to verify possible reversals of impairment.

g) Other assets

Works of art

The works of art as of December 31, 2023 were valued at homogeneous currency, having restated their value in the currency of September 30, 2024 applying the inflation adjustment method established as of

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

23
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)
NOTE 3 - BASIS FOR PREPARATION (Cont.)

3.4) Measurement (Cont.)

g) Other assets (Cont.)

Works of art (Cont.)

in accordance with Resolution No. 10/2018 of IGJ detailed in Note 2.1). The value of these assets, as a whole, does not exceed their recoverable value.

Non-current assets held for sale

Assets, or groups of assets, classified as held for sale in accordance with accounting principles generally accepted in Argentina, shall be disclosed separately from other assets.

An asset may be classified as held for sale if its carrying amount will be recovered principally through a sale transaction, rather than through continuing use, within 12 months after the last balance sheet date.

To apply the above classification, an asset must meet the following conditions:

-Be available for immediate sale in the current conditions;
-Management must be committed to a plan to sell the asset and have actively initiated a program to find a buyer and complete the plan;
-Actively negotiated for sale at a reasonable price, in relation to their current fair value;
-The sale is expected to be arranged within one year from its reclassification date;
-It is unlikely that significant changes will be made to the plan or that the plan will be withdrawn.

Assets, or groups of assets, classified as held for sale, are measured at the lower of residual value and net realizable value at fiscal year-end.

The Company will not depreciate the asset while it is classified as held for sale, or while it is part of a group of assets for disposal classified as held for sale. However, interest and other expenses attributable to the liabilities of a disposal group classified as held for sale will continue to be recognized.

The balances of financial instruments, deferred taxes and investment properties classified as held for sale are not subject to the valuation methods detailed above. The liabilities directly associated with the groups of assets to be disposed of will be reclassified and disclosed separately in the Company's Statement of Financial Position.

The Company has a strategic plan for these properties, in which independent third parties participate in the sale of the real property and issue a valuation opinion based on market comparable.

As of December 31, 2023, the Company has recognized for impairment of held for sale assets an amount of thousands of Argentine pesos 823,046,921.


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

24
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS FOR PREPARATION (CONT.)

3.4) Measurement (Cont.)

h) Allowances

Deducted from assets:

For other bad debts: as of December 31, 2023 the Company has accounts receivable related to share sales from Hexagon Inversiones Argentina S.A., which was merged in September 2008 with HSBC Argentina Holdings S.A. (currently GGAL Holdings S.A.) since they are considered difficult to recover, the Company has provided for them in full.

i) Other liabilities and other accounts payable

As of December 31, 2023, provisions are included for accrued expenses, which have been valued at their nominal value.

j) Financial intermediation obligations

Includes financing received from the BCRA and foreign entities as commercial and financial lines. Amounts due are recorded at the time the principal is advanced to the Company and the measurement of this financial liability at fiscal year-end is at amortized cost.

k) Debt Securities issued

Includes issues of subordinated and unsubordinated debt with public and/or private offering issued by the Company, which are measured at amortized cost. In the event that the Company purchases its own debt securities, these are eliminated from the consolidated financial statements and the difference between the residual value of the financial liability and the payment thereof is included in the Statement of Income as income from early extinguishment of debt.

l) Income tax

The Company has recognized the income tax charge based on the deferred tax method, thus recognizing temporary differences between the accounting and tax measurement of assets and liabilities.

Current accounting standards generally accepted in Argentina establish that the rate expected to be in effect at the time of the reversal of the deferred tax asset or deferred tax liability should be used to calculate the deferred tax.

The Tax Reform established by Law 27,430, approved on December 29, 2017, modified the corporate income tax rate, establishing that it will be gradually reduced from 35% to 30% for fiscal periods beginning on or after January 1, 2018, through December 31, 2019, and to 25% for fiscal periods beginning on or after January 1, 2020.

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


25
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

l) Income tax (Cont.)

However, the Social Solidarity and Productive Reactivation Law (Law 27,541 Official Bulletin 12/23/19) suspended the reduction of income tax rates that had been provided for in the Tax Reform Law. The same stipulated that the 30% rate will apply until the fiscal years beginning on 1/1/2021, this date included.

Net cumulative taxable earnings
They will pay $
Plus % of
On the excess of $
More than $
A $
-
14,301,209
-
25%
-
14,301,209
143,012,092
3,575,302
30%
14,301,209
143,012,092
hereinafter
42,188,567
35%
143,012,092





As indicated, the amounts provided for in the scale will be updated as from 2022 by applying the CPI corresponding to October of the year prior to the adjustment with respect to the same month of the previous year. The restated amount is applicable for fiscal years beginning after each restatement.

Extraordinary Advance: RG 5391 published in the Official Gazette on 07/20/2023 established an extraordinary payment on account of income tax. It is applicable to those companies that, in the tax returns for the 2022 or 2023 periods, as applicable, have reported a tax result equal to or higher than $600,000,000 without applying the deduction of losses from previous periods and have not determined income tax. The amount of the payment on account will be 15% of the taxable income of the previous tax period without considering the deduction of losses, which will be paid in 3 equal installments. Since the Company does not meet these conditions, the payment of this advance is not applicable.

RG 5424 published in the Official Gazette on 09/28/2023 established an extraordinary payment on account of income tax. It is applicable to those companies that, in the tax returns for the periods 2022 or 2023, as the case may be, have reported a tax income equal to or higher than $600,000,000 without applying the deduction of losses of previous periods and have as their main activity any of those detailed in the item FINANCIAL INTERMEDIATION AND INSURANCE SERVICES of the CLAE. Excluding those covered by RG 5391. The amount of the payment on account will be 15% of the taxable income of the previous tax period without considering the deduction of losses, which will be paid in 3 equal installments.

This resolution is applicable to the Company, which must pay an extraordinary advance payment of Argentine pesos 281,542,789 to be paid in 3 equal installments of Argentine pesos 93,847,596 in October, November and December.

The Company has recorded in these consolidated financial statements the impacts that this change generates in the balances of net deferred assets and liabilities, considering the effective rate estimated to be applicable at the probable date of reversal of such deferred assets and liabilities.

With respect to the tax inflation adjustment, Law 27,541 provided that the amount determined, corresponding to the first and second fiscal years beginning on or after January 1, 2019, must be imputed 1/6 in those fiscal periods and the remaining 5/6 in equal parts in the 5 immediately following fiscal periods.



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

26
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 3 - BASIS OF PREPARATION (CONT.)

3.4) Measurement (Cont.)

m) Revenue recognition

Revenues from administrative services are recognized based on the rendering of administrative services at the closing date.

n) Use of estimates

The preparation of consolidated financial statements requires the Entity to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies, as well as the reported revenues and expenses for the period. In this regard, estimates are made to calculate, for example, allowances for credit risk, the useful lifetimes of property, plant and equipment, depreciation and amortization, the recoverable value of assets, the income tax charge, certain labor charges and allowances for contingencies, labor, civil and commercial lawsuits and the fair value of certain financial instruments. Actual future incomes may differ from estimates and evaluations made at the date of preparation of these consolidated financial statements.

o) Technical commitments - Insurance

With respect to the valuation of the technical commitments of HSBC - Seguros de Retiro (Argentina) S.A. and HSBC - Seguros de Vida (Argentina) S.A., they have been established in accordance with the rules and regulations issued by the National Insurance Superintendency (Superintendencia de Seguros de la Nación “SSN”) based on the approved technical notes. As of December 31, 2023, the Company established the reserve for risks in progress in accordance with the policy-by-policy method, following the provisions of the General Regulations of the Insurance Activity (RGAA, Reglamento General de la Actividad Aseguradora). Also, as of that date, the mathematical reserve was calculated in accordance with the standards and technical bases approved by the SSN.

