SECURITIES AND EXCHANGE COMMISSION

FORM 20-F Annual and transition report of foreign private issuers pursuant to sections 13 or 15(d)

Filing Date: 2017-05-01 | Period of Report: 2016-12-31 SEC Accession No. 0001193125-17-149605

(HTML Version on secdatabase.com)

FILER GRUPO FINANCIERO GALICIA SA Mailing Address Business Address TTE. GRAL. JUAN D. PERON TTE. GRAL. JUAN D. PERON CIK:1114700| IRS No.: 000000000 | State of Incorp.:C1 | Fiscal Year End: 1231 430 430 Type: 20-F | Act: 34 | File No.: 000-30852 | Film No.: 17798238 25TH FLOOR 25TH FLOOR SIC: 6029 Commercial banks, nec BUENOS AIRES C1 BUENOS AIRES C1 CP1038AAJ CP1038AAJ 0115411434

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 2017 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 20–F

(Mark One) ☐ Registration Statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

or

☒ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended December 31, 2016

or

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

or

☐ Shell Company Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of event requiring this Shell Company Report

Commission File Number 000-30852

GRUPO FINANCIERO GALICIA S.A. (Exact name of Registrant as specified in its charter)

GALICIA FINANCIAL GROUP (Translation of Registrant’s name into English)

REPUBLIC OF ARGENTINA (Jurisdiction of incorporation or organization)

Grupo Financiero Galicia S.A. Tte. Gral. Juan D. Perón 430, 25th floor C1038 AAJ-Buenos Aires, Argentina (Address of principal executive offices)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Pedro A. Richards, Chief Executive Officer Tel: 54 11 4 343 7528 / Fax: 54 11 4 331 9183, [email protected] Perón 430, 25° Piso C1038AAJ Buenos Aires ARGENTINA (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

American Depositary Shares, each representing ten Class B ordinary Shares

Name of each exchange on which registered Nasdaq Capital Market

Title of each class Class B Ordinary Shares, Ps.1.00 par value, (not for trading but only in connection with the listing of the American Depositary Shares on the Nasdaq Capital Market)

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Class A Ordinary Shares, Ps.1.00 par value 281,221,650 Class B Ordinary Shares, Ps.1.00 par value 1,019,042,947

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth Company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐ † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document U.S. GAAP ☐ International Financial Reporting Standards Other ☒ As issued by the International Accounting Standards Board ☐

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☒

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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TABLE OF CONTENTS

Page PRESENTATION OF FINANCIAL INFORMATION 1 FORWARD LOOKING STATEMENTS 2 PART I 4 Item 1. Identity of Directors, Senior Management and Advisers 4 Item 2. Offer Statistics and Expected Timetable 4 Item 3. Key Information 4 Item 3.A. Selected Financial Data 4 Exchange Rate Information 6 Item 3.B. Capitalization and Indebtedness 7 Item 3.C. Reasons for the Offer and Use of Proceeds 7 Item 3.D. Risk Factors 7 Item 4. Information on the Company 20 History and Development of the Company 20 Organizational Structure 20 History 21 Business 30 Competition 48 Sales and Marketing 51 Property 52 Capital Investments and Divestitures 53 Selected Statistical Information 55 Government Regulation 87 Argentine Banking Regulation 93 Credit Cards Regulation 106 Concealment and Laundering of Assets of a Criminal Origin 107 Item 4.A. Unresolved Staff Comments 109 Item 5. Operating and Financial Review and Prospects 109 Item 5.A. Operating Results 109 Overview 109 The Argentine Economy 109 The Argentine Financial System 111 The Argentine Insurance Industry 112 Inflation 113 Currency Composition of Our Balance Sheet 113 Results of Operations for the Fiscal Years Ended December 31, 2016, December 31, 2015 and December 31, 2014 114 U.S. GAAP and Argentine Banking GAAP Reconciliation 129 Results by Segments 136 Consolidated Assets 144 Exposure to the Argentine Public Sector 145 Funding 146 Contractual Obligations 152 Off-Balance Sheet Arrangements 153 Critical Accounting Policies 154 U.S. GAAP—Critical Accounting Policies 155 Principal Trends 160 Item 5.B. Liquidity and Capital Resources 161 Liquidity—Holding Company on an Individual Basis 161 Consolidated Cash Flows 162 Banco Galicia’s Liquidity Management 165 Capital 166 Capital Expenditures 167 Item 5.E. Off-Balance Sheet Arrangements 167 Item 5.F. Contractual Obligations 167

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Item 5.G. Safe Harbor 167

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents TABLE OF CONTENTS (continued)

Page Item 6. Directors, Senior Management and Employees 167 Our Board of Directors 167 Our Audit Committee 170 Our Supervisory Committee 170 Compensation of Our Directors 171 Management of Grupo Financiero Galicia 172 Board of Directors of Banco Galicia 172 Functions of the Board of Directors of Banco Galicia 174 Banco Galicia’s Executive Officers 176 Banco Galicia’s Supervisory Committee 179 Compensation of Banco Galicia’s Directors and Officers 180 Employees 180 Nasdaq Corporate Governance Standards 181 Share Ownership 183 Item 7. Major Shareholders and Related Party Transactions 183 Major Shareholders 183 Related Party Transactions 184 Item 8. Financial Information 186 Legal Proceedings 186 Dividend Policy and Dividends 187 Significant Changes 189 Item 9. The Offer and Listing 190 Shares and ADSs 190 Argentine Securities Market 192 Market Regulations 193 Item 10. Additional Information 194 Description of Our Bylaws 194 Exchange Controls 201 Taxation 201 Material Contracts 208 Documents on Display 209 Item 11. Quantitative and Qualitative Disclosures About Market Risk 210 General 210 Interest Rate Risk 211 Foreign Exchange Rate Risk 213 Currency Mismatches 214 Market Risk 216 Cross-border Risk 217 Overseas Foreign Currency Transfer Risk 218 Risk Exposures in the Non-financial Public Sector 218 Operational Risk 218 Item 12. Description of Securities Other Than Equity Securities 220 Item 12.D. American Depositary Shares 220 Fees and Charges Applicable to ADS Holders 220 Fees and Direct and Indirect Payments Made by the Depositary to Us 220 PART II 221 Item 13. Defaults, Dividend Arrearages and Delinquencies 221 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 221 Item 15. Controls and Procedures 221 Item 16.A. Audit Committee Financial Expert 222 Item 16.B. Code of Ethics 222 Item 16.C. Principal Accountants’ Fees and Services 223 Item 16.D. Exemptions from the Listing Standards for Audit Committees 223 Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 223

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Item 16.F. Change in Registrant’s Certifying Accountant 223 Item 16.G. Corporate Governance 223

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents TABLE OF CONTENTS (continued)

Page Item 16.H. Mine Safety Disclosure 224 PART III 224 Item 17. Financial Statements 224 Item 18. Financial Statements 224 Item 19. Exhibits 224

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents PRESENTATION OF FINANCIAL INFORMATION

Grupo Financiero Galicia S.A. (“Grupo Financiero Galicia” or “Grupo Galicia”) is a financial services holding company incorporated in Argentina and is one of Argentina’s largest financial services groups. In this annual report, references to “we”, “our”, and “us” are to Grupo Financiero Galicia and its consolidated subsidiaries, except where otherwise noted. Our consolidated financial statements consolidate the accounts of the following companies: • Grupo Financiero Galicia; • Banco de Galicia y Buenos Aires S.A. (“Banco Galicia” or the “Bank”), our largest subsidiary, consolidated with (i) Banco Galicia Uruguay S.A. (“Galicia Uruguay”) liquidated as of April 30, 2016, (ii) Galicia Cayman S.A. (“Galicia Cayman”), only until September 30, 2014 as on October 1, 2014 it was merged into Banco Galicia, (iii) Tarjetas Regionales S.A. (“Tarjetas Regionales”) and its operating subsidiaries, (iv) Tarjetas del Mar S.A. (“Tarjetas del Mar”), (v) Galicia Valores S.A., (vi) Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión (“Galicia Administradora de Fondos”) but only until March 31, 2014, as on April 1, 2014 it was sold to Grupo Financiero Galicia, (vii) Compañía Financiera Argentina S.A. (“Compañía Financiera Argentina” or “CFA”) and (viii) Cobranzas y Servicios S.A. (collectively, “Banco Galicia” or the “Bank” except where otherwise noted);Sudamericana Holding S.A. (“Sudamericana”) and its subsidiaries; • Galicia Warrants S.A. (“Galicia Warrants”); • Net Investment S.A. (“Net Investment”); • Galicia Administradora de Fondos (consolidated with Grupo Financiero Galicia since April 2014); and • Galval Agente de Valores S.A. (“Galval”), the results of which were consolidated only during the first half of fiscal year 2012, since on September 4, 2012, the Board of Directors of Grupo Financiero Galicia (the “Board of Directors”) approved the sale of 100% of its interest in Galval. Such transaction was approved by the Central Bank of Uruguay in June 2013 and was consummated on June 12, 2013.

We maintain our financial books and records in Argentine Pesos and prepare our financial statements in conformity with the accounting rules of the Argentine Central Bank, which entity prescribes the generally accepted accounting principles for all financial institutions in Argentina. This annual report refers to those accounting principles as “Argentine Banking GAAP”. Argentine Banking GAAP differs in certain relevant respects from generally accepted accounting principles in Argentina, which we refer to as “Argentine GAAP”. Argentine Banking GAAP also differs in certain significant respects from the generally accepted accounting principles in the United States, which we refer to as “U.S. GAAP”. See Note 31 to our audited consolidated financial statements included in this annual report for a description of the differences between Argentine GAAP and Argentine Banking GAAP, and Note 34 to our audited consolidated financial statements included in this annual report for a discussion of the principal differences between Argentine Banking GAAP and U.S. GAAP and a reconciliation to U.S. GAAP of our net income for the three fiscal years ended December 31, 2016 and total shareholders’ equity as of December 31, 2016 and 2015, and Item 5. “Operating and Financial Review and Prospects” - Item 5.A. “Operating Results-U.S. GAAP and Argentine Banking GAAP Reconciliation”.

In this annual report, references to “US$” and “Dollars” are to United States Dollars and references to “Ps.” or “Pesos” are to Argentine Pesos. The exchange rate used in translating Pesos into Dollars and used in calculating the convenience translations included in the following tables is the “Reference Exchange Rate” which is published by the Argentine Central Bank and which was Ps.15.8502, Ps. 13.0050 and Ps. 8.5520 per US$1.00 as of December 31, 2016, December 31, 2015 and December 31, 2014, respectively. The exchange rate translations contained in this annual report should not be construed as representations that the stated Peso amounts actually represent or have been or could be converted into Dollars at the rates indicated or at any other rate.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Our fiscal year ends on December 31, and references in this annual report to any specific fiscal year are to the twelve-month period ended December 31 of such year.

Unless otherwise indicated, all information regarding deposit and loan market shares and other financial industry information has been derived from information published by the Argentine Central Bank.

We have expressed all amounts in millions of Pesos, except percentages, ratios, multiples and per-share data.

Certain figures included in this annual report have been rounded for purposes of presentation. Percentage figures included in this annual report have not been calculated on the basis of such rounded figures but rather on the basis of such amounts prior to rounding. For this reason, percentage amounts in this annual report may vary from those obtained by performing the same calculations using the figures in the financial statements. Certain numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them due to rounding.

FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements that involve substantial risks and uncertainties, including, in particular, statements about our plans, strategies and prospects under the captions Item 4. “Information on the Company-Capital Investments and Divestitures,” Item 5. “Operating and Financial Review and Prospects”-Item 5.A. “Operating Results-Principal Trends” and Item 5.B. “Liquidity and Capital Resources.” All statements other than statements of historical facts contained in this annual report (including statements regarding our future financial position, business strategy, budgets, projected costs and management’s plans and objectives for future operations) are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of such words as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue” or other similar terminology. Although we believe that the expectations reflected in these forward-looking statements are reasonable, no assurance can be provided with respect to these statements. Because these statements are subject to risks and uncertainties, actual results may differ materially and adversely from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially and adversely from those contemplated in such forward-looking statements include but are not limited to: • changes in Argentine government regulations applicable to financial institutions, including tax regulations and changes in or failures to comply with banking or other regulations; • changes in general political, legal, social or other conditions in Argentina, Latin America or abroad; • fluctuations in the Argentine rate of inflation; • changes in capital markets in general that may affect policies or attitudes toward lending to Argentina or Argentine companies, including expected or unexpected turbulence or volatility in domestic or international financial markets; • changes in the macroeconomic situation at the regional, national or international levels, and the influence of these changes on the microeconomic conditions of the financial markets in Argentina; • increased competition in the banking, financial services, credit card services, insurance, asset management, mutual funds and related industries; • changes in interest rates which may, among other things, adversely affect margins; • a loss of market share by any of Grupo Financiero Galicia’s main businesses; • a change in the credit cycle, increased borrower defaults and/or a decrease in the fees charged to clients;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • Grupo Financiero Galicia’s subsidiaries inability to sustain or improve their performance; • Banco Galicia’s inability to obtain additional debt or equity financing on attractive conditions or at all, which may limit its ability to fund existing operations and to finance new activities; • technological changes and changes in Banco Galicia’s ability to implement new technologies; • changes in the saving and consumption habits of its customers and other structural changes in the general demand for financial products, such as those offered by Banco Galicia; • possible financial difficulties of the Argentine government; • volatility of the Peso and the exchange rates between the Peso and foreign currencies; and • other factors discussed under Item 3. “Key Information” - Item 3.D. “Risk Factors” in this annual report.

You should not place undue reliance on forward-looking statements, which speak only as of the date that they were made. Moreover, you should consider these cautionary statements in connection with any written or oral forward-looking statements that we may issue in the future. We do not undertake any obligation to release publicly any revisions to forward-looking statements after completion of this annual report to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this annual report might not occur and are not guarantees of future performance.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents PART I

Item 1. Identity of Directors, Senior Management and Advisers Not applicable.

Item 2. Offer Statistics and Expected Timetable Not applicable.

Item 3. Key Information Item 3.A. Selected Financial Data The following table presents summary historical financial and other information about us as of the dates and for the periods indicated.

Our financial statements do not include any effect for inflation accounting other than the adjustments to non-monetary assets through February 28, 2003.

The selected consolidated financial information as of December 31, 2016, and December 31, 2015, and for the fiscal years ended December 31, 2016, December 31, 2015 and December 31, 2014 has been derived from our audited consolidated financial statements included in this annual report. The selected consolidated financial information as of December 31, 2014, December 31, 2013, and December 31, 2012, and for the fiscal years ended December 31, 2013, and December 31, 2012, has been derived from our audited consolidated financial statements not included in this annual report.

You should read this data in conjunction with Item 5. “Operating and Financial Review and Prospects” and our audited consolidated financial statements included in this annual report.

Fiscal Year Ended December 31, 2016 2016 2015 2014 2013 2012 (in millions of Dollars, except as noted)(1) Unaudited (in millions of Pesos, except as noted)(1) Consolidated Income Statement in Accordance with Argentine Banking GAAP Financial Income 2,310 36,608 25,844 19,860 13,076 9,129 Financial Expenses 1,277 20,239 13,402 10,321 6,170 3,941 Net Financial Income (2) 1,033 16,369 12,442 9,539 6,906 5,188 Provision for Losses on Loans and Other Receivables 223 3,533 2,214 2,411 1,776 1,347 Income before Taxes 591 9,371 7,139 5,330 3,056 2,125 Income Tax (212 ) (3,353 ) (2,801 ) (1,992 ) (1,232 ) (789 ) Net Income / (Loss) 380 6,018 4,338 3,338 1,824 1,336 Basic Earnings / (Loss) per Share (in Pesos) 0.29 4.63 3.34 2.57 1.45 1.08 Diluted Earnings / (Loss) per Share (in Pesos) 0.29 4.63 3.34 2.57 1.45 1.08 Cash Dividends per Share (in Pesos) 0.01 0.18 0.12 0.08 0.03 0.02 Book Value per Share (in Pesos) 0.99 15.66 11.14 7.88 5.34 3.92 Amounts in Accordance with U.S. GAAP Net Income / (Loss) 381 6,037 4,336 3,504 1,575 1,310 Basic and Diluted Earnings / (Losses) per Share (in Pesos) 0.29 4.64 3.33 2.70 1.27 1.06 Book Value / (Deficit) per Share (in Pesos) 0.97 15.45 11.06 7.88 5.34 4.12 Financial Income 2,180 34,549 24,252 18,166 13,109 9,187 Financial Expenses 1,225 19,410 12,826 9,663 6,178 3,923 Net Financial Income / (Loss) 955 15,139 11,426 8,503 6,931 5,264 Provision for Losses on Loans and Other Receivables 201 3,192 1,985 1,992 1,795 1,338

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Income Tax 202 3,195 2,644 1,890 1,176 780 Consolidated Balance Sheet in Accordance with Argentine Banking GAAP Cash and Due from Banks 3,859 61,166 30,835 16,959 12,560 8,345 Government Securities, Net 864 13,701 15,525 10,010 3,987 3,627 Loans, Net 8,672 137,452 98,345 66,608 55,265 42,593 Total Assets 15,284 242,251 161,748 107,314 83,156 63,458 Deposits 9,570 151,688 100,039 64,666 51,395 39,945 Other Funds (3) 4,430 70,210 47,224 32,402 24,814 18,643 Total Shareholders’ Equity 1,284 20,353 14,485 10,246 6,947 4,870 Average Total Assets (4) 11,634 184,395 122,684 92,510 69,844 54,416 Percentage of Period-end Balance Sheet Items Denominated in Dollars: Loans, Net of Allowances 12.77 12.77 3.26 4.20 5.27 6.32 Total Assets 27.56 27.56 16.88 12.11 11.74 11.42 Deposits 33.63 33.63 14.37 7.46 7.15 7.84 Total Liabilities 30.82 30.82 18.86 13.61 13.71 14.29 Amounts in Accordance with U.S. GAAP Trading Securities 1,085 17,196 16,148 10,199 3,326 3,450 Available-for-Sale Securities 342 5,423 4,385 4,627 4,819 3,251 Total Assets 16,429 260,403 180,142 120,393 92,729 72,398 Total Liabilities 15,162 240,316 165,759 110,150 85,785 67,290 Shareholders’ Equity (Deficit) 1,267 20,087 14,383 10,243 6,944 5,108

Fiscal Year Ended December 31, 2016 2015 2014 2013 2012 (in millions of Pesos, except as noted)(1) Selected Ratios in Accordance with Argentine Banking GAAP Profitability and in Efficiency Net Yield on Interest Earning Assets (5) 13.26 % 14.18 % 14.42 % 13.77 % 14.14 % Financial Margin (6) 12.10 13.12 13.56 12.75 12.11 Return on Average Assets (7) 3.48 3.83 3.85 2.91 2.80 Return on Average Shareholders’ Equity (8) 35.03 35.54 39.07 32.47 32.12 Net Income from Services as a Percentage of Operating Income (9) 39.63 38.65 37.40 38.03 38.15 Efficiency ratio (10) 64.98 63.64 60.51 66.65 68.84 Capital Shareholders’ Equity as a Percentage of Total Assets 8.40 % 8.96 % 9.55 % 8.35 % 7.67 % Total Liabilities as a Multiple of Shareholders’ Equity 10.90 x 10.17 x 9.47 x 10.97 x 12.03 x Total Capital Ratio 15.04 % 13.38 % 15.91 % 14.28 % 13.02 % Liquidity Cash and Due from Banks as a Percentage of Total Deposits 40.32 % 30.82 % 26.23 % 24.44 % 20.89 % Loans, Net as a Percentage of Total Assets 56.74 60.80 62.07 66.46 67.12 Credit Quality Past Due Loans (11) as a Percentage of Total Loans 2.43 % 2.46 % 2.61 % 2.69 % 2.53 % Non-Accrual Loans (12) as a Percentage of Total Loans 3.31 3.11 3.57 3.57 3.37 Allowance for Loan Losses as a Percentage of Non-accrual Loans(12) 100.06 112.41 105.78 103.80 115.85 Net Charge-Offs (13) as a Percentage of Average Loans 1.67 1.26 2.81 2.33 2.00 Ratios in Accordance with U.S. GAAP Capital

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Shareholders’ Equity (deficit) as a Percentage of Total Assets 7.71 7.98 8.51 7.49 7.06 % Total Liabilities as a Multiple of Total Shareholders’ Equity 11.96x 11.52x 10.75x 12.35x 13.17x Liquidity Loans, Net as a Percentage of Total Assets 52.76 % 54.55 % 55.29 % 59.43 % 58.74 % Credit Quality Allowance for Loan Losses as a Percentage of Non-Accrual Loans 128.53 135.35 129.78 127.05 138.77 Inflation and Exchange Rate Wholesale Inflation (14) 34.59 % 12.65 % 28.27 % 14.76 % 13.13 % Consumer Inflation (15) 41.05 % 26.90 % 23.91 % 10.95 % 10.84 % Exchange Rate Variation (16) (%) 21.88 52.07 31.21 32.55 14.27 CER (17) 35.79 15.05 24.34 10.53 10.55

The ratios disclosed above are considered significant by the management of Grupo Financiero Galicia despite of the fact that they are not a specific requirement of any GAAP. (1) The exchange rate used to convert the December 31, 2016 amounts into Dollars was Ps.15.8502 per US$1.00. All amounts are stated in millions of Pesos, except inflation and exchange rates, percentages, ratios, multiples and per-share data. (2) Net financial income primarily represents income from interest on loans and other receivables resulting from financial brokerage plus net income from government and corporate debt securities, including gains and losses, minus interest on deposits and other liabilities from financial intermediation. It also includes the CER adjustment. (3) Primarily includes debt with merchants and liabilities with other banks and international entities. (4) The average balances of assets, including the related interest that is due are calculated on a daily basis for Banco Galicia and for Galicia Uruguay, as well as for Tarjetas Regionales consolidated with its operating subsidiaries, and on a monthly basis for Grupo Financiero Galicia and its non-banking subsidiaries. (5) Net interest earned divided by interest-earning assets. For a description of net interest earned, see Item 4. “Information on the Company-Selected Statistical Information-Interest-Earning Assets-Net Yield on Interest-Earning Assets”. (6) Financial margin represents net financial income divided by average interest-earning assets. (7) Net income excluding minority interest as a percentage of average total assets. (8) Net income as a percentage of average shareholders’ equity. (9) Operating income is defined as net financial income plus net income from services. (10) Administrative expenses as a percentage of operating income as defined above. (11) Past-due loans are defined as the aggregate principal amount of a loan plus any accrued interest that is due and payable for which either the principal or any interest payment is 91 days or more past due. (12) Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio: “Medium Risk”, “High Risk”, “Uncollectible”, and “Uncollectible Due to Technical Reasons”, and (b) Commercial portfolio: “With problems”, “High Risk of Insolvency”, “Uncollectible”, and “Uncollectible Due to Technical Reasons”. (13) Charge-offs plus direct charge-offs minus bad debts recovered. (14) As of December 31, 2015 as measured by the interannual change between October 2014 and October 2015 Wholesale Price Index (“WPI”), published by INDEC (as defined herein), because the measurement of this index was discontinued. In 2016 the measure was normalized. (15) In 2015, annual variation of the Consumer Price Index (“CPI”) was calculated using the Consumer Price Index of the City of Buenos Aires, an alternative measure of inflation proposed by INDEC after it discontinued its index. (16) Annual change in the end-of-period exchange rate expressed in Pesos per Dollar. (17) The “CER” is the “Coeficiente de Estabilización de Referencia”, an adjustment coefficient based on changes in the CPI.

Exchange Rate Information The following table sets forth the annual high, low, average and period-end exchange rates for Dollars for the periods indicated, expressed in Pesos per Dollar and not adjusted for inflation.

Exchange Rate (1) High Low Average Period-End (in Pesos per Dollar) 2012 4.9173 4.3048 4.5760 4.9173 2013 6.5180 4.9228 5.5442 6.5180 2014 8.5555 6.5430 8.2314 8.5520

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 2015 13.7633 8.5537 9.4421 13.0050 2016 16.0392 13.0692 14.9449 15.8502 October 2016 15.2250 15.1152 15.1810 15.1745 November 2016 15.8442 15.0183 15.3399 15.8442 December 2016 16.0392 15.5225 15.8296 15.8502 January 2017 16.0533 15.8083 15.9065 15.9117 February 2017 15.8350 15.3675 15.5983 15.4550 March 2017 15.6687 15.3818 15.5237 15.3818

(1) Using closing reference exchange rates as published by the Argentine Central Bank. (2) Annual average: based on the last day of each month’s closing quotation. (3) Monthly average: daily closing quotations.

As of April 24, 2017, the exchange rate was Ps.15.4192 for US$1.00.

Item 3.B. Capitalization and Indebtedness Not applicable.

Item 3.C. Reasons for the Offer and Use of Proceeds Not applicable.

Item 3.D. Risk Factors You should carefully consider the risks described below in addition to the other information contained in this annual report. In addition, most, if not all, of the risks described below must be evaluated bearing in mind that our most important asset is our equity interest in Banco Galicia. Thus, a material change in Banco Galicia’s shareholders’ equity or income statement would also adversely affect our businesses and results of operations. We may also face risks and uncertainties that are not presently known to us or that we currently deem immaterial, which may impair our business. Our operations, property and customers are located in Argentina. Accordingly, the quality of our customer portfolio, loan portfolio, financial condition and results of operations depend, to a significant extent, on the macroeconomic and political conditions prevailing in Argentina. In general, the risk assumed when investing in the securities of issuers from countries such as Argentina, is higher than when investing in the securities of issuers from developed countries.

Risk Factors Relating to Argentina

The current state of the Argentine economy, together with uncertainty regarding the new government, may adversely affect our business and prospects.

Grupo Galicia’s results of operations may be affected by inflation, fluctuations in the exchange rate, modifications in interest rates, changes in the Argentine government’s policies and other political or economic developments either internationally or in Argentina that affect the country.

During the course of the last few decades, Argentina’s economy has been marked by a high degree of instability and volatility, periods of low or negative economic growth and high, fluctuating levels of inflation and devaluation. Grupo Galicia’s results of operations, the rights of holders of securities issued by Grupo Galicia and the value of such securities could be materially and adversely affected by a number of possible factors, some of which

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents include Argentina’s inability to sustain economic growth, the effects of inflation, Argentina’s ability to obtain financing, a decline in the international prices for Argentina’s main commodity exports, fluctuations in the exchange rates of other countries against which Argentina competes and the vulnerability of the Argentine economy to external shocks.

Since 2012, Argentina has gone through a period of stagflation. Figures of economic activity reflected a slowdown in domestic production, together with an increasing inflation rate at a higher pace than that noted in previous years. After the Peso devaluation with respect to the U.S. Dollar that took place in January 2014, the exchange rate between those two currencies remained relatively steady until the end of the former government’s term of office. During that period, low activity growth levels continued coexisting with a high inflation rate.

In December 2015, Mauricio Macri took office as the new president of Argentina. Since becoming president, Mr. Macri has implemented several measures, such as exchange and regulatory measures that reversed policies that had been in place prior to his administration, such as regulations related to exchange controls and other currency regulations. The impact of these measures, such as a devaluation of the Peso with respect to the U.S. Dollar of approximately 50%, as well as the impact of any measures that the Macri administration may implement in the future, is unknown and could have a material and adverse impact on the results of Banco Galicia’s operations.

No assurance can be given that additional events in the future, such as the enactment of new regulations by the Argentine government or authorities, will not occur. As a result of the foregoing, the financial position and results of operations of private sector companies in Argentina, including Grupo Galicia, the rights of the holders of securities issued by such institutions and the value thereof may be negatively and adversely impacted.

Economic conditions in Argentina may deterioriate, which may adversely impact Grupo Galicia’s business and financial condition.

A less favorable international context, a decrease in the competitiveness of the Peso as compared to foreign currencies, the low consumer confidence and low confidence from both local and foreign investors and a higher inflation rate, among other factors, may affect the development and growth of the Argentine economy and cause volatility in the local capital markets. Such events may adversely impact Grupo Galicia’s business and financial condition. Pursuant to the National Institute of Statistics and Census (the “INDEC”), the gross domestic product (the “GDP”) in Argentina, in real terms, decreased 1.0%, in 2012; increased 2.4% in 2013; decreased 2.5% in 2014; increased 2.6% in 2015; and decreased 2.3% in 2016. Likewise, the INDEC carried out a review of the economic growth data corresponding to the periods from 2005 to 2015. This review exhibited a 20% difference between current measurements and those conducted by the prior administration.

In particular, the Argentine economy continues to be vulnerable to several factors, including: • a high rate of public spending; • a high inflation rates; • the regulatory framework for various economic activities are under review and remain uncertain; • economic recovery has depended on the high prices of commodities, which prices are volatile and beyond the control of the government. • a more restrictive monetary policy of the United States could generate an increase in financial costs for Argentina.

No assurance can be provided that a decline in economic growth or certain economic instability will not occur. Any such stagnation or slowdown or increased economic and political instability could have a significant adverse effect on Grupo Galicia’s business, financial position and results of operations and the trading price for its ADSs.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The impact of the presidential and congressional elections held in October 2015 and the mid-term elections to be held in October 2017 on the future economic and political environment of Argentina is uncertain.

Presidential and congressional elections in Argentina took place on October 25, 2015, and a runoff election (or “ballotage”) between the two leading presidential candidates was held on November 22, 2015, which resulted in Mr. Mauricio Macri being elected President of Argentina. The Macri administration assumed office on December 10, 2015.

Since assuming office, the Macri administration has announced and implemented several significant economic and policy reforms, including reforms related to the National Statistics Institute (Instituto Nacional de Estadísticas y Censos or “INDEC”), the foreign exchange market (see “Foreign Exchange Rates and Exchange Controls”), foreign trade, fiscal deficit reduction, the correction of certain monetary imbalances and the energy crisis, among other reforms.

The Macri administration does not have a majority of seats in the Argentine Congress and it may therefore be difficult to implement some of the aforementioned measures unless President Macri obtains support from the opposition party. This creates further uncertainty as to whether the Macri administration will be able to pass further reform measures. The political uncertainty surrounding potential economic reform could lead to volatility in the market prices of securities of Argentine companies.

The fiscal, monetary and currency adjustments undertaken by the Macri administration may result in slower short-term economic growth while seeking to guide the economy toward a sustained path for growth in the medium-term. Immediately after the foreign exchange controls were lifted on December 16, 2015, the dismantling of the multiple exchange regime resulted in the official Peso exchange rate (available only for certain types of transactions) falling in value by 40.1%, and the Peso-U.S. Dollar exchange rate fell to Ps.13.76 to US$1.00 on December 17, 2015. The Argentine Central Bank has since allowed the Peso to float with limited intervention intended to ensure the orderly operation of the foreign exchange market. On April 4, 2017, the Peso-U.S. Dollar exchange rate was Ps.15.38 to US$1.00. There can be no assurance as to the short- or long-term effects of these policies on the exchange rate or the Argentine economy as a whole.

The impact that these measures and any future measures taken by the new administration will have on the Argentine economy as a whole and the financial sector in particular cannot be predicted. Economic liberalization may be disruptive to the economy and may fail to benefit, or may harm, our business. In particular, Grupo Galicia has no control over the implementation of the reforms to the regulatory framework that governs its operations and cannot guarantee that these reforms will be implemented or that they will be implemented in a manner that will benefit its business. The failure of these measures to achieve their intended goals could adversely affect the Argentine economy and Grupo Galicia’s business, financial position and results of operations and the trading price for its ADSs.

If the high levels of inflation continue, the Argentine economy and Grupo Galicia’s financial position and business could be adversely affected.

Since 2007, the Argentine economy has experienced high levels of inflation. According to private estimates, as figures published by the INDEC were not reliable, inflation rates increased from levels of around 10% in 2005 and 2006 to a level above 20% during the following years, and reached a rate of 42.3% in 2014, decreasing to 27.2% in 2015, mainly due to the slowdown in economic activity in Argentina and to the overvaluation of the Peso, and increasing again to around 40% in 2016, primarily as a consequence of the adjustments made by the government to fix certain macroeconomic imbalances, such as the dismantling of the multiple exchange regime and eliminating certain subsidies. Additional measures implemented by the Macri administration with respect to increases in the rates for public services are expected result in a further reduction of inflation rates in 2017. In the past, inflation has materially undermined the Argentine economy and the Argentine government’s ability to generate conditions that fostered economic growth. In addition, high inflation or a high level of volatility with respect to the same may materially and adversely affect the business volume of the financial system and prevent the growth of financial intermediation activity. This, in turn, could adversely affect economic activity and employment.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In addition to the above, the accuracy of INDEC’s calculation of the CPI in Greater Buenos Aires (IPC-GBA), according to which inflation was calculated, has been questioned. In particular, concerns were historically voiced that the actual consumer and wholesale price indices may be significantly higher than those that were indicated by INDEC. In order to address these concerns, the Macri administration has implemented various personnel changes at the INDEC. The new individuals in charge have discontinued use of most previously-used indices in order to review the same and, potentially, to establish new, more accurate and reliable indices. There is currently uncertainty regarding what other future measures the INDEC may adopt and the impact that such measures may have on the relationship between Argentina and the IMF and the results of operations of Grupo Galicia.

A high inflation rate also affects Argentina’s competitiveness abroad, as well as real salaries, employment rates, consumption rates and interest rates. A high level of uncertainty with regard to these economic variables, and lack of stability in terms of inflation, could lead to shortened contractual terms and affect the ability to plan and make decisions. This may have a negative impact on economic activity and on the income of consumers and their purchasing power, all of which could materially and adversely affect Grupo Galicia’s financial position, results of operations and business and the trading price for its ADSs.

Argentina’s and Argentine companies’ ability to obtain financing and to attract direct foreign investment is limited and may adversely affect Grupo Galicia’s financial position, results of operations and business.

Argentina and Argentine companies have had limited access to foreign financing in recent years, primarily as a result of a default in December 2001 by Argentina on its debt to foreign bondholders, multilateral financial institutions and other financial institutions. Argentina settled all of its outstanding debt with the IMF in 2006, carried out a variety of debt swaps with certain bondholders between 2004 and 2010, and reached an agreement with the Paris Club in 2014. After several years of litigation, on March 1, 2016, an agreement was reached between the Argentine government and certain creditors to which the Argentine government was previously in default. This agreement consisted of a payment in cash of approximately US$ 4.7 billion to the NML, Aurelius, Barcebridge and Davidson Kempner funds.

On April 18, 2016, in order to make the payment to said funds and to other bondholders in similar conditions, Argentina issued bonds in an amount of US$16.5 billion, with interest rates between 6.25% and 7.62% and maturities of 3, 5, 10 and 30 years. The payment of approximately US$9.3 billion to the bondholders was made on April 22, 2016, thus reaching a final solution to the Argentine debt in default.

Despite this settlement, the government may still have or could again have limited access to financing that it would use to stimulate growth and implement reforms, and the financing that is available may only be available with onerous terms (such as high interest rates and shortened availability periods), which could have a significant adverse effect on Argentina’s economy and on Argentine companies or Grupo Galicia’s ability to obtain international financing, and could also adversely affect local credit conditions.

A decline in the international prices of Argentina’s main commodity exports and an additional real appreciation of the Peso against the U.S. Dollar could affect the Argentine economy and create new pressures on the foreign exchange market, and have a material adverse effect on Grupo Galicia’s financial condition, prospects and operating results.

Commodity exports, which represented approximately 35% of Argentine exports in 2016, have contributed to an increase in exports by Argentina since the third quarter of 2002, and have historically contributed to Argentina’s recovery from prior crises. High prices for commodities have contributed to the increase in exports by Argentina during the last decade, and have also contributed to increase tax revenues for the Argentine government, mainly from export taxes (withholdings). However, this reliance on the export of certain commodities, such as soy, has made the country more vulnerable to fluctuations in their prices. A decrease in commodity prices may adversely affect the Argentine government’s fiscal revenues and the Argentine economy as a whole.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents A significant increase in the real appreciation of the Peso could affect Argentina’s competitiveness, substantially affecting exports, and this in turn could prompt new recessionary pressures on the country’s economy and a new imbalance in the foreign exchange market, which could lead to a high degree of volatility in the exchange rate. More importantly, in the short term, a significant appreciation of the real exchange rate could substantially reduce Argentine public sector’s tax revenues in real terms, given the strong reliance on taxes on exports (withholdings). The occurrence of the foregoing could lead to higher inflation and potentially materially and adversely affect the Argentine economy, as well as Grupo Galicia’s financial condition and operating results and, thus, the trading prices for its ADSs.

Volatility in the regulatory framework could have a material and adverse effect on Argentina’s economy in general, and on Grupo Galicia’s financial position, specifically.

From time to time the Argentine government has enacted several laws amending the regulatory framework governing a number of different activities as a measure to stimulate the economy, some of which have had adverse effects on Grupo Galicia’s business. As an example in 2012, the Argentine Central Bank passed a number of regulations that require financial entities, including Banco Galicia, to provide loans with interest rates that are below the then-prevailing market interest rates and in 2014, the Argentine Central Bank passed new regulations limiting the interest rates and fees that can be charged by financial entities for certain types of loans to individuals. Although the current administration has eliminated some of these regulations, political and social pressures could inhibit the Argentine government’s implementation of policies designed to generate growth and enhance consumer and investor confidence.

No assurance can be provided that future regulations, and especially those related to the financial system, will not materially and adversely affect the assets, revenues and operating income of private sector companies, including Grupo Galicia, the rights of holders of securities issued by those entities, or the value of those securities. The lack of regulatory foresight could impose significant limitations on activities of the financial system and Grupo Galicia’s business, and would generate uncertainty regarding its future financial position and result of operations and trading price for its ADSs.

The Argentine economy and its goods, financial services and securities markets remain vulnerable to external factors, which could affect Argentina’s economic growth and Grupo Galicia’s prospects.

The financial and securities markets in Argentina are influenced, to varying degrees, by economic and market conditions in other countries. Although such conditions may vary from country to country, investor reactions to events occurring in one country may affect capital flows to issuers in other countries, and consequently affect the trading prices of their securities. Decreased capital inflows and lower prices in the securities market of a country may have a material adverse effect on the real economy of those countries in the form of higher interest rates and foreign exchange volatility.

During periods of uncertainty in international markets, investors generally choose to invest in high-quality assets (“flight to quality”) over emerging market assets. This has caused and could continue to cause an adverse impact on the Argentine economy and could continue to adversely affect the country’s economy in the near future.

The problems faced by the European Union’s periphery countries, resulting from a combination of factors such as low growth, fiscal woes and financial pressures, are particularly acute. Reestablishing financial and fiscal stability to offset the low or zero growth continues to pose a challenge. As a result, the leading economies of the European Union imposed emergency economic plans in such countries, which plans are still in place. During 2014, the U.S. Federal Reserve reduced its asset purchase and its monetary easing programs. Such changes started to strengthen the U.S. Dollar globally, affecting the evolution of commodity prices and lowering capital inflows to countries such as Argentina; which impacts were observed in 2015 and 2016.

Brazil, which is Argentina’s main trade partner, has experienced a decrease in GDP (which declined by 3.8% in 2015 and 3.6% in 2016) in recent years. Although Brazil’s economic outlook seems to be improving, a further deterioration of activity, a delay in Brazil’s expected economic recovery or a slower pace of economic improvement in Brazil may have a negative impact on Argentine exports and on the overall level of economic and industrial activity in Argentina, particularly with respect to the automotive industry. The international financial environment may also result in a devaluation of regional currencies and exchange rates, including the Peso, which would likely also cause volatility in Argentina.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents A new global economic and/or financial crisis or the effects of deterioration in the current international context, could affect the Argentine economy and, consequently, Grupo Galicia’s results of operations, financial condition and the trading price for its ADSs.

A potential additional devaluation of the Peso may hinder or potentially prevent Grupo Galicia from being able to honor its foreign currency denominated obligations.

If the Peso depreciated significantly against the U.S. Dollar, as has recently occurred and which could occur again in the future, it could have an adverse effect on the ability of Argentine companies to make timely payments on their debts denominated in or indexed or otherwise connected to a foreign currency, generate very high inflation rates, reduce real salaries significantly, and have an adverse effect on companies focused on the domestic market, such as public utilities and the financial industry. Such a potential devaluation could also adversely affect the Argentine government’s capacity to honor its foreign debt, with adverse consequences for Grupo Galicia’s and Banco Galicia’s businesses, which could affect Grupo Galicia’s capacity to meet obligations denominated in a foreign currency which, in turn, could have a material adverse effect on the trading prices for Grupo Galicia’s ADSs.

At the end of 2014, the exchange rate was 8.552 Pesos per U.S. Dollar, and remained relatively stable through the end of 2015. Following the removal of various restrictions on the foreign exchange market, on December 2015, the Peso devaluated 52%, reaching an exchange rate of 13.005 Pesos per U.S. Dollar as of December 31, 2015. The Peso continued to fluctuate during 2016, reaching 15.850 Pesos per U.S. Dollar as of December 31, 2016. Any further depreciation of the Peso may have an adverse impact on the business of Grupo Galicia and on the trading prices for its ADSs.

Changes or new regulations in the Argentine foreign exchange market may adversely affect the ability and the manner in which Grupo Galicia repays its obligations denominated in, indexed to or otherwise connected to a foreign currency.

Since December 2001, different government administrations have established and implemented various restrictions on foreign currency transfers (both in respect of transfer into and out of Argentina). Although the Macri administration eliminated such restrictions, Grupo Galicia cannot assure that such measures will not be implemented again in the future.

The impact that the new measures will have on the Argentine economy and Grupo Galicia’s is uncertain. No assurance can be provided that the regulations will not be amended, or that no new regulations will be enacted in the future imposing greater limitations on funds flowing into and out of the Argentine foreign exchange market. Any such new measures, as well as any additional controls and/or restrictions, could materially affect Grupo Galicia’s ability to access the international capital markets and, may undermine its ability to make payments of principal and/or interest on its obligations denominated in a foreign currency or transfer funds abroad (in total or in part) to make payments on its obligations (which could affect Grupo Galicia’s financial condition and results of operations). Therefore, Argentine resident or non-resident investors should take special notice of these regulations (and their amendments) that limit access to the foreign exchange market. In the future Grupo Galicia may be prevented from making payments in U.S. Dollars and/or making payments outside of Argentina due to the restrictions in place at that time in the foreign exchange market and/or due to the restrictions on the ability of companies to transfer funds abroad.

It may be difficult to effect service of process against Grupo Galicia’s executive officers and directors, and foreign judgments may be difficult to enforce or may be unenforceable.

Service of process upon individuals or entities which are not resident in the United States may be difficult to obtain in the United States. Grupo Galicia and substantially all of its subsidiaries are companies incorporated under the laws of Argentina. Most of their shareholders, directors, members of the Supervisory Syndics’ Committee, officers, and some specialists named herein are domiciled in Argentina and the most significant part of their assets is

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents located in Argentina. Although Grupo Galicia has an agent to receive service of process in any action against it in the United States with respect to its ADSs, none of its executive officers or directors has consented to service of process in the United States or to the jurisdiction of any United States court. As a result, it may be difficult to effect service of process against Grupo Galicia’s executive officers and directors. Additionally, under Argentine law, the enforcement of foreign judgments will only be allowed if the requirements in sections 517 to 519 of the National Code of Civil and Commercial Procedures are met or, if it is one of the powers governed by provincial law, the requirements in the applicable local code of procedure, and provided that the foreign judgment does not infringe on concepts of public policy in Argentine law, as determined by the competent courts of Argentina. An Argentine court may consider the enforcement of foreign judgments which order payments to be made pursuant to a foreign-currency denominated security, to holders outside of Argentina is contrary to the public policy of Argentina if for instance at such time there are legal restrictions in place prohibiting Argentine debtors from transferring foreign currency abroad to pay off debts.

The measures adopted by the Argentine government and the claims filed by workers on an individual basis or as part of a labor union action may lead to pressures to increase salaries or additional benefits, which would increase companies’, including Grupo Galicia’s, operating costs. Additionally, labor union activity could lead to strikes or work stoppages, which may materially and adversely affect Grupo Galicia’s results of operations.

In the past, the Argentine government has passed laws and regulations requiring private sector companies to maintain certain salary levels and provide their employees with additional work-related benefits. Furthermore, employers, both in the public sector and in the private sector, have been experiencing intense pressure from their personnel, or from the labor unions representing such personnel, demanding salary increases and certain benefits for the workers, given the prevailing high inflation rates. Labor pressure can also potentially lead to strikes or work stoppages if demands are not satisfied, which could have a material and adverse effect on Grupo Galicia’s operations.

There can be no assurance that the Argentine government will not adopt measures in the future mandating salary increases or the provision of additional employee benefits, or that employees or their unions will not exert pressure on companies, such as Grupo Galicia, in demanding the implementation of such measures. The implementation of any such measures could have a material and adverse effect on Grupo Galicia’s expenses and business, results of operations and financial condition and, thus, on the trading prices for its ADSs.

Risk Factors Relating to the Argentine Financial System

The stability of the Argentine financial system is dependent upon the ability of financial institutions, including Banco Galicia, the main subsidiary of Grupo Galicia, to maintain and increase the confidence of depositors.

The measures implemented by the Argentine government in late 2001 and early 2002, in particular the restrictions imposed on depositors to withdraw money freely from banks and the pesification and restructuring of their deposits, were strongly opposed by depositors due to the losses on their savings and undermined their confidence in the Argentine financial system and in all financial institutions operating in Argentina.

If depositors once again withdraw their money from banks in the future, there may be a substantial negative impact on the manner in which financial institutions, including Banco Galicia, conduct their business, and on their ability to operate as financial intermediaries. Loss of confidence in the international financial markets may also adversely affect the confidence of Argentine depositors in local banks.

An adverse economic situation, even if it is not related to the financial system, could trigger a massive withdrawal of capital from local banks by depositors, as an alternative to protect their assets from potential crises. Any massive withdrawal of deposits could cause liquidity issues in the financial sector and, consequently, a contraction in credit supply.

The occurrence of any of the above could have a material and adverse effect on Grupo Galicia’s expenses and business, results of operations and financial condition and, thus, on the trading prices for its ADSs.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents If financial intermediation activity volumes relative to GDP are not restored to significant levels, the capacity of financial institutions, including Banco Galicia, the main subsidiary of Grupo Galicia, to generate profits may be negatively affected.

As a result of the 2001-2002 financial crisis, the volume of financial intermediation activity dropped dramatically: private sector credit plummeted from 24% of GDP in December 2000 to 7.7% in June 2004 and total deposits as a percentage of GDP fell from 31% to 23.2% during the same period. The depth of the crisis and the effect it had on depositors’ confidence in the financial system created uncertainty as to its ability to act as an intermediary between savings and credit. Further, the ratio of total financial system’s private-sector deposits and loans to GDP remains low when compared to international levels and continues to be lower than the periods prior to the crisis, especially in the case of private-sector deposits and loans, which represented approximately 18% and 13% of GDP, respectively, at the end of 2016.

There is no assurance that financial intermediation activities will continue in a manner sufficient to reach the necessary volumes to provide financial institutions, including Banco Galicia, with sufficient capacity to generate income, or that those actions will be sufficient to prevent Argentine financial institutions, such as Banco Galicia, from having to assume excessive risks in terms of maturity mismatches. Under these circumstances, for an undetermined period of time, the scale of operations of Argentine-based financial institutions, including Banco Galicia, their business volume, the size of their assets and liabilities or their income-generation capacity could be much lower than before the crisis which may, in turn, impact the results of operations of Banco Galicia and, potentially, the trading price for Grupo Galicia’s ADSs.

The Argentine financial system’s growth and income, including that of Banco Galicia, the main subsidiary of Grupo Galicia, depend in part on the development of medium- and long-term funding sources.

In spite of the fact that the financial system’s and Banco Galicia’s deposits continue to grow, they are mostly demand or short-term time deposits and the sources of medium- and long-term funding for financial institutions are currently limited. If Argentine financial institutions, such as Banco Galicia, are unable to access adequate sources of medium and long-term funding or if they are required to pay high costs in order to obtain the same and/or if they cannot generate profits and/or maintain their current volume and/or scale of their business, this may adversely affect Grupo Galicia’s ability to honor its debts.

Argentine financial institutions (including Banco Galicia) continue to have exposure to public sector debt (including securities issued by the Argentine Central Bank) and its repayment capacity, which in periods of economic recession, may negatively affect their results of operations.

Argentine financial institutions continue to be exposed, to some extent, to the public sector debt and its repayment capacity. The Argentine government’s ability to honor its financial obligations is dependent on, among other things, its ability to establish economic policies that succeed in fostering sustainable growth and development in the long term, generating tax revenues and controlling public expenditures, which could, either partially or totally, fail to take place.

Banco Galicia’s exposure to the public sector as of December 31, 2016 was Ps. 16,153 million, representing approximately 6.7% of its total consolidated assets and 85.4% of its shareholders’ equity. Of this total, Ps.10,241 million were Argentine Central Bank debt instruments, Ps.5,079 million corresponded to Argentine government securities, while the remaining Ps.833 million corresponded to other receivables resulting from financial brokerage. As a result, Grupo Galicia’s income-generating capacity may be materially impacted, or may be particularly affected by the Argentine public sector’s repayment capacity and the performance of public sector bonds, which, in turn, is dependent on the factors referred to above. Banco Galicia’s ability to honor its financial obligations may be adversely affected by the Argentine government’s repayment capacity or its failure to meet its obligations in respect of Argentine government obligations owed to Banco Galicia.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The Consumer Protection Law may limit some of the rights afforded to Grupo Galicia and its subsidiaries.

Argentine Law No. 24,240 (the “Consumer Protection Law”) sets forth a series of rules and principles designed to protect consumers, which include Banco Galicia’s customers. The Consumer Protection Law was amended by Law No. 26,361 on March 12, 2008 to expand its applicability and the penalties associated with violations thereof. Additionally, Law No. 25,065 (as amended by Law No. 26,010 and Law No. 26,361, the “Credit Card Law”) also sets forth public policy regulations designed to protect credit card holders. On October 1, 2014, a new Civil and Commercial Code was sanctioned, which captured the principles of Consumer Protection Law and established their application to banking agreements.

On September 17, 2014, Law No. 26,993 was enacted, which created a “System to Solve Disputes in Consumer Relationships”, introducing new administrative and legal procedures within the framework of the Consumer Protection Law; namely, an administrative and a judicial regime for such matters.

The application of both the Consumer Protection Law and the Credit Card Law by administrative authorities and courts at the federal, provincial and municipal levels has increased. This trend has led to an increase in general consumer protection levels. In the event that Grupo Galicia and its subsidiaries are found to be liable for violations of any of the provisions of the Consumer Protection Law or the Credit Card Law, the potential penalties could limit some of Grupo Galicia and its subsidiaries’ rights, for example, with respect to their ability to collect payments due from services and financing provided by Grupo Galicia or its subsidiaries, and adversely affect their financial results of operations. There can be no assurance that court and administrative rulings based on the newly enacted regulation or measures adopted by the enforcement authorities will not increase the degree of protection given to its debtors and other customers in the future, or that they will not favor the claims brought by consumer groups or associations. This may prevent or hinder the collection of payments resulting from services rendered and financing granted by Grupo Galicia’s subsidiaries, which may have an adverse effect on their results and operations.

Class actions against financial institutions for an indeterminate amount may adversely affect the profitability of the financial system and of Banco Galicia, specifically.

Certain public and private organizations have initiated class actions against financial institutions in Argentina, including Banco Galicia. Class actions are contemplated in the Argentine National Constitution and the Consumer Protection Law, but their use is not regulated. The courts, however, have admitted class actions in spite of lacking specific regulations, providing some guidance with respect to the procedures for the same. These courts have admitted several complaints filed against financial institutions to defend collective interests, based on arguments that object to charges applied to certain products, applicable interest rates and the advisory services rendered in the sale of government securities, among others.

Final judgments entered against financial institutions under these class actions may affect the profitability of financial institutions in general and of Banco Galicia specifically in relation to class actions filed against Banco Galicia. For further information regarding class actions brought against Banco Galicia, please refer to the Item 8. “Accounting Information – Legal Proceedings – Banco Galicia”.

Administrative procedures filed by the tax authorities of certain provinces against financial institutions, such as Banco Galicia (the primary subsidiary of Grupo Galicia) and amendments to tax laws applicable to Grupo Galicia could generate losses for Grupo Galicia.

Buenos Aires City tax authorities, as well as certain provincial tax authorities, have initiated administrative proceedings against financial institutions in order to collect higher gross income taxes from such financial institutions beginning in 2002 and onward. Such tax authorities are alleging that the Compensatory Bond (as defined below) should be subject to taxation. The purpose of the Compensatory Bond was to compensate financial institutions for the losses they would otherwise have incurred as a result of the measures implemented to confront the 2001-2002 economic crisis, in particular, the asymmetric pesification of assets and liabilities. The final decision regarding these proceedings remains uncertain and substantial losses may be sustained by financial institutions, including Banco Galicia.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Although Banco Galicia believes it has met its tax obligations regarding current regulations and has properly recorded provisions for those risks based on the opinions and advice of its external legal advisors and pursuant to the applicable accounting standards, certain risks may render those provisions inadequate. Tax authorities may not agree with Grupo Galicia’s tax treatment, possibly leading to an increase in its tax liabilities.

Moreover, amendments to existing regulations may increase Grupo Galicia’s tax rate and a material increase in the tax burden could adversely affect its financial results.

Risk Factors Relating to Us

Grupo Galicia may be unable to repay its financial obligations due to a lack of liquidity it may suffer because of being a holding company.

Grupo Galicia, as a holding company, conducts its operations through its subsidiaries. Consequently, it does not operate or hold substantial assets, except for equity investments in its subsidiaries. Except for such assets, Grupo Galicia’s ability to invest in its business development and/or to repay obligations is subject to the funds generated by its subsidiaries and their ability to pay cash dividends. In the absence of such funds, Grupo Galicia may be forced to resort to financing options at unappealing prices, rates and conditions. Additionally, such financing could be unavailable when Grupo Galicia may need it.

Grupo Galicia’s subsidiaries are under no obligation to pay any amount to enable Grupo Galicia to carry out investment activities and/or to cancel its liabilities or to give Grupo Galicia funds for such purposes. Each of the subsidiaries is a legal entity separate from Grupo Galicia, and due to certain circumstances, legal or contractual restrictions, as well as to the subsidiaries’ financial condition and operating requirements, Grupo Galicia’s ability to receive dividends and its ability to develop its business and/or to comply with payment obligations could be limited. Under certain regulations, Banco Galicia has restrictions relating to dividend distributions.

Notwithstanding the fact that the repayment of such obligations could be afforded by Grupo Galicia through other means, such as bank loans or new issues in the capital market, investors should take notice of the above, prior to deciding on their investment in equity in Grupo Galicia. For further information on dividend distribution restrictions, see Item 5.B. “Financial Review and Prospects – Liquidity and Capital Resources”.

Corporate governance standards and disclosure policies that govern companies listing their shares pursuant to the public offering system in Argentina may differ from those regulating highly developed capital markets, such as the U.S. As a foreign private issuer, Grupo Galicia applies disclosure policies and requirements that differ from those governing U.S. domestic registrants.

Argentine disclosure requirements are more limited than those in the United States and differ in important respects. As a foreign private issuer, Grupo Galicia is subject to different disclosure policies and other requirements than a domestic U.S. registrant. For example, as a foreign private issuer in the U.S., Grupo Galicia is not subject to the same requirements and disclosure policies as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue financial statements, report on significant events and the standards applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants.

In addition, although Argentine laws provide for certain requirements that are similar to those prevailing in the U.S. in relation to publicly listed companies (including, for example, those related to price manipulation), in general, applicable Argentine laws are different to those in the U.S. and in certain aspects may provide different or fewer protections or remedies as compared to U.S. laws. Further, Grupo Galicia relies on exemptions from certain Nasdaq rules that are applicable to domestic companies. Accordingly, the corporate information available about Grupo Galicia is not the same as, and may be more limited than, the information available to shareholders of a U.S. company.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Adverse conditions in the credit, capital and foreign exchange markets may have a material adverse effect on Grupo Galicia’s financial position and results of operations and adversely impact it by limiting its ability to access funding sources.

Grupo Galicia may sustain losses relating to its investments in fixed- or variable-income securities on the exchange market and its monetary position due to, among other reasons, changes in market prices, defaults and fluctuations in interest rates and in exchange rates. A deterioration in the capital markets may cause Grupo Galicia to record net losses due to a decrease in the value of its investment portfolios, in addition to losses caused by the volatility in financial market prices, even if the economy overall is not affected. Any of these losses could have an adverse effect on Grupo Galicia’s results of operations.

Grupo Galicia’s subsidiaries estimate and establish reserves for potential credit risk or future credit losses, which may be inadequate or insufficient, and which may, in turn, materially and adversely affect its financial position and results of operations.

Grupo Galicia’s subsidiaries estimate and establish reserves for potential credit risk and losses related to changes in the levels of income of debtors/borrowers, increased rates of inflation, increased levels of non-performing loans or an increase in interest rates. This process requires a complex and subjective analysis, including economic projections and assumptions regarding the ability of debtors to repay their loans.

Therefore, if in the future Grupo Galicia’s subsidiaries are unable to effectively control the level of quality of their loan portfolio, if loan loss reserves are inadequate to cover future losses, or if they are required to increase their loan loss reserves due to an increase in the amount of their non-performing loans, the financial position and the results of operations of Grupo Galicia’s subsidiaries may be materially and adversely affected.

If Grupo Galicia’s subsidiaries should fail to detect money laundering and other illegal or inappropriate activities in a comprehensive or timely manner, the business interests and reputation of Grupo Galicia may be harmed.

Grupo Galicia’s subsidiaries must be in compliance with all applicable laws against money laundering, funding of terrorist activities and other regulations. These laws and regulations require, among other things, that Grupo Galicia’s subsidiaries adopt and implement control policies and procedures which involve “know your customer” principles that comply with the applicable regulations, and reporting suspicious or unusual transactions to the applicable regulatory authorities. While Grupo Galicia’s subsidiaries have adopted policies and procedures intended to detect and prevent the use of their networks for money laundering activities and by terrorists, terrorist organizations and other types of organizations, those policies and procedures may fail to fully eliminate the risk that Grupo Galicia’s subsidiaries have been or are currently being used by other parties, without their knowledge, to engage in activities related to money laundering or other illegal activities. To the extent that Grupo Galicia’s subsidiaries have not detected or do not detect those illegal activities, the relevant governmental agencies to which they report have the power and authority to impose fines and other penalties on Grupo Galicia’s subsidiaries. In addition, their business and reputation could be adversely affected if customers use it for money laundering activities or other illegal activities.

A disruption or failure in Grupo Galicia’s information technology system could adversely affect its operations and financial position.

The success of Grupo Galicia’s subsidiaries is dependent upon the efficient and uninterrupted operation of their communications and computer hardware systems, including those systems related to the operation of their ATM networks. Grupo Galicia’s communications, systems or transactions could be harmed or disrupted by fire, floods, power failures, defective telecommunications, computer viruses, electronic or physical theft and similar events or disruptions. Any of the foregoing events may cause disruptions in Grupo Galicia’s systems, delays and the loss of critical data, and could prevent it from operating at optimal levels. In addition, the contingency plans in place may not be sufficient to cover all those events and, therefore, this may mean that the applicable insurance coverage is limited or inadequate, preventing Banco Galicia from receiving full compensation for the losses sustained as a result of such a global disruption. If any of these events occur, it could damage the reputation, entail serious costs and affect Grupo Galicia’s transactions, as well as its results of operations and financial position.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents An increase in cybersecurity breaches or fraudulent and other illegal activity involving Grupo Galicia or its subsidiaries could lead to reputational damage to Grupo Galicia’s (or its subsidiaries’) brands and could reduce the use and acceptance of its and its subsdiaries’ products.

The business of many of Grupo Galicia’s subsidiaries depends on the efficient and uninterrupted operation of its data processing systems, its platforms for the exchange of information and its digital networks. Many of Grupo Galicia’s subsidiaries have has access to a large amount of confidential information about their respective clients. Therefore, cybersecurity breaches represent a potential risk for Grupo Galicia. Cybersecurity breaches that result in, for example, identity theft, phishing schemes or the theft of personal and confidential information could negatively affect the security of information that is stored and transmitted through the information systems and network infrastructure of Grupo Galicia and could cause existing and potential clients to refrain from conducting business with the subsidiaries of Grupo Galicia. Grupo Galicia cannot provide any assurance that the systems are invulnerable to cybersecurity breaches or that its existing security measures will be successful in protecting against any such breach. If any of the above described events were to occur, it could lead to reputational damage to Grupo Galicia’s brands, which could reduce the use and acceptance of its products, or to greater regulation, which could increase its compliance costs, all of which could materially adversely affect its business and results of operation and the trading price for its ADSs.

Fluctuations in the value of the Peso could adversely affect Argentine economic growth and Argentina’s international reserves and the financial situation of the Grupo Galicia and its subsidiaries.

The devaluation of the Peso could have a negative impact on the ability of certain Argentine businesses to make timely payments on their foreign currency-denominated debt, could cause inflation, could cause a significant reduction in salaries in real terms, could put at risk the financial stability of companies, such as certain subsidiaries of Grupo Galicia, whose success depends on internal market demand and could also adversely affect the ability of the Argentine government to pay its foreign currency-denominated debt. The Peso depreciated vis-à-vis the Dollar by almost 30% in 2013 and 2014. In 2015, the Peso depreciated approximately 52% as compared to the Dollar, which included a 10% depreciation between January 1, 2015 and September 30, 2015 and a 38% devaluation during the final quarter of the year, the majority of which was concentrated in the period after December 16, 2015 once the government of Macri assumed control of the exchange rate put in place by the prior government. In 2016, the Peso lost approximately 21% of its value as compared to the Dollar. The selling exchange rate published by Banco Nación as of March 28, 2017 was Ps. 15.80 per US$1.00.

From time to time, the Central Bank may intervene in the foreign exchange market to influence exchange rates. Purchases of Pesos by the Central Bank could cause a decrease in the international reserves of the Central Bank. A significant decrease in the Central Bank’s international reserves may have an adverse impact on Argentina’s ability to withstand external shocks to the economy, and any adverse effects to the Argentine economy could, in turn, adversely affect the financial position and business of Grupo Galicia and its subsidiaries.

Further, a significant depreciation of the Peso would, among other things, increase the cost of servicing the certain of Grupo Galicia’s subsidiares’ foreign currency denominated debt. Either a significant depreciation or appreciation could have a material adverse effect on the Argentine economy and Grupo Galicia’s financial condition and results of operations.

Shortages in the availability of energy in Argentina could adversely affect the Argentine economy and hence the operation and business of Grupo Galicia and its subsidiaries.

The various economic crisis in the past in Argentina and the fixing of the tariff rates in the electricity sector, have provoked a significant lack of infrastructure and business investment for the supply and transportation of natural gas and electricity. At the same time, the demand for the natural gas and electricity in Argentina has increased considerably due to the improving economic conditions in the country and the low cost of such services. To address such increase in demand, Argentina has needed to import natural gas from other countries. The Central Bank’s reserves have been frequently used by the government to pay for such imports. If the government is unable to pay to import natural gas to cover the energy deficit, the Argentine economy may suffer and Argentine businesses may be adversely affected.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Several measures have been adopted by the government in order to lessen the short term impact of the lack of energy for residential and industrial users. If these measures are not sufficient, or if the relevant investments are not timely made, the Argentine economy could be seriously affected, producing a negative impact on local business.

Since 2015, as a first step, tariff increases were implemented and subsidies to industries and to high income consumers were reduced. In February 2016, the government implemented various increases in tariffs and reductions in subsidies for gas and electricity users.

On August 18, 2016, the Supreme Court suspended the gas tariff increases for residential users and ordered public hearings in respect of such increases. The Argentine government, complying with this ruling, conducted public hearings on the matter in September 2016. During such hearings, the Secretary of Energy ratified the government’s plan to maintain such increases and to further increase the same. In October 2016, resolution No. 212 – E/2016 established the new gas tariffs with an average increase of 200% for residential consumers and of 277% for most merchants, small and medium companies.

On September 27, 2016, Federal Judge No. 3 of the Province of Cordoba suspended for the whole country the increase of gas tariffs for merchants, small and medium companies and ordered the imposition of the tariff regime in place on March 31, 2016 until December 27, 2016. Such resolution was appealed by the Argentine government. On September 6, 2016, the Supreme Court ruled in favor of increasing the electricity tariffs in the Province of Buenos Aires.

As a consequence of the above, the cost of energy has increased significantly in recent years, which increase may have an adverse effect on the Argentine economy and Grupo Galicia’s financial condition and results of operations.

The high levels of public spending in Argentina could generate long lasting adverse consequences for the Argentine economy.

During recent years, the Argentine government has substantially increased the levels of its public spending. In 2015, the spending of the public sector increased by 34.5% as compared to the prior year, and the government announced a primary fiscal deficit equal to 5.5% of GDP. In 2016, the spending of the public sector increased by 38.2% as compared to the prior year, and the government announced a primary fiscal deficit equal to 4.6% of GDP . If spending continues to outpace revenue, the fiscal deficit is likely to increase and past sources to address such deficit, such as the Central Bank and the National Administrator of Pensions may be utilized.

Any such increasing deficit could have a negative effect on the government’s ability to access to the long term financial markets, and in turn, could limit the access to such markets for Argentine companies, such as Grupo Galicia and its subsidiaries. The same may have a material and adverse effect on Grupo Galicia’s financial condition and results of operations.

Failure to adequately address actual and perceived risks arising from institutional deterioration and corruption could adversely affect Argentina’s economy and financial position and the ability of Argentine companies to attract foreign investment.

The lack of a solid institutional framework and corruption have been identified as serious problems for Argentina, and may continue to be. In the Transparency International’s Corruption Perceptions Index 2016, which measures corruption in 176 countries, Argentina ranked No. 95. In the World Bank’s “Doing Business” report in 2016, Argentina Ranked No. 121 among 189 countries, having ranked No. 124 in 2015. The failure to address these issues could increase the risk of political instability, distort the decision- making process, adversely affect Argentina’s international reputation and its ability and the ability of its companies to attract foreign investment. Although the Macri administration has announced several measures aimed at strengthening Argentina’s institutions and reducing corruption, the Argentine government’s ability to implement these initiatives is uncertain as it would require the involvement of the judiciary branch, which is independent, as well as legislative support from opposition parties and there can be no assurances that the implementation of such measures will be successful. A deterioration in the Argentine economy could have a material and adverse effect on Grupo Galicia’s financial condition and results of operations.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Item 4. Information on the Company History and Development of the Company Our legal name is Grupo Financiero Galicia S.A. We are a financial services holding company that was incorporated on September 14, 1999, as a sociedad anónima (which is a stock corporation) under the laws of Argentina. As a holding company we do not have operations of our own and conduct our business through our subsidiaries. Banco Galicia is our main subsidiary and one of Argentina’s largest full-service banks. Through the operating subsidiaries of Tarjetas Regionales (of which Banco Galicia owns 77%), a holding company controlled by Banco Galicia, and CFA, whose potential sale is currently the subject to the approval of local and regulatory authorities (of which Banco Galicia owns 97% and Grupo Financiero Galicia owns 3%), we provide proprietary brand credit cards throughout the “Interior” of the country and consumer finance services throughout Argentina. Argentines refer to the Interior as all of Argentina except for the Buenos Aires, the federal capital, and the areas surrounding the city of Buenos Aires (“Greater Buenos Aires”), i.e., the provinces, including the Buenos Aires Province but excluding the city of Buenos Aires and its surroundings. Through Sudamericana and its subsidiaries we provide insurance products in Argentina. We directly or indirectly own other companies providing financial related products as explained herein. We are one of Argentina’s largest financial services groups with consolidated assets of Ps.242,251 million as of December 31, 2016.

Our goal is to consolidate our position as one of Argentina’s leading comprehensive financial services providers while continuing to strengthen Banco Galicia’s position as one of Argentina’s leading banks. We seek to broaden and complement the operations and businesses of Banco Galicia, through holdings in companies and undertakings whose objectives are related to and/or can produce synergies with financial activities. Our non-banking subsidiaries operate in financial and related activities in which Banco Galicia either cannot participate or in which it can participate only on a limited basis due to restrictive banking regulations.

We are domiciled in Buenos Aires, Argentina. Under our bylaws, our corporate duration is until June 30, 2100. Our duration may be extended by a resolution passed at the extraordinary shareholders’ meeting. Our principal executive offices are located at Teniente General Juan D. Perón 430, Twenty-Fifth floor, (C1038AAJ), Buenos Aires, Argentina. Our telephone number is (54-11) 4343-7528.

Our agent for service of process in the United States is CT Corporation System, presently located at 111 8th Avenue, New York, New York 10011.

Organizational Structure The following table illustrates our organizational structure as of December 31, 2016. Percentages indicate the ownership interests held.

All the companies shown in the chart are incorporated in Argentina, except for Galicia Uruguay, which is incorporated in Uruguay and which is currently not an operating financial institution.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents

History Grupo Financiero Galicia Grupo Financiero Galicia was formed on September 14, 1999 as a financial services holding company to hold all the shares of the capital stock of Banco Galicia held by members of the Escasany, Ayerza and Braun families. Its initial nominal capital amounted to 24,000 common shares, 12,516 of which were designated as class A ordinary (common) shares (the “class A shares”) and 11,484 of which were designated as class B ordinary (common) shares (the “class B shares”).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Following Grupo Financiero Galicia’s formation, the holding companies that held the shares in Banco Galicia on behalf of the Escasany, Ayerza and Braun families were merged into Grupo Financiero Galicia. Following the merger, Grupo Financiero Galicia held 46.34% of the outstanding shares of Banco Galicia. In addition, and due to the merger, Grupo Financiero Galicia’s capital increased from 24,000 to 543,000,000 common shares, 281,221,650 of which were designated as class A shares and 261,778,350 of which were designated as class B shares. Following this capital increase, all of our class A shares were held by EBA Holding S.A., an Argentine corporation that is 100% owned by our controlling shareholders, and our class B shares were held directly by our controlling shareholders in an amount equal to their ownership interests in the holding companies that were merged into Grupo Financiero Galicia.

On May 16, 2000, our shareholders held an extraordinary shareholders’ meeting during which they unanimously approved a capital increase of up to Ps.628,704,540 and the public offering and listings of our class B shares. All of the new common shares were designated as class B shares, with a par value of Ps.1. During this extraordinary shareholders’ meeting, all of our existing shareholders waived their preemptive rights. In addition, the shareholders determined that the exchange ratio for the exchange offer would be one class B share of Banco Galicia for 2.5 of our class B shares and one ADS of Banco Galicia for one of our ADSs. The exchange offer was completed in July 2000 and the resulting capital increase was of Ps.549,407,017. Upon the completion of the exchange offer, our only significant asset was our 93.23% interest in Banco Galicia.

On January 2, 2004, our shareholders held an extraordinary shareholders’ meeting during which they approved a capital increase of up to 149,000,000 preferred shares, each of them mandatorily convertible into one of our class B shares on the first anniversary of the date of issuance, to be subscribed for in up to US$100 million of face value of subordinated notes to be issued by Banco Galicia to its creditors in the restructuring of the foreign debt of its head office in Argentina (the “Head Office”) and its Cayman Branch, or cash. This capital increase was carried out in connection with the restructuring of Banco Galicia’s foreign debt. On May 13, 2004, we issued 149,000,000 preferred non-voting shares, with preference over the ordinary shares in the event of liquidation, each with a face value of Ps.1. The preferred shares were converted into class B shares on May 13, 2005. With this capital increase, our capital increased to Ps.1,241,407,017.

In August 2007, Grupo Financiero Galicia exercised its preemptive rights in Banco Galicia’s share issuance and subscribed for 93.6 million shares of Banco Galicia. The consideration paid for such shares consisted of: (i) US$102.2 million face value of notes due 2014 issued by Banco Galicia in May 2004, and (ii) cash. After the capital increase, Grupo Financiero Galicia held 94.66% of Banco Galicia’s shares, an increase from 93.60%.

In September 2013, Grupo Financiero Galicia announced that it had reached an agreement to merge Lagarcué S.A. and Theseus S.A. into Grupo Financiero Galicia. The consolidated financial statements prepared specifically for this merger were issued as of June 30, 2013 and the effective date of such merger was September 1, 2013.

This merger resulted in an increased ownership interest by Grupo Financiero Galicia in its principal subsidiary Banco Galicia of 25,454,193 class B shares of Banco Galicia representing 4.526585% of the total capital stock of Banco Galicia previously owned by Lagarcué S.A. and Theseus S.A.

Consequently, Grupo Financiero Galicia agreed to increase its capital stock by issuing 58,857,580 new class B shares representing 4.526585% of the outstanding capital stock of Grupo Financiero Galicia to be delivered to the shareholders of Lagarcué S.A. and Theseus S.A.

Additionally, Grupo Financiero Galicia, together with Banco Galicia and the shareholders of Lagarcué S.A. and Theseus S.A., signed a supplemental agreement governing operational issues and providing for the settlement and mutual withdrawal of any pending claims.

All documentation related to the merger of Lagarcué S.A. and Theseus S.A. into Grupo Financiero Galicia was approved at the extraordinary shareholders’ meeting of Grupo Financiero Galicia held on November 21, 2013, including the exchange ratio and the above mentioned capital increase of Ps.58,857,580 through the issuance of 58,857,580 class B shares, with a face value of Ps.1, one vote per share, entitled to participate in the profits of the financial year beginning on January 1, 2013.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents On December 18, 2013, the definitive merger agreement contemplating the merger of Lagarcué S.A. and Theseus S.A. into Grupo Galicia was registered in a public deed pursuant to the terms of paragraph 4 of article 83 of the Ley General de Sociedades (Law No. 19,550, as amended, the General Corporations Law or “Corporations Law”), and effective as of September 1, 2013. Therefore, 25,454,193 class B shares of Banco Galicia, representing 4.526585 % of its capital stock previously owned by Lagarcué S.A. and Theseus and S.A. were transferred to Grupo Financiero Galicia. As a result, Grupo Financiero Galicia owns 560,199,603 shares of Banco Galicia, representing 99.621742% of its capital stock and voting rights.

On February 25, 2014, the Board of Directors of Grupo Financiero Galicia resolved to offer to acquire all remaining shares of Banco Galicia owned by third parties, amounting to 2,123,962 shares, at an amount of Ps.23.22 per share, which was approved by the Comisión Nacional de Valores (the “National Securities Commission”, or the “CNV”) on April 24, 2014.

On February 27, 2014, by Resolution No. 17,300, the Board of the CNV consented to the merger of Lagarcué S.A. and Theseus S.A into Grupo Financiero Galicia and to the above mentioned increase in capital of Grupo Financiero Galicia.

In compliance with Argentine regulations, Grupo Financiero Galicia made all required communications and paid the amounts corresponding to the remaining shares of Banco Galicia held by third parties. On August 4, 2014, Grupo Financiero Galicia became the owner of 100% of the outstanding capital stock of Banco Galicia when the relevant unilateral declaration to acquire the remaining shares of Banco Galicia held by third parties recorded as a public deed pursuant to Article 95 of the Law No. 26,831 (the “Capital Markets Law”, in Spanish “Ley de Mercado de Capitales”).

On April 15, 2014, the Board of Directors approved the purchase of 95% of the capital stock of Galicia Administradora de Fondos from Banco Galicia for an amount of Ps.39 million.

On January 12, 2017, Grupo Financiero Galicia together with its main subsidiary, Banco Galicia, decided to accept an offer by Mr. Julio A. Fraomeni and Galeno Capital S.A.U. to purchase 100% of Banco Galicia’s subsidiary, Compañía Financiera Argentina S.A. This transaction is subject to the approval of the certain regulatory authorities, which approvals are still pending as of the date of this annual report.

On March 31, 2017, the Board of Directors approved the sale of its stake (58.8% of the issued and oustanding shares) in its subsidiary Tarjetas del Mar S.A. (“TDM”) to Sociedad Anónima Importadora y Exportadora de la Patagonia.–CFA also sold its stake (1.2% of the issued and outstanding shares) in TDM to Federico Braun.

The consideration received for these sales is approximately US$5 million, and Banco Galicia believes that the sale will not have a significant impact on Banco Galicia’s shareholders’ equity.

Banco Galicia Banco Galicia is a banking corporation organized as a stock corporation under Argentine law and supervised and licensed to operate as a commercial bank by the Superintendencia de Entidades Financieras y Cambiarias (Superintendency of Financial Institutions and Exchange Bureaus or the “Superintendency”).

Banco Galicia was founded in September 1905 by a group of businessmen from the Spanish community in Argentina and initiated its activities in November of that year. Two years later, in 1907, Banco Galicia’s stock was listed on the Buenos Aires Stock Exchange (“BASE”). Banco Galicia’s business and branch network increased significantly by the late 1950s and continued expanding in the following decades, after regulatory changes allowed Banco Galicia to exercise its potential and gain a reputation for innovation, thereby achieving a leading role within the domestic banking industry.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In the late 1950s, Banco Galicia launched the equity mutual fund FIMA Acciones and founded the predecessor of the asset manager Galicia Administradora de Fondos. Beginning in the late 1960s Banco Galicia began to establish an international network mainly comprised of branches in New York and in the Cayman Islands, a bank in Uruguay and several representative offices.

In order to develop automated banking in Argentina and avoid bank disintermediation (i.e., when consumers access information or goods directly rather than through intermediaries) in the provision of electronic information and fund transfer services, in 1985, Banco Galicia established, together with four other private- sector banks operating in Argentina, Banelco S.A. to operate a nationwide automated teller system, which became the largest in the country. During the same year, Banco Galicia also acquired an interest in VISA Argentina S.A., and is currently one of the largest issuers of such cards in Argentina.

During the 1990s, Banco Galicia implemented a growth and modernization strategy directed at achieving economies of scale and increasing productivity and, therefore, heavily invested in developing new businesses, acquiring new customers, widening its product offering, developing its IT and human resources capabilities, and expanding its distribution capacity. This was comprised of traditional channels (branches) and, especially, alternative channels, including new types of branches (e.g., in-store), ATMs, banking centers, phone banking and internet banking.

As part of its growth strategy, in 1995 Banco Galicia began a new expansion phase into the Interior of Argentina where high growth potential was believed to exist. Typically the Interior is underserved relative to Buenos Aires and its surroundings with respect to access to financial services, and its population tends to use fewer banking services. Between 1995 and 1999, Banco Galicia acquired equity interests in entities and formed several non-banking companies providing financial services to individuals in the Interior through the issuance of proprietary brand credit cards. See “-Regional Credit Card Companies” below. In addition, in 1997, Banco Galicia acquired a regional bank that was merged into it, with branches located mainly in Santa Fe and Córdoba, two of the wealthiest and most populous provinces.

In order to fund its strategy, during the 1990s, Banco Galicia tapped the international capital markets for both equity and debt. In June 1993, Banco Galicia carried out its initial international public offering in the United States and Europe and, as a result, listed its American Depositary Receipts (“ADRs”) on the Nasdaq Stock Market until 2000, when Banco Galicia’s shares were exchanged for our shares. In 1991, it was the first Argentine bank to issue debt in the European capital markets and, in 1994, it was the first Latin American issuer of a convertible bond. In 1996, Banco Galicia raised equity again through a local and international public offering.

In 1996, Banco Galicia entered the bank insurance business through an agreement with ITT Hartford Life Insurance Co. for the joint development of initiatives in the life insurance business. In the same year, Banco Galicia initiated its internet presence, which evolved into a full e-banking service for both companies and individuals.

At the end of 2000, Banco Galicia was the largest private-sector bank in the Argentine market with a 9.8% deposit market share.

In 2001 and 2002, Argentina experienced a severe political and financial crisis, which had a material adverse effect on the financial system and on financial businesses as a whole, including Banco Galicia, but especially on financial intermediation activity. However, during the crisis, the provision of transactional banking services was maintained. With the normalization of the Argentine economy’s situation and the subsequent growth cycle that began in mid-2002, financial activities began to expand at high rates, which translated into high growth for the financial system as a whole, including Banco Galicia. The provision of services continued to develop, even further than prior to the crisis, and financial intermediation resumed progressively.

Beginning in May 2002, Banco Galicia began to implement a series of initiatives to deal with the liquidity shortage caused by the systemic deposit run, the unavailability of funding and other adverse effects of the 2001-2002 financial crisis. Banco Galicia significantly streamlined its operations and reduced its administrative expenses and, immediately after launching such initiatives, restored its liquidity. Also, in late 2002 and early 2003, Banco Galicia closed all of its operating units abroad or began to wind them down. In addition, Banco Galicia: (i) restructured most of its commercial loan portfolio, a process that was substantially completed in 2005, (ii)

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents restructured its foreign debt, a process that began in 2002 and that was completed in May 2004, and resulted in an increase in its capitalization, and (iii) in February 2004, finalized the restructuring of its debt with the Argentine Central Bank incurred as a consequence of the 2001-2002 financial crisis.

Together with the launching of the above-mentioned initiatives, Banco Galicia began to normalize its activities, progressively restoring its customer relations and growing its business with the private sector. In 2007, Banco Galicia finalized the full repayment of its debt with the Argentine Central Bank incurred as a consequence of the 2001-2002 financial crisis. In addition, in August 2007, Banco Galicia repaid in full the notes that it had issued to restructure the debt of its New York Branch and undertook a share offering to increase its capitalization, in order to be able to support the increase in regulatory capital requirements on a bank’s exposure to the public sector and the growth of its business with the private sector.

On June 1, 2009, Banco Galicia entered into a stock purchase agreement with AIG and with AIG Consumer Finance Group Inc. for the purchase of the shares of CFA, Cobranzas y Servicios S.A. and Procesadora Regional S.A. (collectively the “CFA Group”), Argentine companies that are involved in financial and related activities.

Pursuant to Resolution No. 124, dated June 7, 2010, the Argentine Central Bank authorized the purchase of the shares of the CFA Group by Banco Galicia and Tarjetas Regionales and on August 31, 2010, through Resolution No. 299, the National Commission for the Defense of Competition (Comisión Nacional de Defensa de la Competencia) approved the transaction. The purchase of the shares of the CFA Group was completed by Banco Galicia (95%) and Tarjetas Regionales (5%) on June 24, 2010. The price to acquire the shares of these companies was Ps.334 million. This purchase was financed with Banco Galicia’s available cash, within its ordinary course of business. During the fiscal year ended December 31, 2011, the 5% interest held by Tarjetas Regionales was acquired by Grupo Financiero Galicia and Banco Galicia, which acquired 3% and 2% of such interest, respectively. Following such acquisition, Banco Galicia held a 97% interest in CFA.

On February 25, 2014, Grupo Financiero Galicia, which controlled 99.62% of the shares of Banco Galicia, resolved to issue an offer to acquire the 2,123,962 shares of Banco Galicia owned by third parties. On April 24, 2014, said transaction was approved by the CNV and on July 14, 2014, it was incorporated by the Argentine Superintendency of Corporations. Currently, 100% of the outstanding capital stock of Banco Galicia is owned by Grupo Financiero Galicia. See “-Grupo Financiero Galicia” above.

On January 12, 2017, Grupo Financiero Galicia together with its main subsidiary, Banco Galicia Compañía Financiera Argentina S.A., decided to accept an offer by Mr. Julio A. Fraomeni and Galeno Capital S.A.U. to purchase 100% of Banco Galicia’s subsidiary, Compañía Financiera Argentina S.A. This transaction is subject to the approval of the certain regulatory authorities, such as approval by the Argentine Central Bank, which approvals are still pending as of the date of this annual report.

The consideration to be paid in connection with the sale of Compañía Financiera Argentina S.A. is subject to certain adjustments, which may be affected by the timing of the closing of the transaction. It is currently estimated that the transaction will not have a significant impact on the Bank’s shareholders’ equity. See “-Compañía Financiera Argentina” below.

In addition, Banco Galicia requested to delist its shares from the BASE to become a privately held company. Banco Galicia’s quotation was suspended on April 30, 2014. On August 21, 2014, the CNV approved Banco Galicia’s request to delist its shares from the BASE.

On April 15, 2014, Banco Galicia sold its interest in Galicia Administradora de Fondos to Grupo Financiero Galicia for Ps.39 million.

During the third quarter of fiscal year 2014, Banco Galicia sold to VISA Argentina S.A., a company in which the Bank had a 15.9% equity interest, its equity investment in Banelco S.A., for Ps.40 million.

In September 2014, the Bank entered into a preliminary agreement to merge Galicia Cayman into the Bank, effective as of October 1, 2014. The Bank controlled 99.989% of the shares of Galicia Cayman and had an option to

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents purchase the remaining 0.011%, which was owned by Cobranzas y Servicios S.A. In November 2014, the Bank’s shareholders’, through an extraordinary shareholders’ meeting, exercised the above mentioned option and approved the merger and incorporation of Galicia Cayman into the Bank, effective on October 1, 2014. This transaction resulted in the dissolution without liquidation of Galicia Cayman.

In a survey conducted in 2016 by Great Place to Work®, which involved more than 87,000 employees from 115 different companies, Banco Galicia was ranked fourth among the best companies to work for with more than 1,000 employees.

Restructuring of the Foreign Debt of Banco Galicia’s Head Office in Argentina and its Cayman Branch On May 18, 2004, Banco Galicia successfully completed the restructuring of US$1,321 million of the debt of Banco Galicia’s Head Office and its Cayman Branch, consisting of bank debt (including debt with multilateral credit agencies) and bonds. This amount represented 98% of the foreign debt eligible for restructuring. As of December 31, 2014, the principal amount of old debt, the holders of which did not participate in the exchange offer was US$1 million.

Banco Galicia paid creditors who elected to participate in the cash offer and the Boden offer and issued (i) US$649 million of long-term U.S. Dollar-denominated debt instruments, of which US$465 million were Dollar-denominated notes due 2014 (referred to as the “2014 Notes”), (ii) US$400 million of medium-term Dollar-denominated debt instruments, of which US$353 million were Dollar- denominated notes due 2010 (referred to as the “2010 Notes”) and (iii) US$230 million of subordinated Dollar-denominated debt instruments, of which US$218.2 million were Dollar-denominated notes due 2019 (referred to as the “Subordinated Notes Due 2019” or the “2019 Notes”).

In January 2010, Banco Galicia paid the last amortization installment of its 2010 Notes, for a principal amount of US$34 million and in November 2010, Banco Galicia redeemed all of its 2014 Notes, for an outstanding principal amount of US$102 million.

During February 2011, Banco Galicia partially redeemed capitalized interest on its Subordinated Notes Due 2019 for US$90 million (and accrued interest thereof for US$1.4 million), which amount was capitalized between January 1, 2004 and December 31, 2010, and was originally scheduled to be paid on January 1, 2014.

In addition, in December 2011, with respect to such notes, Banco Galicia made an advance payment of interest, including both interests that capitalized from January 1, 2011 to June 30, 2011, of US$6 million, and accrued interest thereof for US$0.3 million. Such payment was originally scheduled to be made on January 1, 2014.

In January 2014, Banco Galicia paid cumulative interest accrued on these notes from July 1, 2011 to December 31, 2013 for US$29 million.

Grupo Financiero Galicia previously held a credit against Banco Galicia for a face value of US$10 million, as a result of the acquisition from third parties of subordinated loans maturing in 2019. During fiscal year 2016, Banco Galicia prepaid its Subordinated Notes due 2019 and the subordinated loans that were to mature in 2019.

Banco Galicia Uruguay S.A. and Galicia (Cayman) Ltd. In 1983, Galicia Uruguay was established as a “Casa Bancaria”, a license that granted an offshore status, as an alternative service location for Banco Galicia’s customers. In September and October 1999, the Uruguayan government’s executive branch and the Uruguayan Central Bank, respectively, approved Galicia Uruguay’s status as a full service domestic bank.

Due to the effects of the 2001-2002 financial crisis on Galicia Uruguay, in early 2002, the Central Bank of Uruguay suspended its activities and assumed control and management of Galicia Uruguay. In December 2002, Galicia Uruguay restructured its deposits into debt maturing in 2011. On June 1, 2004, Galicia Uruguay’s license to operate as a domestic commercial bank was revoked by the Central Bank of Uruguay, but it retained the license

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents from the Uruguayan government’s executive branch. Control and management of Galicia Uruguay by the Central Bank of Uruguay ended on February 22, 2007. On May 15, 2009, Galicia Uruguay made available to its clients in advance US$27 million, corresponding to the remaining balance of its restructured debt, which was initially due in September 2011. Having fulfilled its obligations, Galicia Uruguay’s shareholders resolved at a shareholders’ meeting held on June 30, 2010, to voluntarily dissolve and liquidate the company.

Furthermore, taking into consideration the financial condition and the evolution estimated in the liquidation process, shareholders decided to reduce the company’s computable capital in an amount equal to US$2.1 million through the voluntary redemption of shares, which was carried out on October 18, 2010. During 2013 and 2014, shareholders decided to carry out two new voluntary share redemptions. These redemptions were carried out for a value equal to US$2 million and US$3 million, on November 18, 2013 and September 10, 2014, respectively.

As of the date of this annual report, Galicia Uruguay was in the process of finalizing its dissolution process with the appropriate Uruguayan authorities.

Regional Credit Card Companies In the mid-1990s, Banco Galicia made the strategic decision to target the “non-account holding” individuals market, which, in Argentina, typically includes the low and medium-low income segments of the population who live in the Interior of the country, in addition to certain parts of Greater Buenos Aires. To implement this strategic decision, in 1995 Banco Galicia began investing in non- bank companies (the “Regional Credit Card Companies”) operating in certain regions of the Interior, providing financial services to individuals through the issuance of credit cards with proprietary brands and extending credit to its customers through such cards.

In 1995, Banco Galicia made the first investment in this business by acquiring a minority stake in Tarjeta Naranja S.A. (“Tarjeta Naranja”) and in 1997 increased its ownership to 80%. This company had begun operations in 1985 in the city of Córdoba, where it marketed “Tarjeta Naranja”, its proprietary brand credit card, and had enjoyed local growth.

In 1996, Banco Galicia formed Tarjetas Cuyanas S.A. (“Tarjetas Cuyanas”), to operate in the Cuyo Region (the provinces of Mendoza, San Juan and San Luis) in partnership with local businessmen. This company launched the “Nevada Card” in May 1996 in the city of Mendoza. Also in 1996, Banco Galicia formed a new company, Tarjetas del Mar, to operate in the city of Mar del Plata and its area of influence. Tarjetas del Mar began marketing the “Mira” card in March 1997.

In early 1997, Banco Galicia purchased an interest in Comfiar S.A., a consumer finance company operating in the provinces of Santa Fe and Entre Ríos, which was merged into Tarjeta Naranja in January 2004.

In 1999, Banco Galicia reorganized its participation in this business through Tarjetas Regionales, a holding company wholly owned by Banco Galicia and Galicia Cayman, which owns the shares of Tarjeta Naranja, Comfiar S.A., Tarjetas Cuyanas, and Tarjetas del Mar. In addition, between 1999 and 2000, Tarjetas Regionales acquired Tarjetas del Sur S.A., a credit card company operating in southern Argentina. In March 2001, Tarjetas del Sur S.A. merged into Tarjeta Naranja.

During 2012, the ownership interests in Tarjetas Regionales and its operating subsidiaries were modified due to the following events: • Tarjeta Naranja’s board of directors approved the merger of Tarjeta Mira S.A. (merged company) into Tarjeta Naranja (merging company). • Tarjetas Regionales carried out a capital increase that was mainly paid by the contribution of the minority shareholders’ holdings in its subsidiaries Tarjeta Naranja and Tarjetas Cuyanas. Therefore, Banco Galicia’s direct and indirect interest decreased to 77% of the capital stock and the remaining 23% is held by the shareholders who, by means of the above- mentioned contribution, became Tarjetas Regionales’ minority shareholders.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents During May 2014, an extraordinary shareholders’ meeting of Tarjetas del Mar approved a capital increase of Ps.32 million, which was fully subscribed for by Sociedad Anónima Importadora y Exportadora de la Patagonia. As a consequence, the Bank currently holds a 58.8% equity interest in Tarjetas del Mar, while CFA holds a 1.2% equity interest and Sociedad Anónima Importadora y Exportadora de la Patagonia holds the remaining 40%.

On March 31, 2017,the Board of Directors approved the sale of its stake (58.8% of the issued and oustanding shares) in its subsidiary Tarjetas del Mar S.A. (“TDM”) to Sociedad Anónima Importadora y Exportadora de la Patagonia. CFA also sold its stake (1.2% of the issued and outstanding shares) in TDM to Federico Braun.

The consideration received for these sales is approximately US$5 million, and Banco Galicia believes that the sale will not have a significant impact on Banco Galicia’s shareholders’ equity.

It is worth to mention that Sociedad Anónima Importadora y Exportadora de la Patagonia already owned 40% of the total shares of TDM.

As of December 31, 2016, Banco Galicia held 77% of Tarjetas Regionales. In turn, Tarjetas Regionales directly and indirectly held 100% of Tarjeta Naranja and 100% of Tarjetas Cuyanas.

These companies have experienced a significant expansion of their customer bases, in absolute terms and with respect to the range of customers served, number of cards issued, distribution networks and size of operations, as well as a technological upgrade and general modernization. By mid 1995, Tarjeta Naranja had approximately 200,000 cards outstanding. As of December 31, 2016, the Regional Credit Card Companies, on a consolidated basis, had approximately 10 million issued cards and were the largest proprietary brand credit card operation in Argentina.

In terms of funding, the Regional Credit Card Companies have historically used one or more of the following third party sources of financing: merchants, bond issuances, bank loans and other credit lines, financial leases and securitizations using financial trust vehicles. This diversification has allowed the Regional Credit Card Companies to maintain and expand their business without depending excessively on one single source or provider.

The business operations of the Regional Credit Card Companies are exposed to foreign exchange rate fluctuations and interest rate fluctuations; however, they mitigate the foreign exchange rate risk in respect of their business and operation through hedging transactions and try to offset their interest rate exposure with assets that bear interest at similar floating rates. In addition, the Regional Credit Card Companies have an overall liquidity policy requiring them to maintain sufficient liquidity to cover at least three months of future operations and to formulate a cash flow projection for each upcoming year. These internal policies and practices ensure adequate working capital through which the Regional Credit Card Companies protect their operations against short-term cash shortages, allowing them to focus on expanding their business and continuously better serving their clients.

In addition, Tarjeta Naranja has exported its business model to the Dominican Republic, where it commenced operations in 2007 through a joint venture with Grupo León, and to Peru, where it commenced operations in 2011 through a joint venture with Banco de Crédito del Perú. As of the end of the second quarter of 2012, Tarjeta Naranja Dominicana S.A.’s shareholders decided to sell to Banco Múltiple León S.A. (holder of the remaining 50% interest in Tarjeta Naranja Dominicana S.A.’s capital stock) Tarjeta Naranja Dominicana S.A.’s rights related to customers and to start the liquidation of the company. Later, on October 14, 2014, Tarjeta Naranja entered into the final agreement to transfer its interest in Tarjeta Naranja Perú (a joint venture), equivalent to 24% of the capital stock of such company, to Grupo Crédito S.A. for US$900,000. As December 31, 2016, the shares were transferred.

Compañía Financiera Argentina CFA is a financial company which operates under the Financial Institutions’ Law and other regulations set forth by the Argentine Central Bank.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents CFA is a leading financial company in Argentina in the personal loans business, providing consumer personal loans through different products. Within this framework, CFA grants unsecured personal loans within the Argentine territory, mainly through its “Efectivo Sí” offices, intermediary entities (mutuals, unions, cooperatives, etc.) and the financing of purchases through its affiliated merchants. It also issues credit cards on a limited scale.

CFA had different names before adopting its current name. It was originally formed under the name “Río de la Plata Sociedad Anónima Comercial y de Financiaciones” on August 16, 1960, and in 1977 the name was changed to “Burofinanz S.A. Compañía Financiera” (authorized by Resolution No. 424 of the Argentine Central Bank, dated December 29, 1977).

In 1992, CFA carried out its commercial activities under the name “Interbonos Compañía Financiera S.A.” (authorized by Resolution No. 284 of the Argentine Central Bank, dated June 17, 1992), as agent of the Mercado Abierto (fixed income brokerage), and later shifted its activities to personal financing, providing small loans through retail merchants for the acquisition of different consumer goods. In 1994, it created “Efectivo Sí”, which is a product aimed at satisfying the financial needs of the segment of the population characterized by limited interaction with traditional banks.

In 1995, Banco de Crédito Argentino acquired an interest in the company’s capital stock and later Banco de Crédito Argentino was acquired by BBVA Banco Francés S.A., which became the major shareholder of CFA. Subsequently, the “División Convenios” (Agreements Division) was created, which allowed CFA to enter the market of agreements with mutuals, unions, cooperatives and other intermediary organizations, and grant loans to its associates.

The Argentine Central Bank, through its Resolution No. 85 dated February 7, 1996, registered CFA’s change of denomination to “Compañía Financiera Argentina S.A.” and authorized it to operate as a financial company under the Financial Institutions’ Law, thus allowing CFA to initiate its activities on February 27, 1996.

In 1998, most of CFA’s capital stock was acquired by AIG Consumer Finance Group Inc., a company controlled by American International Group Inc. (AIG). Six years later, in 2004, the “Cuota Sí” product, aimed at financing purchases through affiliated merchants, was designed.

In June 2010, Compañía Financiera Argentina was acquired by Banco Galicia and Tarjetas Regionales, with an interest in CFA’s capital stock of 95% and 5%, respectively.

During fiscal year 2011, the 5% interest held by Tarjetas Regionales was acquired by Grupo Financiero Galicia and Banco Galicia, which acquired 3% and 2% of such interest, respectively. Following such acquisition, Banco Galicia held a 97% interest in CFA.

On January 12, 2017, the decision made by the shareholders of the Company, was to accept the offer to buy all the shares in Compañía Financiera Argentina S.A.(CFA) and in Cobranzas y Servicios S.A. such offer was made by Mr. Julio Alfredo Fraomeni and Galeno Capital S.A.U. The closing of the transaction is subject to the prior compliance with the conditions set out in the offer, such as the Argentine Central Bank’s approval.

The price offered is subject to certain adjustment variables, the effect of which may vary according to the time when the transaction is finally closed with its approval by the regulatory authorities. Notwithstanding the foregoing, the Group believe that the economic result of the transaction will not cause a significant impact on the Company’s shareholders’ equity.

Sudamericana Holding In 1996, Banco Galicia entered the bank insurance business, through the establishment of a joint venture with Hartford Life International to sell life insurance and annuities, in which it had a 12.5% interest. In December

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 2000, Banco Galicia sold its interest in this company and purchased 12.5% of Sudamericana, a subsidiary of Hartford Life International. As a result of various acquisitions, Grupo Financiero Galicia owns 87.5% of Sudamericana (with the remaining 12.5% being held by Banco Galicia) which offers life, retirement, property and casualty insurance products in Argentina through its subsidiaries Galicia Seguros S.A. (“Galicia Seguros”), which provides property, casualty and life insurance, Galicia Retiro Compañía de Seguros S.A. (“Galicia Retiro”), which provides retirement insurance and Galicia Broker Asesores de Seguros S.A. (“Galicia Broker”), an insurance broker

In addition, during fiscal year 2012 Galicia Seguros, together with other three insurance companies, created Nova Re Compañía Argentina de Reaseguros S.A., the goal of which is to increase the scope of offerings of reinsurance products in Argentina.

Galicia Administradora de Fondos Incorporated in 1958, Galicia Administradora de Fondos manages the FIMA family mutual funds that are distributed by Banco Galicia through its multiple channels (network of branches and home banking and investment centers, among others). The company’s team is comprised of asset management professionals whose goal is to manage the FIMA family funds in order to meet the demand of individuals, companies and institutions. The assets of each fund are distributed across a variety of assets, such as bonds, negotiable obligations, trusts, shares and deposits, among others, in line with the fund’s investment objective.

On April 15, 2014, Banco Galicia sold its 95% interest in Galicia Administradora de Fondos to Grupo Financiero Galicia.

Its shareholders are Grupo Financiero Galicia, with a 95% stake, and Galicia Valores, with the remaining 5%.

Net Investment Net Investment was established in February 2000 as a holding company (87.5% owned by Grupo Financiero Galicia and 12.5% owned by Banco Galicia) whose initial purpose was to invest in and develop businesses related to technology, communications, internet connectivity and web contents. Net Investment has performed its activities in the areas of business to business e-commerce, with the purpose of creating and exchanging synergies with Banco Galicia’s business activities.

During the 2011 fiscal year, the shareholders decided to amend the corporate purpose of Net Investment to be able to invest in additional companies in related, accessory and/or supplementary activities.

Galicia Warrants Galicia Warrants was founded in April 1993, when it obtained the authorization from the relevant authorities to store goods and issue certificates of deposits of goods and warrants under the provisions of Law No. 9,643.

Galicia Warrants is a leading company in the deposit certificates and warrants issuance market and its main customers belong to the agricultural, industrial and agro-industrial sectors, as well as exporters and retailers. Its main objective is to enable its customers to access credit and financing, which are secured by the property kept under custody. Its shareholders are Grupo Financiero Galicia, with an 87.5% stake, and Banco Galicia, with the remaining 12.5%.

Business Banking Banco Galicia, our largest subsidiary, operates in Argentina and substantially all of its customers, operations and assets are located in Argentina. Banco Galicia is a bank that provides, directly or through its subsidiaries, a wide variety of financial products and services to large corporations, small and medium-sized companies, and individuals.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia is one of Argentina’s largest full-service banks and is a leading provider of financial services in Argentina. According to information published by the Argentine Central Bank, as of December 31, 2016, Banco Galicia ranked second in terms of assets, deposits and loan portfolio within private-sector banks in Argentina. As of the same date, Banco Galicia also ranked first among private-sector domestic banks in terms of assets, loans and deposits. Its market share of private sector deposits and of loans to the private sector was 9.92 % and 10.12% respectively, as of the end of 2016. On a consolidated basis, as of the end of fiscal year 2016, Banco Galicia had total assets of Ps.240,058 million, total loans of Ps.137,451 million, total deposits of Ps.151,727 million, and its shareholders’ equity amounted to Ps.18,906 million.

Banco Galicia provides a full range of financial services through one of the most extensive and diversified distribution platforms amongst private-sector financial institutions in Argentina. This distribution platform, as of December 31, 2016, was comprised of 279 full service banking branches, located throughout the country, 1,872 ATMs and self-service terminals owned by Banco Galicia, phone banking and e-banking facilities. Banco Galicia’s customer base, on an unconsolidated basis, was comprised of 3.6 million customers, who were comprised of mostly individuals but who also included more than 96,000 companies. Banco Galicia has a strong competitive position in retail banking, both with respect to individuals and small- and medium-sized companies. Specifically, based on internal studies undertaken by Banco Galicia, it is estimated that Banco Galicia is one of the primary providers of financial services to individuals, one of the largest providers of credit cards, one of the primary private-sector institution serving the small- and medium-sized companies sector, and has traditionally maintained a leading position in the agriculture and livestock sectors. Banco Galicia’s primary clients are classified into two categories, the Wholesale Banking Division and the Retail Banking Division.

For a breakdown of Banco Galicia’s revenues by category of activity for the last three financial years, see Item 5.A. “Operating Results-Results by Segments-Banking.”

Wholesale Banking The Wholesale Banking division manages and builds relationships with companies from all economic sectors and supports its business model by being closely related to its corporate customers, providing dedicated and focused services.

Large Corporations Banking Most of the Large Corporations Banking segment is comprised of companies and/or economic groups with annual revenues of over Ps.700 million, multinational companies and listed companies.

During fiscal year 2016, Banco Galicia maintained its leading position in the Large Corporations Banking segment, serving both local and multinational companies and increasing customer acquisition rates.

Demand for longer term credit began to increase in fiscal year 2016, and Banco Galicia participated in several large transactions, which doubled its loan portfolio and also doubled the volume of payment/collection transactions as compared to fiscal year 2015.

These results were further strengthened by the implementation of a customer-oriented business model, driven by a strong focus on customer-oriented product consulting designed to maximize customer satisfaction and take advantage of increasing demand.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Companies The Companies segment of Wholesale Banking division continued to grow in fiscal year 2016. The Companies segment’s mission is to develop business based on three mainstays: proximity to client, client response times and benefits provided to clients.

This segment is comprised of Argentine companies in various economic sectors (except for agriculture), whose annual revenues range from Ps. 100 million to Ps. 1 billion. There are a total of 22 corporate banking centers throughout Argentina. These centers are strategically located through the country, and employ a professional team of business executives that specialize in foreign trade and treasury solutions. These centers work with our national branches in order to provide the best experience for our customers.

The Companies segment utilizes a business approach that focuses on obtaining insight into its customers’ business needs, which allows Banco Galicia to offer targeted products based on meeting its customers’ demand for specific products. During fiscal year 2016, the segment focused on improving customer service, both in its call centers and by its tellers.

The Companies segment has also targeted an increase in customer loyalty by organizing 50 events throughout Argentina. These events were designed to provide customers with updates on, among other topics, politics and the economy, foreign trade regulations and training courses in collections and payments, and human resource training.

Agricultural and Livestock Sector Tarjeta Galicia Rural holds approximately 34% of the market share of credit-card related transactions in the agricultural sector, with a sales volume of more than Ps. 6.6 billion. More than 80 interest-free agreements with leading agricultural and livestock sector companies remained in force in fiscal year 2016.

Noteworthy among the business activities carried out in the sector during fiscal year 2016 were multiple offers to finance agricultural campaigns, including structuring of loans to best suit each producer’s needs, the financing of capital goods, such as agricultural machinery, vehicles and other investments in production tools, and the investment in the purchase and retention of female breeding stock for the growth of breeder herds through the Credit Line for Production and Financial Inclusion.

Crop loan funding in foreign currency returned in fiscal year 2016. To adapt to new market conditions, the segment launched new financial solutions, including the Tarjeta Galicia Rural + Dólares and the Tarjeta Galicia Rural Bodegas, credit cards which can be used to finance winegrowing related activities. The improved economic environment in the sector enabled the segment to offer a wide range of long-term loans for investment projects, with an emphasis on renewable and efficient energy, in addition to the possibility of settling leasing and collateral loan transactions in U.S. Dollars, thereby cementing the positive trend towards providing long term financing.

During fiscal year 2016, the fourteenth edition of the Excelencia Agropecuaria La Nación Award (La Nación-’s Agricultural Excellence Award), was awarded to Banco Galicia, and the Revista Chacra a la Gestión Solidaria del Campo Award (Chacra Magazine’s Rural Solidarity Award) and the CAPA Award for agricultural journalism were also both awarded to Banco Galicia.

As in prior fiscal years, Banco Galicia supported the research and outreach activities of Universidad Austral. The Bank also continued supporting the activities of the Fundación Producir Conservando, the activities of the Agronomy School of the University of Buenos Aires, and continued supporting the work of Asociación Argentina de Productores en Siembra Directa (Argentine Association of No-till Farming), as well as different activities promoted by Consorcios Regionales de Experimentación Agrícola (Agricultural Experimentation Regional Consortiums) and the Líderes (Leaders) training program. Banco Galicia also continued to actively participate in the advisory council of Confederaciones Rurales Argentinas (CRA) (Argentine Rural Confederations) and regional confederations, as well as to support rural societies in the interior of the country. It also cooperated with Sociedad Rural Argentina (SRA) on its 150th anniversary, and provided support to the training program for agricultural

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents leaders of the Centro de Estudios e Investigación para la Dirigencia Agroindustrial (Study and Research Center for Agro-industry Management), in which Banco Galicia’s employees take part annually. Banco Galicia also maintained an active presence on the board of the Asociación Argentina del Girasol (Argentine Sunflower Association), the association of sunflower farmers, as well as cooperated with other associations for Argentina’s primary agricultural crops.

Foreign Trade During fiscal year 2016, foreign trade volume (imports plus exports) amounted to US$14,994 million, which accounted for 12% of the Argentine trade balance. Out of the total foreign transactions, 67% were carried out through Office Banking, Banco Galicia’s corporate e-banking service. Galicia Comex, Banco Galicia’s specialized website for conducting foreign trade transactions, continued its growth, remaining a valuable market reference point.

A series of significant regulatory changes were introduced throughout fiscal year 2016, which enabled the Bank to develop training workshops allowing for the active participation of attendees, including discussions on practical case studies. Fifteen workshops were organized in different locations throughout the country with more than 800 attendees.

The Bank continued its Foreign Trade Project in fiscal year 2016. Such project is currently expected to conclude in the first quarter of 2019. Through this world-class project, Banco Galicia is replacing the technological systems that it currently uses to direct, process and manage foreign trade transactions, and is introducing and updating office banking functionalities for customers.

Capital Markets and Investment Banking Banco Galicia’s capital markets activity is focused on corporate debt transactions and, to a lesser extent, on mergers and acquisitions and securitization transactions.

In fiscal year 2016, Banco Galicia continued to provide capital market advice and investment banking services to a variety of companies. During fiscal year 2016, the Bank organized and structured a number of transactions, including syndicated and structured loans and debt issuances, and provided advice on mergers and acquisitions, notes, short-term securities, bills and financial trusts.

Among the largest Peso-denominated transactions in which Banco Galicia participated were issuances by companies in the automotive industry, such as Fiat, Toyota and Mercedes Benz, in an aggregate amount of more than Ps. 1,000 million; companies related to Grupo Financiero Galicia, such as Tarjeta Naranja, Tarjetas Cuyanas, and CFA in an aggregate amount of more than Ps. 5,600 million; government bonds, such as those issued by the City of Buenos Aires, the Province of Buenos Aires and the Province of Neuquén, in an aggregate amount of more than Ps. 6,600 million; and debt issued by companies in the financial sector, such as Banco BICE, Banco Hipotecario, Bacs Payment Schemes Limited and Banco de la Provincia de Buenos Aires in an aggregate amount of more than Ps. 4,400 million.

Among the largest U.S. Dollar-denominated transactions in which Banco Galicia participated are issuances by Yacimientos Petrolíferos Fiscales (YPF), John Deere Ltd. and Inversiones y Representaciones Sociedad Anónima, in an aggregate amount of more than US$ 400 million.

Wholesale Banking The Wholesale Banking division manages and builds relationships with companies from all economic sectors and supports its business model by being closely linked to its corporate customers, providing dedicated and focused services to such customers.

Across Argentina, Banco Galicia has granted multiple credit lines to companies to finance needs ranging from working capital to medium- to long-term investment projects.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In fiscal year 2016, the Wholesale Banking division focused on simplifying transactional activities by directing operations to Office Banking and adjusting solutions to facilitate and streamline treasury management, regardless of company size. To this end, the Bank’s goals were focused on implementing various platform initiatives, including initiatives involving: • incentivizing customers to make time deposits via Office Banking by offering a preferential rate for such deposits, which resulted in migrating approximately 7,000 transactions with an aggregate value of approximately Ps. 4,200 million; • closing Primary Biddings (now Lebac and Letes), decreasing the use of physical branches by increasing the volume of electronic transactions, and creating a distinct customer experience; • consummating pre-scheduled purchase and redemption transactions involving Fima Mutual Funds, thereby promoting investment planning and full performance of the customer daily obligations, thus attracting more funds and increasing the number of clients who use Banco Galicia as their primary bank; and • making foreign currency exchange services available through Office Banking.

With respect to Checking accounts, the deployment of the new SAP system allowed a coordinated management of customer migration. This new tool will help swiftly and effectively manage rates by account type and by segment, perform cash pooling (centralized accounts) transactions, address offers and establish parameters by customer group based on the segment’s business strategy.

With respect to Payroll accounts, customer experience was significantly improved during 2016 and the daily management of process areas (Operations & Support) was optimized. Banco Galicia successfully deployed the first stage of the Payroll – Massive Addition Project, a significant improvement in setting up new payroll accounts, which led to a substantial reduction of complaints by companies using this service. As of December 31, 2016, more than 9,600 accounts of 1,300 companies were being processed using this new tool.

In order to streamline and facilitate the customer’s treasury management and to enhance internal efficiency, the Cobranza Integrada Galicia (Galicia Integrated Collection) service was extended to the smart self-service terminals which operate 24 hours a day, 7 days a week. Extended hours of operation resulted in increased transactions and a successful migration of teller transactions through this channel, providing customers with additional times in which they could access their accounts. e-platform Office Banking, Banco Galicia’s corporate e-banking service, provides a quick, dynamic and safe channel to manage the online accounts of corporate customers and continues to grow year after year.

During 2016, various improvements were made to Office Banking, with the goals of increasing efficiency, improving user experiences and increasing functionality. These improvements presented customers with the ability to self-manage their banking services by accessing their accounts via a personal, password-protected account, without having to visit a Banco Galicia branch. Additionally, new functionalities were added to the investment module (including time deposit management, primary biddings, sale and purchase of foreign currency, and scheduled transactions of Fima Mutual Funds). Banco Galicia also began to provide online consultation for loans in 2016.

The Office Express service was also launched in 2016. This express service was specifically developed for small and medium enterprise (“SME”) customers and provides a streamlined service that authorizes transactions through the Galicia Office Token app.

The positive effect of these initiatives resulted in an increase in transaction volumes by 67% as compared to the fiscal year ended December 31, 2015.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The number of transactions that cleared through Banco Galicia’s interbanking clearing house increased by 43% as compared to the fiscal year ended December 31, 2015. As of the end of fiscal year 2016, Banco Galicia was ranked first in terms of the number of transactions consummated through its interbanking clearing house. Additionally, the number of transactions traded through the Swift channel increased by 67% as compared to the fiscal year ended December 31, 2015. Furthermore, additional functionalities were added, including the possibility to automatically make payments to the Administración Federal de Ingresos Publicos (“AFIP”).

Retail Banking The Retail Banking Division manages Banco Galicia’s business with individuals from all income brackets, micro and smaller businesses (i.e., those businesses with annual revenues below Ps.120 million) and small retailers and professionals. Retail Banking provides a wide range of financial products and services, encompassing transactions, loans, and investments. On the transactions side, Banco Galicia offers its customers checking and savings accounts, credit and debit cards, and payroll direct deposit, among other services. Banco Galicia’s customers have access to its services through its branch network as well as through its electronic distribution channels. See “-Sales and Marketing.”

The Retail Banking Division is currently focused on (i) developing a customer-oriented culture, (ii) positioning itself as a leader in the technological transformation of the financial markets, (iii) reinforcing a multifaceted approached to customer needs in order to create a positive experience for our customers by developing a multichannel strategy designed to create the best possible customer experience, (iv) developing innovative products and services, and (v) improving each segment’s strategy in order to maintain a leading position in such segment.

The Retail Banking Division’s customer base grew 7% during 2016, reaching 2.5 million customers as of December 31, 2016.

Segments Business and SMEs The Business and SMEs segment continued to be ranked as a leader in terms of customer satisfaction, according to studies conducted by private consulting firms. The segment continued to focus on customer service in fiscal year 2016. The Business and SMEs segment’s customer base grew 10% during 2016, achieving a 32% market share as of December 31, 2016.

The most important business achievements were a 7% increase in payroll accounts and, at a credit level, the placement of the Financing Line for Production and Financial Inclusion for over Ps. 900 million in the Business and SMEs segment. The segment’s leading position in the issuance of the Visa Business card is also evidenced by the segment’s market share (based on information provided by Visa).

Good Businesses Meetings continued being carried out at the national level, with 7 meetings in the cities of Buenos Aires, Córdoba, Paraná, Mendoza, Mar del Plata, Resistencia and Tucumán. In 2016, more than 4,400 business people in the SMEs segment took part in these training sessions, and thousands of people watched via live broadcast.

Banco Galicia continued to have a strong presence at trade fairs, with business teams and stands at 17 exhibitions, which participation was used in order to reinforce customer loyalty in the Business and SMEs segment.

Banco Galicia remained a leader in customer satisfaction in fiscal year 2016. Using the Net Promoter Score (“NPS”) measurement system, Banco Galicia was ranked first in Micro-and Small-sized Companies, with an 18% and a 14% NPS Index, respectively. In the Micro-sized Companies category, Banco Galicia was 5 percentage points. above the second place company, and in the Small-sized Companies category it was 2 percentage points above the second place company.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The new Office Express service and the Galicia Office Token app were implemented in fiscal year 2016, which facilitates access to e-banking for the SMEs sector, while enhancing user experience on a digital platform. As of December 31, 2016, over 9,000 users used the app to carry out transactions.

Galicia ÉMINENT Galicia ÉMINENT is a service aimed at high-income customers. The service experienced a 28% growth rate in the number of clients in fiscal year 2016 as compared to the fiscal year ended December 31, 2015. According to surveys carried out together with other banks Galicia ÉMINENT was ranked first in terms of service as compared to other high-income services and showed a growing trend in brand recognition, while its main competitors stagnated in terms of said indicator during the same period. Galicia ÉMINENT was also ranked first in terms of customer service, with an NPS score of 41%.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The new Galicia Conecta service helped position Banco Galicia and Galicia ÉMINENT as pioneers in the new remote customer service model. Galicia Conecta increased the number customers who use Banco Galicia as their primary bank by focusing on increasing its digital profile and enhancing the customer’s experience while significantly reducing customer service costs.

A new integral marketing campaign was recently launched to allow Galicia Conecta to fully benefit from market trends and opportunities, with the goals of continuing growth, building the portfolio and enlarging its client base by providing a highly customized service tailored to the consumer. Galicia Conecta sought to renew and set itself apart from competitors by using modern, fresh and aspirational slogans while still conveying the fundamental values of trust, respect and freedom of choice.

The new campaign was based on four pillars relevant to the target audience: Quiero Viajes, the Éminent Conecta customer service, the proximity feature “Te Conozco” (I Know You), and investment advice by financial experts.

General Income In order to continue to build a customer-oriented organizational culture, General Income was managed by different subsegments, giving priority to increasing the number of customers who use Banco Galicia as their primary bank and focusing on the Prefer subsegment (consisting of middle-to upper middle-class customers), by improving product offerings (including the Platinum proposal for high income customers); and on the “MOVE” subsegment (consisting of young adults), by strengthening alliances with relevant brands.

The NPS system continued to be utilized to measure the performance of our massive points of contact and Online Banking segments in 2016. This allowed us to achieve the highest volume of client interactions in these segments as compared to other segments, to better listen to our customers’ needs and to be ranked first place in these two segments in terms of customer service as compared to other banking institutions.

The General Income segment experienced an interannual growth of 2%, improving the customer portfolio structure thanks to the development of indirect channels and an online sales channel, which, at the same time, made acquisition costs more efficient.

The Bank focused on customer activation and development in the youth segment, using targeted communications through new communications channels such as “Galicia Move” on Instagram, which launched in August 2016. The youth segment experienced accelerated growth through the online sales channel, which accounted for 36% of MOVE registrations (with the remaining MOVE registrations taking place on university campuses). The segment solidified the concept of a “bank without branches, 100% online” as a differential brand attribute. The Bank currently has over 100,000 MOVE customers and a presence at 17 universities.

Furthermore, the Bank worked on improving its efficiency by reviewing the profitability of channels and transferring transactions among channels, while taking into account the customers’ preferences or habits.

Private Banking The Private Banking division offers distinctive and professional financial services to high-net worth individuals, through the management of their investments and the provision of financial advisory services. Private Banking offers its customers a wide range of domestic financial investment alternatives, such as deposits, FIMA mutual funds, government and corporate securities, and shares and trusts where the Bank acts as an arranger.

One of the Private Banking premises, in line with the Bank’s strategy to differentiate itself from competitors through the quality of its service, is the preferential treatment of its customers. In this regard, Private Banking has highly-trained officers, an investment center that operates from 8 a.m. to 6 p.m., a wide network of Éminent officers, and exclusive areas of customer service at branches on the first floor in its headquarters.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Channels Indirect Channels In 2016, the Indirect Channels division continued to grow and to pursue its mission to develop internal and external channels to attract new customers and to efficiently market Consumer Banking products, with its main objective being to create a positive customer experience. The division is made up of the Retail Sales Unit (a sales force focused on cross-selling, attraction of customers that already use the Bank’s direct payroll deposit service and attraction of SMEs accounts), the Indirect Sales Channel Unit (focused on attracting new customers through entrance into new agreements with third parties), and the Commercial Planning for Telephone Banking Unit (focused on attracting customers and cross-selling through internal and external call centers).

Agreements and Payroll The Bank continued to grow in the area salary direct deposits in fiscal year 2016, increasing the number of customers by 1%, and the total credited salaries by 39.5%, as compared to the fiscal year ended December 31, 2015, thus further consolidating its leadership position in the market.

The Bank developed relationships with more than 30 ABC1 schools, providing products focused on all of their business needs and also reached agreements with several additional organizations and associations, including the Professional Council of Economic Sciences of the Province of Buenos Aires, opening new accounts for its members, and the Association of Pediatrics of the Province of Buenos Aires, opening accounts for their 44 affiliates and assuming their collection services.

Deposits The average balance of total retail deposits in Pesos reached Ps. 63,391 million as of December 31, 2016, with an interannual growth rate of 44%. The mix of transactional deposits and time deposits fluctuated throughout fiscal year 2016 in line with interest rate changes, and overall transactions accounted for 54% of total deposits for fiscal year 2016.

U.S. Dollar-denominated deposits grew by 431% in fiscal year 2016, reaching a total of Ps. 42,047 million as of December 31, 2016. This increase was directly driven by the Tax Amnesty Law, enacted in August 2016, which generated more than US$1,200 million in revenues.

From August 2016 to October 2016, more than 24,000 new accounts were opened due to the Tax Amnesty Law, placing the Bank at the forefront in terms of new accounts opened, while 80% of these new accounts received deposits.

The Online Banking channel increased its share of time deposits, reaching a volume of 34% of total time deposits of Banco Galicia. In addition, Office Banking offered the possibility to make time deposits online starting in June 2016, which allowed Retail SMEs to opt-in to perform such transactions via this channel.

Personal Loans The Argentine Central Bank removed interest rate caps on personal loans in the later part of 2015, which increased credit issuances in the market. Banco Galicia experienced sustained growth in the number of personal loans granted in fiscal year 2016. The Bank experienced an increase of 66 basis points in market share (the fastest market-share growth rate as compared to its competitors) and reached Ps. 8,600 million of loans outstanding as of December 31, 2016. Banco Galicia automatically granted 80% of the loans it extended in fiscal year 2016. Additionally, in line with the Retail Banking business strategy, new specialized products and services were created in the Personal Loans segment.

The Online Banking division increased its market share by 22%, with a 271% increase as compared to the fiscal year ended December 31, 2015, and was ranked second among Banco Galicia’s sales channels.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Cards and Promotions The credit and debit card business continued its strong growth during 2016, with a 42% increase in purchases as compared to 2015, and over 230 million transactions conducted during the year. The Bank’s market share in the banking payment means of payment (i.e., credit and debit card business) market was 12.2% in 2016.

During fiscal year 2016, Banco Galicia issued over 478,000 primary cards and 369,000 additional cards, totaling 4.3 million authorized cards. With approximately 5,700 business agreements, Banco Galicia provides benefits to its customers at 12,000 stores across various industries throughout the country.

Consumption amounting to Ps. 5,700 million was financed through the “AHORA 12” (NOW 12 Installments) program in fiscal year 2016.

Quiero! (I Want!) Fidelity Program Quiero!, is a program that rewards customers for using the Bank’s payment methods for purchasing products. The program continued to grow in 2016. As of December 31, 2016, Quiero! had approximately 1 million members.

The Quiero! Fidelity Program experiences greater penetration with high-income customers, who tend to spend a greater amount of money using credit cards. Also noteworthy is the program’s relatively high penetration levels with lower income customers, which we believe exists because the program provides easy access to rewards in exchange for points.

According to market research, in 2016 the Quiero! program continued to be the program with the most name recognition among consumers, both by the Bank’s own customers and those of its competitors. It was also described by such research as one of the best benefits programs in Argentina, broadly appreciated by customers who have redeemed points in exchange for rewards.

Three features of the program which were introduced in 2015 continued to grow in 2016: • The Outstanding Flights Chart, which offers customers the possibility to travel to 20 destinations domestically and internationally in exchange for points. • The Post-Purchase Savings program, which offers discounts to customers after they purchase certain goods and services. This program accounts for 20% of point redemptions. • The voucher program, which allows customers to use e-codes to exchange points for movie and theater tickets, meals, discount coupons in fast-food chains and ice-cream, and other goods and services.

The Quiero! Fidelity Program allows Banco Galicia to increase its operating efficiency by allocating resources to customers from higher-income segments as such clients receive more points as they spend more, and by mitigating the cost impact of the program on the Bank’s income statement both by increasing the customer’s usage of the card and by increasing the overall number of cardholders.

Digital Banco Galicia continued its focus on its digital transformation in fiscal year 2016, with the aim of significantly improving the customer experience in terms of speed of service, simplicity and relevance of offerings in order to fulfill its mission of being considered among the top financial institutions in Argentina.

In 2016, the Bank continued to promote the use of digital channels, and a Digital Innovation Lab (LAB) was created with the aim of adopting the best practices of Fintech companies (companies that leverage technology to offer new financial services) by developing prototypes designed to provide more value to businesses.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents A new, technologically advanced mobile application (“app”) was launched in 2016, with included a format designed to significantly improve the customer experience, which caused an increase in downloads and usage of the app. As of December 31, 2016, 300,000 customers used the app. As of December 31, 2016, 36% of Banco Galicia’s customers who use digital channels use the app. The Bank’s sales strategy for customers and potential customers in the web and mobile environment was further developed in 2016 through the use of digital advertising and data models that result in systematic efficiency, thereby reducing conversion costs and increasing overall cost efficiency in these channels. The number of customers utilizing digital operations (both Mobile and Online Banking) reached 1,300,000, an increase of 30% as compared to the fiscal year ended December 31, 2015.

Banco Galicia was ranked the most searched bank in Argentina in 2016, and led the YouTube rankings with respect to most viewed videos posted by companies in the financial sector, accounting for 46% of total viewed videos in the financial sector for fiscal year 2016. Banco Galicia also focused on offering products through Facebook and developing new contest formats in 2016.

Branch Network In 2016, a project to transform the Bank’s network of brick-and-mortar branches was initiated as part of the Bank’s Multichannel project, the aim of which was to develop a multi-format network to enhance efficiency in the Bank’s transformation and expansion processes by streamlining customer service in the network, utilizing new technologies and process designs and improving branch layout.

Twenty-three new branches were added to Banco Galicia’s network in fiscal year 2016: the Bank opened 10 traditional branches, 4 satellite branches, 5 “express” branches, 2 in house facilities and 2 new collection and payment centers for a total investment of Ps. 159 million.

Banco Galicia’s entire network of branches was migrated to the Centralized Operations Management model in 2016, which allows more time to develop value-add products for the customer.

With the goal of improving business productivity and performance, the Bank developed a new Comprehensive Management Approach as well as a new Customer Relationship Management (CRM) program, which the Bank believes will help improve the sales process and enhance customer satisfaction.

Furthermore, the Bank continued construction on a distribution network, which is designed to incorporate a modern design, videoconferences and other material that will contribute to increase brand awareness.

Red Galicia 24 and Self-Service Terminals Apart from its branches, Banco Galicia uses Red Galicia 24 (Banco Galicia’s ATM and self-service terminals network), the bancogalicia.com portal, Galicia Servicios Móviles, its Retail Sales Unit, and the Commercial Planning area of its Customer Contact Center, which are service, transactional and sales channels focused on individual and corporate customers.

At the end of fiscal year 2016, Banco Galicia had 1,872 self-service pieces of equipment (942 ATMs and 930 terminals), which were distributed throughout branches, office buildings and other locations, such as gas stations, supermarkets and shopping malls.

The level of self-service transactions grew 7% in fiscal year 2016 as compared to the fiscal year ended December 31, 2015, and almost 116 million transactions were performed through ATMs and self-service terminals in 2016. The average withdrawal amount also increased by 10% in fiscal year 2016 as compared to fiscal year 2015.

During fiscal year 2016, 902 new pieces of self-service equipment were installed (153 ATMs and 749 self-service terminals), 83% of which resulted from the need for equipment renewal and 17% of which were installed to increase the number of self-service machines available for consumers. The Bank also focused on converting its ATMs in the second half of 2016 so that such machines could dispense Argentina’s new Ps.500 bills, which increased the ATMs’ loading capacity and improved quality of service.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents At December 31, 2016, all of the Bank’s self-service equipment were “smart” self-service terminals, which support envelope-free deposits and recognize and validate both cash and check deposits and payments.

Insurance During fiscal year 2016, the Insurance segment experienced strong growth, introducing new products and experiencing growth in additional channels, which resulted in entry into more than 500,000 new insurance policies in 2016 and an increase in income of more than Ps. 120 million, as compared to fiscal year 2015. At December 31, 2016 Banco Galicia had underwritten approximately 1.6 million property and personal insurance policies.

The Insurance segment also experienced growth in existing sales channels, and focused on technological progress aimed to improve customer satisfaction and provide greater product segmentation.

