*Grupo Financiero Galicia (GGAL): 1Q25 Results* See report here: https://tinyurl.com/AdcapGGAL1Q25Results *Grupo Financiero Galicia (GGAL US; Not Rated) reported a soft 1Q25,* though results were broadly in line with expectations and outperformed peers in a challenging sector backdrop. Net income totaled ARS 145.98 billion, reflecting a 63% y/y decline in real terms but still delivering an ROE of 8.88%, slightly above our 8% forecast. The main drag came from a sharp drop in net interest income, down 51% y/y in real terms, as NIM compressed to 19.2% due to weak returns on government securities. *However, we view this impact as transitory, with normalization expected to lift ROE by 2–3 percentage points in the coming quarter.* Loan growth was robust, rising 131% y/y in real terms, outpacing the system, while deposits increased 83% y/y but declined 5% q/q. *The bank adjusted its full-year ROE guidance to 12–13%*, from a previous range of 12–15%. Operationally, Galicia showed improving trends, with net operating income rising 15% q/q despite a 47% y/y decline, supported by a 6% q/q drop in operating costs and a better efficiency ratio of 50.4%. Asset quality remained relatively stable, with NPLs at 3.64% and loan-loss coverage at 143.6%, even as the retail portfolio grew. *Public sector exposure was reduced to 19% of total assets. During the call, management flagged a temporary imbalance between loans and deposits and announced plans to expand institutional funding to support credit growth.* They also noted rising delinquencies in the individual segment, consistent with a more aggressive origination strategy. Looking forward, GGAL emphasized disciplined risk management, the strategic importance of growing retail lending, and completing the operational integration of HSBC Argentina by mid-2025.