6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the month of August, 2020

Commission File Number: 0-30852

GRUPO FINANCIERO GALICIA S.A.

(the “Registrant”)

Galicia Financial Group S.A.

(translation of Registrant’s name into English)

Tte. Gral. Juan D. Perón 430, 25^th Floor

(CP1038AAJ) Buenos Aires, Argentina

(address of principal executive offices)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F    X      Form 40-F         

Indicate by check mark whether by furnishing the information contained in this form, the Registrant is also thereby furnishing the information to the Securities and Exchange Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes         No    X

If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-                     

FORM 6-K

Commission File No. 0-30852

Month Filed	Event and Summary	Exhibit No.
August, 2020	Press Release regarding the Financial Results of the Registrant for the Second Quarter of the 2020 Fiscal Year that ended on June 30, 2020.	99.1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GRUPO FINANCIERO GALICIA S.A.
	(Registrant)
Date: August 27, 2020	By:	/s/ Fabián E. Kon
		Name: Fabián E. Kon
		Title:   Chief Executive Officer

EX-99.1

Exhibit 99.1

GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR

THE SECOND QUARTER OF THE 2020 FISCAL YEAR THAT ENDED ON JUNE 30, 2020

Buenos Aires, Argentina, August 25, 2020 – Grupo Financiero Galicia S.A. (BYMA /NASDAQ: GGAL) announced its financial results for the second quarter of the 2020 fiscal year (the “Quarter”), which ended on June 30, 2020.

Beginning with the fiscal year that started on January 1, 2020, Grupo Financiero Galicia S.A. (“GFG” or “Grupo Financiero Galicia”) has applied the restatement criteria established by IAS 29 “Financial Information in Hyperinflationary Economies”, and the expected credit loss model, in accordance with Communication “A” 6847 of the Argentine Central Bank, which includes item 5.5 “Impairment” of IFRS 9 “Financial Instruments”. For comparative purposes, the information corresponding to the 2019 fiscal year has been adjusted in accordance with the abovementioned standards and restated in constant currency, except as otherwise noted.

HIGHLIGHTS

Ø Comprehensive income attributable to Grupo Financiero Galicia for the Quarter reached Ps.7,460 million, 25% lower than the Ps.9,970 million recorded in the same quarter of the 2019 fiscal year. Net income attributable to Grupo Financiero Galicia amounted to Ps.5,633 million, 43% below the Ps.9,924 million recorded in the second quarter of the prior fiscal year. Net profit per share for the Quarter amounted to Ps.3.95, as compared to the Ps.6.95 per share recorded for the same quarter of the 2019 fiscal year.

Ø The results of the Quarter were mainly attributable to the income derived from GFG’s interests in Banco de Galicia y Buenos Aires S.A.U. (“Banco Galicia” or the “Bank”), for Ps.4,833 million, Sudamericana Holding S.A. (“Sudamericana Holdings”), for Ps.364 million, Galicia Administradora de Fondos S.A. (“GAF”), for Ps.296 million, and in Tarjetas Regionales S.A. (“Tarjetas Regionales”), for Ps.18 million, and which were increased by a net operating income of Ps.78 million and partially offset by personnel and administrative expenses of Ps.65 million and losses from the net monetary position in the amount of Ps.62 million.

Ø The Bank’s market share of loans to the private sector was 12.91%, and 10.44% for deposits from the private sector, increasing 230 basis points (“bp”) and decreasing 25 bp, respectively, as compared to June 30, 2019.

Ø As of the end of the Quarter, the minimum capital requirement amounted to Ps.53,284 million, increasing Ps.23,799 million (81%), and computable capital was Ps.127,402 million, increasing Ps.66,614 million (110%), as compared to the figure recorded in second quarter of the 2019 fiscal year. The excess of computable capital over the minimum capital requirement amounted to Ps.74,118 million, and the total capital ratio was 19.58%.

Conference Call:

August 26, 2020, 12:00 pm Eastern Time

Call-in number: +1 323-289-6576

Conference ID: 2692353

For more information, contact:

Bruno Folino - CFO

Pablo Firvida - IRO Tel.: (5411) 6329-4881

inversores@gfgsa.com

www.gfgsa.com

1

CONSOLIDATED INFORMATION

Consolidated Financial Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Financial Information
Assets		892,994		823,500		950,963		8		(6)
Net loans and other financing		427,540		411,825		423,462		4		1
Deposits		590,264		505,383		583,012		17		1
Shareholders’ equity attributable to GFG		141,015		133,554		123,026		6		15
Shares outstanding (in thousands of shares) (1)		1,426,765		1,426,765		1,426,765		-		-
Book value per share (in pesos)		98.82		93.59		86.21		523		1,261
Net income attributable to GFG		5,633		8,772		9,924		(36)		(43)
Net income per share (in pesos)		3.95		6.15		6.95		(220)		(300)

(1) 10 ordinary shares = 1 ADS.

Selected Ratios			2020		2019				Variation (bp)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Return (1) on average assets (2)		2.72		4.44		4.19		(172)		(147)
Return (1) on average shareholders´ equity (2)		16.45		27.06		34.59		(1,061)		(1,814)
Financial Margin (2) (3)		20.21		21.80		19.43		(159)		78
Efficiency ratio (4)		41.41		43.08		45.20		(167)		(379)
Total capital ratio (5)		20.04		21.28		16.82		(124)		322
Non-performing loans / Loans to private sector		3.54		4.61		5.89		(107)		(235)
Allowance for loan losses / Loans to private sector		5.37		5.57		5.20		(20)		17
Allowance for loan losses / Non-accrual loans		151.45		120.88		88.29		3,057		6,316
Cost of risk (2)		4.97		5.37		4.87		(40)		10
Allowance for loan losses(6) / Non-accrual financing		214.61		144.66		110.62		6,995		10,399

(1) Net income attributable to GFG.

(2) Annualized.

(3) Net interest income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income and expenses, divided by the average balance of interest-earning assets.

(4) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position.

(5) Banco Galicia consolidated with Tarjetas Regionales.

(6) Includes provisions for unused balances of overdrafts and credit cards.

Market Indicators			2020		2019		Variation
In pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Market price									(bp)
Shares – BYMA		103.20		57.95		151.60		4,525		(4,840)
ADS – NASDAQ (in US$)		9.70		7.05		35.50		265		(2,580)
Price BYMA / book value		1.04		0.62		1.76		42		(72)
Average daily volume (in thousands of shares)									(%)
BYMA		3,496		1,803		1,485		94		135
NASDAQ (1)		18,404		11,221		16,046		64		15
Market share (%)									(bp)
Banco Galicia
Loans to the private sector		12.91		12.39		10.61		52		230
Deposits from the private sector		10.44		10.07		10.69		37		(25)
Galicia Administradora de Fondos S.A.		11.11		12.07		11.16		(96)		(5)

(1) Expressed in equivalent shares: 10 ordinary shares = 1 ADS.

