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Annual Report - January / December 2015

CONTENTS

FINANCIAL HIGHLIGHTS

LETTER FROM THE CHAIRMAN

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

ANNUAL REPORT

THE ARGENTINE ECONOMY, THE FINANCIAL SYSTEM AND THEINSURANCE INDUSTRY

REVIEW OF OPERATIONS

ASPECTS RELATED TO CORPORATE ORGANIZATION, DECISION MAKING, INTERNAL CONTROL, AND COMPENSATIONPOLICY FOR DIRECTORS AND OFFICERS

MANAGEMENT’S DISCUSSION AND ANALYSIS

REPORT ON THE DEGREE OF COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE

ANNUAL FINANCIAL STATEMENTS

NOTICE OF SHAREHOLDERS MEETING

ADDITIONAL INFORMATION

2.

3.

5.

8.

9.

14.

47.

55.

89.

115.

189.

190.

GRUPO FINANCIERO GALICIA S.A.

Grupo Financiero Galicia S.A. (hereinafter “Grupo Financiero

Galicia”) was constituted in 1999, as a financial services

holding company organized under the laws of Argentina. Its

most important asset is the 100% interest in Banco de Galicia

y Buenos Aires S.A. (hereinafter “Banco Galicia” or “the Bank”).

Founded in 1905, Banco Galicia is one of the largest private-

sector banks in the Argentine financial system, and one of the

leading providers of financial services in the country. In its

capacity as a universal bank, and through affiliated companies

and various distribution channels, Banco Galicia offers a full

spectrum of financial services to 9 million customers, both

individuals and corporations. Banco Galicia operates one of

the most extensive and diversified distribution networks

among private-sector banks in Argentina, offering more than

425 points of contact with customers, including traditional

branches and e-banking facilities, together with other 297

service centers that correspond to regional credit-card

companies and 94 that belong to Compañía Financiera

Argentina S.A. (“Compañía Financiera Argentina” or “CFA”).

Banco Galicia customers also have access to telephone-

banking services and to bancogalicia.com and Galicia Móvil,

the first financial Internet portal and the first payment service

through cellular telephone, respectively, established by a bank

in Argentina. Furthermore, Banco Galicia is the Argentine

leading bank in terms of importance on social networks.

Grupo Financiero Galicia | Annual Report 20152

2015DECEMBER 31

FOR THE F ISCAL YEAR

Net I n come Average Shares Outstanding ( i n m i l l i on s ) ( 1 )

Ea rn ings pe r Sha re ( 1 ) ( 2 )

In mi l l ions of Pesos , except as s tated otherwise

2014

(1) In fiscal year 2013, 58.9 million share increase is included in the calculation as from September 1, 2013 related to the merger with Theseus S.A. and Lagarcué S.A.(2) Calculated based on net income..(3) Financial income less financial expenses, divided by average interest-earning assets. (4) The market share corresponds to deposits and loans in the Argentine market and is calculated based on daily information on deposits and loans in the Argentine

financial system, prepared by the Argentine Central Bank using end-of-month balances.

3 , 3 3 81 , 3 0 02 . 5 7

4 , 3 3 81 , 3 0 03 . 3 4

FINANCIAL HIGHLIGHTS

AT YEAR-END

Asse t s Loans, NetDepos i t sSha reho lde r s ’ Equ i t ySha re s Ou t s tand ing ( i n m i l l i on s ) ( 1 )

Book Va lue pe r Sha re ( 2 )

107 , 3 1 46 6 , 6 0 86 4 , 6 6 61 0 , 2 4 61 , 3 0 07 . 8 8

161 , 7 4 89 8 , 3 4 5

1 0 0 , 0 3 91 4 , 4 8 51 , 3 0 01 1 . 1 4

SELECTED RATIOS (%)

Re tu rn on Ave rage Sha reho lde r s ’ Equ i t y ( 2 )

Return on Average Assets ( 2 )

F inanc i a l Ma rg in ( 3 )

Sha reho lde r s ’ Equ i t y t o To ta l A s se t s

3 9 . 0 73 . 8 5

1 3 . 5 69 . 5 5

35 . 5 43 . 8 3

1 3 . 1 28 . 9 6

2 0 1 3

1 , 8 2 41 , 2 6 11 . 4 7

8 3 , 1 5 65 5 , 2 6 55 1 , 3 9 56 , 9 4 71 , 3 0 05 . 3 4

3 2 . 4 72 . 9 1

1 2 . 7 58 . 3 5

MARKET SHARE (4) (%)

Depos i t s f r om the P r i va t e Sec to r Loans to the Pr ivate Sector

8 . 7 98 . 7 6

9 . 4 19 . 6 0

9 . 2 08 . 7 8

EXCHANGE RATE

Pesos pe r U . S . Do l l a r 8 . 5 5 213 . 0 0 5 6 . 5 1 8

Grupo Financiero Galicia | Annual Report 2015 3

I am pleased to address you in order to submit the Annual Report related to the 17th FiscalYear of Grupo Financiero Galicia S.A. as of December 31, 2015.

In 2015, the international environment was characterized by a significant decline in the pricesof financial assets, commodities and currencies, which adversely affected the emergingeconomies. The market volatility and the slower pace of growth of the global activity increasedthe investors’ risk aversion and caused a turnaround of capital flows from the emerging world.

Despite this environment, the Argentine market managed to differentiate itself due to thepositive expectations characterized by a year marked by politics and presidential elections.

As regards the Argentine economy, in 2015 private consulting firms estimate the growth ofthe economic activity around 1.7%, which is a slight recovery, as compared to the prior-yeardecline, within an inflationary environment of 27% annually.

During November, the presidential elections determined that Mauricio Macri was electedArgentina’s president for the coming four years. Since the new administration took office, itdefined three great and challenging goals: zero poverty, to put an end to drug trafficking andunite Argentina. At this stage, the approach to Argentina’s economic policy management isexpected to change. The new administration expressed the need to correct the accumulatedimbalances on several fields, which could have an impact on activity and employment duringthe first months of the current year. The main challenges would be tied to the normalizationof the foreign exchange market, a lower tax deficit and the inflation rate deceleration.Provided that those problems are successfully solved, the activity could resume the path ofgrowth towards the second half of the year and would lay the basis to achieve a greaterexpansion in the following years. In addition, the foreign front will play a key role in theeconomic performance, particularly as regards the evolution of the Brazilian economy,Argentina’s main business partner, and the agreement to be reached with holdouts in order tonormalize the access to the international capital markets.

In these first three months of administration, we may note a government that seeks to buildconsensuses and wants to make Argentina reenter the world, in line with the above-mentioned goals.

In fiscal year 2015, Grupo Financiero Galicia recorded profits for Ps. 4,338 million, 30% higherthan that recorded in fiscal year 2014. About 90% of this profit resulted from the interest inour main subsidiary, Banco Galicia. This profit is supplemented by the interest in othersubsidiaries, basically in the insurance business through Sudamericana Holding and in mutualfunds through Galicia Administradora de Fondos.

The higher consolidated income for the period resulted from the 30% increase in net financialincome and the 38% increase in net income from services, in addition to an 8% decrease inthe provision for loan losses, partially offset with a 40% increase in administrative expenses.Accordingly, the average return on equity (ROE) stood at 35.5%.

The credit exposure to the private sector reached Ps. 115,000 million, showing a 45.5%increase during fiscal year 2015. Meanwhile, deposits amounted to Ps. 100,270 million,showing a 54.4% increase. The Bank’s estimated market share as of December 31, 2015 was9.6% in loans and 9.4% in deposits, considering the intermediation with the private sector.

To our Shareholders,

LETTER FROM THE CHAIRMAN

Chairman of the Board of Directors

Autonomous City of Buenos Aires, March 9, 2016

EDUARDO J. ESCASANY

These results exceeded our forecasts made one year ago, taking into account that 2015 was ayear characterized by an intense electoral schedule, which caused uncertainty as to the activity,the tax and monetary aspects, as well as inflation levels. However, despite the challengingeconomic environment and an increasingly complex regulatory environment regarding thefinancial system, the Bank kept focus on meeting the customers’ needs with passion anddedication.

The first measures adopted by the new authorities of the Argentine Central Bank to encouragecompetition among banks were positive ones, since the quotas for financing under credit linesfor the productive investment were made more flexible, maximum interest rates to grantpersonal loans and minimum interest rates for certain time deposits were eliminated, the limitson the position in foreign currency were changed and the opening of new braches wasfacilitated. We expect that, likewise, the obligation to require the Argentine Central Bank’sauthorization for higher commissions on products for individuals is changed and therequirements for the payment of dividends are relaxed.

The greatest challenge for the Argentine financial system for the coming years will be to keepprofitability levels that allow increasing the regulatory capital to face the expected growth ofloans in an environment of increased economic activity, especially if such growth isaccompanied by a deepening of the financial market at the levels of comparable countries inour region.

It is noteworthy the very good performance of the insurance business, in which we participatethrough Sudamericana Holding, which reached income amounting to Ps. 409 million, mainlyresulting from the successful compliance with the plan developed to achieve a rise in thevolume of premiums.

Grupo Financiero Galicia’s Board of Directors will propose the Shareholders’ Meeting to paydividends in cash for Ps. 150 million.

To conclude, on behalf of Grupo Financiero Galicia’s Board of Directors and on my own behalf,I would like to thank the shareholders for their ongoing trust, over 12,000 employees for theirdedication, commitment and enthusiasm, the suppliers for their support, and customers, thefocus of our decisions, for choosing us every day.


BOARD OF DIRECTORS

EDUARDO J. ESCASANY

CHAIRMAN

PABLO GUTIÉRREZVICE-CHAIRMAN

ABEL AYERZA

FEDERICO BRAUN

ANTONIO GARCÉS

C. ENRIQUE MARTIN

LUIS ODDONE

SILVESTRE VILA MORET

DIRECTORS

MARÍA O. HORDEÑANA DE ESCASANY (†)

SERGIO GRINENCO

ALEJANDRO M. ROJAS LAGARDE

AUGUSTO R. ZAPIOLA MACNAB

ALTERNATE DIRECTORS

GRUPO FINANCIERO GALICIA S.A.

SUPERVISORYSYNDICS’ COMMITTEE

NORBERTO D. CORIZZO

LUIS A. DÍAZ

ENRIQUE M. GARDA OLACIREGUI

SYNDICS

MIGUEL N. ARMANDO

FERNANDO NOETINGER

HORACIO TEDIN

ALTERNATE SYNDICS

EXECUTIVE OFFICERS

PEDRO A. RICHARDS

MANAGING DIRECTOR

JOSÉ LUIS GENTILE

CHIEF FINANCIAL AND ACCOUNTING OFFICER

BOARD OF DIRECTORSAND EXECUTIVE OFFICERS

(†) María O. Hordeñana de Escasany has been an alternate director of Grupo Financiero Galicia since the Company’screation until her death, on September 18, 2015. She has also played an outstanding role at Fundación Banco Galicia.She has chaired it for more than forty years and she has personally served to provide the help needed by Banco Galicia’semployees and retirees and their families. She will be specially remembered for her warm and kind manner, and wepay tribute to her loving memory.


BANCO DE GALICIA Y BUENOS AIRES S.A.

BOARD OF DIRECTORS

SERGIO GRINENCOCHAIRMAN

PABLO GUTIÉRREZVICE-CHAIRMAN

GUILLERMO J. PANDOSECRETARY DIRECTOR

LUIS M. RIBAYA*RAÚL H. SEOANEPABLO M. GARATIGNACIO A. GONZÁLEZDIRECTORS

ENRIQUE GARCÍA PINTOC. ENRIQUE MARTINAUGUSTO R. ZAPIOLA MACNABOSCAR J. FALLERONI*ALTERNATE DIRECTORS

SUPERVISORYSYNDICS’ COMMITTEE

ENRIQUE M. GARDA OLACIREGUINORBERTO D. CORIZZOLUIS A. DÍAZSYNDICS

FERNANDO NOETINGERMIGUEL N. ARMANDOHORACIO TEDINALTERNATE SYNDICS

EXECUTIVE OFFICERS

DANIEL LLAMBÍASFABIÁN KONCHIEF EXECUTIVE OFFICER (1)

GERMÁN GHISONIRETAIL BANKING DIVISION MANAGER

SEBASTIÁN PUJATOWHOLESALE BANKING DIVISION MANAGER

PABLO LEÓN CASTROFINANCIAL DIVISION MANAGER

GASTÓN BOURDIEUCOMPREHENSIVE CORPORATE SERVICES DIVISION MANAGER

RAFAEL BERGÉSORGANIZATIONAL DEVELOPMENT AND HUMAN RESOURCES DIVISION MANAGER

BRUNO FOLINOPLANNING DIVISION MANAGER

MARCELO PONCINICREDIT DIVISION MANAGER

DIEGO RIVASRISK MANAGEMENT DIVISION MANAGER (2)

FLAVIO DOGLIOLOCUSTOMER’S EXPERIENCE DIVISION

PABLO FIRVIDAINSTITUTIONAL RELATIONS DIVISION MANAGER

MARÍA ELENA CASASNOVAS (3)LEGAL ADVISORY DIVISION MANAGER

OMAR SEVERINIAUDIT DIVISION MANAGER

CLAUDIA ESTECHOANTI-MONEY LAUNDERING UNIT DIVISION MANAGER

CARLOS DIETACOMPLIANCE DIVISION MANAGER

PATRICIA LASTIRYBOARD OF DIRECTORS SECRETARIAT

(1) As from April 4, 2016, Mr. Fabián Kon will hold that position. The appointment is subject to theArgentine Central Bank’s approval.(2) Until October 2015, this position was held by Juan Carlos L’Afflitto, who shall be proposed by GrupoFinanciero Galicia to hold the position of Director of the Bank in the next General Shareholders’ Meetingof Banco de Galicia and Buenos Aires S. A.(3) María Elena Casasnovas shall be proposed by Grupo Financiero Galicia to hold the position ofDirector of the Bank in the next General Shareholders’ Meeting of Banco de Galicia y Buenos Aires S. A.

* It is evidenced that Mr. Luis M. Ribaya resigned hisposition on December 18, 2015 and Mr. Oscar J. Falleroni,CPA, resigned his position on January 19, 2016.


SUDAMERICANA HOLDING S.A.

SEBASTIÁN GUTIÉRREZCHIEF EXECUTIVE OFFICER

GALICIA ADMINISTRADORA DE FONDOS S.A.

EZEQUIEL ROSALESCHAIRMAN

TARJETAS REGIONALES S.A.

MIGUEL PEÑACHIEF EXECUTIVE OFFICER

COMPAÑÍA FINANCIERA ARGENTINA S.A.

PABLO CAPUTTOCHIEF EXECUTIVE OFFICER

GALICIA WARRANTS S.A.

SANTIAGO PASMANCHIEF EXECUTIVE OFFICER


ANNUAL REPORT

The Board of Directors

submits to the

Shareholders for their

consideration,

the Annual Report,

the Financial Statements

and the Supervisory

Syndics Committee’s

Report for the 17th fiscal

year of Grupo Financiero

Galicia S.A. as of

December 31, 2015.


THE ARGENTINE ECONOMY, THE FINANCIALSYSTEM AND THEINSURANCE INDUSTRY


The Argentine Economy

In 2015, the international economic environment showedsomehow more adverse for emerging economies in general,deepening the downward trend of financial assets, commoditiesand currencies that began being noticed by the end of 2014.Certain decrease in the expansion direction of the monetary policyof developed economies and renewed doubts about the pace ofgrowth of the global economy determined an increase in theinvestors’ risk aversion and a turnaround of capital flows in theemerging world.

Developed economies expanded at an estimated 1.9% rate. TheUnited States and Spain stood out, with a 2.5% and 3.2% growth,respectively. Europe ended the year with a 1.5% increase, a 1.7%projection both for 2016 and 2017. In turn, the emergingeconomies continued decelerating their pace of expansion,growing by 4.0% in 2015, with 4.3% and 4.7% projections for2016 and 2017, respectively.

The strong expectation as to the rise in the reference rate by theU.S. Federal Reserve during the whole year – which finally tookplace in December – correlated with a U.S. Dollar appreciation by9.2%, as compared to the other developed currencies, and 16%, ascompared to emerging ones. Meanwhile, Latin Americancurrencies depreciated by 24%, on average, as compared to theU.S. Dollar throughout the year. This U.S. Dollar appreciationaffected the price of raw materials, whose general index decreasedby 25%. In turn, the companies’ market value was characterized bya high volatility and reflected a global loss of 4.1%, with a 2.6%and 17% decline in developed and emerging markets, respectively.The local market operated the other way round, due to thecircumstances of the local current situation. The Merval indexachieved a 36% rise in the year.

In 2015, the Argentine economy achieved certain recovery duringthe first half of the year, after a recessionary 2014. Some privateestimates reflect a growth in the economic activity of around 1.7%,a figure that contrasts with the 2.6% drop noted in 2014. Theworse performance of the activity towards year-end would leave anil carryforward for 2016.

It is noteworthy that the economic activity figures, like the otherstatistical series prepared by the Argentine Institute of Statisticsand Census (INDEC, as per its initials in Spanish), werediscontinued in last December by the new national administration,ordering the state of administrative emergency of the National

Statistics System for the sake of review and readjustment of theseries published. They would not be relaunched until mid-2016.

In terms of the local market, the recovery noted in the activityapparently began having a positive impact on the employmentdynamics. The unemployment rate for the third quarter of 2015 –last available data – stood at 5.9% of the economically activepopulation from 7.5% noted in the same quarter of 2014. Anyhow,the employment statistics published by the INDEC are also underanalysis.

In the monetary sphere, the main monetary aggregates acceleratedtheir pace, standing above the nominal growth of the economy.The monetary base ended the year with an annual 34.9%expansion, 12.2 percentage points (p.p.) above the 2014 growth.Particularly, this monetary aggregate increased by Ps. 161,325million, which is almost exclusively due to the increased financingto the National Treasury (Ps. 177,926 million) and, to a lesserextent, the item “Other” (Ps. 57,597 million), particularlysignificant in 2015, as a result of the settlement of U.S. Dollarfutures contracts after the devaluation. This expansion waspartially offset by the sale of foreign currencies, which resulted inan absorption of Ps. 71,822 million in the year. In addition, repotransactions increased by Ps. 5,777 million, while transactionsrelated to Argentine Central Bank Bills and Notes (Lebacs andNobacs, respectively) decreased by Ps. 8,734 million. This trendwas as well reflected in the performance of the private-sector M2(money in circulation and deposits in savings and checkingaccounts that belong to the private sector), which grew 30.6% in2015, as compared to a 27.7% growth in 2014. On the other hand,total M2 (including deposits from the public sector) ended 2015with a 28.5% growth, after increasing by 28.9% in the prior year.

Domestic interest rates evolved at the pace of the expectationsregarding the evolution of the foreign exchange market. During thefirst half, the foreign exchange stability and the banks’ restoredliquidity allowed keeping rates in a relative calm environment.However, interest rates on time deposits ended 2015 at levelshighly above those in the first months of the year, which reflectsthe increasing foreign exchange stress and the rise in the ArgentineCentral Bank’s reference rates during the last weeks of 2015.Particularly, Badlar, which reached a minimum of 19.6% during theyear, in January, averaged a value of about 27% in December.

The reference exchange rate established by the Argentine CentralBank increased from Ps. 8,552 to Ps 13,005 per U.S. Dollarbetween December 30, 2014 and December 31, 2015, equivalentto a 52.1% depreciation; while the average exchange rate


increased from Ps. 8.12 per U.S. Dollar in 2014 to Ps. 9.27 perU.S. Dollar in 2015.

According to private estimates, inflation in 2015 was about 27%,considerably below the 2014 levels of the 40% inter-annually.Particularly, the Consumer Price Index of the City of Buenos Aires(IPCBA, as per its initials in Spanish) – an alternative inflationmeasure proposed by the INDEC after it discontinued its index –showed a 26.9% growth in prices in 2015 from 38%, as shown ayear ago.

In the fiscal area, tax revenues, including social security,accumulated an annual 30.0% increase until November 2015 (thelast data available as of the date of preparation of this document),as compared to the inter-annual 36.3% expansion in 2014. On theother hand, primary expenditures increased by 34.8% on an annualbasis in 2015. Thus, the Argentine public sector recorded a primarydeficit (including extraordinary resources derived from ANSES(National Social Security Administration) and the Argentine CentralBank) amounting to Ps. 70,448 million in the first 11 months of theyear, equivalent to 1.5% of the Gross Domestic Product (“GDP”).This figure entailed a decline, as compared to the primary deficit inthe same period of 2014 (0.4% of GDP), amounting to Ps. 15,225million. After interest payments accumulated up to November forPs. 96,080 million, the financial deficit amounted to Ps. 166,528million, equivalent to 3.4% of GDP.

Regarding the external sector, during 2015, the foreign exchangebalance current account published by the Argentine Central Bank –the data on the balance of payments (on an accrued basis) werediscontinued by the INDEC – reached a deficit amounting toUS$ 11,593 million, which represents a significant decline, ascompared to that in 2014, which amounted to US$ 2,350 million.The current account deficit, measured in terms of GDP, stood atabout 2% in 2015. This decline was partly due to a decrease in theyear’s balance of trade surplus, the positive balance of whichamounted to US$ 3,547 million, US$ 5,388 million lower than theamount reached in 2014.

Particularly, revenues for collections of exports of goods amountedto US$ 57,012 million in 2015, which showed a 18% drop, ascompared to the level noted in the prior year and which representsthe minimum revenues for the last six years. The highest backwardstep was noted in the oil seeds, oils and cereals sector, whichshowed collections for exports 26% lower than the revenues in thesame period of the prior year, mainly explained by the lower pricesof the most important commodities for the country (soy, soy flour,corn and wheat).

On the other hand, during 2015 the payments of imports of goodsof the foreign exchange balance amounted to US$ 53,465 million,there being an inter-annual decline of 12% (about US$ 7,200million), in an environment of both declines in the level of foreignpurchases and an increase in the estimated debt for this item. Fromthe sector viewpoint, a decline in the payments of imports wasnoted in the main activity sectors, with higher impact on energyand automotives, whose payments of imports were 37% and 12%lower than those noted in 2014, respectively.

Furthermore, the data of the Argentine Trade Exchange (“ICA”, asper its initials in Spanish) showed a considerable backward step inexports and imports (on an accrued basis) in 2015, resulting in abalance of trade deficit amounting to US$ 3,035 million, after15 years of surplus.

In particular, the exports (on an accrued basis) showed an annual17% decline, totaling US$ 56,752 million, as a result of a 16% dropin prices and 1% decrease in quantities. All large industries –Commodities, Agriculture and Livestock Manufacture (“MOA”, asper its initials in Spanish), Industrial Manufacture (“MOI”, as perits initials in Spanish) and Fuels and Energy – had a lower exportvalue. Whereas both prices and quantities decreased for MOI andFuels and Energy, for Commodities and MOA the decrease resultedfrom a considerable drop in prices, offset by an increase in quantities.

The value of imports (on an accrued basis) for 2015 (US$ 59,787million) was 8% lower than that in 2014 due to a 13% drop inprices and a 5% increase in quantities. The lower value of importswas mainly explained by the drop in the prices of Fuels and Lubricants.

Within this environment, the non-financial private sector’s capitalaccount (as per estimates made by the single free exchange marketor MULC, as per its initials in Spanish) posted a net foreign currencyoutflow of US$ 5,961 million in 2015, as compared to a net outflowof US$ 237 million in 2014. As of December 31, 2015, theArgentine Central Bank’s international reserves amounted toUS$ 25,563 million, US$ 5,879 million below what was noted inlate 2014.

The Financial System

In 2015, the financial brokerage activity accelerated the pace ofgrowth, reversing the 2014 trend. Accordingly, the financialsystem’s depth measured by the loans-to-private-sector to GDPratio increased by 1.7 p.p. during the year and stood at 16.5%.


Total loans to the private sector in the financial system grew37.2%, when compared to the end of 2014, reaching Ps. 812,837million. Loans that increased the most were consumer credit lines,made up of loans through credit cards and personal loans, whichincreased by 47.4%, reaching Ps. 355,922 million at year-end. Asregards commercial loans, mainly made up of overdrafts,promissory notes and discounted and purchased notes, they grewby 35.7%, amounting to Ps. 304,005 million. Collateral loansincreased by 22.6%, with a final balance of Ps. 40,304 million,while mortgage loans increased by 15.9%, to Ps. 56,530 million. Inturn, loans to the public sector accounted for 9.9% of total assetsas of November 2015 (the last information available), increasing1.8 p.p. inter-annually.

The financial system’s total deposits increased 37.7% during theyear, reaching Ps. 1,335,662 million. Deposits from the non-financialprivate sector increased 47.3%, amounting to Ps. 1,048,300million, whereas deposits from the public sector reached Ps.286,908 million, representing a 12.1% growth. Within depositsfrom the private sector, transactional deposits grew 37.6%reaching Ps. 509,521 million, while time deposits increased 60.7%,reaching Ps. 508,454 million.

The average interest rate paid by private banks in December fortime deposits in Pesos of up to 59 days was 27.9%, with anincrease of 648 basis points (b.p.) inter-annually, while in the caseof lending rates, that applicable to overdrafts was 34.5% (+365 b.p.)and to promissory notes, 30.6% (+447 b.p.).

In November 2015, financial institutions slightly decreased theirliquidity levels (in relation to total deposits) when compared to theprior year, with an average rate of 24.9%, as compared to 26.7%in the same month of the prior year. In financial standing terms, theArgentine financial system’s net worth increased by Ps. 54,335million, what represents a 33.0% growth. The system’s profitabilitywas equivalent to 4.0% of total assets (-0.3 p.p.), while return onshareholders’ equity was 31.4% (-2.2 p.p.).

During the first 11 months of the year, income from interest andincome from services represented 5.4% and 4.2% of total assets,

respectively. In turn, administrative expenses increased from 7.4%to 7.6% of total assets, while provisions for loan losses decreasedto 0.9% of total assets from 1.0% in November 2014.

The non-accrual loan portfolio to the non-financial private sectorreached 1.7% in November 2015, 0.3 p.p. below when comparedto the same month of the previous year. The coverage of theprivate-sector non-accrual loan portfolio with allowances increasedto 146% from 140% represented in November 2014.

As to the financial system's structure, as of November 30, 2015,the financial system was composed of 80 financial institutions,considering both banks and non-banking institutions. Of such total,64 were banks, of which 52 were private banks. Also, of the latter,33 were domestic-owned private banks and 19 were foreign-owned banks. Government-owned banks were 12 and non-banking financial institutions were 16.

The concentration of the financial system, measured by the marketshare of private sector deposits of the ten leading banks, reached76.0% as of November 30, 2015, a similar percentage to the onerecorded in the same month of 2014.

Based on information as of September 2015 (the last informationavailable), the Argentine financial system’s banks employed a totalof 107,836 people, representing a 1.7% increase from December31, 2014.

The Insurance Industry

During 2015, the insurance market’s production amounted to Ps.153,300 million, 40.7% higher than the production level in 2014,measured at current values.

Out of total production, 81% relates to P&C insurance, amongwhich insurance for automotives (44%) and workers’compensation (35%) stand out, 17% to life and personalinsurance, where the most important one is group life insurance(68%), followed by individual life (14%) and personal accidents(13%), and the remaining 2% relates to retirement insurance.


Outlook

An economic and financial scenario marked by a change ofapproach to the country’s economic policy management isexpected in 2016. The new administration expressed the need tocorrect the imbalances on several fields, which could have animpact on activity and employment during the first months of theyear. The main challenges would be tied to the final normalizationof the foreign exchange market, a lower tax deficit and theinflation rate deceleration in a foreign exchange and rateadjustment environment. A quick solution to the problem with thedefault debt holders would allow reentering the internationalcapital market. Provided that those obstacles are successfullyovercome, the activity could resume the path of growth towardsthe second half of the year and would lay the basis to achieve agreater expansion in the following years.

Although export prices would be, on average, below what wasnoted during the peaks of 2012 and 2013, the expectationsregarding exportable balances of crop production are optimistic.On the other hand, the contraction outlook for the Brazilianeconomy (Brazil is Argentina’s main business partner) would lessboost exports and the domestic industry (particularly theautomotive industry). The international environment mightcontribute certain volatility as long as there is a more intensepressure on the currencies of the region and the exchange terms.

In turn, the financial system will continue increasing gradually theintermediation with the private sector, driven by different changesin effective regulations the new government is carrying out, andthat would lead to a more deregulated financial system, creatingthe bases for increased competitiveness and efficiency, in line withLatin American banks. The low leveraging level regionallycompared at companies and families, as well as the lower levels ofuse of banking services evidence the Argentine financialinstitutions’ potential.

In financial standing terms, net results will help maintaincapitalization levels according to Basel Committee regulations.Income from services will still be significant within operating

income, whereas the banks will continue working onadministrative expenses in order to improve the operatingefficiency.

Portfolio quality indicators have been strength over the last fewyears despite the modest economic growth and both the non-accrual loan portfolio and its coverage with allowances have beenkept in similar figures. Although 2016 is expected to be anotheryear of low economic growth, these indicators would remain at2015 levels.

To conclude, we consider that the financial system, which hasexcellent fundamental indicators, would have a positive financialresult in 2016, with a mid- and long-term macroeconomicenvironment with renewed and promising expectations.

The outlook for 2016 of the insurance market does not anticipatemajor changes, with production growth levels near those recordedin 2015. In order to reduce the technical losses, the market shallrestore its rates, as well as focus on improving its costs and lossexperience ratios. Due to the expected rise in interest rates and thecurrency devaluation for the coming fiscal year, the financialincome will continue driving the insurance market’s results ofoperations, paying the technical losses that arise.

Homeowners and office package insurance is expected to continuewith the upward trend as a result of a higher demand for suchinsurance, given the low market penetration of these products,along with a higher insurance awareness of the population ingeneral. Life insurance is likely to continue growing, for which itwill mostly depend on the tax incentives the government may grantto this type of insurance.

Grupo Financiero Galicia | Memoria y Balance 201414

REVIEW OF OPERATIONS

. GRUPO FINANCIERO GALICIA

. BANCO GALICIAWholesale BankingRetail BankingConsumptionFinancial DivisionRisk ManagementCreditComprehensive Corporate ServicesOrganizational Development and Human Resources

. SUDAMERICANA HOLDING

. GALICIA ADMINISTRADORA DE FONDOS

. GALICIA WARRANTS

. NET INVESTMENT

14


GRUPO FINANCIERO GALICIA

Grupo Financiero Galicia’s corporate purpose is exclusively relatedto financial services and investment.

Grupo Financiero Galicia’s strategy is to continue establishingitself as one of Argentina’s leading comprehensive financialservices companies while continuing to strengthen Banco Galicia’sposition as one of Argentina’s leading banks. Its main objective isto create value for its shareholders within a framework ofsustainable management that considers the social context and theimpact on the environment.

On September 10, 2013, Grupo Financiero Galicia, as mergingcompany, entered into a Preliminary Merger Agreement, for thetotal assets and liabilities of Lagarcué S.A. and Theseus S.A., asmerged companies.

At Grupo Financiero Galicia’s Extraordinary Shareholders’ Meetingheld on November 21, 2013, the aforementioned documents wereapproved, as well as the exchange ratio and the capital increaseby Ps. 58,857,580, through the issuance of 58,857,580 ordinarybook-entry Class “B” shares, with a face value of Ps. 1 and onevote per share, entitled to take part in the distribution of profits asfrom the fiscal year commenced on January 1, 2013.

On December 18, 2013, the Final Merger Agreement was signed.Therefore, Grupo Financiero Galicia incorporated theaforementioned companies by absorption in force as fromSeptember 1, 2013. Accordingly, a total of 25,454,193 Class “B”shares of the controlled company, Banco Galicia, representing4.5% of the capital stock, owned by Lagarcué S.A. and TheseusS.A. were incorporated. Consequently, Grupo Financiero Galiciaheld 560,199,603 shares of Banco Galicia, representing 99.6% ofthe Company’s capital stock and votes. As of December 31, 2012,

it held 533,814,765 shares, representing 94.9% of the capitalstock and votes.

On February 27, 2014, the Board of Directors of the NationalSecurities Commission (CNV) gave its consent to the merger byabsorption of Grupo Financiero Galicia with Lagarcué S.A. andTheseus S.A., and to Grupo Financiero Galicia’s capital increase,ordering its registration.

On February 25, 2014, the Board of Directors decided to make theunilateral statement of willingness to acquire all the remainingshares of Banco Galicia held by third parties, which amounted to2,123,962 shares. The price was set at Ps. 23.22 per share, whichwas approved by the CNV’s Board of Directors on April 24, 2014.In compliance with effective regulations, Grupo Financiero Galiciamade the publications required and deposited the amount relatedto the total remaining shares outstanding of Banco Galicia held bythird parties. On August 4, 2014, the above-mentioned statementof willingness to acquire was executed by public deed.

In addition, on April 15, 2014, the Board of Directors approved thepurchase of 19,000 shares representing 95% of GaliciaAdministradora de Fondos S.A.’s capital stock (hereinafter“Galicia Administradora de Fondos” or “GAF”) from BancoGalicia in the amount of Ps. 39,481,302.

On October 28, 2015, Mercado Abierto Electrónico (MAE), throughResolution “C” 4916, authorized the listing and trading of GrupoFinanciero Galicia S.A.’s Class B Book-entry Ordinary Shares, withface value of Ps. 1 each, and entitled to one vote per share.

The following is a description of the subsidiary companies’operations during the fiscal year.


BANCO GALICIA


110 aniversarioBanco Galicia, providing financial services throughout the country since 1905.


Additionally, in order to optimize cash movements, the treasury ofBranch 990, which is located at Torre Galicia (Corporate Tower),was implemented. This allowed receiving more than Ps. 1,000million in cash from CIG collections, which were formerlychanneled through different branches in downtown Buenos Airesand the area around it. This improvement generated a total savingof Ps. 3 million in money transport, in addition to releasing timeand workload at branches.

Large-Corporations Banking

As in previous years, during 2015, Banco Galicia maintained itsleading position and consolidated its presence in the corporatesegment, managing to be ranked among the best in the market,according to the last survey conducted by Brain Network.

This was attained thanks to a successful commercial planning, theimprovement in the service offering and the implementation of adifferentiated advisory model, which made the Bank be close to itscustomers’ needs.

During the fiscal year, the Corporate Customer service wasimplemented to channel and solve post-sale in a faster and morepersonalized manner, managing to provide the customer with anexcellent experience. Thanks to the performance achieved and theongoing search for tailor-made solutions, the volumes oftransactional products increased by over 45%, as compared to theprior year.

Capital Markets and Investment Banking

In 2015, Banco Galicia consolidated its position in the capitalmarket and investment banking, structuring different financingproducts designed tailor-made to corporate, PyMEs (small- andmedium-sized companies) and agricultural companies. The Bankorganized and structured more than 115 transactions, 31 syndicatedand structured loans were carried out, 88 issuances in the capitalmarket, with a wide variety of products, which included, amongothers, advice on mergers and acquisitions (M&A), negotiableobligations, short-term securities, bills and financial trusts.

The most important transactions that stand out are issuances of oilsector companies, such as YPF, Pan American Energy and AxionEnergy, for more than Ps. 7,500 million, the issuances ofautomotive financial sector companies, such as Fiat, Toyota andMercedes Benz, for more than Ps. 700 million, the companies

WHOLESALE BANKING

e-platform

The number of transactions performed through Office Bankingincreased by 55%, as compared to the previous fiscal year. During2015, more than 20 platform implementations were carried out,such as the possibility of making payments to the ArgentineRevenue Service (“AFIP”), selling checks in custody with onlinecrediting of funds, authorizing multiple transactions in only onestep, making the model of users related to more than one companysimpler and others to improve the customer’s experience in thechannel and its design, and optimizing the security and use of theplatform. In the syndicated survey conducted among several banks,Office Banking achieved the first place of customers’ preference totransact in the segments analyzed.

The Interbanking clearing house also continued optimizing,increasing the volumes transacted, as compared to 2014, by 38%.At year-end, Banco Galicia was ranked first in terms of number oftransactions and volume transacted in AFIP Payments.

Also, the SWIFT channel had a transactional growth of 63%, ascompared to the previous year; an operation the Bank continuesrepositioning.

Transactional Products, Investments and Insurance

In 2015, the goals were focused on creating increased efficiency inthe transactional products, in providing excellent experience tocustomers and in developing new products that allow the Bank todifferentiate itself from competitors.

The following products stood out: i) the launch of CobranzaIntegrada Galicia (Galicia Integral Collection) at smart self-serviceterminals (TASI, as per its initials in Spanish), a product intended tomeet collection needs of companies from the Micro / PES (small-sized companies) segments through automated channels; andii) remote deposits, with a 155% increase in volume, reachingPs. 2,600 million through the processing of 657,000 checks (a 48%increase, as compared to 2014) sent remotely by 130 service usercompanies, a transaction that allows releasing cash desk’s timeand make customers loyal.

Through the specialized management, Hail Insurance waspurchased for more than 151,000 hectares, resulting in significantcommissions earned.


related to Grupo Financiero Galicia, such as Tarjeta Naranja,Tarjetas Cuyanas, CFA and Grupo Financiero Galicia itself for morethan Ps. 3,000 million and, finally, the issuances of bills, such asthe City of Buenos Aires, the Province of Buenos Aires and theProvince of Neuquén, for more than Ps. 14,700 million.

Syndicated transactions were structured for Ps. 5,588 million. Themost outstanding are those granted to Ledesma for Ps. 1,260 million,to Bayer for Ps. 1,000 million, to Nidera for more than Ps. 1,125 millionand to Axion Energy for Ps. 300 million.

Companies

In 2015, the Companies segment division was created, whosemission is to develop the business strategy based on threemainstays: value proposal, service model, and acquisition &development.

The customer portfolio is made up of companies whose annualrevenues range from Ps. 70 million to Ps. 700 million expandedthroughout the country.

The service model based on closeness, specialization andintegrated equipment to serve this type of customers continuedgrowing and consolidating, reaching a total of 19 CorporateBanking Centers, made up of professional and specialized BusinessOfficers. The synergy with the network of branches issupplemented with a team of professionals specialized in foreigntrade and treasury solutions at each center, providing acomprehensive service that is tailor-made to each business, withdecentralized and regional decision and resolution.

As regards making customers loyal, more than 30 types of eventswere organized throughout the country, providing customers withupdates on politics and economy, foreign trade regulations andtraining courses in collections and payments, among others.

During the fiscal year, Banco Galicia kept is leading position asmain bank of the segment, primarily standing out in the placementof loans and the purchase of checks of the Credit Line for theProductive Investment (the “Productive Line”), the financing ofworking capital and the updates of Office Banking, the electronicchannel designed to improve the customers’ experience.

Agricultural Sector

In 2015, Tarjeta Galicia Rural held a market share above 37%within the specific cards of this segment, with a 30% increase inthe sales volume, as compared to 2014, exceeding Ps. 7,700million.

More than 95 agreements at zero rate remained in force withleading companies in the sector, which seek to maximize the offerof services to agricultural companies. Among the business actionscarried out during the fiscal year, we should highlight multipleoffers to finance the agricultural campaign, structuring loans tailor-made to each producer and the financing of capital goods, such asagricultural machinery, vehicles and other investments inproduction implements, as well as the investment in the purchaseof bellies for the growth of breeder herd through the ProductiveLine, and capital market transactions were also carried out.

During the fiscal year, the thirteenth edition of the ExcelenciaAgropecuaria La Nación - Banco Galicia Award (La Nación-BancoGalicia’s Agricultural Excellence Award), with more than 214 jobssubmitted, was achieved, and Banco Galicia - Revista Chacra a laGestión Solidaria del Campo Award (Banco Galicia-ChacraMagazine’s Rural Solidarity Award), the FOCA Awards to theSustainable Agricultural Practices and CAPA-Banco Galicia Awardto the agricultural journalism were granted.

Like in previous fiscal years, the Bank supported the research andoutreach activities of Universidad Austral, with active participationreceiving delegations. The Bank also continued supporting theactivities of the Fundación Producir Conservando, and continuedsupporting the work of Asociación Argentina de Productores enSiembra Directa (Argentine Association of No-till Farming)(Aapresid, as per its initials in Spanish) with the purpose ofspreading the agriculture certified in Argentina, as well as differentactivities promoted by Consorcios Regionales de ExperimentaciónAgrícola (Agricultural Experimentation Regional Consortiums)(CREA, as per its initials Spanish) for the sector, and the support tothe Líderes (Leaders) training program. On the other hand, theBank was actively involved with Confederaciones RuralesArgentinas (CRA) (Argentine Rural Confederations) and regionalconfederations, and supporting the Rural Societies in the interior ofthe country. It was also in close relationship of cooperation withSociedad Rural Argentina (SRA) and support to its training programfor CEIDA’s agricultural leaders, in which a Bank’s employee takespart annually. We kept the active presence in the board of ASAGIR,the association of the sunflower chain, and the cooperation withthe other value chains of the main agricultural crops.


Furthermore, the work to ensure the Foreign Trade Officers’specialization and the service quality of the Companies segment atthe Corporate Banking Centers distributed throughout the countrycontinued.

Galicia Comex, the Foreign Trade specialized site, continuesconsolidating as a market reference.

During the second half of 2015, the Foreign Trade Project started,the end of which is expected for the first quarter of 2019. With thisword-class project, Banco Galicia technologically replaces thesystems that it currently uses to channel, process and manageForeign Trade transactions, and includes the introduction andupdate of Office Banking functionalities for customers.

RETAIL BANKING(1)

Retail Banking continued consolidating its business strategydifferentiated by segment and defined its challenges for the 2016-2020 period, which consist in building jointly with all areas acustomer-oriented culture, leading the digital transformation in thefinancial market and in that of new competitors, developing thedesign of the multichannel strategy creating the customer’s bestexperience, developing innovative products and services, andincreasing the strategies by segment to keep a leading position.

Focused on these challenges, we redesigned the Retail Banking’sstructure, creating the Marketing Division, including segments,products, advertising and business intelligence, and the DigitalDivision, whose mission is to rank the Bank as the best digital bankin Argentina. The primary goal is to direct the organization, eitherthrough its technical or its business areas, towards a dynamics thatallows competing in this area, accelerating the cycles of design,development and execution of the channels, products andcampaigns with a strong customer-oriented approach. In turn, theChannels Division’s goal will be to continue developing indirectsales channels, the sellers, the retail sales unit, agreements andpayroll, and encouraging synergies with group companies.

The Retail Banking Division’s customer base grew 10% during2015, exceeding 2 million customers.

The Bank was present at 217 events, which represented a 351-daypresence effort throughout the country.

Finally, Tarjeta Galicia Rural’s loyalty plans were carried out withthe main four livestock breeds – Hereford, Aberdeen Angus,Brangus and Braford – building closer relationships with theassociations and extending the cooperation agreements held withthem with benefits for associates.

Non-financial Public Sector

During the fiscal year, the business management was focused onkeeping and growing the businesses generating transactionalflows, enabling the growth of sight deposits, without neglectingthe advisory services to customers to attract time deposits.

Once the campaign aimed at Automotive Property Registries hasbeen completed, the Bank managed to attract 60% of the market.Based on the business analysis, it was decided that as from 2016these customers will be served from the network of branches (520checking accounts).

Moreover, new non-traditional businesses continued beinggenerated, such as the exchange of physical money of lowdenomination throughout the country for electronic money (CorreoOficial de la República Argentina).

The highest value was to sustain the level of customers and theirrelated businesses in the course of a year of elections.

Foreign Trade

The foreign trade volume (imports + exports) amounted toUS$ 13,268 million in 2015, which accounts for 11% of Argentina’sbalance of trade.The participation of customers who perform foreign tradetransactions through Galicia Office is 64%.

During the fiscal year, seminars on exchange regulations updatesin different marketplaces of the country took place, attended byover 550 people from all segments, which allowed the Bank to beclose to its customers with customized advisory services. Thetraining at schools of Corporate Officers (“OFES”, as per itsacronym in Spanish) and different sectors of Head Office alsocontinued. (1) The figures in this section relate to the Bank individually, without consolidation

with the regional credit-card companies or with CFA.


regards satisfaction, it achieved the first position, according tostudies conducted by private consulting firms through an ongoingcustomer focus. The High Income NPS exceeded the second one by9 p.p. and kept the satisfaction levels achieved in 2014.

The Bank also kept its leadership in premium credit cardconsumptions throughout the year, as per the informationfurnished by Visa, American Express and Mastercard. On the otherhand, and to continue improving its customers’ experience, itbegan remotely serving customers who value a remote service, aswell as rewarding them for recommending Banco Galicia to theirgroup of friends. These achievements make Galicia Éminentcontinue being the financial service best remembered and valuedamong the segment’s people.

In order to continue building a customer-oriented organizationalculture, general income was managed differently by subsegments,giving priority to the development of the most chosen brand andfocusing on the Prefer and Move subsegments.

For the purpose of listening to customers and generating a virtuouscycle of ongoing improvement, the NPS methodology wasimplemented at the main points of contact. As regards GeneralIncome, to which this methodology began being applied in 2015,the Bank was ranked second, increasing its satisfaction level by 1 p.p.

The growth of customers was an interannual 6%, improving thecustomer portfolio structure thanks to the development of indirectchannels and the online sale channel, which, at the same time,made acquisition costs more efficient.

We worked mainly on the acquisition of new customers in theyoung people segment, not only through the university channel,but also on the online channel. The latter represents 25% of thetotal additions of MOVE. In this regard, the use of platforms, suchas Facebook, Google, YouTube and Whatsapp, increased in thecustomer relation and relationship processes, consolidating theconcept of “bank without branches, 100% online” as differentialbrand attribute. The Bank currently has over 100,000 MOVEcustomers and is present at 17 universities.

Furthermore, we worked on the efficiency by analyzing theprofitability of channels and migrating transactions among channels,always taking into account the customers’ preferences or habits.

Segments

During 2015, in order to continue creating a differentiatingexperience focused on the customer, the development of the valueproposal was strengthened for the Business and PyMEs segmentand the leadership in the High-Income segment was consolidated.

Galicia Negocios y Pymes (Galicia Business and Pymes –Small– andmedium-sized companies) stood out because of being ranked asleader regarding customer satisfaction of this segment, accordingto studies conducted by private consulting firms, increasing thecustomer base by 11% and leading the most chosen portfolio,achieving a 29% penetration. The most important businessachievements were the 16% increase in payroll accounts and,at credit level, the placement of the Productive Line for overPs. 1,540 million in the segment. The leadership of the VisaBusiness card is also evidenced in the consumption market share,as per the information furnished by Visa.

The Good Businesses Meetings continued being carried out, withmeetings in the cities of Buenos Aires, Córdoba, Santa Fe, Mendoza,Mar del Plata and, for the first time, in Resistencia/Corrientes. In2015, more than 3,400 PyMEs businessmen took part in thesetraining sessions and business contact generation, and more than180,000 people were present at the live broadcast throughbuenosnegocios.com.

The presence at trade fairs, with business teams and spaces at nineexhibitions, was kept to consolidate the closeness with thesegment’s customers.

The buenosnegocios.com community has more than 25,000 usersand 15,000 registered companies, and received more than 750,000visits during the year.

The Bank widely leads the customer satisfaction indexes. Using theNet Promoter Score (“NPS”) measurement system, Banco Galiciawas ranked first in Micro-Companies, with a 37% index and 25 p.p.above the second position, and Small-sized Companies, with 29%and 15 p.p. above its immediate follower, considerably exceedingthe indexes reflected in 2014 in both subsegments.

In a strong competitiveness situation, the Galicia Éminent serviceevidenced an interannual 16% growth of customers. In turn, as


Private Banking

Private Banking offers distinctive and professional financialservices to individuals with high-sized net worth, through themanagement of their investments and the provision of financialadvisory services. Private Banking offers its customers a wide rangeof domestic financial investment alternatives, such as deposits,FIMA mutual funds, government and corporate securities, sharesand trusts where the Bank acts as a dealer.

One of the Private Banking premises, in line with the Bank'sstrategy to differentiate from competitors through service quality,is the preferential treatment of its customers. In this regard, theservice has highly-trained officers, an investment center thatoperates from 8 a.m. to 6 p.m., a wide network of Éminent officers,exclusive spaces for service at branches and the sixteenth floor ofTorre Galicia (Galicia Tower).

Channels

Indirect ChannelsIn 2015, the Indirect Channels Division was consolidated, whosemission is to develop internal and external channels to attract newcustomers and market Consumer Banking products. The area ismade up of the Retail Sales Unit (focused on cross-selling andattraction of customers with direct payroll deposit), Indirect SalesChannel (focused on attracting customers through agreementswith third parties, with mass capacity of distribution, allowing anincrease in the capillarity of points of sale) and CommercialPlanning of Telephone Banking (focused on attracting customersand cross-selling through internal and external call centers). Duringthe year, the division attracted 44% of the Bank’s new customers.

Agreements and PayrollThe Bank also continued consolidating its leadership in directpayroll deposit, increasing by 3.48% the number of customers, ascompared to 2014, increasing its market share. Furthermore, theaverage salary per capita improved, with direct impact on sightdeposits.

The agreements with associations, and other entities andassociations (Colegio Público de Abogados de la Capital Federal(Bar Association of the City of Buenos Aires), AsociaciónOdontológica Argentina (Argentine Dental Association), ConsejosProfesionales de Ciencias Económicas (Professional Councils inEconomic Sciences), etc.), increased, achieving more deposits,customers and payroll for the Bank.


Deposits

In December 2015, the average balance of total retail deposits inPesos reached Ps. 44,084 million, which represents 49% of thetotal. The composition mix between transactional deposits andtime deposits remained unchanged. As regards channels for raisingtime deposits, Online Banking was the one that evolved the most,with a 105% growth and reaching an average amount of Ps. 5,081million at fiscal year-end.

Deposits in U.S. Dollars increased by 124%.

Personal Loans

The personal loans portfolio increased by Ps. 1,192 million during2015. The development of alternative channels continued beingconsolidated, especially within the Online Banking channel, as wellas the Branches, ATMs and Telephone channels. Eighty per cent ofloans were automatically granted within the sale channel.

Cards and Promotions

The credit and debit cards business continued growing stronglyduring 2015, with a 46% increase in purchases, as compared to2014, and over 200 million transactions during the year. BancoGalicia’s share in the banking payment means market was 12.1%.

During the fiscal year, the Bank issued over 450,000 basic cardsand 339,000 additional cards, totaling 4.2 million cards. With5,600 business agreements, the Bank grants benefits to itscustomers at 12,000 stores of different industries throughout thecountry.

Additionally, a consumption amounting to Ps. 3,500 million wasfinanced through the “AHORA 12” (NOW 12 Installments).

Quiero! Fidelity Program (I Want!)

Quiero!, the program of benefits that rewards customers for theirrelation with the Bank and the use of bank products, was able toconsolidate its position in its fifth year, and reached more than840,000 customers subscribed by December 31, 2015.

Since its launch, the program achieved greater penetration in high-income customers, who benefited from their higher cross-selling,

balances and spending. For instance, it is worth highlighting that,in High-Income and Private Banking segments, the program’spenetration exceeds 80%. The penetration ratios and excellentacceptance, value and use indicators in the Retail Banking incomeshould be also highlighted, given the variety of benefits and theshorter redemption times offered, as compared to other programs.

Apart from the customers’ recognition, market research byindependent agencies confirmed again that both our customersand those of our competitors are well acquainted with the Quiero!program, and that it is considered the best program of benefits inthe financial system. Customers who have already made exchangesare even better acquainted with it.

The news that allows increasing satisfaction, scope and innovationincludes the launch of Outstanding Flights, a platform that allowscustomers to travel to selected destinations at a lower cost. Inaddition, the post-purchase exchange was introduced, whichenables to make a purchase and then exchange points to get thebenefit.

While Quiero! consolidated year after year as a value offer forcustomers, it also allowed Banco Galicia to advance towardshigher efficiency in the use of the investment in benefits, achievinga lower impact on the income statement, and allocating resourcesto the customers from priority segments based on the incomerecorded.

Digital

At Banco Galicia, about 90% of customers’ interactions(transactions and queries) take place through digital devices,mainly Online Banking, to which 1,000,000 customers accessquarterly. This channel is supplemented with the Mobileapplication, which grew fast over the last two years and currentlyconcentrates 30% of customers’ accesses. In the near future,interactions are expected to be moved from the PC to the mobilephone, given the spread of smart phones and the projectedevolution of the Galicia mobile application.

During 2015, digital channels grew by 14% in terms of number ofcustomers and the increase in transactions was even higher. Anexample is the foreign currency purchase and sale, where 95% oftransactions moved from branches to Online Banking, substantiallyimproving the customer’s experience and considerably reducingoperating costs.


In 2015, Banco Galicia consolidated its digital environmentstrategy and developed an innovation lab for the purpose ofproviding a cutting-edge service through these channels, wherecompetition increases more and more due to the trend towardsdigitalization and arising non-financial players competing indifferent areas of the bank and financial environment.

Branch Network

BranchesDuring 2015, the focus was kept on continuing transforming thebranch network into a space of customers’ contact, developmentand creation of loyalty. At the same time, the concept ofcustomer’s experience continued being developed and the NPSmethodology continued being consolidated.

To achieve this, 64 branches were improved and modernizedthrough image changes, partial and full remodelings, furniturechanges and wider lobbies, with a total investment of Ps. 140 million.

Additionally, the second Collections and Payments center wascreated in the city of Córdoba to handle large cash volumetransactions, creating a safe and dynamic environment both forcustomers and employees. During 2016, these centers will continuebeing expanded, generating collection and payment nodes.

The efficiency model at the branch network continued beingdeveloped, eliminating and streamlining processes, with lowadded value to the customer and improving service time.

In order to continue streamlining sale processes and providing thecustomer with a better experience, a series of improvements in theBank’s CRM system were designed and developed.

A delivery system was implemented for additions of new cards,where the customer determines the address of delivery, whichallows improving the time of disposing them and the customer’sexperience.

More channels were developed and more hours were scheduled tofacilitate customers’ self-service. Cash deposits were optimized atsmart self-service terminals (“TASI”, as per its initials in Spanish),without cash caps during 24 hours.

The cash desk service was improved, reducing waiting timesthrough different initiatives, such as, the hiring of 32 cashiers underflexible work during the first 10 business days of each month.

Finally, satellite service models began being analyzed, with simplerbranches that will be useful to allow increasing the capillarity ofour branch network through different formats.

Red Galicia 24 and Self-Service TerminalsBanco Galicia has one of the most extensive networks throughoutthe country. At the end of 2015, the Bank had 1,700 self-servicepieces of equipment (860 ATMs and 840 self-service terminals),distributed at branches, banks at work and other locations, such asgas stations, hypermarkets and shopping malls.

The level of transactions grew by 5%, as compared to the previousyear, and 110 million transactions were channeled through ATMsand self-service terminals, whereas the average amounts bywithdrawal increased by 23%.

At fiscal year-end, smart terminals represented 80% of the totalnumber of self-service terminals. The main advantages of this newtechnology are online crediting, the convenience and extendedtimes to make deposits, the payment of cards, and the reduction inprocessing times and paper use, since it is no longer necessary touse envelopes to make deposits and payments.

Insurance

In 2015, this business considerably developed, increasing both theoffer of products and the presence in different sale channels, whichresulted in 520,000 new insurance policies and an increase inincome of more than Ps. 100 million, as compared to 2014.Accordingly, calm continued being brought to Banco Galicia’scustomers, with over 1.5 million property and personal insurancepolicies.

New coverage, such as the Bike Insurance, additional to HomeInsurance, was introduced. In addition, multiple sale channels wereadded and products, such as the Unemployment Insurance, weredeveloped, whose 800% growth has raised the stock to 17,000policies and Theft Insurance, which doubled the portfolio, ascompared to the previous period, primarily due to the more than100,000 new coverage purchased for Cellular Phones Insurance.

Individuals’ insurance products grew significantly as well,especially Family Protection Insurance (Life), which alreadyexceeded 50,000 current policies.

Banco Galicia thus consolidates its position as one of the leadingbanks having strong presence in most risks.


Business Intelligence

During 2015, the Analytical Innovation area consolidated, whosemission is to observe trends, analyze and implement newtechnologies. In this respect, the Real Time Decision (“RTD”) toolwas implemented in Online Banking, making the Bank become thefirst one in Latin America in having a decision engine that allowsmaking customized offers in real time to improve the customer’sexperience, increase sales and customer retention, and maximizeincome and increase transactional deposits. To such end, the RTDtool takes information from more than 200 variables to analyze inreal time and determine what to offer to each customer andimprove experience on each channel.

In the second half of the year, our customers’ behavior andpredictive models were developed to know them better and helpdirect more effectively activation, cross-selling and attrition actions.

In terms of relational communication, there was a 36% growth, ascompared to 2014, and the effective contact levels increased by 32%.

Publicity and Image

In 2015, we worked hard on the brand’s top of mind, the positionof priority segments and the relaunch of the Quiero! Viajesprogram. Communication was given priority by developing simpleand important content messages through four systems: massmedia, directed, social networks and customer relation actions toachieve the maximum effectiveness.

At the creative level, Marcos, Claudia and the little Cataaccompanied to tell with humor, clearly and directly all thebenefits, promotions and savings offered by Banco Galicia. Thanksto the communication consistency kept, the advertising top of mindwas achieved in the financial institutions category and the Bankmanaged to be the top-of-mind brand during several months,surpassing and going beyond the competition and several advertisers.

This was also reflected in the digital world, since a strong bet wasplaced on the channel, relaunching the bancogalicia.com website,improving its use, with a simpler navigation as well, with allcontents in only one click made by the customer, more modernaccording to the latest trends of the digital market and with moretools, such as the unified promotions search engine, from whichcustomers may inquire as to all the Bank’s promotions and knowhow to accumulate them with Quiero! or request Account Servicesor Credit Cards 100% online.


purpose, a multidisciplinary work that resulted in the design of aprogram to implement behaviors to be developed in 2016 and thatestablishes the guidelines for what will come next year.

CONSUMPTION

Through its regional credit-card companies (Tarjeta Naranja S.A.and Tarjetas Cuyanas S.A.) and Compañía Financiera Argentina,Banco Galicia offers financing for the consumption of low- andmedium-income customer segments.

Regional Credit Card Companies

Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A. are the Bank’ssubsidiaries through Tarjetas Regionales S.A.

Average monthly statements issued amounted to 3.1 million, 6.0%above the previous year’s average. Consumptions increased by43.8%, up to Ps. 71,608 million, as a result of 148 million purchasetransactions, which represents a 5.5% increase, as compared to2014 transactions.

Considering Argentine Central Bank’s last information available as

The transactional sites were renamed: Galicia Home Banking asOnline Banking and Galicia Office as Office Banking.

Regarding the young people segment, MOVE allowed continuingworking on the position, with a digital media campaign thoughtexclusively for the target market. The results were sought promptlysince card sales goals on the digital channel surpassed.

In connection with Business and Pymes, customer relation actionswere increased. Highly-valued events and fairs in the industryallowed strengthening the relation as brand ambassadors. BuenosNegocios (Good Businesses) became a milestone on the agenda ofentrepreneurs and Pymes businessmen nationwide, with highdegree of satisfaction reflected in the NPS.

The Éminent position continued being developed within the high-income segment, communicating sets of benefits tailor-made toeach customer with a highly-valued contact policy.

We also worked on the Bank’s most visible face, the branches. Theoptimization of spaces and the use of new supports were key toproposing image improvements and their communication. Thesegoals will continue during 2016.

We internally worked on the strategy and expression of the Bank’s


of December 2015 about financial and non-financial institutions,regional credit card companies had a 19.2% market share inauthorized cards and 13.8% market share in consumption,increasing by 0.5% as compared to the first variable mentioned,whereas a 1.1% drop is noted in consumption, as compared to thesame month in the previous year.

In the branch network there were no significant variations in thenumber of service centers although there were improvement andmodernization changes. In the case of Tarjeta Naranja, thecorporate building in the city of Córdoba, called “Casa Naranja”(Orange House), of almost 15,000 m2 was opened. In the case ofTarjetas Cuyanas, two new branches were opened, one in the cityof Godoy Cruz (Mendoza) and the other one in Resistencia (Chaco).The companies have 297 service centers in the aggregatethroughout the country.

In turn, the staff of Tarjeta Naranja and Tarjetas Cuyanas at fiscalyear-end totaled 4,746 employees, a 4.5% decrease whencompared to the previous fiscal year.

From the standpoint of the funding of transactions, priority wasgiven to the issuance of negotiable obligations, which entailed alower cost and longer terms when compared to bank loans, whichallowed offering customers longer financing term plans.

In the commercial sphere, regional credit card companies’mainstays for success continue being closeness to the customerand store, quality in customer service and services. From theadvertising point of view, Tarjeta Naranja’s presence as officialsponsor of Argentina’s National Soccer Team in Copa AméricaChile 2015 stood out, even from the social and solidarity viewpointwith the “Un gol, un potrero” (One Goal, One Soccer Field)program.

The growth in demand for magazines issued along with accountstatements continued during the fiscal year. Accordingly,“Convivimos” and “Cima” exceeded one million subscribers, witha high and increasing penetration in the total account statements.

Furthermore, new services were introduced into “Naranja Online”,such as the virtual branch, where customers have newfunctionalities and designs. In addition, e-commerce websites(www.tiendanaranja.com and www.preciosbajos.com), withincreasing sales, in terms of transactions and amounts,consolidated.

Tarjeta Naranja continued standing out as reference of the socialnetworks sector, with more than 1,500,000 Facebook friends,while Tarjeta Nevada has over 200,000 Facebook friends. This is anessential channel to provide customer services, chat with the


community, share news, benefits and promotional campaigns.

During the year, the LEAN methodology continued improving cost-efficiency, focused on the ongoing optimization of processes, andenhancing the customer’s experience, thus ensuring the quality ofproducts and services.

It should be also highlighted that Tarjeta Naranja was ranked fifthin Great Place to Work, among the best companies with the bestwork environment in Argentina.

The credit portfolio managed reached Ps. 29,924 million at fiscalyear-end, with a 50.2% increase in the year. At the same time,arrears ratios, as a result of a successful credit risk and recoverymanagement, improved.

Tarjetas Regionales S.A.’s net income, in accordance withArgentine Central Bank’s accounting standards, amounted to Ps.1,531 million, increasing by 100.9%, as compared to Ps. 762 millionin fiscal year 2014, and keeping high ratios of return on capital andon assets that stood at 43.3% and 8.5%, respectively, as comparedto 29.2% and 5.3%, respectively, in the previous year.

Compañía Financiera Argentina - CFA

The company is a non-banking financial institution, regulated bythe Argentine Central Bank, leader in the consumer personalloans to low- and medium-income customer segment, andcompetes with government- and privately-owned banks.

As of December 31, 2015, customers reached 454,000. The staffwas made up of 1,158 employees and had 58 branches and 36points of sale throughout the country. CFA’s net incomeamounted to Ps. 127 million as of fiscal year-end, Ps. 14 millionhigher than that in 2014.

The net operating income for the fiscal year amounted to Ps.1,444 million, an increase amounting to Ps. 272 million, ascompared to 2014, mainly due to the increase in the credit cardportfolio. The growth has been partially offset with the higherfunding cost generated by the rise in wholesale rates.

The provision for loan losses for the fiscal year amounted to Ps.400 million, Ps. 30 million higher than Ps. 370 million in 2014.

As of fiscal year-end, the loan portfolio, net of allowances forloan losses, amounted to Ps. 2,929 million, representing an

increase of Ps. 203 million or 7.4%, as compared to the previousfiscal year

The shareholders’ equity amounted to Ps. 1,250 million, Ps. 127million higher than Ps. 1,123 million in 2014.

The company will continue concentrating its efforts on keepingthe leadership position achieved in the consumer loans market,adjusting its transactions to the new regulatory conditions,focusing on increasing efficiency levels in transactions throughoperating processes reengineering, consolidating “anchor”products (Credit Card and Benefit Account), which allow keepingthe business relationship with our customers beyond thesettlement of the effective credit assistance and thus cuttingdown granting and raising costs, and consolidating the fundingstrategy began some years ago through the capital market share.

FINANCIAL DIVISION

The Financial Division includes the Financial Operations, BankingRelations, Assets and Liabilities Management, and InformationManagement and Support areas. Additionally, it takes part in theFIMA mutual funds business, being the main distribution channelfor this type of products.

The Financial Operations Division’s structure was changed duringthe last quarter of the fiscal year: It was divided into theCommercial Division, whose main responsibility is the relation withcustomers, and the Product Division, whose main responsibility isthe development of financial products.

Furthermore, the Public Sector Division, which was part of theWholesale Banking Division, became part of the Financial BankingDivision.

Finally, the Assets and Liabilities Management Division becamepart of the Planning Division.

Financial Operations

The Financial Operations Division is responsible for, among otherthings, managing liquidity and the different financial risks of BancoGalicia, based on the parameters determined by the Board ofDirectors. It manages positions in foreign currency and governmentsecurities, and it also acts as intermediary and distributes financialinstruments for its own customers (institutional investors) and


corporate customers and individuals. It takes part in differentmarkets in its capacity as comprehensive clearing and settlementagent (Mercado Abierto Electrónico or “MAE”, Mercado a Términode Rosario or “ROFEX”, and Mercado de Valores de Buenos Airesor “MERVAL”)

The volume traded in the foreign exchange market experienced adecrease as a result of foreign exchange restrictions. Although onthe wholesale market the total volume traded among banks on theMAE decreased by 4%, as compared to 2014, from US$ 49,900 millionto US$ 47,660 million, the volume traded by the Bank increased by32%, from US$ 4,056 million in 2014 to US$ 5,363 million in 2015,being in the fourth position of the ranking.

Regarding the futures market, Banco Galicia fell from the third tothe fourth place in the MAE’s ranking, and it was ranked second inROFEX. In both markets, Banco Galicia traded a total volume ofUS$ 14,995 million, 113% more than the US$ 7,026 traded in 2014.

The foreign trade volume transacted amounted to US$ 12,632 million,remaining at similar levels, as compared to 2014.

In addition, U.S. Dollar trading transactions significantly increasedas a result of loosening foreign exchange restrictions, from US$ 600million in 2014 to US$ 1,006 million in 2015.

The total volume traded in fixed income through the MAE wasUS$ 122,730 million. Banco Galicia kept the first place in theannual ranking, with a 29% increase, as compared to the previousyear, reaching US$ 20,998 million traded and a 17.1% market share.

Banking Relations

The Banking Relations Division is responsible, at internationallevel, for managing the Bank’s business relationships withcorrespondent banks, international credit agencies, official creditbanks and, at domestic level, with banks, financial companies,exchange houses, and other entities that carry out relatedactivities.

