Why Grupo Financiero Galicia S.A. (NASDAQ: GGAL) stock is rising

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Grupo Financiero Galicia S.A. (NASDAQ: GGAL) stock rose over 4.7% on 13th August, 2019 (As of  11:29 am GMT-4; Source: Google finance) though the company for the second quarter has reported the 316% rise in the Net income attributable to GGAL to Ps.11,580 million compared to the Ps.2,782 million recorded in the second quarter of 2018. The profit per share for the quarter amounted to Ps.8.11, compared to Ps.1.95 per share for the same quarter of the fiscal year 2018. The profit rose due to the income derived from its interest in Banco de Galicia y Buenos Aires S.A.U. for Ps.10,107 million, in Tarjetas Regionales S.A., for Ps.922 million, in Sudamericana Holding S.A., for Ps.340 million, and in Galicia Administradora de Fondos S.A. (or “GAF”), for Ps.114 million, increased by a net operating income of Ps.109 million and partially offset by personnel and administrative expenses of Ps.52 million. The Bank’s market share of loans to the private sector was 10.62% and that for deposits from the private sector 10.68%, increasing 57 bp and 24 bp respectively, as compared to June 30, 2018.  As of the end of the second quarter, the minimum capital requirement amounted to Ps.29,485 million and the computable capital was Ps.60,788 million. The excess over the capital requirement amounted to Ps.31,303 million, and the total capital ratio was 16.98%

Why Grupo Financiero Galicia S.A. (NASDAQ: GGAL) stock is rising

Moreover, the net income attributable to GFG for the second quarter totaled Ps.11,580 million, which represented a 7.32% annualized return on average assets and a 68.87% return on average shareholder’s equity. The rise in the profit is mainly due to profits from its interest in Banco Galicia, for Ps.10,107 million, in Tarjetas Regionales S.A., for Ps.922 million, in Sudamericana Holding S.A., for Ps.340 million, and in Galicia Administradora de Fondos S.A., for Ps.114 million. For Banco Galicia, the net income for the second quarter amounted to Ps.10,107 million, Ps.8,140 million (414%) higher than in the same quarter of fiscal year 2018, mainly due to an increase of net operating income (142%). Net operating income of Banco Galicia amounted to Ps.23,072 million, Ps.13,551 million higher than the Ps.9,521 recorded in the second quarter of 2018, mainly as a consequence of the growth of the net income from financial instruments, partially offset by higher loan-loss provisions and interest expenses. As of June 30, 2019, the total financing to the private sector reached Ps.295,329 million, with a 21% increase from a year before, mainly as a consequence of the growth of the loan portfolio, both of UVAadjusted loans (117%) and of foreign-currency loans (60%).

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