3.5) Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances and highly liquid investments (i.e. that can be cashed in less than 30 days).

      12/31/2023

Cash and Banks
1,702,544,431,674
Transitional investments
3,215,674,389,818


Cash and cash equivalents on the statement of cash flows
4,918,218,821,492
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

27
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)
NOTE 4 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT LINES IN THE STATEMENT OF FINANCIAL POSITION
ASSET
12/31/2023


a) Cash and banks



Cash in local and foreign currency
728,214,505,295
Banks in local currency
239,397,860,038
Banks in foreign currency
732,093,497,772
Other related parties
272,221,445
Others
      2,566,347,124

1,702,544,431,673
b) Investments (Schedule I)



Debt Securities
134,055,941,584
Public Income Securities
1,754,237,099,440
Loans
18,639,325,900
Financial Trusts
6,914,159,071
Time Deposits
76,716,384,293
Repurchase transactions
945,126,546,156
Financing for the sale of the interest in Prisma Medios de Pago
58,605,187,661
Derivative Financial Instruments
7,784,439,121
Shares
2,837,447,958
Other Investments
7,160,411,298
Mutual Funds
  203,597,447,335

3,215,674,389,818
c) Loans



Non-financial public sector
5,202,959,316
Other financial institutions
26,062,482,568
To the non-financial private sector and foreign residents

- Advances
418,115,104,726
-       Overdrafts
344,438,332,957
- Mortgage
761,294,615
- Pledges
97,553,421,477
- Personal
101,745,254,823
- Credit cards
390,683,812,980
- Others
59,476,307,605
- Other financing
13,518,904,890
- Interest, adjustments and differences
47,208,678,109
Charges not applied
(38,556,387)
Documented interest
(13,947,613,125)
Allowance for impairment
(44,756,429,830)
Interest and accrual adjustments
323,730,929
Loans and advances to employees
      6,302,750,664

1,452,650,436,317
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

28
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 4 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT LINES IN THE STATEMENT OF FINANCIAL POSITION(CONT.)

d) Finance leases receivables
12/31/2023


Capital
8,183,057,370
Accrued interest receivable
323,730,929
Allowance for impairment
(146,773,099)

8,360,015,199


e) Service receivables



Awards Receivable
1,327,102,517
Accounts receivable for administration and management of mutual funds
64,233,056
Reinsurance Companies Current Account
3,711,320,979
Expenses to be recovered from mutual funds
738,832,013

5,841,488,565


f) Other receivables



Sundry Debtors
5,360,959,500
Pan American Energy Loan
118,381,981
Taxes
44,873,294
Advances
93,557,122
Accrued dividends receivable
429,466,121
Producers Current Account
35,839,313,424
Sundry in local currency
32,573,911,839
Less: Allowance for impairment (Note 3.3.h) and Schedule II)
(1,146,830,063)

73,313,633,217


g) Investments in equity instruments



Equity Instruments

Play Digital
831,556,716
Mercado Abierto Electrónico S.A.
5,199,998
Interbanking S.A.
132,706,702
Argencontrol S.A.
2,216,017
Compensadora Electrónica S.A.
4,011,869
Gire S.A.
107,253,115
Deposit Insurance S.A.
16,291,684
Swift
37,115

1,099,273,216
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

29
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 4 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT LINES IN THE STATEMENT OF FINANCIAL POSITION (CONT.)
h) Property, plant and equipment
12/31/2023


Net carrying amount at inception
298,166,050,154
Increases
23,228,952,872
Net decreases
(58,587,485)
Devaluation
(4,007,255,756)
Impairment losses
(5,497,805,712)
Depreciation charge
(45,699,971,473)
Net book value as of 12.31.2023
266,131,382,600


Cost
529,706,780,366
Accumulated depreciation
(263,575,397,766)
Net book value as of 12.31.2023
266,131,382,600


i) Intangible assets



Net carrying amount at inception
55,100,531,831
Increases due to internal development
14,753,136,615
Amortization charge
(19,160,951,844)
Impairment loss charge
(344,374,833)
Net book value as of 12.31.2023
50,348,341,769


Cost
184,664,799,182
Accumulated amortization
(129,210,793,154)
Impairment loss
(5,105,664,259)
Net book value as of 12.31.2023
50,348,341,769


j) Other assets



Financial assets pledged as collateral
424,510,613
Deferred income tax assets
136,000,688,353
Non-current assets held for sale
26,702,223,876
Commissions to be amortized
16,096,300,663
Works of art
550,484,071

179,774,207,575
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

30
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 4 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT LINES IN THE STATEMENT OF FINANCIAL POSITION (CONT.)


LIABILITIES
12/31/2023


k) Deposits



Non-Financial Private Sector and Residents Abroad
1,171,456,974
Non-Financial Public Sector
64,249,893
Financial Sector
3,922,337,559,378
Total
3,923,573,266,246


l) Debt Securities



HSBC Latin America Holdings (UK) Limited
164,472,155,899


m) Financial intermediation obligations



Financial creditors for cash purchases to be settled
6,582,089,438
Non-financial accounts payable for cash purchases to be settled
1,069,941,242
Collections and other transactions on behalf of third parties
80,573,283,127
Leases payable
16,970,327,406
Balances with clearing houses
150,038,160,215
Financing received from local financial institutions
18,436,593
Other financing received from financial institutions
2,153,301,727
Others
10,597,154,440
Credit balances with forward transactions
12,761,555,214

280,764,249,401
n) Insurance Contract liabilities



With policyholders
9,581,251,325
With reinsurers
130,589,188
With producers
443,359,310

10,155,199,823
o) Trade payables



Other accounts payable
267,670,202
Suppliers
8,413,525

276,083,727
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

31
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 4 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT LINES IN THE STATEMENT OF FINANCIAL POSITION (CONT.)

p) Social security and tax liabilities
12/31/2023


Provision for bonuses
2,112,426,126
Vacation provision
1,251,047,914
Social security taxes payable
434,593,744
Income tax payable (Note 7)
12,516,608,968
Income tax credits
(1,581,298,283)
VAT return
52,607,896
Gross income tax
1,875,293,973
Deferred tax liabilities
18,820,284,104
Withholdings to third parties
10,592,116,903
Other
2,351,032,969

48,424,714,316
q) Other liabilities



Purchases of investments to be settled
193,912,678,209
Dividends payable
186,449,739,780
Loan Fees to be accrued
17,559,399,312
Provision for expenses
4,029,919,479
Current income tax liabilities
597,919,594
Deferred tax
407,910,733
Other non-financial liabilities
36,504,463

402,994,071,571


r) Technical commitments - Insurance



Ongoing and Similar Risks
509,259,962
Mathematical Reserves - Direct Insurance
285,863,799,839
Fluctuation Funds
14,819,895,344
Mathematical Reserves of Annuities
221,923,224,848
Mathematical Reserves for Annuities
9,607,368,055
Provision for Mathematical Reserves Recomposition
6,558,670,752
Interest or Accumulation Funds
60,923,265,627
Others
2,236,611,641

602,442,096,069
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

32
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024

(in Argentine pesos)