As it happened in previous fiscal years, bilateral meetings wereheld with the most active correspondent banks from abroad,through which the Bank channeled the different products andservices offered to its customers. The steady and adequate offer ofcredit lines in the correspondent banking segment of theInternational Finance Corporation (“IFC”) and the Inter-AmericanDevelopment Bank (“IDB”) helped us meet letters of credit and

standby letters of credit confirmation requests, as well as thefinancing needs related to customer export transactions. TheMercosur, especially Brazil, continued holding a considerable shareof the commercial activity, followed by Southeast Asia (mainlyChina), the European Union, and to a lesser extent, the NAFTAmember countries.

Additionally, Banco Galicia continued strengthening relationshipsand analyzing the different business opportunities with multilateralagencies and official credit banks, such as the IFC, the IDB, theFMO, the Proparco, the National Economic and SocialDevelopment Bank (BNDES, as per initials in Spanish), the AndeanDevelopment Corporation (CAF, as per its initials in Spanish) andthe Inter-American Investment Corporation (IIC), among others,with the purpose of broadening the offer of mid- and long-termcredit lines to finance sustainable investment projects and importof capital goods, under the framework of Argentina’s economicopenness.

At the domestic level, the Bank continued analyzing andidentifying business opportunities, with financial institutions,placing emphasis on being the most chosen brand, always withina framework of reciprocity and long-term steady relationships.

Assets and Liabilities Management

The Assets and Liabilities Management Division is in charge ofpreparing and analyzing information aimed at managing themismatches inherent in banking activities, maintaining theexposure within the policies determined by the Board of Directors.

The Bank’s activities include the provision of support to the Asset-Liability Committee (ALCO) through the analysis and quantificationof the risks associated with different business hypotheses andmarket scenarios, as well as the follow-up of liquidity policies andcurrency mismatches, whether due to regulations of the ArgentineCentral Bank or else Banco Galicia’s operations, and theassessment of the Funding Unit’s results of operations through atransfer pricing method so as to assess the profitability of eachbusiness unit, isolating them from the rate, term and currency riskexposure.

RISK MANAGEMENT

The Risk Management Division is responsible for managing theBank’s and the subsidiaries’ risks in a comprehensive manner and


follows international best practices. It is independent from otherbusiness areas, since it reports directly to the Bank’s GeneralDivision. This approach goes along with a high level ofcommitment from all the Bank's governance bodies, whichstrengthens the idea of an independent management but, at thesame time, involved in the business decisions and oriented towardsthe risk profile, using state-of-the-art tools and systems foridentifying, measuring, monitoring and mitigating each and everyrisk faced by the Bank.

The mission of the Division comprises the following activities: (i)Actively and comprehensively manage and monitor the risks takenby Banco Galicia and its subsidiaries, ensuring compliance withinternal policies and regulations in force; (ii) keep the Board ofDirectors totally abreast of the risks that the Bank faces, proposinghow to deal with them; (iii) help strengthen a risk managementculture that provides a global view of business, by fullyunderstanding the risks taken; (iv) design and suggest policies andprocedures to mitigate and control risks; (v) quantify the capitalrequired by each business and recommend the General Division itsallocation to the risk taken and the profitability expected; and (vi)escalate dispensations from risk internal policies to the Bank’sGeneral Division, as appropriate, together with a compliance plan.

The Division’s responsibilities include: (i) Ensure contingency plans

are in place for risks posing a threat to business continuity; (ii)recommend the most suitable methodologies for the Bank tomeasure identified risks; (iii) guarantee that the launching of anynew product includes a previous assessment of potential risksinvolved; and (iv) provide technical support and assistManagement Divisions in relation to global risk management.

This Management Division handles financial, operational, credit,reputational and strategic risks.

The Compliance Division, which reports to the Board of Directors,was created in 2014 and its mission - applicable to the Bank, itsaffiliated companies and individuals - consists in monitoringcompliance with the laws, regulations and internal policies in orderto prevent financial and/or criminal penalties and minimizereputational impact. It is an independent role that coordinates andassists in identifying, providing advice on, monitoring, reportingand warning about compliance risks.

On the other hand, there is a division dealing with Prevention andControl of Money Laundering and Funding of Terrorist Activities,which also reports to the Board of Directors, whose purpose is toprevent the execution of financial operations with funds fromillegal activities, and the use of our bank as a vehicle for launderingmoney and funding terrorist activities.


Banco Galicia complies with all regulatory requirements set forthby Law No. 25246, as amended, Resolution No. 121/2011, asamended, issued by the Financial Information Unit (“UIF”, as perits initials in Spanish), and Argentine Central Bank’s Communiqué“A” 5218, as supplemented and amended.

Banco Galicia has policies, procedures and control structures inplace related to the features of the various products offered, whichhelp monitor transactions in order to identify unusual or suspicioustransactions and report them to the UIF. The Anti-MoneyLaundering Unit (“UAL”, as per its initials in Spanish) is in chargeof managing this risk, through the implementation of control andprevention procedures as well as the communication thereof to therest of the organization through the drafting of the correspondinghandbooks and the training of all employees.

Banco Galicia has appointed a Director responsible for themanagement of this risk, and has created a Committee in chargeof planning, coordinating and enforcing the compliance with thepolicies set by the Board of Directors (see “Aspects related toCorporate Organization, Decision Making, Internal Control, andCompensation Policy for Directors and Officers”). The basicprinciple on which the regulations regarding prevention andcontrol of money laundering are based is in line with the “knowyour customer” policy in force worldwide. The management of

this risk is regularly reviewed by the internal and external audit.

Risk Management-related Governance Bodies

The bodies mentioned below are part of the internal controlstructure involved in terms of definition, assessment and control ofthe risks taken by the Bank: Risk Management Committee, Asset-Liability Committee (ALCO), Crisis Committee, Financial Committee– Consumer Banking, Financial Risk Committee, Operational RiskCommittee, Legal Risk Committee, Wholesale Credit RiskCommittee, Retail Credit Risk Committee, Consumer Financing andHealth & Safety Committee.

CREDIT

The Credit Division’s mission is to assure quality of loan portfoliothrough the origination of businesses and the optimization of loanrecovery strategies in accordance with standards of best practices.

This Division performs the following functions: credit granting,preventive management, tracking down and classification ofcustomers, together with recovery of past-due loans.

In order to have timely information and a flexible and efficientstructure that helps respond and adjust to the current macro andmicroeconomic variables, the above-mentioned functions, both forcompanies and for individuals, are under the charge of theDivisions that report directly to the Area, thus looking for a moreefficient decision-making process.

The Division has specific sectors for complex businesses: banks,capital market and agri-business. In addition, there is an area for thereview and analysis of sectors by activity and environmental risk.

The analysis and granting in relation to the individuals portfolio aremade on a centralized basis by the Individuals Credit ApprovalDivision.

Applications for these products, such as credit cards, checkingaccount overdrafts and secured or unsecured personal loans, areautomatically assessed through automated credit scoring systemsthat take into account different criteria to determine the customer’scredit background and repayment capacity, as well as throughgranting guidelines based on the customer's credit history withinthe financial system (which is verified against the informationprovided by a company that furnishes credit information) or withBanco Galicia (credit screening).

Credit approval of corporate loan portfolio is carried out throughtwo specialized teams: the Corporate Credit Approval Division andthe Credit Analysis Division.

Before approving a loan, Banco Galicia performs an assessment ofthe potential borrower and his/her financial condition. Creditsexceeding certain amounts are analyzed by credit line andcustomer. For credits below certain amounts, the Bank usesautomated risk assessment systems that provide financial and non-financial information on the borrower, and that performprojections on the financial statements and generate automaticwarnings about situations that may indicate an increase in the risk.

Banco Galicia performs its risk assessment based on the followingfactors:

• Qualitative AnalysisAssessment of the corporate borrower’s creditworthinessperformed by the officer in charge of the account based onpersonal knowledge.

• Economic and Financial RiskQuantitative analysis of the borrower’s balance sheet amounts.

• Economic Risk of the SectorMeasurement of the general risk of the financial sector where theborrower operates (based on internal and external statisticalinformation).

• Environmental RiskEnvironmental impact analysis (required for all investment projectsof significant amounts).

Loans are approved by the Corporate Approval Division and CreditRisk Analysis Division, pursuant to authorization levels, exceptloans exceeding certain amount and loans granted to (domestic orforeign) financial institutions and to related customers; these loansare approved by the Credit Committee.

The Strategy and Planning Division is in charge of the strategicvision of the area defining efficiency ratios and action plans,proposing alternatives that contribute to the ongoing improvementand ensure compliance with the goals set.

It is also responsible for ensuring the regulatory compliance, asestablished by regulatory agencies, and reviewing and proposingchanges to internal policies, both as regards credit granting andpreventive management and recovery of past-due loans. This areaconstantly interfaces with the Risk Management Division.

The Customer Credit Recovery Division’s main role is to reduce thedeterioration of the portfolio under management and pursuecustomers’ reinsertion in the commercial line. It is also responsiblefor the preventive management in charge of the primaryreorganization of the Bank’s portfolio through strategic models ofbehavior that help anticipate non-performing credit customers.

The Portfolio Recovery Division covers the court and out-of-courtproceedings of customers within the individuals and companiesportfolio to maximize the portfolio recovery. In addition, it providesadvice on legal aspects to the Credit Division.

COMPREHENSIVE CORPORATE SERVICES

AThere follows a description of the main activities carried out bythe Divisions.

Organization

Banco Galicia remains on the way of transforming key processes



started four years ago by implementing the LEAN methodology,being a reference in its application within the region. During thefiscal year, it continued expanding this methodology and addingnew processes to those already implemented in the Claim andPost-sale Management, Customer Contact Center (“CCC”), RetailLoan Origination, Companies Loan Origination, Branches andForeign Trade, implementing it in the Purchases and Contractsprocess, in key Financial Area processes, in the DemandManagement process of the Organization and Systems areas, inthe Technology area’s Help Desk and the Anti-money-LaunderingUnit. In addition, the LEAN project started in the Development andHuman Resources Area.

Additionally, the Bank continues making progress in the ProcessMonitoring practice, whereby the people responsible for thebusiness, together with different reference people, systematicallyfollow up customer-oriented indicators and carry out actions fortheir ongoing improvement.

Moreover, projects were developed, which boosted efficiency orgenerated new or higher capacity to improve the service qualityand increase income. They include the sale of products through thePortal, Online Banking and CCC, the automation of the Stores’Subscription to multiple card brands, the centralization ofCustomer Retention and Closing of Products actions, a newpersonalized and remote service model for Éminent Customers, theoutsourcing of the Bank’s documentation filing, including that keptat branches, and the implementation of new tools and processes toimprove the expense and investment management and thebudgetary control.

Engineering and Maintenance

Eighty-seven per cent of the network’s image change plan wascompleted, which represented the involvement of 64 branches.

Also, the branch located at Florida moved to Maipú 241, in orderto improve the customers’ service and experience of one of thebranches with the largest public traffic.

In relation to the Automated Banking Plan, 190 pieces of equipmentwere replaced, encouraging a technology improvement in the totalnumber installed, which will allow broadening the current serviceprovision.

As regards Grupo Financiero Galicia’s efficiency management andLEAN Purchases Project, the pilot new model of branch maintenance

was launched, which was carried out together with the companiesthat are part of Grupo Financiero Galicia, achieving increasedefficiency in costs and improving services.

The contingency plan was applied to counteract the energy crisis,achieving an operating capacity in hours of 99.89% of the totalnetwork.

As regards Galicia Square, a new sustainable corporateheadquarters being built by the Bank in Chacarita neighborhood inthe City of Buenos Aires and that will house mainly operatingsectors, the reinforced concrete structure of the two towers and theglazing closure of the Leiva Tower were completed. The CorrientesTower began being closed and the installation works continue,according to the planned schedule.

Management and Security

Moving forward with the resource management efficiency policy,during the year a transformation program called LEAN Purchasesstarted. The goal is to establish a standard supply methodology forthe whole organization, with clear roles and processes. To suchend, the Strategic Supply Division was created to facilitateattaining these goals. During the year, training courses were givenand 40% of the Bank’s total expenses, excluding Taxes andCompensation, was analyzed, achieving savings amounting to Ps.60 million. In 2016, the training and implementation of themethodology will continue being strengthened, seeking toconsolidate such division’s coordination role within GrupoFinanciero Galicia.

As regards the Branches’ security and based on the data obtainedfrom reports and other banks, a Map of Banking Crimes wasdrawn. This information allowed establishing the most exposedareas and making decisions to give priority to putting securityshutters at branches, allowing operating after closing with moreprotection.

In October, the Bank’s Payments to Suppliers System and FixedAssets Management System was changed. The new system (SAPERP) will allow controlling the traceability of the Bank’s outflowprocesses, among other benefits.

Information Security

The Information Security Division carried out initiatives with a


primarily customer-focused vision. In this regard, work on differentprojects was performed, the most important of which are thoseintended to ensure Online Banking and Office Banking operations,by introducing and expanding a world-class tool that allows asimpler experience and improving the customers’ security, basedon their usual behavior on those channels. Also, other controls andtechnologies were introduced, which protect the Bank’s technologicalinfrastructure exposed to Internet.

Another project that should be highlighted was the migration ofsavings accounts to the new SAP environment, performingdifferent controls aimed at protecting the Bank’s information andtechnological environment security.

Operations

The Operations Division’s management was focused on improvingthe customer’s experience, the business performance and theefficiency of processes.

In connection with the main business projects developed, the CCCmanaged over 4 million contacts, thus generating the placement ofmore than 15,000 personal loans. The Customer Service doubledits percentage share of the total amount placed in the year.

Furthermore, the pilot Éminent Digital was launched, with advisorsserving 4,000 customers to meet their business or service needs.

During the year, at the Companies Loan Origination, 8,600 CreditLine for the Productive Investment transactions amounting to Ps.4,600 million were reviewed, documented and settled. In addition,the Operations Division joined the Best Business Management,thus recognizing the contribution to the customers’ satisfactionand experience, since 60% of the Division’s employees interactsdirectly with them.

Continuing with the focus on efficiency, Retail Loan Originationincreased by 21% in the year the monthly average of foldersprocessed. With respect to Clearing, the re-deposit system forillegible checks was developed, thus avoiding the 24-hour delay increditing to the customer’s account. In addition, the OperationsDivision was focused on retail customers’ closing of productsprocess.

As regards the Foreign Trade service, the Operations Division wasrewarded for its payment quality, the facilitation of trade financingand operational excellence by entities, such as the IDB, Standard

Chartered, Wells Fargo and Commerzbank. Also, Banco Galiciaachieved the second position in the market for the volumetransacted in U.S. Dollars in imports and exports, and continuedbeing one of the top-of-mind banks chosen by customers.

Systems

The Systems Division was focused on the project to change thebanking core system, reaching this year the final instances of itsimplementation. The development of the functionality of checkingaccounts was completed in December, only remaining the effectivemigration thereof for 2016. Likewise, it began with the introductionof Individuals portfolio loans, starting with those granted throughOnline Banking and Banelco. Thus, after migrating checkingaccounts during 2016, the project will be completed.

The use of technology to analyze SAP HANA information wasextended, making available to customers through Online Bankingthe possibility of consulting the necessary information to prepareits income tax returns and the unified view of the benefits grantedby the Bank in its different loyalty creation programs.

The first of a series of implementations about the tool to analyzeReal Time Decision (“RTD”) information was carried out, which allowsmaking directed promotions or proposals according to differentbusiness criteria, personalized by customer or by segment, whichwill allow substantially improving the acceptance ratio of offers.

A facility was developed to allow the exchange of Quiero! pointsafter the purchase date, thus allowing customers to takeadvantage of the Bank’s promotions although they do not knowthem at the moment they carry out the purchase.

ORGANIZATIONAL DEVELOPMENT AND HUMAN RESOURCES

Being one of the best companies to work for is one of BancoGalicia’s strategic mainstays. This entails a commitment andsustainable vision in people management, seeking to attract thebest market talents and make them loyal. In this line, the changesimplemented in people management provided a sound platform toleverage compliance with the strategy the Bank set for the comingfive years, strengthening the organizational culture.

Year 2015 began with the 2015-2020 Strategy, which includes thebusiness model of the Customer’s Experience. Aligned with this


new strategy, an organizational redesign was made in order togenerate possibilities for the development of managerial positionsselecting the best talent for key positions. The new structure of theArea Managers Committee arose from a selection process thatencourages and promotes the internal talent.

The Organizational Culture Plan also began being executedfocused on the challenges defined as priority: To define andcommunicate the leader model as main agent in the culturemanagement sustainability, aligning talent management policiesand practices, reviewing the model of organizational values andpurpose, and strengthening the work environment management.These cultural priorities are critical to strengthen and support thecustomer’s experience business model based on the employee’sexperience.

The ongoing Management of work environment is a key driver toachieve it. As evidence of the result of the work performed by thewhole organization for the sake of carrying out the best and mostinnovative Human Resources practices, in the last survey of workenvironment the Bank obtained a general average of 79%,achieving the fourth position of the Great Place to Work ranking ofthe best companies to work for in Argentina.

Internal Communication

In 2015, the work on our strategic mainstays continued to go onbuilding a simple, efficient, innovative and multichannelcommunication to strengthen the organizational culture throughthe Internal Communication.

The “Conociéndonos cada día más” (Getting to Know Each OtherMore Every Day) program is the space that provides a closeexperience among employees, area managers and the ChiefExecutive Officer, and more than 3,500 employees have taken parttherein for five years in a row. The tour of meetings with the branchnetwork was made in 2015. More than 30 meetings were heldthroughout the country.

Banco al Día (Up-to-Date Bank) is the channel whereby the ChiefExecutive Officer monthly shares the matters relevant to theorganization’s strategic vision. The synergy with differentcompanies of Grupo Financiero was added in 2015. The firstexperience was with Galicia Seguros upon editing Banco al Día atits headquarters.

Líder al Día (Up-to-Date Leader) also consolidated this year as the


companies from other industries, workshops with employees wereheld, and integrated shared management processes weregenerated.

Additionally, the Knowledge Management team joined the ChangeManagement Department. This team’s purpose is to providesupport to businesses to expedite employees’ learning through thecollective knowledge management, including safeguarding keyinformation, its consultation and view, and the internal structure tosupport the whole Bank.

+Benefits

Designed to care for, support and honor employees both in thework environment and in all their personal projects, the Bank’sbenefits program gathers the best market practices and is aimed atall ages and geographic areas with benefits specially thought toprovide each employee with the best experience.

In connection with care and encouragement of healthy habits, in2015 the activities were focused on how to prevent and cope withstress, holding conferences and workshops about prevention toolsfor employees and their families.

most valued channel, continuing with the goal of ensuring thatleaders receive key information for their management and that oftheir teams, which increases its role as communicators as well.

Change Management

In the Change Management area, the work comprised three focalpoints: project portfolio, synergies and initiatives.

As regards project portfolio, 56 projects were managed and theIntegrated Impact Vision was developed for the purpose ofmeasuring the additional dedication required from employees of allthe Bank’s areas due to the changes introduced from differentprojects, a map that allows giving visibility upon making decisionson actions that have an impact on different audiences. In addition,the results and comments of the work environment surveyconducted of the audiences impacted by the different projects wereanalyzed, understanding them as material variables upon definingthe adequate change plan.

Under the synergy focal point, the activities related to integratingthe processes that are shared with strategic partners, focused ongenerating better results upon undertaking actions, werecontinued. Exchanges with companies of Grupo Financiero and


Programs related to flexible work time, birthdays, mothers’ gradualreturn to work and the creation of spaces that allow integrating theemployees’ families with different actions, such as, celebration ofthe family day, children’s day, family visit on Christmas, teachers’day, private movie theater, theater performance, etc., wereconsolidated.

Each employee was also provided with assistance to meet the newtax requirements through workshops, tutorial videos andpersonalized professional tax and legal assistance.

Employees throughout the country were integrated through events,such as, after-office meetings, sports competitions and culturalevents.

In addition, employees had the possibility of choosing somebenefits, according to their needs, such as, birthday gifts, theschool kit for their children, exclusive discounts, specialagreements and purchase of products at special prices, all these byintroducing new technologies that allow easy access.

Innovation Program

In 2015, we continued developing the Bank’s innovative capacity.

The program based its actions on three mainstays:-Development of the Innovate Skill: Through different trainingactions, over 990 employees acquired innovation methodologytools, which allowed them to be more innovative in their dailytasks. Furthermore, the Innovation Day was celebrated, where over300 employees throughout the country took part and more than 25reports were generated regarding the Customer’s Experience,directly helping with the design of this new area’s strategy.-Expert Referents’ Training: A new generation of InnovationDrivers joined the program. A group of 26 employees from differentareas and hierarchies who were provided with tools to becomereferents and experts of the methodology.-Consolidation of the Proceso de Innovación Galicia (“PIG”,as per its initials in Spanish) (Galicia Innovation Process):Weused the PIG to manage 5 projects from different areas thatengaged 54 employees.

All these initiatives and those carried out over the last three yearsinvolved 40% of the Bank’s employees, with 93 initiativesimplemented and more than 10 being implemented.

This year the Galicia Lab was also opened, which is focused on fullyworking on digital innovations, and a new innovation space.


Jobs

During 2015, 18 young professionals were hired for differentcentral areas and 65 at branches with Éminent, and Business andPyMEs profile, continuing with the recruiting process throughsocial networks and referrals.

The Bank continued taking part in job fairs to consolidate theEmploying Brand, 3 Web-based fairs and 6 face-to-face fairs atdifferent universities.

The call for the “Experiencia Galicia” (Galicia’s Experience)Program was made through social networks, Banco Galicia’swebsite and universities with which we have internshipagreements. Moreover, two mass recruiting days were organized,where the Bank received 320 young students from the City ofBuenos Aires and Greater Buenos Aires.

Training

In line with the Bank’s strategy and performance goals, a series oftraining courses were offered to allow a better performance ofduties. The most important ones are as follows:- Under the framework of the Experiencia Galicia Program, asummer job practice for young university students, differenttraining activities were carried out for over 100 young peoplethroughout the country, including proposals that, from play andpractice, allowed training interns in their duties at branches.- To improve insurance knowledge, and its marketing skills, theInsurance Trainers Program was held, which consisted in trainingan employee from each branch, who will be responsible for trainingthe members of his/her branch, in addition to becoming a referencein the issue.- By mid-2015, the Bank implemented a new Digital Service Modelfor the Éminent segment, for which it designed the Digital ÉminentSchool, a training program that develops competencies to improvethe customer relation experience with technologies aligned withthe new market demands.- To achieve a better customer input and reduce waiting times atbranches, 32 Flex Cashiers were hired, who work the first 10business days of each month, for which a tailor-made trainingschedule was designed.- To boost the implementation of LEAN in the Bank’s differentareas, online courses and face-to-face workshops were designed.- As part of the Customer’s Day program, the whole Community ofLeaders was invited to take part in the “Conociendo NuestrosProcesos” (Understanding our Processes) experience, whosepurpose is to understand the organization from a process view,

based on a walk-through by stage, generating a full vision thatallows detecting improvement opportunities that add value to theCustomer’s Experience.

Development

The focus continued on the Potential Calibration to promote a crossview and ensure equity criteria considering different variables thatdescribe the potential for the Bank. The organization’s TalentMapping was obtained from these committees, which providesmaterial information to carry out different actions. This year, forthe first time, a total of 1,200 branch profiles were calibrated,which allowed having an immediate comprehensive view of thenetwork talents.

Under the framework of the Performance Assessment process, thecycle was changed from October to September as from 2015. Thischange allows facilitating the goal setting and evaluation processand making it more efficient since it is performed simultaneouslywith the annual budget.

This year the new Galicia’s competencies model was presented.Eleven new competencies were defined, which are characterized bybeing challenging and inherent to our culture aspirations.

The PeopleNet tool was introduced as innovation in OportunidadesGalicia (Galicia Opportunities) to facilitate both the managementof internal job postings and the employee’s experience in theprocess.

In 2015, the second edition of the TEDxGalicia event was carriedout, in which 6 internal and 3 external speakers participated.

During the year, 71 grants were given and 19 employees whoreceived grants in previous years continue with their programs.

Quality Assurance

During 2015, the customer’s experience continued being spreadthroughout the organization, leveraged by the results of severalsatisfaction surveys in all the segments, and through theenlargement of the NPS methodology for the service of Éminent,Business and Pymes, and PyMEs Pes (small-sized companies)segments in the branch network, deploying its application to theWholesale and Financial Banking and at the CCC.

The NPS methodology allowed being closer to customers over the


last four years, listening to and understanding their needs to beable to provide them with the experience they expect from theBank.

In the second half of the year, studies were conducted to assess thesatisfaction and recommendation level of customers from thedifferent segments regarding the banks with which they operate.Extraordinary results were obtained from these studies. BancoGalicia was ranked first considering the NPS, with significantdifference with respect to the second one in the cases of High-Income, Agricultural, Business and PyMEs and Financial Banking,and shared in the cases of Corporate and Middle-market, whereasMassive Income was ranked second. This achievement was builtwith the commitment and conviction of all the employees whoadjusted processes, products and service models and achieved thatcustomers notice and perceive it, understanding that each one’sdaily work has impact on the customers’ experience and requireseveryone to continue improving it day after day.

To make the entire organization’s customer-oriented approachstronger, in 2015 the number of divisions that have NPS as KPI (KeyPerformance Indicator) was broadened, leveraging by indicators thewhole institution’s work on improving the customer’s experience.

Regarding the employee’s experience concept, the InternalCustomer Program continued assessing the NPS and thesatisfaction level of the Bank’s employees with the internal servicesreceived. Once more, the central departments assessed werebroadened and the goal to raise the degree of commitment toservice was increased. This assessment allows identifyingopportunities for improvement in internal processes that eventuallyhave an impact on customer service.

The spreading of the “Pasión por el Cliente” (Passion for theCustomer) program also continued, with three forums in whichmiddle management and the rest of the organization took part.These meetings are intended to raise awareness, modify habits andspread the customer-oriented philosophy throughout theorganization.

In 2015, Galicia Warrants’ and Galicia Administradora de Fondos’processes certified in previous years under ISO 9001 wererevalidated. Each of these certifications has a customer satisfactionsurvey, which allows knowing their service input and managingimprovements. The certification is the procedure whereby anauthorized certifying entity assures in writing that a givencompany’s product, process or service meets the requirementsspecified in an international standard, ISO 9001 being the mostrenowned.


The Bank maintained its adherence to the Code of BankingPractices, an initiative fostered by several Argentine BankAssociations, with the purpose of contributing to guaranteeing therights of users of financial services and products. It further tries toguarantee the transparency in the data provided by financialinstitutions to their customers, and the bonds between theinstitutions that provide financial services and the communitythose institutions belong to. Banco Galicia also maintained itsmembership in the Fundación Empresaria para la Calidad y laExcelencia (FUNDECE - Business Foundation for Quality andExcellence), an institution that fostered the creation of the PremioNacional a la Calidad (National Award to Quality), which annuallyrecognizes the best companies in the country.

By year-end, the Bank decided to change its structure and replacethe Quality Assurance Division, creating the Customer’s ExperienceDivision. This important strategic decision is aimed at achieving theposition as the best Universal Bank in Argentina with customerswho have expectations exceeded and recommend the bank’sservice, and employees are increasingly satisfied and proud ofworking at Galicia. The area’s challenges are to build, along withall the Bank’s sectors, a customer-oriented culture, to lead priorityand cross-section projects to improve the Customer’s Experience,to design and manage a sound and integrated ongoingimprovement system, to lead the learning cycle to share the bestpractices and support the ongoing improvement cycle with NPS,LEAN and Innovation methodologies.

Corporate Social Responsibility

Banco Galicia conceives sustainability as critical contents of thebusiness strategy. Therefore, work is performed to reconcilepositive economic results and, at the same time, the responsibilityfor efficiently managing the social and environmental impactcaused by its operations is assumed. This business vision is sharedwith all the companies that are part of Grupo Financiero Galicia,performing sustainable development work jointly.

Through social investment programs, the Bank conducts activitiesto strengthen and improve upper education quality, expandedopportunities to undertake and innovate through training and

providing decent employment opportunities, and contributed withpublic health institutions, along with the local health agents’training, to child malnutrition prevention. These initiatives ofrelation with the community translate into facts and results thatare annually communicated to customers, shareholders, suppliers,employees and the whole community.

Banco Galicia drives an integrated environmental managementstrategy that contemplates an efficient use of natural resources,focusing on the rational consumption of electric power and paper.In addition, it calculates its corporate carbon footprint, carries outawareness initiatives and environmental preservation and grantscredit lines that favor the minimization of the impact on theenvironment. Moreover, it has a special Mezzofinanzas line tofinance sustainable and innovative undertakings and projects, witha high social and environmental impact.

The Bank also revalues its employees’ solidarity initiatives bymeans of the Corporate Volunteering Program throughinfrastructure and equipment improvement projects for the benefitof public non-profit organizations.

Under this framework of action, an integrated communicationstrategy began, jointly with the main companies of GrupoFinanciero Galicia through the Sustainability Report. By means ofthis publication the different companies’ economic, social andenvironmental results are made known. The Report is preparedfollowing different international guidelines, such as, the IBASESocial Balance Sheet, the AA1000SES Accountability Standard, ISO26000 Standard on Social Responsibility, the ten principles of theGlobal Compact and the G4 Global Reporting Initiative (“GRI”)Guidelines and its Financial Supplement. Additionally, the 17Sustainable Development Goals will be contemplated, anintegrated set of worldwide sustainable priorities by 2030,launched at the 2015 United Nations Summit.

These initiatives conclude on the sustainable view of the businessBanco Galicia undertakes along with its commitment as socialplayer. In addition, the definition of a coordinated strategy for thejoint work with companies of Grupo Financiero Galicia will allowidentifying and strengthening actions and aspects related to thesustainable management for companies and their stakeholders.


Grupo Financiero Galicia holds 87.5% of the company’s capitalstock and Banco Galicia owns the remaining 12.5%.

This investment in the insurance business is part of GrupoFinanciero Galicia’s general plan to strengthen its position asleader in providing financial services.

In turn, Sudamericana Holding is the controlling company ofGalicia Seguros S.A. (property and life insurance), Galicia RetiroCompañía de Seguros S.A. (retirement insurance) and GaliciaBroker Asesores de Seguros S.A. (insurance broker). Additionally,Sudamericana Holding currently holds 35% (indirectly) of Nova ReCompañía Argentina de Reaseguros S.A. (local reinsurer).

Total insurance production of the aforementioned insurancecompanies amounted to Ps. 2,547 million during 2015, 44% higherthan the volume of premiums of the previous year.

This increase in insurance production was recorded mainly forGalicia Seguros, with Ps. 782 million more premiums written thanin the same period of the previous fiscal year. As regards GaliciaSeguros’ business transactions, the focus was placed on continuingto increase the company’s turnover and sales, which in 2015amounted to Ps. 709 million of annualized premiums. Thisrepresented a 39% growth when compared to the previous year,thus increasing the insurance policy laps ratio and extending thetypes of coverage offered.

Galicia Retiro Compañía de Seguros continues with an action planaimed at effectively administering the current business andkeeping a proactive analysis on the evolution of market conditionsin order to assess whether to re-launch the sales of voluntaryretirement products, both individual and group.

Galicia Seguros will continue the vertical growth of businessthrough Banco Galicia and regional credit card companies, as wellas the development of the existing alternative sales channels bymeans of the launching of new products and the use of new pointsof contact and sales, and the analysis of feasibility of underwritinginsurance in new property insurance lines in order to mitigatecompanies’ risks. Additionally, it will continue maintaining its goalsof: (i) boosting the business with products supplementary to thecore business of Banco Galicia and its subsidiaries, adjusted toeach of their segments; (ii) expanding the sale of insurance tocompanies; (iii) make management effective to support the growthof the business volume, implementing the update of themanagement system (Visual Time); (iv) consolidating the insuranceposition for individuals, taking advantage of the synergies withGrupo Galicia and developing the over-the-counter market andadditional channels; (v) keeping the efforts to restrict the level ofexpenses and obtaining the estimated profitability; and (vi)fostering a very good work environment and be eligible as anexcellent company to work for by the staff .

Galicia Broker Asesores de Seguros will continue focusing on andboosting its growth in the area of business related to the corporatesector, offering its customers professional advisory services thatwill allow them to find the most appropriate insurance andcompanies in each case, in order to contribute to the main goal ofgrowing with appropriate profitability levels. On the other hand,the company will continue moving forward so as to maintainoperating systems updated to continue gaining ground as regardsefficiency and in developing systems that allow online interactionwith sales channels, streamlining the carrying out of newbusinesses, easing the monitoring of transactions and providingmanagement information.

SUDAMERICANA HOLDING


Galicia Administradora de Fondos’ shareholders are GrupoFinanciero Galicia, which holds 95% of shares and Galicia ValoresS.A., Banco Galicia’s subsidiary, which holds the remaining 5%.

GAF manages FIMA mutual funds. Banco Galicia distributes themutual funds to several customer segments (institutional,corporate and natural persons) through its broad distributionchannel network (branches, e-banking, telephone banking), whileit acts as a custodian of the assets that make up the funds, in itsrole as custodial agent of collective investment productscorresponding to mutual funds. Furthermore, this companymanages investments and determines the market value of mutualfund units on a daily basis.

The assets of mutual funds are invested in a variety of instruments,such as bonds, negotiable obligations, trusts, shares, timedeposits, among others, according to the investment purpose ofeach mutual fund.

FIMA funds equity increased by 53% when compared to the closeof the previous fiscal year, reaching, as of December 31, 2015, avolume of funds managed of Ps. 18,174 million, which accounts fora 9% market share, thus keeping its share as compared to theprevious year. This increase in volume mainly took place in theinstitutional and corporate customers segments, and in FIMAAhorro Pesos, FIMA Ahorro Plus and FIMA Premium.

Under the framework of the amendment to GAF’s bylaws, whichremoved the limitation on the only purpose, allowing the companyto be able to carry out other activities, such as the portfoliomanagement, the company currently has three new regulationsapproved, Fima Premium Plus, Fima Gestión I and Fima Mix I, inview of a possible demand for 2016.

In fiscal year 2015, GAF optimized the financial performance of itsliquid assets, making placements in its own FIMA mutual fundsthat it manages.

As regards credit ratings, Moody’s Latin America Calificadora deRiesgo S.A. granted the FIMA funds the following ratings: FIMAPremium “Aaa”, FIMA Ahorro Pesos “Aa”, FIMA Ahorro Plus“Aa”, FIMA Renta Pesos “A”, FIMA Renta Plus “A”, FIMA CapitalPlus “A”, FIMA Pymes “A” and FIMA PB Acciones “Ef-3”.

The outlook for 2016 foresees an ongoing increase in mutual fundsand the development of business related to that activity within theframework of the new Capital Markets Law, such as advisoryservices and management of discretional investment portfolios.

GALICIA ADMINISTRADORA DE FONDOS


Its shareholders are Grupo Financiero Galicia, with an 87.5% stake inthis company, and Banco Galicia, with the remaining 12.5%

This is a leading company in the industry of certificates of deposit andwarrants. This company has been conducting transactions since 1994,supporting medium and large companies in regard to the custody ofstocks. Its main purpose is to enable its customers access to credit andfinancing, which are secured by the property kept under custody.Galicia Warrants S.A.’s main customers belong to the agricultural,industrial and agro-industrial sectors, as well as exporters and retailers.

The volume of operations for 2015 was higher than that for 2014,which entailed a 90% increase in income from services, as a result ofthe increase in the customer portfolio and the volumes of goods undercustody. The sectors that demanded this financial instrument the mostwere regional economies, mainly those related to agriculture andagroindustry.

Income from services for the fiscal year reached Ps. 81.4 million,whereas net income amounted to Ps. 31.3 million.

The Company will continue focusing on providing customers with thebest service, tailoring it to their needs. This will enable a sustainedgrowth and an expectation about a more aggressive development forthe coming years.

Grupo Financiero Galicia owns an 87.5% stake in Net Investment S.A.,while the remaining 12.5% stake is held by Banco Galicia. NetInvestment was created to carry out Internet business transactions.Within the framework of the Board of Directors’ search for newbusiness alternatives, the shareholders decided to amend the corporatepurpose to be able to have an interest in other companies that carry outrelated, accessory and/or else supplementary activities.

The outlook for 2016 is related to the possibility of carrying out thebusiness alternatives and opportunities that are being analyzed by theBoard of Directors.

NET INVESTMENT GALICIA WARRANTS


ASPECTS RELATED TO CORPORATEORGANIZATION, DECISIONMAKING, INTERNALCONTROL, ANDCOMPENSATION POLICY FOR DIRECTORSAND OFFICERS


Eduardo J. Escasany

Pablo Gutiérrez

Abel Ayerza

Federico Braun

C. Enrique Martin

Luis O. Oddone

Silvestre Vila Moret

Antonio R. Garcés

Juan Miguel Cuattromo (1)

María O. Hordeñana de Escasany (2)

Sergio Grinenco

Alejandro M. Rojas Lagarde

Augusto R. Zapiola Macnab

Chairman

Vice-Chairman

Director

Director

Director

Director

Director

Director

Director

Alternate Director

Alternate Director

Alternate Director

Alternate Director

04/15/2016

04/15/2016

04/29/2018

04/29/2017

04/29/2018

04/15/2016

04/29/2017

04/29/2018

04/29/2016

04/29/2017

04/29/2018

04/29/2018

04/29/2018

EXPIRATIONOF TERM

POSITIONNAME Composition and Functions of the Board of Directors

The Ordinary and Extraordinary Shareholders’ Meeting held onApril 29, 2015, fixed the number of directors in nine and in four thenumber of alternate directors.

The composition of the Board of Directors is in the chart on the left:

The Board of Directors meets formally once a month and each timecircumstances so require it. It is responsible for the establishmentof general guidelines related to asset and liability management,the approval of business plans, economic and financial budgets,investment plans, and proposals for development of newbusinesses.

Corporate Organization

Grupo Financiero Galicia is directed by two management divisions.

General Division: Its main function consists in implementing thepolicies defined by Grupo Financiero Galicia’s Board of Directors,as well as suggesting to the Board of Directors the application ofplans, budgets and company organization. This division is also incharge of supervising the Financial & Accounting Division,assessing the attainment of goals and the performance of thecompany. It as well takes part in the Board of Directors ofsubsidiaries.

Financial and Accounting Division: It is mainly responsible forthe assessment of investment alternatives, thus suggestingwhether to invest or divest holdings in different companies orbusinesses. It also plans and coordinates the company’sadministrative services and financial resources in order toguarantee its proper management. This division also aims atmeeting requirements set by several controlling authorities,complying with information and internal control needs andbudgeting purposes. Furthermore, it is in charge of planning,preparing, coordinating, controlling and providing financialinformation to the stock exchanges where the Company’s sharesare listed and to regulatory bodies.

This division also has the following committees:

Disclosure Committee: This Committee is made up of GrupoFinanciero Galicia’s Managing Director, the Chief Financial andAccounting Officer and two supervisors from the Financial andAccounting Division. At least one of the members of thisCommittee takes part in the meetings held by the "Disclosure

(1) The Director resigned to his position as from September 7, 2015.(2) Passed away on September 18, 2015.


Committee", created for the same purposes at the mainsubsidiaries. Among others, it has the authority to invite theexecutives in charge of other areas of the Company and/ oraffiliated companies, as it deems convenient, to attend themeetings held by the Committee. This Committee was created in2002 with the purpose of complying with what is recommended bythe Sarbanes-Oxley Act of 2002 of the United States of America,since Grupo Financiero Galicia is a listed company on the NASDAQCapital Market. The above-referred Law was passed in order toprovide a more stringent regulatory framework regardinginformation and corporate responsibilities, both for companies inthe United States of America as well as foreign companies that actor participate in U.S. markets. Among its responsibilities, thefollowing stand out: monitoring the Company’s internal control,reviewing the financial statements and other informationpublished, preparing the reports for the Board of Directors on theactivities carried out by the Committee, controlling the activitiesperformed by internal audit, executing and implementing thenecessary measures to comply with the certifications required bySections 906, 302 and 404 provided by the Sarbanes-Oxley Act,monitoring the modifications introduced in order to extend theapplication of the provisions of the Sarbanes-Oxley Act to theCompany’s main affiliated companies, and interacting with theCompany’s Audit Committee. It is worth noting that thisCommittee's operations have been adapted to comply withdomestic laws currently represented by Capital Markets Law No.26831 and regulations issued by the CNV, so as to be able to helpwith tasks that are regulated by such laws. At present, thisCommittee performs significant activities on the administrative andinformation areas that serve the Board of Directors and theCompany’s Audit Committee in the development of their functions.This way, the Company contributes to the transparency ofinformation provided to the stock exchanges where its shares arelisted.

Audit Committee: This Committee was created as a body with noexecutive functions, which purpose is to provide the Company’sBoard of Directors with assistance in overseeing the financialstatements, as well as in the task of controlling Grupo FinancieroGalicia and its subsidiaries and companies it owns a stake in. ThisCommittee complies with the provisions set forth by CapitalMarkets Law No. 26831 and regulations issued by the CNV, whichrequire that companies that make a public offering of sharesshould form an Audit Committee, and develop a charter withregulations for its operation. Furthermore, it is worth noting thisCommittee has been created in compliance with the requirementsof the Sarbanes-Oxley Act. Among the activities it carries out, thefollowing are worth noting: the annual planning of the

Committee’s activities and the allocation of means for itsoperation; the evaluation on the independence, working plans andperformance of External Audit and the assessment of plans andperformance of Internal Audit; evaluation of the internal control inforce at the Company (which, furthermore, complies with theprovisions of Section 404 of the Sarbanes-Oxley Act) and at itsmain subsidiaries, and, as part of that, the accounting andadministrative system’s operation; the assessment on the use ofinformation policies on risk management at the Company’s mainsubsidiaries; assessment on the reliability of financial informationsubmitted to the regulators and markets where the Company listsits shares; evaluation of standards of conduct through the analysisof legal and regulatory provisions being in force and set forth in theCode of Ethics established by the Company, mainly with regard totransparency, conflict of interests, reliability and the appropriatedisclosure of accounting information and other significant events,as well as the protection of the Company’s net worth; the analysisof related party transactions for the cases established by CapitalMarkets Law No. 26831; and the analysis of whether conditionsare reasonable and of compliance with the General Program for theIssuance of Negotiable Obligations outstanding.

Supervisory Syndics’ Committee

In line with what is set forth in the General Corporations Law,corporate bylaws provide for a Supervisory Syndics' Committeeconsisting of three regular members (syndics) and three alternatemembers (alternate syndics). In accordance with the applicableArgentine law, the Supervisory Syndics' Committee is responsible forcontrolling the Company's management, for which its membersexamine books and documentation when they deem it convenientand at least every three months. At least one of the members attendsthe meetings of the Board of Directors. Unlike directors, syndics andalternate syndics cannot have management functions. The syndicsare responsible for, among other things, preparation of a report toshareholders analyzing the Company’s financial statements andAnnual Report for each fiscal year.

Alternate syndics act in the temporary or permanent absence of asyndic. The syndics and the alternate syndics are elected for a one-year term by the shareholders at their Annual General Meeting.

Compensation Policy for Directors and Officers

LThe policy for compensation applied by Grupo Financiero Galiciaand its controlled companies is, essentially, the same, and it consistsin arranging salary levels in order of importance based on a systemthat describes and assesses tasks by factors (Hay System). The


purpose is to pay compensation amounts similar to those observedin the domestic market for functions with the same hierarchy andresponsibilities. Managers receive a fixed compensation and mayreceive a variable fee based on individual performance. This policyfor compensation envisages the possibility of having access toretirement insurance and there are no option plans.

Directors earn fees based on the tasks performed, in accordance witheffective regulations and have the Audit Committee’s opinion on thereasonableness of the fees paid in the market. Compensation for themembers of the Board of Directors shall be considered by theShareholders’ Meeting once the fiscal year has ended.

Policy on Dividends

Grupo Financiero Galicia’s policy for the distribution of dividendsenvisages the following, among other factors: (i) the obligatorynature of establishing a legal reserve, (ii) the company’s financialcondition and its indebtedness, (iii) the requirements of controlledcompanies, and (iv) that the profits recorded in the financialstatements are realized and liquid profits, a requirement of Section68 of the General Corporations Law so that it is possible to distributethem as dividends. The proposal to distribute dividends arising fromsuch analysis has to be approved at the Shareholders' Meeting thatdiscusses the Financial Statements corresponding to each fiscal year.

Composition and Functions of Banco Galicia’s Board ofDirectors

The Ordinary and Extraordinary Shareholders’ Meeting held onApril 29, 2015, fixed the number of directors in seven and in fourthe number of alternate directors.

On this page , below , the detailed composition of the Board.

The Board of Directors formally meets at least twice a week andinformally every day, is in charge of Banco Galicia's generalmanagement and takes all the necessary decisions to fulfill said task.

Members of the Bank’s Board of Directors also serve in thefollowing committees:

Risk Management Committee: This Committee is composed offive Directors, the Chief Executive Officer, the Managers of the RiskManagement Division and Planning Division and the Internal AuditManager. It is in charge of approving risk management strategies,policies, processes and procedures, with the related contingencyplans, establishing the specific limits for each risk exposure andapproving, when appropriate, the temporary limit excesses andbecoming aware of each risk position and compliance with policies.The Committee meets at least once every two months. Its resolutionsare summarized in writing in minutes.

Sergio Grinenco

Pablo Gutiérrez

Guillermo J. Pando

Luis M. Ribaya (3)

Raúl H. Seoane

Pablo M. Garat (1)

Ignacio A. González (1)

Enrique García Pinto (2)

C. Enrique Martin

Augusto R. Zapiola Macnab (2)

Oscar J. Falleroni (3)

Chairman

Vice-Chairman

Secretary Director

Director

Director

Director

Director

Alternate Director

Alternate Director

Alternate Director

Alternate Director

12/31/2017

12/31/2017

12/31/2017

12/31/2016

12/31/2016

12/31/2015

12/31/2015

12/31/2017

12/31/2017

12/31/2015

12/31/2015

EXPIRATION OF TERM

POSITIONNAME

(1) In accordance with National Securities Commission (CNV) regulations, and pursuant to the criteria adopted by said entity, Messrs. Pablo M. Garat and Ignacio A. González are Independent Directors.(2) In accordance with CNV regulations, and pursuant to the criteria adopted by the CNV, Mr. Enrique García Pinto is Independent Alternate Director. He shall replace the Independent Directors

in the case of a vacancy.(3) It is evidenced that Mr. Luis M. Ribaya resigned to his position on December 18, 2015 and Oscar J. Falleroni, Accountant, resigned to his position on January 19, 2016.


Credit Committee: This Committee is composed of seven Directors,the Chief Executive Officer and the Managers of the Credit and RiskManagement Divisions. The Managers of the Wholesale Banking,Retail Banking and Financial Divisions shall attend the meetings aslong as the bank account pending approval by this committeecorresponds to any of the above-mentioned divisions. It is in chargeof approving and signing the following transactions: Ratings andtransactions granted to customers/groups which risk level is greaterthan 2.5% of the Bank’s computable regulatory capital (“RPC”, asper its initials in Spanish) as of last December, with annual updating.The Committee meets at least once every week. Approvedoperations are recorded in signed and dated minutes.

Asset-Liability Committee (ALCO): Five Directors, the ChiefExecutive Officer, the Retail Banking Manager, the WholesaleBanking Manager, the Financial Division Manager, the RiskManagement Division Manager and the Planning Division Managerare members of this Committee. It is in charge of analyzing theevolution of Banco Galicia’s business from a financial point of view,in regard to fund raising and different assets placement. It is also incharge of the follow-up and control of liquidity, interest rate andcurrency mismatches. This Committee is in charge of analyzing,together with the business divisions, measures in connection withthe management of interest rate, currency and maturity mismatches,with the goal of maximizing financial and foreign-exchange resultswithin risk and capital use policies. This Committee is alsoresponsible for suggesting changes to these policies, if necessary, tothe Board of Directors. The Committee meets at least once a month.Its resolutions are summarized in writing in minutes.

Information Technology Committee: This Committee iscomposed of three Directors, the Chief Executive Officer, theComprehensive Corporate Services Division Manager and the ITDepartment Manager. This Committee is in charge of supervisingand approving the development plans of new systems and theirbudgets, as well as supervising these systems’ budget control. It isalso responsible for approving the general design of the systems’structure, the main processes thereof and the systems implemented,as well as monitoring the quality of the Bank’s systems, within thepolicies established by the Board of Directors. The Committee meetsat least once every three months. It can hold extraordinary meetingsin case there is any issue that requires urgent consideration. Itsresolutions are summarized in writing in minutes.

Audit Committee: In accordance with the Argentine Central Bank’sregulations, Banco Galicia formed an Audit Committee composed oftwo Directors and the Internal Audit Manager. The Committee is incharge of supervising the adequacy and conformity, as well as the

effective functioning of the internal control systems so as to ensurecompliance with all the Bank’s rules submitted to the ArgentineCentral Bank and the self-regulated entities of the capital market.The Committee meets at least once a month. Its resolutions areentered in minutes, which are transcribed in signed books.

Committee for the Control and Prevention of MoneyLaundering and Funding of Terrorist Activities: It is composedof two Directors, the Chief Executive Officer, the Manager in chargeof the Anti-Money Laundering Unit (UAL), the Internal AuditManager, and the Managers of the following Divisions: RiskManagement, Credit, Financial, Wholesale Banking, Retail Bankingand Comprehensive Corporate Services. The Syndics can be invitedto attend any meeting called by this Committee. In compliance withthe regulations set forth by the Argentine Central Bank, Messrs.Guillermo J. Pando and Raúl H. Seoane, Directors, have beenappointed as the Bank’s officers responsible for the control andprevention of money laundering and funding of terrorist activities.Likewise, the Financial Division Manager is the officer in charge offinancial intermediation transactions. This Committee is responsiblefor planning, coordinating and enforcing compliance with thepolicies on the issue established and approved by the Board ofDirectors. The Committee is scheduled to meet at least once everytwo months and its resolutions must be registered in a minutes book.

Disclosure Committee: This Committee is composed of fiveDirectors (two of whom are independent ones), the Chief ExecutiveOfficer, the Managers of the Planning Division and the RiskManagement Division, the Internal Audit Manager, the AccountingDivision, the Asset and Liabilities Management, the InstitutionalRelations Department and Legal Advisory Managers, and the Personin Charge of Market Relations. The Syndics can be invited to attendany meeting called by this Committee. A member of the Committeethat was created for the same purpose by Grupo Financiero Galiciaalso attends the meetings held by this Committee. Likewise, theCommittee may call officers from Banco Galicia's different divisionswhenever it may deem necessary. This Committee was created tocomply with the provisions of the U.S. Sarbanes-Oxley Act. TheCommittee will meet every three months or as long as there areissues that require consideration. Its resolutions are summarized inwriting in minutes.

Human Resources Committee: It is composed of two Directors,the Chief Executive Officer and the Organizational Development andHuman Resources Manager. It is in charge of the appointment,transfer, turnover, development, headcount and compensation ofthe personnel included in salary levels 9 and above (Hay System). Itis also in charge of assessing and approving the policies set by the


Board of Directors with regard to incentives, respecting thedefinitions provided for by the Risk Management Committee, inorder to ensure an appropriate risk assumption by the assessedparties. It shall also approve the payment of incentives together withthe Managers of the Risk Management and Planning Divisions. TheCommittee meets every six months or whenever there are issues thatrequire consideration. Its resolutions are summarized in writing inminutes.

Planning and Management Control Committee: This Committeeis composed of five Directors, the Chief Executive Officer, theManagers of the Risk Management Division and Planning Divisionand the Internal Audit Manager. The Syndics can be invited toattend any meeting called by this Committee. It is in charge ofanalyzing, defining and following up the consolidated balancesheet and income statement, and carrying out the quarterlybudgetary follow-up by Division. Furthermore, it is in charge ofapproving, together with the Organizational Development andHuman Resources Manager, compliance levels that shall be used inthe assessment of staff and of the budgeted amount for thepayment of annual incentives. The Committee meets at least onceevery month. Its resolutions are summarized in writing in minutes.

Segments and Business Management Committee: ThisCommittee is composed of three Directors, the Chief ExecutiveOfficer, the Division Managers, the Department Managers and thoseofficers whose participation is deemed convenient and who areespecially called upon. It is in charge of analyzing, defining andfollowing up businesses and segments. The Committee will meet atleast once every three months. Its resolutions are summarized inwriting in minutes.

Crisis Committee: This Committee is composed of five Directorsand the Chief Executive Officer. The Committee may call thoseofficers whose participation is deemed relevant. It is in charge ofevaluating the situation upon facing a liquidity crisis and decidingthe steps to be implemented to tackle it. The Committee shall meetwhen convened by the Board of Directors and shall hold sessionsas may be required until the liquidity crisis ends. Its resolutions aresummarized in writing in minutes.

Financial Committee - Consumer Banking: This Committee iscomposed of two Directors, the Chief Executive Officer, theFinancial Division and Risk Management Managers, and theFinancial Operations and Capital Market Managers. TheCommittee is also composed of Tarjetas Regionales S.A.’s ChiefExecutive Officer and Financial Manager and Compañía FinancieraArgentina S.A.’s Financial Manager. The members of the

Committee may request the presence of officers from other areasor from the Companies if matters warrant so. It is in charge ofanalyzing the financial evolution and the funding needs ofconsumer financing companies, as well as analyzing the portfolioand liquidity evolution and the related policies, and assessing thefunding alternatives. It shall meet at least every two months. Itsresolutions are summarized in writing in minutes.

On a monthly basis, the Board of Directors is informed of theactions taken by the Committees, which are written down inminutes.

Corporate Organization

On August 31, 2009, Mr. Daniel A. Llambías, accountant, wasappointed Banco de Galicia’s Chief Executive Officer by decision ofthe Board of Directors. The Chief Executive Officer is in charge ofimplementing the strategic goals established by Banco Galicia’sBoard of Directors. He also coordinates the Managers of the Bank’sDivisions, reporting to the Board of Directors.

At fiscal year-end, the following Divisions report to Banco Galicia’sChief Executive Officer:

Retail Banking Division: This Division is responsible for designing,planning and implementing the vision, strategies and goals for theRetail Banking’ businesses and for each customer segment anddistribution channel. It is as well in charge of the definition andcontrol of this Division’s business goals. The following departmentsreport to this Division: Marketing, Private Banking, Branches,Digital, Channels and Retail Banking Planning.

Wholesale Banking Division: This Division is responsible fordesigning, planning and implementing the vision, strategies andgoals for the Wholesale Banking’ businesses and for each customersegment (corporate, medium-sized companies, agriculturalcompanies and public-sector companies) and product. It is as wellin charge of the definition and control of this Division’s businessgoals. The following departments report to this Division: Large-corporations Banking and Middle-market Banking, AgribusinessSector, Wholesale Products and Marketing, Capital Markets andInvestment Banking, and Corporate Banking Centers.

Financial Division: This Division is responsible for planning andmanaging the correct use of financial resources and otherTreasury’s goals, providing the appropriate funding for BancoGalicia’s businesses, establishing and applying the Bank’s deposit-raising and funding policies within the parameters established by


Banco Galicia’s risk policies. It also manages short-term resourcesand the investment portfolio, ensuring the correct conduction oftransactions. The following departments report to this Division:Commercial, Products, Banking Relations, Information Support andManagement, and Public Sector.

Risk Management Division: The Division is responsible foranalyzing risks in all of its areas: financial, operational, credit,reputational and strategic, ensuring compliance with internalpolicies and applicable regulations; keeping the Board of Directorsabreast of the risks to which the Bank is exposed and proposing thecoverage thereof; and designing and proposing policies andprocedures for risk control and mitigation, administering theprocess that shall be used to assess the relationship between ownresources available and resources necessary to maintain anappropriate risk profile. The following departments report to thisDivision: Wholesale Risk, Retail Risk, Financial Risk, OperationalRisk, Risk Information and Analysis, and Development andAdministration of Models.

Credit Division: This Division is responsible for developing andproposing the strategies for credit and credit-granting policies, aswell as managing and monitoring credit origination processes,follow-up and control thereof, and the recovery of past-due loans.This aims at ensuring the quality of the loan portfolio, cost andtime efficiency, and recovery optimization, thus minimizing loanlosses and optimizing efficiency in processes and business creditgranting. The following departments report to this Division: CreditAnalysis, Corporate Credit Approval, Consumer Credit, ConsumerCredit Recovery, Portfolio Recovery and Credit Strategy andPlanning.

Comprehensive Corporate Services Division: This Division isresponsible for designing, planning and implementing thestrategies for the IT, Organization, Operations, Purchase of Goodsand Services and Infrastructure Divisions, and the maintenancethereof. It is as well in charge of Banco Galicia’s physical safety andinformation, with the purpose of ensuring and maintaining thelogistic support for its operations and activities. The followingdepartments report to this Division: Operations, IT, Organization,Engineering and Maintenance, Information Security and Manage-ment and Security.

Organizational Development and Human Resources Division:This Division is in charge of designing, planning and implementingHuman Resources strategies, as well as defining and controllingmanagement goals of Banco Galicia’s human resources with thepurpose of ensuring homogeneous practices, availability of

qualified and motivated personnel and a proper work environment.The following departments report to this Division: HumanResources Advisory, Human Resources Management, Compensation,Sustainability, Talent Management, Internal Communications andCulture.

Strategic Planning Division: This Division is responsible forplanning, coordinating and controlling the development andmaintenance of budget, management planning and control, andaccounting and tax activities. The following departments report tothis Division: Accounting, Tax Advisory, Management Control,Efficiency Control, Research, Consolidation and Analysis, andAssets and Liabilities Management.

Customers’ Experience Division: This Division is responsible forbuilding, along with all the Bank’s sectors, a customer-orientedculture, lead priority and cross-section projects to improve theCustomer’s Experience, design and manage a sound and integratedongoing improvement system, lead the learning cycle to share thebest practices and support the ongoing improvement cycle withNPS, LEAN and Innovation methodologies. The followingdepartments report to this Division: NPS Operation, Customer’sVision, Initiatives, and Analysis and Indicators.

Legal Advisory Department Division: This Department Division isresponsible for providing advisory services and determining thesteps to be taken for Banco Galicia’s business conduction under theregulations in force, with the purpose of ensuring the legitimacythereof and avoiding loss of rights, indemnifications and/orpenalties.

Institutional Relations Department Division: This DepartmentDivision is responsible for creating and proposing institutionalcommunication strategies and managing and controlling pressactivities, as well as developing the institutional image, providingadvice to the different areas.

The following department divisions report to the Board of Directors:

Internal Audit Department Division: This Department Division isresponsible for assessing and monitoring the effectiveness,conformity and efficiency of internal control systems with thepurpose of ensuring compliance with applicable laws andregulations.

Anti-Money Laundering Unit Department Division: ThisDepartment Division is responsible for coordinating and monitoringcompliance with the policies established by the Board of Directors


on control and prevention of money laundering and funding ofterrorist activities in order to minimize reputational risks, thusensuring compliance with applicable regulations and internationalstandards.

Compliance Division: Its mission is to ensure compliance withapplicable laws, regulations and internal policies of the Bank,coordinating the appropriate tasks to avoid the imposition ofpenalties due to legal or regulatory violations and the suffering offinancial or reputational losses.

Banco Galicia’s Supervisory Syndics’ Committee

Banco Galicia’s Bylaws provide for a Supervisory Syndics'Committee consisting of three Regular Syndics and three AlternateSyndics. Pursuant to the General Corporations Law and theArgentine Central Bank regulations, the regular and alternateMembers of the Supervisory Syndics’ Committee are responsible forcontrolling that Banco Galicia’s administration is in accordancewith applicable regulations. Syndics and Alternate Syndics do notpartake in business management and cannot have managerialfunctions of any kind. They are in charge, among other tasks, of thepreparation of a report to the shareholders regarding the financialstatements for each fiscal year. The Syndics and the AlternateSyndics are elected at the Annual Ordinary Shareholders’ meetingfor a one-year term, and they can be reelected. Alternate Syndicsact in the temporary or permanent absence of one or more Syndics.

Policy for Compensation of Directors and Officers ofBanco Galicia

Banco Galicia's Bylaws set forth that the Shareholders’ Meetingcan establish that an incentive compensation be paid to the Boardof Directors, when applicable, in the amount approved by theShareholders' Meeting. Such amount cannot exceed six percent

(6%) of the Bank's net income before income tax or any other taxthat may replace it.

Section 25, sub-section 2, of Banco Galicia’s Bylaws establishesthat one of the powers and duties of the Board of Directors is todetermine, whenever it so deems convenient to corporate interests,whether its members shall perform technical or administrativeduties within the Company and receive remuneration for suchactivities, with such remuneration having to be reported at theShareholders’ Meeting. In such cases, compensation for therelevant directors set by the Shareholders’ Meeting shall becharged to general expenses.

The Board of Directors sets the policy for compensation of BancoGalicia’s personnel. Managers receive a fixed compensation and theymay also receive a variable compensation based on their performance.

Five of the Directors are Banco Galicia’s employees, and theyestablish institutional policies and control the execution thereof.Therefore, they receive fixed compensation and are entitled tovariable compensation based on their performance, provided thatthese additional payments do not exceed the standard paymentsmade by similar entities in the Argentine financial system, aprovision that is applicable to Managers as well.

The policy for compensation envisages the possibility of havingaccess to retirement insurance. The Bank does not maintain anyoptions plans.

The Shareholders’ Meeting must approve the compensation of theBoard of Directors after the close of the fiscal year.

During the fiscal year, provisions were established to cover thevariable compensation of Banco Galicia’s Board of Directors andmanagers for the fiscal year.

MANAGEMENT’SDISCUSSION AND ANALYSIS

SELECTED FINANCIALINFORMATION

CONSOLIDATED ASSETSAND LIABILITIES

INCOME STATEMENT

RISK MANAGEMENT

CREDIT RISKFINANCIAL RISKSOPERATIONAL RISK

REGULATORY CAPITAL

CAPITAL AND RESERVESAND PROPOSEDDISTRIBUTION OF PROFITS

55


In the following analysis of Grupo Financiero Galicia S.A.'sfinancial condition and results of operations, data for GrupoFinanciero Galicia S.A. is consolidated, on a line-by-line basis,with the financial statements of the companies it controlsdirectly or indirectly, as explained in the Notes to the ConsolidatedFinancial Statements, unless there is clarification to the contrary.

Grupo Financiero Galicia’s consolidated financial statements,as well as the figures expressed in the tables in this report,correspond to Grupo Financiero Galicia S.A., Banco de Galiciay Buenos Aires S.A. consolidated(1), Sudamericana HoldingS.A. and its subsidiaries, Galicia Administradora de FondosS.A., Galicia Warrants S.A. and Net Investment S.A.

Due to the fact that Banco de Galicia y Buenos Aires S.A. isGrupo Financiero Galicia’s main equity investment, a financialinstitution subject to the Argentine Central Bank Regulations,the Company has adopted the valuation and disclosure criteriaapplied by Banco de Galicia y Buenos Aires S.A., which in somesignificant aspects differ from Argentine GAAP.

By means of Communiqué “A” 3671 dated July 25, 2002, theArgentine Central Bank established that, for the valuation offoreign currency balances, financial institutions had to usethe reference exchange rate published by the ArgentineCentral Bank. Therefore, all assets and liabilities in foreigncurrency were valued using that exchange rate which, at theend of fiscal year 2013, was of Ps. 6.518 per U.S. Dollar, at theend of fiscal year 2014 was of Ps. 8.552 per U.S. Dollar, and atthe end of fiscal year 2015 was of Ps. 13.005 per U.S. Dollar.

Grupo Financiero Galicia’s fiscal year closes every December31, as well as the fiscal year of the companies it controlseither directly or indirectly, except for Sudamericana Holding S.A.and its subsidiaries, whose fiscal year closes every June 30.

MANAGEMENT’S DISCUSSION AND ANALYSIS

(1) Banco de Galicia y Buenos Aires S.A. consolidates its financial statements with TarjetasRegionales S.A. and its subsidiaries, Tarjetas del Mar S.A., Compañía Financiera ArgentinaS.A., Cobranzas & Servicios S.A., Galicia Valores S.A., Banco Galicia Uruguay S.A. (underliquidation proceedings), Galicia Administradora de Fondos (until March 31, 2014, since inApril it was sold to Grupo Financiero Galicia) and Galicia Cayman S.A. (until September30, 2014, and merged with the Bank as from October 1, 2014).

SELECTED FINANCIAL INFORMATIONIn millions of Pesos, except as stated otherwise

December 31,

Consolidated income statement

Financial income

Financial expenses

Net financial income

Provision for loan losses

Net income from services

Income from insurance activities

Administrative expenses

Minority interest

Income (Loss) from equity investments

Miscellaneous income / (loss), net

Income before taxes

Income tax

Net income

Consolidated balance sheet

Cash and due from banks

Government and corporate securities

Loans, net

Assets

Deposits

Other liabilities (1)

Shareholders’ equity

Average assets

Balance sheet items denominated in foreign currency (%)

Assets

Liabilities

(1) It includes, mainly, debts with stores due to purchase transactions, liabilities with other international banks and entities, and debt securities.

2013

13,076

6,170

6,906

1,776

4,239

905

7,428

(209)

124

295

3,056

1,232

1,824

12,560

3,987

55,265

83,156

51,395

24,814

6,947

69,844

11.74

13.71

2014

19,860

10,321

9,539

2,411

5,699

1,238

9,221

(230)

213

503

5,330

1,992

3,338

16,959

10,010

66,608

107,314

64,666

32,402

10,246

92,510

12.11

13.61

2015

25,844

13,402

12,442

2,214

7,837

1,801

12,905

(365)

100

443

7,139

2,801

4,338

30,835

15,525

98,345

161,748

100,039

47,224

14,485

122,684

16.88

18.86

57Grupo Financiero Galicia | Annual Report Fiscal Year 2015

Grupo Financiero Galicia | Annual Report Fiscal Year 201558

SELECTED FINANCIAL INFORMATION (CONT.)In millions of Pesos, except as stated otherwise

December 31,

Selected ratios (%)

Profitability and efficiency

Net yield on average interest-earning assets (1)

Financial margin (2)

Interest spread, nominal basis (3)

Return on average assets (4)

Return on average shareholders’ equity (5)

Administrative expenses as a percentage of net operating income (6)

Net income from services as a percentage of net operating income(6)

Net income from services as a percentage of administrative expenses

Capital

Shareholders' equity as a percentage of total assets

Tangible shareholders' equity(7) as a percentage of total assets

Total liabilities as a multiple of shareholders' equity

Liquidity

Cash and due from banks as a percentage of total deposits

Loans, net, as a percentage of total assets

Loan portfolio quality

Past-due loan portfolio(8) as a percentage of total loans

Non-accrual portfolio(9) as a percentage of loans to the private sector

Allowance for loan losses as a percentage of total loans (excluding interbank loans)

Non-accrual loan portfolio (9) as a percentage of total loans (excluding interbank loans)

Allowance for loan losses as a percentage of non-accrual loans (9)

Inflation and exchange rate

Wholesale inflation (10) (11)

Exchange rate variation (12)

CER (13)

(1) Net interest earned divided by average interest-earning assets (average interest-bearing assets). For a description of net interest earned, see the “Interest-Earning Assets-Net Yield andSpread” table.(2) Financial Income less Financial Expenses divided by average interest-earning assets.(3) It represents the difference between the average nominal interest rates earned on interest-earning assets and the average nominal interest rates paid on interest-bearing liabilities.(4) Net Income plus Minority Interests, divided by Average Total Assets.(5) Net Income divided by Average Shareholders' Equity.(6) Net Operating Income: Financial Income minus Financial Expenses plus Net Income from Services.(7) Tangible Shareholders’ Equity is defined as Shareholders’ Equity minus Intangible Assets.(8) Past-due loans consist of principal or interest amounts which have been 91 days or more past due.(9) For a description of non-accrual loans, see “Risk Management - Credit Risk - Asset Quality of the Loan Portfolio”.(10) In accordance with the variation of the Domestic Wholesale Price Index in Argentina (the WPI, or IPIM as per its initials in Spanish). Data as of October 2015 (October 2015/October 2014Variation)(11) Source: Instituto Nacional de Estadística y Censos (Argentine Institute of Statistic and Census, INDEC).(12) Variation of the exchange rates of the Peso vis-à-vis the U.S. Dollar.(13) Reference Stabilization Coefficient (Coeficiente de Estabilización de Referencia, based on the CPI).

