Santiago Petri

Santiago Petri asked about Grupo Financiero Galicia's assumption for loan-to-GDP penetration to achieve a mid-teens return on equity (ROE) by 2027. He also inquired if this mid-teens ROE is the sustainable steady-state target or if the bank aims higher, and what the steady-state loan-to-GDP penetration in Argentina would be under this assumption.

Answer

Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) stated that current loan-to-GDP is 10-11%, with projections expecting a 2% annual improvement. He aims for a sustainable ROE between 15-20% in the longer term, expecting to reach 15% by the end of 2026 and be in that range by 2027, potentially higher by 2028. This target assumes a stabilized country and an improved operating model to compete with fintechs.

Santiago Petri asked about the loan-to-GDP assumption underlying the mid-teens ROE target by 2027, whether this ROE is a sustainable steady state, and the long-term loan-to-GDP penetration target for Argentina.

Answer

Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) stated that current loan-to-GDP is 10-11% and they project a 2% annual improvement. He aims for a sustainable ROE between 15-20% in the longer term, expecting to reach mid-teens by 2027 and higher by 2028, assuming continued economic improvement and changes in their operating model to reduce costs and compete with fintechs.

Santiago Petri challenged the assumption that interest rate volatility would diminish after the elections, noting that the volatility predated recent political events, and asked for clarification on this outlook.

Answer

CFO Gonzalo Fernández Covaro acknowledged the uncertainty but explained the bank's view is that the current high real interest rates are unsustainable and that a market-friendly election outcome could help stabilize the situation. IR Officer Pablo Firvida added that the government and Central Bank may be more willing to adjust regulations after the election, as their current priority is maintaining stability until then.

Santiago Petri from Franklin Templeton requested clarification on the competitive environment in Chilean beer, pointing out that CCU's market share was stable on lower volumes while a competitor reported higher volumes.

Answer

CFO Felipe Dubernet clarified that CCU's overall *beverage* market share was stable, but there was a marginal loss in the *alcoholic* categories. He attributed this entirely to heavy promotional activity from the competition and stated the company is not concerned due to the outstanding health of its brands.

Santiago Petri requested clarification on the competitive beer environment in Chile, pointing out that CCU reported stable market share with lower volumes while a competitor reported higher volumes.

Answer

Chief Financial Officer Felipe Dubernet clarified that CCU's overall beverage market share was stable, with a marginal gain. However, within the alcoholic categories specifically, there was a marginal, non-significant loss of market share. He attributed this discrepancy entirely to heavy promotional activity from the competition and expressed confidence in CCU's outstanding brand health indicators.