As of December 31, 2016, the Bank had underwritten 55,000 policies related to unemployment insurance, and had also sold 100,000 policies related to cellular phone insurance. The Bank also experienced growth in protected sale insurance and theft insurance policies as compared to 2015. Finally, the Bank grew its sales of individual insurance products.

Banco Galicia continued strengthening its position as one of the leading banks in the marketing of insurance products in 2016, with a strong presence in most risk coverage areas.

Marketing Analytics In 2016, Banco Galicia focused its marketing efforts through the use of the Real Time Decision (RTD) tool across its Online Banking platform, which Banco Galicia used in connection with incorporating additional products and offers to increase the number of new products used by consumers, as the tool enables automatic learning about customer preferences. Customer interest in loan and insurance offerings increased by 37% in fiscal year 2016 as compared to fiscal year 2015, which the Bank believes is a result of its marketing efforts.

As previously described, the Bank also implemented the new CRM program, which established centralized commercial actions and used predictive models and new campaigns to help improve the management of Bank employees.

Furthermore, the Bank implemented Coremetrics software in its websites as a web data capture tool and created a data lab to enable it to efficiently address problem areas within the business.

A 10% increase in open market data was made available to the Bank’s call center at a 17% lower per unit cost as compared to fiscal year 2015. Targeted communications grew 30% as compared to fiscal year 2015 and contact levels (which we use to refer to the percentage of emails or other messages sent that are read by our customers) increased by 26% in fiscal year 2016 as compared to fiscal year 2015.

Publicity and Image Mass Media Campaigns The Bank launched a number of mass media campaigns in 2016. “Marcos” and “Claudia” continued serve as spokespersons in commercials for Quiero! (I Want!), Quiero Viajes (Quiero Travel), personal loans, ¡Vamos los Jueves! (Let’s Go on Thursdays), and the Banco Galicia debit card. Bank’s marketing campaigns were recognized with several awards in 2016, such as the Effie Latin America, Effie Argentina, Ojo de Iberoamérica (The Eye of Latin America), the Buenos Anuncios Awards and the Jerry Goldenberg Award.

Banco Galicia remained a frontrunner in the Brand Impact Index, an index that measures the most successful commercials from a commercial standpoint, for several months throughout fiscal 2016. The Bank also experienced record levels of brand awareness in fiscal year 2016.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Digital Communication Banco Galicia continued its focus on its digital transformation in 2016, with the aim of encouraging customers to download its new app, focusing on online media campaigns and promoting self-service products such as tutorials through concerted communications efforts. The Bank also is the first Argentine bank to have an official, branded channel on Spotify.

Branches The Bank focused on improving its branch image in 2016, primarily through a redesign project jointly developed by the Architecture Division and the Customer Experience Division, which focused on account signage issues, customer service, space optimization, digitally-oriented proposals, and high-impact support. The Bank plans to continue to focus on these objectives in 2017.

Consumption Through its Regional Credit Card Companies and CFA, Banco Galicia offers financing for low- and mid-income consumer segments.

Regional Credit Card Companies (“Tarjetas Regionales”) The companies devoted to the issuance of regional credit cards and the provision of financing transactions to consumers are subsidiaries of Banco Galicia through Tarjetas Regionales (Tarjeta Naranja and Tarjetas Cuyanas).

Through the Regional Credit Card Companies, Tarjetas Regionales is the largest non-bank credit card issuer in Argentina and one of the largest in Latin America, in each case, based on the number of credit cards issued. It is also one of the two largest merchant acquirers in Argentina and one of the largest credit card processors in Argentina. As of December 31, 2016, Tarjetas Regionales had more than 3.5 million active accounts, 10.0 million issued credit cards and more than 250,000 affiliated merchants. As of the same date, Tarjetas Regionales estimated that its market share of issued credit cards in Argentina was approximately 19.0% and of active accounts in Argentina was approximately 21.4%. As the credit card processor for all of its credit card operations, Tarjetas Regionales processes approximately 163 million transactions per year.

Tarjetas Regionales has a distinctive business model that it believes is well-suited to developing economies in Latin America and to the cultural background of its clients. Its business model of credit card issuance and related credit services focuses on the specific needs of lower- and lower-middle-income clients through personalized and attentive services using its extensive network of branches. Tarjetas Regionales’ client base is primarily in the Interior, where each of its brands has a leading presence in its coverage area. Its current expansion efforts in Argentina are focused on the Greater Buenos Aires and the Ciudad Autonoma de Buenos Aires (“CABA”).

In addition, through the Regional Credit Card subsidiaries, Tarjetas Regionales issues, operates and processes its own branded credit cards, the Tarjeta Naranja credit card and the Tarjeta Nevada credit card, which allow credit card holders to charge purchases of goods and services in the network of merchants that have agreed to accept these proprietary credit cards. As of December 31, 2016, these proprietary credit cards accounted for, on average, approximately 50% of its issued credit cards and approximately 69% in terms of its average monthly purchase volumes. Tarjetas Regionales also offers its clients international credit card brands such as Visa, MasterCard and American Express that are issued by Banco Galicia on its behalf. In addition to its credit card business, Tarjetas Regionales also extends personal loans, through the Regional Credit Card Companies, to its clients either for the account of the Regional Credit Card Companies or for the account of Banco Galicia at the election of the relevant Regional Credit Card Company. Tarjetas Regionales provides its products and services through an extensive network of 260 branches, client service centers and other points of sale strategically located in most major Argentine cities. Its branch network provides a critical service and payment interface for its clients, which allows it to provide targeted client service and form relationships with its clients and affiliated merchants.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents For a breakdown of the Regional Credit Card Companies’ revenues for the last three financial years, see Item 5.A. “Operating Results-Results by Segments-Regional Credit Cards”.

Compañía Financiera Argentina CFA is the leading financial company in Argentina in the personal loan business. As of December 31, 2016, CFA’s assets were over Ps.5,925 million and its shareholders’ equity was Ps.1,223 million. CFA employed 1,164 people. With 57 branches and 37 points of sale throughout Argentina, CFA offers its products to 517,000 customers, who belong, in general, to the low-to-medium income segments, characterized by limited interaction with traditional banks. Such customers often seek a more simplified and quick processing regime for their loans and other banking products.

Main products: • Efectivo Sí - Loans • Personal Loans: Unsecured personal loans payable in installments. • Consumer Loans: Product to finance purchases of goods through merchants associated with CFA, without using any cash or credit cards. Such goods include home appliances, household goods and construction materials. • Payroll Loans: Granted to affiliates or associate members of mutuals, cooperatives, unions, and to companies’ employees. • Loans to Public Sector Employees: Loans targeted to public sector employees on the national level, which are deducted directly from their salary. • Efectivo Sí - Savings • Time Deposits: An investment alternative which allows customers to receive returns over its invested money in a quick and streamlined manner. • Savings Account and Debit Card: Mainly aimed at retired individuals who receive their salaries through Efectivo Sí. • Efectivo Sí - Cards • Credit Cards: CFA is an issuer of Visa and MasterCard, both domestically and internationally. • Efectivo Sí - Insurance • Insurance: CFA sells different types of insurance policies from leading companies of the market to meet customers’ needs. • Retirement and pension payment - National Social Security Administration: Aimed at retired individuals and pensioners collecting their payments at CFA.

Throughout the year, the Efectivo Sí trademark continued to be strengthened, mainly through advertising in major soccer tournaments organized by the Argentine Soccer Association.

CFA’s net income for fiscal year 2016 amounted to Ps.342 million (including the results of Cobranzas y Servicios in accordance with its 5% equity interest). At year end, its loan portfolio, net of allowances for loan losses, exceeded Ps.4,916 million, representing a 68% increase as compared to fiscal year 2015 and had strong portfolio quality ratios.

CFA’s objective is to secure, maintain and expand its leading position in the consumer finance market. During 2017, CFA expects to further grow and consolidate its customer portfolio and boost credit card circulation. With respect to financing, it will seek financing from the domestic capital market by issuing trusts and notes, and it will focus on increasing financing through time deposits at its branches.

For a breakdown of CFA’s revenues for the last financial year, see Item 5.A. “Operating Results-Results by Segments-CFA”.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Financial Division The Financial Banking Division of Banco Galicia includes the Commercial, Financial Institutions, Public Sector, Products, Information Management, and Support areas. Additionally, it is also responsible for the mutual funds business (FIMA), as it is the main distribution channel for FIMA mutual fund products.

Commercial Division The Commercial Division is responsible for improving the Bank’s position in the Institutional Customer segment (which includes insurance companies and mutual funds), and acting as the investment channel for the Corporate segment.

The functions of the Commercial Division include reinforcing the cross-selling of financial products, developing new customer segments and encouraging the use of transactional products in order to promote development of commercial banking customers.

As a result of efforts made with its commercial banking customers, Banco Galicia led the NPS Indicators at a 37% NPX Index as of December 31, 2016.

The Commercial Division’s most important asset in fiscal year 2016 was Lebac, which recorded an exponential growth in trading volumes. Banco Galicia traded Ps. 301,103 million (94% Lebac biddings) in the primary market and Ps. 423,765 million (95% Lebac transactions) in the secondary market in fiscal year 2016.

The number of transactions handled by the Commercial Division increased by 73% as compared to fiscal year 2015; fiscal year 2016 started with 1,070 monthly transactions and ended with 1,852 monthly transactions, with an annual total of 17,800 transactions in fiscal year 2016.

Of note is the addition of the ANSES – Sustainability Guarantee Fund as a new customer, representing an average of Ps. 150,147 million held in its account.

Financial Institutions The Financial Institutions Division is responsible, at an international level, for managing the Bank’s business relationships with correspondent banks, international credit agencies, official credit banks and export credit insurance companies, and, at domestic level, with banks, financial companies, exchange houses, and other entities that carry out related activities.

As in prior fiscal years, during fiscal year 2016 meetings were held with the most active foreign correspondent banks, through which the Bank channeled the different products and services offered to its customers. The growing offer of credit lines by banks in the correspondent banking segment, the International Finance Corporation (“IFC”) and the Inter-American Development Bank (“IDB”) helped the Bank meet letters of credit and standby letters of credit confirmation requests, as well as to meet its customers’ financing needs.

Additionally, under the framework of Argentina’s new policy of economic openness, Banco Galicia continued strengthening relationships and analyzing different business opportunities with multilateral agencies and official credit banks, such as the IFC, the IDB, the Netherlands Development Finance Company (the “FMO”), the Proparco, the National Economic and Social Development Bank (“BNDES”), the Andean Development Corporation (“CAF”), the German Investment Corporation (the “DEG”) and the KfW Group, among others, with the purpose of broadening the offer of mid- and long-term credit lines to finance sustainable investment projects. For example, in June 2016, the IFC approved a credit line worth US$ 130 million, and in December 2016 the IDB granted a credit line worth US$ 100 million, each with the aim of allocating such resources to provide long-term financing to SMEs to help finance sustainable energy projects in Argentina.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia also re-established contacts with the main European export credit insurance companies in fiscal year 2016, such as Hermes, COFACE, SACE, and Ceste, among others, aiming to offer medium- and long-term credit lines to its customers for capital-goods imports.

Banco Galicia continued analyzing and identifying domestic business opportunities during fiscal year 2016, with the aim of forming long-term, steady relationships with such customers.

Public Sector The Public Sector Division became part of the Financial Banking Division in January 2016, with its main responsibility being to develop the business relationship with customers that belong to the public sector segment by offering treasury solutions and comprehensive product offerings to such customers.

In order to build customer loyalty, Banco Galicia decided to establish a business presence in different strategic locations nationwide. The Public Sector team is made up of seven offices, with locations in the Autonomous City of Buenos Aires, Córdoba, Mendoza, Rosario, and Mar del Plata. A new customer service model was implemented in fiscal year 2016, which entails working closely with the Commercial division, the Banking Transaction Products division and with financial institutions’ advisors.

One of the Public Sector Division’s main initiatives during fiscal year 2016 was to set forth specific policies for Public- sector funding with the Credit and Risks Divisions. As a result of these changes, the holding and placement of fixed-income products, collections, payments, and foreign trade transactions grew exponentially, broadly exceeding budgeted targets. Accordingly, Banco Galicia continued to grow in the segment in fiscal year 2016.

Product Division The main responsibilities of the Product Division are the management and administration of foreign currency positions, derivative instruments, government and corporate securities, all with the goal of building the Bank’s own portfolio and providing brokerage services to institutional, corporate and individual customers. The Product Division’s responsibilities also include developing and applying investment strategies, based on risk parameters determined by the board of directors of Banco Galicia. By providing comprehensive financial strategic advice, Banco Galicia was able to maintain a leadership position in capital markets in fiscal year 2016, offering debt origination and structuring aimed at debt issuers.

During fiscal year 2016, the loosening of restrictions in respect of the foreign exchange market liberalization caused a significant increase in trading volumes. In the wholesale market, the total volume traded among banks in the Mercado Abierto Electrónico (“MAE”) increased by 152% as compared to fiscal year 2015, from US$ 47,965 million to US$ 120,925 million, and the volume traded by Banco Galicia increased by 216% as compared to fiscal year 2015, from US$ 5,363 million in 2015 to US$ 16,925 million in 2016 (making it the second ranked Argentine bank as measured by trading volumes in the MAE). Banco Galicia operated a total trading volume in the futures market of US$ 5,880 in fiscal year 2016 (the second ranked Argentine bank as measured by amount of futures market trading in the MAE), and was ranked third in the Rosario Futures Exchange (“ROFEX”). Foreign trade volume transactions amounted to US$ 15,190 million in fiscal year 2016, increasing by 20% as compared to fiscal year 2015. U.S. Dollar trading transactions increased from US$ 1,007 million in fiscal year 2015 to US$ 3,098 million in fiscal year 2016.

The total volume traded in fixed income through the MAE increased by 74% as compared to fiscal year 2015, from US$ 157,205 million in fiscal year 2015 to US$ 273,949 million in fiscal year 2016. Banco Galicia remained the highest ranked Argentine bank in terms of fixed income trading volume, with an 84% increase as compared to fiscal year 2015, with US$ 42,808 million traded and a 15% market share as of December 31, 2016.

Banco Galicia maintained its position as the first place bank in terms of primary issuances in the MAE in fiscal year 2016, with a total issued notes volume of Ps. 7,720 million in fiscal year 2016. In sub-sovereign securities, the Bank fell to third place, with an issued volume of Ps. 7,738 million in fiscal year 2016, while rising one place in the ranking to fourth place in the trusts category, with an issued volume of Ps. 2,140 million in fiscal year 2016.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Customer Experience Banco Galicia replaced the Quality Assurance Division with the Customer Experience Division in fiscal year 2016. The goal of this important strategic decision is to increase customer satisfaction, thereby leading such customers to recommend Banco Galicia to other potential customers. The Customer Experience Division’s goals are to build a customer-oriented culture in order to provide the best customer experience based on in-depth knowledge of their financial needs, and to provide easy access to a motivated team of experts. The Customer Service Division is comprised of the following sub-divisions:

Analysis and Indicators Division The Analysis and Indicators Division guides the process of setting NPS goals, analyzing potential weaknesses of the Bank as compared to its competitors, and the prioritization of on-going customer service initiatives. Furthermore, the area defines and leads the measurement of all the Bank’s customer indices, while also providing the Bank’s leaders with meaningful information for critical decision-making. During 2016, NPS benchmarks were improved as a result of more reliable metrics, positively impacting on the overall Key Performance Indicators (“KPIs”) of the organization.

NPS Operation Division The NPS Operation Division is focused on designing, improving and operating an ongoing improvement system across all relevant channels and incidents, and is oriented towards all of the Bank’s segments. It is responsible for assessing, managing, distributing and following up on opportunities for improvement obtained through NPS, and organizing visits to the Bank’s network of branches. During 2016, 13 areas were visited, including 20 branches with a low NPS rating, 22 Corporate Banking Centers, and all of the points of sale locations. 272 opportunities for improvement were assessed, of which, as of December 31, 2016, 135 were completed, implemented and communicated, 31 were referred to other areas as part of strategic projects (delivery and claims), 80 were currently under development, and 26 were rejected due to their low impact nature.

Initiatives Division The Initiatives Division is responsible for leading priority and cross-section projects to improve customer experience. Two major transformation processes were implemented during fiscal year 2016: • Complaints Process: 46 initiatives were implemented in less than 6 months during fiscal year 2016, and there are 15 initiatives currently under development, including initiatives that aim to resolve the root causes of the most serious complaints. The project plans to introduce a method of service recovery in the case of conflict situations with customers, and problem-solving actions to improve the customer’s experience when it comes to addressing complaints. Two major initiatives yielded positive results in 2016, reducing the number of complaints related to the frequent-traveler program by 40% in the fourth quarter of fiscal year 2016 as compared to the fourth quarter of fiscal year 2015, and reducing the rate of complaints related to promotions based on customer purchases from 0.5% to 0.25% as compared to fiscal year 2015. • Delivery: Certain changes were made during fiscal year 2016 to allow the Bank’s logistics team to take over the assembly process of the payroll’s basic and plus packages in the new Product Assembly Center. These products had an expected delivery time of 19 business days in fiscal year 2015, which was reduced to 5 business days in fiscal year 2016, enhancing customer experience for both businesses and individuals who choose to direct deposit their salaries into their bank accounts. These products represented the first step of a plan to take over the process of sending payroll- related materials during 2017. Additionally, the renewal process was integrated into the Bank’s internal software to follow-up products implemented in 2015, with the goal of further enhancing transparency and providing better responses to customers. Ongoing efforts are also being made to improve the existing delivery ratios and change the current stock management system.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Customer Vision Division The Customer Vision Division guides the cultural development of the Bank’s management and employees, with the goal of improving the Bank’s training, recruitment and promotion practices to help create a customer-oriented culture.

Galicia Seguros Galicia Seguros is a provider of a variety of property and casualty and life insurance products. Its most important line of business is group life insurance, including employee benefit plans and credit related insurance. With regard to property and casualty insurance products, it primarily underwrites home and ATM theft insurance. Galicia Retiro provides annuity products, and Galicia Broker is an insurance broker. In the 2012 fiscal year, Galicia Seguros, together with three other insurance companies, created Nova Re Compañía Argentina de Reaseguros S.A., which aims to increase the reinsurance offers in the Argentinean market. These companies operations are all located in Argentina.

Total insurance production of the aforementioned insurance companies amounted to Ps.3,429 million during 2016, 35% higher than the volume of premiums of the previous year (Ps.2,544 million).

This increase in insurance production was recorded mainly for Galicia Seguros, with Ps.885 million more premiums written than in the same period of the previous fiscal year. As regards Galicia Seguros’ business transactions, the focus was placed on continuing to increase the company’s turnover and sales, which in 2016 amounted to Ps.1,059 million of annualized premiums. This represented a 49% growth as compared to the previous year, thus increasing the insurance policy lapse ratio and extending the types of coverage offered by adding insurance policies in new lines of business.

Law No. 26,425 that created the Argentine Social Security Integrated System (Sistema Integrado Previsional Argentino) brought an end to pension-linked life annuities, the main product marketed by Galicia Retiro. Consequently, the company’s main objective is to efficiently administrate current business and to analyze whether or not to re-launch new voluntary individual and group retirement products.

Within the current economic framework, measures aimed at complying with the goals established in the Business Plan will continue during 2017.

Other Businesses Galicia Administradora de Fondos This is the company that manages the FIMA family mutual funds that are distributed by Banco Galicia through its various channels (network of branches, home banking and investment centers, among others). The company’s team is comprised of asset management professionals the goal of whom is to manage the FIMA family funds and to meet the demands of the individuals, companies and institutions the company serves.

During fiscal year 2016, the market volume for mutual funds increased 52%, primarily due to bond funds, amounting to Ps. 323,037 million as of the end of 2016. The total assets of the FIMA family mutual funds increased 105.4% from the previous fiscal year, reaching, as of December 31, 2016, a volume of Ps.37,329 million, representing a market share of 11.6%. This increase in volume took place in several customer segments, including mid-sized companies and individuals, particularly in respect of the FIMA Ahorro Pesos, FIMA Ahorro Plus, FIMA Renta en Pesos, FIMA Renta Plus and FIMA Renta Dólares I funds.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The following funds were launched during fiscal year 2016: FIMA MIX I and FIMA Renta Dólares I. At December 31, 2016, FIMA Renta Dólares I reached US$ 141.7 million in investments. On December 28, 2016, the FIMA Renta Dólares II fund was formed, which will mainly invest in domestic bonds issued in U.S.-Dollars, thereby supplementing the Bank’s offering of U.S. Dollar- denominated funds.

During the fiscal year, Galicia Administradora de Fondos optimized the financial performance of its liquid assets. In this regard, investments were made in the same FIMA mutual funds it manages.

The outlook for 2017 foresees a continued growth in mutual funds and the development of business activity within the framework of the new Capital Markets Law.

Net Investment: This company has performed its activities in the areas of intercompany e-commerce, with the purpose of creating and exchanging synergies with Banco Galicia’s business activities.

During the 2011 fiscal year, the shareholders of Net Investment decided to amend the corporate purpose in order to be able to invest in additional companies in related, accessory and/or supplementary activities.

For fiscal year 2017, the board of directors of Net Investment is analyzing business alternatives and opportunities.

Galicia Warrants This company is a leading company in the deposit certificates and warrants issuance market. It has been conducting transactions since 1994, supporting medium and large companies with respect to stock custody. Galicia Warrants’ main objective is to enable its customers to access credit and financing secured by the property kept under custody. Galicia Warrants’ main customers belong to the agricultural, industrial and agro-industrial sectors, as well as exporters and retailers. In fiscal year 2016, Galicia Warrants recorded an income from services of Ps. 118.5 million and a net income of Ps.31.6 million.

For a breakdown of the other businesses’ revenues for the last three financial years, see Item 5.A. “Operating Results- Results by Segments-Other Grupo Galicia Businesses.”

Competition Due to our financial holding structure, competition is experienced at the level of our operating subsidiaries. We face strong competition in most of the areas in which our subsidiaries are active. For a breakdown of our total revenues, for each of the past three fiscal years, for the activities discussed below (i.e., banking, regional credit cards, CFA personal loans and insurance), see Item 5.A. “Operating Results-Results by Segments.”

Banking Banco Galicia faces significant competition in all of its principal areas of operation from foreign banks operating in Argentina (mainly large retail banks which are subsidiaries or branches of banks with global operations), Argentine national and provincial government-owned banks, private-sector domestic banks and cooperative banks, as well as non-bank financial institutions.

With respect to private-sector customers, Banco Galicia’s main competitors are large foreign banks and certain domestically- owned private-sector banks. Banco Galicia also faces competition from government-owned banks.

Banco Galicia’s estimated market share of private-sector deposits in the Argentine financial system was 9.92% as of December 31, 2016, as compared to 9.40% as of December 31, 2015 and 8.79% as of December 31, 2014.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents With respect to loans to the private sector, Banco Galicia’s Argentine market share was 10.12% as of December 31, 2016, as compared to 9.68% and 8.76% as of December 31, 2015 and December 31, 2014, respectively.

According to the information published by the Argentine Central Bank, as of October 31, 2016, Banco Galicia was the second largest private-sector bank as measured by its assets, its deposits and its loan portfolio and ranked third in terms of net worth.

Banco Galicia believes that it has a strong competitive position in retail banking, both with respect to individuals and small and medium-sized companies. Specifically, Banco Galicia believes it is one of the primary providers of financial services to individuals, the primary private-sector institution serving the small and medium-sized companies sector, and has traditionally maintained a leading position in the agriculture and livestock sector.

Argentine Banking System As of December 31, 2016, the Argentine financial system consisted of 78 financial institutions, of which 63 were banks and 15 were financial non-bank institutions (including finance companies, credit unions and savings and loans associations). Of the 63 banks, 13 were Argentine national and provincial government-owned or related banks. Of the 50 private-sector banks, 33 were private- sector domestically-owned banks and 17 were foreign-owned banks (i.e., local branches or subsidiaries of foreign banks).

As of December 31, 2016, the top 10 banks, in terms of total deposits (excluding Argentine national and provincial government-owned banks), were: Banco Santander Río, Banco Galicia, BBVA Banco Francés, Banco Macro, Credicoop, HSBC Bank and Patagonia. Banco Galicia, Banco Macro and Credicoop are domestically-owned banks and the others are foreign-owned banks. According to information published by the Argentine Central Bank as of December 31, 2016, private-sector banks accounted for 53.1% of total deposits and 65.3% of total net loans in the Argentine financial system. As of the same date, financial institutions (other than banks) accounted for approximately 0.3% of deposits and 3.1% of net loans in the Argentine financial system.

As of December 31, 2016, the largest Argentine national and provincial government-owned or related banks, in terms of total deposits, were Banco Nación and Banco de la Provincia de Buenos Aires. Under the provisions of the Financial Institutions’ Law, public-sector banks have comparable rights and obligations to private banks, except that public-sector banks are usually chosen as depositaries for public-sector revenues and promote regional development and certain public-sector banks have preferential tax treatment. The bylaws of some public-sector banks provide that the governments that own them (both national and provincial governments) must guarantee their commitments. According to information published by the Argentine Central Bank, as of Decemberr 31, 2016, government-owned banks and banks in which the national, provincial and municipal governments had an ownership interest accounted for 46.7% of deposits and 31.6% of loans in the Argentine financial system.

Consolidation has been a dominant theme in the Argentine banking sector since the 1990’s, with the total number of financial institutions declining from 214 in 1991 to 78 as of December 31, 2016, with the ten largest banks holding 77.0% of the system’s deposits from the private sector and 70.0% of the system’s loans to the private sector as of December 31, 2016.

Foreign banks continue to have a significant presence in Argentina, despite the fact that the number of these financial institutions decreased from 39 at the end of 2001 to 17 as of December 2016, and the fact that their share of total deposits has decreased since the 2001-2002 financial crisis while the share of domestic private-sector banks has increased.

The Argentine banking sector focuses on transactional business, and lacks a robust supply of medium and long-term lending. Local financial system deposits and loans are equivalent to 24% and 13% of the Gross Domestic Product (GDP) respectively, well below those same ratios for other countries in the region.

To promote the growth of the financial system, the Argentine Central Bank (BCRA) aims to achieve low and stable inflation by reducing the money supply with positive real interest rates, as well as with other measures. In

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents addition to these goals, the BCRA is implementing an agenda that focuses on full banking service use (through the offer of free savings accounts and money transfers), effective communication of the cost of all services, innovation and increased competition. To boost savings in domestic currency and long-term lending (mortgage loans in particular), the monetary authority has introduced instruments denominated in Housing Units (Unidades de Vivienda – UVAs), an instrument to adjust deposit and loans by inflation.

Regional Credit Cards In the consumer loan market, the Regional Credit Card Companies compete with Argentine banks and other financial institutions that target similar economic segments. The main players in this segment include Banco Supervielle, Banco Columbia, Banco Comafi, Banco Credicoop, Banco Macro, Banco MasVentas, Banco Municipal de Rosario, Banco Nación (Nativa card), Banco de Córdoba (Cordobesa card), Cabal card, tarjeta shopping card and CFA (Efectivo Si). Historically, certain international banks with presence in Argentina have attempted to target consumers in these economic segments and have been, to date and for the most part, unsuccessful.

In order to compete effectively at a national and regional level, the Regional Credit Card Companies target low- to middle- income clients by offering personalized services in each region, focusing their commercial efforts mainly on medium- and low-income segments. While other Argentine credit card issuers and consumer loan providers focus on earning interest on outstanding personal loans and credit card balances, the Regional Credit Card Companies also focus on and have access to additional sources of revenues including merchant fees and commissions, which allow them to offer competitive pricing and financing terms. Furthermore, unlike other credit card issuers in Argentina, approximately 60% of the Regional Credit Card Companies’ clients pay their credit card bill through their branch network. The broad geographical reach of their distribution network, which is the second largest in Argentina, has allowed the Regional Credit Card Companies to establish a local presence in all the provinces of Argentina.

The Regional Credit Card Companies believe that their diversified and consistent funding sources, significant network of branches, robust information technology infrastructure, relationships with over 250,000 merchants and the brand recognition they enjoy provide them with a competitive edge to consolidate and expand their market share in their target market segment, making it difficult for new players to effectively compete in this market segment on a national scale.

Compañía Financiera Argentina CFA markets all of its financial products mainly to medium- and low-income segments. CFA’s main competitors are: Banco Cetelem, Banco Columbia, Banco de Servicios y Transacciones, Cooperativa la Capital del Plata, Caja de Crédito Cuenca, Banco de Servicios Financieros, Banco Supervielle and Banco Sáenz (Frávega Group).

CFA also faces competition from certain entities which render non-regulated services, or small chains, located in less populated cities. Some big chains of retailers also offer their own financing, such as Garbarino, Frávega, Megatone and Riveiro, financed through the issuance of financial trusts.

Insurance Sudamericana’s subsidiaries face significant competition since, as of December 2016, the Argentine insurance industry was comprised of approximately 186 insurance companies, 16 of which were dedicated exclusively to annuities. Subsidiaries of foreign insurance companies and the world’s largest insurance companies with global operations are among these companies.

During 2016, the insurance industry continued growing. Production amounted to Ps.211 billion, 37% higher than the level recorded for the period before.

Out of the total insurance production, 81% relates to property insurance, 17% relates to life and personal insurance, and 2% relates to retirement insurance.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Within the 81% corresponding to property insurance, the automotive insurance segment continues to be the most significant segment, representing 45%, followed by the workers’ compensation segment, representing 35%.

Within the life insurance segment, the group life insurance segment is the most significant, representing 69%, followed by individual life insurance, representing 14%, and personal accident insurance, representing 12%.

As of December 31, 2016, based on internal studies undertaken by Galicia Seguros it is estimated that Galicia Seguros ranked fourth in terms of net premiums for life insurance policies underwritten and first in terms of net premiums for home insurance policies underwritten and in terms of net premiums for theft insurance policies underwritten.

Sales and Marketing Banco Galicia markets all of its financial products and services to high-, medium- and medium- to low-income individuals, including loans, insurance and the FIMA family of mutual funds, among other products, through its branch network, which operates online in real time. Within the Bank’s branches, the sales force is specialized by type of customer and by customer segment. Banco Galicia’s sales policy encourages tellers to perform sales functions as well. Wealthy individuals who are private banking customers are served by specialized officers and a specialized network of service centers, including a head office facility.

December 2016 Branches (number) Bank Branches 279 Regional Credit Card Cos. Branches 206 CFA Branches 94 Business Centers and In-House Facilities 37 Eminent’s space with Private-Banking 10 Electronic Banking Terminals (number) ATMs 942 Self-Service Terminals 930 Electronic Banking Transactions (thousands per month) ATMs + Self-Service Terminals 14,182 Phone-Banking 2,396 e-banking 62,486

Commercial and investment banking services to large corporations and other entities are provided in a centralized manner. Branch officers are responsible for Banco Galicia’s relationship with middle-market and small businesses and most of its agriculture and livestock sector customers. Banco Galicia has also established specialized centers that concentrate on providing service to businesses, which are distributed across the country and located in main cities of the Interior and certain customer companies’ facilities.

All of Banco Galicia’s individual and corporate customers have access to Banco Galicia’s electronic distribution channels, including its ATM and self-service terminals network, a multifunction call center, an e-banking website (www.bancogalicia.com) and a mobile banking service platform (Galicia Móvil).

Banco Galicia is the leading Argentine bank in terms of relevance on social networks. Customers use social networks as a means to talk to Banco Galicia quickly, effectively and openly. Banco Galicia consistently focuses on adapting to the variety of situations that result from the use of social media, using these opportunities as a chance to improve its relationship with its customers. Through its work on the digital platform, Banco Galicia has established an excellent reputation regarding its online services, providing not only traditional services, but also involving the use of social networks, cellular phones and transactional, informative and communicative services, with the purpose of promoting the Bank’s business and establishing effective channels of communication with its current and potential customers. Banco Galicia is customer service-oriented and assigns great importance to its customer service model, constantly seeking to improve its customer service.

Banco Galicia has a segmented marketing approach and designs marketing campaigns focused on specific segments of Banco Galicia’s customer base. Banco Galicia’s marketing strategy is also focused on the development of long-term relationships with customers based on a deep and increasing knowledge of those customers. As part of this client-oriented strategy, Banco Galicia implemented a customer relationship management technology.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia considers quality of service and providing differentiating experiences to its clients as the main elements capable of distinguishing it from competitors. In order to measure these indicators, Banco Galicia periodically performs surveys, with positive results in recent years, showing high customer satisfaction and recognition.

The Regional Credit Card Companies market their products and services through a network of branches and service centers, the size of which depends on the size of the locations in which they operate. The Regional Credit Card Companies’ culture is strongly client service-oriented and assigns great importance to quality of customer service. Sales officials receive intensive training in personalized sale of the companies’ products and quality of service, given that the bulk of sales is conducted on a one-on-one basis. Quality of service at the branches is permanently monitored by third parties and availability is enhanced through extended business hours. Each of the companies has a website through which they conduct sales, receive customers’ requests (such as requests for statements, loans or increases in the credit limits assigned and new cards, among others), and provide information on and promote products. These sites include a link that allows payments to be made. In addition, Tarjeta Naranja has a website aimed at selling products associated with its primary merchants. Similarly, Tarjetas Cuyanas also has a website. Each company has a call center, through which sales, post-sales and collection functions are performed.

CFA markets its products through a network of 57 branches and 37 points of sale, located throughout Argentina. The company leads the personal loan business among financial institutions in Argentina and offers its products to customers who belong, in general, to the low-to-medium income segments, characterized by limited interaction with traditional banks. As such, CFA offers its product “Efectivo Si Consumer Loans” in approximately 400 active merchants, while the agreements are offered out of the branches through different channels. Such customers often seek a more simplified and quick processing regime for their loans and other banking products.

Sudamericana’s subsidiaries mainly use Banco Galicia’s, the Regional Credit Card Companies’ and CFA’s distribution networks to market their products. They also use Galicia Broker sales officers, and Sudamericana has its own telemarketing center.

Property The following are our main property assets, as of December 31, 2016:

Square Meters Property Address (approx.) Main Uses Grupo Financiero Galicia - Rented -Tte. Gral. Juan D. Perón 430, 25th floor, Buenos Aires, Argentina 89 Administrative activities Banco de Galicia y Buenos Aires S.A. - Owned -Tte. Gral. Juan D. Perón 407, Buenos Aires, Argentina 18.815 Administrative activities -Tte. Gral. Juan D. Perón 430, Buenos Aires, Argentina 41.547 Administrative activities -Corrientes 6287, Buenos Aires, Argentina 34,000 Administrative activities - Rented -San Martín 178/200, Buenos Aires, Argentina 3.777 Administrative activities -Corrientes 411, 3rd and 4th floors, Buenos Aires, Argentina 3.586 Administrative activities Tarjeta Naranja S.A. - Owned -Sucre 152, 154 and 541, Córdoba, Argentina 6,300 Administrative activities -La Tablada 451, Humberto Primo 450 y 454, Córdoba, Argentina 14,080 Administrative activities -Jujuy 542, Córdoba, Argentina 853 Administrative activities -Ruta Nacional 36, km. 8, Córdoba, Argentina 7,715 Storage -Río Grande, Tierra del Fuego, Argentina 309 Administrative activities -San Jerónimo 2348 and 2350, Santa Fe, Argentina 1,475 Administrative activities - Rented -Sucre 145/151, La Rioja 359, 364 and 375, Córdoba, Argentina 4,450 Administrative activities and printing center Av. Corrientes 3135, CABA, Argentina 1,271 Administrative activities Tarjetas Cuyanas S.A. - Rented -Belgrano 1415, Mendoza, Argentina 1,160 Administrative activities

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Square Meters Property Address (approx.) Main Uses -Belgrano 1462, Mendoza, Argentina 1,152 Administrative activities and printing center -Olascoaga 348, Guaymallén, Mendoza, Argentina 580 Storage -Godoy Cruz 670, Guaymallén, Mendoza, Argentina 400 Storage -Belgrano 1478, Mendoza, Argentina 350 Administrative activities Compañía Financiera Argentina - Rented -Paseo Colón 746, 3rd floor, Buenos Aires, Argentina 7,628 Administrative Activities Galicia Warrants S.A. - Owned -Tte. Gral. Juan D. Perón 456, 6th floor, Buenos Aires, Argentina 118 Administrative activities -Alsina 3396/3510, San Miguel de Tucumán, Tucumán, Argentina 12,800 Storage - Rented -Alto Verde, Chicligasta, Tucumán, Argentina 2,000 Storage -Santa Marta, Alderete, Tucumán, Argentina 2,100 Storage -Las Talitas, Las Talitas, Tucumán, Argentina 2,300 Storage -Tafi Viejo, Tafi Viejo, Tucumán, Argentina 8,748 Storage Galicia Seguros S.A. - Owned -Maipú 241, Buenos Aires, Argentina 3,261 Administrative activities

As of December 31, 2016, our distribution network consisted of: • Banco Galicia: 279 branches located in Argentina, 145 of which were owned and 134 of which were rented by Banco Galicia, located in all of Argentina’s 23 provinces. • Tarjeta Naranja: 208 sales points located in 21 of the 23 Argentine provinces, 157 of which were rented by the company. • Tarjetas Cuyanas: 52 sales points in the provinces of Mendoza, San Juan, San Luis, Santiago del Estero, Chaco, La Pampa, La Rioja, Catamarca, Neuquén, Rio Negro, Salta, Jujuy and Tucumán, all of which were leased. • CFA: 57 branches and 37 payment centers, all of which were leased and with at least one branch located in each of Argentina’s provinces.

Capital Investments and Divestitures During 2016, our capital expenditures amounted to Ps.2,827 million, distributed as follows: • Ps.1,502 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings); and • Ps.1,325 million in organizational and development expenses.

During 2015, our capital expenditures amounted to Ps.1,987 million, distributed as follows: • Ps.1,097 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings); and • Ps.890 million in organizational and development expenses.

During 2014, our capital expenditures amounted to Ps.1,170 million, distributed as follows: • Ps.475 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings); and

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • Ps.695 million in organizational and development expenses.

These capital expenditures were made mainly in Argentina.

During the 2012 fiscal year, Galicia Seguros invested Ps.12 million for the formation of a reinsurance company (Nova Re Compañía Argentina de Reaseguro S.A.), controlling 39% of the capital stock and voting rights of such company.

In October 2013, Galicia Seguros approved the sale of its 4% ownership interest in Nova Re Compañía Argentina de Reaseguro S.A. to Reaseguradora Patria S.A., a Mexican reassurance company. This transaction was finalized in January 2016 and Galicia Seguros continued to own 35% of Nova Re following the consummation of the sale.

As a result of a number of acquisitions of shares in the market, since December 16, 2013, Grupo Financiero Galicia increased its ownership of outstanding shares in and voting rights for its subsidiary Banco Galicia to 95%, reaching a position of nearly total control according to Argentine regulations. On December 19, 2013, Grupo Financiero Galicia announced that it had finalized the merger of Lagarcué S.A. and Theseus S.A. into Grupo Financiero Galicia, further increasing its ownership interest in Banco Galicia by 4.5% (which was previously owned by Lagarcué S.A. and Theseus S.A). As a result of the foregoing transactions, as of the year ended December 31, 2013, Grupo Financiero Galicia controlled 99.6% of the capital stock of Banco Galicia.

On February 25, 2014, Grupo Financiero Galicia resolved to issue an offer to acquire the 2,123,962 shares of Banco Galicia owned by third parties at a price of Ps.23.22 per share. On April 24, 2014, said transaction was approved by the CNV and on July 14, 2014, it was incorporated by the Argentine Superintendency of Corporations. On August 4, 2014, the above approval in respect of such acquisition was made part of the public record, and, as a consequence of this acquisition, Grupo Financiero Galicia currently owns 100% of the shares of the Bank.

On April 15, 2014, Banco Galicia sold its interest in Galicia Administradora de Fondos to Grupo Financiero Galicia, for Ps.39 million.

During May 2014, the shareholders of Tarjetas del Mar approved a capital increase of Ps.32 million, which was fully subscribed for by Sociedad Anónima Importadora y Exportadora de la Patagonia. As a result, the Bank has a 58.8% equity interest in Tarjetas del Mar, while CFA holds a 1.2% and Sociedad Anónima Importadora y Exportadora de la Patagonia holds the remaining 40%.

During the third quarter of fiscal year 2014, the Bank transferred to Visa Argentina S.A. its equity investment in Banelco S.A., for Ps.40 million.

On October 14, 2014, Tarjeta Naranja executed the final agreement to sell its equity interest in Tarjeta Naranja Perú, equivalent to 24% of the capital stock, to Grupo Crédito S.A. for US$900,000. The shares were sold as of December 31, 2014.

Investment planning We have budgeted capital expenditures for the fiscal year ending December 31, 2017, for the following purposes and amounts:

(In millions of Pesos) Infrastructure of Corporate Buildings, Tower and Branches (construction, furniture, equipment, phones and other fixed assets) Ps. 1,973 Organizational and IT System Development 1,431 Total Ps. 3,404

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents These capital expenditures will be made mainly in Argentina.

Management considers that internal funds will be sufficient to finance fiscal year ended December 31, 2017 capital expenditures.

Selected Statistical Information You should read this information in conjunction with the other information provided in this annual report, including our audited consolidated financial statements and Item 5. “Operating and Financial Review and Prospects”. We prepared this information from our financial records, which are maintained under accounting methods established by the Argentine Central Bank under Argentine Banking GAAP, and do not reflect adjustments necessary to reflect the information in accordance with U.S. GAAP.

The exchange rate used in translating Pesos into Dollars, which is used in calculating the convenience translations included in the following tables is the Reference Exchange Rate published by the Argentine Central Bank, which was Ps.15.8502, Ps. 13.0050 and Ps. 8.5520 per US$1.00 as of December 31, 2016, December 31, 2015 and December 31, 2014, respectively. The exchange rate translations contained in this annual report should not be construed as representations that the stated Peso amounts actually represent or have been or could be converted into Dollars at the rates indicated or any other rate. See Item 3. “Key Information-Exchange Rate Information”.

Average Balance Sheet and Income from Interest-Earning Assets and Expenses from Interest-Bearing Liabilities The average balances of interest-earning assets and interest-bearing liabilities, including the related interest that is receivable and payable, are calculated on a daily basis for Banco Galicia, Galicia Uruguay, Tarjetas Regionales and CFA on a consolidated basis. The average balances of interest-earning assets and interest bearing liabilities are calculated on a monthly basis for Grupo Financiero Galicia and its other non-banking subsidiaries.

Average balances have been separated between those denominated in Pesos and those denominated in Dollars. The average yield/rate is the amount of interest earned or paid during the period divided by the related average balance.

Net gains/losses on government securities and related differences in quoted market prices are included in interest earned. We manage our trading activities in government securities as an integral part of our business. We do not distinguish between interest income and market gains or losses on our government securities portfolio. The non-accrual loans balance is included in the average loan balance calculation.

The following table shows our consolidated average balances, accrued interest and nominal interest rates for interest-earning assets and interest-bearing liabilities for the fiscal year ended December 31, 2016.

Fiscal Year Ended December 31, 2016 (*) Pesos Dollars Total Average Average Average Average Accrued Yield/ Average Accrued Yield/ Average Accrued Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate (in millions of Pesos, except rates) Assets Government Securities 16,110 4,646 28.84 5,410 160 2.96 21,520 4,806 22.33 Loans Private Sector 99,817 28,979 29.03 11,282 395 3.50 111,099 29,374 26.44 Public Sector 1 — — — — — 1 — — Total Loans (1) 99,818 28,979 29.03 11,282 395 3.50 111,100 29,374 26.44 Other 2,555 827 32.37 111 5 4.50 2,666 832 31.21 Total Interest-Earning Assets 118,483 34,452 29.08 16,803 560 3.33 135,286 35,012 25.88

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Cash and Gold 15,854 — — 18,139 — — 33,993 — — Equity in Other Companies 3,212 — — 396 — — 3,608 — — Other Assets 14,217 — — 1,397 — — 15,614 — — Allowances (3,971 ) — — (135 ) — — (4,106 ) — — Total Assets 147,795 — — 36,600 — — 184,395 — — Liabilities and Equity Deposits Checking Accounts — — — — — — — — — Savings Accounts 16,127 43 0.27 11,360 — — 27,487 43 0.16 Time Deposits 47,953 13,057 27.23 6,032 76 1.26 53,985 13,133 24.33 Total Interest-Bearing Deposits 64,080 13,100 20.44 17,392 76 0.44 81,472 13,176 16.17 Debt Securities 6,125 1,875 30.61 9,425 1,023 10.85 15,550 2,898 18.64 Other 2,721 940 34.55 1,576 63 4.00 4,297 1,003 23.34 Total Interest-Bearing Liabilities 72,926 15,915 21.82 28,393 1,162 4.09 101,319 17,077 16.85 Demand Deposits 24,478 — — 3,710 — — 28,188 — — Other Liabilities 29,877 — — 6,661 — — 36,538 — — Minority Interests 1,172 — — — — — 1,172 — — Shareholders’ Equity 17,178 — — — — — 17,178 — — Total Liabilities and Equity 145,631 — — 38,764 — — 184,395 — — Spread and Net Yield Interest Rate Spread 7.26 (0.76 ) 9.02 Cost of Funds Supporting Interest-Earning Assets 13.43 6.92 12.62 Net Yield on Interest-Earning Assets 15.65 (3.58 ) 13.26

(*) Rates include the CER adjustment. (1) Non-accruing loans have been included in average loans.

The following table shows our consolidated average balances, accrued interest and nominal interest rates for interest-earning assets and interest-bearing liabilities for the fiscal year ended December 31, 2015.

Fiscal Year Ended December 31, 2015 (*) Pesos Dollars Total Average Average Average Average Accrued Yield/ Average Accrued Yield/ Average Accrued Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate (in millions of Pesos, except rates) Assets Government Securities 11,746 3,275 27.88 2,870 243 8.47 14,616 3,518 24.07 Loans Private Sector 74,081 20,173 27.23 3,710 155 4.18 77,791 20,328 26.13 Public Sector 16 4 25.00 — — — 16 4 25.00 Total Loans (1) 74,097 20,177 27.23 3,710 155 4.18 77,807 20,332 26.13 Other 2,264 588 25.97 118 5 4.24 2,382 593 24.90 Total Interest-Earning Assets 88,107 24,040 27.29 6,698 403 6.02 94,805 24,443 25.78 Cash and Gold 10,112 — — 7,272 — — 17,384 — — Equity in Other Companies 2,369 — — 392 — — 2,761 — — Other Assets 10,057 — — 904 — — 10,961 — — Allowances (3,175 ) — — (52 ) — — (3,227 ) — —

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Total Assets 107,470 — — 15,214 — — 122,684 — — Liabilities and Equity Deposits Checking Accounts — — — — — — — — — Savings Accounts 11,932 28 0.23 2,496 — — 14,428 28 0.19 Time Deposits 36,198 8,526 23.55 2,335 60 2.57 38,533 8,586 22.28 Total Interest-Bearing Deposits 48,130 8,554 17.77 4,831 60 1.24 52,961 8,614 16.26 Debt Securities 4,248 1,103 25.97 6,212 743 11.96 10,460 1,846 17.65 Other 1,489 496 33.31 1,161 43 3.70 2,650 539 20.34 Total Interest-Bearing Liabilities 53,867 10,153 18.85 12,204 846 6.93 66,071 10,999 16.65 Demand Deposits 19,850 — — 1,062 — — 20,912 — — Other Liabilities 20,778 — — 1,858 — — 22,636 — — Minority Interests 860 — — — — — 860 — — Shareholders’ Equity 12,205 — — — — — 12,205 — — Total Liabilities and Equity 107,560 — — 15,124 — — 122,684 — — Spread and Net Yield Interest Rate Spread 8.44 (0.91 ) 9.13 Cost of Funds Supporting Interest-Earning Assets 11.52 12.63 11.60 Net Yield on Interest-Earning Assets 15.76 (6.61 ) 14.18

(*) Rates include the CER adjustment. (1) Non-accruing loans have been included in average loans.

The following table shows our consolidated average balances, accrued interest and nominal interest rates for interest-earning assets and interest-bearing liabilities for the fiscal year ended December 31, 2014.

Fiscal Year Ended December 31, 2014 (*) Pesos Dollars Total Average Average Average Average Accrued Yield/ Average Accrued Yield/ Average Accrued Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate (in millions of Pesos, except rates) Assets Government Securities 7,561 1,814 23.99 1,199 40 3.34 8,760 1,854 21.16 Loans Private Sector 55,704 16,072 28.85 3,368 164 4.87 59,072 16,236 27.49 Public Sector — — — — — — — — — Total Loans (1) 55,704 16,072 28.85 3,368 164 4.87 59,072 16,236 27.49 Other 2,400 664 27.67 117 4 3.42 2,517 668 26.54 Total Interest-Earning Assets 65,665 18,550 28.25 4,684 208 4.44 70,349 18,758 26.66 Cash and Gold 7,838 — — 6,499 — — 14,337 — — Equity in Other Companies 2,123 — — 534 — — 2,657 — — Other Assets 7,451 — — 325 — — 7,776 — — Allowances (2,550 ) — — (59 ) — — (2,609 ) — — Total Assets 80,527 — — 11,983 — — 92,510 — — Liabilities and Equity Deposits Checking Accounts — — — 1 — — 1 — — Savings Accounts 8,722 20 0.23 1,464 — — 10,186 20 0.20

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Time Deposits 28,418 6,555 23.07 1,811 35 1.93 30,229 6,590 21.80 Total Interest-Bearing Deposits 37,140 6,575 17.70 3,276 35 1.07 40,416 6,610 16.35 Debt Securities 3,110 811 26.08 5,866 674 11.49 8,976 1,485 16.54 Other 1,492 477 31.97 1,197 39 3.26 2,689 516 19.19 Total Interest-Bearing Liabilities 41,742 7,863 18.84 10,339 748 7.23 52,081 8,611 16.53 Demand Deposits 14,432 — — 686 — — 15,118 — — Other Liabilities 14,789 — — 1,350 — — 16,139 — — Minority Interests 629 — — — — — 629 — — Shareholders’ Equity 8,543 — — — — — 8,543 — — Total Liabilities and Equity 80,135 — — 12,375 — — 92,510 — — Spread and Net Yield Interest Rate Spread 9.41 (2.79 ) 10.13 Cost of Funds Supporting Interest-Earning Assets 11.97 15.97 12.24 Net Yield on Interest-Earning Assets 16.28 (11.53) 14.42

(*) Rates include the CER adjustment. (1) Non-accruing loans have been included in average loans.

Changes in Net Interest Income-Volume and Rate Analysis The following table allocates, by currency of the underlying asset or liability, changes in our consolidated interest income and interest expenses between changes in the average volume of interest-earning assets and interest-bearing liabilities and changes in their respective average yield/rate for (i) the fiscal year ended December 31, 2016 compared with the fiscal year ended December 31, 2015; and (ii) the fiscal year ended December 31, 2015, compared with the fiscal year ended December 31, 2014. Differences related to both rate and volume are allocated proportionally to the rate variance and the volume variance, respectively.

Fiscal Year 2016/ Fiscal Year 2015, Fiscal Year 2015/ Fiscal Year 2014, Increase (Decrease) due to changes in Increase (Decrease) due to changes in Volume Rate Net Change Volume Rate Net Change (in millions of Pesos) Interest Earning Assets Government Securities Pesos 1,255 116 1,371 1,130 331 1,461 Dollars (313 ) 230 (83 ) 96 107 203 Total 942 346 1,288 1,226 438 1,664 Loans(1) Private Sector Pesos 7,397 1,409 8,806 4,943 (842 ) 4,101 Dollars 261 (21 ) 240 23 (32 ) (9 ) Total 7,658 1,388 9,046 4,966 (874 ) 4,092 Public Sector Pesos (2 ) (2 ) (4 ) 4 — 4 Dollars — — — — — —

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Total (2 ) (2 ) (4 ) 4 — 4 Other Pesos 82 157 239 (37 ) (39 ) (76 ) Dollars — — — — 1 1 Total 82 157 239 (37 ) (38 ) (75 ) Total Interest-Earning Assets Pesos 8,732 1,680 10,412 6,040 (550) 5,490 Dollars (52 ) 209 157 119 76 195 Total 8,680 1,889 10,569 6,159 (474) 5,685 Interest Bearing Liabilities Savings Account Pesos 11 4 15 7 1 8 Dollars — — — — — — Total 11 4 15 7 1 8 Time Deposits Pesos 3,061 1,470 4,531 1,830 141 1,971 Dollars 24 (8 ) 16 12 13 25 Total 3,085 1,462 4,547 1,842 154 1,996 Notes Pesos 549 223 772 295 (3 ) 292 Dollars 341 (61 ) 280 41 28 69 Total 890 162 1,052 336 25 361 Other liabilities Pesos 423 21 444 — 19 19 Dollars 15 5 20 (1 ) 5 4 Total 438 26 464 (1 ) 24 23 Total Interest Bearing Liabilities Pesos 4,044 1,718 5,762 2,132 158 2,290 Dollars 380 (64 ) 316 52 46 98 Total 4,424 1,654 6,078 2,184 204 2,388

(1) Non-accruing loans have been included in average loans.

The increase of Ps.10,569 million in interest income for the fiscal year ended December 31, 2016, as compared to the previous year, can be explained by the Ps.8,680 million increase from the increase in the volume of interest-earning assets, accompanied by an increase of Ps.1,889 million in interest income due to an increase in interest rates.

In particular, Ps.10,412 million of the increase was due to an increase in interest income from Peso-denominated assets. This increase was due to an increase in volume, mainly as a result of the increase in Peso-denominated loans to the private sector (representing 84.7% of the increase). The average volume of private sector for Peso-denominated loans amounted to Ps.99,817 million for fiscal year 2016, as compared to Ps.74,801 million

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents for the previous fiscal year. This increase was due to a Ps.1,680 million increase in interest income from Peso-denominated assets, which resulted from an increase in interest rates earned from Peso-denominated assets due to a 180 basis points (“b.p.”) increase in the average interest rate for loans to the private sector, from 27.23% to 29.03%. The Ps.1,288 million increase in interest from government securities was due to an increase in volume equal to Ps.946 million and an increase in interest rates (accounting for Ps.346 million), mainly as a consequence of the higher average rate accrued on provincial treasury bills and debt securities.

In terms of interest expenses, the Ps.6,078 million increase for the fiscal year ended December 31, 2016, as compared to 2015, is primarily a result of an increase in the volume of time deposits denominated in Pesos (which increased from Ps.36,198 million in 2015 to Ps.47,953 million in 2016), together with a 367 b.p. increase in the interest rate payable on time deposits, which increased from 23.55% to 27.23%. In terms of volume, time deposits represented 67.8% of the net change in respect of time deposits in fiscal year 2016, an increase as compared to 92.3% in fiscal year 2015, while the interest rate payable on time deposits represented only 32.2% of the net change in respect of time deposits as of the end of fiscal year 2016, as compared to the 7.7% as of the end of fiscal year 2015. The higher amount of notes outstanding was in line with the trajectory of interest bearing liabilities, Ps.890 million in terms of volume of notes outstanding, primarily attributable to the issuances of notes by Tarjeta Naranja, Tarjetas Cuyanas, CFA and Banco Galicia. Such issuances were partially offset by the amortization of certain outstanding notes. In terms of interest rates, a Ps.162 million increase in the interest payable on the notes was recorded.

Interest-Earning Assets-Net Yield on Interest-Earning Assets The following table analyzes, by currency of denomination, the levels of our average interest-earning assets and net interest earned, and illustrates the net yields and spreads obtained, for each of the periods indicated.

Fiscal Year Ended December 31, 2016 2015 2014 (in millions of Pesos, except percentages) Total Average Interest-Earning Assets Pesos 118,483 88,107 65,665 Dollars 16,803 6,698 4,684 Total 135,286 94,805 70,349 Net Interest Earned (1) Pesos 18,537 13,887 10,687 Dollars (602 ) (443 ) (540 ) Total 17,935 13,444 10,147 Net Yield on Interest-Earning Assets (2) (%) Pesos 15.65 15.76 16.28 Dollars (3.58 ) (6.61 ) (11.53 ) Weighted-Average Yield 13.26 14.18 14.42 Interest Spread, Nominal Basis (3) (%) Pesos 7.26 8.44 9.41 Dollars (0.76 ) (0.91 ) (2.79 ) Weighted-Average Yield 9.03 9.13 10.13 Credit Related Fees Included in Net Interest Earned Pesos 352 279 224 Dollars 1 2 2 Total 353 281 226

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (1) Net interest earned corresponds to the net financial income (“Financial Income” minus “Financial Expenses”, as set forth in the Income Statement), plus (i) financial fees included in “Income from Services - In Relation to Lending Transactions” in the Income Statement,(ii) contributions to the Deposits Insurance Fund included in the item with the same denomination that is part of the “Financial Expenses” caption in the Income Statement, and (iii) contributions and taxes on financial income included in the Income Statement under “Financial Expenses - Others”; minus (i) net income from corporate securities, included under “Financial Income/Expenses - Interest Income and Gains/Losses from Holdings of Government and Corporate Securities”, in the Income Statement,(ii) differences in quotation of gold and foreign currency included in the item with the same denomination that is part of the Financial Expenses/Income caption in the Income Statement, and (iii) the premiums and adjustments on forward transactions in foreign currency, included in the item “Financial Income-Others” in the Income Statement. Net interest earned also includes income from government securities used as security margins in repurchase agreement transactions. This income/loss is included in “Miscellaneous

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Income/Loss - Others” in the Income Statement. Net income from government securities includes both interest and gains/losses due to the variation of market quotations. (2) Net interest earned, divided by average interest-earning assets. (3) Interest spread, nominal basis is the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities.

Government and Corporate Securities The following table shows our holdings of government and corporate securities at the balance sheet dates stated below, and the breakdown of the portfolio in accordance with the Argentine Central Bank classification system and by the currency of denomination of the relevant securities. Our holdings of government securities represent mainly holdings of Banco Galicia.

Fiscal Year Ended December 31, 2016 2015 2014 (in millions of Pesos) Government Securities Pesos Recorded at Cost plus Yield 1,772 1,390 30 Debt securities of provinces 1,702 1,343 30 Others 70 47 — Recorded at Fair Value 2,026 1,954 1,480 Bonar Bonds 101 944 1,437 Bonac Bonds 930 622 13 Others 995 388 30 Issued by Argentine Central Bank 8,550 6,924 7,247 Lebac Unquoted 6,974 758 3,649 Lebac Quoted 1,576 6,166 3,581 Nobac Repurchase Agreement Transactions — — 17 Total Government Securities in Pesos 12,348 10,268 8,757 Dollars Recorded at Cost plus Yield 150 — 287 Government Bonds 150 — 287 Recorded at Fair Value 1,203 422 966 Boden 2015 Bonds — — 39 Government Bonds 1,203 422 927 Issued by Argentine Central Bank — 4,835 — Lebac Unquoted — 4,835 — Total Government Securities in Dollars 1,353 5,257 1,253 Total Government Securities 13,701 15,525 10,010 Corporate Securities Corporate Equity Securities (Quoted) in Pesos — — — Corporate Equity Securities (Quoted) in Dollars — — — Allowances — — — Total Government and Corporate Securities 13,701 15,525 10,010

As of December 31, 2016, the growth in our public securities denominated in Pesos was mainly due to the volume of Lebacs issued by the Argentine Central Bank.

The amount of government securities denominated in Pesos, recorded at cost plus yield, for Ps. 1,772 million, correspond to our holdings of debt securities and treasury bills, mainly issued by the provinces of Buenos Aires (for Ps. 791 million), Neuquén (for Ps. 737 million) and Entre Ríos (for Ps. 144 million).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The amount of government securities denominated in Pesos, recorded at fair value, for Ps. 2,026 million, correspond mainly to our holdings in Argentine Bonds due 2017 and 2019, for Ps. 62 million and Ps. 39 million, respectively; National Treasury Bonds for Ps. 930 million and Discount Bonds maturing in 2033 for Ps. 875 million.

At December 31, 2016, the holding of public securities denominated in dollars was composed mainly of Argentine Nation Bonds with maturity in 2017 for Ps. 835 million, recorded at fair value.

As of December 31, 2015, the increase in our holdings of Argentine government securities denominated in Pesos was mainly due to our holdings recorded at cost plus yield of debt securities issued by the provinces of Buenos Aires, Neuquén and Entre Rios, among others, for Ps. 1,313 million and our holdings recorded at fair value of Bonac 2016 bonds for Ps.609 million.

Regarding our holdings of government securities denominated in dollars as of December 31, 2015, the increase was attributable to our holdings of Lebac unquoted for Ps. 4,835 million.

In 2014 the increase in our holdings of Argentine government securities denominated in Pesos was attributable to an increase in our holdings of Lebac and Nobac for Ps. 7,247 million. The portfolio of government securities denominated in Pesos for securities recorded at fair value reflects Grupo Financiero Galicia’s holdings of bonds issued by the Argentine government due in 2015, 2016, 2017 and 2019 for Ps.75 million, Ps.374 million, Ps.798 million and Ps.190 million, respectively.

Regarding our holdings of government securities denominated in dollars as of December 31, 2014, the increase in securities recorded at fair value includes debt securities of the provinces of Neuquén, Chubut, Buenos Aires and Mendoza, among others. The lower position in securities recorded at cost plus yield in dollars was primarily due to the decrease in securities of the provinces of Neuquén and Chubut.

All government securities, except for the Lebac and Nobac, which are issued by the Argentine Central Bank, were issued by the Argentine government.

Government Securities - Net Position The following table shows our net position in government and corporate securities at the balance sheet date, and the breakdown of the portfolio in accordance with the Argentine Central Bank classification system and by the securities’ currency of denomination. The net position is defined as holdings plus forward purchases and spot purchases pending settlement, minus forward sales and spot sales pending settlement.

As of December 31, 2016 Spot Spot Forward Forward purchases sales Net Holdings Purchases (1) Sales (2) to be settled to be settled Position (in millions of Pesos) Government Securities Holdings Recorded at Cost plus Yield Pesos 1,772 — — — — 1,772 Dollars 150 — — 30 (120 ) 60 Holdings Recorded at Fair Value Pesos 2,026 — — 7 (1 ) 2,032 Dollars 1,203 — — 713 (547 ) 1,369 Securities issued by the Argentine Central Bank Pesos 8,550 2,420 — 320 (50 ) 11,240 Total Government Securities 13,701 2,420 — 1,070 (718 ) 16,473 Corporate Equity Securities (Quoted) — — — — — — Total Government and Corporate Securities 13,701 2,420 — 1,070 (718 ) 16,473

(1) Forward purchases include securities granted as collateral. (2) Forward sales include government securities deposits.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The net position of government securities as of December 31, 2016 amounted to Ps.16,473 million.

The net position of government securities at cost plus yield issued in Pesos, for Ps.1,832 million, mainly corresponds to debt securities and treasury bills, primarily issued by the provinces of Buenos Aires, Neuquén and Entre Ríos.

The net position corresponding to government securities at fair value in Pesos, in the amount of Ps.2,032 million, mainly corresponds to Banco Galicia’s holdings of bonds issued by the Argentine government due in 2017 and 2019 for Ps.62 million and Ps.39 million, respectively, treasury bonds issued by the Argentine government for Ps.930 million and of discount bonds due in 2033 for Ps.875 million. The net position of government securities at fair value in Dollars amounts to Ps.1,369 million, a key component of which is the Argentine Bond for Ps.845 million due in 2017.

Regarding securities issued by the Argentine Central Bank, the net position of Ps.11,240 million corresponds to our holding of Lebac in Pesos.

Remaining Maturity and Weighted-Average Yield The following table analyzes the remaining maturity and weighted-average yield of our holdings of government and corporate securities as of December 31, 2016. Our government securities portfolio yields do not contain any tax equivalency adjustments.

Maturity Yield Maturing after 1 Maturing after 5 Maturing year but within years but within Maturing Total within 1 year 5 years 10 years after 10 years Book Book Book Book Book Yield Value Value Yield (1) Value Yield (1) Value Yield (1) Value (1) (in millions of Pesos, except percentages) Government Securities Recorded at Fair Value Pesos 2,026 284 22.8 % 805 6.2 % 60 17.7 % 877 4.1 % Dollars 1,203 973 0.6 % 126 2.0 % 104 4.8 % — — Recorded at Cost plus Yield Pesos 1,772 679 21.7 % 1,093 4.7 % — — — — Dollars 150 150 3.1 % — — — — — — Instruments Issued by the Argentine Central Bank Pesos 8,550 8,550 29.6 % — — — — — — Dollars — — — — — — — — — Securities Without Quotation Pesos — — — — — — — — — Dollars — — — — — — — — — Total Government Securities 13,701 10,636 25.9 % 2,024 5.1 % 164 9.5 % 877 4.1 % Corporate Debt Securities — — — — — — — — — Total Portfolio 13,701 10,636 25.9 % 2,024 5.1 % 164 9.5 % 877 4.1 %

(1) Effective yield based on December 31, 2016 quoted market values.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Loan Portfolio Our total loans reflect Banco Galicia’s, the Regional Credit Card Companies’ and CFA’s loan portfolios including past due principal amounts. Personal loans and credit-card loans are typically loans to individuals granted by Banco Galicia, the Regional Credit Card Companies or CFA. The Regional Credit Card Companies’ loans are included under “Credit card loans”, while most of CFA’s loans are included under “Personal loans”. Also, certain amounts related to advances, promissory notes, mortgage loans and pledge loans are extended to individuals. However, advances and promissory notes mostly represent loans to companies. The following table analyzes our loan portfolio, i.e., Banco Galicia’s loan portfolio consolidated with the Regional Credit Card Companies’ and CFA’s loan portfolio, by type of loan and total loans with guarantees.

As of December 31, 2016 2015 2014 2013 2012 (in millions of Pesos) Principal and Interest Non-Financial Public Sector — — — — — Local Financial Sector 2,098 762 193 633 357 Non-Financial Private Sector and Residents Abroad (1) Advances 10,063 8,549 3,987 3,349 3,098 Promissory Notes 25,298 22,752 16,304 13,323 10,460 Mortgage Loans 2,178 2,099 1,661 1,803 1,159 Pledge Loans 678 487 500 481 311 Personal Loans 15,312 9,259 6,996 8,051 7,283 Credit Card Loans 72,766 56,260 37,348 27,389 19,279 Placements in Banks Abroad 1,227 232 261 586 277 Other Loans 11,405 692 1,337 1,237 1,619 Accrued Interest, Adjustment and Quotation Differences Receivable 1,775 1,407 969 827 661 Documented Interest (642 ) (597 ) (348 ) (271 ) (201 ) Total Non-Financial Private-Sector and Residents Abroad 140,060 101,140 69,015 56,775 43,946 Total Gross Loans 142,158 101,902 69,208 57,408 44,303 Allowance for Loan Losses (4,707 ) (3,560 ) (2,615 ) (2,129 ) (1,732 ) Total Loans 137,451 98,342 66,593 55,279 42,571 Loans with Guarantees With Preferred Guarantees (2) 3,322 2,988 2,695 2,433 1,699 Other Guarantees 18,984 13,508 9,463 8,257 6,830 Total Loans with Guarantees 22,306 16,496 12,158 10,690 8,529

(1) Categories of loans include: - Advances: short-term obligations drawn on by customers through overdrafts. - Promissory Notes: endorsed promissory notes, notes 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. - Pledge Loans: loans secured by collateral (such as cars or machinery) other than real estate, where such collateral is an integral part of the loan documents. - 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. - Other Loans: loans not included in other categories. - Documented Interest: discount on notes and bills.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (2) Preferred guarantees include mortgages on real estate property or pledges on movable property, such as cars or machinery, where Banco Galicia has priority, endorsements of the Federal Office of the Secretary of Finance, pledges of Government securities, or gold or cash as collateral.

For the fiscal year ended December 31, 2016, Banco Galicia’s loan portfolio before allowances for loan losses amounted to Ps.142,158 million, a 40% increase as compared to the fiscal year ended December 31, 2015, as a result of increases of 40% in both our loans to individuals and our loans to companies.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents For the fiscal year ended December 31, 2015, Banco Galicia’s loan portfolio before allowances for loan losses amounted to Ps.101,902 million, a 47% increase as compared to the fiscal year ended December 31, 2014, as a result of increases of 47% in both our loans to individuals and our loans to companies.

Loans by Type of Borrower The following table shows the breakdown of our total loan portfolio, by type of borrower at December 31, 2016, 2015 and 2014. The middle-market companies’ category includes Banco Galicia’s loans to small and medium-sized companies and the agricultural and livestock sectors while the individuals’ category includes loans granted by Banco Galicia, the Regional Credit Card Companies and CFA. Loans to individuals comprise both consumer loans and commercial loans extended to individuals with a commercial activity.

As of December 31, 2016 2015 2014 Amount % of Total Amount % of Total Amount % of Total (in millions of Pesos, except percentages) Commercial Loans 56,845 40.0 42,641 41.8 29,104 42.0 Corporate 22,434 15.8 13,619 13.4 8,590 12.4 Middle-Market Companies 34,411 24.2 29,022 28.4 20,514 29.6 - Agribusiness 12,555 8.8 13,209 13.0 9,289 13.4 - Small and medium-sized companies 21,856 15.4 15,813 15.4 11,225 16.2 Individuals 81,978 57.7 58,267 57.2 39,649 57.3 - Bank 46,418 32.7 32,806 32.2 20,538 29.7 - Regional Credit Card Companies 30,279 21.3 22,033 21.6 16,096 23.3 - CFA 5,281 3.7 3,428 3.4 3,015 4.3 Financial Sector (1) 3,335 2.3 994 1.0 455 0.7 Non-Financial Public Sector — — — — — — Total (2) 142,158 100.0 101,902 100.0 69,208 100.0

(1) Includes local and international financial sector. Financial Sector loans are primarily composed of interbank loans (call money loans), overnight deposits at international money center banks and loans to provincial banks. (2) Before the allowance for loan losses.

Loans by Economic Activity The following table sets forth as of the dates indicated an analysis of our loan portfolio according to the borrower’s main economic activity. Figures include principal and interest.

As of December 31, 2016 2015 2014 % of % of % of Amount Total Amount Total Amount Total (in millions of Pesos, except percentages) Financial Sector (1) 3,335 2.3 994 1.0 455 0.7 Services Non-Financial Public Sector — — — — — — Communications, Transportation Health and Others 4,272 3.0 5,084 5.0 2,886 4.2 Electricity, Gas, Water Supply and Sewage Services 2,658 1.9 160 0.2 216 0.3 Other Financial Services 1,663 1.2 553 0.5 366 0.5 Total 8,593 6.1 5,797 5.7 3,468 5.0 Primary Products Agriculture and Livestock 11,921 8.4 11,342 11.1 8,178 11.8 Fishing, Forestry and Mining 1,810 1.3 1,956 1.9 1,459 2.1

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As of December 31, 2016 2015 2014 % of % of % of Amount Total Amount Total Amount Total (in millions of Pesos, except percentages) Total 13,731 9.7 13,298 13.0 9,637 13.9 Consumer 82,730 58.2 59,012 57.9 39,747 57.4 Retail Trade 6,499 4.6 3,287 3.3 2,237 3.2 Wholesale Trade 6,641 4.7 5,450 5.3 3,699 5.4 Construction 1,177 0.8 1,035 1.0 709 1.0 Manufacturing Foodstuffs 6,316 4.4 3,499 3.4 2,943 4.3 Transportation Materials 2,307 1.6 2,783 2.7 996 1.4 Chemicals and Oil 4,320 3.0 2,712 2.7 2,269 3.3 Other Manufacturing Industries 6,509 4.6 4,035 4.0 3,048 4.4 Total 19,452 13.6 13,029 12.8 9,256 13.4 Other Loans — — — — — — Total (2) 142,158 100.0 101,902 100.0 69,208 100.0

(1) Includes local and international financial sectors. (2) Before the allowance for loan losses.

Consumer loans account for the majority of the loan portfolio, which as of the fiscal year-end represented 58.2% of our total loan portfolio, as compared to 57.9% for fiscal year 2015 and 57.4% for fiscal year 2014.

As for business activities, the most significant categories for the fiscal year ended December 31, 2016 were those of the manufacturing industry, the primary production sector and trade (wholesale and retail), with a total portfolio share of 13.6%, 9.7% and 9.3%, respectively.

The most significant growth as compared to fiscal year 2015 occurred in the manufacturing industry and consumer loans, with increases of 49% and 40%, respectively.

Maturity Composition of the Loan Portfolio The following table sets forth an analysis by type of loan and time remaining to maturity of our loan portfolio as of December 31, 2016.

After 1 After 6 After 3 Month but Months but After 1 Year Years but Total at Within 1 within 6 within 12 but within 3 within 5 After 5 December 31, Month Months Months Years Years Years 2016 (in millions of Pesos) Non-Financial Public Sector (1) — — — — — — — Financial Sector (1) 1,476 201 139 267 15 0 2,098 Private Sector and Residents Abroad 78,103 32,214 14,048 13,361 1,704 629 140,059 - Advances 4,877 3,305 1,881 0 0 0 10,063 - Promissory Notes 6,231 10,072 3,387 5,137 413 58 25,298 - Mortgage Loans 97 264 367 743 137 570 2,178 - Pledge Loans 17 144 113 310 94 0 678

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents - Personal Loans 1,540 3,998 3,559 5,530 684 1 15,312 - Credit-Card Loans 56,180 11,908 3,741 882 55 0 72,766 - Other Loans 8,050 2,523 1,000 759 321 0 12,653 - Accrued Interest and Quotation Differences Receivable (1) 1,775 — — — — — 1,775 - (Documented Interest) (642 ) — — — — — (642 ) - (Unallocated Collections) (22 ) — — — — — (22 ) Allowance for Loan Losses (2) (4,706 ) (4,706 ) Total Loans, Net 74,873 32,415 14,187 13,628 1,719 629 137,451

(1) Interest and the CER adjustment were assigned to the first month. (2) Allowances were assigned to the first month as were past due loans and loans in judicial proceedings.

Interest Rate Sensitivity of Outstanding Loans The following table presents the interest rate sensitivity of our outstanding loans due after one year by denomination as of December 31, 2016.

In millions of Pesos As a % of Total Loans Variable Rate (1)(2) Pesos 2,342 14.7 % Dollars 905 5.7 % Total 3,247 20.4 % Fixed Rate (2)(3) Pesos 11,318 70.8 % Dollars 1,411 8.8 % Total 12,729 79.6 %

(1) Includes overdraft loans. (2) Includes past due loans and excludes interest receivable, differences in quotations and the CER adjustment. (3) Includes short-term and long-term loans whose rates are determined at the beginning of the loans’ life.

Credit Review Process Credit risk is the potential for financial loss resulting from the failure of a borrower to honor its financial contractual obligations. Our credit risk arises mainly from Banco Galicia’s, the Regional Credit Card Companies’ and CFA’s lending activities, and from the fact that, in the normal course of business, these subsidiaries are parties to certain transactions with off-balance sheet treatment and associated risk, mainly commitments to extend credit and guarantees granted. See also Item 5.A. “Operating Results-Off- Balance Sheet Arrangements”.

Our credit approval and credit risk analysis is a centralized process based on the concept of “opposition of interests”. This is achieved through the existing division among the risk management, the credit and the origination functions both in retail and wholesale businesses, thus enabling us to achieve an ongoing and efficient control of asset quality, a proactive management of loans with problems, aggressive charge-offs of uncollectible loans, and adequate loan loss provisioning. Apart from that, it includes the follow-up of the models for measuring the portfolio risk at the operation and customer levels, facilitating the detection of loans with problems and the losses associated thereto, what in turn allows the early detection of situations that could entail some degree of portfolio deterioration and provides appropriate protection of our assets.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia The Risk Management Division is responsible for the overall risk management of the Bank and its subsidiaries, in accordance with international best practices. It is independent from other business areas, as it reports directly to the Bank’s General Division. This approach is in line with a high level of commitment from all the Bank’s governance bodies, which strengthens the idea of an independent management but, at the same time, it is involved in business decisions and oriented toward optimizing the Bank’s risk profile, using state-of-the-art tools and systems for identifying, measuring, monitoring and mitigating each and every risk faced by the Bank.

The mission of the Risk Management Division is comprised of the following activities: (i) actively and comprehensively managing and monitoring the risks assumed by Banco Galicia and its subsidiaries to ensure compliance with internal policies and regulations; (ii) keeping the board of directors of Banco Galicia informed with respect to the risks Banco Galicia faces and proposing how to deal with such risks, as well as defining the risk profile to be adopted; (iii) strengthening a risk management culture that fully understands the risks taken by providing a global view of the business; (iv) setting the risk appetite that the Bank is willing to take, designing policies and procedures to monitor, control and mitigate its main risks; (v) quantifying the capital required by each business and recommending to the General Division the appropriate allocation and profitability of each risk undertaken; and (vi) facilitating communication regarding dispensations from risk internal policies to Banco Galicia’s General Division, as appropriate, together with developing a compliance plan.

The Risk Management Division’s responsibilities include: (i) ensuring that contingency plans for risks posing a threat to business continuity are in place; (ii) recommending the most suitable methodologies for Banco Galicia to measure identified risks; (iii) guaranteeing that the launching of any new product includes a previous assessment of potential risks involved; and (iv) providing technical support and assisting management with global risk management.

The Risk Management Division handles solvency levels and financial, operational, credit, reputational and strategic risks. The Risk Management Division works with the support of the Compliance and Money Laundering Prevention Division, a division that also reports to the board of directors of Banco Galicia, and whose purpose is to prevent the execution of financial operations with funds derived from illegal activities, and the use of the Bank as a vehicle for laundering money and funding terrorist activities. In addition, the Risk Management Division monitors compliance with laws, regulations and internal policies in order to prevent financial and/or criminal penalties and to minimize any reputational impact. It is an independent role that coordinates and assists in identifying, providing advice on, monitoring, reporting and warning about compliance risks.

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

Banco Galicia has policies, procedures and control structures in place related to the features of the various products offered, which assist in monitoring transactions in order to identify unusual or suspicious transactions and report them to the UIF. The Compliance and Money Laundering Prevention Division is responsible for managing such risk, through the implementation of control and prevention procedures as well as through communication thereof to the rest of the organization via employee training and incorporation of such risk into company handbooks.

Banco Galicia has appointed a director to be responsible for the management of such risk, and has created a committee in charge of planning, coordinating and enforcing compliance with the policies set by the board of directors of Banco Galicia (see-“Aspects related to Corporate Organization, Decision Making, Internal Control, and Compensation Policy for Directors and Officers”). Such regulations are based on Banco Galicia’s “know your customer” policy, which is implemented and enforced worldwide. Internal and external auditors regularly review management of such risk.

The Credit Division is responsible for developing and proposing strategies for credit and credit-granting policies, as well as managing and monitoring credit origination processes, follow-up and control thereof, and the recovery of past-due loans. The goal of this division is ensuring the quality of the loan portfolio, minimizing cost and maximizing time efficiency, and recovery optimization, thus minimizing loan losses and optimizing efficiency in processes and business credit granting.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The following subdivisions depend on support from the Credit Division: Wholesale Credit, Retail Credit, Portfolio Management and Monitoring, Consumer Credit Recovery, Portfolio Recovery and Credit Policy Strategy and Planning.

In order to obtain timely information and to provide a flexible and efficient structure that assists in responding and adjusting to then current macro and microeconomic variables, the above-mentioned functions, both for companies and for individuals, are under the direction of divisions and departments that report directly to the Credit Division.

The Retail Credit Division is responsible for ensuring that the fraud screening and prevention process is effective, thus assuring the quality of the retail portfolio. The subdivision designs and manages complex credit decision-taking models and tools, directs alignment efforts to implement retail business strategies, and works with the business team to develop business opportunities.

The Wholesale Credit Division is in responsible for the corporate rating process, thus assuring the quality of the wholesale portfolio. The subdivision directs alignment efforts to implement business strategies based on the customer service model, and works with the business team to develop business opportunities.

The Risk Management Division deals specifically with complex business such as banks, public sector, capital markets and investment projects.

Before approving a loan, Banco Galicia performs an assessment of the potential borrower and his/her financial condition. Approvals of loans exceeding certain amounts are analyzed based on the credit line and the customer.

Banco Galicia performs its risk assessment based on the following factors:

Qualitative Analysis Assessment of the corporate borrower’s creditworthiness performed by the officer in charge of the account based on personal knowledge. Economic and Financial Risk Quantitative analysis of the borrower’s balance sheet amounts. Economic Risk of the Sector Measurement of the general risk of the financial sector where the borrower operates (based on statistical information, internal and external). Environmental Risk Environmental impact analysis (required for all investment projects of significant amounts).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Loans are generally approved pursuant to pre-set authorization levels, except loans exceeding certain amounts, which are approved by the Credit Committee.

The Credit Policy Division is responsible for determining origination and recovery policies, ensuring proper implementation of such policies and disclosure to other divisions of the Bank.

The Portfolio Management and Monitoring Division is responsible for monitoring and reviewing the credit portfolio. In addition, the Portfolio Management and Monitoring Division is in charge of analyzing environmental and sectorial risks.

The Strategy and Planning Division is responsible for developing the strategic vision of the area and defining efficiency ratios and action plans, thereby ensuring compliance with the preset targets. The Strategy and Planning Division is also responsible for ensuring compliance with applicable regulations, as established by national and international regulatory agencies, and for reviewing and proposing changes to Banco Galicia’s internal policies, with respect to both credit granting and recovery of past-due loans.

The Customer Credit Recovery Division’s main role is to minimize any losses of the portfolio and to pursue an increase in customers for the Bank’s commercial line of products, as well as to establish recovery management models tailored for each type of portfolio.

The Portfolio Recovery Division manages legal proceedings and other customer complaints within the Individual and Company portfolios with the goal of minimizing losses pursuant to such claims. In addition, it provides advice on legal aspects to the Credit Division.

Regional Credit Card Companies Each of the Regional Credit Card Companies maintains its own credit products and limits; however, their credit approval and credit risk analysis procedures are basically the same. Assessment of the credit risk of each customer is based on certain required information, provided by the customer, and verified by the companies, as well as on information on customers’ credit records obtained from credit bureaus and other entities. Once the information is verified, the credit card is issued. There are certain requirements such as age, minimum levels of income (depending on the type of customer, i.e. employee, self-employed, etc.) and domicile area that must be fulfilled in order to qualify for a credit card. Credit limits are defined based on customers’ income. Credit limits may be raised for a particular customer, either at the customer’s request or based on the customer’s past payment profile, at the companies’ discretion or for all customers, due to, among other factors, macroeconomic conditions such as inflation, salary trends or interest rates.

Credit risk assessment, credit approval (the extension of a credit card and the assignment of a limit) and classification (in accordance with the current loan classification criteria defined by the Argentine Central Bank regulations) of the loan portfolio are managed by each company on a centralized basis by a unit that is separate from the sales units. The credit process is described in manuals and Tarjeta Naranja, the largest regional credit card company, has certified all of its processes under the ISO 9001/2000 standard. Credit limits and policies are defined by the board of directors of each regional credit card company.

With regards to recovery of past due loans, the Regional Credit Card Companies and Cobranzas Regionales, a subsidiary of Tarjetas Regionales, manage the early stages of delinquency through their branch personnel and use different types of contact with customers (letters, phone calls, etc.). After 100 days, recovery is turned over to collection agencies that manage out of court proceedings, and if the loan is not recovered, court proceedings could be initiated by other specialized agencies. Cobranzas Regionales supervises the whole process of recovery, including recovery procedures of such collection agencies.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Compañía Financiera Argentina CFA maintains its own credit products and limits. Assessment of the credit risk of each customer is based on certain required information, provided by the customer, and verified by the company, as well as on information on customers’ credit records obtained from credit bureaus and other entities.

Credit risk assessment, credit approval and classification (in accordance with the current loan classification criteria defined by the Argentine Central Bank regulations) of the loan portfolio are managed by the company on a centralized basis by a unit that is separate from the sales units.

Main Argentine Central Bank’s Rules on Loan Classification and Loan Loss Provisions General Regardless of the internal policies and procedures designed to minimize risks undertaken, Banco Galicia complies with the Argentine Central Bank regulations.

In 1994, the Argentine Central Bank introduced the current loan classification system and the corresponding minimum loan- loss provision requirements applicable to loans and other types of credit (together referred to as “loans” in this section) to private sector borrowers.

The current loan classification system applies certain criteria to classify loans in a bank’s “consumer” portfolio, and another set of criteria to classify loans in its “commercial” portfolio. The classification system is independent of the currency in which the loan is denominated.

The loan classification criteria applied to loans in the consumer portfolio is based on objective guidelines related to the borrower’s degree of fulfillment of its obligations or its legal status, the information provided by the Financial System’s Debtors System-whenever debtors reflect lower quality levels than the rating assigned by the Bank, by the Non-Performing Debtors’ database from former financial institutions and the status resulting from the enforcement of the refinance guidelines. In the event of any disagreement, the guidelines indicating the greater risk level of loan losses should be considered.

For the purposes of the Argentine Central Bank’s regulations, consumer loans are defined as mortgage loans, pledge loans, credit card loans and other types of loans in installments granted to individuals. All other loans are considered commercial loans. In addition, in accordance with an option set forth in these regulations, Banco Galicia prospectively applies the consumer portfolio classification criteria to commercial loans of up to Ps.2.5 million. This classification is based on the level of fulfillment and the situation thereof.

The main classification criterion for loans in the commercial portfolio is each borrower’s ability to pay, mainly in terms of such borrower’s future cash flows. If a customer has both commercial and consumer loans, all these loans will be considered as a whole to determine eligibility for classification in the corresponding portfolio. Loans backed with preferred guarantees will be considered at 50% of their face value.

By applying the Argentine Central Bank’s classification to commercial loans, banks must assess the following factors: the current and projected financial situation of the borrower, the customer’s exposure to currency risk, the customer’s managerial and operating background, the borrower’s ability to provide accurate and timely financial information, as well as the overall risk of the sector in which the borrower operates and the borrower’s relative position within that sector.

The Argentine Central Bank’s regulations also establish that a team independent from the departments responsible for credit origination must carry out a periodic review of the commercial portfolio. Banco Galicia’s Credit Division, which is independent from the business units that generate transactions, is responsible for these reviews.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The review must be carried out on each borrower with debt pending payment equal to the lesser of the following amounts: Ps.4 million or 1% of the bank’s computable capital (the “RPC”) but, in any case, the review shall cover at least 20% of the total loan portfolio. The frequency of the review of each borrower depends on the bank’s exposure to that borrower. The Argentine Central Bank requires that the larger the exposure is, the more frequent the review should be. This review must be conducted every calendar quarter when credit exposure to that borrower is equal to or in excess of 5% of the bank’s RPC, or every six months when exposure equals or exceeds the lesser of the following amounts: Ps.4 million or 1% of the bank’s RPC. In all cases, at least 50% of Banco Galicia’s commercial portfolio must be reviewed once every six months; and all other borrowers in Banco Galicia’s commercial portfolio must be reviewed during the fiscal year, so that the entire commercial portfolio is reviewed every fiscal year.

In addition, only one level of discrepancy is permitted between the classification assigned by a bank and the lowest classification assigned by at least two other banks whose combined credit to the borrower represents 40% or more of the total credit of the borrower, considering all banks. If Banco Galicia’s classification was different by more than one level from the lowest classification granted, Banco Galicia must immediately downgrade its classification of the debtor to the same classification level, or else within one classification level.

Loan Classification The following tables contain the six loan classification categories corresponding to the different risk levels set forth by the Argentine Central Bank. Banco Galicia’s total exposure to a private sector customer must be classified according to the riskier classification corresponding to any part of such exposure.

Commercial Portfolio.

Loan Classification Description 1. Normal Situation The debtor is widely able to meet its financial obligations, demonstrating significant cash flows, a liquid financial situation, an adequate financial structure, a timely payment record, competent management, available information in a timely, accurate manner and satisfactory internal controls. The debtor is in the upper 50% of a sector of activity that is operating properly and has good prospects. 2. With Special Follow-up Cash flow analysis reflects that the debt may be repaid even though it is possible that the customer’s future payment ability may deteriorate without a proper follow-up. This category is divided into two subcategories: (2.a). Under Observation; (2.b). Under Negotiation or Refinancing Agreements. 3. With Problems Cash flow analysis evidences problems to repay the debt, and therefore, if these problems are not solved, there may be some losses. 4. High Risk of Insolvency Cash flow analysis evidences that repayment of the full debt is highly unlikely. 5. Uncollectible The amounts in this category are deemed total losses. Even though these assets may be recovered under certain future circumstances, inability to make payments is evident at the date of the analysis. It includes loans to insolvent or bankrupt borrowers. 6. Uncollectible due to Loans to borrowers indicated by the Argentine Central Bank to be in non-accrual status with financial Technical Reasons institutions that have been liquidated or are being liquidated, or whose

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents authorization to operate has been revoked. It also includes loans to foreign banks and other institutions that are not: (i) classified as “normal”; (ii) subject to the supervision of the Argentine Central Bank or other similar authority of the country of origin; (iii) classified as “investment grade” by any of the rating agencies admitted pursuant to Communiqué “A” 2729 of the Argentine Central Bank.

Consumer Portfolio.

Loan Classification Description 1. Normal Situation Loans with timely repayment or arrears not exceeding 31 days, both of principal and interest. 2. Low Risk Occasional late payments, with a payment in arrears of more than 32 days and up to 90 days. A customer classified as “Normal” having been refinanced may be recategorized within this category, as long as he amortizes one principal installment (whether monthly or bimonthly) or repays 5% of principal. 3. Medium Risk Some inability to make payments, with arrears of more than 91 days and up to 180 days. A customer classified as “Low Risk” having been refinanced may be recategorized within this category, as long as he amortizes two principal installments (whether monthly or bimonthly) or repays 5% of principal. 4. High Risk Judicial proceedings demanding payment have been initiated or arrears of more than 180 days and up to one year. A customer classified as “Medium Risk” having been refinanced may be recategorized within this category, as long as he amortizes three principal installments (whether monthly or bimonthly) or repays 10% of principal. 5. Uncollectible Loans to insolvent or bankrupt borrowers, or subject to judicial proceedings, with little or no possibility of collection, or with arrears in excess of one year. 6. Uncollectible due to Loans to borrowers who fall within the conditions described above under “Commercial Portfolio- Technical Reasons Uncollectible due to Technical Reasons”.

Loan Loss Provision Requirements Allocated Provisions. Minimum allowances for loan losses are required for the different categories in which loans are classified. The rates vary by classification and by whether the loans are secured. The percentages apply to total customer obligations, both principal and interest. The allowance for loan losses on the performing portfolio is unallocated, while the allowances for the other classifications are individually allocated. Regulations provide for the suspension of interest accrual or the requirement of allowances equivalent to 100% of the interests for customers classified as “With Problems” and “Medium Risk”, or lower. The allowances are set forth as follows:

Minimum Allowances for Loan Losses Category Secured Unsecured 1. Normal Situation 1 % 1 %

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 2. (a) “Under Observation” and “Low Risk” 3 % 5 % 2. (b) “Under Negotiation or Refinancing Agreements” 6 % 12 % 3. “With Problems” and “Medium Risk” 12 % 25 % 4. “High Risk of Insolvency” and “High Risk” 25 % 50 % 5. “Uncollectible” 50 % 100% 6. “Uncollectible Due to Technical Reasons” 100% 100%

Loans backed with preferred guarantees “A” (loans assigned or pledged in such a way that a financial institution may be assured of its full repayment due to the existence of a solvent third party or secondary markets available for the sale of the assets) require a 1% provision independently of the customer category.

General Provisions. In addition to the specific loan loss allowances described above, the Argentine Central Bank requires the establishment of a general allowance of 1% for all loans in its “Normal Situation” category. This general allowance is not required for interbank financial transactions of less than 30 days, or loans to the non-financial public sector or to financial institutions majority- owned by the Argentine national, provincial or city governments with governmental guarantees. Besides these general provisions, Banco Galicia may establish additional provisions, determined based on Banco Galicia’s judgment of the entire loan portfolio risk at each reporting period.

As of December 31, 2016, 2015 and 2014, we maintained a general loan loss allowance of Ps. 2,272 million, Ps.1,455 million and Ps.1,283 million, respectively, which exceeded by Ps. 677 million, Ps.294 million and Ps.457 million, respectively, the 1% minimum general allowance required by the Argentine Central Bank. The increase in these amounts was related to the growth and maturing of individuals’ loan portfolios and the impact of the worsening of certain macroeconomic variables.

Classification of the Loan Portfolio based on Argentine Central Bank Regulations The following tables set forth the amounts of our loans past due and the amounts not yet due of the loan portfolio, including the loan portfolios of Banco Galicia, the Regional Credit Card Companies and CFA, applying the Argentine Central Bank’s loan classification criteria in effect at the dates indicated.

As of December 31, 2016 Amounts Not Yet Due Amounts Past Due Total Loans (in millions of Pesos, except percentages) Amounts % Amounts % Amounts % Loan Portfolio Classification 1. Normal and Normal Performance 134,730 97.1 — — 134,730 94.8 2. With Special Follow-up - Under observation and Low Risk 2,724 2.0 — — 2,724 1.9 3. With Problems and Medium Risk 721 0.5 1,043 30.2 1,764 1.2 4. High Risk of Insolvency and High Risk 528 0.4 1,552 44.9 2,080 1.5 5. Uncollectible — — 853 24.7 853 0.6 6. Uncollectible Due to Technical Reasons — — 7 0.2 7 — Total 138,703 100.0 3,455 100.0 142,158 100.0

As of December 31, 2015 Amounts Not Yet Due Amounts Past Due Total Loans (in millions of Pesos, except percentages) Amounts % Amounts % Amounts % Loan Portfolio Classification 1. Normal and Normal Performance 97,232 97.8 — — 97,232 95.4 2. With Special Follow-up - Under observation and Low Risk 1,503 1.5 — — 1,503 1.5

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 3. With Problems and Medium Risk 362 0.4 521 20.8 883 0.9 4. High Risk of Insolvency and High Risk 301 0.3 860 34.3 1,161 1.1 5. Uncollectible — — 1,118 44.7 1,118 1.1 6. Uncollectible Due to Technical Reasons — — 5 0.2 5 — Total 99,398 100.0 2,504 100.0 101,902 100.0

As of December 31, 2014 Amounts Not Yet Due Amounts Past Due Total Loans (in millions of Pesos, except percentages) Amounts % Amounts % Amounts % Loan Portfolio Classification 1. Normal and Normal Performance 65,279 96.9 — — 65,279 94.3 2. With Special Follow-up - Under observation and Low Risk 1,457 2.2 — — 1,457 2.1 3. With Problems and Medium Risk 339 0.5 439 24.3 778 1.1 4. High Risk of Insolvency and High Risk 327 0.4 1,049 58.1 1,376 2.0 5. Uncollectible — — 315 17.4 315 0.5 6. Uncollectible Due to Technical Reasons — — 3 0.2 3 — Total 67,402 100.0 1,806 100.0 69,208 100.0

As of December 31, 2013 Amounts Not Yet Due Amounts Past Due Total Loans (in millions of Pesos, except percentages) Amounts % Amounts % Amounts % Loan Portfolio Classification 1. Normal and Normal Performance 54,119 96.9 — — 54,119 94.3 2. With Special Follow-up - Under observation and Low Risk 1,238 2.2 — — 1,238 2.1 3. With Problems and Medium Risk 311 0.6 415 26.9 726 1.3 4. High Risk of Insolvency and High Risk 197 0.3 724 46.9 921 1.6 5. Uncollectible — — 402 26.1 402 0.7 6. Uncollectible Due to Technical Reasons — — 2 0.1 2 — Total 55,865 100.0 1,543 100.0 57,408 100.0

As of December 31, 2012 Amounts Not Yet Due Amounts Past Due Total Loans (in millions of Pesos, except percentages) Amounts % Amounts % Amounts % Loan Portfolio Classification 1. Normal and Normal Performance 41,791 96.8 — — 41,791 94.3 2. With Special Follow-up - Under observation and Low Risk 1,017 2.4 — — 1,017 2.3 3. With Problems and Medium Risk 244 0.5 353 31.5 597 1.4 4. High Risk of Insolvency and High Risk 128 0.3 535 47.6 663 1.5 5. Uncollectible — — 233 20.8 233 0.5 6. Uncollectible Due to Technical Reasons — — 2 0.1 2 — Total 43,180 100.0 1,123 100.0 44,303 100.0

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Amounts Past Due and Non-Accrual Loans The following table analyzes amounts past due by 90 days or more in our loan portfolio, by type of loan and by type of guarantee as of the dates indicated, as well as our non-accrual loan portfolio, by type of guarantee, our allowance for loan losses and the main asset quality ratios as of the dates indicated.

As of December 31, 2016 2015 2014 2013 2012 (in millions of Pesos, except ratios) Total Loans (1) 142,158 101,902 69,208 57,408 44,303 Non-Accrual Loans (2) With Preferred Guarantees 96 106 50 39 13 With Other Guarantees 88 103 59 58 29 Without Guarantees 4,520 2,958 2,363 1,954 1,453 Total Non-Accrual Loans (2) 4,704 3,167 2,472 2,051 1,495 Past Due Loan Portfolio Non-Financial Public Sector — — — Local Financial Sector — — — Non-Financial Private Sector and Residents Abroad Advances 189 188 169 150 96 Promissory Notes 144 192 121 76 54 Mortgage Loans 79 45 12 28 9 Pledge Loans 3 8 9 5 1 Personal Loans 274 304 262 243 188 Credit-Card Loans 2,673 1,693 1,200 1,003 740 Placements with Correspondent Banks — — — — — Other Loans 93 74 33 38 35 Total Past Due Loans 3,455 2,504 1,806 1,543 1,123 Past Due Loans With Preferred Guarantees 60 59 42 34 10 With Other Guarantees 60 97 38 47 25 Without Guarantees 3,335 2,348 1,726 1,462 1,088 Total Past Due Loans 3,455 2,504 1,806 1,543 1,123 Allowance for Loan Losses 4,707 3,560 2,615 2,129 1,732 Ratios (%) As a % of Total Loans: - Total Past Due Loans 2.43 2.46 2.61 2.69 2.53 - Past Due Loans with Preferred Guarantees 0.04 0.06 0.06 0.06 0.02 - Past Due Loans with Other Guarantees 0.04 0.10 0.05 0.08 0.06 - Past Due Unsecured Amounts 2.35 2.30 2.50 2.55 2.45 - Non-Accrual Loans (2) 3.31 3.11 3.57 3.57 3.37 - Non-Accrual Loans (2) (Excluding Interbank Loans) 3.36 3.12 3.59 3.62 3.40 Non-Accrual Loans (2) as a Percentage of Loans to the Private Sector 3.31 3.11 3.57 3.57 3.37 Allowance for Loan Losses as a % of: - Total Loans 3.31 3.49 3.78 3.71 3.91 - Total Loans Excluding Interbank Loans 3.36 3.50 3.79 3.76 3.94 - Total Non-Accrual Loans (2) 100.06 112.41 105.78 103.80 115.85 Non-Accrual Loans with Guarantees as a Percentage of Non-Accrual Loans (2) 3.91 6.60 4.41 4.73 2.81 Non-Accrual Loans as a Percentage of Total Past Due Loans 136.15 126.48 136.88 132.92 133.13

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents

(1) Before the allowance for loan losses. (2) Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio: “Medium Risk”, “High Risk”, “Uncollectible”, and “Uncollectible Due to Technical Reasons”, and (b) Commercial portfolio: “With problems”, “High Risk of Insolvency”, “Uncollectible”, and “Uncollectible Due to Technical Reasons”.

Our non-accrual loans to the private sector recorded an improvement of 20 b.p. increasing from 3.11% in fiscal year ended 2015 to 3.31% in fiscal year ended 2016.

Banco Galicia has entered into certain debt renegotiation agreements with customers. Banco Galicia has eliminated any differences between the principal and accrued interest due under the original loan and the new loan amount through a charge against the allowance for loan losses. Loans under such agreements are included within past due and accruing loans, which amounted to Ps.61 million, Ps.90 million and Ps.88 million as of December 31, 2016, 2015 and 2014, respectively.

For the past three fiscal years, Banco Galicia’s coverage of non-accrual loans with allowances for loan losses has exceeded 100%.

Under Argentine Central Bank rules, we are required to cease the accrual of interest or to establish provisions equal to 100% of the interest accrued on all loans pertaining to the non-accrual loan portfolio, that is, all loans to borrowers in the categories of: • in the consumer portfolio: “Medium Risk”, “High Risk”, “Uncollectible” and “Uncollectible Due to Technical Reasons”. • in the commercial portfolio: “With Problems”, “High Risk of Insolvency”, “Uncollectible” and “Uncollectible Due to Technical Reasons”.

The table below shows the interest income that would have been recorded on non-accrual loans on which the accrual of interest was discontinued and the recoveries of interest on loans classified as non-accrual on which the accrual of interest had been discontinued:

As of December 31, 2016 2015 2014 2013 2012 (in millions of Pesos) Interest Income that Would Have Been Recorded on Non-Accrual Loans on which the Accrual of Interest was Discontinued 173 159 117 127 86 Recoveries of Interest on Loans Classified as Non-Accrual on which the Accrual of Interest had been Discontinued (1) 9 8 6 6 4

(1) Recorded under “Miscellaneous Income”.

Loan Loss Experience The following table presents an analysis of our allowance for loan losses and of our credit losses as of and for the periods indicated. Certain loans are charged off directly to income statement (such charge offs are immaterial amounts charged to income before any allowances for loan losses are recorded) therefore, are not reflected in the allowance.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year Ended December 31, 2016 2015 2014 2013 2012 (in millions of Pesos, except ratios) Total Loans, Average (1) 111,166 77,832 59,094 47,964 35,213 Allowance for Loan Losses at Beginning of Period (2) 3,560 2,615 2,129 1,732 1,284 Changes in the Allowance for Loan Losses During the Period (2) Provisions Charged to Income 3,389 2,128 2,339 1,701 1,295 Prior Allowances Reversed (117 ) — (1 ) — (12 ) Charge-Offs (A) (2,125 ) (1,203 ) (1,840 ) (1,304 ) (835 ) Inflation and Foreign Exchange Effect and Other Adjustments — 20 (12 ) — — Allowance for Loan Losses at End of Period 4,707 3,560 2,615 2,129 1,732 Charge to the Income Statement during the Period Provisions Charged to Income (2) 3,389 2,128 2,339 1,701 1,295 Direct Charge-Offs, Net of Recoveries (B) (272 ) (226 ) (181 ) (187 ) (132 ) Recoveries of Provisions (117 ) — (1 ) — (60 ) Net Charge (Benefit) to the Income Statement 3,000 1,902 2,157 1,514 1,103 Ratios (%) Charge-Offs Net of Recoveries (A+B) to Average Loans (3) 1.67 1.26 2.81 2.33 2.00 Net Charge to the Income Statement to Average Loans (3) 2.70 2.44 3.65 3.16 3.13

(1) Before the allowance for loan losses. (2) Includes quotation differences for Galicia Uruguay. (3) Charge-offs plus direct charge-offs minus bad debts recovered.

During 2016, the Bank established allowances for loan losses in an amount of Ps.3,389 million. The increase in allowances established for loan losses in fiscal year 2016 as compared to fiscal year 2015 was mainly due to an increase in the level of provisions for loan losses required by our companies.

Allocation of the Allowance for Loan Losses The following table presents the allocation of our allowance for loan losses among the various loan categories and shows such allowances as a percentage of our total loan portfolio before deducting the allowance for loan losses, in each case for the periods indicated. The table also shows each loan category as a percentage of our total loan portfolio before deducting the allowance for loan losses at the dates indicated.

As of December 31, 2016 2015 2014 Loan Loan Loan % of Category % of Category % of Category Amount Loans % Amount Loans % Amount Loans % (in millions of Pesos, except percentages) Non-Financial Public Sector — — — — — — — — — Local Financial Sector — — 1.5 — — 0.8 — — 0.3 Non-Financial Private Sector and Residents Abroad Advances 161 0.1 7.1 157 0.2 8.4 121 0.2 5.8 Promissory Notes 103 0.1 17.8 150 0.2 22.3 94 0.2 23.6 Mortgage Loans 43 — 1.5 33 — 2.1 13 — 2.4 Pledge Loans 3 — 0.5 7 — 0.4 5 — 0.7 Personal Loans 324 0.2 10.8 311 0.3 9.1 299 0.4 10.1 Credit-Card Loans 1,808 1.3 51.2 1,295 1.3 55.2 759 1.1 54.0 Placements in Correspondent Banks — — 0.9 — — 0.2 — — 0.3 Other 51 — 8.7 49 — 1.5 19 — 2.8 Unallocated(1) 2,214 1.6 — 1,558 1.5 — 1,305 1.9 — Total 4,707 3.3 100.0 3,560 3.5 100.0 2,615 3.8 100.0

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As of December 31, 2013 2012 Amount % of Loans Loan Category % Amount % of Loans Loan Category % (in millions of Pesos, except percentages) Non-Financial Public Sector — — — — — — Local Financial Sector — — 1.1 — — 0.8 Non-Financial Private Sector and Residents Abroad Advances 95 0.2 5.8 68 0.2 7.0 Promissory Notes 56 0.1 23.2 41 0.1 23.6 Mortgage Loans 11 — 3.2 4 — 2.6 Pledge Loans 3 — 0.9 1 — 0.7 Personal Loans 261 0.5 14.0 190 0.4 16.5 Credit-Card Loans 676 1.2 47.7 461 1.0 43.5 Placements in Correspondent Banks — — 1.0 — — 0.6 Other 22 — 3.1 15 — 4.7 Unallocated (1) 1,005 1.7 — 952 2.2 — Total 2,129 3.7 100.0 1,732 3.9 100.0

(1) The unallocated reserve consists of the allowances established on the portfolio classified in the “normal situation” category and includes additional reserves in excess of Argentine Central Bank minimum requirements.

Charge-Offs The following table sets forth the allocation of the main charge-offs made by Banco Galicia, the Regional Credit Card Companies and CFA during the years ended December 31, 2016, 2015 and 2014.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year Ended December 31, 2016 2015 2014 (in millions of Pesos) Charge-offs by Type Advances 125 45 95 Promissory Notes 222 146 180 Mortgage Loans 79 1 75 Pledge Loans 7 4 5 Personal Loans 496 340 410 Credit-Card Loans Banco Galicia 381 217 255 Regional Credit Card Companies 751 436 691 Other Loans 64 14 129 Total(1) 2,125 1,203 1,840

(1) Do not include the amounts directly charged off to the income statement.

During fiscal year 2016, Ps.2,125 million was charged off against the allowance for loan losses, including the Regional Credit Card Companies’ and CFA’s loan portfolios, while in fiscal year 2015 it amounted to Ps.1,203 million. For both fiscal years, the increases as compared to the prior years were attributable to the maturing of the individuals’ loan portfolio.

Foreign Outstandings Cross-border or foreign outstandings for a particular country are defined as the sum of all claims against third parties domiciled in that country and comprise loans (including accrued interest), acceptances, interest-bearing deposits with other banks, other interest-bearing investments and any other monetary assets that are denominated in Dollars or other non-local currency. The following were our foreign outstandings as of the dates indicated.

Fiscal Year Ended December 31, Country 2016 2015 2014 (in millions of Pesos) United States Demand Deposits 1,366 230 47 Overnight Placements 1,227 232 261 Other 37 19 10 Total 2,630 481 318 Germany Demand Deposits 50 82 32 Other — 4 — Total 50 86 32

As of December 31, 2016, we had the following foreign outstandings: • Ps.2,630 million (1.09% of our total assets) representing liquid placements with United States financial institutions, of which Ps.1,227 million represented overnight placements and Ps.1,366 million corresponded to demand deposits. • Ps.50 million with German financial institutions corresponding to demand deposits.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Deposits The following table sets out the composition of our deposits as of December 31, 2016, 2015 and 2014. Our deposits represent deposits with Banco Galicia and CFA.

As of December 31, 2016 2015 2014 (in millions of Pesos) Checking Accounts and Other Demand Deposits 27,973 19,437 15,755 Savings Accounts 53,779 27,519 16,897 Time Deposits 49,876 51,118 30,730 Other Deposits (1) 19,145 1,045 722 Plus: Accrued Interest, Quotation Differences and CER Adjustment 915 920 562 Total Deposits 151,688 100,039 64,666

(1) Includes among other, deposits originated by Decree No. 616/05, Reprogrammed Deposits under judicial proceedings and other demand deposits. In 2016, includes mainly deposits related to the Tax Amnesty Law.

In 2016, our consolidated deposits increased 52% mainly as a result of a Ps.26,260 million increase in deposits in saving accounts and a Ps.18,100 million increase in other deposits mainly due to the increase of deposits related to the Tax Amnesty Law. These increase were mainly due to deposits received by Banco Galicia.

In 2015, our consolidated deposits increased 55% primarily as a result of a Ps.20,388 million increase in time deposits and a Ps.14,304 million increase in deposits in checking and savings accounts. These increases were mainly due to deposits received by Banco Galicia.

In 2014, our consolidated deposits increased 26% mainly as a result of a Ps.8,457 million increase in deposits in checking and savings accounts and a Ps.4,545 million increase in time deposits. These increases were mainly due to deposits received by Banco Galicia.

For more information, see Item 5.A. “Operating Results-Funding”.

The following table provides a breakdown of our consolidated deposits as of December 31, 2016, by contractual term and currency of denomination.

Peso-Denominated Dollar-Denominated Total % of % of % of Amount Total Amount Total Amount Total (in millions of Pesos, except percentages) Checking Accounts and Demand Deposits Ps.27,973 28.0 % Ps.5 0.0 % Ps.27,978 18.6 % Savings Accounts 26,630 26.7 27,145 53.2 53,775 35.7 Time Deposits 43,171 43.3 6,707 13.2 49,878 33.1 Maturing Within 30 Days 12,025 12.1 2,250 4.4 14,275 9.5 Maturing After 31 Days but Within 59 Days 16,869 16.9 1,501 2.9 18,370 12.2 Maturing After 60 Days but Within 89 Days 6,062 6.1 124 0.2 6,186 4.1 Maturing After 90 Days but Within 179 Days 5,324 5.3 1,656 3.3 6,980 4.6 Maturing After 180 Days but Within 365 Days 2,525 2.5 1,112 2.2 3,637 2.4 Maturing After 365 Days 366 0.4 64 0.2 430 0.3 Other Deposits 1,992 2.0 17,153 33.6 19,145 12.6 Maturing Within 30 Days 1,518 1.6 17,153 33.6 18,671 12.3 Maturing After 31 Days but Within 59 Days 0 0.0 0 0.0 0 0.0 Maturing After 60 Days but Within 89 Days 0 0.0 0 0.0 0 0.0 Maturing After 90 Days but Within 179 Days 29 0.0 0 0.0 29 0.0 Maturing After 180 Days but Within 365 Days 443 0.4 0 0.0 443 0.3 Maturing After 365 Days 2 0.0 0 0.0 2 0.0 Total Deposits (1) 99,766 100.0% 51,010 100.0 % 150,776 100.0%

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (1) Only principal. Excludes the CER adjustment.

The categories with the highest concentration of maturities per their original term are those within the segments “within 30 Days” and “after 31 days but within 59 days” (Pesos and Dollars), which accounted for 21.7% of the total and corresponded mainly to Peso-denominated time deposits. The rest of the terms represent a lower percentage of the total portfolio and have a homogeneous usage rate. As of December 31, 2016, the average original term for both non-adjusted Peso-denominated time deposits was 41 days and of Dollar-denominated deposits was approximately 51 days. Dollar-denominated deposits, equal to Ps.51,010 million (only principal), represented 33.8% of total deposits.

The increase in dollar denominated deposits was mainly as a result of increased deposits resulting from the Tax Amnesty Law.

The following table provides information about the maturity of our outstanding time deposits exceeding US$100,000, as of December 31, 2016.

Deposits over US$100,000 (in millions of Pesos) Time Deposits Within 30 Days 4,291 After 31 Days but Within 59 Days 8,819 After 60 Days but Within 89 Days 1,966 After 90 Days but Within 179 Days 2,536 After 180 Days but Within 365 Days 2,315 After 365 Days 314 Total Outstanding Time Deposits Exceeding US$100.000 (1) 20,241

(1) Only principal.

Return on Equity and Assets The following table presents certain selected financial information and ratios for the periods indicated.

Fiscal Year Ended December 31, 2016 2015 2014 (in millions of Pesos, except percentages) Net Income / (Loss) 6,018 4,338 3,338 Average Total Assets 184,395 122,684 92,510 Average Shareholders’ Equity 17,178 12,205 8,543 Shareholders’ Equity at End of the Period 20,353 14,485 10,246 Net Income as a Percentage of: Average Total Assets 3.48 3.83 3.85 Average Shareholders’ Equity 35.03 35.54 39.07 Declared Cash Dividends 240.00 150.00 100.00 Dividend Payout Ratio 3.99 3.46 3.00 Average Shareholders’ Equity as a Percentage of Average Total Assets 9.32 9.95 9.23 Shareholders’ Equity at the End of the Period as a Percentage of Average Total Assets 11.04 11.81 11.08

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Short-term Borrowings Our short-term borrowings include all of our borrowings (including repurchase agreement transactions, debt securities and notes) with a contractual maturity of less than one year, owed to foreign or domestic financial institutions or holders of notes.

As of December 31, 2016 2015 2014 (in millions of Pesos) Short-Term Borrowings Argentine Central Bank 13 7 7 Other Banks and International Entities Credit Lines from Domestic Banks 1,609 553 377 Credit Lines from Foreign Banks 2,067 1,107 507 Notes — — 228 Repos 1,646 — — Total 5,335 1,667 1,119

As of the end of fiscal year 2016, our short-term borrowings consisted of credit lines from foreign banks, which represented 39% of our short term borrowings, credit lines from domestic banks, which represented 30% of our short term borrowings and repurchase agreements with local banks, which represented 31% of our short term borrowings.

We also borrow funds under different credit arrangements from local and foreign banks and international lending agencies as follows:

As of December 31, 2016 2015 2014 (in millions of Pesos) Banks and International Entities Contractual Short-term Liabilities Other Lines from Foreign Banks 2,067 1,107 507 Total Banks and International Entities 2,067 1,107 507 Domestic and Financial Institutions Contractual Short-term Liabilities: Other Lines from Credit from Domestic Banks 1,609 553 377 Total Domestic and Financial Institutions 1,609 553 377 Total 3,676 1,660 884

The outstanding amounts and the terms corresponding to the outstanding notes as of the dates indicated below are as follows:

As of December 31, Annual Interest Maturity Rate 2016 2015 2014 (in millions of Pesos) Notes(*) CFA Class XI Series I (Quarterly interest, principal payable at maturity) 2015 Badlar + 297 b.p. — — 50 CFA Class XII Series I 2015 Badlar + 247 b.p. — — 50

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As of December 31, Annual Interest Maturity Rate 2016 2015 2014 (in millions of Pesos) (Quarterly interest, principal payable at maturity) CFA Class XIII Series I (Quarterly interest, principal payable at maturity) 2015 27.50 % — — 128 Total — — 228

(*) Only principal.

The following table sets forth the items listed below for our significant short-term borrowings for the fiscal years ended December 31, 2016, 2015 and 2014: • the weighted-average interest rate at year-end, • the maximum balance recorded at the monthly closing dates of the periods, • the average balances for each period calculated on a daily basis, and • the weighted-average interest rate for each period.

As of December 31, 2016 2015 2014 (in millions of Pesos, except percentages) Argentine Central Bank Weighted-average Interest Rate at End of Period — % — % — % Maximum Balance Recorded at the Monthly Closing Dates 35 39 8 Average Balances for Each Period 11 6 5 Weighted-average Interest Rate for the Period — % — % — % Credit Lines from Domestic Banks Weighted-average Interest Rate at End of Period 26.5 % 29.1 % 27.5 % Maximum Balance Recorded at the Monthly Closing Dates 1,609 1,282 681 Average Balances for Each Period 1,005 757 524 Weighted-average Interest Rate for the Period 31.4 % 26.6 % 31.0 % Credit Lines from Foreign Banks Weighted-average Interest Rate at End of Period 2.6 % 3.5 % 3.4 % Maximum Balance Recorded at the Monthly Closing Dates 2,083 1,579 1,498 Average Balances for Each Period 1,429 974 871 Weighted-average Interest Rate for the Period 3.0 % 2.9 % 2.5 % Repurchases with Domestic Banks Weighted-average Interest Rate at End of Period 25.7 % — % — % Maximum Balance Recorded at the Monthly Closing Dates 1,646 140 433 Average Balances for Each Period 300 176 59 Weighted-average Interest Rate for the Period 28.9 % 23.8 % 21.7 % Notes Weighted-average Interest Rate at End of Period — % — % 25.5 % Maximum Balance Recorded at the Monthly Closing Dates — 1,024 228 Average Balances for Each Period — 619 114 Weighted-average Interest Rate for the Period — % 25.8 % 24.0 %

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Regulatory Capital Grupo Financiero Galicia Grupo Financiero Galicia’s capital adequacy is not under the supervision of the Argentine Central Bank. Grupo Financiero Galicia has to comply with the minimum capital requirement established by the Corporations Law. On October 8, 2012, through Decree 1331/12, such amount was determined to be Ps.100,000.

Banco Galicia Banco Galicia is subject to the capital adequacy rules of the Argentine Central Bank. The capital adequacy regulations are based on the Basel Committee methodology which establishes the minimum capital a financial institution is required to maintain in order to cover the various risks inherent to its business activity and endemic to its assets. Such risks include: credit risk, generated both by exposure to the private sector and to the public sector; operational risk, generated by losses due to the lack of conformity with internal processes or due to failure of such processes; market risk, generated by positions in securities, foreign-currency and CER.

The computable capital is determined as follows: • The computable regulatory capital is divided into core capital (or Tier I) and supplemental capital (or Tier II). Deductions (i.e., organization and development expenses) mainly become part of the core capital. • Any holdings in financial entities, insurance companies, companies whose corporate purpose is the issuance of credit cards and other companies with activities complementary to financial entities, must be deducted from the calculation. • The result of the period is part of the core capital (Positive: 100% of audited results, 50% of unaudited results; Negative: 100%). • The supplemental capital is comprised of 100% of the provisions for loan losses in connection with the loan portfolio in normal situation and of subordinated notes. The computable capital will be decrease in 20% of the par value emitted for the last five years of each emission.

Regarding capital requirements, the following percentages apply in the determination: • Financing to the non-financial public sector in Pesos: 0% • Bank premises and equipment and miscellaneous assets: 8% • Mortgage loans to households: from 35% of the 8%, if the amount is lower than 75% of the property’s value. • Consumer loan portfolio: 75% of the 8%.

Beginning in December 2015, through its Communiqué “A” 5831, the Argentine Central Bank implemented certain regulatory changes which established that the capital requirement on credit risk must be calculated based on the balances as of the last day of each month. Prior to the change in law, the capital requirement for credit risk was calculated based on the average balances as of the second month before the date of the determination of the requirement. Under the new law, the computable capital to be considered is that of the same month of the capital requirement, while previously it was that of the prior month.

Minimum capital requirements must be met by the Bank, both on an individual basis and on a consolidated basis with its significant subsidiaries.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In the table below, Banco Galicia’s information on regulatory capital and compliance with minimum capital requirements regulations is consolidated with Tarjetas Regionales and its subsidiaries, CFA and Galicia Uruguay.

December 31, (in millions of Pesos, except percentages) 2016 2015 2014 Minimum capital required (A) 15,258 11,063 7,077 Allocated to Credit Risk 11,511 8,369 5,098 Allocated to Market Risk 556 296 200 Allocated to Operational Risk 3,191 2,398 1,779 Computable Capital (B) 22,010 14,071 10,133 - Tier I 16,471 11,732 8,041 - Tier II 5,539 2,339 2,020 Additional Capital- Market Variation — — 72 Excess over Required Capital (B)-(A)(1) 6,752 3,008 3,056 Total Capital Ratio (%)(2) 15.04 13.38 15.91 Ratio Basel (%)(3) 11.82 10.18 11.79

In accordance with Argentine Central Bank rules applicable at each date. (1) Excess over required capital includes the 0.25% increase stemming from the additional requirement related to the Bank serving in the role of custodian of titles and representative of investments of the Fondo de Garantía y Sustentabilidad del Sistema Integrado Previsional Argentino. (2) Total computable capital / risk weighted assets (credit and market risks). (3) In accordance with Argentine Central Bank rules applicable at each date, operational risk is to be considered in order to determine the amount of risk weighted assets. The requirement on operational risk is related the evolution of the average of financial income and fee income.

As of December 31, 2016, the Bank’s consolidated computable capital was Ps.6,752 million (44.3%) higher than the Ps.15,258 million minimum capital requirement. As of December 31, 2015, this excess amounted to Ps.3,008 million or 27.2%.

The minimum capital requirement increased Ps.4,195 million for the year ended December 31, 2016 as compared to the year ended December 31, 2015, mainly as a result of higher minimum capital requirements of (i) Ps.3,142 million due to the increase in holdings of the private-sector loan portfolio and (ii) Ps.793 million in connection with certain increased operational risks.

Computable capital increased Ps.7,939 million as compared to December 31, 2015, mainly a consequence of a higher Tier I capital, for Ps.4,739 million, mainly due to the higher net income, partially offset by an increase in deductions, resulting from organization and development expenses. Tier II capital recorded a Ps.3,200 million increase, mainly as a consequence of the higher balance of (i) a 100% of subordinated notes par value of US$250 million emitted in July 19,2016, which were used to rescue subordinated notes due 2019, that were considered in 24%, and (ii) the provisions for loan losses for the credit portfolio in normal situation.

The capital ratio as of December 31, 2016 was 15.04%, 1.7 p.p. higher as compared to December 31, 2015, due to the above described regulatory change.

Regional Credit Card Companies Since the Regional Credit Card Companies are not financial institutions, their capital adequacy is not regulated by the Argentine Central Bank. The Regional Credit Card Companies have to comply with the minimum capital requirement established by the Corporations Law, which was required to be Ps.100,000. However, as noted above, Banco Galicia has to comply with the Argentine Central Bank’s capital adequacy rules on a consolidated basis, which includes the Regional Credit Card Companies.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Compañía Financiera Argentina Since CFA is a financial institution, its capital adequacy is subject to rules of the Argentine Central Bank, the same as Banco Galicia. In addition, as noted above, Banco Galicia has to comply with the Argentine Central Bank’s capital adequacy rules on a consolidated basis, which includes CFA.

Minimum Capital Requirements of Insurance Companies The insurance companies controlled by Sudamericana must meet the minimum capital requirements set by General Resolution No. 39,957 of the National Insurance Superintendency. This resolution requires insurance companies to maintain a minimum capital level equivalent to the highest of the amounts calculated as follows: (a) By line of insurance: this method establishes a fixed amount by line of insurance. For life insurance companies, it is Ps.9 million, increasing to Ps.12 million for companies that offer pension-linked life insurance. For providers of retirement insurance that do not offer pension-linked annuities, the requirement is Ps.30 million. For companies that offer property insurance that includes damage coverage (excluding those related to vehicles) the requirement is Ps.9 million (increasing to Ps.45 million for companies that offer all property and casualty products). (b) By premiums and additional fees: to use this method, the company must calculate the sum of the premiums written and additional fees earned in the last 12 months. Based on the total, the company must calculate 16%. Finally, it must adjust the total by the ratio of net paid claims to gross paid claims for the last 36 months. This ratio must be at least 50%. (c) By claims: to use this method, the company must calculate the sum of gross claims paid during the 36 months prior to the end of the period under analysis. To that amount, it must add the difference between the balance of unpaid claims as of the end of the period under analysis and the balance of unpaid claims as of the 36th month prior to the end of the period under analysis. The resulting figure must be divided by three. Then the company must calculate 23%. The resulting figure must be adjusted by the ratio of net paid claims to gross paid claims for the last 36 months. This ratio must be at least 50%. (d) For life insurance companies that offer policies with an investment component, the figures obtained in b) and c) must be increased by an amount equal to 4% of the technical reserves adjusted by the ratio of net technical reserves to gross technical reserves (at least 85%), plus 0.3% of at-risk capital adjusted by the ratio of retained at-risk capital to total at-risk capital (at least 50%).

The minimum required capital must then be compared to computable capital, defined as shareholders’ equity less non- computable assets. Non-computable assets consist mainly of deferred charges, pending capital contributions, the proposal for profits distribution and excess investments in authorized instruments.

As of December 31, 2016, the computable capital of the companies controlled by Sudamericana exceeded the minimum requirement of Ps.556 million by Ps.91 million.

Sudamericana also owns Galicia Broker, a company dedicated to brokerage in different lines of insurance that is regulated by the guidelines of the Corporations Law, which provided for a minimum capital requirement of Ps.100,000.

Government Regulation General All companies operating in Argentina must be registered with the Argentine Public Registry of Commerce, whose regulations are applicable to all Argentine companies but may be superseded by other regulatory entities’ (such as the CNV’s or Argentine Central Bank’s) rules. All companies operating in Argentina are also regulated by the Corporations Law.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As companies listed in Argentina, Grupo Financiero Galicia and Banco Galicia must comply with the disclosure, reporting, governance and other rules applicable to such companies in the markets in which they are listed and those of regulators in the countries in which they are listed, including the Capital Markets Law, Law No. 20,643, the Decrees No. 659/74 and No. 2,220/80, as well as Decree No. 1023/13(the Decree for Transparency in the Public Offering, “Régimen de la Transparencia de la Oferta Pública”) and the CNV’s General Regulation No. 622/13, as amended (the “CNV Rules”).

In their capacity as public issuers of securities, Grupo Financiero Galicia and Banco Galicia are subject to the aforementioned rules. Since Grupo Financiero Galicia has publicly listed American Depository Shares (or “ADSs”) in the United States, it is also subject to the reporting requirements of the United States Securities and Exchange Act of 1934 (the “Exchange Act”) for foreign private issuers and to the provisions applicable to foreign private issuers under the Sarbanes Oxley Act. See Item 9 “The Offer and Listing Market Regulations”.

Banco Galicia’s operating subsidiaries are also subject to the following laws: Law No. 25,156 (the Competition Defense Law or, in Spanish “Ley de Defensa de la Competencia”), Law No. 22,820 (Fair Business Practice Law, in Spanish “Ley de Lealtad Comercial”) and Law No. 24,240, as amended, (the Consumer Protection Law or, in Spanish “Ley de Defensa del Consumidor”).

As a financial services holding company, we do not have a specific institution that regulates our activities. Our banking and insurance subsidiaries are regulated by different regulatory entities. The Argentine Central Bank is the main regulatory and supervising entity for Banco Galicia.

The banking industry is highly regulated in Argentina. Banking activities in Argentina are regulated by Law No. 21,526, as amended (the “Financial Institutions Law”), which places the supervision and control of the Argentine banking system in the hands of the Argentine Central Bank. The Argentine Central Bank regulates all aspects of financial activity. See “—Argentine Banking Regulation” below.

Banco Galicia and our insurance subsidiaries are subject to Law No. 25,246, as amended, which was passed on April 13, 2000, which provides for an anti-money laundering framework in Argentina, including Laws No. 26,268, 26,268 and 27,304, which amend Law No. 25,246 to include activities associated with terrorism and its financing within the scope of criminal activities.

Sudamericana’s insurance subsidiaries are regulated by the National Insurance Superintendency and Laws No. 17,418 and No. 20,091. Galicia Broker is regulated by the National Insurance Superintendency, through Law No. 22,400.

The Regional Credit Card Companies and the credit card activities of Banco Galicia are regulated by Law No. 25,065, as amended (the “Credit Cards Law”). Both the Argentine Central Bank and the Secretariat of Domestic Trade have issued regulations to, among other things, enforce public disclosure of companies’ pricing (fees and interest rates) in order to assure consumer awareness of such pricing. See “—Credit Cards Regulation”.

Net Investment is regulated by the Corporations Law, as previously noted, and is not regulated by any specific regulatory agency. Galicia Warrants is regulated by Law No. 9,643.

On January 6, 2002, the Argentine Congress enacted Law No. 25,561 (the “Public Emergency Law”), which, together with various decrees and Argentine Central Bank rules, provided for the principal measures with which to manage the 2001-2002 financial crisis, including Asymmetric Pesification, among others. The period of effectiveness of the Public Emergency Law has been extended to December 31, 2017.

Foreign Exchange Market In January 2002, through the Public Emergency Law, Argentina declared a public emergency situation in respect of its social, economic, administrative, financial and foreign exchange matters and authorized the Argentine Executive Branch to establish a system to determine the foreign exchange rate between the Argentine Peso and

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents foreign currencies and to issue foreign exchange-related rules and regulations. Within this context, on February 8, 2002, through Decree No. 260/2002, the Argentine Executive Branch established (i) a single and free-floating foreign exchange market (a “MULC”, or “Mercado Único y Libre de Cambios”) through which all foreign exchange transactions in a foreign currency must be conducted, and (ii) that foreign exchange transactions in a foreign currency must be conducted at the foreign exchange rate to be freely agreed upon among the contracting parties, subject to the requirements and regulations imposed by the Argentine Central Bank (please see below for a summary of the main regulations).