2013

13.77

12.75

10.43

2.91

32.47

66.65

38.03

57.07

8.35

6.63

10.97

24.44

66.46

2.69

3.57

3.76

3.62

103.80

14.76

32.55

10.53

2014

14.42

13.56

10.13

3.85

39.07

60.51

37.40

61.80

9.55

7.87

9.47

26.23

62.07

2.61

3.57

3.79

3.59

105.78

28.27

31.21

24.34

2015

14.18

13.12

9.13

3.83

35.54

63.64

38.65

60.73

8.96

7.70

10.17

30.82

60.80

2.46

3.11

3.50

3.12

112.41

12.65

52.07

15.05

PhySICAL DATA

December 31,

Employees

Banco Galicia

Regional credit-card companies

Compañía Financiera Argentina S.A.

Sudamericana Holding S.A.

Galicia Administradora de Fondos S.A.

Other companies

Total employees

Branches

Banco Galicia



Total branches

Deposit accounts

Banco Galicia


Total deposit accounts

CONSOLIDATED ASSETS AND LIABILITIES

ASSETS. The structure and main components of Grupo Financiero Galicia’s consolidated assets as of December 31, 2015, and as of the samedate of the two previous years were as follows:

ASSETSIn millions of Pesos

December 31,


Government and corporate securities

Loans, net

Other assets

Total

Grupo Financiero Galicia | Annual Report Fiscal Year 2015 59

2013

5,487

5,668

1,170

224

13

41

12,603

261

204

59

524

2,618,269

149,390

2,767,659

2014

5,374

5,232

1,112

242

16

36

12,012

261

207

59

527

2,849,895

156,533

3,006,428

2015

5,573

5,040

1,158

307

17

33

12,128

260

207

58

525

3,375,439

217,173

3,592,612

%

15.1

4.8

66.5

13.6

100.0

2013

12,560

3,987

55,265

11,344

83,156

%

15.8

9.3

62.1

12.8

100.0

2014

16,959

10,010

66,608

13,737

107,314

%

19.1

9.6

60.8

10.5

100.0

2015

30,835

15,525

98,345

17,043

161,748

Cash and due from banks. The item “Cash and due from banks”included cash for $7,288 million, balances held at the ArgentineCentral Bank for $23,107 million and balances held in correspondentbanks for $440 million. The balance held at the Argentine Central Bankis computable for meeting the minimum cash requirements.

Government and corporate securities. The following table showsthe components of the item “Government and Corporate Securities”in terms of cash holdings and net position (cash holdings plus forwardpurchases and spot purchases pending settlement, less forward salesand spot sales pending settlement).

GOvERNMENT AND CORPORATE SECuRITIES - hOLDINGS AND NET POSITIONIn millions of Pesos

December 31, 2015

Government securities

Holdings recorded at cost plus yield

Pesos

Holdings recorded at fair market value

Pesos

U.S. Dollars

Instruments issued by the argentine central bank

Pesos

U.s. Dollars

Total government securities

Total government and corporate securities

(1) They include securities used as collateral.(2) They include government securities deposits.


Net

Position

1,420

1,953

571

8,102

4,835

16,881

16,881

Spot Transactions Pending Settlement

Sales

-

(22)

(11)

-

-

(33)

(33)

Purchases

30

4

175

128

-

337

337

Foward Transactions

Sales (2)

-

-

(15)

-

-

(15)

(15)

Purchases (1)

-

17

-

1,050

-

1,067

1,067

Holdings

1,390

1,954

422

6,924

4,835

15,525

15,525

As of December 31, 2015, the Company’s net position in governmentand corporate securities amounted to $16,881 million.

The amount of government securities at cost plus yield issued in Pesos,for $1,420 million, corresponded to debt securities and treasury bills,mainly of the Provinces of Buenos Aires, Neuquén and Entre Ríos.

The net position of government securities measured at fair marketvalue in Pesos amounting to $1,953 million corresponded, mainly, toBanco Galicia’s holdings of National Government Bonds due 2016,2017 and 2019, for $117 million, $695 million and $81 million,respectively, national treasury bonds due 2016 for $593 million anddiscount bonds due 2033 for $284 million. In U.S. Dollars, the positionamounted to $571 million, of which Bono Argentino de Ahorro parael Desarrollo Económico (BAADE - Argentine Bond for EconomicDevelopment) for $199 million stood out.

In turn, the position for instruments issued by the Argentine CentralBank amounted to $12,937 million, made up of Lebacs in Pesos for$8,102 million and in U.S. Dollars for $4,835 million.

Loans. The category “Loans, Net” in the “Assets” table was madeup of the following as of the indicated dates:

LOANS, NETIn millions of Pesos

December 31,

To the non-financial public sector

To the financial sector

To the non-financial private sector

Residents abroad

Total

As of December 31, 2015, total net consolidated loans amounted to$98,345 million and, representing 60.8% of total assets, continued tobe the Company’s most important asset.

For more information, see “Risk Management-Credit Risk”.

Other Assets. The category “Other Assets” mainly includes thefollowing items:

OThER ASSETSIn millions of Pesos

December 31,

Other receivables resulting from financial brokerage

Receivables from financial leases

Equity investments in other companies

Miscellaneous receivables

Bank premises and equipment, miscellaneous

assets and intangible assets

Others (1)

Total

(1) It includes, among others, assets related to the insurance activity.

2013

13

627

54,038

587

55,265

2014

15

191

66,141

261

66,608

2015

18

754

97,339

234

98,345

2013

5,696

1,128

89

1,162

3,062

207

11,344

2014

6,798

1,048

52

1,760

3,759

320

13,737

2015

8,061

958

52

2,569

4,925

478

17,043

At fiscal year-end, the item “Other Receivables resulting from FinancialBrokerage” primarily included the following: $1,639 million forunlisted negotiable obligations, $1,568 million corresponding tobalances deposited at the Argentine Central Bank as guarantees infavor of clearing houses and $1,495 million corresponding toparticipation certificates and debt securities of Financial Trusts.

EXPOSURE TO THE ARGENTINE PUBLIC SECTOR. Grupo FinancieroGalicia’s exposure to the public sector as of the referred dates was asfollows:

ExPOSuRE TO ThE PuBLIC SECTOR (*)In millions of Pesos

December 31,

Government Securities - Net Position

Held for trading

Bonar 2015

Lebac - Nobac

Loans

Secured loans and other loans

Other receivables resulting from

financial brokerage

Participation certificates and trust securities

Others

Total

(*) It does not include deposits with the Argentine Central Bank, since these are assetsthrough which the Bank complies with the minimum cash requirements set up by suchentity.

As of December 31, 2015, the exposure to the public sector reached$17,859 million. Not taking into consideration the debt securitiesissued by the Argentine Central Bank, the exposure amounted to$4,922 million, equal to 3% of total assets.

As of December 31, 2014, such exposure amounted to $3,547 million,representing 3.3% of total assets.

The increase in exposure to the public sector during the last twelvemonths was due to the purchase of national treasury bonds due 2016for $593 million, along with a higher balance of provincial treasurybills and debt securities, among others.

EXPOSURE TO THE PRIVATE SECTOR. The following table showsBanco Galicia’s total exposure to the private sector. Such caption

includes all the balance sheet and memorandum account items thatrepresent a credit exposure to the private sector: Loans, receivablesfrom financial leases, debt securities and other financing, such asguarantees granted and unused balances of loans granted, as well ascurrent balances at the dates indicated of loans duly transferred tothe different trusts.

ExPOSuRE TO ThE PRIvATE SECTORIn millions of Pesos

December 31,

Loans


Securities

Other financing (1)

Total loans

Activos assets (2)

Total

(1) It includes guarantees granted, unused balances of loans granted and some itemsunder Other Receivables Resulting from Financial Brokerage.(2) CFA Trust I Financial Trust.

As of December 31, 2015, the Bank’s total exposure to the privatesector (without deducting the allowances for loan losses) amountedto $114,982 million, an annual increase of 46%.

Total loans included $22,045 million corresponding to regional credit-card companies and $3,429 million corresponding to CFA.

In 2015, loans to the private sector grew mainly in individuals($18,618 million, equivalent to 47%), small- to medium-sizedcompanies (PyMES) ($8,508 million, equivalent to 41%) and largecorporations ($5,029 million, equivalent to 59%).

As regards economic sectors, the growth of loans granted to theconsumer sector ($19,265 million, equivalent to 48%), themanufacturing industry ($3,773 million, equivalent to 41%), theagricultural and livestock sector ($3,164 million, equivalent to 39%),the wholesale and retail business ($2,801 million, equivalent to 47%)and communication and transportation ($2,198 million, equivalent to76%). See “Risk Management - Credit Risk - Loan Portfolio”.

FUNDING AND LIABILITIES. The structure and main components ofthe consolidated funding as of December 31, 2015, and as of the endof the two previous fiscal years were as follows:


2013

4,298

1,351

392

2,555

13

13

1,105

1,079

26

5,416

2014

10,379

2,665

-

7,714

15

15

867

830

37

11,261

2015

16,881

3,944

-

12,937

18

18

960

709

251

17,859

2013

57,408

1,150

888

6,355

65,801

-

65,801

2014

69,208

1,066

724

7,877

78,875

141

79,016

2015

101,902

980

1,471

10,629

114,982

-

114,982

MATuRITy OF DEPOSITS AS OF DECEMBER 31, 2015, PuRSuANT TO ThEIR TERM (1)In millions of Pesos

Peso-denominated U.S. Dollar-denominated Total

Checking accounts and other demand deposits

Savings accounts

Time deposits maturing

Up to 30 days

From 31 to 59 days

From 60 to 89 days

From 90 to 179 days

From 180 to 365 days

More than 365 days

Other deposits maturing

Up to 30 days

From 31 to 59 days

From 60 to 89 days

From 90 to 179 days

From 180 to 365 days

More than 365 days

Total

(1) Only principal. It does not include CER adjustment or else interest.


LIABILITIES AND ShAREhOLDERS’ EquITyIn millions of Pesos

December 31,

Deposits

Checking accounts

Savings accounts

Time deposits

Others

Other interest, exchange rate differences payable and cer adjustment

Credit lines (1)

Argentine Central Bank

Local banks (2)

International banks and credit entities

Repurchase agreement and reverse repurchase agreement transactions

Subordinated and unsubordinated debt securities (1)



Total

(1) Each item includes principal, interest accrued, exchange rate differences and premiums payable, as well as CER adjustment, where applicable.(2) It includes credit line granted by the IDB (Inter-American Development Bank) through the Secretariat of Industry and Commerce.(3) It includes debts with stores due to credit card transactions, collections on account of third parties in Pesos and U.S. Dollars, miscellaneous obligations and allowances, among others.

% of Total

19.6

27.8

51.6

18.0

16.6

8.2

5.3

2.3

1.2

1.0

0.6

-

-

-

0.4

-

100.0

Amount

19,437

27,519

51,118

17,817

16,449

8,084

5,297

2,290

1,181

1,045

632

-

-

1

395

17

99,119

% of Total

-

60.5

38.5

18.5

3.2

0.0

12.7

4.1

0.0

1.0

0.9

-

-

-

-

0.1

100.0

Amount

-

8,688

5,529

2,658

453

3

1,817

591

7

145

130

-

-

-

-

15

14,362

% ofTotal

22.9

22.2

53.8

17.9

18.9

9.5

4.1

2.0

1.4

1.1

0.6

-

-

-

0.5

-

100.0

Amount

19,437

18,831

45,589

15,159

15,996

8,081

3,480

1,699

1,174

900

502

-

-

1

395

2

84,757

The main sources of funds are deposits from the private sector, linesof credit extended by local banks and entities, international banks andmultilateral credit agencies, repo transactions mainly related togovernment securities, mid- and long-term debt securities placed inthe local and international capital market and debts with stores dueto credit card transactions.

Deposits. As of December 31, 2015, total consolidated depositsamounted to $100,039 million, representing 61.8% of total funds(including shareholders’ equity).During the fiscal year, total consolidated deposits increased 55%,mainly as a consequence of the 58% increase in deposits from theprivate sector.

%

61.8

14.9

14.2

31.5

0.7

0.5

2.5

-

1.7

0.8

-

9.2

18.1

8.4

100.0

2013

51,395

12,394

11,801

26,185

574

441

2,153

6

1,462

685

-

7,612

15,048

6,947

83,155

%

60.3

14.7

15.8

28.6

0.7

0.5

1.7

-

1.0

0.7

-

9.5

19.0

9.5

100.0

2014

64,666

15,755

16,897

30,730

722

562

1,848

7

1,113

727

1

10,176

20,378

10,246

107,314

%

61.8

12.0

17.0

31.6

0.6

0.6

1.8

-

0.9

0.8

0.1

7.9

19.5

9.0

100.0

2015

100,039

19,437

27,519

51,118

1,045

920

2,812

7

1,397

1,273

135

12,827

31,585

14,485

161,748


The above-mentioned chart shows that the highest concentration ofmaturities for time deposits was in the terms up to 59 days,representing 67% of total time deposits. At fiscal year-end, the averageterm for the raising of non-adjusted Peso- and U.S. Dollar-denominatedtime deposits was approximately 51 days.

U.S. Dollar-denominated deposits, for $14,362 million, represented14.5% of total deposits.

Local Banks and Entities. As of December 31, 2015, credit linesgranted by local banks and entities amounted to Ps. 1,397 million.This amount (principal plus interest) mainly corresponds to Ps. 1,147million for financing received from local banks by the regional credit-card companies and CFA, Ps. 127 million for call loans received by theBank and the regional credit-card companies, Ps. 115 million received

from the BICE, and Ps. 8 million for the credit line granted by the IDBthrough the Secretariat of Industry and Commerce.

International Banks and Credit Entities. As of December 31, 2015,loans granted by international banks and credit entities amounted to$1,273 million. This amount (principal plus interest) represents U.S.Dollar-denominated debt subject to foreign law, of which, mainly,$1,096 million correspond to prefinancing and foreign tradetransactions, $69 million received from Proparco, $68 million receivedfrom the FMO, $24 million to debt with international banks and creditentities and Ps. 16 million to a credit line granted by the IDB throughthe Secretariat of Industry and Commerce.

Debt Securities. The following table shows the Bank’s consolidateddebt securities as of December 31, 2015:

DEBT SECuRITIES (*)In millions of Pesos

Grupo Financiero Galicia

ON Clase V Serie II (1)

ON Clase VI Serie I (2)

ON Clase VI Serie II (3)

ON Clase VII (4)

Banco Galicia

ON Clase I (5)

ON Subordinadas (6)

Otros (7)

Tarjetas Cuyanas S.A.

ON Clase XIV Serie II (8)

ON Clase XVI (9)

ON Clase XVIII (10)

ON Clase XIX Serie II (11)

ON Clase XX (12)

ON Clase XXI (13)

ON Clase XXII (14)

Tarjeta Naranja S.A.

ON Clase XIII (15)

ON Clase XXIV Serie II (16)

ON Clase XXV Serie II (17)

ON Clase XXVI Serie II (18)

ON Clase XXVII Serie II (19)

ON Clase XXVIII Serie II (20)

ON Clase XXIX (21)

ON Clase XXX (22)

ON Clase XXXI (23)


ON Clase XII Serie II (24)

ON Clase XIII Serie II (25)

Balances as of

12.31.2015

76

116

110

160

3.794

3.056

6

113

97

114

69

257

204

257

1.749

33

143

145

120

94

285

346

321

156

75

Annual Interest Rate (%)

Badlar + 525 b.p.

Badlar + 325 b.p.

Badlar + 425 b.p.

27.00%/Badlar +425 b.p.

8.75%

16.00%

-

Badlar + 415 b.p.

Badlar + 340 b.p.

Badlar + 400 b.p.

Badlar + 495 b.p.

27.90%/Badlar + 450 b.p.

27.50%/Badlar + 450 b.p.

Badlar + 425 b.p.

9.00%

Badlar + 500 b.p.

Badlar + 415 b.p.

Badlar + 399 b.p.

Badlar + 395 b.p.

Badlar + 450 b.p.

27.75%/Badlar + 450 b.p.

27.75%/Badlar + 450 b.p.

27.00%/Badlar + 450 b.p.

Badlar + 400 b.p.

Badlar + 440 b.p.

Currency

Pesos

Pesos

Pesos

Pesos

U.S. Dollars

U.S. Dollars

U.S. Dollars

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

U.S. Dollars

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

Pesos

Maturity Date

01.31.2017

04.23.2016

10.23.2017

07.27.2017

05.04.2018

01.01.2019

Vencidas

05.16.2016

08.01.2016

10.31.2016

02.20.2017

12.10.2016

02.12.2017

05.13.2017

01.28.2017

02.26.2017

04.30.2016

11.07.2016

03.10.2016

01.22.2017

04.27.2017

06.29.2017

04.19.2017

09.24.2016

12.09.2016


TíTuLOS DE DEuDA (*) (CONT.)En millones de pesos, excepto tasas

ON Clase XIV (26)

ON Clase XV (27)

Total

(*) Only principal (it does not include interest), net of eliminations when appropriate.(1) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on January 31, 2017.(2) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on April 23, 2016.(3) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on October 23, 2017.(4) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27% for the first nine months and Badlar + 425 b.p. for the following 15 months. Principal shall be fullypaid upon maturity, on July 27, 2017.(5) Interest shall be paid in cash, semiannually in arrears. Principal shall be fully paid upon maturity, on May 4, 2018.(6) Interest payable in cash: 11% annually as from January 1, 2014 and up to (but excluding) January 1, 2019. Also, interest is paid on additional subordinated negotiable obligations due2019, at a 5% rate annually from January 1, 2004, payable on January 1, 2014 and January 1, 2019. Principal is fully payable on January 1, 2019, unless previously redeemed at par, plusunpaid accrued interest and additional amounts, if any, either fully or partially, at the Bank’s option, at any time.(7) The balance represents debt (9% negotiable obligations due 2003) not tendered by its holders in the exchange offered by the Bank to restructure its foreign debt, which was completed inMay 2004. Interest balance amounts to $8 million.(8) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on May 16, 2016.(9) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on August 1, 2016.(10) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on October 31, 2016.(11) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on February 20, 2017.(12) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.90% from the issuance date until the ninth month inclusive, as from the tenth month and up to thematurity Badlar + 450 b.p. Principal shall be fully paid upon maturity on December 10, 2016.(13) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.50% from the issuance date until the sixth month inclusive, as from the seventh month and up tothe maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on February 12, 2017.(14) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on May 13, 2017.(15) Interest shall be paid semiannually, in January and July of each year, until maturity. Fixed rate in U.S. Dollars of 9%. Principal shall be paid in 3 equal and annual installments, startingfrom January 28, 2015 and until maturity on January 28, 2017.(16) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on February 26, 2017.(17) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on April 30, 2016.(18) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on July 11, 2016.(19)Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on October 3, 2016.(20) Interest shall be paid on a quarterly basis in arrears. Principal shall be payable in three installments, 33.33% on July 22, 2016, 33.33% on October 22, 2016 and the remaining 33.34%upon maturity on January 22, 2017.(21) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.75% from the issuance date until the twelfth month inclusive, as from the thirteenth month and upto the maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on April 27, 2017.(22) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.75% from the issuance date until the ninth month inclusive, as from the tenth month and up to thematurity Badlar + 450 b.p. Principal shall be fully paid upon maturity on June 29, 2017.(23) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27% from the issuance date until the third month inclusive, as from the fourth month and up to thematurity Badlar + 450 b.p. Principal shall be fully paid upon maturity on April 19, 2017.(24) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on September 24, 2016.(25) Interest shall be paid on a quarterly basis in arrears. Principal shall be paid in three installments, 33% on June 9, 2016, 33% on September 9, 2016, and 34% on December 9, 2016.(26) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.24% from the issuance date until the ninth month inclusive, as from the tenth month and up to thematurity Badlar + 425 b.p. Principal shall be fully paid in three installments, 33% on August 5, 2016, 33% on November 5, 2016 and 34% on February 5, 2017.(27) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.99% from the issuance date until the ninth month inclusive, as from the tenth month and up to thematurity Badlar + 450 b.p. Principal shall be fully paid in three installments, 33% on October 30, 2016, 33% on January 30, 2017 and 34% on April 30, 2017.

From the total debt securities for $12,317 million at fiscal-year end, $8,605 million corresponded to the U.S. Dollar-denominated debt, out of which$3,794 million corresponded to the negotiable obligations issued by the Bank due 2018, $3,056 million to subordinated negotiable obligationsdue 2019, and $1,749 million to negotiable obligations due 2017 issued by Tarjeta Naranja.

The difference with the total amount, for $3,712 million, corresponded to Peso-denominated debt for negotiable obligations issued by GrupoFinanciero Galicia, the regional credit-card companies and CFA.

The balance of securities issued in Argentine pesos increased $119 million as compared to 2014 year-end, whereas U.S. Dollar-denominated debtincreased $2,415 million, due to quotation differences.

Balances as of

12.31.2015

227

194

12.317

Annual Interest Rate (%)

27.24%/Badlar + 425 b.p.

27.99%/Badlar + 450 b.p.

Currency

Pesos

Pesos

Maturity Date

02.05.2017

04.30.2017

Other Liabilities. The category “Other Liabilities” mainly includesthe following items:

OThER LIABILITIESIn millions of Pesos

December 31,

Other liabilities resulting from financial brokerage (1)

Miscellaneous liabilities (2)

Provisions

Unallocated items (3)


Minority interest in controlled companies

Total

(1) It mainly includes liabilities with stores in connection with credit-card transactions ofBanco Galicia and the regional credit-card companies.(2) It includes balances of tax debt, social security contributions to be deposited and sundrycreditors.(3) It mainly includes balances among Banco Galicia’s branches for unallocated itemscorresponding to funds collected on account of third parties.(4) It includes liabilities related to the insurance activity.

INCOME STATEMENT

During the fiscal year, Grupo Financiero Galicia's net income amountedto $4,338 million, representing a 30% increase as compared to incomeamounting to $3,338 million in fiscal year 2014.

This income was mainly the result of the equity investment in BancoGalicia, which recorded income for $3,913 million during the fiscalyear, in addition to the income from its equity investments inSudamericana Holding S.A. for $357 million and in GaliciaAdministradora de Fondos S.A. for $110 million.

The annual increase in income was mainly the result of the increasein net operating income(1) (33%), supported by the higher volume ofintermediation with the private sector, jointly with a higher incomefrom insurance activities (46%) and lower provisions for loan losses(8%) due to the better behavior of arrears. This positive effect was

(1) Net financial income plus net income from services.

offset by higher administrative expenses (40%), as a result of a higheractivity level and the evolution of costs.

Net operating income for the fiscal year amounted to $20,279 million,a 33% increase as compared to 2014. This positive evolution was dueboth to a $2,903 million (30%) and higher net income from servicesfor $2,138 million (38%).

Net earnings per share for the fiscal year were $3.34, compared to$2.57 in fiscal year 2014. The return on average assets and the returnon average shareholders’ equity for the fiscal year were 3.83% and35.54%, respectively, whereas in the previous fiscal year they were3.85% and 39.07%, respectively.

FINANCIAL INCOMEIn millions of Pesos

December 31,

Income from loans and other receivables resulting

from financial brokerage and premiums earned

on reverse repurchase agreement transactions

Income from government and corporate debt

securities, net

Others (1)

Total

(1) It reflects net income from receivables from financial leases, premiums on foreigncurrency forward transactions, as well as CER adjustment and, in fiscal year 2014, gain(loss) on quotation differences.

Financial income amounted to $25,844 million, showing a 30%increase compared to the $19,860 million recorded in fiscal year 2014.This increase was the result of the increase in the average volume ofinterest-earning assets, offset by a decrease in the average ratethereof.

For the fiscal years indicated, the average balance of the Company’sinterest-earning assets and interest-bearing liabilities, as well as theyields on its interest-earning assets and the cost of its interest-bearingliabilities, were as follows:


2013

11,225

2,476

443

15

287

602

15,048

2014

15,443

3,381

366

40

367

781

20,378

2015

24,991

4,442

482

75

488

1,107

31,585

2013

11,369

939

768

13,076

2014

16,211

2,448

1,201

19,860

2015

20,269

4,323

1,252

25,844

MARKET ShARE (*)Precentages

December 31,

Total deposits

Deposits from private sector

Deposits in checking and saving accounts and

time deposits

Total loans

Loans to the private sector

(*) Banco Galicia and CFA within the Argentine market, based on daily information ondeposits and loans prepared by the Argentine Central Bank. End-of-month balances areused. Deposits and loans include only principal. Information related to regional credit-cardcompanies is not included.

Average interest-earning assets amounted to $94,805 million,representing an increase of $24,456 million (35%), as compared to$70,349 million in the previous fiscal year. Out of this growth, $18,735million corresponds to the increase in the average loan portfolio,accompanied by the higher portfolio of government securities for$5,857 million.

The average yield on interest-earning assets was 25.78%, with an 88basis points decrease during the year, due to the lower average rate

of 136 basis points of loans, partially offset by the increase of 291basis points in the yield on the portfolio of government securities.

The average of loans to the private sector for the fiscal year amountedto $77,807 million, 32% higher than $59,072 million in the previousfiscal year. Out of the loans to the private sector (taking intoconsideration final balances), the following growth is worth noting:$18,912 million (51%) in credit cards, $6,448 million (40%) inpromissory notes and $4,562 million in overdrafts (114%).

This variation in loans was influenced by the “Credit Line for theProductive Investment” program established by the Argentine CentralBank, which is aimed at financing specific-purposes and characteristicsworking capital and investment projects. At fiscal year-end, thebalance in force amounted to $9,727 million, with an increase of$2,860 million (42%), as compared to the balance as of the same datein the previous fiscal year. The lines that showed the highest variationwere promissory notes amounting to $1,527 million and purchase ofchecks amounting to $954 million.

As of December 31, 2015, the Bank’s estimated market share in thetotal loans to the private sector, excluding the loans granted to the

2013

6.92

9.20

9.47

8.07

8.78

2014

6.63

8.79

9.06

8.07

8.76

2015

7.44

9.41

9.65

8.89

9.60

yIELD ON INTEREST-EARNING ASSETS AND INTEREST-BEARING LIABILITIESIn millions of Pesos, except for rates (%)

December 31,

Activos Rentables

Títulos públicos

Préstamos

Otros activos rentables

Pasivos con costo

Cuentas corrientes

Cajas de ahorro

Plazo fijo

Títulos de deuda

Otros pasivos con costo

Spread y rendimiento neto

Spread de interés base nominal (1)

Rendimiento neto sobre activos rentables (2)

Margen financiero (3)

(1) It represents the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities. Interest rates includeCER adjustment.(2) Net interest earned divided by average interest-earning assets (average interest-bearing assets). Interest rates include CER adjustment.Net interest earned corresponds to net financial income (financial income less financial expenses, as set forth in the income statement), plus:- financial fees, included in Income from Services - Related to Lending Transactions, in the Income Statement,- contributions made to the Deposit Insurance Fund (FGD), included in Financial Expenses - Deposit Insurance Fund, in the Income Statement and- taxes on financial income, included in Financial Expenses - Others, in the Income Statement, less:- Net income (loss) from corporate securities, included in Financial Income/Expenses - Income (loss) from Holding of Government and Corporate Securities, in the Income Statement, and- differences in the quotation of gold and foreign currency, included in Financial Income/Expenses - Differences in Quotation of Gold and Foreign Currency, in the Income Statement, and- premiums on foreign exchange forward transactions and adjustments on foreign exchange forward transactions, included in Financial Income - Others, in the Income Statement.

Net interest earned also includes income that corresponds to government securities used as margin requirements of repurchase agreement transactions. This income/loss is included inMiscellaneous Income (Loss) - Others, in the Income Statement. Income (Loss) from Holding of Government Securities includes interest and income/loss resulting from variations in marketquotations.(3) Financial income less financial expenses, divided by average interest-earning assets.

2013

Rate

23.03

14.33

24.01

17.77

12.60

-

0.18

16.22

13.70

16.97

10.43

13.77

12.75

Principal

54,160

4,156

47,912

2,092

39,779

1

8,078

23,257

6,351

2,092

2014

Rate

26.66

21.16

27.49

26.54

16.53

-

0.20

21.80

16.54

19.19

10.13

14.42

13.56

Principal

70,349

8,760

59,072

2,517

52,081

1

10,186

30,229

8,976

2,689

2015

Rate

25.78

24.07

26.13

24.91

16.65

-

0.19

22.28

17.65

20.34

9.13

14.18

13.12

Principal

94,805

14,616

77,807

2,382

66,071

-

14,428

38,533

10,460

2,650

66 Grupo Financiero Galicia | Annual Report Fiscal Year 2015

regional credit-card companies, was 9.60%, as compared to 8.76%as of the same date in the previous year.

The average interest rate on total loans was 26.13%, compared to27.49% in fiscal year 2014.

The average rate of Peso-denominated loans to the private sector was27.23%, 162 basis points lower than 28.85% for 2014. Thedetermination of each rate for the fiscal year was influenced, amongother items, by the granting of the Credit Line for the ProductiveInvestment (at a fixed annual rate of 19.00% for the first tranche of2015, 18.00% for the second tranche of 2015, 17.50% for the firsttranche of 2014, 19.50% for the second tranche of 2014 and 15.25%for the 2013 quota) and by Communiqué “A" 5590 of the ArgentineCentral Bank issued in June 2014, which determined limits to interestrates on certain loans. This rule remained effective until December 17,2015, date on which the Argentine Central Bank, through itsCommuniqué “A” 5853, eliminated the limit on rates referred toabove.

The average position on government securities amounted to $14,616million, higher than the $8,760 million recorded in fiscal year 2014.This was the result of a $4,185 million increase in the average positionon Peso-denominated government securities and a $1,671 millionincrease in the average position on government securities in U.S.Dollars.

The increase in the average position of Peso-denominated governmentsecurities was mainly due to higher balances of securities issued by theArgentine Central Bank (Lebacs) and, to a lesser extent, investmentsmade in provincial (Buenos Aires and Neuquén, among others)treasury bills and debt securities.

The higher average position in U.S. Dollars was mainly due to theholding of Lebacs, as a result of the placement made during the fiscalyear as a result of the Argentine Central Bank’s regulation whereby thesubscription of these bills is allowed based on time deposits in foreigncurrency raised.

The average yield on government securities was 24.07% during thefiscal year, 291 basis points higher than 21.16% in fiscal year 2014, asa consequence of a higher average rate both in Pesos and U.S. Dollars.

In this regard, the average rate in Pesos in 2015 was 27.88%,increasing 389 basis points, as compared to 23.99% for 2014, whereasthe rate of U.S. Dollars-denominated government securities was8.47%, 513 basis points above 3.34% for fiscal year 2014, mainly dueto the yield on provincial debt securities and treasury bills.

The average portfolio of “Other Interest-Earning Assets” amountedto $2,382 million, 5% lower than the $2,517 million recorded in fiscal

year 2014, whereas the average rate of such item was 24.90%, 164basis points lower, as compared to 26.54% in the previous fiscal year,as a result of the decrease of 170 basis points in the rate of Peso-denominated transactions.

The category “Other Financial Income” recorded a $51 millionincrease, mainly influenced by the higher income from forwardtransactions in foreign currency, which totaled $917 million as of fiscalyear-end, as compared to $830 million for the previous fiscal year. Infiscal year 2014, this item included a gain on quotation differencesamounting to $13 million. It is made up of a gain amounting to $241million from foreign exchange brokerage activities and a lossamounting to $228 million due to the valuation of the net foreigncurrency position. For the fiscal year, there was a loss on the quotationdifferences, which is disclosed in “Other Financial Expenses”.

FINANCIAL ExPENSESIn millions of Pesos

December 31,

Interest on deposits

Negotiable obligations

Contributions and taxes

Others (1)

Total

(1) Including interest accrued on liabilities resulting from financial brokerage withinternational banks and entities, premiums payable on repurchase agreements and, duringfiscal years 2015 and 2013, gain (loss) on quotation differences.

Financial expenses for the fiscal year amounted to $13,402 million,showing a 30% increase when compared to the $10,321 millionrecorded in 2014.

The variation was the result of a 27% increase in the average balanceof interest-bearing liabilities, whereas the rate was kept at similarlevels, with a 12 basis points increase during the year.

Average interest-bearing liabilities amounted to $66,071 million,compared to $52,081 million in fiscal year 2014. This variation wasmainly due to the $12,546 million increase in total interest-bearingdeposits (savings account and checking account), which amounted to$52,961 million as of fiscal year-end, whereas it amounted to $40,415million as of the previous fiscal year, and a $1,484 million increase inthe average balance of debt securities, which amounted to $10,460million, as compared to $8,976 million in the previous fiscal year.

Of the total average interest-bearing deposits, $48,130 million werePeso-denominated deposits, and $4,831 million were U.S. Dollar-denominated, compared to $37,140 million and $3,276 million,respectively, in fiscal year 2014. Average deposits in Pesos grew 30%,with a 37% increase in deposits in savings accounts and a 27%increase in time deposits. Average deposits in U.S. Dollars increased

2013

3,780

869

1,009

512

6,170

2014

6,577

1,485

1,480

779

10,321

2015

8,694

1,846

2,111

751

13,402


47% during the fiscal year, with a 70% increase in deposits in savingsaccounts and a 29% increase in time deposits. Part of this growth isexplained by the evolution of the exchange rate during the period,since the U.S. Dollar exchange rate experienced a 52% increase duringthe year.

Considering only private-sector deposits in checking and savingsaccounts and time deposits raised by the Bank, the estimated depositmarket share of the Bank in the Argentine financial system decreasedfrom 9.65% as of December 31, 2015, to 9.06% as of December 31,2014.

The average rate of the time deposit stands out of the total interest-bearing deposits (savings accounts and time deposits), which stood at22.28% during the fiscal year, 48 basis points higher than that notedin the previous fiscal year. The evolution of the time deposit rate wasinfluenced by Argentine Central Bank’s regulations, which establishedminimum rates for raising Peso-denominated time deposits, theamounts of which do not exceed certain values.

Peso-denominated interest-bearing deposits accrued an average rateof 17.77%, similar to the 17.70% rate for fiscal year 2014. In turn, therate of U.S. Dollar-denominated interest-bearing deposits was 1.24%,17 basis points higher than the average rate of 1.07% in fiscal year2014.

The average balance of debt securities was $10,460 million, $1,484million higher than the $8,976 million for the previous fiscal year. Thisvariation was mainly related to the negotiable obligations issued byTarjeta Naranja, Tarjetas Cuyanas, CFA S.A. and Grupo FinancieroGalicia, and the variation in the U.S. Dollar during the period, offset bythe amortizations made during the year.

The average rate for debt securities in fiscal year 2015 was 17.65%,while in the previous fiscal year it had been 16.54%, mainly due to theincrease in the interest coupon of Banco Galicia’s negotiableobligations that accrue a floating interest rate linked to the evolutionof private Badlar.

The average balance of the “Other Interest-Bearing Liabilities” captionwas $2,650 million, with an average rate of 20.34% while, for fiscalyear 2014, the average balance amounted to $2,689 million and theaverage rate was 19.19%. This caption mainly includes Peso- and U.S.Dollar-denominated debt with domestic and international banks andentities, and Peso- and U.S. Dollar-denominated obligations inconnection with repurchase agreement transactions of governmentsecurities.

The item “Other Financial Expenses” amounted to $751 million,showing a $28 million (4%) decrease. In the fiscal year, this item

includes a gain (loss) on quotation differences amounting to $188million. It was made up of a loss amounting to $538 million due to thevaluation of the net foreign currency position and a gain of $350million from foreign exchange brokerage activities. In fiscal year 2014,there was a gain on the quotation differences, which is disclosed in“Other Financial Income”.

NET FINANCIAL INCOME. Net financial income for the fiscal yearamounted to Ps 12,442 million, and the corresponding financialmargin was 13.12%; while in fiscal year 2014 the correspondingfigures were $9,539 million and 13.56%, respectively.

The net income for the fiscal year (excluding the gain (loss) onquotation differences and the gain (loss) on forward transactions)amounted to $11,712 million, compared to a $8,960 million profit inthe previous fiscal year, determining a 12.35% financial margin forthis fiscal year, in comparison to 12.74% the previous fiscal year. Thisvariation was the result of a drop in the spread (defined as thedifference between the average nominal interest rate on interest-earning assets and the average nominal interest rate oninterest-bearing liabilities), which stood at 9.13% during the fiscalyear, as compared to 10.13% in fiscal year 2014, influenced by thelower accrued rate on loans (135 basis points), partially offset by ahigher volume of transactions.

INTEREST-EARNING ASSETS - NET yIELD ANDSPREAD (*)In millions of Pesos, except for rates

December 31,

Total average interest-earning assets

Pesos

U.S. Dollars

Total

Net interest earned

Pesos

U.S. Dollars

Total

Net yield on interest-earning assets (1) (%)

Pesos

U.S. Dollars

Weighted-average yield

Interest spread, nominal basis (2) (%)

Pesos

U.S. Dollars

Weighted-average yield

(*) Interest includes CER adjustment.(1)Net Interest earned divided by average interest-earning assets. See the “yield oninterest-earning assets and interest-bearing liabilities” table.(2) Interest spread, nominal basis, is the difference between the average nominal interestrate on interest-earning assets and the average nominal interest rate on interest-bearingliabilities.

2013

50,736

3,424

54,160

7,768

(308)

7,460

15.31

(9.00)

13.77

10.30

(1.56)

10.43

2014

65,665

4,684

70,349

10,687

(540)

10,147

16.28

(11.53)

14.42

9.41

(2.79)

10.13

2015

88,107

6,698

94,805

13,887

(443)

13,444

15.76

(6.61)

14.18

8.44

(0.91)

9.13


CONSOLIDATED AvERAGE NOMINAL yIELDS AND RATES FOR ASSETS AND LIABILITIES (*)In millions of Pesos, except for rates (%)

December 31, 2015

Assets


Loans

Private sector

Public sector

Total loans

Others

Interest-earnings assets

Cash and gold


Other assets

Allowances

Total assets

Liabilities and shareholders’ equity

Deposits

Checking accounts

Savings accounts

Time deposits and rescheduled deposits

Total Interest-bearing deposits

Debt securities

Other interest-bearing liabilities

Total interest-bearing liabilities

Checking accounts

Other liabilities

Minority interest


Total liabilities and shareholders’ equity

Spread and net yield (%)

Spread

Cost of funds of interest-earning assets

Net yield on interest-earnings assets

(*) Interest earned/paid includes CER adjustment.

Average

Nominal

Rate

24.07

26.13

25.00

26.13

24.90

25.78

-

-

-

-

-

-

0.19

22.28

16.26

17.65

20.34

16.65

-

-

-

-

-

9.13

11.60

14.18

Average

Balance

14,616

77,791

16

77,807

2,382

94,805

17,384

2,761

10,961

(3,227)

122,684

-

14,428

38,533

52,961

10,460

2,650

66,071

20,912

22,636

860

12,205

122,684

Total

Interest

Earned/

Paid

3,518

20,328

4

20,332

593

24,443

-

-

-

-

-

-

28

8,586

8,614

1,846

539

10,999

-

-

-

-

-

Interest

Earned/

Paid

243

155

-

155

5

403

-

-

-

-

-

-

-

60

60

743

43

846

-

-

-

-

-

U.S. Dollars

Average

Nominal

Rate

8.47

4.18

-

4.18

4.24

6.02

-

-

-

-

-

-

-

2.57

1.24

11.96

3.70

6.93

-

-

-

-

-

(0.91)

12.63

(6.61)

Average

Balance

11,746

74,081

16

74,097

2,264

88,107

10,112

2,369

10,057

(3,175)

107,470

-

11,932

36,198

48,130

4,248

1,489

53,867

19,850

20,778

860

12,205

107,560

Interest

Earned/

Paid

3,275

20,173

4

20,177

588

24,040

-

-

-

-

-

-

28

8,526

8,554

1,103

496

10,153

-

-

-

-

-

Pesos

Average

Nominal

Rate

27.88

27.23

25.00

27.23

25.97

27.29

-

-

-

-

-

-

0.23

23.55

17.77

25.97

33.31

18.85

-

-

-

-

-

8.44

11.52

15.76

Average

Balance

2,870

3,710

-

3,710

118

6,698

7,272

392

904

(52)

15,214

-

2,496

2,335

4,831

6,212

1,161

12,204

1,062

1,858

-

-

15,124



December 31, 2014

Assets


Loans

Private sector

Public sector

Total loans

Others


Cash and gold


Other assets

Allowances

Total assets


Deposits

Checking accounts

Savings accounts



Debt securities



Checking accounts

Other liabilities

Minority interest




Spread





Average

Nominal

Rate

21.16

27.49

-

27.49

26.54

26.66

-

-

-

-

-

-

0.20

21.80

16.35

16.54

19.19

16.53

-

-

-

-

-

10.13

12.24

14.42

Average

Balance

8,760

59,072

-

59,072

2,517

70,349

14,337

2,657

7,776

(2,609)

92,510

1

10,186

30,229

40,416

8,976

2,689

52,081

15,118

16,139

629

8,543

92,510

Total

Interest

Earned/

Paid

1,854

16,236

-

16,236

668

18,758

-

-

-

-

-

-

20

6,590

6,610

1,485

516

8,611

-

-

-

-

-

Interest

Earned/

Paid

40

164

-

164

4

208

-

-

-

-

-

-

-

35

35

674

39

748

-

-

-

-

-

U.S. Dollars

Average

Nominal

Rate

3.34

4.87

-

4.87

3.42

4.44

-

-

-

-

-

-

-

1.93

1.07

11.49

3.26

7.23

-

-

-

-

-

(2.79)

15.97

(11.53)

Average

Balance

7,561

55,704

-

55,704

2,400

65,665

7,838

2,123

7,451

(2,550)

80,527

-

8,722

28,418

37,140

3,110

1,492

41,742

14,432

14,789

629

8,543

80,135

Interest

Earned/

Paid

1,814

16,072

-

16,072

664

18,550

-

-

-

-

-

-

20

6,555

6,575

811

477

7,863

-

-

-

-

-

Pesos

Average

Nominal

Rate

23.99

28.85

-

28.85

27.67

28.25

-

-

-

-

-

-

0.23

23.07

17.70

26.08

31.97

18.84

-

-

-

-

-

9.41

11.97

16.28

Average

Balance

1,199

3,368

-

3,368

117

4,684

6,499

534

325

(59)

11,983

1

1,464

1,811

3,276

5,866

1,197

10,339

686

1,350

-

-

12,375


December 31, 2013

Assets


Loans

Private sector

Public sector

Total loans

Others


Cash and gold


Other assets

Allowances

Total assets


Deposits

Checking accounts

Savings accounts



Debt securities



Checking accounts

Other liabilities

Minority interest




Spread




Average

Nominal

Rate

14.33

24.02

-

24.01

17.77

23.03

-

-

-

-

-

-

0.18

16.22

12.09

13.70

16.97

12.60

-

-

-

-

-

10.43

9.25

13.77

Average

Balance

4,156

47,905

7

47,912

2,092

54,160

9,811

1,709

6,296

(2,132)

69,844

1

8,078

23,257

31,336

6,351

2,092

39,779

11,728

12,008

711

5,618

69,844

Total

Interest

Earned/

Paid

595

11,506

-

11,506

371

12,472

-

-

-

-

-

-

15

3,772

3,787

870

355

5,012

-

-

-

-

-

Interest

Earned/

Paid

27

138

-

138

7

172

-

-

-

-

-

-

-

17

17

440

23

480

-

-

-

-

-

U.S. Dollars

Average

Nominal

Rate

6.80

4.69

-

4.69

8.78

5.04

-

-

-

-

-

-

-

1.15

0.70

10.48

3.45

6.60

-

-

-

-

-

(1.56)

14.02

(9.00)

Average

Balance

3,755

44,965

7

44,972

2,009

50,736

6,344

1,446

5,671

(2,059)

62,138

-

7,140

21,782

28,922

2,153

1,426

32,501

11,264

10,895

711

5,618

60,989

Interest

Earned/

Paid

568

11,368

-

11,368

364

12,300

-

-

-

-

-

-

15

3,755

3,770

430

332

4,532

-

-

-

-

-

Pesos

Average

Nominal

Rate

15.13

25.28

-

25.28

18.14

24.24

-

-

-

-

-

-

0.20

17.24

13.04

19.96

23.28

13.94

-

-

-

-

-

10.30

8.93

15.31

Average

Balance

401

2,940

-

2,940

83

3,424

3,467

263

625

(73)

7,706

1

938

1,475

2,414

4,198

666

7,278

464

1,113

-

-

8,855


PROVISION FOR LOSSES ON LOANS AND OTHER RECEIVABLES.Provisions for loan losses amounted to $2,214 million, $197 million(8%) lower than those in the previous fiscal year. The decrease wasrelated to a better behavior in the evolution of arrears, both thebusiness portfolio and the individuals’ portfolio, mitigated by higherregulatory charges on the portfolio in normal situation as a result ofthe increase in the volume of receivables.

For further information on the asset quality of the portfolio, see “RiskManagement-Credit Risk.”

NET INCOME FROM SERVICES. The table below shows the evolutionof the main components that make up net income from services:

NET INCOME FROM SERvICESIn millions of Pesos

December 31,

Credit card

Deposits

Credit-related fees

Values for collection

Foreign trade

Safe deposit boxes

CFA

Collections

Financial fees

Cash management

Transportation of valuables

Others (1)

Total income

Total expenses


(1) It includes, among others, fees from investment banking activities and assetmanagement.

Net income from services amounted to $7,837 million, 38% higherthan the $5,699 million recorded in fiscal year 2014. The evolution ofbusiness activity and the rise in prices (complying with the proceduresset forth by the Argentine Central Bank’s regulations related toindividuals) account for the increases noted.

The most significant increases took place in fees related to credit cards(35%), deposit accounts (46%) and values for collection (52%). Theincrease in CFA’s income from services (82%) is mainly related tohigher fees related to the credit cards product and the accountsoffered to its retired customers.

Banco Galicia’s total deposit accounts amounted to 3.6 million as ofDecember 31, 2015, 20% higher than the same period the previous year.

Banco Galicia’s income from credit and debit card transactions, on an

individual basis, amounted to $3,214 million, a 45% increase over the$2,219 million recorded in the previous fiscal year. This higher incomewas attributable not only to the greater number of credit cardsmanaged, but also to the greater average purchases made with suchcards during the year. The total number of credit cards managed byBanco Galicia (excluding those managed by the regional credit-cardcompanies and CFA) increased 19%, reaching 3.4 million as ofDecember 31, 2015, in comparison with 2.9 million as of December 31,2014.

Income from services corresponding to the regional credit-cardcompanies was $4,049 million, 28% higher than $3,157 million in2014. This variation was due to the increase in the purchases for thefiscal year, together with an increase in the number of credit cards.These companies managed 10 million cards as of December 31, 2015,increasing by 12% as compared to December 31, 2014.

CREDIT CARDSNumber of credit cards, except for purchases

December 31,

Visa

“Gold”

International

National

“Business”

“Corporate”

“Platinum”

Galicia Rural

MasterCard

“Gold”

Mastercard

Argencard

“Platinum”

“Black”

American Express

“Gold”

International

“Platinum”


Visa

Mastercard

American Express

Regional brands (1)

Compañía Financiera Argentina

Visa

Mastercard

Total

Total amount of purchases

(en millions de Pesos)

(1) It corresponds to Tarjeta Naranja, Tarjetas Cuyanas and La Anónima.


2013

4,097

879

289

105

128

124

122

87

82

55

43

223

6,234

1,995

4,239

2014

5,376

1,341

227

182

180

167

137

126

97

69

59

345

8,306

2,607

5,699

2015

7,263

1,960

314

276

214

193

250

169

137

91

53

551

11,471

3,634

7,837

2013

1,586,344

324,903

826,297

90,245

71,307

3,139

270,453

15,476

107,235

34,935

71,779

521

-

-

810,780

238,088

345,380

227,312

8,270,150

3,164,358

519,342

34,247

4,552,203

101,412

93,881

7,531

10,891,397

75,925

2014

1,750,960

395,732

906,701

68,980

85,039

3,241

291,267

17,107

126,880

43,824

82,652

404

-

-

986,962

307,072

427,932

251,958

8,879,717

3,646,229

537,947

41,307

4,654,234

170,930

155,228

15,702

11,932,556

101,814

2015

2,088,236

459,767

1,138,234

57,224

99,155

3,271

330,585

17,548

264,487

78,091

166,049

326

13,534

6,487

1,059,707

329,011

465,815

264,881

9,973,612

4,211,135

660,534

47,487

5,054,456

159,435

145,361

14,074

13,563,025

146,508


Expenses from services increased by 39%, from $2,607 in 2014 to$3,634 million, mainly as a result of higher expenses related to creditand debit card transactions and the customer’s loyalty creationprogram, together with higher gross income taxes.

ADMINISTRATIVE EXPENSES. The following table shows thecomponents of administrative expenses for the fiscal year 2015 andthe two previous fiscal years:

ADMINISTRATIvE ExPENSESIn millions of Pesos

December 31,

Salaries and social security contributions

Personnel services

Directors’ and syndics' fees

Advertising and publicity

Electricity and communications

Expenses related to bank premises and

equipment (depreciation charges and leases)

Taxes

Others

Total administrative expenses

In 2015, administrative expenses amounted to $12,905 million, 40%higher from the $9,221 million recorded in the previous fiscal year.

Salaries, social security contributions and personnel services increased37%, from $4,699 million in 2014 to $6,412 million at fiscal year-end,mainly due to the salary increase agreed upon with unions.

The remaining administrative expenses amounted to $6,493 million inthe fiscal year, reflecting a 44% increase from the $4,522 millionrecorded in the previous fiscal year. This increase primarily resultedfrom the evolution of the costs related to the different servicesrendered by Grupo Financiero Galicia, together with the higheramortization of organization expenses for $303 million (91%) becausethe Bank’s investment in the “SAP Core Banking” system began beingamortized in December 2014.

INCOME (LOSS) FROM EQUITY INVESTMENTS. During the fiscalyear, income from equity investments in other companies amountedto $100 million, 53% lower than that for the previous fiscal year,during which the profit generated by the transfer of the Bank’s equityinvestment in Banelco S.A. to Visa Argentina S.A. had been recorded,under the framework of the project of integration of those companies.Additionally, as of June 30, 2015, the amortization of the negativegoodwill resulting from the purchase of CFA and Cobranzas y ServiciosS.A. was completed.

INCOME (LOSS) FROM INSURANCE ACTIVITIES. The breakdownof income (loss) from insurance activities as of the referred dates was

as follows:

INCOME (LOSS) FROM INSuRANCE ACTIvITIES (*)In millions of Pesos

December 31,

Premiums and surcharges accrued

Claims accrued

Surrenders

Life and ordinary annuities

Underwriting and operating expenses

Other income and expenses

Total

(*) Not including administrative expenses and taxes.

Income (loss) from the commercialization of insurance (excludingadministrative expenses and taxes, net of eliminations related torelated-party transactions) totaled $1,801 million as of fiscal year-end,46% higher than $1,238 million for fiscal year 2014. This result wasmainly due to the increase in the volume of premiums written,primarily as a consequence of the evolution of the commercializationof property and life insurance. In this regard, in 2015, Galicia SegurosS.A. achieved total premiums and surcharges accrued amounting to$2,516 million, obtaining an interannual increase of about 49%.

In 2015, the loss experience remained at similar levels to thosepresented in the previous year.

During 2015, sales reached $709 million of annualized premiums,obtaining an increase of about 39%, as compared to 2014.

MISCELLANEOUS INCOME (LOSS), NET. Miscellaneous net incomerecorded income of $443 million for the fiscal year, compared toincome of $503 million for the previous fiscal year.

The lower profit for $60 million was due to the increase in provisionsfor loans losses of miscellaneous receivables and other allowances,mainly offset by higher income (loss) related to margin requirementsof repurchase agreement transactions and yields generated on fundsof losses of credit cards (Visa, Mastercard, American Express andBanelco).

INCOME TAX. The income tax charge during the fiscal year was$2,801 million, thus accounting for an increase of $809 million ascompared to fiscal year 2014.

RISK MANAGEMENT

The tasks related to risk information and internal control of each of thecompanies controlled by Grupo Financiero Galicia are defined andcarried out, rigorously, by each of them.

2013

3,681

128

64

383

217

376

608

1,971

7,428

2014

4,549

150

85

414

249

466

851

2,457

9,221

2015

6,150

262

111

545

308

553

1,219

3,757

12,905

2013

1,274

(164)

(4)

(3)

(199)

1

905

2014

1,688

(235)

(4)

(4)

(219)

12

1,238

2015

2,516

(358)

(5)

(4)

(350)

2

1,801

Apart from the applicable domestic regulations, Grupo FinancieroGalicia, in its capacity as a listed company on the markets of theUnited States of America, complies with the certification of its internalcontrols pursuant to Section 404 of the Sarbanes Oxley Act (SOX).Corporate risk management is monitored by the Audit Committee,which as well gathers and analyzes the information submitted by themain controlled companies.

As regards risks, Banco Galicia assumes a policy that takes intoaccount several business and operating aspects following the mainguidelines of internationally renowned standards.

This is the vision of the internal structure, duties and roles are definedin their hierarchies and resources are invested in monitoring andoptimizing the risk management.

The Risk Management Committee is the body in charge of defining,assessing and controlling the risks taken by the Bank and itssubsidiaries.

The management of the different risks is decentralized in the Divisionsthat are directly responsible for each of them.

The Risk Management Division is mainly responsible for actively andintegrally monitoring and managing the different risks Banco Galiciaand its subsidiaries are exposed to, among other functions.

CREDIT RISK. Credit risk stems from the possible losses that can besustained due to the total or partial non-compliance with financialobligations taken on both with Banco Galicia and with consumptionfinancing affiliated companies by its customers or else counterparties.

The credit approval and credit risk analysis of the Bank and itssubsidiaries is a centralized process based on the concept ofopposition of interests. This is achieved through the existing divisionamong the risk management, credit and origination functions both inretail and wholesale businesses. This allows an ongoing and efficientmonitoring of the quality of assets, a proactive management ofproblem loans, aggressive write-offs of uncollectible loans, and aconservative policy on allowances for loan losses.

Apart from that, it includes the follow-up of the models for measuring

the portfolio risk at the operation and customer levels, facilitating thedetection of problem loans and the losses associated therewith, whatin turn allows the early detection of situations that could entail somedegree of portfolio deterioration and provides appropriate protectionof the Bank’s assets.

Within the framework of the Risk Management Committee (“CAR”,as per its initials in Spanish), the Board of Directors approves thestrategies, policies, procedures and controls related to thecomprehensive management of the Bank’s risks. In turn, the WholesaleRisk Management Division, Retail Risk Management andConsumption Division verify compliance and assess credit risk on acontinuous basis.

As an outstanding aspect we can mention that credit granting policiesfor retail banking and consumption financing companies focus onautomatic granting processes. These are based on behavior analysismodels. Additionally, Banco Galicia is strongly geared towardsobtaining portfolios with direct payroll deposit, which statistically havea better compliance behavior when compared to other types ofportfolios.

As for the wholesale banking, credit granting is based on analysesconducted on credit, cash-flow, balance sheet, capacity of theapplicant. These are supported by statistical rating models.

The Bank has a review-by-sector policy, which determines the levelsof review for the economic activities belonging to the private-sectorportfolio according to the concentration they show with regard to theBank’s total credit and/or computable regulatory capital (RPC, as perits initials in Spanish).

Wholesale Risk Management Division, Retail Risk Management andConsumption Division also constantly monitor their portfolio throughdifferent indicators (asset quality of the loan portfolio, the coverage ofthe non-accrual portfolio with allowances, non-performance, roll rates,etc.), as well as the classification and concentration thereof (throughmaximum ratios between the exposure to each customer, its owncomputable capital (“RPC”) or regulatory capital, and that of eachcustomer). The loan portfolio classification, as well as its concentrationcontrol, are carried out following the regulations provided for by theArgentine Central Bank.


BREAKDOwN OF ThE LOAN PORTFOLIOIn millions of Pesos

December 31,

Principal and interest

Non-financial public sector

Local financial sector

Non-financial private sector and residents abroad (1)

Overdrafts

Promissory notes

Mortgage loans

Collateral loans

Personal loans

Credit cards

Placements in banks abroad

Others

Accrued interest, adjustment and quotation differences receivable

Documented interest

Total (1)

Allowance for loan losses

Total loans

Loans with guarantees

With preferred guarantees (2)

Other guarantees

Total loans with guarantees

(1)Categories of loans above include:- Overdrafts: short-term obligations drawn on by customers through overdrafts.- Promissory notes: endorsed promissory notes, debentures and other promises to pay signed by one borrower or group of borrowers and factored loans.- Mortgage loans: loans granted to purchase or improve real estate and collateralized by such real estate, and commercial loans secured by a real estate mortgage.- Collateral loans: loans secured by collateral (such as cars or machinery) other than real estate.- Personal loans: loans to individuals.- Credit-Card loans: loans granted through credit cards to credit card holders. - Placements in banks abroad: short-term loans to banks abroad and short-term loans granted by Galicia Uruguay to international banks outside Uruguay.- Other loans: loans not included in other categories.

(2)Preferred guarantees include mortgages on real estate property or pledges on movable property, pledges of Argentine government securities, or gold or cash collateral.

As of December 31, 2015, Banco Galicia’s loan portfolio before allowances for loan losses amounted to $101,902 million, a 47% increase whencompared to the previous fiscal year-end.

LOANS By TyPE OF BORROwERIn millions of Pesos, except for percentages

December 31,

Large corporations

Small and medium-sized companies

Total loans to corporations

Individuals

Financial sector (1)


Total (2)

(1) It includes domestic and international financial sector.(2) Before allowances for loan losses.

Loans to the private sector before allowances increased by 47%, as compared to the prior fiscal year-end, as a result of an increase both inindividuals (47%), in PyMES (small- and medium-sized companies) (41%) and in large corporations (59%).

%

11.3

31.5

42.8

55.7

1.5

-

100.0

2013

6,508

18,064

24,572

31,988

848

-

57,408

%

12.4

29.6

42.0

57.3

0.7

-

100.0

2014

8,590

20,514

29,104

39,649

455

-

69,208

%

13.4

28.4

41.8

57.2

1.0

-

100.0

2015

13,619

29,022

42,641

58,267

994

-

101,902


2013

-

633

3,349

13,323

1,803

481

8,051

27,389

586

1,237

827

(271)

57,408

(2,129)

55,279

2,433

8,257

10,690

2014

-

193

3,987

16,304

1,661

500

6,996

37,348

261

1,337

969

(348)

69,208

(2,615)

66,593

2,695

9,463

12,158

2015

-

762

8,549

22,752

2,099

487

9,259

56,260

232

692

1,407

(597)

101,902

(3,560)

98,342

2,988

13,508

16,496

LOANS By ECONOMIC ACTIvITyIn millions of Pesos, except for percentages

December 31,

Financial sector (1)

Services


Communications, transportation, health and others

Electricity, gas, water supply and sewage

Other financial services

Total services

Primary production sector

Agriculture and livestock

Fishing, forestry and mining

Total primary production sector

Consumption

Retail trade

Wholesale trade

Construction

Manufacturing sector

Food and beverage

Transportation materials

Chemicals and oil

Other manufacturing industries

Total manufacturing sector

Others

Total (2)

((1) It includes domestic and international financial sector.(2) Before allowances for loan losses.

Consumer loans still account for the greater part of the loan portfolio, which as of the fiscal year-end represented 57.9% of total loan portfolio.

As for business activities, the most significant sectors were those of the Primary Production, Manufacturing Industry and Retail and WholesaleTrade, with a total portfolio share of 13.0%, 12.8% and 8.6%, respectively.

The most significant growths were shown in consumer loans, the manufacturing industry and agriculture and livestock, with increases of 48%,41% and 39%, respectively.

ANALySIS OF ThE ASSET quALITy OF LOAN PORTFOLIOIn millions of Pesos, except for ratios

December 31,

Total loans (1)

Non-accrual loan portfolio

With preferred guarantees

With other guarantees

Without guarantees

Total non-accrual loan portfolio

Past-due loan portfolio



Non-financial private sector and residents abroad

Overdrafts

%

1.5

-

5.0

0.5

0.4

5.9

12.5

0.8

13.3

55.3

4.0

5.4

1.2

4.0

1.7

2.7

5.0

13.4

-

100.0

2013

848

-

2,882

260

231

3,373

7,160

478

7,638

31,720

2,326

3,075

707

2,303

963

1,557

2,898

7,721

-

57,408

%

0.7

-

4.2

0.3

0.5

5.0

11.8

2.1

13.9

57.4

3.2

5.4

1.0

4.3

1.4

3.3

4.4

13.4

-

100.0

2014

455

-

2,886

216

366

3,468

8,178

1,459

9,637

39,747

2,237

3,699

709

2,943

996

2,269

3,048

9,256

-

69,208

%

1.0

-

5.0

0.2

0.5

5.7

11.1

1.9

13.0

57.9

3.3

5.3

1.0

3.4

2.7

2.7

4.0

12.8

-

100.0

2015

994

-

5,084

160

553

5,797

11,342

1,956

13,298

59,012

3,287

5,450

1,035

3,499

2,783

2,712

4,035

13,029

-

101,902

2013

57,408

39

58

1,954

2,051

-

-

150

2014

69,208

50

59

2,363

2,472

-

-

169

2015

101,902

106

103

2,958

3,167

-

-

188


ANALySIS OF ThE ASSET quALITy OF LOAN PORTFOLIO (CONT.)In millions of Pesos, except for ratios

December 31,

Promissory notes

Mortgage loans

Collateral loans

Personal loans

Credit cards

Others

Total past-due loan portfolio

Past-due loan portfolio



Without guarantees

Total past-due loan portfolio


Ratios (%)

Past-due loans as a percentage of total loans

Past-due loans with preferred guarantees as a percentage of total loans

Past-due loans with other guarantees as a percentage of total loans

Past-due loans without guarantees as a percentage of total loans

Non-accrual loans as a percentage of total loans

Non-accrual loans as a percentage of total loans (excluding interbank loans)

Non-accrual loans as a percentage of loans to the private sector

Allowance for loan losses as a percentage of total loans

Allowance for loan losses as a percentage of total loans (excluding interbank loans)

Allowances for loan losses as a percentage of non-accrual portfolio

Non-accrual portfolio with guarantees as a percentage of non-accrual portfolio

Non-accrual portfolio as a percentage of past-due portfolio

(1) Before allowances for loan losses.

The non-accrual portfolio as a percentage of total loans was 3.1% as of fiscal year-end, which represents an improvement when compared to3.6% in the previous fiscal year.

The coverage of the non-accrual loan portfolio with allowances increased from 105.78% as of 2014 fiscal year-end to 112.41% as of 2015 fiscalyear-end.

CLASSIFICATION OF ThE LOAN PORTFOLIOIn millions of Pesos

December 31,

Normal situation

With special follow-up and low risk

With problems and medium risk

High risk of insolvency and high risk

Uncollectible

Uncollectible due to technical reasons

Total loans (1)

Total non-accrual loan portfolio (2)

(1) Before allowances for loan losses.(2) Non-accrual loan portfolio is defined as the loan portfolio classified in the last four categories of the loan classification.

2013

Total

54,119

1,238

726

921

402

2

57,408

2,051

Amounts not

yet due

54,119

1,238

311

197

-

-

55,865

508

Amounts

past due

-

-

415

724

402

2

1.543

1.543

Amounts

past due

-

-

439

1,049

315

3

1,806

1,806

2014

Total

65,279

1,457

778

1,376

315

3

69,208

2,472

Amounts not

yet due

97,232

1,503

362

301

-

-

99,398

663

Amounts

past due

-

-

521

860

1,118

5

2,504

2,504

2015

Total

97,232

1,503

883

1,161

1,118

5

101,902

3,167

Amounts not

yet due

65,279

1,457

339

327

-

-

67,402

666

2013

76

28

5

243

1,003

38

1,543

34

47

1,462

1,543

2,129

2,69

0,06

0,08

2,55

3,57

3,62

3,57

3,71

3,76

103,80

4,73

132,92

2014

121

12

9

262

1,200

33

1,806

42

38

1,726

1,806

2,615

2,61

0,06

0,05

2,50

3,57

3,59

3,57

3,78

3,79

105,78

4,41

136,88

2015

192

45

8

304

1,693

74

2,504

59

97

2,348

2,504

3,560

2,46

0,06

0,10

2,30

3,11

3,12

3,11

3,49

3,50

112,41

6,60

126,48



PROvISIONS FOR LOAN LOSSESIn millions of Pesos, except for ratios

December 31,

Total loans, average (1)

Allowance for loan losses at the beginning of the fiscal year

Changes in the allowance for loan losses

Allowances for loan losses made during the fiscal year

Reversals of allowances for loan losses

Write-offs (A)

Allowance for loan losses at fiscal year-end

Provisions charged to income during fiscal year

Allowances for loan losses made (2)

Direct write-offs, net of recoveries (B)

Allowances for loan losses reversed

Net charge to the income statement

Ratios (%)

Charges-offs (-A+B) as a percentage of average total loans

Net charge to the income statement as a percentage of average total loans

(1) Before allowances for loan losses.(2) It includes quotation difference corresponding to Galicia Uruguay.

