MINIMUM CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2023

MINIMUM CAPITAL REQUIREMENTS

MINIMUM CAPITAL REQUIREMENTS

34 . MINIMUM CAPITAL REQUIREMENTS

The Central Bank requires financial institutions to maintain minimum capital amounts measured as of each month's closing, The minimum capital is defined as the greater of (i) the basic minimum capital requirement, which is explained below, or (ii) the sum of the credit risk, operational risk and market risk, Financial institutions (including their domestic Argentine and international branches) must comply with the minimum capital requirements both on an individual and a consolidated basis.

The following table sets forth information regarding excess capital and selected capital and liquidity ratios of the Bank:

As stated above under "Presentation of Financial and Other Information", we have prepared our audited consolidated financial statements for 2023, 2022 and 2021 under IFRS, Minimum capital requirement has been prepared in accordance with the rules of the Argentine Central Bank, which is not comparable to data prepared under IFRS.

	Year ended December 31,(2)
	2023		2022		2021
	(in thousands of Pesos except percentages and ratios)
Calculation of excess capital:
Allocated to assets at risk	51,149,308		20,729,624		12,957,481
Allocated to Bank premises and equipment, intangible assets and equity investment assets	10,474,161		3,747,910		2,035,689
Market risk	2,658,844		1,693,962		965,159
Public sector and securities in investment account,	272,202		625,570		34,489
Operational risk	21,891,498		8,188,453		4,805,957
Required minimum capital under Central Bank rules	86,446,013		34,985,519		20,798,775
Basic net worth	264,420,324		77,619,877		42,938,440
Complementary net worth	—		2,600,170		1,564,272
Deductions	(55,583,242)		(25,063,540)		(11,770,286)
Total capital under Central Bank rules	208,837,082		55,156,507		32,732,426
Excess capital	122,391,069		20,170,988		11,933,651
Credit Risk Weighted Assets (1)	756,569,592		303,351,644		181,430,487
Risk Weighted Assets (1)	1,058,040,330		428,238,464		254,513,436
Selected capital and liquidity ratios:
Regulatory capital/credit risk weighted assets	27.6	%	18.2	%	18.4	%
Regulatory capital/risk weighted assets	19.7	%	12.9	%	12.9	%
Average shareholders’ equity as a percentage of average total assets	14.5	%	12.2	%	12.5	%
Total liabilities as a multiple of total shareholders’ equity	6.3x		8.3x		7.5x
Cash as a percentage of total deposits	14.4	%	8.7	%	11.1	%
Liquid assets as a percentage of total deposits (3)	64.1	%	46.0	%	49.2	%
Tier 1 Capital / risk weighted assets	19.7	%	12.3	%	12.2	%

(1) Risk Weighted Assets includes operational risk weighted assets, market risk weighted assets, and credit risk weighted assets, Operational risk weighted assets and market risk weighted assets are calculated by multiplying their respective required minimum capital under Central Bank rules by 12.5, Credit Risk Weighted Assets is calculated by applying the respective credit risk weights to our assets, following Central Bank rules,

(2) Nominal values without inflation adjustment,

(3) Liquid assets include cash, securities issued by the Central Bank, and Repo transactions with the Central Bank. This ratio does not consider other government securities held by the Company to set Minimum Reserve Requirements.