On June 9, 2005, through Decree No. 616/2005, the Argentine Executive Branch mandated that: (a) all inflows of funds into the local foreign exchange market arising from foreign debts incurred by residents, both individuals or legal entities in the Argentine private sector, except for those concerning foreign trade financing and primary issuances of debt securities admitted to public offering and listed on self-regulated markets; and (b) all inflows of funds of non-residents channeled through the MULC and (i) held in the local currency, (ii) used to acquire any type of financial asset or liability in the financial and/or non-financial private sector, with the exception of foreign direct investments and primary issuances of debt securities and shares admitted to public offering and listed on self-regulated markets, and (iii) investments in securities issued by the public sector and acquired in secondary markets; must meet the following requirements: (i) Such inflows of funds may only be transferred outside the local foreign exchange market at the expiration of a term of 365 calendar days as from the date of settlement of such funds into Argentine Pesos (the “Minimum Stay Period”); (ii) The proceeds of such inflows of funds must be credited to an account in the local banking system; (iii) A non-transferable and non-interest-bearing deposit for 30% of the amount of the transaction must be kept in Argentina for a period of 365 calendar days, in accordance with the terms and conditions laid down in the applicable regulations (the “Deposit”); and (iv) The Deposit is to be denominated in Dollars and held in Argentine financial institutions and it may not be used to guarantee or as collateral for any type of credit transactions.

The requirements of Decree 616/2005 were subsequently eased. Under the Macri administration, several changes were implemented. On December 28, 2015, the Argentine Central Bank issued Communiqué “A” 5861 and Communiqué “A” 5864 which specifically abrogated both Communiqué “A” 4864 and Communiqué “A” 4882. In addition, on December 29, 2015, the CNV issued Resolution No. 651, by which it abrogated the prior CNV regulations that complemented the restrictions issued by Communiqué “A” 4864 and “A” 4882.

On December 18, 2015, through Resolution No. 3/2015, the Ministry of Treasury and Public Finance amended Executive Decree No. 616/2005 as follows: (i) the Deposit percentage was reduced from 30% to 0% and (ii) the Minimum Stay Period was reduced from 365 days to 120 days. Resolution No. 1-E/2017 of the Ministry of Treasury further reduced such Minimum Stay Period to 0 days.

On August 8, 2016, the Argentine Central Bank issued Communiqué “A” 6037 (which was subsequently amended), through which it amended the regulations with respect to the income and outflow of funds from Argentina. Below is a description of the main aspects of the Argentine Central Bank regulations concerning this new regime:

Inflowing Funds Financial Debts.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Pursuant to Communiqué “A” 6037 (as amended and restated), financial debt operations with the foreign non-financial private sector, the financial sector and local governments, are not obligated to enter and settle that debt income on the MULC.

Regardless of whether or not the funds are being invested in the foreign exchange market, in transactions involving the non- financial private sector and the financial sector, the debt is recorded as “External liabilities and bond issues” (Com. A “3602 and complementary) as provided in Article 1 of Decree No. 616/05.

As established by Communiqué “A” 6037, primary issues of debt securities that have a public offering and are traded on authorized securities markets, and correspondent balances of entities authorized to trade in foreign exchange, as far as they do not constitute credit operations, are exempt from the provisions of the previous paragraphs. Likewise, indebtedness with Multilateral and Bilateral Credit Agencies and with Official Credit Agencies, directly or through their related agencies, as in debt to cancel would have originated in loans of funds that they had granted in fulfillment of its object, are also exempted from the provisions of the previous paragraph.

Outflowing Funds Services, rents, current transfers and non-produced non-financial assets. No limitations are imposed on access to the MULC for remittances abroad to pay for debt services, earnings, dividends and non-produced non-financial asset acquisitions, irrespective of the type of payment made (e.g. shipping, insurance, royalties, technical advice, professional fees, etc.). Access to the MULC for such purpose requires the presentation of documentation in compliance with the reporting regimes established by Communiqué “A” 3602 (as amended and supplemented) and Communiqué “A” 4,237 (as amended and supplemented), as applicable.

Non-residents have access to the MULC for debt services, earnings and current transfers collected in Argentina according to the specific regulations that apply to MULC access by non-residents.

Other Provisions General Regulation for access to MULC The presentation of the affidavit contained in each exchange ticket, indicating the code and concept that corresponds to the exchange transaction, is sufficient to grant access to the exchange market for resident and non-resident clients, according to the regulations established for each of them. Cases with specific requirements are exempted from the previous rule (Communiqué “A” 6037).

Foreign Currency Sale to Non-Residents According to Communiqué “A” 6037 (as amended and restated), in respect of sales of currency abroad, financial entities may grant access to MULC upon receipt of a client affidavit detailing the regulation under which it had access to the exchange market; and with respect to currency sales, bank drafts and traveler’s check drafts, to the following non-resident clients in Argentina: (i) International organizations and institutions that perform functions as official export credit agencies, listed on Communiqué “A” 6037 Attachment. (ii) Diplomatic and consular representatives and diplomatic staff in Argentina while performing their duties. (iii) Court officials, government authorities or agency representatives, special missions, commissions or bilateral organizations established by international treaties or conventions in which Argentina is member, each while performing their duties.

Access to the foreign exchange market may also be granted to other non-residents for transfers of funds deposited in Argentina to foreign accounts, as long as they reasonably demonstrates that the funds correspond to:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (i) Financial debts originated from external loans from non-residents. (ii) Payments for Argentine imports. (iii) Payment for services, rents and other current transfers to other countries. (iv) Resident foreign debts for imports of goods. (v) Secured National Government Bonds and Loan Services issued in local currency. (vi) Recovery of local bankruptcy credits and collection of insolvency debts, as long as the non-resident client has been recognized as a creditor by a final and non-appealable court resolution. (vii) Inheritances according to heirs declaration. (viii) Benefits, or services or sale of securities received, granted by the National Government under the provisions of Laws No. 24.043, No. 24.411 and No. 25.914. (ix) Direct investments repatriations in the non-financial private sector in companies that do not control local financial entities, and/or in real estate properties, as long as the foreign beneficiary is a natural person or corporation residing in, incorporated in or with its principal business address in domains, jurisdictions, territories or associated countries considered “cooperators for fiscal transparency purposes” in accordance with the provisions of Article 1 Decree No. 589/ 13, its complementary rules and amendments, for the following concepts: (i) direct investment sale; (ii) final settlement of direct investments; (ii) capital reduction decided by the local company; and (iv) return of irrevocable contributions made by the local company. (x) Charges from services or sale liquidation from other portfolio investments (and their income), as long as the foreign beneficiary is a natural person or corporation residing in, incorporated in or with its principal business address in domains, jurisdictions, territories or associated countries considered “cooperators for fiscal transparency purposes” in accordance with the provisions of Article 1 Decree No. 589/13. These portfolio investments repatriations include, but are not limited to, among others: portfolio investments in stock and local companies shares, investments in mutual funds and local trusts, purchase of loan portfolios granted by local banks to residents, bills and promissory notes purchased from local business operations, investment on local bonds issued in Argentinean pesos and foreign currency locally payable and other local credit purchases. In these cases, regulation requires a certification issued by a local financial or exchange entity, detailing the date and amount of the funds settlement in the exchange market corresponding to the investment.

Access to the MULC is also allowed to a resident for a funds transfer in favor of a non-resident in all the cases identified above.

Central Bank prior approval is not required for foreign currency purchases by a non-resident that do not exceed the equivalent of US$10,000 per month in the group of entities authorized to operate in exchanges.

Formation of resident foreign assets Communiqué “A” 6037, modified by Communications “A” 6058 and “A” 6137, established that resident individuals, or companies from the private sector formed in Argentina that are not entities authorized to operate in exchanges, estates and other organizations formed in Argentina, and local governments can access MULC without Central Bank prior approval in the following cases: direct investments from residents, portfolio investments abroad from residents, loans granted by residents to non-residents, foreign currency purchased in Argentina and travelers checks purchased by residents; when, in each case, the following conditions are fulfilled: in the case of foreign currency sales to residents for portfolio investment constitution abroad, the transfer must be destined for an account or other holding of external financial assets registered in the name of the client that are not located in countries or territories not considered “cooperators for the purposes of fiscal transparency” in accordance with the provisions of Article 1 of Decree No. 589/ 13, or in countries or territories where the Recommendations of the International Financial Action Task Force are not applied or not sufficiently implemented. To this end, non-cooperative countries or territories should be considered as those listed by the International Financial Action Task Force (www.fatf-gafi.org). A foreign entity or institution must identify where the investment is located and the client account number must be registered in the corresponding exchange.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents These rules do not prevent the application of any other applicable regulation for the prevention of money laundering, terrorist financing and other illegal activities.

Compensation to Financial Institutions For the Asymmetric Pesification and its Consequences Decree No. 214/02 provided for compensation to financial institutions, for (i) losses caused by the mandatory conversion into Pesos of most of their liabilities at the Ps.1.40 per US$1.00 exchange rate (which was greater than the Ps.1 per US$1.00 exchange rate established for the conversion into Pesos of their Dollar-denominated assets), through the delivery of a Peso-denominated Compensatory Bond issued by the Argentine government; and (ii) the currency mismatch left on financial institutions’ balance sheets after the compulsory pesification (conversion into pesos) of certain assets and liabilities, through the conversion of the abovementioned Peso-denominated Compensatory Bond into a Dollar-denominated Compensatory Bond, which was achieved by the purchase of a Dollar-denominated Hedge Bond. For such purpose, the Argentine government established the issuance of a Dollar-denominated bond bearing Libor and maturing in 2012 (Boden 2012 Bonds).

The compensation procedure applicable to Banco Galicia, under the terms of Decree No. 214/02, was completed in April 2007.

For Differences Related to Amparo Claims As a result of the provisions of Decree No. 1,570/01, the Public Emergency Law, Decree No. 214/02 and concurrent regulations, and as a result of the restrictions on cash withdrawals and of the issuance of measures that established the pesification and restructuring of foreign-currency deposits since December 2001, a significant number of claims have been filed against the Argentine government and/or financial institutions, formally challenging the emergency regulations and requesting prompt payment of deposits in their original currency. Most courts have declared the emergency regulations unconstitutional.

Through Communiqué “A” 3916, dated April 3, 2003, the Argentine Central Bank allowed for the recording of an intangible asset on account of the difference between the amount paid by financial institutions pursuant to legal actions, and the amount resulting from the conversion into Pesos of the balance of the Dollar deposits reimbursed, at the exchange rate of 1.4 Pesos per Dollar (adjusted by the CER plus accrued interest as of the payment date). In addition, it established that the corresponding amount must be amortized in 60 monthly equal and consecutive installments beginning in April 2003.

On November 17, 2005, through Communiqué “A” 4439, the Argentine Central Bank established that, beginning in December 2005, from the date of such regulation forward, financial institutions providing new commercial loans with an average maturity of greater than two years could defer the losses related to the amortization of amparo claims. The maximum deferrable amount was 10% of a financial institution’s RPC or 50% of the new commercial loans. Likewise, financial institutions were not able to reduce the remainder of their commercial loan portfolio. This methodology was applied until December 2008, when the balances recorded as of that date began to be amortized in up to 36 monthly equal and consecutive installments.

With respect to judicial deposits that have been subject to pesification, the Argentine Central Bank established that, beginning in July 2007, financial institutions must establish provisions in an amount equal to the difference that results from comparing such deposits’ balances at each month’s end, as measured in their original currency, and the corresponding Peso balances actually recorded on their books. Such provision, established as of December 31, 2015 and charged to income, amounted to Ps.8 million in fiscal year 2016.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents During fiscal year 2010, Banco Galicia amortized the total remaining balance of the deferred losses from amparo claims for Ps.281 million.

Banco Galicia has complied with Argentine Central Bank regulations concerning the amortization of amparo claims. However, Banco Galicia reserves the right to make claims in view of the negative effect on its financial condition caused by compliance with court orders, in excess of the provisions of the above-mentioned regulations. On December 30, 2003, Banco Galicia formally requested of the executive branch of the Government, with a copy of such request sent to the Argentine Ministry of Economy and to the Argentine Central Bank, the payment of due compensation for the losses incurred in connection with Asymmetric Pesification.

In June 2014, through Resolution No. 365, the Ministry of the Economy and Public Finance rejected an administrative claim filed by Banco Galicia. Before the due date set for said action, The Bank’s Board of Directors decided not to pursue further legal action with respect to such claim.

Argentine Banking Regulation The following is a summary of certain matters relating to the Argentine banking system, including provisions of Argentine law and regulations applicable to financial institutions in Argentina. This summary is not intended to constitute a complete analysis of all laws and regulations applicable to financial institutions in Argentina.

General Since 1977, banking activities in Argentina have been regulated by the Financial Institutions Law (“FIL”) which places the supervision and control of the Argentine banking system in the hands of the autonomous Argentine Central Bank. The Argentine Central Bank enforces the FIL and grants authorization to banks to operate in Argentina. The FIL confers numerous powers to the Argentine Central Bank, including the ability to grant and revoke bank licenses, authorize the establishment of branches of Argentine banks outside of Argentina, approve bank mergers, capital increases and certain transfers of stock, set minimum capital, liquidity and solvency requirements and lending limits, grant certain credit facilities to financial institutions in cases of temporary liquidity problems and promulgate other regulations that further the intent of the FIL. The Argentine Central Bank has vested the Superintendency with most of the Argentine Central Bank’s supervisory powers. In this section, unless otherwise stated, references to the Argentine Central Bank should be understood to be references to the Argentine Central Bank acting through the Superintendency. FIL grants the Argentine Central Bank broad access to the accounting systems, books, correspondence, and other documents belonging to banking institutions. The Argentine Central Bank regulates the supply of credit and monitors the liquidity of, and generally supervises the operation of, the Argentine banking system.

Current regulations equally regulate Argentine and foreign owned banks.

Principal Regulatory Changes since 2002 On January 6, 2002, the Argentine government enacted the Emergency Law (Ley de Emergencia) to address the 2001-2002 economic crisis. The principal measures taken by the Argentine government during 2002, both through the enactment of the Emergency Law and a series of decrees and other regulations, include the following: (i) the ratification of the suspension of payments on most public debt, with the exception of debts owed to multilateral lending agencies; (ii) the repeal of sections of the Convertibility Law (Ley de Convertibilidad) that established, since 1991, a 1 to 1 parity between the Peso and the Dollar, the devaluation of the Peso, and an exchange rate fluctuation regime, which domestically resulted in a decrease in the value of the Peso against the Dollar of around 240% during 2002; (iii) the amplification of exchange controls and restrictions on transfers abroad, which measures began to be eased towards the end of 2002; (iv) the ratification and extension of the restrictions on cash withdrawals from bank deposits that were established in December 2001 (the “corralito”), and later lifted in December 2002; (v) asymmetric pesification, the specific details of which are as follows: (a) Dollar-denominated debts of individuals and companies with financial institutions were converted into debt denominated in Pesos at an

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents exchange rate of Ps.1.00 per US$1.00 (1:1), (b) Dollar-denominated public sector debt to the financial sector were converted into Peso- denominated debt instruments at an exchange rate of Ps.1.40 per US$1.00 (1.40:1), and (c) Dollar-denominated bank deposits were converted into Peso-denominated bank deposits at an exchange rate of Ps.1.40 per US$1.00 (1.40:1), while foreign regulated public sector debt held by banks and companies remained Dollar-denominated; (vi) the modification of the return on assets and cost of liabilities pesified at the rate of Ps.1.40 per US$1.00 through the establishment of maximum and minimum interest rates and capital adjustments in accordance with retail price or wage change indices; (vii) the extension of the maturities of Peso-denominated time deposits and deposits originally denominated in Dollars, above a certain amount, which established a payment schedule with maturities in 2003 or 2005, depending on whether the deposits were originally made in Pesos or Dollars (the “corralón”); (viii) the voluntary exchange of corralito or corralón deposits for Argentine government bonds (through Decree No. 739/03, dated April 1, 2003, the corralón was eliminated); (ix) the amendment of the charter of the Argentine Central Bank (see “—General” above); and (x) the compensation to financial institutions, through bonds issued by the Argentine government for the losses caused by asymmetric pesification. The executive branch of the Argentine government and the Argentine Central Bank have provided a set of rules for determining the amount of compensation for losses related to asymmetric pesification, although certain financial entities claim that the compensation established by such rules is not adequate to cover the losses that they have experienced. On November 4, 2015, the Argentine Congress extended the validity of the Emergency Law until December 31, 2017.

Supervision As the regulator of the Argentine financial system, the Argentine Central Bank requires financial institutions to submit information on a daily, monthly, quarterly, semiannual and annual basis. These reports, which include balance sheets and income statements, information relating to reserve funds, use of deposits, portfolio quality (including details on debtors and any established loan loss provisions) and other pertinent information, allow the Argentine Central Bank to monitor financial institutions’ financial condition and business practices.

The Argentine Central Bank periodically carries out formal inspections of all banking institutions for the purpose of monitoring compliance by banks with legal and regulatory requirements. If Argentine Central Bank rules are breached, it may impose various sanctions depending on the magnitude of the infringement. These sanctions range from calling attention to the infraction, to the imposition of fines or even the revocation of the financial institution’s operating license. Moreover, non-compliance with certain rules may result in the obligatory presentation to the Argentine Central Bank of specific adequacy or regularization plans. The Argentine Central Bank must approve these plans in order for the financial institution to remain operational.

Financial institutions operating in Argentina have been subject to the supervision of the Argentine Central Bank on a consolidated basis since 1994. Information set out in “-Limitations on Types of Business,” “-Capital Adequacy Requirements,” “- Lending Limits,” and “-Loan Classification System and Loan Loss Provisions” below, relating to a bank’s loan portfolio, is calculated on a consolidated basis. However, regulations relating to a bank’s deposits are not based on consolidated information, but on such bank’s deposits in Argentina (for example, liquidity requirements and contributions to the deposit insurance system).

Examination by the Argentine Central Bank The Argentine Central Bank began to rate financial institutions based on the “CAMEL” quality rating system in 1994. Each letter of the CAMEL system corresponds to an area of the operations of each bank being rated, with: “C” standing for capital, “A” for assets, “M” for management, “E” for earnings, and “L” for liquidity. Each factor is evaluated and rated on a scale from 1 to 5, with 1 being the highest rating an entity can receive. The Argentine Central Bank modified the supervision system in September of 2000. The objectives and basic methodology of the new system, referred to as “CAMELBIG,” do not differ substantially from the CAMEL system. The components were redefined in order to evaluate business risks separately from management risks. The components used to rate the business risks are: capital, assets, market, earnings, liquidity and business. The components to rate management risks are: internal control and the quality of management. By combining the individual factors that are under evaluation, a combined index can be populated that represents the final rating for the financial institution.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents After temporarily halting such examinations as a result of the 2001-2002 financial and economic crisis, the Argentine Central Bank resumed the examination process, which remains in effect as of the date of this filing. In Banco Galicia’s case, the first examination after the 2001-2002 financial crisis was based on the information as of June 30, 2005. New examinations were conducted, the last one of which was based on information as of April 30, 2013.

Regulatory capital (Minimum Capital Requirements) Financial entities are subject to the capital adequacy rules of the Argentine Central Bank. Banco Galicia, as a commercial bank, must maintain a minimum capital level mandated by such rules, which must be equal or exceed the value resulting from comparing the minimum capital fixed by the Argentine Central Bank.

The minimum capital fixed requirements for a commercial bank located in the City of Buenos Aires, such as Banco Galicia, is a capital reserve of at least Ps. 26 million. The minimum capital requirements related to credit risk, which are calculated according to a formula created by the Argentine Central Bank, are designed to establish the minimum capital necessary to offset the risk that the counterparty does not comply with its obligation in a transaction related to the assets that are being reviewed. The minimum capital requirements related to market risks are designed at offset the eventual losses generated by change of price of the market rates or credit quality, which would affect the assets and liabilities of the bank. Such market risk includes (among other risks) liquidity risk and interest rate risk. The operational risk observes the possibility of suffering losses as consequence of external events or due to a failure or deficiency in an internal process, the employees or internal systems.

In order to verify compliance with the minimum capital requirements, the Argentine Central Bank considers the computable regulatory capital (“RPC”) of a particular entity (i.e. capital that the entities actually have). Pursuant to the Argentine Central Bank’s regulations, a bank’s RPC is the sum of the minimum core capital (Tier 1 capital) and supplementary capital (Tier 2 capital), minus certain deductible concepts. The Argentine Central Bank considered Basel III requirements in order to regulate the RPC (and listed the assets included in each Tier as well the deductible concepts).

According to the Argentine Central Bank’s regulations, any financial institution operating with an RPC under the minimum capital requirements must: (i) pay-in the correspondent amount within the following two months from the month in which it fails to comply with the requirement, or (ii) submit to the Superintendency a regularization and reorganization plan within the following 30 calendar days counted as from the last day of the month in which it fails to comply with the requirement. The Superintendency may appoint a supervisor and impose restrictions on distribution of dividends, among other actions, when non-compliance with the RPC requirements occurs.

In addition, any financial institution operating under the minimum capital requirement related to market risk (when such failure is caused by the requirements established to prevent interest rates risk, foreign exchange risk or equity prices risk), must pay-in the corresponding amount necessary to comply with the requirements and/or reduce its asset position until the applicable requirement is complied with, within a term of 10 business days counted from the first failure to comply with the requirements. In case the non- compliance situation remains after such term elapsed, the entity must submit to the Superintendency a regularization and reorganization plan within the following 5 days.

BASIC System

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The Argentine Central Bank established a control system (“BASIC”) with the purpose of allowing public access to a greater level of information and increased security with respect to their holdings in the Argentine financial system. Each letter corresponds to one of the following procedures: • B (“Bonos” or Bonds). All financial institutions in Argentina at one point were required to engage in certain debt issuing transactions in order to expose them to scrutiny and analysis by third parties with high standards. The Argentine Central Bank eliminated this requirement on March 1, 2002. • A (“Auditoría” or Audit). The Argentine Central Bank requires a set of external audit procedures that include: (a) the creation of a registry of auditors; (b) the implementation of strict accounting procedures to be complied with by external auditors; (c) the payment of a performance guarantee by those auditors to encourage their compliance with the procedures, and (d) the creation of a department within the Argentine Central Bank that is liable for verifying that the procedures are followed. The purpose of this requirement is to ensure accurate disclosure is made by the financial institutions to both the Superintendency and the public. • S (“Supervisión” or Supervision). The Argentine Central Bank has the right to inspect financial institutions periodically. • I (“Información” or Information). Financial institutions are required to file on a monthly basis certain daily, weekly, monthly and quarterly statistical information. • C (“Calificación” or Rating). The Argentine Central Bank established a system that required the periodic credit evaluation of financial entities by internationally recognized rating agencies, which was suspended by Communiqué “A” 3601 in May 2002. In November 2014, the Argentine Central Bank established new evaluation rules according to the Communiqué “A” 5671.

Legal Reserve The Argentine Central Bank requires that every year banks allocate to a legal reserve a percentage of their net profits established by the Argentine Central Bank, which currently amounts to no more than 20% and no less than 10% of their yearly income. Such reserve may only be used during periods of bank losses and after using up every allowance and other reserves. Distribution of dividends will not be allowed if the legal reserve is not met.

Profit Distribution In accordance with Communications “A” 5827 and “A” 6013, all distributions of dividends must be authorized by the Argentine Central Bank.

The Argentine Central Bank states that at least one month prior to the filing of an application for profit distribution approval with the Argentine Central Bank, it must be verified that the financial institution requesting such approval: (i) is not subject to the provisions of Articles 34, “Regularization and sanitation” (“Regularización y saneamiento”) and 35, “Restructuring of the entity in receipt of credit and bank deposits of the FIL” (“Reestructuración de la entidad en resguardo del crédito y los depósitos bancarios” Financial Institutions Law (“Ley de Entidades Financieras”), (ii) does not receive financial assistance related to illiquidity from the Argentine Central Bank, (iii) completes in a timely manner all reporting requirements established by the Argentine Central Bank, and (iv) has no deficiencies related to either minimum capital integration on both an individual and consolidated basis or the minimum Peso- denominated cash, foreign currency or government securities requirements.

Additionally, Communiqué “A” 3785 requires that if a given financial institution holds securities issued by the Argentine government under Decree 905/02 as compensation for losses related to asymmetric pesification, that are recorded at “technical value,” such entity may not distribute profits unless the amount of such distribution exceeds the difference between the registration and listing values of the aforementioned government securities.

The Argentine Central Bank imposed restrictions on the payment of dividends, limiting the ability of financial institutions to distribute dividends without its prior consent.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents By means of Communiqué “A” 5827 and “A” 6013 (as amended), the Argentine Central Bank amended and restated its regulations regarding dividend distribution by financial institutions. Pursuant to such regulation, the Superintendency will review the ability of a financial institution to distribute dividends upon request for approval by the institutions. The Superintendency may authorize the distribution of dividends when each of the following circumstances are applicable during the month preceding the request: (i) the financial institution is not subject to a liquidation procedure or the mandatory transfer of assets ordered by the Argentine Central Bank in accordance with section 34 or 35 bis of the FIL; (ii) the financial institution is not receiving financial assistance from the Argentine Central Bank; (iii) the financial institution is in compliance with its reporting obligations to the Argentine Central Bank; (iv) the financial institution is in compliance with minimum capital requirements (both on an individual and consolidated basis and excluding any individual franchise granted by the Superintendency) and with minimum cash reserves (on average), whether in Pesos, foreign currency or securities issued by the public sector; and (v) the financial institution is not subject to any significant fines (an amount exceeding the 25% of the RPC), debarment, suspension, revocation or prohibition imposed in the last five years by the Argentine Central Bank, the UIF, the CNV, and/or the National Superintendency of Insurance (Superintendencia de Seguros de la Nación), except when such financial institution has implemented corrective measures that are satisfactory to the Superintendency (such corrective measures would also be brought to the attention of the regulatory body that originally imposed the sanction). The Superintendency also takes into consideration information that it receives from, and/or sanctions imposed by, equivalent foreign agencies or authorities. When weighing the significance of the sanctions, the Superintendency takes into account the type of sanctions, the underlying reason for such sanctions and the amount of sanctions imposed on the financial institution. Additionally, the Superintendency factors in the degree of participation in the events leading up to the sanction, the economic effects of the violation, the degree of damage caused to third parties, the economic benefit that the sanctioned party received from the violation, the sanctioned party’s operating volume, its liability and the title or function that such party holds.

Financial institutions that comply with all of the above-mentioned conditions may distribute dividends up to an amount equal to: (i) the positive balance of the account “accumulated retained earnings” (“resultados no asignados”) at the end of the fiscal year, (ii) plus voluntary reserves for future dividend payments and (iii) minus voluntary reserves and mandatory statutory reserves and other items, such as (a) balance of account related to payments made under pesification judicial rulings; (b) the net positive balance of the book-value and the market-value of certain public debt securities and Argentine Central Bank notes that the financial institution owns that are not marked to market; (c) unrecorded adjustments of asset value informed by the Superintendency or mentioned by external auditors on their report; (d) individual exemptions for asset valuation granted by the Superintendency; (e) balance of judicial deposits in foreign currency and accounting value of such deposits as required by Law No. 25,561 and Decree No. 214/02; and (f) net results of losses due to application of rules for valuation of securities of the non-financial public sector and monetary regulations of the Argentine Central Bank.

Dividends cannot be paid, however, in any of the following circumstances: • if the average minimum cash reserve is lower than the amount of cash required by the latest reported position or the pro-forma position after making the dividend payment; and/or • if the financial institution did not comply with the applicable Additional Capital Margins (as defined below).

In addition, for financial institutions that are branches of foreign financial institutions, the Superintendency will consider the liquidity and solvency of their headquarters and the markets in which they operate.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Legal Reserve Requirements for Liquidity Purposes The deposit amount minus the Minimum Cash Requirement yields the “lending capacity” of a particular deposit.

The Argentine Central Bank modifies the percentages of the Minimum Cash Requirements from time to time depending on monetary policy considerations. The Minimum Cash Requirements must be complied with using specific assets (see below), in the same currency as the deposit that triggers such requirement. Compliance with the Minimum Cash Requirements is determined in averages, for monthly periods.

Compliance with Minimum Cash Requirements must be made in the same debt currency and/or instrument that corresponds to the requirement through (i) financial entities checking accounts in pesos opened in the Argentine Central Bank; (ii) financial entities minimum cash accounts in dollars or other foreign currencies opened in the Argentine Central Bank; (iii) special guarantee accounts in favor of clearing houses and for coverage of credit cards, vouchers and ATM operations and for transfer settlement of immediate funds; (iv) non-bank financial entities checking accounts opened in commercial banks for the requirement of minimum cash integration; (v) special accounts opened in the Argentine Central Bank linked to the provision of social security benefits in charge of National Social Security Administration (“Administración Nacional de la Seguridad Social” or ANSES) and (vi) Sub-Account 60 minimum cash of public securities and debt instruments issued by the Argentine Central Bank, at market value.

Through Communiqué “A” 3528, dated March 25, 2002, the Argentine Central Bank established that the lending capacity of foreign currency-denominated deposits must only be applied to Dollar-denominated international trade financing, interbank loans and Lebac acquired through tender offers or secondary trading, and that total lending capacity is determined by adding total foreign currency-denominated deposits and total interbank loans that have been identified by the grantor institution as resulting from its own lending capacity, minus the minimum cash requirements related to deposits. Any such lending capacity not applied in the aforementioned manner will result in an increased Minimum Cash Requirement for the same amount. With respect to Lebac, however, the entity failing to apply its lending capacity in the manner set forth above will be subject to an increase in the Minimum Cash Requirement that is equivalent to the deposits payable in Pesos and a fee equal to twice the annual nominal interest rate related to bids for Lebac in Pesos. The cut-rate reported by the Argentine Central Bank will also be used to determine such fee.

Pursuant to Communiqué “A” 4449, dated December 2, 2005, the Argentine Central Bank established that, effective December 2005, the Minimum Cash Requirement in Pesos must be applied over the monthly average of the daily depositary balances, except for the period from December to February of the following year, for which the quarterly average must be used.

According to Communiqué “A” 5976 (as modified and complemented), the percentages of Minimum Cash Requirements applicable in accordance with Argentine Central Bank rules, are as follows: • Demand deposits: • Peso-denominated checking accounts and savings accounts: 22%. • Dollar-denominated savings accounts: 25%. • Time deposits, including those adjusted by CER (by remaining maturity): • Peso-denominated: up to 29 days: 16%; from 30 to 59 days: 12%; from 60 to 89 days: 7%; from 90 to 179 days: 1%; from 180 to 365 days: 0%. • Dollar-denominated: up to 29 days: 23%; from 30 to 59 days: 17%; from 60 to 89 days: 11%; from 90 to 179 days: 5%; from 180 to 365 days: 2%; and more than 365 days: 0%.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Deficiencies of minimum cash and daily integrations in pesos are subject to a fine equivalent to twice the BADLAR rate of private banks for pesos deposits, informed for the last business day of relevant period (according to Communiqué “A” 5356 and modifications).

Deficiencies of minimum cash and daily integrations in foreign currency are subject to a fine equivalent to twice the private banks BADLAR rate in dollars or twice the 30-day LIBOR rate for operations in that currency, informed for the last business day of relevant period or last available, whichever is higher (according to Communiqué “A” 5356 and modifications).

The assets which may be taken into account when determining compliance with this requirement include cash, which includes bills and coins in vaults, ATMs, branches and transportation and armored truck companies. Effective October 1, 2006, and pursuant to the Argentine Central Bank’s Communiqué “A” 4580, up to 67% of the Minimum Cash Requirement may be met using cash. The Minimum Cash Requirements can also be met using balances held at the Argentine Central Bank of Peso- and Dollar- denominated accounts and escrow accounts relating to clearing houses.

As of December 31, 2016, Banco Galicia was in compliance with its legal reserve requirements and continued to be in compliance as of the date of this annual report.

In addition, through Communiqué “A” 5980, dated May 26, 2016, the Argentine Central Bank established a percentage increase that financial institutions must apply for minimum cash requirement. This increase is made in two periods: the first covering the period from June 1, 2016 to June 30, 2016, and the second from July 1, 2016.

Limitations on Types of Business In accordance with the provisions of the FIL, commercial banks are authorized to carry out all activities and operations which are not strictly prohibited by law or by the Argentine Central Bank regulations. Permitted activities include the capacity to: grant and receive loans; receive deposits from the general public in local and foreign currency; secure its customers’ debts; acquire, place and trade with shares and debt securities in the Argentine over-the-counter market, subject to the prior approval of the CNV; carry out operations in foreign currencies; act as trustee; and issue credit cards.

Financial institutions are not allowed to own commercial, industrial, agricultural or any other type of companies unless they are authorized by the Argentine Central Bank. Pursuant to the rules of the Argentine Central Bank, a commercial bank’s total equity investments (including interest in local mutual funds) may not exceed 50% of the bank’s adjusted shareholders’ equity or its RPC. Also, the following investments may not exceed 15%, in the aggregate, of the bank’s adjusted shareholders’ equity: (i) shares not listed on stock exchanges except for (a) shares in companies providing services complementary to the ones offered by the bank, and (b) certain equity interests requiring the provision of utility services, if applicable; (ii) listed shares and participation certificates in mutual funds not included for the purposes of determining capital requirements associated with market risk; and (iii) listed shares that don’t have a “largely publicly available market price” (when there are daily quotations of relevant operations, which should not be substantially affected by the provision of ownership by the bank of such shares).

In order to carry out the calculation of limits described above, it is not necessary to deduct the capital stock allocated to foreign branches from a bank’s shareholders’ equity.

Pursuant to the Argentine Central Bank’s regulations, financial institutions are not allowed to engage directly in insurance activities or hold more than a 12.5% interest (or more than a specific percentage of the financial institution’s adjusted shareholders’ equity) in the outstanding capital of a company which does not provide services complementary to those offered by financial institutions. The Argentine Central Bank determines which services are complementary to those provided by financial institutions; it has been determined that such services include those offered in connection with stock brokerage, the issuance of credit, debit or similar cards, financial intermediation in leasing and factoring transactions.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Non-banking financial institutions are not allowed to provide certain services and activities, such as checking accounts, or to participate in foreign trade transactions, among other activities.

As of January 2015, regulations required that financial institutions not acquire (i) over 12.5% of the capital stock; (ii) over 12.5% of the total of votes; or (iii) a participation equivalent to the voting power – even if below 12.5% – of other companies that provide up to two complementary financial services (to those provided by the financial entity), without the prior authorization of the Argentine Central Bank. The acquisition of participations is not authorized when such companies provide more than two complementary financial services. This regulation does not directly affect those financial institutions that already provide complementary services or those that control companies that already provide complementary financial services, but it should be considered for possible future acquisitions.

Capitalization of Debt Instruments Through Communiqué “A” 5889, dated January 21, 2016, the Argentine Central Bank modified Item 8.6 (Capital Contributions) of Section 8 (Capital Adequacy) of the Financial Entities Minimum Capital Regulations. Through this communication, the Argentine Central Bank broadened the set of financial instruments other than cash that it expressly allows to be contributed as capital for the purposes of all regulations related to capital, capital calculations and capital increases. With respect to financial instruments other than cash (where no special authorization from the Argentine Central Bank is required), the regulation establishes that subject to the prior authorization by the Superintendency, the following instruments are allowed as capital contributions: (i) securities issued by the Argentine government, (ii) debt instruments issued by the Argentine Central Bank, and (iii) a financial institution’s deposits and other liabilities resulting from its financial brokerage activities, including subordinated obligations. With respect to instruments (i) and (ii), the contributions must be recorded at market value. It is understood that an instrument has a market value when it is regularly listed on regulated local or foreign stock markets and traded on such markets in such amounts that the liquidation of such instruments does not significantly affect the listing price of such instruments. With respect to instrument (iii), contributions must be recorded at market value, as defined in the previous sentence or, in the case of financial institutions that publicly offer their stock, at the price determined by the applicable regulatory authority. If the aforementioned conditions are not met, the instruments in question will not be contributable as capital.

Deposits and other liabilities resulting from a given financial institution’s financial brokerage activities, including subordinated obligations that are not permitted to be traded in local or foreign regulated secondary markets, will be allowed to be contributed as capital at their accounting value, pursuant to Argentine Central Bank rules.

Lending Limits The total equity stake and credit amounts, including collateral, that a bank is allowed to grant to a customer at any time is based on the bank’s adjusted shareholders’ equity as of the last day of the immediately preceding month and on the customer’s shareholders’ equity.

In accordance with the Argentine Central Bank’s regulations, a commercial bank shall not lend or provide credit (“financial assistance”) in favor of, nor hold shares in the capital stock of, a single unaffiliated customer (together with its affiliates) for amounts higher than 15% of the bank’s adjusted shareholders’ equity or 100% of the customer’s shareholders’ equity. Nevertheless, a bank may provide additional financial assistance to such customer up to a sum equivalent to 10% of the bank’s adjusted shareholders’ equity, if the additional financial assistance is secured by certain liquid assets, including government or private debt securities.

The total amount of financial assistance a bank is authorized to provide to a borrower and its affiliates is also limited based on the borrower’s shareholders’ equity. The total amount of financial assistance granted to a borrower and its affiliates shall not be higher than, in the aggregate, 100% of such borrower’s shareholders’ equity, although such limit may be increased an additional 200% of the borrower’s shareholders’ equity if the sum does not exceed 2.5% of the bank’s adjusted shareholders’ equity.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Since October 1, 1995, the Argentine Central Bank has required that the granting of any kind of loans exceeding 2.5% of a bank’s adjusted shareholders’ equity be approved by the branch’s manager, the regional manager, the senior administrative officer of the credit division, the general manager and the credit committee, if any, and must also have the approval by the board of directors, management board or another similar board.

Global exposure to the public sector (national, provincial and municipal public sector) shall not be higher than 75% of an institution’s adjusted shareholders’ equity. Additionally, Section 12 of Communiqué “A” 3911, as amended, establishes that the average monthly financial assistance to non-financial public sector, in the aggregate, shall not be higher than 35% of the bank’s total assets as of the end of the previous month.

The Argentine Central Bank also regulates the level of “total financial exposure” (defined as financial assistance or credit plus equity participations) of a bank to a “related party”. Until August 2013 a related party was defined as bank’s affiliates and related individuals, “affiliate” meaning any entity over which a bank, directly or indirectly, has control, is controlled by, or is under common control with, or any entity over which a bank has, directly or indirectly, significant influence with respect to such entity’s corporate decisions, and “related individuals” meaning bank’s directors, senior management, syndics (síndicos) and such persons’ direct relatives. On August 9, 2013, the Argentine Central Bank issued the Communiqué “A” 5472, through which the definition of related parties was modified and broadened.

The Argentine Central Bank limits the level of total financial exposure that a bank can have outstanding to related parties, depending on the rating granted to each bank by the Superintendency. Banks rated 4 or 5 are forbidden to extend financial assistance to related parties. For banks ranked between 1 and 3, the financial assistance without guarantees to related parties cannot exceed, together with any equity participation held by the bank in its affiliates, 5% of such bank’s RPC. The bank may increase its financing to such related parties up to an amount equal to 10% of such bank’s RPC if the financial assistance is secured.

However, a bank may grant additional financial assistance to such related parties up to the following limits: • Individual maximum limits for customers over which a bank has control • Domestic financial entities • Financial institutions rated 1, 2 or 3, subject to consolidation with the lender or the borrower: • If the affiliate is a financial institution rated 1, the amount of total financial exposure can reach 100% of a bank’s RPC, and 50% for additional financial assistance. • If the receiving affiliate financial institution is rated 2, the amount of total financial exposure can reach 20% and an additional 105% can be included. • If the affiliate is a financial institution rated 3, the amount of total financial exposure can reach 10%, and additional financial assistance can reach 40%. • Financial institutions not subject to consolidation with the lender or the borrower: 10% • Domestic companies with complementary services • Domestic companies with complementary services associated with brokerage activities, financial brokerage in leasing and factoring operations, and temporary acquisition of shares in companies to facilitate their development in order to sell such shares afterwards • Controlling company rated 1: General assistance: 100% • Controlling company rated 2: General assistance 10% / Additional assistance 90% • Domestic companies with complementary services related to the issuance of credit cards, debit cards or other cards: • Controlling company rated 1: General assistance: 100% / Additional assistance 50% • Controlling company rated 2: General assistance 20% / Additional assistance 105% • Controlling company rated 3: General assistance 10% / Additional assistance 40%

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • In addition, subject to the 25% limitation on financial exposure at the end of every month, these companies can offer financing to financial services users, not subject to the Credit Cards Law but in compliance with regulations related to interest rates in financing operations, applying the corresponding factors. • Domestic companies with complementary services, not subject to consolidation with the lender or the borrower : 10% • Foreign financial entities: • Investment grade: 10% • No Investment grade: Unsecured 5%; Secured10% • Individual maximum limits for customers over which there is a personal relationship • Lender is rated from 1 to 3: 5% of its RPC.

In addition, the aggregate amount of a bank’s total financial exposure to its related parties, except for the ones subject to individual maximum limits higher than 10% (complementary services companies), may not exceed 20% of such bank’s RPC.

Notwithstanding the limitations described above, financial assistance is also limited in order to prevent risk concentration. To that end, a bank’s aggregate amount of non-exempt total financial exposure (including equity interests) independently of whether customers qualify as such bank’s related parties or not, in the case in which such exposure exceeds 10% of such bank’s RPC, may not exceed three times the bank’s RPC excluding total financial exposure to domestic financial institutions, or five times the bank’s RPC, including such exposure.

For a second floor financial institution (i.e. a financial institution which only provides financial products to other banks and not to the public) the latter limit is 10 times the bank’s RPC.

Banco Galicia has historically complied with such rules.

Loan Classification System and Loan Loss Provisions For a description of the Argentine Central Bank’s loan classification system and the Argentine Central Bank’s minimum loan loss provisions requirements, see “-Selected Statistical Information-Main Argentine Central Bank’s Rules on Loan Classification and Loan Loss Provisions”.

Limitation on fees and other substantial elements On June 10, 2014, the Argentine Central Bank issued a series of Communications which set forth: (i) the requirement for an authorization to increase certain fees (Communiqué “A” 5685) and (ii) an alternative method for expressing the total financial cost of a loan, which going forward will be expressed as an annual nominal rate applicable to the loans granted (Communiqué “A” 5592).

Valuation of Public Sector Assets Since March 1, 2011, the Argentine Central Bank amended the valuation criteria applicable to holdings of public sector debt according to the probable allocation of the assets: (a) Fair value: the difference between the corresponding market price of the debt instruments (market value or present value), and the net book value of the offset account; it is applicable to debt instruments included in the list of volatilities or present values published by the Argentine Central Bank. (b) Cost plus yield: the debt instruments not included in the list mentioned in a) above, are registered at incorporation value increased on an exponential basis according to their internal rate of return.

For further description of the rules governing the valuation of public sector assets, see “Selected Statistical Information- Government and Corporate Securities.”

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Foreign Currency Position Through Communiqué “A” 5997, the Argentine Central Bank set the limit of the Foreign Currency Positive Global Position (defined as the assets and liabilities arising from financial intermediation and securities denominated in foreign currency) which cannot exceed 15% of the RPC or liquid equity, each as of the previous month to which corresponds.

Deposit Insurance System In 1995, Law No. 24,485 and Decree No. 540/95, as amended, created a deposit insurance system for bank deposits and delegated to the Argentine Central Bank the organization and start-up of the deposit insurance system. The deposit insurance system was implemented through the creation of a fund named Fondo de Garantía de los Depósitos (“FGD”), which is administered by Seguros de Depósitos S.A. (“Sedesa”). The shareholders of Sedesa are the Argentine government, through the Argentine Central Bank, which holds at least one share, and a trust constituted by the financial institutions which participate in the fund.

The Argentine Central Bank establishes the extent of participation by each institution in proportion to the resources contributed by each such institution to the FGD. Banks must contribute to the FGD on a monthly basis in an amount that is currently equal to 0.015% of the monthly average of daily balances of a financial institution’s deposits (both Peso- and foreign currency- denominated).

The deposit insurance system covers all Peso and foreign currency deposits held in demand deposit accounts, savings accounts and time deposits for an amount up to Ps.450,000 per person, account and deposit. Certain deposits are not covered by the guarantee of the deposit insurance system, including those deposits that do not accrue interest, deposits that do not accrue an amount payable due to the application of the CER and deposits with a yield that exceeds the benchmark interest rate set by the Argentine Central Bank. The guarantee provided by the deposit insurance system must be made effective within 30 days from the revocation of the license of a financial institution, subject to the outcome of the exercise by depositors of their priority rights described under “-Priority Rights of Depositors” below. The Argentine Central Bank may modify, at any time, and with general scope, the amount of the mandatory deposit guarantee insurance.

Decree No. 1292/96 enhanced Sedesa’s functions by allowing it to provide equity capital or make loans to Argentine financial institutions experiencing difficulties and to institutions that buy such financial institutions or their deposits. As a result of such decree, Sedesa has the flexibility to intervene in the restructuring of a financial institution experiencing difficulties prior to bankruptcy.

Debt securities issued by banks are not covered by the deposit insurance system.

Priority Rights of Depositors According to section 49(e) of the FIL, in the event of a judicial liquidation or the bankruptcy of a financial entity, the holders of deposits in Pesos and foreign currency benefit from a general priority right to obtain repayment of their deposits up to the amount set forth below, with priority over all other creditors, with the exception of the following: (i) deposits secured by a mortgage or pledge, (ii) rediscounts and overdrafts provided to financial entities by the Argentine Central Bank, according to section 17 subsections (b), (c) and (f) of the Argentine Central Bank Charter, (iii) credits provided by the Banking Liquidity Fund, which was created by Decree No. 32, dated December 26, 2001, secured by a mortgage and pledge and (iv) certain labor credits, including accrued interest until the date of their total repayment.

The holders of the following deposits are entitled to the general preferential right established by the FIL (following this order of preference):

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • deposits of individuals or entities up to Ps.50,000, or the equivalent thereof in foreign currency, with only one person per deposit being able to use this preference. For the determination of this preference, all deposits of the same person registered by the entity are computed; • deposits in excess of Ps.50,000, or the equivalent thereof in foreign currency, referred to above; • liabilities originated on commercial credit lines provided to the financial entity, which are directly related to international trade.

According to the FIL, the preferences set forth in previous paragraphs (i) and (ii) above are not applicable to deposits held by persons who are affiliates of the financial entity, either directly or indirectly as determined by the Argentine Central Bank.

In addition, pursuant to Section 53 of the FIL, the Argentine Central Bank has an absolute priority over all other creditors of the entity, except as provided by the FIL.

Deposit and Loans in Housing Units In order to facilitate access to mortgage loans, though Communiqué “A” 5945, dated April 8, 2016, the Argentine Central Bank established a new type of savings and loans denominated in Housing Units (ins Spanish “Unidades de Vivienda – “UVIs”). UVIs values will be updated using the Reference Stabilization Coefficient (in Spanish Coeficiente de Estabilización de Referencia – “CER”).

Financing Loans for Production and Financial Inclusion Through Communiqué “A” 6084, dated October 21, 2016, the Argentine Central Bank established some modifications to the conditions corresponding to the 2016-second semester quota, such as deadline reductions for some loans and interest rate reduction to 17% (22% until October 31) for payday loans as of November, 1st. It also determined guidelines for 2017-first semester quota, in which the financial balance included must be at least equivalent to 18% (during 2016-second semester it was 15,5%) of non-financial private sector deposits nominated in pesos, calculated on a monthly basis average of daily balances from November, 2016. To these effects, will be deemed the daily balance simple average of current financings between January 1st and June 30, 2017. Nominal annual fixed rate established was 17%.

Financial Institutions with Economic Difficulties The FIL establishes that financial institutions, including commercial banks such as Banco Galicia, which evidence a deficiency in their cash reserves, have not complied with certain required technical standards, including minimum capital requirements, or whose solvency or liquidity is deemed to be impaired by the Argentine Central Bank, must submit a restructuring plan to the Argentine Central Bank. Such restructuring plan must be presented to the Argentine Central Bank on the date specified by the Argentine Central Bank, which should not be later than 30 calendar days from the date on which the request is made by the Argentine Central Bank. In order to facilitate the implementation of a restructuring plan, the Argentine Central Bank is authorized to provide a temporary exemption from compliance with technical regulations and/or the payment of charges and fines that arise from such non-compliance.

The Argentine Central Bank may also, in relation to a restructuring plan presented by a financial institution, require such financial institution to provide guarantees or limit the distribution of profits, and appoint a supervisor, to oversee such financial institutions’ management, with the power to veto decisions taken by the financial institution’s corporate authorities.

In addition, the Argentine Central Bank’s charter authorizes the Superintendency, subject only to the prior approval of the president of the Argentine Central Bank, to suspend for up to 30 days, in whole or in part, the operations of a financial institution if its liquidity or solvency have been adversely affected. Notice of this decision must be given to the board of directors of the Argentine Central Bank. If at the end of such suspension period the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Superintendency considers renewal necessary, such renewal can only be authorized by the board of directors of the Argentine Central Bank for an additional period not to exceed 90 days. During the suspension period: (i) there is an automatic stay of claims, enforcement actions and precautionary measures; (ii) any commitment increasing the financial institution’s liabilities is void, and (iii) acceleration of indebtedness and interest accrual is suspended.

If, in the judgment of the Argentine Central Bank, a financial institution is in a situation which, under the FIL, would authorize the Argentine Central Bank to revoke the financial institution’s license to operate as such, the Argentine Central Bank may, prior to considering such revocation, order a variety of measures, including (1) taking steps to reduce, increase or sell the financial institution’s capital; (2) revoking the approval granted to the shareholders of the financial institution to own an interest therein, giving a term for the transfer of such shares; (3) excluding and transferring assets and liabilities; (4) constituting trusts with part or all the financial institution’s assets; (5) granting of temporary exemptions to comply with technical regulations and/or pay charges and fines arising from such defective compliance; or (6) appointing a bankruptcy trustee and removing statutory authorities.

Furthermore, any actions authorized, commissioned or decided by the Argentine Central Bank under Section 35 of the FIL involving the transfer of assets and liabilities, or complementing such transfers, or necessary to execute the restructuring of a financial institution, as well as those related to the reduction, increase and sale of equity, are not subject to any court authorization and cannot be deemed inefficient in respect of the creditors of the financial institution which was the owner of the excluded assets, even though its insolvency preceded any such actions.

Dissolution and Liquidation of Financial Institutions The Argentine Central Bank must be notified of any decision to dissolve a financial institution pursuant to the FIL. The Argentine Central Bank, in turn, must then notify a court of competent jurisdiction, which will determine who will liquidate the entity (the corporate authorities or an appointed, independent liquidator). This determination is based on whether or not sufficient assurances exist regarding the ability of such corporate authorities to carry out the liquidation properly.

Pursuant to the FIL, the Argentine Central Bank no longer acts as liquidator of financial institutions. However, when a restructuring plan has failed or is not considered viable, local and regulatory violations exist, or substantial changes have occurred in the financial institution’s condition since the original authorization was granted, the Argentine Central Bank may decide to revoke the license of the financial institution to operate as such. In this case, the law allows judicial or extrajudicial liquidation as in the case of voluntary liquidation described in the preceding paragraph.

The bankruptcy of a financial institution cannot be adjudicated until the license is revoked by the Argentine Central Bank. No creditor, with the exception of the Argentine Central Bank, may request the bankruptcy of the former financial institution before 60 days have elapsed since the revocation of its license.

Argentine Voluntary Disclosure Regime In a context of the Organisation for Economic Co-operation and Development (OECD) standard of automatic exchange of information, on May 31, 2016 the Argentine Congress approved a law filed by the Executive Branch, which included a voluntary and extraordinary disclosure regime (the “Regime”) and significant changes to personal asset tax, income tax and minimum presumed income tax.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The Regime required the disclosure of unreported assets held in Argentina and abroad. The most relevant provisions were:

Beneficiaries It applied to individuals and legal entities residing or domiciled in Argentina as of December 31, 2015 and to unreported assets existing (i) until the date of the enactment of the law, in the case of individuals, and (ii) in the last fiscal year that ended before January 1, 2016, in the case of legal entities.

Unreported assets subject to the Regime The unreported assets subject to the Regime were: (i) foreign or local currency, (ii) real estate, (iii) movable assets (including shares, equity interests, trust beneficiary rights, any kind of financial instruments or securities, such as bonds, negotiable obligations, American Depositary Receipts (ADRs), shares or quotas in funds and similar assets, and (iv) any other asset (including credits and rights for valuable consideration).

Even though the Regime established the mandatory full disclosure of the unreported assets (leaving no chance for partial disclosure), it did not require the mandatory repatriation of such assets back to Argentina.

Exclusion The Regime did not apply to assets held in financial institutions or by custody agents established or located in jurisdictions or countries identified by the Financial Action Task Force (FATF) as High Risk or Non-Cooperative.

Deadline The Regime was available until to March 31, 2017.

Regularization The Regime provided that taxpayers would have three options to legalize unreported assets: • Pay a one-time special tax (ranging from 0% to 15%) • Purchase public bonds, and hold such bonds for the requisite period provided by the Regime • Make long-term investments in Argentina in an amount equal to or greater than U.S. $250,000

Benefits The regularization of unreported assets implied the forgiveness of unpaid taxes (such as VAT, Income Tax, and Personal Asset Tax), as well as of criminal tax and exchange control implications regarding those assets. In addition, the “Non Supported Net Worth Increase” (“incremento patrimonial no justificado”) presumption, provided by the Argentine Procedural Tax Law No. 11,683, did not apply.

Credit Cards Regulation The Credit Cards Law establishes the general framework for credit card activities. Among other regulations, this law: • sets a 3% cap on the rate a credit card company can charge merchants for processing customer card holders’ transactions with such merchants, calculated as a percentage of the customers’ purchases. With respect to debit cards, the cap is set at 1.5% and the amounts relating to the customers’ purchases should be processed in a maximum of 3 business days; • establishes that credit card companies must provide the Argentine Central Bank with the information on their loan portfolio that such entity requires; and

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • sets a cap on the interest rate a credit card company can charge a card holder, which cannot exceed the average interest rate charged by the issuer on personal loans by more than 25%; for non-bank issuers, such amount cannot exceed the financial system’s average interest rate on personal loans (published by the Argentine Central Bank) by more than 25%.

The Argentine Central Bank has issued regulations to enforce public disclosure of companies’ pricing (fees and interest rates) to ensure consumer awareness of such pricing.

In addition, during 2014 the Argentine Central Bank issued a series of regulations in order to establish caps on interest rates on personal loans, pledge loans and credit card loans, as well as to establish a requirement for an authorization to increase fees.

On December 17, 2015, through its Communiqué “A” 5853, the Argentine Central Bank removed the regulations in force related to the limits on interest rates on lending transactions.

Concealment and Laundering of Assets of a Criminal Origin Law 25,246 (as amended in July 2011 by Law No. 26,683) incorporates money laundering as a crime under the Argentine Criminal Code. Additionally, with the goal of preventing money laundering, the UIF was created under the jurisdiction of the Argentine Ministry of Justice, Security and Human Rights. The main consequence of such modification is that money laundering is now classified as a separate offense.

Law No. 26,683 punishes not only laundering assets from other people’s crimes as set by Law No. 25,246, but also “Self- Laundering”, which describes the act of laundering money tied to a crime the individual committed him or herself. It also prescribes certaom tax offenses described in Article 303 of the Argentine Penal Code as punishable laundering behaviour.

The new standard falls under Article 303 of the Argentine Penal Code in the chapter titled “Crimes against economic and financial order.”

The minimum and maximum of the criminal scale will be doubled when (i) the foregoing acts were crimes that are particularly serious, meaning those crimes with a punishment that is greater than three years of imprisonment; (ii) the perpetrator committed the crime for profit; and (iii) the perpetrator regularly performs concealment activities.

The criminal scale can only be increased once, even when more than one of the above-mentioned acts occurs. In such case, court may take into consideration the multiple acts when individualizing the original punishment.

In addition, the regulations establish that: (i) within the framework of a review of reported suspicious activity, the person required by the UIF to provide information may not withhold it, claiming such information is a banking, stock market or professional secret, nor because it is legally or contractually confidential. (ii) if after completing its analysis of the reported activity, the UIF finds sufficient elements to suspect that the activity is a money laundering operation pursuant to the law, then the UIF shall notify the Public Ministry in order to determine if a criminal prosecution should begin (iii) people who have acted for their spouse, any relative that is related by blood up to the fourth degree or by marriage up to the second degree, or a close friend or person to whom they owe special gratitude, shall be exempted from criminal responsibility.

Notwithstanding the foregoing, pursuant to the Argentine Criminal Code, the exemption shall not be effective in the following cases:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (i) with respect to a person who secures or helps the perpetrator of or a participant in a crime to secure the product or profit of the crime, (ii) with respect to a perpetrator that committed the crime for profit, (iii) with respect to a perpetrator that regularly performs concealment activities, (iv) with respect to any person who converts, transfers, administers, sells, encumbers, or uses money or any asset derived from any crime he was not involved in, with the possible result of giving the original or secondary assets the appearance of having a legal origin, and as long as their value is greater than Ps.50,000, through a single or series of related acts.

Finally, the law lists the parties that are obligated to report to the UIF, which include among others: - Financial institutions, agents and stock companies, and insurance companies, - Public notaries and registered professionals whose activities are governed by the Consejo Profesional de Ciencias Económicas (Economic Sciences Professional Council), companies that receive donations or capital contribution for over Ps.50,000 and companies that organize and regulate professional sport events.

Banco Galicia formed the “Committee for the Control and Prevention of Money Laundering”, the name of which was changed in 2005 to the “Committee for the Control and Prevention of Money Laundering and Funding of Terrorist Activities”, which is responsible for establishing and maintaining the general guidelines for Banco Galicia’s strategy to control and prevent money laundering and the financing of terrorism.

For more information, see “Item 6. Directors, Senior Management and Employees-Functions of the Board of Directors of Banco Galicia”.

Banco Galicia has also appointed two directors to fulfill the roles of Compliance Officer and Substitute Compliance Officer. In addition, a unit specializing in this subject was created, the Anti-Money Laundering Unit; responsible for the execution of the policies passed by the committee and for the monitoring of control systems and procedures in order to ensure that they are adequate.

The “Guide for unusual or suspicious transactions within the scope of the financial and foreign exchange system” (passed by Resolution No. 121/2011 of the UIF) establishes the obligation to report, among others, the following investment related transactions: (i) investments related to purchases of government or corporate securities given in custody to the financial institution if such securities’ value appears to be inappropriate due to the type of business of the client; (ii) deposits or “back to back” loan transactions with branches, subsidiaries or affiliates of the bank in places known to be “tax havens” or countries or territories considered by the Financial Action Task Force as non-cooperative; (iii) client requests for investment management services (whether in foreign currency, shares or trusts) where the source of the funds is not clear or is not consistent with its business. (iv) Significant and unusual movements in custodial accounts, (v) frequent use by infrequent clients of special investment accounts whose owner is the financial entity; and (vi) regular security transactions, through purchases and sales on the same day and for identical volumes and nominal values, taking advantage of quotation differences, when such transactions are not consistent with the client’s profile and regular activity.

Such reporting obligation generally consists of performing due diligence in order to get to know the client and understand the corresponding transaction and also, if applicable, to report any irregular or suspicious activity to the UIF, pursuant to the terms and conditions established by the regulation applicable to such obligated party.

Law No. 26,734 enacted on December 22, 2011, incorporated terrorism financing and the financing of terrorism as an aggravating circumstance to all criminal conduct in the Argentine Criminal Code.

Such law punishes any individual who directly or indirectly collects or provides goods or money with the intention of being used, or knowing that they will be used, in whole or in part (i) to finance a crime with the purpose

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents established in Section 41.5; (ii) for an organization who commits or attempts to commit crimes with the purpose established in Section 41.5; and (iii) for a person who commits or attempts to commit or participates in any way in committing crimes with the purpose established in Section 41.5.

The new legislation also punishes terrorism as an aggravating factor in other punishable crimes when any such offense was committed in order to terrorize the population.

Item 4.A. Unresolved Staff Comments None.

Item 5. Operating and Financial Review and Prospects

Item 5.A. Operating Results The following discussion and analysis is intended to help you understand and assess the significant changes and trends in our historical results of operations and the factors affecting our resources. You should read this section in conjunction with our audited consolidated financial statements and their related notes included elsewhere in this annual report.

Overview In recent years, we have undertaken to expand the volume of our business with the private sector in order to increase our recurrent earnings generation capacity.

We have increased our customer base and our fee-based business and financial intermediation activities with the private sector, strengthening our position as a leading domestic private-sector financial institution. In addition, our total deposits and loan origination have increased.

We have increased our regulatory capital through the issuance of subordinated bonds (most recently in July 2016), and through internal origination. The increase in our overall level of activity, which led to the above-mentioned increase in the volume of our fee based business and financial intermediation with the private sector, has had a positive impact on our net financial income and on our net income from services. Loan loss provisions increased due to the deterioration of individuals’ loan portfolios and also due to the worsening of the economic condition.

In spite of a slowdown in the Argentine economy, Banco Galicia has managed to expand its business with the private sector and to improve its income generation, while strengthening its financial condition, maintaining an adequate coverage of its credit risks and maintaining a healthy asset quality.

In summary, in recent years, our operating profitability was positively impacted by the growth of our business - both the financial intermediation and fee-based businesses - with the private sector, in a continued low credit risk environment, but within a context of growing inflation. Fiscal year 2017 is expected to be a challenging year of transition at the local level as there are still certain macroeconomic imbalances to be solved, such as a significant fiscal deficit, high levels of inflation and the uncertainty of access to the international capital market on attractive conditions, together with mid-term elections in Argentina and a more volatile world economy, all of which could negatively impact the Argentine economy.

The Argentine Economy Global capital markets began fiscal year 2016 with high volatility and a downward trend of financial assets, commodities and currencies. Stock markets worldwide reacted negatively to a 3% devaluation of the Yuan over a period from December 2015 until the beginning of January 2016, resulting from a sharp reversal of U.S. Dollar inflows in China. U.S. equities experienced the worst January in the last 25 years (except for during the 2008/2009 sub-prime crisis). In addition, financial markets had to face two major setbacks: the surprising outcome of the success of the Brexit referendum (which will result in the British exit from the Eurozone, an issue not yet clearly defined that may take at least two years to finalize) and Donald Trump’s unexpected victory in the U.S. election.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents However, despite volatility, stock markets ended fiscal year 2016 with gains, especially in Latin America (+30% as compared to fiscal year 2015). The turmoil in equity global markets was replicated in the “risk-free” sovereign fixed-income debt markets. The global benchmark bond (the 10-Year U.S. Treasury Bond) started 2016 yielding 2.28% and dropped to 1.37% (an all-time low), returning to a positive trend once US electoral results were confirmed.

Higher interest rates typically result in a stronger currency. Against this backdrop, the U.S. Dollar increased by nearly 4% in 2016, compared to the U.S. Dollar Index (a basket comprised of the currencies of certain United States trading partners), which reached its peak since 2002. In turn, emerging currencies (EMCI Index) had a zero average variation compared to the U.S. Dollar, with two contrasting cases: In 2016, the Brazilian Real recorded a currency appreciation of 18%, while the Argentine Peso registered a devaluation of 22%, each as measured against the U.S. Dollar.

In general, a strengthening U.S. Dollar implies weak commodity prices. This expected outcome did not occur in 2016, however, and the index comprising the 19 most traded commodities worldwide (CRB Index) experienced an overall improvement of 9% during fiscal year 2016. The most salient reason for the increase was the significant increase (+45%) of crude oil prices in 2016, with the benchmark WTI reaching the price of US$ 54 per barrel, in compliance with the supply reduction agreement signed by OPEC members by the end of 2016.

In connection with global activity levels, developed economies grew at an estimated rate of 1.6% rate in 2016. In turn, emerging economies seemed to have returned to a growth path, with an estimated growth rate of 4.1% in 2016.

At the domestic level, in 2016 Argentina started down a path to economic normalization. Although economic activity decreased at the beginning of 2016, following the growth seen in 2015 (+2.6%), began to improve by the end of 2016. Private estimates reflect a decline in economic activity of around 2.8% in 2016 while GDP data prepared by the Argentine Institute of Statistics and Census (INDEC, as per its initials in Spanish) suggest a similar result, with a decline of 2.3% (based on figures up to the third quarter resulting in a cumulative downturn of 2.4%).

In terms of the labor market, the decline seen in economic activity in 2016 had an impact on the employment dynamics. The unemployment rate for the third quarter of 2016 – the latest available data – stood at 8.5% of the economically active population, up from 8.3% (estimated figures) in the same quarter of 2015. Employment statistics published by the INDEC prior to the second quarter of 2016 are under analysis and new data is not comparable with the previous series.

In the monetary area, the main monetary aggregates decelerated their pace, increasing at a slower rate than the nominal growth of the economy. The monetary base of the Argentine government ended the year with an annual expansion of 31.7%, 3.2 percentage points (p.p.) below the 2015 growth. Particularly, the monetary aggregate increased by Ps. 197,775 million, which is mostly due to the purchase of foreign currency from the National Treasury by the Argentine Central Bank (Ps. 160,286 million), and due to the increased level of financing provided to the National Treasury (Ps. 159,997 million) and, to a lesser extent, by the purchase of foreign currency by the private sector amounting to Ps. 40,890 million. This expansion was partly offset by the placement of Argentine Central Bank Bills and Notes (“Lebacs” and “Nobacs”, respectively) for Ps. 132,257 million and a Ps. 48,755 million increase in repurchase transactions. This trend was not reflected in the performance of the private-sector M2 (money in circulation and deposits in savings and checking accounts that belong to the private sector), which grew 32.2% in 2016, as compared to a 31.7% growth in 2015. On the other hand, total M2 (including deposits from the public sector) ended 2016 with a 30.3% increase, after also increasing by 28.2% in the prior year.

Domestic interest rates evolved in line with with expected changes in prices and the foreign exchange market. During the first half of 2016, following the exchange rate devaluation that occurred in 2015, high government interest rates paved the way for rises in market rates. However, once the exchange market stabilized and with lower inflation expectations at a time of abundant liquidity, interest rates on time deposits ended 2016 below the levels registered at the beginning of the year. In particular, Badlar ended 2016 at 19.9%, close to the minimum of 19.8% reached in December 2016, and well below the average of 30.5% recorded between March and May 2016.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The reference exchange rate established by the Argentine Central Bank increased from Ps. 13.005 to Ps. 15.850 per U.S. Dollar between December 31, 2015 and December 31, 2016 (reflecting a 21.9% depreciation in the Peso vis-à-vis the U.S. Dollar); while the average exchange rate increased from Ps. 9.27 in 2015 to Ps. 14.78 per U.S. Dollar in 2016.

According to private estimates, inflation in 2016 was approximately 40%, considerably above the 2015 levels (27% inter- annually). Particularly, the Consumer Price Index of the City of Buenos Aires (“IPCBA”) – an alternative inflation measure proposed by the INDEC at the beginning of the new series in May 2016, due to a lack of historical data – reflected a 41.0% growth in prices in 2016, up from a 26.9% increase in prices in 2015.

In the fiscal area, tax revenues, including social security, increased by 36.3% as compared to a 30.9% growth (inter-annually) in 2015. On the other hand, primary expenditures increased by 38.2%. Thus, the Argentine public sector achieved a primary deficit of Ps. 359,382 million, equivalent to 4.5% of GDP. This reflects an increase of the deficit, as compared to the primary deficit in the same period of 2015 (4.2% of GDP), amounting to Ps. 244,102 million. After interest payments for Ps. 185,253 million, and considering revenues from the ANSES for Ps. 69,850 million and profits transferred by the Argentine Central Bank for Ps. 109,617 million, the 2016 financial deficit amounted to Ps. 365,169 million, equivalent to 4.6% of GDP.

Regarding the external sector, during 2016, the foreign exchange balance current account published by the Argentine Central Bank (cash basis) reached a deficit amounting to US$ 15,863 million, higher than the deficit registered in 2015 which amounted to US$ 11,732 million. Measured in terms of GDP, the current account deficit stood at about 3% in 2016, marking a decline of 1 percentage points (p.p.) against 2015. This increase in the deficit is primarily explained by an increase in net interest payments (mainly related to payments made to holders of defaulted securities) and profits and dividends outflows, partly offset by an increase in net income from assets (US$ 8,093 million in 2016 against US$ 3,547 million in 2015).

In particular, revenues from the export of goods amounted to US$ 58,081 million in 2016, which represents a 2% increase as compared to the level seen in 2015; however, revenues from exports are still below the levels realized in years before 2015. The highest increase was noted in the oil seeds, oils and cereals sector, where collections for exports amounted to US$ 27,387 million, 19% higher than revenues in the same period of the previous year, primarily explained by a reduction in withholding taxes on exports of agricultural products.

On the other hand, payments in respect of the importation of goods amounted to US$ 49,988 million in 2016, which represented a decrease of 7% (about US$ 3,500 million) as compared to 2015. In sectorial terms, a decline in payments for imports was noted in the country’s main activity sectors, with the largest impact noted in the energy and automotive sectors.

Within this environment, the non-financial private sector’s capital account (as per estimates made by the single free exchange market or MULC, as per its initials in Spanish) posted a net foreign currency inflow of US$ 3,160 million, as compared to a net outflow of US$ 5,883 million in 2015. As of December 31, 2016, the Argentine Central Bank’s international reserves amounted to US$ 38,772 million, US$ 13,208 million more than the amount reported as of December 31, 2015.

The Argentine Financial System Total loans to the private sector in the financial system reached Ps. 1,058,164 million in December 2016, increasing 31.5% as compared to December 2015. The type of private sector loans that increased the most were commercial loans, consisting of overdrafts in checking account and notes (promissory notes and purchased/discounted notes), which grew 37.6%, in 2016, closing the year at Ps. 417,550 million. Consumer credit lines, made up of loans made through credit cards and personal loans, grew 30.4% during 2016, reaching Ps. 464,815 million at December 31, 2016. Collateral loans increased by 37.3% in 2016 as compared to 2015, with a final balance of Ps. 55,355 million, while mortgage loans increased by 11.9% in 2016 as compared to 2015, ending this period at Ps. 63,287 million.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The financial system’s total deposits amounted to Ps. 1,898,833 million at December 31, 2016, marking an increase of 41.8% as compared to December 31, 2015. Deposits from the non-financial private sector recorded an increase of 43.9% in 2016 as compared to 2015, amounting to Ps. 1,510,162, while deposits from the public sector reached Ps. 380,125 million, an increase of 32.8% in 2016 as compared to 2015. Within deposits from the private sector, transactional deposits increased 73.0% in 2016, due to the Tax Amnesty Law, reaching Ps. 881,859 million, while time deposits increased 14.9% in 2016, reaching Ps. 584,601 million.

The average interest rate paid by private banks in December 2016 for time deposits denominated in Pesos of between 30 and 44 days was 18.8%, a decline of 772 basis points (b.p.) as compared to 2015. With respect to lending rates, those applicable to checking account overdrafts were 31.0% (-351 b.p. as compared to 2015) and to promissory notes, 23.6% (-705 b.p. as compared to 2015).

Financial institutions increased their liquidity levels (in relation to total deposits) in December 2016 as compared to December 2015, to reach a ratio that of 35.1% (+650 b.p. as compared to December 2015). Regarding Lebac holdings, liquidity rose at 49.5% in December 2016 as compared to 47.0% in December 2015. In financial standing terms, the Argentine financial system’s net worth increased by Ps. 70,513 million during 2016, amounting to Ps. 297,376 million, thus representing a 31.1% growth from 2015. In 2016, the system’s profitability was equivalent to 3.7% of total assets (-0.4 p.p. as compared to 2015), while the return on shareholders’ equity was 29.7% (-2.7 p.p. as compared to 2015).

In 2016, income from interest and income from services amounted to 4.7% and 3.8% of total assets, respectively, for the same period. In turn, administrative expenses remained at 7.7% of total assets, while provisions for loan losses amounted to 0.8% of total assets (below the 0.9% registered in 2015).

The non-accrual loan portfolio to the non-financial private sector reached 1.84% in 2016, thereby leading to a slight increase of 1.74% as compared to 2015. The coverage of the private-sector non-accrual loan portfolio with allowances reached 136%, 12 p.p. less than coverage levels in 2015.

As of November 30, 2016, the financial system was composed of 78 financial institutions. Of these 28 financial institutions, 63 were banks, of which 50 of were private banks (33 of which were domestically-owned and 17 of which foreign-owned) and 13 of which were government-owned banks as well as 15 non-banking financial institutions.

The concentration of the financial system, measured by the market share of private sector deposits of the ten leading banks, reached 76.8% as of November 30, 2016, a similar percentage to the one recorded in the same month of 2015.

Based on information as of September 2016, the last information available, the Argentine financial system employed a total of 110,054 people, representing a 3.3% increase from September 30, 2015.

The Argentine Insurance Industry The insurance industry continued to grow during the 2016 fiscal year. Production amounted to Ps.211,027 million, 37.6% higher than in 2015. Out of total insurance production, 81% related to property insurance, 17% related to life and personal insurance and 2% related to retirement insurance. Within the 81% corresponding to property insurance, the automotive insurance segment comprised the most significant portion, with 45% of property insurance, followed by the workers’ compensation segment with 35%.

Within the life insurance business, group life insurance represented 69% of the segment, followed by individual life insurance, representing 14%, and personal accident insurance, representing 12%.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Inflation Historically, inflation in Argentina has played a significant role in influencing, often negatively, the economic conditions in Argentina and, in turn, the operations and financial results of companies operating in Argentina, such as Grupo Financiero Galicia.

In fiscal year 2015, due to changes in the authorities at the Institute of Statistics, the WPI and CPI series were discontinued beginning in October 2015. The WPI index was republished beginning January 2016. A new CPI series was launched in May 2016, but did not contain historical information.

The chart below presents a comparison of inflation rates published by INDEC, measured by the WPI and the CPI, for the fiscal years 2016, 2015 and 2014. In 2016, annual variation of the CPI was calculated using the Consumer Price Index of the City of Buenos Aires, an alternative measure of inflation proposed by INDEC after it discontinued its index.

In addition, the chart below presents the evolution of the CER index, published by the Argentine Central Bank, used to adjust the principal of certain of our assets and liabilities, for the periods indicated.

For the 12-month period ended December 31, (in percentages) 2016 2015 2014 Price Indices (1) (2) WPI 34.59 12.65 28.27 CPI 41.05 26.90 23.91 Adjustment Indices CER 35.79 15.05 24.34

(1) Data for December of each year as compared to December of the immediately preceding year, except for WPI in 2015, which corresponds to the interannual variation between October 2015 and October 2014, and WPI 2016, which corresponds the interannual accumulated variation, because the measurement of this index was discontinued. Source: INDEC/the Argentine Central Bank. (2) The accuracy of the measurements of INDEC is in doubt, and the CPI and WPI could be substantially higher than those indicated by INDEC, for the fiscal years 2015 and 2014. For example, according to private sector estimates, the CPI approximately increased by 41% (rather than 23.9%) in 2014, 27% (rather than 18.6%) in 2015.

In the first two months of 2017, the CPI published by INDEC increased 3.8% and the CER increased 2.6% during the same period.

Currency Composition of Our Balance Sheet The following table sets forth our assets and liabilities denominated in foreign currency, in Pesos and adjustable by the CER, as of the dates indicated.

As of December 31, 2016 2015 2014 (In millions of Pesos) Assets In Pesos, Unadjusted 174,780 133,733 93,496 In Pesos, Adjusted by the CER 699 710 819 In Foreign Currency (1) 66,771 27,305 12,999 Total Assets 242,250 161,748 107,314 Liabilities and Shareholders’ Equity In Pesos, Unadjusted, Including Shareholders’ Equity 175,380 134,431 94,091 In Pesos, Adjusted by the CER 99 12 11 In Foreign Currency (1) 66,771 27,305 13,212 Total Liabilities and Shareholders’ Equity 242,250 161,748 107,314

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (1) If adjusted to reflect forward sales and purchases of foreign exchange made by Grupo Financiero Galicia and recorded off- balance sheet, assets amounted to Ps. 82,616 and liabilities Ps 78,690 million as of December 31, 2016.

Funding of Banco Galicia’s long position in CER-adjusted assets through Peso-denominated liabilities bearing a market interest rate (and no principal adjustment linked to inflation) exposes Banco Galicia to differential fluctuations in the inflation rate and in market interest rates, with a significant increase in market interest rates vis-à-vis the inflation rate (which is reflected in the CER variation), which has a negative impact on our net financial income.

Two other currencies have been defined apart from the Argentine Peso: assets and liabilities adjusted by CER and foreign currency. Banco Galicia’s policy in force establishes limits in terms of maximum “net asset positions” (assets denominated in a currency which are higher than the liabilities denominated in such currency) and “net liability positions” (assets denominated in a currency which are lower than the liabilities denominated in such currency) for mismatches in Pesos adjusted by CER and in foreign currency, as a proportion of Banco Galicia’s RPC, on a consolidated basis.

An adequate balance between assets and liabilities denominated in foreign currency characterizes the management strategy for this risk factor, seeking to achieve full coverage of long-term asset-liability mismatches and allowing a short-term mismatch management margin that contributes to the possibility of improving certain market situations. Short- and long-term goals are attained by appropriately managing assets and liabilities and by using the financial products available in our market, particularly “dollar futures” both in institutionalized markets (MAE and ROFEX) and in forward transactions performed with customers.

Transactions in foreign currency futures (specifically, U.S. Dollar futures) are subject to limits that take into consideration the particular characteristics of each trading environment.

Results of Operations for the Fiscal Years Ended December 31, 2016, December 31, 2015 and December 31, 2014 We discuss below our results of operations for the fiscal year ended December 31, 2016 as compared with our results of operations for the fiscal year ended December 31, 2015, and our results of operations for the fiscal year ended December 31, 2015 as compared with our results of operations for the fiscal year ended December 31, 2014.

Net Income/Loss

Fiscal Year Ended Change December 31, December 31, 2016/ 2015/ 2016 2015 2014 2015 2014 (in millions of Pesos, except percentages) Consolidated Income Statement Financial Income 36,608 25,844 19,860 10,764 5,984 Financial Expenses 20,239 13,402 10,321 6,837 3,081 Net financial Income 16,369 12,442 9,539 3,927 2,903 Provision for Losses on Loans and Other Receivables 3,533 2,214 2,411 1,319 (197 ) Net income from Services 10,746 7,837 5,699 2,909 2,138 Income from Insurance Activities 2,452 1,801 1,238 651 563 Administrative Expenses 17,618 12,905 9,221 4,713 3,684

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year Ended Change December 31, December 31, 2016/ 2015/ 2016 2015 2014 2015 2014 (in millions of Pesos, except percentages) Minority Interest (403 ) (365 ) (230 ) (38 ) (135 ) Income / (Loss) from Equity Investments 80 100 213 (20 ) (113 ) Miscellaneous Income / (Loss), Net 1,278 443 503 835 (60 ) Income Tax 3,353 2,801 1,992 552 809 Net income / (Loss) 6,018 4,338 3,338 1,680 1,000 Return on Average Assets (1) 3.48 3.83 3.85 (0.35 ) (0.02 ) Return on Average Shareholders’ Equity 35.03 35.54 39.07 (0.51 ) (3.53 )

(1) For the calculation of the return on average assets, profits or losses corresponding to minority interests are excluded from net income.

Net income for the fiscal year ended December 31, 2016 was Ps.6,018 million, as compared to Ps.4,338 million for the fiscal year ended December 31, 2015 and Ps.3,338 million for the fiscal year ended December 31, 2014.

Net earnings per share for the fiscal year ended December 31, 2016 were Ps.4.63, as compared to Ps.3.34 for the fiscal year ended December 31, 2015 and Ps.2.57 for the fiscal year ended December 31, 2014.

The return on average assets and the return on average shareholders’ equity for the fiscal year ended December 31, 2016 were 3.48% and 35.03%, respectively, as compared to 3.83% and 35.54%, respectively, for the fiscal year ended December 31, 2015 and to 3.85% and 39.07%, respectively, for the fiscal year ended December 31, 2014.

Fiscal Year 2016 compared to Fiscal Year 2015 Net income for the fiscal year ended December 31, 2016 was Ps.6,018 million, as compared to Ps.4,338 million for the fiscal year ended December 31, 2015, representing Ps.1,680 million or 39% increase. Such increase was primarily attributable to: • a Ps.10,764 million increase in financial income, from Ps.25,844 million to Ps.36,608 million, • a Ps.2,909 million increase in net income from services, from Ps.7,837 million to Ps.10,746 million, • a Ps.651 million increase in income from insurance activities, from Ps.1,801 million to Ps.2,452 million, and

Such changes were partially offset by: • a Ps.1,319 million increase in provisions for loan losses and other receivables, from Ps.2,214 million to Ps.3,533 million. • a Ps.6,837 million increase in financial expenses, from Ps.13,402 million to Ps.20,239 million, • a Ps.4,713 million increase in administrative expenses, from Ps.12,905 million to Ps.17,618 million, and • a Ps.552 million increase in income tax, from Ps.2,801 million to Ps.3,353 million.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The growth in income as compared to the year ended December 31, 2015, was mainly due to the increase in operating income (net financial income plus net income from services), which increased due to the higher volume of intermediation with the private sector, together with a 36% increase in income from insurance activities. This effect was offset by a 60% increase in provisions for loan losses due to the evolution of credits in arrears of the consumer portfolio and to higher regulatory provisions on the normal portfolio as a consequence of the increase in the credit portfolio, and an increase of 37% in administrative expenses, as a consequence of the increase in the level of activity and the evolution of costs.

Fiscal Year 2015 compared to Fiscal Year 2014 Net income for the fiscal year ended December 31, 2015 was Ps.4,338 million, as compared to Ps.3,338 million for the fiscal year ended December 31, 2014, representing Ps.1,000 million or 30% increase. Such increase was primarily attributable to: • a Ps.5,984 million increase in financial income, from Ps.19,860 million to Ps.25,844 million, • a Ps.2,138 million increase in net income from services, from Ps.5,699 million to Ps.7,837 million, • a Ps.563 million increase in income from insurance activities, from Ps.1,238 million to Ps.1,801 million, and • a Ps.197 million decrease in provisions for loan losses and other receivables, from Ps.2,411 million to Ps.2,214 million.

Such changes were partially offset by: • a Ps.3,081 million increase in financial expenses, from Ps.10,321 million to Ps.13,402 million, • a Ps.3,684 million increase in administrative expenses, from Ps.9,221 million to Ps.12,905 million, and • a Ps.809 million increase in income tax, from Ps.1,992 million to Ps.2,801 million.

The growth in income as compared to the year ended December 31, 2014, was mainly due to the increase in operating income (net financial income plus net income from services), which increased due to the higher volume of intermediation with the private sector, together with a 45% increase in income from insurance activities and an 8% decrease in provisions for loan losses due to the better behavior of the credit portfolio in arrears. This effect was offset by an increase of 40% in administrative expenses, as a consequence of the increase in the level of activity and the evolution of costs.

Financial Income Our financial income was composed of the following:

Fiscal Year Ended December 31, 2016 2015 2014 (in millions of Pesos) Income on Loans and Other Receivables Resulting from Financial Brokerage and Premiums Earned on Reverse Repurchases 29,446 20,269 16,211 Income from Government and Corporate Securities, Net 5,809 4,323 2,448 Other (1) 1,353 1,252 1,201 Total 36,608 25,844 19,860

(1) Reflects income from receivables from financial leases, premiums on forward sales of foreign currency, CER adjustment and, during fiscal year 2016 and 2014, results from foreign-exchange differences.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The following table shows our yields on interest-earning assets and cost of funds:

As of December 31, 2016 2015 2014 Average Average Average Balance Rate Balance Rate Balance Rate (in millions of Pesos, except rates) Interest-Earning Assets 135,286 25.88 94,805 25.78 70,349 26.66 Government Securities 21,520 22.33 14,616 24.07 8,760 21.16 Loans 111,100 26.44 77,807 26.13 59,072 27.49 Other 2,666 31.21 2,382 24.91 2,517 26.54 Interest-Bearing Liabilities 101,319 16.85 66,071 16.65 52,081 16.53 Savings Accounts 27,487 0.16 14,428 0.19 10,186 0.20 Time Deposits 53,985 24.33 38,533 22.28 30,229 21.80 Debt Securities 15,550 18.64 10,460 17.65 8,976 16.54 Other Interest-bearing Liabilities 4,297 23.34 2,650 20.34 2,690 19.18 Spread and Net Yield Interest Spread, Nominal Basis (1) 9.03 9.13 10.13 Net Yield on Interest-earning Assets (2) 13.26 14.18 14.42 Financial Margin (3) 12.10 13.12 13.56

(1) Reflects the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities. Interest rates include the CER adjustment. (2) Net interest earned divided by average interest-earning assets. Interest rates include the CER adjustment. (3) Represents net financial income, divided by average interest-earning assets.

Fiscal Year 2016 compared to Fiscal Year 2015 Financial income for the fiscal year ended December 31, 2016 was Ps.36,308 million, as compared to Ps.25,844 million for the fiscal year ended December 31, 2015, representing a 42% increase. Such increase was the result of a higher average volume of interest-earning assets and of higher average yields.

The average of interest-earning assets increased Ps.40,481 million, from Ps.94,805 million for the fiscal year ended December 31, 2015 to Ps.135,286 million for the fiscal year ended December 31, 2016, representing a 43% increase. Of this increase, Ps.33,293 million was due to an increase in the average size of the loan portfolio and Ps.6,904 million was due to an increase in holdings of government securities.

The average yield on interest-earning assets for the fiscal year ended December 31, 2016 was 25.88%, as compared to 25.78% for the fiscal year ended December 31, 2015, a 10 b.p. increase that was a result of the 31 b.p. increase in the average interest rate obtained from loans to the private sector, which increase was partially offset by a 174 b.p. decrease in the average yields obtained from government securities.

The average amount of loans to the private sector for the fiscal year ended December 31, 2016, amounted to Ps.111,100 million, a 43% increase as compared to the Ps.77,807 million for the fiscal year ended December 31, 2015. This increase was primarily attributable to a Ps.16,506 million (or 29%) increase in credit cards, a Ps.6,053 million (or 65%) increase in personal loans and a Ps.2,546 million (or 11%) increase in promissory notes.

Credit growth was influenced by projects that were undertaken pursuant to the Credit Line for Productive Investment set forth by the Argentine Central Bank with the goal of financing investment projects and providing working capital for specific purposes and with certain characteristics. As of the end of fiscal year 2016, the outstanding amount of loans related to this credit line reached Ps.13,829 million, reflecting an increase of Ps.4,102 million or 42% as compared to fiscal year 2015. The increased growth under this credit line was recorded in check purchases for Ps.5,359 million.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents According to Argentine Central Bank information, as of December 31, 2016, Banco Galicia’s estimated market share of loans to the private sector, excluding loans granted by the Regional Credit Card Companies, was 10.12% as of December 31, 2016, as compared to 9.68% as of December 31, 2015.

The average interest rate on total loans was 26.44% for the fiscal year ended December 31, 2016, as compared to 26.13% for the fiscal year ended December 31, 2015.

The average interest rate earned on Peso-denominated loans to the private sector was 29.03% for the fiscal year ended December 31, 2016, as compared to 27.23% for the fiscal year ended December 31, 2015, representing a 180 b.p. increase year-over- year. This interest rate was influenced by, among other things, loans that were undertaken pursuant to the Credit Line for Productive Investment (with nominal annual fixed rates of 17.00% beginning in November 1,2016 and 19.00% and 18.00% for the first and second part of the 2015 quota, respectively), and by the regulation issued by the Argentine Central Bank in June 2014 in order to establish caps on interest rates on loans. On December 17, 2015, through its Communiqué “A” 5853, the Argentine Central Bank removed such limits.

The average position in government securities for the fiscal year ended December 31, 2016 was Ps.21,520 million, reflecting an increase of 47% as compared to Ps.14,616 million for the fiscal year ended December 31, 2015, as a consequence of the increase of Ps.4,364 million in the average position on Peso-denominated government securities and of Ps.2,540 million in the average position on Dollar-denominated government bonds.

The increase in the average position in Pesos was due to higher balances in securities issued by the Argentine Central Bank (Lebacs) and, to a lesser extent, in debt securities and treasury bills issued by different provinces.

The increase in the average position in U.S. Dollar-denominated government securities was mainly due to the holdings of U.S. Dollar-denominated treasury bills.

The average yield on government securities for the fiscal year ended December 31, 2016 was 22.33%, as compared to 24.07% for the fiscal year ended December 31, 2015, a 174 b.p. decrease, as a consequence of a lower average yield in Dollars. Thus, the average interest rate on government securities denominated in Pesos for the fiscal year ended December 31, 2015 was 28.84%, as compared to 27.88% for the fiscal year ended December 31, 2015, a 96 b.p. increase, mainly due to the higher average rate accrued on provincial treasury bills and debt securities, while the average interest rate on government securities denominated in dollars decreased 551 b.p. from 8.47% for fiscal year ended December 31, 2015 to 2.96% for the fiscal year ended December 31, 2016.

The average “Other Interest-Earning Assets” for the fiscal year ended December 31, 2016 was Ps.2,666 million, as compared to Ps.2,382 million for the fiscal year ended December 31, 2015, representing an increase of 12%. The average rate on this item for the fiscal year ended December 31, 2016 was 31.21%, 631 b.p. higher as compared to 24.90% for the previous fiscal year. This increase was mainly attributable to the variation in the average rate of other Peso-denominated assets, which increased to 32.37% for the fiscal year ended December 31, 2016 from 25.97% for the fiscal year ended December 31, 2015.

The line item “Other Financial Income” recorded an increase of Ps.101 million, mainly due to the higher income from currency quotation differences, which was Ps.1,025 million profit in fiscal year ended December 31, 2016. For the fiscal year ended December 31, 2015, such line item included Ps.917 million profit from foreign currency futures transactions. For the fiscal year ended December 31, 2015 the result from currency quotation differences was negative and was disclosed under the item “Other” in the Financial Expenses table.

The following table indicates our market share in the segments listed below:

Fiscal Year Ended December 31, (in percentages) 2016 2015 2014 Total Deposits 7.96 7.42 6.63

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year Ended December 31, (in percentages) 2016 2015 2014 Private-Sector Deposits Total 9.92 9.40 8.79 Deposits in Checking and Savings Accounts and Time Deposits 10.17 9.65 9.06 Total Loans 9.80 8.91 8.07 Private-Sector Loans 10.12 9.68 8.76

Exclusively Banco Galicia and CFA within the Argentine market, based on daily information on deposits and loans prepared by the Argentine Central Bank. End-of-month balances are used. Deposits and loans include only principal. The Regional Credit Card Companies’ data is not included.

Fiscal Year 2015 compared to Fiscal Year 2014 Financial income for the fiscal year ended December 31, 2015 was Ps.25,844 million, as compared to Ps.19,860 million for the fiscal year ended December 31, 2014, representing a 30% increase. Such increase was the result of a higher average volume of interest-earning assets and was partially offset by lower average yields.

The average of interest-earning assets increased Ps.24,456 million, from Ps.70,349 million for the fiscal year ended December 31, 2014 to Ps.94,805 million for the fiscal year ended December 31, 2015, representing a 35% increase, Ps.18,735 million of which was due to an increase in the average loan portfolio and Ps.5,857 million of which was due to an increase in holdings of government securities.

The average yield on interest-earning assets for the fiscal year ended December 31, 2015 was 25.78%, as compared to 26.66% for the fiscal year ended December 31, 2014, an 88 b.p. decrease that was a result of the 136 b.p. decrease in the average interest rate obtained from loans to the private sector, which decrease was partially offset by a 291 b.p. increase in the average yields obtained from government securities.

The average amounts of loans to the private sector for the fiscal year ended December 31, 2015, amounted to Ps.77,807 million, a 32% increase as compared to the Ps.59,072 million for the fiscal year ended December 31, 2014. Within the loans to the private sector segment (in final balances) increases of Ps.18,912 million or 51% in credit cards, Ps.6,448 million or 40% in promissory notes and Ps.4,562 million or 114% in advances, stood out.

Credit growth was influenced by projects that were undertaken pursuant to the Credit Line for Productive Investment set forth by the Argentine Central Bank with the goal of financing investment projects and providing working capital for specific purposes and with certain characteristics. As of the end of fiscal year 2015, the outstanding amount of loans related to this credit line reached Ps.9,727 million, reflecting an increase of Ps.2,860 million or 42% as compared to fiscal year 2014. The increased growth under this credit line was recorded in promissory notes for Ps.1,527 million and check purchases for Ps.954 million.

According to Argentine Central Bank information, as of December 31, 2015, Banco Galicia’s estimated market share of loans to the private sector, excluding loans granted by the Regional Credit Card Companies, was 9.60% as of December 31, 2015, as compared to 8.76% as of December 31, 2014.

The average interest rate on total loans was 26.13% for the fiscal year ended December 31, 2015, as compared to 27.49% for the fiscal year ended December 31, 2014.

The average interest rate earned on Peso-denominated loans to the private sector was 27.23% for the fiscal year ended December 31, 2015, as compared to 28.85% for the fiscal year ended December 31, 2014, representing a 162 b.p. decrease. This interest rate was influenced by, among other things, loans that were undertaken pursuant to the Credit Line for Productive Investment (with nominal annual fixed rates of 19.00% and 18.00% for the first and second part of the 2015 quota, respectively), and by the regulation issued by the Argentine Central Bank in June 2014 in order to establish caps on interest rates on loans. On December 17, 2015, through its Communiqué “A” 5853, the Argentine Central Bank removed such limits.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The average position in government securities for the fiscal year ended December 31, 2015 was Ps.14,616 million, reflecting an increase of 67% as compared to Ps.8,760 million for the fiscal year ended December 31, 2014, as a consequence of the increase of Ps.4,185 million in the average position on Peso-denominated government securities and of Ps.1,671 million in the average position on Dollar-denominated government bonds.

The increase in the average position in Pesos was due to higher balances in securities issued by the Argentine Central Bank (Lebacs) and, to a lesser extent, in debt securities and treasury bills issued by different provinces (Buenos Aires and Neuquén, among others).

The increase in the average position in Dollar-denominated government securities was mainly due to the holdings of Lebacs as a consequence of the regulation of the Argentine Central Bank, which allows the Bank to invest in this kind of instrument in relation to the foreign currency deposits taken.

The average yield on government securities for the fiscal year ended December 31, 2015 was 24.07%, as compared to 21.16% for the fiscal year ended December 31, 2014, a 290 b.p. increase, as a consequence of a higher average yield both in Pesos and in Dollars. Thus, the average interest rate on government securities denominated in Pesos for the fiscal year ended December 31, 2015 was 27.88%, as compared to 23.99% for the fiscal year ended December 31, 2014, a 389 b.p. increase, mainly due to the higher average rate accrued on provincial treasury bills and debt securities, while the average interest rate on government securities denominated in dollars increased 513 b.p. from 3.34% for fiscal year ended December 31, 2014 to 8.47% for the fiscal year ended December 31, 2015.

The average “Other Interest-Earning Assets” for the fiscal year ended December 31, 2015 was Ps.2,382 million, as compared to Ps.2,517 million for the fiscal year ended December 31, 2014, representing a decrease of 5%. The average rate on this item for the fiscal year ended December 31, 2015 was 24.90%, 164 b.p. lower as compared to 26.54% for the previous fiscal year. This decrease was mainly attributable to the variation in the average rate of other Peso-denominated assets, which decreased to 25.97% for the fiscal year ended December 31, 2015 from 27.67% for the fiscal year ended December 31, 2014.

In fiscal year 2015, the line item “Other Financial Income” reflected an increase of Ps.51 million as compared to fiscal year 2014, mainly due to increased income from foreign-currency forward transactions, which amounts increased from Ps.830 million in fiscal year 2014 to Ps.917 million in fiscal year 2015. For the fiscal year ended December 31, 2014, such line item included Ps.13 million profit from currency quotation differences, composed of a Ps.241 million gain from foreign exchange brokerage activities and a Ps.228 million loss from the valuation of the foreign currency net position. For the fiscal year ended December 31, 2015, the result from currency quotation differences was negative and was disclosed under the item “Other” in the Financial Expenses table.

Financial Expenses Our financial expenses were composed of the following:

Fiscal Year Ended December 31, 2016 2015 2014 (in millions of Pesos) Interest on Deposits 13,127 8,694 6,577 Notes 2,899 1,846 1,485 Contributions and Taxes 2,955 2,111 1,480 Other (1) 1,258 751 779 Total 20,239 13,402 10,321

(1) Includes interest accrued on liabilities resulting from financial brokerage with international banks and credit entities, premiums payable on repurchase agreement transactions, CER adjustment and, during fiscal year 2015 and 2013, results from foreign- exchange differences.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year 2016 compared to Fiscal Year 2015 Financial expenses for the fiscal year ended December 31, 2016 were Ps.20,239 million, as compared to Ps.13,402 million for the fiscal year ended December 31, 2015, a 51% increase. Such growth was attributable to a 53% increase in the average balance of interest-bearing liabilities.

The average interest-bearing liabilities for the fiscal year ended December 31, 2016 were Ps.101,319 million, as compared to Ps.66,071 million for the fiscal year ended December 31, 2015. Such growth was attributable to a Ps.28,511 million increase in total interest-bearing deposits (saving accounts and time deposits), which increased from Ps.52,961 million to Ps.81,472 million, and to the Ps.5,090 million increase in the average balance of debt securities, from Ps.10,460 million to Ps.15,550 million.

With respect to the total average interest-bearing deposits for the fiscal year ended December 31, 2016, Ps.64,080 million were Peso-denominated deposits and Ps.17,392 million were Dollar-denominated deposits, as compared to Ps.48,130 million and Ps.4,831 million, respectively, for the fiscal year ended December 31, 2015. Average Peso-denominated deposits recorded an increase of 33%, with a growth of 35% in savings accounts and 32% in time deposits. Average deposits Dollar-denominated deposits increased 260% during fiscal year 2016, with increases of 355% and 158% in savings accounts and time deposits, respectively; a portion of such growth is explained by the impact of the Tax Amnesty Law and better expectations related to the macroeconomic context.

Using Argentine Central Bank information, considering only deposits from the private sector in checking and savings accounts and time deposits, Banco Galicia’s estimated Argentine deposit market share was 10.17% for the fiscal year ended December 31, 2016, as compared to 9.64% for the fiscal year ended December 31, 2015.

Out of the total interest-bearing deposits (savings accounts and time deposits) for the fiscal year ended December 31, 2016, the average interest rate on time deposits was 24.33% as compared to 22.28% for the fiscal year ended December 31, 2015, a 205 b.p. increase.

Peso-denominated deposits (savings accounts and time deposits) for the fiscal year ended December 31, 2016 accrued at a 20.44% average interest rate, a 267 b.p. increase as compared to 17.77% for the fiscal year ended December 31, 2015. The rate of Dollar-denominated deposits for the fiscal year ended December 31, 2016 was 0.44%, as compared to 1.24% for the fiscal year ended December 31, 2015, an 80 b.p. decrease.

The average balance of debt securities for the fiscal year ended December 31, 2016 was Ps.15,550 million, an increase of Ps.5,090 million or 49% as compared to Ps.10,460 million for the fiscal year ended December 31, 2015. This growth was mainly attributable to the issuance of notes by Tarjeta Naranja, Tarjetas Cuyanas, CFA and Banco Galicia and to the variation in the quotation of the Dollar during the period and was partially offset by amortizations of outstanding notes during the fiscal year 2016.

The average interest rate for debt securities for the fiscal year ended December 31, 2016 was 18.64%, as compared to 17.65% for the fiscal year ended December 31, 2015.

The average balance of “Other Interest-Bearing Liabilities” for the fiscal year ended December 31, 2016 was Ps.4,297 million, with an average rate of 23.34%, representing an increase of 62% as compared to Ps.2,650 million for the fiscal year ended December 31, 2015, with an average rate of 20.34%. This item includes mainly Peso and Dollar-denominated debt with local and international banks and credit entities, and Peso and Dollar-denominated obligations in connection with repurchase agreement transactions for government securities.

The item “Other Financial Expenses” for the fiscal year ended December 31, 2016 was Ps.1,258 million, representing an increase of Ps.507 million or 68% as compared to Ps.751 million for the fiscal year ended December 31, 2015. As of December 31, 2016, financial expenses included Ps.877 million from interest on other financing and Ps.196 million from foreign-currency forward transactions.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year 2015 compared to Fiscal Year 2014 Financial expenses for the fiscal year ended December 31, 2015 were Ps.13,402 million, as compared to Ps.10,321 million for the fiscal year ended December 31, 2014, a 30% increase. Such growth was attributable to a 27% increase in the average balance of interest-bearing liabilities.

The average interest-bearing liabilities for the fiscal year ended December 31, 2015 were Ps.66,071 million, as compared to Ps.52,081 million for the fiscal year ended December 31, 2014. Such growth was attributable to the Ps.12,546 million increase in total interest-bearing deposits (saving accounts and time deposits), which increased from Ps.40,415 million to Ps.52,961 million, and to the Ps.1,484 million increase in the average balance of debt securities, from Ps.8,976 million to Ps.10,460 million.

With respect to the total average interest-bearing deposits for the fiscal year ended December 31, 2015, Ps.48,130 million were Peso-denominated deposits and Ps.4,831 million were Dollar-denominated deposits, as compared to Ps.37,140 million and Ps.3,276 million, respectively, for the fiscal year ended December 31, 2014. Average Peso-denominated deposits recorded an increase of 30%, with a growth of 37% in savings accounts and 27% in time deposits. Average deposits in Dollars increased 47% during fiscal year 2015, with increases of 70% and 29% in savings accounts and time deposits, respectively; a portion of such growth is explained by the evolution of the exchange rate during the period, as the exchange rate for the Dollar increased 52% during 2015.

Using Argentine Central Bank information, considering only deposits from the private sector in checking and savings accounts and time deposits, Banco Galicia’s estimated Argentine deposit market share was 9.65% for the fiscal year ended December 31, 2015, as compared to 9.06% for the fiscal year ended December 31, 2014.

Out of the total interest-bearing deposits (savings accounts and time deposits) for the fiscal year ended December 31, 2015, the average interest rate on time deposits stood out, which was 22.28% as compared to 21.80% for the fiscal year ended December 31, 2014, a 48 b.p. increase. This interest rate was influenced by the passage of Communiqué “A” 5640 of the Argentine Central Bank, which established beginning in October 2014 minimum interest rates for time deposits denominated in pesos corresponding to individuals (later companies were included) whose deposits do not exceed certain amounts.

Peso-denominated deposits (saving accounts and time deposits) for the fiscal year ended December 31, 2015 accrued at a 17.77% average interest rate, a 7 b.p. increase as compared to 17.70% for the fiscal year ended December 31, 2014. The rate of Dollar- denominated deposits for the fiscal year ended December 31, 2015 was 1.24%, as compared to 1.07% for the fiscal year ended December 31, 2014, a 17 b.p. increase.

The average balance of debt securities for the fiscal year ended December 31, 2015 was Ps.10,460 million, an increase of Ps.1,484 million or 17% as compared to Ps.8,976 million for the fiscal year ended December 31, 2014. This growth was mainly attributable to the issuance of notes by Tarjeta Naranja, Tarjetas Cuyanas, CFA and Grupo Financiero Galicia and to the variation in the quotation of the Dollar during the period, and was partially offset by amortizations of outstanding notes during the fiscal year 2015.

The average interest rate for debt securities for the fiscal year ended December 31, 2015 was 17.65%, as compared to 16.54% for the fiscal year ended December 31, 2014. This increase was mainly attributable to the increase in the interest rate on certain outstanding notes which, according to their contractual conditions, accrue interest at a variable rate that is tied to the private Badlar rate.

The average balance of “Other Interest-Bearing Liabilities” for the fiscal year ended December 31, 2015 was Ps.2,650 million, with an average rate of 20.34%, representing a decrease of 1% as compared to Ps.2,689 million for the fiscal year ended December 31, 2014, with an average rate of 19.19%. This item includes mainly Peso and Dollar-denominated debt with local and international banks and credit entities, and Peso and Dollar-denominated obligations in connection with repurchase agreement transactions for government securities.

The item “Other Financial Expenses” for the fiscal year ended December 31, 2015 was Ps.751 million, representing a decrease of Ps.28 million or 4% as compared to Ps.779 million for the fiscal year ended December 31,

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 2014. As of December 31, 2015, financial expenses included a Ps.188 million loss from currency quotation differences, composed of a Ps.538 million loss from the valuation of the foreign currency net position and a Ps.350 million gain from foreign exchange brokerage activities. For the fiscal year ended December 31, 2014 the result from currency quotation differences was positive and was disclosed under the item “Other” in the Financial Income table.

Net Financial Income Fiscal Year 2016 compared to Fiscal Year 2015 Net financial income for the fiscal year ended December 31, 2016 was Ps.16,369 million, with a corresponding financial margin of 12.10%, as compared to Ps.12,442 million for the fiscal year ended December 31, 2015, with a corresponding financial margin of 13.12%.

Net financial income for the fiscal year ended December 31, 2016 (excluding the results from currency quotation differences and the results from foreign-currency forward transactions) amounted to Ps.15,536 million as compared to Ps.11,712 million income for the fiscal year ended December 31, 2015, with a corresponding financial margin of 11.48% and 12.35%, respectively. This variation was attributable to a lower spread (defined as the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities) which decreased to 9.03% for the fiscal year ended December 31, 2016 from 9.13% for the fiscal year ended December 31, 2015, influenced by the lower interest rate accrued on government securities (174 b.p.). This decrease was partially offset by a higher volume of intermediation.

Fiscal Year 2015 compared to Fiscal Year 2014 Net financial income for the fiscal year ended December 31, 2015 was Ps.12,442 million, with a corresponding financial margin of 13.12%, as compared to Ps.9,539 million for the fiscal year ended December 31, 2014, with a corresponding financial margin of 13.56%.

Net financial income for the fiscal year ended December 31, 2015 (excluding the results from currency quotation differences and the results from foreign-currency forward transactions) amounted to Ps.11,712 million as compared to Ps.8,960 million income for the fiscal year ended December 31, 2014, with a corresponding financial margin of 12.35% and 12.74%, respectively. This variation was attributable to a lower spread (defined as the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities) which decreased to 9.13% for the fiscal year ended December 31, 2015 from 10.13% for the fiscal year ended December 31, 2014, influenced by the lower interest rate accrued on loans (136 b.p.), as a consequence of loans that were undertaken pursuant to the Credit Line for Productive Investment and the regulation issued by the Argentine Central Bank in June 2014 in order to establish caps on interest rates on loans (on December 17, 2015 through its Communiqué “A” 5853, the Argentine Central Bank removed such limits). This decrease was partially offset by a higher volume of intermediation.

Provision for Losses on Loans and Other Receivables Fiscal Year 2016 compared to Fiscal Year 2015 Provisions for losses on loans and other receivables for the fiscal year ended December 31, 2016 were Ps.3,533 million, as compared to Ps.2,214 million for the fiscal year ended December 31, 2015, a Ps.1,319 million increase which was primarily attributable to an increase in the amount of consumer portfolios in arrears and by higher regulatory provisions on the normal portfolio as a consequence of the increase in the size of the credit portfolio.

The non-accrual loan portfolio as of December 31, 2016 represented 3.31% of total loans, recording a 0.20 p.p. deterioration as compared to the 3.11% ratio recorded a year before. The coverage of the non-accrual portfolio with allowances decreased from 112.41% as of December 31, 2015 to 100.06% as of December 31, 2016. During fiscal year 2016, Banco Galicia established allowances for loan losses equal to Ps.3,389 million.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Direct charges, net of recoveries, represented a gain of Ps.272 million. Charge-offs against allowances for loan losses were equal to Ps.2,125 million, as compared to Ps.1,203 million as of the end of fiscal year 2015, which increase mainly related to the maturing of the portfolio.

Fiscal Year 2015 compared to Fiscal Year 2014 Provisions for losses on loans and other receivables for the fiscal year ended December 31, 2015 were Ps.2,214 million, as compared to Ps.2,411 million for the fiscal year ended December 31, 2014, a Ps.197 million decrease attributable to better performance of credits in arrears of both, the consumer and the commercial portfolio, partially offset by higher regulatory provisions on the normal portfolio as a consequence of the increase in the size of the credit portfolio.

The non-accrual loan portfolio as of December 31, 2015 represented 3.11% of total loans, recording a 0.46 p.p. improvement as compared to the 3.57% ratio recorded a year before. The coverage of the non-accrual portfolio with allowances decreased from 105.78% as of December 31, 2014 to 112.41% as of December 31, 2015. The improvement of both ratios as compared to the prior fiscal year is related to the better performance of the portfolio during 2015. During 2015, Banco Galicia established allowances for loan losses equal to Ps.2,128 million.

Direct charges, net of recoveries, represented a gain of Ps.226 million. Charge-offs against allowances for loan losses were equal to Ps.1,203 million, as compared to Ps.1,840 million as of the end of fiscal year 2014, which increase mainly related to the maturing of the portfolio.

Net Income from Services Our net income from services consisted of:

Fiscal Year Ended % Change December 31, December 31, 2016/ 2015/ 2016 2015 2014 2015 2014 (in millions of Pesos) (in percentages) Income From Credit and Debit Cards 10,194 7,263 5,376 40 35 Deposit Accounts 2,580 1,960 1,341 32 46 Credit-related Fees 374 314 227 19 38 Check Collection 354 276 182 28 52 International Trade 357 214 180 67 19 Safe Deposit Box 229 193 167 19 16 Collection Services (Taxes and Utility Bills) 246 169 126 46 34 CFA 270 250 137 8 82 Financial Fees 155 137 97 13 41 Cash Management 138 91 69 52 32 Services for Shipments 46 53 59 (13 ) (10 ) Other (1) 902 551 345 64 60 Total Income 15,845 11,471 8,306 38 38 Total Expenses 5,099 3,634 2,607 40 39 Net Income from Services 10,746 7,837 5,699 37 38

(1) Includes, among others, fees from investment banking activities, asset management, assets under custody and guarantees granted.

Fiscal Year 2016 compared to Fiscal Year 2015 Net income from services for the fiscal year ended December 31, 2016 was Ps.10,746 million, as compared to Ps.7,837 million for the fiscal year ended December 31, 2015, a 37% increase. The evolution in the business volume and the rise in prices (in compliance with the procedures established by the regulations of the Argentine Central Bank related to individuals), account for the increases in most of the items noted in the chart above.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The most noteworthy increases in fees were those related to national and regional credit cards which increased by 40% as compared to the fees charged in fiscal year 2015, to deposit accounts which increased 32% as compared to fiscal year 2015, and to international trade which increased 67% as compared to fiscal year 2015.

Total deposit accounts for the fiscal year ended December 31, 2016 were 4.0 million, representing a 12% increase.

Banco Galicia’s income from credit and debit card transactions, on an individual basis, for the fiscal year ended December 31, 2016 was Ps.4,543 million, as compared to Ps.3,214 million for the fiscal year ended December 31, 2015, a 41% increase. Such increase was mainly attributable not only to the greater number of credit cards managed, but also to the greater average amount of purchases made with each card during the year. The total number of cards managed by Banco Galicia excluding those issued by the Regional Credit Card Companies and CFA, for the fiscal year ended December 31, 2016 was 3.7 million, as compared to 3.4 million for the fiscal year ended December 31, 2015, a 7% increase.

Income from services corresponding to the Regional Credit Card Companies for the fiscal year ended December 31, 2016 was Ps.5,651 million, as compared to Ps.4,049 million for the fiscal year ended December 31, 2015, a 40% increase. Such increase was mainly attributable to an increase in the amount of purchases made during the fiscal year together with a greater number of issued credit cards. The Regional Credit Card Companies had issued 11 million credit cards as of December 31, 2016, as compared to 10 million credit cards as of December 31, 2015, a 5% increase.

Consequently, income generated from credit card transactions amounted to Ps.10,194 million in 2016, Ps.2,931 million higher from the Ps.7,263 million generated in 2015.

Expenses from services for the fiscal year ended December 31, 2016 were Ps.5,099 million, as compared to Ps.3,634 million for the fiscal year ended December 31, 2015, representing a 40% increase. Such increase was mainly attributable to the growth in expenses related to credit and debit card transactions and to the total benefits program, together with a higher turnover tax.

Fiscal Year 2015 compared to Fiscal Year 2014 Net income from services for the fiscal year ended December 31, 2015 was Ps.7,837 million, as compared to Ps.5,699 million for the fiscal year ended December 31, 2014, a 38% increase. The evolution in the business volume and the rise in prices (in compliance with the procedures established by the regulations of the Argentine Central Bank related to individuals), account for the increases in most of the items noted in the chart above.

The most noteworthy increases in fees were those related to national and regional credit cards which increased by 35% as compared to the fees charged in fiscal year 2014, to deposit accounts which increased 46% as compared to fiscal year 2014 and to check collections which increased 52% as compared to fiscal year 2014. The growth in income from services corresponding to CFA, which increased by 82%, was mainly due to higher fees related to the credit cards issued and to the benefit account offered to retired individuals.

Total deposit accounts for the fiscal year ended December 31, 2015 were 3.6 million, representing a 20% increase.

Banco Galicia’s income from credit and debit card transactions, on an individual basis, for the fiscal year ended December 31, 2015 was Ps.3,214 million, as compared to Ps.2,219 million for the fiscal year ended December 31, 2014, a 45% increase. Such increase was mainly attributable not only to the greater number of credit cards managed, but also to the greater average amount of purchases made with each card during the year. The total number of cards managed by Banco Galicia excluding those issued by the Regional Credit Card Companies and CFA, for the fiscal year ended December 31, 2015 was 3.4 million, as compared to 2.9 million for the fiscal year ended December 31, 2014, a 19% increase.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Income from services corresponding to the Regional Credit Card Companies for the fiscal year ended December 31, 2015 was Ps.4,049 million, as compared to Ps.3,157 million for the fiscal year ended December 31, 2014, a 28% increase. Such increase was mainly attributable to an increase in the amount of purchases made during the fiscal year together with a greater number of issued credit cards. The Regional Credit Card Companies had issued 10 million credit cards as of December 31, 2015, as compared to 8.9 million credit cards as of December 31, 2014, a 12% increase.

Consequently, income generated from credit card transactions amounted to Ps.7,263 million in 2015, Ps.1,887 million higher from the Ps.5,376 million generated in 2014.

Expenses from services for the fiscal year ended December 31, 2015 were Ps.3,634 million, as compared to Ps.2,607 million for the fiscal year ended December 31, 2014, representing a 39% increase. Such increase was mainly attributable to the growth in expenses related to credit and debit card transactions and to the total benefits program, together with a higher turnover tax.

The following table sets forth the number of credit cards outstanding as of the dates indicated:

% Change December 31, December 31, 2016/ 2015/ Credit Cards 2016 2015 2014 2015 2014 (number of credit cards, except otherwise noted) (percentages) Visa 2,156,402 2,088,236 1,750,960 3 19 “Gold” 473,756 459,767 395,732 3 16 International 1,204,446 1,138,234 906,701 6 26 Domestic 46,271 57,224 68,980 (19 ) (17 ) “Business” 111,306 99,155 85,039 12 17 “Corporate” 3,262 3,271 3,241 0 1 “Platinum” 317,361 330,585 291,267 (4 ) 13 Galicia Rural 17,846 17,548 17,107 2 3 American Express 1,014,931 1,059,707 986,962 (4 ) 7 “Gold” 311,942 329,011 307,072 (5 ) 7 International 445,400 465,815 427,932 (4 ) 9 Platinum 257,589 264,881 251,958 (3 ) 5 MasterCard 485,650 264,487 126,880 84 108 “Gold” 134,501 78,091 43,824 72 78 MasterCard 263,597 166,049 82,652 59 101 Argencard 274 326 404 (16 ) (19 ) “Platinum” 49,967 13,534 — 269 100 “Black” 37,311 6,487 — 475 100 Regional Credit Card Companies 10,459,445 9,973,612 8,879,717 5 12 Local Brands (1) 5,249,000 5,054,456 4,654,234 4 9 Visa 4,452,617 4,211,135 3,646,229 6 15 MasterCard 702,687 660,534 537,947 6 23 American Express 55,141 47,487 41,307 16 15 CFA 176,061 159,435 170,930 10 (7 ) Visa 163,763 145,361 155,228 13 (6 ) MasterCard 12,298 14,074 15,702 (13 ) (10 ) Total 14,310,335 13,563,025 11,932,556 6 14 Total Amount of Purchases (in millions of Pesos) Ps. 209,440 Ps. 146,508 Ps. 101,814 43 44

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

Administrative Expenses The following table sets forth the components of our administrative expenses:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fiscal Year Ended % Change December 31, December 31, 2016/ 2015/ 2016 2015 2014 2015 2014 (in millions of Pesos) (in percentages) Salaries and Social Security Contributions 8,247 6,150 4,549 34 35 Personnel Services 372 262 150 42 75 Amount Accrued in Relation to Directors’ and Syndics’ Compensation 80 111 85 (28 ) 31 Advertising and Publicity 749 545 414 37 32 Electricity and Communications 460 308 249 49 24 Property-related Expenses 776 553 466 40 19 Taxes 1,719 1,219 851 41 43 Other 5,215 3,757 2,457 39 53 Total 17,618 12,905 9,221 37 40

Fiscal Year 2016 compared to Fiscal Year 2015 Administrative expenses for the fiscal year ended December 31, 2016 were Ps.17,618 million, as compared to Ps.12,905 million for the fiscal year ended December 31, 2015, a 37% increase.

Salaries, social security contributions and expenses related to personnel services for the fiscal year ended December 31, 2016 were Ps.8,619 million, as compared to Ps.6,412 million for the fiscal year ended December 31, 2015, a 34% increase. Such increase was mainly attributable to the salary increase agreement with the unions. For the fiscal year ended December 31, 2015, the staff of Grupo Financiero Galicia and its subsidiaries was composed of 12,131 employees, while as of the end of fiscal year 2016 the same staff was composed of 11,956 employees.

The remaining administrative expenses for the fiscal year ended December 31, 2016 were Ps.8,999 million, as compared to Ps.6,493 million for the fiscal year ended December 31, 2015, a 39% increase. Such increase was mainly attributable to the increase in amounts payable due to the different services provided.

Fiscal Year 2015 compared to Fiscal Year 2014 Administrative expenses for the fiscal year ended December 31, 2015 were Ps.12,905 million, as compared to Ps.9,221 million for the fiscal year ended December 31, 2014, a 40% increase.

Salaries, social security contributions and expenses related to personnel services for the fiscal year ended December 31, 2015 were Ps.6,412 million, as compared to Ps.4,699 million for the fiscal year ended December 31, 2014, a 37% increase. Such increase was mainly attributable to the salary increase agreement with the unions. For the fiscal year ended December 31, 2014, the staff of Grupo Financiero Galicia and its subsidiaries was composed of 12,012 employees, while as of the end of fiscal year 2015 the same staff was composed of 12,128 employees.

The remaining administrative expenses for the fiscal year ended December 31, 2015 were Ps.6,493 million, as compared to Ps.4,522 million for the fiscal year ended December 31, 2014, a 44% increase. Such increase was mainly attributable to the increase in amounts payable due to the different services provided, together with increased amortizations of organization and development expenses for Ps.303 million (91%), as in December 2014 the Bank began to amortize its investment in the SAP Core Banking System.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Income from Insurance Activities The following table shows the results generated on insurance activities:

Fiscal Year Ended % Change December 31, December 31, 2016/ 2015/ 2016 2015 2014 2015 2014 (in millions of Pesos) (in percentages) Earned premiums and surcharges accrued 3,413 2,516 1,688 36 49 Claims accrued (490 ) (358 ) (235 ) 37 52 Surrenders (6 ) (5 ) (4 ) 20 25 Annuities (5 ) (4 ) (4 ) 25 0 Underwriting, claims related and running expenses (501 ) (350 ) (219 ) 43 60 Other income (Loss) 41 2 12 1,950 (83 ) Total 2,452 1,801 1,238 36 45

Fiscal Year 2016 compared to Fiscal Year 2015 Income (loss) from insurance activities (excluding administrative expenses and taxes, net of eliminations related to related- party transactions) totaled Ps. 2,452 million as of December 31, 2016, a 36% increase as compared to the Ps. 1,801 million of income recorded for the fiscal year ended December 31, 2015. This increase was mainly due to the increase in the volume of premiums written, primarily due to the evolution of the commercialization of property and life insurance products sold. During fiscal year 2016, Galicia Seguros S.A. earned Ps. 3,413 million from premiums and surcharges accrued during the period, representing an increase of approximately 36% as compared to fiscal year 2015.

In fiscal year 2016, the claims ratio remained at similar levels to those presented in the previous year.

With respect to sales, as of the end of fiscal year 2016, annualized premiums equaled Ps. 1,059 million of annualized premiums, an increase of approximately 49%, as compared to Ps.709 million as of the end of fiscal year 2015.

Fiscal Year 2015 compared to Fiscal Year 2014 Income from insurance activities (excluding administrative expenses and taxes, net of eliminations corresponding to transactions with related companies) amounted to Ps.1,801 million as of December 31, 2015, a 45% increase as compared to the Ps.1,238 million of income recorded for the fiscal year ended December 31, 2014. The increase in income from insurance activities was mainly a result of the increase in the volume of premiums issued, primarily due to the evolution of property and life insurance products sold. During 2015, Galicia Seguros earned Ps.2,516 million from premiums and surcharges accrued, representing an increase of 49% in the year.

In fiscal year 2015, the claims ratio was 13.42%, a similar level as compared to the 13.94% during the previous year.

Regarding sales, as of the end of fiscal year 2015, annualized premiums equaled Ps.709 million, a 39% increase as compared to Ps.510 million as of the end of fiscal year 2014.

Income/(Loss) from Equity Investments Fiscal Year 2016 compared to Fiscal Year 2015 Income from equity investments for the fiscal year ended December 31, 2016 was Ps.80 million, as compared to Ps.100 million for the fiscal year ended December 31, 2015. The 20% decrease was mainly attributable to the fact that fiscal year 2016 recorded lower dividends from VISA Argentina S.A. This effect was partially offset by a higher dividend paid to Interbanking S.A.

Fiscal Year 2015 compared to Fiscal Year 2014 Income from equity investments for the fiscal year ended December 31, 2015 was Ps.100 million, as compared to Ps.213 million for the fiscal year ended December 31, 2014. The 53% decrease was mainly attributable to the fact that fiscal year 2014 recorded the profit from the sale of Banco Galicia’s equity investment in Banelco S.A. to VISA Argentina S.A. In addition, as of December 31, 2015, the negative goodwill from the acquisition of CFA was fully amortized.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Miscellaneous Income/(Loss), Net Fiscal Year 2016 compared to Fiscal Year 2015 Miscellaneous net income for the fiscal year ended December 31, 2016 was Ps.1,278 million, as compared to Ps.443 million for the fiscal year ended December 31, 2015.

The higher income of Ps.835 million was mainly due to the sale of a property owned by Banco Galicia, an increase in profits from loans recovered and punitive interest and to lower net other provisions.

Fiscal Year 2015 compared to Fiscal Year 2014 Miscellaneous net income for the fiscal year ended December 31, 2015 was Ps.443 million, as compared to Ps.503 million for the fiscal year ended December 31, 2014.

The lower income of Ps.60 million was mainly due to the increase in provisions for loan losses and other provisions, partially offset by higher income related to security margins on repurchase agreement transactions and to the return from the funds used to cover possible losses related to credit cards (Visa, Mastercard, American Express and Banelco).

Income Tax Fiscal Year 2016 compared to Fiscal Year 2015 The income tax charge for the fiscal year ended December 31, 2016 was Ps.3,353 million, as compared to Ps.2,801 million for the fiscal year ended December 31, 2015, a Ps.552 million increase.

The effective income tax rate for fiscal year 2016 was 35.8%, lower than the 39.2% recorded in 2015.

Fiscal Year 2015 compared to Fiscal Year 2014 The income tax charge for the fiscal year ended December 31, 2015 was Ps.2,801 million, as compared to Ps.1,992 million for the fiscal year ended December 31, 2013, a Ps.809 million increase.

The effective income tax rate for fiscal year 2015 was 39.2%, higher than the 37.4% recorded in 2014.

U.S. GAAP and Argentine Banking GAAP Reconciliation General We prepare our financial statements in accordance with Argentine Banking GAAP. The more significant differences between Argentine Banking GAAP and U.S. GAAP relate to the determination of the allowance for loan losses, the carrying value of certain government securities and receivables for government securities, the accounting of Banco Galicia’s foreign debt restructuring, goodwill, securitization and recognition of deferred income taxes. For more detail on differences in accounting treatment between Argentine Banking GAAP and U.S. GAAP as of December 31, 2016, see Note 34 to our consolidated financial statements.

Allowances for Loan Losses With respect to the determination of the allowance for loan losses, we follow the rules of the Argentine Central Bank. Under these rules, reserves are based on minimum reserve requirements established by the Argentine

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Central Bank. U.S. GAAP requires that an impaired loan be generally valued at the present value of expected future cash flows discounted at the loan’s effective rate or at the fair value of the collateral if the loan is collateral dependent. For the purposes of analyzing our loan loss reserve under U.S. GAAP, we divide our loan portfolio into performing and non-performing commercial and consumer loans.

The following table shows the allowance for loan losses for the periods indicated under Argentine Banking GAAP and U.S. GAAP and the corresponding shareholders’ equity adjustment under U.S. GAAP:

December 31, December 31, December 31, 2016 2015 2014 (in millions of Pesos) Argentine Banking GAAP 4,766.3 3,621.7 2,678.1 U.S. GAAP ASC 310 Allowance for Loan Losses 97.4 159.4 97.0 ASC 450 4,662.2 3,438.6 2,558.8 U.S. GAAP Shareholders’ Equity Adjustment (1) 6.6 23.8 22.2

(1) Including qualitative and quantitative adjustments.

ASC 310 Analysis The non-performing commercial loan portfolio is comprised of loans falling into the following classifications of the Argentine Central Bank: • “With Problems” • “High Risk of Insolvency” • “Uncollectible”

The following table shows our loan loss reserve under ASC 310 for our non-performing commercial loan portfolio as of the dates indicated.

December 31, December 31, December 31, 2016 2015 2014 (in millions of Pesos) Loan Loss Reserve Under U.S. GAAP – ASC 310 Analysis 97.4 159.4 97.0

For such non-performing commercial loans, we applied the procedures required by ASC 310. For loans that were not collateral dependent, the expected future cash flows to be received from the loans were discounted using the interest rate at each balance sheet date for variable loans. Loans that were collateral dependent, and for which there was an expectation that the loan balance would be recovered via the exercise of collateral, were valued using the fair value of the collateral. In addition, in order to assess the fair value of collateral, we discounted collateral valuations due to the extended period of time that it can take to foreclose on assets in Argentina.

ASC 450 Analysis To calculate the allowance required for smaller-balance impaired loans and unimpaired loans, we perform an analysis of historical losses from our consumer and performing commercial loan portfolios in order to estimate losses for U.S. GAAP purposes resulting from loan losses that had been incurred in such loan portfolios at the balance sheet date but which had not been individually identified.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Loss estimates are analyzed by loan type and thus for homogeneous groups of clients. Such historical ratios are updated to incorporate the most recent data reflecting current economic conditions, industry performance trends, geographic or obligor concentrations within each portfolio segment, and any other pertinent information that may affect the estimation of the allowance for loan losses. Many factors can affect Banco Galicia’s estimates of allowance for loan losses, including volatility of default probability, migrations and estimated loss severity.

We estimate that, on average, it takes a period of up to one year between the trigger of an impairment event and identification of a loan as being a probable loss for consumer and performing commercial loans.

The increase in the allowances recorded under ASC 450 is mostly due to a higher volume of credit card transactions and personal loans granted during 2016 and 2015 and the worsening of macroeconomic factors, such as the inflation and unemployment rates. The table below shows our loan loss reserve under ASC 450 for consumer and performing commercial loans as of the dates indicated.

December 31, December 31, December 31, 2016 2015 2014 (in millions of Pesos) Loan Loss Reserve Under U.S. GAAP – ASC 450 Analysis 4,662.2 3,438.6.4 2,558.8

In addition to assessing the reasonableness of the loan loss reserve as described above, Grupo Financiero Galicia makes an overall determination of the adequacy of each period’s reserve based on such ratios as: • Loan loss reserves as a percentage of non-accrual loans, • Loan loss reserves as a percentage of total amounts past due, and • Loan loss reserves as a percentage of past-due unsecured amounts.

The table below shows the above-mentioned ratios as of the dates indicated.