During 2015, the Bank established allowances for loan losses for $2,148 million.

Direct charges to the income statement, net of recoveries, represented a gain of $226 million. The net charge to the income statement for thefiscal year was $1,902 million, representing 2.44% of the average loan portfolio for the fiscal year.

Charge-offs against allowances for loan losses were $1,203 million.

COMPOSITION OF ALLOwANCES FOR LOAN LOSSES PER TyPE OF LOANIn millions of Pesos, except for percentages

December 31,




Overdrafts

Promissory notes

Mortgage loans

Collateral loans

Personal loans

Credit card loans

Placements in banks abroad

Others

Unallocated

Total

(1) Allowances for loan losses as a percentage of total loans.(2) Loans charged in every line as a percentage of total loans.

2013

47,964

1,732

1,701

-

(1,304)

2,129

1,701

(187)

-

1,514

2.33

3.16

2014

59,094

2,129

2,327

(1)

(1,840)

2,615

2,339

(181)

(1)

2,157

2.81

3.65

2015

77,832

2,615

2,148

-

(1,203)

3,560

2,128

(226)

-

1,902

1.26

2.44

2013

% (2)

-

1.10

5.83

23.21

3.14

0.84

14.02

47.71

1.02

3.13

-

100.00

Amount

-

-

95

56

11

3

261

676

-

22

1,005

2,129

% (1)

-

-

0.17

0.10

0.02

-

0.45

1.18

-

0.04

1.75

3.71

% (1)

-

-

0.17

0.14

0.02

0.01

0.43

1.10

-

0.02

1.89

3.78

2014

% (2)

-

0.28

5.76

23.56

2.40

0.72

10.11

53.96

0.38

2.83

-

100.00

Amount

-

-

157

150

33

7

311

1,295

-

49

1,558

3,560

% (1)

-

-

0.15

0.15

0.03

0.01

0.30

1.27

-

0.05

1.53

3.49

2015

% (2)

-

0.75

8.39

22.33

2.06

0.48

9.09

55.21

0.23

1.46

-

100.00

Amount

-

-

121

94

13

5

299

759

-

19

1,305

2,615


CREDITIn millions of Pesos, except for ratios

December 31,

Loan portfolio classification

Normal situation

With special follow-up and low risk

With problems and medium risk

High risk of insolvency and high risk

Uncollectible


Total loans (1)

Non-accrual loan portfolio (2)



Without guarantees

Total non-accrual loan portfolio


Ratios (%)

Allowance for loan losses as a percentage of total loans

Non-accrual loan portfolio as a percentage of total loans

Allowance for loan losses as a percentage of non-accrual loan portfolio

Non-accrual loan portfolio with guarantees as a percentage of non-accrual loan portfolio

(1) before allowances for loan losses.(2) non-accrual loan portfolio is defined as the loan portfolio classified in the last four categories of the loan classification.

2013

62,488

1,254

748

930

404

3

65,827

41

60

1,984

2,085

2,172

3,30

3,17

104,17

4,84

2014

74,900

1,507

792

1,392

318

3

78,912

57

61

2,387

2,505

2,675

3,39

3,17

106,79

4,71

2015

110,503

1,528

894

1,172

1,131

5

115,233

110

108

2,984

3,202

3,648

3,17

2,78

113,93

6,81

In accordance with the Argentine Central Bank’s methodology for thepreparation of the Statement of Debtor’s Status, total credit is definedas the sum of loans, certain accounts under the balance sheet heading“Other Receivables from Financial Brokerage” that represent credittransactions (such as unlisted negotiable obligations), the“Receivables from Financial Leases” and the memorandum accounts“Guarantees Granted” and “Unused Balances of Loans Granted”.Defined in this way, Banco Galicia’s consolidated credit portfolio,including the portfolio of the regional credit-card companies and thatof CFA, amounted to $115,233 million as of fiscal year-end.

As of December 31, 2015, the ratio of the non-accrual loan portfolioto total credit was 2.8%, which represented an improvement whencompared to 3.2% in the previous fiscal year. Furthermore, coverageof non-accrual loan portfolio with allowances was 113.9% as of fiscalyear-end, compared to the 106.8% in the previous fiscal year.

FINANCIAL RISKS. Financial risk is a phenomenon inherent to thefinancial brokerage activity. The exposure to the different financial riskfactors is a natural circumstance that cannot be completely avoidedwithout affecting Banco Galicia’s long-term economic viability.However, the lack of management with regard to risk exposures isone of the most significant short-term threats. Risk factors need to beidentified and managed within a specific policy framework thatenvisages the profile and the level of risk the Bank’s Board of Directorshas decided to take to achieve its long-term strategic goals.

The following risk factors subject to management and control havebeen identified:

• Continuity and stability of the sources of funds (deposits, debt,credit lines, other sources of funds).• Market price of financial assets and/or derivative instrumentslisted on stock exchanges.• Foreign currency exchange.• Fluctuation in lending and borrowing interest rates.• Credit risk from counterparties located in foreign jurisdictions. • Regulatory restrictions on the remittance of financialinstruments or else liquid funds to counterparties from abroad tocomply with obligations undertaken.

From this perspective, financial risk is defined as the possibility ofsustaining losses due to variations in the market price of listed financialassets and liabilities, fluctuations in market interest rates, foreigncurrency exchange and changes in the Bank’s liquidity situation. Cross-border, overseas foreign currency transfer risks and risk exposures in theNon-financial Public Sector are included within financial risks.

Liquidity Risk. This risk has to do with not being able to meetcontractual commitments and the operational needs of the businesswithout affecting market prices, attracting the attention of othermarket players and compromising the counterparty’s credit quality.

Banco Galicia’s goal is to maintain an adequate level of liquid assets


that allows it to meet financial commitments at contractual maturity,take advantage of potential investment opportunities and meet creditdemand.

Liquidity risk management is carried out by applying an internal modelthat is subject to a periodic review.

The liquidity policy sets forth limits that cover three areas of liquidityrisk:

• Liquidity in Terms of Stock: A level of management liquidity wasestablished as the excess over legal minimum cash requirements,taking into consideration the characteristics and behavior of BancoGalicia’s different liabilities. The liquid assets that make up suchliquidity were determined as well.• Cash Flow Liquidity: gaps between the contractual maturitiesof consolidated financial assets and liabilities are analyzed andmonitored. There is a cap for the gap between maturities,determined based on the gap accumulated against total liabilitiespermanently complied with during the first year.• Concentration of Deposits: The concentration of deposits isregulated in terms of the ten leading customers and the followingfifty customers; and a maximum limit with regard to the share indeposits is determined individually.

With the purpose of monitoring and regulating possibleconcentrations of time deposits by entities decentralized from thenational government, the Bank decided to determine specific limitsfor these transactions, independently from the rest of Banco Galicia’scustomers. In case circumstantial excesses over the concentrationlimits determined occur, these lead to higher requirements with regardto liquidity in terms of stock.

Furthermore, the liquidity policy is supplemented by the LiquidityContingency Plan that contemplates a set of early warnings to monitorliquidity evolution and possible business actions in order to obtainextraordinary liquid resources to address the above-mentioned

situation.

Additionally, a stress test program was designed to regularly evaluatethe liquidity capacity specified by the policy, in order to address differentscenarios, defined as extreme, according to historical experience.

Liquidity Management (On an individual basis). As of December31, 2015, the liquidity structure of the Bank was as follows:

LIquIDITy (BAnco GALIcIA, on An UnconSoLIDATED BASIS)

In millions of Pesos

December 31,

Legal requirements

Management liquidity

Total liquidity (1)

(1) It does not include cash and due from banks of controlled companies.

Legal requirements correspond to the minimum cash requirements forPeso- and U.S. Dollar-denominated assets and liabilities as per therules and regulations of the Argentine Central Bank.

The assets computable for compliance with this requirement are thebalances of the Peso- and U.S. Dollar-denominated deposit accountsat the Argentine Central Bank and the escrow accounts held at theArgentine Central Bank in favor of clearing houses.

Management liquidity, defined as a percentage over deposits andother liabilities, is made up of the following items: Lebac, overnightplacements in banks abroad, net short-term interbank loans (callloans), technical cash and placements at the Argentine Central Bankin excess of the necessary items to cover minimum cash requirements.

Liquidity Gaps. To analyze the flows and as a supplement to theabove-mentioned analysis of liquidity in terms of stock, the “LiquidityGap” is prepared, showing the mismatches resulting from thecontractual maturity of consolidated financial assets and liabilities.

2015

19,141.5

18,284.0

37,425.5


LIquIDITy GAP In millions of Pesos

December 31, 2015

Assets


Argentine Central Bank - escrow accounts

Overnight placements in banks abroad

Loans - public sector

Loans - private sector


Negotiable obligations and corporate securities

Financial trusts

Other financing


Others

Total assets

Liabilities

Deposits in savings accounts

Demand deposits

Time deposits


International banks and credit entities

Local financial institutions

Other financing (1)

Total liabilities

Asset / liability gap

Cumulative gap

Ratio of cumulative gap to cumulative liabilities

Ratio of cumulative gap to total liabilities

Principal plus CER adjustment. It does not include interest.(1) It includes, mainly, debt with stores in connection with credit card operations, liabilities in connection with repurchase agreement transactions and debt with domestic credit agencies andcollections for third parties.

Total

7,721

24,645

232

409

96,956

15,030

1,471

1,685

426

306

149

149,030

27,318

20,303

51,625

12,504

1,406

1,393

22,635

137,184

11,846

11,846

Over 10 years

-

-

-

-

9

-

-

-

-

5

-

14

-

-

-

-

-

-

-

-

14

11,846

8.6%

8.6%

5 - 10 years

-

-

-

-

138

-

15

14

-

4

-

171

-

-

-

-

-

4

-

4

167

11,832

8.6%

8.6%

1 - 5 years

-

-

-

20

11,684

-

1,005

408

-

154

-

13,271

-

-

10

10,236

220

506

-

10,972

2,299

11,665

8.5%

8.5%

Less than 1 year

7,721

24,645

232

389

85,125

15,030

451

1,263

426

143

149

135,574

27,318

20,303

51,615

2,268

1,186

883

22,635

126,208

9,366

9,366

7.4%

6.8%

The table above is prepared taking into account contractual maturity.Therefore, all financial assets and liabilities with no maturity date areincluded in the “Less than One Year” category.

Banco Galicia must comply with a maximum limit for liquiditymismatches. This limit has been established at -25% (minus 25%) forthe ratio of cumulative gap to total liabilities within the first year.

Currency Risk (Currency Mismatch). Financial brokerage naturallyinvolves the raising of funds and the subsequent use thereof. Bothfunding (deposits and other alternative sources of financing) and theuse of the funds in loans and/or investments can be carried out inassets and liabilities denominated in different currencies. This possiblecurrency mismatch between liabilities and the use thereof on assetsgenerates a source of risk that arises from the variations in thedifferent foreign currency exchange rates. This risk is inherent to the

structure of assets and liabilities per currency.

Currency risk is defined as the risk of incurring in equity losses as aconsequence of variations in the foreign currency exchange rates inwhich assets and liabilities (both on and off the Balance Sheet) aredenominated.

The policy framework currently in force establishes limits in terms ofmaximum net asset positions (assets denominated in a currency whichare higher than the liabilities denominated in such currency) and netliability positions (assets denominated in a currency which are lowerthan the liabilities denominated in such currency) for mismatches inforeign currency, as a proportion of the Bank’s computable regulatorycapital (RPC, as per its initials in Spanish), on a consolidated basis. Banco Galicia manages mismatches not only regarding assets andliabilities, but also covering mismatches through the foreign currency


futures market. Transactions in foreign currency futures (U.S. Dollarfutures) are carried out through MAE, ROFEX and with customers.These transactions are subject to limits that take into considerationcharacteristics particular of each trading environment.

The table below shows the composition of Banco Galicia’s(consolidated) shareholders’ equity as of December 31, 2015, bycurrency and type of principal adjustment:

COMPOSITION OF ShAREhOLDERS’ EquITyIn millions of Pesos

December 31, 2015

Financial assets and liabilities

Pesos - adjusted by CER

Pesos - non-adjusted

Foreign currency (1)

Other assets and liabilities

Total gaps

Adjusted for forward transactions recorded

in memorandum accounts:

Financial assets and liabilities

Pesos - adjusted by cer

Pesos- non-adjusted (2)

Foreign currency (1) (2)

Other assets and liabilities

Total adjusted gaps

(1) Stated in Pesos, at the exchange rate of $13.005 per U.S. Dollar.(2) Adjusted for forward sales and purchases of foreign exchange, without delivery ofunderlying assets and recorded in Memorandum Accounts.

As of December 31, 2015, considering the adjustments from forwardtransactions recorded under memorandum accounts, Banco Galiciahad net asset positions in foreign currency and Pesos adjusted andnon-adjusted by CER.

The paragraphs below describe Banco Galicia’s composition of thedifferent currency mismatches as of December 31, 2015 on aconsolidated basis.

Peso-denominated Assets and Liabilities Adjusted by CER. Atfiscal year-end, the Bank had a net asset position of $674 million,mainly made up of $686 million corresponding to the participationcertificate in Galtrust I Financial Trust.

The limit established for the CER-adjusted mismatch is at 100% andat 25% of the Bank’s RPC for the net asset position and the net liabilityposition, respectively. At fiscal year-end, the asset position in Pesosadjusted by CER accounted for 4.8% of the Bank’s RPC.

Foreign Currency Assets and Liabilities. The Bank’s assetsdenominated in foreign currency mainly comprised the following: (i)

Cash and balances held at the Argentine Central Bank andcorrespondent banks for $17,654 million; (ii) loans to the non-financialprivate sector and residents abroad for $3,208 million (principal andinterest, net of allowances), and (iii) government securities for $5,198million.

The Bank’s liabilities denominated in foreign currency consisted mainlyof: (i) Deposits for $14,377 million (principal, interest and quotationdifferences); (ii) $9,106 million of subordinated and unsubordinatednegotiable obligations issued by Banco Galicia and the regional credit-card companies; (iii) debt with international banks and credit agenciesfor $1,408 million; and (iv) $2,081 million in connection withcollections for third parties.

A net liability position of $814 million stemmed from the consolidatedbalance sheet. Furthermore, forward transactions in foreign currencywithout delivery of the underlying asset for a notional value of $2,837million were recorded in memorandum accounts. Therefore, as of thatdate, the Bank’s net position in foreign currency adjusted to reflectthese transactions was an asset position of $2,023 million, equivalentto US$ 156 million.

Banco Galicia has set limits as regards foreign-currency mismatchesat -10% (minus 10%) of the Bank’s consolidated RPC for its netliability position. At the end of the fiscal year, Banco Galicia's positionin foreign currency represented 14.4% (plus 14.4%) of theconsolidated RPC.

Non-adjusted Peso-denominated Assets and Liabilities. TheBank’s non-adjusted Peso-denominated assets mainly comprised thefollowing: (i) Loans to the non-financial private sector for $94,380million (principal plus interest, net of allowances); (ii) cash andbalances held at the Argentine Central Bank and correspondent banksfor $14,713 million (including the balance of escrow accounts); (iii)$6,606 million corresponding to the holdings of securities issued bythe Argentine Central Bank; (iv) $3,240 million corresponding to theholding of debt securities, primarily Bonar, provincial securities andothers; (v) $1,910 million corresponding to negotiable obligations and(vi) $602 million corresponding to debt securities and participationcertificates in various financial trusts.

Banco Galicia’s non-adjusted Peso-denominated liabilities mainlycomprised: (i) Deposits for $85,791 million (principal plus interest); (ii)liabilities with stores in connection with Banco Galicia’s credit cardactivities and the regional credit-card companies for $15,316 million;(iii) $3,914 million corresponding to negotiable obligations issued byregional credit-card companies and CFA; and iv) $1,391 million inliabilities with local financial institutions (almost all corresponding tothe regional credit-card companies).

The net asset position in non-adjusted Peso-denominated assets and

Gap

9,734

674

9,874

(814)

4,078

13,812

9,734

674

7,037

2,023

4,078

13,812

Liabilities

139,761

12

111,698

28,051

6,977

146,738

139,761

12

90,450

49,299

6,977

146,738

Assets

149,495

686

121,572

27,237

11,055

160,550

149,495

686

97,487

51,322

11,055

160,550


liabilities was $6,973 million at fiscal year-end.

Other Assets and Liabilities. In the category “Other Assets andLiabilities”, the assets were mainly the following: (i) Bank, premisesand equipment, miscellaneous and intangible assets for $4,838million; (ii) miscellaneous receivables for $2,091 million;

Liabilities mainly included the following: (i) $3,979 million recordedunder “Miscellaneous Liabilities”, and (ii) provisions for othercontingencies for $456 million.

Interest Rate Risk (Balance Sheet Structural Risk). Anotherdistinctive and natural characteristic of financial brokerage is theexistence of interest-earning assets and interest-bearing liabilities withdifferent maturities (or different rate repricing periods) and interestrates that can be fixed or variable. This situation leads to a gap ormismatch that arises from the balance sheet and measures theimbalance between fixed- and variable-rate assets and liabilities, andresults in the so-called interest-rate risk or else Balance Sheetstructural risk. A commercial bank can face the interest rate risk onboth sides of its balance sheet: With regard to the income generatedby assets (loans and securities) and the expenses related to theinterest-bearing liabilities (deposits and others sources of funds).

The policy currently in force defines this gap as the risk that thefinancial margin and the economic value of equity may vary as aconsequence of fluctuations in market interest rates. The magnitude ofsuch variation is associated with the sensitivity to interest rates of thestructure of the Bank's assets and liabilities.

Aimed at managing and limiting the sensitivity of Banco Galicia'seconomic value and results with respect to variations in the interestrate inherent to the structure of certain assets and liabilities, thefollowing caps have been determined:

• Limit on the net financial income for the first year.• Limit on the net present value of assets and liabilities.

Limit on the Net Financial Income for the First Year. The effect ofinterest rate fluctuations on the net financial income for the first yearis calculated using the methodology known as scenario simulation.On a monthly basis, net financial income for the first year is simulatedin a base scenario and in a “+100 basis points” scenario. In order toprepare each scenario, different criteria are assumed regarding thesensitivity to interest rates of assets and liabilities, depending on thehistorical performance observed of the different balance sheet items.Net financial income for the first year in the “+100 basis points”scenario is compared to the net financial income for the first year inthe base scenario. The resulting difference is related to the annualizedaccounting net financial income for the last calendar trailing quarteravailable, for Banco Galicia on a consolidated basis, before quotationdifferences and CER adjustment.

The limit on a potential loss in the “+100 basis points” scenariorelatively to the “base” scenario was established at 20% of the netfinancial income for the first year, as defined in the above paragraph.At fiscal year-end, the negative difference between the net financialincome for the first year corresponding to the “+100 b.p.” scenarioand that corresponding to the “base” scenario accounted for -0.1%(minus 0.1%) of the net financial income for the first year.

Limit on the Net Present Value of Assets and Liabilities. The netpresent value of assets and liabilities is also calculated on a monthlybasis and taking into account the assets and liabilities of BancoGalicia's consolidated balance sheet. A methodological adjustmentwas made and implemented in the interest rate risk calculation, fromthe “Net Present Value” standpoint.

The net present value of the consolidated assets and liabilities, asmentioned, is calculated for a “base” scenario in which the listedsecurities portfolio is discounted using interest rates obtainedaccording to interest rate curves determined based on the marketyields of different reference bonds denominated in Pesos, in U.S.Dollars and adjusted by the CER. Interest rate curves for unlisted assetsand liabilities are also created using market interest rates. The netpresent value of assets and liabilities is also obtained for a secondscenario called “critical”, where through a significant number ofstatistical simulations of the interest rate track record, a “critical”scenario is obtained as a result of the interest rate risk exposurepresented by the balance sheet structure.

The economic capital is obtained from the resulting differencebetween the “critical” scenario and the present value of assets andliabilities of the “base” scenario, and considering a 99.5% confidenceinterval.

The limit on interest rate risk exposure, stated as a difference betweenthe present value of assets and liabilities in the “base” scenario andthe “critical” scenario cannot exceed 15% of the consolidated RPC. Asof December 31, 2015, the “Value at Risk” (also known as "VaR")stood at -13.6% (minus 13.6%) of the RPC.

Market Risk. The exposure to portfolios of listed financialinstruments, whose value varies according to the movement in theirmarket prices, is subject to a specific policy framework that regulatesthe risk of incurring a loss as a consequence of the variation of themarket price of financial assets whose value is subject to negotiation.

Brokerage transactions and/or investments in government securities,currencies, negotiable obligations, derivative products and debtinstruments issued by the Argentine Central Bank are governed by thepolicy that limits the maximum tolerable losses in a given fiscal year.

In order to measure and monitor this source of risk, the model known

as VaR is used, among others. This model determines intra-daily, for theBank individually, the possible loss that could be generated by thepositions in securities, derivative instruments and currencies undercertain parameters.

The parameters taken into consideration are as follows:(i) A 99% “degree of confidence.”(ii) VaR estimates are made for holding periods of “n” days,defined as the number of days necessary to settle the position ineach security.(iii) In the case of securities, if they are new issuances, the availabletrading days are taken into consideration for the calculation ofvolatilities; if there are not enough trading days or if there are noquotations, the volatility of bonds from domestic issuers withsimilar risk and characteristics is used.

Likewise, the measurement method known as DVO1 (Dollar Value ofOne Basis Point) is also applied to measure and monitor the tradingof debt instruments issued by the Argentine Central Bank, debtsecurities issued by the provinces and the brokerage of negotiableobligations.

Banco Galicia's policy requires that the Risk Management and TreasuryDivisions agree on the parameters under which the models work, andestablishes the maximum losses authorized both for securities, foreign-currency, Argentine Central Bank’s debt instruments and derivativeproducts in a fiscal year. Maximum losses were established in:

Risk

Currency

Fixed-income

Interest rate derivatives

Furthermore, the policy includes the regular carrying out of stress tests,which goal is to assess the risk positions and their results, underadverse market conditions. Finally, “contingency plans” were designedfor each transaction, which include the actions to be implemented ina critical scenario.

Cross Border Risk. It is the risk of incurring in equity losses as aconsequence of the impairment or uncollectibility of exposures (loans,positions in securities, equity investments, and liquidity) located ininternational jurisdictions. It comprises risks generated by enteringinto transactions with public or private counterparties residing abroad.

In order to regulate risk exposures in international jurisdictions, limitswere established taking into consideration the jurisdiction’s creditrating, the type of transaction and a maximum exposure percounterparty.

The Bank defined its policy by setting maximum exposure limits

measured as a percentage of its RPC and taking into account if thecounterparty is considered investment grade:

Overseas Foreign Currency Transfer Risk. With the purpose ofmitigating the risk resulting from an eventual change in domestic lawsthat may affect overseas foreign currency transfers, in order to meetincurred liabilities, a policy was devised to set a limit for liabilitiestransferred abroad, as a proportion to total consolidated liabilities.Such ratio was fixed in 15%.

As of December 31, 2015, exposure stood at 8.7% over total liabilities.

Risk Exposures in the Non-financial Public Sector. Risk exposuresin the “Non-financial Public Sector” in federal, provincial andmunicipal jurisdictions are regulated by a management policy set inthe last quarter of fiscal year 2012.

The policy sets limits on risk exposures, establishing a “possible loss”(as a percentage of the Bank’s RPC) associated with a given position,contemplating in its application the debt instruments issued by thedifferent jurisdictions and other possible vehicles of financing to theNon-financial Public Sector. The policy is also supplemented by a limitthat establishes that the total position in the Non-financial PublicSector should not exceed a given percentage of the Bank’s RPC.

The limits set are as follows:• The possible loss cannot exceed 4% of the Bank’s RPC.• The total position cannot exceed 70% of the Bank’s RPC.

OPERATIONAL RISK. Banco Galicia adopts the definition ofoperational risk determined by the Argentine Central Bank and thebest international practices. Operational risk is the risk of losses dueto the lack of conformity or due to failure of internal processes, the actsof people or systems, or else because of external events. This definitionincludes legal risk, but does not include strategic and reputation risks.Banco Galicia defined the framework for the operational risk

Risk

Jurisdictional risk

Counterparty risk

Required Credit Rating

International rating

agency

International banking

relations credit division

Investment Grade

No limit

Maximum limit:

15%

The limit is distri-

buted between

financial and

foreign trade

transactions, thus

absorbing local

counterparty

margin

Not Investment

Grade

Maximum limit:

5%

Maximum limit:

1%

Only foreign trade

transactions


Policy on Limits

$57 million

$271 million

$25 million


management, which comprises the financial institution’s policies,practices, procedures and structures for its proper management.

The Risk Management Division, independent from the business orsupport units involved, includes a specific unit that is responsible forthe management of such risks. The duties of this unit are, amongothers, to develop and monitor the operational risk managementmodel, inherent in the Bank’s products, activities, processes, systemsand technology, aligned with the regulations and best practices inforce, organize the main necessary processes, provide advice, trainingand support to divisions, ensure that the Bank’s contingency, recoveryand activity continuity plans are developed according to the size andcomplexity of its operations, as well as the respective tests thereon.

The operational risk management is understood as the identification,assessment, monitoring, control and mitigation of this risk. It is anongoing process carried out throughout the Bank, which fosters a riskmanagement culture at all organization levels through an effectivepolicy and a program led by Senior Management.

Identification. The starting point of the operational risk managementis the identification of risks and their association with the controlsestablished to mitigate them, considering internal and external factorsthat may affect the process development. The results of this exerciseare entered into a log of risks, which acts as a central repository of thenature and status of each risk and controls thereof.

Assessment. Once risks have been identified, the size in terms ofimpact, frequency and likelihood is determined.

Monitoring. The monitoring process allows detecting and correctingthe possible deficiencies in operational risk management policies,processes and procedures or their update.

Risk Control and Mitigation. The control process ensurescompliance with internal policies and analyzes risks and responses toavoid, accept, mitigate or share them, by aligning them with the risktolerance defined.

The methodological approach adopted by the Bank includes severalmanagement tools.

Self-Risk Assessment. The self-risk assessment is a process toidentify and assess existing risks, considering the controls establishedto manage and mitigate them. The self-assessment is a criticalcomponent of the operational risk management framework since thevulnerability of operations and activities to risk can be verified basedon this process. Assessment can be quantitative or qualitative.

Operational Risk Map. The operational risk map allows viewing allthe risks assessed within a matrix of colors that, at first sight, points

out those risks in a classification of high, very high, medium, low andvery low, for their later analysis and for the preparation of reports oraction plans.

Risk Indicators. Risk indicators, which are risk assessmentmechanisms based on thresholds set, are defined by business andsupport area managers, and offer a fair basis to estimate the likelihoodand severity of one or more operational risk events.

Collection of Risk Events. It is the tool whereby material data aboutrisk events detected are identified and logged systematically. Thecollection of these events contributes to reducing incidents and theamounts of losses, as well as improving the products service quality.

The Bank has defined training strategies, together with theOrganizational Development and Human Resources Division, for thepurpose of training and making all its employees aware of theimportance of the operational risk and its proper management. Fortraining programs, the Argentine Central Bank regulations and thedefinitions included in the Operational Risk Policy are taken intoaccount.

The Bank has also defined policies to mitigate risks derived fromservice outsourcing and a code of conduct governing the relationshipwith suppliers.

The Bank also ensures that its operational risks are appropriatelyassessed before launching or introducing new products, activities,processes or systems.

Accordingly, the Bank has the structure and necessary resources to beable to set the operational risk profile and take, as the case may be,the appropriate corrective actions, complying with the regulationsestablished by the Argentine Central Bank about the guidelines forthe operational risk management at financial institutions.

The minimum capital requirement with regard to the operational riskis determined according to the Argentine Central Bank regulations.

An appropriate management of operational risks also helps improvecustomer service quality.

REGuLATORy CAPITAL

Grupo Financiero Galicia, as well as the companies it controls, isregulated by the General Corporations Law. In Section 186, the lawestablishes the minimum capital amount of a corporation. ThroughDecree 1331/12, which came into force on October 8, 2012, suchamount was determined to be $100,000.

Banco Galicia. With regard to regulatory capital, Banco Galicia must


comply with the regulations set forth by the Argentine Central Bank.These regulations are based on the Basel Committee methodology,and establish the minimum capital a financial institution is required tomaintain in order to cover the different risks inherent to its businessactivity and incorporated into its assets. Such risks mainly include:Credit risk, generated both by exposure to the private sector and to thepublic sector; operational risk, generated by the losses resulting fromthe non-adjustment or failures of internal processes; market risk,generated by positions in securities, foreign currency and CER.

Computable capital breaks down as follows:• Computable regulatory capital is divided into BasicShareholders’ Equity (Tier 1 Capital) and SupplementaryShareholders’ Equity (Tier 2 Capital). Deductible Items start to bemainly part of the Basic Shareholders’ Equity.• Equity investments in financial institutions, credit card issuers,insurance companies and others with activity supplementary tothe financial institution should be deducted from the calculationof computable capital.• Results for the period are part of the Basic Shareholders’ Equity(Income: 100% of audited results, 50% of unaudited results;Losses: 100%). Previously they were part of the SupplementaryCapital.• Supplementary Shareholders' Equity includes subordinatednegotiable obligations and 100% of the allowances for loan losseson the portfolio in normal situation.• Regardless of the reduction in their calculation by 20% perannum starting five years before their maturity, as from 2013,subordinated negotiable obligations shall be computed at 90% oftheir value, decreasing 10 percentage points every 12 months.

The following risk weights are applied to the main exposuresregarding minimum capital requirements:

• Loans in Pesos to the Non-financial Public Sector: 0%.• Bank Premises and Equipment and Miscellaneous Assets: 8%.• Family Mortgage Loans: 35% over the 8%, if the amount doesnot exceed 75% of the asset value.• Retail Portfolio(1): 75% over 8%.

( ) Through Communiqué “A” 5831 dated November 18, 2015, effective as from December,retail portfolio was defined as individuals with loans equal to 75 times the minimum livingwage and MiPyMEs (MicroPyMEs) with loans up to $10 million, as long as the agreedamount does not exceed 30% of income.

Additionally, as from December 2015, the Argentine Central Bank,through Communiqué “A” 5831, established that the minimumcapital requirement to cover credit risk be computed based on end-of-month balances. Until November 2015, the information was calculatedbased on the monthly average balances of the second monthpreceding that to which the minimum capital requirement was related.Computable capital is computed for the same month of the minimumcapital requirement, whereas the prior-month balance was previouslydisclosed.

Minimum capital requirements must be met by the Bank, not only onan individual basis, but also on a consolidated basis with its significantsubsidiaries.

REGuLATORy CAPITAL (*)In millions of Pesos, except for ratios

December 31,

Shareholders’ equity - computable

regulatory capital

Minimum capital requirements (a)

Credit risk

Market risk

Operational risk

Computable capital (b)

Tier one common capital

Tier two common capital

Additional capital per market variation

Difference (b - a)

Total risk assets

Ratios (%)

Shareholders’ equity as a % of total

consolidated assets

Excess over required capital as % of required capital

Total capital ratio

(*) In accordance with Argentine Central Bank regulations applicable at each date.

As of December 31, 2015, the Bank’s computable capital exceeded in$3,008 million (27.2%) the minimum capital requirement, which was$11,063 million. This excess amount was $3,056 million (43.2%) as ofDecember 31, 2014.

The minimum capital requirement increased by $3,986 million, whencompared to December 31, 2014, mainly due to the increase relatedto: i) financing to the private sector: $3,271 million due to the growthof the balances thereof (the variation was also influenced by theabove-mentioned regulatory change, Communiqué “A” 5831) and ii)operational risk: $619 million.

Computable capital increased by $3,938 million when compared toDecember 31, 2014, due to an increase of $3,691 million in Tier 1Common Capital, primarily as a result of the higher results recorded,partially offset by higher deductions as a consequence of organizationand development expenses. The Tier 2 Common Capital increased by$319 million primarily as a result of the increase in the computablebalance for the allowance for loan losses on the portfolio in normalsituation.

The capital ratio recorded in 2015 stood at 13.38%, 2.53 percentagepoints lower as compared to 2014 due to the above-mentionedregulatory change. If the effective methodology is kept until November2015, the capital ratio would be similar to that recorded in 2014.

2013

6,741

5,691

4,328

58

1,305

7,513

5,478

1,805

230

1,822

52,605

8.20

32.02

14.28

2014

9,899

7,077

5,098

200

1,779

10,133

8,041

2,020

72

3,056

63,690

9.34

43.18

15.91

2015

13,812

11,063

8,369

296

2,398

14,071

11,732

2,339

-

3,008

105,193

8.60

27.19

13.38

Insurance Companies. The insurance companies controlled bySudamericana Holding S.A. must meet the minimum capitalrequirements set by the Argentine Superintendency of Insurance.

The abovementioned regulatory agency requires insurance companiesto maintain a minimum capital level based on: a) line of insurance; b)premiums and surcharges and c) claims. The minimum required capitalmust then be compared to computable capital, defined as shareholder’sequity less noncomputable assets. Noncomputable assets consistmainly of deferred charges, pending capital contributions, proposeddistribution of profits and excess investments in authorizedinstruments.

As of December 31, 2015, the computable capital of the companiescontrolled by Sudamericana Holding S.A. exceeded the minimumrequirement of $387 million by $120 million.

Sudamericana Holding S.A. also holds Galicia Broker Asesores deSeguros S.A., company dedicated to the brokerage in different lines ofinsurance that is regulated by the guidelines of the GeneralCorporations Law.

CAPITAL AND RESERvES AND PROPOSEDDISTRIBuTION OF PROFITS

As of the close of fiscal year ended December 31, 2015, balancescorresponding to capital, capital adjustment, premium for trading ofshares in own portfolio and additional paid-in capital totaled$1,797,990,556.43.

Profits recorded in fiscal year 2015 amounted to $4,338,396,375.83,which the Board of Directors proposes to distribute as follows:

To cash dividends (1) (2)

To discretionary reserve

(1) 11.5361135% with regard to 1,300,264,597 Class “A” and “B” ordinary shares with aface value of $1 each.(2) Pursuant to what is set forth in the last paragraph of the section incorporated by ActNo. 25585 after Section 25 of Act No. 23966, when decided, and in the cases that maycorrespond, the Company will be restored the amounts corresponding to the tax onpersonal assets it paid for fiscal year 2015 in its capacity as substitute taxpayer of theshareholders subject to the above-mentioned tax. Additionally, pursuant to Section 4 of ActNo. 26893, the Company shall withhold 10% for income tax from those shareholderssubject to the tax.

Should the foregoing proposal be approved, the composition of GrupoFinanciero Galicia S.A.’s shareholders’ equity, as of December 31, 2015,pursuant to the applicable regulations, would be as follows:

Capital stock

Capital adjustment

Premium for trading of shares in own portfolio

Additional paid-in capital

Profit reserves

Legal reserve

Facultative reserve

Total shareholders’ equity

Eduardo J. EscasanyChairman of the Board of DirectorsAutonomous City of Buenos Aires

March 9, 2016


In Pesos

150,000,000.00

4,188,396,375.83

In Pesos

1,300,264,597.00

278,130,755.47

605,682.08

218,989,521.88

315,679,070.49

12,221,150,636.26

14,334,820,263.18


This Annual Report contains statements regarding events which are currently anticipated to occur in the future, or forward-looking statements. These forward-looking statements orprojections reflect Grupo Financiero Galicia S.A.’s opinions and expectations with respect to future events and their occurrence in general, as well as with respect to particular events. As aresult of factors not considered, which are unforeseen at the time of making such forward-looking statements or which are out of Banco de Galicia y Buenos Aires S.A.’s control, actualresults or their consequences could differ significantly from those that are contemplated or estimated to occur in the future. Shareholders and other readers of this Annual Report arecautioned not to place undue reliance on such forward-looking statements or projections, which speak only as of their dates. Grupo Financiero Galicia S.A. assumes no obligation to publiclyupdate or revise any forward-looking statements or projections, whether as a result of new information, future events or otherwise. Finally, shareholders and any other reader of this AnnualReport must note that this translation has been made from the original version written and expressed in Spanish, therefore, any matters of interpretations should be referred to the originalversion in Spanish.

REPORT ON THE CODE ONCORPORATE GOVERNANCE

RESPONSE STRUCTURE –SCHEDULE IV

89

The Board of Directors of Grupo Financiero Galicia S.A. (hereinafter “Grupo FinancieroGalicia”) complies, in every relevant respect, with the recommendations included in theCode on Corporate Governance as Schedule IV to Title IV of the amended regulationsissued by the National Securities Commission (Text amended in 2013). The aforementionedis in accordance with what stems from the following “Response Structure” table.

As a general introduction, it should be noted that, since its beginning, Grupo FinancieroGalicia has constantly shown respect for the rights of its shareholders, reliability andaccuracy in the information provided, transparency as to its policies and decisions, andcaution with regard to the disclosure of strategic business issues. Moreover, it should besaid that all resolutions from the corporate bodies have been adopted pursuant to GrupoFinanciero Galicia S.A.’s corporate interest.

REPORT ON THE DEGREE OF COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE


x

PRINCIPLE I. MAKE THE RELATIONSHIP TRANSPARENT AMONG THE ISSUER, THE GROUP HEADED THEREBYAND/OR OF WHICH IT IS A MEMBER AND ITS RELATED PARTIES

Recommendation I.1:Ensure the disclosure by the ManagementBody of the policies applicable to theIssuer’s relationship with the groupheaded thereby and/or of which it is amember and its related parties.

Please answer if:The Issuer has an internal rule or policyfor the authorization of transactionsamong related parties pursuant toSection 73 of Act No. 17811, transactionscarried out with shareholders andmembers of the management bodies,first-line managers and syndics and/ormembers of the Oversight Committee,within the environment of the economicgroup headed thereby and/or of which itis a member. Specify the main guidelinesof the internal rule or policy.

Recommendation I.2: Ensure the existence of mechanisms thatwould prevent conflicts of interests.

Responder si:Notwithstanding the regulations in force,the Issuer has clear policies and specificprocedures for the identification,management and solving of conflicts ofinterest that could arise among themembers of the Management Body, first-line managers and syndics and/ormembers of the Oversight Committeeregarding their relationship with the Issueror individuals related thereto.

Pursuant to the provisions of Section 72 of the CapitalMarkets Law, every act or contract the company carriesout or else enters into with a related party that involves asignificant amount shall be subject to previous considerationby the Audit Committee, which shall issue a groundedopinion and shall determine whether its terms arereasonably appropriate with regard to ordinary andcustomary market conditions.The term to issue such opinion is 5 (five) calendar days. Ifthe Board of Directors deems it necessary, it can requestthe opinion be issued by independent audit firms. In casethe Audit Committee or else the independent audit firmbelieves the transaction conditions are not consideredreasonably appropriate with regard to the market, underconsideration by the Board of Directors, the transactionshall be subject to the prior approval by the Shareholders'Meeting. If the transaction conditions are consideredreasonably appropriate with regard to ordinary andcustomary market conditions, the Board of Directorssubmits the issue for its approval and discloses the decisionin minutes, indicating each Director’s vote. The report ofthe Audit Committee and, if applicable, the reports ofindependent audit firms, are made available for theconsideration of shareholders at the Company’s registeredoffice, on the next business day after the correspondingdecision of the Board of Directors has been adopted. This isinformed to shareholders through the Financial InformationHighway (AIF as per its initials in Spanish) of the NationalSecurities Commission and the Market's Gazette.

Since it is a holding company, whose activity involvesmanaging its equity investments, assets and resources, ithas a limited personnel structure, what eases theidentification, control and solving of possible conflicts ofinterest.In this regard, Grupo Financiero Galicia’s Code of Ethicssets forth that all the Company’s employees are responsiblefor avoiding acting on behalf of the Company in situationswhere the employee and/or a close relative has any kind ofpersonal interest, and/or using the Company nameimproperly, and/or accepting any kind of favors from anyindividual or entity with which Grupo Financiero Galicia atpresent has or will have in the future a businessrelationship, and/or taking personal advantage from anybusiness opportunity in which Grupo Financiero Galicia

x

COMPLIANCE NONCOMPLIANCE(1)

REPORT(2) OR EXPLAIN (3)

TOTAL(1) PARTIAL(1)


Recommendation I.3: Prevent the misuse of inside information.

Please answer if:Notwithstanding the regulations in force,the Issuer has policies and mechanismsthat prevent the misuse of insideinformation by the members of the

x Grupo Financiero Galicia has staff in charge of InvestorRelations, and the individuals who perform this functionare in no case authorized to provide information that mayplace the person who requests such information in aprivileged or advantageous position in comparison to theother shareholders or investors. In this regard, the Code of Ethics provides for that noaccounting information that has not been already disclosed

was involved, and/or providing any of Grupo FinancieroGalicia’s competitors with any kind of assistance for thebenefit of its commercial activity. In the event any conflictof interest arises due to employment reasons or of anyother kind, the Company’s employees shall immediatelyreport the situation to the person in charge of the AuditCommittee. Company’s employees shall not performbusiness or professional activities at the same time as andsimilar to those ones carried out for Grupo FinancieroGalicia, which in any way may compete with any of theCompany’s businesses. Those Company’s employees whohave any influence on Grupo Financiero Galicia’s businessdecisions, or any such employee’s close relative shall nothave a significant financial interest; for example, as ashareholder or administrator, in any of Grupo FinancieroGalicia’s suppliers, without the prior written consent by theCompany’s Board of Directors. In the event any employeeor such employee’s close relative has any significantfinancial interest in any of Grupo Financiero Galicia’scompetitors, such employee shall report the situation to theperson in charge of the Audit Committee. Company’sexecutive officers, managers, professionals and technicianswho have undertaken any activity other than the oneperformed at Grupo Financiero Galicia shall fully informabout said activity to the person in charge of the AuditCommittee. Company’s employees shall not carry out civicor political activities during business hours that may causeany conflict of interests, since this may be understood asGrupo Financiero Galicia’s participation in such activities.Pursuant to what is set forth in its rules and regulations, theAudit Committee shall intervene in cases of transactionswhere there are or may be conflicts of interests regardingmembers of the Company's governing bodies or controllingshareholders and, if applicable pursuant to the regulationsin force, shall submit the market the pertinent informationin due time.



TOTAL(1) PARTIAL(1)

Describe the most significant aspectsthereof.


Management Body, first-line managersand syndics and/or members of theOversight Committee, controllingshareholders or shareholders that have amaterial influence on the Issuer,professionals that take part and the rest ofthe individuals mentioned in Sections 7and 33 of Decree No. 677/01.Describe the most significant aspectsthereof.

to the public as regards Grupo Financiero Galicia or itsaffiliates shall be released without the prior writtenapproval by Grupo Financiero Galicia’s Chief Financial andAccounting Officer. Also, employees are not allowed toinform or use confidential information obtained whilehe/she works for Grupo Financiero Galicia for his/her ownbenefit or for third parties’ benefit, such as trading GrupoFinanciero Galicia’s securities or securities of its potentialcommercial associates. Customers of Grupo FinancieroGalicia’s related companies rely on the fact that theirpersonal information was exclusively obtained withcommercial purposes. Consequently, employees shalladopt the necessary measures to ensure confidentiality,integrity and availability of such data and information. Thiscomprises identification of such data that have to beprotected, adequate levels of protection for such data, andaccess to such protected data only by those people whomust use them to perform their functions. Any employeewho has any information due to his/her position or activitywith respect to a Company’s performance or businessessubject to a public offering of securities, which has notbeen disclosed to the market and that may affect in anyway such securities’ price, or that may affect tradingtransactions and negotiation of such securities, shall bestrictly reserved about that information. Grupo FinancieroGalicia’s employees or those people hired by GrupoFinanciero Galicia, such as the cases of external audit orconsulting services, shall refrain from using confidentialinformation for their own benefit or for third parties’benefit. Any employee shall be responsible for managingcarefully access passwords, and under no circumstancehe/she is allowed to inform them. Furthermore, employeesshall refrain from informing confidential information toanother person who then acquires or sells Grupo FinancieroGalicia’s securities, including put or call options on suchsecurities and/or trading securities from any otherCompany whose value could be affected by GrupoFinanciero Galicia’s measures that have not been releasedto the public yet, as well as put or call options on suchsecurities.



TOTAL(1) PARTIAL(1)


PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE ISSUER

Recommendation II.1: Ensure that the Management Bodyassumes the management and supervisionof the Issuer and its strategic orientation.

Please answer if:II.1.1 The Management Body approves:

II.1.1.1 The strategic or business plan, aswell as the annual management goals andbudgets;

x

x

The Board of Directors approves the annual budget andmonitors compliance therewith. Furthermore, in its capacityas a holding company, Grupo Financiero Galicia receives thebusiness plans of the controlled companies and prepares aconsolidated business plan taking into consideration thegoals set, the business condition and the budgets submitted.

With regard to the requirements, we inform the following:

II.1.1.2 The policy on investments (infinancial assets and capital goods), andfinancing;

x The policy on investments (in financial assets and capitalgoods) and financing is approved by the Board of Directors.

II.1.1.3 The policy on corporategovernance (compliance with the Code onCorporate Governance);

Grupo Financiero Galicia monitors the application of thecorporate governance policies provided for by theregulations in force through the Audit Committee and theDisclosure Committee. There also exist matrices speciallydesigned for the verification of certain aspects such asinternal controls, independence of directors and regulatoryupdating.

x

II.1.1.4 Policy to select, assess andcompensate first-line managers;

The policy to select, assess and compensate first-linemanagers is defined and approved by the Board of Directors.

x

II.1.1.5 Policy to assign responsibilities tofirst-line managers;

x The policy to assign responsibilities to first-line managersis approved and monitored by the Board of Directors,which sets the guidelines thereof.

II.1.1.6 Monitoring of succession plans offirst-line managers;

x The monitoring of succession plans of first-line managers isthe responsibility of the Board of Directors. Taking intoconsideration the limited personnel structure of the Issuer,such plans are drawn up on an individual basis.



TOTAL(1) PARTIAL(1)


II.1.1.8 Policy on comprehensive riskmanagement and internal control, andfraud prevention;

x The policies on risk management control, as well as anyother which purpose is to monitor internal informationand control systems, are defined within the framework ofeach of the affiliated operating companies. Nonetheless,and in addition to that, the Audit Committee and theDisclosure Committee monitor the actions taken by themain controlled companies.

II.1.1.7 Policy on corporate socialresponsibility;

x

II.1.1.9 Policy on ongoing training for themembers of the Management Body andfirst-class managers;If the Company has these policies,describe the most significant aspectsthereof.

x Training of directors and managers, obviously to anextent that cannot be compared to what is required in thecase of operating companies, is carried out pursuant towhat the Board of Directors deems necessary.

The policies on corporate social responsibility are definedand carried out by each of the operating companies.

II.1.2 If deemed important, include otherpolicies applied by the Management Bodythat have not been mentioned before, andspecify the main aspects thereof.

---- ---- ---- --------------------------------

II.1.3 The Issuer has a policy intended forensuring the availability of materialinformation for the Management Body’sdecision-making, and a direct consultationway for managerial staff, in a symmetricmanner for all of its members (executive,external and independent) and inadvance, that allows the appropriateanalysis of its contents. Specify.

x The material information for the Board of Directors’decision-making is put at the disposal of all of its membersfor their consideration, in advance for the detailed analysisthereof, with changes in the term pursuant to the scope andcomplexity of such information. The Managing Director andthe Chief Financial and Accounting Officer are at thedisposal of the directors to answer questions related to theduties assigned to them, or else to the reports prepared bythem. They even take part in the meetings convened bydirectors in order to answer questions that could be raisedwhen dealing with issues they are responsible for.

II.1.4 Matters submitted for theManagement Body's consideration areaccompanied by an analysis of the risksassociated with the decisions that couldbe adopted, taking into considerationthe business risk level considered

x The Board of Directors fully complies with the requirementof having updated policies on risk control and management,in line with the best practices. The tasks related to riskinformation and internal control of each of the controlledcompanies are defined and carried out, rigorously, in eachof them. This is particularly strict in the main controlled



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II.2.1 Compliance with the annual budgetand business plan;

acceptable by the Issuer. Specify.

x The Board of Directors approves the annual budget andmonitors compliance therewith. Furthermore, in itscapacity as a holding company, Grupo Financiero Galiciareceives the business plans of the controlled companiesand prepares a consolidated business plan taking intoconsideration the goals set, the business condition andthe budgets submitted.

II.2.2 The first-line managers’performance and their compliance withthe goals assigned to them (the level ofintended profits versus the level ofprofits achieved, financial rating,accounting reporting quality, marketshare, etc.).Describe the most significant aspects ofthe Issuer’s Management Control policy,providing details of the methods usedand the frequency of the monitoringcarried out by the Management Body.

x The Board of Directors strictly complies with the verificationof the implementation of strategies and policies, and ofcompliance with the budget and operations plan, apartfrom monitoring, on a monthly basis, the divisions in all theaspects provided for in the regulations.

company, Banco Galicia, where the requirements to becomplied with are stringent as it is a financial institutionregulated by the Argentine Central Bank. Apart from theapplicable domestic regulations, Grupo Financiero Galicia,in its capacity as a listed company on the markets of theUnited States of America, complies with the certification ofits internal controls pursuant to Section 404 of the SarbanesOxley Act (SOX). Corporate risk management is monitoredby the Audit Committee, which as well gathers and analyzesthe information submitted by the main controlledcompanies.

Recommendation II.3: Report the Management Body’sperformance evaluation process and therelated impact.

Recommendation II.2: Ensure an effective business managementcontrol.

Please answer if:The Management Body verifies:



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Grupo Financiero Galicia’s directors strictly comply with theduties and responsibilities imposed on them by theCorporate Bylaws. In addition, all resolutions from the Boardof Directors are adopted pursuant to the Issuer’s corporateinterest.

II.3.2 The Management Body disclosesthe results of its performance consideringthe goals set at the beginning of theperiod, so that the shareholders mayassess the degree of compliance withsuch goals, which contemplate bothfinancial and non-financial aspects.Furthermore, the Management Bodysubmits a diagnosis about the degree ofcompliance with the policies mentionedin Recommendation II, points II.1.1 andII.1.2. Specify the main aspects coveredby the assessment conducted by theGeneral Shareholders' Meeting on theManagement Body’s compliance withthe goals set and the policies mentionedin Recommendation II, points II.1.1 andII.1.2, mentioning the date of theShareholders’ Meeting where suchassessment was disclosed.

x Pursuant to the legal structure of corporations inArgentina, the Board of Directors can only explain itsperformance in order that other bodies are able to assessit (the Supervisory Syndics’ Committee or the OversightCommittee as bodies in charge of supervising thecorporate management, or else the Shareholders’Meeting, senior body with power to decide on the issue).This is such in Argentine law that the GeneralCorporations Law expressly prohibits in Section 241 thatdirectors who are shareholders take part in the votingregarding their performance and responsibility. For thatreason, Grupo Financiero Galicia’s Board of Directorsprovides thorough explanations in its Annual Report andanswers all the questions asked at the Shareholders'Meeting, but it refrains from expressing an opinion on itsperformance in any form whatsoever. The assessment isconducted by shareholders at the Shareholders’ Meeting,taking as well into consideration the informed opinion ofthe Supervisory Syndics’ Committee (Grupo FinancieroGalicia does not have an Oversight Committee).

II.3.1 Each member of the ManagementBody complies with the Corporate Bylawsand, as the case may be, with theRegulations governing the ManagementBody’s operation. Specify the mainguidelines set out in the Regulations.State the degree of compliance with theCorporate Bylaws and Regulations.

x

Grupo Financiero Galicia complies with the appropriatestandards regarding total number of directors, as well asnumber of independent directors. Its bylaws provide for the

II.4.1 The proportion of executive,external and independent members (thelatter defined by the regulations of this

x

Please answer if:

Recommendation II.4: That the number of external andindependent members represents asignificant proportion in the Issuer’sManagement Body.

Please answer if:



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Commission) of the Management Bodycorresponds with the Issuer’s capitalstructure. Specify.

x flexibility necessary to adapt the number of members to thepossible variation of the conditions in which the companycarries out its activities. Generally, there are between threeand nine directors, as determined by the Shareholders’Meeting in each opportunity. The Shareholders' Meeting canalso appoint alternate directors up to a maximum that shallbe equal to the number of regular directors appointed. Inorder to guarantee the continuous performance of itscorporate business, the Board of Directors can be renewedpartially, as long as the number of candidates proposed isenough so that shareholders may exercise their cumulativevoting right. The drawing-up of the corresponding bylawshas been adopted in recent years, after careful studies hadbeen carried out for the good performance of the body.

x The policy on the appointment of directors, bothindependent and not independent, is the responsibility ofthe Shareholders’ Meeting. Grupo Financiero Galicia’sBoard of Directors does not take part in such decisions asits members have no decision-making power at theShareholders’ Meeting. At Shareholders’ Meetings, theone who proposes the appointment of candidates fordirectors (the same happens with syndics) tells whethercandidates are for one or the other category. At present,of the eight directors that form the Board of Directors, fiveare not independent and three are independent. Withregard to the independence of the members of the Boardof Directors, no challenges have taken place during thelast year.

II.4.2 During the current year, through aGeneral Shareholders’ Meeting, theshareholders agreed on a policy aimed athaving a proportion of at least 20% ofindependent members of total membersof the Management Body. Describe the most significant aspects ofsuch policy and of any shareholders’agreement that allows understandinghow the members of the ManagementBody are appointed and during whichterm. State whether the independence ofthe members of the Management Bodyhas been challenged during the year andwhether there have been abstentions dueto conflicts of interests.

Recommendation II.5: Agree on the existence of standards andprocedures inherent to the selection andproposal of members of theManagement Body and first-linemanagers.

Please answer if:



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II.5.1.1 Made up of at least threemembers of the Management Body,mostly independent ones;

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II.5.1 The Issuer has an AppointmentCommittee:

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II.5.1.2 Chaired by an independentmember of the Management Body;

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II.5.1.3 That has members who prove tohave adequate skills and experience inhuman resources policies-related matters;

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II.5.1.4 That meets at least twice a year; ---------------------------------------------- ---- ----

II.5.1.5 Whose decisions are notnecessarily binding for the GeneralShareholders’ Meeting, but forconsultation purposes as regards theappointment of the members of theManagement Body.

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Grupo Financiero Galicia understands that, within theframework of the legal structure in Argentina and marketreality, it is not appropriate to create such a committee withthe duties mentioned in this item. It should be noted that,unlike other legislations, under Argentine law theShareholders’ Meeting has the exclusive power to appointdirectors. Therefore, the recommendations regarding such aCommittee would not be binding and could be evenabstract.With regard to the appointment of first-line managers, theBoard of Directors considers it is not convenient to create anAppointment Committee due to the reduced size of thecompany, as was mentioned before.

II.5.2 If there is an AppointmentCommittee, it:

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II.5.2.1. Verifies the annual review andassessment of its regulations andsuggests to the Management Body themodifications necessary for its approval;

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II.5.2.3 Identifies candidates formembers of the Management Body to beproposed by the Committee to theGeneral Shareholders’ Meeting;

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------------------------------------------II.5.2.2 Suggests the development ofcriteria (skills, experience, professionaland ethical reputation, among others) forthe appointment of new members of theManagement Body and first-linemanagers;

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II.5.2.4 Suggests members of theManagement Body that shall take part inthe different committees of theManagement Body pursuant to theirbackground;

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II.5.2.5 Recommends that the Chairmanof the Board of Directors is not also theIssuer’s Managing Director;

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II.5.2.6 Ensures the availability ofresumes of the members of theManagement Body and first-classmanagers on the Issuer's website, wherethe duration of the members of theManagement Body’s office is specified;

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II.5.2.7 Verifies the existence of asuccession plan of the Management Bodyand of first-line managers.

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II.5.3 If considered important, includepolicies implemented by the Issuer’sAppointment Committee that have notbeen mentioned in the preceding point.

------------------------------------------

The Board of Directors is required to analyze whether it isconvenient that directors and/or syndics perform duties atother institutions, or else it is irrelevant. This issue has beenanalyzed by Grupo Financiero Galicia repeatedly. Due to thefact that directors do not carry out full-time duties, and it isenriching that they be acquainted with the Board dynamics

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Recommendation II.6: Assess whether it is advisable formembers of the Management Bodyand/or syndics and/or members of theOversight Committee to perform dutiesat several Issuers.

x



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Please answer if:The Issuer sets a limit for the members ofthe Management Body and/or syndicsand/or members of the OversightCommittee with regard to theperformance of duties at other institutionsthat do not belong to the economic groupheaded by the Issuer and/or of which it isa member. Specify such limit and describewhether any violation to such limit tookplace during the year.

in other companies; limiting the number of institutionswhere they can be members of the Board of Directors is notdeemed convenient.

As regards this item, the Board of Directors shall establishan ongoing training program for its members and for themanagement officers. Grupo Financiero Galicia, as anexclusively holding company, does not need to implementand have such a program as operating companies do.Notwithstanding the foregoing, the Board of Directorsanalyzes the specific needs on the issue.

Recommendation II.7: Ensure the training and development ofmembers of the Management Body andfirst-line managers of the Issuer.

Please answer if:

xII.7.1 The Issuer has ongoing TrainingPrograms related to the existing needs ofthe Issuer for the members of theManagement Body and first-linemanagers, which include matters abouttheir roles and responsibilities, thecomprehensive business risk management,specific business knowledge and therelated regulations, the dynamics ofcorporate governance and corporatesocial responsibility matters. In the caseof the members of the Audit Committee,international accounting, auditing andinternal control standards, as well asspecific capital market regulations. Describe the programs carried out duringthe year and the degree of compliancetherewith.

The Issuer has no other alternative means to encouragemembers of the Board of Directors and first-line managersto be trained, as it does not deem it necessary.

II.7.2 The Issuer, through other meansnot mentioned in II.7.1, encourages themembers of the Management Body andfirst-line managers to be constantlytrained so as to supplement their

---- ---- ----



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education level, thus adding value to theIssuer. State how this is done.

Recommendation III: The Management Body shall have a policyon the comprehensive business riskmanagement and monitors itsappropriate implementation.

Please answer if:

x The tasks related to risk information and internal controlof each of the controlled companies are defined andcarried out, rigorously, in each of them. This is particularlystrict in the main controlled company, Banco de Galicia yBuenos Aires S.A., where the requirements to be compliedwith are stringent as it is a financial institution regulatedby the Argentine Central Bank. Corporate riskmanagement is monitored by the Audit Committee, whichas well gathers and analyzes the information submittedby the main controlled companies.The Audit Committee also supervises the divisions withregard to all aspects related to risk management.

III.2 There is a Risk ManagementCommittee inside the ManagementBody or General Division. Report on theexistence of manuals of procedures anddetail the main risk factors that arespecific to the Issuer or its activity andthe mitigation actions implemented. Ifthere is not such a Committee, the riskmanagement supervision role performedby the Audit Committee shall bedescribed. Also, specify the degree ofinteraction between the ManagementBody or its committees and the Issuer’sGeneral Division in relation to thecomprehensive business risk ma-nagement.

PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND DISCLOSE THEBUSINESS RISK

x The Board of Directors fully complies with therequirement of having updated policies on risk controland management, in line with the best practices.

III.1 The Issuer has policies oncomprehensive business risk (oncompliance with strategic, operating,financial, accounting reporting, laws andregulations goals, among others).Describe the most significant aspectsthereof.



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x Grupo Financiero Galicia’s Managing Director implementsthe risk management policies established by the Board ofDirectors, under the supervision of the Audit Committee.

III.3 There is an independent functionwithin the Issuer’s General Division thatimplements the comprehensive riskmanagement policies (Risk ManagementOfficer function or equivalent one).Specify.

x Apart from the applicable domestic regulations, GrupoFinanciero Galicia, in its capacity as a listed company onthe markets of the United States of America, complieswith the certification of its internal controls pursuant toSection 404 of the Sarbanes Oxley Act (SOX).

III.4 Comprehensive risk managementpolicies are permanently updated accordingto authoritative recommendations andmethodologies in the field. State which.

x Grupo Financiero Galicia’s Board of Directors reports,through a note to its consolidated financial statements,the tasks carried out to monitor risk management. Themain aspects dealt with are the following: financial risks,liquidity, currency risk, interest rate risk, market risk, crossborder risk, transfer risk, exposure to the non-financialpublic sector, credit risk, operational risk, securitizationrisk, concentration risk, reputational risk, strategic riskand risk regarding asset laundering, terrorism financingand other illegal activities.

III.5 The Management Body reports theresults of monitoring the riskmanagement performed jointly with theGeneral Division in the financialstatements and the Annual Report.Specify the main aspects of the abovedisclosures.

x The Audit Committee is formed by three directors, all ofwhom are independent directors. The Committee ischaired by an independent director.

IV.1 The Management Body, whenappointing the members of the AuditCommittee, considering that most ofthem shall be independent, assesseswhether it is advisable to be chaired byan independent member.

PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT AUDITS

Recommendation IV: Ensure the independence andtransparency of the duties the AuditCommittee and the External Auditor areentrusted with.

Please answer if:



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IV.3 The members of the AuditCommittee annually assess the suitability,independence and performance of theexternal Auditors appointed by theShareholders' Meeting. Describe thesignificant aspects of the procedures usedto perform the assessment.

x The Audit Committee carries out an annual assessment ofthe independence, work plans and performance ofexternal auditors, through the analysis of the differentservices rendered, the reports issued, interviews carriedout, correspondence sent and received and reading of thedocumentation requested by the Committee. Additionally,and in compliance with the provisions set forth in theregulations in force, the Audit Committee annually fileswith the National Securities Commission a report on theBoard of Directors’ proposals for the appointment ofexternal auditors and the compensation for directors, foreach fiscal year.

IV.4 The Issuer has a policy on theturnover of the members of theSupervisory Committee and/or theExternal Auditor, and, in the case of thelatter, if turnover includes the externalaudit form or only natural persons.

x As regards syndics, the conclusion of the analysis is thatsuch rotation is neither useful nor convenient, mainly dueto the complexity of businesses to be controlled and thelengthy period of time it would take a person acting assyndic for the first time to start to understand suchbusinesses. In connection with External Auditors, the

IV.2 There is an internal audit functionthat reports to the Audit Committee orthe Management Body’s Chairperson andthat is responsible for assessing theinternal control system.State whether the Audit Committee orthe Management Body annually assessesthe performance of the internal auditarea and the degree of independence ofits professional work, understanding assuch that the professionals in charge ofsuch function are independent from theother operating areas and meetindependence requirements with respectto the controlling shareholders or relatedentities that have a material influence onthe Issuer. Also specify whether the internal auditfunction performs its work in conformitywith the International Standards for theProfessional Practice of Internal Auditingissued by the Institute of InternalAuditors (IIA).

The Audit Committee conducts an annual assessment ofthe plans and performance of internal auditors,outsourced from Banco Galicia, through the analysis oftheir Methodology and Annual Work Plan, meetings andreports issued.In addition, it assesses the internal controls currently inforce at the Company and its main subsidiaries, and alsoit observes the requirements set forth in Section 404 ofthe U.S. Sarbanes-Oxley Act, — and the relatedadministrative/accounting system — through the analysisof the reports issued by both internal and externalauditors and the Supervisory Syndics’ Committee, theanalysis of the Company’s compliance with thecertifications required by Sections 302 and 906 of the U.S.Sarbanes-Oxley Act, performed by the Company’sDisclosure Committee, as well as the interviews andclarifications made by the subsidiaries’ officers.

x



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following are applicable: Capital Markets Law, theamended regulations of the National SecuritiesCommission (Text amended in 2013), the regulationsapplicable to external auditors’ firms of issuing companiesregistered in the United States of America (SecuritiesExchange Act of 1934, Section 10-A, Paragraph j. on“Audit Partner Rotation”; Sarbanes-Oxley Act of 2002,Title II, Section 203. “Audit Partner Rotation”; and theCode of Federal Regulations, Title 17, Chapter II, Section210.2-01, paragraph (c)(6) of the Securities and ExchangeCommission), and the best practices existing in the area. Also, as established by General Resolution No. 639/2015of the National Securities Commission, the Company’sExtraordinary Shareholders’ Meeting held on September8, 2015 approved the extension of the maximum three-year term in which Price Waterhouse & Co. S.R.L. willconduct the audit work, in accordance with the provisionsset out in Section 28 of Chapter III of Title II of theregulations (Text amended in 2013, as amended) for fiscalyears 2016, 2017 and 2018. Such decision was backed bythe Audit Committee’s favorable opinion, according to thereport issued on August 4, 2015.

x Grupo Financiero Galicia presents its financial statementsto the National Securities Commission, the Buenos AiresStock Exchange, the Córdoba Stock Exchange, MAE,Nasdaq and the U.S. Securities and ExchangeCommission. In addition, financial statements arepublished on the Company’s website, where shareholdersmay subscribe to the “E-Mail Alerts” system, whichallows them to be updated through e-mail regarding allpublications of financial statements, documents and

x One of the issues related to Grupo Financiero GaliciaS.A.'s policy on the transparency of information submittedto shareholders is that, apart from Grupo FinancieroGalicia’s managers and executives, officers from all thecompanies that form the holding group, particularlyBanco de Galicia y Buenos Aires, attend the Shareholders’Meetings, with the purpose of answering questions thatmay be raised by shareholders.

V.1.1 The Management Body fostersperiodic informative meetings with theshareholders, which take place at thesame time with the presentation of theinterim financial statements. Specifystating the number and frequency ofmeetings held in the course of the year.

PRINCIPLE V. RESPECT THE SHAREHOLDERS’ RIGHTS

Recommendation V.1: Ensure that the shareholders have accessto the Issuer’s information.

Please answer if:



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Recommendation V.2: Encourage the active participation of allshareholders.

Please answer if:

V.2.1 The Management Body takesmeasures to encourage the participationof all the shareholders at the GeneralShareholders’ Meetings. Specify bydifferentiating the measures required bylaw from those voluntarily offered by theIssuer to its shareholders.

x In order to invite shareholders to the General Shareholders'Meetings, the company makes publications at the OfficialGazette, La Nación newspaper, the Buenos Aires StockExchange, Mercado Abierto Electrónico (MAE), CordobaStock Exchange, the National Securities Commission,Nasdaq and the U.S. Securities and Exchange Commission. In this regard, it seems it is not necessary to offer additionalincentives aimed at promoting attendance to Shareholders’Meetings, because during recent years attendance has beenapproximately 75% of the capital stock, percentageconsidered a very significant participation for a publiccompany.