2

GRUPO FINANCIERO GALICIA

RESULTS FOR THE QUARTER

Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Results from Equity Investments		5,697		8,816		9,897		(35)		(42)
Banco de Galicia y Buenos Aires S.A.U.		4,833		7,282		9,335		(34)		(48)
Tarjetas Regionales S.A.		18		1,091		48		(98)		63
Galicia Administradora de Fondos S.A.		296		94		120		215		147
Sudamericana Holding S.A.		364		289		310		26		17
Other subsidiaries		186		60		84		210		121
Net operating income		78		72		158		8		(51)
Administrative expenses		(65)		(40)		(76)		63		(14)
Other operating income and expenses		(1)		(1)		(9)		-		(89)
Results from the net monetary position		(62)		(65)		(111)		(5)		(44)
Income tax		(14)		(10)		65		40		(122)
Net income attributable to GFG		5,633		8,772		9,924		(36)		(43)
Other comprehensive income		1,827		(2,295)		46		180		3,872
Comprehensive income attributable to GFG		7,460		6,477		9,970		15		(25)

Net income attributable to GFG for the Quarter amounted to Ps.5,633 million, which represented a 2.72% annualized return on average assets and a 16.45% return on average shareholders’ equity.

The abovementioned results were mainly attributable to profits from GFG’s interests in Banco Galicia, for Ps.4,833 million, Sudamericana Holding, for Ps.364 million, GAF, for Ps.296 million, and in Tarjetas Regionales, for Ps.18 million.

SELECTED FINANCIAL INFORMATION – CONSOLIDATED

Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Assets
Cash and due from banks		126,831		195,569		182,591		(35)		(31)
Debt securities		155,799		97,056		210,565		61		(26)
Net loans and other financing		427,540		411,825		423,462		4		1
Other financial assets		120,648		59,046		75,365		104		60
Equity investments in subsidiaries, associates and joint businesses		3		-		-		N/A		N/A
Property, bank premises, equipment		37,091		37,122		38,185		-		(3)
Intangible assets		12,279		10,402		9,607		18		28
Other assets		12,756		12,433		10,769		3		18
Assets available for sale		47		47		419		-		(89)
Total assets		892,994		823,500		950,963		8		(6)
Liabilities
Deposits		590,264		505,383		583,012		17		1
Financing from financial entities		11,002		25,082		31,132		(56)		(65)
Other financial liabilities		67,277		66,328		103,139		1		(35)
Notes		15,837		28,315		50,288		(44)		(69)
Subordinated notes		18,239		17,233		15,665		6		16
Other liabilities		45,965		44,094		41,543		4		11
Total liabilities		748,584		686,435		824,779		9		(9)
Shareholders’ equity attributable to third parties		3,395		3,511		3,158		(3)		8
Shareholders’ equity attributable to GFG		141,015		133,554		123,026		6		15
Total shareholder’s equity		144,410		137,065		126,184		5		14

3

Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Net interest income		19,727		17,004		4,168		16		373
Interest income		35,075		37,507		34,431		(6)		2
Interest related expenses		(15,348)		(20,503)		(30,263)		(25)		(49)
Net fee income		7,450		7,419		7,443		-		-
Fee income		9,349		9,391		9,563		-		(2)
Fee related expenses		(1,899)		(1,972)		(2,120)		(4)		(10)
Net results from financial instruments		13,538		14,901		26,860		(9)		(50)
Gold and foreign currency quotation differences		952		1,098		3,295		(13)		(71)
Other operating income		5,496		4,299		5,037		28		9
Underwriting income from insurance business		1,213		957		1,054		27		15
Loan loss provisions		(5,402)		(5,187)		(4,710)		4		15
Net operating income		42,974		40,491		43,147		6		-
Personnel expenses		(6,473)		(6,457)		(6,714)		-		(4)
Administrative expenses		(6,866)		(6,513)		(6,678)		5		3
Depreciations and devaluations of assets		(1,629)		(1,641)		(1,550)		(1)		5
Other operating expenses		(14,237)		(6,201)		(9,261)		130		54
Operating income		13,769		19,679		18,944		(30)		(27)
Results from the net monetary position		(4,103)		(5,627)		(6,789)		(27)		(40)
Income tax		(4,029)		(5,057)		(2,222)		(20)		81
Net income		5,637		8,995		9,933		(37)		(43)
Net income attributable to third parties		4		223		9		(98)		(56)
Net income attributable to GFG		5,633		8,772		9,924		(36)		(43)
Other comprehensive income(1)		1,827		(2,295)		46		180		3,872
Total comprehensive income		7,464		6,700		9,979		11		(25)
Comprehensive income attributable to third parties		4		223		9		(98)		(56)
Comprehensive income attributable to GFG		7,460		6,477		9,970		15		(25)
(1) Net of income tax.
Additional Information			2020						2019
	2Q		1Q		3Q		2Q		2Q
Employees		9,521		9,554		9,718		9,824		9,888
Banco Galicia		5,971		6,040		6,118		6,247		6,256
Tarjetas Regionales		3,099		3,075		3,151		3,161		3,227
Galicia Administradora de Fondos		25		27		27		29		23
Sudamericana Holding		376		376		395		375		372
Other subsidiaries		50		36		27		12		10
Branches and other points of sales		511		517		528		545		552
Banco Galicia		326		326		326		325		325
Tarjetas Regionales S.A.		185		191		202		220		227
Deposit Accounts at Banco Galicia (in thousands)		5,812		5,427		5,279		5,140		4,965
Credit Cards (in thousands)		13,472		13,428		13,544		13,852		13,762
Banco Galicia		5,096		5,032		4,986		5,191		5,118
Tarjetas Regionales S.A.		8,376		8,396		8,558		8,661		8,644
GAF’ assets under management (millions of pesos)		153,617		128,904		88,128		83,367		117,183
Inflation, exchange rate and interest rates
Consumer price index(1) (%)		321.97		305.55		283.44		253.71		225.54
Consumer price index(1)		5.37		7,80		11.72		12.49		9.51
Wholesale price index (IPIM) (%)		2.69		3,62		13.22		15.94		11.57
Acquisition value unit (UVA)		55.06		51,62		47.16		41.26		38.03
Exchange rate (Ps./US$)(2)		70.46		64,47		59.90		57.56		42.45
Badlar (quarterly averages)(3)		24.42		33,25		48.06		54.67		50.82

(1) Consumer price index published by the National Institute of Statistics (INDEC)

(2) Reference exchange rates in accordance to Communiqué “A” 3500 from the Argentine Central Bank as of the last working day of the Quarter.

(3) Private banks’ 30-day time deposits rate for amounts over Ps.1 million.

4

BANCO GALICIA

HIGHLIGHTS

Ø Net income for the Quarter amounted to Ps.4,833 million, Ps.4,502 million (48%) lower than the figure recorded for the same quarter of the 2019 fiscal year, mainly as a result of a 61% increase in operating expenses.

Ø Net operating income for the Quarter amounted to Ps.34,655 million, Ps.1,379 million lower than the Ps.36,034 million recorded in the second quarter of the 2019 fiscal year, mainly as a consequence of a decrease in net income from financial instruments, which was partially offset by growth in net interest income.

Ø The credit exposure to the private sector reached Ps.418,992 million for the Quarter, up 5% from the Ps.399,335 million recorded in the second quarter of the 2019 fiscal year, and deposits reached Ps.593,414 million, up 2% from the Ps.584,203 million recorded during the same period. As of June 30, 2020, the Bank’s estimated market share of loans to the private sector was 12.91%, while its estimated market share of deposits from the private sector was 10.44%.

Ø The non-accrual loan portfolio represented 2.69% of total loans to the private sector, representing a decrease of 171 bp from the 4.40% figure recorded at the end of the same quarter of the prior fiscal year, while coverage with allowances for loan losses reached 152.48%.