December 31, 2016 December 31, 2015 December 31, 2014 Loan Loss Reserves as a Percentage of Non-accrual Loans 128.53 % 135.35 % 129.78 % Loan Loss Reserves as a Percentage of Total Amounts Past Due 83.53 % 94.13 % 81.86 % Loan Loss Reserves as a Percentage of Past-due Unsecured Amounts 145.61 % 153.26 % 153.96 %

The allowance for loan losses has increased approximately 30% during 2016 under U.S. GAAP. This variation is due to an increase in the portfolio of loans to the private sector and to the qualitative approach reflecting current economic conditions, industry performance trends, geographic or obligor concentrations, within each portfolio segment required for smaller-balance impaired and unimpaired.

Carrying Value of Certain Government Securities and Receivables for Government Securities As of December 31, 2013, our holding of Bonar 2015 Bonds have been recorded at their acquisition cost increased according to the accrual of their internal rate of return under Argentine Banking GAAP. During 2014 they were fully settled.

Under U.S. GAAP, the Bonar 2015 Bonds were considered as “available for sale securities” and recorded at fair value with the unrealized gains or losses recognized as a charge or credit to equity through other comprehensive income.

Under U.S. GAAP, all of these assets are carried at fair value as fully explained in Note 34 to our financial statements and “- U.S. GAAP-Critical Accounting Policies”.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Foreign Debt Restructuring For U.S. GAAP purposes, the restructuring is accounted for in each of two steps. The first step of the restructuring required the holders of our debt to exchange its old debt for new debt in two tranches. Pursuant to “Determining Whether a Debtor’s Modification or Exchange of Debt Instruments” is within the scope of ASC 470 (ASC 820), we did not receive any concession from the holders of the debt and therefore, the first step of the restructuring was not considered a trouble debt restructuring. Pursuant to “Debtors Accounting for a Modification or Exchange of Debt Instruments” ASC 470-50, the first step of the restructuring was accounted for as a modification of the old debt and therefore we did not recognize any gain or loss. The second step of the restructuring offers the holders of our debt issued in the first step explained above the option to exchange it for new securities including cash, Boden 2012 Bonds and our equity shares. Pursuant to U.S. GAAP, this second step of the restructuring was accounted for in accordance with “Accounting by Debtors and Creditors for Trouble Debt Restructurings” ASC 310-40, as a partial settlement of the debt through the transfer of certain assets and equity at its fair value. After deducting the considerations used to repay the debt, ASC 310-40 requires the comparison of the future cash outflows of the restructured debt and the carrying of the debt at the restructuring date.

Gain on troubled debt restructuring is only recognized when the remaining carrying value of the debt at the date of the restructuring exceeds the total future cash payments of the restructured debt reduced by the fair value of the assets and equity given as payment of the debt. Since the total future cash outflows of the restructured debt exceeds the carrying value of the old debt, no gain on restructuring was recorded under U.S. GAAP.

As a result, under U.S. GAAP, the carrying amount of the restructured debt is greater than the amount recorded under Argentine Banking GAAP. Therefore, under U.S. GAAP, a new effective interest rate was determined to reflect the present value of the future cash payments of the restructured debt.

Furthermore, under U.S. GAAP, expenses incurred in a trouble debt restructuring are expensed as incurred. Expenses related to the issuance of equity were deducted directly from the shareholders’ equity.

During 2016, Grupo Galicia prepaid certain subordinated negotiable obligations, which were originally scheduled to be paid in 2019. Consequently, no shareholders’equity adjustment was recorded as of December 31, 2016.

Shareholders’ equity adjustments between Argentine Banking GAAP and U.S. GAAP as of December 31, 2015, amounted to Ps.(69) million.

Securitizations The following table summarizes the adjustment for U.S. GAAP purposes related to securitization transactions as of December 31, 2016 and 2015:

As of December 31, 2016 2015 (In millions of Pesos) Book Value Fair Value – U.S. GAAP Book Value Fair Value – U.S. GAAP Argentine Book value Shareholders’ Argentine Book value Shareholders’ Banking under U.S. Equity Banking under U.S. Equity GAAP GAAP Adjustment GAAP GAAP Adjustment Galtrust I (1) 505 541 36 686 715 29 Total 505 541 36 686 715 29

(1) Financial Trust “Galtrust I”

The financial trust “Galtrust I” was created in October 2000 in connection with the securitization of provincial loans for a total amount of Ps.1,102 million. The securitized loans were from the portfolio of loans granted to provincial governments, guaranteed by the federal tax revenues shared with the provincial governments.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents During 2002, the portfolio of loans and the related retained interest payments in Galtrust I were subject to the pesification. As a result, the retained interest in the trust was converted into Pesos at an exchange rate of Ps.1.40 to US$1.00 and the interest rate for their debt securities changed to CER plus 10%. During 2003, Galtrust I had swapped its provincial loans for Bogar Bonds.

Under Argentine Banking GAAP, this transaction was accounted for as sales and the participation certificates retained by the Bank are recorded at the present value of cash flows discounted by the I.R.R. of instruments with similar characteristics and duration and with volatility. When the book value exceeds the present value, the monthly accrual is recorded in an asset offset account.

The retained interest in the trust was recorded under Argentine Central Bank rules in the “Other Receivables from Financial Brokerage”, and its balance as of December 31, 2016 and 2015, was Ps.505 million and Ps.686 million, respectively.

In accordance with ASC 810, Grupo Financiero Galicia was deemed to be the primary beneficiary of this trust and, therefore, the Bank reconsolidated the assets and liabilities of the mentioned trust. Upon consolidation, the Bogar Bonds were classified as available-for-sale securities and measured at fair value with changes recorded in other comprehensive income.

Debt securities originated in connection with this financial trust were cancelled as of December 31, 2014.

(2) Financial Trust Galicia

Under this trust, Argentine government promissory notes in Pesos at 2% due 2014 for Ps.108.0 million were transferred and a certificate of participation and debt securities were received in exchange. Those Argentine government promissory notes were previously received in exchange of national secured loans held by us.

For Argentine Banking GAAP purposes, the debt securities and certificates retained by Banco Galicia are accounted for at cost plus accrued interest for the debt securities, and the equity method is used to account for the residual interest in the trust. The cost of these securities was determined based on the book value of the promissory notes transferred.

This transfer was not considered a true sale for U.S. GAAP purposes, and therefore, it was recorded as a “secured borrowing” according to ASC 860. Therefore, we recognized in our consolidated balance sheet the promissory notes transferred to the financial trust.

Under U.S. GAAP, the promissory notes were classified as loans recorded at amortized cost with the corresponding loan loss reserve, as applicable. The U.S. GAAP adjustment is related to the difference between the cost basis used under both standards. For Argentine Banking GAAP, the cost was determined based on the carrying value of national secured loans previously hold and exchange for the promissory notes, while under U.S. GAAP, the cost was determined based on the fair value of each national secured loans transferred in exchange of the promissory notes received.

As of December 31, 2014 this trust was cancelled.

Additional information required by U.S. GAAP The table below presents the aggregated assets and liabilities of the financial trusts which have been consolidated for U.S. GAAP purposes:

As of December 31, (In millions of Pesos) 2016 2015 Cash and Due from Banks Ps.36 Ps.27 Government Securities and Promissory Notes 469 659 Loans 19 16

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Accrued interest, adjustments and exchange rate differences receivable — — Allowances — — Investment 6 — Other Assets (1) 7 Total Assets Ps.530 Ps.709

Debt Securities Ps.— Ps.— Accrued interest — — Certificates of Participation 528 708 Other Liabilities 2 1 Total Liabilities Ps.530 Ps.709

Our maximum loss exposure, which amounted to Ps.530 million and Ps.709 million as of December 31, 2016 and 2015, respectively, is based on the unlikely events that all the assets in the VIE’s become worthless and incorporates potential losses associated with assets recorded on our balance sheet.

Negative Goodwill – Compañía Financiera Argentina and subsidiaries The Argentine Central Bank’s board of directors, through Resolution No.124 dated June 7, 2010, authorized Banco Galicia to purchase 95% of the shares belonging to the following companies: CFA, Cobranzas y Servicios S.A. and Procesadora Regional S.A. (former Universal Processing Center S.A.). Furthermore, through the above-mentioned resolution the Argentine Central Bank authorized the subsidiary Tarjetas Regionales to purchase the remaining 5% of the shares belonging to such companies.

The total purchase price paid amounted to Ps.328.3 million for CFA, Ps.0.8 million for Cobranzas y Servicios S.A. and Ps.4.8 million for Procesadora Regional S.A. (former Universal Processing Center S.A.).

Pursuant to Argentine Central Bank rules, and due to the difference between the acquisition cost and the estimated fair value of assets and liabilities acquired as of June 30, 2010, a negative goodwill amounting to Ps.500.6 million was recorded by CFA and a negative goodwill of Ps.16.8 million was recorded by Cobranzas y Servicios S.A., both of which were recorded under the line item Liabilities-Provisions. With regard to Procesadora Regional S.A. (former Universal Processing Center S.A.), a goodwill amounting to Ps.4.0 million was recorded under Intangible Assets – Goodwill. The negative goodwill is subsequently charged to Income on a straight- line basis during 60 months.

Under U.S. GAAP, ASC 805 requires the acquisition of controlling interest of CFA, Cobranzas y Servicios S.A. and Procesadora Regional S.A. (former Universal Processing Center S.A.) to be accounted for as a business combination applying the purchase method, recognizing all net assets acquired at their fair value.

Considering that the net assets acquired were originally recorded at their estimated fair value under Argentine Banking GAAP, no adjustments for U.S. GAAP purposes were recorded in this regard. However, the negative goodwill recorded as a liability and being amortized over a 60 months period under Argentine Banking GAAP, has been fully recognized as a gain in the consolidated statement of income for U.S. GAAP purposes under the caption Miscellaneous Income.

In addition, the amortization of negative goodwill recorded under Argentine Banking GAAP has been reversed for U.S. GAAP purposes.

As of December 31, 2014 we had a balance of Ps.50 millon related to the negative goodwill. As of the end of fiscal year 2015, we had fully amortized the negative goodwill.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Income Tax Argentine Central Bank regulations do not require the recognition of deferred tax assets and liabilities and, therefore, income taxes for Banco Galicia are recognized on the basis of amounts due in accordance with Argentine tax regulations. However, we and our non-bank subsidiaries apply the deferred income tax method.

For the purposes of U.S. GAAP reporting, we applied ASC 740-10 “Accounting for Income Taxes”. Under this method, income tax is recognized based on the assets and liabilities method whereby deferred tax assets and liabilities are established for temporary differences between the financial reporting and tax basis of our assets and liabilities. Deferred tax assets are recognized if it is more likely than not those assets will be realized.

According to the taxable income projections, Grupo Financiero Galicia estimates that is more likely than not that it will recover the temporary differences and the presumed minimum income tax with future taxable income and the presumed minimum income tax will be utilized. Therefore, no valuation allowance was provided against presumed minimum income tax and temporary differences.

“Accounting for Uncertainty in Income Taxes”, ASC 740-10 was issued in July 2006 and interprets FASB Statement of Financial Accounting Standards ASC 740-10. ASC 740-10 became effective for us on January 1, 2007 and prescribes a comprehensive model for the recognition, measurement, financial statement presentation and disclosure of uncertain tax positions taken or expected to be taken in a tax return. ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

We classify income tax-related interest and penalties as income taxes in the financial statements. The adoption of this pronouncement had no effect on our overall financial position or results of operations.

Summary As a result of the above and other differences, our net income and shareholders’ equity under Argentine Banking GAAP and U.S. GAAP for the periods indicated were as follows:

Net Income (Loss) Shareholders’ Equity (Deficit) Argentine Banking Argentine Banking GAAP U.S. GAAP GAAP U.S. GAAP (in millions of Pesos) Fiscal Year 2016 6,018 6,037 20,353 20,087 Fiscal Year 2015 4,338 4,336 14,485 14,383 Fiscal Year 2014 3,338 3,504 10,246 10,243

The significant differences that result between shareholders’ equity under U.S. GAAP and shareholders’ equity under Argentine Banking GAAP primarily reflect that: • Under U.S. GAAP, ASC 850-40 defines three stages for the costs of computer software developed or obtained for internal use: the preliminary project stage, the application development stage and the post-implementation operation stage. Under U.S. GAAP, only second stage costs should be capitalized. Under Argentine Banking GAAP, the Bank capitalized costs relating to all three of the stages of software development. • The difference between the consideration transferred for the acquisition of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. and the fair value of the assets acquired and liabilities assumed was recognized as a gain in earnings on the acquisition date. Instead, under Argentine Banking GAAP, such difference was recorded in the line item Liabilities-Provisions. Pursuant to the Argentine Central Bank regulations, negative goodwill must be charged to Income with regard to the causes that have originated it, not to exceed a 60-month straight-line method amortization.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • The recognition of the Deferred Income Taxes differs under Argentine Banking GAAP as compared to U.S. GAAP. Under Argentine Banking GAAP banking companies are not allowed to record Deferred Income Tax, as such Grupo Galicia and its non-banking subsidiaries have recognized a deferred tax asset for local purposes. As such, the U.S. GAAP adjustment includes: (a) Deferred Income Taxes for banking companies not recorded for local purposes and; (b) tax effects on the US GAAP adjustments including in the reconciliation. • In accordance with U.S. GAAP under ASC 310, loan origination fees net of certain direct loan origination costs should be recognized over the life of the related loan as an adjustment of yield. Under Argentine Banking GAAP, the Bank does not defer loan origination fees and costs. • The significant differences that result between net income under U.S. GAAP and net income under Argentine Banking GAAP primarily reflect that under U.S. GAAP the difference between the consideration transferred for the acquisition of CFA and Cobranzas y Servicios S.A. and the fair value of the assets acquired and liabilities assumed was recognized as a gain in earnings on the acquisition date. Instead, under Argentine Banking GAAP, the negative goodwill is charged to Income on a straight-line basis during 60 months.

Results by Segments The presentation of our segment disclosures for the years ended December 31, 2016, 2015 and 2014 corresponds with our internal reporting structure, considering the banking business as one single segment that is evaluated regularly by our management in deciding how to allocate resources and in assessing the performance of our business.

We measure the performance of each of our business segments primarily in terms of “Net income”, in accordance with the regulatory reporting requirements of the Argentine Central Bank. Net income and other information by segment are based on Argentine Banking GAAP and are consistent with the presentation of our consolidated financial statements.

Our disclosure segments are as follows: • Banking: our banking business segment represents Banco Galicia. • Regional Credit Cards: our regional credit cards business segment represents the accounts of Tarjetas Regionales consolidated with its subsidiaries and of Tarjetas del Mar. • CFA: the CFA business segment primarily extends unsecured personal loans to low and middle-income segments of the Argentine population. It represents the accounts of Compañía Financiera Argentina and Cobranzas y Servicios. • Insurance: our insurance business segment represents the accounts of Sudamericana and its subsidiaries. • Other Grupo Galicia Businesses: this segment includes the results of Net Investment, Galicia Warrants, Galicia Administradora de Fondos (since April 2014, when Banco Galicia sold its interest in the company to Grupo Financiero Galicia) and Galicia Valores. Our results by segment are shown in Note 30 to our audited consolidated financial statements. Below is a discussion of our results of operations by segment for the years ended December 31, 2016, December 31, 2015 and December 31, 2014.

Banking The table below shows the results of our banking business segment.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents For the year ended December 31, In millions of Pesos, except percentages 2016 2015 2014 Net Financial Income 10,512 8,353 6,528 Net Income from Services 6,010 4,172 2,965 Net Operating Revenue 16,522 12,525 9,493 Provisions for Loan Losses 1,526 1,061 1,265 Administrative Expenses 10,146 7,395 4,981 Net Operating Income 4,850 4,069 3,247 Income from Equity Investments Tarjetas Regionales SA 1,098 1,179 587 Compañía Financiera Argentina 345 57 287 Sudamericana 90 50 28 Others 156 146 205 Income from Equity Investments 1,689 1,433 1,107 Other Income (Loss) 409 (67 ) 99 Pre-tax Income 6,948 5,435 4,453 Income Tax Provision 1,854 1,522 1,295 Net Income 5,094 3,913 3,158 Net Income as a % of Grupo Financiero Galicia’s Net Income 85 % 90 % 95 % Average Loans 84,002 58.277 43,372 Average Deposits 108,820 72.974 54,417

Net income for this segment amounted to Ps.5,094 million, a Ps.1,181 million increase, or 30%, as compared to Ps.3,913 million for the fiscal year ended December 31, 2015, which in turn was Ps.755 million higher than the Ps.3,158 million for the fiscal year ended December 31, 2014.

The Ps.1,181 million increase in net income was primarily a result of an increase of Ps.3,996 million in net operating revenues, offset by higher provisions for loans losses of Ps.465 million, higher administrative expenses in an amount of Ps.2,751 million and higher income tax in an amount of Ps.332 million.

The increase in net income for the fiscal year 2016 as compared to the fiscal year 2015 was primarily attributable to the growth in net operating income, which was lower than the increase in administrative expenses, and, as a consequence, there was deterioration in the efficiency ratio.

During the fiscal year ended December 31, 2016, the growth in net financial income was due to the increase in the volume of financial intermediation with the private sector, partially offset by a decrease in financial margins.

The average of interest-earning assets as of the end of fiscal year 2016 experienced an increase as compared to fiscal year ended December 31, 2015, due to the growth recorded in loans to the private sector. This increase was primarily attributable to a Ps.8,766 million or 26% increase in credit cards, a Ps.3,781 million or 60% increase in personal loans, a Ps.1,497 million or 17% increase in advances and a Ps.191 million or 39% increase in pledge loans.

Credit growth was influenced by projects that were undertaken pursuant to the Credit Line for Productive Investment set forth by the Argentine Central Bank. As of December 31, 2016, the outstanding amount of loans related to this credit line was Ps.13,829 million. For more information, see Item 5. “Operating and Financial Review and Prospects”-Item 5.A. “Operating Results”-“Results of Operations”.

According to information provided by the Argentine Central Bank, as of December 31, 2016, Banco Galicia’s estimated market share of loans to the private sector was 9.64%, as compared to 9.26% as of December 31, 2015 and 8.27% as of December 31, 2014.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The average position in government securities for the fiscal year ended December 31, 2016 increased as compared to the fiscal year ended December 31, 2015, due to higher balances, primarily, in securities issued by the Argentine Central Bank, accompanied by an increased position in government securities denominated in pesos and in foreign currency for Ps.1,812 million and Ps.2,404 million, respectively. The average yield on government securities recorded an increase both in transactions denominated in pesos as well as in foreign currency.

Financial expenses as of the end of fiscal year 2016 increased as compared to the previous fiscal year, as a consequence of a higher average balance of interest-bearing liabilities combined with an increase in the average cost thereof.

Out of total interest-bearing liabilities, variations in transactional deposits stood out, which were higher than the increase recorded in time deposits. In addition, the increase in the average rate on interest-bearing deposits (savings accounts and time deposits) for the fiscal year ended December 31, 2016 as compared to the previous fiscal year, was mainly attributable to the evolution of the interest rate on time deposits, which was in line with the financial system dynamics.

According to information provided by the Argentine Central Bank, as of December 31, 2016, Banco Galicia’s estimated market share of deposits from the private sector was 9.83%, as compared to 9.35% as of December 31, 2015 and 8.65% as of December 31, 2014.

Net income for the fiscal year ended December 31, 2016, included a Ps.974 million gain from currency quotation differences, comprised of a Ps.1,153 million gain from foreign exchange brokerage activities and a Ps.179 million loss from the valuation of the foreign currency net position and the result from foreign currency forward transactions. Net income for the fiscal year ended December 31, 2015, included a Ps.858 million gain from currency quotation differences, comprised of a Ps.350 million gain from foreign exchange brokerage activities and a Ps.507 million gain from the valuation of the foreign currency net position and the result from foreign currency forward transactions.

Net income from services was Ps.6,010 million for the fiscal year ended December 31, 2016, as compared to Ps.4,172 million for the fiscal year ended December 31, 2015, a 44% increase, which in turn was 41% higher than the Ps.2,965 million for the fiscal year ended December 31, 2014. The increase in the business volume and the rise in prices (in compliance with the procedures established by the regulations of the Argentine Central Bank for fees related to individuals), account for the increases.

The main components of income from services are fees related to credit and debit card transactions, deposit accounts, foreign exchange brokerage activities and insurance. With respect to credit cards, the most important component for the Bank’s income from services, revenue from such segment increased 41% for the fiscal year ended December 31, 2016, with 3.7 million credit cards managed, compared to 3.4 million for the fiscal year ended December 31, 2015 and to 2.9 million for the fiscal year ended December 31, 2014. Such growth was accompanied by an increase in consumption during the past three fiscal years.

Provisions for loan losses and other receivables were Ps.1,526 million for the fiscal year ended December 31, 2016, representing an increase of Ps.465 million as compared to Ps.1,061 million for the fiscal year ended December 31, 2015, primarily due to the evolution of credits in arrears of the consumer portfolio and to higher regulatory provisions on the normal portfolio as a consequence of the increase in the credit portfolio. Provisions for loan losses and other receivables as of the fiscal year ended December 31, 2015, represented an decrease of Ps.204 million as compared to Ps.1,265 million for the fiscal year ended December 31, 2014, primarily attributable to the better performance of the commercial portfolio.

Administrative expenses were Ps.10,146 million for the fiscal year ended December 31, 2016, as compared to Ps.7,395 million for the fiscal year ended December 31, 2015, a 37% increase. In turn, administrative expenses for the fiscal year ended December 31, 2015, were 48% higher as compared to Ps.4,981 million for the fiscal year ended December 31, 2014. These increases were attributable to both higher personnel expenses and other administrative expenses.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The increase in personnel expenses (salaries, Argentine social security contributions and expenses related to personnel services) was mainly due to salary increases agreed upon with the union. As of the fiscal year ended December 31, 2016 the Bank had 5,799 employees, while as of the fiscal year ended December 31, 2015 the Bank had 5,573 employees.

The increase in other administrative expenses was mainly due to the increase of expenses related to services provided to the Bank.

Income from equity investments was Ps.1,690 million for the fiscal year ended December 31, 2016, Ps.257 million higher as compared to Ps.1,433 million for the fiscal year ended December 31, 2015, which in turn was Ps.326 million higher than the Ps.1,107 million for the fiscal year ended December 31, 2014. The increase recorded in the fiscal year ended December 31, 2016 was mainly attributable to (i) higher profits from CFA, for Ps.288 million, from Ps.57 million as of fiscal year ended December 31, 2015 to Ps.345 million in fiscal year 2016 (net of eliminations of results from transactions with related companies), as a consequence of amortization of the negative goodwill generated from the acquisition of CFA, which was completed as of June 30, 2015, (ii) the higher profits from Sudamericana Holding, in an amount of Ps.90 million and (iii) higher profits from other income from equity investments, in an amount Ps.156 million. These positive trends were partially offset by the lower profits from Tarjetas Regionales in the amount of Ps.81 million, mainly due to the increase in net operating revenues, offset by increases in administrative expenses and income taxes and. For more information, see “-Regional Credit Cards”, “-CFA” and “-Insurance”.

Other net income for the fiscal year ended December 31, 2016 was Ps.409 million, Ps.476 million higher as compared to the Ps.67 million loss profit for the fiscal year ended December 31, 2015, which was lower than the Ps.99 million for the fiscal year ended December 31, 2014. Other net income for the fiscal year 2016 was the consequence of the sale of a property owned by Banco Galicia, higher loans recovered and higher punitive interest, partially offset by lower establishment of net allowances.

The income tax charge during the fiscal year ended December 31, 2016 was Ps.1,854 million, Ps.332 million higher than the Ps.1,522 million for fiscal year 2015.

Regional Credit Cards The table below shows the results of our regional credit cards business segment.

For the year ended December 31, In millions of Pesos, except percentages 2016 2015 2014 Net Financial Income 4,019 2,685 1,714 Net Income from Services 5,267 4,221 3,261 Net Operating Revenue 9,286 6,906 4,975 Provisions for Loan Losses 1,661 753 776 Administrative Expenses 5,676 4,168 3,197 Net Operating Income 1,949 1,985 1,002 Income from Equity Investments — — (14 ) Other Income (Loss) 626 427 314 Minority Interests — — — Pre-tax Income 2,575 2,412 1,302 Income Tax Provision 1,118 863 517 Net Income 1,457 1,549 785 Net Income as a % of Grupo Financiero Galicia’s Net Income 24 % 36 % 24 % Average Loans 23,132 16,415 12,727

For the fiscal year ended December 31, 2016, the Regional Credit Card Companies recorded net income of Ps.1,457 million, as compared to Ps.1,549 million for the fiscal year ended December 31, 2015, representing a Ps.93 million or 6% decrease.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The increase in income corresponding to the Regional Credit Card Companies for the fiscal year ended December 31, 2016 was mainly attributable to an increase in net operating revenues of Ps.2,380 million partially offset by increases of provisions for loan losses of Ps.908 million, Ps.1,508 million in administrative expenses and Ps.255 million in income tax.

The net operating revenues for the fiscal year ended December 31, 2016 amounted to Ps.9,286 million, a 34% increase above the Ps.6,906 million for fiscal year ended December 31, 2015, as a result of higher net financial income for Ps.1,333 million and higher net income from services for Ps.1,046 million. The increase in net operating income was due to the growth of the average amount of purchases and financing, and to an increase in the number of transactions.

As of December 31, 2016, provisions for loan losses amounted to Ps.1,661 million, Ps.908 million higher than in the previous fiscal year, mainly due to increased levels of default by the Regional Credit Card Companies’ customers.

Administrative expenses for the fiscal year ended December 31, 2016 amounted to Ps.5,676 million, a 36% increase from the fiscal year ended December 31, 2015, mainly due to the salary increase agreed upon with unions, the higher level of economic activity and the higher costs during the period.

In fiscal year 2016, other net income amounted to Ps.626 million, 47% above the Ps.427 million recorded a year before, which in turn was 36% higher than fiscal year 2014. Both annual variations were the result of an increase in loans recovered.

The income tax charge during fiscal year 2016 was Ps.1,118 million, Ps.255 million higher than in fiscal year 2015.

The Regional Credit Card Companies experienced growth in the following key indicators during the fiscal year ended December 31, 2016, as compared to the fiscal year ended December 31, 2015 (due to the significance of the transactions, the following variations correspond to Tarjeta Naranja and Tarjetas Cuyanas): • average statements issued: 5% growth, reaching an annual average of 3.3 million customers; • increase in retail sales: 42%, from Ps.71,608 million to Ps.101,806 million; • increase in loan portfolio: 42%, amounting to Ps.42,463 million; and • increase in the number of purchase transactions: 10%, reaching 163 million.

Regarding the distribution network, in the fiscal years ended December 31, 2016 and December 31, 2015, there were 260 service centers. During fiscal year 2016 new openings of branches in CABA (Tarjeta Naranja) and in the province of Corrientes and Formosa (Tarjetas Cuyanas) were offset by the closing of branches in other locations.

The Regional Credit Card Companies had 4,575 employees as of December 31, 2016, as compared to 5,040 employees as of December 31, 2015.

For the fiscal year ended December 31, 2015, the Regional Credit Card Companies recorded net income of Ps.1,549 million, as compared to Ps.785 million for the fiscal year ended December 31, 2014, representing a Ps.764 million or a 97% increase.

The increase in income corresponding to the Regional Credit Card Companies for the fiscal year ended December 31, 2015 was mainly attributable to an increase in net operating revenues of Ps.1,931 million accompanied by lower provisions for loan losses of Ps.23 million, partially offset by increases of Ps.971 million in administrative expenses and Ps.346 million in income tax.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The net operating revenues for the fiscal year ended December 31, 2015 amounted to Ps.6,906 million, a 39% increase above the Ps.4,975 million for fiscal year ended December 31, 2014, as a result of higher net financial income for Ps.971 million and higher net income from services for Ps.960 million. The increase in net operating income was due to the growth of the average amount of purchases and financing, and to an increase in the number of transactions.

As of December 31, 2015, provisions for loan losses amounted to Ps.753 million, Ps.23 million lower than in the previous fiscal year, mainly due to an improvement in the behavior of the clients together with an increased amount of loans recovered.

Administrative expenses for the fiscal year ended December 31, 2015 amounted to Ps.4,168 million, a 30% increase from the fiscal year ended December 31, 2014, mainly due to the salary increase agreed upon with unions, the higher level of economic activity and the higher costs during the period.

In fiscal year 2015, other net income amounted to Ps.427 million, 36% above the Ps.314 million recorded a year before, which in turn was 44% higher than fiscal year 2013. Both annual variations were the result of an increase in loans recovered.

The income tax charge during fiscal year 2015 was Ps.863 million, Ps.346 million higher than in fiscal year 2014.

The Regional Credit Card Companies experienced growth in the following key indicators during the fiscal year ended December 31, 2015, as compared to the fiscal year ended December 31, 2014 (due to the significance of the transactions, the following variations correspond to Tarjeta Naranja and Tarjetas Cuyanas): • average statements issued: 6% growth, reaching an annual average of 3.1 million customers; • increase in retail sales: 44%, from Ps.49,812 million to Ps.71,608 million; • increase in loan portfolio: 50%, amounting to Ps.29,924 million; and • increase in the number of purchase transactions: 6%, reaching 148 million.

Regarding the distribution network, in the fiscal years ended December 31, 2015 and December 31, 2014, there were 262 service centers. During fiscal year 2015 new openings of branches in CABA (Tarjeta Naranja) and in the province of Mendoza and Chaco (Tarjetas Cuyanas) were offset by the closing of branches in other locations.

The Regional Credit Card Companies had 5,040 employees as of December 31, 2015, as compared to 5,232 employees as of December 31, 2014.

CFA

The table below sets forth the results of operations of CFA’s business segment:

For the year ended December 31, In millions of Pesos, except percentages 2016 2015 2014 Net Financial Income 1,468 1,255 1,106 Net Income from Services 301 270 140 Net Operating Revenue 1,769 1,525 1,246 Provisions for Loan Losses 346 400 369 Administrative Expenses 1,232 930 769 Net Operating Income 191 195 108 Income from Equity Investments 1 2 2 Other Income (Loss) 294 101 102 Pre-tax Income 486 298 212 Income Tax Provision 144 139 83

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Net Income 342 159 129 Net Income as a % of Grupo Financiero Galicia’s Net Income 6 % 4 % 4 % Average Loans 4,031 3,140 2,994 Average Deposits 774 900 1,120

CFA’s net income for the fiscal year ended December 31, 2016 amounted to Ps.342 million, Ps.183 million higher than the Ps.159 million gain for the fiscal year ended December 31, 2015.

Net operating revenue for the fiscal year ended December 31, 2016 amounted to Ps.1,769 million, a Ps.244 million increase as compared to the Ps.1,525 million for the fiscal year ended December 31, 2015. This variation was due to higher net financial income for Ps.213 million and net income from services for Ps.31 million.

The increase of net financial income was mainly due to an increase in earnings of the credit card portfolio, a higher rate of return on outstanding loans and the elimination of the cap on the interest rates by the Argentine Central Bank.

Net income from services amounted to Ps.301 million for the fiscal year ended December 31, 2016, an 11% increase from the prior year, mainly due to higher fees related to credit cards, insurance and the benefit account offered to retired individuals.

Provisions for loan losses for the fiscal year ended December 31, 2016 amounted to Ps.346 million, increasing Ps.54 million as compared to the fiscal year ended December 31, 2015 (which had provisions for loan losses of Ps.400 millon), as a result of the evolution of the past due loan portfolio.

Administrative expenses for the fiscal year ended December 31, 2016 amounted to Ps.1,232 million, an increase of Ps.302 million or 32% as compared to fiscal year ended December 31, 2015. The main increases were recorded in personal expenses for Ps.117 million due to the salary increase agreements and to a higher staff, in security services for Ps.16 million as a consequence of increases in the cost, in taxes for Ps.24 million, in administrative services for Ps.35 million, in maintenance/reparations for Ps.16 million and in rental activities for Ps.35 million due to the evolution of the Dollar during the period which affected the contracts denominated in such currency.

For the fiscal year ended December 31, 2016, CFA had more than 517,000 customers, 1,164 employees, 57 branches and 37 points of sale throughout Argentina. As of the same date, CFA’s net loans to the private sector amounted to Ps.4,916 million and its shareholders equity totaled Ps.1,221 million.

CFA’s net income for the fiscal year ended December 31, 2015 amounted to Ps.159 million, Ps.30 million higher than the Ps.129 million gain for the fiscal year ended December 31, 2014.

Net operating revenue for the fiscal year ended December 31, 2015 amounted to Ps.1,525 million, a Ps.279 million increase as compared to the Ps.1,246 million for the fiscal year ended December 31, 2014. This variation was due to higher net financial income for Ps.149 million and net income from services for Ps.130 million.

The increase of net financial income was mainly due to a decrease in the costs of funding, as a consequence of a lower financing portfolio, and to higher income from the sale of portfolios under the Credit Line for Productive Investment established by the Argentine Central Bank.

Net income from services amounted to Ps.270 million for the fiscal year ended December 31, 2015, a 93% increase from the prior year, mainly due to higher fees related to credit cards, insurance and the benefit account offered to retired individuals.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Provisions for loan losses for the fiscal year ended December 31, 2015 amounted to Ps.400 million, increasing Ps.31 million as compared to the Ps.369 millon from the fiscal year ended December 31, 2014, as a result of the evolution of the past due loan portfolio.

Administrative expenses for the fiscal year ended December 31, 2015 amounted to Ps.930 million, an increase of Ps.161 million or 21% as compared to fiscal year ended December 31, 2014. The main increases were recorded in personal expenses for Ps.37 million due to the salary increase agreements and to a higher staff, in security services for Ps.26 million as a consequence of increases in the cost, in professional fees for Ps.25 million, in maintenance/reparations for Ps.16 million and in rental activities for Ps.14 million due to the evolution of the Dollar during the period which affected the contracts denominated in such currency.

For the fiscal year ended December 31, 2015, CFA had more than 454,000 customers, 1,158 employees, 58 branches and 36 points of sale throughout Argentina. As of the same date, CFA’s net loans to the private sector amounted to Ps.2,929 million and its shareholders equity totaled Ps.1,324 million.

Insurance The table below shows the results of our insurance business segment.

As of December 31, In millions of Pesos, except percentages 2016 2015 2014 Net Financial Income 351 232 145 Net Operating Revenue 351 232 145 Administrative Expenses 516 378 269 Net Operating Income (165 ) (146) (124) Income from Insurance Activity 1,273 775 485 Income from Equity Investments 3 2 1 Other Income (Loss) — (1 ) (1 ) Pre-tax Income 1,111 630 361 Income Tax Provision 387 221 127 Net Income 724 409 234 Net Income as a % of Grupo Financiero Galicia’s Net Income 12 % 9 % 7 %

As a consequence of the activities carried out by Sudamericana’s subsidiaries, the segment related to the results of its main accounts (earned premiums, claims, acquisition costs, etc.) are included under “Income from Insurance Activities”. The results of this segment mainly represent the results of Galicia Seguros.

Net income for fiscal year 2016 amounted to Ps.724 million, Ps.315 million higher than in fiscal year 2015. This growth was due to the increase of premiums earned, which were mainly the result of Galicia Seguros’ performance. In general, the issuance of all products offered increased, in particular, homeowners insurance, theft and life insurance.

Administrative expenses grew following the increase in acquisition costs, mainly corresponding to expenses related to the issuance of policies, salary increases and increases in other expenses within a context of higher costs.

As of December 31, 2016, the insurance segment had more than 6.5 million outstanding insurance contracts under all its lines of business.

Net income for fiscal year 2015 amounted to Ps.409 million, Ps.175 million higher than in fiscal year 2014. This growth was due to the increase of premiums earned, which were mainly the result of Galicia Seguros’ performance. In general, the issuance of all products offered increased, in particular, homeowners insurance, theft and life insurance.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Administrative expenses grew following the increase in acquisition costs, mainly corresponding to expenses related to the issuance of policies, salary increases and increases in other expenses within a context of higher costs.

As of December 31, 2015, the insurance segment had more than 6.5 million outstanding insurance contracts under all its lines of business.Net income for fiscal year 2014 amounted to Ps.234 million, Ps.56 million higher than in fiscal year 2013. This growth was due to the increase of premiums earned, which were mainly the result of Galicia Seguros’ performance. In general, the issuance of all products offered increased, in particular, homeowners insurance, theft insurance and life insurance. In addition, Galicia Seguros started offering surety insurance.

Administrative expenses grew following the increase in acquisition costs, mainly corresponding to expenses related to the issuance of policies, salary increases and increases in other expenses within a context of higher costs.

As of December 31, 2014, the insurance segment had more than 6.3 million outstanding insurance contracts under all its lines of business.

During the three fiscal years described herein, the claims ratio has remained at the same or similar level.

Other Grupo Galicia Businesses In fiscal year 2016, this segment recorded a Ps.249 million profit, mainly generated by net revenues from Galicia Administradora de Fondos equal to Ps.197 million. The remaining profit corresponded to Galicia Warrants, Galicia Valores and Net Investment.

In fiscal year 2015, this segment recorded a Ps.147 million profit, predominantly from Galicia Administradora de Fondos (Ps.110 million) and Galicia Warrants (Ps.27 million).

In fiscal year 2014, this segment recorded a Ps.63 million profit, mainly generated by net revenues from Galicia Administradora de Fondos equal to Ps.38 million. The remaining profit corresponded to Galicia Warrants and Net Investment.

Consolidated Assets The structure and main components of our consolidated assets as of the dates indicated were as follows:

For the year ended December 31, 2016 2015 2014 Amounts % Amounts % Amounts % (in millions of Pesos, except percentages) Cash and Due from Banks 61,166 25.2 30,835 19.1 16,959 15.8 Government and Corporate Securities 13,701 5.7 15,525 9.6 10,010 9.3 Loans 137,452 56.7 98,345 60.8 66,608 62.1 Other Assets 29,932 12.4 17,043 10.5 13,737 12.8 Total 242,251 100.0 161,748 100.0 107,314 100.0

Of our Ps.242,251 million total assets as of December 31, 2016, Ps.240,058 million, or 99.1%, corresponded to Banco Galicia on a consolidated basis. The remaining Ps.2,193 million, or 0.9%, were primarily attributable to Sudamericana on a consolidated basis. The composition of our assets demonstrates an increase in the amounts of all line items.

The line item “Cash and Due from Banks” included cash for Ps.7,457 million, balances held at the Argentine Central Bank for Ps.51,390 million and balances held in correspondent banks for Ps.2,319 million. The balance held at the Argentine Central Bank is used for meeting the minimum cash requirements set by the Argentine Central Bank.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Our holdings of government and corporate securities as of December 31, 2016 amounted to Ps.13,701 million. Our holdings of government and corporate securities are shown in more detail in Item 4. “Information on the Company-Selected Statistical Information-Government and Corporate Securities”.

Our total net loans amounted to Ps.137,452 million as of December 31, 2016, of which Ps.137,451 million corresponded to Banco Galicia (including the Regional Credit Card Companies’ portfolios) and the remaining amount to secured loans held by Sudamericana. For more information on Banco Galicia’s and CFA’s loan portfolio, see Item 4. “Information on the Company-Selected Statistical Information-Loan Portfolio”.

The “Other Assets” line item mainly includes the following items recorded in our balance sheet under “Other Receivables Resulting from Financial Brokerage”, unless otherwise noted:

For the year ended December 31, 2016 2015 2014 (In millions of Pesos) Other Receivables Resulting from Financial Brokerage 18,603 8,459 6,983 Balances at the Argentine Central Bank as guarantees in favor of clearing houses 2,356 1,568 1,304 Securities Receivable under Spot and Forward Purchases to be Settled 7,851 765 251 Debt Securities 1,422 1,639 1,258 Participation certificates in, and debt securities of, different financial trusts, created by Banco Galicia or by third parties 1,138 809 1,102 Galtrust I(1) 505 686 788 Government securities and guarantees of forward sales and purchase of foreign exchange in favor of MAE and ROFEX 425 567 256 Other Financing 91 425 86 Others 4,815 2,000 1,938 Receivables from Financial Leases 955 958 1,048 Equity Investments 53 52 52 Miscellaneous Receivables 3,015 2,171 1,575 Bank Premises and Equipment, Miscellaneous Assets and Intangible Assets 6,678 4,925 3,759 Others(2) 628 478 320 Total 29,932 17,043 13,737

(1) Corresponding to our holdings of debt securities and participation certificates issued by the Galtrust I Financial Trust, resulting from the securitization of loans to the provincial public sector in late 2000. (2) It includes, others relating to insurance asset, among other concepts.

Exposure to the Argentine Public Sector The following table shows our total net exposure to the Argentine public sector as of December 31, 2016, 2015 and 2014. This exposure mainly consisted of exposure of Banco Galicia.

For the year ended December 31, 2016 2015 2014 (in millions of Pesos) Net Position in Government Securities 16,473 16,881 10,379 Trading 5,233 3,944 2,665 Bonar 2015 Bonds — — — Lebac and Nobac 11,240 12,937 7,714 Loans 14 18 15 Other Receivables Resulting from Financial Brokerage 833 960 867 Trusts’ Certificates of Participation and Securities 515 709 830 Other 318 251 37 Total Assets (1) 17,320 17,859 11,261

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (1) Does not include deposits with the Argentine Central Bank, which constitute one of the items by which Banco Galicia complies with the Argentine Central Bank’s minimum cash requirements.

As of December 31, 2016, our total exposure to the public sector was equal to Ps.17,320 million.

Excluding the holding of debt securities issued by the Argentine Central Bank for Ps.11,240 million, compared to Ps.12,937 million for fiscal year 2015, net exposure to the non-financial public sector increased by Ps.1,158 million in fiscal year 2016. The decrease in the exposure to the public sector during the last twelve months was mainly due to the lower balance of treasury bonds held in 2016.

As of December 31, 2015, our total exposure to the public sector was equal to Ps.17,859 million. Excluding the holding of debt securities issued by the Argentine Central Bank for Ps.12,937 million, compared to Ps.7,714 million for fiscal year 2014, net exposure to the non-financial public sector increased by Ps.1,375 million in fiscal year 2015. The increase in the exposure to the public sector during the last twelve months was mainly due to the acquisition of treasury bonds due in 2016, for Ps.593 million, together with a higher balance in treasury bills and debt securities issued by different provinces.

Funding Banco Galicia’s and the Regional Credit Card Companies’ and CFA’s lending activities are our main asset-generating businesses. Accordingly, most of our borrowing and liquidity needs are associated with these activities. We also have liquidity needs at the level of our holding company, which are discussed in Item 5. “Operating and Financial Review and Prospects-Item 5.B. “Liquidity and Capital Resources-Liquidity-Holding Company on an Individual Basis”. Our objective is to maintain cost-effective and well diversified funding to support current and future asset growth in our businesses. For this, we rely on diverse sources of funding. The use and availability of funding sources depends on market conditions, both local and foreign, and prevailing interest rates. Market conditions in Argentina include a structurally limited availability of domestic long-term funding.

Our funding activities and liquidity planning are integrated into our asset and liability management and our financial risks management and policies. The liquidity policy of Banco Galicia is described in Item 5. “Operating and Financial Review and Prospects- Item 5.B. “Liquidity and Capital Resources-Banco Galicia’s Liquidity Management” and our other financial risk policies, including interest rate, currency and market risks are described in Item 11. “Quantitative and Qualitative Disclosures about Market Risk”. Our funding sources are discussed below.

Traditionally, our primary source of funding has been Banco Galicia’s deposit taking activity. Although Banco Galicia has access to Argentine Central Bank financing, management does not view this as a primary source of funding in line with our overall strategies discussed herein.

Other important sources of funding have traditionally included issuing Dollar-denominated medium and long-term debt securities issued in foreign capital markets and borrowing from international banks and multilateral credit agencies. Banco Galicia entered into a master loan agreements with the International Finance Corporation (the “IFC”) in 2016, for US$130 million, divided into 2 parts, one of them with the purpose of funding long-term loans to small and medium-sized companies and the other part with the purpose of funding renewable energy project and efficiency energy power project. In addition, Banco Galicia entered into a long-term loan agreement with the Netherlands Development Finance Company (the “FMO”) on December 17, 2010 for US$20 million and a long-term loan agreement with the IDB on February 15, 2011 for US$30 million. In December 2011 Proparco, the Development Financial Institution partly owned by Agence Française de Dévelopement, granted Banco Galicia a US$20 million loan, with a 6 year term, for the financing of investment projects of small and medium-sized companies mainly active in the agribusiness and export sectors.

Selling government securities under repurchase agreement transactions has been a recurrent source of funding for Banco Galicia. Currently, although not presently such an important source of funding, repurchase

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents agreement transactions are part of the liquidity policy of the Bank. Within its liquidity policy, Banco Galicia considers its unencumbered liquid government securities holdings as part of its available excess liquidity. See Item 5. “Operating and Financial Review and Prospects” -Item 5.B. “Liquidity and Capital Resources-Banco Galicia’s Liquidity Management”.

The Regional Credit Card Companies fund their business through the issuance of notes in the local and international capital markets, borrowing from local financial institutions and debt with merchants generated in the ordinary course of business of any credit card issuing company. In 2016, the Regional Credit Card Companies issued notes in an amount equal to Ps.4,698 million and received loans for Ps.869 million.

CFA funds its business through the issuance of debt securities in the local market, borrowing from financial institutions and time deposits from institutional investors (insurance companies and mutual funds).

Below is a breakdown of our funding as of the dates indicated:

For the year ended December 31, 2016 2015 2014 Amounts % Amounts % Amounts % (in millions of Pesos, except percentages) Deposits 151,688 62.2 100,039 61.8 64,666 60.3 Checking Accounts and Other Demand Deposits 27,973 11.5 19,437 12.0 15,755 14.7 Savings Accounts 53,779 22.2 27,519 17.0 16,897 15.8 Time Deposits 49,876 20.6 51,118 31.6 30,730 28.6 Other Deposits 19,145 7.9 1,045 0.6 722 0.7 Interest Payable and Differences in quotation 915 0.4 920 0.6 562 0.5 Debt with Financial Institutions (1) 8,131 3.4 2,812 1.8 1,848 1.7 Domestic Financial Institutions 4,101 1.7 1,404 0.9 1,120 1.0 International Banks and Credit Agencies 2,233 0.9 1,273 0.8 727 0.7 Repurchases 1,784 0.8 135 0.1 1 — Notes (Unsubordinated and Subordinated) (1) 17,078 7.0 12,827 7.9 10,176 9.5 Other obligations 45,000 18.6 31,585 19.5 20,378 19.0 Shareholders’ Equity 20,353 8.4 14,485 9.0 10,246 9.5 Total Funding 242,251 100.0 161,748 100.0 107,314 100.0

(1) Includes accrued interest, quotation differences, and CER adjustment where applicable.

As of December 31, 2016, deposits represented 62.2% of our funding, up from 61.8% as of December 31, 2015 and 60.3% for the year ended December 31, 2014. Our deposit base increased 52% in 2016 as compared to 2014, 55% in 2015 as compared to 2014, and 26% in 2014 as compared to 2013. During fiscal year 2016, the Ps.51,649 million increase in deposits was due to the increase in transactional deposits (deposits in checking and savings accounts, with increases of 44% and 95%, respectively) and other deposits, was mainly due to the increase of deposits related to the Tax Amnesty Law. The increase registered during 2015 was the result of an increase in transactional deposits (44%) and time deposits (66%). For more information on deposits, see Item 4. “Information on the Company-Selected Statistical Information-Deposits”.

As of December 31, 2016, credit lines from international banks and credit agencies representing Dollar-denominated debt subject to foreign law amounted to Ps.2,233 million. Of this total, Ps.2,085 million corresponded to trade loans; Ps.79 million corresponded to a loan agreement with the IFC; Ps.50 million corresponded to a loan agreement with Proparco; and Ps.19 million corresponded to a long-term loan agreement with the FMO. The increase of Ps.960 million as compared to December 31, 2015 was mainly due to an increase in trade loans (Ps.984).

As of December 31, 2015, credit lines from international banks and credit agencies representing Dollar-denominated debt subject to foreign law amounted to Ps.1,273 million. Of this total, Ps.1,096 million corresponded to trade loans; Ps.69 million corresponded to a loan agreement with Proparco; Ps.68 million corresponded to a long-

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents term loan agreement with the FMO; Ps.24 million corresponded to debt with banks and international organizations and Ps.16 million line granted by the IDB through the Ministry of Trade and Industry. The increase of Ps.546 million as compared to December 31, 2014 was mainly due to an increase in trade loans.

Our debt securities outstanding amounted to Ps.17,078 million (principal and interest) as of December 31, 2016, as compared to Ps.12,827 million as of December 31, 2015, and Ps. 10,176 million as of December 31, 2014. Of our debt securities outstanding at the end of fiscal year 2015, Ps.9,612 million (only principal) corresponded to Dollar-denominated debt subject to foreign law and Ps.6,950 million (only principal) corresponded to Peso-denominated debt.

As of December 31, 2016, the breakdown of our Dollar-denominated debt was as follows:

Annual Maturity Interest Rate Total(1) Banco Galicia Notes Due 2026 2026 8.25 % 3,918 9% Notes Due 2003 2003 9.00 % 7 Fixed Rate Due 2018 2018 8.75 % 4,628 Tarjeta Naranja Notes Class XIII 2017 9.00 % 1,059 Total 9,612

(1) Only principal

As of December 31, 2016, the breakdown of our Pesos-denominated debt was as follows:

Annual Maturity Interest Rate Total(1) Grupo Financiero Galicia Notes Class V Series II 2017 Badlar + 525 b.p. 78 Notes Class VI Series II 2017 Badlar + 425 b.p. 110 Notes Class VII 2017 27% / Badlar + 425 b.p. 157 Tarjetas Cuyanas Notes Class XIX Series II 2017 Badlar + 495 p.b. 10 Notes Class XXI 2017 27.50% 201 Notes Class XXII 2017 Badlar + 425 p.b. 300 Notes Class XXIII 2017 Badlar + 499 p.b. 163 Notes Class XXIV Series I 2017 Badlar + 408 p.b. 66 Notes Class XXIV Series II 2019 Badlar + 498 p.b. 185 Notes Class XXV 2020 Badlar + 394 p.b. 348 Notes Class XXVI Series I 2018 Badlar + 275 p.b. 150 Notes Class XXVI Series II 2020 Badlar + 400 p.b. 350 Tarjetas del Mar Notes Class I 2017 Badlar + 450 p.b. 119 Tarjeta Naranja Notes Class XXIV Series II 2017 Badlar + 500 p.b. 34 Notes Class XXVIII Series II 2017 Badlar + 450 p.b. 2 Notes Class XXIX 2017 27.75% / Badlar + 450 p.b. 167 Notes Class XXX 2017 27.75% / Badlar + 450 p.b. 335 Notes Class XXXI 2017 27.00% / Badlar + 450 p.b. 181 Notes Class XXXII 2017 Badlar + 450 p.b. 151 Notes Class XXXIII Series I Tasa Mín. 37% / 2017 Badlar + 450 p.b. 119 Notes Class XXXIII Series II Tasa Mín. 37% / Badlar + 540 2019 p.b. 361 Notes Class XXXIV Series I Tasa Mín. 32% / Badlar + 338 2017 p.b. 104

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Notes Class XXXIV Series II Tasa Mín. 32% / Badlar + 467 2020 p.b. 465 Tasa Mín. 26% / Badlar + 299 Notes Class XXXV Series I 2018 p.b. 224 Notes Class XXXV Series II Tasa Mín. 26% / 2020 Badlar + 399 p.b. 750 Notes Class XXXVI Series I Tasa Mín. 25.5% / 2018 Badlar + 325 p.b. 192 Notes Class XXXVI Series II Tasa Mín. 25.5% / Badlar + 325 2019 p.b. 546

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents CFA Notes Class XIV 2017 27.24% / Badlar + 425 p.b. 61 Notes Class XV 2017 27.99% / Badlar + 450 p.b. 82 Notes Class XVI 2017 Badlar + 450 p.b. 254 Notes Class XVII Series I Tasa Mín. 36% / 2017 Badlar + 400 p.b. 58 Notes Class XVII Series II Tasa Mín. 36% / Badlar + 498 2019 p.b. 286 Notes Class XVIII Tasa Mín. 29.5% / 2018 Badlar + 288 p.b. 341 Total 6,950

(1) Only principal

The increase in our debt securities outstanding as of December 31, 2016 as compared to December 31, 2015 was mainly a result of: (i) the issuance by Tarjeta Naranja of senior notes in an aggregate principal amount of Ps.2,912 million, (ii) the issuance by Tarjetas Cuyanas of senior notes in an aggregate principal amount of Ps.1,099 million, (iii) the issuance by CFA of senior notes in an aggregate principal amount of Ps.939 million and (iv) the issuance by Tarjeta del Mar of senior notes in an aggregate principal amount of Ps.119 million.

The increase in our debt securities outstanding as of December 31, 2015 as compared to December 31, 2014 was mainly a result of: (i) the issuance by Tarjeta Naranja of senior notes in an aggregate principal amount of Ps.1,046 million, (ii) the issuance by Tarjeta Cuyanas of senior notes in an aggregate principal amount of Ps.787 million, (iii) the issuance by CFA of senior notes in an aggregate principal amount of Ps.421 million and (iv) the issuance by Grupo Financiero Galicia of senior notes in an aggregate principal amount of Ps.160 million.

The increase in our debt securities outstanding as of December 31, 2014 as compared to December 31, 2013 was mainly a result of: (i) the issuance by Tarjeta Naranja of senior notes in an aggregate principal amount of Ps.1,059 million, (ii) the issuance by Tarjeta Cuyanas of senior notes in an aggregate principal amount of Ps.892 million, (iii) the issuance by CFA of senior notes in an aggregate principal amount of Ps.649 million and (iv) the issuance by Grupo Financiero Galicia of senior notes in an aggregate principal amount of Ps.430 million.

For more information see “-Contractual Obligations” below.

The category “other obligations” includes Ps.20,813 million of debt with merchants in connection with credit-card transactions of Banco Galicia and the Regional Credit Card Companies, Ps.5,804 million in “miscellaneous liabilities”, Ps 4,763 million of amounts payable for spot and forward purchases to be settled Ps.3,220 million in connection with collections on account of third parties and minority interest for Ps.1,462 million.

Ratings The following are our ratings as of the date of this annual report:

Standard & Fitch Evaluadora Poor’s Argentina Latinoamericana Moody’s LOCAL RATINGS Grupo Financiero Galicia S.A. Rating of Shares 1 Short-/Medium Term Debt AA- Banco de Galicia y Buenos Aires S.A. Counterparty Rating raA+ Debt (Long-Term / Short Term) raA+ AA(arg) / A1+(arg) AA- Baa1.ar Subordinated Debt A+ Ba1.ar Deposits (Long Term / Short Term) raA+ / raA-1 Deposits (Local Currency / Foreign Currency) Baa1.ar / Ba1.ar Trustee TQ1-.ar

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Tarjeta Naranja S.A. Medium-/Long-Term Debt AA-(arg)

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Standard & Fitch Evaluadora Poor’s Argentina Latinoamericana Moody’s Tarjetas Cuyanas S.A. Long-Term Debt AA-(arg) CFA S.A. Long-Term Debt AA-(arg) INTERNATIONAL RATINGS Banco de Galicia y Buenos Aires S.A. Long-Term Debt B B3 Subordinated Debt CCC Caa1 Tarjeta Naranja S.A. Medium-/Long-Term Debt B

(*) See “-Contractual Obligations”.

Debt Programs On March 9, 2009, Grupo Financiero Galicia’s shareholders, during an ordinary shareholders’ meeting, and the Board of Directors created a global short-, medium- and long-term notes program, for a maximum outstanding amount of US$60 million. This program was authorized by the CNV pursuant to Resolution No.16,113 of April 29, 2009.

In August 2012, during an extraordinary shareholders’ meeting, it was decided to ratify the decision made at the ordinary and extraordinary shareholders’ meeting held in April 2010 with regard to the approval of the US$40 million increase in the amount of Grupo Financiero Galicia’s global notes program. Therefore, once approved by the CNV, the amount was for up to US$100 million or its equivalent in other currencies. On May 8, 2014, the CNV, pursuant to Resolution No. 17,343, granted an extension of the debt program for another five year period.

On May 8, 2013 Grupo Financiero Galicia issued its Class IV notes in the aggregate principal amount of Ps.220 million due in 18 months with a variable rate equal to the benchmark rate (Badlar) plus 3.49%.

On January 30, 2014, Grupo Financiero Galicia issued its Class V notes, in two series, in an aggregate principal amount of Ps.180 million with the following terms and conditions: (i) Ps.102 million of Series I notes, with a variable interest rate equal to the benchmark rate (Badlar) plus 4.25%, with an 18 month maturity and (ii) Ps.78 million of Series II notes, with a variable interest rate equal to the benchmark rate (Badlar) plus 5.25%, with a 36 month maturity. Both series pay interest on a quarterly basis. In addition, certain of the Class V notes were subscribed for with Class III notes for a face value of Ps.20,622,455.

During February 2014, Grupo Financiero Galicia cancelled, upon maturity, all of the outstanding Class III notes.

In October 2014, Grupo Financiero Galicia issued its Class VI notes, in two series, in an aggregate principal amount of Ps.250.0 million with the following terms and conditions: (i) Ps.140.2 million of Series I notes, with a variable interest rate equal to the benchmark rate (Badlar) plus 3.25%, with an 18 month maturity and (ii) Ps.109.8 million of Series II notes, with a variable interest rate equal to the benchmark rate (Badlar) plus 4.25%, with a 36 month maturity. Both series pay interest on a quarterly basis. In addition, certain of the Class VI notes were subscribed with Class IV notes for a face value of Ps.30,997,382.

On November 10, 2014 Grupo Financiero Galicia cancelled, upon maturity, all of the outstanding Class IV notes.

In July 2015, Grupo Financiero Galicia issued its Class VII notes for an aggregate principal amount of Ps.160 million. Such notes mature on the date that is 24 months after the date of their issuance and accrue interest at a fixed rate equal to 27% from the date of their issuance through the 9th month after their issuance and at a floating rate equal to Badlar plus 4.25% from the 10th month of their issuance through their maturity date. The Class VII notes pay interest on a quarterly basis. The aggregate principal amount of such notes will be repaid upon maturity. On July 31, 2015 Grupo Financiero Galicia cancelled, upon maturity, all of its outstanding Class V Series I notes.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In April 2016, Grupo Financiero Galicia cancelled, upon maturity, all of its outstanding Class VI Series I notes.

On January 31, 2017, Grupo Financiero Galicia cancelled, upon maturity, all of its outstanding Class V Series II notes.

Banco Galicia has a program outstanding for the issuance and re-issuance of non-convertible notes, subordinated or non- subordinated, adjustable or non-adjustable, secured or unsecured, with a term from 30 days to up to the current permitted maximum (30 years), for a maximum outstanding face value during the period of such program of up to US$342.5 million. This program was approved by the CNV on November 4, 2005 and its extension pursuant to Resolution No. 16,454, dated November 11, 2010. On November 20, 2015, pursuant to its Resolution No. 17,883 the CNV approved a new extension of the program and the increase of its maximum outstanding face value to up to US$500 million. The term of the program is for five years commencing on the date of approval of the extension by the CNV. On May 4, 2011 Banco Galicia issued 8.75% Class I notes due 2018 in the aggregate principal amount of US$300.0 million under this program. These notes are subject to a number of significant covenants, which are subject to important qualifications and exceptions, that, among other things, restrict the ability of (i) Banco Galicia and certain of its subsidiaries to directly or indirectly, create, incur, assume or suffer to exist liens upon its present or future assets to secure any indebtedness and (ii) Banco Galicia to merge, consolidate or amalgamate with or into, or convey or transfer or lease all or substantially all of its properties and assets, whether in one transaction or a series of related transactions.

During the 2016 fiscal year, Banco Galicia issued certain subordinated negotiable obligations maturing in 2026 for a nominal value of US$ 250 million. The funds of this issue were used for the redemption of its Subordinated Notes due 2019.

Tarjeta Naranja has a program outstanding for the issuance and re-issuance of non-convertible notes, subordinated or non- subordinated, adjustable or non-adjustable, secured or unsecured, with a term from 30 days to up to the current permitted maximum (30 years), for a maximum outstanding face value during the period of such program of up to US$650 million. The program was approved by the CNV on May 23, 2012. As of December 31, 2016, debt for a principal amount outstanding of Ps. 1,059 million (approximately US$67 million) had been issued under the program. Tarjeta Naranja’s program contains certain restrictions on liens, subject to the provisions established in the applicable pricing supplement with respect to each class and/or series of notes, so long as any note issued under such program remains outstanding. Certain notes issued under Tarjeta Naranja’s program are subject to covenants that limit the ability of Tarjeta Naranja and certain of its subsidiaries, subject to important qualifications and exceptions, to pay dividends on its capital stock or redeem, repurchase or retire its capital stock or subordinated indebtedness, make certain restricted payments, and consolidate, merge or transfer assets, among others.

Tarjetas Cuyanas has a program outstanding with the same characteristics, for a maximum outstanding face value during the period of such program of up to US$120 million. The CNV approved the program on May 18, 2010 and approved the increase of its maximum outstanding face value to up to US$250 million on May 7, 2013. As of December 31, 2016, debt for a principal amount outstanding of Ps. 2,116 million (or US$131 million) had been issued under this program.

CFA has a program outstanding for the issuance of ordinary short, medium or long term, secured or unsecured, subordinated or non-subordinated notes, for a maximum outstanding face value during the period of such program of up to Ps.200 million. The CNV approved this program on August 3, 2006, and approved an increase of its maximum outstanding face value to up to Ps.500 million on March 19, 2008.

On January 27, 2011 the CNV approved an extension of the program and the increase of its maximum outstanding face value to up to US$250 million.On January 8, 2016 the CNV approved an extension of the program and the increase of its maximum outstanding face value to up to US$250 million. During 2016, CFA issued debt in the aggregate principal amount of Ps.300 million on February 2, 2016, Ps.345.83 million on May 24, 2016, and Ps.350 million on August 5, 2016. As of December 31, 2016, debt equal to an aggregate principal amount outstanding of Ps. 1,251 million had been issued under CFA’s debt program.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Contractual Obligations The table below identifies the total amounts (principal and interest) of our main on balance-sheet contractual obligations, their currency of denomination, remaining maturity and interest rate and the breakdown of payments due, as of December 31, 2016.

Annual Less than 1 to 3 3 to 5 Over 5 Maturity Interest Rate Total 1 Year Years Years Years Grupo Financiero Galicia Bonds Notes Class V Series II (Pesos) 2017 Badlar + 525 bp 78 78 — — — Notes Class VI Series II (Pesos) 2017 Badlar + 425 bp 110 110 — — — Notes Class VII (Pesos) 27%/ 2017 Badlar + 425 bp 157 157 — — — Banco Galicia Deposits Time Deposits (Pesos/US$) Various Various 50,350 50,333 17 — — Bonds 9% Notes Due 2003 (US$) (1) 2003 9.00% 7 7 — — — Fixed Rate Due 2018 (US$)(2) 2018 8.75% 4,628 — 4,628 — — 2026 Notes (US$) (3) 2026 8.25% 3,918 — — — 3,918 Loans FMO Financial Loans (US$) Libor + 550 Various b.p. 18 18 — — — PROPARCO Financial Loans (US$) Libor + 400 Various b.p. 49 33 16 — — IFC Financial Loans (US$) Various Various 79 — 45 34 — Other Financial Loans (US$) (4) Various Various 2,067 2,067 — — — IDB Financial Loans (Pesos) Various Various 83 15 38 18 12 Fontar Financial Loans (Pesos) Various Various 6 2 2 1 1 BICE Financial Loans (Pesos) Various Various 1,160 209 585 337 29 BICE Financial Loans (US$) Various Various 4 2 2 — — Short-term Intrebank Loans (Pesos) 2017 Various 165 165 — — — Repos Repos 2017 Various 1,646 1,646 — — — Tarjetas Regionales Financial Loans with Local Banks (Pesos) Various Various 2,057 2,057 — — — Notes (Pesos/US$) Various Various 6,581 3,009 1,659 1,913 — CFA Local Financing (Pesos) Various Various 582 567 13 2 — Notes (Pesos) Various Various 1,083 455 628 — — Total 74,828 60,930 7,633 2,305 3,960

Principal and interest. Includes the CER adjustment, where applicable. (1) The balance represents debt not tendered by its holders to the exchange offered by Banco Galicia to restructure its foreign debt, which was completed in May 2004. (2) Interest payable in cash semiannually, fixed rate of 8.75%. Principal payable in full on May 4, 2018. (3) Interest payable in cash semiannually, fixed rate of 8.25%, up to July 19, 2021, when benchmark rate will be a 7.156% additional. Principal payable in full on July 19, 2026. (4) Borrowings to finance international trade operations to Bank customers.

Off- Balance Sheet Contractual Obligations Operating Leases As of December 31, 2016, we also had off-balance sheet contractual obligations arising from the leasing of certain properties used as a part of our distribution network. The estimated future lease payments in connection with these properties are as follows:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document -152-

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (In millions of Pesos) 2017 365 2018 309 2019 274 2020 244 2021 213 2022 and after 234 Total 1,639

Other As a shareholder of Aguas Cordobesas S.A., Banco Galicia is a guarantor with respect to compliance with certain obligations arising from the concession contract signed by Aguas Cordobesas S.A. In addition, Banco Galicia and the other shareholders committed, in certain circumstances, to provide financial support to the company if it was unable to fulfill the commitments it had undertaken with various international financial institutions.

Banco Galicia, as a shareholder and proportionally to its 10.833% interest, is jointly responsible, to the Province of Córdoba, for contractual obligations under the concession contract for its entire term. Should any of the other shareholders fail to comply with the commitments arising from their joint responsibility, the province may force Banco Galicia to assume the unfulfilled commitment, but only in proportion and to the extent of the interest held by Banco Galicia. See Note 3 to our consolidated financial statements.

Off-Balance Sheet Arrangements Our off-balance sheet risk mainly arises from Banco Galicia’s activities.

In the normal course of its business, Banco Galicia is a party to financial instruments with off-balance sheet risk which are entered into in order to meet the financing needs of its customers. These instruments expose us to credit risk in addition to the amounts recognized on our consolidated balance sheets. These financial instruments include commitments to extend credit, standby letters of credit, guarantees granted and acceptances.

Commitments to Extend Credit, Stand-By Letters of Credit and Guarantees Granted Commitments to extend credit are agreements to lend to a customer at a future date, subject to meeting certain contractual terms. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent actual future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis.

We use the same credit policies in making commitments, conditional obligations and guarantees as we do for granting loans. In the opinion of management, our outstanding commitments and guarantees do not represent unusual credit risk.

Standby letters of credit and guarantees granted are conditional commitments issued by Banco Galicia to guarantee the performance of a customer to a third party. Guarantees granted are surety guarantees in connection with transactions between two parties. Acceptances are conditional commitments for foreign trade transactions.

Our exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit, standby letters of credit, guarantees granted and acceptances is represented by the contractual notional amount of those investments.

Our credit exposure related to these items as of December 31, 2016, is summarized below:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents December 31, 2016 (in millions of Pesos) Commitments to Extend Credit 9,094 Standby Letters of Credit 650 Guarantees Granted 1,135 Acceptances 586

In addition to the above commitments, as of December 31, 2016, purchase limits available for credit-card holders amounted to Ps.200,918 million.

As of December 31, 2016, main fees related to the above-mentioned commitments were Ps.40 million corresponding to standby letters of credit, Ps.31 million from guarantees provided and Ps.11 million from commitments to extend credit.

The credit risk involved in issuing letters of credit and granting guarantees is essentially the same as that involved in extending loan facilities to customers. In order to grant guarantees to our customers, we may require counter guarantees. As of December 31, 2016, these counter guarantees, classified by type, were as follows:

December 31, 2016 (in millions of Pesos) Preferred Counter Guarantees 61 Other Counter Guarantees 242

For more detailed information about off-balance sheet financial instruments, see Note 25 to our audited consolidated financial statements.

Other We account for checks drawn on us and other financial institutions, as well as other items in the process of collection, such as notes, bills and miscellaneous items, in memorandum accounts until the related item clears or is accepted. In management’s opinion, the risk of loss on these clearing transactions is not significant. The amounts of clearing items in process as of December 31, 2016, were as follows:

December 31, 2016 (in millions of Pesos) Checks Drawn on Banco Galicia 2,014 Checks Drawn on Other Banks 2,560 Bills and Other Items for Collection 18,309

With respect to fiduciary risk, we act as trustee of trust agreements to guarantee obligations arising from various contracts between the parties. As of December 31, 2016, the trust funds amounted to Ps.8,183 million.

In addition, we hold securities in custody, which as of December 31, 2016 amounted to Ps.258,872 million.

For more detailed information about off-balance sheet financial instruments, see Note 25 to our audited consolidated financial statements.

Critical Accounting Policies We believe that the following are our critical accounting policies under Argentine Banking GAAP, as they are important to the portrayal of our financial condition and results of operations and require our most difficult, subjective and complex judgment and the need to make estimates about the effect of matters that are inherently uncertain.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Allowance for Loan Losses Our allowance for loan losses including the allowance for loan losses of Banco Galicia and CFA is maintained in accordance with Argentine Central Bank rules. Under such rules, a minimum allowance for loan losses is calculated primarily based upon the classification of Banco Galicia’s commercial loan borrowers and upon delinquency aging (or the number of days the loan is past due) for individual loan borrowers of both Banco Galicia and CFA and for Banco Galicia’s commercial loans of less than Ps.2.5 million. Although we are required to follow the methodology and guidelines for determining the minimum loan loss allowance as set forth by the Argentine Central Bank, we are allowed to establish additional allowances for loan losses. The determination of the allowance for loan losses requires a significant degree of judgment. The credit card companies follow the IFRS guidelines to record the allowances for loan losses, which include the minimum requirements of Argentine Central Bank rules.

For commercial loans, we are required to classify all of our commercial loan borrowers. In order to perform the classification, we must consider the management and operating history of the borrower, the present and projected financial situation of the borrower, the borrower’s payment history and ability to service the debt, the capability of the borrower’s internal information and control systems and the risk in the sector in which the borrower operates. We apply the minimum loss percentages required by the Argentine Central Bank to our commercial loan borrowers based on the loan classification and the nature of the collateral, or guarantee in respect of the loan. In addition, based on the overall risk of the portfolio, we consider whether or not additional loan loss reserves in excess of the minimum required are warranted.

For our consumer loan portfolio, including the loan portfolios of Banco Galicia, the Regional Credit Card Companies and CFA, we classify loans based upon delinquency aging, consistent with the requirements of the Argentine Central Bank. Minimum loss percentages required by the Argentine Central Bank are also applied to the totals in each loan classification.

Other Receivables Resulting from Financial Brokerage and Miscellaneous Receivables We carry other receivables resulting from financial brokerage and miscellaneous receivables net of allowances for uncollectible amounts. Our judgment regarding the ultimate collectability is performed on an account-by-account basis and considers our assessment of the borrower’s ability to pay based on factors such as the borrower’s financial condition, past payment history, guarantees and past-due status.

Goodwill Goodwill is carried at cost less accumulated amortization. The carrying amount of goodwill is analyzed for impairment based on estimates of future undiscounted cash flows generated by the business acquired. The estimate of future cash flows requires complex management judgment.

Pursuant to the Argentine Central Bank regulations, the negative goodwill has to be charged to Income with regard to the causes that have originated it, not to exceed a 60-month straight-line method amortization.

U.S. GAAP - Critical Accounting Policies Additional information in connection with critical accounting policies for U.S. GAAP purposes is described as follows.

Allowance for Loan Losses Under U.S. GAAP, Banco Galicia considers loans to be impaired when it is probable that all amounts of principal and interest will not be collected according to the contractual terms of the loan agreement. The allowance for significant impaired loans are assessed based on the present value of estimated future cash flows discounted at the current effective loan rate or the fair value of the collateral in the case where the loan is considered collateral-dependent. An allowance for impaired loans is provided when discounted future cash flows or collateral fair value is lower than book value.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In addition, if necessary, a specific allowance for loan losses is established for individual loans, based on regular reviews of individual loans, recent loss experience, credit scores, the risk characteristics of the various classifications of loans and other factors directly influencing the potential collectability and affecting the quality of the loan portfolio.

To calculate the allowance required for smaller-balance impaired loans and unimpaired loans, we perform an analysis of historical losses from our consumer and performing commercial loan portfolios in order to estimate losses for U.S. GAAP purposes resulting from loan losses that had been incurred in such loan portfolios at the balance sheet date but which had not been individually identified. Loss estimates are analyzed by loan type and thus for homogeneous groups of clients. Such historical ratios are updated to incorporate the most recent data reflecting current economic conditions, industry performance trends, geographic or obligor concentrations within each portfolio segment, and any other pertinent information that may affect the estimation of the allowance for loan losses.

We estimate that, on average, it takes a period of up to one year between the trigger of an impairment event and identification of a loan as being a probable loss for consumer and performing commercial loans.

Many factors can affect Banco Galicia’s estimates of allowance for loan losses, including volatility of default probability, migrations and estimated loss severity.

A ten percent decrease in the expected cash flows of significant impaired loans individually analyzed, could result in an additional impairment of approximately Ps.2 million.

A ten percent increase in the historical loss ratios for loans collectively analyzed could result in an additional impairment of approximately Ps.386 million.

These sensitivity analyses do not represent management’s expectations of the deterioration in risk ratings or the increases in loss rates but are provided as hypothetical scenarios to assess the sensitivity of the allowance for loan and lease losses to changes in key inputs. We believe the risk ratings and loss severities currently in use are appropriate and represent management’s expectations about the credit risk inherent in its loan portfolio.

Determining the allowance for loan losses requires significant management judgments and estimates including, among others, identifying impaired loans, determining customers’ ability to pay and estimating the fair value of underlying collateral or the expected future cash flows to be received. Actual events are likely to differ from the estimates and assumptions used in determining the allowance for loan losses.

Fair Value Estimates A portion of our assets is carried at fair value, including trading and available-for-sale securities, retained interests in assets transferred to financial trusts, futures and forward transactions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10, among other things, requires Grupo Financiero Galicia to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

In addition, ASC 825-10 provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments and written loan commitments not previously recorded at fair value. Under ASC 825-10, fair value is used for both the initial and subsequent measurement of the designated assets, liabilities and commitments, with the changes on fair value recognized in net income. As a result of ASC 825-10 analysis, Grupo Financiero Galicia has not elected to apply fair value accounting for any of its financial instruments not previously carried at fair value.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Fair Value Hierarchy ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820-10 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Inputs include the following: (a) Quoted prices for similar assets or liabilities in active markets; (b) Quoted prices for identical or similar assets or liabilities in non-active markets; (c) Pricing models whose inputs are observable for substantially the full term of the asset or liability; and (d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means. • Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Determination of Fair Value Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon internally developed models that use primarily market-based or independently-sourced market parameters, including interest rate yield curves, option volatilities and currency rates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, Banco Galicia’s creditworthiness, liquidity and unobservable parameters that are applied consistently over time.

Grupo Financiero Galicia believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Impairment of Assets Other Than Loans Certain assets, such as goodwill and equity investments are subject to an impairment review. Asset impairment charges require considerable judgment and are recorded when market value declines below the carrying value, for declines other-than- temporary, or where the cost of the asset is deemed to not be recoverable.

Goodwill impairment exists when the fair value of the reporting unit to which the goodwill is allocated is not enough to cover the book value of its assets and liabilities and the goodwill. The fair value of the reporting units

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents is estimated using discounted cash flow techniques. The sustained value of the majority of the goodwill is supported ultimately by revenue from our banking and credit-card businesses. A decline in earnings as a result of a lack of growth, or our inability to deliver cost-effective services over sustained periods, could lead to a perceived impairment of goodwill, which would be evaluated and, if necessary, recorded as a write-down in our consolidated income statement. On an annual basis, or as circumstances dictate, management reviews goodwill and evaluates events or other developments that may indicate impairment in the carrying amount. The evaluation methodology for potential impairment is inherently complex and involves significant management judgment in the use of estimates and assumptions. These estimates involve many assumptions, including the expected results of the reporting unit, an assumed discount rate and an assumed growth rate for the reporting unit.

As of December 31, 2016 and 2015, no impairment was recorded.

The fair value of equity investments is determined using discounted cash flow techniques. This technique involves complex management judgment in terms of estimating the future cash flows of the companies and in defining the applicable interest rate to discount those cash flows.

Deferred Tax Asset Valuation Allowance Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the carrying amounts of assets and liabilities recorded for accounting and tax reporting purposes and for the future tax effects of net operating loss carryforwards. Recognition of those deferred tax assets is subject to management’s judgment based on available evidence that realization is more likely than not and they are reduced, if necessary, by a valuation reserve. Management’s judgment on the likelihood that deferred tax assets can be realized is subjective and involves estimates and assumptions about matters that are inherently uncertain. This judgment involves estimating future taxable income and the timing at which the temporary differences between book and taxable income will be reversed. Underlying estimates and assumptions can change over time, influencing our overall tax positions, as a result of unanticipated events or circumstances.

According to taxable income projections, Grupo Financiero Galicia believes that is more likely than not that it will recover the temporary differences and the presumed minimum income tax. Therefore, no valuation allowance was provided against presumed minimum income tax and temporary differences.

Securitizations Under U.S. GAAP, prior to January 1, 2010, Grupo Financiero Galicia adopted SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, as amended by SFAS 156, both of them codified under the topic ASC No. 860 “Transfers and Servicing” (“ASC No. 860”). ASC No. 860 required an entity to recognize the financial and servicing assets it controls and the liabilities it had incurred and to derecognize financial assets when control has been surrendered.

Effective January 1, 2010, Grupo Financiero Galicia implemented new accounting guidance provided by SFAS 166 and 167 (ASU 2009-16 and ASU 2009-17, respectively, under the new codification), which amend the accounting for the transfers of financial assets and the consolidation of VIEs.

The new guidance eliminates the concept of QSPEs that were previously exempt from consolidation and introduces a new framework for determining the primary beneficiary of a VIE. The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. Therefore, Grupo Financiero Galicia must evaluate all existing securitization trusts that qualify as QSPEs to determine whether they must be consolidated in accordance with ASU 2009-17. An entity is considered a VIE if it possesses one of the following characteristics: • Insufficient equity investment at risk • Equity lacks decision-making rights • Equity with non-substantive voting rights

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • Lacking the obligation to absorb an entity’s expected losses • Lacking the right to receive an entity’s expected residual returns

Under the new guidance, the primary beneficiary is the part that has both (1) the power to direct the activities of an entity that most significantly impact the VIE’s economic performance; and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

To assess whether Grupo Financiero Galicia has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, Grupo Financiero Galicia considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes, first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities.

Under ASC 810-10-65, Banco Galicia should measure the components of the newly consolidated financial trusts at their carrying amounts as of the adoption date. Grupo Financiero Galicia must determine the amounts of the assets, liabilities, and non- controlling interests of the newly consolidated financial trusts, that would have been recorded in Grupo Financiero Galicia’s financial statements as of January 1, 2010, as if ASU 2009-17 had been effective as of the date of Grupo Financiero Galicia’s initial involvement with the financial trusts. Any difference between the net amount added (assets less liabilities of each financial trusts where Grupo Financiero Galicia is primary beneficiary) from Grupo Financiero Galicia’s balance sheet and the amount of any previously recognized retained interest is recognized as a cumulative-effect adjustment to retained earnings.

Based on the mentioned evaluation as of December 31, 2015 and 2014 Grupo Financiero Galicia consolidated the financial trust Galtrust I in which Grupo Financiero Galicia had a controlling financial interest and for which it is the primary beneficiary.

Exchange of Assets In accordance with U.S. GAAP, specifically ASC 310-20, satisfaction of one monetary asset by the receipt of another monetary asset for the creditor is generally based on the market value of the asset received in satisfaction of the debt (an extinguishment). In this particular case, the securities being received are substantially different in structure and in interest rates than the debt securities swapped. Therefore, such amounts should initially be recognized at their fair value. The estimated fair value of the securities received will constitute the cost basis of the asset. Any difference between the old asset and the fair value of the new asset is recognized as a gain or loss.

Banco Galicia exchanged Argentine government bonds denominated in Pesos at 2% due 2014 (Boden 2014 Bonds) with a face value of Ps.683.6 million (recorded in Banco Galicia’s shareholders’ equity in February 2009 within the scope of an exchange transaction of National Secured Loans at market price) for Bonar 2015 Bonds with a face value of Ps.912.7 million.

Under U.S. GAAP, the Bonar 2015 Bonds were considered as available for sale securities and recorded at fair value with the unrealized gains or losses recognized as a charge or credit to equity through other comprehensive income.

Other-than-temporary impairment Under U.S. GAAP Galtrust I was classified as an available-for-sale security, and therefore, carried at fair value with changes in the fair value reflected in other comprehensive income for the years ended December 31, 2016 and 2015.

“Recognition and Presentation of Other-Than-Temporary Impairments” ASC 320 establishes a new method of recognizing and reporting other-than-temporary impairments of debt securities. Impairment is now considered to be other than temporary if an entity:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 1. intends to sell the security;

2. is more likely than not to be required to sell the security before recovering its cost; or

3. does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell)–that is, a ‘credit loss’.

This credit loss is based on the present value of cash flows expected to be collected from the debt security. If a credit loss exists but an entity does not intend to sell the impaired debt security and it is more likely than not to be required to sell before recovery, the impairment is other than temporary. It should therefore be separated into:

1. the estimated amount relating to the credit loss, and

2. all other changes in fair value.

Only the estimated credit loss amount is recognized in profit or loss; the remaining change in fair value is recognized in ‘other comprehensive income’. This approach more closely aligns the impairment models for debt securities and loans by reflecting only credit losses as impairment in profit and loss.

As of December 31, 2016 and 2015 the fair value of Galtrust I exceeded its amortized cost. Therefore for U.S. GAAP purposes the Bank concluded that there was no recognition of impairment.

Principal Trends Related to Argentina During the early part of 2017, a temporary calm in markets allowed Argentine companies to return to the international debt markets, allowing them to issue securities covering most of their financing needs for 2017.

With respect to the foreign exchange market, both foreign currency debt issuances and the impact of anti-money laundering regulations may offset a potential drop in business offers and maintain the calm until the second quarter of 2017, when most agricultural exports are settled. With respect to monetary policy, after a difficult 2016 (especially in terms of interest rates), the contractionary trend observed in 2016 may continue until the market’s inflationary expectations are brought in line with the Argentine Central Bank’s objectives.

In the fiscal area, after 2016, which was slightly more expansionary than expected, the Argentine government is expected to focus on gradually reestablishing the balance of public accounts in the midterm. An increase in real wages, together with the possibility of an increase in exports and larger crop production in the agricultural sector may support continued economic recovery.

Related to the Financial System We believe that the financial system will continue to gradually increase its level of interaction with the private sector in 2017. We believe that this gradual increase will be driven by changes in regulations that the government is implementing which would result in a less regulated financial system, thereby increasing the competitiveness and efficiency of Argentine banks as compared to other Latin American banks. We believe that the overall low levals of penetration of banking services (both at a corporate and personal level) at a regional level as well as the low levels of the use of banking services create potential growth for Argentine financial institutions.

In financial standing terms, net results will help maintain capitalization levels according to Basel Committee regulations. Income from services will still be significant within operating income, whereas the banks will continue working on administrative expenses in order to improve their operating efficiency.

Portfolio quality indicators have been strong over the last few years despite the modest economic growth and both the non- accrual loan portfolio and its coverage with allowances have been kept in similar figures. The Market Expectations Survey (“REM”) estimates 3.0% economic growth in 2017, which could help to maintain the non-accrual loan portfolio and a low cost of credit.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents To conclude, we believe that the the financial system, which has strong fundamental indicators, will have positive returns in 2017, with a mid- and long-term macroeconomic environment with renewed and promising expectations.

Related to Us It is expected that the level of activity of all the subsidiaries of Grupo Financiero Galicia will be consistent with the expectations in this economic context. Given that Banco Galicia is the most significant asset of Grupo Financiero Galicia, we refer to the trends related to Banco Galicia.

In 2017, Banco Galicia will continue its strategy of providing distinguishing experiences to its clients and offering high- quality products and services to satisfy the needs of each segment of customers, working to increase its volume of financial intermediation activities with the private sector and to improve its recurring operating results, controlling administrative expenses in an effort to improve operational efficiency and maintaining an adequate diversification and risk coverage.

The analysis of these trends should be read in conjunction with the discussion in Item 3. “Key Information-Risk Factors”, and with consideration that the Argentine economy has been historically volatile, which has negatively affected the volume and growth of the financial system.

Item 5.B. Liquidity and Capital Resources Liquidity - Holding Company on an Individual Basis We generate our net earnings/losses from our operating subsidiaries, specifically Banco Galicia, our main operating subsidiary. Banco Galicia’s dividend-paying ability has been affected since late 2001 by the effects of the 2001-2002 liquidity crisis and its impact on Banco Galicia’s income-generation capacity. In addition, there were other restrictions on Banco Galicia’s ability to pay dividends resulting from applicable Argentine Central Bank rules and the loan agreements entered into by Banco Galicia as part of its foreign debt restructuring. See Item 8. “Financial Information-Dividend Policy and Dividends.”

From 2002 to 2010 we did not receive any dividends from Banco Galicia, which is the primary source of funds available to us. On April 27, 2011, during Banco Galicia’s shareholders’ meeting, a distribution of cash dividends for a total amount of Ps.100 million was approved. Since that date, Banco Galicia’s ability to pay dividends was affected due to regulations issued by the Argentine Central Bank.

The extent to which a banking subsidiary may extend credit or otherwise provide funds to a holding company is limited by Argentine Central Bank rules. For a description of these rules, see Item 4. “Information on the Company-Argentine Banking Regulation-Lending Limits.”

During fiscal year 2014, Grupo Financiero Galicia received dividends in an amount equal to Ps. 128 million. Similarly, during fiscal years 2015 and 2016, Grupo Financiero Galicia received from its subsidiaries dividends for Ps. 190 million and Ps. 431 million, respectively. During February 2017, Grupo Financiero Galicia received dividends for Ps. 196 million.

According to Grupo Financiero Galicia’s policy for the distribution of dividends and due to Grupo Financiero Galicia’s financial condition for the fiscal year ended December 2016 and the fact that most of the profits for fiscal years 2014, 2015 and 2016 corresponded to income from holdings (with just a fraction corresponding to the realized and liquid profits meeting the requirements to be distributed as per Section 68 of the Corporations Law), the shareholders’ meeting held on April 25, 2017 approved the distribution of cash dividends for Ps.240 million. This amount represents 18.46% with regard to 1,300,264,597 class A and B ordinary shares with a face value of Ps.1 each.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents For fiscal year 2014, the shareholders’ meeting held on April 29, 2015 approved the distribution of cash dividends in an amount of Ps.100 million, which represents a dividend of 7.69% with respect to 1,300,264,597 class A and B ordinary shares of Grupo Financiero Galicia with a face value of Ps.1 each. Similarly, for fiscal year 2015, the shareholders’ meeting held on April 26, 2016 approved the distribution of cash dividends for Ps.150 million, which represents a dividend of 11.54% with respect to 1,300,264,597 class A and B ordinary shares of Grupo Financiero Galicia with a face value of Ps.1 each.

For fiscal years 2014 and 2015, pursuant to the section incorporated by Act No. 25,585 after Section 25 of Act No. 23,966, Grupo Financiero Galicia received the reimbursement of tax withholdings related to the taxes paid on behalf of the shareholders subject to the tax on personal assets, likewise, pursuant to Section 4 of Act No. 26.893, Grupo Financiero Galicia withheld 10% for income tax from those shareholders subject to such tax.

Due to Act. No. 27,260, Grupo Financiero Galicia will neither reimburse nor withhold any amount for taxes purposes to the dividends to be paid for fiscal year 2016.

As of December 31, 2016, Grupo Financiero Galicia, on an individual basis, had cash and due from banks in an amount of Ps.0.3 million and short-term investments made up of special checking account deposits, mutual funds, government securities and shares sold pending of payment in an amount of Ps.199 million.

As of December 31, 2015, Grupo Financiero Galicia, on an individual basis, had cash and due from banks in an amount of Ps.0.8 million and short-term investments made up of special checking account deposits, mutual funds and time deposits in an amount of Ps.22 million.

As of December 31, 2014, Grupo Financiero Galicia, on an individual basis, had cash and due from banks in an amount of Ps.0.6 million and short-term investments made up of special checking account deposits, mutual funds and time deposits in an amount of Ps.10 million.

For a description of the notes issued by Grupo Financiero Galicia, see “-Item 5.A. “Operating Results”-“Debt Programs”.

Each of our subsidiaries is responsible for their own liquidity management. For a discussion of Banco Galicia’s liquidity management, see “-Banco Galicia’s Liquidity Management-Banco Galicia (Unconsolidated) Liquidity Management”.

Consolidated Cash Flows Our consolidated statements of cash flows were prepared using the measurement methods and the presentation requirements prescribed by the Argentine Central Bank. See our consolidated cash flow statements as of and for the fiscal years ended December 31, 2016, December 31, 2015 and December 31, 2014, included in this annual report.

As of December 31, 2016, on a consolidated basis, we had Ps.73,087 million in available cash (defined as total cash and cash equivalents), representing a Ps.30,112 million increase as compared to the end of December 31, 2015. As of December 31, 2015, we had Ps.42,975 million in available cash, representing a Ps.19,921 million increase from the Ps.23,054 million as of December 31, 2014.

Effective May 14, 2007, and in accordance with the provisions of Argentine Central Bank’s Communiqué “A” 4667, cash equivalents are comprised of the following: Argentine Central Bank debt instruments (Nobac and Lebac) having a remaining maturity that does not exceed 90 days, securities in connection with reverse repurchase agreement transactions with the Argentine Central Bank, local interbank loans and overnight placements in correspondent banks abroad. Cash equivalents also comprise, in the case of the Regional Credit Card Companies, time deposit certificates and mutual fund shares.

The table below summarizes the information from our consolidated statements of cash flows for the three fiscal years ended December 31, 2016, 2015 and 2014 which is also discussed in more detail below.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents December 31, 2016 2015 2014 (in millions of Pesos) Funds(1) at the Beginning of the Fiscal Year Ps.42,975 Ps.23,054 Ps.15,824 Funds Provided (Used) by Operating Activities 25,013 15,625 7,515 - Net (Increase)/Decrease in Government and Private Securities 4,144 2,398 (1,097 ) - Net (Increase)/Decrease in Loans (10,040 ) (12,867 ) 2,698 - Net Increase/(Decrease) in Deposits 34,427 22,576 5,679 - Other (3,518 ) 3,518 235 Funds Provided (Used) by Investing Activities (1,479 ) (1,123 ) (495 ) - Payments for bank premises, equipment and miscellaneous assets, net (1,479 ) (1,133 ) (493 ) - Payments for equity investments — 10 (2 ) - Other — — — Funds Provided (Used) by Financing Activities 2,664 (1,529 ) (1,304 ) - Net Increase/(Decrease) in notes (100 ) (1,562 ) (633 ) - Net Increase/(Decrease) in banks and international entities 477 77 (236 ) - Net Increase/(Decrease) in loans from local financial institutions 2,479 93 (368 ) - Other (192 ) (137 ) (67 ) Effect of Exchange Rate on Cash and Cash Equivalents 3,914 6,948 1,514 Funds at the End of the Fiscal Year Ps.73,087 Ps.42,975 Ps.23,054

(1) Cash and cash equivalents

Under Argentine Banking GAAP, our operating activities include the operating results, the origination of loans and other credits to the private sector, as well as raising customer deposits and entering into sales of government securities under repurchase agreement transactions. Our financing activities include issuing bonds in the local and foreign capital markets and borrowing from foreign and local banks and international credit agencies. Our investing activities primarily consist of the acquisition of equity investments and purchasing of bank premises and equipment.

Management believes that cash flows from operations and available cash and cash equivalent balances, will be sufficient to fund our financial commitments and capital expenditures for fiscal year 2017.

Cash Flows from Operating Activities In fiscal year 2016, net cash provided by operating activities amounted to Ps.25,013 million, mainly due to: (i) a Ps.34,427 million increase in deposits, corresponding to an increase of Ps.17,653 million in deposits related to the Tax Amnesty Law, an increase of Ps.18,479 million in demand deposits and a Ps 1,705 million decrease in time deposits and (ii) an increase of Ps.10,040 million in transactions related to loans, due to higher values of loans granted, mainly related to credit cards, advances and promissory notes, an effect that was offset by amortizations and payments of interests. Likewise, Ps.3,518 million due to the decrease of net other assets and liabilities were provided by operating activities. In addition, Ps.4,144 million of net cash was provided by operating activities attributable to the portfolio of government and private securities.

In fiscal year 2015, net cash provided by operating activities amounted to Ps.15,625 million, mainly due to: (i) a Ps.22,576 million increase in deposits, corresponding to an increase of Ps.14,966 million in demand deposits and a Ps.7,610 million increase in time deposits and (ii) an increase of Ps.12,867 million in transactions related to loans, due to higher values of loans granted, mainly related to credit cards, advances and promissory notes, an effect that was offset by amortizations and payments of interests. Likewise, Ps.3,518 million due to the increase of net other assets and liabilities were provided by operating activities. In addition, Ps.2,398 million of net cash was provided by operating activities attributable to the portfolio of government and private securities.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In fiscal year 2014, net cash provided by operating activities amounted to Ps.7,515 million, mainly due to: (i) a Ps.5,679 million increase in deposits, corresponding to an increase of Ps.8,606 million in demand deposits and a Ps.2,927 million decrease in time deposits and (ii) a decrease of Ps.2,698 million in transactions related to loans, due to amortizations and payments of interests which were higher than the new transactions. Transactions related to personal loans, advances, promissory notes and international trade financing experienced positive cash flows, an effect that was offset by negative cash flows generated on credit cards transactions. Likewise, Ps.235 million due to the increase of net other assets and liabilities were provided by operating activities. In addition, net cash was used by operating activities as follows: Ps.1,097 million attributable to the increase in the portfolio of government and private securities, mainly Lebac and trading portfolio, partially offset by the sale of Bonar 2015 bonds, among others.

Cash Flows from Investing Activities In fiscal year 2016, net cash used by investing activities amounted to Ps.1,479 million mainly attributable to the acquisition of bank premises and equipment for Ps.900 million and miscellaneous assets for Ps.579 million.

In fiscal year 2015, net cash used by investing activities amounted to Ps.1,123 million mainly attributable to the acquisition of bank premises and equipment for Ps.740 million and miscellaneous assets for Ps.393 million.

In fiscal year 2014, net cash used by investing activities amounted to Ps.495 million mainly attributable to the acquisition of bank premises and equipment for Ps.284 million and miscellaneous assets for Ps.209 million.

Cash Flows from Financing Activities In fiscal year 2016, financing activities provided cash in the amount of Ps.2,664 million due to: (i) a net decrease of Ps.100 million as a consequence of the payment or cancellation of principal and interest on notes for approximately Ps.8,912 million, partially offset by issuances of notes for approximately Ps.8,812 million during the same period, (ii) Ps.477 million as a consequence of the increase in foreign credit facilities, (iii) an increase in loans from local financial institutions for Ps.2,479 million and (iv) a net decrease in others fluctuations of Ps.192 million corresponding to other financing activities, mainly related to the payment of dividends.

In fiscal year 2015, financing activities used cash in the amount of Ps.1,529 million due to: (i) Ps.1,562 million as a consequence of the payment or cancellation of principal and interest on notes for approximately Ps.4,611 million, partially offset by the issuances of notes for approximately Ps.3,042 million during the same period, (ii) Ps.77 million as a consequence of the increase in foreign credit facilities, (iii) an increase in loans from local financial institutions for Ps.93 million and (iv) a net decrease in others fluctuations of Ps.137 million corresponding to other financing activities, mainly related to the payment of dividends.

In fiscal year 2014, financing activities used cash in the amount of Ps.1,304 million due to: (i) Ps.633 million as a consequence of the payment or cancellation of principal and interests on notes for approximately Ps.3,804 million, offset by the issuances of notes for approximately Ps.3,181 million during the same period, (ii) Ps.236 million as a consequence of the decrease in foreign credit facilities, partially offset by loans granted mainly by the BID equal to Ps.318 million, (iii) payments in loans from local financial institutions for Ps.368 and (iv) a net decrease in others fluctuations of Ps.67 million corresponding to other financing activities, mainly related to the payment of dividends.

Effect of Exchange Rate on Cash and Cash Equivalents In fiscal year 2016, the effect of the exchange rate on consolidated cash flow, decreased Ps. 3,034 million as compared to fiscal year 2015 in which the evolution of the exchange rate, with an annual increase of 52% as compared to fiscal year 2014, had a significant effect on the consolidated cash flows, increasing by Ps.5,434 million as compared to fiscal year 2014.

For a description of the types of financial interests we use and the maturity profile of our debt, currency and interest rate structure, see Item 5. “Operating and Financial Review and Prospects”—Item 5.A. “Operating Results”.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia’s Liquidity Management Banco Galicia Consolidated Liquidity Gaps Liquidity risk is the risk that liquid assets are not available for Banco Galicia to meet financial commitments at contractual maturity, take advantage of potential investment opportunities and meet demand for credit. To monitor and control liquidity risk, Banco Galicia monitors and systematically calculates the gaps between financial assets and liabilities maturing within set time intervals based on contractual remaining maturity, on a consolidated basis with the Regional Credit Card Companies and CFA. All the deposits in checking accounts and other demand deposits and deposits in savings accounts are included in the first time interval. These figures are used to simulate different liquidity crisis scenarios based on assumptions stemming from historical experience.

As of December 31, 2016, the consolidated gaps between maturities of Banco Galicia’s financial assets and liabilities based on contractual remaining maturity were as follows:

As of December 31, 2016 (1) Less than one Year 1 – 5 Years 5 – 10 Years Over 10 Years Total (in millions of Pesos, except ratios) Assets Cash and Due from Banks 9,743 — — — 9,743 Argentine Central Bank – Escrow Accounts 53,689 — — — 53,689 Overnight Placements 1,227 — — — 1,227 Loans – Public Sector 1,203 281 — — 1,484 Loans – Private Sector 116,806 16,456 264 61 133,587 Government Securities 13,002 — — — 13,002 Notes and Corporate Securities 819 401 138 — 1,358 Financial Trusts 2,831 106 14 — 2,951 Other Financing 91 — — — 91 Receivables from Financial Leases 142 205 15 — 362 Other 6,699 — — — 6,699 Total Assets 206,252 17,449 431 61 224,193 Liabilities Savings Accounts 71,101 — — — 71,101 Demand Deposits 29,347 — — — 29,347 Time Deposits 50,363 17 — — 50,380 Notes 4,084 9,189 3,918 — 17,191 International Banks and Credit Agencies 2,117 96 — — 2,213 Domestic Banks 2,685 999 41 — 3,725 Other Liabilities (1) 34,558 — — — 34,558 Total Liabilities 194,255 10,301 3,959 — 208,515 Asset / Liability Gap 11,997 7,148 -3,528 61 15,678 Cumulative Gap 11,997 19,145 15,617 15,678 15,678 Ratio of Cumulative Gap to Cumulative Liabilities 6.2 % 9.4 % 7.5 % 7.5 % Ratio of Cumulative Gap to Total Liabilities 5.8 % 9.2 % 7.5 % 7.5 %

Principal plus CER adjustment. Does not include interest. (1) Includes, mainly, debt with retailers due to credit card operations, liabilities in connection with repurchase transactions, debt with domestic credit agencies and collections for third parties. The “Less than One Year” bucket also includes Ps.7 million corresponding to Banco Galicia’s foreign debt not tendered by its holders in the exchange offered to restructure such foreign debt, which was completed in May 2004.

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

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia must comply with a maximum limit set by its board of directors for liquidity mismatches. This limit has been established at -25% (minus 25%) for the ratio of cumulative gap to total liabilities within the first year. As shown in the table above, Banco Galicia complies with the established policy, since such gap was 7.5 % as of December 31, 2016.

Banco Galicia (Unconsolidated) Liquidity Management The following is a discussion of Banco Galicia’s liquidity management, excluding the consolidated companies.

Banco Galicia’s policy is to maintain a level of liquid assets that allows it to meet financial commitments at contractual maturity, take advantage of potential investment opportunities, and meet customer’s credit demand. To set the appropriate level, forecasts are made based on historical experience and on an analysis of possible scenarios. This enables management to project funding needs and alternative funding sources, as well as excess liquidity and placement strategies for such funds. As of December 31, 2016, Banco Galicia’s unconsolidated liquidity structure was as follows:

As of December 31, 2016 (in millions of Pesos) Legal Requirement Ps. 56,237.7 Management Liquidity 14,260.7 Total Liquidity (1) Ps. 70,498.4

(1) Excludes cash and due from banks of consolidated companies.

The legal liquidity requirements in the table above correspond to the Minimum Cash Requirements for Peso- and Dollar- denominated liabilities determined by Argentine Central Bank regulations. For more information on the Argentine Central Bank regulations regarding reserve requirements for liquidity purposes, see Item 4. “Information on the Company-Argentine Banking Regulation-Legal Reserve Requirements for Liquidity Purposes”.

The assets included in this calculation are the balances of Peso- and Dollar-denominated deposit accounts at the Argentine Central Bank and escrow accounts held at the Argentine Central Bank in favor of clearing houses.

Management liquidity consists of the following items: (i) 100% of the balance of overnight placements in banks abroad, (ii) 90% of the Lebac balance, (iii) 90% of the market value of available government securities, due to the potential liquidity that might be obtained through sales or repurchase transactions, (iv) net short-term interbank loans (call loans), and (v) 100% of the balance at the Argentine Central Bank, including escrow accounts in favor of clearing houses, in excess of the amounts necessary to cover the Minimum Cash Requirements.

Capital Our capital management policy is designed to ensure prudent levels of capital. The following table analyzes our capital resources as of the dates indicated.

As of December 31, 2016 2015 2014 (in millions of Pesos, except ratios, multiples and percentages) Shareholders’ Equity Ps.20,353 Ps.14,485 Ps.10,246 Shareholders’ Equity as a Percentage of Total Assets 8.40 % 8.96 % 9.55 % Total Liabilities as a Multiple of Total Shareholders’ Equity 10.90 x 10.17 x 9.47 x Tangible Shareholders’ Equity (1) as a Percentage of Total Assets 7.34 % 7.70 % 7.87 %

(1) Tangible shareholders’ equity represents shareholders’ equity minus intangible assets.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents For information on our capital adequacy and that of our operating subsidiaries, see Item 4. “Information on the Company- Selected Statistical Information-Regulatory Capital”.

Capital Expenditures In the course of our business, our capital expenditures are mainly related to fixed assets, construction and organizational and IT system development. In general terms, our capital expenditures are not significant when compared to our total assets.

For a more detailed description of our capital expenditures in 2016 and our capital commitments for 2017, see Item 4. “Information on the Company-Capital Investments and Divestitures”. For a description of financing of our capital expenditures, see “- Consolidated Cash Flows”.

Item 5.E. Off-Balance Sheet Arrangements See Item 5.A. “Operating Results-Off-Balance Sheet Arrangements” and “Operating Results-Off-Balance Sheet Contractual Obligations.”

Item 5.F. Contractual Obligations See Item 5.A. “Operating Results-Contractual Obligations.”

Item 5.G. Safe Harbor These matters are discussed under “Forward-Looking Statements.”

Item 6. Directors, Senior Management and Employees Our Board of Directors Our ordinary shareholders’ meeting took place on April 25, 2017. The following table sets out the members of our Board of Directors as of that date (all of whom reside in Buenos Aires, Argentina), the positions they hold within Grupo Financiero Galicia, their dates of birth, their principal occupations and the dates of their appointment and on which their current terms will expire. Terms expire when the annual shareholders’ meeting takes place.

Principal Member Current Name Position Date of Birth Occupation Since Term Ends Eduardo J. Escasany Chairman June 30, 1950 Businessman April 2005 December 2018 Pablo Gutierrez Vice chairman December 9, 1959 Businessman April 2003 December 2018 Abel Ayerza Director May 27, 1939 Businessman September 1999 December 2017 Federico Braun Director February 4, 1950 Businessman September 1999 December 2019 Antonio R. Garcés Director May 30, 1942 Businessman April 2012 December 2017 Enrique Martin Director October 19, 1945 Businessman April 2006 December 2017 Pedro A. Richards Director Nov 14, 1952 Businessman April 2017 December 2018 Silvestre Vila Moret Director April 26, 1971 Businessman June 2002 December 2019 Daniel A. Llambías Director February 8, 1947 Businessman April 2017 December 2019 Sergio Grinenco Alternate Director May 26, 1948 Banker April 2003 December 2018 Alejandro Rojas Lagarde Alternate Director July 17, 1937 Lawyer April 2000 December 2018 Augusto Rodolfo Zapiola Macnab Alternate Director June 27, 1947 Economist April 2015 December 2018

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The following is a summary of the biographies of the members of our Board of Directors:

Eduardo J. Escasany: Mr. Escasany obtained a degree in economics at the Universidad Católica Argentina. He was associated with Banco Galicia from 1973 to 2002. He was appointed to Banco Galicia’s board of directors in 1975. In 1979, he was elected as the vice chairman and from 1989 to March 21, 2002 he was the chairman of Banco Galicia’s board of directors and its chief executive officer. He was elected as the vice chairman of the Argentine Bankers Association from 1989 to 1993 and the chairman of such association from 1993 to 2002. He was chairman of the Board of Directors from April 2002 to June 2002. In April 2005, he was re-elected as member of the Board of Directors and appointed as chairman in 2010. He is also a lifetime trustee and vice chairman of the Fundación Banco de Galicia y Buenos Aires. He is the chairman of Helena Emprendimientos Inmobiliarios S.A. and regular director in Sociedad Argentina de Energía S.A. and at RMPE Asociados S.A. and an alternate director in RPE Distribución S.A. Mr. Escasany is Mr. Silvestre Vila Moret’s uncle.

Pablo Gutierrez: Mr. Gutierrez obtained a degree in business administration at the Universidad de Buenos Aires. He has been associated with Banco Galicia since 1985, where he served in different positions. In April 2005, he was appointed to the board of directors of Banco Galicia. Mr. Gutierrez is chairman of Tarjetas Regionales, vice president of Sudamericana Holding and Tarjetas del Mar S.A., regular director of CFA, Tarjetas Cuyanas S.A., Tarjeta Naranja S.A. and an alternate trustee of the Fundación Banco de Galicia y Buenos Aires. He was an alternate director of Grupo Financiero Galicia from April 2003 to April 2010 when he was appointed as vice chairman. In April 2012, he was appointed as the vice chairman of Banco Galicia. Mr. Gutierrez is Mr. Abel Ayerza’s nephew.

Abel Ayerza: Mr. Ayerza obtained a degree in business administration at the Universidad Católica Argentina. He was associated with Banco Galicia from 1966 to 2002. Mr. Ayerza is also the chairman of Aygalpla S.A., a lifetime trustee and second vice chairman of the Fundación Banco de Galicia y Buenos Aires and the managing partner of Cribelco S.R.L., Crisabe S.R.L. and Huinca Cereales S.R.L. He has been a member of the Board of Directors since September, 1999. Mr. Ayerza is the uncle of Mr. Pablo Gutierrez.

Federico Braun: Mr. Braun obtained a degree in industrial engineering at the Universidad de Buenos Aires. He was associated with Banco Galicia from 1984 to 2002. Mr. Braun is also the chairman of Patagonia Logística S.A., Campos de la Patagonia S.A., Estancia Anita S.A., Club de Polo Los Pingüinos S.A. and S.A. Importadora y Exportadora de la Patagonia; the vice chairman of Club de Campo Los Pingüinos S.A., Pampa Natural S.A. and Asociación de Supermercados Unidos. He is regular director of Inmobiliaria y Financiera “La Josefina” S.A. and an alternate director of Martseb S.A. He is a member of Asociación Empresaria Argentina and a lifetime trustee of the Fundación Banco de Galicia y Buenos Aires. He has been a member of the Board of Directors since September, 1999.

Antonio Roberto Garcés: Mr. Garcés obtained a degree in national public accounting at the Universidad de Buenos Aires. He has been associated with Banco Galicia since 1959 and with Grupo Financiero Galicia since 2002. In April 1985, he was appointed as an alternate director of Banco Galicia. Subsequently, he was appointed as the vice chairman of Banco Galicia in September 2001, the chairman of the board of directors of Banco Galicia from March 2002 until August 2002, and then the vice chairman from August 2002 until April 2003, when he was elected as the chairman of Banco Galicia’s board of directors until 2011. From 2003 to 2010 he was the chairman of Grupo Financiero Galicia. In April 2012, Mr. Garcés was appointed as a regular director of Grupo Financiero Galicia. He is also a Director of Compañía Financiera Argentina and the trustee of the Fundación Banco de Galicia y Buenos Aires S.A.

C. Enrique Martin: Mr. Martin obtained a degree in law at the Universidad de Buenos Aires. He was a professor at the Universidad de Buenos Aires for more than 20 years and has a post-graduate certificate in international economics from the University of London. He was associated with Banco Galicia from 1977 until 2002 and was responsible for the International Banking Relations Department. Mr. Martin is a senior Advisor to ZEIG S.A. He is also a director of the Argentine-Chilean Chamber of Commerce and an advisor to the Canadian-Argentine Chamber of Commerce. He has been a member of the Board of Directors since April 2006, and in 2012 was appointed as an alternate director of Banco Galicia.

Pedro Alberto Richards: obtained a degree in economics from the Universidad Católica Argentina. He holds a Master of Science in Management from the Sloan School of Management at the Massachusetts Institute of

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Technology. He was the director of the National Development Bank (BANADE). He has been associated with Banco Galicia since 1990. He was a member of the board of directors of Galicia Capital Markets S.A. between 1992 and 1994 and vice chairman of Net Investment between September 2001 and May 2007. Since August 2000, he served as Grupo Financiero Galicia’s managing director and from 2010 as our CEO. Mr. Richards is also Director of Galicia Warrants, chairman of Net Investment, and director of CFA and Galicia Administradora de Fondos S.A. Mr. Richards was an alternate director of Grupo Financiero Galicia from April 2003 until April 2005, when he was appointed as director, a position he occupied until April 14, 2010. He was appointed as director of Grupo Financiero Galicia in April 2017.

Silvestre Vila Moret: Mr. Vila Moret obtained a degree in banking administration at the Universidad Católica Argentina. He was associated with Banco Galicia from 1997 until May 2002. Mr. Vila Moret is also vice chairman of El Benteveo S.A. and Santa Ofelia S.A. He has been a member of the Board of Directors since June 2002. Mr. Vila Moret is the nephew of Mr. Eduardo J. Escasany.

Daniel Antonio Llambías: Mr. Llambías was born on February 8, 1947. He obtained a degree in national public accounting at the Universidad de Buenos Aires. He has been associated with Banco Galicia since 1964. He was elected as an alternate director of Banco Galicia in September 1997 and as a director in September 2001 until August 2009, when he was appointed CEO. Mr. Llambías is a director of Tarjeta Naranja, Tarjetas Regionales, and an alternate trustee of the Fundación Banco de Galicia y Buenos Aires. He was the chairman of ADEBA from April 2016 to April 2017. Mr. Llambías was appointed as a director of Grupo Financiero Galicia in April 2017.

Sergio Grinenco: Mr. Grinenco obtained a degree in economics at the Universidad Católica Argentina and a master’s degree in business administration from Babson College in Wellesley, Massachusetts. He has been associated with Banco Galicia since 1977. He was elected as an alternate director of Banco Galicia in September 2001 and as the vice chairman in April 2003, a position he held until 2011. He is an alternate director of Grupo Galicia since April 2003. Mr. Grinenco is also the chairman of CFA, vice chairman of the Asociación de Bancos Argentina, a regular director of Tarjetas Regionales and an alternate trustee of the Fundación Banco de Galicia y Buenos Aires. In 2012, he was appointed as the chairman of Banco Galicia.

Alejandro María Rojas Lagarde: Mr. Rojas obtained a degree in law at the Universidad de Buenos Aires. He has held a variety of positions at Banco Galicia since 1963. From 1965 to January 2000, he was responsible for the general counsel office of Banco Galicia. He has been an alternate director on the Board of Directors since 2000. He is also a manager of Rojas Lagarde S.R.L., alternate director of Santiago Salud S.A. and lifetime trustee of the Fundación Banco de Galicia y Buenos Aires.

Augusto Rodolfo Zapiola Macnab: Mr. Zapiola Macnab obtained a degree in economics from the Pontificia Universidad Catolica Argentina. He has been associated with Banco Galicia from June 1978 until September 2002. In April 2013, he was elected as an alternate director of Banco Galicia. In April 2015, he was elected as an alternate director on the Board of Directors of Grupo Galicia.

Our Board of Directors may consist of between three and nine permanent members. Currently our Board of Directors has nine members. In addition, the number of alternate directors-individuals who act in the temporary or permanent absence of a director- has been set at three. The directors and alternate directors are elected by the shareholders at our annual general shareholders’ meeting. Directors and alternate directors are elected for a maximum term of three years.

Mr. Sergio Grinenco is also a director of Banco Galicia and Mr. Augusto Rodolfo Zapiola Macnab is also an alternate director of Banco Galicia. In addition, some members of our Board of Directors may serve on the board of directors of any subsidiary.

Five of our directors are members of the families that are the controlling shareholders of Grupo Financiero Galicia.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Our Audit Committee Grupo Financiero Galicia complies with the provisions set forth by the Capital Markets Law and the regulations set forth by the CNV, which require that companies which make a public offering of shares should form an Audit Committee, and develop a charter with regulations for its operation.

Accordingly, the Board of Directors established an Audit Committee with three members. During fiscal year 2016, Messrs. Luis O. Oddone, Antonio R. Garcés and C. Enrique Martin were the members of the Audit Committee, all of whom were considered independent under the CNV and Nasdaq requirements. Messrs. Silvestre Vila Moret, Antonio R. Garcés and C. Enrique Martin are the current members of the Audit Committee. Messrs. Antonio R. Garcés and C. Enrique Martin are considered independent under the CNV and Nasdaq requirements and Mr. Silvestre Vila Moret is not considered independent under such rules. All three members of the Audit Committee are financially literate and have extensive managerial experience. Mr. Oddone was the financial expert during fiscal year 2016, and as of April 25, 2017, Mr. Antonio Garcés is the financial expert serving on our Audit Committee.

According to the CNV rules, the Audit Committee is primarily responsible for (i) issuing a report on the Board of Directors’ proposals for the appointment of the independent auditors and the compensation for the Directors, (ii) issuing a report detailing the activities performed according to the CNV requirements, (iii) issuing the Audit Committee’s annual plan and implementing it each fiscal year, (iv) evaluating the external auditors’ independence, work plans and performance, (v) evaluating the plans and performance of the internal auditors, (vi) supervising the reliability of our internal control systems, including the accounting system, and of external reporting of financial or other information, (vii) following-up on the use of information policies on risk management at Grupo Financiero Galicia’s main subsidiaries, (viii) evaluating the reliability of the financial information to be filed with the CNV and the SEC, (ix) verifying compliance with the applicable conduct rules, and (x) issuing a report on related party transactions and disclosing any transaction where a conflict of interest exists with corporate governance bodies and controlling shareholders. The Audit Committee has access to all information and documentation that it requires and is broadly empowered to fulfill its duties. During 2016, the Audit Committee held eleven meetings.

Our Supervisory Committee Our bylaws provide for a Supervisory Committee consisting of three members who are referred to as syndics (“syndics”) and three alternate members who are referred to as alternate syndics (“alternate syndics”). In accordance with the Corporations Law and our bylaws, the syndics and alternate syndics are responsible for ensuring that all of our actions are in accordance with applicable Argentine law. Syndics and alternate syndics are elected by the shareholders at the annual general shareholders’ meeting. Syndics and alternate syndics do not have management functions. Syndics are responsible for, among other things, preparing a report to shareholders analyzing our financial statements for each year and recommending to the shareholders whether to approve such financial statements. Alternate syndics act in the temporary or permanent absence of a syndic. Currently, there are three syndics and three alternate syndics. Syndics and alternate syndics are elected for a one-year term.

The following table shows the members of our Supervisory Committee. Each of our syndics was appointed at the ordinary shareholders’ meeting held on April 25, 2017. Terms expire when the annual shareholders’ meeting takes place or as set forth below.

Principal Current Name Position Occupation Term Ends Norberto Corizzo Syndic Accountant December 2017 José Luis Gentile Syndic Accountant December 2017 Enrique M. Garda Olaciregui Syndic Lawyer December 2017 Miguel Armando Alternate Syndic Lawyer December 2017 Fernando Noetinger Alternate Syndic Lawyer December 2017 Horacio Tedín Alternate Syndic Lawyer December 2017

The following is a summary of the biographies of the members of our Supervisory Committee:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Norberto Corizzo: Mr. Corizzo obtained a degree in national public accounting at the Universidad de Buenos Aires. He has developed taxes activities in companies such as López González Raimondi y Asoc., Noel y Cía and Price Waterhouse. He has been syndic at Grupo Financiero Galicia since April 2003. He has been associated with Banco Galicia since 1977 up to June 2002 performing positions related to tax and internal audit. Mr. Corizzo is also a syndic of Banco Galicia, EBA Holding, Tarjetas Regionales, Cobranzas Regionales S.A., Tarjeta Naranja, Tarjetas Cuyanas and of other subsidiaries of Banco Galicia and Grupo Financiero Galicia.

José Luis Gentile: Mr. Gentile obtained a degree in national public accounting at the Universidad de Buenos Aires. He has provided services to Grupo Financiero Galicia since 1999 up to March 2017, when he was Chief Financial Officer. He was elected as a syndic of Banco Galicia and Grupo Financiero Galicia since the shareholders’ meetings held on April 25, 2017. Additionally, he is a syndic of Galicia Valores and Galicia Warrants, and an alternate syndic of Cobranzas Regionales and Tarjeta Naranja, and a member of the board of directors of Electrigal, Galicia Seguros and of other subsidiaries of Banco Galicia and Grupo Financiero Galicia.

Enrique M. Garda Olaciregui: Mr. Garda Olaciregui obtained a degree in law at the Universidad del Salvador. He has a master in Finances at Universidad del CEMA and a degree in Corporate Law at Universidad Austral. He has been associated with Banco Galicia since 1970. He served as legal advisor to Banco Galicia between September 2001 and April 2003. He has provided services as a Secretary Director between April 2003 and April 2010, when he was designated as regular syndic of Banco Galicia. Additionally, he is a regular syndic at Tarjetas Regionales, CFA, Galicia Seguros, Galicia Valores, Galicia Warrants, Sudamericana Holding and other subsidiaries of Banco Galicia and Grupo Financiero Galicia.

Miguel Armando: Mr. Armando obtained a degree in law at the Universidad de Buenos Aires. He was first elected as an alternate syndic of Banco Galicia in 1986. He also acted as an alternate syndic of Grupo Financiero Galicia between 1999 and January 2009 at which point he became a regular syndic until April 2009, at which time he was reelected as an alternate syndic of Grupo Financiero Galicia. He is the vice chairman of Arnoar S.A. and a member of the board of directors of Santiago de Compostela Promotora de Seguros S.A. Mr. Armando is also a syndic of EBA Holding S.A. and an alternate syndic of Banco Galicia, Galicia Valores, Tarjetas Regionales, Tarjeta Naranja and Tarjetas Cuyanas, among others.

Fernando Noetinger: Mr. Noetinger obtained a degree in law at the Universidad de Buenos Aires. He has been associated with Banco Galicia since 1987. He was and has been an alternate syndic of Grupo Financiero Galicia from September 1999 to June 2002 and from April 2006 to date. Mr. Noetinger is also chairman of Arnoar S.A. and Doña Ines S.A., and an alternate syndic of EBA Holding S.A., Electrigal S.A., Tarjetas Regionales, Galicia Warrants, Galicia Valores, Banco Galicia, Galicia Retiro, Galicia Seguros, Sudamericana and Net Investment, among others.

Horacio Tedín: Mr. Tedín obtained a degree in law at the Universidad de Buenos Aires. In 1981 he founded his own law firm, which has actively worked for Banco Galicia and other big corporate clients. Mr. Tedín has been an alternate syndic of Grupo Financiero Galicia since 2006. He is also a syndic of Teruel Mandataria S.A., Santiago de Compostela Promotora de Seguros S.A. and Electrigal S.A. and an alternate syndic of EBA Holding S.A., CFA, among others.

Compensation of Our Directors Compensation for the members of the Board of Directors is considered by the shareholders at the shareholders’ meeting once the fiscal year has ended. Directors are paid an annual fee based on the functions they carry out and they may receive partial advance payments during the year. At the ordinary shareholders’ meeting held on April 25, 2017 the compensation for the Board of Directors was set at Ps.20,093,234 for the fiscal year ending on December 31, 2016. For a description of the amounts to be paid to the board of directors of Banco Galicia, see “—Compensation of Banco Galicia’s Directors and Officers” below.

We do not maintain a stock-option, profit-sharing or pension plan for the benefit of our directors.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents We do not have a policy establishing any termination benefits for our directors.

Management of Grupo Financiero Galicia Our organizational structure consists of a chief executive officer (“CEO”) who reports to the Board of Directors, and the Chief Financial Officer who reports to the CEO and is in charge of the Financial and Accounting Division.

The CEO´s main function consists of implementing the policies defined by the Board of Directors, as well as suggesting to the Board of Directors the application of plans, budgets and company organization. He is also responsible for supervising the Financial and Accounting Division and assessing the attainment of performance goals of Grupo Financiero Galicia. The position also takes part in the Board of Directors of some subsidiaries.

Our CEO is Mr. Pedro Alberto Richards. For his biography please see Item 6, “Our Board of Directors”.

Our CFO is Mr. José Luis Ronsini, who was born on November 29, 1971. He obtained a degree in national public accounting from the Universidad Católica Argentina. He holds a Master of Finance from the Universidad del Cema, and attended the Senior Management Program at the Universidad de San Andrés. He has been associated with Banco Galicia since 2001. He previously served as the Chief Credit Risk Auditor, responsible for complementary societies, Tarjetas Regionales S.A., and Galicia Administradora de Fondos S.A. Mr. Ronsini has served as General Accountant of Banco Galicia since 2012.

The Financial & Accounting Division is mainly responsible for the assessment of investment alternatives, thus suggesting whether to invest or withdraw Grupo Financiero Galicia’s positions in different companies or businesses. It also plans and coordinates Grupo Financiero Galicia’s administrative services and financial resources in order to guarantee its proper management. This division also aims at meeting requirements set by several controlling authorities, complying with information and internal control needs and budgeting purposes. Furthermore, it includes functions aimed at planning, preparing, coordinating, controlling and providing financial information to the stock exchanges where Grupo Financiero Galicia’s shares are listed, regulatory bodies and both domestic and international investors and analysts. It facilitates the provision of materials and responses to questions sent by shareholders and investors in general through a specifically designed “contact us”, located in our web page.

Our compensation policy, which is essentially the same as the policy followed by the companies that we control, consists of arranging salary levels in order of importance based on a system that describes and assesses job positions based on objective factors (the Hay System). The purpose of such system is to pay compensation that is similar to the compensation that is paid for a similar position in the domestic market. Managers who are our employees or our controlled companies’ employees receive a fixed salary and may receive a bonus based on individual performance. This policy for compensation includes the possibility of having access to retirement insurance. We do not maintain stock-option, profit-sharing or pension plans or any other retirement plans for the benefit of our managers.

We have established a Disclosure Committee in response to the U.S. Sarbanes-Oxley Act of 2002. The main responsibility of this committee is to review and approve controls over the public disclosure of financial and related information, and other procedures necessary to enable our chief financial officer and CEO to provide their certifications of our annual report that is filed with the SEC. The members are Messrs. Pedro A. Richards, José Luis Ronsini, Adrián Enrique Pedemonte and Ms. Mariana Saavedra. In addition, at least one of the members of this committee attends all the meetings of our principal subsidiaries’ disclosure committees.

Board of Directors of Banco Galicia At the ordinary shareholders’ meeting held on April 27, 2017, the size of Banco Galicia’s board of directors was set at seven members and three alternate directors. The following table sets forth the members of Banco Galicia’s board of directors as of April 27, 2017, all of whom are residents of Buenos Aires, Argentina, the position currently held by each of them, their dates of birth, their principal occupations, the dates of their appointment and the year in which their current terms will expire. The business address of the members of the Banco Galicia’s board of directors is Tte. General J. D. Perón 430, 24th floor (C1038AAI) Buenos Aires, Argentina.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Date of Principal Member Current Name Position Birth Occupation Since Term Ends Sergio Grinenco Chairman of the Board May 26, 1948 Banker April 2012 December 2019 Raúl Héctor Seoane Vicechairman July 18, 1953 Economist April 2012 December 2019 Guillermo J. Pando Secretary Director October 23, 1948 Banker April 2003 December 2019 María Elena Casasnovas Director May 10, 1951 Lawyer April 2016 December 2018 Juan Carlos L’Afflitto Director September 15, 1958 Accountant April 2016 December 2018 Pablo M. Garat (1) Director January 12, 1953 Lawyer April 2004 December 2018 Ignacio A. González (1) Director April 23, 1944 Accountant April 2010 December 2018 Enrique García Pinto (2) Alternate Director August 10, 1948 — April 2009 December 2017 Cirilo E. Martin Alternate Director October 19, 1945 Lawyer April 2012 December 2017 Augusto R. Zapiola Macnab Alternate Director June 27, 1947 Economist April 2013 December 2018

(1) In accordance with the rules of the CNV, and pursuant to the classifications adopted by the CNV, Messrs. Garat and González are independent and were reelected at the ordinary shareholders’ meeting held on April 15, 2013. Messrs. Garat and González are also independent directors in accordance with the Nasdaq rules. (2) In accordance with the rules of the CNV, and pursuant to the classifications adopted by the CNV, Mr. García Pinto is an independent alternate director. He would replace the independent directors in case of vacancy. He is also an independent director in accordance with the Nasdaq rules.

The following are the biographies of the members of the board of directors of Banco Galicia:

Sergio Grinenco: See “-Our Board of Directors”.

Raúl Héctor Seoane: Mr. Seoane obtained a degree in economics from the Universidad de Buenos Aires. He has been associated with Banco Galicia since 1988. Mr. Seoane was first elected as an alternate director of Banco Galicia from 2005 until December 2011, and in April 2012 was elected as a director. He is also a vice chairman of CFA and Distrocuyo S.A. and an alternate trustee of Fundación Banco de Galicia y Buenos Aires.

Guillermo Juan Pando: Mr. Pando has been associated with Banco Galicia since 1969. He was first elected as an alternate director of Banco Galicia from September 2001 until June 2002, and in April 2003 he was elected as a director. He is also the chairman of Santiago Salud S.A. and Distrocuyo S.A., vice chairman of Electrigal S.A., a director of CFA and an alternate trustee of Fundación Banco de Galicia y Buenos Aires.

María Elena Casasnovas: Mrs. Casanovas has been associated with Banco Galicia since 1972. She obtained a degree in law from the Universidad Católica Argentina. She completed the Program for High Management at Universidad Torcuato Di Tella and the Senior Management Program at Universidad San Andrés.

Juan Carlos L’Afflitto: Mr. Afflitto has been associated with Banco Galicia since 1986. He has an accounting degree from the Universidad de Buenos Aires. He worked as advisor and accountant at Morgan, Benedit y Asociados and until 1990 he was a professor at the Universidad Católica Argentina.

Pablo María Garat: Mr. Garat has been associated with Banco Galicia as an independent director since April 2004. He has a degree in law at the Universidad de Buenos Aires. Mr. Garat has been an official representative of the Province of Tierra del Fuego and an advisor to the Argentine Senate, and he currently develops its professional independent activity at his own law firm and is a professor at the University of Constitutional Law and Constitutional Tributary Law.

Ignacio Abel González: Mr. González obtained a degree in national public accounting at the Universidad de Buenos Aires and a master in Auditing at Drew University, New Jersey. Previously, he served as a Member of the International Committee of Finance & Value Sharing, PricewaterhouseCoopers. He was appointed as director of

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia at the shareholders’ meeting held on April 14, 2010. He is also syndic of Sociedad Anónima La Nación, La Nación Nuevos Medios, Publirevistas S.A., Pampa Natural S.A., Sociedad Anónima Importadora y Exportadora de la Patagonia, Banelsip S.A. and Banelco S.A. and the founder and president of P.O.D.E.R (Polo de Desarrollo Educativo Renovador).

Enrique García Pinto: Mr. García Pinto has been associated with Banco Galicia since 1970. Previous to such time he served at Nobleza Piccardo SAYCYF and Saturno Agropecuaria SCA. Mr. García Pinto was appointed as an alternate director of Banco Galicia at the shareholders’ meeting held on April 28, 2009. He is also vice chairman of Teruel Mandataria S.A. and director of Distrocuyo S.A.

Cirilo Enrique Martin: See “-Our Board of Directors”.

Augusto Rodolfo Zapiola Macnab: See “-Our Board of Directors”.