Grupo Financiero Galicia has staff in charge of InvestorRelations. This department holds meetings and carries outconference calls with shareholders and holders of othersecurities, in which a director or senior officerparticipates. This department is also available to answerany questions from shareholders and investors. It isimportant to point out that the individuals who performthis function are in no case authorized to provideinformation that may place the person who requests suchinformation in a privileged or advantageous position incomparison to the other shareholders or investors.In addition, the company has its own website(www.gfgsa.com) at the disposal of its shareholders. Thiswebsite can be freely accessed and is permanentlyupdated. This website is in line with the regulations inforce; and legal, accounting, statutory and regulatoryinformation required is available for the public. Thewebsite also has a channel for queries.

xV.1.2 The Issuer has mechanisms forreporting to investors and a specializedarea to answer inquiries. It also has awebsite, which may be accessed byshareholders and other investors andwhich allows an access channel for themto establish contact between them.Specify.

significant events. Informative meetings are held everytime an investor, or a group of investors, so requires.



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V.2.3 The mechanisms implemented bythe Issuer are applicable so that theminority shareholders propose matters tobe discussed at the General Shareholders’Meeting, in conformity with theprovisions set out in effective regulations.Specify the results.

x Since its creation, Grupo Financiero Galicia has constantlyshown respect for the rights of shareholders. That is whyGeneral Shareholders’ Meetings are convened and held instrict compliance with the procedures set forth by theGeneral Corporations Law, the Capital Markets Law, theregulations set forth by the National Securities Commission,the regulations of the stock exchanges on which its sharesare listed and the Corporate Bylaws. The procedure forminority shareholders to exercise their right to include itemsin the agenda at Shareholders' Meetings is regulated withinsuch legal and statutory framework. Furthermore, thecompany is controlled by representatives of the NationalSecurities Commission and the stock exchanges, whichverify whether the call for Shareholders’ Meetings and theholding thereof are carried out appropriately.

V.2.4 The Issuer has policies toencourage the participation of the mostsignificant shareholders, such asinstitutional investors. Specify.

Grupo Financiero Galicia has no policies to encourage theparticipation of institutional shareholders, since it believesthey are not necessary. The percentage of attendance andparticipation has been very high during the last years.

V.2.5 At the Shareholders’ Meetings,where members of the ManagementBody are proposed, the following isinformed prior to voting: (i) eachcandidate’s position regarding whetherto adopt or not a Code on CorporateGovernance; and (ii) the grounds for suchposition.

The Code on Corporate Governance is discussed andapproved by Grupo Financiero Galicia's Board of Directors,for its inclusion in the Annual Report for each fiscal year.Consequently, its members agree with its contents andratify such adherence expressly, through the approvalrecorded in minutes. To date, there have not been cases inwhich a director of the company adopted a positiondifferent and/or contrary to the adoption of the Code.

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xRecommendation V.3: Ensure the principle of equity betweenshare and vote.

Please answer if:The Issuer has a policy that promotes theprinciple of equity between share andvote. State how the composition of

Grupo Financiero Galicia has a capital stock of $1,300,264,597, divided into two classes of book-entryshares, Class “A” shares, with a face value of $ 1 eachand entitled to 5 votes per share, and Class “B” shares,with a face value of $ 1 each and entitled to 1 vote pershare. In agreement with the regulations set forth by theLaw and by the Bylaws, each class of shares grants theholders thereof the same rights.

V.2.2 The General Shareholders' Meetinghas Regulations to govern its operations,which ensure that the information isavailable well in advance for decision-making. Describe the main guidelinesthereof.

Grupo Financiero Galicia believes the availability ofinformation for decision-making at Shareholders’ Meetings,on the part of shareholders, is duly regulated by the GeneralCorporations Law, the Capital Markets Law and theregulations set forth by the National Securities Commission.

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Recommendation V.4: Establish mechanisms of protection for allshareholders against takeovers.

Please answer if:The Issuer adheres to the system for themandatory acquisition of shares in apublic offering. Otherwise, specifywhether there are other alternativesystems, provided for by the Bylaws,such as tag along or others.

Once Capital Markets Law No. 26831 has becomeeffective, Grupo Financiero Galicia S.A. has beencomprised in the public offering system for acquisitionand the system of residual equity interests.

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Recommendation V.5: Increase the percentage of outstandingshares on capital.

Please answer if:The Issuer has a dispersed shareownership of at least 20% for its ordinaryshares. Otherwise, the Issuer has a policyfor the increase of its dispersed shareownership in the market.State which is the Issuer’s percentage ofdispersed share ownership as apercentage of capital stock and how it haschanged during the last three years.

Grupo Financiero Galicia has a capital stock of $1,300,264,597, divided into two classes of book-entryshares, Class “A” shares, with a face value of $ 1 eachand entitled to 5 votes per share, and Class “B” shares,with a face value of $ 1 each and entitled to 1 vote pershare. In agreement with the regulations set forth by theLaw and by the Bylaws, each class of shares grants theholders thereof the same rights. The company’s equitystructure is made up of 21.63% Class "A" shares,43.58% Class "B" shares and 34.79% ADRs (certificatesof deposit of Class "B” shares). Furthermore, somethingworth noting is that Class "B" shares are authorized tobe listed on the Buenos Aires Stock Exchange, CórdobaStock Exchange, Mercado Abierto Electrónico (MAE) andNasdaq of the United States of America (through ADRs).

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Recommendation V.6: Ensure that there is a transparent policyon dividends.

Please answer if:

xV.6.1 The Issuer has a policy on thedistribution of dividends provided in theCorporate Bylaws and approved by theShareholders' Meeting. Such policyestablishes the conditions to distributecash dividends or shares. If there is such

Grupo Financiero Galicia’s policy for the distribution ofdividends envisages, among other factors, the obligatorynature of establishing a legal reserve, the company’sfinancial condition and its indebtedness, the businessrequirements of affiliated companies, the regulationsthey are subject to and, mainly, that the profits recorded

outstanding shares has been changingduring the last three years.



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x

in the financial statements are, to a great extent, incomefrom holdings and not realized and liquid profits, arequirement of Section 68 of the General CorporationsLaw so that it is possible to distribute them as dividends.The proposal to distribute dividends arising from suchanalysis has to be approved at the Shareholders'Meeting that discusses the Financial Statementscorresponding to each fiscal year.

V.6.2 The Issuer has documentedprocesses to prepare the proposal forallocation of the Issuer’s UnappropriatedRetained Earnings that result in legal,statutory and voluntary reserves, carryforwards to new fiscal year and/orpayment of dividends. Specify those processes and detail theMinutes of the General Shareholders’Meeting whereby the distribution ofdividends (in cash or shares) was or wasnot approved, if this is not provided in theCorporate Bylaws.

In the Annual Report to the Financial Statements, GrupoFinanciero Galicia’s Board of Directors informs shareholdersabout the balances corresponding to Capital, CapitalAdjustment and Premium for Trading of Shares in OwnPortfolio, and makes a proposal for the distribution ofprofits, where the amount allocated to the distribution ofdividends in cash is indicated.

x As informed in Principle V, Recommendation 1.2, theCompany has its own website (www.gfgsa.com) at thedisposal of its shareholders. This website can be freelyaccessed and is permanently updated. This website is inline with the regulations in force; and legal, accounting,statutory and regulatory information is available for thepublic. Furthermore, it has a channel of directcommunication with the Company, where any interestedparty can raise its concerns, which are received and dealtwith by Grupo Financiero Galicia.

VI.1 The Issuer has an updated websiteof public access, which does not onlyfurnish material information of theCompany (Corporate Bylaws, group,members of the Management Body,financial statements, Annual Report,among others), but it also gathersinquiries of users in general.

PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE COMMUNITY

Recommendation VI: Provide the community with the disclosureof matters relating to the Issuer and achannel of direct communication with theCompany.

Please answer if:

a policy, state the criteria, frequency andconditions that shall be met for thepayment of dividends.



TOTAL(1) PARTIAL(1)


VI.2 The Issuer issues an annualCorporate Social Responsibility Report,which is verified by an independentExternal Auditor. If any, state the legal orgeographic scope or coverage thereofand where it is available. Specify thestandards or initiatives adopted to carryout its policy on corporate socialresponsibility (Global Reporting Initiativeand/or the Global United NationsCompact, ISO 26000, SA8000,Development Goals for the Millennium,SGE 21-Foretica, AA 1000, EquatorPrinciples, among others).

---- ---- ---- Grupo Financiero Galicia has a reduced structure since itis a holding company of a group, which main asset is thecontrolling equity interest in Banco de Galicia, whichcurrently represents 100% of Banco Galicia’s capitalstock. Consequently, the reports that account for theCorporate Social and Environmental Responsibility areprepared by Banco de Galicia, which has alreadypublished its tenth Sustainability Report, through whichthe Bank’s strategy and management are disclosed,taking into consideration its three areas: economic, socialand environmental performance.This report is of great importance for the Bank since it isa tool that allows the Bank to document annualperformance and communicate progress and aspects tobe improved and meet the expectations of stakeholderswith which the Bank interacts, in a structured andongoing manner. The report’s intention is that readers beable to know the company’s policies, practices andprograms thanks to a clear reading, with quantitativeinformation of interest that leaves readers to reflect onthe importance of social players’ responsible contributionto sustainable development.Since 2007, internationally widely renowned guidelinesand standards are applied to prepare this report: Theguidelines of the Social Balance of the IBASE for thesystematization of results with an economic value, theAA1000SES Accountability standard as a basis for thedialogue with stakeholders, the ISO 26000 standard onSocial Responsibility, the communication on progress(COP) requirement with the commitment to the tenprinciples of the United Nations Global Compact and theG4 Global Reporting Initiative (GRI) guidelines with theSector Supplement for Financial Services. In regard to thislast tool, the Sustainability Report complies with the “Inaccordance” criteria and the Comprehensive option.The Sustainability Report is audited by PwC externalauditors and checked by the GRI organization through the“Content Index Service”. Since 2007, the Bank hasadhered to the Equator Principles and since 2014 anduntil December 2015, it forms part of the ExecutiveSecretariat of the Global Compact Network Argentina.



TOTAL(1) PARTIAL(1)


Grupo Financiero Galicia has no CompensationCommittee, and the Board of Directors considers it is notconvenient to create one due to the reduced size of thecompany. Due to its nature, such a committee is commonin big organizations.

VII.1 The Issuer has a CompensationCommittee:

----------------------------------------VII.1.1Made up of at least three membersof the Management Body, mostlyindependent ones;

PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY

Recommendation VII: Establish clear policies on thecompensation of the members of theManagement Body and first-linemanagers, with special focus onestablishing conventional or statutorylimitations based on the existence orinexistence of profits.

Please answer if:

---- ---- ----

---- ---- ----

----------------------------------------VII.1.2 Chaired by an independentmember of the Management Body;

---- ---- ----

----------------------------------------VII.1.3 That has members who prove tohave adequate skills and experience inhuman resources policies-relatedmatters;

---- ---- ----

----------------------------------------VII.1.4 That meets at least twice a year; ---- ---- ----

----------------------------------------VII.1.5 Whose decisions are notnecessarily binding for the GeneralShareholders’ Meeting or for theOversight Committee, but forconsultation purposes as regards thecompensation of the members of theManagement Body.

---- ---- ----

----------------------------------------VII.2 If there is a CompensationCommittee, it:

---- ---- ----



TOTAL(1) PARTIAL(1)


----------------------------------------VII.2.1 Ensures the existence of a clearrelation between performance of the keymembers of staff and their fixedcompensation and variable compensation,taking into consideration the risksundertaken and the management thereof;

---- ---- ----

----------------------------------------VII.2.2 Controls that the variable portionof the compensation of the members ofthe Management Body and first-linemanagers is related to the Issuer’s mid-and long-term performance;

---- ---- ----

----------------------------------------VII.2.3 Reviews the competitive positionof the Issuer’s policies and practicesregarding compensation and benefits ofcomparable companies, and suggestschanges in case they are necessary;

---- ---- ----

----------------------------------------VII.2.4 Defines and communicates thepolicy on retention, promotion, layoff andsuspension of key members of staff;

---- ---- ----

----------------------------------------VII.2.5 Informs the guidelines todetermine the retirement plans ofmembers of the Management Body andfirst-line managers of the Issuer;

---- ---- ----

----------------------------------------VII.2.6 Regularly informs theManagement Body and the Shareholders’Meeting about the measures taken andmatters analyzed at its meetings,

---- ---- ----

----------------------------------------VII.2.7 Ensures attendance of theChairman of the Compensation Committeeat the General Shareholders’ Meeting thatapproves compensation to theManagement Body so that it explains theIssuer’s policy on compensation to themembers of the Management Body andfirst-line managers.

---- ---- ----



TOTAL(1) PARTIAL(1)


----------------------------------------VII.3 If considered important, includepolicies implemented by the Issuer’sCompensation Committee that have notbeen mentioned in the preceding point.

---- ---- ----

The Audit Committee expresses its opinion on whethercompensation proposals for Directors and top officers arereasonable, taking into consideration market standards.

VII.4 If there is no CompensationCommittee, explain how the dutiesdescribed in VII. 2 are performed withinthe Management Body itself.

---- ---- ----

x Grupo Financiero Galicia has a Code of Ethics, which issigned by the members of the company, who agree withits contents and commit to carrying out business withhonesty, responsibility and transparency. Such Code is public and can be read by Shareholdersand/or any interested party on the company's website.

VIII.1 The Issuer has a Business Code ofConduct. State the main guidelines andwhether it is publicly known. Such Codeis signed by, at least, the members of theManagement Body and first-linemanagers. Indicate whether itsapplication to suppliers and customers isencouraged.

x In Grupo Financiero Galicia’s website (www.gfgsa.com)there is a “Contact us” link where stakeholders can fill aform including their personal information and the reasonsfor their inquiries or claims. Such form is immediately sentto two employees experienced in dealing with inquiriesand/or claims from investors, for the analysis and solutionthereof. The process for the reception, analysis andsolution of queries or claims is carried out with thehighest confidentiality and integrity standards that arecharacteristic of Grupo Financiero Galicia. Investors canalso raise their concerns in person, at the company’sregistered office. In such a case, investors are received byemployees especially appointed for such purpose, who try

VIII.2 The Issuer has mechanisms toreceive any unlawful or unethicalbehavior reporting, either personally orelectronically, ensuring that theinformation furnished is aligned with thehighest confidentiality and integritystandards, as well as the record andconservation of the information. Statewhether the service to receive and assessreporting is rendered by the Issuer’spersonnel or by external and independentprofessionals for further protection ofthose who report these events.

PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS

Recommendation VIII: Ensure ethical behaviors at the Issuer.

Please answer if:



TOTAL(1) PARTIAL(1)


to answer questions completely and efficiently. In case animmediate answer is not possible due to the need togather information and/or carry out an investigation, theyare requested to state how they want to be reached inorder to receive information on the result and, in duetime, be sent the answer requested.

x Since its inception and to date, Grupo Financiero Galiciahas not received complaints or else reporting frominvestors, whether in person or through the website. Thatis why there are no precedents with regard to the AuditCommittee’s level of involvement in the solution ofconflicts. With regard to the process implemented by the companyfor the management and solution of the reporting frominvestors, please refer to Item VIII.2.

VIII.3 The Issuer has policies, processesand systems to manage and solve thereporting mentioned in point VIII.2. Makea description of the most significantaspects thereof and indicate the AuditCommittee’s degree of involvement insuch solutions, particularly in thatreporting associated with internal controlmatters for accounting reporting and asregards the behaviors of the members ofthe Management Body and first-linemanagers.



TOTAL(1) PARTIAL(1)


The need to include certain corporate governanceguidelines in the corporate bylaws can be understoodwithin the framework of laws that are not as stringent asArgentine laws with regard to the definition of the Boardof Directors’ duties and responsibilities. In Argentina, theGeneral Corporations Law, the Capital Markets Law, theregulations set by the National Securities Commissionand, additionally, the variety of specific regulations inother areas of law, provide for a very complete frameworkand, therefore, any addition to the bylaws is unnecessary.

PRINCIPLE IX: BROADEN THE SCOPE OF THE CODE

Recommendation IX: Foster the inclusion of provisions relatedto good corporate governance practices inthe Corporate Bylaws.

Please answer if:The Management Body assesseswhether the provisions of the Code onCorporate Governance shall bereflected, either partially or completely,in the Corporate Bylaws, including thegeneral and specific responsibilities ofthe Management Body. State whichprovisions are actually included in theCorporate Bylaws since the creation ofthe Code to date.

(1) Mark with an X if applicable.

(2) In case of full compliance thereof, please state how the Issuer complies with the principles and recommendations of the Code on Corporate Governance.

(3) In case of partial compliance or non-compliance, please indicate why and which steps the Issuer's Management Body plans to take in order to include what it is notadopting in the next fiscal year or future fiscal years, if any.

Chairman of the Board of Directors

Autonomous City of Buenos Aires, March 9, 2016

Eduardo J. Escasany



TOTAL(1) PARTIAL(1)

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIALSTATEMENTS

INDIVIDUAL FINANCIAL STATEMENTS

AUDITORS' REPORT

REPORT OF THE SUPERVISORYCOMMITTEEFOR THE FISCAL YEARS ENDED DECEMBER 31,

2015 AND DECEMBER 31, 2014

Fiscal Year No. 17, commenced January 1, 2015Legal Domicile: Tte. Gral. Juan D. Perón No. 430 – 25th floor Autonomous City of Buenos Aires - ArgentinaPrincipal Line of Business: Financial and Investment Activities

Registration No. with the Corporation Control Authority (I.G.J.): 12,749Sequential Number – Corporation Control Authority (I.G.J.): 1,671,058Date of Registration with the Corporation Control Authority (I.G.J.):Of Bylaws: September 30, 1999Date of Latest Amendment to Bylaws: July 16, 2010Date of Expiration of the Company’s Bylaws: June 30, 2100

Information on the Controlling CompanyCompany’s Name: EBA HOLDING S.A.Principal Line of Business: Financial and Investment ActivitiesInterest Held by the Controlling Company in the Shareholders’ Equity as of 12.31.15:21.63%Interest Held by the Controlling Company in the Votes as of 12.31.15: 57.98%

Capital Status as of 12.31.15 (Note 8 to the Financial Statements):Figures Stated in Thousands of Pesos for “Subscribed”, “Paid-in” and “Registered” Shares

SharesAmount

281,221,650

1,019,042,947

1,300,264,597

281,222

1,019,043

1,300,265

281,222

1,019,043

1,300,265

281,222

1,019,043

1,300,265

5

1

Ordinary Class “A”,Face Value of 1

Ordinary Class “B”,Face Value of 1

Type VotingRights per

Share

Subscribed Paid-in Registered

115

CONSOLIDATED BALANCE SHEETAS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014

The accompanying Notes 1 to 39 are an integral part of these consolidated financial statements

Figures stated in thousands of Pesos

December 31,

ASSETS


Cash

Financial institutions and correspondents

Argentine central bank (BCRA)

Other local financial institutions

Foreign

Government and private securities


Holdings recorded at their acquisition cost plus the I.R.R.

Instruments issued by the argentine central bank

Investments in listed private securities

Loans



Interbank loans (call money loans granted)

Other loans to local financial institutions

Accrued interest, adjustments and exchange rate differences receivable

To the non-financial private sector and residents abroad

Overdrafts

Promissory notes

Mortgage loans

Collateral loans

Personal loans

Credit card loans

Others

Accrued interest, adjustments and exchange rate differences receivable

Documented interests

Unallocated collections

Allowances



Amounts receivable for spot and forward sales to be settled

Securities receivable under spot and forward purchases to be settled

Premiums from bought options

Others not included in the debtor classification regulations

Unlisted negotiable obligations

Balances from forward transactions without delivery of underlying asset to be settled

Others included in the debtor classification regulations

Accrued interest and adjustments receivable included in the debtor classification regulations

Allowances



Accrued interest and adjustments receivable

Allowances

2014

16,959,205

4,369,380

12,589,825

12,466,435

36,820

86,570

10,010,150

2,446,230

316,773

7,246,751

396

66,608,201

15,556

192,545

182

150,058

42,305

69,015,019

3,986,633

16,303,892

1,661,062

499,971

6,995,637

37,348,043

1,598,476

970,185

(348,222)

(658)

(2,614,919)

6,797,613

1,377,804

135,408

250,822

3,581,004

930,240

117,016

591,041

367

(186,089)

1,047,963

1,039,579

21,443

(13,059)

2015

30,834,663

7,288,153

23,546,510

23,106,877

105,511

334,122

15,525,090

2,376,386

1,389,617

11,759,087

-

98,344,731

17,705

761,547

40,000

685,500

36,047

101,125,473

8,548,542

22,737,166

2,098,824

486,891

9,259,159

56,260,115

924,741

1,407,465

(596,853)

(577)

(3,559,994)

8,060,768

1,738,892

290,795

765,288

41,027

2,093,958

1,639,013

287,161

1,393,560

783

(189,709)

958,092

956,131

20,119

(18,158)

Notes

3

4 y 5

6

7

5

1.13

5

5

5

5


CONSOLIDATED BALANCE SHEET (CONT.) AS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Equity investments

In financial institutions

Others

Allowances


Receivables for assets sold

Minimum presumed income tax - tax credit

Others

Other accrued interest and adjustments receivable

Allowances

Bank premises and equipment

Miscellaneous assets

Intangible assets

Goodwill

Organization and development expenses

Unallocated items

Other assets

Total assets

LIABILITIES

Deposits


Financial sector


Checking accounts

Savings accounts

Time deposits

Investment accounts

Others

Accrued interest, adjustments and exchange rate differences payable

Other liabilities resulting from financial brokerage


Others

Banks and international entities

Unsubordinated negotiable obligations

Amounts payable for spot and forward purchases to be settled

Securities to be delivered under spot and forward sales to be settled

Premiums from options written

Loans from local financial institutions

Interbank loans (call money loans received)

Other loans from local financial institutions

Accrued interest payable

Balances from forward transactions without delivery of underlying asset to be settled

Others

Accrued interest, adjustments and exchange rate differences payable

Miscellaneous liabilities

Directors' and syndics' fees

2014

51,795

4,240

49,488

(1,933)

1,760,516

8,864

8,446

1,861,635

22,411

(140,840)

1,553,718

404,312

1,800,622

24,990

1,775,632

13,564

306,819

107,314,478

64,666,037

1,674,488

34,612

62,956,937

15,281,662

16,897,334

29,509,765

250,951

469,506

547,719

25,401,369

7,478

7,478

717,287

7,869,526

250,636

136,945

-

1,100,311

3,000

1,080,386

16,925

118,218

14,946,540

254,428

3,380,664

28,098

2015

51,731

6,447

45,920

(636)

2,569,453

19,651

10,230

2,692,286

23,164

(175,878)

2,079,085

820,073

2,025,844

15,316

2,010,528

58,963

419,510

161,748,003

100,039,233

630,401

26,961

99,381,871

19,121,256

27,451,942

50,847,541

395,189

649,174

916,769

37,328,900

7,033

7,033

1,262,381

9,261,471

764,898

294,548

15,427

1,388,903

127,100

1,244,269

17,534

1,266,014

22,788,958

279,267

4,442,113

38,713

Notes

9

5

1.15

10

11

12

13

14

16

1.13

17

16


CONSOLIDATED BALANCE SHEET (CONT.) AS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Others

Provisions

Subordinated negotiable obligations

Unallocated items

Other liabilities

Minority interest in controlled companies

Total liabilities


Total liabilities and shareholders' equity

MEMORANDUM ACCOUNTS

Debit

Contingent


Loans obtained (unused balances)

Guarantees received

Contingencies re. Contra items

Control

Loans classified as irrecoverable

Others

Control re. Contra items

Derivatives

"Notional" value of call options bought

"Notional" value of forward transactions without delivery of underlying asset

Interest rate swaps

Derivatives re. Contra items

Trust accounts

Trust funds

Credit

Contingent

Loans granted (unused balances) included in the debtor classification regulations

Guarantees granted to the argentine central bank

Other guarantees granted included in the debtor classification regulations

Other guarantees granted not included in the debtor classification regulations


Others not included in the debtor classification regulations

Contingencies re. Contra items

Control

Checks and drafts to be credited

Others

Control re. Contra items

Derivatives

"Notional" value of call options written

"Notional" value of forward transactions without delivery of underlying asset

Derivatives re. Contra items

Trust accounts

Trust liabilities re. Contra items

2014

3,352,566

365,783

2,065,815

39,924

367,436

781,026

97,068,054

10,246,424

107,314,478

115,620,165

21,860,839

40,825

150,000

13,135,485

8,534,529

71,321,827

3,394,233

65,387,606

2,539,988

16,072,977

-

9,284,396

240,269

6,548,312

6,364,522

6,364,522

115,620,165

21,860,839

5,965,652

2,148

426,214

686,551

737,862

716,102

13,326,310

71,321,827

1,614,617

925,371

68,781,839

16,072,977

-

6,548,312

9,524,665

6,364,522

6,364,522

2015

4,403,400

481,596

3,300,516

75,436

488,073

1,107,315

147,263,182

14,484,821

161,748,003

216,187,507

31,302,851

-

193,874

20,115,869

10,993,108

118,516,727

3,500,868

105,328,149

9,687,710

59,441,489

624,951

30,580,294

60,000

28,176,244

6,926,440

6,926,440

216,187,507

31,302,851

6,599,546

1,912

1,006,833

1,177,045

1,879,279

328,493

20,309,743

118,516,727

3,630,338

6,057,372

108,829,017

59,441,489

737,832

27,438,412

31,265,245

6,926,440

6,926,440

Notes

18

19

16

20

5

21

8

22

5

5

5

8


CONSOLIDATED INCOME STATEMENTFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Financial income

Interest on cash and due from banks

Interest on loans to the financial sector

Interest on overdrafts

Interest on promissory notes

Interest on mortgage loans

Interest on collateral loans

Interest on credit card loans

Interest on financial leases

Interest on other loans

Net income from government and private securities

Net income from options

Interest on other receivables resulting from financial brokerage

Net income from secured loans - decree Nº 1387/01

C.E.R. Adjustment

Exchange rate differences on gold and foreign currency

Others

Financial expenses

Interest on savings account deposits

Interest on time deposits

Interest on interbank loans received (call money loans)

Interest on other loans from financial institutions

Interest on other liabilities resulting from financial brokerage

Interest on subordinated negotiable obligations

Other interest

C.E.R. Adjustment

Contributions made to deposit insurance fund

Exchange rate differences on gold and foreign currency

Others

Gross financial brokerage margin


Income from services

Related to lending transactions

Related to borrowing transactions

Other commissions

Others

Expenses from services

Commissions

Others


Personnel expenses


Other fees

Advertising and publicity

Taxes

Depreciation of bank premises and equipment

2014

19,860,096

4

163,678

1,570,043

3,758,362

321,139

83,590

6,567,266

217,218

3,449,740

2,448,362

-

170,870

3,780

1,400

12,651

1,091,993

10,320,678

2,028

6,493,769

20,504

128,025

1,516,997

310,056

81,186

377

151,450

-

1,616,286

9,539,418

2,411,250

8,305,632

1,674,174

1,249,613

238,183

5,143,662

2,607,284

1,231,912

1,375,372

9,221,356

5,199,661

85,201

236,527

413,927

850,772

172,582

2015

25,844,168

-

85,681

1,870,336

5,031,904

367,566

87,808

9,257,193

225,819

3,299,417

4,323,266

91,605

99,314

3,643

4,341

-

1,096,275

13,402,332

3,182

8,507,743

40,982

86,169

1,825,749

373,998

182,640

282

497,258

187,836

1,696,493

12,441,836

2,214,240

11,471,296

2,232,198

1,834,293

398,332

7,006,473

3,633,898

1,487,054

2,146,844

12,904,702

7,086,485

111,211

396,090

544,603

1,218,962

218,611

Notes

24

24

11


CONSOLIDATED INCOME STATEMENT (CONT.)FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Amortization of organization expenses

Other operating expenses

Others

Net income from financial brokerage

Income from insurance activities

Minority interest

Miscellaneous income

Net income from equity investments

Penalty interest

Loans recovered and allowances reversed

Others

Miscellaneous losses

Penalty interest and charges in favor of the argentine central bank

Provisions for losses on miscellaneous receivables and other provisions

C.E.R. Adjustment

Amortization of differences arising from court resolutions

Depreciation and losses from miscellaneous assets

Amortization of goodwill

Others

Net income before income tax

Income tax

Net income for the fiscal year

2014

332,197

1,143,316

787,173

3,605,160

1,238,029

(229,910)

1,095,450

213,380

306,723

297,327

278,020

378,667

64

209,958

1

4,803

987

7,767

155,087

5,330,062

1,992,272

3,337,790

2015

635,442

1,529,353

1,163,945

5,160,292

1,801,404

(364,558)

1,203,592

100,126

328,882

319,297

455,287

660,909

398

448,659

-

4,308

3,433

9,674

194,437

7,139,821

2,801,424

4,338,397

Notes

13

25

24

12

13

24

1.14

27


CONSOLIDATED STATEMENT OF CASH FLOWS AND CASH EQUIVALENTSFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Changes in cash and cash equivalents

Cash at beginning of fiscal year

Cash at fiscal year-end

Net increase in cash (in constant currency)

Causes for changes in cash (in constant currency)

Operating activities

Net collections / (Payments) for:


Loans



To the non-financial private sector and residents abroad



Deposits

From the financial sector

From the non-financial public sector

From the non-financial private sector and residents abroad


Financing from the financial sector

Interbank loans (call money loans received)

Others (except from liabilities included in financing activities)

Collections related to income from services

Payments related to expenses for services

Administrative expenses paid

Payment of organization and development expenses

Collection for penalty interest, net

Differences arising from court resolutions paid

Collection of dividends from other companies

Other collections related to miscellaneous profits and losses

Net collections / (payments) for other operating activities

Other receivables and miscellaneous liabilities

Other operating activities, net

Income tax and minimum presumed income tax payment

Net cash flow provided by operating activities

Investing activities

Payments for bank premises and equipment, net

Payments for miscellaneous assets, net

Payments for equity investments

Collections for equity investments

Net cash flow used in investing activities

Financing activities

Net collections / (Payments) for:

Unsubordinated negotiable obligations

Argentine central bank

Others

2014

15,823,881

23,054,015

7,230,134

(1,097,152)

425,142

85

2,273,221

742,311

298,654

12,511

(31,727)

5,698,207

(123,004)

4,013,978

10,184,091

(2,291,464)

(9,515,786)

(685,644)

306,723

(4,803)

76,347

125,447

(1,468,794)

(313,289)

(1,110,114)

7,514,940

(284,117)

(209,024)

(49,376)

47,578

(494,939)

(282,489)

-

1,450

2015

23,054,015

42,975,265

19,921,250

2,398,746

(443,503)

4,084

(12,427,921)

1,176,179

312,919

(7,651)

(1,044,087)

23,627,782

83,151

7,809,635

14,169,321

(3,415,706)

(12,837,369)

(865,139)

328,882

(4,308)

66,174

31,411

(1,422,814)

22,778

(1,937,591)

15,624,973

(740,313)

(392,593)

-

10,045

(1,122,861)

(1,323,019)

-

(445)

Notes

29

29


CONSOLIDATED STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS (CONT.)FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Banks and international entities


Distribution of dividends

Loans from local financial institutions

Net cash flow used in financing activities

Financial income and holding gain on cash and cash equivalents (including interest and monetary gain)

Net increase in cash

2014

(235,854)

(351,010)

(68,495)

(367,714)

(1,304,112)

1,514,245

7,230,134

2015

76,972

(238,591)

(136,800)

92,697

(1,529,186)

6,948,324

19,921,250

Notes


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED DECEMBER 31,2015 AND DECEMBER 31, 2014 Figures stated in thousands of Pesos ($) and thousands of U.S. Dollars (US$)

NOTE 1 - BASIS FOR THE PRESENTATION OF THEFINANCIAL STATEMENTS AND ACCOUNTINGPRINCIPLES APPLIED

Grupo Financiero Galicia S.A. (the Company) was constituted onSeptember 14, 1999, as financial services holding company organizedunder the laws of Argentina. The Company’s main asset is its interestin Banco de Galicia y Buenos Aires S.A. Banco de Galicia y BuenosAires S.A. is a private-sector bank that offers a full spectrum offinancial services both to individual and corporate customers.

PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTSThese consolidated financial statements, which stem from accountingrecords, have been stated in thousands of Argentine Pesos and arepresented in line with the provisions of Argentine Central Bank’s(“BCRA”) Communiqué "A" 3147 and supplementary regulationsregarding financial reporting requirements for the publication ofannual financial statements, with the guidelines of TechnicalPronouncements Nº 8 and 19 of the Argentine Federation ofProfessional Councils in Economic Sciences (“F.A.C.P.C.E.”) and withthe regulations of the National Securities Commission (“C.N.V.”) (Textamended in 2013). These financial statements include the balancescorresponding to the operations carried out by Grupo FinancieroGalicia S.A. and its subsidiaries.The financial statements of Grupo Financiero Galicia S.A. have beenconsolidated on a line-by-line basis with those of its controlledcompanies, either directly or indirectly, which are detailed in Note 2.Due to the fact that Banco de Galicia y Buenos Aires S.A. is theCompany’s main equity investment, a financial institution subject tothe Argentine Central Bank regulations, and pursuant to theregulations of the C.N.V. (Text amended in 2013), the Company hasadopted the valuation and disclosure criteria applied by Banco deGalicia y Buenos Aires S.A., which in some significant aspects differfrom Argentine GAAP in force in the Autonomous City of Buenos Aires(see Note 1.16).Furthermore, the consolidated financial statements of SudamericanaHolding S.A. were prepared in accordance with the disclosure andvaluation criteria approved by the Argentine Superintendence ofInsurance; which in some aspects differ from Argentine GAAP in forcein the Autonomous City of Buenos Aires, in particular as regards thevaluation of investments in Secured Loans and certain GovernmentSecurities, recoverable values and deferral of acquisition expenses.Nevertheless, this departure has not produced a significant effect onthe financial statements of Grupo Financiero Galicia S.A.These consolidated financial statements include the balances of its

subsidiary abroad: Banco Galicia Uruguay S.A. (In liquidation). Theconversion into Pesos of this subsidiary’s accounting balances wasmade according to the following:I) Assets and liabilities were converted into Pesos according to item1.2 of this Note.II) Allotted capital has been computed for the actually disbursedrestated amounts.III) Retained earnings were determined as the difference betweenassets, liabilities and the allotted capital.iIV) Net income for the fiscal year was determined by the differencebetween retained earnings at the beginning of the fiscal year andretained earnings at fiscal year-end. The balances of income statementaccounts were converted into Pesos applying the monthly averageexchange rates recorded in each month of this fiscal year.V) The significant items arising from intercompany transactions,thatdo not transcend to third parties, have been eliminated from theBalance Sheet and the Income Statement.

CONSIDERATION OF THE EFFECTS OF INFLATIONArgentine GAAP in force in the Autonomous City of Buenos Airesprovide for that financial statements shall be stated in constantcurrency, pursuant to the provisions of Technical Pronouncements Nos.6 and 17 of the Argentine Federation of Professional Councils inEconomic Sciences (“F.A.C.P.C.E.”), as amended by TechnicalPronouncement Nº 39, approved by the Professional Council inEconomic Sciences of the Autonomous City of Buenos Aires on April16, 2014, as well as interpretation Nº 8 of the F.A.C.P.C.E. These GAAPprovide for that the adjustment for inflation shall be applied upon aninflationary context, which is present when, among otherconsiderations, there exists an accumulated rate of inflation reachingor exceeding 100% during three years, taking into consideration, forsuch purpose, the domestic wholesale price index published by theArgentine Institute of Statistics and Census. Financial statementsreflect the effects of the changes in the purchasing power of thecurrency up to February 28, 2003, the adjustment for inflation havingbeen discontinued from such date, pursuant to the provisions ofArgentine GAAP in force in the Autonomous City of Buenos Aires andthe requirements of Decree Nº 664/03 of the National ExecutiveBranch, Section 268 of General Resolution Nº 7/2005 of theCorporation Control Authority, Communiqué “A” 3921 of theArgentine Central Bank and General Resolution Nº 441/03 of theC.N.V. Resolution M.D. Nº 41/03 of the Professional Council inEconomic Sciences of the Autonomous City of Buenos Aires(C.P.C.E.C.A.B.A.) established the discontinuation of the recognitionof the changes in the purchasing power of the currency, effective


October 1, 2003.Even though the variation of the index determined by the ArgentineGAAP does not determine the application of the adjustment forinflation, pursuant to the aforementioned, when reading andanalyzing these financial statements one should take intoconsideration the existence of successive fluctuations in significanteconomic variables, which took place during the past fiscal years.

COMPARATIVE INFORMATIONThe comparative information in the Balance Sheet, Schedules, Notes,Income Statement, Statement of Changes in Shareholders’ Equity andStatement of Cash Flows and Cash Equivalents corresponds to theend of the previous fiscal year. Certain figures in the consolidatedfinancial statements for the year ended December 31, 2014 have beenreclassified for purposes of their presentation in comparative formatwith those for this fiscal year.

ACCOUNTING ESTIMATESThe preparation of financial statements at a given date requires theCompany to make estimates and assessments that affect the amountsof assets and liabilities reported and the disclosure of contingentassets and liabilities, as well as the income and expenses accrued forthe fiscal year. In this regard, the Company makes estimates in orderto calculate, at any given moment, the allowance for uncollectiblereceivables, the depreciation and amortization charges, therecoverable value of assets, the income tax charge and the provisionsfor contingencies, among others. Future actual results may differ fromestimates and assessments made at the date these financialstatements were prepared.

MOST RELEVANT ACCOUNTING POLICIES1.1 - ASSETS AND LIABILITIES IN DOMESTIC CURRENCY. Monetaryassets and liabilities which include, where applicable, the interestaccrued at fiscal year-end, are stated in period-end currency andtherefore require no adjustment whatsoever.

1.2 - ASSETS AND LIABILITIES IN FOREIGN CURRENCY. Foreigncurrency assets and liabilities have been stated at the U.S. Dollarexchange rate set by the Argentine Central Bank, in force at the closeof operations on the last working day of each month.As of December 31, 2015 and December 31, 2014, balances in U.S.Dollars were converted applying the reference exchange rate (figuresstated in Pesos: $13.005, $8.552, respectively) set by the ArgentineCentral Bank.Assets and liabilities valued in foreign currencies other than the U.S.Dollar have been converted into the latter currency using the swaprates informed by the Argentine Central Bank.Interest receivable or payable has been accrued at fiscal year-end,where applicable.

1.3 - GOVERNMENT AND PRIVATE SECURITIES. Argentine Central

Bank regulations set forth, according to the assets’ most probable use,two valuation criteria for holdings of non-financial public sector debtinstruments:a) Fair market value: These holdings are government securities andmonetary regulation instruments included in the volatilities or presentvalues lists issued by the Argentine Central Bank.These are recorded at the closing price for each class of securities inthe corresponding markets or at their present value, plus the value ofamortization and/or interest coupons due and receivable.b) Acquisition cost plus the I.R.R.: These include governmentsecurities and monetary regulation instruments issued by theArgentine Central Bank that are not included in the preceding item.These holdings are recorded at their acquisition cost increased on anexponential basis according to their I.R.R. The monthly accrual ischarged to income or an asset offset account, depending on thesecurities involved:b1)Government debt instruments subscribed through swap, paymentor exchange by any other government debt instruments. In the casethe market value of each instrument is lower than its book value, 50%of the monthly accrual of the I.R.R. is charged against an asset offsetaccount. Said offset account shall be reversed by charging to incometo the extent its balance exceeds the positive difference between themarket value and book value.b2)Monetary regulation instruments issued by the Argentine CentralBank. The monthly accrual of the I.R.R. is charged to income.b3) Government securities that were not subscribed through swapwith no volatility or present value informed by the Argentine CentralBank. These are recorded at the present value of cash flows discountedby the internal rate of return of instruments with similar characteristicsand duration and with volatility. When the book value exceeds thepresent value, the monthly accrual is recorded in an asset offsetaccount.b4)Argentine Saving Bond for Economic Development (BAADE - BonoArgentino de Ahorro para el Desarrollo Económico) and SavingPromissory Note for Economic Development (Pagaré de Ahorro parael Desarrollo Económico), acquired through primary subscription. Theseare recorded at their acquisition cost, the monthly accrual of the I.R.R.being charged to income.Furthermore, those instruments subject to be valued at the fair marketvalue and then decided to be valued at their acquisition cost plus theI.R.R. may be recorded in this item, when the purpose thereof is toobtain contractual cash flows. In these cases, the maximum amountto be used shall not exceed net liquid assets of 40% of deposits.As of December 31, 2015 and December 31, 2014, taking into accountthe above-mentioned valuation criteria, Grupo Financiero Galicia S.A.records its holdings according to the following:

1.3.1 - HOLDINGS RECORDED AT FAIR MARKET VALUE. Theseholdings include trading securities that were valued according to whatis stated in item a. above.The same criterion is applied to holdings of such securities used in


loans, as guarantee, transactions to be settled and repo transactions,when appropriate.

1.3.2 - HOLDINGS RECORDED AT THEIR ACQUISITION COST PLUSTHE I.R.R. In this account, the Company records the Argentine SavingBond for Economic Development (BAADE), among others.The holding of such securities has been valued pursuant to thecriterion stated in item b. above.The same criterion is applied to holdings of such securities used inloans, as guarantee, transactions to be settled and repo transactions,when appropriate.

1.3.3 - INVESTMENTS IN LISTED PRIVATE SECURITIES. Thesesecurities are valued at the fiscal year-end closing price in thecorresponding market, less estimated selling costs, when applicable.

1.3.4 - INSTRUMENTS ISSUED BY THE ARGENTINE CENTRALBANK. Holdings of instruments issued by the Argentine Central Bankwhich are included in the volatilities list have been valued at theirclosing price in the corresponding markets. The same criterion wasapplied to holdings of such securities used in loans, as guarantee,transactions to be settled and repo transactions, when appropriate. Holdings of instruments issued by the Argentine Central Bank whichare not included in the volatilities list have been valued at theiracquisition cost increased on an exponential basis according to theirI.R.R. The same criterion was applied to holdings of such securities usedin loans, as guarantee and in repo transactions, when appropriate.

1.4 - ACCRUAL OF ADJUSTMENTS, INTEREST, EXCHANGE RATEDIFFERENCES, PREMIUMS ON FUTURE TRANSACTIONS ANDVARIABLE INCOME. For foreign and local currency transactions witha principal adjustment clause, as well as for those in which rates havebeen prearranged for terms up to 92 days, the accrual has beenrecognized on a linear basis.For local currency transactions at rates arranged for longer periods,interest has been accrued on an exponential basis.Banco de Galicia y Buenos Aires S.A. received deposits accruing avariable-rate yield pursuant to the Argentine Central Bank regulations.The fixed-rate yield of each transaction is accrued as per the above-mentioned paragraph, while variable-rate yield is accrued by applyingthe portion of the agreed yield to the positive variation in theunderlying asset’s price, which is taken as a basis for determining saidvariation, occurred between the original arrangement term and theend of the month (See item 1.13. of this Note).For lending and borrowing transactions, which according to the legaland/or contractual conditions may be applicable, the adjustment bythe C.E.R. has been accrued.For lending transactions, the Company does not recognize interestaccrual when debtors are classified in a irregular status.

1.5 - OTHER RECEIVABLES RESULTING FROM FINANCIAL

BROKERAGE1.5.1 - MUTUAL FUND UNITS. The holdings of mutual fund unitshave been valued pursuant to the value published by the mutual fundmanager at fiscal year-end, less estimated selling costs, whenapplicable.

1.5.2 - FINANCIAL TRUST DEBT SECURITIES - UNLISTED. Debtsecurities added at par have been valued at their technical value; theremaining holdings were valued at their acquisition cost increased onan exponential basis according to their I.R.R.

1.5.3 - PARTICIPATION CERTIFICATES IN FINANCIAL TRUSTS -UNLISTED. Participation certificates in financial trusts are valuedtaking into account the share in the assets, net of liabilities, whichstem from the financial statements of the respective trusts, as modifiedby the application of the Argentine Central Bank regulations, whenapplicable.Trusts - with government-sector assets as underlying assets - havebeen valued pursuant to the valuation criteria described in item 1.3.2of this Note. In the particular case of the Participation Certificate inGaltrust I Financial Trust, it has been recorded according to what isstated in item 1.3.b.3 of this Note.

1.5.4 - UNLISTED NEGOTIABLE OBLIGATIONS. These have beenvalued at their acquisition cost increased on an exponential basisaccording to their I.R.R.

1.6- RECEIVABLES FROM FINANCIAL LEASES. These receivablesare recorded at the present value of the sum of periodic installmentsand residual values previously established and calculated pursuant tothe terms and conditions agreed upon in the corresponding financiallease agreements by applying their I.R.R.

1.7 - EQUITY INVESTMENTS. The Company’s equity investments incompanies where it has a significant interest were valued pursuantto the equity method. The remaining equity investments were valued at their acquisition costplus, when applicable, uncollected cash dividends and stock dividendsfrom capitalized profits. An allowance for impairment of value hasbeen established on such equity investments where the book valueexceeds the equity method value.

1.8 - BANK PREMISES AND EQUIPMENT AND MISCELLANEOUSASSETS. Bank Premises and Equipment and Miscellaneous Assetshave been valued at their acquisition cost, restated at constantcurrency as mentioned in this Note, net of the correspondingaccumulated depreciation.Financial leases that mainly transfer risks and benefits inherent to theleased property are recognized at the beginning of the lease either bythe cash value of the leased property or the present value of cashflows established in the financial lease, whichever lower.



Depreciation charges are calculated following the straight-linemethod, at rates determined based on the useful life assigned to theassets, which is 600 months for real estate, up to 120 months forfurniture and fixtures and no more than 60 months for the rest of theassets.The updated residual value of the assets, taken as a whole, does notexceed their value-in-use at fiscal year-end.

1.9 - INTANGIBLE ASSETS. Intangible assets have been valued attheir acquisition cost, restated in constant currency, as mentioned inthis Note, net of the corresponding accumulated amortization,calculated proportionally over the estimated number of months ofuseful life.Amortization has been recognized on a straight-line basis over 60months for “Organization and Development Expenses”.

1.10 - MISCELLANEOUS LIABILITIES1.10.1 - LIABILITIES - CUSTOMERS FIDELITY PROGRAM “QUIERO”The fair value of the points assigned to customers through the“Quiero” Program is estimated. Said value is assessed by means of theuse of a mathematical model that takes into account certainassumptions of exchange percentages, the cost for the exchangedpoints based on the combination of available products and thepreferences of the Bank’s customers, as well as the expiration term ofthe customers’ non-exchanged points. As of December 31, 2015 andDecember 31, 2014, the liabilities recorded under “MiscellaneousLiabilities - Others” for its customers’ non-exchanged points amountedto $286,497 and $202,465, respectively.

1.11 - ALLOWANCES AND PROVISIONS1.11.1 - ALLOWANCES FOR LOAN LOSSES AND PROVISIONS FORCONTINGENT COMMITMENTS. These have been established basedupon the estimated default risk of Grupo Financiero Galicia S.A.’scredit assistance granted through its subsidiaries, which results froman evaluation of debtors' compliance with their payment obligations,their economic and financial condition, and the guarantees securingtheir related transactions, in line with the Argentine Central Bankregulations.

1.11.2 - SEVERANCE PAYMENTS. The Company directly chargesseverance payments to expenses.The amounts that the Company may possibly have to pay for laborlawsuits are covered by a provision, which is recorded under"Liabilities - Provisions for Severance Payments”.

1.11.3 - LIABILITIES - OTHER PROVISIONS. Provisions have beenset up to cover contingent situations related to labor, commercial,legal, civil and tax issues and other miscellaneous risks that are likelyto occur.

1.12 - NEGATIVE GOODWILL. The Company recorded a negative

goodwill. This stems from the difference between the acquisition costpaid for the companies Compañía Financiera Argentina S.A. andCobranzas y Servicios S.A. and the value of assets and liabilitiespurchased as of June 30, 2010. As of December 31, 2014, suchgoodwill amounted to $49,562 (net of accumulated amortizations),and was recorded under the “Liabilities - Provisions” caption. As ofDecember 31, 2015, such goodwill has been fully amortized.The negative goodwill is charged to Income on a straight-line basisduring 60 months, pursuant to the Argentine Central Bank regulationsin that regard.

1.13 - DERIVATIVES AND HEDGING TRANSACTIONS1.13.1 - FORWARD PURCHASE-SALE OF FOREIGN CURRENCYWITHOUT DELIVERY OF THE UNDERLYING ASSET. Mercado AbiertoElectrónico (M.A.E.) and Rosario Futures Exchange (RO.F.EX.) havetrading environments for the closing, recording and settlement offinancial forward transactions carried out among its agents. Thegeneral settlement mode for these transactions is without delivery ofthe traded underlying asset. Settlement is carried out on a daily basis,in Pesos, for the difference, if any, between the closing price of theunderlying asset and the closing price or value of the underlying assetcorresponding to the previous day, the difference in price beingcharged to income.Forward purchase and sale transactions are recorded underMemorandum Accounts for the notional value traded. Accruedbalances pending settlement are recorded in the category “Balancesfrom Forward Transactions without Delivery of Underlying Asset to beSettled” under “Other Receivables Resulting from FinancialBrokerage” and/or “Other Liabilities Resulting from FinancialBrokerage”, when appropriate.

1.13.2 - INTEREST RATE SWAPS. These transactions are conductedwithin the environment created by the M.A.E., and the settlementthereof is carried out on a monthly basis, in Pesos, for the differencebetween the cash flows calculated using a variable rate (Badlar forprivate banks for time deposits of 30 to 35 days) and the cash flowscalculated using a fixed rate, or vice versa, on the notional valueagreed, the difference in price being charged to income.Sale transactions are recorded under Memorandum Accounts for thenotional value traded.Accrued balances pending settlement are recorded in the category“Balances from Interest Rate Swaps to be Settled” under “OtherReceivables Resulting from Financial Brokerage” and/or “OtherLiabilities Resulting from Financial Brokerage”, as appropriate.

1.13.3 - CALL OPTIONS BOUGHT AND WRITTEN ON GOLDFUTURES WITHOUT DELIVERY OF THE UNDERLYING ASSET. Thesetransactions have been conducted with the purpose of hedging thevariable yield of the deposits received by Banco de Galicia y BuenosAires S.A. and set forth by the Argentine Central Bank.The deposit date, the term to exercise the option and the underlying

asset are the same as those for the related deposit. Notional amountshave been computed so that the offset value of derivative instrumentsis similar to the variable yield of the investment. Changes in the valueof the underlying asset at the time of the arrangement and at fiscalyear-end, equivalent to the variable yield, have been recognized inIncome and are recorded under “Other Receivables Resulting fromFinancial Brokerage” and/or under “Other Liabilities Resulting fromFinancial Brokerage”, as appropriate. Premiums received and/or paidhave been accrued on a straight-line basis during the currency of theagreement.Call options bought and written on gold futures have been recordedunder “Memorandum Accounts - Debit-Derivatives - Notional Value ofCall Options Bought” and under “Memorandum Accounts - Credit-Derivatives - Notional Value of Call Options Written”.Banco de Galicia y Buenos Aires S.A.'s management of financial risksis carried out within the limits of the policies approved by the Boardof Directors in such respect. In that sense, “derivative instruments”carried out are means for the Company to hedge its risk exposuresand/or used as a financial product to develop investment and tradingstrategies. In both cases, the use of these instruments is performedwithin the guidelines of internal policies set forth by the Bank.

1.14 - INCOME TAX. Pursuant to the Argentine Central Bankregulations, at the subsidiaries Banco de Galicia y Buenos Aires S.A.and Compañía Financiera Argentina S.A., the income tax charge isdetermined by applying the effective tax rate to the estimated taxableincome, without considering the effect of any temporary differencesbetween taxable and book income.

1.15 - MINIMUM PRESUMED INCOME TAX. The minimumpresumed income tax is determined at the effective rate of 1% of thecomputable assets at fiscal year-end. Since this tax is supplementaryto the income tax, the Company’s tax liability for each fiscal year isequal to the higher of the two taxes. However, if the minimumpresumed income tax were to exceed income tax in a given fiscal year,such excess may be computed as a payment on account of the incometax that could be generated in any of the next ten fiscal years. Therecognition of this right and its realization stem from the ability togenerate future taxable income sufficient for offsetting purposes.Based on the foregoing, as of December 31, 2015 and December 31,2014, the Company has assets for $10,230 and $8,446, respectively.The breakdown of outstanding tax credits and their probableexpiration date are detailed below:

Tax credit as of

Date of generation 12.31.2015 12.31.2014 Expiration date

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

The Company has set up a provision for the minimum presumedincome tax credit accrued during this fiscal year and the previous fiscalyear, for $4,707 and $3,647, respectively, since its recovery is not likelyat the issuance date of these financial statements.

1.16 - DIFFERENCES BETWEEN THE ARGENTINE CENTRAL BANKREGULATIONS AND ARGENTINE GAAP IN FORCE IN THEAUTONOMOUS CITY OF BUENOS AIRES. The main differencesbetween the valuation and disclosure criteria applied to theseconsolidated financial statements and Argentine GAAP in force in theAutonomous City of Buenos Aires are detailed below:

1.16.1. ACCOUNTING FOR INCOME TAX ACCORDING TO THEDEFERRED TAX METHOD. The subsidiaries Banco de Galicia y BuenosAires S.A. and Compañía Financiera Argentina S.A. determine theincome tax charge by applying the effective tax rate to the estimatedtaxable income, without considering the effect of any temporarydifferences between book and taxable income.Pursuant to Argentine GAAP in force, the income tax must berecognized using the deferred tax method and, therefore, deferred taxassets or liabilities must be established based on the aforementionedtemporary differences. In addition, unused tax loss carry-forwards ortax credits that may be offset against future taxable income should berecognized as deferred assets, provided that taxable income is likelyto be generated.The application of this criterion, based on projections prepared by theaforementioned subsidiaries, would determine deferred tax assets


2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

10

76

148

318

363

583

1,629

1,458

1,714

2,135

3,659

-

12,093

-

76

148

319

363

583

1,629

1,458

1,714

1,881

2,306

4,460

14,937

amounting to $414,758 as of December 31, 2015, and to $337,726 asof December 31, 2014.

1.16.2. VALUATION OF GOVERNMENT SECURITIES. ArgentineCentral Bank regulations set forth specific valuation criteria forgovernment securities recorded at their acquisition cost plus the I.R.R.,which are described in 1.3.b. of this Note. Pursuant to Argentine GAAPin force in the Autonomous City of Buenos Aires, the above-mentionedassets must be valued at their current value.As of December 31, 2015 and December 31, 2014, the application ofthis criterion would determine an increase in Shareholders’ Equity ofabout $38,418 and $7,958, respectively, due to the securities held byBanco de Galicia y Buenos Aires S.A.

1.16.3. ALLOWANCES FOR RECEIVABLES FROM THE NON-FINANCIAL PUBLIC SECTOR. Current regulations issued by theArgentine Central Bank on the establishment of allowances providethat credits against the public sector are not subject to allowances forloan losses. Pursuant to Argentine GAAP, those allowances must beestimated based on the recoverability risk of assets.

1.16.4. DEBT SECURITIES AND PARTICIPATION CERTIFICATES INFINANCIAL TRUSTS. Had the Participation Certificate in Galtrust IFinancial Trust been marked to market, Banco de Galicia y BuenosAires S.A.’s Shareholders’ Equity would have been increased by $1,349as of December 31, 2015, while it would have been reduced by $5,982as of December 31, 2014.

1.16.5. NEGATIVE GOODWILL. A negative goodwill had beenrecorded which corresponds to the difference between the acquisitioncost paid for the companies Compañía Financiera Argentina S.A. andCobranzas y Servicios S.A. and their equity method value estimated atthe moment of the purchase. Such negative goodwill is recorded underthe “Liabilities - Provisions” account.Pursuant to the Argentine Central Bank regulations, the negativegoodwill has to be charged to income with regard to the causes thathave originated it, not to exceed a 60-month straight-line methodamortization. Pursuant to Argentine GAAP, the negative goodwill thatis not related to expenses estimations or estimated future lossesshould be recognized as a gain at the time of the purchase.

As of December 31, 2015, the negative goodwill balance has beenfully amortized, while as of December 31, 2014, such balanceamounted to $49,562.

1.16.6. RESTRUCTURED LOANS AND LIABILITIES. Restructuredloans and financial obligations are valued based on the actuallyrestructured principal amounts plus accrued interest and principaladjustments, when applicable, minus collections or payments made.Pursuant to Argentine GAAP, those restructured loans and liabilities,for which modification of original conditions imply a substitution ofinstruments, must be recorded on the basis of the best possibleestimate of the amounts receivable or payable discounted at a marketrate that reflects market evaluations on the time value of money andthe specific risks of such assets and liabilities at the time ofrestructuring.

1.16.7. CONVERSION OF FINANCIAL STATEMENTS. The conversioninto Pesos of the financial statements of the foreign subsidiary for thepurposes of their consolidation, made in accordance with theArgentine Central Bank regulations, differs from Argentine GAAP(Technical Pronouncement Nº 18). These principles require that: a) themeasurements in the financial statements to be converted into Pesosthat are stated in period-end foreign currency (current values,recoverable values) be converted at the exchange rate of the financialstatements’ date; and b) the measurements in the financial statementsto be converted into Pesos that are stated in foreign currency ofperiods predating the closing date (for example: those which representhistorical costs, income, expenses) be converted at the relevanthistorical exchange rates, restated at period-end currency, whenapplicable due to the application of Technical Pronouncement Nº 17.Exchange-rate differences arising from conversion of the financialstatements shall be treated as financial income or expenses, whenappropriate.The application of this criterion that replaces what has been stated inthis Note does not have a significant impact on the consolidatedfinancial statements.

1.16.8. PENALTIES IMPOSED ON AND SUMMARY PROCEEDINGSBROUGHT AGAINST FINANCIAL INSTITUTIONS. Communiqué “A”5689 of the Argentine Central Bank provides for that, as from January



2015, financial institutions shall establish provisions for 100% of theadministrative and/or disciplinary penalties, and those of a criminalnature with a judgment from a lower court, imposed or commencedby the Argentine Central Bank, the Financial Information Unit (U.I.F. asper its initials in Spanish - Unidad de Información Financiera), theC.N.V. and the Argentine Superintendency of Insurance, which havebeen notified to Banco de Galicia y Buenos Aires S.A., regardless theirlevel of importance, even when there are legal or administrativemeasures that stop the payment of fines, and whichever the legalstage of the case. Furthermore, it provides for financial institutionsshall inform such penalties in a note to the financial statements,whether they are determined or not, as well as the summaryproceedings commenced by the Argentine Central Bank, as from themoment the institution is given notice thereof. Pursuant to Argentine GAAP in force in the Autonomous City ofBuenos Aires, such contingencies shall be recorded under liabilitieswhen the possibility their effects take place is high and they can beappropriately determined in terms of currency. These shall as well beinformed in notes to the financial statements. Contingencies whichoccurrence is considered to be remote shall not be included in thefinancial statements or the notes thereto, while those which possibilityof occurrence is not considered remote but do not meet therequirements to be recorded under liabilities shall only be informed innotes to the financial statements.

1.17 - ADOPTION OF THE INTERNATIONAL FINANCIALREPORTING STANDARDS (I.F.R.S.) BY THE C.N.V. The C.N.V. hasestablished the application of Technical Pronouncement Nº 26 of theArgentine Federation of Professional Councils in Economic Sciences,which adopts the International Financial Reporting Standards issuedby the I.A.S.B. (International Accounting Standards Board) for certainentities included within the public offering system, whether becauseof their capital or their negotiable obligations, or because they haverequested to be included in such system, for financial statementscorresponding to fiscal years started as from January 1, 2012.The adoption of such standards is not applicable to the Company sincethe C.N.V., in Article 2 - Section I - Chapter I of Title IV: PeriodicReporting System of the C.N.V.´s Pronouncements (Text amended in2013), exempts banks, insurance companies and companies thatinvest in banks and insurance companies.

Due to the foregoing, and since the Company complies with therequirements described below, which are set forth in theaforementioned article, these financial statements are presentedpursuant to the valuation and disclosure criteria established by theArgentine Central Bank regulations:- Grupo Financiero Galicia S.A.’s corporate purpose is exclusivelyrelated to financial and investment activities;- The interest in Banco de Galicia y Buenos Aires S.A. accounts for93.48% of Grupo Financiero Galicia S.A.’s assets, being theCompany's main asset;- 90.79% of Grupo Financiero Galicia’s income stems from theinterest in Banco de Galicia y Buenos Aires S.A.’s income; and- Grupo Financiero Galicia S.A. has a 100% interest in Banco deGalicia y Buenos Aires S.A., thus having control over such institution.

In February 2014, the Argentine Central Bank decided financialinstitutions should comply with the I.F.R.S., and established animplementation schedule for such standards, to be effective for fiscalyears starting on January 1, 2018. In accordance with the mentionedabove, Banco de Galicia y Buenos Aires S.A.’s Board of Directors hasbecome aware of the roadmap established by the Argentine CentralBank and has appointed a coordinator and an alternate coordinator,who shall be in charge of the compliance process. On March 20, 2015,it has approved the Implementation Plan required by regulations,which Plan was submitted to this body on March 27, 2015. In compliance with the provisions of Communiqué “A” 5635, at themeeting held on September 16, 2015, Banco de Galicia y Buenos AiresS.A.’s Board of Directors approved the first report on the progressmade during the six-month period from March to September 2015.Furthermore, on September 25, 2015, Banco de Galicia y Buenos AiresS.A.’s Audit Committee approved the Special Internal Audit Reportrelated to the Implementation Plan’s level of progress with regard toachieving compliance with the International Financial ReportingStandards (I.F.R.S.). Both reports were filed with the Argentine CentralBank on September 28, 2015.Banco de Galicia y Buenos Aires S.A. is currently working on the initialaccounting assessment process, by reviewing the main I.F.R.S. to beapplied as well as the most significant changes in relation tomeasurement and disclosure aspects with regard to the ArgentineCentral Bank regulations.


NOTE 2 - CONSOLIDATED CONTROLLED COMPANIES

The basic information regarding Grupo Financiero Galicia’s consolidated controlled companies is detailed as follows:

Direct and indirect holding 12.31.2015

Shares Porcentaje de participación sobre

Issuing company Type Amount Total Capital Possible Votes

Banco de Galicia y Buenos Aires S.A. (*)

Banco Galicia Uruguay S.A. (En liquidation) (**)

Cobranzas Regionales S.A. (***)

Cobranzas y Servicios S.A.



Galicia Broker Asesores de Seguros S.A.

Galicia Retiro Compañía de Seguros S.A.

Galicia Seguros S.A.

Galicia Valores S.A.

Galicia Warrants S.A.

Net Investment S.A.

Procesadora Regional S.A.


Tarjeta Naranja S.A. (****)

Tarjetas Cuyanas S.A. (****)

Tarjetas del Mar S.A. (****)

Tarjetas Regionales S.A. (*)

(*) Ordinary shares A and B. (**) With a F.V. of 1000. During this fiscal year, the Extraordinary Shareholders’ Meeting of Banco Galicia Uruguay S.A. (In liquidation) decided to redeem sharesfor an amount equivalent to US$1,880. (***) With a F.V. of 100. (****) With a F.V. of 10.

Direct and indirect holding 12.31.2014

Shares Porcentaje de participación sobre

Issuing company Type Amount Total Capital Possible Votes

Banco de Galicia y Buenos Aires S.A. (*)

Banco Galicia Uruguay S.A. (En liquidación) (**)

Cobranzas Regionales S.A. (***)









Net Investment S.A.



Tarjeta Naranja S.A. (****)

Tarjetas Cuyanas S.A. (****)

Tarjetas del Mar S.A. (****)

Tarjetas Regionales S.A. (*)

(*) Ordinary shares A and B. (**) With a F.V. of 1000. (***) With a F.V. of 100. (****) With a F.V. of 10.

100.00000

100.00000

77.00000

100.00000

100.00000

100.00000

99.99439

99.99991

99.99978

100.00000

100.00000

100.00000

78.15000

100.00000

77.00000

77.00000

60.00000

77.00000

100.00000

100.00000

77.00000

100.00000

100.00000

100.00000

99.99439

99.99991

99.99978

100.00000

100.00000

100.00000

78.15000

100.00000

77.00000

77.00000

60.00000

77.00000

562,326,651

69,099

7,700

475,728

557,562,500

20,000

71,310

7,727,271

1,830,883

1,000,000

1,000,000

12,000

12,709,967

185,653

1,848

2,489,628

4,787,962

829,886,212

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

100.00000

100.00000

77.00000

100.00000

100.00000

100.00000

99.99439

99.99991

99.99978

100.00000

100.00000

100.00000

78.15000

100.00000

77.00000

77.00000

60.00000

77.00000

100.00000

100.00000

77.00000

100.00000

100.00000

100.00000

99.99439

99.99991

99.99978

100.00000

100.00000

100.00000

78.15000

100.00000

77.00000

77.00000

60.00000

77.00000

562,326,651

110,530

7,700

475,728

557,562,500

20,000

71,310

7,727,271

1,830,883

1,000,000

1,000,000

12,000

12,709,967

185,653

1,848

2,489,628

4,787,962

829,886,212

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary


Information as 12.31.2015

Shareholders’

Company Assets Liabilities Equity Net income

Banco de Galicia y Buenos Aires S.A.

Banco Galicia Uruguay S.A. (En liquidation)

Cobranzas Regionales S.A.




Galicia Broker Asesores de Seguros S.A. (*)

Galicia Retiro Compañía de Seguros S.A. (*)

Galicia Seguros S.A. (*)



Net Investment S.A.


Sudamericana Holding S.A. (*)



Tarjetas del Mar S.A.

Tarjetas Regionales S.A.

(*) For the six-month period ended December 31, 2015.

Information as 12.31.2014

Shareholders’

Company Assets Liabilities Equity Net income


Banco Galicia Uruguay S.A. (En liquidación)





Galicia Broker Asesores de Seguros S.A. (*)

Galicia Retiro Compañía de Seguros S.A. (*)

Galicia Seguros S.A. (*)



Net Investment S.A.







(*) For the six-month period ended December 31, 2014.