NOTE 5 - COMPOSITION OF CERTAIN STATEMENT OF INCOME LINES

a) Net interest income
12/31/2023


Interest-related income

Interest on loans to the financial sector
               9,776,612,000
Interest on advances
           224,223,885,000
Interest on overdrafts
           114,869,085,000
Interest on mortgage loans
                  179,025,000
Interest on pledge loans
             27,764,075,000
Interest on credit card loans
             69,952,763,000
Interest on finance leases
               4,581,785,000
Interest on personal loans
             42,499,510,000
Interest on foreign trade loans
                  555,109,000
Net income from public and private securities
           522,419,996,000
Adjustments for CER and UVA/UVI clause
           160,660,089,000
Premiums and interest on reverse repurchase transactions with the financial sector
           204,724,664,000
Others
               2,240,230,000

       1,384,446,828,000




Interest expenses

Interest on time deposits
           (383,892,409,000)
Interest on other financial intermediation obligations
               (3,376,710,000)
Interest on checking accounts deposits
             (81,866,092,000)
Interest on savings accounts deposits
                     (92,546,000)
Interest on other time deposits
           (109,006,020,000)
Interest on financing from local financial institutions
                  (949,269,000)
Interest on other deposits
                  (354,113,000)
Premiums on liabilities repurchase transactions with the financial sector
                  (542,204,000)
Adjustments for CER and UVA/UVI clause
             (10,474,936,000)
Other interests
               (3,796,779,000)

           (594,351,078,000)


Net Income from interest
           790,095,750,000



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

33
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024

(in Argentine pesos)

NOTE 5 - COMPOSITION OF CERTAIN STATEMENT OF INCOME LINES (Cont.)


b) Insurance Business Result



Issued premiums
             30,443,746,160
Prior Fiscal Year Technical Commitments
           219,446,217,860
Technical Commitments for the Fiscal Year
           (288,568,489,738)
Ceded premiums Reinsurance
                  (685,375,975)

             (39,363,901,693)
c) Commissions and fees for services



Fee income

Commissions for guarantees granted
                     89,309,000
Foreign exchange and foreign exchange commissions
               5,565,406,000
Commissions related to credit, credit cards and insurance
             29,299,660,618
Bond-linked commissions
             17,328,235,000
Commissions related to securities
               1,468,248,000

             53,750,858. 618

d) Commissions lost



Fee-related Expenses

Market rights commissions (ROFEX/MAE)
(270,156,762)
Commissions paid for services
(2,979,465,089)
Foreign exchange and foreign exchange commissions
(822,645,775)
Commissions Loyalty programs
(1,730,860,643)
Others
(6,642,908,424)
Total Commissions lost
(12,446,036,693)



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

     34
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 5 - COMPOSITION OF CERTAIN STATEMENT OF INCOME LINES (CONT.)
e) Other expenses
Contributions to the Deposit Insurance Scheme(6,389,218,809)
Charges for uncollectible accounts of sundry credits and other allowances(6,990,893,571)
Turnover Tax(177,021,720,531)
Loss from operations or devaluation of various assets(6,013,262,290)
Interest on lease liability(4,526,290,396)
Adjustments for sundry obligations(15,101,083,462)
Others(13,958,402,298)
Redemptions(9,083,616,540)
Annuities and Annuities(24,921,793,479)
Other Expenses(6,226,826,566)
Revenue11,958,338,509
(258,274,769,433)
f) Impairment charge
Allowances Consumer Portfolio24,801,938,483
Allowances for Commercial and Similar Portfolio2,340,816,351
Recovery of Allowances(1,643,890,562)
Restatement of transactions in constant currency20,847,902,111
46,346,766,383



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

35
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 5 - COMPOSITION OF CERTAIN STATEMENT OF INCOME LINES (CONT.)
g) Financial incomes12/31/2023
Generated by assets
Income from holding investments in Mutual Funds(79,562,427,884)
Net Income from Financial Instruments measured at Fair Value through Profit or Loss157,984,237,014
Income from Derecognition of assets measured at Amortized Cost909,741,153
Revaluation on dollar link loan held by HSBC Argentina Holdings SA22,702,867,872
Exchange differences5,134,815,883
Income from exposure to changes in the purchasing power of the currency(815,078,136,190)
(707,908,902,152)
h) Other income
Income (loss) on sale of property, plant and equipment27,727,075
Redemptions(9,813,408,598)
Revenue119,171,506,903
Other Compensation and Benefits(1,042,763,928)
Allowances for miscellaneous contingencies(777,617,176)
Cost recovery84,474,924,716
Exchange Rate Differences on Gold and Foreign Currency181,945,296,726
Other operating income104,933,715,755
Depreciation and impairment of assets(55,336,818,783)
Fees and commissions for management and administration of Mutual Funds15,219,625,126
Other commissions63,312,197,990
502,114,385,805
i) Income  from equity instruments
HSBC Bank Argentina S.A.27,407,504
HSBC Seguros de Retiro (Argentina) S.A.(5,805,132)
HSBC Seguros de Vida (Argentina) S.A.(2,559,155)
HSBC Global Asset Management Argentina SA SGFCI530,510
HSBC Participaciones (Argentina) S.A.(731,238)
18,842,490
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

36
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 6 – INVESTMENT IN EQUITY INSTRUMENTS

Investments in controlled companies are as follows:

Companies
Financial statements considered for the purpose of calculating the proportional equity value  
Percentage of equity interest

12/31/2023

12/31/2023
Controlled


Direct
Total
Banking activity




HSBC Bank Argentina S.A.
12/31/2023

99.98
   99.98
Insurance activity




HSBC - Seguros de Vida (Argentina) S.A.
12/31/2023

98.00
(1) 99.99
HSBC - Seguros de Retiro (Argentina) S.A.
12/31/2023

98.00
(1) 99.99
Other activities




HSBC Participaciones (Argentina) S.A.
12/31/2023

99.43
    99.43
HSBC Global Asset Management (Argentina) S.A.
12/31/2023

56.44
(1) 99.99

(1)Through the holding of a controlled company.




See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


37
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 7 - INCOME TAX

Deferred tax assets and liabilities are as follows:



Items
12/31/2023
Valuation of securities
164,585,225,771
Tax losses carry forward
16,174,175
Provisions
940,300,039
Inflation adjustment
347,241
Other
1,451,776
Total Deferred Tax Assets
165,543,499,003

Items
12/31/2023
Valuation of securities
(168,554,200,733)
Property, Plant and Equipment
          (161,107,478)
Inflation adjustment
            (36,091,453)
Other
              (3,285,082)
Total Deferred Tax Liabilities
  (168,754,684,737)


Net Deferred Tax Liabilities
       (3,211,185,742)



As of December 31, 2023, based on the projections made, the Company has recognized the entire net deferred liability as of that date.


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


38
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024 (in Argentine pesos)

NOTE 7 - INCOME TAXES (cont.)