Functions of the Board of Directors of Banco Galicia Banco Galicia’s board of directors may consist of three to nine permanent members. In addition, there can be one or more alternate directors who can act during the temporary or permanent absence of a director. As of the date of this annual report, none of the directors were also employees.

Banco Galicia’s board of directors meets formally twice each week and informally on a daily basis, is in charge of Banco Galicia’s general management and makes all the necessary decisions. Members of Banco Galicia’s board of directors serve on the following committees:

Risk and Capital Allocation Committee: This Committee is composed of four Directors, the Chief Executive Officer, the Risk Management and Planning Division Managers. It is in charge of analyzing and approving capital allocations, establishing risk policies and monitoring the Bank’s risks. The Committee meets at least once every two months. Its resolutions are summarized in writing in minutes.

High Credit Committee: This Committee is composed of four Directors, the Chief Executive Officer, the Credit Division Manager and the Wholesale Banking Manager. It is in charge of approving and granting ratings and loans to high risk customers and groups. The Committee meets at least once a week. Approved operations are recorded in chronologically numbered spreadsheets.

Low Credit Committee: This committee is composed of two Directors, the Chief Executive Officer and the Credit Division Manager. The Committee is responsible for approving and mandating the standards and approval requirements for client operations and medium-risk groups within Banco Galicia. The Committee meets at least twice a week. Approved operations are recorded in chronologically numbered spreadsheets.

Information Technology Committee: This committee is composed of three Directors, the Chief Executive Officer and the Comprehensive Corporate Services Division Manager. This Committee is in charge of supervising and approving the development plans of new systems and their budgets, as well as supervising these systems’ budget control. It is also 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 the policies established by the Board of Directors. The Information Technology Committee meets at least once every six months. It can hold extraordinary meetings in case there is any issue that requires urgent consideration. Its resolutions are summarized in writing in minutes.

Audit Committee: In accordance with the Argentine Central Bank’s regulations, Banco Galicia formed an Audit Committee composed of two Directors and the Internal Audit Manager. The Committee is in charge of supervising the adequacy and conformity, as well as the effective functioning of the internal control systems so as to ensure compliance with all the Bank’s rules submitted to the Argentine Central Bank and the self-regulated entities of the capital market. The Committee meets at least once a month. Its resolutions are entered in minutes, which are transcribed in signed books.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Committee for the Control and Prevention of Money Laundering and Funding of Terrorist Activities: It is composed of four Directors, the Chief Executive Officer, the Compliance and Prevention of Money Laundering Manager, the Internal Audit Manager, and the Managers of the following Divisions: Risk Management, Financial, Wholesale Banking, Retail Banking and Comprehensive Corporate Services. The Financial Division Manager is the officer in charge of financial intermediation transactions. The Syndics can be invited to attend any meeting called by this Committee. This Committee is responsible for planning, coordinating and enforcing compliance with the policies on the issue established and approved by the Board of Directors. The Committee meets at least once per quarter. Resolutions must be registered in a minutes book.

Disclosure Committee: It is composed of three Directors, the Chief Executive Officer and the Planning Division Manager. The Syndics can be invited to attend any meeting called by this Committee. A member of the Committee that was created for the same purpose by Grupo Financiero Galicia S.A. shall also attend the meetings held by this Committee. This Committee is in charge of promoting compliance with the provisions set forth in the Sarbanes-Oxley Act of 2002 of the United States of America. The Committee meets at least every three months or whenever there are issues that require consideration. Its resolutions are summarized in writing in minutes.

Human Resources and Governance Committee: It is composed of two Directors, the Chief Executive Officer, and the Organizational Development and Human Resources Manager. This Committee is responsible for presenting a succession plan for the Chief Executive Officer and the Division Manager positions, analyzing and establishing the compensation for the Chief Executive Officer and Division Managers, and monitoring the performance matrix of Division Managers and Department Managers. The Committee meets every two months or whenever there are issues that require urgent consideration. Its resolutions are summarized in writing in minutes.

Asset and Liabilities Committee (ALCO): Three Directors, the Chief Executive Officer, the Retail Banking Manager, the Wholesale Banking Manager, the Financial Division Manager, the Risk Management Division Manager and the Planning Division Manager are members of this Committee. It is in charge of fund raising and different asset allocations. Moreover, this Committee is in charge of the follow-up and control of liquidity, interest-rate and currency gaps. The Committee meets at least once a month. Its resolutions are summarized in writing in minutes.

Planning and Management Control Results Reporting Committee: This committee is composed of five directors, the CEO, the Risk Management Division manager, the Planning Division manager and the Internal Audit Department manager. The syndics can be invited to attend any meeting called by this committee. This committee is responsible for monitoring management, reviewing financial results and evaluating the macroeconomic situation. It is also responsible for the analysis, definition and follow-up of the consolidated balance sheet and income statement, as well as approving, with the participation of the Human Resources Manager, the compliance indexes that will be used in the staff evaluation process and in the budget for annual incentives. This committee meets at least once every three months. Its resolutions are summarized in writing and signed by two of the above-mentioned officers.

Strategy and New Businesses Committee: This Committee is composed of three Directors, the Chief Executive Officer, the Planning and Risk Management Division Managers. It is in charge of analyzing new businesses. The Committee meets at least once every two months. It can hold extraordinary meetings in case there is any issue that requires urgent consideration. Its resolutions are summarized in writing in minutes.

Liquidity Crisis Committee: This Committee is composed of three Directors and the Chief Executive Officer. The Committee may call those officers whose participation is deemed relevant. It is in charge of evaluating the situation upon facing a liquidity crisis and deciding the steps to be implemented to tackle it. The Committee shall meet when convened by the Board of Directors and shall hold sessions as may be required until the liquidity crisis ends. Its resolutions are summarized in writing in minutes.

Income Statement Reporting Committee: It is composed of five Directors, the Chief Executive Officer and the Planning Division Manager. It is in charge of monitoring management and income statements, as well as evaluating the macroeconomic situation. The Committee meets at least once per quarter. Its resolutions are summarized in writing in minutes.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Every month, the Board of Directors learns about the decisions taken by these Committees, what is written down in minutes.

Banco Galicia’s Executive Officers On October 7, 2015, Mr. Fabian Enrique Kon, was appointed as the CEO of Banco Galicia to succeed Mr. Daniel Llambías effective as of April 4, 2016. The designation was determined by the Bank’s board of directors. The CEO is in charge of implementing the strategic goals established by the Board of Directors of Banco Galicia. Likewise, he coordinates the managers of Banco Galicia’s divisions, while reporting to Banco Galicia’s board of directors.

Fabián Enrique Kon: Mr. Kon was born on September 25, 1958. He obtained a degree in national public accounting at the Universidad de Buenos Aires. He worked at Pistrelli, Diaz y Asociados, Accenture, Exolgan Container Terminal and Tradecom, in managerial positions. From 2006 to February 2014, he was Galicia Seguros’ CEO and in March 2014, he was appointed Banco Galicia´s retail banking manager. Mr. Kon is also the chairman of Sudamericana Holding S.A., vice chairman of Tarjetas del Mar and Tarjetas Regionales, director of Tarjetas Cuyanas and Tarjeta Naranja, and an alternate director of Net Investment.

As of the date of this annual report, the following divisions and department managers report to Banco Galicia’s CEO:

Division Manager Retail Banking German Alejandro Ghisoni Wholesale Banking Sebastián Pujato Financial Pablo María León Risk Management Diego Rivas Credit Marcelo Poncini Comprehensive Corporate Services Gastón Bourdieu Organizational Development and Human Resources Rafael Pablo Bergés Strategic Planning Bruno Folino Customer Experience Flavio Dogliolo

Retail Banking Division: This division is responsible for designing, planning and implementing the vision, strategies, policies and goals for the Retail Banking’ businesses and for each customer segment (Private Banking, EMINENT, Prefer Banking, Consumer Banking, and Micro- and Small-Sized Companies) and the distribution channels (Branch Network and Alternative Channels). It is also responsible for defining and controlling of the division’s business goals, ensuring that these goals competitively meet market demands and remain in line with the Bank’s strategic objectives, guaranteeing sales volume, profitability, quality and customer satisfaction, while managing risk levels. This division proposes and develops the advertising plan, banking products for the consumer segment, and works with the Wholesale Banking Division to develop a customer service model tailored by segment and ensuring that growth, profitability and customer service targets are met. The following departments report to this division: Private Banking, Channels; Marketing; Branches; Retail Banking Planning; and Digital.

Wholesale Banking Division: This division is responsible for designing, planning and implementing the vision, strategies, policies and goals for the Wholesale Banking’ businesses and for each customer segment (corporate, medium-sized, and agricultural companies) and products. It is also responsible for defining and controlling the division’s business goals, ensuring that these goals competitively meet market demands and remain in line with the Bank’s strategic objectives, guaranteeing sales volume, profitability, quality and customer satisfaction, while managing risk levels. This division proposes and develops banking products for the corporate segment, and works with the Retail Banking Division to develop a customer service model tailored by segment, ensuring that growth and profitability targets are met. The following departments report to this division: Corporate Banking; Companies Segment; Agribusiness Segment; Middle-market Banking Centers (“CBE”); Wholesale Products and Marketing, Capital Markets and Investment Banking.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Financial Division: This division is responsible for designing, planning and implementing the vision, strategies, policies and goals for the Treasury Division, to ensure the provision of funding, complying with mismatch policies, and attaining liquidity targets, while optimizing performance and ensuring the achievement of the Bank’s business goals with respect to volume and profitability. Furthermore, it is in charge of managing the financial position of the Bank, negotiating rates, funds, incentives and campaigns with different areas, and providing regulatory, information and technical support for the management of assets and liabilities, aiming to guarantee the control of liquidity, rate, currency and market risks and the compliance with applicable legal and policy provisions. In addition, this division plans, proposes and implements the strategy for the development and maintenance of business relations with international banks, international entities, international mutual funds and bi-national clearing houses with the aim of enhancing the Bank’s image in international markets and ensuring the efficiency of business operations based on the growth and profitability targets established by the organization. The following departments report to this division: Commercial, Products, Financial Institutions, Information Support and Management, and Public Sector.

Risk Management Division: This division is responsible for monitoring and actively managing the various risks faced by Banco Galicia (credit, financial and operational) and its subsidiaries, while monitoring efficiency and compliance with control procedures with a focus on prevention of, categorizing and measuring risks. This division is also responsible for the monitoring and oversight of compliance with policies on control and prevention of money laundering and funding of terrorist activities in order to minimize any potential reputational risks. The following departments report to this division: Market and Liquidity Risk, Operational Risk, Credit Risk, Capital Management and Model Manufacturing.

Credit Division: This division is responsible for developing and proposing strategies for credit and credit-granting policies, as well as managing and monitoring credit origination processes, follow-up and control thereof, and the recovery of past-due loans, with the goal of ensuring the quality of the loan portfolio, controlling costs (including time spent on a particular matter), and recovery optimization, thus minimizing loan losses and optimizing efficiency in processes and business credit granting. The following departments report to this division: Retail Credit; Wholesale Credit; Portfolio Recovery; Consumer Credit Recovery; Credit Strategy and Planning; Policies; and Portfolio Analysis and Management.

Comprehensive Corporate Services Division: This division is responsible for designing, planning and implementing the strategies and policies for the IT, Organization, Operations, Purchase of Goods and Services and Infrastructure divisions, and the maintenance thereof. It is also responsible for Banco Galicia’s physical safety and information, both ensuring and maintaining logistic support for its operations and activities by means of a functional coordination of all of the Bank’s services, and optimizing the human and technological resources available to the Bank. This division is responsible for developing and proposing innovations and new solutions with resepct to business processes, and preparing the expense and investment budget. In addition, it provides legal advice to different sectors of Banco Galicia to conduct business in accordance with applicable regulations. The following departments report to this division: Operations, IT, Organization, Engineering and Maintenance, Information Security, Management and Security, and Legal Advice.

Organizational Development and Human Resources Division: This division is responsible for designing, planning and implementing human resources strategies and policies, as well as defining and controlling management goals of the Bank’s human resources to ensure standardized practices, availability of qualified and motivated personnel, and a proper work environment, in accordance with applicable employment legislation and with the Bank’s cultural patterns and values. It is also responsible for dictating corporate social responsibility activities and the internal communication, with the purpose of enhancing the Bank’s image with focus on social responsibility, promoting employee loyalty, and applying social marketing to cement the Bank’s competitive advantage. The following departments report to this division: Sustainability; Internal Communications and Culture; Human Resources Management; Talent Management; Compensation; and Human Resources Advisory.

Strategic Planning: This division is responsible for planning, coordinating and controlling the development and maintenance of budget, planning, and accounting and tax activities, with the aim of providing management with relevant information to facilitate its decision-making processes, management control, and also is responsible for compliance with disclosure requirements, as well as guaranteeing the availability of information allowing the Bank to obtain strategic, long-term financing. It is also in charge of planning and ensuring compliance with required

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents liquidity levels, interest rates and currency mismatches strategies, formulating proposals to the Asset and Liabilities Committee (“ALCO”) related to the management of such mismatches in order to maximize profitability in conformity with the Bank’s policies. The following departments report to this division: Accounting; Assets and Liabilities Management; Management Control; Tax Advisory; Research, Consolidation and Analysis.

Customer Experience: This division is responsible for developing, throughout the organization, a customer-oriented culture, designed to gain a competitive advantage in the financial services market. The following departments report to this division: NPS Operation, Customer’s Vision, Initiatives, and Analysis and Indicators.

The following departments report to the board of directors of Banco Galicia:

Department Manager Internal Audit Omar Severini Compliance and Prevention of Money Laundering Teresa del Carmen Piraino

Internal Audit Department Division: This department division is responsible for assessing and monitoring the effectiveness of internal control systems with the purpose of ensuring compliance with applicable laws and regulations.

Compliance and Prevention of Money Laundering Department Division: This department division is responsible for coordinating and monitoring compliance with the policies established by the board of directors of Banco Galicia with respect to control systems and prevention of money laundering and funding of terrorist activities in order to minimize any potential reputational risks, thus ensuring compliance with applicable regulations and international standards. It is in charge of planning and assessing the information used by different departments within the division to ensure policy compliance. Such information is included in the reports issued by the division to the rest of the organization and certain national and international regulatory agencies,

The following departments report to the CEO:

Department Manager Institutional Relations Department Pablo Eduardo Firvida

Institutional Relations Department Division: This department division is responsible for creating and implementing institutional communication strategies and policies, as well as managing and controlling activities and relations with the press and the media and providing advice to other departments on these issues, with the goal of ensuring adequacy of responses, securing a presence and the advocating for the Bank’s interests in the media, while strengthening the Bank’s institutional image. The Investor Relations Department reports to this division.

The following are the biographies of Banco Galicia’s senior executive officers mentioned above and not provided in the sections “-Board of Directors of Banco Galicia” or “-Our Board of Directors” above.

Germán Alejandro Ghisoni: Mr. Ghisoni was born on May 6, 1967. He obtained a degree in business management at the Universidad Católica Argentina. He completed the Program for Executive Development at IAE (Instituto Argentino de Empresas), the Strategic Management in Banking Program at INSEAD and the Customer Centric Organitatios at Kellogg School of Management. He has been associated with Banco Galicia since 1995.

Juan Sebastián Pujato: Mr. Pujato was born on October 6, 1961. He obtained a degree in industrial engineering at the Universidad de Buenos Aires. He completed two Programs for Executive Development at IAE and at IMD, Switzerland. He has been associated with Banco Galicia since 1992 as assistant director of Credit Cards and Consumption, he seconded the Marketing Division and was manager of the Consumption Department until March 2008. He is also an alternate director of Tarjetas Regionales S.A.

Pablo M. Leon: Mr. Leon was born on August 31, 1964. He obtained a degree in finance at the Universidad de Palermo and two PDF (Programs for Executive Development) at IAE (Instituto Argentino de Empresas) and

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents IMD, Lausanne, Switzerland. He has been associated with Banco Galicia since 1987. He is also the chairman of Galicia Valores and director of Argenclear S.A.

Marcelo Poncini: Mr. Poncini was born on November 11, 1961. He obtained a degree in business administration at the Universidad de Morón. He has been associated with Banco Galicia since 1987.

Gastón Bourdieu: Mr. Bourdieu was born on August 31, 1956. He obtained a degree in agricultural administration at UADE University. He has been associated with Banco Galicia since 1981 as a member of the young professional program in the Credit Division. He is a director of Galicia Warrants, an alternate director of Tarjetas Regionales, director of Maradona S.A. and Sullair Argentina S.A.

Rafael Pablo Bergés: Mr. Bergés was born on September 10, 1963. He obtained a degree in industrial engineering. He has been associated with Banco Galicia since August 2010. Prior to such time, he worked at Techint and at a several multinational companies in managerial positions. From 1998 to 2009 he was vice president in the Human Resources Division of Grupo Telefónica.

Bruno Folino: Mr. Folino was born on February 23, 1966. He has an accounting degree from the Universidad de Buenos Aires. He completed a post-graduate degree in Tax & Legal at the Universidad Austral and Master in Science of Management Sloan at GSB Stanford University. He started his career in Price Waterhouse & Co at the Auditing Department, and later, at the Tax & Legal Department. He has been associated with Banco Galicia since 1997 as Tax Manager and Planning Manager. In 2012 he was appointed Planning Manager and was appointed Director of Tarjetas Regionales at the meeting held on April 9, 2015.

Flavio Dogliolo: Mr. Dogliolo was born on March 13, 1965. He obtained a degree in business administration from the Universidad Católica Argentina. He received an MBA from the Universidad Austral. He was the manager of means of payments and automatic banking at Banco Bansud S.A., manager of quality and service productivity at Banco Río de la Plata S.A. and he worked in marketing database and commercial planning at Siembra AFJP S.A. He has been associated with the Bank since 1998. He is vice chairman of Procesadora Regional, a director of Tarjetas Cuyanas and Compañía Financiera Argentina, and an alternate director of Tarjeta Naranja.

Omar Severini: Mr. Severini was born on July 30, 1958. He obtained a degree in national public accounting from the Universidad de Belgrano. He has been associated with Banco Galicia since 1978.

Teresa del Carmen Piraino: Ms. Piraino was born on April 6, 1971. She obtained a degree in national public accountant. She has been associated with Banco Galicia since 1992.

Pablo Eduardo Firvida: Mr. Firvida was born on March 17, 1967. He obtained a degree in industrial engineering at the Universidad de Buenos Aires. He has been associated with Banco Galicia since 1996.

Banco Galicia’s Supervisory Committee Banco Galicia’s bylaws provide for a Supervisory Committee consisting of three syndics and three alternate syndics. Pursuant to Argentine law and to the provisions of Banco Galicia’s bylaws, Banco Galicia’s syndics and alternate syndics are responsible of ensuring that all of Banco Galicia’s actions are in accordance with applicable Argentine law. Syndics and alternate syndics do not participate in business management and cannot have managerial functions of any type. Syndics are responsible for, among other things, the preparation of a report to the shareholders analyzing Banco Galicia’s financial statements for each year and the recommendation to the shareholders as to whether to approve such financial statements. Syndics and alternate syndics are elected at the ordinary shareholders’ meeting for a one-year term and they can be re-elected. Alternate syndics act in the temporary or permanent absence of a syndic.

The table below shows the composition of Banco Galicia’s Supervisory Committee as they were re-elected by the annual shareholders’ meeting held on April 27, 2017.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Year of Principal Name Appointment Position Occupation Current Term Ends Enrique M. Garda Olaciregui 2017 Syndic Lawyer December 31, 2017 Norberto D. Corizzo 2017 Syndic Accountant December 31, 2017 José Luis Gentile 2017 Syndic Accountant December 31, 2017 Fernando Noetinger 2017 Alternate Syndic Lawyer December 31, 2017 Miguel N. Armando 2017 Alternate Syndic Lawyer December 31, 2017 Horacio Tedín 2017 Alternate Syndic Lawyer December 31, 2017

For the biographies of Messrs. Enrique M. Garda Olaciregui, Norberto D. Corizzo, José Luis Gentile, Fernando Noetinger and Miguel N. Armando and Horacio Tedín, see “-Our Supervisory Committee”.

Compensation of Banco Galicia’s Directors and Officers Banco Galicia’s board of directors establishes the policy for compensation of Banco Galicia’s personnel. Banco Galicia’s managers receive a fixed compensation. Seven directors are not employees of Banco Galicia. These non-employee directors, receive a fixed compensation, provided that payments do not exceed the standard levels of similar entities in the Argentine financial market, a provision that is applicable to managers as well. The Officers’ compensation regime includes the possibility of acquiring a retirement insurance policy. Banco Galicia does not maintain stock-option plans or pension plans or any other retirement plans for the benefit of its directors and managers. Banco Galicia does not have a policy establishing any termination benefits for its directors.

For fiscal year 2016, Banco Galicia’s ordinary shareholders’ meeting held on April 27, 2017, approved compensation for the directors in the total amount of Ps.12.9 million.

Employees The following table shows the composition of our staff:

As of December 31, 2016 2015 2014 Grupo Financiero Galicia S.A. 6 6 6 Banco de Galicia y Buenos Aires S.A. 5,799 5,573 5,374 Branches 2,790 2,690 2,614 Head Office 3,009 2,883 2,760 Galicia Uruguay — 2 2 Regional Credit Card Companies 4,571 5,040 5,232 CFA(*) 1,164 1,161 1,112 Sudamericana Consolidated 374 307 242 Other Subsidiaries 42 42 44 Total 11,956 12,128 12,012

(*) Includes Cobranzas y Servicios S.A.

Within the current legal framework, membership in an employee union is voluntary and there is only one union of bank employees with national representation. As of December 31, 2016, approximately 32% of Banco Galicia’s employees were affiliated with the national bank employee union. As of December 31, 2016, approximately 96.4% of the Regional Credit Card Companies’ work force was party to the merchant union’s Collective Bargaining Agreement No. 130/75 applicable to trade employees, 7.9% of which were members of a labor union and 0.05% of which were labor union representatives. As of December 31, 2016, approximately 10% of CFA’s employees were affiliated with the merchant union. Usually during the first four months of the year, the bank employee union and the national commerce employee union renegotiate their respective collective labor agreements in order to establish new minimum wages. As a result of such negotiations, salary increases are granted. In 2016, the Argentine union that represents employees in the banking sector declared general strikes. These strikes were not particular to any one bank, but rather affected all banks in Argentina to the extent that some or all of the employees of any given bank were members of such union. In connection with such strikes, certain of the employees of the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Bank are members of the referenced union and did participate in the strike; however, the Bank was able to continue its operations during the course of such strikes as not all of its employees participated. While employees of Banco Galicia have participated in general strikes against the Argentine banking sector, Banco Galicia has not experienced a targeted strike by its employees against the Bank in particular since 1973 and the Regional Credit Card Companies and CFA have never experienced any strike event. We believe that our relationship with our employees has developed within normal and satisfactory parameters.

We have a human resources policy that aims at providing our employees possibilities for growth and personal and socio- economic achievement. We will continue our current policy of monitoring both wage levels and labor conditions in the financial industry in order to be competitive. Our employees receive fixed compensation and may receive variable compensation according to their level of achievement. We do not maintain any profit-sharing programs for our employees.

The Fundación Banco de Galicia y Buenos Aires (the “Fundación”) is an Argentine non-profit organization that provides various services to Banco Galicia employees. The various activities of the Fundación include, among others, purchasing school materials for the children of Banco Galicia’s employees and making donations to hospitals and other charitable causes, including cultural events. The Fundación is managed by a Council, certain members and alternate members of which are members of our Board of Directors and supervisory committee. Members and alternate members of the Council do not receive remuneration for their services as trustees.

Nasdaq Corporate Governance Standards Pursuant to Nasdaq Marketplace Rule 5615(a) (3), a foreign private issuer may follow home country corporate governance practices in lieu of the requirements of the Rule 5600 Series, provided that the foreign private issuer complies with certain sections of the Rule 5000 Series, discloses each requirement that it does not follow and describes the home relevant country practice followed in lieu of such requirement. The requirements of the Rule 5000 Series and the Argentine corporate governance practice that we follow in lieu thereof are described below: (i) Rule 5250 (d) - Distribution of Annual and Interim Reports. In lieu of the requirements of Rule 5250 (d), we follow Argentine law, which requires that companies make public a Spanish language annual report, including annual audited consolidated financial statements, by filing such annual report with the CNV and the BASE, within 70 calendar days of the end of the company’s fiscal year. Interim reports must be filed with the CNV and the BASE within 42 calendar days of the end of each fiscal quarter. The BASE publishes the annual reports and interim reports in the BASE bulletin and makes the bulletin available for inspection at its offices. In addition, our shareholders can receive copies of our annual reports and any interim reports upon such shareholders’ request. English language translations of our annual reports and interim reports are furnished to the SEC. We also post the English language translation of our annual reports and quarterly press releases on our website. Furthermore, under the terms of the Second Amended and Restated Deposit Agreement, dated as of June 22, 2000, among us, The Bank of New York, as depositary, and owners of ADSs issued thereunder, we are required to furnish The Bank of New York with, among other things, English language translations of our annual reports and each of our quarterly press releases. Annual reports and quarterly press releases are available for inspection by ADRs holders at the offices of The Bank of New York located at, 101 Barclay Street, New York, New York. Finally, Argentine law requires that 20 calendar days before the date of a shareholders’ meeting, the board of directors must provide to the shareholders, at the company’s executive office or through electronic means, all information relevant to the shareholders’ meeting, including copies of any documents to be considered by the shareholders (which includes the annual report), as well as proposals of the company’s board of directors.

(ii) Rule 5605 (b) (2) – Executive Sessions of Independent Directors. In lieu of the requirements of Rule 5605 (b) (2), we follow Argentine law which does not require independent directors to hold regularly scheduled meetings at which only such independent directors are present (i.e., executive sessions). Our Board of Directors as a whole is responsible for monitoring our affairs. In addition, under Argentine law, the board of directors may approve the delegation of specific responsibilities to designated directors or non-director managers of the company. Also, it is mandatory for public companies to form a supervisory committee (composed of syndics), which is responsible for monitoring the legality of the company’s actions under Argentine law and the conformity thereof with its bylaws.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents (iii) Rule 5605 (d) – Compensation of Officers. In lieu of the requirements of Rule 5605 (d), we follow Argentine law, which does not require companies to form a compensation committee comprised solely of independent directors. It also is not required under Argentine law that the compensation of the CEO and all other executive officers be determined by either a majority of the independent directors or a compensation committee comprised solely of independent directors. Under Argentine law, the board of directors is the corporate body responsible for determining the compensation of the CEO and all other executive officers, so long as they are not directors. In addition, under Argentine law, the audit committee shall give its opinion about the reasonableness of management’s proposals on fees and option plans for directors or managers of the company. Finally, because we are a “controlled company” as defined in Rule 5615 (c) (1), we are relying on the exemption provided thereby for purposes of complying with Rule 5615 (c) (2). (iv) Rule 5605 (e) (1) – Nomination of Directors. In lieu of the requirements of Rule 5605 (e) (1), we follow Argentine law which requires that directors be nominated directly by the shareholders at the shareholders’ meeting and that they be selected and recommended by the shareholders themselves. Under Argentine law, it is the responsibility of the ordinary shareholders’ meeting to appoint and remove directors and to set their compensation. In addition, because we are a “controlled company” as defined in Rule 5615 (c) (1), we are relying on the exemption provided thereby for purposes of complying with Rule 5615 (c) (2). (v) Rule 5605 (c) (1) – Audit Committee Charter. In lieu of the requirements of Rule 5605 (c) (1), we follow Argentine law, which requires that audit committees have a charter but does not require that companies certify as to the adoption of the charter nor does it require an annual review and assessment thereof. Argentine law instead requires that companies prepare a proposed plan or course of action with respect to those matters, which are the responsibility of the company’s audit committee. Such plan or course of action could, at the discretion of our audit committee, include a review and assessment of the audit committee charter. (vi) Rule 5605 (c) (2) – Audit Committee Composition. Argentine law does not require, and it is equally not customary business practice in Argentina, that companies have an audit committee comprised solely of independent directors. Argentine law instead requires that companies establish an audit committee with at least three members comprised of a majority of independent directors as defined by Argentine law. Nonetheless, although not required by Argentine law, during fiscal year 2016 we had an Audit Committee entirely comprised of three independent directors, pursuant to the definition of independence in Rule 10 A-3 (b) (1), one of which the Board of Directors determined to be a financial expert. In addition, we have a supervisory committee (“comisión fiscalizadora”) composed of three syndics, who are responsible for monitoring the legality, under Argentine law, of the actions of our Board of Directors and the conformity of such actions with our bylaws. (vii) Rule 5620 (c) – Quorum. In lieu of the requirements of Rule 5620 (c), we follow Argentine law and our bylaws, which distinguish between ordinary meetings and extraordinary meetings and require, in connection with ordinary meetings, that a quorum consist of a majority of stock entitled to vote. If no quorum is present at the first meeting, a second meeting may be called at which the shareholders present, whatever their number, constitute a quorum and resolutions may be adopted by an absolute majority of the votes present. Argentine law and our bylaws require, in connection with extraordinary meetings, that a quorum consist of 60% of the stock entitled to vote. However, if such quorum is not present at the first meeting, our bylaws provide that a second meeting may be called which may be held with the number of shareholders present. In both ordinary and extraordinary meetings, decisions are adopted by an absolute majority of votes present at the meeting, except for certain fundamental matters (such as mergers and spin-offs (when we are not the surviving entity and the surviving entity is not listed on any stock exchange), anticipated liquidation, a change in our domicile to outside of Argentina, total or partial recapitalization of our statutory capital following a loss, any transformation in our corporate legal form or a substantial change in our corporate purpose) which require an approval by vote of the majority of all the stock entitled to vote (all stock being entitled to only one vote). (viii) Rule 5620 (b) – Solicitation of Proxies. In lieu of the requirements of Rule 5620 (b), we follow Argentine law which requires that notices of shareholders’ meetings be published, for five consecutive days, in the Official Gazette and in a widely circulated newspaper in Argentina no earlier than 45 calendar days prior to

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents the meeting and at least 20 calendar days prior to such meeting. In order to attend a meeting and be listed on the meeting registry, shareholders are required to submit evidence of their book-entry share account held at Caja de Valores S.A. (“Caja de Valores”) up to three business days prior to the scheduled meeting date. If entitled to attend the meeting, a shareholder may be represented by proxy (properly executed and delivered with a certified signature) granted to any other person, with the exception of a director, syndic, member of the surveillance committee (“consejo de vigilancia”), manager or employee of the issuer, which are prohibited by Argentine law from acting as proxies. In addition, our ADRs holders receive, prior to the shareholders’ meeting, a notice listing the matters on the agenda, a copy of the annual report and a voting card. (ix) Rule 5630 (a) – Conflicts of Interest. In lieu of the requirements of Rule 5630 (a), we follow Argentine law which requires that related party transactions be approved by the audit committee when the transaction exceeds one percent (1%) of the corporation’s net worth, measured pursuant to the last audited balance sheet. Directors can contract with the corporation only on terms consistent with prevailing market terms. If the contract is not in accordance with prevailing market terms, such transaction must be pre-approved by the board of directors (excluding the interested director). In addition, under Argentine law, a shareholder is required to abstain from voting on a business transaction in which its interests may be in conflict with the interests of the company. In the event such shareholder votes on such business transaction and such business transaction would not have been approved without such shareholders’ vote, such shareholder may be liable to the company for damages and the resolution may be declared void.

Other than as noted above, we are in full compliance with all other applicable Nasdaq corporate governance standards.

Sh are Ownership For information on the share ownership of our directors and executive officers as of December 31, 2016, see Item 7. “Major Shareholders and Related Party Transactions-Major Shareholders”.

Item 7. Major Shar eholders and Related Party Transactions Major Shareholders As of March 31, 2017, our capital structure was made up of class A shares, each of which is entitled to five votes and class B shares, each of which is entitled to one vote. As of March 31, 2016, we had 1,300,264,597 shares outstanding composed of 281,221,650 class A shares and 1,019,042,947 class B shares.

Our controlling shareholders are members of the Escasany, Ayerza and Braun families and the Fundación. As of March 31, 2017, the controlling shareholders owned 100% of our class A shares through EBA Holding (representing 21.6% of our total outstanding shares) and 12.4% of our class B shares (or 9.7% of our total outstanding shares), therefore directly and indirectly owning 31.3% of our shares and 63.2% of total votes.

Based on information that is available to us, the table below sets forth, as of March 31, 2017, the number of our class A and class B shares held by holders of more than 5% of each class of shares, the percentage of each class of shares held by such holder, and the percentage of votes that each class of shares represent as a percentage of our total possible votes.

Class A Shares

Name Class A Shares % of Class A Shares % of Total Votes EBA Holding S.A. 281,221,650 class A shares 100 58.0

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Class B Shares

Name Class B Shares % of Class B Shares % of Total Votes The Bank of New York Mellon (1) 463,256,005 class B shares 45.5 19.1 ANSES 264,221,559 class B shares 25.9 10.9 EBA Holding Shareholders (2) 126,442,225 class B shares 12.4 5.2

(1) Pursuant to the requirements of Argentine law, all class B shares represented by ADSs are owned of record by The Bank of New York, as Depositary. The address for the Bank of New York is 101 Barclay Street, New York 10286, and the country of organization is the United States. (2) No member holds more than 2.0% of the capital stock. Such holding includes 25,556,360 shares in the form of ADSs

Based on information that is available to us, the table below sets forth, as of March 31, 2017, the shareholders that either directly or indirectly have more than 5% of our votes or shares.

Name Shares % of Shares % of Total Votes The Bank of New York Mellon 463,256,005 class B shares 35.6 19.1 EBA Holding S.A 281,221,650 class A shares 21.6 58.0 ANSES 264,221,559 class B shares 20.3 10.9 EBA Holding Shareholders 126,442,225 class B shares 9.7 5.2

Members of the three controlling families have owned the majority of the issued share capital of Banco Galicia since 1959. Members of the Escasany family have been on the board of directors of Banco Galicia since 1923. The Ayerza and Braun families have been represented on Banco Galicia’s board of directors since 1943 and 1947, respectively. Currently, there are five members of these families on our Board of Directors.

On September 13, 1999, the controlling shareholders of Banco Galicia formed EBA Holding S.A., an Argentine corporation, which is 100% owned by our controlling shareholders. EBA Holding holds 100% of our class A shares.

Currently, EBA Holding only has class A shares outstanding. EBA Holding’s bylaws provide for certain restrictions on the sale or transfer of its class A shares. While the class A shares of EBA Holding may be transferred to any other class A shareholder of EBA Holding, any transfer of such class A shares to third parties would automatically result in the conversion of the sold shares into class B shares of EBA Holding having one vote per share. In addition, EBA Holding’s bylaws contain rights of first refusal, buy-sell provisions and tag-along rights.

As of December 31, 2016, we had 131 identified United States record shareholders (not considering The Bank of New York), of which 17 held our class B shares and 114 held our ADSs. Such United States holders, in the aggregate, held approximately 189 million of our class B shares, representing approximately 14.5% of our total outstanding capital stock as of such date.

Related Party Transactions Grupo Financiero Galicia and its non-banking subsidiaries are not a party to any transactions with, and have not made any loans to any (i) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by Grupo Financiero Galicia or its non-banking subsidiaries, (ii) associates (i.e. an unconsolidated enterprise in which Grupo Financiero Galicia or its non- banking subsidiaries has a significant influence or which has significant influence over Grupo Financiero Galicia or its non-banking subsidiaries), (iii) individuals owning, directly or indirectly, an interest in the voting power of Grupo Financiero Galicia or its non- banking subsidiaries that gives them significant influence over Grupo Financiero Galicia or its non-banking subsidiaries, as applicable, and close members of any such individual’s family (i.e. those family members that may be expected to influence, or be influenced by, that person in their dealings with Grupo Financiero Galicia or its non-banking subsidiaries, as applicable), (iv) key management personnel (i.e. persons that have authority and responsibility for planning, directing and controlling the activities of Grupo Financiero Galicia or its non-banking subsidiaries, including directors and senior management of companies and close members of such individual’s family) or (v) enterprises in which a substantial interest is owned, directly or indirectly, by any person described in (iii) or (iv) over which such a person is able to exercise significant influence nor are there any proposed transactions with such persons. For purposes of this paragraph, this includes enterprises owned by directors or major shareholders of Grupo Financiero Galicia or its non- banking subsidiaries that have a member of key management in common with Grupo Financiero

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Galicia or its non-banking subsidiaries, as applicable. In addition, “significant influence” means the power to participate in the financial and operating policy decisions of the enterprise but means less than control. Shareholders beneficially owning a 10% interest in the voting power of Grupo Financiero Galicia or its non-banking subsidiaries are presumed to have a significant influence on Grupo Financiero Galicia or its non-banking subsidiaries, as applicable.

Some of our directors and the directors of Banco Galicia have been involved in certain credit transactions with Banco Galicia as permitted by Argentine law. The Corporations Law and the Argentine Central Bank’s regulations allow directors of a limited liability company to enter into a transaction with such company if such transaction follows prevailing market conditions. Additionally, a bank’s total financial exposure to related individuals or legal entities is subject to the regulations of the Argentine Central Bank. Such regulations set limits on the amount of financial exposure that can be extended by a bank to affiliates based on, among other things, a percentage of a bank’s RPC. See Item 4. “Information on the Company—Argentine Banking Regulation—Lending Limits”.

Banco Galicia is required by the Argentine Central Bank to present to its board of directors, on a monthly basis, the outstanding amounts of financial assistance granted to directors, controlling shareholders, officers and other related entities, which are transcribed in the minute books of the board of directors of Banco Galicia. The Argentine Central Bank establishes that the financial assistance to directors, controlling shareholders, officers and other related entities must be granted on an equal basis with respect to rates, tenor and guarantees as loans granted to the general public.

In this section “total financial exposure” comprises equity interests and financial assistance (all credit related items such as loans, holdings of corporate debt securities without quotation, guarantees granted and unused balances of loans granted, among others), as this term is defined in “Item 4. Information on the Company—Argentine Banking Regulation—Lending Limits”.

“Related parties” refers mainly to our directors and the directors of Banco Galicia, our senior officers and senior officers of Banco Galicia, our syndics and Banco Galicia’s syndics, our controlling shareholders as well as all individuals who are related to them by a family relationship and any entities directly or indirectly affiliated with any of these parties, not required to be consolidated.

The following table presents the aggregate amounts of total financial exposure of Banco Galicia to related parties, the number of recipients, the average amounts and the single largest exposures as of the end of the three fiscal years ended December 31, 2016 and as of February 28, 2017, the last date for which information is available.

February 28, December 31, December 31, December 31, 2017 2016 2015 2014 In millions of Pesos, except as noted Aggregate Total Financial Exposure Ps.443 Ps.687 Ps.427 Ps.394 Number of Recipient Related Parties 365 358 381 359 Individuals 301 295 319 300 Companies 64 63 62 59 Average Total Financial Exposure Ps.1 Ps.2 Ps.1 Ps.1 Single Largest Exposure Ps.47 Ps.276 Ps.62 Ps.50

The financial assistance granted to our directors, officers and related parties by Banco Galicia was granted in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other non-related parties, and did not involve more than the normal risk of collectability or present other unfavorable features.

In June 2011, Banco Galicia entered into an agreement with Galicia Seguros, a company indirectly controlled by Grupo Financiero Galicia, pursuant to which the Bank can offer insurance products on behalf of Galicia Seguros. In addition, they entered into an agreement for a one-year period pursuant to which Galicia Seguros insures the Bank for the balances of certain loans in the case of death of its clients. On July 31, 2014, Banco Galicia renewed both agreements with Galicia Seguros, for an additional year, with automatic deferral. Such agreements were considered to be “related party transactions” pursuant to Section 72 of the Capital Markets Law.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The board of directors of Banco Galicia, during its meeting held on March 17, 2014, granted a checking account overdraft in favor of Grupo Financiero Galicia for up to Ps.125 million with a maturity date of June 30, 2015.

Similarly, the board of directors of Banco Galicia, during its meeting held on March 11, 2015, decided to grant a checking account overdraft in favor of Grupo Financiero Galicia for up to Ps.230 million with a maturity date of June 30, 2016. On April 5, 2016 this checking account overdraft was increased to Ps.300 million with a maturity date of June 30, 2017.

On March 14, 2017, the board of directors of Banco Galicia decided to grant a checking account overdraft in favor of Grupo Financiero Galicia for up to Ps.500 million with a maturity date of June 30, 2018.

Item 8. Financial Information We have elected to provide the financial information set forth in Item 18 of this annual report.

Legal Proceedings We are a party to the following legal proceedings:

Banco Galicia In response to certain pending legal proceedings, Banco Galicia has recorded reserves to cover (i) various types of claims filed by customers against it (e.g. claims for thefts from safe deposit boxes, collections of checks that had been fraudulently altered, discrepancies related to deposit and payment services rendered to Banco Galicia’s customers, etc.) and (ii) estimated amounts payable under labor-related lawsuits filed against Banco Galicia by former employees.

As of the date of this annual report, provincial tax collection authorities, as well as tax collection authorities from the Autonomous City of Buenos Aires, are in the process (in different degrees of completion) of conducting audits and assessments mainly regarding the Compensatory Bond granted by the National Government to compensate financial institutions for the losses generated by the asymmetric pesification of loans and deposits.

Regarding the assessment of tax collection authorities from the Autonomous City of Buenos Aires, within the framework of the legal actions brought by Banco Galicia with the purpose of challenging the assessment of the tax collection authorities, a preliminary injunction was granted by the Argentine Federal Court of Appeals in Administrative Matters for the amount corresponding to the Compensatory Bond, which was ratified by the Supreme Court of Justice. Therefore, the Court ordered the Governmental Public Revenue Authority to refrain from starting tax enforcement proceedings or otherwise requesting precautionary measures for such purpose until a final judgment is issued. The proceedings are currently pending a decision by the Argentine Federal Court of Appeals in Administrative Matters with regard to the appeal filed by Banco de Galicia against the decision issued on the core issue by the Court of First Instance in November 2013. In any case, it is worth noting the decision issued by the federal prosecutor of the Court of Appeals was favorable to Banco de Galicia.

With regard to the Autonomous City of Buenos Aires’ claims on account of other items, Banco Galicia adhered to the System for the Settlement of Tax Liabilities in Arrears (Law No. 3,461 and the related regulations), which contemplated the total relief of interest and fines. The Bank’s adherence to such system was communicated within the framework of the respective cases before the corresponding judicial authorities. In connection with the assessments made by tax collection authorities from the Province of Buenos Aires, under the framework of some of the processes under discussion at the Provincial Tax Court, at this stage of proceedings the decision issued was: (i) unfavorable to Banco Galicia’s request regarding the items not related to the Compensatory Bond, and (ii) favorable with regard to the non-taxability thereof. Therefore, Banco Galicia adhered to the System

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents for the Regularization of Tax Debts (Regulatory Decision No. 12 and related decisions), which contemplated discounts on the amounts not related to the Compensatory Bond. The Bank’s adherence to such system was communicated within the framework of the respective cases before the corresponding judicial authorities. In turn, the authorities from the Province of Buenos Aires objected to the judgment rendered by the Provincial Tax Court with regard to the Compensatory Bond, and requested the Court of Appeals in Administrative Matters of La Plata to set such decision aside. Banco Galicia entered an appearance and filed a motion for lack of jurisdiction, since it believes only the Argentine Supreme Court of Justice has jurisdiction to issue a decision on such matter. On April 15, 2014, the aforementioned court sustained the motion for lack of jurisdiction and ordered the proceedings to be filed. The authorities from the Province of Buenos Aires filed an appeal before the Supreme Court of Justice of the Province of Buenos Aires, which has not issued a decision to date.

Furthermore, Banco Galicia has been expressing its disagreement regarding claims made by various jurisdictions at the corresponding administrative and/or legal proceedings.

These proceedings and their possible effects are constantly being monitored by the Bank’s management. Even though Banco Galicia believes it has complied with its tax liabilities in full pursuant to current regulations, provisions deemed adequate for each proceeding have been established.

Consumer Protection Associations, on behalf of consumers, have filed claims against Banco Galicia in connection with the collection of certain financial charges.

The Bank does not believe that the resolution of these controversies will have a significant impact on its financial condition.

Regional Credit Card Companies The AFIP, Provincial Revenue Boards and Municipalities are in the process of conducting audits and assessments, in different degrees of completion, at the companies controlled by Tarjetas Regionales. Said agencies have served notices and made claims regarding taxes applicable to Tarjetas Regionales’s subsidiaries. Therefore, the companies are taking the corresponding administrative and legal steps in order to solve such issues. The original amount claimed for taxes totaled approximately Ps.14 million.

Based on the opinions of their tax advisors, the companies believe that the abovementioned claims are both legally and technically groundless and that taxes related to the claims have been correctly calculated in accordance with tax regulations in force and existing case law.

Compañía Financiera Argentina Consumer Protection Associations, on behalf of consumers, have filed claims against CFA in connection with the collection of certain financial charges.

The company does not believe that the resolution of these controversies will have a significant impact on its financial condition.

Dividend Policy and Dividends Dividend Policy Grupo Financiero Galicia’s policy for the distribution of dividends envisages, among other factors, the obligatory nature of establishing a legal reserve, the company’s financial condition and its indebtedness, the business requirements of affiliated companies and, mainly, that the profits recorded in the financial statements are, to a great extent, income from holdings and not realized and liquid profits, a requirement of Section 68 of the Corporations Law so that it is possible to distribute them as dividends. The proposal to distribute dividends arising from such analysis has to be approved at the shareholders’ meeting that discusses the Financial Statements corresponding to each fiscal year.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents We may only declare and pay dividends out of our retained earnings representing the profit realized on our operations and investments. The Corporations Law and our bylaws state that no profits may be distributed until prior losses are covered. Dividends paid on our class A shares and class B shares will equal one another on a per share basis. As required by the Corporations Law, 5% of our net income is allocated to a legal reserve until the reserve equals 20% of our outstanding capital. Dividends may not be paid if the legal reserve has been impaired until it is fully restored. The legal reserve is not available for distribution to shareholders.

Our ability to pay dividends to our shareholders principally depends on (i) our net income, (ii) cash availability, (iii) indebtedness and (iv) applicable legal requirements.

Holders of our ADSs will be entitled to receive any dividends payable in respect of our underlying class B shares. We will pay cash dividends to the ADSs depositary in Pesos, although we reserve the right to pay cash dividends in any other currency, including Dollars. The ADSs deposit agreement provides that the depositary will convert cash dividends received by the ADSs depositary in Pesos to Dollars and, after deduction or upon payment of fees and expenses of the ADSs depositary and deduction of other amounts permitted to be deducted from such cash payments in accordance with the ADSs deposit agreement (such as for unpaid taxes by the ADSs holders in connection with personal asset taxes or otherwise), will make payment to holders of our ADSs in Dollars.

Dividends Grupo Financiero Galicia As a holding company, our principal source of cash from which to pay dividends on our shares is dividends or other intercompany transfers from our subsidiaries, primarily Banco Galicia. Due to the dividend restrictions contained in Banco Galicia’s loan agreements in connection with Banco Galicia’s foreign debt restructuring—that were lifted when said debt were fully paid during fiscal year 2016-and in some Argentine Central Bank regulations, our ability to distribute cash dividends to our shareholders has been materially and adversely affected since late 2001 until 2010, when Banco Galicia obtained the authorization to distribute its profits.

After the end of fiscal year 2011, the Argentine Central Bank modified its regulations governing the minimum capital requirements and dividend distribution and, consequently, Banco Galicia has not paid dividends to date. However, Grupo Financiero Galicia paid a cash dividend corresponding to fiscal year 2013, Ps.39 million equivalent to Ps.0.0297 per share, for fiscal year 2014, Ps.100 million equivalent to Ps.0.0769 per share, and Ps.150 million equivalent to Ps.0.1154 per share, all of them subject to the deduction, when applicable, of the personal assets tax and the 10% withhold for income tax.

Due to the fact that most of the profits for fiscal year 2016 correspond to income by holdings and just a fraction corresponds to the realized and liquid profits meeting the requirements to be distributed as per Section 68 of the Corporations’ Law, and taking as well into consideration Grupo Financiero Galicia’s financial condition, during the shareholders’ meeting held on April 25, 2017 a payment of dividends in cash was approved in an amount of Ps.240 million, which represents 18.458% with regard to 1,300,264,597 class A and B ordinary shares with a face value of Ps.1 each.

Pursuant Act No. 27,260, Grupo Financiero Galicia will neither reimburse nor withhold any amount for taxes purposes over the dividends to be paid for fiscal year 2016.

For more information on requirements for dividend distribution, see Item 4. “Information on the Company-Argentine Banking Regulation-Profit Distribution”.

Banco Galicia At the close of the fiscal year ended December 31, 2016, Banco Galicia’s capital, non-capitalized contributions, profit reserves, adjustments to shareholders’ equity and retained earnings (not including the fiscal year’s net income) totaled Ps.13,812 million.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Banco Galicia’s net income for fiscal year 2016 amounted to Ps.5,094 million. Taking into consideration the Argentine Central Bank rules regarding the distribution of profits, as explained above, Banco Galicia’s board of directors proposed at the shareholders’ meeting held on April 27, 2017, and such shareholders approved, the allocation of Ps.1,019 million to legal reserve and Ps.4,075 million to discretionary reserve for the future distribution of profits.

Regional Credit Card Companies During the ordinary and extraordinary shareholders’ meeting held on April 20 2017, the shareholders decided to pay a cash dividend corresponding to fiscal year 2016 in the amount of Ps.389 million

Sudamericana Holding On August 24, 2016, Sudamericana held an extraordinary shareholders’ meeting, at which shareholders approved the payment of cash dividends in the amount of Ps.350 million.

CFA During the shareholders’ meeting held on March 28, 2017, the shareholders decided to pay a cash dividend corresponding to fiscal year 2016 in the amount of Ps.250 million. This dividend distribution is still pending approval of the Argentine Central Bank.

Significant Changes Grupo Financiero Galicia During February and March 2017, Grupo Financiero Galicia received dividends in an amount of Ps.196 million and Ps.187 million, respectively, from Galicia Administradora de Fondos, a subsidiary that was acquired during fiscal year 2014, and received dividends in an amount of Ps.9 million in 2017 from Galicia Warrants S.A.

On April 1st, 2017, Jose Luis Ronsini was appointed as the new Chief Financial Officer, replacing Jose Luis Gentile.

Banco Galicia On January 25, 2017, Banco de Galicia y Buenos Aires S.A.’s Board of Directors approved the issuance of Short-, Mid- and Long-term Notes for a face value in an amount of up to US$550 million (or its equivalent in other currencies).

On February 6, 2017, the C.N.V. authorized the issuance of Class III Notes due within 36 months as from the date of issuance and settlement for a face value of up to US$100 million, with the possibility to increase up to a face value of US$550 million. Such notes shall accrue interest at a variable rate equal to the arithmetic average of private Badlar, plus an applicable margin. Interest on such notes shall be paid on a quarterly basis.

On March 31, 2017, the Board of Directors approved the sale of its stake (58.8% of the issued and outstanding total shares) in TDM to Sociedad Anónima Importadora y Exportadora de la Patagonia. CFA also sold its stake (1.2% of the issued and outstanding shares) in TDM to Federico Braun.

The consideration received for these sales is approximately US$5 million and Banco Galicia believes that the sale will not have a significant impact on Banco Galicia´s shareholders equity.

On April 12, 2017, the shareholders of the Banco Galicia accepted an offer to purchase Banco Galicia’s investment (consisting of 3,250,000 Class E shares) in Aguas Cordobesas S.A. (ACSA) for Ps.48 millions, of which Ps.38,3 million has been already received by Banco Galicia. The remaining Ps.9.7 million will be paid upon receipt of the approval of the government of the Province of Córdoba.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Tarjetas Regionales On January 11, 2017, the board of directors of Tarjetas Cuyanas S.A., a subsidiary of Tarjetas Regionales, approved the issuance of its Class XXVII notes for a maximum global face value of up to Ps.500 millions.

On January 28, 2017, Tarjeta Naranja S.A., a subsidiary of Tarjetas Regionales, cancelled the third and final principal installment of its Class XIII notes in an amount of US$67 million, together with accrued interest.

On April 7, 2017, Tarjetas Cuyanas S.A.’s Board of Directors approved the issuance of its Class XXVIII notes for a maximun global face value of up to Ps.500 million.

On April 11, 2017, Tarjeta Naranja S.A. issued its Class XXXVII Peso Linked Negotiable Obligation in an amount of USD$250 million, bearing interest at a rate of BADLAR + 3.50% (with a mínimum interest rate of 15%). This interest will be payed in U.S. Dollars for a total amount of Ps.3,845.7 million in three equal annual installments (to be made in April 2020, 2021 and 2022).

Item 9. The Offer and Listing Market Regulations Shares and ADSs Our class B shares are listed on the BASE, MAE and the Córdoba Stock Exchange under the symbol “GGAL”. Our class B shares have started listing on MAE since October 28, 2015. Our ADSs, each representing ten class B shares, are listed on the Nasdaq Capital Market, under the symbol “GGAL”. Our ADSs have been listed on Nasdaq Capital Market since August 2002. Previously, our ADSs had been listed on the Nasdaq National Market since July 24, 2000.

The following tables present, for the periods indicated, the high and low closing prices and the average trading volume of our class B shares on the BASE as reported by the BASE and the high and low closing prices and the average trading volume of our ADSs on the Nasdaq as reported by the Nasdaq Capital Market. There has been low trading volume of our class B shares on the Córdoba Stock Exchange. The following prices have not been adjusted for any stock dividends and/or stock splits.

Grupo Financiero Galicia - Class B Shares - Buenos Aires Stock Exchange (in Pesos)

Average Daily Volume High Low (in thousands of Class B shares) Calendar Year 2012 4.51 2.72 2,153 2013 10.95 3.86 1,646 2014 21.40 8.30 1,229 2015 43.45 17.60 852 2016 49.50 31.60 495 Two Most Recent Fiscal Years 2015 First Quarter 31.40 17.60 904 Second Quarter 28.85 22.50 689 Third Quarter 29.60 22.00 713 Fourth Quarter 43.45 23.25 1,123 2016 First Quarter 47.70 31.60 596 Second Quarter 46.50 36.00 483 Third Quarter 49.50 42.00 393 Fourth Quarter 49.30 37.30 517

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 2017 First Quarter 60.90 42.80 682 Most Recent Six Months November 2016 47.60 41.10 479 December 2016 44.90 37.30 633 January 2017 54.20 42.80 883 February 2017 55.50 49.50 592 March 2017 60.90 49.10 554 April 2017 (through April 20, 2017) 62.00 58.90 475

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents As of April 20, 2017, the closing price of our class B shares was Ps.60.20.

Grupo Financiero Galicia – ADSs - Nasdaq Capital Market (in US$)

Average Daily Volume High Low (in thousands of ADRs) Calendar Year 2012 8.15 4.21 217 2013 13.05 4.96 304 2014 18.50 7.30 553 2015 29.25 14.99 460 2016 33.08 22.77 303 Two Most Recent Fiscal Years 2015 First Quarter 26.13 14.99 501 Second Quarter 24.10 17.84 414 Third Quarter 22.22 15.30 385 Fourth Quarter 29.25 16.62 543 2016 First Quarter 30.92 22.77 318 Second Quarter 32.05 25.34 367 Third Quarter 33.08 28.04 221 Fourth Quarter 32.74 23.23 306 2017 First Quarter 39.20 27.50 462 Most Recent Six Months November 2016 31.53 26.81 279 December 2016 27.95 23.23 433 January 2017 34.12 27.50 595 February 2017 35.80 30.83 351 March 2017 39.20 31.99 438 April 2017 (through April 20, 2017) 40.41 38.09 336

As of April 20, 2017, the closing price of our ADSs was US$39.02.

Argentine Securities Market The principal and oldest exchange for the Argentine securities market is the BASE. The BASE started operating in 1854 and handles approximately 95% of all equity trading in Argentina. Securities listed on the BASE include corporate equity and debt securities and government securities. Debt securities listed on the BASE may also be listed on the MAE. The MERVAL, which is affiliated with the BASE, was founded in 1929 and is the largest stock market in Argentina. The MERVAL is a private entity, whose capital is integrated by shares admitted to public offer regime and was registered as a market by the CNV under N°16. Its capital is composed of 183 outstanding shares and there are 214 agents registered as members of the Merval market. We are member of the Merval through Galicia Valores, a subsidiary that owns one share. Additionally, the Bank, within the framework of the Capital Market Law, was authorized by the CNV to act as a settlement and clearing agent and trading agent-comprehensive, and was added as member of the MERVAL.

Trading on the BASE is conducted mostly through the Sistema Integrado de Negociación Asistida por Computación (Integrated Computer Assisted Trading System, “SINAC”) although there are still some transactions carried out by continuous open outcry, the traditional auction system, from 11:00 a.m. to 5:00 p.m. each business day of the year. SINAC is a computer trading system that permits trading in debt and equity securities and is accessed by brokers directly from workstations located at their offices. As a result of an agreement between the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents MERVAL and the MAE, equity securities are traded exclusively on the BASE and corporate and government debt securities are traded on the MAE and the BASE. Currently, all transactions relating to listed corporate and government debt securities can be effected on SINAC. In addition, a substantial over-the-counter market exists for private trading in listed debt securities and, prior to the agreement described above, equity securities. Such trades are reported on the MAE.

Although companies may list all of their capital stock on the BASE, in most cases the controlling shareholders retain the majority of a company’s capital stock. This results in only a relatively small percentage of most companies’ stock being available for active trading by the public on the BASE. Even though individuals have historically constituted the largest group of investors in Argentina’s equity markets, in recent years, banks and insurance companies have shown an interest in these markets. Argentine mutual funds, by contrast, continue to have very low participation in the market. Although 99 companies had equity securities listed on the BASE as of December 31, 2016, the 10 most-traded companies on the exchange accounted for approximately 68% of total trading value during 2016. Our shares were the second-most traded shares on the BASE in 2016, with a 9% share of trading volume.

The Córdoba Stock Exchange is another important stock market in Argentina. Securities listed on the Córdoba Stock Exchange include both corporate equity and debt securities and government securities. Through an agreement with the BASE, all the securities listed on the BASE are authorized to be listed and subsequently traded on the Córdoba Stock Exchange. Thus, many transactions that originate on the Córdoba Stock Exchange relate to companies listed on the BASE and such trades are subsequently settled in Buenos Aires.

The MAE is a self-regulated organization that is supervised by the CNV. MAE is mainly comprised by private banks, either composed by national or foreign capital, national banks, provincial banks, municipal Banks, cooperative Banks, financial companies, exchange companies and agents.

Market Regulations The CNV oversees the Argentine securities markets and is responsible for authorizing public offerings of securities and supervising brokers, public companies and mutual funds. Argentine pension funds and insurance companies are regulated by separate Argentine government agencies, while financial institutions are regulated mainly by the Argentine Central Bank. The Argentine securities markets are regulated by the CNV, which was created by Law No. 17,811, as amended.

In compliance with the provisions of Law No. 20,643 and the Decrees No. 659/74 and No. 2,220/80, most debt and equity securities traded on the exchanges and the MAE must, unless otherwise instructed by the shareholders, be deposited by the shareholders in Caja de Valores, which is a corporation owned by the BASE, the MERVAL and certain provincial exchanges. Caja de Valores is the central securities depository of Argentina, which provides depository facilities for securities and acts as a transfer and paying agent in connection therewith. It also handles settlement of securities transactions carried out on the BASE and operates the computerized exchange information system.

The level of regulation of the market for Argentine securities and investors’ activities is relatively low as compared to the United States and certain other countries, and enforcement of existing regulatory provisions has been limited. In addition, there may be less publicly available information about Argentine companies than is regularly published by or about companies in these countries. However, the CNV has taken steps to strengthen disclosure and regulatory standards for the Argentine securities market, including the issuance of regulations prohibiting insider trading and requiring insiders to report on their ownership of securities, with associated penalties for non-compliance.

In order to improve Argentine securities market regulation, Decree No. 677/01 or “Decree for Transparency in the Public Offering”, was promulgated and took effect on June 1, 2001. This decree has come to be regarded as the financial consumer’s “bill of rights”. Its objective is to provide transparency and protection to participants in the capital markets. The decree applies to individuals and entities that participate in the public offering of securities and to stock exchanges as well. Among its key provisions, the decree broadens the definition of “security;” governs the treatment of negotiable securities; obligates publicly listed companies to form audit

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents committees composed of three or more members of the board of the directors, the majority of whom must be independent under CNV regulations; authorizes market-stabilization transactions under certain circumstances; governs insider trading, market manipulation and securities fraud; and regulates going-private transactions and acquisitions of voting shares, including controlling stakes in public companies.

In order to offer securities to the public in Argentina, an issuer must meet certain requirements of the CNV regarding assets, operating history, management and other matters, and only securities for which an application for a public offering has been approved by the CNV may be listed on the corresponding stock exchange. This approval does not imply any kind of certification of assurance related to the merits of the quality of the securities, or the solvency of the issuer. Issuers of listed securities are required to file unaudited quarterly financial statements and audited annual financial statements, as well as various other periodic reports, with the CNV and the corresponding stock exchange.

Securities can be freely traded on the Argentine markets but certain restrictions exist regarding access by residents and non- residents to the local foreign exchange market and to transfers of foreign exchange abroad. See Item 4. “Information on the Company- Government Regulation-Foreign Exchange Market”.

On October 2007, the CNV passed Resolution No. 516/07 providing for the voluntary adoption of a corporate governance code. The CNV recommends adoption of such code by public companies but requires that their policy with respect to each topic described in the code be disclosed in detail in the annual report. This resolution was effective for fiscal years beginning on January 1, 2008 and after and, therefore, public companies, including us, have to report on their degree of fulfillment of each topic of such code.

In December 2012, the Argentine Congress passed the Capital Markets Law (Law No. 26,831), which became effective on January 2013, replacing Law No.17,811 and Decree No. 677/01, with the aim of regulating the capital market under the supervision of the CNV and broadening the CNV’s powers. Additionally, the law intends to enhance the growth of local markets, to develop new and simplified negotiating systems and to create new regulation standards for the Argentine stock exchange, markets and other intermediary agents.

Item 10. Additional Information Description of Our Bylaws General Set forth below is a brief description of certain provisions of our bylaws and Argentine law and regulations with regard to our capital stock. Your rights as a holder of our capital stock are subject to Argentine corporate law, which may differ from the corporate laws of other jurisdictions. This description is not purported to be complete and is qualified in its entirety by reference to our bylaws, Argentine law and the rules of the BASE, the Córdoba Stock Exchange as well as the CNV. A copy of our bylaws has been filed with and can be examined at the CNV in Buenos Aires and the SEC in Washington, D.C.

We were incorporated on September 14, 1999, as a stock corporation under the laws of Argentina and registered on September 30, 1999, with the IGJ, under corporate registration number 14,519 of Book 7, Volume of Stock Corporations. Our domicile is in Buenos Aires, Argentina. Under our bylaws, our duration is until June 30, 2100 and we are exclusively a financial and investment company (as stated in “Chapter 2. Purpose. Article 3.” of our bylaws). This duration may be extended by resolution taken at an extraordinary shareholders’ meeting.

Our bylaws do not contain any provision governing the ownership threshold above which shareholder ownership must be disclosed.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Outstanding Capital Stock Our total subscribed and paid-in share capital as of December 31, 2016, amounted to Ps.1,300,264,947, composed of class A shares and class B shares, each with a par value of Ps.1. The following table presents the number of our shares outstanding as of December 31, 2016, and the voting interest that the shares represent.

As of December 31, 2016 Shares Number of Shares % of Capital Stock % of Voting Rights Class A Shares 281,221,650 21.63 57.98 Class B Shares 1,019,042,947 78.37 42.02 Total 1,300,264,597 100.00 100.00

Registration and Transfer The class B shares are book-entry common shares held through Caja de Valores. Caja de Valores maintains a stock registry for us and only those persons listed in such registry will be recognized as our shareholders. Caja de Valores periodically delivers to us a list of the shareholders as at a certain date.

The class B shares are transferable on the books of Caja de Valores. Caja de Valores records all transfers in our registry. Within 10 days of any such transfer, Caja de Valores is required to confirm the registration of transfer with the transferor.

Voting Rights At shareholders’ meetings, each class A share is entitled to five votes and each class B share is entitled to one vote. However, class A shares are entitled to only one vote in certain matters, such as: • a merger or spin-off in which we are not the surviving corporation, unless the acquirer’s shares are authorized to be publicly offered or listed on any stock exchange; • a transformation in our legal corporate form; • a fundamental change in our corporate purpose; • a change of our domicile to outside Argentina; • a voluntary termination of our public offering or listing authorization; • our continuation following a delisting or a mandatory cancellation of our public offering or listing authorization; • a total or partial recapitalization of our statutory capital following a loss; and • the appointment of syndics.

All distinctions between our class A shares and our class B shares will be eliminated upon the occurrence of any of the following change of control events: • EBA Holding sells 100% of its class A shares; • EBA Holding sells a portion of our class A shares to a third person who, when aggregating all our class A shares with our class B shares owned by such person, if any, obtains 50% plus one vote of our total votes; or

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents • the current shareholders of EBA Holding sell shares of EBA Holding that will allow the buyer to exercise more than 50% of the voting power of EBA Holding at any general shareholders’ meeting of EBA Holding shareholders, except for transfers to other current shareholders of EBA Holding or to their heirs or their legal successors or to entities owned by any of them.

Limited Liability of Shareholders Shareholders are not liable for our obligations. Shareholders’ liability is limited to the payment of the shares for which they subscribe. However, shareholders who have a conflict of interest with us and do not abstain from voting may be held liable for damages to us. Also, shareholders who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to Argentine law or our bylaws may be held liable for damages to us or to third parties, including other shareholders, resulting from such resolutions.

Directors Our bylaws provide that the Board of Directors shall be composed by at least three and at most nine members, as decided at a general ordinary shareholders’ meeting. To be appointed to our Board of Directors, such person must have been presented as a candidate by shareholders who represent at least 10% of our voting rights, at least three business days before the date the general ordinary shareholders’ meeting is to be held. Our bylaws do not state an age limit over which the directors cannot serve on our board.

At each annual shareholders’ meeting, the term of one third of the members of our Board of Directors (no fewer than three directors) expires and their successors are elected to serve for a term of three years. The shareholders’ meeting shall have the power to fix a shorter period (one or two years) for the terms of office of one, several or all the directors. This system of electing directors is intended to help maintain the continuity of the board. Alternate directors replace directors until the following general ordinary shareholders’ meeting is held. Directors may also be replaced by alternate directors if a director will be absent from a board meeting. The Board of Directors is required to meet at least once every month and anytime any one of the directors or syndics so requests.

Our bylaws state that the Board of Directors may decide to appoint an executive committee and/or a delegate director.

Our bylaws do not provide for any arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to in this annual report was selected as a director or member of senior management.

Additionally, pursuant to our bylaws, any borrowing powers on behalf of the Company are granted to our Board of Directors. Our Board of Directors has the power to delegate these borrowing powers to our directors through a power of attorney and currently certain of our directors have powers of attorney to negotiate the terms of and borrow money on behalf of the Company. Furthermore, as stated by our bylaws, the chairman of our Board of Directors is also the legal representative of the Company. Although our bylaws do not expressly address a director’s power to vote on proposals, arrangements or contracts in which the director has a material interest, pursuant to customary Argentine business practice and certain tenants of Argentine corporate law, our directors do not vote on proposals, arrangements or contracts in which the director has a material interest.

Appointment of Directors and Syndics by Cumulative Voting The Corporations Law provides for the use of cumulative voting to enable minority shareholders to appoint members of the board of directors and syndics. Upon the completion of certain requirements, shareholders are entitled to appoint up to one third of the vacancies to be filled on the board of directors by cumulative voting. Each shareholder voting cumulatively has the number of votes resulting from multiplying the number of votes to which such shareholder would normally be entitled by the number of vacancies to be filled. Such shareholder may apportion his votes or cast all such votes for one or a number of candidates not exceeding one third of the vacancies to be filled.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Compensation of Directors The Corporations Law and the CNV establish rules regarding the compensation of directors. The maximum amount of aggregate compensation that the members of the board of directors may receive, including salaries and other compensation for the performance of permanent technical and administrative services, may not exceed 25.0% of profits of each fiscal year. This maximum amount shall be limited to 5.0% when no dividends are distributed to the shareholders and shall be increased proportionately to the dividend distribution until the 25.0% limit is reached when all profits are distributed.

The Corporations Law provides that aggregate director compensation may exceed the maximum percentage of computable profit in any one year when the company’s profits are non-existent or too small as to allow payment of a reasonable compensation to board members which have been engaged in technical or administrative services to the company, provided that such proposal is described in the notice of the agenda for the ordinary shareholders’ meeting and is approved by a majority of shareholders present at such shareholders’ meeting.

In addition to the above, our bylaws establish that best practices and national and international market standards regarding directors with similar duties and responsibilities shall be considered when determining the compensation of board members.

Syndics Our bylaws, in accordance with Argentine law, provide for the maintenance of a supervisory committee whose members are three permanent syndics and three alternate syndics. Syndics are elected for a one-year term and may be re-elected. Alternate syndics replace permanent syndics in case of absence. For the appointment of syndics, each of our class A shares and class B shares has only one vote. Fees for syndics are established by the shareholders at the annual ordinary shareholders’ meeting. Their function is to oversee the management of the company, to control the legality of the actions of the board of directors, to attend all board of directors’ meetings, to attend all shareholders’ meetings, to prepare reports for the shareholders on the financial statements with their opinion, and to provide information regarding the company to shareholders that represent at least 2% of the capital stock. Syndics’ liabilities are joint and several and unlimited for the non-fulfillment of their duties. They are also jointly and severally liable, together with the members of the board of directors, if the proper fulfillment of their duties as syndics would have avoided the damage or the losses caused by the members of the board of directors.

Shareholders’ Meetings Shareholders’ meetings may be ordinary meetings or extraordinary meetings. An annual ordinary shareholders’ meeting is required to be held in each fiscal year to consider the matters outlined in Article 234 of the Corporations Law, including, among others: • approval of the financial statements and general performance of the management for the preceding fiscal year; • appointment and remuneration of directors and members of the supervisory committee; • allocation of profits; and • any other matter the board of directors decides to submit to the shareholders’ meeting concerning the company’s business administration. Matters which may be discussed at these or other ordinary meetings include resolutions regarding the responsibility of directors and members of the supervisory committee, as well as capital increases and the issuance of notes.

Extraordinary shareholders’ meetings may be called at any time to discuss matters beyond the competence of the ordinary meeting, including but not limited to amendments to the bylaws, matters related to the liquidation of a company, limitation of the shareholders’ preemptive rights to subscribe new shares, issuance of bonds and debentures, transformation of the corporate form, a merger into another company and spin-offs, early winding-up, change of the company’s domicile to outside Argentina, total or partial repayment of capital for losses, and a substantial change in the corporate purpose set forth in the bylaws.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Shareholders’ meetings may be convened by the board of directors or by the syndics. A shareholder or group of shareholders holding at least 5.0% in the aggregate of our capital stock may request the board of directors or the syndics to convene a general shareholders’ meeting to discuss the matters indicated by the shareholder.

Once a meeting has been convened with an agenda, the agenda limits the matters to be decided upon at such meeting and no other matters may be decided upon.

Additionally, our bylaws provide that any shareholder holding at least 5% in aggregate of our capital stock may present, in writing, to the Board of Directors, before February 28 of each year, proposals of items to be included in the agenda at the annual general ordinary shareholders’ meeting. The Board of Directors is not obligated to include such items in the agenda.

Class B shares represented by ADSs will be voted or caused to be voted by the Depositary in accordance with instructions of the holders of such ADSs. In the event instructions are not received from the holder, the Depositary shall give a discretionary proxy for the shares represented by such ADSs to a person designated by us.

Notice of each shareholders’ meeting must be published in the Official Gazette, and in a widely circulated newspaper in the country’s territory, at least twenty days prior to the meeting but not more than forty-five days prior to the date on which the meeting is to be held. The board of directors will determine the appropriate publication of notices outside Argentina in accordance with the requirements of the jurisdictions and exchanges on which our shares are traded. In order to attend a meeting and to be listed on the meeting registry, shareholders must submit evidence of their book-entry share account held at Caja de Valores at least three business days prior to the scheduled meeting date without counting the meeting day.

The quorum for ordinary meetings consists of a majority of stock entitled to vote, and resolutions may be adopted by the affirmative vote of 50% plus one vote (an “absolute majority”) of the votes present whether in person or participating via electronic means of communication. If no quorum is present at the first meeting, a second meeting may be called at which the shareholders present, whatever their number, shall constitute a quorum. Resolutions are to be adopted by an absolute majority of the votes present. The second meeting may be convened to be held one hour later on the same day as the first meeting had been called for, provided that it is an ordinary shareholders’ meeting, or within 30 days of the date for which the first ordinary meeting was called.

The quorum for extraordinary shareholders’ meetings consists of 60% of stock entitled to vote, and resolutions may be adopted by an absolute majority of the votes present. If no quorum is present at the first meeting, a second meeting may be called at which the shareholders present, whatever their number, shall constitute a quorum. Resolutions are to be adopted by an absolute majority of the votes present. The second meeting has to be convened to be held within 30 days of the date for which the first extraordinary meeting was called, and the notice must be published for three days, at least eight days before the date of the second meeting. Some special matters require a favorable vote of the majority of all the stock holding voting rights, the class A shares being granted the right to only one vote each. The special matters are described in “-Voting Rights” above.

Dividends Dividends may be lawfully paid and declared only out of our retained earnings representing the profit realized and liquid on our operations and investments reflected in our annual financial statements, as approved at our annual general shareholders’ meeting. No profits may be distributed until prior losses are covered. Dividends paid on our class A shares and class B shares will equal one another on a per-share basis.

As required by the Corporations Law, 5% of our net income is allocated to a legal reserve until the reserve equals 20% of our outstanding capital. Dividends may not be paid if the legal reserve has been impaired. The legal reserve is not available for distribution to shareholders.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Our Board of Directors submits our financial statements for the previous fiscal year, together with reports prepared by our supervisory committee, to our shareholders for approval at the general ordinary shareholders’ meeting. The shareholders, upon approving the financial statements, determine the allocation of our net income.

Our Board of Directors is allowed by law and by our bylaws to decide to pay anticipated dividends on the basis of a balance sheet especially prepared for purposes of paying such dividends.

Under CNV regulations and our bylaws, cash dividends must be paid to shareholders within 30 days of the shareholders’ meeting approving the dividend. Payment of dividends in shares requires authorization from the CNV, the BASE and the Córdoba Stock Exchange, whose authorizations must be requested within 10 business days after the shareholders’ meeting approving the dividend. We must make a distribution of the shares available to shareholders not later than three months after receiving authorization to do so from the CNV.

Shareholders may no longer claim the payment of dividends from us after three years have elapsed from the date on which the relevant dividends were made available to such shareholders.

Capital Increases and Reductions We may increase our capital upon resolution of the general ordinary shareholders’ meeting. All capital increases must be reported to the CNV, published in the Official Gazette and registered with the Public Registry of Commerce. Capital reductions may be voluntary or mandatory. A voluntary reduction of capital must be approved by an extraordinary shareholders’ meeting after the corresponding authorization by the BASE, the Córdoba Stock Exchange and the CNV and may take place only after notice of such reduction has been published and creditors have been given an opportunity to obtain payment or guarantees for their claims or attachment. A reduction of capital is mandatory when losses have exceeded reserves and more than 50% of the share capital of the company.

Preemptive Rights Under Argentine law, it is mandatory that a shareholder of ordinary shares of any given class have preemptive rights, proportional to the number of shares he or she owns, to subscribe for shares of capital stock of the same class or of any other class if the new subscription offer does not include all classes of shares. Shareholders may only decide to suspend or limit preemptive rights by supermajority at an extraordinary shareholders’ meeting and only in exceptional cases. Shareholders may waive their preemptive rights only on a case-by-case basis.

In the event of an increase in our capital, holders of class A shares and class B shares have a preemptive right to subscribe for any issue of class B shares in an amount sufficient to maintain the proportion of capital then held by them. Holders of class A shares are entitled to subscribe for class B shares because no further class A shares carrying five votes each are allowed to be issued in the future. Under Argentine law, companies are prohibited from issuing stock with multiple voting rights after they have been authorized to make a public offering of securities.

Preemptive rights are exercisable following the last publication of the notification to shareholders of the opportunity to exercise preemptive rights in the Official Gazette and an Argentine newspaper of wide circulation for a period of 30 days, provided that such period may be reduced to no less than 10 days if so approved by an extraordinary shareholders’ meeting.

Shareholders who have exercised their preemptive rights and indicated their intention to exercise additional preemptive rights are entitled to additional preemptive rights (“accretion rights”), on a pro rata basis, with respect to any unsubscribed shares, in accordance with the terms of the Corporations Law. Class B shares not subscribed for by shareholders through the exercise of their preemptive or accretion rights may be offered to third parties.

Holders of ADSs may be restricted in their ability to exercise preemptive rights if a registration statement relating to such rights has not been filed or is not effective or if an exemption from registration is not available.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Appraisal Rights Whenever our shareholders approve: • a merger or spin-off in which we are not the surviving corporation, unless the acquirer’s shares are authorized to be publicly offered or listed on any stock exchange, • a transformation in our legal corporate form, • a fundamental change in our corporate purpose, • a change of our domicile to outside Argentina, • a voluntary termination of our public offering or listing authorization, • our continuation following a delisting or a mandatory cancellation of our public offering or listing authorization, or • a total or partial recapitalization of our statutory capital following a loss, any shareholder that voted against such action or did not attend the relevant meeting may exercise its right to have its shares canceled in exchange for the book value of its shares, determined on the basis of our latest balance sheet prepared in accordance with Argentine laws and regulations, provided that such shareholder exercises its appraisal rights within the periods set forth below.

There is, however, doubt as to whether holders of ADSs, will be able to exercise appraisal rights with respect to class B shares represented by ADSs.

Appraisal rights must be exercised within five days following the adjournment of the meeting at which the resolution was adopted, in the event that the dissenting shareholder voted against such resolutions, or within 15 days following such adjournment if the dissenting shareholder did not attend such meeting and can prove that he was a shareholder on the date of such meeting. In the case of a merger or spin-off involving an entity authorized to make a public offering of its shares, appraisal rights may not be exercised if the shares to be received as a result of such transaction are listed on any stock exchange. Appraisal rights are extinguished if the resolution giving rise to such rights is overturned at another shareholders’ meeting held within 75 days of the meeting at which the resolution was adopted.

Payment of the appraisal rights must be made within one year from the date of the shareholders’ meeting at which the resolution was adopted, except if the resolution was to delist our capital stock, in which case the payment period is reduced to 60 days from the date of the related resolution.

Preferred Stock According to the Corporations Law and our bylaws, an ordinary shareholders’ meeting may approve the issuance of preferred stock. Such preferred stock may have a fixed dividend, cumulative or not cumulative, with or without additional participation in our profits, as decided by shareholders at a shareholders’ meeting when determining the conditions of the issuance. They may also have other preferences, such as a preference in the event of our liquidation.

The holders of preferred stock shall not be entitled to voting rights. Notwithstanding the foregoing, in the event that no dividends are paid to such holders for their preferred stock, and for as long as such dividends are not paid, the holders of preferred stock shall be entitled to voting rights. Holders of preferred stock are also entitled to vote on certain special matters, such as the transformation of the corporate form, a merger into another company and spin-offs (when we are not the surviving entity and the surviving entity is not listed on any stock exchange), early winding-up, a change of our domicile to outside Argentina, total or partial repayment of capital for losses and a substantial change in the corporate purpose set forth in our bylaws or in the event our preferred stock is traded on stock exchanges and such trading is suspended or terminated.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Conflicts of Interest As a protection to minority shareholders, under the Corporations Law, a shareholder is required to abstain from voting on any resolution in which its direct or indirect interests conflict with that of or are different than ours. In the event such shareholder votes on such resolution, and such resolution would not have been approved without such shareholders’ vote, the resolution may be declared void by a court and such shareholder may be liable for damages to the company as well as to any third party, including other shareholders.

Redemption or Repurchase According to the Capital Markets Law, a stock corporation may acquire the shares issued by it, provided that the public offering and listing thereof has been authorized, subject to the following terms and conditions and those set forth by the CNV. The above-mentioned conditions are: (a) the shares to be acquired shall be fully paid up; (b) there shall be a resolution signed by the board of directors to such effect; (c) the acquisition shall be made out of net profits or free or voluntary reserves; and (d) the total amount of shares acquired by the company, including previously acquired shares, shall not exceed 10% of the capital stock or such lower percentage determined by the CNV. The shares acquired by the company in excess of such limit shall be disposed of within the term of 90 days after the date of the acquisition originating such excess.

The shares acquired by the company shall be disposed of by the company within the maximum term of three years counted as from the date of acquisition thereof. Upon disposing of the shares, the company shall make a preemptive offer thereof. Such an offer will not be obligatory if the shares are used in connection with a compensation plan or program for the company’s employees or if the shares are distributed among all shareholders pro rata their shareholdings. If shareholders do not exercise, in whole or in part, their preemptive rights, the sale shall be made at a stock exchange.

Liquidation Upon our liquidation, one or more liquidators may be appointed to wind up our affairs. If no such appointment is made, our Board of Directors will act as liquidator. All outstanding common shares will be entitled to participate equally in any distribution upon liquidation. In the event of liquidation, in Argentina and in any other country, our assets shall first be applied to satisfy our debts and liabilities.

Other Provisions Our bylaws are governed by Argentine law and the ownership of any kind of our shares represents acceptance of our bylaws and submission to the exclusive jurisdiction of the ordinary commercial courts of Buenos Aires for any claim or dispute related to us, our shareholders, directors and members of the supervisory committee.

Exchange Controls For a description of the exchange controls that would affect us or the holders of our securities, see Item 4. “Information on the Company-Government Regulation-Foreign Exchange Market”.

Taxation The following is a summary of the principal Argentine and U.S. federal income tax consequences arising from the acquisition, ownership and disposition of our class B shares and ADSs. The summary is based upon Argentine and U.S. federal tax laws, as well as the regulations in effect as of the date of this annual report. Further, such summary is subject to any subsequent changes in such laws and regulations that may come into effect after such date. Any change could apply retroactively and could affect the continued validity of this summary. The summary which follows does not constitute legal advice or a legal opinion with respect to the transactions that the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents holders of our class B shares or ADSs may enter into, but rather is only a brief description of certain (and not all) aspects of the Argentine and U.S. federal income tax systems as they relate to the acquisition, ownership and disposition of our class B shares and ADSs. In addition, although the following summary is believed to be a reasonable interpretation of the current taxation rules and regulations, Grupo Galicia cannot assure you that the applicable authorities or tribunals will agree with all of, or any of, the tax consequences outlined below. Currently, there is no tax treaty between the United States and Argentina.

Argentine Taxes Law No. 26,893, enacted on September 12, 2013 and published in the Official Gazette on September 23, 2013, introduced several changes to Income Tax Law No. 20,628, including the derogation of Section 78 of Decree No. 2,284/1991, which provides that foreign holders with no permanent establishment in Argentina are exempt from paying income tax on the capital gains arising from the sale or other disposition of shares or ADSs.

Law No. 26,893 has been regulated by Decree No 2334/2013, which provides that changes introduced by Law No.26,893 are effective from the date of publication of such law in the Official Gazette and are applicable to taxable events consummated from such date onwards.

Taxation of Dividends As from the effectiveness of Law No. 26,893, dividends distributions (other than stock dividends) made by local entities to individuals, undivided estates, and foreign entities were subject to tax at a rate of 10%, However this provision was repealed by the enactment of Law N° 27,260 (July 22, 2016).

Dividend payments on ADSs or ordinary shares, whether in cash, property, or stock, were not subject to Argentine withholding tax or other taxes.

Equalization Tax There is a specific rule under which a 35% tax (“equalization tax”) will be imposed on certain dividends approved by the registrant’s shareholders. The equalization tax will be applied only to the extent that distributions of dividends exceed the taxable income of the company increased by non-taxable dividends received by the distributing company in prior years and reduced by Argentine income tax paid by the distributing company.

The equalization tax will be imposed as a withholding tax on the shareholder receiving the dividend. Dividend distributions made in kind (other than cash) will be subject to the same tax rules as cash dividends. Stock dividends are not subject to Argentine taxation.

Taxation of Capital Gains (CGT) In accordance with Law No. 26,893 capital gains derived by non-resident individuals or foreign companies from the sale, exchange or other disposition of ADSs or class B shares are subject to the following regulations:

Beginning on September 23, 2013, the transfer of ADSs or class B shares may trigger capital gain taxation. In such a case, the buyer would be responsible for withholding the corresponding tax (i.e. no liability should exist for the seller) – although no withholding mechanism is currently available.

Notwithstanding the above, based on certain tax precedents, there may be support to argue that gains obtained by a non- resident from the disposal of ADSs or class B shares should be regarded as foreign source income and, therefore, not subject to Argentine CGT. As this is a controversial issue, further analysis is required.

Capital gains obtained by non-resident individuals or foreign entities from the sale, exchange or other disposition of such securities are currently subject to tax in Argentina at an effective 13.5% rate (15% tax rate applied to a gross presumed margin of 90% of the gross income) on gross proceeds arising from the sale transaction or, alternatively, to a 15% statutory rate on the actual capital gain (with proper evidence of cost incurred).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents In the case of Argentine individuals, gains derived from the transfer of ADSs or class B shares, after offsetting certain general deductions, would be subject to an income tax at a 15% rate, assuming transactions are not performed under an authorized Argentine stocks exchange market. In this sense, it must be said that there is also a controversial issue related with such tax treatment. Further analysis is recommendable in this regard.

Finally, net capital gains from the sale, exchange or other dispositions of ADSs or class B shares, obtained by Argentine corporations or similar entities will be subject to income tax at a 35% rate, like any other current gain.

Transfer Taxes No Argentine transfer taxes are applicable on the sale or transfer of ADSs or class B shares.

Tax on Minimum Notional Income The tax reform in force since 1999 reinstituted a tax on assets on Argentine companies. This tax is similar to the asset tax that was previously in effect in Argentina from 1990 to 1995. It applies at a general rate of 1% on a broadly defined asset base encompassing most of the taxpayer’s gross assets at the end of any fiscal year ending after December 31, 1998.

Specifically, the Law establishes that banks, other financial institutions and insurance companies will consider a taxable base equal to 20% of the value of taxable assets.

A company’s asset tax liability for a tax year will be reduced by its income tax payments, and asset tax payments for a tax year can be carried forward to be applied against the company’s income tax liability in any of the following ten tax years.

According to Law 27,260, this tax would be repealed as of 2019.

Personal Assets Tax Individuals domiciled and undivided estates located in Argentina or abroad will be subject to an annual tax in respect of assets located in Argentina and abroad. Applicable wealth tax rates and minimum non-taxable asset values for the general taxpayer regime are reduced and replaced with effect as of fiscal year 2016 by Law 27,260. The following is the new scheme:

Exempt Fiscal year Tax rate Minimum 2016 0.75 % Ps.800,000 2017 0.50 % Ps.950,000 2018 and on 0.25 % Ps.1,050,000

Taxpayers that have been compliant with their federal tax obligations in relation to fiscal years 2014 and 2015, according to tax authority information, that do not make use of the tax amnesty or moratorium regimes (Law 27,260), have access to be exempt from wealth tax filing and payment obligations for fiscal years 2016, 2017 and 2018.

Individuals domiciled abroad will pay the tax only in respect of the assets they hold in Argentina. In the case of individuals domiciled abroad, the tax will be paid by the individuals or entities domiciled in Argentina which, as of December 31 of each year, hold the joint ownership, possession, use, enjoyment, deposit, safekeeping, custody, administration or tenure of the assets located in Argentina subject to the tax belonging to the individuals domiciled abroad. When the direct ownership of notes, government securities and certain other investments, except shares issued by companies ruled by the Corporations Law, corresponds to companies domiciled abroad in countries that do not enforce registration systems for private securities (with the exception of insurance companies, open-end investment funds, pension funds or banks and financial entities with head offices in countries that have adopted the international banking supervision standards laid down by the Basel Committee on Banking Supervision) or that pursuant to their bylaws, charter, documents or the applicable regulatory framework, have as their principal activity

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents investing outside of the jurisdiction of their organization or domicile, or are generally restricted from doing business in their country of incorporation, it will be assumed, without any proof to the contrary being admitted, that those assets belong ultimately to individuals and therefore the system for paying the tax for such individuals domiciled abroad is applicable to them.

There is an exception pursuant to a tax reform that was published in the Official Gazette as Law No. 25,585, which went into effect on December 31, 2002. This tax reform introduced a mechanism to collect the personal assets tax on shares issued by companies ruled by the Corporations Law, which ownership belongs to individuals domiciled in Argentina or abroad and companies or entities domiciled abroad. In the case of companies or entities domiciled abroad, it will be assumed, without any proof to the contrary being admitted, that those shares belong ultimately to individuals domiciled abroad.

The tax was assessed and paid by those companies ruled by the Corporations Law at the rate of 0.5% on the value of the shares or equity interest. Since fiscal year 2016, after amendments introduced by Law 27,260, the tax rate applicable to participations in domestic entities is reduced, from 0.50% to 0.25%. The valuation of the shares, whether listed or not, must be made according to their proportional equity value. These companies may eventually seek reimbursement from the direct owner of their shares in respect of any amounts paid to the Argentine tax authorities as personal assets tax. Grupo Financiero Galicia has sought reimbursement for the amount paid corresponding to December 31, 2002. The Board of Directors submitted the decision on how to proceed with respect to fiscal year 2003 to the annual shareholders’ meeting held on April 22, 2004. At that meeting, our shareholders voted to suspend all claims on our shareholders for amounts unpaid for fiscal year 2002 and to have us absorb the amounts due for fiscal year 2003 onward when not withheld from dividends.

Pursuant to Law No. 27,260, Argentine companies that have properly fulfilled their tax obligations during the two fiscal years prior to the 2016 fiscal year, and which comply with certain other requirements may qualify for an exemption from personal asset taxes for the 2016, 2017 and 2018 fiscal years. The request for this tax exemption should be filed before March 31, 2017. Grupo Financiero Galicia has filed such request. Notwithstanding, we cannot assure that in the future, Grupo Financiero Galicia can fulfill those requirements and maintain such exemption.

Other Taxes There are no Argentine federal inheritance, succession or gift taxes applicable to the ownership, transfer or disposition of ADSs or class B shares. There are no Argentine stamps, issue, registration or similar taxes or duties payable by holders of ADSs or class B shares.

Deposit and Withdrawal of Class B Shares in Exchange for ADSs No Argentine tax is imposed on the deposit or withdrawal of class B shares in exchange for ADSs.

United States Federal Income Taxes The following is a summary of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of class B shares and ADSs, as their terms are set forth in the documents or the forms thereof, relating to such securities as in existence on the date hereof, but it does not purport to address all the tax considerations that may be relevant to a decision to purchase, own or dispose of class B shares or ADSs. This summary assumes that the class B shares or ADSs will be held as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”), and does not address tax consequences to all categories of investors, some of which (such as dealers or traders in securities or currencies, real estate investment trusts, regulated investment companies, grantor trusts, tax-exempt entities, banks, insurance companies, persons that received class B shares or ADSs as compensation for the performance of services, persons owning (or deemed to own for U.S. federal income tax purposes) 10% or more (by voting power or value) of our shares, investors whose functional currency is not the Dollar and persons that hold the class B shares or ADSs as part of a position in a “straddle” or as part of a “hedging” or “conversion” transaction for U.S. federal income tax purposes) may be

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents subject to special tax rules. Moreover, this summary does not address the U.S. federal estate and gift or alternative minimum tax consequences of the acquisition, ownership and disposition of class B shares or ADSs.

This summary (i) is based on the Code, existing, proposed and temporary United States Treasury Regulations and judicial and administrative interpretations thereof, in each case, as in effect and available on the date hereof, and (ii) is based in part on representations of the Depository and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms. All of the foregoing are subject to change, which change could apply retroactively and could affect the tax consequences described below.

For purposes of this summary, a “U.S. Holder” is a beneficial owner of class B shares or ADSs that, for U.S. federal income tax purposes, is (i) a citizen or resident of the United States, (ii) a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if such trust validly elects to be treated as a United States person for U.S. federal income tax purposes or if (a) a United States court can exercise primary supervision over its administration and (b) one or more United States persons have the authority to control all of the substantial decisions of such trust. A “Non-U.S. Holder” is a beneficial owner of class B shares or ADSs that is neither a U.S. Holder nor a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes).

If a partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds class B shares or ADSs, the tax treatment of the partnership and a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor as to its tax consequences.

Each prospective purchaser should consult its own tax advisor with respect to the U.S. federal, state, local and non- U.S. tax consequences of acquiring, owning and disposing of class B shares or ADSs.

Ownership of ADSs in General In general, for U.S. federal income tax purposes, holders of ADSs will be treated as the owners of the class B shares represented by such ADSs. For purposes of the discussion below, we assume that intermediaries in the chain of ownership between the holder of an ADS and Grupo Financiero Galicia are acting consistently with the claiming of U.S. foreign tax credits by U.S. Holders.

Taxation of Distributions Subject to the discussion below under “Passive Foreign Investment Company Considerations,” for U.S. federal income tax purposes, the gross amount of distributions by Grupo Financiero Galicia of cash or property (other than certain distributions, if any, of class B shares or ADSs distributed pro rata to all shareholders of Grupo Financiero Galicia, including holders of ADSs) made with respect to the class B shares or ADSs before reduction for any Argentine taxes withheld therefrom, will constitute dividends to the extent that such distributions are paid out of Grupo Financiero Galicia’s current or accumulated earnings and profits, as determined for U.S. federal income tax purposes, and will be included in the gross income of a U.S. Holder as dividend income. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” non-corporate U.S. Holders generally will be taxed on such distributions on ADSs (or class B shares that are readily tradable on an established securities market in the United States at the time of such distribution) at the lower rates applicable to long-term capital gains (i.e., gains from the sale of capital assets held for more than one year). Non-corporate U.S. Holders that (i) do not meet a minimum holding period requirement with respect to such ADSs (or class B shares), (ii) elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4)(B) of the Code or (iii) receive dividends with respect to which they are obligated to make related payments for positions in substantially similar or related property will not be eligible for the reduced rates of taxation. In addition, dividends will not be eligible for the dividends received deduction generally allowed to corporations under the Code.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Subject to the discussion below under “Passive Foreign Investment Company Considerations,” if distributions with respect to the class B shares or ADSs exceed Grupo Financiero Galicia’s current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, the excess will be treated first as a tax-free return of capital to the extent of such U.S. Holder’s adjusted tax basis in the class B shares or ADSs. Any amount in excess of such adjusted basis will be treated as capital gain from the sale or exchange of such class B shares or ADSs. Grupo Financiero Galicia does not maintain calculations of its earnings and profits under U.S. federal income tax principles.

Dividends paid in Pesos will be included in the gross income of a U.S. Holder in an amount equal to the Dollar value of the Pesos on the date of receipt, which, in the case of ADSs, is the date they are received by the Depositary. The amount of any distribution of property other than cash will be the fair value of such property on the date of distribution. Any gains or losses resulting from the conversion of Pesos between the time of the receipt of dividends paid in Pesos and the time the Pesos are converted into Dollars will be treated as ordinary income or loss, as the case may be, of a U.S. Holder. Dividends received by a U.S. Holder with respect to the class B shares or ADSs will be treated as foreign source income, which may be relevant in calculating such holder’s foreign tax credit limitation. Subject to certain conditions and limitations, Argentine tax withheld on dividends may be deducted from taxable income or credited against a U.S. Holder’s U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific categories of income. For this purpose, dividend income with respect to class B shares or ADSs should generally constitute “passive category income,” or in the case of certain U.S. Holders, “general category income.” The rules governing the foreign tax credit are complex. Prospective holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Subject to the discussion below under “Backup Withholding and Information Reporting,” a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on dividends received on class B shares or ADSs, unless such income is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States.

Taxation of Capital Gains Subject to the discussion below under “Passive Foreign Investment Company Considerations,” U.S. Holders will recognize capital gain or loss for U.S. federal income tax purposes upon a sale or exchange of class B shares or ADSs in an amount equal to the difference between such U.S. Holder’s adjusted tax basis in the class B shares or ADSs and the amount realized on their disposition. In the case of a non-corporate U.S. Holder, the maximum marginal U.S. federal income tax rate applicable to such gain will be lower than the maximum marginal U.S. federal income tax rate for ordinary income (other than certain dividends) if the U.S. Holder’s holding period in the class B shares or ADSs exceeds one year at the time of the sale or exchange. Gain or loss, if any, recognized by a U.S. Holder generally will be treated as United States source income or loss for U.S. foreign tax credit purposes. Consequently, a U.S. Holder may not be able to use the foreign tax credit arising from any Argentine tax imposed on the disposition of class B shares or ADSs unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources. Certain limitations apply to the deductibility of capital losses for U.S. federal income tax purposes.

A U.S. Holder’s initial tax basis in the class B shares or ADSs is the Dollar value of the Pesos denominated purchase price determined on the date of purchase. If the class B shares or ADSs are treated as traded on an “established securities market,” a cash basis U.S. Holder (or, if it elects, an accrual basis U.S. Holder) will determine the Dollar value of the cost of such class B shares or ADSs by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.

With respect to the sale or exchange of class B shares or ADSs, the amount realized generally will be the Dollar value of the payment received, before reduction for any Argentine taxes withheld therefrom, determined on (i) the date of receipt of payment in the case of a cash basis U.S. Holder and (ii) the date of disposition in the case of an accrual basis U.S. Holder. If the class B shares or ADSs are treated as traded on an “established securities market,” a cash basis taxpayer (or, if it elects, an accrual basis taxpayer) will determine the Dollar value of the amount realized by translating the amount received at the spot rate of exchange on the settlement date of the sale.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Subject to the discussion below under “Backup Withholding and Information Reporting,” a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on gain realized on the sale or exchange of class B shares or ADSs unless (i) such gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States or (ii) in the case of gain realized by an individual Non-U.S. Holder, the Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of the sale or exchange and certain other conditions are met.

Passive Foreign Investment Company Considerations A non-U.S. corporation will be classified as a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules, either (1) at least 75 percent of its gross income is “passive income” or (2) at least 50 percent of the average value of its gross assets is attributable to assets that produce “passive income” or is held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions, other than certain income derived in the active conduct of a banking business.

The application of the PFIC rules is unclear both generally and specifically with respect to banks. The United States Internal Revenue Service (“IRS”) has issued a notice and certain proposed Treasury Regulations that exclude from passive income any income derived in the active conduct of a banking business by a qualifying foreign bank (the “Active Bank Exception”). However, the IRS notice and proposed Treasury Regulations are inconsistent in certain respects. Because final Treasury Regulations have not been issued, there can be no assurance that Grupo Financiero Galicia or its subsidiaries will satisfy the Active Bank Exception for any given taxable year.

Based on certain estimates of its gross income and gross assets (which estimates are inherently imprecise), the nature of its business, and reliance on the Active Bank Exception, Grupo Financiero Galicia believes that it should not be classified as a PFIC for the taxable year ended December 31, 2016. Grupo Financiero Galicia’s status in future years will depend on its assets and activities in those years. Grupo Financiero Galicia has no reason to believe that its assets or activities will change in a manner that would cause it to be classified as a PFIC, but there can be no assurance that Grupo Financiero Galicia will not be considered a PFIC for any taxable year. If Grupo Financiero Galicia were a PFIC, a U.S. Holder of class B shares or ADSs generally would be subject to imputed interest charges and other disadvantageous tax treatment with respect to any gain from the sale or exchange of, and certain distributions with respect to, the class B shares or ADSs.

If Grupo Financiero Galicia were a PFIC, a U.S. Holder of class B shares or ADSs could make a variety of elections that may alleviate certain of the adverse tax consequences referred to above, and one of these elections may be made retroactively. However, it is expected that the conditions necessary for making certain of such elections will not apply in the case of the class B shares or ADSs. U.S. Holders should consult their own tax advisors regarding the tax consequences that would arise if Grupo Financiero Galicia were treated as a PFIC.

Reporting Requirements Non-corporate U.S. Holders, including individuals, that hold “specified foreign financial assets,” as defined in the Treasury Regulations (which may include class B shares or ADSs), other than in an account at a U.S. financial institution or the U.S. branch of a non-U.S. financial institution, are required to report certain information relating to such assets. U.S. Holders are urged to consult their tax advisors regarding the effect, if any, of this and any other reporting requirements on their ownership and disposition of class B shares or ADSs. Failure to comply with applicable reporting requirements could result in the imposition of substantial penalties.

Backup Withholding and Information Reporting United States backup withholding tax and information reporting requirements generally apply to certain payments to certain holders of stock.

Information reporting generally will apply to payments of dividends on, and to proceeds from the sale or redemption of, class B shares or ADSs made within the United States, or by a U.S. payor or U.S. middleman, to a holder of class B shares or ADSs (other than an exempt recipient, such as a payee that is not a United States person and that provides an appropriate certification).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Payments of dividends on, or proceeds from the sale or redemption of, class B shares or ADSs within the United States, or by a U.S. payor or U.S. middleman, to a holder (other than an exempt recipient, such as a payee that is not a United States person and that provides an appropriate certification) will be subject to backup withholding if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. The backup withholding tax rate is currently 28%.

FATCA Beginning on January 1, 2019 (or, if later, the date on which final Treasury Regulations are published defining the term “foreign passthru payment”), Grupo Financiero Galicia may be required, pursuant to Sections 1471 through 1474 of the Code, and the Treasury Regulations promulgated thereunder (often referred to as the “Foreign Account Tax Compliance Act” or “FATCA”) to withhold U.S. tax at a 30% rate on all or a portion of any distribution on class B shares or ADSs which is treated as a “foreign passthru payment.”

Assuming that distributions from Grupo Financiero Galicia constitute “foreign passthru payments” and that Grupo Financiero Galicia enters into an agreement with the IRS to report the information required by FATCA or, if Argentina has entered in an intergovernmental agreement with the United States (an “IGA”). Grupo Financiero Galicia complies with such IGA, then an investor considered to have a “U.S. account” maintained by Grupo Financiero Galicia may be required to provide the information described below or be subject to U.S. withholding tax on any distribution on class B shares or ADSs that is treated as a “foreign passthru payment.” Investors in class B shares or ADSs that are financial institutions, or financial institutions that receive payments on behalf of other persons, and that have not entered into an agreement with the IRS (or otherwise established an exemption from FATCA, including pursuant to an applicable IGA) would also be subject to this U.S. withholding tax.

FATCA is particularly complex and its application to Grupo Financiero Galicia is uncertain at this time. Each holder of class B shares or ADSs should consult its own tax advisor to obtain a more detailed explanation of FATCA and to learn how it might affect such holder under its particular circumstances.

Medicare Tax on Investment Income Certain U.S. Holders that are individuals, estates or trusts are required to pay a 3.8% tax on the lesser of (i) the U.S. Holder’s “net investment income” for the taxable year and (ii) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold. Net investment income includes, among other things, dividends and capital gains from the sale or other disposition of class B shares or ADSs.

THE ABOVE SUMMARIES ARE NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES RELATING TO THE ACQUISITION, OWNERSHIP AND DISPOSITION OF CLASS B SHARES OR ADSs. PROSPECTIVE HOLDERS SHOULD CONSULT AN INDEPENDENT TAX ADVISOR CONCERNING THE TAX CONSEQUENCES IN THEIR PARTICULAR CIRCUMSTANCES.

Material Contracts Bonds In connection with Banco Galicia’s issuance on May 4, 2011 of its Class I notes due 2018 in the aggregate principal amount of US$300 million, within its global short-term, medium-term and/or long-term note program, for an outstanding face value at any time of up to US$343 million, or the equivalent amount in other currencies, Banco Galicia entered into an indenture with The Bank of New York Mellon, acting as trustee, pursuant to which such notes were issued. This indenture includes a number of significant covenants, which are subject to important qualifications and exceptions, that, among other things, restrict the ability of (i) Banco Galicia and certain of its

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents subsidiaries to directly or indirectly, create, incur, assume or suffer to exist liens upon its present or future assets to secure any indebtedness and (ii) Banco Galicia to merge, consolidate or amalgamate with or into, or convey or transfer or lease all or substantially all of its properties and assets, whether in one transaction or a series of related transactions. On connection with the same issuance, on July 19, 2016 Banco Galicia issued an aggregate amount of US$ 250 million of Class II subordinated notes.

On July 19, 2016 Banco Galicia issued its Class II in an aggregate principal amount of U$S 250 million.

During 2016, Tarjeta Naranja issued an aggregate principal amount of Ps.3,207 million (Ps.261 million Class XXXII, Ps.500 million Class XXXIII, Ps.600 million Class XXXIV, Ps.1,000 million Class XXXV and Ps.847 million Class XXXVI). Its outstanding principal amount of debt issued in 2015 was Ps.807 (Ps.37 million Class XXVIII, Ps.169 million Class XXIX, Ps.400 million Class XXX and Ps.201 million Class XXXI).

During 2016, Tarjetas Cuyanas issued an aggregate principal amount of Ps.1,442 million (Ps.242 million Class XXIII, on March 16, 2016; Ps.300 million Class XXIV on May 5, 2016; Ps.400 million Class XXV on July 26, 2016 and Ps.500 million Class XXVI on Octobre 24, 2016). Its outstanding principal amount of debt issued in 2015 was Ps. 1,129 million (Ps.297 million Class XIX, Ps.300 million Class XX, Ps.232 million Class XXI and Ps.300 million Class XXII).

During 2015, CFA issued an aggregate amount of Ps.459 million (Ps.249 million Class XIV, Ps.210 million Class XV). Its outstanding principal amount of debt issued in 2014 was Ps.277 million (Ps.200 million Class XII, Ps.77 million Class XIII).

On May 8, 2013 Grupo Financiero Galicia issued its Class IV notes in an aggregate principal amount of Ps.220 million.

On January 28, 2011 Tarjeta Naranja issued Class XIII notes due 2017 in an aggregate principal amount of US$200 million.

According to the applicable price supplement for each issuance of the described notes, the companies agreed to certain commitments with the holders which include, among others, the inability to merge except in certain circumstances, restrictions on incurring or guaranteeing certain indebtedness and restrictions on asset dispositions.

For a description of the notes issued during fiscal year 2016, see Note 14 to our financial statements.

Loans In May 2016, the IFC granted Banco Galicia a credit line in an amount of up to US$130 million. As of December 31, 2016 Banco Galicia has used the sum of US $ 5,000,000 for the granting of loans through this line.

In December 2010, the FMO granted Banco Galicia a US$20 million loan with a 6 year term. The purpose of these facilities is to fund long-term loans to small and medium-sized companies. In December 2011, Proparco granted Banco Galicia a US$20 million loan with a 6 year term for the financing of investment projects of export oriented small and medium-sized companies mainly active in the agribusiness sector. As of September 30, 2016, the principal amount of these facilities amounted to US$1,125,000.00 and US$3,111,666.68, respectively.

Documents on Display We are subject to the informational requirements of the Exchange Act. In accordance with these requirements, we file reports and other information with the SEC. These materials, including this annual report and its exhibits, may be inspected and printed or copied for a fee at the SEC’s Public Reference Room at 100 F Street,

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents N.E., Washington, D.C. 20549. You may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. These materials are also available on the SEC’s website at http://www.sec.gov. Material submitted by us can also be inspected at the offices of the National Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006-1506.

Item 11. Quantitative and Qualitative Disclosures About Market Risk General Market risks faced by us are the risks arising from the fluctuations in interest rates and in foreign exchange rates. Our market risk arises mainly from the operations of Banco Galicia in its capacity as a financial intermediary. Our subsidiaries and other entities in which we have a minority equity interest are also subject to market risk. However, the amount of these risks is not significant and they are not discussed below. Policies regarding these risks are applied at the level of our operating subsidiaries.

In compliance with the Argentine Central Bank’s regulations, based on the best practices and international standards, Banco Galicia has a Risk Management Division responsible for identifying, monitoring and actively and integrally managing the different risks Banco Galicia and its subsidiaries are exposed to (credit, financial and operational risks). The aim of the Division is to guarantee Banco Galicia’s board of directors that it is fully aware of the risks Banco Galicia is exposed to. It also creates and proposes the policies and procedures necessary to mitigate and control such risks. The Risk Management Committee, made-up of four members of the board of directors of Banco Galicia, the CEO and the managers of the Risk Management Division, the Planning Division and Internal Audit, is the highest corporate body to which Banco Galicia’s board of directors delegates integral risk management and the executive responsibility to define and enforce risk management policies, procedures and controls. This Committee is also responsible for setting specific limits for the exposure to each risk and approving, when applicable, temporary excesses over such limits as well as being informed of each risk position and compliance with policies.

See Item 6. “Directors, Senior Management and Employees-Functions of the Board of Directors of Banco Galicia”. Liquidity management is discussed in Item 5.B. “Liquidity and Capital Resources”. Credit risk management is discussed in Item 4. “Information on the Company-Selected Statistical Information-Credit Review Process” and other sections under Item 4. “Information on the Company-Selected Statistical Information” describing Banco Galicia’s loan portfolio and loan loss experience.

The following sections contain information on Banco Galicia’s sensitivity to interest-rate risk and exchange-rate risk that constitute forward-looking statements that involve risks and uncertainties. Actual results could differ from those projected in the forward-looking statements.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Interest Rate Risk A distinctive and natural characteristic of financial brokerage is the existence of interest-earning assets and interest-bearing liabilities with different maturities (or different rate repricing periods) and interest rates that can be fixed or variable. This situation leads to a gap or mismatch that arises from the balance sheet and measures the imbalance between fixed- and variable-rate assets and liabilities, and results in the so-called interest-rate risk or else balance sheet structural risk. A commercial bank can face the interest rate risk on both sides of its balance sheet with regard to the income generated by assets (loans and securities) and the expenses related to the interest-bearing liabilities (deposits and others sources of funds).

The policy currently in force defines this gap as the risk that the financial margin and the economic value of equity may vary as a consequence of fluctuations in market interest rates. The magnitude of such variation is associated with the sensitivity to interest rates of the structure of Banco Galicia’s assets and liabilities.

Aimed at managing and limiting the sensitivity of Banco Galicia’s economic value and results with respect to variations in the interest rate inherent to the structure of certain assets and liabilities, the following 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 of interest rate fluctuations on the net financial income for the first year is calculated using the methodology known as scenario simulation. On a monthly basis, net financial income for the first year is simulated in a base scenario and in a “+100 b.p.” scenario. In order to prepare each scenario, different criteria are assumed regarding the sensitivity to interest rates of assets and liabilities, depending on the historical performance observed of the different balance sheet items. Net financial income for the first year in the “+100 b.p.” scenario is compared to the net financial income for the first year in the base scenario. The resulting difference is related to the annualized accounting net financial income for the last calendar trailing quarter available, for Banco Galicia on a consolidated basis, before quotation differences and CER adjustment.

The limit on a potential loss in the “+100 b.p.” scenario with respect to the base scenario was established at 20% of the net financial income for the first year, as defined in the paragraph above. At the end of fiscal year 2016, the negative difference between the net financial income for the first year corresponding to the “+100 b.p.” scenario and that corresponding to the base scenario accounted for 0.0% of the net financial income for the first year.

The tables below show as of December 31, 2016 and December 31, 2015, in absolute and percentage terms, the change in Banco Galicia’s net financial income (“NFI”) of the first year, as compared to the NFI of the “base” scenario corresponding to various interest-rate scenarios in which interest rates change 50, 100, 150 and 200 b.p. from those in the “base” scenario. Banco Galicia’s net portfolio is broken down into trading and non-trading. The trading net portfolio represents primarily securities issued by the Argentine Central Bank (Lebac and Nobac).

Net Portfolio Net Financial Income (1) (In millions of Pesos, except percentages) As of December 31, 2016 As of December 31, 2015 Change in Interest Rates in b.p. Variation % Change in the NFI Variation % Change in the NFI 200 (2 ) -0.01 % (40 ) -0.20 % 150 (4 ) -0.02 % (30 ) -0.15 % 100 (5 ) -0.03 % (20 ) -0.10 % 50 (7 ) -0.04 % (10 ) -0.05 % Static (50) (15 ) -0.08 % 29 0.14 % (100) (20 ) -0.11 % 58 0.29 % (150) (26 ) -0.15 % 87 0.43 % (200) (31 ) -0.17 % 116 0.57 %

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Net Trading Portfolio Net Financial Income (1) (In millions of Pesos, except percentages) As of December 31, 2016 As of December 31, 2015 Change in Interest Rates in b.p. Variation % Change in the NFI Variation % Change in the NFI 200 178 0.99 % 265 1.31 % 150 134 0.75 % 199 0.98 % 100 89 0.50 % 133 0.66 % 50 45 0.25 % 66 0.33 % Static (50) (45 ) -0.25 % (66 ) -0.33 % (100) (89 ) -0.50 % (132 ) -0.65 % (150) (134 ) -0.75 % (199 ) -0.98 % (200) (178 ) -0.99 % (265 ) -1.31 %

Net Non Trading Portfolio Net Financial Income (1) (In millions of Pesos, except percentages) As of December 31, 2016 As of December 31, 2015 Change in Interest Rates in b.p. Variation % Change in the NFI Variation % Change in the NFI 200 (180 ) -1.01 % (305 ) -1.51 % 150 (138 ) -0.77 % (229 ) -1.13 % 100 (94 ) -0.52 % (153 ) -0.76 % 50 (52 ) -0.29 % (76 ) -0.38 % Static (50) 30 0.17 % 95 0.47 % (100) 69 0.39 % 190 0.94 % (150) 108 0.60 % 286 1.41 % (200) 147 0.82 % 381 1.88 %

(1) Net interest of the first year.

Limit on the Net Present Value of Assets and Liabilities The net present value of assets and liabilities is also calculated on a monthly basis and taking into account the assets and liabilities of Banco Galicia’s consolidated balance sheet.

In fiscal year 2015, the methodology used for calculating the risk of interest rate from the perspective of the net present value was modified.

The net present value of the consolidated assets and liabilities, as mentioned, is calculated for a “base” scenario in which the listed securities portfolio is discounted using interest rates obtained according to yield curves determined based on the market yields of different reference bonds denominated in Pesos, in Dollars and adjusted by the CER. Yield curves for unlisted assets and liabilities are also created using market interest rates. The net present value of assets and liabilities is also calculated for a “critical” scenario, obtained by means of a significant number of statistical simulations on the interest rate evolution path, as a consequence of the exposure to interest rate risk shown on the balance sheet structure.

The economic capital is obtained from the resulting difference between the “critical” and “base” scenarios, considering a 99.5% degree of accuracy.

The limit on the exposure to interest rate risk, in terms of the difference between the net present value of assets and liabilities in the “base” scenario and in the “critical” scenario cannot exceed 15% of the consolidated RPC. As of the fiscal year-end for 2016, the VaR (Value at Risk) was -6.7% of the RPC.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Foreign Exchange Rate Risk Exchange-rate sensitivity is the relationship between the fluctuations of exchange rates and Banco Galicia’s net financial income resulting from the revaluation of Banco Galicia’s assets and liabilities denominated in foreign currency. The impact of variations in the exchange rate on Banco Galicia’s net financial income depends on whether Banco Galicia has a net asset foreign currency position (the amount by which foreign currency denominated assets exceed foreign currency denominated liabilities) or a net liability foreign currency position (the amount by which foreign currency denominated liabilities exceed foreign currency denominated assets). In the first case an increase/decrease in the exchange rate results in a gain/loss, respectively. In the second case, an increase/ decrease results in a loss/gain, respectively. Banco Galicia has established limits for its consolidated foreign currency mismatches for the asset and liability positions of -/+15% of Banco Galicia’s RPC. At the end of the fiscal year, Banco Galicia’s net asset position in foreign currency represented 9.6%.

As of December 31, 2016, Banco Galicia had a net asset foreign currency position of Ps.2,111 million (equal to US$133 million) after adjusting its on-balance sheet net liability position of Ps.1,815 million (minus US$115 million) by net forward purchases of foreign currency without delivery of the underlying asset, for Ps.3,926 million (US$248 million), recorded off-balance sheet.

As of December 31, 2015, Banco Galicia had a net asset foreign currency position of Ps.2,023 million (equal to US$156 million) after adjusting its on-balance sheet net liability position of Ps.814 million (US$63 million) by net forward purchases of foreign currency without delivery of the underlying asset, for Ps.2,837 million (US$218 million), recorded off-balance sheet.

As of December 31, 2014, Banco Galicia had a net asset foreign currency position of Ps.1,519 million (equal to US$178 million) after adjusting its on-balance sheet net liability position of Ps.488 million (US$57 million) by net forward purchases of foreign currency without delivery of the underlying asset, for Ps.2,007 million (US$235 million), recorded off-balance sheet.

The tables below show the effects of changes in the exchange rate of the Peso vis-à-vis the Dollar on the value of Banco Galicia’s foreign currency net asset position as of December 31, 2016, 2015 and 2014. As of these dates, the breakdown of Banco Galicia’s foreign currency net asset position into trading and non-trading is not presented, as Banco Galicia’s foreign currency trading portfolio was not material.

Value of Foreign Currency Net Position as of December 31, 2016 Percentage Change in the Value of the Peso Relative to the Dollar (1) Amount Absolute Variation % Change (In millions of Pesos, except percentages) 40% 2,953 842 40 30% 2,744 633 30 20% 2,533 422 20 10% 2,322 211 10 Static 2,111 (2) — — (10)% 1,900 (211 ) (10 ) (20)% 1,689 (422 ) (20 ) (30)% 1,478 (633 ) (30 ) (40)% 1,269 (842 ) (40 )

(1) Devaluation / (Revaluation). (3) Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Value of Foreign Currency Net Position as of December 31, 2015 Percentage Change in the Value of the Peso Relative to the Dollar (1) Amount Absolute Variation % Change (In millions of Pesos, except percentages) 40% 2,830 807 40 30% 2,630 607 30 20% 2,428 405 20 10% 2,225 202 10 Static 2,023 (2) — — (10)% 1,821 (202 ) (10 ) (20)% 1,618 (405 ) (20 ) (30)% 1,416 (607 ) (30 ) (40)% 1,216 (807 ) (40 )

(1) Devaluation / (Revaluation). (2) Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts.

Value of Foreign Currency Net Position as of December 31, 2014 Percentage Change in the Value of the Peso Relative to the Dollar (1) Amount Absolute Variation % Change (In millions of Pesos, except percentages) 40% 2,127 608 40 30% 1,975 456 30 20% 1,823 304 20 10% 1,671 152 10 Static 1,519 (2) — — (10)% 1,367 (152 ) (10 ) (20)% 1,215 (304 ) (20 ) (30)% 1,063 (456 ) (30 ) (40)% 911 (608 ) (40 )

(1) Devaluation / (Revaluation). (2) Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts.

Currency Mismatches Financial brokerage naturally involves the raising of funds and the subsequent use thereof. Both funding (deposits and other alternative sources of financing) and the use of the funds in loans and/or investments can be carried out in assets and liabilities denominated in different currencies. This possible currency mismatch between liabilities and the use thereof on assets generates a source of risk that arises from the variations in the different 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 equity losses as a consequence of variations in the foreign currency exchange rates in which assets and liabilities (both on and off the Balance Sheet) are denominated.

For purposes of the management and mitigation of the currency risk, two other currencies have been defined apart from the Argentine Peso: Assets and liabilities adjusted by CER and foreign currency.

The policy framework currently in force establishes limits in terms of maximum net asset positions (assets denominated in a currency which are higher than the liabilities denominated in such currency) and net liability positions (assets denominated in a currency which are lower than the liabilities denominated in such currency) for mismatches in Pesos adjusted by CER and in foreign currency, as a proportion of Banco Galicia’s RPC, on a consolidated basis.

Banco Galicia manages mismatches not only regarding assets and liabilities, but also covering mismatches through the foreign currency futures market. Transactions in foreign currency futures (Dollar futures) are carried out through the MAE, ROFEX and with customers. These transactions are subject to limits that take into consideration particular characteristics of each trading

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document environment. A global exposure limit was set for these futures contracts, equivalent to 100% of Banco Galicia’s RPC on a consolidated basis.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The table below shows the composition of Banco Galicia’s shareholders’ equity by currency and type of principal adjustment, that is Banco Galicia’s assets and liabilities denominated in foreign currency, in Pesos and adjustable by the CER, as of December 31, 2016.

As of December 31, 2016 Assets Liabilities Gap (In millions of Pesos) Financial Assets and Liabilities 227,393 203,551 23,842 Pesos - Adjusted by CER 680 99 581 Pesos - Unadjusted 159,984 134,908 25,076 Foreign Currency (1) 66,729 68,544 -1,815 Other Assets and Liabilities 12,665 17,601 -4,936 Total Gap 240,058 221,152 18,906 Adjusted for Forward Transactions Recorded in Memo Accounts Financial Assets and Liabilities 227,393 203,551 23,842 Pesos - Adjusted by the CER 680 99 581 Pesos - Unadjusted, Including Shareholders’ Equity (2) 144,139 122,989 21,150 Foreign Currency (1) (2) 82,574 80,463 2,111 Other Assets and Liabilities 12,665 17,601 -4,936 Total Adjusted Gap 240,058 221,152 18,906 (1) In Pesos, at an exchange rate of Ps.15.8502 per US$1. (2) Adjusted for forward sales and purchases of foreign exchange, without delivery of underlying assets and recorded in Memorandum Accounts.

As of December 31, 2016, considering the adjustments from forward transactions recorded under memorandum accounts, Banco Galicia had net asset positions in Foreign Currency, and in Pesos Adjusted and Non-adjusted by CER.

The paragraphs below describe the composition of the different currency mismatches as of December 31, 2016.

Peso-denominated Assets and Liabilities Adjusted by CER At fiscal year-end, the Bank had a net asset position of Ps.581 million, mainly made up of Ps.505 million corresponding to the participation certificate in Galtrust I Financial Trust and Ps. 175 million of mortgage loans adjustable by UVA.

Banco Galicia’s adjusted liabilities were mainly comprised of Ps. 99 million of time deposits.

Assets and Liabilities Denominated in Foreign Currency As of December 31, 2016, the Bank’s assets denominated in foreign currency were mainly comprised of the following: (i) cash and balances held at the Argentine Central Bank and correspondent banks in the amount of Ps.39,478 million, (ii) loans to the non-financial private sector and residents abroad in the amount of Ps.17,551 million (principal and interest, net of allowances), (iii) Ps. 5,729 million corresponding to obligations in connection with spot transactions pending settlement, (iv) Ps. 1,277 million corresponding to holdings of government bonds and (v) 1,042 million corresponding to holdings of private securities.

As of December 31, 2016, the Bank’s liabilities denominated in foreign currency consisted mainly of: (i) deposits in the amount of Ps.51,022 million (principal, interest and exchange-rate differences), including Ps.16,899 of deposits related to the Tax Amnesty Law; (ii) Ps.10,014 million of subordinated and unsubordinated notes issued by Banco Galicia and the Regional Credit Card Companies; (iii) debt with international banks and credit agencies in the amount of Ps.2,233 million and (iv) Ps.2,494 million in connection with collections for third parties.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents A net liability position in the amount of Ps.1,815 million as of December 31, 2016. Furthermore, forward transactions in foreign currency without delivery of the underlying asset for a notional value in the amount of Ps.3,926 million were recorded in memorandum accounts. As of December 31, 2016, the Bank’s net position in foreign currency adjusted to reflect these transactions was an asset position of Ps.2,111 million, equivalent to US$133 million.

Banco Galicia has set limits as regards foreign-currency mismatches at -15% (minus 15%) of the Bank’s RPC for its net asset position and its short position, respectively. As of December 31, 2016, Banco Galicia’s net asset position in foreign currency represented 9.6% of its RPC.

Non-Adjusted Peso-Denominated Assets and Liabilities The Bank’s non-adjusted Peso-denominated assets at December 31, 2016 were mainly comprised of the following: (i) loans to the non-financial private sector in the amount of Ps.117,919 million (principal plus interest, net of allowances); (ii) cash and balances held at the Argentine Central Bank and correspondent banks in the amount of Ps.23,953 million (including the balance of escrow accounts); (iii) Ps.7,551 million corresponding to holdings of securities issued by the Argentine Central Bank; (iv) Ps.3,720 million corresponding mainly to holdings of Boncer 2021 and discount bonds, (v) Ps.2,040 million corresponding to participation in investment funds and (vi) Ps.1,730 million of negotiable bonds.

Banco Galicia’s non-adjusted Peso-denominated liabilities at December 31, 2016 were mainly comprised of the following: (i) deposits in the amount of Ps.100,605 million (principal plus interest); (ii) liabilities with stores in connection with Banco Galicia’s credit card activities and the Regional Credit Card Companies in the amount of Ps.20,813 million; (iii) Ps.7,654 million corresponding to notes issued by the Regional Credit Card Companies and CFA, (iv) Ps.4,040 million in liabilities with local financial institutions (almost all corresponding to the Regional Credit Card Companies), and (v) repos in the amount of Ps. 1,784.

The net asset position in non-adjusted Peso-denominated assets and liabilities was Ps.21,150 million at December 31, 2016.

Other Assets and Liabilities In the category “Other Assets and Liabilities”, assets at December 31, 2016 were mainly comprised of the following: (i) premises and equipment, miscellaneous and intangible assets in the amount of Ps. 6,571 million, (ii) miscellaneous receivables in the amount of Ps. 2,546 million and (iii) equity investments in the amount of Ps. 173 million.

Liabilities at December 31, 2016 mainly included: (i) Ps.5,218 million recorded under “Miscellaneous Liabilities”, (ii) Ps. 5,287 million of amounts payable for spot and forward purchases to be settled, (iii) minority interest in the amount of Ps.1,350 million and (iv) allowances for other contingencies in the amount of Ps. 352 million

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

Brokerage transactions and/or investments in government securities, currencies, notes, derivative products and debt instruments issued by the Argentine Central Bank are governed by the policy 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 Banco Galicia individually, the possible loss that could be generated by the positions in securities, derivative instruments, the Argentine Central Bank, Argentine provinces, brokerage of notes and currencies under certain parameters.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The parameters taken into consideration are as follows: (i) A 95% - 99% degree of accuracy. (ii) VaR estimates are made for holding periods of one day and “n” days, where “n” is defined as the number of days necessary to settle the position in each security. (iii) In the case of new issuances, the available trading days are taken into consideration; if there are not enough trading days or if there are no quotations, the volatility of bonds from domestic issuers with similar risk and characteristics is used.

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

Currency Ps.72 million. Fixed-income instruments Ps.554 million. Interest rate derivatives Ps.4 million.

The policy also comprises the development of periodic stress tests, aimed at evaluating high risk positions and its results under adverse market conditions. Contingency plans were also designed, which include recommended actions to take under a critical scenario, such as recessionary economic conditions.

Cross-border Risk Cross-border risk represents the risk of incurring equity losses as a consequence of the impairment or failure to collect exposures (loans, positions in securities, equity investments, and liquidity) abroad. It includes risks generated by entering into transactions with public or private counterparties domiciled outside of Argentina.

In order to regulate risk exposures in international jurisdictions, limits were established taking into consideration the jurisdiction’s credit rating, the type of transaction and a maximum exposure acceptable for each counterpart.

The Bank defined its policy by setting maximum exposure limits measured as a percentage of its RPC and taking into account if the counterparty is considered investment grade:

Risk Required Credit Rating Investment Grade Not Investment Grade - Jurisdictional Risk - International Rating Agency - No limit - Maximum limit: 5% - Counterparty Risk - International Banking Relations - Maximum limit: 15% - Maximum limit: 1% - Credit Division - The limit is distributed between - Only foreign trade financial and foreign trade transactions transactions, thus absorbing local counterparty margin

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Overseas Foreign Currency Transfer Risk With a view towards mitigating the risk resulting from a potential change in domestic laws that may affect overseas foreign currency transfers, in order to meet incurred liabilities, a policy was devised to set a limit for liabilities transferred abroad, as a proportion to total consolidated liabilities. Such ratio was fixed at 15%.

As of the fiscal year ended December 31, 2016, this exposure was 6.2%.

Risk Exposures in the Non-financial Public Sector Risk exposures in the “Non-financial Public Sector” in federal, provincial and municipal jurisdictions are regulated by a management policy changed in the fourth quarter of the 2016 fiscal year.

The policy sets limits on risk exposures, establishing them as a percentage of the Bank’s RPC in two different kind of assistance: • Direct assistance established by loans, leasing, credit accounts, credit cards, payrolls and other credit lines issued by de Bank, with different limits split by government level • Total assistance (including Government bonds), with another set of limits associated with government levels

The exposure limits set by this policy, are in line with regulatory limits for Non-financial-Public Sector

Operational Risk Banco Galicia adopts the definition of operational risk determined by the Argentine Central Bank and the best international practices. Operational risk is defined as the risk of losses due to the lack of conformity or due to failure of internal processes, the acts of people or systems, or otherwise because of external events. This definition includes legal risk, but does not include strategic and reputational risks.