5

RESULTS FOR THE QUARTER

Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Net interest income		16,519		12,861		1,201		28		1,275
Net fee income		4,742		4,045		4,509		17		5
Net results from financial instruments		12,908		14,019		25,967		(8)		(50)
Gold and foreign currency quotation differences		865		796		3,277		9		(74)
Other operating income		4,053		3,330		3,575		22		13
Loan-loss provisions		(4,432)		(3,766)		(2,495)		18		78
Net operating income		34,655		31,285		36,034		11		(4)
Personnel expenses		(4,610)		(4,622)		(4,833)		-		(5)
Administrative expenses		(4,855)		(4,677)		(4,981)		4		(3)
Depreciations and devaluations of assets		(1,210)		(1,196)		(1,173)		1		3
Other operating expenses		(12,514)		(5,056)		(7,779)		148		61
Operating income		11,466		15,734		17,268		(27)		(34)
Results from the net monetary position		(3,164)		(4,403)		(5,167)		(28)		(39)
Results from associates and joint businesses		64		31		5		106		1,180
Income tax		(3,533)		(4,080)		(2,771)		(13)		27
Net Income		4,833		7,282		9,335		(34)		(48)
Other comprehensive income (loss)		1,791		(2,272)		53		179		3,279
Total comprehensive income		6,624		5,010		9,388		32		(29)
Profitability and Efficiency			2020		2019		Variation ( bp)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Return (1) on average assets		2.46		4.02		4.21		(156)		(175)
Return (1) on average shareholders’ equity		16.77		26.73		37.81		(996)		(2,104)
Financial margin(1)(2)		20.14		20.90		19.73		(76)		41
Efficiency ratio (3)		37.18		41.24		41.00		(406)		(382)

(1) Annualized.

(2) Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income, divided by average interest-earning assets.

(3) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position.

During the Quarter, net income attributable to Banco Galicia amounted to Ps.4,833 million, Ps.4,502 million (48%) lower than the Ps.9,335 million recorded for the same quarter of the previous fiscal year. This result was primarily a consequence of a Ps.5,802 million (34%) lower operating income, which was primarily due to a Ps.13,059 million (50%) decrease in net income from financial instruments and higher operating expenses in the amount of Ps.4,735 million (61%), offset by a Ps.15,318 million (1,275%) increase in net interest income.

6

Net Interest Income			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Interest income		30,824		32,062		28,409		(4)		9
Private sector securities		-		-		34		-		(100)
Public Sector securities (1)		1,666		3,213		1,020		(48)		63
Loans and other financing		27,469		26,862		27,164		2		1
Financial sector		848		818		778		4		9
Non-financial private sector		26,621		26,044		26,386		2		1
Overdrafts		3,119		2,857		3,320		9		(6)
Promissory notes		10,466		8,468		4,665		24		124
Mortgage notes		2,740		3,058		3,907		(10)		(30)
Pledge loans		171		154		225		11		(24)
Personal loans		3,524		3,469		3,552		2		(1)
Credit-card loans		5,192		6,806		8,730		(24)		(41)
Financial leases		85		110		214		(23)		(60)
Other		1,324		1,122		1,773		18		(25)
Repurchase agreement transactions		1,689		1,987		191		(15)		784
Interest expenses		(14,305)		(19,201)		(27,208)		(25)		(47)
Deposits from the non-financial private sector		(13,088)		(16,904)		(23,979)		(23)		(45)
Saving accounts		(2)		(2)		(2)		-		-
Time deposits and term investments		(10,792)		(14,343)		(20,481)		(25)		(47)
Other		(2,294)		(2,559)		(3,496)		(10)		(34)
Financing from financial institutions		(137)		(276)		(571)		(50)		(76)
Repurchase agreement transactions		(18)		(209)		(220)		(91)		(92)
Other interest-bearing liabilities		(192)		(289)		(337)		(34)		(43)
Notes		(870)		(1,523)		(2,101)		(43)		(59)
Net interest income		16,519		12,861		1,201		28		1,275

Net interest income for the Quarter amounted to Ps.16,519 million, representing a Ps.15,318 million (1,275%) increase as compared to the Ps.1,201 million profit recorded for the same quarter of the 2019 fiscal year.

Interest income for the Quarter reached Ps.30,824 million, up 9% from the Ps.28,409 million recorded in the same quarter of the 2019 fiscal year. This increase was primarily a consequence of higher interest realized on promissory notes, amounting to Ps.5,801 million, and from repurchase agreement transactions, amounting to PS.1,498 million, and offset by lower interests on credit card loans in the amount of Ps.3,538 million.

Interest expenses amounted to Ps.14,305 million, down 47% from the same quarter of the 2019 fiscal year, mainly as a result of lower interest realized on time deposits and term investments, for Ps.9,689 million (47%).

7

Yield and Rates(1)							2020				2019				Variation (%/ bp)
Average balances: in millions of pesos			2Q				1Q				2Q				vs 1Q20				vs 2Q19
Yields and rates: annualized nominal %	Av. B.		Int.		Av. B.		Int.		Av. B.		Int.		Av. B.		Int.		Av. B.		Int.
In pesos		469,262		34.85		397,660		42.20		393,845		55.22		18		(735)		19		(2,037)
Government securities		127,600		40.95		138,890		41.29		178,022		63.73		(8)		(34)		(28)		(2,278)
Loans		296,254		34.03		237,335		42.48		204,956		48.07		25		(845)		45		(1,404)
Other interest-earning assets		45,408		23.04		21,435		44.95		10,867		50.65		112		(2,191)		318		(2,761)
In foreign currency		75,121		11.41		99,949		16.30		169,422		5.73		(25)		(489)		(56)		568
Government securities		5,308		62.09		10,631		93.91		14,560		(0.52)		(50)		(3,182)		(64)		6,261
Loans		68,137		7.44		87,597		7.09		153,064		5.98		(22)		35		(55)		146
Other interest-earning assets		1,676		11.93		1,721		6.04		1,798		34.93		(3)		589		(7)		(2,300)
Interest-earning assets		544,383		31.62		497,609		37.00		563,267		40.34		9		(538)		(3)		(872)
In pesos		315,582		16.58		271,363		26.88		270,579		39.01		16		(1,030)		17		(2,243)
Saving accounts		61,666		0.55		49,642		0.99		48,332		1.26		24		(44)		28		(71)
Time deposits		244,648		20.38		204,587		32.43		200,519		47.42		20		(1,205)		22		(2,704)
Debt securities		5,857		27.32		11,703		34.38		15,328		44.78		(50)		(706)		(62)		(1,746)
Other interest-bearing liabilities		3,411		15.13		5,431		38.00		6,400		46.94		(37)		(2,287)		(47)		(3,181)
In foreign currency		152,170		2.02		165,356		2.02		263,554		1.40		(8)		-		(42)		62
Saving accounts		82,299		-		89,533		-		170,001		-		(8)		-		(52)		-
Time deposits		33,531		1.41		33,976		1.53		39,375		0.57		(1)		(12)		(15)		84
Debt securities		24,088		7.74		23,279		7.39		27,414		7.24		3		35		(12)		50
Other interest-bearing liabilities		12,252		6.07		18,568		5.90		26,764		5.53		(34)		17		(54)		54
Interest-bearing liabilities		467,752		11.84		436,719		17.46		534,133		20.45		7		(562)		(12)		(861)

(1) Does not include foreign currency quotation differences. Annual nominal interest rates were calculated using a 360-day denominator

The average interest-earning assets amounted to Ps.544,383 million, representing an Ps.18,884 million (3%) decrease as compared to the figure recorded in the second quarter of the previous fiscal year, which was primarily a consequence of the Ps.84,927 million (55%) decrease in the average dollar-denominated loan portfolio and a decrease of Ps.50,422 million (28%) in the average portfolio of government securities. The foregoing decreases were partially offset by an increase in the average volume of peso-denominated loans, for Ps.91,298 million (45%), and of other interest-earning assets, for Ps.34,541 million (318%).