The reconciliation between the income tax for the fiscal year and the income tax resulting from applying the current tax rate to the accounting income before income tax is shown below:

12/31/2023


Income for the fiscal year before taxes
406,971,249,868
Current tax rate
35%
Income for the fiscal year at the tax rate
142,439,937,454


Permanent differences at the tax rate

  Dividends
(124,906,508,556)
Inflation adjustment on the purchase and sale of mutual funds
(3,072,398)
Inflation adjustment on the purchase and sale of mutual funds prior fiscal year
3,575,935
 Fund Purchase and Sale Update
(6,918,826,163)
 Retirement Insurance No deductible
11,338,101
 Tax inflation adjustment
839,889,672
 Expenses and amortization of vehicles
9,832,066
 Monetary Loss
601,591,034
 Monetary loss on tax
3,140,355,297
 Permanent Tax Rate Difference Sworn Statement Dec2022
(8,431,566)
 Adjustment of affidavit Dec 2022
(979,905)

 
Total income tax charge
15,208,700,970
Deferred tax charge for the fiscal year
(2,199,709,583)
Inflation Effect on the opening balance
(117,175,923)
Difference between affidavit and provision
(48,647,992)
Tax inflation adjustment
(3,140,355,297)

 
Current Income tax
9,702,812,175

NOTE 8 - STATEMENT OF SHAREHOLDERS' EQUITY

The Company's statement of shareholders' equity as of December 31, 2023 is as follows:


  12/31/2023  


         $

Subscribed, paid-in and registered capital
1,184,364,392


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

39
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 9 - RESTRICTED ASSETS

9.1. Government securities collateralized by Rofex and MAE transactions
“Financial assets pledged as collateral - Collateral deposits” as of December 31, 2023 includes thousands of Argentine pesos 15,523,222, corresponding to the following bonds, T DEBT CABA C23 TV (BDC28) PV ARS 853M; BONCER 2025 AFS (TC25) PV ARS 235.5M; T DEBT CLASS 22 TV (BDC24) PV ARS 82M; BONTE BDL V, 04/18/24 (TB24) FV ARS 2000M and BONTE USD 2030 LEY NY (GD30) FV USD 2.1M.
The securities were delivered as collateral as a consequence of the contracts signed to operate in Rofex, which establish that collateral must be posted to cover open positions held by the agent in such markets.

9.2. Credit Card Guarantee Fund
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - Deposits as Collateral” balances related to its credit card operations amounting to Argentine pesos 46,473,701,901.

9.3. Collateral deposits for real property leases
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - Deposits as Collateral” balances corresponding to real property lease balances of Argentine pesos 169,491,271.
.
9.4. Collateral deposits as offsetting entry agent Law 26,831 of Capital Markets
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - Deposits as Collateral” balances related to the function of agent of ALyC and AN established by Law 26,831 for Argentine pesos 514,938,515.

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

40
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 9 - RESTRICTED ASSETS (CONT.)

9.4. Collateral deposits as offsetting entry agent Law 26,831 of the Capital Markets Law (Contd.)

The assets comprising the liquid offsetting entry are shown in the following table:

Liquid Offsetting Entry
Balances at 12/31/2023 in Argentine pesos
Assets available in Argentine pesos and other currencies
Cash at Banks - BCRA
Account code 00150 - BCRA current account in Argentine pesos
11,147,426
11,147,426
Assets in local instruments
National Public Securities DISC B, 2033 LARG CER deposited at
Cash Account 6200135
208,535,484
46,442

9.5. Collateral deposits for repurchase transactions
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - Deposits as Collateral” balances in Argentine pesos as collateral for guarantees and the execution of repurchase transactions amounting to Argentine pesos 1,608,615,913.

9.6. Deposits as Collateral - Attachments and precautionary measures
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - balance foreclosed” an amount of Argentine pesos 75,864,987.
9.7. Collateral deposits for transactions with Coelsa and Interbanking
As of December 31, 2023, the company has recorded within “Financial assets pledged as collateral - Deposits as Collateral” balances related to the role of agent of Coelsa and Interbanking Argentine pesos 23,746,293,361 (corresponding to VN 12,080,500m of LELIQ 9/012024).

9.8. Collateral deposits for derivative transactions
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - Collateral deposits” as collateral for guarantees and the execution of futures transactions for Argentine pesos 403,162.
9.9. Special escrow accounts in favor of electronic clearing houses
As of December 31, 2023, the Company has recorded within “Financial assets pledged as collateral - BCRA special guarantee accounts” Argentine pesos 47,888,157,067, corresponding to guarantees in favor of electronic clearing houses and to hedge the settlement of transactions with credit cards, consumer vouchers and ATMs.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

41
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 10 - RESTRICTIONS ON PROFIT DISTRIBUTIONS

The next Shareholders' Meeting, in accordance with current regulations, will decide how to allocate the profit for the fiscal year ended December 31, 2023.
    
On the other hand, on April 28, 2023, the Ordinary Shareholders' Meeting, which considered the Consolidated Financial Statements as of December 31, 2022, resolved to allocate Argentine pesos 42,337,251,089 to the payment of cash dividends, Argentine pesos 5,138,526,004 to the Legal Reserve and Argentine pesos 73,605,057,260 to the voluntary reserve. All amounts are restated in the currency of the date of distribution at the Meeting.

NOTE 11 - ASSIGNMENT OF LITIGATION RIGHTS

On December 30, 2022, Máxima SA AFJP in liquidation has irrevocably assigned and transferred to the Company (its controlling company) any credit and/or right that corresponds or may correspond to Máxima SA AFJP in liquidation by virtue of the following lawsuits in force:

a) Máxima S.A. AFJP v. EN (Ministry of Economy and Public Finance and others) s/ Proceso de conocimiento, Case Number 29746/2015, pending before the Federal Contentious-Administrative Court of the Autonomous City of Buenos Aires.
b) Máxima S.A. AFJP Encaje y otro c/ Provincia de Misiones s/ Cobro de pesos s/ Sums of money, Case Number 21000091/2010, pending before the Federal Court of Posadas, Misiones.
c) Province of Misiones v. TMF Trust Company (Argentina) S.A. and others in a declaratory action, Case Number 21000481/2003, pending before the Federal Court of Posadas, Misiones.
d) Perez Carlos Antonio v. Anses y s/ Inconstitucionalidades Varias, Case Number 166728/2018, pending before the Federal Social Security Court of the Autonomous City of Buenos Aires.
e) Rodriguez Carla Anabel y otros c/ Prevención ART s/ Acción de Inconstitucionalidad, Case Number 2222/2009, which is pending before the courts of Rosario, Santa Fe.
f) Any liabilities, amounts or costs accrued or that may accrue in the future, by virtue of the existing lawsuits listed above, and any liabilities, contingencies or costs arising from the lawsuits listed above.



See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

42
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 11 - ASSIGNMENT OF LITIGATION RIGHTS (CONT.)

By virtue of this agreement, the Company irrevocably assumed that debt, and agreed to comply with such assigned obligations at maturity, leaving Máxima SA AFJP in liquidation exempt and released from any liability derived from the aforementioned lawsuits.

Based on the foregoing, Máxima SA AFJP in liquidation paid to the Company a net amount of Argentine pesos 60,000,000 restated in September 2024 currency, equivalent to Argentine pesos 376,643,076. Such payment has been executed on December 30, 2022 as follows:

i. Through the transfer of the holdings in the ESTANCIAS DEL PILAR Direct Investment Fund owned by the Company, in the amount of Argentine pesos 35,091, and
ii. By means of bank transfer, the amount of Argentine pesos 120,913,474.

With respect to the court filings informing the assignment of the litigious rights, it was resolved to take into account the assignment of rights in Docket Máxima S.A. AFJP v. EN (Ministry of Economy and Public Finances and others) s/ Proceso de conocimiento. On the other hand, the assignments of rights presented in 2 files are still pending confirmation.  




