Bank of the Year Argentina: Banco Galicia
October 31, 2019
Riding sky-high returns on central bank notes, the bank is navigating Argentina’s economic turbulence
With Argentina’s economy in a tailspin marked by high inflation, soaring interest rates and a deep recession, the country’s banks are again facing severe economic headwinds. Gone is the enthusiasm from three years ago when Argentina’s banking sector appeared poised for growth.
Still, Banco Galicia has again demonstrated its ability to navigate Argentina’s economic turbulence.
In the second-quarter, Galicia notched the highest quarterly profit among Argentina’s four largest listed banks which include BBVA Banco Frances, Banco Santander Rio and Banco Macro.
Galicia reported a profit of 11.58 billion pesos ($199 million)in the April-June period, a 315% increase from the same quarter last year, buoyed by its gains in short-term central bank notes known as Leliqs.
The notes carried interest rates above 60% during the second quarter, proving to be attractive investments for Argentine banks as Argentina’s economy contracted.
Galicia, Argentina’s largest domestically owned bank, also continued its digital push, implementing new personal financial management software that the bank hopes will be a tool of financial education for clients and help deliver a more personalized digital banking experience.
Like other Argentine banks, Galicia is ramping up its digital investments at a time when several high-profile fintechs have started to operate.