Average interest-bearing liabilities reached Ps.467,752 million, decreasing Ps.66,381 million (12%) during the same period, primarily due to a decrease in the average balance of dollar-denominated deposits (particularly in saving accounts, which dropped Ps.87,702 million (52%)).

The average yield on interest-earning assets for the Quarter was 31,62%, representing an 872 bp decrease as compared to the figure recorded in the same quarter of the prior fiscal year mainly resulting from decreases of 2,761 bp in the average yield on other interest-earning assets in pesos, 2,300 bp on other interest-earning assets in dollars and of 2,278 bp on government securities. The foregoing decreases were offset by a 6,261 bp increase in the average yield on government securities in foreign currency resulting from price increases. Likewise, the average cost of interest-bearing liabilities was 11.84%, representing an 861 bp decrease as compared to the second quarter of the prior fiscal year that was mainly due to a 3,181 bp decrease in the average interest rate on other interest-bearing liabilities in pesos and a 2,704 bp decrease in the interest rate on peso-denominated time deposits.

8

Net Fee Income			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Credit cards		2,636		2,212		2,417		19		9
Deposit accounts		1,042		1,018		1,149		2		(9)
Insurance		287		309		322		(7)		(11)
Financial fees		65		54		100		20		(35)
Credit-related fees		121		110		36		10		236
Foreign trade		380		359		443		6		(14)
Collections		385		332		353		16		9
Utility-Bills collection services		370		485		469		(24)		(21)
Mutual Funds		198		294		274		(33)		(28)
Other		499		314		343		59		45
Total fee income		5,983		5,487		5,906		9		1
Total expenditures		(1,241)		(1,442)		(1,397)		(14)		(11)
Net fee income		4,742		4,045		4,509		17		5

Net fee income amounted to Ps.4,742 million, up 5% from the Ps.4,509 million recorded in the second quarter of the previous fiscal year. The increase in fees which stood out were those related to credit cards (for Ps.219 million or 9%).

Net Income from Financial Instruments			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Government securities		12,104		13,648		27,700		(11)		(56)
Argentine Central Bank		8,976		13,655		27,882		(34)		(68)
Other		3,128		(7)		(182)		N/A		1,819
Private sector securities		492		68		689		624		(29)
Derivative financial instruments		312		303		(2,395)		3		(113)
Forward transactions		315		284		(2,342)		11		(113)
Interest-rate swaps		(3)		19		(53)		(116)		94
Results from other financial assets/liabilities		-		-		(27)		-		100
Net income from financial instruments		12,908		14,019		25,967		(8)		(50)

Net income from financial instruments for the Quarter amounted to Ps.12,908 million, down Ps.13,059 million from the Ps.25,967 million recorded in the same quarter of the 2019 fiscal year primarily as a consequence of the decrease in results from government securities, which was due to lower holdings of, and yields on, instruments issued by the Argentine Central Bank (Leliq).

A Ps.865 million profit from gold and foreign currency quotation differences was recorded during the Quarter, as compared to a Ps.3,277 million profit recorded from the same quarter of the 2019 fiscal year. This result includes a Ps.986 million gain from foreign-currency trading.

Other Operating Income			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Other financial income(1)(2)		(546)		81		(3)		(774)		N/A
Fees from bundles of products(1)		1,385		1,464		1,247		(5)		11
Rental of safe deposit boxes(1)		278		299		223		(7)		25
Other fee income(1)		132		252		261		(48)		(49)
Other adjustments and interest on miscellaneous receivables		1,202		904		808		33		49
Other		1,602		330		1,039		385		54
Total other operating income		4,053		3,330		3,575		22		13

(1) Item included for calculating the efficiency ratio.

(2) Item included for calculating the financial margin.

Other operating income for the Quarter reached Ps.4,053 million, increasing Ps.478 million from the Ps.3,575 million profit recorded in the second quarter of the 2019 fiscal year.

9

Provisions for loan losses for the Quarter amounted to Ps.4,432 million, Ps.1,937 million higher than the figure recorded in the same quarter of the prior fiscal year due to the evolution in the parameters used pursuant to the expected credit-loss model.

Personnel expenses amounted to Ps.4,610 million, decreasing 5% from the figure recorded for the same quarter of the 2019 fiscal year and mainly attributable to a 5% decrease in staff.

Administrative Expenses			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Fees and compensations for services		469		238		836		97		(44)
Fees to directors and syndics		11		13		13		(15)		(15)
Publicity, promotion and research expenses		136		214		363		(36)		(63)
Taxes		1,255		852		989		47		27
Maintenance and repairment of goods and IT		1,113		1,082		541		3		106
Electricity and communications		390		396		360		(2)		8
Stationery and office supplies		131		69		95		90		38
Hired administrative services		677		806		717		(16)		(6)
Security		147		120		136		23		8
Insurance		48		54		33		(11)		45
Other		478		833		898		(43)		(47)
Total administrative expenses		4,855		4,677		4,981		4		(3)

Administrative expenses for the Quarter totaled Ps.4,855 million, down 3% in the same period, as a consequence of lower fees and compensations for services, amounting to Ps.367 million (44%), as compared to the second quarter of the 2019 fiscal year.

Depreciation and devaluation of assets amounted to Ps 1,210 million, up 3% from the second quarter of the 2019 fiscal year. This loss includes Ps.156 million from financial leases.

Other Operating Expenses			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Contribution to the Deposit Insurance Fund(1)(2)		220		185		261		19		(16)
Other financial expenses(1)(2)		163		103		433		58		(62)
Turnover tax		2,982		2,668		2,785		12		7
On financial income(1)(2)		2,033		1,830		2,047		11		(1)
On fees(1)		838		740		646		13		30
On other items		111		98		92		13		21
Other fee-related expenses(1)		1,159		1,104		1,327		5		(13)
Other provisions		7,314		781		2,707		836		(170)
Claims		59		68		78		(13)		(24)
Other		617		147		188		320		228
Total other operating expenses		12,514		5,056		7,779		148		61

(1) Item included for calculating the efficiency ratio.

(2) Item included for calculating the financial margin.

Other operating expenses reached Ps.12,514 million, increasing Ps.4,735 million (61%) from the Ps.7,779 million recorded in the second quarter of the 2019 fiscal year. This increase resulted from higher charges for additional provisions related to the impact of COVID-19.

The income tax charge for the Quarter was Ps.3,533 million, Ps.762 million lower than the figure recorded in the second quarter of the 2019 fiscal year. It is worth mentioning that, beginning in the second half of 2019, the tax inflation adjustment established by applicable income tax laws began to be applied.

10

Other comprehensive income for the Quarter amounted to Ps.1,791 million, as compared to a Ps.53 million gain in the same period of the 2019 fiscal year. This was mainly due to the reversal of the negative impact from the sale of part of Bonar 24 (AY24D).