See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

43
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 12 -     SANCTIONS AND PENALTIES APPLIED TO THE FINANCIAL SUBSIDIARY AND LEGAL PROCEEDINGS INITIATED BY THE BCRA

The Subsidiary HSBC Bank Argentina S.A. has been notified of the following administrative and/or disciplinary sanctions:

a) Sanctions applied by the Financial Information Unit (Unidad de Información Financiera “UIF”): On October 11, 2019, the Company was notified of Resolution UIF 98 in the framework of summary 144/13, which imposes a penalty of thousands of Argentine pesos 206; and another fine for the same amount on certain individuals who were members of the Board of Directors as of the date of the facts. These penalties were confirmed by the Court of Appeals on October 27, 2022. The case is concluded.

On November 17, 2020, the Company was notified of Resolution UIF 47/20 in the framework of the summary 174/15 in which a penalty of thousands of Argentine pesos 550 was imposed; and another fine for the same amount to certain individuals who were members of the Board of Directors as of the date of the facts. As of the date of these consolidated financial statements, this resolution is being appealed before the Court of Appeals and is pending resolution.
The Company's management and its legal advisors believe that there would be no significant adverse financial effects that could result from the final outcome of such actions.
b) Sanctions applied by the CNV: On March 6, 2019, the Company was notified of the Resolution of the CNV in the framework of the summary 631/2014 in which a penalty of thousands of Argentine pesos 200 is imposed to be applied to the Company jointly and severally with the directors and syndics at the time of the facts. On March 11, 2021 the Court of Appeals revoked the penalty and the CNV filed an extraordinary appeal against such judgment, which was rejected on August 13, 2021. CNV filed a complaint before the Supreme Court of Justice of the Nation.
On December 17, 2020, the Company was notified of the Resolution of the CNV in the framework of the summary 632/14 which imposes a penalty of thousands of Argentine pesos 500 to be applied to the Company jointly and severally with the directors and syndics at the time of the facts. On December 21, 2021, the Court of Appeals upheld the penalty sanction and ordered the CNV to redetermine the amount since the penalty that the CNV had taken as an aggravating element to sanction (penalty of the summary 631/2014) was later revoked. The extraordinary appeal against the decision of the Court of Appeals was rejected and the Company filed on July 5, 2022 a complaint appeal before the Supreme Court of Justice of the Nation.
Communication “A” 5689 establishes that the Financial Institutions must report the proceedings initiated by the BCRA from the moment the SEFyC notifies its opening. The following are actions notified to the Company as of the date of these consolidated financial statements, which, in the opinion of the Company and its legal advisors, have sufficient allowances to hedge the associated risks.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

44
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 12 - SANCTIONS AND PENALTIES APPLIED TO THE FINANCIAL SUBSIDIARY AND LEGAL PROCEEDINGS INITIATED BY THE BCRA (CONT.)

c) Sanctions applied by the BCRA:

The Company's management and its legal advisors believe that there would be no significant adverse financial effects that could result from the final outcome of such actions.

Date of Notification
Type and number of summary
Persons
summarized
Charges
10/20/2011
Exchange Summary No
4774
Docket No.
101433/10
HSBC Bank
Argentina S.A., and
4 people
(Individuals)
Alleged non-compliance with the provisions of Communication “A” 4359 of the BCRA due to the existence of differences in real property purchase transactions made by non-residents between the amounts received by HSBC and the amounts of the deeds. On April 6, 2017, the acquittal of the defendants was resolved and on May 18, 2017, the Chamber of Appeals confirmed the acquittal. On July 13, 2017, the extraordinary appeal filed by the Prosecutor was granted, which is pending resolution before the Supreme Court of Justice of the Nation.
12/15/2014
Exchange
Summary N°6074
Docket No.
101111/11
HSBC Bank
Argentina S.A., and
7 people
(Individuals)
Alleged failure to supervise the conduct of former employees in the recording of foreign exchange transactions. On October 8, 2018, a judgment was rendered imposing a penalty of USD 2,000,000 to the Bank and penalties to the individuals involved. On April 25, 2019, the Court of Appeals upheld the penalty of USD 2,000,000 imposed on the Bank, revoked the penalties imposed on 4 individuals and upheld the penalties imposed on 2 individuals (former employees). The Entity filed an extraordinary appeal against this judgment. On July 2, 2024, the Supreme Court issued a judgment in which it confirmed the penalty imposed, but ordered the Chamber to issue a new pronouncement based on article 7 of Law 19,359. On September 25, 2024 the Court of Appeals ordered that the payment of such penalty be made in Argentine pesos at the BNA selling exchange rate of the day prior to payment. The Bank will proceed with the payment thereof.
02/03/2015
Financial
Summary No. 1426
Docket No.
100007/15
HSBC Bank
Argentina S.A., and
7 people
(Individuals)
The charge is for failure to comply with the regulations governing the decentralization abroad of activities related to information technology and information systems, and noncompliance with the minimum requirements for their management, implementation and control. On July 29, 2019, a penalty was imposed against the Entity in the amount of $945,000 and penalties against individuals. On March 26, 2021, the Court of Appeals revoked the penalties imposed on the Entity and the individuals. The BCRA filed an extraordinary appeal against such ruling, which is pending resolution before the Supreme Court of Justice of the Nation.





See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

45
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 12 - SANCTIONS AND PENALTIES APPLIED TO THE FINANCIAL SUBSIDIARY AND LEGAL PROCEEDINGS INITIATED BY THE BCRA (CONT.)

c) Sanctions applied by the BCRA (Cont.)

11/05/2015
Financial
Summary No. 1460
Docket No.
100343/15
HSBC Bank
Argentina S.A and 4
individuals
The Entity is charged with alleged noncompliance with minimum standards on internal controls. On March 1, 2019, a resolution was issued imposing a penalty on the Bank in the amount of thousands of Argentine pesos 3,442,500 and penalties on the four individuals. On December 30, 2020, the Court of Appeals upheld these penalties. The Entity filed an extraordinary appeal against this judgment, which was dismissed. On July 15, 2021 the Entity filed a complaint before the Supreme Court of Justice of the Nation, which was rejected in 2023. The case is concluded.
02/22/2018
Financial
Summary No. 1542
Docket No.
100477/17
HSBC Bank
Argentina S.A., and
3 people
(Individuals)
The Bank is charged with the alleged noncompliance with Communication “A” 6242, which ordered the inclusion of the concept “assets” within the available options for online banking transfers. On April 3, 2019, a resolution was issued imposing a penalty on the Bank in the amount of thousands of Argentine pesos 990,000 and penalties on the 3 individuals. On August 13, 2020, the Court of Appeals upheld these penalties. On August 28, 2020, the Bank and the three individuals filed an extraordinary appeal. On December 15, 2020 the Chamber rejected the extraordinary appeal and on December 22, 2020 the Entity filed a complaint appeal before the Supreme Court of Justice of the Nation, which was rejected in 2023. The case is concluded.
03/06/2021

Exchange
Summary No. 7539
Docket No. 381/9/21

HSBC Bank
Argentina S.A. and 3 individuals
The Entity is charged with alleged non-compliance with the criminal exchange regime in connection with international transfers made by customers in 2019. On April 7, 2021, the Entity and individuals responded to the releases. The matter is currently pending for sentencing.
08/29/2023
Exchange Summary No. 8064 Docket No. 22907/22
HSBC Bank Argentina S.A. and 4 individuals
  The Entity is charged with alleged non-compliance with the criminal foreign exchange regime reason for international transfers made in 2020 by customers. On October 4, 2023, the Entity and individuals responded to the releases.