Banco Galicia defined the framework for the operational risk management, which comprises the financial institution’s policies, practices, procedures and structures for its proper management.

The Risk Management Division, independent from the business or support units involved, includes a specific unit that is responsible for the management of such risks. The duties of this unit are, among others, to develop and monitor the operational risk management model, inherent in the Bank’s products, activities, processes, systems and technology, aligned with the regulations and best practices in force, organize the main necessary processes, provide advice, training and support to divisions, ensure that the Bank’s contingency, recovery and activity continuity plans are developed according to the size and complexity 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 an ongoing process carried out throughout the Bank, which fosters a risk management culture at all organization levels through an effective policy and a program led by senior management.

Identification The starting point of the operational risk management is the identification of risks and their association with the controls established to mitigate them, considering internal and external factors that may affect the process development. The results of this exercise are entered into a log of risks, which acts as a central repository of the nature and status of each risk and controls thereof.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Assessment Once risks have been identified, the size in terms of impact, frequency and likelihood is determined.

Monitoring The monitoring process allows for the detection and correction of deficiencies in the operational risk management policies, processes and procedures or update thereof.

Risk Control and Mitigation The control process ensures compliance with internal policies and analyzes risks and responses to avoid, accept, mitigate or share them, by aligning them with the risk tolerance defined.

The control process also provides for several tools to manage the operational risk.

Self-Risk Assessment The self-risk assessment is a process to identify and assess existing risks, considering the controls established to manage and mitigate them. The self-assessment is a critical component of the operational risk management framework since the vulnerability of operations and activities at risk can be verified based on this process. Even though an assessment can be quantitative as well qualitative, risk analysts are encouraged to use the quantitative method.

Operational Risk Map The operational risk map allows viewing all the risks assessed within a matrix of colors that, at first sight, points out those risks in a classification of high, very high, medium, low and very low, for their later analysis and for the preparation of reports or action plans.

Risk Indicators The Bank defined risk indicators to measure operational risk management. The aim of these indicators is to detect gaps early by means of the definition of risk appetite thresholds.

Collection of Risk Events The Risk Events Base is one of the tools used to systematically identify and record important information related to the risk events detected. The Bank promotes the identification and recording of risk events, thus encouraging in the organization the culture of reporting every loss events related to an operational risk.

The Bank has defined training strategies, together with the Organizational Development and Human Resources Division, for the purpose of training and making all its employees aware of the importance of the operational risk and its proper management. For training programs, the Argentine Central Bank regulations and the definitions included in the Operational Risk Policy are taken into account.

The Bank has also defined policies to mitigate risks derived from service outsourcing and a code of conduct governing the relationship with suppliers.

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

Thus, the Bank has the structure and resources needed to establish the profile of operational risk and adopt, when appropriate, the pertinent corrective policies, in compliance with the regulations established by the Argentine Central Bank related to the management of operational risk in financial institutions.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents The determination of minimum capital requirements for operational risk is carried out in accordance with the rules of the Argentine Central Bank.

The management of the operational risks also helps to improve the quality of the service provided to our clients.

Item 12. Description of Securities Other Than Equity Securities Item 12.D. American Depositary Shares Fees and Charges Applicable to ADS Holders The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Persons depositing or withdrawing shares must pay For: $5.00 (or less) per 100 ADSs (or portion of 100 ADSs) • Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property • Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates $0.02 (or less) per ADS • Any cash distribution to ADS registered holders A fee equivalent to the fee that would be payable if securities • Distribution of securities distributed to holders of deposited distributed to you had been shares and the shares had been securities which are distributed by the depositary to ADS deposited for issuance of ADSs registered holders Registration or transfer fees • Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares Expenses of the depositary • Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) • Converting foreign currency to Dollars Taxes and other governmental charges the depositary or the • As necessary custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes. Any charges incurred by the depositary or its agents for servicing • As necessary the deposited securities

Fees and Direct and Indirect Payments Made by the Depositary to Us Past Fees and Payments Grupo Financiero Galicia received a payment of US$280,601 for fiscal year 2016, US$270,898 for fiscal year 2015 and US$289,174 for fiscal year 2014 in relation to continuing annual stock exchange listing fees, standard out-of-pocket maintenance costs for the ADRs (consisting of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationery, postage, facsimile and telephone calls), accounting fees and legal fees.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Future Fees and Payments The Bank of New York Mellon, as depositary, has agreed to reimburse the Company for expenses they incur that are related to establishment and maintenance expenses of the ADSs program. The depositary has agreed to reimburse the Company for its continuing annual stock exchange listing fees and certain accounting and legal fees. The depositary has also agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which consists of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls. It has also agreed to reimburse the Company annually for certain investor relationship programs or special investor relations promotional activities. There are limits on the amount of expenses for which the depositary will reimburse the Company, but the amount of reimbursement available to the Company is not tied to the amount of fees the depositary collects from investors.

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

We expect to receive a similar reimbursement from the depositary for expenses for the fiscal year ending December 31, 2017 to the one we received for the fiscal year ended December 31, 2016.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds Not applicable.

Item 15. Controls and Procedures (a) Disclosure Controls and Procedures.

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as amended). We performed an evaluation of the effectiveness of our disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file with or submit to the SEC under the Exchange Act, as amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and is communicated to our management, including our CEO and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. Our CEO and Chief Financial Officer concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures were effective to provide reasonable assurance of their reliability. Notwithstanding the effectiveness of our disclosure controls and procedures, these disclosure controls and procedures cannot provide absolute assurance of achieving their objectives because of their inherent limitations. Disclosure controls and procedures are processes that involve human diligence and compliance and are subject to error in judgment. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by our disclosure controls and procedures. (b) Management’s Annual Report on Internal Control over Financial Reporting.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 1) Our management is responsible for establishing and maintaining adequate internal control over financial reporting for us and our consolidated subsidiaries. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officers, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with applicable generally accepted accounting principles. Internal controls and procedures are processes that involve human diligence and compliance and are subject to error in judgment. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 2) Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control–Integrated Framework 2013. 3) Based on our assessment, we and our management have concluded that our internal control over financial reporting was effective as of December 31, 2016. 4) Price Waterhouse & Co. S.R.L., an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2016, as stated in their report to our consolidated financial statements.

(c) See Item 18. “Financial Statements-Report of the Independent Registered Public Accounting Firm” for our registered public accounting firm’s attestation report on the effectiveness of our internal control over financial reporting. (d) Changes in Internal Control over Financial Reporting During the Year Ended December 31, 2016.

During the period covered by this report, there have not been any changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16.A. Audit Committee Financial Expert Mr. Luis O. Oddone, independent as that term is defined under Nasdaq National Market listing requirements, was our Audit Committee financial expert during fiscal year 2016. As of April 25, 2017, Mr. Antonio Garcés is the financial expert serving on our Audit Committee, and is also considered independent as that term is defined under Nasdaq National Market listing requirements.

Item 16.B. Code of Ethics We have adopted a code of ethics (for Grupo Financiero Galicia and its main subsidiaries) in accordance with the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We did not modify our code of ethics during the fiscal year ended December 31, 2016. In addition, we did not grant any waivers to our code of ethics during the fiscal year ended December 31, 2016. In June 2009, we adopted a Code of Good Practice in Corporate Governance in accordance with Argentine legal requirements that received minor modifications in 2014, 2015 and 2016. On May 23, 2012 the CNV issued Rule No. 606 (modifying Rule No. 516) which established new standards for the filing of the Code of Good Practices in Corporate Governance. Our code of ethics and our code of corporate governance good practices are attached hereto as Exhibits 11.1 and 11.2.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Item 16.C. Principal Accountants’ Fees and Services The following table sets forth the total amount billed to us by our independent registered public accounting firm, Price Waterhouse & Co. S.R.L., during the fiscal years ended December 31, 2016 and 2015.

2016 2015 (In thousands of Pesos) Audit Fees 31,998 25,031 Audit Related Fees 4,729 2,762 Tax Fees 2,730 2,227 All Other Fees 5,248 3,831 Total 44,705 33,851

Audit Fees Audit fees are mainly the fees billed in relation with professional services for auditing our consolidated financial statements under local and U.S. GAAP requirements for the fiscal years ended December 31, 2016 and December 31, 2015.

Audit-Related Fees Audit-related fees are fees billed for professional services related to attestation, review and verification services with respect to our financial information and the provision of services in connection with special reports in 2016 and 2015.

Tax Fees Tax fees are fees billed with respect to tax compliance and advisory services related to tax liabilities.

All Other Fees All other fees include fees paid for professional services other than the services reported above under “audit fees”, “audit related fees” and “tax fees” in each of the fiscal periods above.

Audit Committee Pre-approval Our audit committee is required to pre-approve all audit and non-audit services to be provided by our independent registered public accounting firm. Our Audit Committee has reviewed and approved audit and non-audit services fees proposed by our independent auditors.

Item 16.D. Exemptions from the Listing Standards for Audit Committees Not applicable. Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 16.F. Change in Registrant’s Certifying Accountant. Not applicable. Item 16.G. Corporate Governance See Item 6. “-Nasdaq Corporate Governance Standards” for a summary of ways in which the Company’s corporate governance practices differ from those followed by U.S. companies.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Item 16.H. Mine Safety Disclosure Not applicable.

PART III

Item 17. Financial Statements Not applicable.

Item 18. Financial Statements Report of the Independent Registered Public Accounting Firm as of and for the fiscal years ended December 31, 2016, 2015 and 2014. Consolidated Balance Sheets as of December 31, 2016 and 2015. Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014. Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014. Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2016, 2015 and 2014. Notes to the Consolidated Financial Statements. You can find our audited consolidated financial statements on pages F-1 to F-108 of this annual report.

Item 19. Exhibits

Exhibit Description 1.1 Unofficial English language translation of the Bylaws (estatutos sociales).**** 2.1 Form of Deposit Agreement between The Bank of New York and the registrant, including the form of American Depositary Receipt.* 2.2 Indenture, dated as of May 4, 2011, among Banco de Galicia y Buenos Aires S.A., The Bank of New York Mellon, Banco de Valores S.A. and The Bank of New York Mellon (Luxembourg) S.A.********* 2.3 Indenture, dated as of January 28, 2011, among Tarjeta Naranja S.A., The Bank of New York Mellon, Banco de Valores S.A. and The Bank of New York Mellon (Luxembourg) S.A.********* 2.4 Indenture, dated as of July 19 , 2016, among Banco de Galicia y Buenos Aires S.A., The Bank of New York Mellon, Banco de Valores S.A. and The Bank of New York Mellon (Luxembourg) S.A. 4.1 English translation of form of Financial Trust Contract, dated April 16, 2002, among Banco Galicia, Banco Provincia de Buenos Aires and BAPRO Mandatos y Negocios S.A.*** 4.2 Form of Restructured Loan Facility (as evidenced by the Note Purchase Agreement, dated as of April 27, 2004, among Banco de Galicia y Buenos Aires S.A., Barclays Bank PLC, the holders party thereto and Deutsche Bank Trust Company Americas).**

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents 4.3 Form of First Amendment and Waiver to Restructured Loan Facility (as evidenced by the First Amendment and Waiver to the Note Purchase Agreement, dated as of December 20, 2004, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).**** 4.4 Form of Second Amendment to Restructured Loan Facility (as evidenced by the Second Amendment to the Note Purchase Agreement, dated as of August 25, 2006, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).***** 4.5 Form of Third Amendment to Restructured Loan Facility (as evidenced by the Third Amendment to the Note Purchase Agreement, dated as of December 28, 2007, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).****** 4.6 Loan Agreement, dated as of July 24, 2007, between Grupo Financiero Galicia S.A. and Merrill Lynch International.****** 4.7 Stock Purchase Agreement, dated as of June 1, 2009, among American International Group Inc., AIG Consumer Finance Group, Inc. and Banco de Galicia y Buenos Aires S.A., and the other parties signatory thereto.******** 4.8 Loan Agreement, dated as of September 8, 2010, between Banco de Galicia y Buenos Aires S.A. and International Finance Corporation.********* 4.9 Loan Agreement, dated as of December 17, 2010, between Banco de Galicia y Buenos Aires S.A. and Netherlands Financierings-Moatschappy Voor Ont Wikkelingslanden N.V.********* 4.10 Loan Agreement, dated as of February 15, 2011, between Banco de Galicia y Buenos Aires S.A. and Inter-American Development Bank.********* 4.11 Loan Agreement, dated as of May 24, 2016, between Banco de Galicia y Buenos Aires S.A. and International Finance Corporation. 8.1 For a list of our subsidiaries as of the end of the fiscal year covered by this annual report, please see Item 4. “Information on the Company-Organizational Structure”. 11.1 Code of Ethics.******* 11.2 Code of Corporate Governance Good Practices.********** 12.1 Certification of the principal executive officer required under Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 12.2 Certification of the principal financial officer required under Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 13.1 Certification of the principal executive officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 13.2 Certification of the principal financial officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Incorporated by reference from our Registration Statement on Form F-4 (333-11960). ** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2003. *** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2002.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents **** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2004. ***** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2006. ****** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2007. ******* Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2008. ******** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2009. ********* Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2010. ********** Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2012.

SIGNATURE

The registrant hereby certifies that it meets all the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.GRUPO FINANCIERO GALICIA S.A.

By: /s/ Pedro Alberto Richards Name: Pedro Alberto Richards Title: Chief Executive Officer

By: /s/ José Luis Ronsini Name: José Luis Ronsini Title: Chief Financial Officer

Date: April 28, 2017

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page Report of the Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2016 and 2015 F-4 Consolidated Statements of Income for the fiscal years ended December 31, 2016, 2015 and 2014 F-7 Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2016, 2015 and 2014 F-9 Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended December 31, 2016, 2015 and 2014 F-11 Notes to the Consolidated Financial Statements F-12

F-1

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Report of the Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Grupo Financiero Galicia S.A.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of cash flows and of changes in shareholders’ equity present fairly, in all material respects, the financial position of Grupo Financiero Galicia S.A. and its subsidiaries at December 31, 2016 and 2015 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting rules prescribed by the Banco Central de la República Argentina (the “BCRA”). Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing on Item 15.

Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Accounting rules prescribed by the BCRA vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 34 to the consolidated financial statements.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PRICE WATERHOUSE & Co. S.R.L.

By /s/ Santiago José Mignone Santiago José Mignone

Buenos Aires, Argentina April 28, 2017

F-3

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Grupo Financiero Galicia S.A. and Subsidiaries

Consolidated Balance Sheets As of December 31, 2016 and 2015 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 ASSETS A. Cash and due from banks Cash 7,457,481 7,288,153 Financial institutions and correspondents 53,708,769 23,546,510 Argentine Central Bank 51,389,550 23,106,877 Other local financial institutions 209,532 105,511 Foreign financial institutions 2,109,687 334,122 Ps.61,166,250 Ps.30,834,663 B. Government and private securities Holdings Recorded at Fair Value 3,228,759 2,376,386 Holdings Recorded at their Acquisition Cost plus the I.R.R. 1,922,473 1,389,617 Securities issued by the Argentine Central Bank 8,549,568 11,759,087 Ps.13,700,800 Ps.15,525,090 C. Loans To the non-financial public sector 14,359 17,705 To the financial sector 2,098,037 761,547 Interbank loans – (call money loans granted) 862,300 40,000 Other loans to domestic financial institutions 1,205,228 685,500 Accrued interest, adjustments and exchange rate differences receivable 30,509 36,047 To the non-financial private sector and residents abroad 140,046,017 101,125,473 Advances 10,063,071 8,548,542 Promissory notes 25,285,214 22,737,166 Mortgage loans 2,178,236 2,098,824 Pledge loans 677,879 486,891 Personal loans 15,311,721 9,259,159 Credit card loans 72,765,948 56,260,115 Other 12,653,202 924,741 Accrued interest, adjustments and quotation differences receivable 1,774,831 1,407,465 Documented interest (642,225 ) (596,853 ) Unallocated collections (21,860 ) (577 ) Allowances (4,706,758 ) (3,559,994 ) Ps.137,451,655 Ps.98,344,731 D. Other receivables resulting from financial brokerage Argentine Central Bank 2,359,284 1,738,892 Amounts receivable for spot and forward sales to be settled. 734,375 290,795 Securities receivable under spot and forward purchases to be settled 7,851,134 765,288 Negotiable obligations without quotation 1,422,433 1,639,013 Premiums from bought options 3,485 41,027 Balances from forward transactions without delivery of principal 111,287 287,161 Other 5,887,364 3,488,301 Allowances (191,087 ) (189,709 ) Ps.18,178,275 Ps.8,060,768

The accompanying Notes are an integral part of these consolidated financial statements

F-4

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Consolidated Balance Sheets - Continued As of December 31, 2016 and 2015 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 ASSETS (Continued) E. Credits for leases Credits for leases 952,522 956,131 Interest and adjustments 17,010 20,119 Allowances (14,186 ) (18,158 ) Ps.955,346 Ps.958,092 F. Equity investments In financial institutions 7,858 6,447 Other 45,707 45,920 Allowances (601 ) (636 ) Ps.52,964 Ps.51,731 G. Miscellaneous receivables Receivables for assets sold 131,096 19,651 Tax on minimum presumed income – Tax credit 9,424 10,230 Accrued Interest and Adjustments on Receivables for Assets Sold 1,626 — Other 3,451,986 2,692,286 Other accrued interest and adjustments receivable 46,192 23,164 Allowances (200,209 ) (175,878 ) Ps.3,440,115 Ps.2,569,453 H. Bank premises and equipment Ps.2,873,552 Ps.2,079,085 I. Miscellaneous assets Ps.1,221,237 Ps.820,073 J. Intangible assets Goodwill 5,642 15,316 Organization and development expenses 2,576,613 2,010,528 Ps.2,582,255 Ps.2,025,844 K. Unallocated items 89,035 58,963 L. Other Assets 539,140 419,510 Total Assets Ps.242,250,624 Ps.161,748,003

The accompanying Notes are an integral part of these consolidated financial statements

F-5

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Consolidated Balance Sheets - Continued As of December 31, 2016 and 2015 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 LIABILITIES AND SHAREHOLDERS’ EQUITY M. Deposits Non-financial public sector Ps.1,294,177 Ps.630,401 Financial sector 62,957 26,961 Non-financial private sector and residents abroad 150,331,013 99,381,871 Current accounts 26,972,277 19,121,256 Saving accounts 53,723,171 27,451,942 Time deposits 49,703,000 50,847,541 Investment accounts 442,665 395,189 Other 18,577,409 649,174 Accrued interest and quotation differences payable 912,491 916,769 Ps.151,688,147 Ps.100,039,233 N. Other liabilities resulting from financial brokerage Argentine Central Bank 12,727 7,033 Other 12,727 7,033 Bank and international entities 2,212,995 1,262,381 Unsubordinated negotiable obligations 12,644,638 9,261,471 Amounts payable for spot and forward purchases to be settled 7,818,144 764,898 Securities to be delivered under spot and forward sales to be settled 736,819 294,548 Premiums from Options Written 2,027 15,427 Loans from domestic financial institutions 4,097,361 1,388,903 Interbank loans 165,000 127,100 Other loans from domestic financial institutions 3,802,398 1,244,269 Accrued interest payable 129,963 17,534 Balances from forward transactions without delivery of underlying asset to be settled 141,013 1,266,014 Amounts payable to merchants 20,812,777 15,316,255 Other 8,904,662 7,472,703 Accrued interest and quotation differences payable 410,490 279,267 Ps.57,793,653 Ps.37,328,900 O. Miscellaneous liabilities Directors’ and Syndics’ fees 41,986 38,713 Other 5,762,298 4,403,400 Ps.5,804,284 Ps.4,442,113 P. Provisions 384,484 481,596 Q. Subordinated negotiable obligations 4,065,255 3,300,516 R. Unallocated items 70,530 75,436 S. Other Liabilities 629,384 488,073 T. Non-controlling interests 1,462,189 1,107,315 Total Liabilities Ps.221,897,926 Ps.147,263,182 SHAREHOLDERS’ EQUITY 20,352,698 14,484,821 Total Liabilities and Shareholders’ Equity Ps.242,250,624 Ps.161,748,003

The accompanying Notes are an integral part of these consolidated financial statements

F-6

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Consolidated Statements of Income For the fiscal years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 A. Financial income Interest on cash and due from banks Ps.17 Ps.— Ps.4 Interest on loans granted to the financial sector 359,427 85,681 163,678 Interest on advances 3,065,507 1,870,336 1,570,043 Interest on promissory notes 6,039,112 5,031,904 3,758,362 Interest on mortgage loans 474,490 367,566 321,139 Interest on pledge loans 88,314 87,808 83,590 Interest on credit card loans 13,455,906 9,257,193 6,567,266 Interest on financial leases 288,462 225,819 217,218 Interest on other loans 5,288,675 3,299,417 3,449,740 Interest on other receivables resulting from financial brokerage 106,033 99,314 170,870 Net income from government and corporate securities 5,809,264 4,323,266 2,448,362 Income from secured loans – Decree No. 1387/01 6,796 3,643 3,780 Net income from options — 91,605 — Consumer price index adjustment (CER) 8,566 4,341 1,400 Exchange rate differences on foreign currency 1,024,992 — 12,651 Other 592,128 1,096,275 1,091,993 Ps.36,607,689 Ps.25,844,168 Ps.19,860,096 B. Financial expenses Interest on saving account deposits 4,644 3,182 2,028 Interest on time deposits 13,063,966 8,507,743 6,493,769 Interest on interbank loans 35,988 40,982 20,504 Interest on financing from the financial sector 187,383 86,169 128,025 Interest on other liabilities resulting from financial brokerage 3,056,336 1,825,749 1,516,997 Interest on subordinated obligations 532,823 373,998 310,056 Other interest 58,018 182,640 81,186 Net expenses for options 28,893 — — Consumer price index adjustment 6,602 282 377 Contributions made to Deposit Insurance Fund 314,515 497,258 151,450 Exchange rate differences on foreign currency — 187,836 — Other 2,949,536 1,696,493 1,616,286 Ps.20,238,704 Ps.13,402,332 Ps.10,320,678 Gross brokerage margin 16,368,985 12,441,836 9,539,418 C. Loan loss provisions 3,533,313 2,214,240 2,411,250 D. Income from services In relation to lending transactions 2,936,523 2,232,198 1,674,174 In relation to borrowing transactions 2,531,191 1,834,293 1,249,613 Other commissions 654,118 398,332 238,183 Other 9,723,086 7,006,473 5,143,662 Ps.15,844,918 Ps.11,471,296 Ps.8,305,632 E. Expenses for services Commissions 2,085,077 1,487,054 1,231,912 Other 3,013,656 2,146,844 1,375,372 Ps.5,098,733 Ps.3,633,898 Ps.2,607,284

The accompanying Notes are an integral part of these consolidated financial statements

F-7

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Consolidated Statements of Income - Continued For the fiscal years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 F. Administrative expenses Personnel expenses 9,669,181 7,086,485 5,199,661 Directors’ and syndics’ fees 79,885 111,211 85,201 Other fees 516,092 396,090 236,527 Advertising and publicity 749,271 544,603 413,927 Taxes 1,719,180 1,218,962 850,772 Depreciation of bank premises and equipment 301,387 218,611 172,582 Amortization of organization expenses 746,544 635,442 332,197 Other operating expenses 2,106,088 1,529,353 1,143,316 Other 1,729,982 1,163,945 787,173 Ps.17,617,610 Ps.12,904,702 Ps.9,221,356 Net Income from financial brokerage Ps.5,964,247 Ps.5,160,292 Ps.3,605,160 G. Income from Insurance activities Ps.2,451,943 Ps.1,801,404 Ps.1,238,029 H. Non-controlling interests result Ps.(403,168 ) Ps.(364,558 ) Ps.(229,910 ) I. Miscellaneous income Net lncome from equity investments 80,419 100,126 213,380 Default interests 482,194 328,882 306,723 Loans recovered and allowances reversed 552,471 319,297 297,327 Other 759,385 455,287 278,020 Ps.1,874,469 Ps.1,203,592 Ps.1,095,450 J. Miscellaneous losses Default interests and charges in favor of the Argentine Central Bank 3,397 398 64 Loan loss provisions for miscellaneous receivables and other provisions 169,173 448,659 209,958 Amortization of differences arising from court resolutions 12,504 4,308 4,803 Depreciation and losses from miscellaneous assets 1,245 3,433 987 Amortization of goodwill 9,674 9,674 7,767 Consumer price index adjustment — — 1 Other 321,080 194,437 155,087 Ps.517,073 Ps.660,909 Ps.378,667 Net Income before tax 9,370,418 7,139,821 5,330,062 K. Income tax Ps.3,352,541 Ps.2,801,424 Ps.1,992,272 Net Income for the year Ps.6,017,877 Ps.4,338,397 Ps.3,337,790

The accompanying Notes are an integral part of these consolidated financial statements

F-8

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Consolidated Statements of Cash Flows For the fiscal years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 CHANGES IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the year 42,975,265 23,054,015 15,823,881 Cash and cash equivalents at the end of the year 73,087,665 42,975,265 23,054,015 Net increase in cash and cash equivalents Ps.30,112,400 Ps.19,921,250 Ps.7,230,134 Causes of changes in cash and cash equivalents Cash Flow from operating activities Net (payments) / collections related to: Government and Private Securities 4,143,521 2,398,746 (1,097,152 ) Loans To the financial sector (154,763 ) (443,503 ) 425,142 To the non-financial public sector 6,123 4,084 85 To the non-financial private sector and foreign residents (9,891,803 ) (12,427,921) 2,273,221 Other receivables resulting from financial brokerage (23,698 ) 1,176,179 742,311 Receivables from Financial Leases 292,960 312,919 298,654 Deposits To the financial sector 35,996 (7,651 ) 12,511 To the non-financial public sector 663,776 (1,044,087 ) (31,727 ) To the non-financial private sector and foreign residents 33,727,300 23,627,782 5,698,207 Other liabilities from financial brokerage Financing from the financial sector Interbank Loans (call money loans received) 1,912 83,151 (123,004 ) Others (except for liabilities included in Financing Activities) 4,585,373 7,809,635 4,013,978 Collections related to income from services 19,581,939 14,169,321 10,184,091 Payments related to expenses for services (4,772,557 ) (3,415,706 ) (2,291,464 ) Administrative expenses paid (17,338,997) (12,837,369) (9,515,786 ) Payment of organization and development expenses (1,273,157 ) (865,139 ) (685,644 ) Collection for penalty interests, net 478,797 328,882 306,723 Differences arising from court resolutions paid (12,504 ) (4,308 ) (4,803 ) Collection of dividends from other companies 73,889 66,174 76,347 Other Collections related to miscellaneous profits and losses 115,200 31,411 125,447 Net (payments) / collections for other operating activities Other receivables and miscellaneous liabilities (2,844,146 ) (1,422,814 ) (1,468,794 ) Other operating activities, net 94,563 22,778 (313,289 ) Payment of income tax / minimum presumed income tax (2,476,528 ) (1,937,591 ) (1,110,114 ) Net cash provided by operating activities Ps.25,013,196 Ps.15,624,973 Ps.7,514,940 Cash Flow from investing activities Payments for bank premises and equipment, net (900,533 ) (740,313 ) (284,117 ) Payments for miscellaneous assets, net (578,598 ) (392,593 ) (209,024 ) Payments for equity investments — — (49,376 ) Other collections for investment activities — 10,045 47,578 Net cash used in investing activities Ps.(1,479,131 ) Ps.(1,122,861 ) Ps.(494,939 )

The accompanying Notes are an integral part of these consolidated financial statements

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Consolidated Statements of Cash Flows - Continued For the fiscal years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 Cash Flow from financing activities Net collections / (payments) related to: Unsubordinated negotiable obligations 286,753 (1,323,019 ) (282,489 ) Others 5,694 (445 ) 1,450 Banks and international entities 477,115 76,972 (235,854 ) Subordinated negotiable obligations (386,591 ) (238,591 ) (351,010 ) Loans from local financial institutions 2,479,299 92,697 (367,714 ) Distribution of dividends to minority shareholders (48,300 ) (36,800 ) (29,900 ) Distribution of dividends to shareholders (150,000 ) (100,000 ) (38,595 ) Cash Flow (used in) by financing activities Ps.(2,663,970) Ps.(1,529,186 ) Ps.(1,304,112) Effect of exchange rate changes on cash and cash equivalents 3,914,365 6,948,324 1,514,245 Net increase in cash and cash equivalents Ps.30,112,400 Ps.19,921,250 Ps.7,230,134

The accompanying Notes are an integral part of these consolidated financial statements

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Consolidated Statements of Changes in Shareholders’ Equity For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Inflation adjustments to Capital Stock Total Capital Paid in and Paid in Profit reserves Accumulated Shareholders’ Stock Capital Capital Legal Other Retained earnings Equity Balance at December 31, 2013 Ps.1,300,265 Ps.219,596 Ps. 278,131 Ps.200,065 Ps.3,125,519 Ps. 1,823,653 Ps.6,947,229 Distribution of retained earnings by the shareholders’ meeting on April 29, 2014 Legal Reserve — — — 91,183 — (91,183 ) — Discretionary Reserve — — — — 1,693,875 (1,693,875 ) — Cash Dividends — — — — — (38,595 ) (38,595 ) Net Income for the year — — — — — 3,337,790 3,337,790 Balance at December 31, 2014 Ps.1,300,265 Ps.219,596 Ps. 278,131 Ps.291,248 Ps.4,819,394 Ps. 3,337,790 Ps.10,246,424 Distribution of retained earnings by the shareholders’ meeting on April 29 , 2015 Legal Reserve — — — 24,432 — (24,432 ) — Discretionary Reserve — — — — 3,213,358 (3,213,358 ) — Cash Dividends — — — — — (100,000 ) (100,000 ) Net Income for the year — — — — — 4,338,397 4,338,397 Balance at December 31, 2015 Ps.1,300,265 Ps.219,596 Ps. 278,131 Ps.315,680 Ps.8,032,752 Ps. 4,338,397 Ps.14,484,821 Distribution of retained earnings by the shareholders’ meeting on April 26 , 2016 Discretionary Reserve — — — — 4,188,397 (4,188,397 ) — Cash Dividends — — — — — (150,000 ) (150,000 ) Net Income for the year — — — — — 6,017,877 6,017,877 Balance at December 31, 2016 Ps.1,300,265 219,596 278,131 315,680 12,221,149 6,017,877 20,352,698

The accompanying Notes are an integral part of these consolidated financial statements

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

1. Description of Business. Grupo Financiero Galicia S.A. (“Grupo Galicia”, the “Company” or the “Group”) is a financial services holding company organized under the laws of Argentina that conducts its business through its subsidiaries, providing general banking services, proprietary brand credit card services, personal loans, insurance and other services.

The detail of subsidiaries of the Company and respective ownership interest are as follows:

December 31, Name 2016 2015 Banco de Galicia y Buenos Aires S.A. 100.00% 100.00% Cobranzas y Servicios S.A. 100.00% 100.00% Compañía Financiera Argentina S.A. (CFA) 100.00% 100.00% Galicia Administradora de Fondos S.A. 100.00% 100.00% Galicia Valores S.A. 100.00% 100.00% Galicia Warrants S.A. 100.00% 100.00% Net Investment S.A. 100.00% 100.00% Sudamericana Holding S.A. 100.00% 100.00% Procesadora Regional S.A. 78.15 % 78.15 % Cobranzas Regionales S.A. 77.00 % 77.00 % Tarjeta Naranja S.A. 77.00 % 77.00 % Tarjetas Cuyanas S.A. 77.00 % 77.00 % Tarjetas Regionales S.A. 77.00 % 77.00 % Tarjetas del Mar S.A. 60.00 % 60.00 % Banco Galicia Uruguay S.A. (in Liquidation) (Note 28) — % 100.00%

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

2. Significant Accounting Policies The following is a summary of significant accounting policies followed by the Group in the preparation of the consolidated financial statements.

2.1 Basis of Presentation The accounting policies and financial statements presentation conform to the rules of the Argentine Central Bank which prescribes the generally accepted accounting principles for all banks in Argentina (the “Argentine Banking GAAP”). This differs in certain significant respects from generally accepted accounting principles in Argentina applicable to enterprises in general (“Argentine GAAP”) (see Note 31) and from generally accepted accounting principles in the United States of America (“U.S. GAAP”) (see Note 34).

Certain required disclosures under Argentine Banking GAAP have not been presented herein since they are not material to the accompanying financial statements. In addition, certain presentations and disclosures have been included in the accompanying financial statements to comply with the United States Securities and Exchange Commission´s regulations for foreign private issuers.

Certain reclassifications of the prior year´s information have been made to conform to the current year’s presentation. Such reclassifications do not have a significant impact on the Group´s financial statements.

2.2 Basis of Consolidation The accompanying consolidated financial statements include the accounts of Grupo Financiero Galicia and its subsidiaries over which the Company has effective control. Investments in companies in which the Company exercises significant influence, but not control, are accounted for under the equity method.

All significant intercompany balances and transactions have been eliminated in consolidation.

2.3 Presentation of Financial Statements in Constant Argentine Pesos. Argentine GAAP in effect in the Autonomous City of Buenos Aires provides that financial statements shall be stated in constant currency, pursuant to the provisions of Technical Pronouncements Nos. 6 and 17 of the Argentine Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E.”), as amended by Technical Pronouncement No. 39, approved by the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires on April 16, 2014, as well as interpretation No. 8 of the F.A.C.P.C.E. These GAAP measures provide that the adjustment for inflation shall be applied in an inflationary context, which is present when, among other considerations, there exists an accumulated rate of inflation reaching or exceeding 100% during three years, taking into consideration, for such purpose, the domestic wholesale price index published by the Argentine Institute of Statistics and Census. Financial statements reflect the effects of the changes in the purchasing power of the currency up to February 28, 2003 (the adjustment for inflation having been discontinued from such date) pursuant to the provisions of Argentine GAAP in force in the Autonomous City of Buenos Aires and the requirements of Decree No. 664/03 of the National Executive Branch, Section 268 of General Resolution No. 7/2005 of the Corporation Control Authority, Communiqué “A” 3921 of the Argentine Central Bank and General Resolution No. 441/03 of the Comisión Nacional de Valores (the “National Securities Commission”, or the “CNV”). Resolution M.D. No. 41/03 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires established the discontinuation of the recognition of the changes in the purchasing power of the currency, effective October 1, 2003.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

At fiscal year-end, the macroeconomic environment cannot be qualified as a hyperinflationary economy considering the guidelines established by the professional accounting standards and the government’s expectation towards a lower inflation level. Even though the controlling agencies have not issued a decision in this regard, at fiscal year-end, the conditions for the application of the adjustment for inflation would not be met. However, when reading and analyzing these financial statements one should take into consideration the existence of fluctuations in significant economic variables, which took place during the past fiscal years.

2.4 Foreign Currency Assets and Liabilities. Assets and liabilities denominated in foreign currencies are incorporated into the accounting records of the Company in Argentine Pesos at the exchange rate prevailing at the time of the transaction.

Assets and liabilities in foreign currencies at year-end are then translated into Argentine Pesos at closing exchange rates.

Assets and liabilities and income and expenses in foreign currencies generate transaction gains and losses, which are recorded within “Exchange rate differences on foreign currency” in the consolidated statements of income.

As of December 31, 2016 and 2015, the Argentine Peso/US Dollar exchange rate was 15.8502 and 13.005, respectively.

2.5 Government and Private Securities. Government securities mainly represent obligations of the Argentine government or the Argentine Central Bank. Corporate securities included in this caption consist of listed corporate equity securities, mutual funds and listed debt securities.

Gains and losses and interest income on government and corporate securities are included as “Net Income from government and corporate securities” in the accompanying consolidated statement of income.

Government Securities As of December 31, 2016 and 2015, the Bank records its holdings according to the following:

Holdings Recorded at Fair Value These holdings include trading securities issued by the Argentine Government which are included in the volatilities or present value lists issued by the Argentine Central Bank.

These securities are valued at their closing price for each class of securities in the corresponding markets or at their present values, plus the value of amortization and/or interest coupons due and receivable. Unrealized gains and losses are reported in earnings.

The same criterion was applied to holdings of such securities used in loans, as guarantee, transactions to be settled and repo transactions, when appropriate.

Holdings Recorded at their Acquisition Cost plus the Interest Rate of Return (I.R.R.) In this caption, the Group records holdings of government securities in pesos and foreign currency, as they are not included in the volatilities or present value lists issued by the Argentine Central Bank.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

These holdings have been valued at their acquisition cost increased on an exponential basis according to their I.R.R. The monthly accrual is charged to income or an asset offset account, depending on the securities involved.

The same criterion was applied to the securities used in loans, as guarantee, transactions to be settled and repo transactions, when appropriate.

Securities Issued by the Argentine Central Bank a) At Fair Value: These holdings are included in the volatilities lists issued by the Argentine Central Bank, and therefore are valued at the closing price for each class of securities in the corresponding markets, plus the value of amortization and/or interest coupons due and receivable. Unrealized gains and losses are reported in earnings. The same criterion was applied to holdings of such securities used in loans, as guarantee, transactions to be settled and repo transactions, when appropriate. b) At the Acquisition Cost plus the I.R.R.: These holdings have been valued at their acquisition cost increased on an exponential basis according to their I.R.R., as they are not included in the volatilities lists issued by the Argentine Central Bank. The same criterion was applied to holdings of such securities used in loans, as guarantee, transactions to be settled and repo transactions, when appropriate.

Investments in listed private securities These securities are recorded at fair value, and any difference between their book value and fair value is recognized as a gain or loss in the income statement.

2.6 Financial Trust Debt Securities and Participation Certificates. Debt securities that are incorporated at par have been valued at their amortized cost. The remaining holdings in debt securities are recorded at cost plus the interest rate of return. Participation certificates in financial trusts are accounted for under the equity method.

2.7 Interest Income (Expense) Recognition. For foreign and local currency transactions with a principal adjustment clause, as well as for those in which rates have been prearranged for terms up to 92 days, the accrual has been recognized on a linear basis. For local currency transactions at rates arranged for longer periods, interest has been accrued on an exponential basis, which provides for an increasing effective rate over the life of the loan or deposit.

The Bank suspends the accrual of interest when the related loan is past due and the collection of interest and principal is in doubt. The suspension of interest corresponds to the loans classified as “with problems” and “medium risk” or below, under the Argentine Central Bank´s classification rules. Accrued interest remains on the Bank´s books and is considered to be part of the loan balance when determining the allowance for loan losses. Regarding impaired loans, interest is recognized on a cash basis after reducing the balance of accrued interest, if applicable.

2.8 Allowances for Loan Losses. These have been established based upon the estimated default risk of Grupo Financiero Galicia’s credit assistance granted through its subsidiaries, which results from an evaluation of debtors’ compliance with

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) their payment obligations, their economic and financial condition, and the guarantees securing their related transactions, in line with the Argentine Central Bank regulations. Specific attention is given to loans with evidence that may negatively affect the Group’s ability to recover the loan and accrued interest.

2.9 Provisions for Contingencies. The Group has certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving labor and other matters. The Group accrues liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, the Group’s estimates of the outcomes of these matters and the Group’s lawyers’ experience in responding, litigating and settling other matters. As the scope of the liabilities becomes better defined, there may be changes in the estimates of future costs, which could have a material effect on the Group’s future results of income and financial condition or liquidity.

2.10 Equity Investments. Equity Investments include investments in companies where a non-controlling interest is held. Under Argentine Banking GAAP, the equity method is used to account for investments where a significant influence in the corporate decision making process exists. Significant influence is considered to be present if one of the following applies: • Ownership of a portion of a related company´s capital granting the voting power necessary to influence the approval of such company’s financial statements and profits distribution. • Representation on the related company´s board of directors or corporate governance body. • Participation in the definition of the related company´s policies. • Existence of significant transactions between the company holding the interest and the related company (for example, when the former is the latter´s only supplier or by far its most important client). • Interchange of senior officers among companies. • Technical dependence of one of the companies on the other.

Investments in which the Company does not have significant influence have been accounted for at the lower of cost or equity method.

2.11 Bank Premises and Equipment, Credits for Leases and Miscellaneous Assets. Bank premises and equipment and miscellaneous assets are valued at cost adjusted for inflation (as described in Note 2.3), less accumulated depreciation.

Construction in progress is carried at cost.

Financial leases that mainly transfer risks and benefits inherent to the leased property are registered at the beginning of the lease either by the cash value of the leased property or the present value of cash flows established in the financial lease, whichever is the lowest.

Accumulated depreciation is computed under the straight-line method at rates over the estimated useful lives of the assets, which generally are estimated to be 50 years for properties, 10 years for furniture and fittings, and 5 years for others. Leasehold improvements are depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the asset.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The cost of maintenance and repairs is charged to expense as incurred. The cost of significant renewals and improvements is added to the carrying amount of the respective fixed assets. When assets are retired or otherwise disposed of, the cost and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of income.

2.12 Intangible Assets. Intangible assets are valued at cost adjusted for inflation (as described in Note 2.3) less accumulated amortization. Intangible assets are amortized on a straight-line basis over 120 months for goodwill and over 60 months for organization and development costs. Under Argentine Banking GAAP, goodwill is no longer recognized as an asset when it is estimated that amounts of future income will not be sufficient to absorb the amortization of goodwill or when there are other reasons to presume that the amount of an investment made will not be recovered in full.

2.13 Shareholders´ Equity. Shareholders’ Equity accounts have been adjusted for inflation following the procedure described in Note 2.3, except for the “Capital Stock” and “Paid-in Capital” accounts, which have been stated at their original values. The adjustment of these accounts was allocated to the “Inflation adjustments to capital stock and paid-in capital” account.

2.14 Minimum Presumed Income Tax and Income Tax. Effective as of 1998, a Minimum Presumed Income Tax (“MPIT”) was established as a complementary component of income tax obligations. MPIT is a minimum taxation, which assesses at the tax rate of 1% of computable assets at fiscal year-end, according to Law No. 25063. Ultimately, the tax obligation will be the higher of MPIT or income tax. For financial entities, the taxable basis is 20% of their computable assets. If, in a fiscal year, the MPIT obligation exceeds the income tax liability, the surplus will be available as a credit against future income tax to be generated in any of the next ten fiscal years. The recognition of this right and its realization each stem from the ability to generate future taxable income sufficient to offsetting purposes.

The Bank has recognized the MPIT amount paid in the year and the accumulated amount paid in prior years as an asset for future tax deductions.

Based on the provisions set forth by the Argentine Central Bank, the Group recorded an asset related to the MPIT amounting to Ps. 9,424 and Ps. 10,230 as of December 31, 2016 and 2015, respectively.

Argentine Central Bank regulations do not require the recognition of deferred tax assets and liabilities; therefore income taxes for Banco Galicia are recognized on the basis of amounts due in accordance with Argentine tax regulations. However, Grupo Galicia and Grupo Galicia’s non-bank subsidiaries apply the deferred income tax method. As a result, Grupo Galicia and its non-bank subsidiaries recognized a deferred tax asset as of December 31, 2016 and 2015.

2.15 Liabilities - Banco Galicia’s Customers Fidelity Program “Quiero” (I want). The Bank records the points assigned to the Bank’s customers through the “Quiero” (“I want”) Program using a mathematical model that takes into account certain assumptions of exchange percentages, the cost for the exchanged points based on the combination of available products and the preferences of the Bank’s customers, as well as the expiration term of the customers’ non-exchanged points.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

As of December 31, 2016 and 2015, the Bank recorded liabilities for Ps.378,636 and Ps.286,497, respectively, from its customers’ non- exchanged points under the caption “Miscellaneous Liabilities”.

2.16 Statements of Cash Flows. The consolidated statement of cash flows was prepared following the regulations prescribed by the Argentine Central Bank. Cash and cash equivalents include cash and due from banks and highly liquid investments with an original maturity of three months or less.

Cash and due from banks and assets held with the purpose of complying with the short-term commitments undertaken, with a high level of liquidity, easily converted into known amounts of cash, subject to insignificant changes in value and with a maturity less than three months from the date of the acquisition thereof, are considered to be cash and cash equivalents. The breakdown is as follows:

December 31, 2016 2015 2014 Cash and Due from Bank 61,166,250 30,834,663 16,959,205 Instruments Issued by the Argentine Central Bank 6,635,954 10,514,624 4,612,259 Reverse Repo Transactions with the Argentine Central Bank — 14,286 16,768 Interbank Loans 862,300 40,000 182 Overnight Placements in Banks Abroad 1,227,101 232,351 261,118 Other Cash Placements 3,196,060 1,339,341 1,204,483 Cash and Cash Equivalents 73,087,665 42,975,265 23,054,015

2.17 Use of Estimates. The preparation of financial statements in conformity with Argentine Banking GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Future results could differ from those estimates and evaluations made at the date of preparation of these consolidated financial statements.

3. Minimum Cash Requirements and Restricted Assets. 3.1 Pursuant to Argentine Central Bank regulations, Banco Galicia and CFA must maintain a monthly average liquidity level. Computable assets for complying with the minimum cash requirement are cash and the checking accounts opened at the Argentine Central Bank.

Banco Galicia and CFA have met the minimum cash requirement established by the Argentine Central Bank.

The minimum cash requirement at the end of each fiscal year of Banco Galicia, the main subsidiary, was as follows (as measured in average daily balances):

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 Peso balances Ps.15,815,068 Ps.9,410,111 Foreign currency balances 26,289,506 6,113,423

3.2 Certain of the Group’s other assets are pledged or restricted from use under various agreements. The following assets were restricted at each balance sheet date:

December 31, 2016 2015 Funds and securities pledged under various arrangements Ps.4,001,954 Ps.3,266,663 Shares on equity investments (*) 5,250 5,250 Deposits in the Argentine Central Bank, restricted under Argentine Central Bank regulations 474,061 2,445 Loans granted as collateral 258,282 917,144 Total Ps.4,739,547 Ps.4,191,502

(*) Shares over which transferability is subject to prior approval of the National or Provincial authorities, as applicable, under the terms of certain concession contracts signed.

The Bank, as a shareholder of Aguas Cordobesas S.A. and proportionally to its 10.833% ownership, is jointly responsible for the contractual obligations arising from the concession contract during the entire term thereof. Should any of the other shareholders fail to comply with the commitments arising from their joint responsibility, the Bank may be forced to assume the unfulfilled commitment by the grantor, but only in the proportion and to the extent of the interest held by the Bank.

4. Interest-Bearing Deposits with Other Banks. As of December 31, 2016 and 2015, the overnight foreign bank interest-bearing deposits included under the caption “Loans—Other” amounted to Ps.1,227,101 and Ps.232,351, respectively.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

5. Government and Private Securities. Government and corporate securities consist of the following at the respective balance sheet dates:

December 31, 2016 2015 Government Securities Holdings Recorded at Fair Value - Government Bonds 3,228,759 2,376,386 Total Holdings Recorded at Fair Value Ps.3,228,759 Ps.2,376,386 Holdings Recorded at their Acquisition Cost plus the I.R.R. - Government Bonds 1,922,473 1,389,617 Total Holdings Recorded at their Acquisition Cost plus the I.R.R. Ps.1,922,473 Ps.1,389,617 Securities Issued by the Argentine Central Bank - Argentine Central Bank Bills at Fair Value 1,576,204 6,166,440 - Argentine Central Bank Bills at Acquisition Cost plus the I.R.R. 6,973,364 5,592,647 Total Securities Issued by the Argentine Central Bank 8,549,568 11,759,087 Total Government Securities Ps.13,700,800 Ps.15,525,090 Total Government and Private Securities Ps.13,700,800 Ps.15,525,090

As of December 31, 2015, Securities issued by Argentine Central Bank sold under repurchase agreements amounted to Ps. 134,317, were recorded under the caption “Other Receivables resulting from financial brokerage”.

As of December 31, 2016, Securities issued by Argentine Central Bank sold under repurchase agreements amounted to Ps. 1,783,342, were recorded under the caption “Other Receivables resulting from financial brokerage”.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

6. Loans. The lending activities of the Bank consist of the following: • Loans to the non-financial public sector: loans to the federal and provincial governments of Argentina. • Loans to the financial sector: loans to local banks and financial entities. • Loans to the non-financial private sector and residents abroad: include the following types of lending: Advances – short-term obligations drawn on by customers through overdrafts. Promissory Notes – endorsed promissory notes, discounted and purchased bills and factored loans. Mortgage loans – loans to purchase or improve real estate and collateralized by such real estate or commercial loans secured by real estate. Pledge loans – loans where collateral is pledged as an integral part of the loan document. Credit card loans – loans to credit card holders. Personal loans – loans to individuals. Others – includes mainly short-term placements in foreign banks.

Pursuant to Argentine Central Bank regulations, financial entities must disclose the breakdown of their loan portfolio between: the non- financial public sector, the financial sector and the non-financial private sector and residents abroad. In addition, financial entities must disclose the type of collateral established on the applicable loans to the non-financial private sector and the pledges granted on loans (preferred guarantees relative to a registered senior pledge).

As of December 31, 2016 and 2015, the classification of the Group´s loan portfolio was as follows:

December 31, 2016 2015 Non-financial public sector Ps.14,359 Ps.17,705 Financial sector (Argentine) 2,098,037 761,547 Non-financial private sector and residents abroad 140,046,017 101,125,473 - With preferred guarantees 3,321,515 2,988,119 - With other guarantees 18,834,154 13,189,545 - Unsecured 117,890,348 84,947,809 Subtotal 142,158,413 101,904,725 Allowance for loan losses (See Note 7) (4,706,758 ) (3,559,994 ) Total Ps.137,451,655 Ps.98,344,731

The Bank also records its loan portfolio by industry segment. The following industry segments comprised the most significant loan concentrations as of December 31, 2016 and 2015, respectively:

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 Consumer 58.2% 57.9% Manufacturing 13.6% 12.8% Primary Products 9.7 % 13.0% Services 6.1 % 5.7 % Retail Trade 4.7 % 3.3 % Wholesale Trade 4.6 % 5.3 % Financial Sector 2.3 % 1.0 % Construction 0.8 % 1.0 %

7. Allowance for Loan Losses. The activity in the allowance for loan losses for the fiscal years ended December 31, 2016, 2015 and 2014, was as follows:

December 31, 2016 2015 2014 Balance at beginning of year Ps.3,559,994 Ps.2,614,919 Ps.2,128,647 Provision charged to income 3,388,863 2,128,158 2,339,264 Allowances reversed (117,305 ) — (1,000 ) Foreign exchange effect and other adjustments — 19,536 (11,901 ) Loans charged off (2,124,794) (1,202,619) (1,840,091) Balance at end of year Ps.4,706,758 Ps.3,559,994 Ps.2,614,919

Certain uncollectible loans, principally small loans, are charged directly to income and are not reflected in the activity in the allowance for loan losses. The charge to “Loan loss provisions” line in the accompanying statements of income is as follows:

December 31, 2016 2015 2014 Provisions charged to income Ps.3,388,863 Ps.2,128,158 Ps.2,339,264 Direct charge-offs 123,959 65,833 47,314 Other receivable losses 18,540 15,150 20,891 Financial leases 1,951 5,099 3,781 Ps.3,533,313 Ps.2,214,240 Ps.2,411,250

The Bank has entered into certain renegotiations with customers. The Bank has eliminated any differences between the principal and accrued interest due under the original loan and the new loan amount through a charge against the allowance for loan losses. Loans under such agreements amounted to Ps.60,750, Ps. 89,906 and Ps.87,529 as of December 31, 2016, 2015 and 2014, respectively.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

8. Other Receivables Resulting from Financial Brokerage. The composition of other receivables from financial brokerage, by type of guarantee, is as follows:

December 31, 2016 2015 Preferred guarantees, including deposits with the Argentine Central Bank Ps.2,360,903 Ps.1,742,364 Other guarantees 7,560 1,652 Unsecured 16,000,899 6,506,461 Less: Allowance for doubtful accounts (191,087 ) (189,709 ) Ps.18,178,275 Ps.8,060,768

The breakdown of the caption “other” included in the balance sheet was as follows:

December 31, 2016 2015 Mutual funds Ps.2,466,372 Ps.599,134 Galtrust I Participation Certificates 504,874 685,915 Other participation certificates and debt securities in financial trusts 1,138,420 808,650 Accrued commissions 165,483 86,198 Other financings 625,234 442,191 Others 986,981 866,213 Ps.5,887,364 Ps.3,488,301

9. Equity Investments. Equity investments in other companies consisted of the following as of the respective balance sheet dates:

December 31, 2016 2015 In Financial Institutions, complementary and authorized activities Prisma Medios de Pagos S.A (Ex – VISA Argentina S.A.) 7,836 7,836 Mercado de Valores de Buenos Aires S.A. 2,749 2,749 Banco Latinoamericano de Exportaciones S.A 7,858 6,447 Others 829 829 Total equity investments in Financial Institutions, complementary and authorized activities Ps.19,272 Ps.17,861

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 In Non-financial Institutions Electrigal S.A Ps.5,455 Ps.5,455 Aguas Cordobesas S.A 8,911 8,911 Distrocuyo S.A. 3,955 3,955 Nova Re Compañía Argentina de Reaseguros S.A. 14,716 14,956 Other 1,256 1,229 Total equity investments in non-financial institutions Ps.34,293 Ps.34,506 Allowances Ps.(601 ) Ps.(636 ) Total Equity investments Ps.52,964 Ps.51,731

10. Miscellaneous receivables – Others. As of December 31, 2016 and December 31, 2015, the breakdown of “Miscellaneous Receivables—Others” was as follows:

December 31, 2016 2015 Sundry Debtors Ps.396,380 Ps.391,962 Deposits as Collateral (*) 1,536,664 1,425,883 Tax Advances 1,159,971 577,202 Payments in Advance 313,109 201,865 Others 45,862 95,374 Ps.3,451,986 Ps.2,692,286

(*) Involving transactions carried out at ROFEX and at MAE and debit/credit cards transactions.

11. Bank Premises and Equipment, Intangible Assets and Miscellaneous Assets. The major categories of the Company´s premises and equipment and accumulated depreciation, as of December 31, 2016 and 2015, were as follows:

December 31, 2016 2015 Land and buildings Ps.2,050,436 Ps.1,903,121 Furniture and fittings 578,779 455,189 Machinery and equipment 1,847,956 1,081,394 Vehicles 30,739 22,413 Others 28,771 10,543 Accumulated depreciation (1,663,129) (1,393,575) Ps.2,873,552 Ps.2,079,085

Depreciation expense recorded for the fiscal years ended December 31, 2016, 2015 and 2014, was Ps.301,387, Ps.218,611 and Ps.172,582, respectively.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The major categories of intangible assets as of December 31, 2016 and 2015 were as follows:

December 31, 2016 2015 Goodwill, net of accumulated amortization of Ps. 43,823 and Ps.34,149, respectively Ps.5,642 Ps.15,316 Organization and development expenses, net of accumulated amortization of Ps.2,289,406 and Ps.1,555,116, respectively. 2,576,613 2,010,528 Ps.2,582,255 Ps.2,025,844

Total amortization expenses for the fiscal years ended December 31, 2016, 2015 and 2014, was Ps.756,218, Ps.645,116 and Ps.339,964 respectively.

Organization and development expenses included software and the related implementation services purchased from third parties, with a net book value of Ps.2,189,068 and Ps.1,738,706 at December 31, 2016 and 2015, respectively.

The table below shows the components of goodwill by type of activity for the periods presented:

December 31, 2016 2015 Banking 5,642 15,316 Ps.5,642 Ps.15,316

Miscellaneous assets consisted of the following as of December 31, 2016 and 2015:

December 31, 2016 2015 Construction in progress Ps.947,590 Ps.538,327 Deposits on fixed asset purchases 86,042 105,109 Stationery and supplies 64,566 53,759 Real estate held for sale 1,276 1,102 Assets under leasing agreements — 1,315 Land and Building 105,781 112,922 Others 15,982 7,539 Ps.1,221,237 Ps.820,073

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

12. Allowances and Provisions. Allowances on assets excluding loans and reserves for contingencies were as follows:

December 31, 2016 2015 Allowances against asset accounts: Other receivables resulting from financial brokerage, for collection risk (a) 191,087 189,709 Credits for leases (a) 14,186 18,158 Equity investments in other companies (b) 601 636 Miscellaneous receivables, for collection risk (a) 200,209 175,878 Reserves for contingencies: For severance payments (c) 46,349 18,999 Litigations (d) 180,782 156,641 Other contingencies (e) 73,086 241,782 Sundry liabilities arising from credit card activities (f) 44,096 24,940 Other commitments (g) 23,482 26,146 Differences arising from court deposit´s dollarization (h) 11,558 7,957 Penalties Imposed 5,131 5,131 Total reserves for contingencies Ps.384,484 Ps.481,596

(a) Based upon an assessment of debtors´ performance, the economic and financial situation and the guarantees collateralizing their respective transactions.

(b) Includes the estimated losses due to the excess of the cost plus dividend method over the equity method equity investments. (c) Estimated amounts payable under labor lawsuits filed against the Bank by former employees.

(d) Litigation arising from different types of claims from customers (e.g., claims for thefts from safe deposit boxes, the cashing of checks that have been fraudulently altered, discrepancies in deposits and payments services that the Bank renders, etc). Consumer Protection Associations, on behalf of consumers, have filed claims against the Bank and Compañía Financiera Argentina with regard to the collection of some financial charges. The Bank and Compañía Financiera Argentina considers the resolution of these controversies will not have a significant impact on its financial condition.

(e) As of December 31, 2016 and 2015, provincial tax collection authorities, as well as tax collection authorities from the Autonomous City of Buenos Aires (“Buenos Aires”), are in the process (in different degrees of completion) of conducting audits and assessments mainly regarding the Compensatory Bond issued by the National Government to compensate financial institutions for the losses generated by the asymmetric pesification of loans and deposits.

The Argentine Federal Court of Appeals in Administrative Matters granted Banco Galicia a preliminary injunction in an amount equal to the Compensatory Bond in Banco Galicia´s challenge of an assessment by the Buenos Aires tax authorities. The Argentine Supreme Court of Justice affirmed the opinion of the Argentine Federal Court of Appeals in Administrative Matters, and the Court of Appeals therefore ordered the tax authority to refrain from starting tax enforcement proceedings or otherwise requesting precautionary measures for such purpose. Currently, a related appeal filed by the Bank against a decision issued in November 2013 by the Court of First Instance is pending before the Federal Administrative Court of Appeals in Administrative Matters.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

As for other claims by the tax authorities of Buenos Aires, Banco Galicia joint the Regularization Regime for Tax Obligations in Default (Law No. 3,461 and regulations), which allowed for a total payment of interest and the cancellation of penalties with respect to tax assessments, Banco Galicia´s accession to such regime was notified to the appropriated judicial authorities under the respected dockets.

With respect to judicial proceedings before the Tax Court of the Province of Buenos Aires related to tax assessments by authorities of the Province of Buenos Aires, such court has resolved: (i) negatively with respect to claims of the Bank not related to the Compensatory Bond; and (ii) positively in respect of the non-taxability of the Compensatory Bond. The Bank also joined the Tax Debt Regularization Regime (Normative Resolution No. 12 and related regulations) providing for discounts on amounts not related to the Compensatory Bond. Banco Galicia’s accession to such regime was notified to the appropriate judicial authorities under the respective dockets. Meanwhile, the Province of Buenos Aires rejected the judgment issued by the Tax Court of the Province of Buenos Aires related to the Compensatory Bond and requested the Administrative Court of Appeals in Administrative Matters of La Plata to rescind that decision. The Bank filed an answer opposing the lack of jurisdiction exception filed by the Province of Buenos Aires on the grounds that only the Supreme Court of Justice has jurisdiction to resolve the issue. On April 15, 2014, the aforementioned Court sustained the motion for lack of jurisdiction and ordered the proceedings to be filed. The authorities from the Province of Buenos Aires filed an appeal before the Supreme Court of Justice of the Province of Buenos Aires, which has not issued a decision to date.

With respect to other claims in various jurisdictions, the Bank has expressed its disagreement to certain tax adjustments, before the administrative and/or judicial corresponding instances. These proceedings and their potential consequences are permanently monitored by the Bank’s management and although the final outcome is still uncertain, the Bank considers it has complied with its tax obligations under existing regulations.

(f) Reserves for a guarantee of credit-card receivables and for the estimated liability for the insurance of the payment of credit-card balances in the event of the death of the credit-card holders.

At the date of these consolidated financial statements, the Argentine Revenue Service (AFIP), Provincial Revenue Boards and Municipalities are in the process of conducting audits and assessments, in different degrees of completion, at the companies controlled by Tarjetas Regionales S.A. Said agencies have served notices and made claims regarding taxes applicable to Tarjetas Regionales S.A.’ s subsidiaries. Therefore, the companies are taking the corresponding administrative and legal steps in order to solve such issues. The original amount claimed for taxes totals approximately Ps.14,461.

Based on the opinions of their tax advisors, the companies believe that the abovementioned claims are both legally and technically groundless and that taxes related to the claims have been correctly calculated in accordance with tax regulations in force and existing case law.

Notwithstanding the foregoing, the companies have set up the provisions deemed appropriate pursuant to the evolution of each proceeding.

(g) Represents contingent commitments in connection with customers classified in categories other than the “normal” categories under Argentine Banking GAAP.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

(h) Represents the difference between the amounts of deposits subject to pesification at Ps. 1.40 and such amounts at the exchange rate as of December 31, 2016.

Penalties Imposed on Banco Galicia and Summary Proceedings commenced by the Argentine Central Bank. • Penalties Imposed on Banco Galicia existing as of December 31, 2016:

Argentine Central Bank’s Financial Summary Proceedings No. 1308. Penalty notification date: October 28, 2013. Reason for the imposition of the penalty: Alleged non-compliance with the regulations on prevention of money laundering, due to lack of files and of customers’ awareness. Penalty amount and responsible individuals penalized (penalties): Banco Galicia Ps.230; Daniel A. Llambías Ps.220; Luis M. Ribaya Ps. 172; Antonio R. Garcés Ps. 169; Enrique M. Garda Olaciregui Ps.126; Eduardo A. Fanciulli Ps.126; Sergio Grinenco Ps.120; Guillermo J. Pando Ps.120; and Pablo Garat Ps.70. Status of the proceedings: The individuals on whom penalties were imposed filed an administrative appeal against the aforementioned penalties, which is pending at the Division V of the Argentine Federal Court of Appeals in Administrative Matters. Accounting treatment: Fines were paid in full and charged to income for the corresponding fiscal year.

Argentine Central Bank’s Financial Summary Proceedings No. 1223 and 1226 (accumulated). Decision No. 762/2013. Penalty notification date: November 15, 2013. Reason for the imposition of the penalty: Alleged non-compliance with Communiqué “A” 3426 and Communiqué “A” 3381 of the Argentine Central Bank, and alleged non-compliance with restrictions related to assistance to related customers. Penalty amount and responsible individuals penalized (penalties): Banco Galicia Ps.400; José H. Petrocelli Ps.328; Luis M. Ribaya Ps.328; Eduardo J. Zimermann Ps.324; Antonio R. Garcés Ps.400; Eduardo H. Arrobas Ps.400; Daniel A. Llambías Ps.400; Eduardo J. Escasany Ps.260; Federico Braun Ps.260; and Abel Ayerza Ps.258. In the case of Messrs. Juan M. Etchegoyhen, Federico M. Caparrós Bosch, Jorge Grouman, Norberto R. 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 on whom penalties were imposed filed an administrative appeal against the aforementioned penalties, which is pending at the Division V of the Argentine Federal Court of Appeals in Administrative Matters. Accounting treatment: Fines were paid in full and charged to income for 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: Alleged omission to report suspicious activities, in possible infringement of Act No. 25246. Penalty amount and responsible individuals penalized (penalties): Banco Galicia Ps.2,242; Eduardo A. Fanciulli Ps.812; Enrique M. Garda Olaciregui Ps.1,429. Status of the proceedings: The individuals on whom penalties were imposed filed a direct appeal against the aforementioned penalties, which is pending at the Division I of the Argentine Federal Court of Appeals in Administrative Matters. Accounting treatment: As of December 31, 2016 and 2015, a provision for Ps.4,483 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: Alleged omission to report suspicious activities, in possible infringement of Section 24 of Act No. 25246. Penalty amount and responsible individuals penalized (penalties): Banco Galicia Ps. 324; Enrique M. Garda Olaciregui, Pablo M. Garat, Sergio Grinenco, Pablo Gutierrez, Guillermo J. Pando, Luis M. Ribaya y Antonio R. Garcés Ps.324, jointly. Status of the proceedings: The individuals on whom penalties were imposed filed a direct appeal against the aforementioned penalties, which is pending at the Division III of the Argentine Federal Court of Appeals in Administrative Matters. Accounting treatment: As of December 31, 2016 and 2015, a provision for Ps.648 has been set up.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

• Summary Proceedings Commenced by the Argentine Central Bank (with no Penalties) Pending as of December 31, 2016: Summary Proceedings No. 6075, notified on January 26, 2015. Charges filed: Alleged infringement of Communiqué “A” 4940, “A” 4662 and “C” 51232 of the Argentine Central Bank upon carrying out eight foreign exchange transactions. Individuals subject to summary proceedings: 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, Matías N. Abate, María B. Troitiño, Natalia Bortoli, Alejandro Schlimovich Ricciardi and Sandra P. Jaleh Camin. Status of the proceedings: a defense brief was filed and the lack of definition by the most favorable criminal law was put forward. Both are being analyzed by the Argentine Central Bank’s Management Division of Foreign Exchange Litigation Matters.

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 Galicia y 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 Argentine Central Bank. Status of the proceedings: a defense was filed with the Argentine Central Bank, which is being analyzed by such entity’s Management Division of Financial Litigation Matters.

Summary Proceedings No. 6669. Notification date: December 29, 2015. Charges filed: Alleged commitment of the crimes set forth in Section 1, Subsection C), e) and f) of Law No. 19359 integrated into Argentine Central Bank’s Communiqué “A” 3471, 3826 and 5264. Individuals subject to summary proceedings: Banco de Galicia y Buenos Aires S.A., María José Baldatti de Iorio and Laura Cecilia Cifala. Status of the proceedings: a defense brief was filed, which is being analyzed by the Argentine Central Bank’s Management Division of Foreign Exchange Litigation Matters.

Summary Proceedings No. 6681. Notification date: December 30, 2015. Charges filed: Alleged commitment of the crimes set forth in Section 1, Subsection C), e) and f) of Law No. 10959 integrated into point 1 of Communiqué “A” 5397 and 4.1 of Communiqué “A” 5264. Individuals subject to summary proceedings: Banco de Galicia y Buenos Aires S.A., María José Baldatti de Iorio, Roberto Fernandez and María Soledad Paz. Status of the proceedings: a defense brief was filed and the lack of definition by the most favorable criminal law was put forward, which was partially sustained by the Argentine Central Bank’s Management Division of Foreign Exchange Litigation Matters. The latter decided to partially file the proceedings The case is currently being analyzed and a new lack of definition by the mos favorable criminal law was put forward.

Summary Proceedings No. 6670. Notification date: February 16, 2016. Charges Filed: Alleged breach of Section 1, Subsection c), e) and f) of Law No. 19359 integrated into Argentine Central Bank’s Communiqué “A” 5377 (amending point 3 of Annex to Communiqué “A” 5264). Individuals subject to summary proceedings: the Bank, María José Baldatti de Iorio, José Antonio Petracca and María Paula Petzl. Status of the proceedings: a defense brief was filed and the lack of definition by the most favorable criminal law was put forward. Both are being analyzed by the Argentine Central Bank’s Management Division of Foreign Exchange Litigation Matters.

Summary Proceedings No. 6876. Notification date: May 20, 2016. Charges Filed: Alleged breach of Section 1, Subsection c), e) and f) of Law No. 19359 integrated into Argentine Central Bank’s Communiqué “A” 3471, 5264 and 5377. Individuals subject to summary proceedings: the Bank, María José Baldatti de Iorio, Natalia Stella Maris Mesiano and María Paula Petzl. Status of the proceedings: a defense brief was filed and the lack of definition by the most favorable criminal law was put forward. Both are being analyzed by the Argentine Central Bank’s Management Division of Foreign Exchange Litigation Matters.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Summary Proceedings No. 6988. Notification date: August 25, 2016. Charges filed: Alleged breach of Section 1, Subsection c), e) and f) of Law No. 19359 integrated into Argentine Central Bank’s Communiqué “A” 3471, 3826, 5264 and 5265. Individuals subject to summary proceedings: María José Baldatti de Iorio, Laura Cecilia Cifala. Status of the proceedings: the defense has not been filed yet, which is in the process of being drafted.

The provisioning criterion required by Communiqué “A” 5689 differs from that of the Argentine GAAP in force in the Autonomous City Buenos Aires. Banco de Galicia y Buenos Aires S.A. reserves the right to dispute the legitimacy of such Communiqué and file a claim for any damages its application could cause the Bank.

Compañía Financiera Argentina S.A. has not been imposed any penalties that should be informed under the terms of Argentine Central Bank’s Communiqué “A” 5689, and to date has no summary proceedings brought against it by the Argentine Central Bank.

13. Other Liabilities Resulting from Financial Brokerage- Banks and International Entities, and Loans from Domestic Financial Institutions. The Bank also borrows funds under different credit arrangements from local and foreign banks and international lending agencies as follows:

December 31, 2016 2015 Description Banks and International Entities Contractual long-term Liabilities Floating Rate Bank Loans 2019 — 21,685 International Finance Corporation. (I.F.C.) 79,251 — Other lines from foreign banks 67,152 134,096 Total long-term liabilities Ps.146,403 Ps.155,781 Contractual short-term liabilities: Other lines from foreign banks 2,066,592 1,106,600 Total short-term liabilities Ps.2,066,592 Ps.1,106,600 Total Banks and International Entities Ps.2,212,995 Ps.1,262,381 Loans from Domestic Financial Institutions Contractual long-term liabilities: BICE (Banco de Inversión y Comercio Exterior) 1,184,213 115,256 Other lines from domestic banks 1,194,010 812,560 Total long-term liabilities Ps.2,378,223 Ps.927,816 Contractual short-term liabilities: Other lines from credit from domestic banks 1,719,138 461,087 Total short-term liabilities Ps.1,719,138 Ps.461,087 Total Domestic Financial Institutions Ps.4,097,361 Ps.1,388,903 TOTAL Ps.6,310,356 Ps.2,651,284

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Accrued interest on the above liabilities in the amount of Ps.41,311 and Ps.14,247 as of December 31, 2016 and 2015, respectively, are included in “Others” under the caption “Other Liabilities Resulting from Financial Brokerage” in the accompanying balance sheet.

As of December 31, 2016, maturities of the above long-term liabilities for each of the following five fiscal years and thereafter were as follows:

Contractual long-term Liabilities 2017 Ps.1,459,739 2018 371,913 2019 290,618 2020 194,267 2021 178,669 Thereafter 29,420 Ps.2,524,626

14. Other Liabilities Resulting from Financial Brokerage—Negotiable Obligations. The amounts outstanding and the terms corresponding to outstanding negotiable obligations at the dates indicated were as follows, considering their original contractual terms:

Annual December 31, Maturity Interest Rate 2016 2015 Negotiable Obligations (1) Long-term liabilities: 9 % Notes Due 2003 2003 9.00% 7,417 6,086 (Semi-annual interest, principal payable at maturity) Banco Galicia- Due 2018 2018 8.75% 4,627,644 3,794,400 (Semi-annual interest, principal payable at maturity) Banco Galicia- subordinated Due 2019 2019 16.00% — 3,300,516 (Semi-annual interest, principal payable at maturity) Banco Galicia- subordinated Due 2026 2026 8.25% 4,065,255 — (Interest fixed,semi-annual interest - principal payable at maturity) Tarjeta Cuyana S.A. Class XXVI Serie II 2020 Badlar + 400 b.p. 350,237 — (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A. Class XXVI Serie I 2018 Badlar + 275 b.p. 149,763 — (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A Class XXIV Serie II 2019 Badlar + 498 b.p. 185,309 — (Interest quarterly, principal payable at maturity) Tarjetas Cuyanas S.A. Class XIV serie II 2016 Badlar + 415 b.p. — 113,200 (Interest quarterly, principal payable at maturity)

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Annual December 31, Maturity Interest Rate 2016 2015 Tarjeta Cuyana S.A Class XIX serie II 2017 Badlar + 495 b.p. 10,056 — (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A Class XXIII 2017 Badlar + 499 b.p. 162,757 — (Interest quarterly, principal payable at maturity) Tarjetas Cuyanas S.A. Class XVI 2016 Badlar + 340 b.p. — 96,470 (Interest quarterly, principal payable at maturity) Tarjetas Cuyanas S.A. Class XVIII 2016 Badlar + 400 b.p. — 114,000 (Interest quarterly, principal payable at maturity) Tarjetas Cuyanas S.A. Class XIX serie I 2017 Badlar + 495 b.p. — 69,056 (Interest quarterly, principal payable at maturity) Tarjetas Cuyanas S.A. Class XX 2016 27.90% - Badlar + 450 b.p. — 257,100 (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A Class XXI 2017 Badlar + 450 b.p. 200,617 204,000 (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A Class XXII 2017 Badlar + 425 b.p. 300,000 256,957 (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A Class XXIV Serie I 2017 Badlar + 408 b.p. 65,691 — (Interest quarterly, principal payable at maturity) Tarjeta Cuyana S.A Class XXV Serie II 2020 Badlar + 394 b.p. 348,000 — (Interest quarterly, principal payable at maturity) Tarjeta del Mar S.A. Class I 2017 Badlar + 450 b.p. 119,362 — (Interest quarterly, principal payable in 3 installments) Tarjetas Naranja S.A. Class XIII (Interest fixed,semi-annual interest, principal payable in 3 annual 2017 9.00% 1,058,729 1,748,774 installments) Tarjetas Naranja S.A. Class XXXV Serie I 2018 Badlar + 299 b.p. 223,933 — (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXXII 2017 Badlar + 450 b.p. 151,400 — (Quarterly interest, principal payable in 3 installments) Tarjetas Naranja S.A.Class XXXV Serie II 2020 Badlar + 399 b.p. 749,545 — (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXVI Serie II 2016 Badlar + 399 b.p. — 145,226 (Interest quarterly, principal payable at maturity) Tarjeta Naranja S.A.Class XXXIII SERIE II 2019 Badlar + 540 b.p. 361,492 — (Interest quarterly, principal payable at maturity) Tarjeta Naranja S.A.Class XXXIII SERIE I 2017 Badlar + 450 b.p. 118,788 — (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXV Serie II 2016 Badlar + 415 b.p. — 142,903 (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXIV Serie II 2017 Badlar + 500 b.p. 33,672 33,467 (Interest quarterly, principal payable at maturity)

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Annual December 31, Maturity Interest Rate 2016 2015 Tarjeta Naranja S.A.Class XXXIV Serie I 2017 Badlar + 338 b. p. 104,015 — (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXVII Serie II 2016 Badlar + 395 b.p. — 120,088 (Interest quarterly, principal payable at maturity) Tarjeta Naranja S.A. Class XXXIV Serie II 2020 Badlar + 467 b.p. 465,497 (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXVIII SII 2017 Badlar + 450 b.p. 1,837 93,725 (Quarterly interest, principal payable in 3 installments) Tarjetas Naranja S.A. Class XXIX 2017 Badlar + 450 b.p. 166,531 284,791 (Interest quarterly, principal payable at maturity) Tarjetas Naranja S.A. Class XXX 2017 27.75 Badlar + 450 b.p. 334,953 346,344 (Interest quarterly, principal payable at maturity) Tarjeta Naranja S.A Class XXXI 2017 27 Badlar + 450 b.p. 181,024 320,619 (Interest quarterly, principal payable at maturity) Tarjeta Naranja S.A. Class XXXVI serie I 2018 25,25 Badlar + 325 b.p. 192,292 — (Interest quarterly, principal payable at maturity) Tarjeta Naranja S.A. Class XXXVI Serie II 2019 25,25 Badlar + 400 b.p. 545,907 — (Interest quarterly, principal payable at maturity) CFA class XVI 254,298 2017 Badlar + 450 b.p. — (Quarterly interest, principal payable at maturity) — CFA class XVII serie I 2017 Badlar + 440 b.p. 58,054 — (Quarterly interest, principal payable at maturity) CFA class XII serie II 2016 Badlar + 400 b.p. — 156,451 (Quarterly interest, principal payable at maturity) CFA class XIII serie II 2016 Badlar + 440 b.p. — 74,793 (Quarterly interest, principal payable in 3 installments) CFA class XIV 2017 27,24% /Badlar + 425 b.p. 60,716 227,066 (Quarterly interest, principal payable in 3 installments) CFA Class XV 2017 27,99% /Badlar + 450 b.p. 82,464 194,045 (Quarterly interest, principal payable in 3 installments) CFA class XVII serie II 2019 Badlar + 498 b. p. 286,124 — (Quarterly interest, principal payable at maturity) CFA class XVIII 341,469 2018 Badlar + 288 b.p. — (Quarterly interest, principal payable at maturity) — Grupo Financiero Galicia Class V Serie II 2017 Badlar + 525 b.p. 78,200 76,074 (Quarterly interest, principal payable at maturity) Grupo Financiero Galicia Class VI Serie I 2016 Badlar + 325 b.p. — 115,991 (Quarterly interest, principal payable at maturity) Grupo Financiero Galicia Class VI Serie II 2017 Badlar + 425 b.p. 109,845 109,845 (Quarterly interest, principal payable at maturity)

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Annual December 31, Maturity Interest Rate 2016 2015 Grupo Financiero Galicia Class VII 2017 27% / Badlar + 425 b.p. 157,000 160,000 (Quarterly interest, principal payable at maturity) Total 16,709,893 12,561,987 Short-term liabilities — — Total Negotiable Obligations 16,709,893 12,561,987

(1) Only principal, except for Subordinated Obligations which include accrued interest for Ps. 147,110, and 244,483, as of December 31, 2016 and 2015, respectively.

As of December 31, 2016 and 2015, interest and principal on all of the above debt securities denominated in U.S. dollars were payable in U.S. dollars. Accrued interest on the above liabilities for Ps.368,204 and Ps. 264,923 as of December 31, 2016 and 2015, respectively, was included in “Other” under the caption “Other Liabilities Resulting from Financial Brokerage” in the accompanying balance sheet. Long-term negotiable obligations as of December 31, 2016 mature as follows:

Maturity Long Term Past Due (*) 7,417 2017 3,810,009 2018 5,535,101 2019 1,378,832 2020 1,913,279 2021 — Thereafter 4,065,255 16,709,893

(*) Corresponds to past due debt not yet restructured.

15. Balances in Foreign Currency. The balances of assets and liabilities denominated in foreign currencies (principally in U.S. dollars) were as follows:

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 Assets: Cash and due from banks Ps.39,486,988 Ps.17,658,396 Government and private securities 1,352,876 5,257,343 Loans 17,551,161 3,208,454 Other receivables resulting from financial brokerage 8,141,115 1,094,074 Credits for leases 51,105 21,651 Equity investments in other companies 8,032 6,594 Miscellaneous receivables 158,634 32,820 Unallocated items 7,918 19,191 Other assets 13,559 6,915 Total Ps.66,771,388 Ps.27,305,438 Liabilities: Deposits Ps.51,017,277 Ps.14,373,198 Other liabilities resulting from financial brokerage 13,287,379 10,054,541 Miscellaneous liabilities 19,369 30,625 Subordinated Negotiable Obligations 4,065,255 3,300,516 Provisions — 7,803 Unallocated items 7,005 8,595 Other Liabilities — 826 Total Ps.68,396,285 Ps.27,776,104

The Group covers its foreign currency mismatch through foreign currency futures transactions. These transactions are carried out through auto-regulated markets (MAE / ROFEX) and with customers.

16. Transactions with Related Parties. The Group has granted loans to certain related parties including related officers, equity-method investees and consolidated companies. Total loans outstanding as of December 31, 2016 and 2015, amounted to Ps.696,470 and Ps. 426,598, respectively, and the change from December 31, 2015 to December 31, 2016, reflects payments amounting to Ps.58,210 and advances of Ps.326,350 . Furthermore, there were foreign exchange differences of Ps.1,732 on the above-mentioned portfolio between those dates.

Such loans were made in the ordinary course of business at normal credit terms, including interest rates and collateral requirements, and, in management’s opinion, such loans represent normal credit risk.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

17. Detail of Statement of Income Accounts.

December 31, 2016 2015 2014 Financial Income Interest on other receivables resulting from financial brokerage: Interest on purchased certificates of deposits 14,261 745 67,847 Advance payment leasing 1,119 50,688 49,060 Other 90,653 47,881 53,963 Ps.106,033 Ps.99,314 Ps.170,870 Other: Premiums on forward purchases of Government securities under repos 284,283 97,190 37,624 Interest on pre-export and export financing 277,704 68,607 84,561 Result from other credits by financial brokerage 25,208 13,053 139,317 Net position of forward transactions in pesos 3,886 917,425 830,222 Other 1,047 — 269 Ps.592,128 Ps.1,096,275 Ps.1,091,993 Financial Expenses Interest on other liabilities resulting from financial brokerage: Interest on negotiable obligations 2,365,869 1,471,835 1,174,736 Interest on other liabilities resulting from financial brokerage from other banks and international entities 690,467 353,914 342,261 Ps.3,056,336 Ps.1,825,749 Ps.1,516,997 Other interest: Interest for other deposits 58,018 181,489 77,048 Other — 1,151 4,138 Ps.58,018 Ps.182,640 Ps.81,186 Other: Premiums on repo transactions 102,894 52,054 24,173 Contributions and taxes on financial income 2,640,087 1,614,130 1,328,762 Net position of forward transactions in pesos 196,248 — 263,014 Other 10,307 30,309 337 Ps.2,949,536 Ps.1,696,493 Ps.1,616,286 Income from services Other: Commissions on credit cards 6,894,873 5,263,898 3,685,519 Safety rental 229,368 192,749 167,125 Insurance premiums 407,732 420,111 292,676 Other 2,191,113 1,129,715 998,342 Ps.9,723,086 Ps.7,006,473 Ps.5,143,662

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 Expenses from services Other: Gross revenue taxes 934,350 793,024 606,436 Linked with credit cards 1,054,512 659,566 325,568 Other 1,024,794 694,254 443,368 Ps.3,013,656 Ps.2,146,844 Ps.1,375,372 Administrative expenses Other operating expenses: Rentals 474,116 334,494 293,180 Electricity and communications 459,524 307,500 248,968 Maintenance and repair expenses 476,022 351,997 204,569 Security Services 501,107 401,632 292,606 Other operating expenses 195,319 133,730 103,993 Ps.2,106,088 Ps.1,529,353 Ps.1,143,316 Miscellaneous income Other: Income from Sale of Bank Premises and Equipment 170,873 10,139 3,325 Income from Transactions with Miscellaneous Assets 1,796 24,562 4,911 Leases 2,689 2,388 2,356 Adjustments and Interest on miscellaneous receivables 323,770 234,508 152,913 Others 260,257 183,690 114,515 Ps 759,385 Ps.455,287 Ps.278,020 Miscellaneous losses Other: Adjustment to Interest on Miscellaneous Liabilities 2,647 1,134 781 Donations 45,353 33,338 23,410 Turnover Tax 45,080 24,940 17,435 Claims 78,166 42,810 37,617 Administrative, disciplinary and criminal penalties — 1,418 — Others 149,834 90,797 75,844 Ps 321,080 Ps.194,437 Ps.155,087

18. Income Taxes. Income tax for the fiscal years ended December 31, 2016, 2015 and 2014, amounted to Ps. 3,352,541, Ps. 2,801,424 and Ps. 1,992,272, respectively. The statutory income tax rate for all the fiscal years presented was 35%.

As of December 31, 2016 and 2015, the consolidated Group’s MPIT available to credit against future income tax amounts to Ps. 9,424 and Ps. 10,230, respectively, and is recognized as Miscellaneous Receivables in the consolidated balance sheet.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The breakdown of outstanding tax credits and their probable expiration dates are detailed below:

Tax Credit as of December 31, Expiration Date of Generation 2016 2015 Date 2005 — 76 2015 2006 148 148 2016 2007 319 319 2017 2008 363 363 2018 2009 583 583 2019 2010 1,629 1,629 2020 2011 1,458 1,458 2021 2012 1,714 1,714 2022 2013 1,881 1,881 2023 2014 2,306 2,306 2024 2015 3,646 4,460 2025 2016 18 — 2026 14,065 14,937 Allowances for non recoverable MPIT assets (4,641 ) (4,707 ) Total 9,424 10,230

19. Shareholders´ Equity and Restrictions Imposed on the Distribution of Dividends. The Argentine Central Bank regulations require that 20% of the profits shown in the Income Statement at fiscal year-end, plus (or less), the adjustments made in previous fiscal years and, less, if any, the loss accumulated at previous fiscal year-end, be allocated to the legal reserve.

This proportion applies regardless of the ratio of the Legal Reserve fund to Capital Stock. Should the Legal Reserve be used to absorb losses, earnings shall be distributed only if the value of the Legal Reserve reaches 20% of the Capital Stock plus the Capital Adjustment.

The Argentine Central Bank sets rules for the conditions under which financial institutions can make distributions of profits. According to these rules, profits can be distributed as long as results of operations are positive after deducting not only the Reserves, which may be legally and statutory required, but also the following items from Unappropriated Retained Earnings: The difference between the book value and the market value of public sector assets and/or debt instruments issued by the Argentine Central Bank not valued at market price, the amounts capitalized for lawsuits related to deposits and any unrecorded adjustments required by the external auditors or the Argentine Central Bank.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Moreover, in order that a financial institution be able to distribute profits, said institution must comply with the capital adequacy rule, i.e. with the calculation of minimum capital requirements and the regulatory capital.

For these purposes, this shall be done by deducting from its assets and Unappropriated Retained Earnings all the items mentioned in the paragraph above.

Moreover, in such calculation, a financial institution shall not be able to compute the temporary reductions that affect minimum capital requirements, computable regulatory capital or its capital adequacy.

Since January 2016, the Argentine Central Bank determined that banks shall meet an additional capital conservation buffer apart from the minimum capital requirement equal to 3.5% of risk-weighted assets. This shall be made up only of Tier 1 Common Capital, net of deductible items. Distribution of profits shall be restricted when the Bank’s computable regulatory capital level and structure is within the range of the capital conservation buffer.

Distribution of profits shall require the prior authorization of the Argentine Central Bank’s Superintendent of Financial and Foreign Exchange Institutions, whose intervention shall have the purpose of verifying the aforementioned requirements have been fulfilled.

In addition to the aforementioned restrictions established by the Argentine Central Bank, which are applicable to Banco de Galicia y Buenos Aires S.A. and Compañía Financiera Argentina S.A., pursuant to Section 70 of the Argentine General Corporations Law, stock companies shall establish a reserve not lower than 5% of the realized and liquid profits shown in the Income Statement for the fiscal year, until 20% of the corporate capital is reached. In the event that said reserve is reduced for any 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 for the distribution of dividends at 25% of the realized and liquid profits of each fiscal year. This restriction shall remain in force as long as the company’s shareholders’ equity is below Ps. 300,000.

Tarjeta Naranja S.A. has agreed, pursuant to the terms and conditions of the Class XIII Negotiable Obligations, as well as in accordance with certain financial loans contracts, not to distribute dividends that may exceed 50% of the company’s net income. This restriction also applies in the case there is any excess on certain indebtedness ratios.

20. Minimum Capital. Grupo Financiero Galicia is not subject to the minimum capital requirements established by the Argentine Central Bank.

In addition, Grupo Financiero Galicia meets the minimum capital requirements established by the Corporations Law, which amount to Ps. 100.

Pursuant to Argentine Central Bank regulations, Banco Galicia is required to maintain a minimum capital, which is calculated by weighting the risks related to assets and to the balances of bank premises and equipment and miscellaneous and intangible assets.

As called for by Argentine Central Bank regulations, as of December 31, 2016 and 2015, the minimum capital requirements were as follows:

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Computable Capital as a % of Minimum Minimum Capital Computable Capital Capital December 31, 2016 Ps.15,258,350 Ps. 22,009,550 144.25 December 31, 2015 Ps.11,062,886 Ps. 14,071,044 127.19

The excess capital covers the 0.25% increase of the additional requirement related to the function of custodian of titles representative of investments of the Fondo de Garantía y Sustentabilidad del Sistema Integrado Provisional Argentino.

21. Earnings per Share. The Company is required to present earnings per share information for all periods presented. Basic earnings per share (“basic EPS”) are computed by dividing the net income for the year by the weighted-average number of common shares outstanding during the year (1,300,265, 1,300,265 and 1,300,265 for the fiscal years ended December 31, 2016, 2015 and 2014, respectively).

Basic EPS for the fiscal years ended December 31, 2016, 2015 and 2014, were 4.628, 3.337 and 2.567, respectively.

There are no dilutive financial instruments outstanding for any of the fiscal years presented.

22. Contribution to the Deposit Insurance System. Law No. 24,485 and Decree No. 540/95 established the creation of the Deposit Insurance System to cover the risk attached to bank deposits, in addition to the system of privileges and safeguards envisaged in the Financial Institutions Law.

The National Executive Branch through Decree No. 1127/98 dated September 24, 1998 established the maximum amount for this insurance system to demand deposits and time deposits denominated either in Pesos and/or in foreign currency. Such amount was currently set at Ps. 450.

This system does not cover deposits made by other financial institutions (including time deposit certificates acquired through a secondary transaction), deposits made by parties related to Banco Galicia, either directly or indirectly, deposits of securities, acceptances or guarantees and those deposits set up after July 1, 1995, at an interest rate exceeding the one established regularly by the Argentine Central Bank based on a daily survey conducted by it. Also excluded are those deposits whose ownership has been acquired through endorsement and those placements made as a result of incentives other than the interest rate. This system has been implemented through the creation of the Deposit Insurance Fund (“FGD”), which is managed by a company called Seguros de Depósitos S.A. (SEDESA). The shareholders of SEDESA are the Argentine Central Bank and the financial institutions, in the proportion determined for each one by the Argentine Central Bank based on the contributions made to the fund.

The Argentine Central Bank set the monthly contributions that financial institutions shall make to the Deposit Insurance Fund, based on its monthly average deposits. The aforementioned contribution was established at 0.015% until October 2014, and increased to 0.06% per month as from November 2014. Effective as of the contribution maturing in April 2016, the Argentine Central Bank established a 0.015% rate for the monthly average of all deposits.

As of December 31, 2016, 2015 and 2014, the standard contribution to the Deposits Insurance System amounted to Ps. 314,515, Ps. 497,258 and Ps. 151,450, respectively, recorded in the Consolidated Statements of Income in Financial Expenses under the caption “Contributions made to Deposit Insurance Fund”.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

23. Balance Sheet and Statement of Income. The presentation of financial statements according to the Argentine Central Bank rules differs significantly from the format required by the Securities and Exchange Commission under Rules 210.9 to 210.9-07 of Regulation S-X (Article 9).

The following balance sheet presents Grupo Financiero Galicia’s balance sheet as of December 31, 2016 and 2015, as if they had followed Article 9 balance sheet disclosure requirements using Argentine Banking GAAP.

December 31, 2016 2015 Assets: Cash and due from banks Ps.61,166,783 Ps.30,835,196 Interest-bearing deposits in other banks 1,227,101 232,351 Federal funds sold and securities purchased under resale agreements or similar agreements — 15,272 Trading account assets 17,189,977 16,147,582 Investment securities 5,385,533 4,356,519 Loans 139,148,092 100,249,210 Allowances for loan losses (4,706,758 ) (3,559,994 ) Miscellaneous receivables 2,803,249 1,802,080 Bank Premises and Equipment 2,873,552 2,079,085 Intangible Assets 2,582,255 2,025,844 Other assets 14,541,413 7,532,106 Total assets Ps.242,211,197 Ps.161,715,251

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 Liabilities and Shareholders’ Equity: Deposits Ps.150,737,062 Ps.99,086,493 Short-term borrowing 3,785,730 1,567,687 Other liabilities 1,611,571 1,483,497 Amounts payable for spot and forward purchases to be settled 7,818,144 764,898 Other liabilities resulting from financial brokerage 31,020,515 24,651,247 Long-term debt 19,234,519 13,645,584 Miscellaneous Liabilities 5,804,285 4,442,113 Contingent liabilities 384,484 481,596 Total Liabilities 220,396,310 146,123,115 Common Stock 1,300,265 1,300,265 Other reserves and retained earnings 19,052,433 13,184,556 Non-controlling Interest 1,462,189 1,107,315 Total Equity 21,814,887 15,592,136 Total Liabilities and Equity Ps.242,211,197 Ps.161,715,251

The statement of income presented below discloses the categories required by Article 9 using Argentine Banking GAAP:

December 31, 2016 2015 2014 Interest income: Interest and fees on loans Ps.29,856,573 Ps.20,660,847 Ps.16,545,320 Interest and dividends on investment securities: Non taxable interest income — — 58,310 Interest on interest bearing deposits with other banks — — 4 Interest on other receivables from financial brokerage 637,734 392,839 380,815 Trading account interest, net 4,999,752 3,717,995 2,079,848 Total interest income Ps.35,494,059 Ps.24,771,681 Ps.19,064,297 Interest expense Interest on deposits 13,175,239 8,614,654 6,609,494 Interest on securities sold under agreements to repurchase 102,894 52,054 24,173 Interest on short-term liabilities from financial intermediation 168,465 169,243 64,908 Interest on long-term liabilities from financial intermediation 3,630,494 2,163,530 1,911,782 Total interest expense 17,077,092 10,999,481 8,610,327 Net interest income 18,416,967 13,772,200 10,453,970 Provision for loan losses, net of reversals 3,020,536 1,922,836 2,182,197 Net interest income after provision for loan losses Ps.15,396,431 Ps.11,849,364 Ps.8,271,773

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 Non-interest income: Service charges on deposit accounts Ps.2,581,659 Ps.1,958,794 Ps.1,340,684 Credit-card service charges and fees 6,454,931 4,636,081 3,260,308 Other commissions 7,378,834 4,752,739 3,552,606 Income from equity in other companies 80,419 100,126 213,380 Premiums and commissions on insurance business 2,451,943 1,801,404 1,238,029 Other 1,617,387 1,716,768 1,370,711 Total non-interest income Ps.20,565,173 Ps.14,965,912 Ps.10,975,718 Non-interest expense: Commissions 4,164,383 2,840,874 2,000,848 Salaries and social security charges 8,247,114 6,150,481 4,549,187 Fees and external administrative services 2,048,006 1,519,233 1,069,935 Depreciation of bank premises and equipment 301,387 218,611 172,582 Personnel services 372,455 261,979 150,353 Rentals 474,116 334,494 293,180 Electricity and communications 459,524 307,500 248,967 Advertising and publicity 749,271 544,603 413,927 Taxes 5,653,212 4,148,314 2,954,855 Amortization of organization and development expenses 746,544 635,442 332,197 Maintenance and repair expenses 476,022 351,997 204,569 Amortization of “Amparo claims” 12,504 4,308 4,803 Other Provisions and reserves 169,173 448,659 209,958 Other 2,314,307 1,544,402 1,082,157 Total non-interest expense Ps.26,188,018 Ps.19,310,897 Ps.13,687,519 Income before tax expense 9,773,586 7,504,379 5,559,972 Income tax expense 3,352,541 2,801,424 1,992,272 Net Income Ps.6,421,045 Ps.4,702,955 Ps.3,567,700 Less: Net income attributable to non-controlling interest 403,168 364,558 229,910 Net Income attributable to Controlling interest Ps.6,017,877 Ps.4,338,397 Ps.3,337,790 Basic EPS 4.628 3.337 2.567 Diluted EPS 4.628 3.337 2.567

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The carrying value and market value of each classification of Investment securities in the Article 9 balance sheet were as follows:

December 31, 2016 December 31, 2015 Unrealized Market Unrealized Carrying value Gains Losses value Carrying value Gains Losses Market value Securities issued by the National Government Galtrust I 504,874 284,182 — 540,858 685,915 467,320 — 714,672 Other assets 4,880,659 — — 4,882,587 3,670,604 — — 3,670,923 TOTAL Ps.5,385,533 284,182 — 5,423,445 Ps.4,356,519 467,320 — 4,385,595

The maturities as of December 31, 2016, of the Investment securities included in the Article 9 balance sheet were as follows:

December 31, 2016 Maturing Maturing after Maturing after 1 year 5 years but Maturing Carrying within but within within 10 after Value 1 year 5 years years 10 years Galtrust I 504,874 427,761 77,113 — — Other assets 4,880,659 4,339,622 325,511 164,710 50,816 TOTAL Ps.5,385,533 4,767,383 402,624 164,710 50,816

The following table presents realized gains and losses from AFS securities:

Year ended December 31, 2016 2015 2014 Gross realized gains — — 196,829 Net unrealized gains / (losses) (183,138) (95,924) 49,919

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

24. Operations by Geographical Segment. The main financial information, classified by country where transactions originate, is shown below. Most of the transactions originated in the Republic of Uruguay were with Argentine citizens and enterprises, and were denominated in U.S. dollars. Transactions between different geographical segments have been eliminated for the purposes of this Note.

December 31, 2016 2015 2014 Total revenues:(*) Republic of Argentina Ps.57,796,364 Ps.41,051,946 Ps.30,964,747 Republic of Uruguay — 6,460 4,195 Net income (loss), net of monetary effects allocable to each country: Republic of Argentina 6,017,877 4,356,218 3,343,584 Republic of Uruguay — (17,821 ) (5,794 ) Total assets: Republic of Argentina 242,250,624 161,706,894 107,206,304 Republic of Uruguay — 41,109 54,174 Bank Premises and Equipment Republic of Argentina 2,873,552 2,079,085 1,553,718 Republic of Uruguay — — — Miscellaneous assets Republic of Argentina 1,221,237 820,073 404,312 Republic of Uruguay — — — Goodwill Republic of Argentina 5,642 15,316 24,990 Republic of Uruguay — — — Other intangible assets Republic of Argentina 2,576,613 2,010,528 1,775,632 Republic of Uruguay — — — Geographical segment assets as a percentage of total assets Republic of Argentina 100.00 % 99.97 % 99.95 % Republic of Uruguay — 0.03 % 0.05 %

(*) The caption Total revenues includes financial income, income from services, income from insurance activities and miscellaneous income.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

25. Financial Instruments with Off-Balance Sheet Risk. The Group has been party to financial instruments with off-balance sheet risk in the normal course of its business in order to meet the financing needs of its customers. These instruments expose the Bank to credit risk above and beyond the amounts recorded in the consolidated balance sheets. These financial instruments include commitments to extend credit, standby letters of credit, guarantees granted and acceptances.

The Group uses the same credit policies in making commitments, conditional obligations and guarantees as it does for granting loans. In management´s opinion, the Group´s outstanding commitments and guarantees do not represent unusual credit risk.

The Group’s exposure to credit loss in the event of non-performance by the counterparty to the financial instrument for commitments to extend credit, standby letters of credit, guarantees granted and acceptances is represented by the contractual notional amount of those investments.

A summary of the credit exposure related to these items is shown below:

December 31, 2016 2015 Commitments to extend credit Ps.9,094,205 Ps.6,599,546 Standby letters of credit 650,461 980,720 Guarantees granted 1,134,828 1,006,833 Acceptances 586,180 898,559

Commitments to extend credit are agreements to lend to a customer at a future date, subject to the meeting of the contractual terms. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent actual future cash requirements of the Group. The Group evaluates each customer’s creditworthiness on a case-by-case basis. In addition to the above commitments, as of December 31, 2016 and 2015, the available purchase limits for credit card holders amounted to Ps. 200,917,969 and Ps. 138,662,899, respectively.

Standby letters of credit and guarantees granted are conditional commitments issued by the Group to guarantee the performance of a customer to a third party.

Acceptances are conditional commitments for foreign trade transactions.

The credit risk involved in issuing letters of credit and granting guarantees is essentially the same as that involved in extending loan facilities to customers. In order to grant guarantees to its customers, the Group may require counter-guarantees. These financial customer guarantees are classified by type, as follows:

December 31, 2016 2015 Preferred counter-guarantees Ps.60,648 Ps.173,596 Other counter-guarantees 241,575 143,407

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The Group accounts for checks drawn on it and other banks, as well as other items in process of collection, such as notes, bills and miscellaneous items, in memorandum accounts until such time when the related item clears or is accepted. In management’s opinion, the risk of loss on these clearing transactions is not significant. The amounts of clearing items in process were as follows:

December 31, 2016 2015 Checks drawn on the Bank Ps.2,013,574 Ps.1,438,958 Checks drawn on the other Bank 2,559,608 3,630,338 Bills and other items for collection 18,309,418 12,778,244

As of December 31, 2016 and 2015, the trusts’ funds amounted to Ps.8,182,699 and Ps.6,926,440, respectively.

In addition, the Group had securities in custody, which as of December 31, 2016 and 2015, amounted to Ps. 258,872,060 and Ps.59,767,387, respectively.

As of December 31, 2016, the Group also has off-balance sheet contractual obligations arising from the leasing of certain properties used as a part of its distribution network. The estimated future lease payments in connection with these properties are as follows:

2017 365,165 2018 308,474 2019 274,432 2020 244,381 2021 213,168 2022 and After 233,696 Total Ps.1,639,316

26. Derivative Financial Instruments. The Group’s management of financial risks is carried out within the limits of the policies approved by the Board of Directors. Under those policies, derivatives are allowed, depending on market conditions, to adjust risk exposures to the established limits, thus contributing to keep such exposures within the parameters set forth by said policies. The Group plans to continue to use these instruments in the future, as long as their use is favorably assessed, in order to limit certain risk exposures.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The derivative instruments held by the Group as of December 31, 2016 and 2015 were as follows:

Net Book Net Book Notional Value as of Value as of Average Amount as December 31, December 31, Fair Value Fair Value Weighted of 2016 2015 as of as of Maturity December 31, Asset / Asset / December 31, December 31, Type of Contract Underlying Term 2016 (Liability) (Liability) 2016 2015 FORWARDS (a) - Purchases Foreign currency 5 months 16,144,003 107,661 287,161 107,661 287,161 - Sales Foreign currency 6 months 11,066,971 (121,511 ) — (121,511 ) — FORWARDS (b) clients - Purchases Foreign currency 4 months 215,072 3,626 — 3,626 — - Sales Foreign currency 4 months 1,195,463 (19,502 ) (1,266,014) (19,502 ) (1,266,014) INTEREST RATE SWAP (c) - Variable for fixed interest rate Other 13 months 45,000 — — — — - Fixed for variable interest rate Other 13 months 30,000 — — — — CALL OPTIONS (d) - Call options written on dollar Foreign currency 9 months 10,200 — — — — - Call options bought on gold Gold 9 months 149,512 — — — — - Call options written on gold Gold 9 months 164,463 — — — — REPURCHASE AGREEMENT TRANSACTION - Purchases National government securities - months 1,783,342 1,783,342 — — —

(a) These transactions are made through recognized exchange markets, such as Mercado Abierto Electrónico (MAE) and Mercado a Término de Rosario (ROFEX). The general settlement method for these transactions does not require delivery of the traded underlying notional, rather, settlement is carried out on a daily basis for the difference, if any, between the closing price of the underlying and the closing price or value of the underlying corresponding to the previous day, the difference in price being charged to income. (b) These transactions have been conducted directly with customers. The Group records under “Other Receivables from Financial Brokerage” and / or “Other Liabilities Resulting from Financial Brokerage”, as the case may be, the difference between the agreed foreign currency exchange rate and an average between such exchange rate at the end of the year according with the future prices published by ROFEX and MAE.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

(c) These transactions are conducted within the environment created by the MAE, and the settlement thereof is carried out on a monthly basis, in pesos, for the difference between the cash flows calculated using a variable rate (Badlar for time deposits of 30 to 35 days of private banks) and the cash flows calculated using a fixed rate, or vice versa, on the notional value traded, the difference in price being charged to income.

In case accrued balances pending settlement exist, they are recorded under “Other Receivables from Financial Brokerage” and/or “Other Liabilities Resulting from Financial Brokerage”, as the case may be. (d) These transactions have been conducted directly with customers pursuant to the above mentioned conditions.

27. Disclosure about Fair Value of Financial Instruments. These estimates were made at the end of December 2016 and 2015. Because many of the Bank´s financial instruments do not have a ready trading market from which to determine a fair value, the disclosures are based upon estimates regarding economic and current market conditions and risk characteristics. Such estimates are subjective and involve matters of judgment and, therefore, are not precise and may not be reasonably comparable to estimates of fair value for similar instruments made by other financial institutions.

To measure fair values of financial instruments, a hierarchy has been established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities, as follows: • Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 2 – inputs include the following: a) Quoted prices for similar assets or liabilities in active markets; b) Quoted prices for identical or similar assets or liabilities in non-active markets; c) Pricing models whose inputs are observable for substantially the full term of the asset or liability; and d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means. • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The estimated fair values do not include the value of assets and liabilities not considered financial instruments.

In order to determine the fair value, cash flows were discounted for each category or group of loans having similar characteristics, based on credit risk, guarantees and/or maturities, using rates offered for similar loans by the Bank as of December 31, 2016 and 2015, respectively.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

2016 Book Value Fair Value Level 1 Level 2 Level 3 Derivative activities: (see Note 26) Assets Ps.111,287 Ps.111,287 Ps.111,287 Ps.— Ps.— Liabilities 141,013 141,013 141,013 — — Non derivative activities: Assets: Cash and due from banks (1) Ps.61,166,250 Ps.61,166,250 Ps.61,166,250 Ps.— Ps.— Government securities (2) 13,700,800 13,706,704 12,341,800 1,070,472 294,432 At market value 4,804,963 4,804,963 4,804,963 — — At acquisition cost plus IRR 8,895,837 8,901,741 7,536,837 1,070,472 294,432 Loans (3) 137,451,655 141,372,704 — — 141,372,704 Others (4) 18,302,805 18,340,069 2,391,860 29,152 15,919,058 Liabilities: Deposits (5) Ps.151,688,147 Ps.151,665,844 Ps.— Ps.— Ps.151,665,844 Other liabilities resulting from financial Intermediation: Banks and international entities and Loans from Domestic Financial Institutions (6) and Negotiable obligations (7) Ps.23,560,702 Ps.23,496,503 Ps.— Ps.— Ps.23,496,503 Others (8) Ps.34,091,938 Ps.34,056,130 Ps.— Ps.— Ps.34,056,130

2015 Book Value Fair Value Level 1 Level 2 Level 3 Derivative activities: (see Note 26) Assets Ps.287,161 Ps.287,161 Ps.287,161 Ps.— Ps.— Liabilities 1,266,014 1,266,014 1,266,014 — — Non derivative activities: Assets: Cash and due from banks (1) Ps.30,834,663 Ps.30,834,663 Ps.30,834,663 Ps.— Ps.— Government securities (2) 15,525,090 15,546,125 13,748,491 — 1,797,634 At market value 8,542,826 8,542,826 8,542,826 — — At acquisition cost plus IRR 6,982,264 7,003,299 5,205,665 — 1,797,634 Loans (3) 98,344,731 96,965,813 — — 96,965,813 Others (4) 8,556,256 8,552,314 415,236 — 8,137,078 Liabilities: Deposits (5) Ps.100,039,233 Ps.99,972,469 Ps.— Ps.— Ps.99,972,469 Other liabilities resulting from financial Intermediation: Banks and international entities and Loans from Domestic Financial Institutions (6) and Negotiable obligations (7) Ps.15,510,072 Ps.14,801,544 Ps.— Ps.— Ps.14,801,544 Others (8) Ps.20,552,814 Ps.20,485,235 Ps.— Ps.— Ps.20,485,235

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Quantitative information about Level 3 Fair Value Measurements The following table provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of substantially all of our Level 3 assets and liabilities measured at fair value on a recurring basis for which we use an internal model.

Description Fair Value Valuation December 31, 2016 Tecnique Unobservable input Range Assets Government securities 294,432 Income Approach Yield Curve in pesos 23.8255% - 23.9769% (Discounted cash flow) Yield Curve in foreing currency 2.92% - 6.86% Loans 141,372,704 Income Approach Yield Curve in pesos 20.68% - 22.53% (Discounted cash flow) Yield Curve in foreing currency 0.82% - 6.41% Others 15,919,058 Income Approach Yield Curve in pesos 20.68% - 22.53% (Discounted cash flow) Yield Curve in foreing currency 0.82% - 6.41% Liabilities Deposits 151,665,844 Income Approach Yield Curve in pesos 20.68% - 22.53% (Discounted cash flow) Yield Curve in foreing currency 0.82% - 6.41% Domestic Financial Institutions and Negotiable Obligations 23,496,503 Income Approach Yield Curve in pesos 20.68% - 22.53% (Discounted cash flow) Yield Curve in foreing currency 0.82% - 6.41% Others 34,056,130 Income Approach Yield Curve in pesos 20.68% - 22.53% (Discounted cash flow) Yield Curve in foreing currency 0.82% - 6.41%

The following is a description of the estimating techniques applied: (1) Cash and due from banks: By definition, cash and due from banks are short-term and do not possess credit loss risk. The carrying values as of December 31, 2016 and 2015 are a reasonable estimate of fair value and are classified within level 1 of the valuation hierarchy.

(2) Government securities: As of December 31, 2016 and 2015 holdings correspond to government bonds and securities issued by Argentine Central Bank

Where quoted prices are available in an active market, securities are classified within level 1 of the valuation hierarchy. Level 1 securities include national and government bonds, instruments issued by Argentine Central Bank and corporate securities. When no quoted prices are available in an active market, fair value is classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows. No changes in the valuation technique took place during the year.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

(3) Loans: The fair values of loans are estimated for groups of similar characteristics, including type of loan, credit quality incorporating the credit risk factor. For floating- or adjustable-rate loans, which mature or are repriced within a short period of time, the carrying values are considered to be a reasonable estimate of fair values. For fixed-rate loans, market prices are not generally available and the fair values are estimated discounting the estimated future cash flows based on the contracted maturity of the loans. The discount rates are based on the current market rates corresponding to the applicable maturity. For nonperforming loans, the fair values are generally determined on an individual basis by discounting the estimated future cash flows and may be based on the appraisal value of underlying collateral as appropriate. The fair value of “loans” is classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows. No changes in the valuation technique took place during the year.

(4) Others: Includes other receivables from financial brokerage and equity investments in other companies. This caption includes financial trusts participation certificates for which their fair value is estimated using valuation techniques to convert the future amounts to a single discounted present amount. The measurement is based on the value indicated by current market expectation about those future amounts. The estimation of the cash flows is based on the future cash flows from the securitized assets, considering the prepayments, historical loan performance, etc. Equity investments in companies where significant influence is exercised are not considered Financial Instruments, and equity investments in other companies are carried at market value less costs to sell.

Securitizations include the consolidated assets of Galtrust I. The fair value was determined by using the fair value of the underlying assets (Bogar Bonds). No changes in the valuation technique took place during the year.

Other assets were classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows based on contractual cash flows using current market rates for instruments with similar characteristics. No changes in the valuation technique took place during the year.

(5) Deposits: The fair value of deposit liabilities on demand and savings account deposits is similar to its book value. The fair value of time deposits was calculated by discounting contractual cash flows using current market rates for instruments with similar maturities.

The fair value of “Deposits” is classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows. No changes in the valuation technique took place during the year. For floating- or adjustable-rate deposits, which mature or are repriced within a short period of time, the carrying values are considered to be a reasonable estimate of fair values. For fixed-rate deposits, market prices are not generally available and the fair values are estimated discounting the estimated future cash flows based on the contracted maturity of the deposits. The discount rates are based on the current market rates corresponding to the applicable maturity

(6) Banks and international entities and loans from domestic financial institutions: Includes credit lines borrowed under different credit arrangements from local and foreign banks and entities. Parts of them were restructured as of May 2004. As of December 31, 2016 and 2015, when no quoted market prices were available, the estimated fair value has been calculated by discounting the contractual cash flows of these liabilities at estimated market rates.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The fair value of “Banks and international entities and loans from domestic financial institutions” is classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows. No changes in the valuation technique took place during the year.

(7) Negotiable obligations: As of December 31, 2016 and 2015, the fair value of negotiable obligations was determined based on quoted market prices and, when no quoted market prices were available, the estimated fair value has been calculated by discounting the contractual cash flows of these liabilities at estimated market rates.

Negotiable Obligations where quoted market prices are available are classified within level 1 of the valuation hierarchy.

The fair values of “Negotiable obligations” where no quoted market are available are classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows. No changes in the valuation technique took place during the year.

(8) Others: Includes other liabilities resulting from financial brokerage. Their fair value was estimated at the expected future cash flows based on contractual maturity discounted at the estimated market rates of similar liabilities at year-end.

The fair value of “Others” is classified as Level 3 of the valuation hierarchy where significant unobservable inputs were used to calculate the fair value. The valuation technique used to obtain the fair value was an income approach using discounted cash flows. No changes in the valuation technique took place during the year.

28. Situation of Banco Galicia Uruguay S.A. (in liquidation). During 2009, Banco Galicia Uruguay S.A. (in liquidation) wholly repaid in advance the debt restructuring plan entered into with its creditors. Therefore and having fulfilled its obligations, its shareholders have resolved, at the Shareholders’ Meeting held on June 30, 2010, to voluntarily dissolve and liquidate the company.

Pursuant to current regulations, the corporate name is, as from said date, Banco Galicia Uruguay S.A. (in liquidation).

Furthermore, taking into consideration the financial condition and the evolution estimated in the liquidation process, shareholders decided to reduce the company’s computable capital for a value equal to US$ 2,069 through the voluntary redemption of shares, which was carried out on October 18, 2010. During 2013 and 2014, shareholders decided to conduct two new voluntary redemptions of shares. These redemptions were carried out for a value equal to US$ 2,127 and US$ 3,337, on November 18, 2013 and September 10, 2014, respectively.

As of December 31, 2015, Banco Galicia Uruguay S.A. (in liquidation)‘s Shareholder’s Equity amounted to Ps. 31,780.

The Extraordinary Shareholder’s Meeting of Banco Galicia Uruguay S.A. (in liquidation) held on April 30, 2016 approved the liquidation financial statements and decided starting the registration process to cancel the company before the Uruguayan authorities.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

29. Financial Trusts. a) Financial trusts with the Bank as trustor outstanding at fiscal year-end:

Estimated Book Value of Creation Maturity Trust Portfolio Securities Held in Own Portfolio Name Date Date Trustee Assets Transferred 12.31.2016 12.31.2015 Galtrust I 10.13.2000 02.04.2018 First Trust of Secured Bonds in US$ Ps. 504,874 Ps. 685,915 New York N.A. Pesos at 2% 490,224 due 2018 (1) (*)

(*) The remaining US$ 9,776 was transferred in cash. (1) In exchange for loans to the Provincial Governments. b) As of December 31, 2016 and December 31, 2015, the Bank records financial trusts in its own portfolio: • Received as loans repayment for Ps. 998,152 and Ps. 657,471, respectively. c) Trust Activities • Trust contracts for purposes of guaranteeing compliance with obligations:

Purpose: in order to guarantee compliance with contractual obligations, the parties to these agreements have agreed to deliver to the Bank, amounts as fiduciary property, to be invested according to the following detail:

Balances of Trust Funds Date of Contract Trustor Ps. US$ Maturity Date (1) 12.07.10 Fondo Fiduciario Aceitero 21,022 — 06/30/2017 04.29.13 Profertil 1,050 116,500 04/30/2018 10.21.13 Sinteplast 80 — 06/30/2017 12.20.13 Los Cipreses 62 — 06/30/2017 09.12.14 Coop. de Trabajadores Portuarios 1,018 — 09/12/2018 12.22.14 Cliba 6 — 06/22/2018 09.07.15 Grimoldi 18,803 — 08/29/2018 09.30.15 Las Blondas IV and V 114,873 — 11/28/2018 03.31.16 Barugel Azulay 15,280 — 03/31/2019 04.14.16 Rios Belt 88,765 — 04/14/2019 Total 260,959 116,500

(1) These amounts shall be released monthly until settlement date of trustor obligations or maturity date, whichever occurs first.

• Financial trust contracts:

Purpose: to administer and exercise the fiduciary ownership of the trust assets until the redemption of debt securities and participation certificates:

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Balances of Trust Funds Date of Contract Trust $ Maturity Date 10.12.05 Hydro I 66 06.30.17 (2) 12.05.06 Faid 2011 9 06.30.17 (3) 12.06.06 Gas I 41,838 12.31.17 (3) 05.06.08 Agro Nitralco II 1,227 12.31.17 (3) 05.14.09 Gas II 4,419,767 12.31.22 (3) 02.10.11 Cag S.A. 560 06.30.17 (3) 04.25.11 Faid 2015 11 06.30.17 (3) 06.08.11 Mila III 401 12.31.17 (3) 09.01.11 Mila IV 791 06.30.17 (3) 09.14.11 Cag S.A. II 756 06.30.17 (3) 10.07.11 Sursem III 34 06.30.17 (3) 05.31.12 Fideicred Agro Series I 17 06.30.17 (3) 12.27.12 Pla I 74 06.30.17 (3) 04.03.13 Welfas I 4 06.30.17 (3) 09.18.13 Don Mario Semillas Series I 135 06.30.17 (3) 11.05.13 Pla II 192 06.30.17 (3) 11.21.13 Comafi Prendas I 1,801 09.29.18 (3) 02.13.14 Mila V 7,825 05.20.20 (3) 06.06.14 Mila VI 8,329 10.20.20 (3) 06.18.14 Red Surcos II 8 06.30.17 (3) 07.08.14 Don Mario Semillas Series II 181 06.30.17 (3) 07.24.14 Fideicred Atanor III 88 06.30.17 (3) 07.22.14 Don Mario Semillas Series III 171 06.30.17 (3) 07.25.14 Fedicred Agro Series II 79 06.30.17 (3) 10.03.14 Mila VII 10,450 01.20.21 (3) 12.02.14 Mas Cuotas Series I 243 05.01.17 (3) 01.13.15 Red Surcos III 2,514 06.30.17 (3) 01.27.15 Mila VIII 22,626 06.15.21 (3) 05.18.15 Mila IX 32,471 09.15.21 (3) 12.02.14 Mas Cuotas Series II 240 06.30.17 (3) 08.24.15 Mila X 35,840 12.20.21 (3) 10.30.15 Mila XI 47,933 01.15.22 (3) 12.09.15 Fedicred Agro Series III 50 06.30.17 (3) 01.07.16 Mas Cuotas Series III 531 05.15.17 (3) 01.14.16 Mila XII 59,028 11.15.21 (3) 02.05.16 Red Surcos IV 48,875 08.31.17 (3) 05.13.16 Mila XIII 71,991 09.15.22 (3) 06.15.16 Mas Cuotas Series IV 140,381 05.15.17 (3) 09.01.16 Mila XIV 76,600 01.31.23 (3) 09.15.16 Mas Cuotas Series V 353,481 07.15.17 (3) 10.27.16 Mila XV 68,582 03.31.23 (3) 12.06.16 Mas Cuotas Series VI 618,992 02.15.18 (3) Total 6,075,192

(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 of the trust assets. d) Banco Galicia’s activities as Security Agent:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document d.1) On April 8, 2011 Banco Galicia was appointed Security Agent and custodian of the National Treasury’s endorsement guarantees in favor of ENARSA (Energía Argentina S.A.) that were assigned in favor of Nación Fideicomisos S.A. in its capacity of Trustee of “ENARSA-BARRAGAN” and “ENARSA-BRIGADIER LOPEZ” financial trusts.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Said endorsement guarantees secure the payment of all obligations arising from the above-mentioned trusts.

The Bank, in its capacity as Security Agent, will maintain custody of the documents regarding the National Treasury’s endorsement guarantees and will be in charge of managing all legal and notarial proceedings with respect to the enforcement thereof.

As of December 31, 2016 and 2015, the balances recorded from these transactions amount to US$ 1,364,097 and Ps.408, respectively. d.2) In April 2013, at the time of entering into the Contract for the Fiduciary Assignment and Trust for Guarantee Purposes “Profertil S.A.”, the Bank was appointed security agent with regard to the Chattel Mortgage Agreement transaction that was completed on June 18, 2013, which additionally secures all the obligations undertaken.

As of December 31, 2016 and 2015, the balance recorded from these transactions amounts to US$ 116,500.

30. Segment Reporting. The Company is required to present segment information. Operating segments are defined as components of an enterprise about which separate financial information is available and which is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. Reportable segments consist of one or more operating segments with similar economic characteristics, distribution systems and regulatory environments. The information provided for Segment Reporting is based on internal reports used by the CODM.

The Group measures the performance of each of its business segments primarily in terms of “Net income” in accordance with the regulatory reporting requirements of the Argentine Central Bank. Net income and other segment information are based on Argentine Banking GAAP and are consistent with the presentation of the Group’s consolidated financial statements.

The following summarizes the aggregation of Grupo Financiero Galicia´s operating segments into reportable segments:

Banking: corresponds to the results of our banking business and represents the accounts of Banco Galicia. As of December 31, 2015 this segment included Banco Galicia Uruguay S.A. (in liquidation).

Regional Credit Cards: shows the results of our regional credit card and consumer finance business and represents the accounts of Tarjetas del Mar S.A. and Tarjetas Regionales S.A. consolidated with its subsidiaries. As of December 31, 2016 and 2015, Tarjetas Regionales S.A,’s main subsidiaries were Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A.

CFA Personal Loans: shows the results of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. as of December 31, 2015 and 2014. These Companies were incorporated as of June 30, 2010 in the consolidated financial statements of the Bank.

Insurance: includes the results of our insurance business and represents the accounts of Sudamericana Holding S.A. and its subsidiaries, including the results of the 12.5% interest owned by the Bank. As of December 31, 2016, Grupo Financiero Galicia S.A. maintained, through Sudamericana Holding S.A., controlling interests in Galicia Seguros S.A., Galicia Retiro Compañía de Seguros S.A. and Galicia Broker Asesores de Seguros S.A.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Other Grupo Galicia Businesses: shows the results of Galicia Warrants S.A., Galicia Administradora de Fondos S.A., Net Investment S.A. and Galicia Valores S.A.

The column “Adjustments” includes consolidation adjustments, eliminations corresponding to transactions conducted between consolidated companies and minority interest.

Other Regional Grupo Credit Galicia Consolidated In Pesos Thousands Banking Cards Insurance Businesses Adjustments Total Year ended December 31, 2016 Net Financial Income 10,511,441 4,018,519 351,038 60,050 (50,456 ) 14,890,592 Net Income from Services 6,010,168 5,266,563 — 429,633 (1,128,942) 10,577,422 Net Operating Revenue 16,521,609 9,285,082 351,038 489,683 (1,179,398) 25,468,014 Provisions for Loan Losses 1,526,264 1,660,879 — — — 3,187,143 Administrative Expenses 10,145,969 5,675,998 515,869 121,784 (22,968 ) 16,482,588 Net Operating Income 4,849,376 1,948,205 (164,831 ) 367,899 (1,202,366) 5,798,283 Net Income from Insurance Companies Activities — — 1,272,562 — 1,095,956 2,368,518 Income from Equity Investment Tarjetas Regionales SA 1,098,477 — — — (1,098,477) — Sudamericana Holding SA 89,553 — — — (89,553 ) — Others 156,894 — 3,215 9,658 (89,348 ) 80,419 Other Income (Loss) 408,721 626,487 (391 ) 1,618 (7,466 ) 1,028,969 Non-controlling interests — (320 ) (2 ) — (402,846 ) (403,168 ) Pre-tax Income 6,603,021 2,574,372 1,110,553 379,175 (1,794,100) 8,873,021 Income tax 1,854,000 1,117,678 387,019 129,978 (279,555 ) 3,209,120 Operations Discontinued 344,678 — — — 9,298 353,976 Net Income 5,093,699 1,456,694 723,534 249,197 (1,505,247) 6,017,877 Average: Private Loans 84,002,773 23,131,591 — — (65,823 ) 107,068,541 Deposits 108,819,505 — — — 415 108,819,920 End of Period: Assets 209,306,331 32,135,405 2,216,743 404,677 (1,812,532) 242,250,624 Equity 18,905,871 5,621,143 1,019,148 265,043 (5,458,507) 20,352,698

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Other Regional CFA Grupo Credit Personal Galicia Consolidated In Pesos Thousands Banking Cards Loans Insurance Businesses Adjustments Total Year ended December 31, 2015 Net Financial Income 8,352,685 2,685,102 1,255,453 232,208 41,897 (125,509 ) 12,441,836 Net Income from Services 4,172,455 4,220,431 270,334 — 249,171 (1,074,993) 7,837,398 Net Operating Revenue 12,525,140 6,905,533 1,525,787 232,208 291,068 (1,200,502) 20,279,234 Provisions for Loan Losses 1,060,955 753,243 400,042 — — — 2,214,240 Administrative Expenses 7,394,068 4,167,964 930,407 378,867 65,824 (32,428 ) 12,904,702 Net Operating Income 4,070,117 1,984,326 195,338 (146,659 ) 225,244 (1,168,074) 5,160,292 Net Income from Insurance Companies Activities — — — 775,460 — 1,025,944 1,801,404 Income from Equity Investment Tarjetas Regionales SA 1,178,836 — — — — (1,178,836) — Compañía Financiera Argentina SA 56,909 — — — — (56,909 ) — Sudamericana Holding SA 50,264 — — — — (50,264 ) — Others 146,172 — 2,117 1,977 2 (50,142 ) 100,126 Other Income (Loss) (67,381 ) 427,260 100,846 (1,000 ) 2,098 (19,266 ) 442,557 Non-controlling interests — 452 — (1 ) — (365,009 ) (364,558 ) Pre-tax Income 5,434,917 2,412,038 298,301 629,777 227,344 (1,862,556) 7,139,821 Income tax 1,522,000 862,295 139,293 221,226 80,090 (23,480 ) 2,801,424 Net Income 3,912,917 1,549,743 159,008 408,551 147,254 (1,839,076) 4,338,397 Average: Private Loans 58,277,340 16,415,390 3,139,660 — — (25,230 ) 77,807,160 Deposits 72,973,511 — 900,160 — — (372 ) 73,873,299 End of Period: Assets 138,753,232 23,767,915 3,829,578 1,519,189 268,162 (6,390,073) 161,748,003 Equity 13,843,949 4,374,448 1,323,716 645,610 166,517 (5,869,419) 14,484,821

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Other Regional CFA Grupo Credit Personal Galicia Consolidated In Pesos Thousands Banking Cards Loans Insurance Businesses Adjustments Total Year ended December 31, 2014 Net Financial Income 6,528,534 1,713,815 1,106,193 145,182 12,131 33,563 9,539,418 Net Income from Services 2,964,979 3,261,005 139,396 — 131,390 (798,422 ) 5,698,348 Net Operating Revenue 9,493,513 4,974,820 1,245,589 145,182 143,521 (764,859 ) 15,237,766 Provisions for Loan Losses 1,265,406 775,852 369,992 — — — 2,411,250 Administrative Expenses 4,981,252 3,197,351 767,615 268,838 47,519 (41,219 ) 9,221,356 Net Operating Income 3,246,855 1,001,617 107,982 (123,656 ) 96,002 (723,640 ) 3,605,160 Net Income from Insurance Companies Activities — — — 484,899 — 753,130 1,238,029 Income from Equity Investment Tarjetas Regionales SA 586,939 — — — — (586,939 ) — Compañía Financiera Argentina SA 286,886 — — — — (286,886 ) — Sudamericana Holding SA 28,524 — — — — (28,524 ) — Others 205,116 (14,283 ) 1,544 1,273 10 19,720 213,380 Other Income (Loss) 99,096 314,541 101,889 (1,409 ) 3,588 (14,302 ) 503,403 Non-controlling interests — (144 ) — (1 ) — (229,765 ) (229,910 ) Pre-tax Income 4,453,416 1,301,731 211,415 361,106 99,600 (1,097,206) 5,330,062 Income tax 1,295,000 516,892 82,993 126,616 36,436 (65,665 ) 1,992,272 Net Income 3,158,416 784,839 128,422 234,490 63,164 (1,031,541) 3,337,790 Average: Private Loans 43,372,366 12,727,204 2,994,179 — — (21,813 ) 59,071,936 Deposits 54,417,076 — 1,119,773 — — (2,433 ) 55,534,416 End of Period: Assets 88,800,122 17,891,948 3,775,223 1,019,076 131,042 (4,302,933) 107,314,478 Equity 9,947,944 3,014,008 1,164,707 387,060 81,630 (4,348,925) 10,246,424

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

31. Differences between the Argentine Central Bank’s Regulations and Argentine GAAP in Force in the Autonomous City of Buenos Aires. The main differences between the Argentine Central Bank’s regulations and Argentine GAAP are detailed below:

Conversion of financial statements The conversion into Argentine pesos of the financial statements of the foreign subsidiaries for purposes of their consolidation with Banco Galicia’s financial statements, made in accordance with Argentine Central Bank regulations, differ from Argentine GAAP (Technical Pronouncement No. 18). Argentine GAAP requires that: a) The measurements in the financial statements that are stated in fiscal year-end foreign currency (current values, recoverable values) be converted into pesos at the balance sheet date exchange rate; and b) The measurements that are stated in foreign currency of periods predating the closing date (for example: those which represent historical costs, income, expenses) in the financial statements be converted into pesos at the pertinent historical exchange rates, restated at fiscal year-end currency due to the application of Technical Pronouncement No. 17. Quotation differences arising from conversion of the financial statements are treated as financial income or losses, as the case may be.