SELECTED FINANCIAL INFORMATION

Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Assets
Cash and due from banks		124,914		193,718		181,329		(36)		(31)
Debt securities		155,897		97,178		211,336		60		(26)
Net loans and other financing		379,596		358,844		359,425		6		6
Other financial assets		113,873		43,464		64,583		162		76
Equity investments in subsidiaries, associates and joint businesses		446		374		739		19		(40)
Property, bank premises, equipment		32,513		32,730		33,584		(1)		(3)
Intangible assets		10,589		8,666		8,241		22		28
Other assets		6,031		6,452		4,878		(7)		24
Assets available for sale		47		47		420		-		(89)
Total assets		823,906		741,473		864,535		11		(5)
Liabilities
Deposits		593,414		507,515		584,203		17		2
Financing from financial entities		10,730		19,116		30,553		(44)		(65)
Other financial liabilities		36,284		31,569		67,899		15		(47)
Notes		8,782		18,533		28,723		(53)		(69)
Subordinated notes		18,240		17,233		15,665		6		16
Other liabilities		37,807		35,482		33,681		7		12
Total liabilities		705,257		629,448		760,724		12		(7)
Shareholders’ equity		118,649		112,025		103,811		6		14
Foreign currency assets and liabilities
Assets		176,704		200,648		326,819		(12)		(46)
Liabilities		183,463		203,385		338,984		(10)		(46)
Net forward purchases/(sales) of foreign currency (1)		(639)		1,468		12,577		(144)		(105)
Net global position in foreign currency		(7,398)		(1,269)		412		(483)		(1,896)

(1) Recorded off-balance sheet.

11

LEVEL OF ACTIVITY

Financing to the Private Sector(1)			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
In pesos		339,297		290,623		228,510		17		48
Loans		300,882		253,848		186,634		19		61
UVA-adjusted loans		27,967		28,667		32,238		(2)		(13)
Financial leases		674		810		1,573		(17)		(57)
Debt securities		82		172		544		(52)		(85)
Other financing(2)		9,692		7,126		7,521		36		29
In foreign currency		79,695		108,544		170,825		(27)		(53)
Loans		58,528		84,240		143,390		(31)		(59)
Financial leases		1,449		1,586		1,595		(9)		(9)
Debt securities		107		165		4,150		(35)		(97)
Other financing(2)		19,611		22,553		21,690		(13)		(10)
Total financing to the private sector		418,992		399,167		399,335		5		5

(1) Includes IFRS adjustment.

(2) Includes certain off-balance sheet accounts related to guarantees granted.

As of June 30, 2020, total financing to the private sector reached Ps.418,992 million, representing a 5% increase as compared to the same period of the prior fiscal year. This increase was mainly a consequence of the growth in the peso-denominated loan portfolio (61%), which was offset by a decrease in the dollar-denominated loan portfolio (59%).

Market Share(1)			2020		2019		Variation (bp)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Total loans		12.78		12.20		10.64		58		214
Loans to the private sector		12.91		12.39		10.61		52		230

(1) According to the daily information on loans published by the Argentine Central Bank. Only principal as of the last day of each quarter.

The Bank’s market share of loans to the private sector, as of June 30, 2020, was 12.91%, increasing 230 bp from June 30, 2019.

12

Breakdown of loans and other financing			2020		2019		Variation(%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Financial entities		10,409		9,618		9,676		8		8
Loans		10,400		9,579		9,666		9		8
Other financing		9		39		10		(77)		(10)
Non-financial private sector and residents abroad		385,304		365,045		362,801		6		6
Loans		376,977		357,176		352,596		6		7
Overdrafts		27,445		39,167		21,382		(30)		28
Promissory notes		130,406		92,965		56,074		40		133
Mortgage loans		15,878		16,111		17,190		(1)		(8)
Pledge loans		6,768		3,490		3,418		94		98
Personal loans		29,784		30,599		37,574		(3)		(21)
Credit-card loans		106,814		101,209		98,122		6		9
Other Loans		44,182		54,994		107,887		(20)		(59)
Accrued interest, adjustments and foreign currency quotation differences receivable		17,548		19,897		12,674		(12)		38
Documented interest		(1,848)		(1,256)		(1,725)		47		7
Financial leases		2,123		2,396		3,168		(11)		(33)
Other financing		6,204		5,473		7,037		13		(12)
Non-financial public sector		-		-		49		(100)		(100)
Total loans and other financing		395,713		374,663		372,526		6		6
Allowances		(16,117)		(15,819)		(13,101)		2		23
Loans		(15,908)		(15,700)		(12,967)		1		23
Financial leases		(62)		(66)		(13)		(6)		377
Other financing		(147)		(53)		(121)		177		21
Net loans and other financing		379,596		358,844		359,425		6		6

As of June 30, 2020, net loans and other financing after provisions amounted to Ps.379,576 million, increasing 6% from June 30, 2019 mainly due to a 7% increase in loans to the private sector, which was a consequence of a 133% increase in promissory notes, and offset by a 59% decrease in other loans.

Loans by Type of Borrower			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Large corporations		137,933		144,300		135,975		(4)		1
SMEs		108,937		75,715		74,826		44		46
Individuals		136,519		137,561		142,125		(1)		(4)
Financial sector		10,400		9,579		9,666		9		8
Residents abroad		1,415		4,046		4,861		(65)		(71)
Other		707		1,010		550		(30)		29
IFRS adjustment		(8,534)		(5,456)		(5,692)		56		50
Total loans		387,377		366,755		362,311		6		7
Allowances		(15,908)		(15,700)		(12,967)		1		23
Net total loans		371,469		351,055		349,344		6		6

13

Loans by Sector of Activity			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Financial sector		10,400		9,579		9,666		9		8
Residents abroad		1,415		4,046		4,861		(65)		(71)
Services		44,771		41,338		25,288		8		77
Agriculture and livestock		77,290		52,250		48,517		48		59
Consumer		136,522		137,568		142,132		(1)		(4)
Retail and wholesale trade		36,837		31,920		30,438		15		21
Construction		4,520		5,809		4,393		(22)		3
Manufacturing industry		58,347		60,696		72,172		(4)		(19)
Other		25,809		29,005		30,536		(11)		(15)
IFRS adjustment		(8,534)		(5,456)		(5,692)		56		50
Total loans		387,377		366,755		362,311		6		7
Allowances		(15,908)		(15,700)		(12,967)		1		23
Net total loans		371,469		351,055		349,344		6		6

In the last twelve months, loans to the private sector increased, particularly in those granted to SMEs (Ps.34,111 million or 46%), primarily through the use of new special credit lines with an interest rate of 24% and the reduction of reserve requirements. By sector of activity, higher levels of growth were recorded in the agriculture and livestock sectors (Ps.28,773 million or 59%) and in services (Ps.19,483 million or 77%).

Net Exposure to the Argentine Public Sector(1)			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Government securities net position		180,373		118,876		225,015		52		(20)
Leliq		135,006		85,431		182,233		58		(26)
Botes		16,159		15,911		15,008		2		8
Other		29,208		17,534		27,774		67		5
Other receivables resulting from financial brokerage		66,069		66		5,818		N/A		1,036
Repurchase agreement transactions - BCRA		66,033		-		5,713		N/A		1,056
Loans and other financing		9		39		59		(77)		(85)
Trust certificates of participation and securities		27		27		46		-		(41)
Total exposure to the public sector		246,442		118,942		230,833		107		7

(1) Excludes deposits with the Argentine Central Bank, which constitute one of the items by which the Bank complies with minimum cash requirements.

As of June 30, 2020, the Bank’s exposure to the public sector amounted to Ps.246,442 million, representing a 7% increase during the last twelve months. Excluding the exposure to the Argentine Central Bank (with respect to Leliq and repurchase agreement transactions), net exposure to the public sector reached Ps.45,403 million (6% of total assets), while as of June 30, 2019, it amounted to Ps.42,887 million (5% of total assets).