See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


46
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 13: RECONCILIATION OF SHAREHOLDERS' EQUITY AND PROFIT FOR THE PERIOD BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN ARGENTINA AND IFRS ACCOUNTING STANDARDS

The following is a reconciliation between the shareholders' equity and consolidated statement of income, presented in accordance with accounting principles generally accepted in Argentina and the amounts according to IFRS accounting standards as issued by the International Accounting Standards Board (“IFRS”):




Total Shareholders´Equity








Profit for the year







Balances arising from consolidated financial statements of HSBC Argentina Holdings S.A. (currently GGAL Holdings S.A.), in accordance with accounting principles generally accepted in Argentina as of December 31, 2023
1,486,092,142,689

391,762,548,898







Application of IFRS 9 - Note 1
(77,173,463,334)

(90,589,972,144)







Application of IFRS 17 related to the valuation of insurance contracts - Note 2
(44,570,955,105

(37,084,868,521)







Application of IFRS 16 related to the valuation of lease contracts - Note 3
(7,497,642,055)

(9,109,887,783)







Valuation of technical commitments in insurance companies - Note 4
64,913,873

302,018,102







Difference in the recognition of result from financial instruments - Note 5
10,601,637,600

(106,146,885,549)







Income taxes - Note 6
103,188,901,987

74,980,596,773




Inflation adjustment
(255,836,497)

106,928,253,863







Balances of HSBC Argentina Holdings S.A. under IFRS as of December 31, 2023
1,470,449,699,159

331,041,803,640
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

47
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 13: RECONCILIATION OF SHAREHOLDERS' EQUITY AND PROFIT FOR THE PERIOD BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN ARGENTINA AND IFRS ACCOUNTING STANDARDS (CONT.)

Notes
1-The financial statements of HSBC Bank Argentina S.A., used for the preparation of the consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Argentina. In relation to the allowance for impairment the Company has followed the guidelines established by the BCRA, which is based on IFRS 9, with the temporary exception of the application of point 5.5 (impairment loss) of IFRS 9 “Financial Instruments” on debt instruments of the Non-Financial Public Sector. This adjustment represents the allowance for impairment of sovereign bonds included in the portfolio which are measured at fair value through other comprehensive income. The impact on shareholders' equity amounted to Argentine pesos 57,218,750,231.

Additionally, in the financial statements of HSBC - Seguros de Retiro (Argentina) S.A. and HSBC - Seguros de Vida (Argentina) S.A., used for the preparation of the consolidated financial statements, government securities are measured at amortised cost. This adjustment corresponds to the application of the classification and measurement provisions on IFRS 9, which implies classifying these bonds at fair value through profit or loss. The impact on shareholders' equity is a decrease of Argentine pesos 89,639,291,693 and profit for the year end of Argentine pesos 166,590,748,412.

2-The financial statements of HSBC - Seguros de Retiro (Argentina) S.A. and HSBC - Seguros de Vida (Argentina) S.A. used for the preparation of the consolidated financial statements have been prepared on the basis of the technical standards approved by the Regulator (SSN) which comply with accounting principles generally accepted in Argentina. The adjustment included corresponds to the application of IFRS 17, which introduces the use of a comprehensive model for the treatment of insurance contracts, with methods for measuring an entity's liabilities based on the characteristics of the contract.

The valuation models assigned to each product based on the results of the Eligibility Test are:
Variable Fee Approach (VFA) for life products with savings, retirement, and pension annuities in pesos, and the General Measurement Model (GMM) for the remaining products.
The liability under IFRS 17 is comprised of the sum of a Best Estimated Liability (BEL), a Risk Adjustment (RA), a Time Value of Guarantees (TVoG), and a Contractual Service Margin (CSM).

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

48
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 13: RECONCILIATION OF SHAREHOLDERS' EQUITY AND PROFIT FOR THE PERIOD BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN ARGENTINA AND IFRS ACCOUNTING STANDARDS (CONT.)

Notes
The BEL is calculated as a projected cash flow, which considers economic and non-economic assumptions. Among the economic assumptions, a discount curve for each currency is used at each calculation date, using the top-down method, constructed with market data; and an inflation curve based on market expectations. Non-economic assumptions include mortality, lapses, partial surrenders, and expenses, based on the company's own experience.

The RA is calculated using the Confidence Level Technique, using the 75th percentile of the normal distribution.

An approach based on the Black & Sholes options model was implemented to calculate the TVoG.
The initial CSM was calculated as of December 31, 2022, using FVA, and then the periodic roll-forward is performed based on the accounting standard.

3-The consolidated financial statements of HSBC Argentina Holdings S.A. (currently GGAL Holdings S.A.) are prepared under accounting principles generally accepted in Argentina which include a measurement model similar to IAS 17 for lease accounting. Under IFRS, leases are accounting under IFRS 16 which establishes the recognition of a right of use asset and a lease liabilities for leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the funding rates in effect at fiscal year-end. The right-of-use asset was measured at an amount equal to the lease liability.

These consolidated financial statements include 70 lease contracts impacted by this standard, in which HSBC Bank Argentina S.A. acts as lessee.









See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

49
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 13: RECONCILIATION OF SHAREHOLDERS' EQUITY AND PROFIT FOR THE PERIOD BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN ARGENTINA AND IFRS ACCOUNTING STANDARDS (CONT.)

Notes
Impact on Shareholders´Equity
Right to use asset related to real property  (net of depreciation)                                                  9,776,152,415
Advances for lease(303,467,719)
Lease payable(16,970,326,751)
(7,497,642,055)
Impact on Profit for the year end
Rentals2,920,996,069
Depreciation(1,280,463,965)
Interest on leases payable(2,578,816,099)
Gain on early termination of contracts116,741,527
Exchange differences(8,288,345,313)
(9,109,887,783)

4-The consolidated financial statements of HSBC Argentina Holdings S.A. (currently GGAL Holdings S.A.) include the valuation of the technical commitments (IBNR) in HSBC - Seguros de Vida (Argentina) S.A., which have been established in accordance with the rules and regulations issued by the SSN based on the approved technical notes which comply with accounting principles generally accepted in Argentina. This adjustment represents the application of the Bornhuetter-Ferguson (B-F) method used by IFRS.

5-In the consolidated financial statements, equity instruments are carried at cost. Under IFRS 9, equity instruments are measured at fair value through profit or loss, except when management made use of the irrevocable option to measure them at fair value through other comprehensive income at the time of initial recognition.

6-Corresponds to the impact on income tax of the adjustments described above.

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

50
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 14- ECONOMIC CONTEXT IN WHICH THE COMPANY OPERATES

The Company operated in a complex economic context, whose main variables have been highly volatile, both domestically and internationally.

In the international arena, following the 50 bps cut in interest rates by the US Federal Reserve, investors were optimistic about a continuity in the path of lower rates, despite the fact that the latest FED projections suggested a 4.4% rate by the end of 2024. However, recent economic information such as the creation of 254,000 new jobs in September and a slight increase in inflation above expectations adjusted expected rates for the current year to 4.5% (vs. 3.8% a month earlier). Against this backdrop, U.S. bond yields rose as much as 4.21% for the 10-year case, while, by contrast, shares advanced by an average of 5%. Likewise, the European Central Bank anticipated the U.S. central bank and announced another rate cut during the last month, thus accumulating rate cuts of 85 bps since the June 2024 meeting.