The application of this criterion does not have a significant impact on the Group’s financial statements.

Allowance for Loan Losses – Non-Financial Public Sector Current Argentine Central Bank regulations on the establishment of allowances provide that receivables from the public sector are not subject to allowances for uncollectibility risk. Under Argentine GAAP, those allowances must be estimated based on the recoverability risk of those assets.

Negative Goodwill A negative goodwill has been recorded which corresponds to the difference between the acquisition cost paid for the companies Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. and their equity method value estimated at the moment of the purchase. Such negative goodwill is recorded under the caption “Liabilities – Provisions”.

Pursuant to the Argentine Central Bank regulations, the negative goodwill has to be charged to income with regard to the causes that have originated it, not to exceed a 60-month straight-line method amortization. Pursuant to Argentine GAAP, the negative goodwill that is not related to expense estimations or estimated future losses should be recognized as a gain at the time of the purchase.

As of December 31, 2014, the negative goodwill balance amounts to Ps. 49,562. During fiscal year 2015, it was fully amortized.

Accounting for Income Tax According to the Deferred Tax Method The subsidiaries Banco Galicia and Compañía Financiera Argentina, both subject to the regulations of the Argentine Central Bank, determine the income tax charge by applying the statutory tax rate to the estimated taxable income, without considering the effect of any temporary differences between accounting and tax results.

Under Argentine GAAP, income tax must be recognized using the deferred tax method and, therefore, deferred tax assets or liabilities must be established based on the aforementioned temporary differences. In addition, unused tax loss carryforwards or fiscal credits that may be offset against future taxable income should be recognized as deferred assets, provided that taxable income is likely to be generated.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Valuation of Government Securities Argentine Central Bank regulations set forth specific valuation criteria for government securities recorded at their acquisition cost plus the I.R.R. Pursuant to Argentine GAAP the above-mentioned assets must be valued at their fair value.

Debt Securities and Participation Certificates in Financial Trusts Pursuant to Argentine Central Bank regulations, participation certificates in Galtrust I Financial Trust are recorded at the present value of cash flows discounted by the I.R.R. of instruments with similar characteristics and duration and with volatility. When the book value exceeds the present value, the monthly accrual is recorded in an asset offset account. According to Argentine GAAP, the above- mentioned asset must be valued at its fair value.

Restructured Loans and Liabilities Restructured loans and financial obligations are valued based on the actually restructured principal amounts plus accrued interest and principal adjustments, 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 of instruments, must be recorded on the basis of the best possible estimate of the amounts receivable or payable discounted at a market rate that reflects market evaluations on the time value of money and the specific risks of such assets and liabilities at the time of restructuring.

Penalties Imposed on and Summary Proceedings Brought against Financial Institutions Argentine Central Bank regulations provide that, as from January 2015, financial institutions shall establish provisions for 100% of the administrative and/or disciplinary penalties, and those of a criminal nature with a judgment from a lower court, imposed or commenced by the Argentine Central Bank, the Financial Information Unit (U.I.F. as per its initials in Spanish—Unidad de Información Financiera), the C.N.V. and the Argentine Superintendency of Insurance, which have been notified to Banco Galicia, regardless their level of importance, even when there are legal or administrative measures that stop the payment of fines, and whichever the legal stage of the case. Furthermore, it provides that financial institutions shall inform such penalties in a note to the financial statements, whether they are determined or not, as well as the summary proceedings commenced by the Argentine Central Bank, as from the moment the institution is given notice thereof.

Pursuant to Argentine GAAP, such contingencies shall be recorded under liabilities when the possibility their effects take place is high and they can be appropriately determined in terms of currency. These shall also be included in notes to the financial statements. Contingencies which are considered to be remote shall not be included in the financial statements or the notes thereto, while those which are not considered remote but do not meet the requirements to be recorded under liabilities shall only be included in notes to the financial statements.

32. Adoption of the International Financial Reporting Standards. The CNV established the application of Technical Pronouncement No. 26 of the Argentine Federation of Professional Councils in Economic Sciences, which adopts the International Financial Reporting Standards (“IFRS”) issued by the IASB (International Accounting Standards Board) for certain entities included within the public offering system, for financial statements corresponding to fiscal years started as from January 1, 2012.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The adoption of such standards is not applicable to the Company since the CNV, in Article 2—Section I—Chapter I of Title IV: Periodic Reporting System of the CNV´s Pronouncements (Text amended in 2013), exempts banks, insurance companies and companies that invest in banks and insurance companies.

Due to the foregoing, and since the Company complies with the requirements described below, which are set forth in the aforementioned article, these financial statements are presented pursuant to the valuation and disclosure criteria established by the Argentine Central Bank regulations: • The Company’s corporate purpose is exclusively related to financial and investment activities; • The interest in Banco de Galicia y Buenos Aires S.A. accounts for 93.36% of the Company’s assets, being the Company’s main asset; • 88.26% of the Company’s income stems from the interest in Banco de Galicia y Buenos Aires S.A.’s income; and • The Company has a 100% interest in Banco de Galicia y Buenos Aires S.A., thus having control over such institution.

In February 2014, the Argentine Central Bank decided financial institutions should comply with the IFRS, and established an implementation schedule for such standards, to be effective for fiscal years starting on January 1, 2018. In accordance with the foregoing, Banco de Galicia y Buenos Aires S.A.’s Board of Directors has become aware of the roadmap established by the Argentine Central Bank and has appointed a coordinator and an alternate coordinator, who shall be in charge of the compliance process. On March 20, 2015, it approved the Implementation Plan required by the regulations, which was submitted on March 27, 2015.

In compliance with the provisions of Communiqué “A” 5635, at the meeting held on September 27, 2016, Banco de Galicia y Buenos Aires S.A.’s Board of Directors approved the third report on the progress made during the six-month period from March 2016 to September 2016. On such date, Banco de Galicia y Buenos Aires S.A.’s Audit Committee approved the Special Internal Audit Report related to the Implementation Plan’s level of progress with regard to achieving compliance with the IFRS. At the meeting held on January 5, 2017, Banco de Galicia y Buenos Aires S.A.’s Board of Directors became aware of the quarterly report on the level of progress with regard to the implementation of the IFRS, as established in such communiqué.

Banco de Galicia y Buenos Aires S.A. has met the reporting requirements established by the Argentine Central Bank’s Communiqué “A” 5844, as supplemented.

As mentioned in the preceding paragraphs, the Company, together with the subsidiaries, began coordinating the tasks related to the compliance with the IFRS in order to meet effective regulations.

33. Subsequent events. Grupo Financiero Galicia S.A. On April 25, 2017 the Group’s shareholders held a shareholders’ meeting during which they approved the payment of dividends in cash in the amount of Ps. 240,000 which represents 18.4578% with regard to 1,300,265 in thousands class “A” and “B” shares with a face value of Ps. 1 each.

Compania Financiera Argentina On January 12, 2017, the decision made by the shareholders of the Company, was to accept the offer to buy all the shares in Compañía Financiera Argentina S.A.(CFA) and in Cobranzas y Servicios S.A. such offer was made by Mr. Julio Alfredo Fraomeni and Galeno Capital S.A.U. The closing of the transaction is subject to the prior compliance with the conditions set out in the offer, such as the Argentine Central Bank’s approval.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The price offered is subject to certain adjustment variables, the effect of which may vary according to the time when the transaction is finally closed with its approval by the regulatory authorities. Notwithstanding the foregoing, the Group believe that the economic result of the transaction will not cause a significant impact on the Company’s shareholders’ equity.

Tarjetas del Mar S.A. On March 31, 2017, Banco Galicia inform that Board of Directors approved the sale of its total stake in its subsidiary Tarjetas del Mar S.A. (“TDM”), that represents 58.8% of the total shares of said company, to Sociedad Anónima Importadora y Exportadora de la Patagonia. Additionally, CFA sold its entire stake in TDM, which represents 1.2% of the total shares of TDM to Engineer Federico Braun.

The entire price reached the amount of US$5 million and it was estimated that it will not have a significant impact on Banco Galicia´s shareholders equity.

It is worth to mention that Sociedad Anónima Importadora y Exportadora de la Patagonia already owned 40% of the total shares of TDM.

Tarjeta Naranja On April 11, 2017 Tarjeta Naranja issued the Class XXXVII Peso Linked Negotiable Obligation for USD 250,000,000 with a final maturity of five years and accruing BADLAR + 3.50% (with a mínimum of 15%). This issuance will be payed in USD for a total amount of Ps.3,845,700 in three equal and anual installments, maturing in April 2020, 2021 and 2022.

Tarjetas Regionales S.A. On April 20, 2017 Tarjetas Regionales S.A.’s shareholders held a shareholders’ meeting during which they approved the payment of dividends in cash in the amount of Ps.389,147 which represents 36.1065% with regard to 1,077,774 in thousands class “A” and “B” shares with a face value of Ps. 1 each.

Aguas Cordobesas S.A. On April 12, 2017 the shareholders of the Bank accepted the offer to buy its investment in Aguas Cordobesas S.A. (ACSA), which comprises 3,250,000 shares Class “E”. Such offer was made by Benito Roggio e Hijos S.A. and amounted to Ps.48,000,000, of which Ps.38,335,000 have been already collected by the Bank and the remaining Ps.9,665,000 will be paid upon the receipt of the approval of the Province of Córdoba government.

34. Summary of Significant Differences between Argentine Central Bank Rules and United States Accounting Principles. The following is a description of the significant differences between Argentine Banking GAAP and U.S. GAAP: a. Income tax. Argentine Central Bank regulations do not require the recognition of deferred tax assets and liabilities and, therefore, income taxes for Banco de Galicia y Buenos Aires S.A. and Compañía Financiera Argentina S.A. are

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) recognized on the basis of amounts due in accordance with Argentine tax regulations. However, Grupo Galicia and Grupo Galicia’s non-bank subsidiaries apply the deferred income tax method. As a result, Grupo Galicia and its non-banking subsidiaries have recognized a deferred tax asset as of December 31, 2016 and 2015.

In addition, the Group records as an asset the credit related with Minimum Presumed Income Tax amounting to Ps. 9,424 and Ps. 10,230 as of December 31, 2016 and 2015 respectively. The MPIT credit will be computable as a down payment of any income tax excess over minimum notional income tax through the next ten years.

For the purposes of U.S. GAAP reporting, Grupo Galicia applies ASC 740-10 “Accounting for Income Taxes”. Under this guidance, income tax is recognized based on the assets and liabilities method whereby deferred tax assets and liabilities are established for temporary differences between the financial reporting and tax basis of Grupo Galicia’s assets and liabilities. Deferred tax assets are recognized if it is more likely than not that such assets will be realized. As such, the U.S. GAAP adjustment included: a) Deferred Income Taxes for banking companies not recorded for local purposes and; b) tax effects on the U.S. GAAP adjustments including in the reconciliation.

Deferred tax assets (liabilities) are summarized as follows:

December 31, 2016 ASC 740-10 applied to Argentine ASC 740-10 U.S. GAAP GAAP applied to U.S. Deferred Tax balances GAAP adjustments total Deferred tax assets Allowance for loan losses – private sector 384,082 (2,311 ) 381,771 Intangible assets — 324,233 324,233 Impairment of fixed assets and foreclosed assets — 16,669 16,669 Liabilities 285,900 — 285,900 Others (4,904 ) 26,719 21,815 Total gross deferred tax assets Ps.665,078 Ps. 365,310 Ps.1,030,388 Deferred tax liabilities: Investments (148,529) — (148,529 ) Others (180,838) — (180,838 ) Total gross deferred tax liabilities Ps.(329,367) Ps. — Ps.(329,367 ) Net deferred income tax asset Ps.335,711 Ps. 365,310 Ps.701,021

December 31, 2015 ASC 740-10 applied to Argentine ASC 740-10 U.S. GAAP GAAP applied to U.S. Deferred Tax balances GAAP adjustments total Deferred tax assets Allowance for loan losses – private sector 391,736 (8,330 ) 383,406 Intangible assets — 249,366 249,366

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Impairment of fixed assets and foreclosed assets — 17,157 17,157 Debt restructuring — 24,226 24,226 Liabilities 309,223 — 309,223 Others (8,609 ) 26,788 18,179 Total gross deferred tax assets Ps.692,350 Ps.309,207 Ps.1,001,557 Deferred tax liabilities: Investments (83,331 ) — (83,331 ) Others (194,261 ) — (194,261 ) Total gross deferred tax liabilities Ps.(277,592) Ps.— Ps.(277,592) Net deferred income tax asset Ps.414,758 Ps.309,207 Ps.723,965

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory income tax rate in Argentina to income before income tax, calculated on the basis of U.S. GAAP for the fiscal years ended December 31, 2016, 2015 and 2014:

December 31, 2016 2015 2014 Income before taxes and non - controlling interest Ps.9,815,581 Ps.7,353,525 Ps.5,605,970 Tax rate in forcé 35 % 35 % 35 % Result for the year at the tax rate 3,435,453 2,573,734 1,962,090 Permanent tax differences (*) (59,968 ) 73,242 (71,929 ) Income tax expense Ps.3,375,485 Ps.2,646,976 Ps.1,890,160

(*) Includes permanent differences originated in operation of shares and non-taxable dividends.

According to the taxable income projections, the Group estimates that it is more likely than not that it will recover the temporary differences and the credit recorded regarding Presumed Minimum Income Tax (See note 2.14) with future taxable income. Therefore, no valuation allowance was provided against the deferred tax assets and presumed minimum income tax.

ASC 740-10 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition for uncertain tax positions taken or expected to be taken in a tax return. As of December 31, 2016 and 2015, there were no uncertain tax positions.

The Group classifies income tax-related interest and penalties as income taxes in the financial statements.

The following table shows the tax years open for examination as of December 31, 2016, by major tax jurisdictions in which the Group operates:

Jurisdiction Tax year Argentina 2011 – 2016

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) b. Commissions on loans. Under Argentine Banking GAAP, the Bank does not defer loan origination fees and costs. In accordance with U.S. GAAP under ASC 310, loan origination fees net of certain direct loan origination costs should be recognized over the life of the related loan as an adjustment of yield.

Therefore the Shareholders’ Equity adjustment between Argentine Banking GAAP and U.S. GAAP as of December 31, 2016 and 2015 amounted to Ps. (81,904) and Ps. (95,440), respectively. c. Intangible assets. Goodwill – Recognition and amortization The following table summarizes the U.S. GAAP shareholders’ equity adjustments as of December 31, 2016 and 2015:

December 31, 2016 2015 Goodwill recognition (1) (4,899 ) (13,293) Reversal of amortizations (2) 50,810 49,530 Total Ps.45,911 Ps.36,237

(1) Under Argentine Banking GAAP the Company recognized as goodwill the excess paid over book value in the acquisition of non- controlling interest of subsidiaries. Under U.S. GAAP such transactions were treated as equity transactions. Also, the amount includes goodwill recognized under Argentine Banking GAAP, which should be reversed for U.S. GAAP purposes. (2) Goodwill is amortized for Argentine Banking GAAP purposes. Under U.S. GAAP, according to ASC 350-20, since June 30, 2001, goodwill is no longer amortized. ASC 350 requires that goodwill should be reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and adjusted in case that impairment is detected. Goodwill amortization recorded under Argentine Banking GAAP has been reversed for U.S. GAAP purposes. During the years ended December 31, 2016 and 2015, no impairment was recorded.

Negative Goodwill – Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. As of June 30, 2010, due to the difference between the acquisition cost and the estimated fair value of assets and liabilities acquired, for the purchase of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. the Group recorded negative goodwill amounting to Ps. 500,608 for Compañía Financiera Argentina S.A. and Ps. 16,764 for Cobranzas y Servicios S.A., respectively, under the caption Liabilities-Provisions. The negative goodwill is subsequently charged to Income on a straight-line basis over 60 months.

Under U.S. GAAP, ASC 805 requires the acquisition of the controlling interest of Compañía Financiera Argentina and Cobranzas y Servicios S.A. to be accounted for as a business combination applying the purchase method, recognizing all net assets acquired at their fair value.

Considering that the net assets acquired were originally recorded at their fair value under Argentine Banking GAAP, no adjustments for U.S. GAAP purposes were recorded in this regard. However, the negative goodwill recorded as a liability and being amortized over a 60 months period under Argentine Banking GAAP, has been fully recognized as a gain in the 2010 consolidated statement of income for U.S. GAAP purposes under the caption Miscellaneous Income.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

In addition, the amortization of negative goodwill recorded under Argentine Banking GAAP has been reversed for U.S. GAAP purposes.

As of December 31, 2014, the Group has a balance of Ps. 49,562, related to the negative goodwill which has been reversed for U.S. GAAP purposes.

During fiscal year 2015, the Group has fully amortized the negative goodwill, consequently no shareholders’adjustment was recorded as of December 31, 2016.

Software costs Under U.S. GAAP, ASC 350-40 defines three stages for the costs of computer software developed or obtained for internal use: the preliminary project stage, the application development stage and the post-implementation operation stage. Only the second stage costs should be capitalized. Under Argentine Banking GAAP, the Bank capitalized costs relating to all three of the stages of software development.

Therefore the Shareholders’ Equity adjustment between Argentine Banking GAAP and U.S. GAAP as of December 31, 2016 and 2015 is as follows:

December 31, 2016 2015 Capitalized cost expensed for U.S. GAAP purposes (1,097,669) (829,932 ) Amortization adjustments 171,288 117,459 Total Ps.(926,381) Ps.(712,473) d. Loan loss reserves. Loans to the non-financial private sector and residents abroad For the purposes of analyzing our loan loss reserve under U.S. GAAP, the Bank divides the loan portfolio into performing and non- performing commercial and consumer loans.

The non-performing commercial loan portfolio is comprised of loans falling into the following classifications of the Argentine Central Bank: • “With Problems” • “High Risk of Insolvency” • “Uncollectible”

The Bank applies ASC 310-10 to all commercial loans classified as “With problems”, “High Risk of Insolvency” and “Uncollectible”. Additionally it is also considered in the assessment, however is not a determining factor, if commercial loans are more than 90 days past due. All non-performing commercial loans are individually assessed for impairment. Consumer loans are assessed on a collective basis.

The allowance for non-performing commercial loans is measured based on the present value of estimated future cash flows discounted at the original effective loan rate or on the fair value of the collateral net of estimated costs to sell in the case where the loan is considered collateral-dependent. An allowance for impaired loans is provided when estimated future cash flows discounted at their original effective rate or collateral fair value is lower than book value.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

To calculate the allowance required for all other commercial and consumer impaired loans and unimpaired loans, the Bank performs an analysis of historical losses from consumer and performing commercial loan portfolios in order to estimate losses for U.S. GAAP purposes, resulting from loan losses that had been incurred in such loan portfolios at the balance sheet date but which had not been individually identified. Loss estimates are analyzed by loan type and thus for homogeneous groups of clients. Such historical ratios are updated to incorporate the most recent data reflecting current economic conditions, industry performance trends, geographic or obligor concentrations within each portfolio segment, and any other pertinent information that may affect the estimation of the allowance for loan losses. Many factors can affect the Bank’s estimates of allowance for loan losses, including volatility of default probability, migrations and estimated loss severity.

Allowances on homogeneous loan portfolios are established based on probability of default, which is defined as the probability of the debtor within a specific loan portfolio or segment and rating, defaulting on its obligations within the next twelve (12) months. Under U.S. GAAP, this probability of default is determined by analyzing estimated defaults or foreclosures based on portfolio trends, historical losses, and client’s payment behavior.

a. Allowance for Credit Losses and Recorded Investments in Financial Receivables The following table presents the allowance for loan losses and the related carrying amount of Financial Receivables for the years ended December 31, 2016 and 2015 respectively:

As of December 31, 2016 Consumer Commercial Loan Portfolio Loan Portfolio Total Allowances for loan losses: Ps. Ps. Ps. Beginning balance 3,412,993 184,930 3,597,923 Charge-offs (1,935,065 ) (189,729 ) (2,124,794 ) Recoveries — — — Foreign Exchange effect and other adjustments — — — Provision 3,185,658 198,358 3,384,016 Ending balance Ps 4,663,586 193,559 4,857,145 Ending balance- individually evaluated for impairment — 97,449 97,449 Ending balance- collectively evaluated for impairment 4,663,586 96,110 4,759,696 Financing receivables: Ending balance 96,080,467 49,465,747 145,546,214 Ending balance: individually evaluated for impairment — 212,036 212,036 Ending balance: collectively evaluated for impairment Ps.96,080,467 49,253,711 145,334,178

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

As of December 31, 2015 Consumer Commercial Loan Portfolio Loan Portfolio Total Allowances for loan losses: Ps. Ps. Ps. Beginning balance 2,534,566 121,291 2,655,857 Charge-offs (1,053,599 ) (193,183 ) (1,246,782 ) Recoveries — — — Foreign Exchange effect and other adjustments 19,536 — 19,536 Provision 1,912,490 256,822 2,169,312 Ending balance Ps 3,412,993 184,930 3,597,923 Ending balance- individually evaluated for impairment — 159,358 159,358 Ending balance- collectively evaluated for impairment 3,412,993 25,572 3,438,565 Financing receivables: Ending balance 69,517,406 35,527,797 105,045,203 Ending balance: individually evaluated for impairment — 363,530 363,530 Ending balance: collectively evaluated for impairment Ps.69,517,406 35,164,267 104,681,673

b. Loan Charge-offs and recoveries Under Argentine Banking GAAP, recoveries on previously charged-off loans are recorded directly to income and the amount of charged-off loans in excess of amounts specifically allocated is recorded as a direct charge to the income statement. The Bank does not partially charge off troubled loans until final disposition of the loan, rather, the allowance is maintained on a loan-by-loan basis for its estimated settlement value. Under U.S. GAAP, all charge off and recovery activity is recorded through the allowance for loan loss account. Further, loans are generally charged to the allowance account when all or part of the loan is considered uncollectible. In connection with loans in judicial proceedings, resolution through the judicial system may span several years. Loans in judicial proceedings, greater than three years as of December 31, 2016, 2015 and 2014, amounted to Ps.9,867, Ps. 11,373 and Ps. 2,649, respectively. Under U.S. GAAP these loans were completely provisioned. The Bank also classified loans, many of which are in judicial proceedings, which amounted to approximately Ps.852,971, Ps. 1,117,685 and Ps. 314,988 as of December 31, 2016, 2015 and 2014, respectively, as uncollectible, although the Bank may hold preferred guarantees. Therefore, the balance of loans and allowance for loan losses would be decreased by these amounts.

c. Impaired Loans ASC 310, requires a creditor to measure impairment of a loan based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. This Statement is applicable to all loans (including those restructured in a troubled debt restructuring involving amendment of terms), except large groups of smaller-balance homogenous loans that are collectively evaluated for impairment. Loans are considered impaired when, based on Management’s evaluation, a borrower will not be able to fulfill its obligation under the original loan terms.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The following table discloses the amounts of loans considered impaired in accordance with ASC 310, as of December 31, 2016 and 2015:

As of December 31, 2016 Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial Impaired Loans Ps35,450 Ps34,947 Ps— With an allowance recorded: Commercial Impaired Loans Ps176,586 Ps148,694 Ps97,449 Total Ps212,036 Ps183,641 Ps97,449 With an allowance recorded: Consumer Impaired Loans Ps3,724,255 Ps3,359,564 Ps2,602,842 Total Ps3,724,255 Ps3,359,564 Ps2,602,842

As of December 31, 2015 Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial Impaired Loans Ps102,670 Ps84,974 Ps— With an allowance recorded: Commercial Impaired Loans Ps260,860 Ps228,778 Ps159,358 Total Ps363,530 Ps313,752 Ps159,358 With an allowance recorded: Consumer Impaired Loans Ps2,426,308 Ps2,364,794 Ps2,414,689 Total Ps2,426,308 Ps2,364,794 Ps2,414,689

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The average recorded investments for impaired loans were Ps.1,735,660 and Ps.1,397,794 for the years ended December 31, 2016 and 2015, respectively

The interest income recognized on impaired loans amounted to Ps.9,994, Ps. 6,576 and Ps.7,251 for the years ended December 31, 2016, 2015 and 2014, respectively.

d. Non-accrual Loans Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio: “Medium Risk”, “High Risk” and “Uncollectible” and (b) Commercial portfolio: “With problems”, “High Risk of Insolvency“and “Uncollectible”.

The following table represents the amounts of nonaccruals, segregated by class of loans, as of December 31, 2016 and 2015, respectively:

As of December 31, 2016 2015 Consumer Advances Ps95,544 Ps91,202 Promissory Notes 105,191 138,545 Mortgage Loans 14,997 14,195 Personal Loans 501,387 627,746 Credit Card Loans 2,858,308 1,501,308 Other Loans 18,905 26,166 Total Consumer Ps3,594,332 Ps2,399,162 Commercial Impaired Loans 184,639 259,006 Total Commercial Ps184,639 Ps259,006 Total Non-accrual loans Ps3,778,971 Ps2,658,168

An aging analysis of past due loans, segregated by class of loans, as of December 31, 2016 and 2015 is as follows:

As of December 31, 2016 30-90 91-180 181-360 Days Past Days Past Days Past Greater Total Past Total Due Due Due than 360 Due Current Financing Consumer Advances 31,711 40,741 34,769 20,034 127,255 971,878 1,099,133 Promissory Notes 55,544 44,294 43,627 17,270 160,735 7,646,571 7,807,306 Mortgage Loans 4,910 2,551 11,313 1,134 19,908 663,514 683,422 Personal Loans 340,118 211,806 208,683 80,898 841,505 12,449,464 13,290,969

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Credit Card Loans 1,587,369 1,085,669 1,308,449 464,190 4,445,677 67,571,390 72,017,067 Other Loans 7,524 6,806 7,955 4,144 26,429 1,156,141 1,182,570 Total Consumer Loans 2,027,176 1,391,867 1,614,796 587,670 5,621,509 90,458,958 96,080,467 Commercial: Performing Loans — — — — — 49,253,711 49,253,711 Impaired loans 5,726 15,415 84,396 88,063 193,600 18,436 212,036 (1) Total Commercial Loans 5,726 15,415 84,396 88,063 193,600 49,272,147 49,465,747 Total 2,032,902 1,407,282 1,699,193 675,733 5,815,109 139,731,105 145,546,214

As of December 31, 2015 30-90 91-180 181-360 Days Past Days Past Days Past Greater Total Past Total Due Due Due than 360 Due Current Financing Consumer Advances 20,948 19,332 39,269 32,601 112,150 752,192 864,342 Promissory Notes 21,276 36,538 60,785 41,223 159,822 4,981,632 5,141,453 Mortgage Loans 2,366 2,687 3,436 8,071 16,560 476,669 493,230 Personal Loans 239,721 159,167 238,348 230,231 867,467 10,131,545 10,999,012 Credit Card Loans 785,900 408,891 630,585 461,832 2,287,208 48,981,340 51,268,548 Other Loans 11,694 5,015 6,100 15,051 37,860 712,961 750,821 Total Consumer Loans 1,081,905 631,630 978,523 789,009 3,481,067 66,036,339 69,517,406 Commercial: Performing Loans — — — — — 35,164,268 35,164,268 Impaired loans 8,937 — 137,170 195,313 341,420 22,109 363,529 (1) Total Commercial Loans 8,937 — 137,170 195,313 341,420 35,186,377 35,527,797 Total 1,090,842 631,630 1,115,693 984,322 3,822,487 101,222,716 105,045,203

(1) Includes Ps.184,639 and Ps. 259,006 of non-accruing loans as of December 31, 2016 and 2015.

e. Credit Quality Indicators The following tables contain the loan portfolio classification by credit quality indicator set forth by the Argentine Central Bank,

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Commercial Portfolio:

Loan Classification Description 1. Normal Situation The debtor is widely able to meet its financial obligations, demonstrating significant cash flows, a liquid financial situation, an adequate financial structure, a timely payment record, competent management, available information in a timely, accurate manner and satisfactory internal controls, The debtor is in the upper 50% of a sector of activity that is operating properly and has good prospects. 2. With Special Follow-up Cash flow analysis reflects that the debt may be repaid even though it is possible that the customer’s future payment ability may deteriorate without a proper follow-up. This category is divided into two subcategories: (2.a) Under Observation (2.b) Under Negotiation or Refinancing Agreements. 3. With Problems Cash flow analysis evidences problems to repay the debt, and therefore, if these problems are not solved, there may be some losses. 4. High Risk of Insolvency Cash flow analysis evidences that repayment of the full debt is highly unlikely. 5. Uncollectible Amounts in this category are deemed total losses. Even though these assets may be recovered under certain future circumstances, inability to make payments is evident at the date of the analysis. It includes loans to insolvent or bankrupt borrowers.

Credit quality indicators for the commercial portfolio are reviewed, at a minimum, on an annual basis, Consumer Portfolio:

Loan Classification Description 1. Normal Situation Loans with timely repayment or arrears not exceeding 31 days, both of principal and interest. 2. Low Risk Occasional late payments, with a payment in arrears of more than 32 days and up to 90 days. A customer classified as “Normal” having been refinanced may be recategorized within this category, as long as he amortizes one principal installment (whether monthly or bimonthly) or repays 5% of principal. 3. Medium Risk Some inability to make payments, with arrears of more than 91 days and up to 180 days. A customer classified as “Low Risk” having been refinanced may be recategorized within this category, as long as he amortizes two principal installments (whether monthly or bimonthly) or repays 5% of principal. 4. High Risk Judicial proceedings demanding payment have been initiated or arrears of more than 180 days and up to one year. A customer classified as “Medium Risk” having been refinanced may be recategorized within this category, as long as he amortizes three principal installments (whether monthly or bimonthly) or repays 10% of principal. 5. Uncollectible Loans to insolvent or bankrupt borrowers, or subject to judicial proceedings, with little or no possibility of collection, or with arrears in excess of one year.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Credit quality indicators for the consumer portfolio are reviewed on a monthly basis.

The following tables show the loan balances categorized by credit quality indicators for the years ended December 31, 2016 and 2015:

As of December 31, 2016 “1” “2” “3” “4” “5” With special High risk of Normal follow-up or With problems or insolvency or Situation Low Risk Medium Risk High risk Uncollectible Total Consumer Advances 971,878 31,711 40,741 34,769 20,034 1,099,133 Promissory Notes 7,646,571 55,544 44,294 43,627 17,270 7,807,306 Mortgage Loans 663,514 4,910 2,551 11,313 1,134 683,422 Personal Loans 12,449,464 340,118 211,806 208,683 80,898 13,290,969 Credit Card Loans 67,571,390 1,587,369 1,085,669 1,308,449 464,190 72,017,067 Other Loans 1,156,141 7,524 6,806 7,955 4,144 1,182,570 Total Consumer Loans 90,458,958 2,027,176 1,391,867 1,614,796 587,670 96,080,467 Commercial: Performing loans 49,164,572 89,139 — — — 49,253,711 Impaired loans — 27,397 75,468 92,283 16,888 212,036 Total Commercial Loans 49,164,572 116,536 75,468 92,283 16,888 49,465,747 Total Financing Receivables 139,623,530 2,143,712 1,467,335 1,707,079 604,558 145,546,214

As of December 31, 2015 “1” “2” “3” “4” “5” With special High risk of Normal follow-up or With problems or insolvency or Situation Low Risk Medium Risk High risk Uncollectible Total Consumer Advances 752,192 20,948 19,332 39,269 32,601 864,342 Promissory Notes 4,981,632 21,276 36,538 60,785 41,223 5,141,453 Mortgage Loans 476,669 2,366 2,687 3,436 8,071 493,230 Personal Loans 10,131,545 239,721 159,167 238,348 230,231 10,999,012 Credit Card Loans 48,981,340 785,900 408,891 630,585 461,832 51,268,548 Other Loans 712,961 11,694 5,015 6,100 15,051 750,821 Total Consumer Loans 66,036,339 1,081,905 631,630 978,523 789,009 69,517,406 Commercial: Performing loans 35,025,369 138,899 — — — 35,164,268 Impaired loans — 104,523 95,826 62,600 100,580 363,529 Total Commercial Loans 35,025,369 243,422 95,826 62,600 100,580 35,527,797 Total Financing Receivables 101,061,708 1,325,327 727,456 1,041,123 889,589 105,045,203

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Loans are considered non-accrual when they are categorized by credit quality as “with problems” or “medium risk” or worse.

Loans past due 90 days or more and still accruing amounted Ps. 118,788 and Ps. 183,401 as of December 31, 2016 and 2015.

As of December 31, 2016 and 2015, the total shareholders’ equity adjustment for loan impairment-private sector was as follows:

Argentine Banking GAAP U.S. GAAP Adjustment December 31, 2015 Ps.3,621,722 Ps.3,597,923 Ps.23,799 Variances 1,144,578 1,161,773 (17,195 ) December 31, 2016 Ps.4,766,300 Ps.4,759,696 Ps.6,604

f. Trouble Debt Restructuring disclosures Restructured loan is considered a TDR if the debtor is experiencing financial difficulties and the Bank grants a concession to the debtor that would not otherwise be considered. Concessions granted could include but it not necessary limited to: reduction in interest rate to rates that are considered below market, extension of repayment schedules and maturity dates beyond original contractual terms.

In 2015 there were seven restructuring transactions affecting commercial debtors whose financial situation had deteriorated. As of the date of issuance of these Consolidated Financial Statements, six of these debtors are in default of their payment obligations.

As for the consumer segment, all the restructuring transactions effected during 2014 had the following characteristics: (i) the debtor had paid, at a minimum, one installment in advance in order to qualify to the restructuring of its debt; (ii) the Bank, CFA and the Regional Cards made sure before the restructuring that the debtor’s monthly payment capacity would be able to absorb the new monthly paying obligation resulting from the restructuring; (iii) the guarantees in force were in all cases maintained or, in the case of loans without guarantees, the execution capacity for the loan was improved; and (iv) all the restructurings currently in force are arranged in consecutive monthly payments, with a minimum of six months and a maximum of 60 months.

The following tables present for the periods ended as of December 31, 2016 and 2015, the financing receivables modified as troubled debt restructurings in 2016 and 2015:

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

2016 Number of Investment Loans recorded Allowances Commercial Performing loans 3 26,118 1,074 Impaired loans — — — Total Commercial 3 26,118 1,074 Consumer Advances 17 829 401 Promissory Notes 540 120,816 10,424 Mortgage Loans 1 689 — Personal Loans 24,960 813,993 40,382 Credit Cards Loans 358,016 4,595,717 449,462 Other Loans 99 90,419 161 Total Consumer 383,633 5,622,463 500,830 TOTAL 383,636 5,648,581 501,904

2015 Number of Investment Loans recorded Allowances Commercial Performing loans 1 4,007 141 Impaired loans 6 51,053 48,929 Total Commercial 7 55,060 49,070 Consumer Advances 315 14,373 3,874 Promissory Notes 495 76,917 14,893 Mortgage Loans 12 5,808 1,030 Personal Loans 41,600 590,966 83,306 Credit Cards Loans 422,462 2,430,735 852,328 Other Loans 4 3,649 1,137 Total Consumer 464,888 3,122,448 956,568 TOTAL 464,895 3,177,508 1,005,638

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The following tables present for the periods ended as of December 31, 2016 and 2015, the financing receivables modified as troubled debt restructurings within the previous twelve months and for which there was a payment default during the year:

2016 Number of Investment Loans recorded Allowances Commercial Performing loans — — — Impaired loans 6 50,588 50,588 Total Commercial 6 50,588 50,588 Consumer Advances 281 14,236 — Promissory Notes 185 28,132 6,630 Mortgage Loans 5 4,528 1,071 Personal Loans 11,765 184,028 18,995 Credit Cards Loans 57,533 549,184 378,837 Other Loans 1 588 — Total Consumer 69,770 780,696 405,533 TOTAL 69,776 831,284 456,121

2015 Number of Investment Loans recorded Allowances Commercial Performing loans 1 4,007 141 Impaired loans 5 47,377 47,222 Total Commercial 6 51,384 47,363 Consumer Advances 281 14,236 3,874 Promissory Notes 233 31,891 10,261 Mortgage Loans 6 2,638 297 Personal Loans 17,662 215,909 62,706 Credit Cards Loans 60,585 348,482 263,104 Other Loans 2 1,044 186 Total Consumer 78,769 614,200 340,428 TOTAL 78,775 665,584 387,791

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) e. Government securities and other investments (i) Bonar 2015 Bonds The Bank exchanged National Government Bonds in Pesos at 2% due 2014 (Boden 2014 Bonds) with a face value of Ps.683,647 (recorded in the Bank’s Shareholders equity in February 2009 within the scope of an exchange transaction of National Secured Loans at market price) for Bonar 2015 Bonds with a face value of Ps. 912,669.

Under Argentine Banking GAAP, bonds subscribed through exchange by any other government debt instruments should be stated in the Shareholders’ Equity at the value that these exchanged securities had been recorded. These bonds were recorded in the captions “Holdings recorded at their acquisition cost plus I.R.R.”.

In accordance with U.S. GAAP, specifically ASC 310-20, satisfaction of one monetary asset by the receipt of another monetary asset for the creditor is generally based on the market value of the asset received in satisfaction of the debt (an extinguishment). In this particular case, the securities being received are substantially different in structure and in interest rates than the debt securities swapped. Therefore, such amounts should initially be recognized at their fair value. The estimated fair value of the securities received will constitute the cost basis of the asset. Any difference between the old asset and the fair value of the new asset is recognized as a gain or loss.

As of December 31, 2013, Bonar 2015 bonds have been recorded at their acquisition cost increased according to the accrual of their internal rate of return (I.R.R.) under Argentine Banking GAAP.

Under U.S. GAAP, the Bonar 2015 bonds were considered as available for sale securities and recorded at fair value with the unrealized gains or losses recognized as a charge or credit to equity through other comprehensive income.

During 2014, the Group sold its holding of Bonar 2015 bonds subscribed through exchange.

(ii) Other investments The following table summarizes the U.S. GAAP adjustment related to other investments, as of December 31, 2016 and 2015:

2016 2015 Book Value Fair Value – Book Value Fair Value – Argentine Book value Shareholders’s Argentine Book value Shareholders’s Banking under U.S. Equity Banking under U.S. Equity GAAP GAAP Adjustment GAAP GAAP Adjustment (in thousands of Ps.) Government securities and securities issued by the Argentine Central Bank 9,701,406 9,707,440 6,034 6,864,527 6,884,724 20,197 Others 23,360 25,288 1,928 22,190 21,869 (321 ) Total 9,724,766 9,732,728 7,962 6,886,717 6,906,593 19,876

Government securities and securities issued by the Argentine Central Bank As of December 31, 2016 and 2015 under Argentine Banking GAAP the Group holds government securities which are classified under the caption “Holdings Recorded at their Acquisition Cost plus the I.R.R”. The Group also holds

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) some securities issued by the Argentine Central Bank, classified under the caption “Securities issued by the Argentine Central Bank”, which are recorded at their cost plus I.R.R. as they have not been included in the information about volatilities or present values issued by the Argentine Central Bank.

For U.S. GAAP purposes, these securities were classified as trading and accounted for at its fair value with changes recorded in the income statement. As of December 31, 2015 those securities issued by the Argentine Central Bank held by Tarjetas Regionales and its subsidiaries Tarjeta Naranja and Tarjetas Cuyanas, were considered as Held-to-maturity securities and therefore accounted for at their amortized cost.

Others Under Argentine Banking GAAP, certain loans that the Group had in its portfolio were transferred to Saturno Trust. In exchange for the loans transferred, the Group received all the participation certificates, which were accounted for at cost. According to this criterion, as of December 31, 2016 and 2015 Saturno Trust was recorded under caption “Other Receivables from Financial Brokerage” for an amount of Ps. 23,360 and Ps. 22,190, respectively.

In accordance with ASC 810, the Group was deemed to be the primary beneficiary of this trust and, therefore, the Bank reconsolidated the assets and liabilities of the mentioned trust. Upon consolidation, the loans have been measured at amortized cost with its corresponding allowance for loan losses measured in accordance with ASC 310. f. Items in process of collection The Bank does not give accounting recognition to checks drawn on the Bank or other banks, or other items to be collected until such time as the related item clears or is accepted. Such items are recorded by the Bank in memorandum accounts. U.S. banks, however, account for such items through balance sheet clearing accounts at the time the items are presented to the Bank.

Grupo Galicia’s assets and liabilities would be increased by approximately Ps. 22,882,600, Ps.17,847,540 and Ps. 13,066,131 applying U.S. GAAP at December 31, 2016, 2015 and 2014, respectively. g. Securitizations. The following table summarizes the adjustment for U.S. GAAP purposes related to securitization transactions as of December 31, 2016 and 2015:

2016 2015 Book Value Fair Value – U.S. GAAP Book Value Fair Value – U.S. GAAP Argentine Book value Shareholders’s Argentine Book value Shareholders’s Banking under U.S. Equity Banking under U.S. Equity GAAP GAAP Adjustment GAAP GAAP Adjustment (in thousands of Ps,) Galtrust I 504,874 540,858 35,984 685,915 714,672 28,757 Total 504,874 540,858 35,984 685,915 714,672 28,757

Financial trust “Galtrust I” The financial trust “Galtrust I” was created in October 2000 in connection with the securitization of provincial loans for a total amount of Ps. 1,102 million. The securitized loans were from the portfolio of loans granted to provincial governments, guaranteed by the federal tax revenues shared with the provincial governments.

During 2002, the portfolio of loans included and the related retained interest in Galtrust I was subject to the pesification. As a result the retained interest in the trust was converted into pesos at an exchange rate of 1.40 to 1 and the interest rate for their debt securities changed to CER plus 10%. During 2003, Galtrust I had swapped its provincial loans for Bogar Bonds due 2018.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Under Argentine Banking GAAP, this transaction was accounted for as sales and the participation certificates retained by the Bank are recorded at the present value of cash flows discounted by the I.R.R. of instruments with similar characteristics and duration and with volatility. When the book value exceeds the present value, the monthly accrual is recorded in an asset offset account. The participation certificates are recorded under Argentine Central Bank rules in the caption “Other Receivables from Financial Brokerage”, and its balance as of December 31, 2016 and 2015, was Ps. 504,874 and Ps. 685,915, respectively.

In accordance with ASC 810, the Group was deemed to be the primary beneficiary of this trust and, therefore, the Bank reconsolidated the assets and liabilities of the mentioned trust. Upon consolidation, the Bogar Bonds were classified as available-for-sale securities and measured at fair value with changes recorded in other comprehensive income.

Debt securities have been cancelled as of December 31, 2014.

Additional information required by U.S. GAAP The table below presents the aggregated assets and liabilities of the financial trusts which have been consolidated for U.S. GAAP purposes:

December 31, 2016 2015 Cash and due from banks Ps.36,083 Ps.27,414 Government securities and Promissory Notes 468,890 658,507 Loans 19,104 16,057 Investments 5,181 — Other assets 563 6,611 Total Assets Ps.529,821 Ps.708,589 Participation Certificates 528,234 708,105 Other liabilities 1,587 484 Total Liabilities Ps.529,821 Ps.708,589

The Group’s maximum loss exposure, which amounted to Ps. 529,821 and Ps. 708,589 as of December 31, 2016 and 2015, respectively, is based on the unlikely event that all of the assets in the VIE’s become worthless and incorporates potential losses associated with assets recorded on the Group’s balance sheet.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) h. Acceptances. Under Argentine Banking GAAP, acceptances are accounted for in memorandum accounts. Under U.S. GAAP, third party liability for acceptances should be included in “Other Receivables Resulting from Financial Brokerage” representing Group customers’ liabilities on outstanding drafts or bills of exchange that have been accepted by the Group. Acceptances should be included in “Other Liabilities Resulting from Financial Brokerage” representing the Group’s liability to remit payment upon the presentation of the accepted drafts or bills of exchange.

The Group’s assets and liabilities would be increased by approximately Ps.586,180, Ps. 898,559 and Ps. 103,515, had U.S. GAAP been applied as of December 31, 2016, 2015 and 2014 , respectively. i. Impairment of real estate properties and foreclosed assets. Under Argentine Banking GAAP, real estate properties and foreclosed assets are carried at cost adjusted by depreciation over the life of the assets. In accordance with ASC 360-10 “Impairment of Long-lived Assets”, such assets are additionally subject to: recognition of an impairment loss if the carrying amounts of those assets are not recoverable from their undiscounted cash flows and an impairment loss measured as the difference between the carrying amount and fair value of the assets.

The Group evaluates potential impairment loss relating to long-lived assets by comparing their carrying amounts with the undiscounted future expected cash flows generated by the assets over the remaining life of the assets. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying value of the assets. Testing whether an asset is impaired and measuring the impairment loss is performed for asset groupings at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In 2002, the Group determined that the uncertainty of the Argentine economic situation had a significant impact on the recoverability of its long-lived assets and evaluated its properties for impairment. An impairment loss was recorded in 2002.

Foreclosed assets are carried at the lower of cost and market. In 2002, the Group recorded a valuation allowance reflecting a decrease in the market values of its foreclosed properties.

In 2016 and 2015, no additional impairment was recorded in real estate properties and foreclosed assets.

The Argentine Banking GAAP depreciation for 2016 and 2015 of the assets impaired in 2002 has been reversed for U.S. GAAP purposes.

Therefore, the Shareholders’ Equity adjustment between Argentine Banking GAAP and U.S. GAAP as of December 31, 2016 and 2015 amounted to Ps. (47,625) and Ps. (49,020), respectively. j. Equity investments in other companies Under Argentine Banking GAAP, the equity investments in companies where significant influence exists are accounted for under the equity method. The remaining investments have been accounted for under the cost method, taking their equity method value as a limit in book value.

For U.S. GAAP purposes, under ASC 323, Investments – Equity Method and Joint Ventures, the Group should determine if any factors are present that might indicate the fair value of the investment has been negatively impacted during the fiscal year. If it is determined that the fair value of an investment is less than the related company’s value, an impairment of the investment must be recognized.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

As of December 31, 2016 and 2015, the group concluded that the carrying amount of certain investments would not be recoverable and therefore an impairment loss was recorded for U.S. GAAP purposes. Therefore the Shareholders’ Equity adjustment between Argentine Banking GAAP and U.S. GAAP as of December 31, 2016 and 2015 amounted to Ps. (14,365) and Ps. (14,365), respectively. k. Financial Guarantees Other Financial Guarantees. During 2016 and 2015, the Company entered into different agreements to guarantee lines of credit of selected customers amounting to Ps.2,938,494 and Ps. 1,231,351, respectively. As of December 31, 2016 and 2015, guarantees granted by the Bank amounted to Ps.707,730 and Ps.367,760, respectively.

Under Argentine Banking GAAP the guarantees are recorded in memorandum accounts. As of December 31, 2016 and 2015, for U.S. GAAP purposes the Bank recognized a liability for the fair value of the obligations assumed at its inception in accordance with the requirements of ASC 460. Such liabilities are being amortized over the expected term of the guarantee. As of December 31, 2016 and 2015, the fair value of the guarantees less the estimated proceeds from collateral amounted to Ps. (469) and Ps. (1,295) respectively

As of December 31, 2016 and 2015, the Group maintained the following guarantees:

2016 Estimated Maximum Proceeds Potential From colateral U.S. GAAP Payments (*) Recourse Adjustment Financial guarantees 707,730 134,619 (469 ) Ps.707,730 Ps.134,619 Ps.(469 )

2015 Estimated Maximum Proceeds Potential From collateral U.S. GAAP Payments (*) Recourse Adjustment Financial guarantees 367,760 45,521 (1,295) Ps 367,760 Ps.45,521 Ps.(1,295)

(*) The maximum potential payments represent a “worse-case scenario”, and do not necessarily reflect expected results. Estimated proceeds from collateral and recourse represent the anticipated value of assets that could be liquidated or received from other parties to offset the Company´s payments under guarantees. l. Non-controlling interest Under Argentine Central Bank rules, the non-controlling interest is required to be disclosed as a component of the liabilities. Under U.S. GAAP, non-controlling interest should be reported as a separate component within equity in the consolidated financial statements. Additionally, consolidated net income and comprehensive income are reported with separate disclosure of the amounts attributable to the parent company and to the non-controlling interest. The non-controlling interest in accordance with Argentine Banking GAAP has been eliminated for U.S. GAAP reconciliation purposes.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Also, non-controlling interest under U.S. GAAP reflects the effect in non controlling interest of all the other U.S. GAAP adjustments discussed. m. Foreign Debt Restructuring On May 18, 2004, the Group completed the restructuring of its foreign debt. As a result of this restructuring, the Group recorded a Ps. 142.5 million gain under Argentine Banking GAAP.

For U.S. GAAP purposes, the restructuring is accounted for in each of two steps. The first step of the restructuring required the holders of the Group’s debt to exchange its old debt for new debt in two tranches. Pursuant to “Determining Whether a Debtor’s Modification or Exchange of Debt Instruments is within the scope of ASC 470), the Group did not receive any concession from the holders of the debt and therefore, the first step restructuring was not considered a trouble debt restructuring. Pursuant to “Debtors Accounting for a Modification or Exchange of Debt Instruments” ASC 470-50, the first step of the restructuring was accounted for as a modification of the old debt and therefore the Group did not recognize any gain or loss. The second step of the restructuring offers the holders of the Group’s debt issued in the first step explained above to exchange it for new securities including cash, Boden 2012 Bonds and equity shares of the Group. Pursuant to U.S. GAAP this second step, the restructuring was accounted for in accordance with “Accounting by Debtors and Creditors for Trouble Debt Restructurings” ASC 310-40, as a partial settlement of the debt through the transfer of certain assets and equity at its fair value. After deducting the considerations used to repay the debt, ASC 310-40 requires the comparison of the future cash outflows of the restructured debt and the carrying of the debt at the restructuring date.

A gain on troubled debt restructuring is only recognized when the remaining carrying value of the debt at the date of the restructuring exceeds the total future cash payments of the restructured debt reduced by the fair value of the assets and equity given as payment of the debt. Since the total future cash outflows of the restructured debt exceeds the carrying value of the old debt, no gain on restructuring was recorded under U.S. GAAP.

As a result, under U.S. GAAP, the carrying amount of the restructured debt is greater than the amount recorded under Argentine Banking GAAP. Therefore, under U.S. GAAP, a new effective interest rate was determined to reflect the present value of the future cash payments of the restructured debt.

Furthermore, under U.S. GAAP, expenses incurred in a troubled debt restructuring are expensed as incurred. Expenses related to the issuance of equity were deducted directly from the shareholder’s equity.

During 2010, the Group repurchased part of the debt maturing in 2010 and 2014. In addition, Negotiable Obligations were repaid in advance. For U.S. GAAP purposes, these transactions were considered as an extinguishment of debt. Therefore, the U.S. GAAP adjustment recorded in previous years related to the debt extinguished was reversed in 2010, generating a gain of approximately Ps. 34,462 included in 2010 U.S. GAAP net income reconciliation.

During 2011, the Group paid in advance the interest capitalized related to the Subordinated Negotiable Obligation for an amount of approximately US$ 95.8 million. This amount was originally scheduled to be paid in 2014. This advance payment does not constitute a modification of terms of the Negotiable Obligation for U.S. GAAP purposes.

Shareholders’ Equity adjustments between Argentine Banking GAAP and U.S. GAAP as of December 31, 2015 amounted to Ps. (69,216).

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

During 2016, the Group have paid in advance the Subordinated Negotiable Obligation, which was originally scheduled to be paid in 2019. Consequently no shareholders’ equity adjustment was recorded as of December 31, 2016. n. Gain on sale of non-controlling interest Under Argentine Banking GAAP the Group recognized during the year ended December 31, 2014 a gain of Ps. 2,490 on the sale of a minority interest in Tarjetas del Mar. Under U.S. GAAP this transaction was treated as an equity transaction. o. Repurchase Agreements and Reverse Repurchase Agreements (“Repos and Reverse Repos”). Under Argentine Banking GAAP, initial measurement of such agreements implies sale or purchase accounting together with the recognition of an asset and liability due to the investing or financing transaction entered into.

For U.S. GAAP purposes these transactions have not qualified as true sales and therefore these transactions were classified trading and recorded at fair value.

The corresponding net adjustment in shareholders’ equity under U.S. GAAP is included under the caption “Government securities and other investments” as of December 31, 2016, 2015 and 2014. p. Fair Value Measurements Disclosures. ASC 820-10 defines fair value, establishes a consistent framework for measuring fair value and disclosure requirements about fair-value measurements. ASC 820 -10, among other things, requires the Group to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

In addition, ASC 825-10 provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments and written loan commitments not previously recorded at fair value. Under ASC 825-10, fair value is used for both the initial and subsequent measurement of the designated assets, liabilities and commitments, with the changes on fair value recognized in net income. As a result of ASC 825-10 analysis, the Group has not elected to apply fair value accounting for any of its financial instruments not previously carried at fair value.

Fair Value Hierarchy ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In addition, ASC 820-10 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 2 – inputs include the following:

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

a) Quoted prices for similar assets or liabilities in active markets; b) Quoted prices for identical or similar assets or liabilities in non-active markets; c) Pricing models whose inputs are observable for substantially the full term of the asset or liability; and d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Determination of Fair Value Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon internally developed models that use primarily market-based or independently-sourced market parameters, including interest rate yield curves, option volatilities and currency rates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, the Bank’s creditworthiness, liquidity and unobservable parameters that are applied consistently over time.

The Group believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The following section describes the valuation methodologies used by the Group to measure various financial instruments at fair value, including an indication of the level in the fair-value hierarchy in which each instrument is generally classified. Where appropriate, the description includes details of the valuation models, the key inputs to those models as well as any significant assumptions.

Assets a) Government securities and other investments Listed investment securities: where quoted prices are available in an active market, securities are classified within level 1 of the valuation hierarchy. Level 1 securities include national and province governments bonds, instruments issued by Argentine Central Bank and corporate securities.

Other investments securities: as quoted market prices are not available, then fair values are estimated by using a discount cash flow model which includes assumptions based upon projected finance charges related to the securitized assets, estimated net credit losses, prepayment assumptions and contractual interest paid to third-party investors. These are classified within level 3 of the valuation hierarchy. b) Securities receivable under spot and forward purchases to be settled and under repo transactions Securities receivables under repurchase agreements are classified within level 1 of the valuation hierarchy using quoted prices available in the active market where the securities are traded.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) c) Securitizations As of December 31, 2016 and 2015 the caption includes the consolidated assets of Galtrust I. The fair value was determined by using the fair value of the underlying assets (Bogar bonds). Therefore, these are classified within level 1 of the valuation hierarchy.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) d) Derivatives Financial Instruments Forward transactions traded in autoregulated markets are made through recognized exchange markets, such as MAE and ROFEX.

The general settlement method for these transactions does not require delivery of the traded underlying asset. Rather, settlement is carried on a daily basis for the difference, if any, between the closing price of the underlying asset and the closing price or value of the underlying asset corresponding to the previous day, the difference in price being charged to income. Therefore, they are classified in Level 1 of the fair-value hierarchy.

Forward transactions conducted directly with customers are recorded as the difference between the agreed foreign currency exchange rate and an average between such exchange rate at the end of the year according with the future prices published by ROFEX and MAE. Therefore, they are classified in Level 1 of the fair-value hierarchy.

Liabilities e) Securities to be delivered under spot and forward sales to be settled and under repo transactions Securities to be delivered under spot and forward sales to be settled and under repo transactions are classified within Level 1 of the valuation hierarchy using quoted prices available in the active market where the securities are traded. f) Derivatives Financial Instruments Forward transactions traded in autoregulated markets are made through recognized exchange markets, such as MAE and ROFEX.

The general settlement method for these transactions does not require delivery of the traded underlying asset. Rather, settlement is carried on a daily basis for the difference, if any, between the closing price of the underlying asset and the closing price or value of the underlying asset corresponding to the previous day, the difference in price being charged to income. Therefore, they are classified in Level 1 of the fair-value hierarchy.

Forward transactions conducted directly with customers are recorded as the difference between the agreed foreign currency exchange rate and an average between such exchange rate at the end of the year according with the future prices published by ROFEX and MAE. Therefore, they are classified in Level 1 of the fair-value hierarchy.

Items measured at fair value on a recurring basis The following table presents the financial instruments carried at fair value as of December 31, 2016 and 2015, for U.S. GAAP purposes by ASC 820-10 valuation hierarchy (as described above).

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Internal Internal models with models with Quoted significant significant market prices observable unobservable Total in active market market carrying markets parameters parameters Balances as of December 31, 2016 value (Level 1) (Level 2) (Level 3) ASSETS a) Government securities and other investments a.1) Holdings recorded at fair value Government Securities recorded at Fair Value Ps.5,162,720 3,797,816 1,070,472 294,432 a.2) Securities issued by Argentine Central Bank Ps.8,543,984 8,543,984 — — a.3) Other Investments (*) Ps.25,288 — — 25,288 b.1) Securities receivable under spot and forward purchases to be settled and under repo transactions Ps.3,306,022 3,244,464 29,152 32,406 c) Securitizations 504,874 504,874 — — Galtrust I (**) Ps. d) Derivatives financial instruments Ps.111,287 111,287 — — TOTAL ASSETS AT FAIR VALUE Ps.17,654,175 16,202,425 1,099,624 352,126 LIABILITIES e) Securities to be delivered under spot and forward sales to be settled and under repo transactions Ps.(716,979) (674,055 ) (29,152 ) (13,772 ) f) Derivatives financial instruments Ps.(141,013) (141,013 ) — TOTAL LIABILITIES AT FAIR VALUE Ps.(857,992) (815,068 ) (29,152 ) (13,772 )

(*) This amount is related to the fair value of participation certificates of Saturno Trust. (**) The Ps. 504,874 corresponds to the fair value of the Bogar Bonds recorded as an asset in Galtrust I.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Internal Internal models with models with Quoted significant significant market prices observable unobservable Total in active market market carrying markets parameters parameters Balances as of December 31, 2015 value (Level 1) (Level 2) (Level 3) ASSETS a) Government securities and other investments a.1) Holdings recorded at fair value Government Securities recorded at Fair Value Ps.3,963,969 3,963,969 — — a.2) Securities issued by Argentine Central Bank Ps.11,717,701 10,374,997 — 1,342,704 a.3) Other Investments (*) Ps.21,869 — — 21,869 b.1) Securities receivable under spot and forward purchases to be settled and under repo transactions Ps.478,925 478,925 — — c) Securitizations Galtrust I (**) Ps.687,263 687,263 — — d) Derivatives financial instruments Ps.287,161 287,161 — — TOTAL ASSETS AT FAIR VALUE Ps.17,156,888 15,792,315 — 1,364,573 LIABILITIES e) Securities to be delivered under spot and forward sales to be settled and under repo transactions Ps.(41,161) (41,161 ) — — f) Derivatives financial instruments Ps.(1,266,014) (1,266,014 ) — — TOTAL LIABILITIES AT FAIR VALUE Ps.(1,307,175) (1,307,175 ) — —

(*) This amount is related to the fair value of participation certificates of Saturno Trust. (**) The Ps. 687,263 corresponds to the fair value of the Bogar Bonds recorded as an asset in Galtrust I.

Changes in level 3 fair value measurements The table below includes a roll forward of the balance sheet amounts as of December 31, 2016, 2015 and 2014 (including the change in fair value) for financial instruments classified by the Group within Level 3 of the valuation hierarchy. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Securities receivable under spot Securities to and be delivered forward under spot Securities issued purchases and forward by Argentine to be settled sales to be Central Bank and and under settled and Total Fair Other government repo under repo Value investments securities transactions transactions Measurements Fair value, December 31, 2014 Ps.18,158 Ps.— Ps.— Ps.— 18,158 Included in earnings 3,711 1,342,704 — — 1,346,415 Fair value, December 31, 2015 Ps.21,869 Ps.1,342,704 Ps.— Ps.— 1,364,573 Included in earnings 3,419 — — — 3,419 Purchases — 294,432 32,406 (13,772) 313,066 Settlements — (1,342,704 ) — — (1,342,704 ) Fair value, December 31, 2016 Ps.25,288 Ps.294,432 Ps.32,406 Ps.(13,772) 338,354

The table below summarizes gains and losses due to changes in fair value, recorded in earnings for level 3 assets and liabilities during the years 2016, 2015 and 2014:

Total Fair Value Measurements Balances as of December 31, 2016 2015 2014 Classification of gains and losses included in earnings : Financial Income Ps. (1,026,219) Ps. 1,346,415 Ps. 1,409 Total Ps. (1,026,219) Ps. 1,346,415 Ps. 1,409

The Group records transfers between levels assuming the transfer occurs at the end of the period. The Group did not transfer any assets or liabilities between Levels 1 and 2 of the fair value hierarchy during 2015 and 2016.

In addition, the Group is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements in accordance with GAAP. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Group records nonrecurring adjustments for including certain impairment amounts for impaired loans calculated in accordance with ASC 310-10 when establishing the allowance for loan losses. Estimates of fair value used for impaired loans generally are based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. The valuation technique used to obtain the fair value was an income approach using discounted cash flows based on the contracted maturity of the loans. The discount rates are based on the current market rates corresponding to the applicable maturity. No changes in the valuation technique took place during the year. Loans subject to nonrecurring fair value measurement were Ps.114,587 and Ps. 204,171 as of December 31, 2016 and 2015 classified as Level 3.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) q. CFA—Discontinued operations The board of directors of one of the main subsidiaries of the Group, Banco de Galicia y Buenos Aires, approved the sale of a major business line, which consists of one component under ASC 205-20-20, during the last quarter of 2016. The business line to be sold represents one of the Group’s five reportable segments “CFA Personal Loans”. The Bank announced the disposal plan to investors on January 12, 2017, however the decision was made prior to that date. The component represents a strategic shift that will have a major effect on the Group operations and financial results, as such, the component is classified as discontinued operation in accordance with the criteria in ASC 205-20-45-1C. Based on the held-for-sale criteria in ASC 360-10-45-9, the component was classified as held-for-sale at December 31, 2016.

The closing of the transaction is subject to the prior compliance of the conditions set out in the offer, such as the Argentine Central Bank’s approval.

The price offered is subject to certain adjustment variables, the effect of which may vary according to the time when the transaction is finally closed with its approval by the regulatory authorities. Notwithstanding the foregoing, the Group believe that the economic result of the transaction will not cause a significant impact on the shareholders’ equity.

Additional disclosures required by ASC 205-20-45-10 and 205-20-50-5B:

December 31, 2016 2015 2014 CFA Personal Loans – discontinued operation: Cash Ps.395,513 Ps.346,791 Ps.319,663 Government and corporate securities 16,776 46,219 313,032 Loans 4,697,314 2,714,379 2,333,228 Others 711,463 658,951 596,637 Total assets 5,821,066 3,766,340 3,562,560 Deposits 1,412,974 616,525 1,157,762 Other liabilities resulting from financial brokerage 2,900,235 1,554,174 1,244,976 Others 389,251 335,160 207,779 Total liabilities 4,702,460 2,505,859 2,610,517 Financial Income Ps. 2,268,786 Ps. 1,855,358 Ps. 1,800,734 Financial Expenditures 800,285 599,905 694,541 Provision for Loan Losses 358,764 227,771 408,234 Administrative Expenses 1,232,194 930,407 767,615 Others 482,151 290,713 145,881 Net income from operations of discontinued Component CFA before Income tax 359,694 387,988 76,225 Income Tax 180,363 168,041 65,163 Net income on discontinued operations 179,331 219,947 11,062 Eliminations with the parent company and its subsidiaries 133,618 21,370 279,040 Net income after eliminations on discontinued operations 312,949 241,317 290,102

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) r. New authoritative pronouncements During 2016, the FASB has issued Accounting Standards Updates. Those updates applicable for the Group are mentioned below:

ASU 2016-01 In January 2016, the FASB issued the Accounting Standards Update No. 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in this Update make targeted improvements to generally accepted accounting principles (GAAP) as follows: i) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; ii) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; iii) eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and iv) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; among other changes.

For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

The Group considers this ASU will not have any significant effect in the US GAAP disclosures and financial information.

ASU 2016-02 Accounting Standard Update 2016-02 “Leases (Topic 842)” was issued in February 2016. The FASB is issuing this Update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. To meet that objective, the FASB is amending the FASB Accounting Standards Codification® and creating Topic 842, Leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP.

For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

The Group considers this ASU will not have any significant effect in the US GAAP disclosures and financial information.

ASU 2016-13 In June 2016, the FASB issued Accounting Standard Update 2016-13 – Financial instruments – Credit losses (Topic 326): Measurement of credit losses on financial instruments. This new accounting guidance will require the earlier recognition of credit losses on loans and other financial instruments based on an expected loss model, replacing the incurred loss model that is currently in use. Under the new guidance, an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The expected loss model will apply to loans and leases, unfunded ending commitments, held-to-maturity (HTM) debt securities and other debt instruments measured at amortized cost. The impairment model for AFS debt securities will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. The new guidance is effective on January 1, 2020, with early adoption permitted on January 1, 2019. The Group is in the process of identifying and implementing required changes to loan loss estimation models and processes and evaluating the impact of this new accounting guidance, which at the date of adoption is expected to increase the allowance for credit losses with a resulting negative adjustment to retained earnings.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

ASU 2016-15 and ASU 2016-18 In August 2016 and November 2016, the FASB issued Accounting Standard Update 2016-15 -“Statement of cash flows (Topic 230): Classification of certain cash receipts and cash payments” and Accounting Standard Update 2016-18 “Statement of cash flows (Topic 230): Restricted cash” that addresses classification of certain cash receipts and cash payments, including changes in restricted cash, in the statement of cash flows. This new accounting guidance will result in some changes in classification in the Consolidated Statement of Cash Flows, which the Group does not expect will be significant, and will not have any impact on its consolidated financial position or results of operations. The new guidance is effective on January 1, 2018, on a retrospective basis, with early adoption permitted.

ASU 2014-09 In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. Amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and the Group plans to adopt this standard on the effective date. The Group has been assessing this ASU and the preliminary findings is that the new pronouncement will not have a significant impact on the consolidated financial statements as the majority of our business transactions will not be subject to this pronouncement

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) s. Consolidated net income

December 31, 2016 2015 2014 Net income as stated Ps.6,017,877 Ps.4,338,397 Ps.3,337,790 Loan origination fees and costs (Note 34 b.) 13,536 (28,113 ) 96,883 Intangible assets: Goodwill recognition and amortization (Note 34 c.) 9,674 9,674 7,767 Negative goodwill (Note 34 c.) — (49,562 ) (99,123 ) Software cost (Note 34 c.) (213,908 ) (206,387 ) (129,978 ) Equity investments in other companies – Impairment (Note 34 j.) — — 6,740 Sale of non-controlling interest (Note 34 n.) — — 2,490 Loan impairment – Private sector (Note 34 d.e.) (17,195 ) 1,587 10,776 Securitizations (Note 34 g.) 192,614 106,511 (22,973 ) Government Securities and other investments: Bonar 2015 Bonds ( Note 34 e. (i)) — — 195,543 Other investments (Note 34 e. (ii)) (14,163 ) 27,633 (625 ) Amortization of real estate properties and foreclosed assets previously impaired under U.S. GAAP (Note 34 i.) 1,395 1,395 1,395 Recognition for the fair value of obligations assumed under financial guarantees issued (Note 34 k.) 826 (191 ) (275 ) Foreign Debt restructuring (Note 34 m.) 69,216 (13,401 ) (22,622 ) Deferred Income tax (Note 34 a.) (22,944 ) 154,448 102,112 Non-controlling interest (Note 34 l.) 403,168 364,558 229,910 Net income in accordance with U.S. GAAP Ps.6,440,096 Ps.4,706,549 Ps.3,715,810 Less Net (Income) attributable to the Non-controlling Interest (Note 34 l.) (403,168 ) (370,980 ) (211,847 ) Net Income attributable to Parent Company in accordance with U.S. GAAP Ps.6,036,928 Ps.4,335,569 Ps.3,503,963 Average number of basic shares outstanding (in thousands) (Note 21) 1,300,265 1,300,265 1,300,265 Basic and diluted EPS 4.643 3.334 2.695

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) t. Consolidated shareholders’ equity

December 31, 2016 2015 Shareholders’ equity as stated Ps.20,352,698 Ps.14,484,821 Loan origination fees and costs (Note 34 b.) (81,904 ) (95,440 ) Intangible assets: Goodwill recognition and amortization (Note 34 c.) 45,911 36,237 Negative Goodwill (Note 34 c.) — — Software Cost (Note 34 c.) (926,381 ) (712,473 ) Equity investments in other companies – Impairment (Note 34 j.) (14,365 ) (14,365 ) Loan impairment – Private sector (Note 34 d.e.) 6,604 23,799 Government securities and other investments: Bonar 2015 Bonds (Note 34 e. (i)) — — Other Investments (Note 34 e. (ii)) 7,962 19,876 Securitizations (Note 34 g.) 35,984 28,757 Impairment of real estate properties and foreclosed assets (Note 34 i.) (67,155 ) (67,155 ) Amortization of real estate properties and foreclosed assets previously impaired under U.S. GAAP (Note 34 i.) 19,530 18,135 Deferred Income tax (Note 34 a.) 701,021 723,965 Recognition for the fair value of obligations assumed under financial guarantees issued (Note 34 k.) (469 ) (1,295 ) Foreign debt restructuring (Note 34 m.) — (69,216 ) Non-controlling interest (Note 34 l.) 1,462,189 1,107,315 Consolidated shareholders’ equity in accordance with U.S. GAAP Ps.21,541,625 Ps.15,482,961 Non-controlling Interest (Note 34 l.) (1,455,009 ) (1,100,135 ) Consolidated Parent Company Shareholders Equity in accordance with U.S. GAAP Ps.20,086,616 Ps.14,382,826

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Roll forward analysis of parent company shareholders’ equity under U.S. GAAP at December 31, 2016, 2015 and 2014:

Consolidated (Accumulated Shareholders’ Adjustments to Other deficit) / Equity Capital Paid Shareholders’ Profit reserves Comprehensive Retained (Parent Stock in Capital Equity Legal Other Income (loss) Earnings Company) Balance at December 31, 2013 Ps.1,300,265 Ps.219,596 Ps. 294,254 Ps.200,065 Ps.3,125,519 Ps. 707,455 Ps.1,096,868 Ps.6,944,022 Distribution of retained earnings: Absorption approved by the shareholders’ meeting on April 29, 2014 Legal Reserve — — — 91,183 — — (91,183 ) — Discretionary Reserve 1,693,875 — (1,693,875) — Cash Dividends — — — — — — (38,595 ) (38,595 ) Unrealized gain of available- for-sale securities, net of tax — — — — — (144,211 ) — (144,211 ) Acquisition of non- controlling interest — (30,264 ) — — — — 10,756 (19,508 ) Sale of non- controlling interest — (2,490 ) — — — — — (2,490 ) Net Income in accordance with U.S. GAAP — — — — — — 3,503,963 3,503,963 Balance at December 31, 2014 Ps.1,300,265 Ps.186,842 Ps. 294,254 Ps.291,248 Ps.4,819,394 Ps. 563,244 Ps.2,787,934 Ps.10,243,181 Distribution of retained earnings:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Absorption approved by the shareholders’ meeting on April 29, 2015 Legal Reserve — — — 24,432 — — (24,432 ) — Discretionary Reserve — — — 3,213,358 — (3,213,358) — Cash Dividends — — — — — — (100,000 ) (100,000 ) Unrealized gain of available- for-sale securities, net of tax — — — — — (95,924 ) — (95,924 ) Acquisition of non- controlling interest — — — — — — — — Sale of non- controlling interest — — — — — — — — Net Income in accordance with U.S. GAAP — — — — — — 4,335,569 4,335,569 Balance at December 31, 2015 Ps.1,300,265 Ps.186,842 Ps. 294,254 Ps.315,680 Ps.8,032,752 Ps. 467,320 Ps.3,785,713 Ps.14,382,826 Distribution of retained earnings: Absorption approved by the shareholders’ meeting on April 26, 2016 Legal Reserve — — — — — Discretionary Reserve — — — — 4,188,397 — (4,188,397) — Cash Dividends — — — — — — (150,000 ) (150,000 ) Unrealized gain of available- for-sale securities, net of tax — — — — — (183,138 ) (183,138 ) Acquisition of non- controlling interest — — — — — — Sale of non- controlling interest — — — — — —

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Net Income in accordance with U.S. GAAP — — — — — — 6,036,928 6,036,928 Balance at December 31, 2016 Ps.1,300,265 Ps.186,842 Ps. 294,254 Ps.315,680 Ps.12,221,149 Ps. 284,182 Ps.5,481,244 Ps.20,086,616

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) u. Comprehensive income “Reporting Comprehensive Income” ASC 220, establishes standards for reporting and the display of comprehensive income and its components (revenues, expenses, gains and losses) in the financial statements. Comprehensive income is the total of net income and all transactions, and other events and circumstances from non-owner sources.

The following disclosure presents the Comprehensive Income according to ASC 220, for the fiscal years ended December 31, 2016, 2015 and 2014:

December 31, 2016 2015 2014 Income Statement Financial Income Ps. 34,548,635 Ps. 24,252,116 Ps. 18,166,003 Financial Expenditures 19,410,376 12,826,259 9,662,588 Net Financial Income 15,138,259 11,425,857 8,503,415 Provision for Loan Losses 3,191,744 1,984,882 1,992,240 Income from Services 15,595,439 11,173,746 8,301,243 Expenditures from Services 5,020,382 3,560,375 2,553,875 Administrative Expenses 16,687,709 12,220,641 8,643,829 Net Income from Financial Brokerage 5,833,863 4,833,705 3,614,714 Income from Insurance activities 2,368,518 1,735,920 1,192,809 Miscellaneous Income 1,564,444 953,089 775,895 Miscellaneous Losses 444,556 578,547 332,713 Net Income from continuing operations before Income tax 9,322,269 6,944,167 5,250,705 Income Tax 3,195,122 2,478,935 1,824,997 Net income from continuing operations 6,127,147 4,465,232 3,425,708 Discontinued Operations: Net Income from operations of discontinued component “CFA-Personal Loans” before income tax 493,312 409,358 355,265 Income tax 180,363 168,041 65,163 Net income from discontinued operations. 312,949 241,317 290,102 Net income under U.S. GAAP 6,440,096 4,706,549 3,715,810 Less Net (Income) attributable to the Non-controlling Interest (403,168 ) (370,980 ) (211,847 ) Net Income attributable to Parent Company 6,036,928 4,335,569 3,503,963 Net income under U.S. GAAP 6,440,096 4,706,549 3,715,810 Other comprehensive income / (loss) (183,138 ) (95,926 ) (144,211 ) Comprehensive income 6,256,958 4,610,623 3,571,599 Net Income attributable to parent Company 6,036,928 4,335,569 3,503,963 Other comprehensive income / (loss) attributable to parent Company (183,138 ) (95,924 ) (144,211 ) Comprehensive income attributable to parent Company 5,853,790 4,239,645 3,359,752

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Net income under U.S. GAAP per common share – basic and diluted Continuing operations 4.40 3.15 2.47 Discontinued operations 0.24 0.19 0.22 Net income per share 4.64 3.34 2.69

Accumulated non-owner changes in equity (accumulated other comprehensive income) as of December 31, 2016, 2015 and 2014 were as follows:

December 31, 2016 2015 2014 Galtrust I 284,182 467,320 563,244 Accumulated other comprehensive income Ps.284,182 Ps.467,320 Ps.563,244 Less, accumulated other comprehensive income attributable to the Non-controlling interest — — — Net accumulated other comprehensive income attributable to Parent Company Ps.284,182 Ps.467,320 Ps.563,244

There were no available for sale securities with a continuous loss position of 12 months or more. There are no unrealized losses on investments as of December 31, 2016 and 2015.

Additional disclosures required by ASU No. 2013-02 are presented in the table below:

Galtrust I Total Beginning Balance 467,320 467,320 Other comprenhensive loss of the year, net (183,138) (183,138) Ending balance 284,182 284,182

Amount reclassified from accumulated other comprehensive Affected Line Item in the Statement where OCI components income Net income is presented Galtrust I (183,138 ) Financial Income Total (183,138 )

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) v. Consolidated cash flows ASC 230 “Statement of Cash Flows” provides guidance for the reporting of cash flows within Operating, Investing and Financing categories. For U.S. GAAP purposes the Company considers as cash equivalents all highly liquid investments with original maturities of three months or less, including cash and cash equivalents corresponding to financial trusts consolidated in accordance with Note 34.h.

For the year ended December 31, 2016 2015 2014 Cash 60,770,737 30,487,872 16,639,542 Cash equivalents 11,907,640 12,081,059 6,021,093 Cash and cash equivalents as shown in the statement of cash flows under Argentine Banking GAAP Ps.72,678,377 Ps.42,568,931 Ps.22,660,635 Cash and cash equivalents corresponding to financial trusts — — 3,551 Cash and Cash equivalents corresponding to discontinued operations 409,288 406,334 393,380 Cash and cash equivalents in the Statement of Cash Flows under US GAAP Ps.73,087,665 Ps.42,975,265 Ps.23,057,566

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

The following table presents the reconciliation of the condensed consolidated statements of cash flows under Argentine Banking GAAP and US GAAP:

For the year ended December 31, 2016 2015 2014 Reconciliation of cash flows under Argentine Banking GAAP and US GAAP Cash flow provided by operating activities under Argentine Banking GAAP Ps.25,013,196 Ps.15,624,973 Ps.7,514,940 Operations Discontinued (359,745 ) 145,851 459,304 Net Cash flow provided by operating activities under Argentine Banking GAAP 25,372,941 15,479,122 7,055,636 Loans, available for sale securities, deposits at the Argentine Central Bank and organization and development expenses reclassified to investing activities 40,452,316 32,587,978 12,100,826 Deposits and repo transactions reclassified to financing activities (48,231,890) (30,198,276) (11,797,890) Interest paid on debt (2,873,065 ) (1,676,158 ) (1,754,664 ) Financial trust consolidated under US GAAP 47,844 5,763 152,805 Cash flow provided by operating activities under US GAAP Ps.14,768,146 Ps.16,198,429 Ps.5,756,713 Operations Discontinued 218,306 441,835 1,873,919 Net cash flow provided by operating activities under US GAAP 14,986,452 16,640,264 7,630,632 Cash flow used in investing activities under Argentine Banking GAAP Ps.(1,479,131 ) Ps.(1,122,861 ) Ps.(494,939 ) Discontinued Operations (21,322 ) (20,997 ) (6,371 ) Net Cash flow used in investing activities under Argentine Banking GAAP (1,457,809 ) (1,101,864 ) (488,568 ) Net increase in Loans, available for sale securities, deposits at the Argentine Central Bank and organization and development expenses (40,452,316) (32,587,978) (12,100,826) Financial trust consolidated under US GAAP—corresponding to loans and securities (6,579 ) 121,700 (170,913 ) Net cash flow used in investing activities under US GAAP Ps.(41,916,704) Ps.(33,568,142) Ps.(12,760,307) Discontinued Operations 72,342 (1,019,640 ) (1,676,367 ) (41,844,362) (34,587,782) (14,436,674) Cash flow (used in) provided by financing activities under Argentine Banking GAAP Ps.2,663,970 Ps.(1,529,186 ) Ps.(1,304,112 ) Discontinued Operations 384,019 (111,899 ) (382,802 )

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Net cash flow (used in) provided by financing activities under Argentine Banking GAAP Ps.2,279,951 Ps. (1,417,287) Ps.(921,310) Deposits and repo transactions 48,190,625 30,165,040 11,797,890 Interest paid on debt reclassified to operating activities 2,873,065 1,676,158 1,754,664 Financial trust consolidated under US GAAP - corresponding to debt — (97,778 ) 8,668 Cash flow provided by financing activities under US GAAP Ps.53,343,641 Ps.30,326,133 Ps.12,639,912 Discontinued Operations (287,696 ) 590,760 (127,421 ) Net cash flow provided by financing activities under US GAAP 53,055,945 30,916,893 12,512,491 Effect of exchange rate changes on cash and cash equivalents Ps.3,914,365 Ps.6,948,324 Ps.1,514,245 Cash and cash equivalents at the beginning of the year under US GAAP 42,568,931 22,664,186 15,513,623 Cash and cash equivalents at the end of the year under US GAAP 72,678,377 42,568,931 22,664,186 Increase (decrease) in cash and cash equivalents under US GAAP 30,109,446 19,904,745 7,150,563 Discontinued Operations 2,954 12,954 70,131 Net increase (decrease) in cash and cash equivalents under US GAAP Ps.30,112,400 Ps.19,917,699 Ps.7,220,694

Additionally, as required by ASC 230-10-45-26, some cash flow lines must be reported gross. The following table presents the gross inflows and outflows for the years ended December 31, 2016, 2015 and 2014:

December 31, 2016 2015 2014 CASH FLOW FROM FINANCING ACTIVITIES: SUBORDINATED AND UNSUBORDINATED NEGOTIABLE OBLIGATION Collections Ps.8,812,246 Ps.3,049,708 Ps.3,198,658 Payments Ps.(8,912,084) Ps.(4,611,318) Ps.(3,832,157) BANK AND INTERNATIONAL ENTITIES Collections Ps.499,726 Ps.93,435 Ps.331,063 Payments Ps.(22,611 ) Ps.(16,463 ) Ps.(566,917 ) CASH FLOW FROM INVESTING ACTIVITIES: MISCELLANEOUS ASSETS AND BANK PREMISES AND EQUIPMENT Collections Ps. 206,103 Ps. 139,721 Ps. 99,710 Payments Ps.(1,685,234) Ps.(1,272,627) Ps.(592,851 )

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) w. Concentration of risk – Total exposure to the public sector - Argentine government and provinces The Group has significant exposure to the Argentine national government and provinces in the form of government securities net positions, secured loans and other debt obligations. As of December 31, 2016 and 2015, the Group had the following bonds and loans outstanding:

December 31, 2016 December 31, 2015 Argentine Argentine Banking Banking GAAP U.S. GAAP GAAP U.S. GAAP Argentine national government loans Ps.14,253 Ps.14,253 Ps.17,501 Ps.17,501 Other Argentine public-sector receivables 44,009 44,009 46,287 46,287 Galtrust I (securitization of Provincial Loans) 471,350 507,334 662,251 691,008 Securities issued by the Argentine Central Bank 11,239,571 11,233,987 12,936,621 12,934,090 Other (1) 5,550,677 5,562,295 4,195,244 4,217,972 Total Ps.17,319,860 Ps.17,361,877 Ps.17,857,904 Ps.17,906,858

(1) Includes bonds and other national government bonds. x. Risks and Uncertainties Government Securities As of December 31, 2016, the Group’s exposure to the Argentine public sector represented approximately 7% of the total Group’s assets. Although the Group’s exposure to the Argentine public sector consists of performing assets, the realization of the Group’s assets, its income and cash flow generation capacity and future financial condition is dependent on the Argentine government ability to comply with its payment obligations.

Argentine Central Bank’s regulations state that, the total exposure of financial institutions to the non-financial public sector must not exceed 35% of their total assets.

As of December 31, 2016 and 2015, the Group was in compliance with the general limit of 35% imposed by the Argentine Central Bank.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Exchange rate and restrictions In January 2002, through the Public Emergency Law, Argentina declared a public emergency situation in respect of its social, economic, administrative, financial and foreign exchange matters and authorized the Argentine Executive Branch to establish a system to determine the foreign exchange rate between the Argentine Peso and foreign currencies and to issue foreign exchange-related rules and regulations. Within this context, on February 8, 2002, through Decree No. 260/2002, the Argentine Executive Branch established (i) a single and free-floating foreign exchange market (a “MULC”, or “Mercado Único y Libre de Cambios”) through which all foreign exchange transactions in a foreign currency must be conducted, and (ii) that foreign exchange transactions in a foreign currency must be conducted at the foreign exchange rate to be freely agreed upon among the contracting parties, subject to the requirements and regulations imposed by the Argentine Central Bank (please see below for a summary of the main regulations).

On June 9, 2005, through Decree No. 616/2005, the Argentine Executive Branch mandated that:

(a) all inflows of funds into the local foreign exchange market arising from foreign debts incurred by residents, both individuals or legal entities in the Argentine private sector, except for those concerning foreign trade financing and primary issuances of debt securities admitted to public offering and listed on self-regulated markets; and (b) all inflows of funds of non-residents channeled through the MULC and destined to (i) being held in the local currency, (ii) acquir all types of financial assets or liabilities in the financial and/or non-financial private sector, with the exception of foreign direct investments and primary issuances of debt securities and shares admitted to public offering and listed on self-regulated markets, and (iii) investments in securities issued by the public sector and acquired in secondary markets; had to, meet the following requirements:

(i) Such inflows of funds may only be transferred outside the local foreign exchange market at the expiration of a term of 365 calendar days as from the date of settlement of such funds into Argentine Pesos (the “Minimun Stay Period”);

(ii) The proceeds of such inflows of funds must be credited to an account in the local banking system;

(iii) A non-transferable and non-interest-bearing deposit for 30% of the amount of the transaction must be kept in Argentina for a period of 365 calendar days, in accordance with the terms and conditions laid down in the applicable regulations (the “Deposit”); and

(iv) The Deposit is to be denominated in Dollars and held in Argentine financial institutions and it may not be used to guarantee or as collateral for any type of credit transactions.

The requirements of Decree 616/2005 were subsequently eased. Under the Macri administration, several changes were implemented. On December 28, 2015, the Argentine Central Bank issued Communiqué “A” 5861 and Communiqué “A” 5864 which specifically abrogated both Communiqué “A” 4864 and Communiqué “A” 4882. In addition, on December 29, 2015, the CNV issued Resolution No. 651, by which it abrogated the prior CNV regulations that complemented the restrictions issued by Communiqué “A” 4864 and “A” 4882.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

On December 18, 2015, through Resolution No. 3/2015, the Ministry of Treasury and Public Finance amended Executive Decree No. 616/2005 as follows: (i) the Deposit percentage was reduced from 30% to 0% and (ii) the Minimum Stay Period was reduced from 365 days to 120 days. Resolution No. 1-E/2017 of the Ministry of Treasury further reduced such Minimum Stay Period to 0 days.

On August 8, 2016, the Argentine Central Bank issued Communiqué “A” 6037 (which was subsequently amended), through which it amended the regulations with respect to the income and outflow of funds from Argentina.

Inflation The high rate of economic growth in recent years, which has been fueled by Argentina’s full utilization of its installed productive capacity, along with expansive fiscal and monetary policies, has caused a high level of inflation in Argentina since 2007. According to INDEC data, the CPI grew 10.8% in 2012, 10.9% in 2013, 23.9% in 2014, 26.9% in 2015 and 41.1% in 2016; and the WPI increased 13.1% in 2012, 14.7% in 2013, 28.3% in 2014, 12.7% in 2015 and 34.6% in 2016. In the past, inflation has materially undermined the Argentine economy and the government’s ability to generate conditions that fostered economic growth. In addition, high inflation or a high level of volatility with respect to the same may materially and adversely affect the business volume of the financial system and prevent the growth of intermediation activity levels. This result, in turn, could adversely affect the level of economic activity and employment.

A high inflation rate also affects Argentina’s competitiveness abroad, real salaries, employment, consumption and interest rates. A high level of uncertainty with regard to these economic variables, and a general lack of stability in terms of inflation, could lead to shortened contractual terms and affect the ability to plan and make decisions. This may have a negative impact on economic activity and on the income of consumers and their purchasing power, all of which could materially and adversely affect Grupo Galicia’s financial position, results of operations and business.

In addition to the above, the accuracy of the measurements of the INDEC is in doubt, and the current actual consumer and wholesale price indices may be significantly higher than those indicated by INDEC. If a correction of the CPI and other INDEC indices is deemed necessary, this may lead to a marked loss of confidence in the Argentine economy. A new index with nationwide coverage (the Índice de Precios al Consumidor Nacional urbano or IPCNu), the methodology of which was developed with help from the IMF, was recently introduced to replace the previous CPI index used by the INDEC that only covered the Autonomous Citiy of Buenos Aires and its outskirts. It is still too early to analyze the accuracy of the IPCNu, but initial figures were close to figures received from private consultants, which too reflect higher levels of inflation. y. Allowance for loan losses Management believes that the current level of allowance for loan losses recorded for U.S. GAAP purposes are sufficient to cover incurred losses of the Group’s loan portfolio as of December 31, 2016. Many factors can affect the Group’s estimates of allowance for loan losses, including expected cash flows, volatility of default probability, migrations and estimated loss severity. The process of determining the level of the allowance for credit losses requires a high degree of judgment. It is possible that others, given the same information, may at any point in time reach different reasonable conclusions.

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos) z. U.S. GAAP estimates Valuation reserves, impairment charges and estimates of market values on assets and step up bonds discounting, as established by the Group for U.S. GAAP purposes are subject to significant assumptions of future cash flows and interest rates for discounting such cash flows. Losses on the exchange of government and provincial bonds and on retained interests in securitization trusts could be significantly affected by higher discount rates. Should the discount rates change in future years, the carrying amounts and charges to income and shareholders´ equity will also change. In addition, as estimates of future cash flows change, the carrying amounts which are dependent on such cash flows could be affected as well. It is possible that changes to the carrying amounts of loans, investments and other assets will be adjusted in the near term in amounts that are material to the Group´s financial position and results of income.

35. Parent only Financial Statements The following are the unconsolidated balance sheets of Grupo Galicia as of December 31, 2016 and 2015 and the related unconsolidated statements of income, and cash flows for the fiscal years ended December 31, 2016, 2015 and 2014.

Balance sheet (Parent Company only)

December 31, 2016 2015 ASSETS A. Cash and due from Banks Cash Ps.20 Ps.14 Financial institutions and correspondents 300 785 Ps.320 Ps.799 B. Government and corporate securities Securities issued by the Argentine Central Bank 138,547 — Ps.138,547 — C. Loans To the financial sector — 151,591 Ps.— Ps.151,591 D. Other receivables resulting from financial brokerage Other receivables not included in the debtor classification Regulations 18,854 9,905 Other receivables included in the debtor classification Regulations 5,578 12,208 Ps.24,432 Ps.22,113 E. Equity investments In financial institutions 19,411,422 14,101,202 Other 1,133,269 713,620 Ps.20,544,691 Ps.14,814,822 F. Miscellaneous receivables Other 192,334 157,504 Allowances (153,042 ) (117,282 ) Ps.39,292 Ps.40,222 G. Bank premises and equipment — 167 H. Intangible assets Goodwill 5,642 15,316 Organization and development expenses — 49 Ps.5,642 Ps.15,365 Total Assets Ps.20,752,924 Ps.15,045,079

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 LIABILITIES AND SHAREHOLDERS’ EQUITY H. Other liabilities resulting from financial brokerage Unsubordinated negotiable obligations Ps.348,045 Ps.488,200 Accrued interest and quotation differences payable 15,911 24,368 363,956 512,568 I. Miscellaneous liabilities Other 36,270 47,690 36,270 47,690 Total Liabilities Ps.400,226 Ps.560,258 SHAREHOLDERS’ EQUITY Ps.20,352,698 Ps.14,484,821 Total Liabilities and Shareholders’ Equity Ps.20,752,924 Ps.15,045,079

Statement of Income (Parent Company only)

December 31, 2016 2015 2014 A. Financial income Interest on loans granted to the financial sector — 27 11 Interest on other receivables resulting from financial brokerage 22 — 25 Net income from government and corporate securities 20,988 2,778 12,085 Exchange rate differences on gold and foreign currency 20,939 53,184 23,677 Ps.41,949 Ps.55,989 Ps.35,798 B, Financial expenses Interest on other liabilities resulting from financial brokerage Ps.118,149 Ps.116,276 Ps.109,110 Exchange rate differences on gold and foreign currency — — Interests on Other Loans from Financial Institutions 464 — 1 Net income from government and corporate securities — — — Other 1,262 995 1,219 Ps.119,875 Ps.117,271 Ps.110,330 C. Gross brokerage margin (77,926 ) (61,282 ) (74,532 ) F, Administrative expenses Personnel expenses 10,826 6,376 7,200 Directors’ and syndics’ fees 21,035 4,652 1,746 Other fees 10,859 7,289 5,981 Taxes 9,915 4,978 7,854 Other operating expenses 499 527 785 Other 3,650 2,136 2,663 Ps.56,784 Ps.25,958 Ps.26,229 Net Income from financial brokerage Ps.(134,710 ) Ps.(87,240 ) Ps.(100,761 ) H. Miscellaneous income Net income from equity investments 6,154,769 4,437,228 3,441,413 Other 10,665 42 6,108 Ps.6,165,434 Ps.4,437,270 Ps.3,447,521 I. Miscellaneous losses Other 12,847 11,633 8,970 Ps.12,847 Ps.11,633 Ps.8,970

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Net Income before tax 6,017,877 4,338,397 3,337,790 J. Income tax Ps.— Ps.— Ps.— Net income for the fiscal year Ps.6,017,877 Ps.4,338,397 Ps.3,337,790

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Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

Statement of cash flows (Parent Company only)

December 31, 2016 2015 2014 CHANGES IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the year 22,912 10,188 10,743 Cash and cash equivalents at the end of the year 163,299 22,912 10,188 Net increase / (decrease) in cash and cash equivalents Ps.140,387 Ps.12,724 Ps.(555 ) Causes of changes in cash and cash equivalents Cash Flow from operating activities Collections for Service 3,258 — 4,203 Payments to Suppliers of Goods and Services (37,686 ) (17,860 ) (18,027 ) Personnel Salaries and Social Security Contributions (8,040 ) (4,908 ) (7,553 ) Payments of Other Taxes (18,111 ) (9,225 ) (27,912 ) Collections for Other Net Operating Activities 7,633 8,465 22,188 Net cash used in operating activities Ps.(52,946 ) Ps.(23,528 ) Ps.(27,101 ) Cash Flow from investing activities Collections for Sales of Fixed Assets 210 — 5,389 Investments Collections 152,705 — — Collection of Dividends 430,810 189,589 127,750 Payments for Equity Investments — — (88,857 ) Net cash provided by investing activities Ps.583,725 Ps.189,589 Ps.44,282 Cash Flow from financing activities Payments of Interest, Net (100,237) (99,177 ) (89,078 ) Collection of Loans Received, Net — 45,840 109,937 Financing Payment (140,155) — — Distribution of Dividends (150,000) (100,000) (38,595 ) Cash Flow used in financing activities Ps.(390,392) Ps.(153,337) Ps.(17,736 ) Net increase / (decrease) in cash and cash equivalents Ps.140,387 Ps.12,724 Ps.(555 )

The accompanying condensed financial statements have been prepared in accordance with Argentine Banking GAAP. Certain information and footnote disclosures normally included in financial statements prepared in accordance with Argentine Banking GAAP have been condensed or omitted. The Company’s majority-owned subsidiaries are recorded using the equity method of accounting. The footnotes’ disclosures contain supplemental information relating to the operations of Grupo Galicia; as such, these financial statements should be read in conjunction with the notes to the consolidated financial statements of the Company.

Regarding the Statement of cash flows, Cash and cash equivalents include cash and due from banks and investments and receivables held with the purpose of complying with the short-term commitments undertaken, with a high level of liquidity, easily converted into known amounts of cash, subject to insignificant risks of changes in value and with a maturity less than three months from the date of the acquisition thereof. The breakdown is as follows:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents Grupo Financiero Galicia S.A. and Subsidiaries

Notes to the Consolidated Financial Statements For the years ended December 31, 2016, 2015 and 2014 (Expressed in thousands of Argentine pesos)

December 31, 2016 2015 2014 Cash and Due from Banks 320 799 565 Investments 162,979 22,113 9,623 Cash and Cash Equivalents 163,299 22,912 10,188

F-108

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 2.4

Execution Version

BANCO DE GALICIA Y BUENOS AIRES, S.A. as Issuer,

THE BANK OF NEW YORK MELLON as Trustee, Co-Registrar, Principal Paying Agent and Principal Transfer Agent

and BANCO DE VALORES S.A. as Representative of the Trustee in Argentina

and

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A. as Luxembourg Paying Agent and Transfer Agent

INDENTURE

Dated as of July 19, 2016

SUBORDINATED RESETTABLE NOTES CLASS II DUE 2026

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document TABLE OF CONTENTS

Page ARTICLE I GENERAL Section 1.1 Definitions 2 Section 1.2 Rules of Construction 15 Section 1.3 Agents 16 ARTICLE II THE NOTES Section 2.1 Form and Dating 18 Section 2.2 Execution and Authentication 18 Section 2.3 Registrars, Transfer Agents and Paying Agent 19 Section 2.4 Paying Agent to Hold Money in Trust 21 Section 2.5 CUSIP and ISIN Numbers 22 Section 2.6 Holder Lists 22 Section 2.7 Global Note Provisions 22 Section 2.8 Legends 23 Section 2.9 Transfer and Exchange 24 Section 2.10 Mutilated, Destroyed, Lost or Stolen Notes 27 Section 2.11 Temporary Notes 28 Section 2.12 Cancellation 28 Section 2.13 Defaulted Interest 28 Section 2.14 Additional Notes 29 ARTICLE III COVENANTS Section 3.1 Payment of Notes 30 Section 3.2 Maintenance of Office or Agency 31 Section 3.3 Maintenance of Corporate Existence; Properties 31 Section 3.4 Compliance with Law 31 Section 3.5 Maintenance of Books and Records 32 Section 3.6 Payment of Taxes 32 Section 3.7 Further Actions 32 Section 3.8 Waiver of Stay, Extension or Usury Laws 32

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Page Section 3.9 Write-off Event 32 Section 3.10 Reports to Holders 33 Section 3.11 Listing and Trading 34 Section 3.12 Additional Amounts 35 Section 3.13 Use of Proceeds 37 Section 3.14 Compliance Certificates 37 ARTICLE IV MERGERS, CONSOLIDATIONS, SALES, LEASES Section 4.1 Mergers, Consolidations, Sales, Leases 37 ARTICLE V REDEMPTION AND REPURCHASES OF NOTES Section 5.1 Redemption 38 Section 5.2 Election to Redeem 38 Section 5.3 Notice of Redemption 38 Section 5.4 Deposit of Redemption Price 39 Section 5.5 Notes Payable on Redemption Date 39 Section 5.6 Repurchases; Notes held by the Issuer and/or Affiliates 39 ARTICLE VI DEFAULTS AND REMEDIES Section 6.1 Events of Default 40 Section 6.2 Acceleration 40 Section 6.3 Other Remedies 40 Section 6.4 Loss Absorption 40 Section 6.5 Control by Majority 42 Section 6.6 Limitation on Suits 43 Section 6.7 Rights of Holders to Receive Payment 43 Section 6.8 Collection Suit by Trustee 43 Section 6.9 Trustee May File Proofs of Claim, etc. 44 Section 6.10 Priorities 44 Section 6.11 Undertaking for Costs 45 Section 6.12 Subordination During Acceleration Event 45

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Page ARTICLE VII TRUSTEE Section 7.1 Duties of Trustee 45 Section 7.2 Rights of Trustee 47 Section 7.3 Individual Rights of Trustee 49 Section 7.4 Trustee’s Disclaimer 49 Section 7.5 Notice of Defaults 49 Section 7.6 Report to Trustee 49 Section 7.7 Compensation and Indemnity 49 Section 7.8 Replacement of Trustee 50 Section 7.9 Successor Trustee by Merger 51 Section 7.10 Eligibility 51 Section 7.11 The Trustee’s Representative in Argentina 51 Section 7.12 Agent 52 ARTICLE VIII DEFEASANCE; DISCHARGE OF INDENTURE Section 8.1 Legal Defeasance and Covenant Defeasance 53 Section 8.2 Conditions to Defeasance 54 Section 8.3 Application of Trust Money 55 Section 8.4 Repayment to Issuer 55 Section 8.5 Indemnity for U.S. Government Obligations 55 Section 8.6 Reinstatement 55 Section 8.7 Satisfaction and Discharge 56 ARTICLE IX AMENDMENTS Section 9.1 Without Consent of Holders 57 Section 9.2 With Consent of Holders 58 Section 9.3 Revocation and Effect of Consents and Waivers 58 Section 9.4 Notation on or Exchange of Notes 59 Section 9.5 Trustee to Sign Amendments and Supplements 59 Section 9.6 Evidence of Action Taken by Holders 59

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document TABLE OF CONTENTS (continued)

Page Section 9.7 Holders to be Treated as Owners 59 Section 9.8 Noteholders Meeting; Consent 60 ARTICLE X RANKING OF THE NOTES Section 10.1 Agreement that Notes are Unsecured and Parity Obligations 62 Section 10.2 Default on Senior Obligations 62 Section 10.3 Liquidation, Dissolution, Insolvency, Bankruptcy 62 Section 10.4 Subrogation 64 Section 10.5 Trustee to Effectuate Ranking 64 Section 10.6 Notices by the Issuer to the Trustee 64 Section 10.7 Rights of the Trustee; Holders of Senior Obligations 65 Section 10.8 Ranking May Not be Impaired 66 ARTICLE XI MISCELLANEOUS Section 11.1 Notices 66 Section 11.2 Certificate and Opinion as to Conditions Precedent 68 Section 11.3 Statements Required in Officers’ Certificate or Opinion of Counsel 68 Section 11.4 Rules by Trustee and Agents 69 Section 11.5 Legal Holidays 69 Section 11.6 Governing Law, etc. 69 Section 11.7 No Recourse Against Others 70 Section 11.8 Provisions of Indenture for the Sole Benefit of Parties and Holders 71 Section 11.9 Successors 71 Section 11.10 Duplicate and Counterpart Originals 71 Section 11.11 Severability 71 Section 11.12 Currency Indemnity 71 Section 11.13 USA Patriot Act 72 Section 11.14 Table of Contents; Headings 72

iv

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT A Form of Note EXHIBIT B Form of Certificate for Transfer to QIB EXHIBIT C Form of Certificate for Transfer Pursuant to Regulation S EXHIBIT D Form of Certificate for Transfer Pursuant to Rule 144 SCHEDULE A Projected Payment Schedule

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document INDENTURE, dated as of July 19, 2016, among Banco de Galicia y Buenos Aires S.A., a sociedad anónima organized and existing under the laws of Argentina with legal domicile at Perón 407, 22nd Floor (C1038AAI), Buenos Aires, Argentina, incorporated on September 28, 1905 with a duration until 2100 and registered with the Public Registry of Commerce of the City of Buenos Aires on November 21, 1995 under number 4, File 32, Book 20A, of “Corporations” (the “Issuer”), The Bank of New York Mellon, as trustee (the “Trustee”), co-registrar (in such capacity, the “Co-Registrar”), paying agent (in such capacity, the “Principal Paying Agent”) and transfer agent (in such capacity, the “ Principal Transfer Agent”), Banco de Valores S.A., as the Trustee’s representative in Argentina (in such capacity, the “Trustee’s Representative in Argentina”), and The Bank of New York Mellon (Luxembourg) S.A., a corporation (société anonyme) organized under the laws of Luxembourg, as Luxembourg paying agent (in such capacity, the “ Luxembourg Paying Agent”) and Luxembourg transfer agent (in such capacity, the “Luxembourg Transfer Agent”).

W I T N E S S E T H :

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication and delivery and administration of its Notes (as defined herein), pursuant to the Issuer’s Global Short-Term, Medium- Term and/or Long-Term Notes Program for a maximum outstanding amount of U.S.$600 million (as amended, the “Program”);

WHEREAS, the Issuer, pursuant to resolutions of its shareholders’ dated November 4, 2005, authorized the creation of the Program with an initial maximum outstanding amount of U.S.$342.5 million, which Program was extended in 2010 and 2015, and the maximum outstanding amount of which Program was increased to U.S.$600 million pursuant to a shareholders’ meeting held on April 26, 2016;

WHEREAS, the Issuer, pursuant to a meeting of its Board of Directors held on May 24, 2016, approved the terms and conditions of the Program;

WHEREAS, the Issuer, pursuant to resolutions of its Board of Directors dated June 23, 2016, has fully authorized the issuance of up to U.S.$300 million of its Notes, substantially in the form hereinafter set forth;

WHEREAS, the Program was authorized by the Argentine Comisión Nacional de Valores (“CNV”) by its Resolution No. 15,228, dated November 4, 2005 and the extensions of the Program were authorized by the CNV pursuant to its Resolution No. 16,454, dated November 11, 2010 and its Resolution No. 17,833, dated November 20, 2015 and the maximum outstanding amount of the Program was increased pursuant to CNV Resolution No. 18,081, dated June 10, 2016;

WHEREAS, the Notes will qualify as “obligaciones negociables no convertibles en acciones” under Argentine Law Nº 23,576, as amended (the “Negotiable Obligations Law”), and Resolution 662 of the CNV;

WHEREAS, the main corporate purpose of the Issuer consists of the performance of authorized operations and transactions within the banking and financial sectors;

1

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document WHEREAS, the capital stock and the shareholders’ equity of the Issuer, as of March 31, 2016, was Ps. 562.33 million and Ps. 15 billion, respectively, in accordance with Argentine Banking GAAP (as defined below);

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Notes issued on and after the date hereof;

WHEREAS, the Trustee has agreed to act as Trustee under this Indenture on the following terms and conditions; and

WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done.

Each party agrees as follows for the benefit of the other parties and of the Holders of the Notes:

ARTICLE I

GENERAL

Section 1.1 Definitions. “Absorption Amount” means the amount of principal and/or accrued and unpaid interest on the Notes which is required to be permanently reduced as determined by the Issuer in compliance with applicable regulations of the Central Bank and ratified by the Central Bank.

“Acceleration Event” has the meaning set forth in Section 6.1. “Additional Amounts” has the meaning set forth under Section 3.12.

“Additional Note Board Resolutions” means resolutions duly adopted by the Board of Directors of the Issuer and delivered to the Trustee in an Officers’ Certificate providing for the issuance of Additional Notes.

“Additional Note Supplemental Indenture” means a supplement to this Indenture duly executed and delivered by the Issuer and the Trustee pursuant to Section 9.1 providing for the issuance of Additional Notes.

“Additional Notes” means any Subordinated Resettable Notes Class II due 2026 of the Issuer originally issued after the Closing Date pursuant to Section 2.14 as specified in the relevant Additional Note Board Resolutions or Additional Note Supplemental Indenture issued therefor in accordance with this Indenture.

“Affiliates” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or

2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“AFIP” means the Argentine Administración Federal de Ingresos Públicos.

“Agent” means any of the Paying Agents, the Registrars, the Transfer Agents, the Trustee’s Representative in Argentina, the Authenticating Agent or any other agent employed to act hereunder.

“Agent Members” has the meaning assigned to it in Section 2.7(b).

“Applicable Tax Law” has the meaning assigned to it in Section 3.1(c).

“Argentina” means the Republic of Argentina.

“Argentine Banking GAAP” means generally accepted accounting principles as prescribed by the SEFC for banks licensed to operate in Argentina, consistently applied, which are in effect from time to time.

“Argentine Banking Law” means Argentine Law No. 21,526, as amended and supplemented.

“Argentine Bankruptcy Law” means Argentine Law No. 24,522, as amended.

“Argentine Governmental Authority” means the government of Argentina or any political subdivision thereof, whether federal, state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers, or functions of or pertaining to a government with jurisdiction, over the Issuer.

“Argentine Paying Agent” means any person authorized by the Issuer to act as paying agent in Argentina, acting in such capacity, in accordance with the terms hereof, to the extent that a Certificated Note is provided to the Argentine Paying Agent for payment in Argentina by a Holder resident in Argentina.

“Argentine Registrar” means any person authorized by the Issuer to act as registrar in Argentina, acting in such capacity, in accordance with the terms hereof, to the extent that a Certificated Note is provided to the Argentine Registar for registration in Argentina by a Holder resident in Argentina.

“Argentine Transfer Agent” means any person authorized by the Issuer to act as transfer agent in Argentina, acting in such capacity, in accordance with the terms hereof, to the extent that a Certificated Note is provided to the Argentine Transfer Agent for transfer in Argentina by a Holder resident in Argentina.

“Authenticating Agent” has the meaning assigned to it in Section 2.2(e).

“Authorized Agent” has the meaning assigned to it in Section 11.6(d).

3

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Authorized Officer” means any officer, Director or attorney-in-fact of the Issuer or any Subsidiary, as applicable, as may be duly authorized to take actions under this Indenture and notified to the Trustee in writing by the Issuer or such Subsidiary, as applicable.

“Bail-in Legislation” has the meaning assigned to in Section 2.3(d).

“Bail-in Powers” has the meaning assigned to in Section 2.3(d).

“Bankruptcy Law” means Title 11, U.S. Code, the Financial Institutions Law, the Argentine Bankruptcy Law or any similar U.S. federal or state law or non-U.S. law for the relief of debtors.

“Bankruptcy Order” means any court order made in a proceeding pursuant to or within the meaning of any Bankruptcy Law, containing an adjudication of bankruptcy or insolvency, or providing for liquidation, receivership, winding-up, dissolution, suspension of payments, reorganization or similar proceedings, or appointing a custodian of a debtor or of all or any substantial part of a debtor’s property, or providing for the staying, arrangement, adjustment or composition of indebtedness or other relief of a debtor.

“BASE” means the Buenos Aires Stock Exchange.

“Benchmark Reset Rate” means (i) the rate per annum corresponding to the semi-annual equivalent yield to maturity, under the heading that represents the average for the week immediately prior to the Reset Date, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication that is published weekly by the U.S. Federal Reserve and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities”, for the 5-year U.S. Treasury Bond or (ii) if such release (or any successor release) is not published during the week preceding the Reset Date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the 5-year U.S. Treasury Bond, calculated by the Independent Investment Banker using a price for the 5-year U.S. Treasury Bond (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Reset Date. The Benchmark Reset Rate will be determined by the Independent Investment Banker at 3:30 p.m. (New York time) on the Reset Date and notified to the Issuer promptly.

“Board of Directors” means, with respect to any Person, the board of directors of such Person or any committee thereof duly authorized to act on behalf of the board of directors of such Person, or similar governing body of such Person, including any managing partner or similar entity of such Person.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“BRRD” has the meaning assigned to it in Section 2.3(d).

“BRRD Liability” has the meaning assigned to it in Section 2.3(d).

4

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Business Day” means a day other than a Saturday, Sunday or any day on which banking institutions are authorized or required by law to close in New York City, United States or the Autonomous City of Buenos Aires, Argentina.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock and partnership interests, but excluding any debt securities convertible into such equity.

“Central Bank” means the Banco Central de la República Argentina, the Argentine Central Bank.

“Central Bank Rules” means the accounting rules of the Central Bank as in effect from time to time.

“Certificated Note” means any Note issued in fully-registered certificated form (other than a Global Note), which shall be substantially in the form of Exhibit A, with appropriate legends as specified in Section 2.8 and Exhibit A.

“Closing Date” means the date of this Indenture (being the original issue date of Initial Notes hereunder).

“CNV” means the Argentine Comisión Nacional de Valores.

“Co-Registrar” means the party named as such in the recitals to this Indenture, acting as co-registrar for the Notes.

“Code” has the meaning given to it in Section 3.1(d).

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of the Notes.

“Comparable Treasury Price” means, with respect to the Reset Date (1) the average of the Reference Treasury Dealer Quotations for the Reset Date, after excluding the highest and lowest such Reference Treasury Dealer Quotation or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“Corporate Trust Office” means, with respect to the Trustee, the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is located on the date hereof at The Bank of New York Mellon, 101 Barclay Street, Floor 7E, New York, New York 10286, Attention: Global Finance Unit.

“Covenant Defeasance” has the meaning assigned to it in Section 8.1(c).

5

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “ Default” means any event that is an Event of Default or which, after notice or passage of time or both, would be an Event of Default.

“ Defaulted Interest” has the meaning assigned to it in paragraph 1 of the Form of Reverse Side of Note contained in Exhibit A.

“Director” means any duly elected member of the Board of Directors of the Issuer as certified in an Officers’ Certificate of the Issuer and delivered to the Trustee.

“Distribution Compliance Period” means, with respect to any Regulation S Global Note, the 40 consecutive days beginning on and including the later of (a) the day on which any Notes represented thereby are offered to persons other than distributors (as defined in Regulation S under the Securities Act) pursuant to Regulation S and (b) the issue date for such Notes as notified by the Issuer to the Trustee.

“DTC” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depositary institution hereinafter appointed by the Issuer that is a clearing agency registered under the Exchange Act.

“Event of Default” has the meaning assigned to it in Section 6.1.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

“Extraordinary Meetings” has the meaning assigned to it in Section 9.8(c).

“Financial Institutions Law” means Argentine Law Nº 21,526, as amended.

“Global Note” means any Note issued in fully-registered certificated form to DTC (or its nominee), as depositary for the beneficial owners thereof, which shall be substantially in the form of Exhibit A, with appropriate legends as specified in Section 2.8 and Exhibit A.

“Government Agency” means any public legal entity or public agency, created by federal, national, provincial or municipal government, or any other legal entity now existing or hereafter created, or now or hereafter owned or controlled, directly or indirectly, by any public legal entity or public agency, including any central bank.

“Holder” means the Person in whose name a Note is registered on the Note register maintained by the Co-Registrar.

“IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board.

“Indenture” means this Indenture, as amended or supplemented from time to time, including the Exhibits hereto, and any supplemental indenture hereto.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

6

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Initial Notes” means any of the Issuer’s Subordinated Resettable Notes Class II due 2026 issued on the Closing Date, and any replacement Notes in respect thereof issued thereafter in accordance with this Indenture. “Insolvency or Liquidation Proceeding” means: (1) the Issuer, pursuant to or under or within the meaning of any Bankruptcy Law: (a) commences a voluntary case or proceeding; (b) consents to the making of a Bankruptcy Order in an involuntary case or proceeding or consents to the commencement of any case against it (or them); (c) consents to the appointment of a custodian, receiver, liquidator, assignee, trustee or similar official of it (or them) or for all or any substantial part of its property; (d) makes a general assignment for the benefit of its (or their) creditors; (e) files an answer or consent seeking reorganization or relief; (f) admits in writing its inability to pay its (or their) debts generally when due; or (g) consents to the filing of a petition in bankruptcy; (2) a court of competent jurisdiction in any involuntary case or proceeding enters a Bankruptcy Order against the Issuer or of all or any substantial part of the property of the Issuer, and such Bankruptcy Order remains unstayed and in effect for 60 consecutive days; (3) a custodian, receiver, liquidator, assignee, trustee or similar official is appointed out of court with respect to the Issuer, or with respect to all or any substantial part of the assets or properties of the Issuer; or (4) the Central Bank (a) initiates a proceeding under Article 34, 35 or 35 bis of the Financial Institutions Law, requesting the Issuer or any of its Significant Subsidiaries to submit a plan under such Article; or (b) orders a temporary, total or partial suspension of the activities of the Issuer or any of its Significant Subsidiaries pursuant to Article 49 of the charter of the Central Bank.

7

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Interest Payment Date” means the stated due date of an installment of interest on the Notes as specified in the Form of Face of Note contained in Exhibit A.

“Issuer” means the party named as such in the recitals to this Indenture and its successors and assigns, including any Successor Person.

“Issuer Order” means a company order executed by two Authorized Officers requesting authentication of Notes setting forth instructions as to delivery.

“Junior Obligations” means (i) all instruments of, guarantees by or other obligations of the Issuer that are in each case eligible to be computed as part of the Issuer’s Tier I Regulatory Capital, as applicable; (ii) all classes of the Issuer’s Capital Stock and (iii) any other securities or obligations of the Issuer’s which rank pari passu with any class of the Issuer’s Capital Stock with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding up.

“Legal Defeasance” has the meaning assigned to it in Section 8.1(b).

“Luxembourg” means the Grand Duchy of Luxembourg.

“ Luxembourg Paying Agent” means any Person authorized by the Issuer to repay the principal of, or interest on, any Notes in Luxembourg in accordance with the terms hereof and shall initially be The Bank of New York Mellon (Luxembourg) S.A.

“Luxembourg Transfer Agent” means any person authorized by the Issuer to act as transfer agent in Luxembourg in accordance with the terms hereof and shall initially be The Bank of New York Mellon (Luxembourg) S.A.

“MAE” means Mercado Abierto Electrónico.

“Maturity Date” means, when used with respect to any Note, the date on which the principal of such Note becomes due and payable as therein or herein provided, whether at Stated Maturity or by declaration of acceleration, call for redemption, exercise of the repurchase right or otherwise.

“Negotiable Obligations Law” has the meaning assigned to it in the recitals to this Indenture.

“Non-U.S. Person” means a person who is not a U.S. person, as defined in Regulation S.

“ Note Custodian” means the custodian with respect to any Global Note appointed by DTC, or any successor thereto, and shall initially be the Trustee.

“Notes” means, collectively, the Initial Notes and any Additional Notes issued under this Indenture.

“OID Legend” has the meaning assigned to it in Section 2.8(c).

8

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Offering Memorandum” means the Issuer’s offering memorandum dated July 14, 2016 used in connection with the Original Offering of Notes.

“Officers’ Certificate” means, when used in connection with any action to be taken by the Issuer or any Subsidiary thereof, a certificate signed by two Authorized Officers of the Issuer or such Subsidiary, as the case may be, and delivered to the Trustee.

“Opinion of Counsel” means a written opinion of counsel, who may be an employee of or counsel for the Issuer (except as otherwise provided in this Indenture), obtained at the expense of the Issuer or any Successor Person, and delivered to the Trustee. “Ordinary Meetings” has the meaning assigned to it in Section 9.8(c).

“Original Offering of Notes” means the original private offering of the Initial Notes outside of Argentina and the public offering of the Notes in Argentina, which were issued on the Closing Date.

“Outstanding” means, as to any Notes as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except: (1) Notes theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (2) Notes, or portions thereof, for the payment or redemption of, which money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer or an Affiliate of the Issuer) in trust or set aside and segregated in trust by the Issuer or an Affiliate of the Issuer (if the Issuer or such Affiliate of the Issuer is acting as Paying Agent) for the Holders of such Notes; provided that if Notes (or portions thereof) are to be redeemed or purchased, notice of such redemption or purchase has been duly given pursuant to this Indenture or provision therefor reasonably satisfactory to the Trustee has been made; (3) Notes which have been surrendered pursuant to Section 2.10 or in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Notes are held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code of the State of New York) in whose hands such Notes are valid obligations of the Issuer; and (4) solely to the extent provided in ARTICLE VIII, Notes which are subject to Legal Defeasance or Covenant Defeasance as provided in ARTICLE VIII; provided, however, that in determining whether the Holders of the requisite aggregate principal amount of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Issuer or any other obligor under the Notes or any Affiliate of the Issuer or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes

9

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document which a Trust Officer of the Trustee actually knows to be so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer or any other obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

“Parity Obligations” means (i) all securities or other subordinated obligations of the Issuer which qualify as Tier II Regulatory Capital of the Issuer and (ii) any other securities or obligations of the Issuer which rank (pursuant to mandatory provisions of law or otherwise) or are expressed to rank, pari passu with the Issuer’s obligations under the Notes.

“Paying Agent” means the Luxembourg Paying Agent, the Principal Paying Agent, the Argentine Paying Agent and any other paying agent appointed by the Issuer to act in such capacity in accordance with the terms hereof and their respective successors.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Pesos” / “Ps.” means Argentine Pesos.

“Post-Petition Interest” means all interest accrued or accruing after the commencement of any insolvency or liquidation proceeding (and interest that would accrue but for the commencement of any insolvency or liquidation proceeding) in accordance with and at the contract rate (including, without limitation, any rate applicable upon default) specified in the agreement or instrument creating, evidencing or governing any indebtedness, whether or not, pursuant to applicable law or otherwise, the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.

“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“Principal/Interest Permanent Reduction” means the permanent reduction of the principal amount of the Notes plus accrued and unpaid interest by an amount equal to the Absorption Amount in connection with a Write-off Event.

“Principal Paying Agent” means the party named as such in the preamble to this Indenture until a successor replaces it in accordance with the terms of this Indenture and, thereafter, means the successor.

“ Principal Transfer Agent” means the party named as such in the preamble to this Indenture until a successor replaces it in accordance with the terms of this Indenture and, thereafter, means the successor.

“Private Placement Legend” has the meaning assigned to it in Section 2.8(b).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Program” has the meaning assigned to it in the recitals to this Indenture.

“QIB” means any “qualified institutional buyer” (as defined in Rule 144A).

“Record Date” has the meaning assigned to it in the Form of Face of Note contained in Exhibit A.

“Redemption Date” means, with respect to any redemption of Notes, the date fixed for such redemption pursuant to this Indenture and the Notes.

“Reduction Date” means the date on which the Issuer shall have caused the Principal/Interest Permanent Reduction.

“Reference Treasury Dealer” means Deutsche Bank Securities Inc., J.P. Morgan Securities LLC or their respective affiliates which are primary United States government securities dealers, and not less than two other leading primary United States government securities dealers in New York City reasonably designated by the Issuer; provided, however, that if any of the foregoing shall cease to be a primary United States government securities dealer in the United States of America (a “Primary Treasury Dealer”), the Issuer will substitute therefor another Primary Treasury Dealer.

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and the Reset Date, the average, as determined by the Independent Investment Banker, of the bid and asked price for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m. (New York time) on the third Business Day preceding the Reset Date.

“Register” has the meaning assigned to it in Section 2.3(a).

“Registrar” means the Co- Registrar, the Argentine Registrar and any other registrar appointed by the Issuer to act in such capacity in accordance with the terms hereof and their respective successors.

“Regulation S” means Regulation S under the Securities Act or any successor regulation.

“Regulation S Global Note” has the meaning assigned to it in Section 2.1(f).

“Relevant Date” means, with respect to any payment due from the Issuer, whichever is the later of (i) the date on which such payment first becomes due and (ii) if the full amount payable has not been received in New York City, New York by the Trustee on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Holders in accordance with this Indenture.

“Relevant Jurisdiction” has the meaning set forth in Section 3.12.

“Relevant Taxes” has the meaning set forth in Section 3.12.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Relevant Resolution Authority” has the meaning assigned to in Section 2.3(d).

“Resale Restriction Termination Date” means, for any Rule 144A Global Note (or beneficial interest therein), one year (or such other period specified in Rule 144) from the Closing Date or, if any Additional Notes that are Rule 144A Global Notes have been issued before the Resale Restriction Termination Date for any Rule 144A Global Notes, from the latest such original issue date of such Additional Notes, as notified by the Issuer to the Trustee.

“Reset Date” means July 19, 2021, the date that is five years from the Closing Date.

“Restricted Note” means any Initial Note (or beneficial interest therein) or any Additional Note (or beneficial interest therein), until such time as: (1) such Note is a Rule 144A Global Note and the Resale Restriction Termination Date therefor has passed; (2) such Note is a Regulation S Global Note and the Distribution Compliance Period therefor has terminated; or (3) the Private Placement Legend therefor has otherwise been removed pursuant to Section 2.9(d) or, in the case of a beneficial interest in a Global Note, such beneficial interest has been exchanged for an interest in a Global Note not bearing or required to bear a Private Placement Legend.

“RPC” means computable capital or responsibilidad patrimonial computable, calculated in accordance with the Central Bank’s norms and regulations.

“Rule 144” means Rule 144 under the Securities Act (or any successor rule).

“Rule 144A” means Rule 144A under the Securities Act (or any successor rule).

“Rule 144A Global Note” has the meaning assigned to it in Section 2.1(e).

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “SEFC” means Superintendency of Financial and Foreign Exchange Institutions (Superintendencia de Entidades Financieras y Cambiarias) of the Central Bank.

“Senior Obligations” means (a) all claims of the Issuer’s unsubordinated creditors and other claims and obligations that rank senior in right of payment under mandatory provisions of Argentinean law, including all labor claims of the Issuer’s employees, all claims of the Issuer’s depositors and all claims of the Argentinean social security administration for healthcare obligations and claims for taxes, or otherwise; and (b) all claims of all of the Issuer’s other creditors, except those whose claims rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of Parity Obligations.

“Significant Subsidiary” means, at any relevant time, any of the Issuer’s subsidiaries which is a “significant subsidiary” of the Issuer within the meaning of Rule 1-02 of Regulation S-X promulgated by the SEC.

“Special Record Date” has the meaning assigned to it in Section 2.13(a).

“SSGD” means Sistema de Seguro de Garantía de los Depósitos, created by Argentine Law No. 24,485.

“Stated Maturity” means, with respect to any indebtedness, the date specified in such indebtedness as the fixed date on which the final payment of principal of such indebtedness is due and payable, including, with respect to any principal amount which is then due and payable pursuant to any mandatory redemption provision, the date specified for the payment thereof (but excluding any provision providing for the repurchase of any such indebtedness upon the happening of any contingency unless such contingency has occurred).

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity: (1) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held; or (2) that is, as of such date, otherwise controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Successor Person” has the meaning set forth under Section 4.1(b).

“Supervisory Committee” means the comisión fiscalizadora of the Issuer.

“Tier I Regulatory Capital” means (a) Common Tier I Capital (“COn1”) (minus certain deductible items); plus (b) the Additional Tier I Capital (“CAn1”) (minus certain deductible items) as defined by Communication “A” 5580 of the Central Bank, as amended. “COn1” includes the following net worth items: (i) Capital Stock (excluding Preferred Stock), (ii) non-capitalized capital contributions (excluding share premium), (iii) adjustments to shareholders’ equity, (iv) earnings reserves

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (excluding the special reserve for debt instruments), (v) unappropriated earnings, (vi) other results either positive or negative, in the terms included in Section 8.2.1.6 of Communication “A” 5580 of the Central Bank, as amended, (vii) share premiums of the instruments included in COn1, and, in the case of consolidated entities and (viii) minority shareholdings (common shares issued by subsidiaries subject to consolidated supervision and belonging to third parties, if certain criteria are met). “CAn1” includes certain instruments of financial entities not included under COn1 that meet the regulatory criteria established in Section 8.3.2 of Communication “A” 5580 of the Central Bank, as amended, and share premiums resulting from instruments included in CAn1. Furthermore, in the case of consolidated entities, it includes instruments issued by subsidiaries subject to consolidated supervision and belonging to third parties, pursuant to applicable regulatory requirements. The above- mentioned items will be considered subtracting certain deductions pursuant to Sections 8.4.1 and 8.4.2 (as applicable) of Communication “A” 5580 of the Central Bank, as amended.

“Tier II Regulatory Capital” means the supplementary capital, including (i) instruments issued by a financial institution (which are not included in Tier I Regulatory Capital) when certain requirements set forth in Sections 8.3.3 and 8.3.4 of Communication “A” 5580 of the Central Bank, as amended, are met, plus (ii) share premiums which are not included in Tier I Regulatory Capital, plus (iii) the provisions required by the Central Bank for loan losses on portfolio customers in “normal status” (situación normal) and those which are guaranteed by preferred “A” guarantees (without exceeding 1.25% of the assets considered in relation to the credit risk evaluation), plus (iv) instruments issued by subsidiaries and held by third parties which are not included in Tier I Regulatory Capital and which comply with the conditions to be considered as Tier II Regulatory Capital, and are not included in Tier I Regulatory Capital when certain additional requirements included in Section 8.3.5 of Communication “A” 5580 of the Central Bank, as amended, are met; minus certain deductible items.

“Transfer Agent” means the Luxembourg Transfer Agent, the Principal Transfer Agent, the Argentine Transfer Agent and any other transfer agent appointed by the Issuer to act in such capacity in accordance with the terms hereof and their respective successors.

“Transparency Directive” has the meaning assigned to it in Section 3.11(a).

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department (or any successor group of the Trustee) of the Trustee, having direct responsibility for the administration of this Indenture or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Trustee” means the party named as such in the preamble to this Indenture until a successor replaces it in accordance with the terms of this Indenture and, thereafter, means the successor.

“ Trustee’s Representative in Argentina” means the party named as such in the preamble to this Indenture until a successor replaces it in accordance with the terms of this Indenture and, thereafter, means such successor.

“USA Patriot Act” has the meaning assigned to it in Section 11.13.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States is pledged and that are not callable or redeemable at the issuer’s option.

“U.S. Dollars” or “U.S.$” means such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

“Write-off Event” means the occurrence of any of the following events: (a) the Central Bank issues a resolution rejecting the standardization and restructuring plan of the Issuer under section 34 of the Argentine Banking Law; (b) the Central Bank issues a final non-appealable resolution revoking the Issuer’s authorization to operate as a commercial bank under section 44 c) of the Argentine Banking Law; (c) the Central Bank authorizes the Issuer’s restructuring in defense of its depositors in accordance with the first paragraph of article 35 bis of the Argentine Banking Law; or (d) an Argentine Governmental Authority passes a law, issues a decree or takes any other measure by which the Issuer is to be capitalized with public funds, or the SSGD grants any similar financial support in conformity with article 35 bis of the Argentine Banking Law as a result of the Issuer’s solvency or liquidity being affected.