14

Deposits			2020		2019				Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
In pesos		455,244		357,606		315,258		27		44
Current accounts		102,769		85,120		60,254		21		71
Saving accounts		158,219		107,626		82,834		47		91
Time deposits		176,751		149,246		159,399		18		11
UVA-adjusted time deposits		10,528		6,659		1,812		58		481
Other		2,638		4,471		2,431		(41)		9
Interests and adjustments		4,339		4,484		8,528		(3)		(49)
In foreign currency		138,170		149,909		268,945		(8)		(49)
Saving accounts		106,081		116,896		233,195		(9)		(55)
Time deposits		28,271		29,384		34,161		(4)		(17)
Other		3,697		3,518		1,560		5		137
Interests and adjustments		121		111		29		9		317
Total deposits		593,414		507,515		584,203		17		2

As of June 30, 2020, the Bank’s deposits amounted to Ps.593,414 million, representing a 2% increase during the last twelve months. This was a consequence of the Ps.139,986 million (44%) growth in peso-denominated deposits, with saving accounts up Ps.75,385 million (91%) and current accounts up Ps.42,515 million (71%), and offset by a Ps.127,114 (55%) decrease in dollar-denominated saving accounts.

At the end of the Quarter, there were 5,8 million deposit accounts, 17% more than the figure recorded for the same period of the prior fiscal year.

Market Share(1)			2020		2019		Variation (%)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Total deposits		8.88		8.53		9.09		35		(21)
Private sector deposits		10.44		10.07		10.69		37		(25)
(1) According to the daily information on loans published by the Argentine Central Bank. Balances as of the last day of each quarter.

As of June 30, 2020, the Bank’s estimated market share of private sector deposits in the Argentine financial system was 10.44%, representing a 25 bp decrease from a year before.

Financial Liabilities			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Financial entities		10,730		19,116		30,553		(44)		(65)
Financing from credit-card purchases		15,081		14,981		16,651		1		(9)
Notes		8,782		18,533		28,723		(53)		(69)
Subordinated notes		18,240		17,233		15,665		6		16
Creditor from purchases of foreign currency		1,296		4		2,357		32,300		(45)
Collections on account of third parties		7,760		7,962		11,078		(3)		(30)
Other financial liabilities		12,147		8,622		37,813		41		(68)
Total financial liabilities		74,036		86,451		142,840		(14)		(48)

Financial liabilities at the end of the Quarter amounted to Ps.74,036 million, Ps.68,804 million (48%) lower than the Ps.142,840 million recorded for the same period of the prior fiscal year. This decline was mainly due to decreases of Ps.25,666 million (68%) in other financial liabilities, Ps.19,941 million (69%) in notes and of Ps.19,823 million (65%) in financial liabilities with financial entities.

15

ASSET QUALITY

Loan Portfolio Quality			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Non-accrual loans(1)		10,433		13,324		15,926		(22)		(34)
With preferred guarantees		2,018		1,900		790		6		155
With other guarantees		1,238		1,641		1,176		(25)		5
Without guarantees		7,177		9,783		13,960		(27)		(49)
Allowance for loan losses		15,908		15,700		12,967		1		23
Relevant ratios (%)								Variation (bp)
Non-accrual loans to private-sector loans		2.69		3.63		4.40		(94)		(171)
Allowance for loan losses to private-sector loans		4.11		4.28		3.58		(17)		53
Allowance for loan losses to non-accrual loans		152.48		117.83		81.42		3,465		7,106
Non-accrual loans with guarantees to non-accrual loans		31.21		26.58		12.34		463		1,887
Cost of risk(2)		4.65		4.62		3.89		3		76
(1) The non-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk and Uncollectible. (2) Annualized.

The Bank’s non-accrual loan portfolio amounted to Ps.10,433 million as of June 30, 2020, representing 2.69% of total loans to the private-sector, decreasing 171 bp from the 4.40% ratio recorded from a year before. This result was mainly a consequence of variances in debtor classification regulations.

The coverage of the non-accrual loan portfolio with allowances for loan losses reached 152.48% as of the end of the Quarter, as compared to the 81.42% recorded from the same period of the prior fiscal year.

In terms of total financing to the private sector (which includes certain items of other financial assets and guarantees granted) and also including provisions on unused balances of credit cards and overdrafts, the Bank’s non-accrual loans portfolio ratio was 2.54%, and its coverage reached 239.92%, as compared to the 4.35% and 106.13% figures recorded in the prior fiscal year, respectively.

Analysis of Loan Loss Experience			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Allowance for loan losses at the beginning of the Quarter
Changes in the allowance for loan losses		15,700		17,092		13,088		(8)		20
Provisions charged to income
Provisions charged to income		4,011		3,796		2,334		6		72
Charge offs		(2,782)		(3,074)		(1,098)		(9)		153
Effect of inflation		(1,021)		(2,114)		(1,357)		(52)		(25)
Allowance for loan losses at the end of the Quarter		15,908		15,700		12,967		1		23
Charge to the income statement
Provisions charged to income(1)		(4,011)		(3,796)		(2,334)		6		72
Direct charge offs(1)		(175)		(149)		(134)		17		31
Bad debts recovered		123		53		68		132		81
Net charge to the income statement		(4,063)		(3,892)		(2,400)		4		69
(1) Item included for calculating the cost of risk.

During the Quarter, Ps.2,782 million were charged off against the allowance for loan losses and direct charges to the income statement in the amount of Ps.175 million were made.

16

CAPITALIZATION AND LIQUIDITY

The minimum capital requirement and the corresponding integration are presented below. Balances are disclosed in accordance with applicable regulations in force as of each period.

Regulatory Capital			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Minimum capital required (A)		53,284		41,783		29,485		28		81
Allocated to credit risk		42,457		32,409		23,041		31		84
Allocated to market risk		1,054		828		596		27		77
Allocated to operational risk		9,773		8,546		5,848		14		67
Computable capital (B)		127,402		108,128		60,788		18		110
Tier I		103,348		87,098		46,709		19		121
Tier II		24,054		21,030		14,079		14		71
Excess over required capital (B) (A)		74,118		66,345		31,303		12		137
Risk weighted assets		650,594		510,236		357,941		28		82
							Variation (bp)
Total capital ratio (%)		19.58		21.19		16.98		(161)		260
Tier I capital ratio (%)		15.89		17.07		13.05		(118)		284

As of June 30, 2020, the Bank’s computable capital amounted to Ps.127,402 million, Ps.74,118 million (139%) higher than the Ps.53,284 million minimum capital requirement. As of June 30, 2019, this excess amounted to Ps.31,303 million (106%).

The minimum capital requirement increased Ps.23,799 million as compared to June 30, 2019, mainly due to the expansion of regulatory requirements on risk weighted assets. Computable capital increased Ps.66,614 million during the same period, primarily as a consequence of a Ps.56,639 million increase in Tier I capital, which was due to an increase resulting from the accounting shareholders’ equity that resulted from the inflation adjustment recorded on non-monetary assets. The Tier II capital increased Ps.9,975 million as a consequence of the effect of the evolution of the foreign exchange rate on the subordinated debt. The total capital ratio was 19.58%, increasing 260 bp during the last twelve months.