At the local level, during the first half of 2024, the Gross Domestic Product showed a 3.4% drop compared to the first half of 2023. The retraction was explained by investment (-24.6%), private consumption (-8.2%) and public consumption (-5.2%). Exports, on the other hand, grew 29%. In seasonally adjusted terms, the Gross Domestic Product accumulates three consecutive quarters of contraction, with declines of 2.3% in the fourth quarter of 2023, 2.2% in the first quarter of 2024 and 1.7% in the second quarter of 2024. According to information from the Monthly Economic Activity Estimator, July and August presented monthly growth rates of 2.1% and 0.2%, respectively.

After closing 2023 with 25.5% inflation in December, monthly inflation slowed down during the first months of 2024: it stood at 20.6% in January, 13.2% in February, 11.0% in March, 8.8% in April and 4.2% in May. Between June and August, inflation remained above 4%, a level that was breached in September (when inflation was 3.5%). On a year-on-year basis, inflation slowed to 209%, having peaked at 289.4% in April 2024. In the first nine months of the year, cumulative inflation amounted to 101.6%.

After the exchange rate jump in December 2023 and up to the present, the exchange rate has sustained a crawl of around 2% per month. The exchange rate went from Argentine pesos 810.7/USD 1 at the beginning of January to Argentine pesos 985.9/USD 1 at September 30, 2024, according to BCRA Communication “A” 3500.

As of September 30, 2024, International Reserves increased by USD 5,442 million, as a result of purchases of foreign currency from the private sector. To date, these purchases from the private sector totaled USD 15,871 million.

At the same time, foreign currency deposits in the private sector increased by USD 12,780 million between August 15 and September 30, within the framework of the government's money laundering program. Since October 1, the date from which the withdrawal of foreign cash was authorized, foreign currency balances fell by USD 585 million. As of the latest available data, dollar deposits amounted to USD 30,803 million.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

51
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 14- ECONOMIC CONTEXT IN WHICH THE COMPANY OPERATES (CONT.)

The BCRA has made five interest rate cuts this year. The benchmark interest rate was reduced from 100% levels at the beginning of 2024 to 40% levels by mid-May. The reference rate remains at this level at the time of writing. As of July 22, the BCRA ceased to carry out overnight liabilities repurchase transactions, defining the Fiscal Liquidity Bills (LEFI, Letras Fiscales de Liquidez) as the new liquidity regulation instruments within a new monetary framework. The reference rate has become that of the LEFI, securities issued by the Treasury whose rate is defined by the BCRA.

During the first nine months of 2024, the Non-financial Public Sector presented a primary surplus income of USD 9,578,390 million (equivalent to 1.7% of GDP). This income, net of interest payments, resulted in a positive financial income of USD 4,921,661 million (0.4% of GDP). This was explained by a 29.5% year-on-year drop in real spending, which exceeded the real impairment in revenues (-6.3% year-on-year).

In May 2024, the International Monetary Fund reported that its technical team had completed the eighth review of the Extended Facilities Agreement. This revision was approved in June by the Board of Directors of the International Monetary Fund, thus enabling the disbursement of approximately USD 800 million. Additionally, it was reported that all performance criteria for the first quarter had been met with margins, implying a better income than expected so far. Revisions for the second and third quarters are still pending.

The Company's management constantly monitors the evolution of the variables affecting its business, in order to define its course of action and identify potential impacts on its equity and financial position.

The consolidated financial statements of the Company should be read in light of these circumstances.  


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President

52
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)
Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

NOTE 15 - EVENTS SUBSEQUENT TO THE CLOSING OF THE FISCAL YEAR

On February 3, 2025, the Board of Directors resolved to initiate the necessary steps to carry out a Corporate Reorganization. The objective is to improve the organization and utilization of resources, as well as achieve more effective and efficient technical and administrative management. The Corporate Reorganization will consist of a spin-off-merger and mergers by absorption, in accordance with the dispositions of: (a) article 88, first paragraph, section I, and the article 82 of the General Companies Law No. 19,550, and its amendments ("LGS"), (b) articles 146, 151 and 152 of General Resolution 15/2024 of the IGJ, and (c) frame it as three simultaneous and concatenated tax-free business reorganizations between entities of the same economic group in accordance with the article 80 of the Income Tax Law, text ordered by Decree 824/2019 and its amendments (the "LIG").
As a result of this process, GGAL Holdings S.A. will be spun off, dissolved without liquidation, and absorbed as a result of a merger by Banco Galicia, Galicia Asset Management S.A.U., and Sudamericana Holding S.A. GGAL Holding S.A. will transfer:
•99.985% of the shares in Banco GGAL S.A. to Banco de Galicia y Buenos Aires S.A.U.
•56.439% of the shares in GGAL Asset Management S.A S.G.F.C.I. to Galicia Asset Management .S.A.U.
•98% of the shares in GGAL Seguros S.A. to Sudamericana Holding S.A.
•98% of the shares in GGAL Seguros de Retiro S.A. to Sudamericana Holding S.A.
•100%, of the shares in GGAL Participaciones S.A.U. to Sudamericana Holding S.A.
The mergers and acquisitions contemplated in the Corporate Reorganization will be carried out as follows:
•Unification of the banking business: Banco Galicia will absorb Banco GGAL S.A., which will be dissolved without liquidation, resulting in a single banking entity.
•Unification of the mutual fund management business: Galicia Asset Management S.A.U. will absorb GGAL Asset Management S.A., which will be dissolved without liquidation, thus consolidating the business into a single entity.
•Absorption of GGAL Participaciones S.A.U.: Sudamericana Holdings S.A. will absorb GGAL Participaciones S.A.U., which will be dissolved without liquidation.
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee
 
Bruno Folino
Vice President


SCHEDULE I
        53
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444


CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024 (in Argentine pesos)
        


Nominal value
 
 
Name and characteristics
Level 1
Level 2
Level 3
of the securities - Issuer  



Public Income Securities
335,740,790,337
1,321,669,646,732
96,825,946,959
Repurchase transactions
                        -
945,126,546,156
                         -
Shares
2,843,862,221
                          -
                         -
Debt Securities
118,377,334,124
15,678,607,461
969,604
Mutual Funds
203,590,778,877
                          -
                         -
Financial Trusts
                        -
                          -
6,914,159,071
Time Deposits
76,716,384,293
                          -
                         -
Loans
                        -
                          -
18,639,325,900
Other Investments
                        -
66,389,626,782
7,160,411,298

       737,269,149,853
      2,348,864,427,132
       129,540,812,832



3,215,674,389,817


See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee

Bruno Folino
Vice President

SCHEDULE II
54
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

PROVISIONS
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)






Balances at



Balances at

beginning of the
 Increases 
 Decreases
Restatement
closing of the
Items
   fiscal year  



  fiscal year   






DEDUCTED FROM ASSETS











Other financial assets
1,103,906,349
1,407,407,896
                         -
(749,416,185)
1,761,898,061
Loans and other financing
67,652,069,760
22,728,190,674
                         -
(45,927,407,471)
44,452,852,963
Provision for other receivables
30,560,869
1,034,285,220
                         -
(20,747,087)
1,044,099,003
Loans and other financing - Other financial institutions
432,675,602
401,231,615
(45,809,202)
(293,733,332)
494,364,683
Other debt securities
518,063
                          -
                         -
(350,751)
167,312
Contingent commitments
729,787,514
4,997,189,523
                         -
(495,435,559)
5,231,541,478












Totals as of 12/31/2023
69,949,518,158
30,568,304,928
(45,809,202)
(47,487,090,384)
52,984,923,500












