Daniel Vas

Danielle Vas inquired about Grupo Financiero Galicia's capital ratio, which decreased by 120 basis points from the second quarter, and the expectation of an NPL peak in March. She asked about the group's bottom capital limit, potential need to reduce loan origination, and how new originations compare to earlier in the year, especially regarding longer duration loans impacting margins and cost of risk.

Answer

Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) explained that the capital ratio was impacted by OCI reserves due to bond price reductions in Q3, but the Tier 1 ratio improved to 24.5% in October following a bond rally. He stated comfort with current capital levels, a minimum appetite of 13-13.5%, and sufficient capital until at least the end of 2027 without growth limitations. Regarding origination, consumer lending has slowed due to portfolio quality, and mortgage origination significantly reduced due to the lack of a securitization market. Personal and auto loans continue, while commercial financing remains short-duration but is expected to lengthen next year as Argentina stabilizes.

Danielle Vas inquired about Grupo Financiero Galicia's capital ratio trends, specifically the bottom limit for capital, and how new loan originations compare to earlier periods, considering their impact on margins and cost of risk.

Answer

Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) explained that the capital ratio was impacted by OCI reserves related to bond prices, noting a recovery in October. He stated a minimum appetite of 13-13.5% and no expected capital restrictions until late 2027. He also detailed a slowdown in consumer lending and mortgages due to portfolio quality and lack of securitization, while commercial lending duration is expected to lengthen next year.

Daniel Vas of Safra inquired about the expected impact of an economic slowdown on small and medium-sized enterprises (SMEs) and the role of Cielo in Bradesco's new SME segmentation strategy.

Answer

CEO Marcelo Morojin explained that while smaller companies face risks, Bradesco sees opportunities by using advanced credit modeling and portfolio management to identify resilient businesses. The bank is focusing on secured loans and government-backed programs, which offer better risk-adjusted returns. He added that Cielo is integrated via APIs to provide targeted services, which has helped increase market share within Bradesco's client base.

Inquired about the impact of the economic slowdown on small SMEs (up to BRL 3 million revenue), the opportunities the bank sees in this segment, and the role of the acquiring business, Cielo.

Answer

The bank manages risk in the SME segment through advanced credit modeling and by prioritizing secured loans and government-backed programs (FGO, FGI), which offer better risk-adjusted returns. They see an opportunity to build long-term relationships. Cielo is being integrated via APIs to offer targeted services and increase market share within this client base. The bank is confident in its overall loan book quality.