3,912,917

(17,821)

5,074

24,674

127,316

115,963

1,967

(2,573)

243,462

20,727

31,253

37

(9,470)

256,844

1,255,586

285,094

31,591

1,556,589

13,812,169

31,780

23,423

66,391

1,249,947

119,885

6,270

14,291

525,112

62,066

46,422

210

9,059

645,611

3,536,345

818,855

123,953

4,598,855

124,899,954

9,329

23,495

14,174

2,498,053

48,972

9,933

114,029

735,915

49,376

44,513

7

4,787

11,235

14,634,003

3,393,544

992,443

10,683

138,712,123

41,109

46,918

80,565

3,748,000

168,857

16,203

128,320

1,261,027

111,442

90,935

217

13,846

656,846

18,170,348

4,212,399

1,116,396

4,609,538

3,158,416

(5,075)

3,614

15,137

112,708

50,357

1,626

241

115,680

15,891

12,783

24

2,638

115,580

619,025

195,763

29,577

833,825

9,899,252

48,692

18,349

41,717

1,122,631

54,279

5,047

16,434

307,679

41,339

27,178

173

18,528

387,059

2,430,759

582,702

111,412

3,202,266

78,846,696

5,482

13,479

18,147

2,590,784

25,268

6,028

93,546

533,796

115,697

19,135

6

7,693

13,280

11,435,447

2,680,939

599,837

23,019

88,745,948

54,174

31,828

59,864

3,713,415

79,547

11,075

109,980

841,475

157,036

46,313

179

26,221

400,339

13,866,206

3,263,641

711,249

3,225,285

On February 25, 2014, Grupo Financiero Galicia S.A.’s Board ofDirectors resolved the following: (i) to issue the statement ofwillingness to acquire provided for in Section 91, Subsection b) of LawNº 26831, with regard to all the remaining shares of Banco de Galiciay Buenos Aires S.A. held by third parties; (ii) to approve the criterionsuggested by the Management Division on the fair price provided forin Section 94, second paragraph, of Law Nº 26831, and establish it in$23.22 (figure stated in Pesos) for each remaining share held by thirdparties; (iii) to request the National Securities Commission theimmediate withdrawal of Banco de Galicia y Buenos Aires S.A. fromthe public offering and listing at the Buenos Aires Stock Exchange,under the terms of Section 94, third paragraph, of Law Nº 26831; (iv)to appoint Banco de Galicia y Buenos Aires S.A. as the financialinstitution where Grupo Financiero Galicia S.A. shall deposit theamount corresponding to the total value of Banco de Galicia y BuenosAires S.A.’s remaining shares; and (v) to give Banco de Galicia yBuenos Aires S.A. notice of the statement of willingness to acquire.

On April 24, 2014, the Board of Directors of the C.N.V. approved theunilateral statement of willingness to acquire issued by the Company.Thus, on May 6, 2014, the amount corresponding to the total value ofBanco de Galicia y Buenos Aires S.A.'s remaining shares wasdeposited. The C.N.V.'s approval of the aforementioned proceedingswas registered with the Corporation Control Authority (I.G.J.) on July14, 2014.

On August 4, 2014, the statement of willingness to acquire wasexecuted by public deed, what makes Grupo Financiero Galicia S.A.the owner, by operation of law, of all of Banco de Galicia y BuenosAires S.A.’s existing shares, pursuant to the provisions of Section 95 ofLaw Nº 26831. The unilateral statement of willingness to acquire wasregistered with the Corporation Control Authority (I.G.J.) on September12, 2014.

On April 7, 2014, Banco de Galicia y Buenos Aires S.A. presented GrupoFinanciero Galicia S.A. with an offer to sell 19,000 shares of GaliciaAdministradora de Fondos S.A., representing 95% of theaforementioned company’s capital stock, being the offer considered

accepted at the time the buyer made a payment equivalent to 25% ofthe total purchase price. On April 15, 2014, Grupo Financiero GaliciaS.A.’s Board of Directors approved the purchase of 95% of GaliciaAdministradora de Fondos S.A.’s capital stock, and paid 25% of thetotal agreed price, which amounted to $39,482. The remaining 75%was paid on October 10, 2014.

During the fiscal year 2014, Galicia Cayman Ltd. transferred itsdomicile to the Republic of Argentina. The company was registered atthe Bureau of Legal Entities (Dirección de Personas Jurídicas) of theProvince of Mendoza under the name Galicia Cayman S.A.Banco de Galicia y Buenos Aires S.A.’s Extraordinary Shareholders’Meeting held in November 2014 approved the merger by absorptionof Galicia Cayman S.A., effective since October 1, 2014, as agreed inthe Preliminary Merger Agreement entered into by the aforementionedcompanies. The merger by absorption of Galicia Cayman S.A.’sShareholders’ Equity into Banco de Galicia y Buenos Aires S.A. led tothe dissolution without liquidation of the former pursuant to theprovisions of Section 82 of the General Corporations Law. The C.N.V.authorized such merger in July 2015. On September 23, 2015, theBureau of Legal Entities (Dirección de Personas Jurídicas) of theProvince of Mendoza decided to cancel Galicia Cayman S.A.’sregistration with the Public Registry of Commerce.Tarjetas del Mar S.A.’s General Extraordinary Shareholders’ Meeting,held in May 2014, decided to increase the capital stock in the amountof $31,919, which was completely subscribed by Sociedad AnónimaImportadora y Exportadora de la Patagonia. By virtue of theaforementioned decision, the company's capital stock is composed asfollows: Banco de Galicia y Buenos Aires S.A.: 58.8% interest;Compañía Financiera Argentina S.A.: 1.2% interest; Sociedad AnónimaImportadora y Exportadora de la Patagonia: 40% interest.The percentage of the controlled companies’ Shareholders’ Equityowned by third parties has been disclosed in the Balance Sheet, underthe "Minority Interest in Consolidated Controlled Companies"account.The gain (loss) on the minority interest is disclosed in the IncomeStatement under "Minority Interest Gain (Loss)”.The minority interest percentages at fiscal year-end are the following:

December 31,










2014

23.00000%

0.00561%

0.00009%

0.00022%

21.85000%

23.00000%

23.00000%

40.00000%

23.00000%

2015

23.00000%

0.00561%

0.00009%

0.00022%

21.85000%

23.00000%

23.00000%

40.00000%

23.00000%



NOTE 3 - GOVERNMENT AND PRIVATE SECURITIES

As of December 31, 2015 and December 31, 2014, holdings of government and private securities were as follows:

December 31,



Government bonds

Total holdings recorded at fair market value

Holdings recorded at their acquisition cost plus the I.R.R.

Government bonds

Total holdings recorded at their acquisition cost plus the I.R.R.

Instruments issued by the Argentine Central Bank

Argentine central bank bills at fair market value

Argentine central bank bills for repo transactions

Argentine central bank bills at acquisition cost plus the I.R.R.

Total instruments issued by the Argentine Central Bank

Total government securities

Private securities

Shares

Total private securities

Total government and private securities

2014

2,446,230

2,446,230

316,773

316,773

3,581,267

16,768

3,648,716

7,246,751

10,009,754

396

396

10,010,150

2015

2,376,386

2,376,386

1,389,617

1,389,617

6,180,021

-

5,579,066

11,759,087

15,525,090

-

-

15,525,090

NOTE 4 - LOANS

The lending activities carried out by Grupo Financiero Galicia S.A.’ssubsidiaries are as follows:A. LOANS TO THE NON-FINANCIAL PUBLIC SECTOR. They areprimarily loans to the National Government and to ProvincialGovernments.B. LOANS TO THE FINANCIAL SECTOR. They represent loans tobanks and local financial institutions.C. LOANS TO THE NON-FINANCIAL PRIVATE SECTOR ANDRESIDENTS ABROAD. They include the following types of loans:Overdrafts: Short-term obligations issued in favor of customers.Promissory Notes: Endorsed promissory notes, discount and factoring.Mortgage Loans: Loans for the purchase of real estate for housingpurposes, secured by such purchased real estate or commercial loans

secured by real estate mortgages.Collateral Loans: Loans in which a pledge is granted as collateral, asan integral part of the loan instrument.Credit Card Loans: Loans granted to credit card holders.Personal Loans: Loans to natural persons.Others: This item primarily involves export prefinancing loans andshort-term placements in banks abroad.According to the Argentine Central Bank regulations, the loan portfoliobreaks down as follows: The non-financial public sector, the financialsector and the non-financial private sector and residents abroad.Moreover, the Company must disclose the type of collateralestablished on the applicable loans to the non-financial private sector.

As of December 31, 2015 and December 31, 2014, the classificationof the loan portfolio was as follows:

December 31,


Financial sector



With other collateral

With no collateral

Subtotal


Total

2014

15,556

192,545

69,015,019

2,694,778

9,462,570

56,857,671

69,223,120

(2,614,919)

66,608,201

2015

17,705

761,547

101,125,473

2,988,119

13,189,545

84,947,809

101,904,725

(3,559,994)

98,344,731

Said loans were granted in the normal course of transactions with standard terms, interest rates, and collateral requirements.

NOTE 5. STATEMENT OF DEBTORS’ STATUS

The loan portfolio classification pursuant to the loan classification criteria set forth by the Argentine Central Bank is detailed as follows:

COMMERCIAL LOAN PORTFOLIO

Classification

Normal

With special follow-up - Under observation

With special follow-up -

Under negotiation or under refinancing agreements

With problems

High risk of insolvency

Uncollectible

CONSUMER AND HOUSING LOAN PORTFOLIO

Classification

Normal Performance

Inadequate Performance

Deficient Performance

Difficult Collection

Uncollectible

The category “financing” includes the items with regard to which debtors should be classified, from the point of view of the debtors’creditworthiness, recorded under the accounts detailed below:

December 31,

Loans




Contingent liabilities

Total

Description

Cash flow analysis shows that the customer is widely able to meet all of its financial commitments. Among the indi-

cators that can reflect this situation, the following are worth noting: The customer shows a liquid financial situation,

regularly complies with the payment of its obligations, has a qualified and honest management, has an appropriate

information system, belongs to a sector of the economic activity or to a business sector that shows an acceptable

future trend and is competitive with regard to the activities it conducts.

Cash flow analysis shows, at the time of carrying out the analysis, that the customer is able to meet all of its

financial commitments. However, there are possible situations that, in case they are not duly controlled or else

solved, could compromise the customer’s future repayment capacity.

This category includes those customers who, when unable to meet their financial commitments pursuant to the

terms and conditions agreed, irrefutably state their intention to refinance their debt.

Cash flow analysis shows that the customer is unable to meet its financial commitments in a normal manner and

that, in case such problems are not solved, they could result in a loss for the financial institution.

Cash flow analysis shows that the customer is highly unlikely to meet all of its financial commitments.

Customers’ debts included in this category are considered uncollectible. Even though there is some possibility of

recovering these assets under certain circumstances in the future, it is evident they are uncollectible at the time of

the analysis.

Description

This category includes customers who duly and timely comply with the payment of their commitments, or else with

payment in arrears of less than 31 days. Provisional overdrafts shall be considered normal until day 61 from the

granting date.

It includes customers with occasional late payments at the time of meeting their commitments, with payments in

arrears of more than 31 days and up to 90 days.

This category includes customers who show some inability to meet their commitments, with payments in arrears of

more than 90 days and up to 180 days.

It includes customers with payments in arrears of more than 180 days and up to one year, or who are subject to judicial

proceedings for collection, if their payments in arrears do not exceed one year.

This category includes insolvent or bankrupt customers, with little or no possibility of collection, or with payments in

arrears in excess of one year.


2014

69,223,120

1,521,648

1,061,022

8,864

7,170,553

78,985,207

2015

101,904,725

3,033,356

976,250

19,651

9,485,658

115,419,640


As of December 31, 2015 and December 31, 2014, the classification of debtors was as follows:

December 31,

COMMERCIAL LOAN PORTFOLIO

Normal

Backed by preferred guarantees and counter-guarantees “A”

Backed by preferred guarantees and counter-guarantees “B”

With no preferred guarantees or counter-guarantees

With special follow-up - under observation




With problems




High risk of insolvency



Uncollectible




Total commercial loan portfolio

CONSUMER AND HOUSING LOAN PORTFOLIO

Normal




Low risk




Medium risk




High risk




Uncollectible






Total commercial and housing loan portfolio

Grand total

The management and mitigation of credit risk are described in Note 35 on risk management policies.

2014

27,061,653

447,835

2,012,876

24,600,942

287,414

1,200

68,426

217,788

30,311

3,275

925

26,111

50,773

28,101

22,672

5

-

-

5

27,430,156

47,911,247

24,108

1,209,530

46,677,609

1,219,774

357

11,129

1,208,288

761,724

-

7,414

754,310

1,340,987

85

8,413

1,332,489

317,835

-

8,912

308,923

3,484

3,484

51,555,051

78,985,207

2015

41,555,896

511,207

2,593,290

38,451,399

166,093

-

75,847

90,246

92,125

-

51,689

40,436

62,486

25,076

37,410

97,670

302

2,710

94,658

41,974,270

69,134,231

48,497

1,091,184

67,994,550

1,361,365

571

9,620

1,351,174

801,461

206

8,994

792,261

1,109,637

232

4,920

1,104,485

1,033,686

429

15,297

1,017,960

4,990

4,990

73,445,370

115,419,640

NOTE 6. ALLOWANCES FOR LOAN LOSSES

The changes in allowances for loan losses as of December 31, 2015and December 31, 2014 were the following:

December 31,

Balances at beginning of fiscal year

Increases

Decreases

Reversals

Uses

Balances at fiscal year-end

NOTE 7. OTHER RECEIVABLES RESULTING FROMFINANCIAL BROKERAGE - OTHERS NOT INCLUDEDIN THE DEBTOR CLASSIFICATION REGULATIONS

As of December 31, 2015 and December 31, 2014, the breakdown ofthe account “Others Not Included in the Debtor ClassificationRegulations” was the following:

December 31,

Unlisted participation certificates and

debt securities in financial trusts

Others

Total


2014

2,128,647

2,327,363

1,841,091

1,000

1,840,091

2,614,919

2015

2,614,919

2,147,694

1,202,619

75,148

1,127,471

3,559,994

2014

1,889,597

1,691,407

3,581,004

2015

1,494,565

599,393

2,093,958

NOTE 8. DERIVATIVE INSTRUMENTS

The amounts of transactions conducted as of fiscal year-end, net of eliminations between affiliated companies, when appropriate, are detailedas follows:

Item

Forward purchase - sale of foreign currency

Purchases

Sales

Sales by customers

Interest rate swaps

Swaps

Swaps from customers

Call options bought and written on dollar futures

Call options bought on dollar

Call options written on dollar

Amount as of

12.31.2014

9,284,396

4,773,359

1,774,953

51,000

189,269

-

-

12.31.2015

30,580,294

20,393,874

7,044,538

40,000

20,000

624,951

737,832

Type of settlement

Settlement on a daily basis







Underlying asset

Foreign currency

Foreign currency

Foreign currency

Others

Others

Dollar

Dollar

NOTE 9. EQUITY INVESTMENTS

As of December 31, 2015 and December 31, 2014, the breakdown of “Equity Investments” was as follows:

December 31,

In financial institutions, supplementary and authorized activities

Banco Latinoamericano de Exportaciones S.A.

Mercado de Valores de Buenos Aires S.A.

Prisma Medios de Pagos S.A. (Ex Visa Argentina S.A.)

Others

Total equity investments in financial institutions, supplementary and authorized activities

In non-financial institutions

Aguas Cordobesas S.A.

Distrocuyo S.A.

Electrigal S.A.

Nova Re Compañía Argentina de Reaseguros S.A.

Others

Total equity investments in non-financial institutions

Provisions

Total

2014

4,240

8,141

7,836

828

21,045

8,911

3,955

5,455

12,979

1,383

32,683

(1,933)

51,795

2015

6,447

2,749

7,836

829

17,861

8,911

3,955

5,455

14,956

1,229

34,506

(636)

51,731


NOTE 10. MISCELLANEOUS RECEIVABLES - OTHERS

As of December 31, 2015 and December 31, 2014, the breakdown of “Miscellaneous Receivables - Others” was as follows:

December 31,

Sundry debtors

Deposits as collateral

Tax advances

Payments in advance

Others

Total

NOTE 11. BANK PREMISES AND EQUIPMENT

As of December 31, 2015 and December 31, 2014, the breakdown of “Bank Premises and Equipment” was as follows:

December 31,

Real estate

Furniture and fixtures

Machines and equipment

Vehicles

Others

Accumulated depreciation

Total

As of December 31, 2015 and December 31, 2014, the depreciation charge amounted to $218,611 and $172,582, respectively.

NOTE 12. MISCELLANEOUS ASSETS

As of December 31, 2015 and December 31, 2014, the breakdown of “Miscellaneous Assets” was as follows:

December 31,

Obras en curso

Anticipos por compra de bienes

Obras de arte

Bienes dados en alquiler

Bienes tomados en defensa de créditos

Papelería y útiles

Otros bienes diversos

Total

As of December 31, 2015 and December 31, 2014, the depreciation and loss charge amounted to $3,433 and $987, respectively.

2014

462,365

734,689

475,620

155,224

33,737

1,861,635

2015

391,962

1,425,883

577,202

201,865

95,374

2,692,286

2014

1,455,854

391,075

853,147

17,761

16,425

(1,180,544)

1,553,718

2015

1,903,121

455,189

1,073,438

22,413

18,499

(1,393,575)

2,079,085

2014

202,405

37,440

1,554

1,097

3,620

49,487

108,709

404,312

2015

538,327

105,109

1,619

1,315

2,261

53,759

117,683

820,073

NOTE 14. OTHER ASSETS

The account “Other Assets” includes assets related to the insuranceactivity. As of December 31, 2015 and December 31, 2014, thebreakdown of this account was the following:

December 31,

Premiums receivable

Receivables from reinsurers

Commissions receivable

Others

Allowances

Total

NOTE 15. RESTRICTED ASSETS AND OTHERCONTINGENT LIABILITIES

Pursuant to the Argentine Central Bank regulations, Banco de Galiciay Buenos Aires S.A. shall maintain a monthly average liquidity level.

As of December 31, 2015, the balances recorded by such institution ascomputable items are as follows:

Concepto

Checking accounts at the


Special guarantees accounts at the


Total computable items to meet

minimum cash requirements

(*) Stated in thousands of US$.

As from January 1, 2016, the Argentine Central Bank provided for thedecrease of the cash reserve in foreign currency through Communiqué“A” 5873 and Communiqué “A” 5893.

As of December 31, 2015, the ability to freely dispose of certain assetscorresponding to the controlled companies was restricted, as follows:

BANCO DE GALICIA Y BUENOS AIRES S.A.a) Cash and Government Securities

For transactions carried out at RO.F.EX. and at M.A.E.

For debit / credit cards transactions

For attachments

Liquidity required to conduct transactions as agents at the C.N.V.

For the contribution to the M.A.E.'s Joint Guarantee Fund

(Fondo de Garantía Mancomunada)

For other transactions

b) Special Guarantees AccountsSpecial guarantees accounts have been opened at the ArgentineCentral Bank as collateral for transactions involving electronic clearinghouses, checks for settling debts and other similar transactions, which,as of December 31, 2015 amounted to $1,546,936.

c) Deposits in favor of the Argentine Central Bank

Unavailable deposits related to foreign exchange transactions

Securities held in custody to act as register agent of book-entry

mortgage securities

d) Equity InvestmentsThe account "Equity Investments" includes shares, the transfer of whichis subject to the prior approval of the National or Provincial authorities,as applicable, under the terms of the concession contracts signed:- Electrigal S.A.: 1,222,406 non-transferable non-endorsableregistered ordinary shares.- Aguas Cordobesas S.A.: 900,000 class E ordinary shares.

Banco de Galicia y Buenos Aires S.A., as a shareholder of AguasCordobesas S.A. and proportionally to its 10.833% interest, is jointlyresponsible before the Provincial State for the contractual obligationsarising from the concession contract during the entire term thereof.If any of the other shareholders fails to comply with the commitmentsarising from their joint responsibility, Banco de Galicia y Buenos AiresS.A. may be forced to assume the unfulfilled commitment by thegrantor, but only in the proportion and to the extent of the interestheld by said Bank.

NOTE 13. INTANGIBLE ASSETS

As of December 31, 2015 and December 31, 2014, the breakdown of “Intangible Assets” was as follows:

December 31,

Goodwill net of accumulated amortization amounting to $34,149 and $24,475, respectively.

Organization and development expenses net of accumulated amortization amounting to $1,555,116 and $1,839,448, respectively.

Total

As of December 31, 2015 and 2014, the amortization charge amounted to $645,116 and $339,964, respectively.


2014

298,882

9,507

2,357

1,874

(5,801)

306,819

2015

412,664

9,735

5,281

1,967

(10,137)

419,510

U$S

1,047,472

2,300

1,049,772

$661,713

$534,365

$108

$17,425

$23,630

$4,988

$533

$1,912

$

9,307,534

1,517,024

10,824,558

2014

24,990

1,775,632

1,800,622

2015

15,316

2,010,528

2,025,844

Euros (*)

15

-

15

e) Contributions to Garantizar S.G.R.’s Risk FundBanco de Galicia y Buenos Aires S.A., in its capacity as sponsoringpartner of Garantizar S.G.R.’s Risk Fund, is committed to maintainingthe contributions made to the fund for two (2) years. As of December31, 2015, the Bank’s contribution amounts to $100.000.

f) Guarantees Granted for Direct ObligationsAs of December 31, 2015, Banco de Galicia y Buenos Aires S.A. hasrecorded $873,269 as collateral for credit lines granted by theInternational Finance Corporation (IFC), and the related transactionshave been allocated to the resources provided thereby.

As collateral for the funds requested, through the Argentine CentralBank, from the Subsecretaría de la Micro, Pequeña y Mediana Empresay Desarrollo Provincial destined to the financing of the Global CreditProgram for Micro-, Small- and Medium-sized Companies, Banco deGalicia y Buenos Aires S. A. used promissory notes for $25,500.Furthermore, as of December 31, 2015, Banco de Galicia y BuenosAires S.A. used promissory notes as collateral for the loans grantedwithin the Credit Program to the Provinces of San Juan and Mendozafor the amount of $18,375.

As of December 31, 2015, the total amount of restricted assetscorresponding to Banco de Galicia y Buenos Aires S.A. for theaforementioned items was $3,808,754, while as of December 31, 2014it was $2,626,634.

COMPAÑÍA FINANCIERA ARGENTINA S.A.As of December 31, 2015, the ability to freely dispose of the followingassets is restricted, as follows:

a) Cash and Government SecuritiesFor debit/credit cards transactions

For attachments

For other transactions

Liquidity required to conduct transactions as agents at the C.N.V.

For transactions at M.A.E.

As of the date of these financial statements, attachments are fullyincluded in a provision.

b) Special guarantees accountsThere are special guarantees accounts open at the Argentine CentralBank as collateral for transactions involving electronic clearing houses,checks for settling debts and other similar transactions, which, as ofDecember 31, 2015 amounted to $21,341.

As of December 31, 2015, the total amount of restricted assetscorresponding to Compañía Financiera Argentina S.A. for theaforementioned items was $56,934, while as of December 31, 2014it was $26,530.

GALICIA VALORES S.A. As of December 31, 2015, this company holds one share of Mercadode Valores de Buenos Aires S.A., while as of December 31, 2014 it heldthree shares of Mercado de Valores de Buenos Aires S.A., which securean insurance policy covering transactions for $2,150 and $6,450,respectively.

TARJETAS DEL MAR S.A.As of December 31, 2015 and December 31, 2014, this company haspaid $110 and $121, respectively, as guarantees related to certain realproperty lease agreements.

TARJETAS REGIONALES S.A.As of December 31, 2014, Tarjetas Regionales S.A. had performedguarantees for $8,552 with Mercado a Término de Rosario S.A.(RO.F.E.X), which correspond to instruments issued by the ArgentineCentral Bank for transactions with derivative instruments conductedwith such market.

TARJETA NARANJA S.A.As of December 31, 2015 and December 31, 2014, Tarjeta NaranjaS.A. has been levied attachments in connection with lawsuits for $238and $220, respectively. Furthermore, this company has paid $350 asguarantees regarding certain tax issues.Also, as of December 31, 2015 and December 31, 2014, the companyhas paid $1,810 and $1,514, respectively, as guarantees related tocertain real property lease agreements.As of December 31, 2015 and December 31, 2014, Tarjeta NaranjaS.A. has performed guarantees for $286,542 and $131,783,respectively, with the Rosario Futures Exchange (RO.F.E.X), throughinstruments issued by the Argentine Central Bank, for hedgingtransactions carried out with such market.Moreover, pursuant to the agreements entered into with financialinstitutions and as collateral for the loans received and the issuanceof negotiable obligations, Tarjeta Naranja S.A. has agreed not todispose of any assets or levy any encumbrance thereon, for an amounthigher than 25% of Tarjeta Naranja S.A.’s assets in some cases, and15% of said company’s Shareholders’ Equity. It is worth mentioningthat the above-mentioned restrictions shall not be applied fortransactions carried out during the ordinary course of the company’sbusiness.

TARJETAS CUYANAS S.A.As of December 31, 2015 and December 31, 2014, Tarjetas CuyanasS.A. has performed guarantees for $28,302 and $9,002, respectively,with the Rosario Futures Exchange (RO.F.E.X), through instrumentsissued by the Argentine Central Bank, for transactions with derivativeinstruments conducted with such market.

As of such dates, the company has paid $1,062 and $768, respectively,as guarantees related to certain real property lease agreements.


$9,064

$473

$15,241

$2,888

$7,927


NOTE 16. NEGOTIABLE OBLIGATIONS

There follows a breakdown of the Global Programs for the Issuance of Negotiable Obligations outstanding:

Type of Negotiable Term of Date of Approval by

Company Autorized Amount (*) Obligations Program Shareholders’ Meeting Approval by the CNV

Grupo Financiero Galicia S.A.






(*) Or its equivalent in any other currency.

Banco de Galicia y Buenos Aires S.A. has the following Subordinated Negotiable Obligations outstanding issued under the Global Program ofUS$2,000,000 as of the close of the fiscal year:

Residual F.V. (US$) Valor Libros (*)

Date of Issuance Currency as of 12.31.2015 Plazo Tasa 31.12.2015 31.12.2014 Emisión Autorizada C.N.V.

18.05.2004 US$ 234,989 (**) (1) (2) 3,300,516 2,065,815 29.12.2003 y 27.04.2004

(*) It includes principal and interest net of expenses.(**) This amount includes US$16,778 of the capitalization of interest services due July 1, 2014, January 2, 2015 and July 1, 2015, on the account of the payment-in-kind (by means ofNegotiable Obligations due 2019).The net proceeds of the above-mentioned issue of Negotiable Obligations were used to refinance the foreign debt in accordance with Section 36 of the Law on Negotiable Obligations, theArgentine Central Bank regulations, and other applicable regulations.(1) These Negotiable Obligations shall be fully amortized upon maturity on January 1, 2019, unless their principal is previously redeemed at par, plus unpaid accrued interest and additionalamounts, if any, fully or partially at the issuer’s option at any time, since Negotiable Obligations due 2014 have been fully repaid.(2) Interest on Negotiable Obligations due 2019 shall be payable in cash and in additional Negotiable Obligations due 2019, semi-annually in arrears on January 1 and July 1 of each year.Interest payable in cash shall accrue at an annual fixed rate of 11%, as from January 1, 2014, being due on January 1, 2019. Interest payable in kind (by means of Negotiable Obligations due 2019) shall accrue at an annual fixed rate of 5%, beginning on January 1, 2004, and shall be payable on January 1, 2014and January 1, 2019, unless these Negotiable Obligations are previously redeemed.

Resolution N°16.113 dated 04.29.2009

and extended through Resolution

Nº 17.343 del 05.08.2014. Authorization

of the increase, Resolution N° 17.064

dated 04.25.2013

Resolution N° 14.708 dated 12.29.2003



N° 16.454 del 11.11.2010 and Resolution

Nº 17.883 dated 11.20.2015. Increase of

the authorized amount through

Resolution Nº 17.883 dated 11.20.2015

Resolution Nº 15.440 dated 08.03.2006,

extended through Resolution Nº 16.505

dated 01.27.2011 and Resolution

Nº 17.958 del 01.08.2016. Increase of the

authorized amount through Resolution

Nº 15.848 del 03.19.2008 and Resolution

Nº 16.505 dated 01.27.2011



Nº 17.676 dated 05.21.2015

Resolution N° 16.328 dated 05.18.2010.

Authorization of the increase, Resolution

Nº 17.072 dated 05.02.2013

03.09.2009 confirmed

on 08.02.2012

09.30.2003 confirmed

on 04.27.2006

04.28.2005, 04.14.2010

and 04.29.2015

11.25.205,10.08.2007,

11.25.2010 and

04.17.2015

03.08.2012

03.30.10 confirmed on

04.06.2010 and

02.15.2013

5 years

5 years

5 years

08.03.2016

5 years

5 years

US$100,000

US$2,000,000

US$500,000

US$250,000

US$650,000

US$250,000

Simple negotiable

obligations, not convertible

into shares

Simple negotiable


into shares, subordinated or

not, secured or unsecured

Simple negotiable


into shares, subordinated or

not, secured or unsecured

Simple negotiable


into shares

Simple negotiable


into shares

Simple negotiable


into shares


The Company has the following Negotiable Obligations outstanding issued under these Global Programs as of the close of the fiscal year:Issuance

Date of placement Maturity Book Value (*) authorized

Company Currency Class N° F. V. Type (**) Term Date Rate 12.31.15 12.31.14 by the C.N.V.






Banco de Galicia y Bs. As. S.A.

















-

79,876

123,091

115,617

167,694

3,839,864

-

-

-

-

182,899

-

76,272

240,531

174,031

1,816,607

-

-

-

34,494

-

149,925

105,901

81,481

145,804

114,860

-

2,590,300

130,070

52,287

155,034

49,970

200,200

130,724

75,747

-

-

1,780,297

118,447

155,127

174,403

34,102

83,176

171,017

Variable Badlar

+ 4.25%

Variable Badlar

+ 5.25%

Variable Badlar

+ 3.25%

Variable Badlar

+ 4.25%

(1)

(2)

Variable Badlar

+ 4.25%

Variable Badlar

+ 2.97%

Variable Badlar

+ 4.30%

Variable Badlar

+ 2.47%

Variable Badlar

+ 4.00%

Fija 27.50%

Variable Badlar

+ 4.40%

Fija 27.24%

hasta el 9no. mes

luego Variable

Badlar + 4.25%

Fija 27.99%

hasta el 9no. mes

luego Variable

Badlar + 4.50%

Fija 9% TNA

Variable Badlar

+ 3.75%

Variable Badlar

+4.50%

Variable Badlar

+ 4%

Variable Badlar

+ 5%

Variable Badlar

+ 2.89%

Variable Badlar

+ 4.15%

$

$

$

$

$

U$S

$

$

$

$

$

$

$

$

$

U$S

$

$

$

$

$

$

07.31.2015

01.31.2017

04.23.2016

10.23.2017

07.27.2017

-

04.17.2015

01.11.2015

10.16.2015

06.20.2015

09.24.2016

09.05.2015

12.09.2016

02.05.2017

04.30.2017

01.28.2017

02.09.2015

06.04.2015

08.26.2015

02.26.2017

04.30.2015

04.30.2016

$101,800

$78,200

$140,155

$109,845

$160,000

Miles de

U$S300,000

$124,000

$49,900

$150,100

$50,000

$200,000

$128,900

$77,375

$249,000

$210,000

Miles de

U$S200,000

$114,020

$152,174

$173,800

$33,500

$79,968

$170,032

V Series I

V Series II

VI Series I

VI Series II

VII

-

X Series II

XI Series I

XI Series II

XII Series I

XII

Series II

XIII Series I

XIII

Series II

XIV

XV

XIII

XXII

Series II

XXIII

Series II

XXIV

Series I

XXIV

Series II

XXV Series I

XXV

Series II

18 months

36 months

18 months

36 months

24 months

84 months

18 months

9 months

18 months

270 días

24 months

270 días

24 months

21 months

21 months

72 months

549 días

547 días

546 días

1096 días

365 días

731 días

04.25.2013

04.25.2013

10.03.2014

10.03.2014

07.16.2015

11.04.2005

and

11.11.2010

09.27.2013

04.08.2014

04.08.2014

09.16.2014

09.16.2014

11.26.2014

11.26.2014

04.15.2015

07.22.2015

01.14.2011

07.18.2013

11.20.2013

02.14.2014

02.14.2014

04.21.2014

04.21.2014

01.30.2014

01.30.2014

10.23.2014

10.23.2014

07.27.2015

05.04.2011

10.17.2013

04.16.2014

04.16.2014

09.24.2014

09.24.2014

12.09.2014

12.09.2014

05.05.2015

07.30.2015

0128..2011

08.09.2013

12.04.2013

02.26.2014

02.26.2014

04.30.2014

04.30.2014

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Issuance

Date of placement Maturity Book Value (*) authorized

Company Currency Class N° F. V. Type (**) Term Date Rate 12.31.15 12.31.14 by the C.N.V.






Tarjeta Naranja S.A. (3)




Tarjeta Naranja S.A. (4)













Total

(*) It includes principal and interest, net of eliminations when appropriate. (**) Not convertible into shares.(1) Annual nominal 27% fixed rate during the first nine months, and variable BADLAR plus a nominal annual 4.25% rate for the following 15 months.(2) Interest agreed at an annual 8.75% rate shall be paid semiannually on May 4 and November 4 of each year until the maturity date, starting on November 4, 2011. The net proceeds fromthis issuance of negotiable obligations was applied to investments in working capital, other loans and other uses envisaged by the provisions of the Law on Negotiable Obligations and theArgentine Central Bank regulations.


-

153,879

-

128,187

98,594

-

298,568

346,605

338,378

(32)

-

-

-

116,974

-

100,874

-

119,262

71,206

260,952

211,150

267,050

9,512,548

145,114

169,060

173,118

158,505

-

(24)

-

-

-

-

178,186

178,527

55,805

148,072

138,448

121,121

161,941

118,446

-

-

-

-

8,095,266

Variable Badlar

+ 2.60%

Variable Badlar

+ 3.99%

Variable Badlar

+ 2.72%

Variable Badlar

+ 3.95%

Variable Badlar

+ 4.50%

-

Mixta 27.75% /

Badlar + 4.50%

Mixta 27.75% /

Badlar + 4.50%

Mixta 27% /

Badlar + 4.50%

-

Variable Badlar

+ 4.20%

Variable Badlar

+ 4.00%

Variable Badlar

+ 3%

Variable Badlar

+ 4.15%

Variable Badlar

+ 2.40%

Variable Badlar

+ 3.40%

Variable Badlar

+ 3.15%

Variable Badlar

+ 4%

Variable Badlar

+ 4.95%

Fija 27.90% TNA

Fija 27.50% TNA

Variable Badlar

+ 4.25%

$

$

$

$

$

-

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

07.11.2015

07.11.2016

10.03.2015

10.03.2016

01.22.2017

-

04.27.2017

06.29.2017

04.19.2017

-

05.07.2015

08.17.2015

05.16.2015

05.16.2016

08.03.2015

08.01.2016

10.31.2015

10.31.2016

02.20.2017

12.10.2016

02.12.2017

05.13.2017

$138,500

$161,500

$165,000

$158,000

$129,000

-

$334,030

$400,000

$370,851

-

$175,000

$173,200

$54,250

$145,750

$133,530

$116,470

$156,140

$114,000

$75,555

$300,000

$232,000

$300,000

XXVI

Series I

XXVI

Series II

XXVII

Series I

XXVII

Series II

XXVIII

Series II

XXVIII

XXIX

XXX

XXXI

XXXII

XII

Series II

XIII

Series I

XIV

Series I

XIV

Series II

XV

XVI

XVII

XVIII

XIX

Series II

XX

XXI

XXII

365 días

731 días

365 días

731 días

731 días

-

731 días

731 días

548 días

-

546 días

546 días

365 días

731 días

365 días

731 días

365 días

731 días

731 días

549 días

550 días

547 días

01.07.2014

01.07.2014

19.09.2014

19.09.2014

09.01.2015

09.01.2015

16.04.2015

18.06.2015

07.10.2015

19.04.2017

28.10.2013

06.02.2014

07.05.2014

07.05.2014

22.07.2014

22.07.2014

21.10.2014

21.10.2014

06.02.2015

01.06.2015

29.07.2015

03.11.2010

07.11.2014

07.11.2014

10.03.2014

10.03.2014

01.22.2015

-

04.27.2015

06.29.2015

10.19.2015

-

11.07.2013

02.17.2014

05.16.2014

05.16.2014

08.01.2014

08.01.2014

10.31.2014

10.31.2014

02.20.2015

06.10.2015

08.12.2015

11.13.2015

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple

Simple


Furthermore, as of December 31, 2015 and December 31, 2014, Banco de Galicia y Buenos Aires S.A. holds past due Negotiable Obligations, theholders of which have not tendered to the restructuring offer as follows:

Residual F.V. (US$) Book Value (*) Issuance authorized

Date of Issuance Currency as of 12.31.2015 Type Term Rate 12.31.2015 12.31.2014 by the C.N.V.

11.08.1993 US$ 468 Simple 10 años 9% 13.846 14.630 08.10.1993

(*) It includes principal and interest.

As of December 31, 2014, Banco de Galicia y Buenos S.A. recorded in its own portfolio Negotiable Obligations due 2018 for the amount of$46,743.

During January 2016, Tarjeta Naranja S.A. issued Class XXXII Negotiable Obligations, for a total amount of $206,811. This issuance was carriedout in only one series, maturing in October 2017, with interest paid on a quarterly basis at a variable rate (Badlar plus a 4.50% annual margin).The first interest payment shall be on April 20, 2016, while the amortization shall be paid in three quarterly installments in April, July and October2017.

After fiscal year-end, Tarjeta Naranja S.A. repaid the second amortization of principal of Class XIII Negotiable Obligations for US$66,660, and thecorresponding interest services. At the date of these financial statements, the payment of the last amortization installment corresponding to theaforementioned Negotiable Obligations, for US$66,680, is pending.

In January 2016, Tarjetas Cuyanas S.A.’s Board of Directors approved the issuance of Class XXIII Negotiable Obligations, with a face value of upto $100,000, which may increase up to a total global face value of $300,000. Class XXIII Negotiable Obligations shall be due in up to 36 months,computed since the issuance date thereof. Principal shall be paid in only one installment 36 months after the issuance date, on the correspondingmaturity date, and shall accrue interest at a mixed interest rate. Interest shall be paid on a quarterly basis.As of the date of these financial statements, the issuance process has not been completed.

During February 2016, Compañía Financiera Argentina S.A. issued Class XVI Negotiable Obligations for a total amount of $300,000, which shallaccrue interest on a quarterly basis at a variable Badlar rate plus a 4.5% margin since the issuance date and up to its maturity date in August2017. Amortization shall be paid in only one installment upon maturity date.

NOTE 17. OTHER LIABILITIES RESULTING FROM FINANCIAL BROKERAGE - OTHERS

As of December 31, 2015 and December 31, 2014, the breakdown of “Other Liabilities Resulting from Financial Brokerage - Others” was as follows:

December 31,

Collections and other transactions on account of third parties

Liabilities due to financing of purchases

Other withholdings and additional withholdings

Correspondent transactions on our account

Liabilities subject to minimum cash requirements

Miscellaneous liabilities not subject to minimum cash requirements

Commissions accrued payable

Others

Total

2014

1,585,354

10,893,132

923,616

64,752

200,414

1,150,754

60,845

67,673

14,946,540

2015

2,487,136

15,316,255

1,224,133

700,024

679,179

2,231,447

52,613

98,171

22,788,958

NOTE 18. MISCELLANEOUS LIABILITIES - OTHERS

As of December 31, 2015 and December 31, 2014, the breakdown of “Miscellaneous Liabilities - Others” was as follows:

December 31,

Sundry creditors

Taxes payable

Salaries and social security contributions payable

Others

Total

NOTE 19. PROVISIONS

As of December 31, 2015 and December 31, 2014, the breakdown of “Provisions” was as follows:

December 31,

Severance payments

Contingent commitments

Other contingencies

Negative goodwill (note 1.12)

Differences due to dollarization of judicial deposits

Total

NOTE 20. OTHER LIABILITIES

The account “Other Liabilities” includes liabilities related to the insurance activity. As of December 31, 2015 and December 31, 2014, thebreakdown of this account was the following:

December 31,

Debts with insureds

Debts with reinsurers

Debts with co-insurers

Debts with insurance brokers

Statutory reserves

Others

Total

NOTE 21. MEMORANDUM ACCOUNTS - CONTROL DEBIT ACCOUNTS - OTHERS

As of December 31, 2015 and December 31, 2014, the breakdown of “Control Debit Accounts - Others” was as follows:

December 31,

Securities held in custody

Values for collection

Security agent function

Others

Total


2014

11,041

2,635

297,791

49,562

4,754

365,783

2015

18,999

26,146

428,494

-

7,957

481,596

2014

117,763

14,218

436

45,506

176,987

12,526

367,436

2015

161,117

16,508

1,000

67,119

225,697

16,632

488,073

2014

38,365,118

9,711,137

12,962,470

4,348,881

65,387,606

2015

59,767,387

12,778,244

19,255,569

13,526,949

105,328,149

2014

646,583

1,770,144

749,190

186,649

3,352,566

2015

971,997

2,176,865

961,634

292,904

4,403,400

NOTE 22. TRUST AND SECURITY AGENT ACTIVITIES

A) TRUST CONTRACTS FOR PURPOSES OF GUARANTEEINGCOMPLIANCE WITH OBLIGATIONSPurpose: in order to guarantee compliance with contractualobligations, the parties to these agreements have agreed to deliver toBanco de Galicia y Buenos Aires S.A., as fiduciary property, amountsto be applied according to the following breakdown:

Date of Balances of Trust Funds Maturity

Contract Trustor $ US$ Date (1)

12.07.2010

07.26.2011

03.21.2012

04.29.2013

07.01.2013

10.21.2013

12.20.2013

12.28.2013

09.12.2014

12.22.2014

09.07.2015

09.30.2015

(1) These amounts shall be released monthly until settlement date of trustor obligations ormaturity date, whichever occurs first.

B) FINANCIAL TRUST CONTRACTSPurpose: to administer and exercise the fiduciary ownership of thetrust assets until the redemption of debt securities and participationcertificates:

Date of Balances of Trust Funds Maturity

Contract Trust $ US$ Date

10.12.2005

12.05.2006

12.06.2006

09.05.2007

05.06.2008

05.14.2009

02.10.2011

04.25.2011

06.08.2011

09.01.2011

09.14.2011

10.07.2011

05.31.2012

12.27.2012

04.03.2013

04.17.2013

Fecha de Saldos de Fondos Fiduciarios

Contrato Fideicomiso (en miles de $) (en miles de US$) Vencimiento

09.18.2013

11.05.2013

11.21.2013

02.13.2014

06.06.2014

06.18.2014

07.08.2014

07.24.2014

07.22.2014

07.25.2014

10.03.2014

10.22.2014

12.02.2014

01.13.2015

01.27.2015

05.18.2015

12.02.2014

08.24.2015

10.16.2015

10.30.2015

12.09.2015

(2) These amounts shall be released monthly until redemption of debt securities. (3) Estimated date, since maturity date shall occur at the time of the distribution of all oftrust assets.

C) ACTIVITIES AS SECURITY AGENTc1) Under the terms and conditions for the issuance of Class INegotiable Obligations for a F.V. of US$25,000 corresponding to INVAPS.E., Banco de Galicia y Buenos Aires S.A. entered into an agreementwith the latter whereby the Bank undertakes the function of SecurityAgent.Pursuant to the terms set forth in the above agreement, INVAP S.E.granted in rem rights with first pledge and privilege over paymentrights and any other credit right owned by INVAP S.E. in favor of theSecurity Agent and in representation of the holders of the securedNegotiable Obligations, in order that the latter can guaranteecompliance thereof until the redemption of such Negotiable Obligations.Banco de Galicia y Buenos Aires S. A., in its capacity as Security Agent,was in charge of the administration of pledged banking accounts,authorized investments, and also carries out all functions specifiedunder the terms and conditions of the agreement. Pledged balancesas of December 31, 2014 amounted to US$34,129 and $8,125.

c2) Banco de Galicia y Buenos Aires S.A. has been appointed SecurityAgent to custody the National Treasury’s endorsement guarantees infavor of ENARSA (Energía Argentina S.A.) that were assigned in favorof Nación Fideicomisos S.A. in its capacity of Trustee of “ENARSA-BARRAGAN” and “ENARSA-BRIGADIER LOPEZ” financial trusts.


08.31.2016

07.28.2016

06.30.2016

04.30.2018

06.30.2016

10.27.2016

12.28.2016

01.28.2017

09.12.2016

06.22.2018

08.29.2018

11.28.2018

7,543

15,614

621

589

34,633

1

3

13

1,025

5

30,242

72,705

162,994

-

-

-

116,500

-

-

-

-

-

-

-

-

116,500

Fondo Fiduciario Aceitero

Tecsan III

Latinoamericana III

Profertil

Ribeiro

Sinteplast

Los Cipreses

Citrícola Ayui

Coop. de Trabajadores

Portuarios

Cliba

Grimoldi

Las Blondas IV

Total

09.05.2016 (2)

06.30.2016 (3)

12.31.2016 (3)

06.30.2016 (3)

12.31.2016 (3)

12.31.2022 (3)

09.30.2016 (3)

02.29.2016 (3)

10.31.2016 (3)

06.30.2017 (3)

09.30.2016 (3)

06.30.2016 (3)

06.30.2016 (3)

08.31.2016 (3)

06.30.2016 (3)

06.30.2016 (3)

86

15

33,239

7

1,230

4,495,903

75,581

6,619

1,108

1,129

43,107

49

37

138

12,127

67

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Hydro I

Faid 2011

Gas I

Saturno VII

Agro Nitralco II

Gas II

Cag S.A.

Faid 2015

Mila III

Mila IV

Cag S.A. II

Sursem III

Fideicred Agro Serie I

Pla I

Welfas I

Sursem IV

06.30.2016 (3)

12.31.2016 (3)

09.29.2018 (3)

05.20.2020 (3)

10.20.2020 (3)

06.30.2016 (3)

06.30.2016 (3)

06.30.2016 (3)

06.30.2016 (3)

06.30.2016 (3)

0128..2021 (3)

12.31.2016 (3)

05.01.2017 (3)

09.30.2016 (3)

06.15.2021 (3)

09.15.2021 (3)

11.15.2016 (3)

12.20.2021 (3)

10.31.2016 (3)

02.28.2022 (3)

12.31.2016 (3)

149

15,348

9,046

19,831

24,618

158

228

158

221

20,678

28,969

163

16,157

71,926

48,546

55,652

89,924

42,474

15,170

50,483

68,022

5,248,363

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Don Mario Semillas Serie I

Pla II

Comafi Prendas I

Mila V

Mila VI

Red Surcos II

Don Mario Semillas Serie II

Fideicred Atanor III

Don Mario Semillas Serie III

Fedicred Agro Serie II

Mila VII

Gleba I

Mas Cuotas Serie I

Red Surcos III

Mila VIII

Mila IX

Mas cuotas Serie II

Mila X

Gleba II

Mila XI

Fedicred Agro Serie III

Totals

Said endorsement guarantees secure the payment of all obligationsarising from the above-mentioned trusts.Banco de Galicia y Buenos Aires S.A., in its capacity as Security Agent,will custody the documents regarding the National Treasury’sendorsement guarantees and will be in charge of managing all legaland notarial proceedings with respect to the enforcement thereof.As of December 31, 2015 and December 31, 2014, the balancesrecorded from these transactions amount to US$1,364,097 and $408,respectively.

c3) In April 2013, at the time of entering into the Contract for theFiduciary Assignment and Trust for Guarantee Purposes “ProfertilS.A.”, Banco de Galicia y Buenos Aires S.A. was appointed securityagent with regard to the Chattel Mortgage Agreement, transactionthat was completed on June 18, 2013, which additionally secures allthe obligations undertaken.As of December 31, 2015 and December 31, 2014, the balancerecorded from these transactions amounts to US$116,500.

NOTE 23. ASSETS AND LIABILITIES IN FOREIGNCURRENCY

The balances of assets and liabilities in foreign currency (mainly in U.S.Dollars) as of December 31, 2015 and December 31, 2014 are detailedas follows.

December 31,

Assets



Loans



Equity investments


Unallocated items

Other assets

Total

Liabilities

Deposits


Miscellaneous liabilities


Unallocated items

Other liabilities

Total

The management and mitigation of currency risk are described in Note35 on risk management policies.

NOTE 24. BREAKDOWN OF THE ITEMS RECORDEDUNDER “OTHERS” IN THE INCOME STATEMENT

December 31,

Ingresos por servicios

Commissions from cards

Commissions from insurance

Others

Total

Expenses from services

Turnover tax

Related to credit cards

Others

Total

Miscellaneous income

Income from sale of bank premises and equipment

Income from transactions with miscellaneous assets

Leases

Adjustments and interest from miscellaneous receivables

Others

Total

Miscellaneous losses

Adjustment to interest on miscellaneous liabilities

Claims

Donations

Turnover tax

Charges for administrative, disciplinary and

criminal penalties

Others

Total

NOTE 25. INCOME FROM INSURANCE ACTIVITIES

As of December 31, 2015 and 2014, the breakdown of “Income fromInsurance Activities” was as follows:

December 31,

Premiums and surcharges accrued

Claims accrued

Surrenders

Life and ordinary annuities

Underwriting and operating expenses

Other income and expenses

Total

NOTE 26. MINIMUM CAPITAL REQUIREMENTS

Grupo Financiero Galicia S.A. is not subject to the minimum capitalrequirements established by the Argentine Central Bank.


2014

8,006,938

1,253,341

2,799,713

878,860

23,835

4,390

25,094

87

7,090

12,999,348

4,822,285

6,290,038

21,637

2,065,815

95

7,248

13,207,118

2015

17,658,396

5,257,343

3,208,454

1,094,074

21,651

6,594

32,820

19,191

6,915

27,305,438

14,373,198

10,054,541

30,625

3,300,516

8,595

826

27,768,301

2014

3,685,519

292,676

1,165,467

5,143,662

606,436

325,568

443,368

1,375,372

3,325

4,911

2,356

152,913

114,515

278,020

781

37,617

23,410

17,435

-

75,844

155,087

2015

5,263,898

420,111

1,322,464

7,006,473

793,024

659,566

694,254

2,146,844

10,139

24,562

2,388

234,508

183,690

455,287

1,134

42,810

33,338

24,940

1,418

90,797

194,437

2014

1,688,160

(235,355)

(4,201)

(3,642)

(218,586)

11,653

1,238,029

2015

2,516,035

(358,193)

(4,231)

(4,226)

(350,125)

2,144

1,801,404

Furthermore, Grupo Financiero Galicia S.A. meets the minimum capitalrequirements established by the General Corporations Law, whichamount to $100.Pursuant to the Argentine Central Bank regulations, Banco de Galiciay Buenos Aires S.A. is required to maintain a minimum capital, whichis calculated by weighting risks related to assets and to balances ofbank premises and equipment, miscellaneous and intangible assets.As called for by the Argentine Central Bank regulations, as ofDecember 31, 2015 and December 31, 2014, minimum capitalrequirements were as follows:

Computable Capital as a % of

Date Capital Required Computable Capital the Capital Requirement

12.31.2015 (*) 11,062,886 14,071,044 127.19

12.31.2014 7,077,104 10,132,927 142.18

(*) As from December 2015, the Argentine Central Bank, through Communiqué “A” 5831,established that the minimum capital requirement to cover credit risk be computed basedon end-of-month balances.

The Argentine Central Bank decided that Banco de Galicia y BuenosAires S.A. be considered, for all purposes, a Domestic SystemicallyImportant Bank (D-SIB). Consequently, since January 2016 the Bankshall meet an additional capital conservation buffer apart from theminimum capital requirement, to be complied with gradually, reaching3.5% of risk-weighted assets in January 2019. The Argentine CentralBank also provided for that, since June 2015, equity investments incompanies devoted to the issuance of credit, debit and similar cardsshall be deducted from the Computable Regulatory Capital (R.P.C.),progressively, reaching 100% in June 2018.

NOTE 27. EARNINGS PER SHARE

Below is a breakdown of the earnings per share as of December 31,2015 and 2014:

December 31,

Income for the fiscal year

Outstanding ordinary shares weighted average

Diluted ordinary shares weighted average

Earnings per ordinary share (*)

Basic

Diluted

(*) Figures stated in whole numbers.

NOTE 28. RESTRICTIONS IMPOSED ON THE DISTRI-BUTION OF PROFITS

The Argentine Central Bank regulations require that 20% of the profitsshown in the Income Statement at fiscal year-end, plus (or less), theadjustments made in previous fiscal years and, less, if any, the loss

accumulated at previous fiscal year-end, be allocated to the legalreserve.This proportion applies regardless of the ratio of the Legal Reservefund to Capital Stock. In the event said reserve is reduced for anyreason, no profits can be distributed until its total refund.According to the conditions set forth by the Argentine Central Bank,profits can only be distributed as long as results are positive afterdeducting not only the Reserves, that may be legally and statutoryrequired, but also the following items from Unappropriated RetainedEarnings: The difference between the book value and the market valueof public sector assets and/or debt instruments issued by the ArgentineCentral Bank not valued at market price, the amounts capitalized forlawsuits related to deposits and any unrecorded adjustments requiredby the external auditors or the Argentine Central Bank.Moreover, in order that a financial institution be able to distributeprofits, said institution must comply with the capital adequacy rule,i.e. with the calculation of minimum capital requirements and theregulatory capital.For these purposes, this shall be done by deducting from its assets andUnappropriated Retained Earnings all the items mentioned in theparagraph above.Moreover, in such calculation, a financial institution shall not be ableto compute the temporary reductions that affect minimum capitalrequirements, computable regulatory capital or its capital adequacy.Through Board of Directors' Resolution Nº 4, The Argentine CentralBank decided that Banco de Galicia y Buenos Aires S.A. be considered,for all purposes, a Domestic Systemically Important Bank (D-SIB).Consequently, for the calculation of the distribution of profits, anadditional capital requirement equivalent to 1% of the risk-weightedassets shall be complied with as from December 2014 and up to thisfiscal year-end.Since January 2016, the Argentine Central Bank determined that banksshall meet an additional capital conservation buffer apart from theminimum capital requirement with regard to risk-weighted assets. Thisshall be made up only of Tier 1 Common Capital, net of deductibleitems. This capital conservation buffer shall be met gradually, withinthe term of 4 years, until reaching its final level for Banco de Galiciay Buenos Aires S.A. in January 2019, which shall be 3.5% of risk-weighted assets. In addition, the Argentine Central Bank requires thatcomputable capital be in excess over the minimum capitalrequirements, equal to 75%. Distribution of profits shall require the prior authorization of theArgentine Central Bank’s Superintendence of Financial and ForeignExchange Institutions, whose intervention shall have the purpose ofverifying the aforementioned requirements have been fulfilled.In addition to the aforementioned restrictions established by theArgentine Central Bank, which are applicable to Banco de Galicia yBuenos Aires S.A. and Compañía Financiera Argentina S.A., pursuantto Section 70 of the General Corporations Law, stock companies shallestablish a reserve not lower than 5% of the realized and liquid profitsshown in the Income Statement for the fiscal year, until 20% of the


2014

3,337,790

1,300,265

1,300,265

2.5670

2.5670

2015

4,338,397

1,300,265

1,300,265

3.3365

3.3365


NOTE 29. STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS

Cash and due from banks and assets held with the purpose of complying with the short-term commitments undertaken, with a high level ofliquidity, easily converted into known amounts of cash, subject to insignificant changes in value and with a maturity less than three months fromthe date of the acquisition thereof, are considered to be cash and cash equivalents. The breakdown is as follows:

December 31,


Instruments issued by the Argentine Central Bank

Reverse repo transactions with the Argentine Central Bank

Interbank loans - (Call money loans granted)

Overnight placements in banks abroad

Other cash placements

Cash and cash equivalents

2013

12,560,345

1,909,979

-

179,000

586,123

588,434

15,823,881

2014

16,959,205

4,612,259

16,768

182

261,118

1,204,483

23,054,015

2015

30,834,663

10,514,624

14,286

40,000

232,351

1,339,341

42,975,265

NOTE 30. CONTRIBUTION TO THE DEPOSITINSURANCE SYSTEM

Law Nº 24485 and Decree Nº 540/95 established the creation of theDeposit Insurance System to cover the risk attached to bank deposits,in addition to the system of privileges and safeguards envisaged inthe Financial Institutions Law.The National Executive Branch through Decree Nº 1,127/98 datedSeptember 24, 1998 established the maximum amount for thisinsurance system to demand deposits and time deposits denominatedeither in Pesos and/or in foreign currency. Such amount has beenestablished at $350 as from November 1, 2014. This system does not cover deposits made by other financialinstitutions (including time deposit certificates acquired through asecondary transaction), deposits made by parties related to Banco deGalicia y Buenos Aires S.A., either directly or indirectly, deposits ofsecurities, acceptances or guarantees and those deposits set up at aninterest rate exceeding the one established regularly by the ArgentineCentral Bank based on a daily survey conducted by it. Those depositswhose ownership has been acquired through endorsement, thoseplacements made as a result of incentives other than interest ratesand locked-up balances from deposits and other excluded transactionsare also excluded. This system has been implemented through theconstitution of the Deposit Insurance Fund (“FGD”), which is managedby a company called Seguros de Depósitos S.A. (SE.DE.S.A.).SE.DE.S.A.’s shareholders are the Argentine Central Bank and thefinancial institutions, in the proportion determined for each one by

the Argentine Central Bank based on the contributions made to thefund.The Argentine Central Bank set the monthly contributions financialinstitutions shall make to the Deposit Insurance Fund at 0.015% untilOctober 2014, increasing to 0.06% per month as from November2014. The aforementioned contribution shall be made with regard tothe monthly average of deposits.In regard to time deposits in U.S. Dollars raised or renewed as fromFebruary 11, 2015, with which Bills issued by the Argentine CentralBank are to be subscribed in such same currency, the contribution tothe above-mentioned Fund shall be reduced to 0.015%.

NOTE 31. NATIONAL SECURITIES COMMISSION(“C.N.V.”)

AGENTS - MINIMUM LIQUIDITY REQUIREMENT. Within theframework of Resolution Nº 622/13 of the C.N.V., Banco de Galicia yBuenos Aires S.A. has been registered, in such agency’s registry, assettlement and clearing agent -comprehensive- Nº 22 (ALyC and AN- INTEGRAL), custodial agent of collective investment productscorresponding to mutual funds Nº 3 (ACPIC FCI), and manager ofcollective investment products at the registry of financial trusteesNº 54.As of December 31, 2015, Banco de Galicia y Buenos Aires S.A.’sShareholders’ Equity exceeds that required by the C.N.V. to act asagent in the categories in which the Bank has already carried out theregistration proceedings. Such requirement amounts to $26,500 with

corporate capital is reached. In the event said reserve is reduced forany reason, no profits can be distributed until its total refund.Tarjeta Naranja S.A.’s Ordinary and Extraordinary Shareholders’Meeting held on March 16, 2006 decided to set the maximum limit forthe distribution of dividends at 25% of the realized and liquid profitsof each fiscal year. This restriction shall remain in force as long as the

company’s Shareholders’ Equity is below $300,000.Pursuant to the Price Supplement of Class XIII Negotiable Obligations,as well as in accordance with certain financial loan contracts, TarjetaNaranja S.A. has agreed not to distribute dividends that may exceed50% of the company’s net income. This restriction also applies in thecase there is any excess over certain indebtedness ratios.


a minimum liquidity requirement of $13,250, which Banco de Galiciay Buenos Aires S.A. made up at the end of the fiscal year with Peso-denominated Bonds at Badlar rate due 2017 for the amount of$17,425, which are held in custody at Caja de Valores (DepositorNº 100100).

CUSTODIAL AGENT OF COLLECTIVE INVESTMENT PRODUCTSCORRESPONDING TO MUTUAL FUNDS. Furthermore, in compliancewith Section 7 of Chapter II, Title V of that Resolution, in its capacityas custodial agent of collective investment products corresponding tomutual funds (depository) of the “FIMA ACCIONES”, “FIMA P.B.ACCIONES”, “FIMA RENTA EN PESOS”, “FIMA AHORRO PESOS”,“FIMA RENTA PLUS”, “FIMA PREMIUM”, “FIMA AHORROPLUS”,“FIMA CAPITAL PLUS”, “FIMA ABIERTO PYMES” funds, as ofDecember 31, 2015, Banco de Galicia y Buenos Aires S.A. holds a totalof 6,089,643,628 units under custody for a market value of$18,174,700, which is included in the “Depositors of Securities Heldin Custody” account. As of December 31, 2014, the securities held incustody totaled 4,897,565,889 units and their market value amountedto $11.885.323.

The balances of the Mutual Funds as of fiscal year-end are detailed asfollows:

December 31,

FIMA Acciones

FIMA P.B. Acciones

FIMA Renta en pesos

FIMA Ahorro en pesos

FIMA Renta Plus

FIMA Premium

FIMA Ahorro Plus

FIMA Capital Plus

FIMA Abierto PyMES

Total

STORAGING OF DOCUMENTS. Pursuant to General ResolutionNº 629 of the C.N.V., Banco de Galicia y Buenos Aires S.A. informs thatit has supporting documents regarding accounting and managementtransactions, which are stored at AdeA (C.U.I.T. Nº 30-68233570-6),Plant III located at Ruta Provincial 36 km 31.5 Nº 6471 (CP 1888)Bosques, Province of Buenos Aires, with legal domicile at Av. Pte.Roque Sáenz Peña 832 Piso 1, C.A.B.A.

2014

59,236

166,347

29,832

3,257,083

43,534

3,048,618

3,862,201

1,334,522

83,950

11,885,323

2015

75,086

254,662

63,563

4,704,972

131,712

4,794,058

6,285,433

1,667,188

198,026

18,174,700

NOTE 32. SETTING UP OF FINANCIAL TRUSTS

A) Financial trusts with Banco de Galicia y Buenos Aires S.A. as trustor:Book Value of Securities Held

Creation Estimated in own Portfolio

Name Date Maturity Date Trustee Trust Assets Portfolio Transferred 12.31.2015 12.31.12014

Galtrust I

(*) The remaining US$9,776 was transferred in cash. (1) In exchange for loans to the Provincial Governments.

B)As of December 31, 2015 and December 31, 2014, Banco de Galicia y Buenos Aires S.A. records in its own portfolio participation certificatesand debt securities from financial trusts amounting to $675,471 and $876,488, respectively.

C)As of December 31, 2014, Compañía Financiera Argentina S.A. had the following financial trust: Book Value of Securities Held

Creation Estimated in own Portfolio

Name Date Maturity Date Trustee Trust Assets Portfolio Transferred 12.31.2015 12.31.12014

Fideicomiso

Financiero CFA

Trust I

(*) On September 21, 2015, Fideicomiso Financiero CFA Trust I was early and finally liquidated since all trust debt securities were settled.

788,163685,915US$490,224 (*)Secured Bonds in Pesos

at 2% due 2018 (1)

First Trust of New York

N.A.

02.04.201810.13.2000

53,192(*)$180,000Personal loansDeutsche Bank S.A.02.22.201602.19.2014


NOTE 33. SEGMENT REPORTING

Grupo Financiero Galicia S.A. measures the performance of each ofits business segments mainly in terms of “Net Income”. The segmentsdefined are made up of one or more operating segments with similareconomic characteristics, distribution channels and regulatoryenvironments.Below there is a description of each business segment’s composition:

Banks: It represents the results of operations of the banking businessand includes the results of operations of subsidiaries Banco de Galiciay Buenos Aires S.A. and Banco Galicia Uruguay S.A. (In liquidation).

Regional Credit Cards: This segment represents the results ofoperations of the regional credit card business and includes the resultsof operations of Tarjetas del Mar S.A. and Tarjetas Regionales S.A.consolidated with its subsidiaries, as follows: Cobranzas Regionales S.A.,Procesadora Regional S.A., Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A.

Personal Loans - CFA:This segment includes the results of operationsof Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A.

Insurance: This segment represents the results of operations of theinsurance companies' business and includes the results of operationsof Sudamericana Holding S.A. consolidated with its subsidiaries, asfollows: Galicia Retiro Cía. de Seguros S.A., Galicia Seguros S.A. andGalicia Broker Asesores de Seguros S.A.

Other Businesses: This segment shows the results of operations ofGalicia Administradora de Fondos S.A., Galicia Warrants S.A. and NetInvestment S.A.

Adjustments: This segment includes results of operations other thanthose related to the preceding segments and consolidationadjustments, eliminations corresponding to transactions conductedbetween consolidated companies and minority interest.