Liquidity			2020		2019		Variation (%)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Cash and due from banks		124,914		193,718		181,329		(36)		(31)
Government securities		107,629		67,360		150,556		60		(29)
Call-money		1,458		1,817		587		(20)		148
Overnight placements in correspondent banks		1,411		4,043		4,844		(65)		(71)
Net repurchase agreement transactions		66,049		(23)		5,309		N/A		1,144
Escrow accounts		8,288		8,049		9,458		3		(12)
Other financial assets		200		143		1,706		40		(88)
Total liquid assets		309,949		275,107		353,789		13		(12)
Liquidity ratios								Variation (bp)
Liquid assets (*) as a percentage of transactional deposits		84.44		88.85		94.02		(441)		(958)
Liquid assets (*) as a percentage of total deposits		52.23		54.21		60.56		(198)		(833)

(*) Liquid assets include cash and due from banks (including deposits with the Argentine Central Bank and the special escrow accounts with the monetary authority), holdings of Lebac (Argentine Central Bank’s bills), net call money interbank loans, short-term placements with correspondent banks and reverse repurchase agreement transactions with the local market.

As of June 30, 2020, the Bank’s liquid assets represented 84.44% of the Bank’s transactional deposits and 52.23% of its total deposits as compared to 94.02% and 60.56%, respectively, as of June 30, 2019.

17

TARJETAS REGIONALES

INFORMATION DISCLOSURE

The data shown in the following tables correspond to Tarjetas Regionales, consolidated line by line with its subsidiaries.

RESULTS FOR THE QUARTER

Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Net interest income		2,966		3,869		2,814		(23)		5
Net fee income		3,229		3,582		3,229		(10)		-
Net results from financial instruments		406		728		760		(44)		(47)
Gold and foreign currency quotation differences		(1)		247		(16)		(100)		94
Other operating income		712		785		1,146		(9)		(38)
Loan loss provisions		(969)		(1,422)		(2,212)		(32)		(56)
Net operating income		6,343		7,789		5,721		(19)		11
Personnel expenses		(1,565)		(1,541)		(1,518)		2		3
Administrative expenses		(1,812)		(1,685)		(1,534)		8		18
Depreciations and devaluations of assets		(361)		(382)		(315)		(5)		15
Other operating expenses		(1,698)		(1,117)		(1,452)		52		17
Operating income		907		3,064		902		(70)		1
Results from the net monetary position		(757)		(1,062)		(1,262)		(29)		(40)
Income tax		(128)		(688)		417		(81)		(131)
Net income		22		1,314		57		(98)		(61)
Profitability and Efficiency			2020		2019		Variation (bp)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Return(1) on average assets		0.13		7.17		0.28		(704)		(15)
Return(1) on average shareholders’ equity		0.43		26.37		1.23		(2,594)		(80)
Financial margin(1)(2)		18.38		25.84		13.34		(746)		504
Efficiency ratio (3)		71.05		53.83		69.10		1,722		195

(1) Annualized.

(2) Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income and expenses, divided by average interest-earning assets.

(3) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position.

During the Quarter, Tarjetas Regionales recorded a Ps.22 million net income, Ps.35 million lower than the figurer recorded for the same quarter of the 2019 fiscal year. This profit represented a 0.13% annualized return on average assets and a 0.43% return on average shareholders’ equity, as compared to the 0.28% and 1.23% figures recorded, respectively, from the second quarter of the 2019 fiscal year.

Net operating income amounted to Ps.6,343 million, increasing 11% from the second quarter of the 2019 fiscal year.

18

SELECTED FINANCIAL INFORMATION

Balance Sheet			2020		2019		Variation (bp)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Assets
Cash and due from banks		1,617		2,283		1,409		(29)		15
Debt securities		-		101		-		(100)		-
Net loans and other financing		46,957		50,378		63,561		(7)		(26)
Other financial assets		4,539		13,415		8,134		(66)		(44)
Property, bank premises, equipment		4,030		3,837		4,079		5		(1)
Intangible assets		1,569		1,599		1,192		(2)		32
Other non-financial assets		3,568		3,320		3,005		7		19
Total assets		62,280		74,933		81,380		(17)		(23)
Liabilities
Financing from financial entities		474		6,389		580		(93)		(18)
Other financial liabilities		29,842		32,314		35,506		(8)		(16)
Notes		7,475		10,269		22,553		(27)		(67)
Other non-financial liabilities		4,517		5,304		4,162		(15)		9
Total liabilities		42,308		54,276		62,801		(22)		(33)
Shareholders’ equity		19,972		20,657		18,579		(3)		7

ASSET QUALITY

Loan Portfolio Quality			2020		2019		Variation (%)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Non-accrual loans(1)		5,238		6,263		8,878		(16)		(41)
Allowances for loan losses		7,825		7,977		9,689		(2)		(19)
Ratios (%)								Variation (bp)
Non-accrual loans to loans to the private sector		9.63		10.76		12.19		(113)		(256)
Allowance for loan losses to loans to the private sector		14.38		13.71		13.30		67		108
allowance for loan losses to non-accrual loans		149.39		127.37		109.13		2,202		4,026
Cost of risk (2)		7.19		9.76		14.06		(257)		(687)

(1) The non-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk and Uncollectible.

(2) Annualized.

As of June 30, 2020, taking into consideration the provisions for unused credit-card balances, the coverage ratio amounted to 163.21%, as compared to the 118.54% figure recorded on the same date of the previous year.

19

Analysis of Loan Loss Experience			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Allowances for loan losses
At the beginning of the Quarter		7,977		7,782		9,428		3		(15)
Changes in the allowance for loan losses
Provisions charged to income		862		1,328		1,878		(35)		(54)
Reversals of allowances for loan losses		(111)		-		(882)		-		(87)
Charge offs(1)		(678)		(579)		11		17		(6,264)
Effect of inflation		(225)		(554)		(746)		(59)		(70)
Allowance for loan losses at the end of the Quarter		7,825		7,977		9,689		(2)		(19)
Charge to the income statement
Provisions charged to income(2)		(862)		(1,328)		(1,878)		(35)		(54)
Direct charge offs(2)		(107)		(94)		(116)		14		(8)
Bad debt recovered		38		11		87		245		(56)
Net charge to the income statement		(931)		(1,411)		(1,907)		(34)		(51)

(1) Item included for calculating the cost of risk.

20

GALICIA ADMINISTRADORA DE FONDOS

RESULTS FOR THE QUARTER

Income Statement	2020				2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Net interest income		6		-		-		N/A		N/A
Net results from financial instruments		20		30		27		(33)		(26)
Gold and foreign currency quotation differences		8		5		(1)		60		(900)
Other operating income		505		210		222		140		127
Net operating income		539		245		248		120		117
Personnel and administrative expenses		(71)		(73)		(44)		(3)		61
Other operating expenses		(29)		(13)		(11)		123		164
Operating income		439		159		193		176		127
Results from the net monetary position		(13)		(33)		(27)		(61)		(52)
Income tax		(130)		(32)		(39)		306		233
Net income		296		94		127		215		133

ASSETS UNDER MANAGEMENT

Mutual Fund	Assets Under Management as of:						Variation (%)
In millions of pesos, except otherwise noted	2Q20		1Q20		2Q19		vs 1Q20		vs 2Q19
Fima Premium		122,518		111,124		68,670		10		78
Fima Ahorro Pesos		6,288		4,400		20,102		43		(69)
Fima Ahorro Plus		9,840		5,602		14,574		76		(32)
Fima Capital Plus		7,749		172		287		4,405		2,600
Fima Renta en Pesos		600		261		470		130		28
Fima Renta Plus		717		204		236		251		204
Fima Abierto Pymes		627		622		697		1		(10)
Fima Acciones		499		257		534		94		(7)
Fima PB Acciones		648		454		1,096		43		(41)
Fima Mix I		475		135		11		252		4,218
Fima Renta Dolares I		1,673		2,305		5,905		(27)		(72)
Fima Renta Dolares II		495		627		2,211		(21)		(78)
Fima Renta Acciones Latinoamerica		54		62		190		(13)		(72)
Fima Renta Fija Internacional		1,434		2,679		8,498		(46)		(83)
Total Assets Under Management		153,617		128,904		123,481		19		24