INCLUDED IN LIABILITIES











Currents











Provision for lawsuits
390,376,424
335,789,123
(112,934,754)
(265,017,772)
348,213,021
Provisions for termination benefits
5,749,846,394
3,841,030,096
(7,375,947,438)
(1,981,556,781)
233,372,272
Provision for contingencies
9,291,269,688
14,532,654,817
(277,216,291)
(6,307,633,970)
17,239,074,243
Other
23,829,436,352
32,755,111,097
(15,555,059,497)
(22,515,396,426)
18,514,091,526






Totals as of 12/31/2023
39,260,928,859
51,464,585,133
(23,321,157,980)
(31,069,604,949)
36,334,751,062

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee

Bruno Folino
 Vice President


SCHEDULE III
55
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

ASSETS AND LIABILITIES IN FOREIGN CURRENCY
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)

FOREIGN CURRENCY BALANCES AS OF
12/31/2023

Value

from
Items
     books  

$
ASSET

Cash and Due from Banks
1,438,724,185,875
Derivative Financial Instruments
32,595,638
Other financial assets
44,248,748,229
Public Income Securities
377,606,566,889
Shares
2,843,862,220
Debt Securities
124,171,595,275
Mutual Funds
59,878,974,618
Financial Trusts
6,189,091,294
Time Deposits
74,432,101,730
Loans and other financing
184,888,794,754
Other Investments
7,160,411,294
Other Debt Securities
270,331,427,776
Financial assets pledged as collateral
54,251,702,527
Other non-financial assets
35,619,352


  Other credits
4,475,392,373


Total assets
2,649,271,069,844


LIABILITIES



Deposits
1,415,030,159,285
Debts
8,653,442,604
Technical Commitments
501,759,731,190
Allowances
30,203,681,732
Financing received from BCRA and other financial institutions
7,678,018,495
Other financial liabilities
99,656,097,937
Subordinated Debt Securities
164,472,155,899
Other non-financial liabilities
25,165,491,727


Total liabilities
2,252,618,778,868


Net asset position
396,652,290,976
USD: U.S. dollar.
(1) See Note 2.3.b)
See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee

Bruno Folino
 Vice President

SCHEDULE IV
56
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

OTHER RECEIVABLES AND PAYABLES: MATURITIES AND RATES
as of December 31, 2023 expressed in homogeneous currency as of September 30, 2024
(in Argentine pesos)
 
To
Between
Between
Between 9 and
more than 12 months
no deadline
Total as of 12/31/2023
 
  3 months  
  3 and 6 months  
  6 and 9 months  
  12 months  
 
 
 
 
$
$
$
$
$
 
$
ASSET
 
 
 
 
 
 
 
Finance leases receivables
4,054,571,586
1,917,822,876
                      -
650,704,992
1,736,915,745
                      -
8,360,015,199
Service receivables
4,576,900,415
                                 -
2,309,455
1,233,412,259
28,866,437
                      -
5,841,488,566
Other credits
21,967,738,347
6,714,920,001
131,773,620
6,892,463,867
37,577,850,884
28,886,495
73,313,633,215
 
 
 
 
 
 
 
 
Totals 12/31/2023
30,599,210,347
8,632,742,877
134,083,075
8,776,581,119
39,343,633,067
28,886,495
87,515,136,980
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
Deposits
3,856,421,850,003
65,919,593,544
                      -
1,230,991,025
831,673
                      -
3,923,573,266,246
Debt Securities
                                    -
3,699,800,679
                      -
3,699,800,679
157,072,554,541
                      -
164,472,155,899
Financial intermediation obligations
270,930,493,342
997,257,811
                      -
1,008,522,367
7,827,975,880
                      -
280,764,249,401
Insurance contract liabilities
10,124,874,143
                                 -
                      -
                      -
30,325,680
                      -
10,155,199,823
Commercial debts
73,197,957
8,181,519
84,473,618
110,230,633
                           -
                      -
276,083,727
Social security and tax liabilities
203,886,863,031
10,210,280,244
1,957,026,719
2,372,312,029
                           -
16,447,972,075
234,874,454,098
Other Liabilities
180,834,823,923
                                 -
                      -
36,504,461
                           -
35,673,003,407
216,544,331,791
Totals as of 12/31/2023
4,522,272,102,400
80,835,113,798
2,041,500,338
8,458,361,195
164,931,687,773
52,120,975,482
4,830,659,740,985

See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee

Bruno Folino
Vice President

    

SCHEDULE V
57
HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Registration number at the Superintendency of Corporations (Inspección General de Justicia): 9,444

INFORMATION REQUIRED BY ART. 64, paragraph b) OF LAW 19550
for the fiscal year ended December 31, 2023 expressed in homogeneous currency as of September 30, 2024 (in Argentine pesos)



TOTAL
Administrative and Personnel Expenses

Personnel Expenses
27,926,352,364
Directors and Syndics' Fees
1,530,995,938
Other fees
8,521,365,858
Propaganda and advertising
6,927,655,219
Taxes
44,055,166,468
Operating expenses
14,918,226,689
Card expenses
15,940,785,000
Maintenance expenses
41,828,587,604
Others
27,325,528,638
Remunerations
172,032,688,860
Social charges
55,261,047,607
Compensation and bonuses to personnel
74,809,210,148
Personnel services
4,112,673,804


Total Administrative and Personnel Expenses
495,190,284,196

















See our report dated
May 16, 2025




PRICE WATERHOUSE & CO. S.R.L.

 

(Partner)




C.P.C.E.C.A.B.A. Tº 1 Fº 17
Dr. Diego Sisto
Public Accountant (UCA)
C.P.C.E.C.A.B.A. T° 274 F° 12

Syndic
By Supervisory Committee

Bruno Folino
Vice President

Report of Independent Auditors

To the Board of Directors and Shareholders of HSBC ARGENTINA HOLDINGS S.A. (currently GGAL Holdings S.A.)

Qualified Opinion

We have audited the accompanying consolidated financial statements of HSBC ARGENTINA HOLDINGS S.A. (now currently GGAL Holdings S.A.) and its subsidiaries (the “Company”) as of December 31, 2023, which comprise the consolidated statement of financial position as of December 31, 2023, and the related consolidated statement of income, of changes in shareholders’ equity and of cash flows for the year then ended , including the related notes (collectively referred to as the “consolidated financial statements”) which, as described in Note 3 to the consolidated financial statements, have been prepared on the basis of accounting principles generally accepted in Argentina.

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in Argentina.

Basis for Qualified Opinion

As discussed in Note 3.3), the Company prepared the accompanying consolidated financial statements for Grupo Financiero Galicia S.A. to comply with Rule 3-05 of Regulation S-X. As a consequence, the consolidated financial statements do not include comparative information as required by the accounting principles generally accepted in Argentina.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Emphasis of Matter 
 
Accounting principles generally accepted in Argentina vary in certain significant respects from IFRS Accounting Standards as issued by the International Accounting Standards Board. Information relating to the nature and effect of such differences is presented in Note 13 to the consolidated financial statements. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Argentina, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern for at least, but not limited to, twelve months from the end of the reporting period, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Price Waterhouse & Co. S.R.L., Bouchard 557, 8th floor, C1106ABG - Autonomous City of Buenos Aires, Argentina
T: +(54.11) 4850.0000, www.pwc.com/ar


Auditors’ Responsibility for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with US GAAS, we:

●Exercise professional judgment and maintain professional skepticism throughout the audit.
●Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
●Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
●Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
●Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters, that we identified during the audit.

/S/ Price Waterhouse & Co. S.R.L.




Diego Luis Sisto

Buenos Aires, Argentina
May 16, 2025
2