*Grupo Financiero Galicia (GGAL): 4Q24 Earnings Preview* Link to report: https://tinyurl.com/02142025-AdcapGGAL4Q24Preview *Grupo Financiero Galicia (GGAL) is currently trading at 2.2x P/B and 8.7x P/E, reflecting a slight premium to its peers.* This valuation captures investor optimism around the recent acquisition of HSBC Argentina at 0.4x book value, which is expected to provide a significant one-time boost to ROE in 2024. This impact is anticipated in the upcoming 4Q24 report, and will impact in 2025 with a lower ROE and integration-related challenges, as potential client attrition and restructuring costs. GGAL remains attractively valued relative to peers, particularly given its growth potential with Naranja X and the benefits from the HSBC acquisition. *4Q24 Preview* The quarter is expected to mirror 3Q24 in terms of margins, with some compression in the quarter but with tailwind also from the liberalization of fixed-term deposit rates. *Loan growth would exceed 80% in real terms.* The portfolio in pesos grew by 45-50%, the dollar-denominated portfolio surged by almost 400%, bolstered by deposit inflows from a tax amnesty program and increased demand from exporters. *In terms of deposits,* a marginal increase in peso deposits was observed during the quarter, while dollar deposits should grow by 60% y/y. Nevertheless, some of the inflows from the tax amnesty exited in 4Q24. *2025 Outlook* Looking ahead, 2025 is expected to be a transition year for GGAL, characterized by margin pressures as the loan portfolio adjusts and competitive dynamics intensify. While loan growth is forecasted at 50%, the shift towards a more corporate-heavy loan mix may weigh on margins. The HSBC acquisition is anticipated to provide an 8-10% boost to ROE in 2024, although a temporary drop to 15% is expected in 2025 due to integration costs. Nonetheless, the acquisition enhances GGAL’s asset quality and positions it for a rebound in ROE to around 20% by 2026 as synergies are realized. Additionally, Naranja X presents a significant growth catalyst, targeting a rapid customer expansion rate and strong ROE potential, supporting GGAL’s long-term growth narrative. To continue reading, please find this report attached. If you have any questions, please let us know.