Regional Credit Personal Other

Banks Cards Loans - CFA Insurance Businesses Adjustements 12.31.2015



Net operating income



Operating income

Income from insurance companies’ activities

Income from equity investments

Minority interest

Miscellaneous income, net


Income tax


Regional Credit Personal Other

Banks Cards Loans - CFA Insurance Businesses Adjustements 12.31.2014



Net operating income



Operating income

Income from insurance companies’ activities

Income from equity investments

Minority interest

Miscellaneous income, net


Income tax


12,441,836

7,837,398

20,279,234

2,214,240

12,904,702

5,160,292

1,801,404

100,126

(364,558)

442,557

7,139,821

2,801,424

4,338,397

9,539,418

5,698,348

15,237,766

2,411,250

9,221,356

3,605,160

1,238,029

213,380

(229,910)

503,403

5,330,062

1,992,272

3,337,790

(125,509)

(1,074,993)

(1,200,502)

-

(32,428)

(1,168,074)

1,025,944

(1,336,151)

(365,009)

(19,266)

(1,862,556)

(23,480)

(1,839,076)

33,563

(798,422)

(764,859)

-

(41,219)

(723,640)

753,130

(882,629)

(229,765)

(14,302)

(1,097,206)

(65,665)

(1,031,541)

41,897

249,171

291,068

-

65,824

225,244

-

2

-

2,098

227,344

80,090

147,254

12,131

131,390

143,521

-

47,519

96,002

-

10

-

3,588

99,600

36,436

63,164

232,208

-

232,208

-

378,867

(146,659)

775,460

1,977

(1)

(1,000)

629,777

221,226

408,551

145,182

-

145,182

-

268,838

(123,656)

484,899

1,273

(1)

(1,409)

361,106

126,616

234,490

1,255,453

270,334

1,525,787

400,042

930,407

195,338

-

2,117

-

100,846

298,301

139,293

159,008

1,106,193

139,396

1,245,589

369,992

767,615

107,982

-

1,544

-

101,889

211,415

82,993

128,422

2,685,102

4,220,431

6,905,533

753,243

4,167,964

1,984,326

-

-

452

427,260

2,412,038

862,295

1,549,743

1,713,815

3,261,005

4,974,820

775,852

3,197,351

1,001,617

-

(14,283)

(144)

314,541

1,301,731

516,892

784,839

8,352,685

4,172,455

12,525,140

1,060,955

7,394,068

4,070,117

-

1,432,181

-

(67,381)

5,434,917

1,522,000

3,912,917

6,528,534

2,964,979

9,493,513

1,265,406

4,981,252

3,246,855

-

1,107,465

-

99,096

4,453,416

3,158,416


The accounting measurement of assets and liabilities allocated to theabove-mentioned segments is the following:

December 31,


Loans



Other assets

Total Assets

Deposits



Other liabilities

Total Liabilities

NOTE 34. CONTINGENCIES

TAX ISSUESBanco de Galicia y Buenos Aires S.A.At the date of these financial statements, provincial tax collectionauthorities, as well as tax collection authorities from the AutonomousCity of Buenos Aires, are in the process (in different degrees ofcompletion) of conducting audits and assessments mainly regardingthe Compensatory Bond granted by the National Government tocompensate financial institutions for the losses generated by theasymmetric pesification of loans and deposits.As regards the assessment of tax collection authorities from theAutonomous City of Buenos Aires, within the framework of the legalactions brought by Banco de Galicia y Buenos Aires S.A. with thepurpose of challenging the assessment of the tax collection authorities,a preliminary injunction was granted by the Argentine Federal Courtof Appeals in Administrative Matters for the amount correspondingto the Compensatory Bond, which was ratified by the Supreme Courtof Justice. Therefore, the Court ordered the A.G.I.P. (GovernmentalPublic Revenue Authority) to refrain from starting tax enforcementproceedings or else requesting precautionary measures for suchpurpose until a final judgment is issued. The proceedings are currentlypending a decision by the Argentine Federal Court of Appeals inAdministrative Matters with regard to the appeal filed by Banco deGalicia y Buenos Aires S.A. against the decision issued on the coreissue by the Court of First Instance in November 2013. In any case, itis worth noting the decision issued by the federal prosecutor of theCourt of Appeals was favorable to Banco de Galicia y Buenos Aires S.A.With regard to the Autonomous City of Buenos Aires’ claims onaccount of other items, Banco de Galicia y Buenos Aires S.A. adheredto the System for the Settlement of Tax Liabilities in Arrears (LawNº 3,461 and the related regulations), which envisaged the total reliefof interest and fines. The Bank’s adherence to such system was

communicated within the framework of the respective cases beforethe corresponding judicial authorities.In connection with the assessments made by tax collection authoritiesfrom the Province of Buenos Aires, under the framework of some ofthe processes under discussion at the Provincial Tax Court's stage, atthis stage of proceedings the decision issued was: (i) unfavorable toBanco de Galicia y Buenos Aires S.A.’s request regarding the itemsnot related to the Compensatory Bond, and (ii) favorable with regardto the non-taxability thereof. Therefore, Banco de Galicia y BuenosAires S.A. adhered to the System for the Regularization of Tax Debts(Regulatory Decision Nº 12 and related decisions), which envisagesdiscounts on the amounts not related to the Compensatory Bond. TheBank’s adherence to such system was communicated within theframework of the respective cases before the corresponding judicialauthorities. In turn, the authorities from the Province of Buenos Airesobjected the judgment rendered by the Provincial Tax Court withregard to the Compensatory Bond, and requested the Court of Appealsin Administrative Matters of La Plata to set such decision aside. Bancode Galicia y Buenos Aires S.A. entered an appearance and filed amotion for lack of jurisdiction, since it believes only the ArgentineSupreme Court of Justice has jurisdiction to issue a decision on suchmatter. On April 15, 2014, the aforementioned Court sustained themotion for lack of jurisdiction and ordered the proceedings to be filed.The authorities from the Province of Buenos Aires filed an appealbefore the Supreme Court of Justice of the Province of Buenos Aires,which has not issued a decision to date.Furthermore, regarding the claims made by the different jurisdictions,Banco de Galicia y Buenos Aires S.A. has been expressing itsdisagreement regarding these adjustments at the correspondingadministrative and/or legal proceedings.These proceedings and their possible effects are constantly beingmonitored by Management. Even though Banco de Galicia y BuenosAires S.A. considers it has complied with its tax liabilities in fullpursuant to current regulations, the provisions deemed adequatepursuant to the evolution of each proceeding have been set up.

Tarjetas Regionales S.A.At the date of these consolidated financial statements, the ArgentineRevenue Service (A.F.I.P.), Provincial Revenue Boards andMunicipalities are in the process of conducting audits andassessments, in different degrees of completion, at the companiescontrolled by Tarjetas Regionales S.A. Said agencies have servednotices and made claims regarding taxes applicable to TarjetasRegionales S.A.'s and its subsidiaries and Tarjetas del Mar S.A.Therefore, the companies are taking the corresponding administrativeand legal steps in order to solve such issues. The original amountclaimed for taxes totals $15,212 approximately.Based on the opinions of their tax advisors, the companies believethat the abovementioned claims are both legally and technicallygroundless and that taxes related to the claims have been correctlycalculated in accordance with tax regulations in force and existing

2014

10,010,150

66,608,201

6,797,613

1,047,963

306,819

84,770,746

64,666,037

25,401,369

2,065,815

367,436

92,500,657

2015

15,525,090

98,344,731

8,060,768

958,092

419,510

123,308,191

100,039,233

37,328,900

3,300,516

488,073

141,156,722

case law.Notwithstanding the foregoing, the companies have set up theprovisions deemed appropriate pursuant to the evolution of eachproceeding.

Compañía Financiera Argentina S.A.In turn, as regards Compañía Financiera Argentina S.A., the ArgentineRevenue Service (A.F.I.P.) conducted audits on fiscal years 1998 and1999, not accepting certain uncollectible loans to be recorded asuncollectible receivables deductible from income tax and minimumpresumed income tax. The original amount claimed for taxes by the taxcollection authorities totals $2,094.In July 2013, the Federal Tax Court notified the judgment sustainingthe appeal filed by the company. Tax collection authorities later filedan appeal against the aforementioned judgment, which was answeredby the company in December 2013. In May 2014, the ArgentineFederal Court of Appeals in Administrative Matters rejected the appealfiled by the Argentine Revenue Service (A.F.I.P), thus confirming thejudgment issued by the Federal Tax Court, which was favorable toCompañía Financiera Argentina S.A. The Court assessed legal costsagainst the Argentine Revenue Service (A.F.I.P). In June 2014, theA.F.I.P. filed an appeal before the Argentine Supreme Court of Justicewith regard to the amount of the fees determined for the institution’sattorneys which, if confirmed, shall be fully paid by the A.F.I.P.Based on the information available at the date of these financialstatements, the company considers the decision to be issued by theArgentine Supreme Court of Justice shall not be different from thejudgments issued by the other courts that heard the case. As of December 31, 2015, Compañía Financiera Argentina S.A. has noprovisions set up corresponding to this claim, while as of December 31,2014, the company had provisions set up that amounted to $5.000.

CONSUMER PROTECTION ASSOCIATIONSBanco de Galicia y Buenos Aires S.A.Consumer Protection Associations, on behalf of consumers, have filedclaims against Banco de Galicia y Buenos Aires S.A. with regard to thecollection of some financial charges. The Bank considers the resolution of these controversies will not havea significant impact on its financial condition.

Compañía Financiera Argentina S.A.Consumer Protection Associations, on behalf of consumers, have filedclaims against Compañía Financiera Argentina S.A. with regard to thecollection of some financial charges. The company considers theresolution of these controversies will not have a significant impact onits financial condition.

NOTE 35. RISK MANAGEMENT POLICIES

The tasks related to risk information and internal control of each of thecontrolled companies are defined and carried out, rigorously, in eachof them. This is particularly strict in the main controlled company,Banco Galicia y Buenos Aires S.A., where the requirements to becomplied with are stringent, as detailed below, as it is a financialinstitution regulated by the Argentine Central Bank. Apart from theapplicable local regulations, Grupo Financiero Galicia S.A., in itscapacity as a listed company on the markets of the United States ofAmerica, complies with the certification of its internal controlspursuant to Section 404 of the Sarbanes Oxley Act (SOX). Corporaterisk management is monitored by the Audit Committee, which as wellgathers and analyzes the information submitted by the maincontrolled companies.The specific function of the comprehensive management of Banco deGalicia y Buenos Aires S.A.’s risks has been allocated to the RiskManagement Division, guaranteeing its independence from the rest ofthe business areas since it directly reports to Banco de Galicia yBuenos Aires S.A.’s General Division and, at the same time, it isinvolved in the decisions made by each area. In addition, the controland prevention of risks related to asset laundering, funding of terroristactivities and other illegal activities are allocated to the Anti-MoneyLaundering Unit Division. The aim of both divisions is to guaranteethe Board of Directors that they are fully aware of the risks Banco deGalicia y Buenos Aires S.A. is exposed to, and they are in charge ofdesigning and proposing the policies and procedures necessary tomitigate and control such risks.Banco de Galicia y Buenos Aires S.A. has developed the CapitalAdequacy Assessment Process (Proceso de Evaluación de Suficienciade Capital - PESC) to assess the relationship between the Bank’s ownresources available and necessary resources to maintain anappropriate risk profile. This process shall also allow identifying boththe economic capital needs for the next fiscal years and the sourcesto meet such needs.In turn, Banco de Galicia y Buenos Aires S.A. has developed a riskappetite framework, which has risk acceptance levels, both on anindividual and a consolidated basis. Within this framework, ratios havebeen established, which are regularly submitted to the RiskManagement Committee. Each of these ratios has an excess threshold and related actions incase of deviations.

FINANCIAL RISKS. Short- and medium-term financial risks aremanaged within the framework of policies approved by Banco deGalicia y Buenos Aires S.A.’s Board of Directors, which establisheslimits to the different risk exposures and also considers theirinterrelation. Management is supplemented by “contingency plans”devised to face adverse market situations. Furthermore, “stress tests”that make it possible to assess risk exposures under historical andsimulated scenarios are created, which identify critical levels of the


different risk factors.

LIQUIDITY. Daily liquidity is managed according to the strategy set,which seeks to keep liquid resources that are enough to mitigate theadverse effects caused by irregular variations in loans and deposits, inaddition to coping with “stress” situations. The current liquidity policy in force provides for the setting of limits andmonitoring in terms of a) liquidity as regards stock: a level of“Management Liquidity Requirement” was established as the excessover legal minimum cash requirements, taking into consideration thecharacteristics and behavior of Banco de Galicia y Buenos Aires S.A.’sdifferent liabilities, and the liquid assets that make up such liquiditywere determined as well; and b) cash flow liquidity: gaps between thecontractual maturities of consolidated financial assets and liabilitiesare analyzed and monitored. There is a cap for the gap betweenmaturities, determined based on the gap accumulated against totalliabilities permanently complied with during the first year.Furthermore, the policy sets forth a contingency plan, by currency type,that determines the steps to be taken and the assets from which liquidresources additional to those set forth in the above-mentioned policycan be obtained.With the purpose of mitigating the liquidity risk that arises fromdeposit concentration per customer, Banco de Galicia y Buenos AiresS.A. has a policy that regulates the concentration of deposits amongthe main customers.

CURRENCY RISK. Banco de Galicia y Buenos Aires S.A.’s currentpolicy in force establishes limits in terms of maximum “net assetpositions” (assets denominated in a foreign currency which are higherthan the liabilities denominated in such currency) and “net liabilitypositions” (assets denominated in a foreign currency which are lowerthan the liabilities denominated in such currency) for mismatches inforeign currency, as a proportion of Banco de Galicia y Buenos AiresS.A.’s R.P.C. An adequate balance between assets and liabilities denominated inforeign currency is what characterizes the management strategy forthis risk factor, seeking to achieve a full coverage of long-term asset-liability mismatches and allowing a short-term mismatch managementmargin that contributes to the possibility of improving certain marketsituations. Short- and long-term goals are attained by appropriatelymanaging assets and liabilities and by using the financial productsavailable in our market, particularly “dollar futures” both ininstitutionalized markets (M.A.E. and RO.F.EX.) and in forwardtransactions performed with customers.Transactions in foreign currency futures (Dollar futures) are subject tolimits that take into consideration the particular characteristics of eachtrading environment.

INTERES RATE RISK. Banco de Galicia y Buenos Aires S.A.’s exposureto the “interest rate risk”, as a result of interest rate fluctuations andthe different sensitivity of assets and liabilities, is managed according

to the strategy approved. On the one hand, it considers a short-termhorizon, seeking to keep the net financial margin within the levels setby the policy. On the other hand, it considers a long-term horizon, thepurpose of which is to mitigate the negative impact on the presentvalue of Banco de Galicia y Buenos Aires S.A.’s Shareholders’ Equityin the face of changes in interest rates.From a comprehensive viewpoint of risk exposures and contributingto including a “risk premium” in the pricing process, the aim is tosystematically estimate the “economic capital” used up by thestructural risk as per the financial statements (interest rate risk) andthe contribution of the “price risk”, in its different expressions, to usingup the capital.

MARKET RISK. Trading of and/or investment in government andcorporate securities, currencies, derivatives and debt instrumentsissued by the Argentine Central Bank, which are listed on the capitalmarkets and the value of which varies pursuant to the variation of themarket prices thereof, are included within the Policy that limits themaximum authorized losses during a year.The "price risk" (market) is daily managed according to the strategyapproved, the purpose of which is to keep Banco de Galicia y BuenosAires S.A. present in the different derivatives, variable- and fixed-income markets while obtaining the maximum return as possible ontrading, without exposing the latter to excessive risk levels. Finally, thepolicy designed contributes to providing transparency and facilitatesthe perception of the risk levels to which it is exposed.In order to measure and monitor risks derived from the variation in theprice of financial instruments frequently listed in the secondarymarkets that form the trading securities portfolio, a model known as“Value at Risk” (also known as "VaR") is used. This model measures,for Banco de Galicia y Buenos Aires S.A. individually, the possible lossthat could be generated by the positions in securities and currenciesunder certain parameters. For financial instruments not frequentlylisted or with no representative listing in the secondary markets, themethodology known as DV01 is used. This consists in estimating thechange of value of a portfolio, for variations of one interest ratepercentage point.

CROSS-BORDER RISK. Banco de Galicia y Buenos Aires S.A.’s foreigntrade transactions and management of “treasury” resources implyassuming cross-border risk positions. These exposures related to cross-border assets are in line with Banco de Galicia y Buenos Aires S.A.’sbusiness and financial strategy, the purpose of which is to providecustomers with an efficient commercial assistance and to improve themanagement of available liquid resources within an appropriate riskand yield environment.

TRANSFER RISK. The possibility of diversifying funding sources, ascontemplated by the liquidity strategy, by obtaining resources inforeign capital markets, involves the possible exposure to potentialregulatory changes that hinder or increase the cost of the transfer of


foreign currency abroad to meet liability commitments. The policy thatmanages the risk of transferring foreign currency abroad thuscontributes to the liquidity strategy and pursues the goal of reachingan adequate balance between liabilities payable to localcounterparties and those payable to foreign counterparties in a return-risk proportion that is adequate for Banco de Galicia y Buenos AiresS.A.’s business and growth.

EXPOSURE TO THE NON-FINANCIAL PUBLIC SECTOR. With thepurpose of regulating risk exposures with regard to the non-financialpublic sector, in the national, provincial and municipal jurisdictions,Banco de Galicia y Buenos Aires S.A. defined a policy the design ofwhich envisages risk exposures in each jurisdiction, as well as the“possible loss” of value related to such holdings.

CREDIT RISK. Banco de Galicia y Buenos Aires S.A.’s credit grantingand analysis system is applied in a centralized manner and is based onthe concept of “opposition of interests”, which takes place when riskmanagement, credit and commercial duties are segregated, withrespect to both retail and wholesale businesses. This allows anongoing and efficient monitoring of the quality of assets, a proactivemanagement of problem loans, aggressive write-offs of uncollectibleloans, and a conservative policy on allowances for loan losses.In addition, this system includes the follow-up of the models formeasuring the portfolio risk at the operation and customer levels, thusmaking it easier to detect problem loans and the related losses. Thisallows early detecting situations that can entail some degree ofportfolio deterioration, and appropriately safeguarding the Bank’sassets.Credit risk management entails approving the credit risk policies andprocedures, verifying compliance therewith and assessing credit riskon an ongoing basis. Banco de Galicia y Buenos Aires S.A.’s WholesaleRisk Management Division, and the Consumption and Retail RiskManagement Division, which have been structured considering thetypes of customers that are part of the respective banking divisions,are in charge of such management.As an outstanding aspect we can mention that the credit grantingpolicy for retail banking focuses on automatic granting processes.These are based on behavior analysis models. Banco de Galicia yBuenos Aires S.A. is strongly geared towards obtaining portfolios withdirect payroll deposit, which statistically have a better compliancebehavior when compared to other types of portfolios.As for the wholesale banking, credit granting is based on analysesconducted on credit, cash flow, balance sheet, capacity of theapplicant. These are supported by statistical rating models andqualitative adjustment models for corporate businesses.Internal policies were implemented regarding concentration percustomer/group, acceptance and concentration per internal rating andreview-by-sector. The latter determines the levels of review for theeconomic activities belonging to the private-sector portfolio accordingto the concentration they show with regard to Banco de Galicia y

Buenos Aires S.A.’s total credit and/or R.P.C.The Wholesale Risk Management Division, and the Consumption andRetail Risk Management Division also constantly monitor theirportfolio through different indicators (asset quality of the loanportfolio, the coverage of the non-accrual portfolio with allowances,non-performance, roll rates, etc.), as well as the classification andconcentration thereof (through maximum ratios between the exposureto each customer, its own computable capital (“R.P.C.”) or regulatorycapital, and that of each customer). The loan portfolio classificationas well as its concentration control is carried out following theArgentine Central Bank regulations.

OPERATIONAL RISK. Pursuant to the best practices and theguidelines determined by the Argentine Central Bank, Banco de Galiciay Buenos Aires S.A. has the Operational Risk Unit, through which ithas implemented the Operational Risk Management Framework. Thisframework includes the Bank’s policies, practices, procedures andstructures for the appropriate management of Operational Risk.Operational Risk is the risk of losses due to the lack of conformity ordue to failure of internal processes, the acts of people or systems, orelse because of external events. It includes legal risk, but does notinclude strategic and reputational risks.Banco de Galicia y Buenos Aires S.A. manages operational riskinherent to its products, activities, processes and material systems,technology and information security processes, as well as risks derivedfrom subcontracted activities and from services rendered by providers.Such management includes the identification, assessment, monitoring,control and mitigation of operational risks.Before launching or introducing new products, activities, processes orsystems, Banco de Galicia y Buenos Aires S.A. makes sure itsoperational risks are appropriately assessed.This way, Banco de Galicia y Buenos Aires S.A. has the necessarystructure and resources to be able to determine the operational riskprofile and thus take the corresponding corrective measures,complying with the regulations set forth by the Argentine Central Bankon guidelines for operational risk management in financial institutionsand operational risk events database.The minimum capital requirement with regard to the operational riskis determined according to the Argentine Central Bank regulations.An appropriate management of operational risks also helps improvingcustomer service quality.In compliance with Communiqué “A” 5398, securitization,concentration, reputational and strategic risks were identified assignificant risks, and a computation and measurement method wasdeveloped, which is currently being implemented. These risks, togetherwith those mentioned previously, were included in the CapitalAdequacy Assessment Report (I.A.C., as per its acronym in Spanish),within the framework of Communiqué “A” 5515.

SECURITIZATION RISK. Securitization is an alternative source offinancing and a mechanism for the transfer of risks to investors.


Notwithstanding the foregoing, securitization activities and the fastinnovation with regard to the techniques and instruments used in suchactivities also generate new risks, including the following:i) Credit, market, liquidity, concentration, legal and reputational risks,due to the securitization positions held or invested, including, amongothers, liquidity facilities and credit enhancement granted; andii)Credit risk due to the underlying exposures with regard tosecuritization.

CONCENTRATION RISK. Risk concentration has to do with theexposures or groups of exposures with similar characteristics, forinstance when they belong to the same debtor, counterparty orguarantor, geographic area or economic sector; or because they aresecured by the same type of assets used as collateral, with thepossibility of generating:i) Losses with regard to income, regulatory capital, assets or the globalrisk level, that are significant enough to affect the financial strengthof the financial institution or its ability to keep the financialinstitution’s main transactions;ii)A major change in the financial institution’s risk profile.

REPUTATIONAL RISK. Reputational risk is defined as the riskassociated with a negative perception of the financial institution bycustomers, counterparties, shareholders, investors, account holders,market analysts and other significant market players, which adverselyaffects the financial institution’s ability to keep existing businessrelationships or establish new relationships, and continue havingaccess to funding sources as for instance in the interbank market orthe securitization market.

STRATEGIC RISK. Strategic risk is that which arises from aninappropriate business strategy or an adverse change in forecasts,parameters, goals and other functions that support such strategy. Eventhough estimating this risk is complex, institutions must develop newmanagement techniques that include all the related aspects.

ASSET LAUNDERING, FUNDING OF TERRORIST ACTIVITIES ANDOTHER ILLEGAL ACTIVITIES RISK. As regards the control andprevention of asset laundering and funding of terrorist activities, Bancode Galicia y Buenos Aires S.A. complies with the regulations set forthby the Argentine Central Bank, the Financial Information Unit and LawNº 25246, as amended, which creates the Financial Information Unit(U.I.F.), under the jurisdiction of the Ministry of Justice and HumanRights with functional autarchy. The Financial Information Unit is incharge of analyzing, addressing and reporting the informationreceived, in order to prevent and avoid both asset laundering andfunding of terrorist activities.Banco de Galicia y Buenos Aires S.A. has promoted theimplementation of measures designed to fight against the use of theinternational financial system by criminal organizations. For suchpurpose, Banco de Galicia y Buenos Aires S.A. has control policies,

procedures and structures that are applied using a “risk-basedapproach”, which allow monitoring transactions, pursuant to the"customer profile" (defined individually based on the information anddocumentation related to the economic, financial and tax condition ofthe customer), in order to detect such transactions that should beconsidered unusual, and to report them before the U.I.F. in the casesthat may correspond. The Anti-Money Laundering Unit (“U.A.L.” asper its initials in Spanish - Unidad Antilavado) is in charge of managingthis activity, through the implementation of control and preventionprocedures as well as the communication thereof to the rest of theorganization by drafting the related handbooks and training allemployees. In addition, the management of this risk is regularlyreviewed by Internal Audit.Banco de Galicia y Buenos Aires S.A. has appointed a director asCompliance Officer, pursuant to Resolution 121/11 of the U.I.F., whoshall be responsible for ensuring compliance with and implementationof the proceedings and obligations on the issue. Banco de Galicia y Buenos Aires S.A. contributes to the prevention andmitigation of risks from transaction-related criminal behaviors, beinginvolved in the international regulatory standards adoption process. In compliance with Communiqué “A” 5394 issued by the ArgentineCentral Bank, in its website (http://www.bancogalicia.com.ar), insidethe “Conózcanos” tab within “Información Corporativa”, Banco deGalicia y Buenos Aires S.A. has a document entitled “Disciplina deMercado - Requisitos mínimos de divulgación”, where there isinformation related to the structure and adequacy of regulatorycapital, the exposure to the different risks and the managementthereof.

NOTE 36. CORPORATE GOVERNANCETRANSPARENCY POLICY

GRUPO FINANCIERO GALICIA S.A.Grupo Financiero Galicia S.A.’s Board of Directors is the Company'shighest management body. It is made up of eight directors and threealternate directors, who must have the necessary knowledge and skillsto clearly understand their responsibilities and duties within thecorporate governance, and to act with the loyalty and diligence of agood businessman.As set out in the bylaws, the term of office for both directors andalternate directors is three years; they are partially changed every yearand may be reelected indefinitely.The Company complies with the appropriate standards regarding totalnumber of directors, as well as number of independent directors.Furthermore, its bylaws provide for the flexibility necessary to adaptthe number of directors to the possible changes in the conditions inwhich the Company carries out its activities, from three to ninedirectors.The Board of Directors complies, in every relevant respect, with therecommendations included in the Code on Corporate Governance asSchedule IV to Title IV of the regulations issued by the National


Securities Commission (Text amended in 2013).It also monitors the application of the corporate governance policiesprovided for by the regulations in force through the Audit Committeeand the Committee for Information Integrity. Periodically, theCommittees provide the Board of Directors with information, and theBoard gets to know the decisions of each Committee. What isappropriate is transcribed in the minutes drafted at the Board ofDirectors' meetings. The Audit Committee set by Capital Markets Law Nº 26831 and theC.N.V.’s regulations is formed by three independent directors, and theCommittee for Information Integrity’s mission is to comply with theprovisions of U.S. Sarbanes-Oxley Act.

Basic holding structure. Grupo Financiero Galicia S.A. is a companywhose purpose is solely to conduct financial and investment activitiesas per Section 31 of the General Corporations Law. That is to say, it isa holding company whose activity involves managing its equityinvestments, assets and resources.Within the group of companies in which Grupo Financiero Galicia S.A.has an interest, Banco de Galicia y Buenos Aires S.A. stands out, inwhich the former has a controlling equity interest, being its main assetas well. Banco de Galicia y Buenos Aires S.A., as a bank institution, issubject to certain regulatory restrictions imposed by the ArgentineCentral Bank. In particular, Banco de Galicia y Buenos Aires S.A. canonly hold a 12.5% interest in the capital stock of companies that donot carry out activities considered supplementary by the ArgentineCentral Bank. Therefore, Grupo Financiero Galicia S.A. holds, eitherdirectly or indirectly, the remaining interests in several companies. Inaddition, Grupo Financiero Galicia S.A. indirectly holds a number ofequity investments in supplementary companies that belong to Bancode Galicia y Buenos Aires S.A. as controlling company.Since Grupo Financiero Galicia S.A. is a holding company, it has alimited personnel structure, and, therefore, many of the businessorganization requirements, common for big productive institutions,cannot be applied to this company.To conclude, one should note that Grupo Financiero Galicia S.A. isunder the control of other pure holding company, EBA Holding S.A.,which has the number of votes necessary to hold the majority of votesat the Shareholders’ Meetings, although it does not have anymanagerial functions over Grupo Financiero Galicia and the Companyhas no group relationship with EBA Holding S.A. No director of EBAHolding S.A. is a director of Grupo Financiero Galicia S.A.

Compensation systems. Directors’ compensation is defined by theGeneral Shareholders’ Meeting and is fixed within the limitsestablished by law and the corporate bylaws. The Audit Committee expresses its opinion on whether compensationproposals for Directors are reasonable, taking into considerationmarket standards.

Business conduct policy. Since its beginning, Grupo Financiero

Galicia S.A. has constantly shown respect for the rights of itsshareholders, reliability and accuracy in the information provided,transparency as to its policies and decisions, and caution with regardto the disclosure of strategic business issues.

Code of ethics. Grupo Financiero Galicia S.A. has a Code of Ethicsformally approved that guides its policies and activities. It considersbusiness objectivity and conflict-of-interests related-aspects, and howthe employee should act upon identifying a breach of the Code ofEthics.

BANCO DE GALICIA Y BUENOS AIRES S.A.Banco de Galicia y Buenos Aires S.A.’s Board of Directors is the Bank'shighest management body. It is currently made up of six directors andthree alternate directors, who must have the necessary knowledgeand skills to clearly understand their responsibilities and duties withinthe corporate governance, and to act with the loyalty and diligence ofa good businessman.Banco de Galicia y Buenos Aires S.A. complies with the appropriatestandards regarding total number of directors, as well as number ofindependent directors. Furthermore, its bylaws provide for theflexibility necessary to adapt the number of directors to the possiblechanges in the conditions in which the Bank carries out its activities,from three to nine directors.The General Shareholders’ Meeting has the power to establish thenumber of directors, both independent and non-independent ones,and appoint them. Out of the seven directors, two are independent. Inaddition, one of the alternate directors is independent. Theindependence concept is defined in the regulations set forth by theC.N.V. and the Argentine Central Bank regulations.As regards prevention of conflicts of interest, the provisions set forthin the General Corporations Law and the Capital Markets Law areapplicable.As set out in the bylaws, the term of office for both directors andalternate directors is three years; two thirds of them (or a fraction ofat least three) are changed every year and may be reelectedindefinitely.The Board of Directors' meeting is held at least once a week and whenrequired by any director. The Board of Directors is responsible for Bancode Galicia y Buenos Aires S.A.’s general management and makes allthe necessary decisions to such end. The Board of Directors' membersalso take part, to a higher or lesser extent, in the commissions andcommittees created. Therefore, they are continuously informed aboutthe Bank’s course of business and become aware of the decisionsmade by such bodies, which are transcribed into minutes.Additionally, the Board of Directors receives a monthly report preparedby the General Manager, the purpose of which is to report the materialissues and events addressed at the different meetings held betweenhim and Senior Management. The Board of Directors becomes awareof such reports, evidencing so in minutes.In connection with directors’ training and development, Banco de


Galicia y Buenos Aires S.A. has a program, which is reviewed everysix months, whereby they regularly attend courses and seminars ofdifferent kinds and subjects.It may be said that Banco de Galicia y Buenos Aires S.A.’s executives,including directors, have proved updated knowledge and skills, andthat the Board of Directors’ performance is the most effective, whichcorresponds with the current dynamics of this body.According to the activities carried out by Banco de Galicia y BuenosAires S.A., effective laws and corporate strategies, the followingcommittees have been created to achieve an effective control over allactivities performed by the Bank:

Risk management committee. It is in charge of approving riskmanagement strategies, policies, processes and procedures, with therelated contingency plans, establishing the specific limits for each riskexposure and approving, when appropriate, the temporary limitexcesses and becoming aware of each risk position and compliancewith policies.

Credit committee. This Committee’s function is to resolve on loansgreater than 2.5% of Banco de Galicia y Buenos Aires S.A.'sComputable Regulatory Capital and all the loans to be granted tofinancial institutions (local or foreign) and related customers.

Asset and liability management committee. It is in charge ofanalyzing the evolution of the Bank’s business from a financial pointof view regarding fund-raising and its placement in different assets,and is responsible for the follow-up and control of liquidity, interest-rate and currency mismatches. It is also in charge of analyzing andrecommending business areas, measures related to the managementof interest-rate and currency mismatches, and maturity gaps in orderto maximize financial and foreign exchange income within acceptableparameters of risk and use of capital, and proposing changes to suchparameters, if deemed necessary, to the Board of Directors.

Information technology committee. It is in charge of supervisingand approving new systems’ development plans and budgets, as wellas supervising these systems’ budget controls. It is also responsiblefor approving the general design of the system’s structure, of the mainprocesses and systems implemented, and for supervising the qualityof the Bank’s systems.

Audit committee. The Audit Committee is responsible for helping,within the framework of its specific functions, the Board of Directorswith: (1) internal controls, individual and corporate risk managementand compliance with the standards established by the Bank, theArgentine Central Bank and effective laws; (2) the process of issuanceof the financial statements; (3) the external auditor's suitability andindependence; (4) the Internal and External Audit’s performance; (5)the solution to the observations made by the Internal and ExternalAudits, the Argentine Central Bank and other regulatory agencies; and

(6) evaluation and approval of the follow-up of the implementation ofrecommendations. It is also responsible for coordinating the Internaland External Audit functions that interact in the financial institution.

Committee for the control and prevention of money launderingand funding of terrorist activities. Its mission is to plan, coordinateand ensure compliance with the policies on anti-money launderingand funding of terrorist activities set and approved by the Board ofDirectors, taking into consideration effective regulations. It is alsoresponsible in this regard for designing internal controls, personneltraining plans and ensuring compliance by the Internal Audit.

Committee for information integrity. Its mission is to comply withthe provisions of U.S. Sarbanes-Oxley Act.

Human resources committee. It is in charge of promotions andappointments, transfers, turnovers, development, staff andcompensation for the personnel included in 9 salary levels and higher.

Planning and management control committee. It is in charge ofanalyzing, defining and following up the consolidated balance sheetand income statement.

Business and segment management committee. It is in chargeof analyzing, defining and following up businesses and segments.

Crisis committee. It is in charge of evaluating the situation uponfacing a liquidity crisis and deciding the steps to be implemented totackle it.

Finance Committee - Consumer banking. It is in charge ofanalyzing the financial evolution and the funding needs of companiesdevoted to the provision of financing to consumers, as well asanalyzing the evolution of the credit portfolio.Banco de Galicia y Buenos Aires S.A. considers the General Managerand Division Management reporting to the General Manager as SeniorManagement. These are detailed as follows:

- Retail Banking Division- Wholesale Banking Division- Finance Division- Comprehensive Corporate Services Division- Organizational Development and Human Resources Division- Risk Management Division- Credit Division- Planning Division- Customer’s Experience Division

Senior Management’s main duties are as follows:- Ensure that the Bank’s activities are consistent with the businessstrategy, the policies approved by the Board of Directors and therisks to be assumed.- Implement the necessary policies, procedures, processes and


controls to manage operations and risks cautiously, meet thestrategic goals set by the Board of Directors and ensure that thelatter receives material, full and timely information so that it mayassess management and analyze whether the responsibilitiesassigned are effectively fulfilled.- Monitor the managers from different divisions, in line with thepolicies and procedures set by the Board of Directors and establishan effective internal control system.

Basic holding structure. Banco de Galicia y Buenos Aires S.A.’smajority shareholder is Grupo Financiero Galicia S.A., which has fullcontrol of its shares and votes. In turn, Banco de Galicia y Buenos AiresS.A. holds equity investments in supplementary companies ascontrolling company, as well as minority interests in companies whosecontrolling company is Grupo Financiero Galicia S.A. From a businesspoint of view, this structure allows the Bank to take advantage ofsignificant synergies that guarantee the loyalty of its customers andadditional businesses. All business relationships with these companies,whether permanent or occasional in nature, are fostered under thenormal and usual market conditions and this is so when Banco deGalicia y Buenos Aires S.A. holds either a majority or minority interest.Grupo Financiero Galicia S.A.’s Board of Directors submits to theShareholders’ Meeting’s vote which shall be Grupo Financiero Galicia’svote, in its capacity as controlling company, at Banco de Galicia yBuenos Aires’s Shareholders’ Meeting. The same method oftransparency and information as to its controlled companies andcompanies it owns a stake in is applied at the Bank’s Shareholders’Meetings, which are always attended by directors and officers thereofand the Board of Directors always provides detailed information aboutthe Company’s activities.

Business conduct policy and/or code of ethics. Banco de Galicia yBuenos Aires S.A. has a Code of Ethics formally approved that guides itspolicies and activities. It considers business objectivity and conflict-of-interests related-aspects, and how the employee should act uponidentifying a breach of the Code of Ethics, with the involvement of theOrganizational Development and Human Resources Management.

Information related to personnel economic incentive practices.The Human Resources Committee, composed of two Directors, theManaging Director and the Organizational Development and HumanResources Division Manager, is in charge of establishing thecompensation policy for Banco de Galicia y Buenos Aires S.A.’spersonnel.

It is the policy of Banco de Galicia y Buenos Aires S.A. to manage thefull compensation of its personnel based on the principles of fairness,meritocracy and justice, within the framework of the legal regulationsin force.

The aim of this policy is to provide an objective and fair basis, through

the design and implementation of tools for the management of thefixed and variable compensation paid to each employee, based on thescope and complexity of each position’s responsibilities, individualperformance with regard to compliance thereof, contribution to theBank’s results and conformity to market values, with the purpose of:

- Attracting and creating loyalty with regard to quality personnelsuitable for the achievement of the business strategy and goals.- Being an individual motivation means.- Easing the decentralized management of compensationadministration.- Allowing the effective budget control of personnel costs.- Guaranteeing internal fairness.

In order to monitor and guarantee both external and internal fairnesswith regard to the payment of fixed and variable compensation, theCompensation area uses, and puts at the disposal of the SeniorManagement and the Human Resources Committee, market surveyspublished by consulting firms specialized in compensation issues,pursuant to the market positioning policies defined by themanagement division for the different corporate levels.

With the purpose of gearing individuals towards the achievement ofattainable results that contribute to the global performance of theBank/Area, and to the increase in motivation for the commonattainment of goals, differentiating individual contribution, Banco deGalicia y Buenos Aires S.A. has different variable compensationsystems:

1.Business Incentives and/or Incentives through Commissions systemfor business areas.2.Annual Bonus System for management levels, officers and the restof the employees who are not included in the business incentivessystem. The annual bonus is determined based on individualperformance and Banco de Galicia y Buenos Aires S.A.’s results, andis paid in the first quarter of the next fiscal year. To determine thevariable compensation for the senior management and middlemanagement, the Bank uses the Management PerformanceAssessment System. This system has been designed including bothqualitative and quantitative K.P.I. (Key Performance Indicators). Inparticular, quantitative Key Performance Indicators are designedrespecting at least three minimum aspects:

- Results.- Business volume or size.- Projections: Indicators that protect the business for the future(For example: Quality, internal and external customer satisfaction,risk coverage, work environment, etc.).

The significance or impact of each of them is monitored and adjustedyearly pursuant to the strategy approved by the Board of Directors.The interaction among these three aspects seeks to make incentivesrelated to results and growth consistent with the risk thresholds


determined by the Board of Directors. In turn, there is no deferred payment of variable compensation subjectto the occurrence of future events or in the long term, taking intoconsideration that the business environment in the Argentine financialsystem is characterized by being mainly transactional, with lendingand borrowing transactions with a very short seasoning term.Annual budget and management control -the latter carried outmonthly in a general manner and quarterly in a more detailed manner-include different risk ratios, including the ratio between compensationand risks undertaken.Variable compensation is only paid in cash. There are no payments inshares.Every change to this policy is submitted to Banco de Galicia y BuenosAires S.A.’s Human Resources Committee for its consideration.

NOTE 37. CREDIT LINES FOR THE PRODUCTIVEINVESTMENT

The Argentine Central Bank established the conditions to grant loansunder the program “Credit Lines for the Productive Investment”,aimed at financing specific-purposes investment projects. Theminimum amounts are applicable in proportion to deposits andagreed-upon rates are established by such organization. Banco deGalicia y Buenos Aires S.A. has complied with the placement of theabove-mentioned loans, in accordance with the conditions referred toabove.For the first half of 2016, the Argentine Central Bank approved theregulations regarding “Financing Line for the Production and FinancialInclusion”, which establish that financial institutions shall keep abalance for such financing equal to, at least, 14% of the deposits in thenon-financial private sector in pesos, calculated based on the monthlyaverage of daily balances for November 2015.

NOTE 38. PENALTIES IMPOSED ON BANCO DEGALICIA Y BUENOS AIRES S.A. AND SUMMARYPROCEEDINGS COMMENCED BY THE ARGENTINECENTRAL BANK

PENALTIES IMPOSED ON BANCO DE GALICIA Y BUENOS AIRESS.A. EXISTING AS OF DECEMBER 31, 2015Argentine Central Bank’s Financial Summary Proceedings Nº 1308.Penalty notification date: October 28, 2013. Reason for the impositionof the penalty: Alleged non-compliance with the regulations onprevention of money laundering, due to lack of files and of customers’awareness. Penalty amount and responsible individuals penalized(penalties): Banco de Galicia y Buenos Aires S.A. $230; Daniel A.Llambías $220; Luis M. Ribaya $172; Antonio R. Garcés $169; EnriqueM. Garda Olaciregui $126; Eduardo A. Fanciulli $126; Sergio Grinenco$120; Guillermo J. Pando $120; and Pablo Garat $70. Status of theproceedings: The individuals on whom penalties were imposed filed anadministrative appeal against the aforementioned penalties, which is

pending at the Division V of the Argentine Federal Court of Appeals inAdministrative Matters. Accounting treatment: Fines were paid in fulland charged to income for the corresponding fiscal year.

Argentine Central Bank’s Financial Summary Proceedings Nº 1223 and1226 (accumulated). Penalty notification date: November 15, 2013.Reason for the imposition of the penalty: Alleged non-compliance withCommuniqué “A” 3426 and Communiqué “A” 3381 of the ArgentineCentral Bank, and alleged non-compliance with restrictions related toassistance to related customers. Penalty amount and responsibleindividuals penalized (penalties): Banco de Galicia y Buenos Aires S.A.$400; José H. Petrocelli $328; Luis M. Ribaya $328; Eduardo J.Zimmermann $324; Antonio R. Garcés $400; Eduardo H. Arrobas $400;Daniel A. Llambías $400; Eduardo J. Escasany $260; Federico Braun$260; and Abel Ayerza $258. In the case of Messrs. Juan M.Etchegoyhen, Federico M. Caparrós Bosch, Jorge Grouman, NorbertoR. Armando (deceased), Daniel Morgan (deceased), Luis O. Oddone,Ricardo A. Bertoglio (deceased), Norberto D. Corizzo and Adolfo H.Melian, warning penalty. Status of the proceedings: The individuals onwhom penalties were imposed filed an administrative appeal againstthe aforementioned penalties, which is pending at the Division V of theArgentine Federal Court of Appeals in Administrative Matters.Accounting treatment: Fines were paid in full and charged to incomefor the corresponding fiscal year.

U.I.F.’s Summary Proceedings Nº 68/09. Penalty notification date:February 25, 2010. Reason for the imposition of the penalty: Allegedomission to report suspicious activities, in possible infringement of ActNº 25,246. Penalty amount and responsible individuals penalized(penalties): Banco de Galicia y Buenos Aires S.A. $2,242; Eduardo A.Fanciulli $812; Enrique M. Garda Olaciregui $1,429. Status of theproceedings: The individuals on whom penalties were imposed filed adirect appeal against the aforementioned penalties, which is pendingat the Division I of the Argentine Federal Court of Appeals inAdministrative Matters. Accounting treatment: As of December 31,2015 and December 31, 2014, a provision for $4,483 and $3,464,respectively, has been set up.

U.I.F.’s Summary Proceedings Nº 213/12. Penalty notification date:May 6, 2014. Reason for the imposition of the penalty: Allegedomission to report suspicious activities, in infringement of Act Nº25,246, Section 24. Penalty amount and responsible individualspenalized (penalties): Banco de Galicia y Buenos Aires S.A. $324;Enrique M. Garda Olaciregui, Pablo M. Garat, Sergio Grinenco, PabloGutierrez, Guillermo J. Pando, Luis M. Ribaya and Antonio R. Garcés$324, jointly. Status of the proceedings: The individuals on whompenalties were imposed filed a direct appeal against theaforementioned penalties, which is pending at the Division III of theArgentine Federal Court of Appeals in Administrative Matters.Accounting treatment: As of December 31, 2015 and 2014, a provisionfor $648 and $257, respectively, has been set up.


SUMMARY PROCEEDINGS COMMENCED BY THE ARGENTINECENTRAL BANK (WITH NO PENALTIES) PENDING AS OFDECEMBER 31, 2015Summary Proceedings Nº 5520, notified on October 10, 2013. Chargesfiled: Alleged infringement of Communiqué “A” 3471 andCommuniqué “C” 35372 of the Argentine Central Bank with regardto the crediting, in favor of residents in Argentina, of different amountsfrom payments from abroad without registering foreign exchangetransactions with regard to such residents. Individuals subject tosummary proceedings: Banco de Galicia y Buenos Aires S.A., HéctorD'Alessandro and Mónica B. Patricelli.

Summary Proceedings Nº 6075, notified on January 26, 2015. Chargesfiled: Alleged infringement of Communiqué “A” 4940, “A” 4662 and“C” 51232 of the Argentine Central Bank upon carrying out eightforeign exchange transactions. Individuals subject to summaryproceedings: Banco de Galicia y Buenos Aires S.A., Alejandro Antonelli,Sergio Lenzuen, Daniel B. Toloza, Ignacio J. Castro, José A. Petracca,Juan C. Litardo, Laura C. Cifala, Marcela R. Skrebutenas, María J.Baldatti, María V. Lema, Marina A. de Sierra, Matías L. Alvarez, MatíasN. Abate, María B. Troitiño, Natalia Bortoli, Alejandro SchlimovichRicciardi and Sandra P. Jaleh Camin.

Argentine Central Bank’s Financial Summary Proceedings 1454 –Record 101059/14, notified on September 16, 2015. Charges filed:Alleged infringement of Argentine Central Bank’s Communiqué “A”5640. Individuals subject to summary proceedings: Banco de Galiciay Buenos Aires S.A., Sergio Grinenco, Pablo Gutierrez, Pablo M. Garat,Ignacio Abel Gonzalez, Guillermo J. Pando, Luis M. Ribaya, Raúl H.Seoane, Ignacio H. Villa Del Prat, Juan Agustín Nuñez, Ariel F. Phoyu,Walter R. Buono, Eduardo S. Coscueta, Sebastián Torriti and Jorge L.García. On September 30, 2015, a defense was filed with the ArgentineCentral Bank.

Summary Proceedings Nº 6669. Notification date: December 29, 2015.Charges filed: Alleged commitment of the crimes set forth in Section1, Subsection C), e) and f) of Law Nº 19359 integrated into ArgentineCentral Bank’s Communiqué “A” 3471, 3826 and 5264. Individualssubject to summary proceedings: Banco de Galicia y Buenos Aires S.A.,María José Baldatti de Iorio and Laura Cecilia Cifala.

Summary Proceedings Nº 6681. Notification date: December 30, 2015.Charges filed: Alleged commitment of the crimes set forth in Section1, Subsection C), e) and f) of Law Nº 10959 integrated into point 1 ofCommuniqué “A” 5397 and 4.1 of Communiqué “A” 5264.Individuals subject to summary proceedings: Banco de Galicia yBuenos Aires S.A., María José Baldatti de Iorio, Roberto Fernandez andMaría Soledad Paz.

The provisioning criterion required by Communiqué “A” 5689 differsfrom that of the Argentine GAAP in force in the Autonomous City ofBuenos Aires. Banco de Galicia y Buenos Aires S.A. reserves the rightto dispute the legitimacy of such Communiqué and file a claim for anydamages its application could cause the Bank.

Compañía Financiera Argentina S.A. has not been imposed anypenalties that should be informed under the terms of ArgentineCentral Bank’s Communiqué "A" 5689, and to date has no summaryproceedings brought against it by the Argentine Central Bank.

NOTE 39. SUBSEQUENT EVENTS

Tarjetas del Mar S.A.The C.N.V. authorized the company to join the Public Offering Systemby issuing simple negotiable obligations, not convertible into shares,up to a maximum amount of US$75,000 or its equivalent in othercurrencies.


BALANCE SHEET AS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014

The accompanying Notes 1 to 16 and Schedules A, B, C, D, E, G, and H are an integral part of these financial statements

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$)

December 31,

Assets

Current assets


Investments

Other receivables

Total current assets

Non-current assets

Other receivables

Investments

Fixed assets

Total non-current assets

Total assets

Liabilities

Current liabilities

Financial debt

Salaries and social security contributions

Tax liabilities

Other liabilities

Total current liabilities

Non-current liabilities

Financial debt

Other liabilities

Total non-current liabilities

Total liabilities

Shareholders' equity (per related statement)


BALANCE SHEET - MEMORANDUM ACCOUNTSAS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014



December

Unused overdrafts

Total

2014

565

9,623

34,231

44,419

89,674

10,591,721

397

10,681,792

10,726,211

120,331

1,050

27,135

3,065

151,581

328,200

6

328,206

479,787

10,246,424

10,726,211

2015

799

22,113

48,441

71,353

143,372

14,830,138

216

14,973,726

15,045,079

164,523

2,047

38,432

7,205

212,207

348,045

6

348,051

560,258

14,484,821

15,045,079

Schedules

D and G

E AND G

E and G

B and C

A

G

Notes

2 and 11

9 and 11

3, 9 and 11

3, 9, 11 and 13

9

4, 9 and 15

5 and 9

6 and 9

7, 9 and 11

4, 9 and 15

7 and 9

2014

125,000

125,000

2015

-

-

SchedulesNotes

11


INCOME STATEMENTFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Net income on investments in related institutions


Financial and holding loss

Generated by assets

Interest

On special checking account deposits

On mutual funds

On time deposits

On promissory notes receivable

Income / loss from government and corporate securities

Foreign exchange income

Generated by liabilities

Interest

On financial debt

Others

Foreign exchange loss

Other income and expenses - (Loss) / Income


Income tax


(*) Balances net of eliminations corresponding to transactions conducted with companies included in Section 33 of Law Nº 19550. See Note 11.

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



Shareholders’ contributions (*) Retained earnings (**)

Premium for

negotiation Additional Unnappropriated Total del

Capital of shares in paid-in Legal Discretionary retained shareholders’

Item Capital stock adjustment own portfolic capital Total reserve reserve earnings equity

Balances as 12.31.2013

Distribution of unappropriated retained earnings (1)

Legal reserve

Discretionary reserve

Cash dividends



Distribution of unappropriated retained earnings (1)

Legal reserve

Discretionary reserve

Cash dividends



(*) See Notes 8 and 16. (**) See Note 12.(1) Approved by the Ordinary Shareholders’ Meeting held on April 29, 2014.(2) Approved by the Ordinary Shareholders’ Meeting held on April 29, 2015.

2014

3,433,646

(27,582)

(73,524)

36,393

3

5,006

22

11

7,079

24,272

(109,917)

(109,111)

(211)

(595)

5,250

3,337,790

-

3,337,790

2015

4,427,554

(26,955)

(60,605)

57,906

2

2,716

25

-

62

55,101

(118,511)

(116,276)

(318)

(1,917)

(1,597)

4,338,397

-

4,338,397

Schedules

H

Notes

11

11

(*)

(*)

(*)

13

14

6,947,229

-

-

(38,595)

3,337,790

10,246,424

-

-

(100,000)

4,338,397

14,484,821

1,823,653

(91,183)

(1,693,875)

(38,595)

3,337,790

3,337,790

(24,432)

(3,213,358)

(100,000)

4,338,397

4,338,397

3,125,519

-

1,693,875

-

-

4,819,394

-

3,213,358

-

-

8,032,752

200,065

91,183

-

-

-

291,248

24,432

-

-

-

315,680

1,797,992

-

-

-

-

1,797,992

-

-

-

-

1,797,992

218,990

-

-

-

-

218,990

-

-

-

-

218,990

606

-

-

-

-

606

-

-

-

-

606

278,131

-

-

-

-

278,131

-

-

-

-

278,131

1,300,265

-

-

-

-

1,300,265

-

-

-

-

1,300,265


STATEMENT OF CASH FLOWSFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014



December 31,

Changes in cash

Cash at beginning of fiscal year

Cash at fiscal year-end

Increase / (Decrease) in cash, net

Causes for changes in cash

Operating activities

Collections for services

Payments to suppliers of goods and services

Personnel salaries and social security contributions

Payments of other taxes

Collections for other operating activities, net

Net cash flow used in operating activities

Investing activities

Collection of dividends

Collections for sale of fixed assets

Payments for equity investments

Net cash flow provided by investing activities

Financing activities

Payments of interest, net

Loans received, net

Distribution of dividends

Net cash flow used in financing activities

Increase / (Decrease) in cash, net

2014

10,743

10,188

(555)

4,203

(18,027)

(7,553)

(27,912)

22,188

(27,101)

127,750

5,389

(88,857)

44,282

(89,078)

109,937

(38,595)

(17,736)

(555)

2015

10,188

22,912

12,724

-

(17,860)

(4,908)

(9,225)

8,465

(23,528)

189,589

-

-

189,589

(99,177)

45,840

(100,000)

(153,337)

12,724

Notes

1.I

1.I


NOTE 1 - BASIS FOR THE PREPARATION OF THEFINANCIAL STATEMENTS

These financial statements have been stated in thousands of ArgentinePesos and prepared in accordance with disclosure and valuationaccounting standards contained in Technical Pronouncements issuedby the F.A.C.P.C.E., approved by the C.P.C.E.C.A.B.A. and the C.N.V.,with the considerations mentioned in Note 1 to the consolidatedfinancial statements in relation to the criteria for the valuation of thesubsidiaries Banco de Galicia y Buenos Aires S.A. and SudamericanaHolding S.A.The preparation of financial statements at a given date requires theCompany’s Management to make estimates and assessmentsregarding events and/or situations and/or circumstances that affector may affect the amounts of assets and liabilities reported and thedisclosure of contingent assets and liabilities at that date, as well asthe income and expenses recorded for the fiscal year. The Company’sManagement makes estimates in order to calculate, at any givenmoment, for example, the depreciation charges, the recoverable valueof assets, the income tax charge and provisions for contingencies.Estimates and assessments made at the date these financialstatements were prepared may differ from the situations, eventsand/or circumstances that may finally occur in the future.On March 25, 2003, the National Executive Branch issued DecreeNº 664 establishing that financial statements for fiscal years ending asfrom said date be stated in nominal currency. Consequently, inaccordance with Resolution Nº 441/03 of the C.N.V., the Companydiscontinued the restatement of its financial statements as from March1, 2003. This criterion is not in line with Argentine GAAP, under whichfinancial statements are to be restated until September 30, 2003.Nevertheless, this departure has not produced a significant effect onthe financial statements.The index used for restating the items in these financial statementswas the domestic wholesale price index published by the ArgentineInstitute of Statistics and Census (I.N.D.E.C.).The most significant accounting policies used in preparing theFinancial Statements are listed below:

A. ASSETS AND LIABILITIES IN DOMESTIC CURRENCY. Monetaryassets and liabilities which include, where applicable, the interestaccrued at fiscal year-end, are stated in period-end currency andtherefore require no adjustment whatsoever.

B. ASSETS AND LIABILITIES IN FOREIGN CURRENCY (U.S.DOLLARS). The assets and liabilities in foreign currency were stated

at the U.S. Dollar exchange rate set by the Argentine Central Bank, atthe close of operations on the last business day of the fiscal year.Interest receivable or payable has been accrued, where applicable.

C. INVESTMENTSc1) Current. Time and special checking account deposits have beenmeasured at their face value, plus accrued interest at fiscal year-end.Argentine mutual fund units have been valued at fiscal year-endclosing price.

c2) Non-current. The equity investments in companies are recognizedusing the equity method as of fiscal year-end.The consolidated financial statements of Sudamericana Holding S.A.have been prepared pursuant to the regulations of the ArgentineSuperintendency of Insurance (S.S.N.), which differ from ArgentineGAAP in certain aspects. Nevertheless, this departure has not produceda significant effect on the financial statements of Grupo FinancieroGalicia S.A.The equity investments in Banco de Galicia y Buenos Aires S.A. andCompañía Financiera Argentina S.A. have been recognized using theequity method, which arises from financial statements prepared inaccordance with Argentine Banking GAAP, which differ in the aspectsmentioned in Note 1.16. to the consolidated financial statements fromArgentine GAAP.

D. GOODWILL. Goodwill resulting from the acquisition of shares inother companies, which is recorded under “Investments”, has beenvalued at its acquisition cost, net of the corresponding accumulatedamortization, calculated proportionally over the estimated useful life. Amortization is assessed on a straight-line basis in equal monthlyinstallments, being the amortization term of 120 months. See Schedule B.The updated residual value of the assets does not exceed theirestimated recoverable value at fiscal year-end.

E. FIXED ASSETS. Fixed Assets have been valued at their acquisitioncost, restated at constant currency as mentioned in this Note, net ofthe corresponding accumulated depreciation.Depreciation charges are calculated following the straight-linemethod, at rates determined based on the useful life assigned to theassets, which is 60 months for hardware and software, furniture andfixtures and 600 months for real estate. See Schedule A.During fiscal year 2014, the Company retired from its assets thosethat, due to their physical and/or technological obsolescence, werenot useful for their intended purpose, and which pieces could not beused or exploited.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 ANDDECEMBER 31, 2014Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$)


On July 22, 2014, the Company’s Board of Directors decided to approvethe sale of the real estate to Banco de Galicia y Buenos Aires S.A.The updated residual value of the assets, taken as a whole, does notexceed their value-in-use at fiscal year-end.

F. FINANCIAL DEBT. Financial debt has been valued pursuant to theamount of money received, plus the accrued portion of interest as offiscal year-end.

G. INCOME TAX AND MINIMUM PRESUMED INCOME TAX. TheCompany has recognized the income tax charge according to thedeferred tax method, thus recognizing the temporary differencesbetween measurements of accounting and tax assets and liabilities, atthe rate in force (see Note 13 to the financial statements). Due to theunlikelihood that future taxable income may be enough to absorb taxloss carry-forwards, the Company has established an allowance forimpairment of value with regard to such income and has not recordedtax loss carry-forwards. See Schedule E.The Company determines the minimum presumed income tax at theeffective rate of 1% of the computable assets at fiscal year-end. Thistax is supplementary to the income tax. The Company’s tax liabilityfor each fiscal year shall be determined by the higher of the two taxes.However, if the minimum presumed income tax were to exceedincome tax in a given fiscal year, such excess may be computed as apayment on account of the income tax that could be generated in any

of the next ten fiscal years.The Company has set up a provision for the minimum presumedincome tax credit accrued during this period and the previous fiscalyear, for $4,497 and $3,439, respectively, since its recovery is not likelyat the issuance date of these financial statements. See Schedule E.

H. SHAREHOLDERS’ EQUITYh1) Activity in the Shareholders’ Equity accounts has been restatedas mentioned in paragraphs three and four of this Note.The "Subscribed and Paid-in Capital" account has been stated at itsface value and at the value of the contributions in the currency valueof the fiscal year in which those contributions were actually made. The adjustment stemming from the restatement of that account in constantcurrency has been allocated to the “Capital Adjustment” account.h2) Income and expense accountsThe results of operations for each fiscal year are presented in the fiscalyear in which they accrue.

I. STATEMENT OF CASH FLOWS. “Cash and Due from Banks”,investments and receivables held with the purpose of complying withthe short-term commitments undertaken, with a high level of liquidity,easily converted into known amounts of cash, subject to insignificantrisks of changes in value and with a maturity less than three monthsfrom the date of the acquisition thereof, are considered to be cash andcash equivalents. The breakdown is as follows:

December 31,


Investments

Total

NOTE 2 - CASH AND DUE FROM BANKS

As of December 31, 2015 and December 31, 2014, the breakdown of the account was as follows:

December 31,

Cash

Due from banks - checking accounts

Total

2014

565

9,623

10,188

2015

799

22,113

22,912

Schedules

D and G

Notes

2

2014

14

551

565

2015

14

785

799

SchedulesNotes

11



NOTE 3 - OTHER RECEIVABLES


December 31,

Current

Tax credits


Recoverable expenses

Promissory notes receivable

Sundry debtors

Prepaid expenses

Others

Allowance for impairment of value of miscellaneous receivables

Total

Non-current

Tax credits

Minimum presumed income tax receivables

Allowance for impairment of value of minimum presumed income tax receivables

Deferred tax asset

Allowance for impairment of value of deferred tax asset


Prepaid expenses

Total

NOTE 4 - FINANCIAL DEBT


December 31,

Current


Total

Non-current


Total

2014

2,065

28,887

5,118

60

38

1

(1,938)

34,231

3,439

(3,439)

94,148

(94,148)

89,674

-

89,674

2015

1,779

40,688

8,224

197

45

-

(2,492)

48,441

4,497

(4,497)

114,790

(114,790)

143,367

5

143,372

Schedules

G

E

E

E

G

Notes

11

11

1.G.

1.G.

13

13

11

2014

120,331

120,331

328,200

328,200

2015

164,523

164,523

348,045

348,045

SchedulesNotes

15

15

NOTE 5 - SALARIES AND SOCIAL SECURITY CONTRIBUTIONS


December 31,

Current

Argentine integrated social security system (S.I.P.A.)

Provision for bonuses

Provision for retirement insurance

Provision for directors’ fees

Other

Total

NOTE 6 - TAX LIABILITIES


December 31,

Current

Income tax - Withholdings to be deposited

Provision for tax on personal property - Substitute taxpayer

Provision for turnover tax

Total

NOTE 7 - OTHER LIABILITIES


December 31,

Current

Sundry creditors

Provision for expenses

Guarantee deposit of directors

Total

No corrientes

Depósito en garantía de directores

Total

NOTE 8 - CAPITAL STATUS

The capital status as of December 31, 2015 and December 31, 2014 was as follows:

Face value Related at constant

Capital Stock Suscribed paid-in Registered currency


Increase due to merger (*)



(*) See Note 16.


2014

118

475

454

-

3

1,050

2015

155

435

650

803

4

2,047

SchedulesNotes

2014

61

26,949

125

27,135

2015

145

38,196

91

38,432

SchedulesNotes

2014

673

2,389

3

3,065

6

6

2015

1,058

6,144

3

7,205

6

6

Schedules

G

Notes

11

1,241,407

58,858

1,300,265

1,300,265

1,300,265

-

1,300,265

1,300,265

1,300,265

-

1,300,265

1,300,265

1,578,396

1,578,396

1,578,396

NOTE 9 - ESTIMATED COLLECTION OR PAYMENT TERMS OF RECEIVABLES, INVESTMENTS AND DEBTS

As of December 31, 2015, the breakdown of receivables, investments, and debts according to their estimated collection or payment term wasthe following:

1st Quarter (*)

2nd Quarter (*)

3rd Quarter (*)

4th Quarter (*)

After one year (*)

Subtotal falling due

No set due date

Total

Non-interest bearing

At variable rate

At fixed rate

Total

(*) From the closing date of these financial statements.

NOTE 10 - EQUITY INVESTMENTS

The breakdown of the Company’s direct equity investments as of fiscal year-end was the following:

Direct holding as of 12.31.2015

Shares Percentage of equity investment held in

Issuing Company Type Amount Total capital Possibles votes





Net Investment S.A.


(*) Ordinary shares A and B.

Direct holding as of 12.31.2014

Shares Percentage of equity investment held in

Issuing Company Type Amount Total capital Possibles votes





Net Investment S.A.


(*) Ordinary shares A and B.


Other liabilities

7,205

-

-

-

6

7,211

-

7,211

7,211

-

-

7,211

Tax liabilities

38,432

-

-

-

-

38,432

-

38,432

38,432

-

-

38,432

Salaries and

social security

contributions

1,244

803

-

-

-

2,047

-

2,047

2,047

-

-

2,047

Financial debt

24,368

140,155

-

-

348,045

512,568

-

512,568

-

512,568

-

512,568

Other receivables

7,708

40,689

26

18

143,372

191,813

-

191,813

40,222

151,591

-

191,813

Investments

22,113

-

-

-

-

22,113

14,830,138

14,852,251

14,830,233

9,905

12,113

14,852,251

100.00000

3.00000

95.00000

87.50000

87.50000

87.50034

100.00000

3.00000

95.00000

87.50000

87.50000

87.50034

562.326.651

16.726.875

19.000

875.000

10.500

162.447

Ordinary (*)

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

100.00000

3.00000

95.00000

87.50000

87.50000

87.50034

100.00000

3.00000

95.00000

87.50000

87.50000

87.50034

562.326.651

16.726.875

19.000

875.000

10.500

162.447

Ordinary (*)

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

The financial position and results of operations of the companies in which Grupo Financiero Galicia S.A. holds a direct equity investment as ofperiod/fiscal year-end are as follows:

Information as of 12.31.2015

Company





Net Investment S.A.


(*) Income for the 12-month period as of December 31, 2015.

Information as of 12.31.2015

Company





Net Investment S.A.


(*) Income for the 12-month period as of December 31, 2014.


Net income

3,912,917

127,316

115,963

31,253

37

408,551

Shareholders’

equity

13,812,169

1,249,947

119,885

46,422

210

645,611

Liabilities

124,899,954

2,498,053

48,972

44,513

7

11,235

Assets

138,712,123

3,748,000

168,857

90,935

217

656,846

Net income

3,158,416

112,708

50,357

12,783

24

234,490

Shareholders’

equity

9,899,252

1,122,632

54,279

27,178

173

387,059

Liabilities

78,846,696

2,590,783

25,268

19,135

6

13,280

Assets

88,745,948

3,713,415

79,547

46,313

179

400,339

On February 25, 2014, Grupo Financiero Galicia S.A.’s Board ofDirectors resolved the following: (i) to issue the statement ofwillingness to acquire provided for in Section 91, Subsection b) of LawNº 26831, with regard to all the remaining shares of Banco de Galiciay Buenos Aires S.A. held by third parties; (ii) to approve the criterionsuggested by the Management Division on the fair price provided forin Section 94, second paragraph, of Law Nº 26831, and establish it in$23.22 (figure stated in Pesos) for each remaining share held by thirdparties; (iii) to request the National Securities Commission theimmediate withdrawal of Banco de Galicia y Buenos Aires S.A. fromthe public offering and listing at the Buenos Aires Stock Exchange,under the terms of Section 94, third paragraph, of Law Nº 26831; (iv)to appoint Banco de Galicia y Buenos Aires S.A. as the financialinstitution where Grupo Financiero Galicia S.A. shall deposit theamount corresponding to the total value of Banco de Galicia y BuenosAires S.A.’s remaining shares; and (v) to give Banco de Galicia yBuenos Aires S.A. notice of the statement of willingness to acquire.

On April 24, 2014, the Board of Directors of the C.N.V. approved theunilateral statement of willingness to acquire issued by the Company.Thus, on May 6, 2014, the amount corresponding to the total value ofBanco de Galicia y Buenos Aires S.A.'s remaining shares wasdeposited. The C.N.V.'s approval of the aforementioned proceedings

was registered with the Corporation Control Authority (I.G.J.) on July14, 2014.

On August 4, 2014, the statement of willingness to acquire wasexecuted by public deed, what makes Grupo Financiero Galicia S.A.the owner, by operation of law, of all of Banco de Galicia y BuenosAires S.A.’s existing shares, pursuant to the provisions of Section 95 ofLaw Nº 26831. The unilateral statement of willingness to acquire wasregistered with the Corporation Control Authority (I.G.J.) on September12, 2014.

On April 7, 2014, Banco de Galicia y Buenos Aires S.A. presented GrupoFinanciero Galicia S.A. with an offer to sell 19,000 shares of GaliciaAdministradora de Fondos S.A. , representing 95% of theaforementioned company’s capital stock, being the offer consideredaccepted at the time the buyer made a payment equivalent to 25% ofthe total purchase price.

On April 15, 2014, Grupo Financiero Galicia S.A.’s Board of Directorsapproved the purchase of 95% of Galicia Administradora de FondosS.A.´s capital stock, and, on that same date, the Company paid 25%of the total agreed price, which amounted to $39,482. The remaining75% was paid on October 10, 2014.


NOTE 11 - SECTION 33 OF LAW N° 19550 - GENERAL CORPORATIONS LAW

The financial statements include the following significant balances corresponding to transactions with its controlled companies and its subsidiaries:

BANCO DE GALICIA Y BUENOS AIRES S.A.

Assets

Cash and due from banks - checking accounts

Investments - special checking account

Other receivables - promissory notes receivable

Total

Liabilities

Other liabilities - provision for expenses

Total

Memorandum accounts

Unused balance of agreement

Total

Income

Financial income - interest on promissory notes receivable

Financial income - interest on time deposits

Total

Expenses


Other operating expenses

Other expenses

Expenses corresponding to the issuance of the global program for the issuance of Negotiable Obligations

Financial expenses - interest on financial debt

Total

NOTE 12 - RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF PROFITS

Pursuant to Section 70 of the General Corporations Law, the Corporate Bylaws and Resolution Nº 368/01 of the C.N.V., 5% of the net income forthe year should be transferred to the Legal Reserve until 20% of the capital stock is reached.