21

SELECTED FINANCIAL INFORMATION

Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Assets
Cash and due from banks		292		156		57		87		412
Loans and other financing		194		-		-		N/A		N/A
Other financial assets		149		384		267		(61)		(44)
Other non-financial assets		16		15		87		7		(82)
Total assets		651		555		411		17		58
Liabilities
Other non-financial liabilities		166		367		37		(55)		349
Total liabilities		166		367		37		(55)		349
Shareholders’ equity		485		188		374		158		30

22

SUDAMERICANA HOLDING

INFORMATION DISCLOSURE

The data shown in the tables of this report and the consolidated financial statements correspond to Sudamericana Holding, consolidated line by line with the subsidiaries under its control.

RESULTS FOR THE QUARTER

Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Earned premium		1,628		1,498		1,517		9		7
Incurred claims		(155)		(220)		(112)		(30)		38
Withdrawals		(3)		(2)		(3)		50		-
Life annuities		(3)		(3)		(4)		-		(25)
Acquisition and general expenses		(630)		(596)		(832)		6		(24)
Other income and expenses		6		(74)		(16)		(108)		(138)
Underwriting income		843		603		550		40		53
Interest income		148		220		227		(33)		(35)
Net results from financial instruments		(2)		23		5		109		(140)
Gold and foreign currency quotation differences		(19)		(7)		38		(171)		(150)
Other operating income		85		144		115		(41)		(26)
Net operating income		1,055		983		935		7		13
Personnel expenses		(233)		(224)		(210)		4		11
Administrative expenses		(121)		(116)		(153)		4		(21)
Depreciations and devaluations of assets		(51)		(57)		(51)		(11)		-
Operating income		650		586		521		11		25
Results from the net monetary position		(91)		(44)		(180)		107		(49)
Income tax		(143)		(212)		13		(33)		1,200
Net income		416		330		354		26		18
Other comprehensive income		40		(25)		(9)		260		544
Total comprehensive income		456		305		345		50		32

Profitability			2020		2019		Variation ( bp)
Percentages, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Return on average assets(1)		30.76		25.81		24.27		495		649
Return on average shareholders’ equity(1)		59.57		54.83		52.44		474		713
Efficiency ratio (2)		40.83		43.21		62.89		(238)		(2,206)
Combined ratio(3)		45.59		51.64		69.16		(605)		(2,357)

(1) Annualized.

(2) Acquisition and general expenses divided by earned premiums plus other income and expenses.

(3) Acquisition and general expenses divided by earned premiums plus incurred claims, withdrawals, life annuities, other income and expenses.

23

SELECTED FINANCIAL INFORMATION

Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	2Q		1Q		2Q		vs 1Q20		vs 2Q19
Assets
Cash and due from banks		88		133		143		(34)		(38)
Debt securities		2		11		11		(82)		(82)
Net loans and other financing		1,137		831		609		37		87
Other financial assets		2,153		2,013		2,537		7		(15)
Property, bank premises, equipment		507		510		501		(1)		1
Intangible assets		112		137		173		(18)		(35)
Assets for insurance contracts		1,365		1,269		1,549		8		(12)
Other non-financial assets		668		389		513		72		30
Total assets		6,032		5,293		6,036		14		-
Liabilities
Financial entities		-		-		8		-		(100)
Liabilities for insurance contracts		1,615		1,666		1,816		(3)		(11)
Other non-financial liabilities		1,383		1,048		1,332		32		4
Total liabilities		2,998		2,714		3,156		10		(5)
Shareholders’ equity		3,034		2,579		2,880		18		5

24

RELEVANT INFORMATION

EXTRAORDINARY SHAREHOLDER’S MEETING

Grupo Financiero Galicia is calling a meeting of its shareholders, at an Extraordinary Meeting to be held on September 22, 2020, at 11:00 a.m., at which the partial cancellation of the Optional Reserve for Future Distribution of Profits (amounting to Ps.1,700 million) and the distribution of cash dividends (in the same amount) will be considered by such shareholders.

COVID-19

During the Quarter, Grupo Financiero Galicia and its subsidiaries have continued and adapted their operations under the challenging circumstances resulting from the spread of the Coronavirus (COVID-19). This Covid-19 pandemic has generated various consequences impacting businesses and economic activities globally. As of mid-March, when the virus began to spread in Argentina, the Argentine National Government implemented a series of measures designed to reduce contagion, provide for preventive and mandatory social isolation from March 20 to August 30, 2020 (a date that may be extended if the Argentine Government so provides) and enabling the free movement of only those people linked to the provision and/or production of services and products declared essential, with certain variations to such measures depending on the region of the country implicated. Additionally, the Argentine Central Bank and other regulatory agencies established certain additional regulations with objectives linked to providing assistance to sectors whose activity was affected by the pandemic and to the health care of the community in general.

The final scope of COVID-19 pandemic and its impact on the global and Argentine economy are still unknown. Although, as of the date of this report, Grupo Financiero Galicia and its subsidiaries have suffered limited impacts on their results due to the pandemic, the impact of a lower level of activity and a higher unemployment could be significant in the future.

The Board of Directors of GFG continues to analyze the evolution of the situation and is prepared to take all measures within its power to guarantee business continuity and to preserve the health and safety of GFG’s employees, customers and other stakeholders.

REGULATORY CHANGES

In connection with the foregoing, the Argentine Central Bank has established certain regulations and protocols, of which the following stand out: (i) attention to customers by prior request of an appointment; (ii) the suspension of the collection of ATM fees; (iii ) the suspension, until December 31, 2020, of dividend distributions; (iv) the extension of credit card maturities; (v) financing of unpaid credit card balances at a maximum interest rate of 43%; (vi) postponement of maturities of unpaid loan balances; (vii) the granting of zero-rate financing to self-employed people; (viii) the granting of financing to Micro SMEs at a 24% nominal annual interest rate; (ix) the granting of financing to companies for the payment of salaries at a subsidized interest rate; (x) a minimum interest rate on time deposits equivalent to 79% of the interest rate on Leliq (and for time deposits from individuals of up to Ps.1 million, said minimum interest rate will be equivalent to 87% of the interest rate on Leliq); (xi) adding flexibility in the parameters used for classification of debtors; and (xii) controls on the foreign exchange market.

Additionally, to promote the granting of financing to sectors affected by the COVID-19 pandemic, the Argentine Central Bank has implemented certain reductions on reserve requirements.

This report is a summary analysis of GFG’s financial condition and results of operations as of and for the periods indicated. For a correct interpretation, this report must be read in conjunction with GFG’s financial statements, as well as with all other material periodically filed with the Argentine National Securities Commission (www.cnv.gob.ar), the Buenos Aires Stock Exchange (www.bolsar.com), the Cordoba Stock Exchange (www.bolsacba.com.ar) and the Nasdaq (www.nasdaq.com). In addition, the Argentine Central Bank (www.bcra.gob.ar) may publish information related to Banco Galicia as of a date subsequent to the last date for which the Bank has published information.

Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Therefore, any matters of interpretation should be referred to the original version in Spanish.

25