12.31.2014

435

63

94,792

95,290

638

638

125,000

125,000

9,643

2,876

12,519

-

516

1,949

2,580

7,014

12,059

12.31.2015

767

95

151,591

152,453

329

329

-

-

11,650

-

11,650

-

35

3,843

960

7,263

12,101

Schedules

D

G

H

Notes

2

3

7

Year of generation

2011

2012

2013

2014

2015

Balances as of 12.31.2015

The classification of net deferred tax assets and liabilities recorded in accordance with their expected term of turn-around is shown in Note 9.

The following table shows the reconciliation of income tax charged to income to that which would result from applying the tax rate in force tothe book income before tax:

December 31,

Book income before income tax

Income tax rate in force

Result for the fiscal year at the tax rate

Permanent differences at the tax rate

Increase in income tax

Expenses not included in tax return

Other causes

Decrease in income tax

Loss on investments in related institutions

Other causes

Allowance for impairment of value (schedule E)

Total income tax charge recorded

Net deferred tax assets as of December 31, 2015 and December 31,2014 amount to $114,790 and $94,148, respectively.A provision for the deferred tax asset has been fully recorded, since itis supposed that the recovery thereof is not likely at the issuance date

of these financial statements. See Schedule E.Tax loss carry-forwards recorded by the Company, pending being used,amount to approximately $313,005, pursuant to the followingbreakdown:


NOTE 13 - INCOME TAX

The following tables show the changes and breakdown of deferred tax assets and liabilities:

Assets


Charge to income


Charge to income

Expiration of tax loss carry´-forward

Others


Liabilities


Charge to income


Charge to income

Others


Total

72,050

22,120

94,170

27,364

(6,662)

(66)

114,806

Total

92

(70)

22

12

(18)

16

Other liabilities

434

(286)

148

-

-

17

165

Fixed assets

92

(70)

22

12

(18)

16

Allowances

962

220

1,182

564

-

-

1,746

Other receivables

2,486

529

3,015

328

-

-

3,343

Tax loss carry-forwards

68,168

21,657

89,825

26,472

(6,662)

(83)

109,552

Defered tax

assets

9,822

13,076

38,607

21,575

26,472

109,552

Year due

2016

2017

2018

2019

2020

Amount

28,062

37,359

110,306

61,643

75,635

313,005

2014

3,337,790

35%

1,168,227

9,411

2,800

-

(1,204,225)

1,597

22,190

-

2015

4,338,397

35%

1,518,439

4,011

3,386

(1,553,188)

-

27,352

-


The following table shows the reconciliation of tax charged to income to tax determined for the fiscal year for tax purposes:

December 31,

Total income tax charge recorded

Temporary differences

Variation in deferred tax assets

Variation in deferred tax liabilities

Allowance for impairment of value (schedule E)

Total tax determined for tax purposes

NOTE 14 - EARNINGS PER SHARE

Below is a breakdown of the earnings per share as of December 31, 2015 and 2014:

December 31,


Outstanding ordinary shares weighted average

Diluted ordinary shares weighted average

Earnings per ordinary share (*)

Basic

Diluted

(*) Figures stated in Pesos.

2014

-

22,120

70

(22,190)

-

2015

-

27,364

(12)

(27,352)

-

2014

3,337,790

1,300,265

1,300,265

2,5670

2,5670

2015

4,338,397

1,300,265

1,300,265

3,3365

3,3365

NOTE 15. GLOBAL PROGRAM FOR THE ISSUANCEOF NEGOTIABLE OBLIGATIONS

On March 9, 2009, the General Ordinary Shareholders’ Meetingapproved the creation of a Global Program for the Issuance of SimpleNegotiable Obligations, not convertible into shares. Such NegotiableObligations may be short-, mid- and/or long-term, secured orunsecured, peso-denominated, dollar-denominated or else may be inany other currency, subject to the compliance with all the legal orregulatory requirements applicable to the issuance in such currency orcurrency unit, adjustable or non-adjustable, and for a maximumoutstanding face value of up to US$60,000 (sixty million U.S. Dollars)or the equivalent thereof in another currency.The maximum term of the program shall be five years as from the datethe program is authorized by the C.N.V., or for any longer termauthorized pursuant to regulations in force.Apart from that, the Negotiable Obligations may be issued pursuantto the laws and jurisdiction of Argentina and/or any other foreigncountry, in several classes and/or series during the period the Programis outstanding, with the possibility to re-issue the amortized classesand/or series without exceeding the Program’s total amount, andnotwithstanding the fact that the maturity dates of the differentclasses and/or series issued occur after the Program’s expiration date,with amortization terms not shorter than the minimum term or longerthan the maximum term permitted by the regulations set forth by theC.N.V., among other characteristics thereof.

By means of Resolution Nº 16113 dated April 29, 2009, the C.N.V.decided to authorize, with certain conditions, the creation of theGlobal Program. Such conditions were released on May 8, 2009.The Shareholders’ Meeting held on April 14, 2010 approved anincrease of US$40,000 in the amount of the Global Program for theIssuance of Negotiable Obligations, which was later confirmed by theCompany’s Shareholders’ Meeting held on August 2, 2012.On February 27, 2013, the Company’s Board of Directors approved tobegin the proceedings to increase the amount of the program. OnApril 25, 2013, the C.N.V. authorized to increase the maximum amountof issuance of the Global Program of Simple Negotiable Obligations,not convertible into shares, for up to a F.V. of US$100,000 or itsequivalent in other currencies. On January 30, 2014, the Company placed Class V, Series I and II,Negotiable Obligations.On May 8, 2014, through Resolution Nº 17343, the C.N.V. decided toauthorize the extension of the term of the Global Program for five (5)years.On October 23, 2014, Grupo Financiero Galicia S.A. issued Class VINegotiable Obligations for a total amount of $250,000, in two Series:Series I for $140,155, maturing on April 23, 2016, and Series II for$109,845, maturing on October 23, 2017, both with interest paid ona quarterly basis as from January 23, 2015. Amortization of both Seriesshall be paid in only one installment upon maturity of each series. Partof the subscription of Class VI Negotiable Obligations was carried outthrough the payment in Class IV Negotiable Obligations, with a face

Bok Value $

Class

V Series I

V Series II

VI Series I

VI Series II

VII

(1) Annual fixed nominal rate of 27% for the first nine months and a variable BADLAR plus the 4.25% annual nominal rate for the following 15 months.


value of $30,997.On July 27, 2015, Grupo Financiero Galicia S.A. issued Class VIINegotiable Obligations for a total amount of $160,000, maturing onJuly 27, 2017. Such Negotiable Obligations shall accrue interest at anannual nominal 27% fixed rate during the first nine months and at avariable BADLAR plus a nominal annual 4.25% rate for the following

15 months. Interest shall be paid on a quarterly basis, since October27, 2015, and amortization shall be paid in only one installment uponmaturity.As of December 31, 2015 and December 31, 2014, the followingNegotiable Obligations issued in Pesos were outstanding:

12.31.2014

105,901

81,481

146,289

114,860

-

12.31.2015

-

82,002

147,255

115,617

167,694

Intert Rate

Variable Badlar + 4.25%




(1)

Maturity Date

07.31.2015

01.31.2017

04.23.2016

10.23.2017

07.27.2017

Term

18 months

36 months

18 months

36 months

24 months

F. V. Amount

$101,800

$78,200

$140,155

$109,845

$160,000

The net proceeds arising from the placement of the NegotiableObligations were used in working capital in the Argentine Republicand/or refinancing liabilities and/or payment of capital contributionsto controlled or affiliated companies, giving priority to a better fundmanagement and to enhance returns deriving from the issuance, incompliance with the provisions set forth in Section 36 of NegotiableObligations Law.The working capital concept may include, in the case of GrupoFinanciero Galicia S.A., among others, investments in affiliatedcompanies, financial investments such as time deposits, financialplacements, mutual funds and cash and due from banks.

NOTE 16. MERGER BY ABSORPTION OF THESEUSS.A. AND LAGARCUE S.A. AND CAPITAL INCREASE

On September 10, 2013, a Preliminary Merger Agreement was enteredinto, which described the terms and conditions of the merger byabsorption by Grupo Financiero Galicia S.A., as merging company, ofthe total assets and liabilities of Lagarcué S.A. and Theseus S.A., asmerged companies. The Preliminary Merger Agreement, the special balance sheets formerger purposes and the consolidated balance sheet for mergerpurposes, ended on September 30, 2013, were approved by LagarcuéS.A. and Theseus S.A. at the Extraordinary Shareholders' Meetings heldon September 10, 2013.At Grupo Financiero Galicia S.A.’s Extraordinary Shareholders’ Meetingheld on November 21, 2013, the aforementioned documents were

approved, as well as the exchange ratio and the capital increase by$58,858, through the issuance of 58,857,580 ordinary book-entryClass “B” shares, with a face value of $ 1 (figure stated in Pesos) andone vote per share, entitled to take part in the distribution of profitsas from the fiscal year commenced on January 1, 2013.On December 18, 2013, the Final Merger Agreement was signed andexecuted by public deed pursuant to the provisions of Section 83,Subsection 4 of the General Corporations Law. Therefore, GrupoFinanciero Galicia S.A. incorporated the aforementioned companiesby absorption, in effect as of September 1, 2013. This way, 25,454,193Class “B” shares of the controlled company Banco de Galicia y BuenosAires S.A., representing 4.526585% of the capital stock, owned byLagarcué S.A. and Theseus S.A. were incorporated.Consequently, Grupo Financiero Galicia S.A. held 560,199,603 sharesof Banco de Galicia y Buenos Aires S.A., representing 99.621742% ofthe Company’s capital stock and 99.621742% of votes.On February 27, 2014, through Resolution Nº 17300, the Board ofDirectors of the National Securities Commission (C.N.V.) gave itsconsent to the merger by absorption of Grupo Financiero Galicia S.A.(as merging company) with Lagarcué S.A. and Theseus S.A. (as mergedcompanies) and to Grupo Financiero Galicia S.A.’s capital increase,ordering its registration.The merger by absorption and the dissolution of the mergedcompanies were registered at the Corporation Control Authority (I.G.J.)on June 12, 2014, while the capital increase of the merging companywas registered on July 10, 2014.

SCHEDULE A - FIXED ASSETS AND INVESTMENTS IN ASSETS OF A SIMILAR NATUREFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Depreciation

Main account

Real estate

Furniture and fixtures

Machines and equipment

Vehicles

Hardware

Totals as of 12.31.15


(*) See Note 1.E.

SCHEDULE B - GOODWILLFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Amortization

Main account

Goodwill (Schedule C)



SCHEDULE C - INVESTMENTS IN SHARES AND OTHER NEGOTIABLE SECURITIES - EQUITY INVESTMENTSFOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Issuance and characteristics of the securities

Non-current investments

Corporations. Section 33 of Law Nº 19550:

Companies subject to direct and indirect control (*)

Banco de Galicia y

Buenos Aires S.A.


Galicia Administradora de Fondos

Comunes de Inversión S.A


Net Investment S.A.


Total non-current investments

(*) See Note 10. (**) See Schedule B.

Book value as

of 12.31.2014

10,124,938

24,990

33,684

51,565

23,781

151

332,612

10,591,721

Book value as

of 12.31.2015

14,063,703

15,316

37,499

113,890

40,619

184

558,927

14,830,138

Equity method

14,063,703

-

37,499

113,890

40,619

184

558,927

14,814,822

Market

price

-

-

-

-

-

-

-

-

Adquisition

cost

3.384.304

43.052

25.669

39.481

11.829

22.341

42.918

3.569.594

Amount

101

562,326,550

562,326,651

16,726,875

19,000

875,000

10,500

162,447

Face value

0.001

0.001

0.001

0.001

0.001

0.001

0.001

Class

Ordinary “A”

Ordinary “B”

Goodwill (**)

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary


Net book

value for

previous

fiscal year

-

1

294

23

79

-

397

Net book

value

-

1

165

1

49

216

-

Acumulated

at period-

end

-

1

531

107

118

757

576

Amount for

the fiscal

year

-

-

129

22

30

181

201

Annual rate

%

2

20

20

20

20

Decreases (*)

-

-

-

-

-

-

1,215

Accumulated

at beginning

of year

-

1

402

85

88

576

1,590

Balance at

period-end

-

2

696

108

167

973

973

Decreases (*)

-

-

-

-

-

-

1,965

Increases

-

-

-

-

-

-

-

At

beginning

of fiscal year

-

2

696

108

167

973

2,938

Net book

value for

previous

fiscal year

24,990

-

24,990

Net book

value

15,316

15,316

-

Acumulated

at period-

end

27,736

27,736

18,062

Amount for

the fiscal

year

9,674

9,674

7,767

Annual rate

%

10

Decreases (*)

-

-

-

Accumulated

at beginning

of year

18,062

18,062

10,295

Balance at

period-end

43,052

43,052

43,052

Decreases (*)

-

-

-

Increases

-

-

19,508

At

beginning

of fiscal year

43,052

43,052

23,544

SCHEDULE C - INVESTMENTS IN SHARES AND OTHER NEGOTIABLE SECURITIES - EQUITY INVESTMENTS(CONT.)FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Information on the issuing companies. Latest financial statements (*)

Issuance and characteristics of the securities

Non-current investments

Corporations. Section 33 of Law Nº 19550:

Companies subject to direct and indirect control (*)





Net Investment S.A.

Sudamericana Holding S.A. (**)

(*) See Note 10. (**) For the six-month period ended December 31, 2015.

SCHEDULE D - OTHER INVESTMENTS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Issuance and characteristics

Current investments (*)

Deposits in special checking accounts

Mutual funds

Time deposits

Total

(*) Include accrued interest, if applicable.

SCHEDULE E - ALLOWANCES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Accounts

Deducted from assets

Impairment of value of deferred tax asset

Impairment of value of miscellaneous receivables

Impairment of value of minimum presumed income tax receivables

Total al 31.12.2015

Total al 31.12.2014

Percentage of

equity held in

the capital stock

100.00000

3.00000

95.00000

87.50000

87.50000

87.50034

Shareholder’s

equity

13,812,169

1,249,947

119,885

46,422

210

645,611

Net income

3,912,917

127,316

115,963

31,253

37

256,844

Capital stock

562,327

557,563

20

1,000

12

186

Date

12.31.2015

12.31.2015

12.31.2015

12.31.2015

12.31.2015

12.31.2015

Actividad principal

Financial activities

Financial activities

Administration of

mutual funds

Issuance of warrants

Information technology

Financial and

investment activities

12.31.2014

7,985

1,530

108

9,623

12.31.2015

12,086

9,905

122

22,113

Schedules

G

Notes

11

Balances at the

previous fiscal

year-end

94,148

1,938

3,439

99,525

Balances at fiscal

year-end

114,790

2,492

4,497

121,779

-

Decreases

6,662

-

-

6,662

96

Increases

27,304

554

1,058

28,916

22,914

Balances at

beginning of

fiscal year

94,148

1,938

3,439

99,525

76,707


SCHEDULE G - FOREIGN CURRENCY ASSETS AND LIABILITIES FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Accounts

Assets

Current assets

Investments

Deposits in special checking accounts

Other receivables


Total current assets

Non-current assets

Other receivables


Total non-current assets

Total assets

Liabilities

Current liabilities

Other liabilities

Suppliers

Provision for expenses

Total current liabilities

Total liabilities

SCHEDULE H - INFORMATION REQUIRED BY SECTION 64, SUBSECTION B) OF LAW Nº 19550 FOR THE FISCAL YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014


Personnel expenses


Other fees

Taxes

Depreciation of fixed assets

Other operating expenses (*)

Other (*)

Expenses corresponding to the “global program for the issuance of negotiable obligations” (*)

Totals

(*) Balances net of eliminations corresponding to transactions conducted with companies included in Section 33 of Law Nº 19550. See Note 11.

Total as of 12.31.2014

7,200

1,746

5,658

9,261

201

584

2,032

900

27,582


6,376

4,652

6,996

6,026

181

346

1,700

678

26,955

Total as of 12.31.2015

6,376

4,652

6,996

6,026

181

346

1,700

678

26,955


Amount in

Argentine Pesos

($) as of 12.31.14

7,984

5,118

13,102

89,674

89,674

102,776

-

1,663

1,663

1,663

Amount and type

of foreign

currency

US$933.46

US$598.50

US$10,485.73

-

194.43

Amount in

Argentine Pesos

($) as of 12.31.15

12,085

8,224

20,309

143,367

143,367

163,676

1,050

5,744

6,794

6,794

Exchange rate

13.0050

13.0050

13.0050

13.0050

13.0050

Amount and type

of foreign

currency

US$929.21

US$632.36

US$11.024.03

US$80.77

US$441.70

ADDITIONAL INFORMATION TO THE NOTES TOTHE FINANCIAL STATEMENTS FOR THE FISCALYEARS ENDED DECEMBER 31, 2015 AND DECEMBER31, 2014Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$)

I. GENERAL ISSUES REGARDING THE COMPANY’SACTIVITIES

1.SIGNIFICANT SPECIFIC LEGAL SYSTEMS ENTAILINGCONTINGENT EXPIRATION OR RESURGENCE OF BENEFITSENVISAGED BY THOSE REGULATIONS.None.

2.SIGNIFICANT CHANGES IN THE COMPANY ACTIVITIES OROTHER SIMILAR CIRCUMSTANCES THAT OCCURRED DURINGTHE FISCAL YEARS COVERED BY THE FINANCIAL STATEMENTSWHICH MAY HAVE AN EFFECT ON THEIR COMPARISON WITHTHOSE PRESENTED IN PREVIOUS FISCAL YEARS, OR THOSE THATSHALL BE PRESENTED IN FUTURE FISCAL YEARS.None.

3.CLASSIFICATION OF RECEIVABLES AND DEBT BALANCESACCORDING TO THEIR ESTIMATED COLLECTION OR PAYMENTTERM.Receivables: See Note 9 to the financial statements.Debts: See Note 9 to the financial statements.

4.CLASSIFICATION OF RECEIVABLES AND DEBTS IN SUCH AMANNER THAT ALLOWS KNOWING THE FINANCIAL EFFECTS OFTHEIR MAINTENANCE.Receivables: See Notes 1.A., 1.B. and 9 and Schedule G to thefinancial statements.Debts: See Notes 1.A., 1.B. and 9 and Schedule G to the financialstatements.

5.BREAKDOWN OF PERCENTAGE OF EQUITY INVESTMENTS -SECTION 33 OF LAW Nº 19550, BOTH IN THE CAPITAL STOCKAND THE TOTAL VOTES. DEBIT AND/OR CREDIT BALANCES BYCOMPANY AND CONSIDERED IN THE MANNER SET FORTH INTHE AFOREMENTIONED ITEMS 3 AND 4.See Notes 9, 10 and 11, and Schedule C to the financial statements.

6. RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS ORSYNDICS OR THEIR RELATIVES UP TO THE SECOND DEGREEINCLUSIVE.As of December 31, 2015 and December 31, 2014, there were no

receivables from or loans granted to directors or syndics or theirrelatives up to the second degree inclusive.

II. PHYSICAL INVENTORY OF INVENTORIES

7.FREQUENCY AND SCOPE OF THE PHYSICAL INVENTORIES OFINVENTORIES.As of December 31, 2015 and December 31, 2014, the Company didnot have any inventories.

III. CURRENT VALUES

8.SOURCES OF THE INFORMATION USED FOR CALCULATINGCURRENT VALUES FOR THE ASSESSMENT OF INVENTORIES,FIXED ASSETS AND OTHER SIGNIFICANT ASSETS.See Notes 1.C., 1.D. and 1.E. to the financial statements.

9.FIXED ASSETS THAT HAVE BEEN TECHNICALLY APPRAISED.As of December 31, 2015 and December 31, 2014, the Company didnot have any fixed assets that have been technically appraised. SeeSchedule A.

10. FIXED ASSETS NOT USED BECAUSE THEY ARE OBSOLETE.As of December 31, 2015 and December 31, 2014, the Company didnot have any obsolete fixed assets which have a book value. SeeSchedule A.

IV. EQUITY INVESTMENTS

11. EQUITY INVESTMENTS IN EXCESS OF WHAT IS SET FORTHBY SECTION 31 OF LAW No. 19550 AND PLANS FOR THEREGULARIZATION OF THIS SITUATION.The Company is engaged in financial and investment activities, so therestrictions of Section 31 of Law Nº 19550 do not apply to its equityinvestments in other companies.

V. RECOVERABLE VALUES

12.CRITERIA FOLLOWED TO DETERMINE THE SIGNIFICANTRECOVERABLE VALUES OF INVENTORIES, FIXED ASSETS ANDOTHER ASSETS, USED AS LIMIT FOR THEIR RESPECTIVEACCOUNTING VALUATIONS.As of December 31, 2015 and December 31, 2014, the criterionfollowed by the Company for determining the recoverable value of itsfixed assets consisted in taking their value-in-use, based on thepossibility of absorbing future depreciation charges with the profitsreported by it.


VI. INSURANCE

13.INSURANCE POLICIES FOR TANGIBLE ASSETS.As of December 31, 2015 and December 31, 2014, the breakdown ofinsurance policies taken out by the Company for its fixed assets wasas follows:

Insured Assets

Vehicles

VII. POSITIVE AND NEGATIVE CONTINGENCIES

14.ELEMENTS USED FOR THE CALCULATION OF PROVISIONS,THE BALANCES OF WHICH, EITHER TAKEN INTO CONSIDERA-TION INDIVIDUALLY OR JOINTLY, EXCEED TWO PER CENT (2%)OF SHAREHOLDERS’ EQUITY.None.

15.CONTINGENCIES WHICH, AT THE DATE OF THE FINANCIALSTATEMENTS, ARE NOT OF REMOTE OCCURRENCE, THE EFFECTSOF WHICH ON SHAREHOLDERS’ EQUITY HAVE NOT BEEN GIVENACCOUNTING RECOGNITION. IT SHOULD BE STATED WHETHER

THE LACK OF ACCOUNTING RECOGNITION IS BASED ON THELIKELIHOOD OF OCCURRENCE OR ON THE DIFFICULTY TOANALYZE SUCH EFFECTS.As of December 31, 2015 and December 31, 2014, there were nocontingencies which are not of remote occurrence and the effects of whichon Shareholders’ Equity have not been given accounting recognition.

VIII. IRREVOCABLE ADVANCES TOWARDS FUTURESHARE SUBSCRIPTIONS

16.STATUS OF CAPITALIZATION ARRANGEMENTS.As of December 31, 2015 and December 31, 2014, there were noirrevocable contributions towards future share subscriptions.

17.CUMULATIVE UNPAID DIVIDENDS ON PREFERRED SHARES.As of December 31, 2015 and December 31, 2014, there were nocumulative unpaid dividends on preferred shares.

18.CONDITIONS, CIRCUMSTANCES OR TERMS FOR THETERMINATION OF THE RESTRICTIONS ON THE DISTRIBUTION OFUNAPPROPRIATED RETAINED EARNINGS, INCLUDING THOSEORIGINATED DUE TO THE USE OF THE LEGAL RESERVE FOR THEABSORPTION OF LOSSES WHICH ARE STILL PENDINGREIMBURSEMENT.See Note 12 to the financial statements.

Book value as

of 12.31.2014

23

Book value as

of 12.31.2015

1

Insured

amount

308

Risks Covered

Theft, robbery, fire

or total loss


SUPPLEMENTARY AND EXPLANATORY STATEMENTBY THE BOARD OF DIRECTORS FOR THE FISCALYEARS ENDED DECEMBER 31, 2015 AND DECEMBER31, 2014Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$)

Pursuant to the provisions of the Rules regarding AccountingDocumentation of the Córdoba Stock Exchange Regulations, the Boardof Directors hereby submits the following supplementary andexplanatory information.

A. CURRENT ASSETS

A) RECEIVABLES: 1) See Note 9 to the financial statements.2) See Notes 3 and 9 to the financial statements.3) As of December 31, 2015 and December 31, 2014, the Companyhad not set up any allowances.

B) INVENTORIES:As of December 31, 2015 and December 31, 2014, the Company didnot have any inventories.

B. NON-CURRENT ASSETS

A) RECEIVABLES: See Schedule E.

B) INVENTORIES:As of December 31, 2015 and December 31, 2014, the Company didnot have any inventories.

C) INVESTMENTS:See Note 10 and Schedule C to the financial statements.

D) FIXED ASSETS:1)As of December 31, 2015 and December 31, 2014, the Company didnot have any fixed assets that have been technically appraised.2) As of December 31, 2015 and December 31, 2014, the Company didnot have any obsolete fixed assets which have a book value.

E) INTANGIBLE ASSETS:1) See Note 1.D, and Schedules B and C to the financial statements.2) As of December 31, 2015 and December 31, 2014, there were nodeferred charges.

C. CURRENT LIABILITIES

A) LIABILITIES:1) See Note 9 to the financial statements.2) See Notes 4, 5, 6, 7 and 9 to the financial statements.

D. PROVISIONS

See Schedule E.

E. FOREIGN CURRENCY ASSETS AND LIABILITIES

See Note 1.B. and Schedule G to the financial statements.

F. SHAREHOLDERS’ EQUITY

1)As of December 31, 2015 and December 31, 2014, the Shareholders’Equity did not include the "Irrevocable Advances towards Future ShareIssues" account.2) As of December 31, 2015 and December 31, 2014, the Companyhad not set up any technical appraisal reserve; nor has it reversed anyreserve of that kind.

G. MISCELLANEOUS

1) The Company is engaged in financial and investment activities, sothe restrictions of Section 31 of Law Nº 19550 do not apply to itsequity investments in other companies.2) See Notes 9 and 11 to the financial statements.3) As of December 31, 2015 and December 31, 2014, there were noreceivables from or loans granted to directors or syndics or theirrelatives up to the second degree inclusive.4) See Notes 9 and 11 to the financial statements.5) As of December 31, 2015 and December 31, 2014, the breakdownof insurance policies taken out by the Company for its fixed assetswas as follows:

Insured Assets

Vehicles

6) As of December 31, 2015 and December 31, 2014, there were nocontingencies highly likely to occur which have not been givenaccounting recognition.7) As of December 31, 2015 and December 31, 2014, the Company didnot have any receivables including implicit interest or indexadjustments.

The Company has complied with the requirements of Section 65 ofLaw Nº 19550 in these financial statements.

Autonomous City of Buenos Aires, February 12, 2016.


Book value as

of 12.31.2014

23

Book value as

of 12.31.2015

1

Insured

amount

308

Risks Covered

Theft, robbery, fire

or total loss

INFORMATIVE REVIEW AS OF DECEMBER 31, 2015AND DECEMBER 31, 2014Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$)

Grupo Financiero Galicia S.A.’s purpose is to strengthen its position asa leading company devoted to providing comprehensive financialservices and, at the same time, to continue to strengthen Banco deGalicia y Buenos Aires S.A.’s position as one of the leading companiesin Argentina. This strategy shall be carried out by supplementing theoperations and business conducted by Banco de Galicia y Buenos AiresS.A. through equity investments in companies and undertakings, eitherexisting or to be created, engaged in financial activities as they areunderstood in the modern economy.

DECEMBER 31, 2015The income for the fiscal year ended December 31, 2015 amounted to$4,338,397. This income has been mainly generated as a consequenceof the valuation of equity investments in our subsidiaries.On January 30, 2014, Grupo Financiero Galicia S.A. issued Class VNegotiable Obligations, in two Series: Series I for $101,800, maturingon July 31, 2015, and Series II, for $78,200, maturing on January 31,2017, both with interest paid on a quarterly basis from April 30, 2014.Part of the subscription of Class V Negotiable Obligations was carriedout through the payment in Class III Negotiable Obligations, with aface value of $20,622.On October 23, 2014, Grupo Financiero Galicia S.A. issued Class VINegotiable Obligations for a total amount of $250,000, in two Series:Series I for $140,155, maturing on April 23, 2016, and Series II for$109,845, maturing on October 23, 2017, both with interest paid ona quarterly basis as from January 23, 2015. Amortization of both Seriesshall be paid in only one installment upon maturity of each series. Partof the subscription of Class VI Negotiable Obligations was carried outthrough the payment in Class IV Negotiable Obligations, with a facevalue of $30,997.The General Ordinary and Extraordinary Shareholders’ Meeting heldon April 29, 2015 resolved, pursuant to the rules and regulations inforce, to allocate Unappropriated Retained Earnings as of December31, 2014, as follows:

To legal reserve $24,432

To cash dividends $100,000

To discretionary reserve $3,213,358

On July 27, 2015, Grupo Financiero Galicia S.A. issued Class VIINegotiable Obligations for a total amount of $160,000, maturing onJuly 27, 2017. Such Negotiable Obligations shall accrue interest at anannual nominal 27% fixed rate during the first nine months and at avariable BADLAR plus a nominal annual 4.25% rate for the following15 months. Interest shall be paid on a quarterly basis, since October27, 2015, and amortization shall be paid in only one installment uponmaturity.

MERGER BY ABSORPTION OF THESEUS S.A. AND LAGARCUÉ S.A.On February 27, 2014, through Resolution Nº 17300, the Board ofDirectors of the National Securities Commission (C.N.V.) gave itsconsent to the merger by absorption of Grupo Financiero Galicia S.A.(as merging company) with Lagarcué S.A. and Theseus S.A. (as mergedcompanies) and to Grupo Financiero Galicia S.A.’s capital increase,ordering its registration.The dissolution by absorption of each of the merged companies andthe merger by absorption by the merging company were registeredon June 12, 2014, while the capital increase of the merging companywas registered on July 10, 2014.

BANCO DE GALICIA Y BUENOS AIRES S.A.’S ACQUISITION OFMINORITY SHAREHOLDINGOn February 25, 2014, Grupo Financiero Galicia S.A.’s Board ofDirectors resolved the following:

- to issue the statement of willingness to acquire provided for inSection 91, Subsection b) of Law Nº 26831 with regard to all theremaining shares of Banco de Galicia y Buenos Aires S.A. held bythird parties;- to approve the criterion suggested by the Management Division onthe fair price provided for in Section 94, second paragraph, of LawNº 26831, and establish it in $23.22 (figure stated in Pesos) for eachremaining share held by third parties;- to request the National Securities Commission the immediatewithdrawal of Banco de Galicia y Buenos Aires S.A. from the publicoffering and listing at the Buenos Aires Stock Exchange, under theterms of Section 94, third paragraph, of Law Nº 26831;- to appoint Banco de Galicia y Buenos Aires S.A. as the financialinstitution where Grupo Financiero Galicia S.A. shall deposit theamount corresponding to the total value of Banco de Galicia yBuenos Aires S.A.’s remaining shares; and- to give Banco de Galicia y Buenos Aires S.A. notice of thestatement of willingness to acquire.

On April 24, 2014, the Board of Directors of the C.N.V. approved theunilateral statement of willingness to acquire issued by the Company.Thus, on May 6, 2014, the amount corresponding to the total value ofBanco de Galicia y Buenos Aires S.A.'s remaining shares wasdeposited. The C.N.V.'s approval of the aforementioned proceedingswas registered with the Corporation Control Authority (I.G.J.) on July14, 2014.On August 4, 2014, the statement of willingness to acquire wasexecuted by public deed, what makes Grupo Financiero Galicia S.A.the owner, by operation of law, of all of Banco de Galicia y BuenosAires S.A.’s existing shares, pursuant to the provisions of Section 95 ofLaw Nº 26831.On September 12, 2014, the unilateral statement of willingness toacquire was registered with the Corporation Control Authority (I.G.J.).


AUTHORIZATION OF LISTING AND TRADING ON MERCADOABIERTO ELECTRÓNICO (M.A.E.)On October 30, 2015, M.A.E., through MAE Resolution “C” 4916

dated October 28, 2015, authorized the listing and trading of theCompany’s Class B Book-entry Ordinary Shares, with face value of $1each, and entitled to one vote per share.

FINANCIAL STRUCTURE - MAIN ACCOUNTS OF THE CONSOLIDATED BALANCE SHEET

Assets



Loans



Equity investments

Bank premises and equipment, miscellaneous assets and intangible assets

Other assets

Total del activo

Liabilities

Deposits



Other liabilities

Minority interest

Total liabilities



INCOME STATEMENT - MAIN ACCOUNTS OF THE CONSOLIDATED INCOME STATEMENT





Net income from financial brokerage

Other miscellaneous income

Income tax

Net income

STRUCTURE OF THE CONSOLIDATED STATEMENT OF CASH FLOWS

Funds provided by operating activities

Funds used in investing activities

Funds (used in) / provided by financing activities

Financial results and by holding of cash and cash equivalents

Total funds provided during the fiscal year

12.31.2011

6,418,891

5,230,863

30,904,527

5,013,791

593,104

56,165

1,920,569

1,055,116

51,193,026

30,135,137

13,927,139

984,364

2,065,457

529,314

47,641,411

3,551,615

51,193,026

12.31.2012

8,345,015

3,627,144

42,592,979

4,418,571

848,264

76,094

2,461,266

1,088,938

63,458,271

39,945,180

14,281,657

1,188,015

2,471,421

701,920

58,588,193

4,870,078

63,458,271

12.31.2013

12,560,345

3,987,329

55,264,926

5,696,143

1,128,067

89,953

3,061,951

1,367,672

83,156,386

51,395,323

19,333,334

1,656,297

3,210,733

601,959

76,197,646

6,958,740

83,156,386

12.31.2014

16,959,205

10,010,150

66,608,201

6,797,613

1,047,963

51,795

3,758,652

2,080,899

107,314,478

64,666,037

25,401,369

2,065,815

4,153,807

781,026

97,068,054

10,246,424

107,314,478

12.31.2015

30,834,663

15,525,090

98,344,731

8,060,768

958,092

51,731

4,925,002

3,047,926

161,748,003

100,039,233

37,328,900

3,300,516

5,487,218

1,107,315

147,263,182

14,484,821

161,748,003

12.31.2011

3,743,543

2,451,703

(843,370)

(4,205,211)

1,146,665

714,141

(753,863)

1,106,943

12.31.2012

5,188,378

3,200,010

(1,347,302)

(5,773,634)

1,267,452

858,041

(789,278)

1,336,215

12.31.2013

6,904,684

4,239,391

(1,776,255)

(7,427,206)

1,940,614

1,115,037

(1,231,998)

1,823,653

12.31.2014

9,539,418

5,698,348

(2,411,250)

(9,221,356)

3,605,160

1,724,902

(1,992,272)

3,337,790

12.31.2015

12,441,836

7,837,398

(2,214,240)

(12,904,702)

5,160,292

1,979,529

(2,801,424)

4,338,397


12.31.2011

431,989

(273,375)

2,370,757

271,285

2,800,656

12.31.2012

1,675,711

(308,999)

(673,393)

386,486

1,079,805

12.31.2013

3,485,941

(437,275)

421,886

1,029,351

4,499,903

12.31.2014

7,514,940

(494,939)

(1,304,112)

1,514,245

7,230,134

12.31.2015

15,624,973

(1,122,861)

(1,529,186)

6,948,324

19,921,250

RATIOS

LIQUIDITYSince the consolidated accounts mainly stem from Banco de Galicia y Buenos Aires S.A., the individual liquidity ratio for the Bank is detailed asfollows:

Liquid assets (*) as a percentage of transactional deposits

Liquid assets (*) as a percentage of total deposits

(*) Liquid Assets include cash and due from banks, Lebacs and Nobacs, net call money, short-term placements in correspondent banks, Special Guarantees Accounts at the Argentine CentralBank and repo and reverse repo transactions with the local market.

SOLVENCY

Solvency

CAPITAL ASSETS

Capital Assets (*)

(*) Equity investments, bank premises and equipment, miscellaneous assets and intangible assets/total assets.

PROFITABILITY

Return on average assets (*)

Return on average shareholders’ equity (*)

(*) Annualized.

EQUITY INVESTMENTS

BANCO DE GALICIA Y BUENOS AIRES S.A.Founded in 1905, Banco de Galicia y Buenos Aires S.A. is one of thelargest private-sector banks in the Argentine financial system, and oneof the leading providers of financial services in the country. Throughaffiliated companies and a variety of distribution channels, BancoGalicia offers a full spectrum of financial services to both individualand corporate customers. Banco de Galicia y Buenos Aires S.A. operatesone of the most extensive and diversified distribution networks of theArgentine private financial sector, offering 526 branches, together with126 points of contact gathered between regional credit-cardcompanies and Compañía Financiera Argentina S.A.

In fiscal year 2015, Banco de Galicia y Buenos Aires S.A. recorded netincome amounting to $3,912,917, $754,501 higher than that recordedthe previous fiscal year, representing a 23.9% increase. The increasein income, when compared to fiscal year 2014, mainly resulted fromthe increase of $5,070,932 in net operating income (net financialincome plus net income from services) and a lower provision for loanlosses for $197,010. This effect was mainly mitigated by higheradministrative expenses for $3,559,727 and the increase in incometax by $628,403.Net operating income for the fiscal year 2015 amounted to

$20,856,872, a 32.1% increase as compared to the $15,785,940recorded in the previous fiscal year. This positive evolution was due toan increase in net income from: i) net services (amounting to$2,298,591, a 36.3% increase), the most outstanding of which arecommissions related to national and regional credit cards, depositaccounts, insurance, securities for collection and credit transactions;and ii) net financial income (amounting to $2,772,341, a 29.3%increase) as a result of the increase in the volumes traded during thefiscal year, mitigated by a decrease in the financial margin. The lowerprovision for loan losses was related to a better behavior in theevolution of arrears, both the business portfolio and the individuals’portfolio, mitigated by higher regulatory charges on the regularportfolio as a result of the increase in the volume of receivables.Administrative expenses totaled $12,449,620, with a 40% increase.Personnel expenses increased by 36% mainly due to the salaryincrease agreed upon with unions. The remaining administrativeexpenses totaled $5,558,709, 45.4% higher than those as of the samedate in the previous fiscal year. This variation was mainly due to therise in costs related to the different services rendered to the Bank, inaddition to the higher amortization of organization expenses(amounting to $302,279, a 91.2% increase) because the Bank’sinvestment in the “SAP Core Banking” system began being amortizedin December 2014. Total financing to the private sector amounted to$114,981,525, showing a 45.5% growth during the last twelve

12.31.2011

76.12

37.85

12.31.2012

55.87

27.64

12.31.2013

64.75

30.78

12.31.2014

75.32

38.60

12.31.2015

91.51

42.93

12.31.2011

3.07

37.39

12.31.2012

2.80

32.12

12.31.2013

2.91

32.47

12.31.2014

3.85

39.07

12.31.2015

3.83

35.54

12.31.2011

7.45

12.31.2012

8.31

12.31.2013

9.13

12.31.2014

10.56

12.31.2015

9.84

12.31.2011

3.86

12.31.2012

4.00

12.31.2013

3.79

12.31.2014

3.55

12.31.2015

3.08


months, and total deposits reached $100,268,988, growing 54.4%when compared to the same period of the previous fiscal year. As ofDecember 31, 2015, Banco de Galicia y Buenos Aires S.A.’s estimatedshare in loans to the private sector was 9.60%, while in deposits fromthe private sector it was 9.41%, when compared to 8.76% and 8.79%,respectively, for the previous fiscal year.

NET INVESTMENT S.A.Grupo Financiero Galicia S.A.’s equity investment in Net InvestmentS.A.’s capital stock is 87.50%, whereas the remaining 12.50% isowned by Banco de Galicia y Buenos Aires S.A.Net Investment S.A. was created to carry out Internet businesstransactions.During 2011, Net Investment S.A.’s shareholders decided to changethe corporate purpose in order to be able to make investments incompanies that conduct supplementary and/or related activities.On April 7, 2015, the company’s Board of Directors decided to exercisethe put option on 325 shares in Weemba, Inc., representing the wholeinterest in this company, according to the Put Option Agreementexecuted on May 17, 2010. The option price amounts to US$15.39(United States dollars fifteen with 39/100) per share. Such transactionwas agreed on April 23, 2015.For fiscal year 2016, Net Investment S.A.’s Board of Directors isanalyzing new business opportunities and alternatives.

SUDAMERICANA HOLDING S.A.Sudamericana Holding S.A. is a holding company providing life,retirement, property insurance and insurance brokerage services. Theequity investment held by Grupo Financiero Galicia S.A. in thiscompany is 87.50%. Banco de Galicia y Buenos Aires S.A. has theremaining 12.50%.The insurance business undertaken by the Company is one of the mostimportant aspects of Grupo Financiero Galicia S.A.’s general plan tostrengthen its position as a leading financial services provider. Joint production of the insurance companies controlled bySudamericana Holding S.A. in the life, retirement and propertyinsurance business, during the twelve-month period ended onDecember 31, 2015, amounted to $2,546,992. As of December 31, 2015,these companies had approximately 6.5 million policies/certificatesinsured in all their lines of business.From a commercial standpoint, the company maintains its purpose oftaking advantage of the greater demand for insurance coverage tosignificantly increase the companies’ sales.As a result of this effort, the premium volume for the fourth quarterof 2015 exceeded that for the same quarter of the previous year by47.8%.

GALICIA WARRANTS S.A.Galicia Warrants S.A. was established in 1993 and, since then, hasbecome a leading company. It renders services to the productive sector

as an additional credit instrument, also rendering a full spectrum ofservices related to inventory management. Its shareholders are Grupo Financiero Galicia S.A., which holds an87.50% equity investment in the company, and Banco de Galicia yBuenos Aires S.A., which holds a 12.50% interest.The company has its corporate headquarters in Buenos Aires and anoffice in the city of San Miguel de Tucumán, through which it carriesout its transactions in the warrants market and as well includes otherservices related to its main activity, for different regional economiesand geographic areas of the country.Based on the experience and understanding of the warrant as asecurity instrument in the financial market, the company set as policyto spread the quality of the service provided and improve it throughthe certification of ISO 9001 Standards; its main focus, during fiscalyear 2015, is the improvement to Merchandise Storage and Custody,and Marketing processes.With regard to storage services, the level of activity in its warehousesremained, thus meeting expectations.During fiscal year 2015, deposit certificates and warrants issuedamounted to $1,066,285, regarding merchandise under custodylocated in different productive regions throughout the country.As of December 31, 2015, Galicia Warrants S.A. obtained income fromservices amounting to $81,473.Galicia Warrants S.A. continues working with the purpose of renderingits customers the best quality and more reliable service that is bettertailored to meet their needs.

GALICIA ADMINISTRADORA DE FONDOS S.A.Galicia Administradora de Fondos S.A.’s shareholders are GrupoFinanciero Galicia S.A., holding 95% of the shares and Galicia ValoresS.A., holding the remaining 5%.Galicia Administradora de Fondos S.A. administers the FIMA mutualfunds distributed by Banco de Galicia y Buenos Aires S.A., in itscapacity as custodial agent of collective investment productscorresponding to mutual funds, through its broad channel network,such as branches, electronic banking, phone banking, and to differentcustomer segments (institutional, corporate and individual customers).FIMA funds equity increased by 52.9% when compared to the closeof fiscal year 2014, reaching, as of December 31, 2015, a volume offunds managed of $18,174,700, which accounts for an 8.6% marketshare.This increase in volume mainly took place in the institutional andcorporate customers segments, particularly regarding FIMA AhorroPesos, FIMA Ahorro Plus and FIMA Premium. The outlook for fiscal year 2016 is that mutual funds will continuegrowing, as well as the businesses related thereto, within theframework of the new Capital Markets Law, for instance, advisoryservices and management of discretional investment portfolios. Duringthis fiscal year, Galicia Administradora de Fondos S.A. optimized thefinancial performance of its liquid assets. In this regard, investmentswere made in the same FIMA mutual funds it manages.


OUTLOOK

For fiscal year 2016, Grupo Financiero Galicia S.A.’s results ofoperations will mainly depend on the development of the Argentineeconomy, and, particularly, the evolution of the financial system.

Autonomous City of Buenos Aires, February 12, 2016.

Santiago Mignone (Socio)Contador Público (U.B.A.)C.P.C.E.C.A.B.A. T° 233 - F° 237

Eduardo J. EscasanyPresidente

Enrique M. Garda OlacireguiSíndico por Comisión Fiscalizadora



INDEPENDENT AUDITOR’S REPORT

To the Shareholders, Chairman and Directors ofGrupo Financiero Galicia S.A.Legal Domicile: Tte. Gral. Juan D. Perón 430 - 25th floor

Autonomous City of Buenos Aires

C.U.I.T. 30-70496280-7

REPORT ON THE FINANCIAL STATEMENTSWe have performed an audit of the accompanying financialstatements of Grupo Financiero Galicia S.A. (hereinafter the“Company”), which include the Balance Sheet as of December 31,2015, and the related Income Statement, Statement of Changes inShareholders' Equity and Statement of Cash Flows for the fiscal yearthen ended, as well as a summary of significant accounting policiesand other explanatory information disclosed in Notes and Schedules,which supplement them. Furthermore, we have examined theconsolidated financial statements of Grupo Financiero Galicia S.A. andits controlled companies for the fiscal year ended December 31, 2015,which are presented as supplementary information.

The amounts and other information for fiscal year 2014 are an integralpart of the financial statements audited mentioned above and,therefore, shall be considered in connection with those financialstatements.

MANAGEMENT’S RESPONSIBILITYAs mentioned in Note 1.17, the Company’s Board of Directors isresponsible for the preparation and fair presentation of theaccompanying financial statements, in accordance with the accountingframework established by the Argentine Central Bank (B.C.R.A.) andthe requirements set forth by the National Securities Commission(C.N.V.) to apply those accounting criteria. In addition, the Board ofDirectors is responsible for the existence of the internal control theymay deem necessary to enable the preparation of financial statementsfree from material misstatements resulting from errors or irregularities.Our responsibility is to express an opinion on the financial statements,based on the audit conducted with the scope specified in theparagraph “Auditors’ Responsibility”.

AUDITORS’ RESPONSIBILITYOur responsibility is to express an opinion on the accompanyingfinancial statements based on our audit.We have conducted our audit in accordance with the Argentineauditing standards provided in Technical Pronouncement No. 37 ofthe Argentine Federation of Professional Councils in EconomicSciences (F.A.C.P.C.E.). Those standards require that we comply withthe ethical requirements, as well as we plan and perform the audit inorder to obtain reasonable assurance about whether the financialstatements are free from material misstatements.

An audit entails applying procedures to obtain judgmental evidenceregarding the amounts and other information disclosed in the financialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risk of materialmisstatements in the financial statements. When performing such riskassessment, the auditor should consider the appropriate internalcontrol for the Company’s preparation and fair presentation of thefinancial statements in order to design adequate audit procedures,based on the circumstances, and not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control. Anaudit also includes evaluating the adequacy of the accounting policiesapplied, the reasonableness of the accounting estimates made by theCompany’s Management and the presentation of the financialstatements as a whole.

We consider that the judgmental evidence we have obtained providesa sufficient and adequate basis for our audit opinion.

OPINIONIn our opinion:

a) the accompanying financial statements fairly present, in allmaterial respects, Grupo Financiero Galicia S.A.’s financial conditionas of December 31, 2015, and the results of its operations, thechanges in shareholders’ equity and the cash flows for the fiscalyear then ended, in accordance with the accounting standardsestablished by the Argentine Central Bank;b) the accompanying consolidated financial statements fairlypresent, in all material respects, Grupo Financiero Galicia S.A.’sconsolidated financial condition with its controlled companies as ofDecember 31, 2015, and the consolidated results of its operationsand the consolidated cash flows for the fiscal year then ended, inaccordance with the accounting standards established by theArgentine Central Bank.

EMPHASIS PARAGRAPH Without changing our opinion, as mentioned in Note 1.16, theaccompanying financial statements have been prepared in accordancewith the accounting framework established by the Argentine CentralBank. Such standards differ, in certain aspects, from the professionalaccounting standards in force. In such note, the Company hasidentified and quantified the effect on the financial statements derivedfrom the different valuation and disclosure criteria, except that the

Price Waterhouse & Co.SRL - Firma miembro de PricewaterhouseCoopersBouchard 557, piso 7° - C1106ABG Ciudad Autónoma de Buenos AiresTel. (54-11) 4850-0000 - Fax (54-11) 4850-1800

quantification cannot be made for unfeasibility reasons.

REPORT ON COMPLIANCE WITH REGULATIONS IN FORCEAs called for by the regulations in force, we report that:

a) The financial statements of Grupo Financiero Galicia S.A. as ofDecember 31, 2015 have been transcribed to the “Inventory andBalance Sheet” book and, insofar as concerns our field ofcompetence, are in compliance with the provisions of the GeneralCorporations Law, and pertinent resolutions of the ArgentineCentral Bank and the National Securities Commission.b) The financial statements of Grupo Financiero Galicia S.A. stemfrom accounting records kept, in all formal aspects, in compliancewith legal regulations.c) We have read the Informative Review, the Additional Informationto the Notes to the Financial Statements required by Section 68 ofthe Buenos Aires Stock Exchange Regulations and Title IV, ChapterIII, Article 12 of the regulations of the National SecuritiesCommission, and the Supplementary and Explanatory Statementby the Board of Directors, required by the Rules concerningAccounting Documentation of the Córdoba Stock ExchangeRegulations, about which, insofar as concerns our field ofcompetence, we have no significant observations to make.d) As of December 31, 2015, Grupo Financiero Galicia S.A.'saccrued debt with the Argentine Integrated Social Security System,which stems from the accounting records, amounted to$123,465.83, which was not yet due at that date.e) As required by Title IV, Section I, Chapter I, Article 2 of theRegulations of the National Securities Commission, we report that:

e.1) Grupo Financiero Galicia S.A.’s corporate purpose isexclusively related to financial and investment activities;e.2) The interest in Banco de Galicia y Buenos Aires S.A. accountsfor 93.48% of Grupo Financiero Galicia S.A.’s assets, being theCompany's main asset;e.3) 90.79% of Grupo Financiero Galicia S.A.’s income stemsfrom the equity investment in the Bank mentioned in e.2).e.4) Grupo Financiero Galicia S.A. holds a 100% equitypercentage in the capital stock, thus having a controlling interestin the Bank mentioned in e.2).

f) As required by Title II, Section VI, Chapter III, Article 21, Subarticlee) of the regulations of the National Securities Commission, wereport that the total fee amount billed to the Company forprofessional auditing and related services in the fiscal year endedDecember 31, 2015, represents:

f.1) 88% of total fees billed to the Company for services in thatfiscal year;f.2) 10% of total fees billed to the Company and its controlling,controlled and related companies for auditing and relatedservices in that fiscal year;f.3) 8% of total fees billed to the Company and its controlling,controlled and related companies for services in that fiscal year;

g) We have applied the procedures on asset laundering and

terrorism financing for Grupo Financiero Galicia S.A. set forth in thecorresponding professional accounting standards issued by theProfessional Council in Economic Sciences of the Autonomous Cityof Buenos Aires.

Autonomous City of Buenos Aires, February 12, 2016

Santiago Mignone (Socio)Contador Público (U.B.A.)C.P.C.E.C.A.B.A. T° 233 - F° 237


REPORT OF THE SUPERVISORY SYNDICS’ COMMITTEE

To the Directors of Grupo Financiero Galicia S.A.Legal Domicile: Tte. Gral. Juan D. Perón 430 - 25th floor

Autonomous City of Buenos Aires

C.U.I.T. 30-70496280-7

1. In our capacity as members of the Supervisory Syndics’ Committeeof Grupo Financiero Galicia S.A., in accordance with the provisions ofSection 294, Subsection 5 of the General Corporations Law, we haveexamined the Annual Report, the Inventory and the accompanyingFinancial Statements of Grupo Financiero Galicia S.A. (the“Company”) as of December 31, 2015, and the related IncomeStatement, Statement of Changes in Shareholders’ Equity andStatement of Cash Flows for the fiscal year then ended, as well as asummary of significant accounting policies and other explanatoryinformation disclosed in Notes 1 to 16 and Schedules A, B, C, D, E, Gand H, which supplement them. Furthermore, we have examined theconsolidated financial statements of Grupo Financiero Galicia S.A. andits controlled companies for the fiscal year ended December 31, 2015,with Notes 1 to 39, which are presented as supplementaryinformation.

The amounts and other information for fiscal year 2014 are an integralpart of the financial statements examined mentioned above and,therefore, shall be considered in connection with those financialstatements.

2. As mentioned in Note 1.17, the Company’s Board of Directors isresponsible for the preparation and fair presentation of theaccompanying financial statements, in accordance with the accountingframework established by the Argentine Central Bank (BCRA) and therequirements set forth by the National Securities Commission (CNV)to apply those accounting criteria. In addition, the Board of Directorsis responsible for the existence of the internal control they may deemnecessary to enable the preparation of financial statements free frommaterial misstatements resulting from errors or irregularities.

3. Our responsibility is to express an opinion on the documentsmentioned in paragraph 1., based on the examination conducted withthe scope specified in paragraph 4.

4. Our work was conducted in accordance with standards applicableto syndics in Argentina. These standards require our examination to beperformed in accordance with the professional auditing standardsapplicable in Argentina and include verifying the consistency of thedocuments reviewed with the information concerning corporatedecisions, as disclosed in minutes, and the conformity of thosedecisions with the law and the bylaws insofar as concerns formal anddocumental aspects. For purposes of our professional work, we have

reviewed the work performed by the external auditors of theCompany, Price Waterhouse & Co. S.R.L., who issued their unqualifiedaudit report on February 12, 2016. The above-mentioned externalauditors conducted their audit in accordance with the Argentineauditing standards provided in Technical Pronouncement No. 37 ofthe Argentine Federation of Professional Councils in EconomicSciences (“F.A.C.P.C.E.”). Our review included verifying the work plansand the nature, scope and timing of the procedures applied and of theresults of the audit performed by the above-referred professionals. Anaudit entails applying procedures to obtain judgmental evidenceregarding the amounts and other information disclosed in the financialstatements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risk of materialmisstatements in the financial statements. When performing such riskassessment, the auditor should consider the appropriate internalcontrol for the Company’s preparation and fair presentation of thefinancial statements in order to design adequate audit procedures,based on the circumstances, and not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control. Anaudit also includes evaluating the adequacy of the accounting policiesapplied, the reasonableness of the accounting estimates made by theCompany’s Management and the presentation of the financialstatements as a whole.

Given that it is not the responsibility of the Supervisory Syndics’Committee to exercise any management control, our examination didnot extend to the business criteria and decisions of the different areasof the Company, as these matters are the exclusive responsibility of theCompany’s Board of Directors.

We also report that, in compliance with the legality control that is partof our field of competence, during this fiscal year we have applied theother procedures described in Section 294 of Law No. 19550, whichwe deemed necessary according to the circumstances, including,among others, the control over the creation and subsistence of thedirectors’ guarantee.

In relation with the Annual Report, we report containing the informationrequired by Section 66 of the Corporations Law,and what as concernsour field of competence, the numerical data are consistent with theaccounting records of the Company and other relevant documentation.Forecasts and projections about future events contained in thatdocumentation are the sole responsibility of the Board.


We believe that the work we performed provides a reasonable basisfor our opinion.

5. In our opinion:i) the accompanying financial statements fairly present, in allmaterial respects, Grupo Financiero Galicia S.A.’s financial conditionas of December 31, 2015, and the results of its operations, thechanges in shareholders’ equity and the cash flows for the fiscalyear then ended, in accordance with the accounting standardsestablished by the Argentine Central Bank;ii) the accompanying consolidated financial statements fairlypresent, in all material respects, Grupo Financiero Galicia S.A.’sconsolidated financial condition with its controlled companies as ofDecember 31, 2015, and the consolidated results of its operationsand the consolidated cash flows for the fiscal year then ended, inaccordance with the accounting standards established by theArgentine Central Bank.

In compliance with the legality control that is part of our field ofcompetence, we have no observations to make.

As regards the Annual Report and the report on the code of corporategovernment corresponding to the fiscal year ended December 31,2015, we have no observations to make insofar as concerns our fieldof competence, and any assertion on future events is the exclusiveresponsibility of the Company’s Board of Directors.

6. Without changing our opinion, as mentioned in Note 1.16, theaccompanying financial statements have been prepared in accordancewith the accounting framework established by the Argentine CentralBank. Such standards differ, in certain aspects, from the professionalaccounting standards in force. In such note, the Company hasidentified and quantified the effect on the financial statements derivedfrom the different valuation and disclosure criteria, except that thequantification cannot be made for unfeasibility reasons.

7. Furthermore, we report the following:i) The accompanying financial statements and the correspondinginventory stem from accounting records kept, in all formal aspects,in compliance with legal regulations prevailing in Argentina. ii) As called for by Section 21, Part VI, Chapter III, Title II of theregulations of the National Securities Commission concerning theindependence of external auditors as well as the quality of theauditing policies applied by them and the Company’s accountingpolicies, the abovementioned external auditor’s report includes arepresentation indicating that the auditing standards in force havebeen observed, which standards include independencerequirements, and contains no observations relative to theapplication of the rules issued by the Argentine Central Bank.iii) We have applied the procedures on asset laundering andterrorism financing set forth in the corresponding professional

accounting standards issued by the Professional Council inEconomic Sciences of the Autonomous City of Buenos Aires.iv) We have read the Informative Review, the AdditionalInformation to the Notes to the Financial Statements required bySection 68 of the Buenos Aires Stock Exchange Regulations andTitle IV, Chapter III, Article 12 of the Regulations of the NationalSecurities Commission, and the Supplementary and ExplanatoryStatement by the Board of Directors, required by the Rulesconcerning Accounting Documentation of the Córdoba StockExchange Regulations, about which, insofar as concerns our field ofcompetence, we have no significant observations to make.

Autonomous City of Buenos Aires, March 9, 2016.

Enrique M. Garda OlacireguiSíndico AbogadoC.P.A.C.F. Tº 15 - Fº 730

Norberto D. CorizzoSíndicoContador PúblicoC.P.C.E.C.A.B.A. Tº 75 - Fº 226

Luis DíazSíndicoContador PúblicoC.P.C.E.C.A.B.A. Tº 83 - Fº 102


NOTICE OF SHAREHOLDERS´MEETING

All shareholders of Grupo Financiero Galicia S. A. are invited to theOrdinary and Extraordinary Shareholders’ Meeting to be held on April26th , 2016, at 11:00 AM (first call), at Tte. Gral. Juan D. Perón 430,Basement-Auditorium, Buenos Aires (not the Company’s registeredoffice), with the following:

AGENDA

1°Appointment of two shareholders to sign the minutes.

2º Examination of the business affairs of our controlled companyBanco de Galicia y Buenos Aires S.A. Position to be adopted byGrupo Financiero Galicia S.A. over the issues to be dealt with atBanco de Galicia y Buenos Aires S.A. next shareholders´ meeting.

3º Examination of the Balance Sheet, Income Statement, and otherdocuments as set forth by Section 234, subsection 1 of the Law ofCommercial Companies and the Annual Report and Report of theSupervisory Syndics’ Committee for the 17th fiscal year endedDecember 31st, 2015.

4° Treatment to be given to the fiscal year's results. Dividends’distribution.

5º Approval of the Board of Directors and Supervisory SyndicsCommittee’s performances.

6º Supervisory Syndics Committee´s compensation.

7° Board of Directors ´compensation.

8° Granting of authorization to the Board of Directors to makeadvance payments of directors fees during the fiscal year startedon January 1st, 2016 ad-referendum of the shareholders’ meetingthat considers the documentation corresponding to said fiscal year.

9° Election of three syndics and three alternate syndics for one-year term of office.

10° Determination of the number of directors and alternatedirectors and, if appropriate, election thereof for the termestablished by the Company’s bylaws until reaching the numberof directors determined by the Shareholders’ meeting.

11º Compensation of the independent accountant certifying theFinancial Statements for fiscal year 2015.

12º Appointment of the independent accountant and alternateaccountant to certify the Financial Statements for fiscal year 2016.

13º Delegation of the necessary powers to the Board of directorsand/or sub-delegation to one or more of its members and/or toone or more members of the Company´s management and/or towhom the Board of Directors designates in order to determine theterms and conditions of the Global Program for the issuance ofsimple, short, mid-and/or long term Negotiable Obligations, non-convertible into shares and the Negotiable Obligations that will beissued under the same Program.

According to current regulations it is necessary to state that duringthe fiscal year 2015 there have been no circumstances to thoseincluded in Section 71 of Law 26,831 (Ley de Mercado deCapitales).

NOTES1) Shareholders are hereby notified that in order to attend theMeeting, they must deliver a certification evidencing their book-entry shares, as issued by Caja de Valores S.A., on or before April20th, 2016 (from 10:00 a.m. to 4:00 p.m.), at Tte. Gral. Juan D.Perón 430, 25th. Floor, Autonomous City of Buenos Aires, so thatthe shares can be registered in the Meeting’s Attendance RecordBook.

2) When considering item 4 of the agenda, the shareholders´meeting shall be treated as extraordinary.

3) Shareholders are hereby reminded that the National SecuritiesCommission requires compliance with the procedures set forth inChapter II, Title II of its regulations comprised on (N.T.2013).

Lic. Eduardo J. EscasanyPresidente



ADDITIONAL INFORMATION

EVOLUTION OF SHARESFiscal Year 2015 2014 2013

4th Q 3rd Q 2nd Q 1st Q 4th Q 3rd Q 2nd Q 1st Q 4th Q

Market Price

Class B Shares (in Pesos) (1) Buenos Aires Stock Exchange (BASE)

High

Low

Close

ADSs (in Dollars) (2) Nasdaq

High

Low

Close

Trading Volume (in Thousands)

BASE (1)

NASDAQ (2) (3)

Total

Average Shares outstanding (in Thousands)

Primary

Earnings per Share (in Pesos)

Primary

Earnings per ADS (in Pesos)

Primary

(1) Source: Buenos Aires Stock Exchange. Prices: Floor trades at the close of each trading day, 72-hour term.Volume data correspond to floor trades and trades carried through the “Computer Assisted Integrated Trading System” (Sistema Integrado de Negociación Asistida por Computadora).(2) Source: Nasdaq Capital Market. Prices at the close of each trading day.(3) Expressed in equivalent shares (1 ADS = 10 shares).

10.95

8.17

9.33

13.05

8.86

10.45

107,176

399,332

506,508

1,300,265

0.482

4.82

12.35

8.30

12.10

12.65

7.30

12.31

65,856

254,305

320,161

1,300,265

0.639

6.39

16.35

12.07

14.75

15.33

12.00

14.65

83,415

397,724

481,139

1,300,265

0.533

5.33

21.30

13.75

21.00

18.50

12.18

14.21

89,653

467,673

557,326

1,300,265

0.716

7.16

21.40

14.90

18.50

16.66

10.33

15.89

57,155

263,745

320,900

1,300,265

0.679

6.79

31.40

17.60

27.75

26.13

14.99

23.15

53,371

305,714

359,085

1,300,265

0.737

7.37

28.85

22.50

24.60

24.10

17.84

18.79

42,031

260,929

302,960

1,300,265

0.730

7.30

29.60

22.00

24.85

22.22

15.30

17.82

45,645

246,303

291,948

1,300,265

0.913

9.13

43.45

23.25

36.80

29.25

16.62

27.08

65,133

347,306

412,439

1,300,265

0.957

9.57


LOCAL RATINGSGrupo Financiero Galicia S.A.

Shares Ratings

Standard & Poor’s

Short-/Medium-Term Debt (1)

Evaluadora Latinoamericana


Institutional Rating

Standard & Poor’s

Medium-/Long-Term Debt (1) (2)

Standard & Poor’s

Moody’s


Subordinated Debt (1) (3)

Standard & Poor’s

Moody’s


Deposits

Standard & Poor’s - Long Term

Standard & Poor’s - Short Term

Moody’s - National Currency

Moody’s - Foreign Currency

Fiduciary

Moody’s



Fitch Argentina


Long-Term Debt (1) (5)

Fitch Argentina


Long-Term Debt (1) (6)

Fitch Argentina

INTERNATIONAL RATINGS Banco de Galicia y Buenos Aires S.A.

Medium-/Long-Term Debt (1)

Standard & Poor’s (1) (2)

Moody’s (1) (2)



Fitch Argentina

(1) See “Management´s Discussion and Analysis - Funding and Liabilities”, “DebtSecurities” table.(2)Class I Negotiable Obligations with maturity on 2018.(3)Negotiable Obligations with maturity on 2019.(4)Class XIII, Class XXIV Series II, Class XXV Series II, Class XXVI Series II, Class XXVIISeries II, Class XXVIII Series II y Class XXIX, Class XXX and Class XXXI NegotiableObligations.(5)Class XIV Series II, Class XVI, Class XVIII, Class XIX Series II, Class XX, Class XXI andClass XXII Negotiable Obligations.(6)Class XV, Class XII Series II, Class XIII and Class XIV Negotiable Obligations.(7)Class XIII Negotiable Obligations.

1

AA-

ra BBB

ra BBB

Baa1.ar

AA-

ra BB+

Ba2.ar

A+

ra BBB

raA-2

Baa1.ar

Ba2.ar

TQ1(-).ar

AA- (arg)

AA- (arg)

AA- (arg)

B-

Caa1

CCC

ADDITIONAL INFORMATION (CONT.)



CORPORATE INFORMATION

OFFICESGrupo Financiero Galicia S.A.Tte. Gral. Juan D. Perón 430, 25° Piso(C1038AAJ), Buenos Aires, ArgentinaTelefax: (54 11) 4343-7528Contact: Investor RelationsTelefax: (54 11) [email protected]

LISTINGGrupo Financiero Galicia’s Class “B” ordinary shares are listed on theBuenos Aires Stock Exchange, the Córdoba Stock Exchange and, underthe form of ADRs (American Depositary Receipts), on the Nasdaq CapitalMarket of the United States of America, under the ticker symbol GGAL.

SHAREHOLDERS´ MEETINGThe Ordinary and Extraordinary Shareholders’ Meeting to be held onApril 26th, 2016, at 11:00 AM (first call), at Tte. Gral. Juan D. Perón 430,Basement-Auditorium, Buenos Aires, Argentina.

REGISTRAR AND TRANSFER AGENTCaja de Valores S.A.25 de Mayo 362 (C1002ABH) Buenos Aires, ArgentinaTelephone : (54) (11) 4317-8900

DEPOSITARY BANK OF ADRSThe Bank of New York Company, Inc.Shareholders RelationsP.O. Box 11258, Church Street StationNew York, NY 10286-1258Telephone from the USA: 1-888-BNY-ADRs - (1-888-269-2377)Telephone from other countries: 1-610-382-7836e-mail: [email protected]

This constitutes an unofficial English translation of the original Spanish document. The Spanishdocument shall govern all respects, including interpretation matters. For further informationplease refers to our web page:

www.gfgsa.com

Diseño Gráfico: García Balza & Gonzalez - www.garciabalza.com.ar - [email protected] / Impresión: Proietto & Lamarque S.A.

annual report - january / december 2015backend.gfgsa.com/upload/annual report_grupo financiero...

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