“Write-off Notice” shall have the meaning set forth in Section 6.4.

Section 1.2 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) all ratios, definitions and calculations contemplated in this Indenture with reference to (or derivative of) the financial statements of the Issuer shall be interpreted and calculated in accordance with the accounting standards applicable to the Issuer as of the date hereof; in the event that such accounting standards change or are otherwise modified following the date hereof for any reason, such ratios, definitions and

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document calculations shall continue to be made in the manner originally contemplated (without giving effect to any such changes or modifications); (3) “or” is not exclusive; (4) “including” means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; (6) references to payments on the Notes shall include Additional Amounts payable on the Notes, if any; (7) all references to Sections or Articles refer to Sections or Articles of this Indenture; (8) references to any law are to be construed as including all statutory and regulatory provisions or rules consolidating, amending, replacing, supplementing or implementing such law; and (9) the term “obligor,” when used with respect to the Notes, means the Issuer and any other obligor as of the date of this Indenture.

Section 1.3 Agents. (a) The Issuer hereby appoints each of the Registrars, the Transfer Agents and the Paying Agents as its agent in relation to the Notes for the purposes specified in this Indenture and in the terms of the Notes applicable thereto and all matters incidental thereto. Each of the Agents shall have the rights, powers and authority granted to and conferred upon it herein and in the Notes, and such further powers and authority to act on behalf of the Issuer as the Issuer and such Agent may hereafter agree in writing. By execution of this Indenture, each of the Agents accepts its appointment as agent of the Issuer in relation to the Notes and shall comply with the provisions of this Indenture and the Notes applicable thereto. (b) The Issuer may vary or terminate the appointment of any Agent at any time and from time to time upon giving at least 30 days’ written notice to such Agent and to the Trustee. Each Agent may at any time resign by giving no less than 30 days’ written notice to the Issuer of such intention on its part, specifying the date on which its desired resignation shall become effective. In the event that the Issuer fails to appoint a new Agent to succeed the resigning Agent within 30 days after receiving notice of such resignation, the resigning Agent shall have the power to appoint a successor Agent. (c) No Agent makes any representation as to the validity or sufficiency of this Indenture, any offering materials or the Notes. No Agent shall be accountable for the use or application by the Issuer of the Notes or the proceeds thereof. (d) Each of the Agents shall be protected and shall incur no liability for or in respect of any action taken or damage suffered by it in reliance upon any Note, notice, direction,

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document consent, certificate, affidavit, statement, or other document to the extent that such communication conforms to the provisions set forth herein, and is believed by it, in good faith, to be genuine and to have been passed or signed by the proper parties. (e) Each of the Agents may become the owners of, or acquire any interest in, any Notes, with the same rights that they would have if it were not acting in such capacity, and may engage or be interested in any financial or other transaction with the Issuer. (f) The Issuer agrees to indemnify and defend each of the Agents and each of their respective officers, directors, employees and agents for, and to hold each of them harmless against any damage, loss, liability, cost, claim, action, demand or expense (including reasonable fees and expenses of legal counsel) arising out of or in connection with each of their respective appointments, or the exercise of each of their respective powers and rights and the performance of each of their respective duties hereunder, or the performance of any other duties pursuant to the terms and conditions hereof, except such as may result from such Agent’s own negligence, bad faith or willful misconduct or that its respective officers or employees. Notwithstanding anything contained in this Indenture to the contrary, the indemnity set forth in this paragraph shall survive the payment of the Notes, the resignation or removal of any Agent and/or the termination of this Indenture. (g) Except as otherwise provided herein, none of the Agents shall be liable for any action taken or omitted by it in good faith, in the absence of negligence or willful misconduct. (h) Each Agent may execute any of its powers or perform any of its duties hereunder either directly or by or through agents or attorneys not regularly in its employ, and such Agent shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder. The Issuer covenants and agrees to pay to each Agent all such compensation agreed to in writing by the Issuer and each Agent and to reimburse each of the Agents for the reasonable and documented out of pocket expenses (including the reasonable fees and expenses of its counsel) incurred by it in connection with the services rendered by it hereunder, including, without limitation, any payments made in connection with taxes or other charges relating to such services. The Issuer shall reimburse the relevant Agent for such expenses within 30 days from receiving a written request therefor together with the appropriate documentation for such expenses. (i) None of the provisions contained in this Indenture shall require any of the Agents to expend, advance or risk its own funds or otherwise incur any personal financial liability in the performance of any of their duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (j) The duties and obligations of each Agent with respect to the Notes and this Indenture shall be determined solely by the express provisions of this Indenture, and each Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document this Indenture against each such Agent. The duties and obligations of each Agent are several and not joint.

ARTICLE II

THE NOTES

Section 2.1 Form and Dating. (a) The Initial Notes are being originally issued by the Issuer on the Closing Date. The Notes shall be issued as Global Notes, and in minimum denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. The Notes and the certificate of authentication shall be substantially in the form of Exhibit A. (b) The terms and provisions of the Notes, the form of which is in Exhibit A, shall constitute, and are hereby expressly made, a part of this Indenture, and, to the extent applicable, the Issuer and the Trustee, by their execution and delivery of this Indenture expressly agree to such terms and provisions and to be bound thereby. In the event of any discrepancies between the provisions or definitions of this Indenture and the ones in any Note, the provisions and definitions of this Indenture will control. Except as otherwise expressly permitted in this Indenture, all Notes shall be identical in all respects. Notwithstanding any differences among them, all Notes issued under this Indenture shall vote and consent together on all matters as one class. (c) The Issuer agrees to cause the Notes to comply with Article 7 of the Negotiable Obligations Law. (d) The Notes may have notations, legends or endorsements as specified in Section 2.8 or as otherwise required by law, stock exchange rule or DTC rule or usage. The Issuer shall approve the form of the Notes and any notation, legend or endorsement on them. Each Note shall be dated the date of its authentication. (e) Notes originally offered and sold to QIBs in reliance on Rule 144A shall be represented by one or more permanent Global Notes (each, a “Rule 144A Global Note”). (f) Notes originally offered and sold to Non-U.S. Persons outside the United States of America in reliance on Regulation S shall be represented by one or more permanent Global Notes (each, a “Regulation S Global Note”).

Section 2.2 Execution and Authentication. (a) A Director and a member of the Supervisory Committee shall sign the Notes for the Issuer by manual or facsimile signature. If a Director and/or a member of the Supervisory Committee whose signature is on a Note no longer holds that position at the time the Trustee authenticates the Note, the Note shall be valid nevertheless. (b) A Note shall not be valid until an authorized signatory of the Trustee manually authenticates the Note. The signature of the Trustee on the certificate of authentication

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document on a Note shall be conclusive evidence that such Note has been duly and validly authenticated and issued under this Indenture. (c) At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver one or more Notes executed by the Issuer to the Trustee for authentication together with an Issuer Order, and the Trustee shall thereafter authenticate and deliver such Notes to or upon the order of the Issuer (contained in such Issuer Order) or pursuant to such procedures as may be specified from time to time by an Issuer Order. (d) The Trustee shall have the right to decline to authenticate and deliver any Notes under this Section 2.2 if the Trustee, (x) being advised by counsel, and after having consulted with counsel to the Issuer, determines that such action may not lawfully be taken, (y) acting in good faith through its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees or Trust Officers shall determine that such action would expose the Trustee to personal liability or (z) determines that such action will affect its rights, duties, obligations or immunities hereunder in a manner not reasonably acceptable to it. (e) The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the Issuer to authenticate the Notes. Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent.

Section 2.3 Registrars, Transfer Agents and Paying Agents. (a) The Issuer shall maintain an office or agency in the Borough of Manhattan, City of New York, and, as long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, in Luxembourg (which office or agency may be an Affiliate of the Trustee), where Notes may be presented or surrendered for registration of transfer or for exchange and where Notes may be presented for payment. If, pursuant to local regulatory requirements in Argentina or the request of any competent Argentine Governmental Authority, an Argentine Paying Agent, Argentine Registrar and Argentine Transfer Agent is appointed, such agent shall act pursuant to the provisions herein only to the extent that an Argentine Holder presents it with a Certificated Note for payment, registration and/or transfer, respectively, in Argentina; it being understood that if an Argentine Holder presents the Argentine Paying Agent with a Certificated Note for payment in Argentina, the Argentine Paying Agent shall provide immediate notice to the Principal Paying Agent, and shall pay principal or interest on the Notes only upon acknowledgment by the Principal Paying Agent that the Principal Paying Agent is unable to make payment by law or by reason of any order, ruling or regulation issued by any court or Government Agency and only if the Argentine Paying Agent has received the Issuer’s deposit pursuant to Section 3.1(a). The Co-Registrar will keep a register (the “Register”) at its office for the registration of ownership, exchange and transfer of the Notes. In the case of the replacement of the Notes, the Register will include notations of the Note so replaced, and the date of the Note issued in replacement thereof. In the case of the cancellation of the Notes, the Register will include notations of the Note so cancelled and the date on which such Note was cancelled. If appointed, the Argentine Registrar shall maintain a record of copies of all registrations of ownership, exchange and transfer of Notes at its office in the City of

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Buenos Aires, Argentina. The Co-Registrar shall give a copy of the Register and immediate notice to the Argentine Registrar of any registration of ownership, exchange or transfer of the Notes in the Register. In the event that an Argentine Holder presents a Certificated Note for registration, exchange or transfer in Argentina, the Argentine Registrar shall give a copy of the Register and immediate notice to the Co-Registrar of any registration of ownership, exchange or transfer of the Notes. The Register will show the amount of the Notes, the date of issue, all subsequent transfers and changes of ownership in respect thereof and the names, tax identification numbers (if relevant to a specific Holder) and addresses of the Holders of the Notes and any payment instructions with respect thereto (if different from a Holder’s registered address). The Co-Registrar and, if applicable, the Argentine Registrar shall at all reasonable times during office hours make the Register (or copies of the Register, in the case of the Argentine Registrar) available to the Issuer or any Person authorized by the Issuer in writing for inspection and for the taking of copies thereof or extracts therefrom, and at the expense and written direction of the Issuer, the Co-Registrar and the Argentine Registrar, if applicable, shall deliver to such Persons all lists of Holders of Notes, their addresses and amounts of such holdings as the Issuer may request. The Issuer may appoint one or more co-registrars and one or more additional Paying Agents. The Issuer may change any Agent without notice to any Holder. The Issuer will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Co-Registrar or Principal Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent, Registrar, or Transfer Agent. (b) The Issuer shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuer shall notify the Trustee of the name and address of each such Agent. If the Issuer fails to maintain a Co-Registrar, Principal Paying Agent or Principal Transfer Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7. (c) The Issuer initially appoints The Bank of New York Mellon as Co-Registrar, Principal Paying Agent and Principal Transfer Agent (and The Bank of New York Mellon hereby accepts such appointment), until such time as another Person is appointed as such, Banco de Valores S.A. as Representative of the Trustee in Argentina (and Banco de Valores S.A. hereby accepts such appointment) under the conditions set forth in this Indenture, until such time as another Person is appointed as such, and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent (and The Bank of New York Mellon (Luxembourg) S.A., hereby accepts such appointment), until such time as another Person is appointed as such. (d) In respect of the foregoing appointment of The Bank of New York Mellon (Luxembourg) S.A. as Luxembourg Paying Agent and Luxembourg Transfer Agent for the Notes, reference is hereby made to (i) the Bank Recovery and Resolution Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms (the “BRRD”), and (ii) in relation to a Member State of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the document described as the EU Bail-in Legislation Schedule then in effect, and published by the Loan Market Association (or any

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document successor person) from time to time at http://www.lma.eu.com/ (the “Bail-in Legislation”). As used herein, the term “BRRD Liability” shall be deemed to have the same meaning as in such laws, regulations, rules or requirements implementing the BRRD under the applicable Bail-in Legislation. Notwithstanding any other term of this Indenture or any other agreements, arrangements, or understanding between the parties, the Issuer acknowledges, accepts, and agrees to be bound by: (i) the effect of the exercise of any “Write-down” and “Conversion Powers” (as defined in relation to the relevant Bail-in Legislation) (“Bail-in Powers”) by the resolution authority with the ability to exercise any Bail-in Powers in relation to The Bank of New York Mellon (Luxembourg) S.A. (the “Relevant Resolution Authority”) in relation to any BRRD Liability of The Bank of New York Mellon (Luxembourg) S.A. under this Indenture, that (without limitation) may include and result in any of the following, or some combination thereof: (1) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; (2) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of The Bank of New York Mellon (Luxembourg) S.A. or another person (and the issue to or conferral on it of such shares, securities or obligations); (3) the cancellation of the BRRD Liability; and/or (4) the amendment or alteration of the amounts due in relation to the BRRD Liability, including any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and (ii) the variation of the terms of this Indenture, as applicable, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority. Section 2.4 Paying Agent to Hold Money in Trust. (a) The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust, for the benefit of Holders or the Trustee all money held by such Paying Agent for the payment of principal of or interest on the Notes (whether such money has been distributed to it by the Issuer or any other obligor of the Notes) in accordance with the terms of this Indenture and shall notify the Trustee in writing of any Default by the Issuer (or any other obligor on the Notes) in making any such payment. While any such Default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. If the Issuer or an Affiliate of the Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Issuer at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.3(c)(a), the Paying Agent (if other than the Issuer) shall have no further liability for the money delivered to the Trustee. Upon any proceeding under any Bankruptcy Law with respect to the Issuer, any Affiliate of the Issuer, if the Issuer or such Affiliate is then acting as Paying Agent, the Trustee shall replace the Issuer or such Affiliate as Paying Agent. (b) The receipt by the Paying Agent or the Trustee from the Issuer of each payment of principal, interest and/or other amounts due in respect of the Notes in the manner

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document specified herein and on the date on which such amount of principal, interest and/or other amounts are then due, shall satisfy the obligations of the Issuer herein and under the Notes to make such payment to the Holders on the due date thereof; provided, however, that the liability of any Paying Agent hereunder shall not exceed any amounts paid to it by the Issuer, or held by it, on behalf of the Holders under this Indenture. Notwithstanding the preceding sentence or any other provision of this Indenture to the contrary, the Issuer (without prejudice to its rights against the Trustee or any Paying Agent) shall indemnify the Holders in the event that there is subsequent failure by the Trustee or any Paying Agent to pay any amount due in respect of the Notes in accordance with the Notes and this Indenture as shall result in the receipt by the Holders of such amounts as would have been received by them had no such failure occurred. Upon the Issuer’s repayment in full of the Notes, and so long as the Paying Agent no longer holds any money payable to the Holders or the Trustee, as the case may be, in connection with this Indenture or the Notes, as applicable, the Paying Agent shall be relieved of any of its obligations under this Indenture and the Notes and any actions other than the exercise of rights, required to be taken by the Paying Agents, shall be taken by the Issuer or its Subsidiaries.

Section 2.5 CUSIP and ISIN Numbers. In issuing the Notes, the Issuer may use CUSIP and ISIN numbers (if then generally in use) and, if so, the Trustee shall use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall promptly notify the Trustee in writing of any initial CUSIP and/or ISIN numbers and any change in the CUSIP or ISIN numbers.

Section 2.6 Holder Lists. The Co-Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Co-Registrar, the Issuer shall furnish to the Trustee, in writing at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

Section 2.7 Global Note Provisions. (a) Each Global Note initially shall: (i) be registered in the name of DTC or the nominee of DTC; (ii) be delivered to the Note Custodian; and (iii) bear the appropriate legend, as set forth in Section 2.8 and Exhibit A. Any Global Note may be represented by more than one certificate. The aggregate principal amount of each Global Note may from time to time be increased or decreased by adjustments made on the records of the Note Custodian, as provided in this Indenture. (b) Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by DTC or by the Note Custodian under such Global Note, and DTC may be treated by the Issuer, the Trustee, each Agent and any of their respective agents as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Trustee, any Agent or any of their respective agents from giving effect to any written certification, proxy or other authorization furnished by DTC. The registered Holder of a Global Note may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Notes. (c) Except as provided below, owners of beneficial interests in Global Notes shall not be entitled to receive Certificated Notes. Global Notes shall be exchangeable for Certificated Notes only in the following limited circumstances: (i) DTC notifies the Issuer that it is unwilling or unable to continue as depositary for such Global Note or DTC ceases to be a clearing agency registered under the Exchange Act, at a time when DTC is required to be so registered in order to act as depositary, and in each case a successor depositary is not appointed by the Issuer within 90 days of such notice; (ii) the Issuer executes and delivers to the Trustee an Officers’ Certificate stating that such Global Note shall be so exchangeable; or (iii) an Event of Default has occurred and is continuing with respect to the Notes.

In connection with the exchange of an entire Global Note for Certificated Notes pursuant to this Section 2.7(c), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and upon Issuer Order the Trustee shall authenticate and deliver, to each beneficial owner identified by DTC in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Certificated Notes of authorized denominations. None ofthe Issuer, the Trustee, any Agents or any of their respective agents shall be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related Notes and each such person may conclusively rely on, and shall be protected in relying on, instructions from DTC for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Notes to be issued).

Section 2.8 Legends. (a) Each Global Note shall bear the legend specified therefor in Exhibit A on the face thereof. (b) Each Restricted Note shall bear the private placement legend specified therefor in Exhibit A on the face thereof (the “Private Placement Legend”). (c) Each Note shall bear the OID Legend specified therefor in Exhibit A on the face thereof (the “OID Legend”).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.9 Transfer and Exchange. The following provisions shall apply with respect to any proposed transfer of an interest in a Rule 144A Global Note that is a Restricted Note: (a) If (1) the owner of a beneficial interest in a Rule 144A Global Note wishes to transfer such interest (or portion thereof) to a Non-U.S. Person pursuant to Regulation S and (2) such Non-U.S. Person wishes to hold its interest in the Notes through a beneficial interest in the Regulation S Global Note, subject to the rules and procedures of DTC, upon receipt by the Note Custodian and Co-Registrar of: (i) instructions from the Holder of the Rule 144A Global Note directing the Note Custodian and Co-Registrar to credit or cause to be credited a beneficial interest in the Regulation S Global Note equal to the principal amount of the beneficial interest in the Rule 144A Global Note to be transferred; and (ii) a certificate in the form of Exhibit C duly executed by the transferor, the Note Custodian and Co-Registrar shall increase the Regulation S Global Note and decrease the Rule 144A Global Note by such amount in accordance with the foregoing. (b) If (1) the owner of a beneficial interest in a Regulation S Global Note wishes to transfer such interest (or any portion thereof) to a QIB pursuant to Rule 144A prior to the expiration of the Distribution Compliance Period therefor and (2) such QIB wishes to hold its interest in the Notes through a beneficial interest in the Rule 144A Global Note, subject to the rules and procedures of DTC, upon receipt by the Note Custodian and Co-Registrar of: (i) instructions from the Holder of the Regulation S Global Note directing the Note Custodian and Co-Registrar to credit or cause to be credited a beneficial interest in the Rule 144A Global Note equal to the principal amount of the beneficial interest in the Regulation S Global Note to be transferred; and (ii) a certificate in the form of Exhibit B duly executed by the transferor, the Note Custodian and Co-Registrar shall increase the Rule 144A Global Note and decrease the Regulation S Global Note by such amount in accordance with the foregoing. (c) Other Transfers. Any transfer of Restricted Notes not described in this Section 2.9 (other than a transfer of a beneficial interest in a Global Note that does not involve an exchange of such interest for a Certificated Note or a beneficial interest in another Global Note, which must be effected in accordance with applicable law and the rules and procedures of DTC, but is not subject to any procedure required by this Indenture) shall be made only upon receipt by the Issuer, the Trustee and the Co-Registrar of such Opinions of Counsel, certificates and/or other information reasonably

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document required by and satisfactory to the Issuer in order to ensure compliance with the Securities Act or in accordance with Section 2.9(d). (d) Use and Removal of Private Placement Legends. Upon the registration of transfer, exchange or replacement of Notes (or beneficial interests in a Global Note) not bearing (or not required to bear upon such registration of transfer, exchange or replacement) a Private Placement Legend, the Note Custodian and Co-Registrar shall exchange such Notes (or beneficial interests) for beneficial interests in a Global Note (or Certificated Notes if they have been issued pursuant to Section 2.7(c)) that does not bear a Private Placement Legend. Upon the transfer, exchange or replacement of Notes (or beneficial interests in a Global Note) bearing a Private Placement Legend, the Note Custodian and Registrar shall deliver only Notes (or beneficial interests in a Global Note) that bear a Private Placement Legend unless: (i) such Notes (or beneficial interests) are transferred pursuant to Rule 144 upon delivery to the Registrar of a certificate of the transferor in the form of Exhibit D and an Opinion of Counsel reasonably satisfactory to the Issuer; (ii) such Notes (or beneficial interests) cease to be Restricted Notes after the Resale Restriction Termination Date or Distribution Compliance Period therefor, as applicable; (iii) a transfer of such Notes is made pursuant to an effective registration statement; or (iv) in connection with such registration of transfer, exchange or replacement the Co-Registrar shall have received an Opinion of Counsel addressed to the Issuer and other evidence reasonably satisfactory to the Issuer to the effect that neither such Private Placement Legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.

The Private Placement Legend on any Note shall be removed at the request of the Holder on or after the Resale Restriction Termination Date or Distribution Compliance Period, as applicable. The Holder of a Global Note may exchange an interest therein for an equivalent interest in a Global Note not bearing a Private Placement Legend upon transfer of such interest pursuant to any of clauses (i) through (iv) of this Section 2.9(d). (e) Consolidation of Global Notes. Nothing in this Indenture shall provide for the consolidation of any Notes with any other Notes unless they constitute, as determined pursuant to an Opinion of Counsel, the same classes of securities for U.S. federal income tax purposes. (f) Retention of Documents. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to this ARTICLE II in accordance with its standard document retention policies. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document communications at any reasonable time upon the giving of reasonable written notice to the Co-Registrar. (g) Registration of Transfer and Exchange. (i) Subject to the other provisions of this Section 2.9 when Notes are presented to the Co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Co-Registrar shall register the transfer or make the exchange as requested if the requirements for such transaction set forth in this Indenture are met; provided that any Notes presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Issuer and to the Co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. (ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Issuer, the Co-Registrar, the relevant Transfer Agent or the Trustee may require payment of a sum sufficient to cover any transfer tax, assessment, or similar governmental charge payable in connection therewith. (iii) The Co-Registrar shall not be required to register the transfer of or exchange of any Note for a period beginning: (1) 15 days before the giving of a notice of an offer to repurchase or redeem Notes and ending at the close of business on the day of such notice; or (2) 15 days before an Interest Payment Date and ending on such Interest Payment Date. (iv) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee and each Agent may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, subject to Section 2.13 whether or not such Note is overdue, and none of the Issuer, the Trustee or any Agent shall be affected by notice to the contrary. (v) All Notes issued upon any registration of transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange. (vi) The Co-Registrar shall be entitled to request such evidence reasonably satisfactory to it documenting the identity and/or signatures of the transferor and the transferee.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (h) No Obligation of the Trustee or Agents. (i) The Trustee and the Agents shall have no responsibility or obligation to any beneficial owner of an interest in a Global Note, an Agent Member of, or a participant in, DTC or other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, Agent Member, beneficial owner or other Person (other than DTC) of any notice (including any notice of redemption) or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be DTC or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through DTC subject to the applicable rules and procedures of DTC. The Trustee and each Agent may conclusively rely and shall be fully protected in conclusively relying upon information furnished by DTC with respect to its Agent Members, participants and any beneficial owners. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer or exchange imposed under this Indenture or under applicable law with respect to any transfer or exchange of any interest in any Note (including any transfers between or among DTC participants, Agent Members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the express terms of this Indenture, to examine the same to determine if it substantially complies on its face as to form with the express requirements hereof, and to notify the party delivering the same if the certificate does not so comply.

Section 2.10 Mutilated, Destroyed, Lost or Stolen Notes. (a) If a mutilated Note is surrendered to the Co-Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken and if the requirements set forth in this Indenture are met, the Issuer shall execute and upon Issuer Order the Trustee shall authenticate a replacement Note if the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an affidavit of loss and indemnity bond sufficient in the judgment of the Issuer and the Trustee to protect the Issuer, the Trustee and Agents from any loss that any of them may suffer if a Note is replaced, and, in the absence of notice to the Issuer or a Trust Officer of the Trustee that such Note has been acquired by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code of the State of New York), the Issuer shall execute and upon Issuer Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously Outstanding.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Upon the issuance of any new Note under this Section 2.10, the Issuer, the Trustee and the Agents may require from such Holder the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Issuer’s counsel, the Trustee and the Agents and their respective counsel) in connection therewith. (c) In case any mutilated, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer may, in its discretion, pay such Notes instead of issuing a new Note in replacement thereof. (d) Every new Note issued pursuant to this Section 2.10 in exchange for any mutilated Note, or in lieu of any destroyed, lost or stolen Note, shall constitute an original additional contractual obligation of the Issuer and any other obligor upon the Notes, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. (e) The provisions of this Section 2.10 shall be exclusive and shall be in lieu of, to the fullest extent permitted by applicable law, all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Section 2.11 Temporary Notes. Until definitive Notes are ready for delivery, the Issuer may execute and, upon Issuer Order, the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and execute and, upon Issuer Order, the Trustee shall authenticate definitive Notes. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at any office or agency maintained by the Issuer for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and upon Issuer Order the Trustee shall authenticate and make available for delivery in exchange therefor one or more definitive Notes representing an equal principal amount of Notes. Until so exchanged, the Holder of temporary Notes shall in all respects be entitled to the same benefits under this Indenture as a Holder of definitive Notes.

Section 2.12 Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Agents shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of cancelled Notes in accordance with its customary procedures or return to the Issuer all Notes surrendered for registration of transfer, exchange, payment or cancellation. Subject to Section 2.10, the Issuer may not issue new Notes to replace Notes it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

Section 2.13 Defaulted Interest. When any installment of interest becomes Defaulted Interest, such installment shall forthwith cease to be payable to the Holders in whose names the Notes were registered on the Record Date applicable to such installment of interest. Defaulted Interest (including any interest on such Defaulted Interest) may be paid by the Issuer, at its election, as provided in Section 2.13(a) or Section 2.13(b).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (a) The Issuer may elect to make payment of any Defaulted Interest (including any interest on such Defaulted Interest) to the Holders in whose names the Notes are registered at the close of business on a special record date for the payment of such Defaulted Interest (a “Special Record Date”), which shall be fixed in the following manner. The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Holders entitled to such Defaulted Interest as provided in this Section 2.13(a). Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than 15 calendar days and not less than ten calendar days prior to the date of the proposed payment and not less than ten calendar days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be sent to each Holder in accordance with Section 11.1, not less than ten calendar days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been given as aforesaid, such Defaulted Interest shall be paid to the Holders in whose names the Notes are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to Section 2.13(b). (b) Alternatively, the Issuer may make payment of any Defaulted Interest (including any interest on such Defaulted Interest) in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this Section 2.13(b) such manner of payment shall be deemed practicable by the Trustee.

Section 2.14 Additional Notes. The Issuer may, from time to time, subject to compliance with any other applicable provisions of this Indenture, without the consent of the Holders, create and issue pursuant to this Indenture Additional Notes by delivering an Additional Note Board Resolution or entering into an Additional Note Supplemental Indenture. Such Additional Notes shall have terms and conditions set forth in Exhibit A identical to those of the Initial Notes, except that Additional Notes: (a) may have a different issue price, issue date and, if applicable, date from which the interest shall accrue from the Initial Notes; and (b) may have terms specified in the Additional Note Board Resolution or Additional Note Supplemental Indenture for such Additional Notes making appropriate adjustments to this ARTICLE II and Exhibit A (and related definitions) applicable to such Additional Notes in order to conform to and ensure compliance with the Securities Act (or other applicable securities laws).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE III

COVENANTS

Section 3.1 Payment of Notes. (a) The Issuer shall pay the principal of and interest (including Defaulted Interest) on the Notes in U.S. Dollars on the dates and in the manner provided in the Notes and in this Indenture. Prior to 11:00 a.m. (New York City time) on the Business Day prior to each Interest Payment Date, the Maturity Date or any other date on which principal or interest on the Notes is due and payable in accordance with the terms thereof, the Issuer shall deposit with the Principal Paying Agent in immediately available funds U.S. Dollars sufficient to make cash payments due on such Interest Payment Date or Maturity Date or such other payment date, as the case may be. If the Issuer or an Affiliate of the Issuer is acting as Paying Agent, the Issuer or such Affiliate shall, prior to 11:00 a.m. (New York City time) on each Interest Payment Date, the Maturity Date or such other payment date, segregate and hold in trust U.S. Dollars sufficient to make cash payments due on such Interest Payment Date or Maturity Date or such other payment date, as the case may be. Subject to Section 2.4(b), principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent (other than the Issuer or an Affiliate of the Issuer) holds in accordance with this Indenture U.S. Dollars designated for and sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. (b) Notwithstanding anything to the contrary contained in this Indenture, each of the Issuer and the Paying Agents may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder. (c) In order to comply with applicable tax laws (inclusive of rules, regulations and interpretations promulgated by competent authorities) related to the Notes and this Indenture in effect from time to time (“Applicable Tax Law”) that a foreign financial institution, the Issuer, the Trustee or any Paying Agent is or has agreed to be subject, the Issuer hereby covenants with the Trustee and each Paying Agent that it will use commercially reasonable efforts to provide each of the Trustee and the Paying Agents with sufficient information so as to enable the Trustee and the Paying Agents to determine whether or not the Trustee or such Paying Agent, as applicable, has tax related obligations under Applicable Tax Law. The Trustee and each Paying Agent shall be entitled to make any withholding or deduction from payments to the extent necessary to comply with Applicable Tax Law for which the Trustee and each Paying Agent shall not have any liability. (d) The projected payment schedule (which schedule is attached as Schedule A to this Indenture) and the OID Legend appearing on the face of the Notes have been included by the Issuer solely for purposes of Sections 1271 through 1275 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding anything herein or therein to the contrary, the amounts set forth in the OID Legend and Schedule A shall be taken as the statements of the Issuer, are provided by the Issuer as a non-binding projection of the amounts

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (including contingent and non-contingent amounts) payable on each scheduled Interest Payment Date and the Maturity Date as required to be determined solely for U.S. federal income tax purposes, and shall not be relied upon by any of the Trustee, Paying Agent or the Issuer for purposes of determining the actual amounts payable in respect of the Notes on any Interest Payment Date or the Maturity Date. Neither the Trustee nor any Paying Agent (i) shall be liable for any difference between any amounts set forth in the OID Legend or the projected payment schedule for the Notes attached to this Indenture as Schedule A and any amounts due or payments made by the Issuer to the Holders in respect of the Notes or (ii) has any responsibility or obligation to rely upon, verify, confirm or otherwise modify or update the amounts set forth in the OID Legend or the projected payment schedule for the Notes attached to this Indenture as Schedule A.

Section 3.2 Maintenance of Office or Agency. (a) The Issuer shall maintain each office or agency required under Section 2.3 where Notes may be presented or surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture (other than the type contemplated by Section 11.6(d)) may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency. (b) The Issuer may also from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in The City of New York or, so long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, in Luxembourg, for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

Section 3.3 Maintenance of Corporate Existence; Properties. Subject to ARTICLE IV, the Issuer shall and shall cause each of its Subsidiaries to, (a) maintain in effect its corporate existence and all registrations necessary therefor, (b) take all reasonable actions to maintain all rights, privileges, titles to property or franchises necessary in the normal conduct of its business and (c) keep all its property used or useful in the conduct of its business in good working order and condition; provided that this covenant shall not require it to maintain any such right, privilege, title to property or franchises or maintain the working order of its property or to preserve the corporate existence of any such Subsidiary, if its Board of Directors determines in good faith that the maintenance or preservation thereof is no longer necessary or desirable in the conduct of its business.

Section 3.4 Compliance with Law. The Issuer shall, and shall cause each of its Subsidiaries to, comply with all applicable laws, rules, regulations, orders and resolutions of each Government Agency having jurisdiction over it or its business except where the failure to so comply would not have a material adverse effect on it and its Subsidiaries’ business, assets, operations or financial condition taken as a whole.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 3.5 Maintenance of Books and Records. The Issuer shall maintain books, accounts and records in accordance with the Central Bank Rules and current legal requirements in Argentina.

Section 3.6 Payment of Taxes. The Issuer shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges (including stamp or other issuance or transfer taxes) or duties levied or imposed upon the Issuer or any of its Subsidiaries or for which it or any of them are otherwise liable, or upon the income, profits or property of the Issuer or any of its Subsidiaries, and the Issuer shall reimburse the Trustee and Holders for any fines, penalties or other fees they are required to pay as a result of the failure by the Issuer or any of its Subsidiaries to pay or discharge any of the abovementioned taxes, assessments and government charges; provided, however, that other than with respect to any taxes or duties described herein that would become payable by the Trustee or the Holders in the event the Issuer or any of its Subsidiaries fail to pay such taxes or duties, the Issuer shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Issuer), are being maintained in accordance with Argentine Banking GAAP or where the failure to effect such payment shall not have a material adverse effect upon the financial condition of the Issuer, taken as a whole, or on the performance of the Issuer’s obligations hereunder.

Section 3.7 Further Actions. The Issuer shall use its reasonable best efforts to take any action, satisfy any condition or do any thing (including the obtaining or effecting of any necessary consent, approval, authorization, exemption, filing, license, order, recording or registration) at any time required in accordance with the applicable laws and regulations to be taken, fulfilled or done in order (a) to enable them lawfully to enter into, exercise their rights and perform and comply with their payment obligations under the Notes and this Indenture, as the case may be, (b) to ensure that those obligations are legally binding and enforceable, and (c) to make the Notes and this Indenture admissible in evidence in the courts of Argentina.

Section 3.8 Waiver of Stay, Extension or Usury Laws. The Issuer covenants (to the fullest extent permitted by applicable law) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Issuer from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture. The Issuer hereby expressly waives (to the fullest extent permitted by applicable law) all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

Section 3.9 Write-off Event. Following a Write-off Event, the Issuer will take the actions described in Section 6.4 to effect the Principal/Interest Permanent Reduction and direct the Trustee to reduce the amount of principal of and accrued and unpaid interest on the Notes in an amount equal to the Absorption Amount.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 3.10 Reports to Holders. (a) So long as any Notes are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer shall, during any such period that the Issuer is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, or becomes exempt from such reporting requirements pursuant to, and in compliance with, Rule 12g3-2(b) under the Exchange Act, furnish to the Holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (b) The Issuer shall furnish or cause to be furnished to the Trustee in English (for distribution only to the Holders of Notes upon their written request): (i) within 120 days after the end of each of the Issuer’s fiscal years (or, if later, the date on which the Issuer is required to deliver to the CNV or to the Central Bank financial statements for the relevant fiscal period), a copy of the Issuer’s audited consolidated balance sheet as of the end of such fiscal year and its consolidated statements of income and statements of shareholders’ equity and statements of cash flows for such fiscal year, prepared in accordance with Central Bank Rules applied consistently throughout the periods reflected therein (except as otherwise expressly noted therein) and delivered in both the English and Spanish languages; (ii) within 60 days after the end of the first three fiscal quarters of each of the Issuer’s fiscal years (or, if later, the date on which the Issuer is required to deliver to the CNV or to the Central Bank financial statements for the relevant fiscal period), a copy of its unaudited consolidated balance sheet as of the end of each such quarter and its unaudited consolidated statements of income and statements of shareholders’ equity and statements of cash flows for such quarter, prepared in accordance with Central Bank Rules applied consistently throughout the periods reflected therein (except as otherwise expressly noted therein) and delivered in both the English and Spanish languages; and (iii) within 180 days after the end of each of the Issuer’s fiscal years, a “management’s discussion and analysis” in respect of the financial statements of the Issuer contemplated in clause (i) above, substantially in the form and substance to the effect generally required of foreign private issuers subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; provided, however, that the Issuer shall not be required to provide such analysis so long as its parent company, Grupo Financiero Galicia S.A., continues to file annual reports with the SEC pursuant to Form 20-F or its equivalent.

Each report deliverable pursuant to clause (b)(i) or (b)(ii) above will be accompanied by an Officers’ Certificate to the effect that (A) the financial statements contained in such report fairly present, in all material respects, the consolidated financial condition of the Issuer and its Subsidiaries as of the date of such financial statements and the results of their operations for the period covered thereby; and (B) such financial statements have been prepared in accordance with

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Argentine Banking GAAP and/or IFRS, as applicable. The Trustee shall not be obligated or required to monitor the Issuer’s compliance with its obligations under this Section 3.10. (c) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

Section 3.11 Listing and Trading. (a) In the event that the Notes are listed on (i) the Luxembourg Stock Exchange for trading on the Euro MTF Market and (ii) the BASE and admitted to trading on the MAE, the Issuer shall use its commercially reasonable efforts to maintain such listings and authorizations; provided that if, as a result of the European Union regulated market amended Directive 2001/34/EC (the “Transparency Directive”) or any legislation implementing the Transparency Directive or other directives or legislation, the Issuer could be required to publish financial information either more regularly than it otherwise would be required to or according to accounting principles which are materially different from the accounting principles which the Issuer would otherwise use to prepare its published financial information, the Issuer may delist the Notes from the Luxembourg Stock Exchange in accordance with the rules of such exchange and seek an alternative (to the extent commercially reasonable) admission to listing, trading and/or quotation for the Notes on a different section of the Luxembourg Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside or outside the European Union as the Board of Directors of the Issuer may decide. (b) From and after the date the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and so long as it is required by the rules of such exchange, all notices to the Holders shall be published in English in accordance with Section 11.1(b).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 3.12 Additional Amounts. All payments by or on behalf of the Issuer of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for or on account, of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within (1) Argentina, (2) any other jurisdiction in which the Issuer or any Successor Person is organized, (3) any other jurisdiction from or through which payments are made by or at the direction of the Issuer or (4) by or within any political subdivision of or in any of the foregoing having the power to tax (each such jurisdiction a “Relevant Jurisdiction” and all such taxes “Relevant Taxes”), unless such withholding or deduction is required or compelled by law. In the event of any such withholding or deduction, the Issuer shall pay to Holders of the Notes in U.S. Dollars such additional amounts (“Additional Amounts”) as will result in the payment to such Holder of the U.S. Dollar amount that would otherwise have been receivable by such Holder in the absence of such withholding or deduction, except that no such Additional Amounts shall be payable: (a) in respect of any Relevant Taxes that would not have been so withheld or deducted but for the existence of any present or former connection, including a permanent establishment, between the Holder or beneficial owner of the Note or any payment in respect of such Note (or, if the Holder or beneficial owner is an estate, nominee, trust, partnership or corporation, between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over, the Holder or beneficial owner), other than the mere receipt of such payment or the mere acquisition, holding or ownership of such Note or beneficial interest or the enforcement of rights thereunder; (b) in respect of any Relevant Taxes that would not have been so withheld or deducted if the Note had been presented for payment (where presentation is required) within 30 days after the Relevant Date (as defined below) except to the extent that the Holder or beneficial owner thereof would have been entitled to such Additional Amounts if it had presented such Note for payment the last day of such 30-day period; (c) in respect of any Relevant Taxes that would not have been so withheld or deducted but for the failure by the Holder, the beneficial owner of the Note or the Trustee to (i) make a declaration of non-residence, or any other claim or filing for exemption or reduction, to which it is entitled or (ii) comply with any certification, identification, information, documentation or other reporting requirement concerning its nationality, residence, identity or any reasonable connection with a Relevant Jurisdiction, including without limitation, pursuant to any applicable law, statute, treaty or regulation of Argentina or written administrative instruction of the AFIP; (d) if the Issuer is required or compelled by law to make any withholding or deduction for or on account of, or is obligated to act as “substitute obligor” for, the Personal Assets Tax under Argentine tax law (Section 1(c), Law N° 25,721, as amended); (e) in respect of any estate, inheritance, gift, value added, sales, use, excise, transfer, personal property or similar taxes, duties, assessments or other governmental charges;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (f) in respect of any Relevant Taxes payable other than by withholding or deduction; (g) in respect of any payment to a Holder of a Note that is a trustee or other fiduciary, a partnership (including an entity treated as a partnership for tax purposes) or a limited liability company or any other Person other than the sole beneficial owner of such payment or Note, to the extent that a beneficiary or settlor with respect to such trustee or fiduciary, a partner or member of such partnership or limited liability company or the beneficial owner of such payment or Note would not have been entitled to the Additional Amounts had such beneficiary, settlor, partner member or beneficial owner been the actual holder of such Note; (h) any tax imposed on or in respect of any note pursuant to sections 1471 to 1474 of the Code, any successor law or regulation implementing, complying with or introduced to conform to such sections or any agreement entered into pursuant to section 1471(b)(1) of the Code or intergovernmental agreement in relation thereto; (i) in respect of any income taxes imposed in connection with Title VI of Law Nº 20,628, excluding those entities subject to the Argentine Banking Law; or (j) in respect of any combination of (a) through (i) above.

All references to principal and interest in respect of the Notes shall be deemed also to refer to any Additional Amounts which may be payable as set forth in this Indenture or in the Notes.

At least ten Business Days prior to the first Interest Payment Date (and at least ten Business Days prior to each succeeding Interest Payment Date if there has been any change with respect to the matters set forth in the below-mentioned Officers’ Certificate), the Issuer shall furnish to the Trustee and the Paying Agents an Officers’ Certificate instructing the Trustee and the Paying Agents whether payments of principal of or interest on the Notes due on such Interest Payment Date shall be without deduction or withholding for or on account of any Relevant Taxes. If any such deduction or withholding shall be required, prior to such Interest Payment Date, the Issuer shall furnish the Trustee and the Paying Agents with an Officers’ Certificate which specifies the amount, if any, required to be withheld or deducted on such payment to Holders of the Notes and certifies that the Issuer shall pay such withholding or deduction to the appropriate taxing authority.

The Issuer shall furnish to the Trustee the official receipts (or a certified copy of the official receipts), if issued, evidencing payment of Relevant Taxes. Copies of such receipts shall be made available to Holders of the Notes upon written request.

The limitation on the Issuer’s obligation to pay Additional Amounts set forth in clause (c) of this Section 3.12 shall not apply if the provision of information, documentation or other evidence required would be materially more onerous in form or procedure or in substance of information disclosed than comparable information, reporting or certification requirements imposed under United States tax laws.

The Issuer shall promptly pay when due any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery or registration of each Note or any other document

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or instrument referred to herein or therein, excluding any such taxes, charges or similar levies imposed by any jurisdiction outside of Argentina and except, in certain cases, for taxes, charges or similar levies resulting from certain registration of transfer or exchange of Notes.

Section 3.13 Use of Proceeds. The Issuer shall use the proceeds of the sale of the Initial Notes as set forth under the caption “Use of Proceeds” in the Offering Memorandum. Section 3.14 Compliance Certificates. (a) The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer, beginning with the fiscal year ending December 31, 2016, an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Authorized Officers of the Issuer they would normally have knowledge of any Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during such period. If they do, the certificate shall describe the Default or Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto. (b) The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Issuer’s or any other Person’s compliance with the covenants described above or with respect to any reports or other documents filed under this Indenture.

ARTICLE IV

MERGERS, CONSOLIDATIONS, SALES, LEASES

Section 4.1 Mergers, Consolidations, Sales, Leases. The Issuer shall not merge, consolidate or amalgamate with or into, or convey or transfer or lease all or substantially all of its properties and assets, whether in one transaction or a series of related transactions, to any Person unless: (a) immediately after giving effect to such transaction, no Event of Default will have occurred and be continuing; (b) any Person formed by any such merger, consolidation or amalgamation, or the Person which acquires by conveyance or transfer, or which leases, such properties and assets (if not the Issuer) (the “Successor Person”): (i) is a Person organized and validly existing under the laws of Argentina, the United States, any state thereof or the District of Columbia, or under the laws of any other country that is a member of the OECD; and (ii) expressly assumes, by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of, and interest on (including Additional Amounts, if any, that may result due to withholding by any authority having the power to tax to which the Successor Person is or may be subject) all of the Notes and all of the Issuer’s other obligations under the Notes and this Indenture;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) either (i) the Issuer or the Successor Person shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Notes will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such transaction and will be subject to U.S. Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such transaction had not occurred or (ii) the Successor Person agrees to indemnify each Holder against any tax, assessment or governmental charge thereafter imposed on such Holder by a Government Agency solely as a consequence of such consolidation, merger, amalgamation, conveyance, transfer or lease with respect to the payment of principal of, or interest on, the Notes; and (d) the Successor Person (except in the case of leases), if any, succeeds to and becomes substituted for the Issuer with the same effect as if it had been named in the Notes as the Issuer.

For the avoidance of doubt, the restrictions set forth in this Section 4.1 shall not apply to a merger, acquisition, consolidation or other business combination in which the Issuer is the surviving entity.

ARTICLE V

REDEMPTION AND REPURCHASES OF NOTES

Section 5.1 Redemption. The Issuer may or shall redeem the Notes, as a whole but not in part, subject to the conditions and at the redemption prices specified in the form of Notes in Exhibit A.

Section 5.2 Election to Redeem. In the case of an optional redemption, the Issuer shall evidence its election to redeem any Notes pursuant to Section 5.1 by a Board Resolution. Prior to delivery of notice of redemption to the Holders, the Issuer shall deliver to the Trustee such Board Resolution, an Officers’ Certificate and a written opinion of recognized Argentine counsel, independent of the Issuer, to the effect that all governmental approvals necessary for the Issuer to effect such redemption have been or at the time of redemption will be obtained and be in full force and effect and that the Issuer is entitled to effect such a redemption pursuant to this Indenture, and setting forth, in reasonable detail, the circumstances giving rise to such right of redemption.

Section 5.3 Notice of Redemption. (a) The Issuer shall give or cause the Trustee to give notice of redemption, in the manner provided for in Section 11.1, not less than 30 nor more than 90 days prior to the Redemption Date, to each Holder of Notes to be redeemed. If the Issuer itself gives the notice, it shall also deliver a copy to the Trustee. (b) In the event the Issuer requests that the Trustee deliver notice of redemption to the Holders, at least 5 Business Days prior to the date such notice is to be delivered to the Holders (unless a shorter period is acceptable by the Trustee), the Issuer shall

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provide the Trustee with the information required to be delivered in such notice pursuant to this Section 5.3 and request the Trustee to deliver the notice of redemption to the Holders. (c) All notices of redemption shall state: (i) the Redemption Date; (ii) the redemption price and the amount of any accrued interest payable as provided in Section 5.5; (iii) that on the Redemption Date the redemption price and any accrued interest payable to the Redemption Date as provided in Section 5.5 shall become due and payable in respect of each Note to be redeemed, and, unless the Issuer defaults in making the redemption payment, that interest on each Note to be redeemed, shall cease to accrue on and after the Redemption Date; (iv) the place or places where a Holder must surrender the Holder’s Notes for payment of the redemption price; and (v) the CUSIP or ISIN number, if any, printed on the Notes, and that no representation is made as to the accuracy or correctness of such CUSIP or ISIN number.

Section 5.4 Deposit of Redemption Price. Prior to 11:00 a.m. New York City time on the Business Day prior to the relevant Redemption Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is acting as Paying Agent, segregate and hold in trust as provided in Section 2.3(c)(a)) an amount of money in immediately available funds sufficient to pay the redemption price of, and accrued interest on, all the Notes that the Issuer is redeeming on that date.

Section 5.5 Notes Payable on Redemption Date. If the Issuer, or the Trustee on behalf of the Issuer, gives notice of redemption in accordance with this ARTICLE V, the Notes called for redemption, shall, on the Redemption Date, become due and payable at the redemption price specified in the notice (together with accrued interest, if any, to the Redemption Date), and from and after the Redemption Date (unless the Issuer shall default in the payment of the redemption price and accrued interest) the Notes shall cease to bear interest. Upon surrender of any Note for redemption in accordance with the notice, the Issuer shall pay the Notes at the redemption price, together with accrued interest, if any, to the Redemption Date. If the Issuer shall fail to pay any Note called for redemption upon its surrender for redemption, the principal shall, until paid, bear interest from the Redemption Date at the rate borne by the Notes.

Section 5.6 Repurchases; Notes held by the Issuer and/or Affiliates. If permitted by applicable Central Bank regulations, the Issuer or any of its Subsidiaries may at any time, and from time to time, repurchase the Notes on the open market or in any other manner, at any price; provided, that in such case, the acquired Notes shall no longer be considered Tier II Regulatory Capital. The Issuer may resell or otherwise dispose of such Notes at any time. Any Notes so repurchased by the Issuer may be cancelled and/or presented to the Trustee for cancellation, as applicable.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.1 Events of Default. Each of the following is an “Event of Default” and an “Acceleration Event” with respect to the Notes: (a) Issuance by a court of a declaration of bankruptcy with respect to the Issuer, pursuant to the Argentine bankruptcy law Nº 24,522, as amended; or (b) A liquidation of the Issuer pursuant to Title VII of the Argentine Banking Law; except that no Write-off Event will constitute an Event of Default or an Acceleration Event.

The Issuer shall deliver to the Trustee, within ten Business Days after an Authorized Officer of the Issuer obtains actual knowledge thereof, written notice of any Default or Event of Default that has occurred and is still continuing, its status and what action the Issuer is taking or proposing to take in respect thereof. Such notice shall be accompanied by an Officers’ Certificate setting forth the details of such Event of Default and stating what action the Issuer proposes to take with respect thereto.

Section 6.2 Acceleration. Following the occurrence of any of the Events of Default specified in Section 6.1 hereof, the outstanding principal amount of the Notes shall be immediately and automatically accelerated without any action on the part of the Trustee or any Holder.

Section 6.3 Other Remedies. (a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to enforce the performance of any provision of the Notes or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 6.4 Loss Absorption. (a) Following a Write-off Event, the Issuer shall take the following actions in order to effect the Principal/Interest Permanent Reduction: (i) provide written notice to Holders via DTC and written notice to the Trustee (a “Write-off Notice”), on the next Business Day succeeding such Write-off Event, for information purposes stating (x) that a Write-off Event has occurred and (y) the applicable Reduction Date. Each Write-off Notice shall include a request by the Issuer to the Trustee to cancel the Notes or to decrease the applicable Global Note by the relevant Principal/Interest Permanent Reduction on the Reduction Date, and the Trustee

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document shall effect such cancellation or decrease, as applicable, on the Reduction Date. Any Write-off Notice must be accompanied by an Officers’ Certificate of the Issuer stating that a Write-off Event has occurred and setting out the method of calculation of the relevant Absorption Amount. The Trustee shall not be deemed to have knowledge of any Write-off Event or required to reflect the Principal/Interest Permanent Reduction in its books and records relating to the Notes, until and unless the Trustee receives notice of the same from the Issuer. (ii) publish a notice for one day on the website of the CNV and the BASE Daily Bulletin, notifying the Holders of: (i) the occurrence of a Write-off Event, and (ii) the Reduction Date, which shall be within 20 Business Days from the publication of said notice, provided, however, that the Issuer shall cause the Principal/Interest Permanent Reduction to be completed prior to a capitalization with public funds under section (d) of the definition of Write-off Event; and (iii) cause the Principal/Interest Reduction to occur on the Reduction Date in accordance with this Section 6.4. (b) Following the occurrence of a Write-off Event, the Notes will be cancelled in an amount equal to the relevant Principal/ Interest Permanent Reduction as described in this Indenture on the Reduction Date and no principal or interest with respect to such Principal/Interest Permanent Reduction can become due and payable, or will be due and payable by the Issuer after such cancellation, and the concept of payment default under this Indenture would no longer be applicable with respect to such Principal/Interest Permanent Reduction or any related interest. The Issuer at any time may deliver Notes to the Trustee for cancellation. (c) By its acquisition of the Notes, each Holder of the Notes acknowledges, agrees to be bound by and consents to any Principal/ Interest Permanent Reduction that may result in the event of a Write-off Event and the cancellation of all, or a portion, of the principal amount of, or interest on, the Notes, and the rights of the Holders under the Notes are subject to the provisions of this Section 6.4 in respect of a Write-off Event. (d) By its acquisition of the Notes, each Holder of the Notes, to the extent permitted by applicable law, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with any Principal/Interest Permanent Reduction as a result of a Write-off Event on the terms set forth in this Indenture. (e) By its acquisition of the Notes, each Holder of the Notes acknowledges and agrees that, upon a Write-off Event, (i) the Trustee shall not be required to take any further directions from Holders of the Notes under this Indenture, which authorizes Holders of a majority in aggregate principal amount of the Outstanding Notes to direct certain actions relating to the Notes, to the extent the Principal/Interest Permanent Reduction as a result of a Write-off Event reduces the value of the Notes to zero, but not otherwise, and (ii) this Indenture shall impose no duties upon the Trustee whatsoever with respect to any Write-off Event, it being

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document understood that if, following the completion of the Principal/Interest Permanent Reduction as a result of a Write-off Event, if any Notes remain Outstanding (for example, in a partial Principal/Interest Permanent Reduction as a result of a Write-off Event), then the Trustee’s duties under this Indenture shall remain applicable with respect to the Outstanding Notes following such Principal/Interest Permanent Reduction as a result of such Write-off Event. (f) Holders of the Notes that acquire the Notes in the secondary market shall be deemed to acknowledge, agree and be bound by and consent to the same provisions specified in this Indenture to the same extent as the Holders of the Notes that acquire the Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Notes related to any Write-off Event. (g) By its acquisition of the Notes, (i) each Holder of the Notes will automatically be deemed to have irrevocably waived its right to claim or receive, and will not have any rights against the Issuer or the Trustee with respect to, repayment of any principal that was subject to a Principal/Interest Permanent Reduction as a result of a Write-off Event as described under this Section 6.4 or any interest with respect thereto (or Additional Amounts payable in connection therewith), including any and all accrued and unpaid interest with respect to such principal as of the Reduction Date, irrespective of whether such amounts have become due and payable prior to the Reduction Date and (ii) each Holder of the Notes shall be deemed to have (1) consented to (x) the Principal/Interest Permanent Reduction as a result of a Write-off Event and acknowledged that such Principal/Interest Permanent Reduction of its Notes following a Write-off Event may occur without any further action on such Holder’s part and (y) the exercise of any Principal/Interest Permanent Reduction by the Issuer as a result of a Write-off Event in accordance with the powers of the Central Bank, as it may be imposed without any prior notice by the Central Bank of its decision to exercise such power with respect to the Notes, and (2) authorized, directed and requested DTC and any direct or indirect participant in DTC or other intermediary through which it holds such Notes to take any and all necessary action, if required to implement the Principal/Interest Permanent Reduction and the exercise of any Central Bank powers relating to the Notes in respect of such Principal/Interest Permanent Reduction as a result of a Write-off Event as it may be imposed, without any further action or direction on the part of such Holder. (h) By its acquisition of the Notes, each Holder of the Notes acknowledges and agrees that any Principal/Interest Permanent Reduction required as a result of a Write-off Event with respect to the Notes shall not give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the U.S. Trust Indenture Act of 1939, as amended. Notwithstanding the foregoing, Holders of the Notes acknowledge and agree that this Indenture is not qualified under the U.S. Trust Indenture Act of 1939, as amended and Holders are not entitled to any protections thereunder except to the extent provisions of the U.S. Trust Indenture Act of 1939, as amended are specifically incorporated in this Indenture.

Section 6.5 Control by Majority. The Holders of a majority in principal amount of the Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document respect to the Notes; provided, however, that (i) such direction shall not be in conflict with any rule of law or with this Indenture and (ii) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee security or indemnity to its satisfaction.

Section 6.6 Limitation on Suits. No Holder of any Note shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless: (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes; (2) the Holders of not less than 25% in principal amount of the Outstanding Notes shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee thereunder; (3) such Holder or Holders have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Notes, it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.

Without prejudice to the above-mentioned in this Section 6.6, each individual Holder shall have the right to initiate an action against the Issuer for the payment of any principal and/or interest past due on any Note, as the case may be as established by Article 29 of the Negotiable Obligations Law, such right will not be subject to any limitation.

Section 6.7 Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest (and Additional Amounts), if any, on such Note when due accordance with Section 29 of the Negotiable Obligations Law, and such rights shall not be impaired without the consent of such Holder.

Section 6.8 Collection Suit by Trustee. If an Event of Default occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document against the Issuer for the whole amount then due and owing (together with applicable interest on any overdue principal and, to the extent lawful, interest on overdue interest) and the amounts provided for in Section 7.7. Subject to all provisions hereof and applicable law, the Holders of a majority in aggregate principal amount of the then Outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.

Section 6.9 Trustee May File Proofs of Claim, etc. (a) In case of any judicial proceeding relative to the Issuer (or any other obligor upon the Notes), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under applicable law in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee may (irrespective of whether the principal of the Notes is then due): (i) file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders under this Indenture and the Notes allowed in any bankruptcy, insolvency, liquidation or other judicial proceedings relative to the Issuer or any Subsidiary of the Issuer or their respective creditors or properties; and (ii) collect and receive any moneys or other property payable or deliverable in respect of any such claims and distribute them in accordance with this Indenture.

Any receiver, trustee, liquidator, sequestrator (or other similar official) in any such proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, taxes, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due to the Trustee pursuant to Section 7.7. (b) Nothing in this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10 Priorities. If the Trustee collects any money or property pursuant to this ARTICLE VI, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.7; SECOND: to the Agents for amounts due under Section 1.3 and the Trustee’s Representative in Argentina for amounts due under Section 7.11;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document THIRD: to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and FOURTH: to the Issuer.

The Trustee may, upon notice to the Issuer, fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

Section 6.11 Undertaking for Costs. All parties agree, and each Holder by its acceptance of its Notes shall be deemed to have agreed, that in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by the Issuer, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in principal amount of Outstanding Notes. Section 6.12 Subordination During Acceleration Event. In the event that the Notes are accelerated, the Notes will nonetheless remain junior in right of payment to the Issuer’s Senior Obligations, and unless all holders of the Issuer’s Senior Obligations have then been paid in full, no payment or other distribution may be made in respect of the Notes. In the event that, notwithstanding the foregoing, the Trustee or any Holders of the Notes receive any payment or distribution that is prohibited by the foregoing sentence, then such amount shall be subject to the provisions of Section 10.2(b).

ARTICLE VII

TRUSTEE

Section 7.1 Duties of Trustee. (a) If a Default or an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. (b) Except during the continuance of a Default or an Event of Default: (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of negligence or willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions, which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (it being understood that the Trustee need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this Section 7.1(c) does not limit the effect of Section 7.1(b); (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5 or Section 6.8 or any other provision of this Indenture. (d) The Trustee shall not be liable for interest on, or to invest, any money received by it except as the Trustee may agree in writing with the Issuer. (e) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (f) No provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this ARTICLE VII. (h) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Authorized Officer of the Issuer. (i) Notwithstanding any provision contained herein to the contrary, the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders unless such Holders shall have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 7.2 Rights of Trustee. (a) The Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any document, instrument, opinion, direction, order, notice or request reasonably believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in such document, instrument, opinion, direction, order, notice or request. (b) Before the Trustee acts or refrains from acting at the direction of the Issuer, it may require an Officers’ Certificate, advice of counsel and/or an Opinion of Counsel, and such Officers’ Certificate, advice and/or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted to be taken by it hereunder. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate, advice of counsel and/or Opinion of Counsel. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (e) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon notice to the Issuer, to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. (f) The Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a Default or Event of Default is received by a Trust Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. For purposes of determining the Trustee’s responsibility and liability hereunder, whenever reference is made in this Indenture to a Default or Event of Default, such reference shall be construed to refer only to such Default or Event of Default for which the Trustee is deemed to have notice pursuant to this Section 7.2(f). (g) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each Agent, custodian and other Person or agent employed to act hereunder.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (h) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, without limitation, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. (i) The Trustee may request that the Issuer deliver an Officers’ Certificate setting forth the names of individuals and/or titles of Authorized Officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. (j) The permissive rights of the Trustee enumerated herein shall not be construed as duties. (k) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service, accidents; labor disputes; acts of civil or military authority or governmental actions (it being understood that the Trustee shall use its best efforts to resume performance as soon as practicable under the circumstances). (l) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys. (m) To the extent permitted by applicable law, the Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise. (n) To help fight the funding of terrorism and money laundering activities, the Trustee will obtain, verify, and record information that identifies individuals or entities that establish a relationship or open an account with the Trustee. The Trustee will ask for the name, address, tax identification number and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship or opening the account. The Trustee may also ask for formation documents such as articles of incorporation, an offering memorandum, or other identifying documents to be provided. (o) To the extent that the consent or authorization of the SEFC, the CNV, the Central Bank or any other Argentine Governmental Authority or compliance with the Negotiable Obligations Law is required for the Issuer’s, the Trustee’s or any Agent’s performance under the Notes or this Indenture, none of the Trustee or any Agent shall have any duty or obligation to determine whether such approval, consent or authorization or compliance is required or any duty or obligation to obtain any consent, approval or authorization or ensure such compliance. The Issuer shall notify the Trustee and the Agents, as applicable, in writing if the approval, consent or authorization of the SEFC, the CNV, the Central Bank or any other Argentine Governmental Authority or compliance with the Negotiable Obligations Law, as applicable, is required for the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document performance under the Notes or this Indenture by the Issuer, the Trustee or any Agent and, if applicable, whether or not such consent has been obtained by the Issuer. (p) Any Board Resolutions of the Issuer required to be delivered to the Trustee pursuant to this Indenture may be in Spanish and need not be accompanied by an English translation and the Trustee shall have no duty or obligation to review such resolutions or otherwise inquire as to or confirm the content thereof, and the Trustee may conclusively rely upon the receipt of any such Board Resolutions as to the requisite authority for the action relating to the purpose for which they were delivered.

Section 7.3 Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee must comply with Section 7.10.

Section 7.4 Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in this Indenture or in any offering material or other document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Notes and perform its obligations hereunder.

Section 7.5 Notice of Defaults. If a Default or Event of Default occurs and is continuing and a Trust Officer has received written notice thereof pursuant to Section 7.2(f) the Trustee shall give to each Holder, with a copy to the Issuer, notice of the Default or Event of Default within 45 days after the Trustee receives written notice thereof. The Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders.

Section 7.6 Report to Trustee. The Issuer agrees to promptly notify the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof.

Section 7.7 Compensation and Indemnity. (a) The Issuer shall pay to the Trustee a compensation equal to U.S.$15,000.00 per annum, or such other reasonable amount as shall have been agreed upon by the Issuer and the Trustee in writing, for its acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it in connection with the performance and/or the exercise of its duties under this Indenture, except for any such expense as may arise from the Trustee’s negligence, willful misconduct or bad faith. Such expenses shall include the reasonable fees and expenses of the Trustee’s agents and counsel. (b) The Issuer shall indemnify and hold harmless the Trustee and its officers, directors, employees and agents against any and all loss, damage, claim, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it without negligence or willful

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document misconduct on its part in connection with the acceptance or administration of this trust and the performance of its duties hereunder and/ or the exercise of its rights hereunder, including the costs and expenses of defending themselves (including reasonable attorney’s fees and costs) against any claim or liability related to the exercise or performance of any of their rights, powers or duties hereunder and under any other agreement or instrument related thereto. The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim if, in the reasonable judgment of counsel to the Trustee, there is no conflict of interest or potential conflict of interest between the Issuer and the Trustee in connection with such defense. The Issuer need not pay for any settlement made without its written consent. (c) To secure the Issuer’s payment obligations in this Section 7.7, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes. The Trustee’s right to receive payment of any amounts due under this Section 7.7 shall not be subordinate to any other liability or indebtedness of the Issuer. (d) The Issuer’s payment obligations pursuant to this Section 7.7 shall survive the payment of the Notes, the discharge or other termination of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses or renders services after the occurrence of an Insolvency or Liquidation Proceeding, the expenses or compensation for services are intended to constitute expenses of administration under any Bankruptcy Law; provided, however, that this shall not affect the Trustee’s rights as set forth in this Section 7.7 or Section 6.10.

Section 7.8 Replacement of Trustee. (a) The Trustee may resign at any time by so notifying the Issuer. In addition, the Holders of a majority in aggregate principal amount of the then Outstanding Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. Moreover, if the Trustee is no longer eligible pursuant to Section 7.10 to act as such, or does not have a Corporate Trust Office in the City of New York, New York, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. The Issuer shall remove the Trustee if: (i) the Trustee fails to comply with Section 7.10; (ii) the Trustee is adjudged bankrupt or insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee otherwise becomes incapable of acting. (b) If the Trustee resigns or is removed by the Issuer or by the Holders of a majority in principal amount of the then Outstanding Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of the Trustee for any

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee. (c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall give a notice of its succession to Holders as described in Section 11.1. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7. (d) If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Outstanding Notes may petition, at the Issuer’s expense, any court of competent jurisdiction for the appointment of a successor Trustee. (e) Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, the Issuer’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

Section 7.9 Successor Trustee by Merger. (a) If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets (including this transaction) to, another corporation or national banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee; provided that such Persons shall be otherwise qualified and eligible under this ARTICLE VII. (b) In case at the time such successor or successors to the Trustee by consolidation, merger or conversion shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force as if the predecessor trustee had authenticated and delivered such Notes.

Section 7.10 Eligibility. The Trustee shall have a combined capital and surplus of at least U.S.$50,000,000 as set forth in its most recent published annual report of condition.

Section 7.11 The Trustee’s Representative in Argentina. (a) As long as it is required by Argentine law or by the CNV, the Trustee will have the Trustee’s Representative in Argentina for the sole purposes set forth in this Section 7.11. (b) The duties of the Trustee’s Representative in Argentina shall be determined solely by the express provisions of this Indenture or as it may agree from time to

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document time in writing with the Trustee, and the Trustee’s Representative in Argentina need perform only those duties that are specifically set forth in this Indenture and those agreed in writing with the Trustee. No implied covenants or obligations shall be read into this Indenture against the Trustee’s Representative in Argentina. The Trustee’s Representative in Argentina shall have only the rights and powers stated below. It is further acknowledged that the Trustee’s Representative in Argentina is not and shall not be considered as if it were a Trustee’s attorney-in-fact. (c) The duties and rights of the Trustee’s Representative in Argentina are only: (i) to receive from Holders, the Issuer, Agents, and any governmental or regulatory authority or entity any and all letters, claims, requests, memorandums or any other document directed to the Trustee with respect to the Notes, (ii) to transmit, deliver or notify the Trustee of the reception of any and all of the mentioned documents by mail, e-mail (in portable document format) or facsimile, within three Business Days of such reception, and (iii) respond or answer such letters, claims, requests, memoranda or documents, following the express written instructions of the Trustee and only if such instructions are given by the Trustee. (d) The Trustee’s Representative in Argentina shall not be liable for any action it takes or omits to take in good faith and within its discretion and in accordance with the terms hereof, rights or powers. (e) The Issuer shall pay to the Trustee’s Representative in Argentina from time to time, and the Trustee’s Representative in Argentina shall be entitled to, such compensation for its acceptance of this Indenture and its services hereunder, as shall have been agreed in writing between the Issuer and the Trustee’s Representative in Argentina. The Issuer shall reimburse the Trustee’s Representative in Argentina promptly upon request for all reasonable disbursements, advances and expenses incurred or made by or on behalf of it in addition to the compensation for its services. Such expenses may include the reasonable compensation, disbursements and expenses of Trustee’s Representative in Argentina’s agents, counsel and other persons not regularly in its employ. (f) The Issuer agrees to indemnify and defend the Trustee’s Representative in Argentina and its officers, directors, employees and agents for, and to hold each entity harmless against any losses, liabilities, claims, damages and/or expenses, including the fees and expenses of counsel incurred by it without negligence or willful misconduct on its part in connection with the performance of its duties or powers hereunder and the exercise of its rights hereunder, or under any related agreement.

Section 7.12 Agents. The rights, protections and immunities granted to the Trustee under this ARTICLE VII including, without limitation, any right to be indemnified, shall apply mutatis mutandis to any Agent appointed pursuant to this Indenture.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE VIII

DEFEASANCE; DISCHARGE OF INDENTURE

Section 8.1 Legal Defeasance and Covenant Defeasance. (a) The Issuer may, at its option, at any time, upon compliance with the conditions set forth in Section 8.2, elect to have either Section 8.1(b) or Section 8.1(c) be applied to its obligations with respect to all Outstanding Notes. (b) Upon the Issuer’s exercise under Section 8.1(a) of the option applicable to this Section 8.1(b), the Issuer shall, subject to the satisfaction of the conditions set forth in Section 8.2, be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Notes and all such amounts as shall be due and payable under this Indenture on the 91st day after the deposit specified in Section 8.2(a) (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Notes, which shall thereafter be deemed to be Outstanding only for the purposes of the sections of this Indenture referred to in clause (i) or (ii) of this Section 8.1(b), and the Issuer shall have been deemed to have satisfied all its other obligations under such Notes, and hereunder (and the Trustee, on demand of and at the expense of the Issuer, shall execute instruments acknowledging the same), except for the following provisions, which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders to receive solely from the trust described in Section 8.2 below, as more fully set forth in such section, payments in respect of the principal of and interest on the Notes when such payments are due, (ii) the Issuer’s obligations with respect to such Notes concerning issuing temporary Notes, registration of Notes, replacing mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payments, (iii) the rights, powers, trusts, duties, protections, benefits, indemnities and immunities of the Trustee as described in ARTICLE VII and hereunder and the Issuer’s obligations in connection therewith, and (iv) this ARTICLE VIII. Subject to compliance with this ARTICLE VIII, the Issuer may exercise its option under this Section 8.1(b) notwithstanding the prior exercise of its option under Section 8.1(c). (c) Upon the Issuer’s exercise under Section 8.1(a) of the option applicable to this Section 8.1(c), the Issuer shall be, subject to the satisfaction of the applicable conditions set forth in Section 8.2, released and discharged from its obligations under the covenants contained in Section 3.6, Section 3.10 and Section 3.11 with respect to the Outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not Outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be Outstanding for all other purposes hereunder (it being

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document understood that such Notes shall not be deemed Outstanding for accounting purposes). For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document but, except as specified above, the remainder hereof and such Notes shall be unaffected thereby.

Section 8.2 Conditions to Defeasance. The Issuer may exercise its Legal Defeasance option or its Covenant Defeasance option only if: (a) the Issuer irrevocably deposits in trust with the Trustee money or U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms shall provide money in an amount, or any combination thereof, in each case, sufficient to pay and discharge the principal of each installment of principal and interest, if any, on the Outstanding Notes on the dates such payments are due, in accordance with the terms of the Notes, to but not including the Stated Maturity thereof or the date of redemption designated by the Issuer pursuant to the final paragraph of this Section 8.2; (b) the Issuer delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Notes to maturity or redemption, as the case may be; (c) no Default or Event of Default (including by reason of such deposit) shall have occurred and be continuing on the date of such deposit; (d) the Issuer shall have delivered to the Trustee an opinion of recognized U.S. counsel independent of the Issuer to the effect: (i) that the Holders shall not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge of obligations, which in the case of Legal Defeasance must be based on a change in law or a ruling by the U.S. Internal Revenue Service; and (ii) that the defeasance trust is not or is not required to be registered, or is registered as, an investment company under the Investment Company Act of 1940, as amended; and (e) the Issuer delivers to the Trustee an Opinion of Counsel and an Officers’ Certificate as to compliance with all conditions precedent provided for in this Indenture relating to the Legal Defeasance or Covenant Defeasance, as applicable, of the Notes.

Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with ARTICLE V hereof.

If the Issuer deposits or causes to be deposited money or U.S. Government Obligations to pay or discharge the principal of and interest, if any, on the Outstanding Notes to

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document but not including a date on which all of the outstanding Notes are to be redeemed, such Redemption Date shall be irrevocably designated by a Board Resolution of the Issuer delivered to the Trustee on or prior to the date of deposit of such money or U.S. Government Obligations, and such Board Resolution shall be accompanied by an irrevocable request by the Issuer that the Trustee give notice of such redemption in the name and at the expense of the Issuer in accordance with Article V of this Indenture.

Section 8.3 Application of Trust Money. The Trustee shall hold in trust U.S. Dollars or U.S. Government Obligations deposited with it pursuant to this ARTICLE VIII. It shall apply the deposited money and the U.S. Dollars from U.S. Government Obligations, together with earnings thereon, through the Principal Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes. Anything in this ARTICLE VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the Issuer’s request any U.S. Dollars or U.S. Government Obligations held by it as provided in this Section 8.3 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.4 Repayment to Issuer. (a) The Trustee and the Paying Agent shall promptly turn over to the Issuer upon request any excess money or securities held by them upon payment of all the obligations under this Indenture. (b) Subject to any applicable abandoned property law, the Trustee and the Paying Agents shall pay to the Issuer upon request any money held by them for the payment of principal of or interest on the Notes that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors. Section 8.5 Indemnity for U.S. Government Obligations. The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations deposited with the Trustee pursuant to this ARTICLE VIII. Section 8.6 Reinstatement. If the Trustee or a Paying Agent is unable to apply any U.S. Dollars or U.S. Government Obligations in accordance with this ARTICLE VIII by reason of any legal proceeding or by reason of any order or judgment of any court or Government Agency enjoining, restraining or otherwise prohibiting such application, the obligations of the Issuer under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this ARTICLE VIII until such time as the Trustee or a Paying Agent is permitted to apply all such U.S. Dollars or U.S. Government Obligations in accordance with this ARTICLE VIII; provided, however, that if the Issuer has made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the U.S. Dollars or U.S. Government Obligations held by the Trustee or such Paying Agent.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 8.7 Satisfaction and Discharge. This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the Notes, and as otherwise expressly provided for herein) as to all Outstanding Notes, and the Trustee, on written demand of and at the expense of the Issuer, shall execute instruments acknowledging satisfaction and discharge of this Indenture, when: (a) either: (i) all the Notes that have theretofore been authenticated and delivered, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer, have been delivered to the Trustee for cancellation; or (ii) all Notes that have not theretofore been delivered to the Trustee for cancellation have become due and payable and the Issuer has irrevocably deposited or caused to be deposited with the Trustee as funds in trust solely for the benefit of the Holders, cash in U.S. Dollars, in amounts as will be sufficient without reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal and Additional Amounts, if any, accrued and unpaid interest on the Notes to the date of deposit (in the case of Notes that have become due and payable) or to the maturity or Redemption Date, as the case may be, together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment and all other amounts due hereunder; (b) no Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit and the deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Issuer is a party or by which the Issuer is bound; (c) the Issuer paid or caused to be paid all sums payable by it under this Indenture; (d) the Issuer delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or the Redemption Date, as the case may be; and (e) the Issuer delivered an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE IX

AMENDMENTS Section 9.1 Without Consent of Holders. (a) The Issuer and the Trustee may amend, modify or supplement this Indenture and the Notes without notice to or consent of any Holder: (i) to cure any ambiguity, omission, defect or inconsistency contained herein or in the Notes; (ii) to provide for the assumption by a Successor Person of the obligations of the Issuer under this Indenture; (iii) to provide for the issuance of Additional Notes in accordance with Section 2.14; (iv) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the U.S. Trust Indenture Act of 1939, as amended; (v) to conform the terms of this Indenture or the Notes with the description thereof set forth in the “Description of the Notes” section of the Offering Memorandum to the extent that such description was intended to be a verbatim recitation of a provision of this Indenture or the Notes; (vi) to evidence the replacement of the Trustee as provided for under this Indenture; and (vii) for any other purpose that the parties hereto may mutually deem necessary or desirable; provided in each such case that any such modification or amendment does not adversely affect the interests of Holders in any respect. (b) In formulating its opinion on the foregoing, the Trustee shall be entitled to conclusively rely on such evidence as it deems appropriate, including, without limitation, solely on an Opinion of Counsel and an Officers’ Certificate. (c) After an amendment under this Section 9.1 becomes effective, the Issuer shall give to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.1. (d) Promptly after the execution by the Issuer and the Trustee of any modification, amendment or supplement to this Indenture pursuant to the provisions of this Section 9.1, the Issuer shall give notice thereof to the Holders, the CNV and the BASE, setting forth in general terms the substance of such modifications, amendments or supplements.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 9.2 With Consent of Holders. (a) Modifications to, amendments of, and supplements to, this Indenture or the Notes not set forth under Section 9.1 may be made with the consent of the Holders of a majority in principal amount of the then Outstanding Notes issued under this Indenture, except that, without the consent of each Holder affected thereby, no amendment may: (i) reduce the percentage of the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest on any Notes; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption, or reduce the redemption price therefor; (iv) make any Notes payable in currency other than that stated in the Notes; (v) make any change in the provisions of this Indenture entitling each Holder to receive payment of principal of and interest on such Notes on or after the due date thereof or to bring suit to enforce such payment; (vi) make any change to Section 3.12 that adversely affects the rights of any Holder or amend the terms of the Notes in a way that would result in a loss of exemption from any applicable Relevant Taxes; and (vii) make any change to the provisions of this Indenture or the Notes that adversely affects the ranking of the Notes. (b) Promptly after the execution by the Issuer and the Trustee of any modification, amendment or supplement to this Indenture pursuant to the provisions of this Section 9.2(b), the Issuer shall give notice thereof to the Holders, the CNV and the BASE, setting forth in general terms the substance of such modifications, amendments or supplements.

Section 9.3 Revocation and Effect of Consents and Waivers. (a) A consent to an amendment, supplement or waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. After an amendment, supplement or waiver becomes effective, it shall bind every Holder, except as otherwise provided in this ARTICLE IX.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date unless the relevant action for which such consent was granted was effectively taken.

Section 9.4 Notation on or Exchange of Notes. If an amendment or supplement changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall execute and upon Issuer Order the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment or supplement.

Section 9.5 Trustee to Sign Amendments and Supplements. The Trustee shall sign any amendment or supplement authorized pursuant to this ARTICLE IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment or supplement the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.1 and Section 7.2) shall be fully protected in conclusively relying upon, such evidence as it deems appropriate, including, without limitation, the documents required by Section 11.2 and solely on an Opinion of Counsel and Officers’ Certificate, each stating that such amendment or supplement is authorized or permitted hereby.

Section 9.6 Evidence of Action Taken by Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a percentage in principal amount of the Holders, whether specified herein or in the Notes, as applicable, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments is or are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article.

Section 9.7 Holders to be Treated as Owners. The Issuer, the Trustee, the Agents and any agent of the Issuer, the Trustee or the Agents may deem and treat any Person in whose name any Note shall be registered upon the Register as the absolute owner of such Note (subject to Section 2.13, whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest on such Note (including Additional Amounts) and for all other purposes; and none of the Issuer, the Trustee, any Agent or any agent of the Issuer, the Trustee or any Agent shall be affected by any notice to

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the contrary. All such payments so made to any such Person, or upon its order, shall be valid, and, to the extent of the sum or sums so paid, effective to satisfy and discharge the liability for moneys payable upon any such Note.

Section 9.8 Noteholders Meeting; Consent. (a) Each of the Issuer (through its Board of Directors) and the Trustee may at any time call a meeting of the Holders for the purpose of entering into a supplemental indenture or amendment. In addition, a meeting of the Holders may be called by the Trustee or the Issuer (acting through its Board of Directors or its statutory auditors’ committee) upon the request of the Holders of at least 5% in aggregate principal amount of the Outstanding Notes, or by the Issuer (acting through its Board of Directors or its statutory auditors’ committee) at its discretion, pursuant to the Negotiable Obligations Law. To be entitled to vote at any meeting of Holders, a Person shall be (i) a Holder of one or more Notes as of the relevant record date or (ii) a Person appointed by a Holder in writing as a proxy for a Holder of one or more Notes. The Issuer, by or pursuant to a resolution of its Board of Directors, may set a record date for purposes of determining the identity of Holders entitled to vote, which record date may be set at any time or from time to time by notice in writing to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than ten days prior to the proposed date of such vote, and thereafter, notwithstanding any other provisions hereof, only Holders of record on such record date will be entitled to so vote or give such consent or revoke such vote or consent. (b) Meetings of Holders shall be held within the City of Buenos Aires and by video-conferencing system. Both Holders at the meeting in the City of Buenos Aires and Holders participating from a different location shall be counted for purposes of quorum. The video-conferencing system shall permit the participants to simultaneously see, hear and speak to each other. If a meeting is being held pursuant to a request of Holders, the agenda for such meeting shall be set forth in the request made by such Holders, and such meeting shall be held within 40 days from the date such request is received by the Issuer or the Trustee. Notice of any meeting of Holders, setting forth the date, time and place of such meeting and the agenda therefor (which shall describe in general terms the action proposed to be taken and the requirements for attendance) shall be given by the Issuer or the Trustee, as applicable, at the expense of the Issuer as specified in Section 11.1. In addition, such notice shall be published (in Spanish) on five different days, not less than 10 days nor more than 30 days prior to the date set for the meeting, in the Official Gazette of the Republic of Argentina (Boletín Oficial de la República Argentina), in the Daily Bulletin of the BASE, in another widely circulated newspaper in Argentina, on the CNV’s website and the Issuer’s website. (c) Meetings of Holders may be ordinary (“Ordinary Meetings”) or extraordinary (“Extraordinary Meetings”). An Extraordinary Meeting requires the presence of Holders representing 60% in aggregate principal amount of the Notes at the time Outstanding, and an Ordinary Meeting requires the presence of Holders representing the majority in aggregate principal amount of the Notes at the time Outstanding.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) An Extraordinary Meeting shall deal with and resolve upon amendments, modifications or supplements to this Indenture with the consent of Holders, which must follow the requirements set forth in Section 9.2. (ii) An Ordinary Meeting shall deal with all matters that are outside the competence of the Extraordinary Meeting. (d) The Issuer shall inform the Trustee whether any meeting shall be an Ordinary Meeting or an Extraordinary Meeting, which determination the Trustee shall be entitled to conclusively rely upon. Amendments or supplements hereto or to the Notes or waivers of any provision hereof or thereof approved at a meeting of Holders may only be approved at an Extraordinary Meeting (or at a second adjourned Extraordinary Meeting) by the affirmative vote of a majority in aggregate principal amount of the Notes then Outstanding, except as contemplated herein. The persons entitled to vote that represent 60% (in the case of an Extraordinary Meeting) or a majority (in the case of an Ordinary Meeting) in aggregate principal amount of the Notes at the time Outstanding shall constitute a quorum at any such meeting of Holders. No meeting of Holders shall be held in the absence of quorum, except if quorum was present when the meeting was called to order. In the absence of a quorum within 30 minutes of the time appointed for a meeting, the meeting shall be adjourned for a period of not less than one hour and no more than 30 days, as determined by the chairman of the meeting who shall keep an attendance record. If notice to reconvene any adjourned meeting is not simultaneously given with the notice of the meeting, additional notice shall be given as provided above and must be published in the Official Gazette of the Republic of Argentina, in the Daily Bulletin of the BASE, in another widely circulated newspaper in Argentina and on the CNV’s website, except that such notice need be published only for 3 days, not less than 8 days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall expressly state the aggregate principal amount of Outstanding Notes, which shall constitute a quorum at said meeting. (e) At any meeting of Holders, each Holder, or its attorney-in-fact, shall be entitled to cast one vote for each U.S. Dollar of the principal amount of Notes that it holds. (f) The Issuer and the Trustee may add any provisions to or change in any manner or eliminate any of the provisions of this Indenture or the Notes, with the affirmative vote, at a meeting of Holders, of a majority in aggregate principal amount of the Notes then Outstanding; however, none of the modifications, amendments or supplements to this Indenture requiring the consent of each Holder affected thereby, as set forth in Section 9.2 hereof, may be made at a meeting of Holders without the unanimous consent of all Holders of Notes then Outstanding. (g) Under no circumstances shall the Trustee be obligated or required to (i) appoint, or otherwise act as, chairman of any meeting of the Holders or (ii) attend any meeting of the Holders.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE X

RANKING OF THE NOTES

Section 10.1 Agreement that Notes are Unsecured and Parity Obligations. The Issuer covenants and agrees, and each Holder of Notes issued hereunder likewise covenants and agrees, that the Notes shall be issued subject to the provisions of this ARTICLE X; and each Holder of a Note, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions. The payment by the Issuer of the principal of and interest on all Notes issued hereunder shall, to the extent and in the manner hereinafter set forth, be junior in right of payment and in liquidation to all Senior Obligations, whether outstanding at the date of this Indenture or thereafter incurred and will be senior in right of payment and in liquidation to only the Issuer’s Junior Obligations. No provision of this ARTICLE X shall prevent the occurrence of any Acceleration Event hereunder. The Notes will constitute the Issuer’s subordinated and unsecured obligations and will rank (i) junior in right of payment to all of the Issuer’s existing and future Senior Obligations, (ii) pari passu in right of payment to the Issuer’s Parity Obligations and (iii) senior in right of payment to the Issuer’s Junior Obligations in the event of bankruptcy or liquidation of the issuer, with express waiver of any general or special privileges.

Section 10.2 Default on Senior Obligations. (a) In the event of the acceleration of the maturity of the Notes due to an Acceleration Event under Section 6.2 hereof, (i) all principal of, interest due or to become due, and other applicable amounts due or to become due, on all Senior Obligations shall be paid in full before the holders of Parity Obligations (including the Notes) shall be entitled to receive or retain any payment in respect thereof, (ii) the holders of Parity Obligations (including the Notes) shall be entitled to receive pari passu among themselves any payment in respect thereof. The Notes and all other Parity Obligations will be senior to the Issuer’s Junior Obligations. (b) In the event that, notwithstanding the foregoing, the Trustee or any Holders of the Notes receives any payment or distribution that is prohibited under Section 10.2(a), then the Trustee or the Holders, as applicable, shall repay that money to, or hold that money in trust for the benefit of, holders of the Issuer’s Senior Obligations or to the trustee or trustees under any indenture pursuant to which any of such Senior Obligations may have been issued, as their respective interests may appear unless such amounts have already been paid by the Trustee in accordance with Section 10.6. The Trustee’s obligations under this Section 10.2 shall be subject to the Trustee’s receipt of written notice in accordance with Section 10.6 that such payment or distribution is prohibited under Section 10.2(a).

Section 10.3 Liquidation, Dissolution, Insolvency, Bankruptcy. (a) Upon any distribution of assets to creditors upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy, insolvency or equivalent proceeding under Argentinean law, in connection with the insolvency or bankruptcy of the Issuer, (i) all principal and interest due or to become due on all Senior Obligations shall be paid in full before the holders of Parity Obligations (including the Notes) shall be entitled to receive or retain any payment in respect

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document thereof, (ii) the holders of Parity Obligations (including the Notes) shall be entitled to receive pari passu among themselves any payment in respect thereof in full before the holders of Junior Obligations shall be entitled to receive or retain any payment in respect thereof; and upon any such liquidation, dissolution or other proceeding specified above, any payment by the Issuer, or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, to which the Holders or the Trustee would be entitled to receive from the Issuer, but for the provisions of this ARTICLE X, the Argentine Banking Law or regulations enacted by the Central Bank of which the Trustee has received written notice, shall be paid by the Issuer or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders or by the Trustee under this Indenture if received by them or it, directly to, first, the holders of Senior Obligations or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Obligations may have been issued, as their respective interests may appear, to the extent necessary to pay such Senior Obligations, respectively, in full, in money or money’s worth, after giving effect, first, to any concurrent payment or distribution to or for the holders of such Senior Obligations, before any payment or distribution is made to the holders of Parity Obligations or to the Trustee. (b) In the event that, notwithstanding the foregoing, the Trustee or any Holders of the Notes receives any such payment or distribution, of any kind or character, whether in cash, property or securities, then the Trustee or the Holders, as applicable, shall repay that money to (in accordance with their written instructions), or hold that money in trust for the benefit of, holders of the Issuer’s Senior Obligations or their representative or representatives, or the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Obligations may have been issued, and their respective interests may appear, as calculated by the Issuer, for application to the payment of all Senior Obligations remaining unpaid to the extent necessary to pay such Senior Obligations, in full in money in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Obligations. (c) For purposes of this ARTICLE X, the words “cash, property or securities” shall not be deemed to include shares of stock of the Issuer as reorganized or readjusted, or securities of the Issuer or any other corporation provided for by a plan of reorganization or readjustment, which is junior in right of payment, at least to the extent provided in this ARTICLE X with respect to the Notes, to the payment of Senior Obligations that may at the time be outstanding, provided that (i) such Senior Obligations are assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of such Senior Obligations are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Issuer with, or the merger of the Issuer into, another Person or the liquidation or dissolution of the Issuer following the sale, conveyance, transfer or lease of its property as an entirety, or substantially as an entirety, to another Person upon the terms and conditions provided for in Section 4.1 of this Indenture shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 10.3 if such other Person shall, as a part of such consolidation, merger, sale, conveyance, transfer or lease, comply with the conditions stated in Section 4.1 of this Indenture.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 10.4 Subrogation. (a) Subject to the payment in full of all Senior Obligations, and to the extent permitted by the Central Bank and the CNV and subject to applicable Argentinean law, the rights of the Holders will be subrogated to the rights of the holders of Senior Obligations to receive payments or distributions of cash, property or securities of the Issuer, as the case may be, applicable to such Senior Obligations until the principal of and interest on the Notes shall be paid in full; and for the purposes of such subrogation, no payments or distributions to the holders of such Senior Obligations of any cash, property or securities to which the Holders or the Trustee would be entitled but for the provisions of this ARTICLE X, and no payment over pursuant to the provisions of this ARTICLE X to or for the benefit of the holders of such debt by Holders or the Trustee, shall, as between the Issuer, its creditors other than holders of Senior Obligations, and the Holders of the Notes, be deemed to be a payment by the Issuer to or on account of such Senior Obligations. It is understood that the provisions of this ARTICLE X are intended solely for the purposes of defining the relative rights of the Holders of the Notes, on the one hand, and the holders of such Senior Obligations on the other hand. (b) Nothing contained in this ARTICLE X or elsewhere in this Indenture or in the Notes is intended to or shall impair, as between the Issuer, its creditors other than holders of Senior Obligations and the Holders of the Notes, the obligation of the Issuer, which is absolute and unconditional, to pay to the Holders of the Notes the principal of and interest (and Additional Amounts, if any) on the Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Notes and creditors of the Issuer, as the case may be, other than the holders of Senior Obligations, as the case may be, nor shall anything herein or therein prevent the Trustee or the Holder of any Note from exercising all remedies, otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this ARTICLE X of the holders of such Senior Obligations, in respect of cash, property or securities of the Issuer, as the case may be, received upon the exercise of any such remedy.

Section 10.5 Trustee to Effectuate Ranking. Each Holder by such Holder’s acceptance of a Note authorizes and directs the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the junior right of payment of the Notes to the Senior Obligations provided in this ARTICLE X and appoints the Trustee such Holder’s attorney-in-fact for any and all such purposes.

Section 10.6 Notices by the Issuer to the Trustee. (a) The Issuer shall give prompt written notice to a Trust Officer of any fact known to the Issuer that would prohibit the making of any payment of monies to or by the Trustee in respect of the Notes pursuant to the provisions of this ARTICLE X. Notwithstanding the provisions of this ARTICLE X or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of monies to or by the Trustee in respect of the Notes pursuant to the provisions of this ARTICLE X, unless and until a Trust Officer shall have received written notice thereof from the Issuer or a holder or holders of Senior Obligations or from any trustee therefor or representative thereof, and before the receipt of any such written notice, the Trustee shall be entitled in all

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section 10.6 at least two Business Days prior to the date (i) upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of or interest on any Note), or (ii) moneys and/or U.S. Government Obligations are deposited in trust pursuant to ARTICLE VIII hereof then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date. (b) The Trustee shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Obligations (or a trustee or representative on behalf of such holder), to establish that such notice has been given by a holder of such Senior Obligations or a trustee or representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of such Senior Obligations to participate in any payment or distribution pursuant to this ARTICLE X, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Obligations, as the case may be, held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this ARTICLE X, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending administrative or judicial determination as to the right of such Person to receive such payment. (c) Upon any payment or distribution of assets of the Issuer referred to in this ARTICLE X, the Trustee and the Holders shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Obligations and other indebtedness of the Issuer, the amounts thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this ARTICLE X.

Section 10.7 Rights of the Trustee; Holders of Senior Obligations. (a) The Trustee in its individual capacity shall be entitled to all the rights set forth in this ARTICLE X in respect of any Senior Obligations at any time held by it, to the same extent as any other holder of Senior Obligations, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. (b) With respect to the holders of Senior Obligations, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this ARTICLE X, and no implied covenants or obligations with respect to the holders of such Senior Obligations shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of such Senior Obligations and, subject to the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provisions of ARTICLE VI of this Indenture, the Trustee shall not be liable to any holder of such Senior Obligations if it shall pay over or deliver to Holders, the Issuer or any other Person money or assets to which any holder of such Senior Obligations shall be entitled by virtue of this ARTICLE X or otherwise. (c) Nothing in this ARTICLE X shall apply to claims of, or payments to, the Trustee under Section 7.7.

Section 10.8 Ranking May Not be Impaired. (a) No right of any present or future holder of any Senior Obligations to enforce its senior right of payment with regard to the Notes as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by the Issuer, as the case may be, with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with. (b) Without in any way limiting the generality of clause (a) of this Section 10.8, the holders of Senior Obligations may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Holders and without impairing or releasing its senior right of payment with regard to the Notes provided in this ARTICLE X or the obligations hereunder of the Holders of the Notes to the holders of such Senior Obligations, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Obligations, or otherwise amend or supplement in any manner such Senior Obligations or any instrument evidencing the same or any agreement under which such Senior Obligations is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Obligations; (iii) release any Person liable in any manner for the collection of such Senior Obligations; and (iv) exercise or refrain from exercising any rights against the Issuer and any other Person, as the case may be.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Notices. (a) Any notice, agreement, direction, instruction, request, demand or other communication that by any provision of this Indenture is required or permitted to be given or served by the Trustee, any Agent or by the Holders to or on the Issuer, shall be in writing and shall be sufficient for every purpose hereunder if given or served by facsimile transmission or other electronic transmission or by courier (except as otherwise specifically provided herein) or by mail addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to Banco de Galicia y Buenos Aires, Tte. Gral. Juan D. Perón 407, Buenos Aires, Argentina, Attention: Gonzalo Braceras, Fax: (5411) 6329-6100. Any notice, agreement, direction, instruction, request, demand or other communication by the Issuer or any Holder to or upon the Trustee shall be in English and in writing and shall be deemed to have been sufficiently given or

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document made, for all purposes, upon actual receipt and if given or made at the Corporate Trust Office of the Trustee by an internationally recognized courier, by mail or by facsimile or other electronic transmission. Any notice, agreement, direction, instruction, request, demand or other communication that by any provision of this Indenture is required or permitted to be given or served to or on the Trustee’s Representative in Argentina shall be sufficient for every purpose hereunder if given by courier (except as otherwise specifically provided herein), facsimile transmission or other electronic transmission or by mail addressed (until another address of the Trustee’s Representative in Argentina is provided to the Trustee and the Issuer) to Banco de Valores S.A., Sarmiento 310, Autonomous City of Buenos Aires, Attention: Jorge Sáez, Alberto Jorge Liwski, Fax: +5411 4323 6942. Any notice, agreement, direction, instruction, request, demand or other communication that by any provision of this Indenture is required or permitted to be given or served to or on the Luxembourg Paying Agent or Luxembourg Transfer Agent, as the case may be, shall be in English and in writing and shall be sufficient for every purpose hereunder if given by courier, by facsimile transmission or other electronic transmission or by mail addressed (until another address of the Luxembourg Paying Agent and Luxembourg Transfer Agent is provided to the Trustee and the Issuer) to The Bank of New York Mellon (Luxembourg) S.A., Vertigo Building – Polaris, 2-4 rue Eugène Ruppert, L-2453, Grand Duchy of Luxembourg, Attention: International Corporate Trust, Fax: +352 24 524 204.

In respect of this Indenture, the Trustee shall not have any duty or obligation to verify or confirm that the Person sending instructions, agreements, directions, reports, notices or other communications or information by electronic transmission is, in fact, a Person authorized to give such instructions, agreements, directions, reports, notices or other communications or information on behalf of the party purporting to send such electronic transmission; and the Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, agreements, directions, reports, notices or other communications or information to the extent in accordance with the terms hereof. Each other party agrees to assume all risks arising out of the use of electronic methods to submit instructions, agreements, directions, reports, notices or other communications or information to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, agreements, notices, reports or other communications or information, and the risk of interception and misuse by third parties.

The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. (b) All notices regarding this Indenture and the Notes to the Holders shall be: (x) if to Holders of Global Notes, given to DTC in accordance with its applicable procedures and (y) if to Holders of Certificated Notes, mailed to each Holder at such Holder’s address as it appears on the Register. From and after the date the Notes are listed on the BASE and admitted for trading on the MAE, all notices to Holders shall be published in the Bulletin of the Buenos Aires Stock Exchange, on the CNV web page, on the Issuer’s web page and in a widely circulated newspaper in Argentina, which is expected to be La Nación (or any successor paper). From and after the date the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market and so long as required by the rules of such exchange, all notices to Holders shall be published in English:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) via the website of the Luxembourg Stock Exchange at www.bourse.lu or in a leading newspaper having a general circulation in Luxembourg; or (ii) if such Luxembourg publication is not practicable, in one other leading English language newspaper being published on each day in morning editions, whether or not it shall be published in Saturday, Sunday or holiday editions. (c) Notices shall be deemed to have been given on the date notice is given, mailed or published as aforesaid in Section 11.1(b) or, if published on different dates, on the date of the first such publication. (d) Notwithstanding anything to the contrary contained herein, any notice or communication to a registered Holder will be deemed to have been duly given to the Holders (x) if to Holders of Global Notes, if given to DTC in accordance with its applicable procedures and (y) if to Holders of Certificated Notes, if mailed to the Holder at the Holder’s address as it appears on the Register; and in either case shall be sufficiently given if so mailed or given within the time prescribed. (e) Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

Section 11.2 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee: (a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Section 11.3 Statements Required in Officers’ Certificate or Opinion of Counsel. Each certificate or opinion, including each Officers’ Certificate or Opinion of Counsel with respect to compliance with a covenant or condition provided for in this Indenture shall include: (a) a statement substantially to the effect that the individual making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) a statement substantially to the effect that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

In giving an Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

Section 11.4 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by, or a meeting of, Holders. The Agents may make reasonable rules for their functions.

Section 11.5 Legal Holidays. If a payment date is not a Business Day, payment shall be made on the next succeeding Business Day, and no interest shall accrue for the intervening period. If a regular Record Date is not a Business Day, the Record Date shall not be affected.

Section 11.6 Governing Law, etc. (A) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT ALL MATTERS RELATING TO THE DUE AUTHORIZATION, EXECUTION, ISSUANCE AND DELIVERY OF THE NOTES BY THE ISSUER, AND MATTERS RELATING TO THE LEGAL REQUIREMENTS NECESSARY IN ORDER FOR THE NOTES TO QUALIFY AS “NEGOTIABLE OBLIGATIONS” UNDER ARGENTINE LAW, SHALL BE GOVERNED BY THE NEGOTIABLE OBLIGATIONS LAW AND ANY OTHER APPLICABLE ARGENTINE LAWS AND REGULATIONS. (b) EACH OF THE PARTIES HERETO AND EACH HOLDER BY ITS ACCEPTANCE OF A NOTE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. (c) Each of the parties hereto: (i) agrees that any suit, action or proceeding against it arising out of or relating to this Indenture or the Notes, as the case may be, may be instituted in any U.S. federal or New York state court sitting in the Borough of Manhattan, The City of New York, New York, provided that the Issuer agrees that any suit, action, or proceeding against it arising out of or relating to this Indenture or the Notes, as the case may be, may be instituted in any court sitting in the City of Buenos Aires, the BASE’s Arbitral Tribunal, and any competent court in the place of its corporate domicile;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding; (iii) waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, any claim that any suit, action or proceeding in such courts has been brought in an inconvenient forum and any right to the jurisdiction of any other courts to which it may be entitled on account of place of residence or domicile; and (iv) agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding and may be enforced in the courts of the jurisdiction of which it is subject by a suit upon judgment. (d) The Issuer has appointed CT Corporation System, as its authorized agent (the “Authorized Agent”) upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon this Indenture or the Notes which may be instituted in any New York state or U.S. federal court in the Borough of Manhattan, The City of New York, New York. The Issuer represents and warrants that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Issuer agrees to take any and all action, including the filing of any and all documents, that may be necessary to continue each such appointment in full force and effect as aforesaid so long as the Notes remain outstanding. The Issuer agrees that the appointment of the Authorized Agent shall be irrevocable so long as any of the Notes remain Outstanding or until the irrevocable appointment by the Issuer of a successor agent in The City of New York, New York as its authorized agent for such purpose and the acceptance of such appointment by such successor. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Issuer. (e) To the extent that the Issuer has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, the Issuer hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Indenture or the Notes. (f) Nothing in this Section 11.6 shall affect the right of the Trustee or any Holder of the Notes to serve process in any other manner permitted by law.

Section 11.7 No Recourse Against Others. No past, present or future incorporator, director, officer, employee, shareholder or controlling person, as such, of the Issuer shall have any liability for any obligations of the Issuer under the Notes or this Indenture or for any claims based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for issuance of the Notes; provided that under Article 34 of the Negotiable Obligations Law, the Directors and members of the Supervisory Committee shall be jointly and severally liable for damages to the Holders arising from any violation of the Negotiable Obligations Law.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 11.8 Provisions of Indenture for the Sole Benefit of Parties and Holders. Other than as set forth in ARTICLE X, nothing in this Indenture or in the Notes, express or implied, shall give or be construed to give to any Person, other than the parties hereto and their successors and the Holders of the Notes, any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders of the Notes.

Section 11.9 Successors. All agreements of the Issuer in this Indenture and the Notes shall bind its respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

Section 11.10 Duplicate and Counterpart Originals. The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture. This Indenture may be executed in any number of counterparts, each of which so executed shall be an original, but all of them together represent the same agreement.

Section 11.11 Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.12 Currency Indemnity. U.S. Dollars are the sole currency of account and payment for all sums payable by the Issuer under or in connection with the Notes or this Indenture. Any amount received or recovered in respect of such obligations in currency other than U.S. Dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer, any Subsidiary thereof or otherwise) by the Trustee, an Agent or any Holder of the Notes in respect of any sum expressed to be due to it from the Issuer shall only constitute a discharge of it under the Notes or this Indenture only to the extent of the U.S. Dollars amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so), acting reasonably. If that U.S. Dollars amount is less than the U.S. Dollars amount expressed to be due to the recipient under the Notes or this Indenture, the Issuer shall indemnify the recipient against any loss sustained by it in making any such purchase. In any event, the Issuer shall indemnify the recipient against the cost of making any purchase of U.S. Dollars. For the purposes of this Section 11.12, it shall be sufficient for the Trustee, such Agent and/or Holder of a Note to certify in a satisfactory manner that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable) and that the change of the purchase date was needed.

The indemnities of the Issuer contained in this Section 11.12, to the extent permitted by law: (i) constitute a separate and independent obligation from the other obligations of the Issuer under this Indenture and the Notes; (ii) shall give rise to a separate and independent cause of action against the Issuer; (iii) shall apply irrespective of any indulgence granted by any Holder of the Notes from time to time; (iv) shall continue in full force and effect notwithstanding

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under the Notes; and (v) shall survive the termination of this Indenture.

Section 11.13 USA Patriot Act. The parties hereto acknowledge that, in accordance with Section 326 of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended, modified or supplemented from time to time, the “USA Patriot Act”), the Trustee, like all financial institutions, is required to obtain, verify and record information that identifies each person or legal entity which maintains a business relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as the Trustee may reasonably request in order for the Trustee to satisfy the requirements of the USA Patriot Act.

Section 11.14 Table of Contents; Headings. The table of contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: /s/ Raul Seoane Name: Raul Seoane Title: Vice Chairman

By: /s/ Guillermo Pando Name: Guillermo Pando Title: Secretary Director

[Signature Page to Indenture]

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Bank of New York Mellon as Trustee, Co-Registrar, Principal Paying Agent and Principal Transfer Agent

By: /s/ Elizabeth Stern Name: Elizabeth Stern Title: Vice President

[Signature Page to the Indenture]

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Bank of New York Mellon (Luxembourg) S.A. as Luxembourg Paying Agent and Luxembourg Transfer Agent

By: /s/ Elizabeth Stern Name: Elizabeth Stern Title: Authorized Signing Officer

[Signature Page to the Indenture]

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Banco de Valores S.A. as Representative of the Trustee in Argentina

By: /s/ Jorge I. Baez Name: Jorge I. Baez Title: Attorney- In-Fact

[Signature page to Indenture]

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT A

FORM OF NOTE

THE SHAREHOLDER’S MEETINGS OF THE ISSUER HELD ON APRIL 28, 2005, AND THE MEETING OF THE BOARD OF DIRECTORS OF THE ISSUER HELD ON SEPTEMBER 15, 2005 (AUTHORIZED PURSUANT TO RESOLUTION NO. 15,228, DATED NOVEMBER 4, 2005, OF THE CNV), ESTABLISHED THE ISSUER’S PROGRAM. THE AMENDMENT AND EXTENSION OF THE PROGRAM WAS ESTABLISHED PURSUANT TO SHAREHOLDERS’ MEETINGS OF THE ISSUER HELD ON APRIL 26, 2016, AND THE MEETING OF THE BOARD OF DIRECTORS OF THE ISSUER HELD ON MAY 24, 2016. THE ISSUANCE OF THE SUBORDINATED RESETTABLE NOTES REPRESENTED HEREBY HAS BEEN APPROVED PURSUANT TO A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ISSUER DATED JUNE 23, 2016, AND AUTHORIZED BY THE CNV ON JUNE 23, 2016.

THE ISSUER WAS ORGANIZED AS A CORPORATION WITH LIMITED LIABILITY (SOCIEDAD ANÓNIMA) UNDER THE LAWS OF ARGENTINA ON SEPTEMBER 28, 1905, AND REGISTERED WITH THE PUBLIC REGISTRY OF COMMERCE OF THE CITY OF BUENOS AIRES UNDER NO. 4, FILE NO. 32, BOOK 20 A, ON NOVEMBER 21, 1995, WITH A DURATION UNTIL 2100, AND ITS REGISTERED DOMICILE IS CALLE TTE. GRAL. J. D. PERÓN 407/29, CITY OF BUENOS AIRES, FEDERAL DISTRICT, ARGENTINA.

IN ACCORDANCE WITH ARTICLE 15 OF THE BY-LAWS OF THE ISSUER, THE ISSUER’S MAIN CORPORATE PURPOSE CONSISTS OF THE PERFORMANCE OF AUTHORIZED OPERATIONS AND TRANSACTIONS WITHIN THE BANKING AND FINANCIAL SECTORS.

THE CAPITAL STOCK OF THE ISSUER AS OF MARCH 31, 2016, THE DATE OF ITS MOST RECENT FINANCIAL STATEMENTS, WAS AR$562.33 MILLION, AND ITS SHAREHOLDERS’ EQUITY WAS AR$15 BILLION.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [Include the following Global Note Legend on all Global Notes:] THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Include the following Private Placement Legend on all Restricted Notes:] THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (i) TO BANCO DE GALICIA Y BUENOS AIRES S.A., (ii) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, (iii) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (iv) OUTSIDE OF THE UNITED STATES IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (v) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

A-2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IF REQUESTED BY BANCO DE GALICIA Y BUENOS AIRES S.A. OR BY ANY INITIAL PURCHASER SET FORTH IN THE APPLICABLE OFFERING DOCUMENTS, THE TRANSFEREE AGREES TO PROVIDE THE INFORMATION NECESSARY TO DETERMINE WHETHER THE TRANSFER OF THIS NOTE IS PERMISSIBLE UNDER THE SECURITIES ACT. THIS NOTE AND RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATED TO THE RESALE OR TRANSFER OF RESTRICTED NOTES GENERALLY. BY THE ACCEPTANCE OF THIS NOTE, THE HOLDER HEREOF SHALL BE DEEMED TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT. THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ONLY AT THE OPTION OF BANCO DE GALICIA Y BUENOS AIRES S.A.

[Include the following OID Legend on all Notes:] FOR PURPOSES OF SECTIONS 1271 THROUGH 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE REGULATIONS THEREUNDER, THIS NOTE IS A CONTINGENT PAYMENT DEBT INSTRUMENT AND WILL ACCRUE ORIGINAL ISSUE DISCOUNT AT BANCO DE GALICIA Y BUENOS AIRES S.A.’S COMPARABLE YIELD FOR U.S. FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE OF THIS NOTE IS 100.000%; THE ISSUE DATE OF THIS NOTE IS JULY 19, 2016; BANCO DE GALICIA Y BUENOS AIRES’S COMPARABLE YIELD FOR THIS NOTE IS 8.750%; AND THE PROJECTED PAYMENT SCHEDULE (WHICH SCHEDULE IS ATTACHED AS SCHEDULE A TO THE INDENTURE) FOR THIS NOTE IS $41.250 PER $1,000 PRINCIPAL AMOUNT ON EACH INTEREST PAYMENT DATE THROUGH THE RESET DATE AND $47.585 PER $1,000 PRINCIPAL AMOUNT ON EACH INTEREST PAYMENT DATE THEREAFTER, OTHER THAN THE MATURITY DATE ON WHICH IT WILL BE $1,047.585 PER $1,000 PRINCIPAL AMOUNT.

A-3

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FORM OF FACE OF NOTE

BANCO DE GALICIA Y BUENOS AIRES S.A.

SUBORDINATED RESETTABLE NOTES CLASS II DUE 2026

No. [ ] Principal Amount U.S.$[ _]

[If the Note is a Global Note include the following two lines: as revised by the Schedule of Increases and Decreases in Global Note attached hereto]

[If the Note is a Rule 144A Global Note, insert: CUSIP NO.: 059538 AR9 ISIN NO.: US059538AR97]

[If the Note is a Regulation S Global Note, insert: CUSIP NO.: P0R66C AA6 ISIN NO.: USP0R66CAA64]

Banco de Galicia y Buenos Aires S.A., a corporation (sociedad anónima) formed in Argentina, promises to pay to [if the Note is a Global Note: Cede & Co., the nominee for The Depository Trust Company], or registered assigns, the principal sum of [ ] U.S. Dollars [If the Note is a Global Note, add the following, as revised by the Schedule of Increases and Decreases in Global Note attached hereto], on July 19, 2026.

Interest Rate: As stated on the reverse hereof Interest Payment Dates: January 19 and July 19 of each year, commencing on January 19, 2017 Record Dates: January 4 and July 4 Maturity Date: July 19, 2026

A-4

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title: Director

By: Name: Title: Supervisory Committee Member TRUSTEE’S CERTIFICATE OF AUTHENTICATION

The Bank of New York Mellon, as Trustee, certifies that this is one of the Notes referred to in the Indenture.

By: Date: Authorized Signatory

A-5

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FORM OF REVERSE SIDE OF NOTE

1. Interest Banco de Galicia y Buenos Aires S.A., a corporation (sociedad anónima) formed in Argentina (and its successors and assigns under the Indenture hereinafter referred to, the “Issuer”), promises to pay interest on the principal amount of this Note at the rate per annum shown above.

The Issuer shall pay interest semi-annually in arrears on each Interest Payment Date of each year, commencing on January 19, 2017. The Notes will bear interest at the rate per annum equal to 8.250% from July 19, 2016 (the “Closing Date”) to, but excluding, July 19, 2021 (the “Reset Date”). From and after the Reset Date to, but excluding, the date of maturity or earlier redemption date of the Notes, the Notes will bear interest at the rate per annum equal to the sum of (i) the Benchmark Reset Rate on the Reset Date plus (ii) 715.6 basis points, as calculated by the Independent Investment Banker on the Reset Date. The Independent Investment Banker shall give written notice to the Issuer and the Trustee of such interest rate on the Reset Date. The calculations of the Independent Investment Banker shall be binding on the Issuer, the Trustee, the Agents and the Holders absent manifest error. The Issuer shall pay interest on overdue principal (plus interest on such interest to the extent lawful), at the rate borne by the Notes to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The Issuer shall pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate then borne by the Notes plus 2.00% per year, and shall pay interest on overdue installments of interest at the same rate to the extent such payments are lawful (“Defaulted Interest”), without regard to any applicable grace periods at the interest rate shown on this Note, as provided in the Indenture.

All payments made by or on behalf of the Issuer in respect of the Notes shall be made free and clear of and without deduction or withholding for or on account of any present or future taxes, duties, assessments or other governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within (1) Argentina, (2) any other jurisdiction in which the Issuer or any Successor Person is organized, (3) any other jurisdiction from or through which payments are made by or at the direction of the Issuer or (4) by or within any political subdivision of or in any of the foregoing having the power to tax (each such jurisdiction, a “Relevant Jurisdiction” and all such taxes, “Relevant Taxes”), unless such withholding or deduction is required or compelled by law. In the event of any such withholding or deduction, the Issuer shall pay to each Holder of the Notes Additional Amounts as provided in the Indenture subject to the limitations set forth in the Indenture.

2. Method of Payment Prior to 11:00 a.m. (New York City time) on the Business Day prior to the date on which any principal of or interest on any Note is due and payable, the Issuer shall irrevocably deposit with the Trustee or the Principal Paying Agent money sufficient to pay such principal and/or interest. The Issuer shall pay interest (except Defaulted Interest) to the Persons who are

A-6

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document registered Holders of Notes at the close of business on the Record Date, whether or not a Business Day, preceding the Interest Payment Date even if Notes are canceled, repurchased or redeemed after the Record Date and on or before the relevant Interest Payment Date; provided that (i) if and to the extent the Issuer shall default in the payment of the interest (including Additional Amounts) due on such Interest Payment Date for such Note, such Defaulted Interest (including Additional Amounts) shall be paid to the Persons in whose names such Note is registered at the close of business on a Special Record Date (which shall be not less than 15 days prior to the date of payment of such Defaulted Interest) established by notice given by or on behalf of the Issuer to the Holders of Notes not less than 10 calendar days preceding such Special Record Date and (ii) interest payable at Stated Maturity or upon acceleration will be payable to the person to whom principal shall be payable. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer shall pay principal and interest in U.S. Dollars.

Payments in respect of Notes represented by a Global Note (including principal and interest) shall be made by the transfer of immediately available funds to the accounts specified by DTC. None of the Issuer, the Trustee or any Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial interests. The Issuer shall make all payments in respect of a Certificated Note (including principal and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Notes may also be made, in the case of a Holder of at least U.S.$1,000,000 aggregate principal amount of Certificated Notes, by wire transfer to a U.S. Dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Principal Paying Agent to such effect designating such account at least 10 Business Day prior to the relevant payment date.

3. Trustee and Agents Initially, The Bank of New York Mellon (the “Trustee”), shall act as Trustee, Principal Paying Agent, Principal Transfer Agent and Co-Registrar, Banco de Valores S.A., shall act as Representative of the Trustee in Argentina, under the conditions set forth in the Indenture, and The Bank of New York Mellon (Luxembourg) S.A., shall act as Luxembourg Paying Agent and Luxembourg Transfer Agent. The Issuer may appoint and change any Agent without notice to any Holder. The Issuer may act as any Agent.

4. Indenture; Ranking The Issuer originally issued the Notes under an Indenture, dated as of July 19, 2016 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Issuer, the Trustee, Banco de Valores S.A., as Representative of the Trustee in Argentina (under the conditions set forth in the Indenture) and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent. The terms of the Notes include those stated in the Indenture. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for

A-7

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document a statement of those terms. Each Holder by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture.

The Notes are subordinated unsecured obligations of the Issuer. Subject to the conditions set forth in the Indenture and without the consent of the Holders, the Issuer may issue Additional Notes. All Notes shall be treated as a single class of securities under the Indenture.

As further set forth in the Indenture, the payment by the Issuer of the principal of and interest on all Notes issued hereunder shall, to the extent and in the manner hereinafter set forth, be junior in right of payment and in liquidation to all Senior Obligations, whether outstanding at the date of the Indenture or thereafter incurred and will be senior in right of payment and in liquidation to only the Issuer’s Junior Obligations. No provision of this paragraph shall prevent the occurrence of any Acceleration Event hereunder. The Notes will constitute the Issuer’s subordinated and unsecured obligations and will rank (i) junior in right of payment to all of the Issuer’s existing and future Senior Obligations, (ii) pari passu in right of payment to the Issuer’s Parity Obligations and (iii) senior in right of payment to the Issuer’s Junior Obligations in the event of bankruptcy or liquidation of the issuer, with express waiver of any general or special privileges.

The Indenture imposes certain limitations, subject to certain exceptions, on, among other things, the ability of the Issuer to consolidate or merge or transfer or convey all or substantially all of the Issuer’s assets.

5. Optional Redemption (a) Optional Redemption of the Notes. Subject to the prior authorization of the SEFC, or any other Argentine Governmental Authority, as required, the Issuer shall have the right, at its option, by the giving of notice as provided in the Indenture to redeem the Notes, in whole but not in part, on the Reset Date at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the date of redemption, together with any Additional Amounts (subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided that the Issuer does not create any expectation that it will redeem the Notes, and provided, further, that after giving effect to such redemption, the Issuer remains in compliance with all applicable Central Bank regulations. (b) Optional Regulatory Redemption. On and at any time after July 19, 2021, the Notes may be redeemed in whole, but not in part, at the Issuer’s election with the prior approval of the SEFC, or any other then-applicable Argentine Governmental Authority, as required, by the giving of notice as provided in the Indenture, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the date of redemption, together with any Additional Amounts (subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) or treaties of Argentina or any political subdivision thereof or therein, or any change in the official application, administration or

A-8

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document interpretation of such laws, regulations, rulings or treaties in a Relevant Jurisdiction, the Issuer will no longer be entitled to treat the full principal amount of the Notes as Tier II Regulatory Capital pursuant to applicable Central Bank regulations, other than pursuant to Section 8.3.3.4(iii) of Communication “A” 5580 of the Central Bank, as amended, which provides that after five years from the issuance of the Notes, the amount that may be accounted as Tier II Regulatory Capital shall be reduced by 20% each year, if such change or amendment is announced on or after the Closing Date; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the date scheduled for redemption. (c) Optional Tax Redemption. On and at any time after July 19, 2021, the Notes may be redeemed, in whole but not in part, at the Issuer’s election with the prior approval of the SEFC, or any other then-applicable Argentine Governmental Authority, as required, by the giving of notice as provided in the Indenture, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date, together with any Additional Amounts (subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) or treaties of a Relevant Jurisdiction, or any change in the official application, administration or interpretation of such laws, regulations, rulings or treaties in a Relevant Jurisdiction, the Issuer has or will become obligated to pay Additional Amounts on the Notes, if such change or amendment is announced on or after the Closing Date (or in the case of a Relevant Tax imposed by a jurisdiction that first becomes a Relevant Jurisdiction on a date after the Closing Date, after such date) and such obligation cannot be avoided by the Issuer taking reasonable measures available to it (it being understood that changing the jurisdiction of the Paying Agent shall be a reasonable measure but changing the jurisdiction of the Issuer shall not be a reasonable measure); provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obligated to pay such Additional Amounts, were a payment in respect of the Notes then due. (d) Optional Redemption Procedures. Prior to the giving of notice of redemption of such Notes pursuant to the Indenture, the Issuer will deliver to the Trustee an Officers’ Certificate and a written opinion of recognized Argentine counsel, independent of the Issuer, to the effect that all governmental approvals necessary for the Issuer to effect such redemption have been or at the time of redemption will be obtained and be in full force and effect and that the Issuer is entitled to effect such a redemption pursuant to the Indenture, and setting forth, in reasonable detail, the circumstances giving rise to such right of redemption. Notice of any redemption will be given to the Holders at least 30 days but not more than 90 days before the Redemption Date to each Holder of Notes to be redeemed in accordance with the Indenture. Once notice of redemption is sent to the Holders, Notes called for redemption become due and payable at the redemption price on the Redemption Date, and, commencing on the Redemption Date, Notes redeemed will cease to accrue unless the Issuer defaults in the payment of the redemption price.

Notes called for redemption shall become due on the date fixed for redemption. The Issuer shall pay the redemption price for any Note together with accrued and unpaid interest thereon to but excluding the Redemption Date. On and after the Redemption Date, interest shall cease to accrue on Notes called for redemption as long as the Issuer has deposited with the

A-9

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Principal Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture. Upon redemption of any Notes by the Issuer, such redeemed Notes shall be cancelled.

6. Denominations; Transfer; Exchange The Notes are in fully registered form without coupons, and only in minimum denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Co-Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Co-Registrar shall be entitled to request such evidence reasonably satisfactory to it documenting the identity and/or signatures of the transferor and the transferee. The Registrar need not register the transfer of or exchange (i) any Notes selected for redemption for a period beginning 15 days before the giving of a notice of Notes to be redeemed and ending on the date of such notice or (ii) any Notes for a period beginning 15 days before an Interest Payment Date and ending on such Interest Payment Date.

7. Persons Deemed Owners The registered holder of this Note shall be treated as the owner of it for all purposes.

8. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or applicable Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee or any Paying Agent for payment.

9. Discharge Prior to Redemption or Maturity Subject to certain conditions set forth in the Indenture, the Issuer at any time may terminate some or all of its obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal of and interest on the Notes to redemption or maturity, as the case may be.

10. Amendment, Waiver (a) The Issuer and the Trustee may amend, modify or supplement the Indenture and the Notes without notice to or consent of any Holder: (i) to cure any ambiguity, omission, defect or inconsistency contained in the Indenture or in the Notes; (ii) to provide for the assumption by a Successor Person of the obligations of the Issuer under the Indenture;

A-10

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) to provide for the issuance of Additional Notes in accordance with the Indenture; (iv) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the U.S. Trust Indenture Act of 1939, as amended; (v) to conform the terms of the Indenture or the Notes with the description thereof set forth in the “Description of the Notes” section of the Offering Memorandum to the extent that such description was intended to be a verbatim recitation of a provision of the Indenture or the Notes; (vi) to evidence the replacement of the Trustee as provided for under the Indenture; and (vii) for any other purpose that the parties to the Indenture may mutually deem necessary or desirable; provided in each such case that any such modification or amendment does not adversely affect the interests of Holders in any respect. (b) Modifications to, amendments of, and supplements to, the Indenture or the Notes not set forth under Section 9.1 of the Indenture may be made with the consent of the Holders of a majority in principal amount of the then Outstanding Notes issued under the Indenture, except that, without the consent of each Holder affected thereby, no amendment may: (i) reduce the percentage of the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest on any Notes; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption, or reduce the redemption price therefor; (iv) make any Notes payable in currency other than that stated in the Notes; (v) make any change in the provisions of the Indenture entitling each Holder to receive payment of principal of and interest on such Notes on or after the due date thereof or to bring suit to enforce such payment; (vi) make any change to the Indenture that adversely affects the rights of any Holder or amend the terms of the Notes in a way that would result in a loss of exemption from any applicable Relevant Taxes; and (vii) make any change to the provisions of the Indenture or the Notes that adversely affects the ranking of the Notes.

A-11

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 11. Defaults and Remedies Following the occurrence of any Event of Default, the outstanding principal amount of the Notes shall be immediately and automatically accelerated. There is no right of acceleration in the case of a default in any payment on the Notes (whether when due, upon redemption or otherwise) or the performance of any of the Issuer’s other obligations under the Indenture or the Notes. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest.

12. Trustee Dealings with the Issuer Subject to certain limitations set forth in the Indenture, the Trustee and the Agents under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

13. No Recourse Against Others No past, present or future incorporator, director, officer, employee, shareholder or controlling person, as such, of the Issuer, shall have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claims based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

14. Authentication This Note shall not be valid until an authorized signatory of the Trustee (or an Authenticating Agent acting on its behalf) manually signs the certificate of authentication on the other side of this Note.

15. Abbreviations Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).

16. CUSIP or ISIN Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP or ISIN numbers to be printed on

A-12

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Notes and has directed the Trustee to use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

17. Governing Law This Note shall be governed by, and construed in accordance with, the laws of the State of New York, provided that all matters relating to the due authorization, execution, issuance and delivery of the Notes by the Issuer, and matters relating to the legal requirements necessary in order for the Notes to qualify as “negotiable obligations” under Argentine law, shall be governed by the Negotiable Obligations Law and any other applicable Argentine laws and regulations.

18. Currency of Account; Conversion of Currency U.S. Dollars are the sole currency of account and payment for all sums payable by the Issuer under or in connection with the Notes or the Indenture. The Issuer shall indemnify the Holders, the Trustee and the Agents as provided in respect of the conversion of currency relating to the Notes and the Indenture.

19. Agent for Service; Submission to Jurisdiction; Waiver of Immunities The parties to the Indenture have agreed that any suit, action or proceeding arising out of or based upon the Indenture or the Notes may be instituted in any New York state or U.S. federal court in The City of New York, New York; provided that the Issuer has agreed that any suit, action, or proceeding against it arising out of or relating to the Indenture or the Notes, as the case may be, may be instituted in any court sitting in the City of Buenos Aires, the BASE’s Arbitral Tribunal, and any competent court in the place of its corporate domicile. The parties to the Indenture have irrevocably submitted to the non-exclusive jurisdiction of such courts for such purpose and waived, to the fullest extent permitted by law, trial by jury, any objection they may now or hereafter have to the laying of venue of any such proceeding, and any claim they may now or hereafter have that any proceeding in any such court is brought in an inconvenient forum and any right to the jurisdiction of any other courts to which any of them may be entitled, on account of place of residence or domicile. The Issuer has appointed CT Corporation System, as its authorized agent upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon the Indenture or the Notes which may be instituted in any New York state or U.S. federal court in The City of New York, New York. To the extent that the Issuer has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to it or any of their property, the Issuer has irrevocably waived and agreed not to plead or claim such immunity in respect of its obligations under the Indenture or the Notes.

Nothing in the preceding paragraph shall affect the right of the Trustee or any Holder of the Notes to serve process in any other manner permitted by law.

A-13

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Issuer shall furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to: Banco de Galicia y Buenos Aires S.A. Perón 407, 22nd Floor (C1038AAI) Buenos Aires, Argentina Attention: Gonzalo Braceras Fax No.: (5411) 6329-6100

This Note does not qualify for the Argentine deposit insurance system established pursuant to Argentine Law Nº 24,485, as amended, and does not benefit from the priority right granted to depositors pursuant to Article 49(d) and (e) of Argentine Law Nº 21,526, as amended. This Note is not secured by any floating lien or special guarantee nor is this Note guaranteed by any other means or by any other entity.

A-14

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to: (Print or type assignee’s name, address and zip code) (Insert assignee’s Social Security or Tax I.D. Number) and irrevocably appoint to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date: Your Signature: (Sign exactly as your name appears on the other side of this Note.)

Signature Guarantee: (Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.

A-15

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [To be attached to Global Notes only]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:

Amount of Amount of Principal Amount Signature of decrease in increase in of this Global authorized Principal Amount Principal Amount Note following signatory of of this Global of this Global such decrease or Trustee or Note Decrease or Increase Note Note increase Custodian

A-16

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT B

FORM OF CERTIFICATE FOR TRANSFER TO QIB

[Date]

The Bank of New York Mellon 101 Barclay Street, Floor 7 East New York, New York 10286

Re: Subordinated Resettable Notes Class II due 2026 of Banco de Galicia y Buenos Aires S.A. (the “Issuer”)

Ladies and Gentlemen: Reference is hereby made to the Indenture, dated as of July 19, 2016 (as amended and supplemented from time to time, the “Indenture”), among the Issuer, The Bank of New York Mellon, as trustee, co-registrar, principal paying agent and principal transfer agent (the “Trustee”), Banco de Valores S.A., as representative of the Trustee in Argentina (under the conditions set forth in the Indenture) and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and transfer agent. Capitalized terms used herein but not defined herein shall have the respective meanings given them in the Indenture.

This letter relates to U.S.$ aggregate principal amount of the Issuer’s Subordinated Resettable Notes Class II due 2026 (the “Notes”) [in the case of a transfer of an interest in a Regulation S Global Note: which represents an interest in a Regulation S Global Note (CUSIP: P0R66C AA6; ISIN: USP0R66CAA64; Common Code: 145501903)] beneficially owned by the undersigned (the “Transferor”). The Transferor hereby requests the transfer of such Notes in exchange for an equivalent beneficial interest in the Rule 144A Global Note (CUSIP: 059538 AR9; ISIN: US059538AR97; Common Code: 145501938).

In connection with such request, and with respect to such Notes, the Transferor does hereby certify that such Notes are being transferred in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended (“Rule 144A”), to a transferee that the Transferor reasonably believes is purchasing the Notes for its own account or an account with respect to which the transferee exercises sole investment discretion, and the transferee, as well as any such account, is a “qualified institutional buyer” within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with applicable securities laws of any state of the United States or any other jurisdiction.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

Very truly yours,

[Name of Transferor]

By:

Authorized Signature

B-2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT C

FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO REGULATION S

[Date]

The Bank of New York Mellon 101 Barclay Street, Floor 7 East New York, New York 10286

Re: Subordinated Resettable Notes Class II due 2026 of Banco de Galicia y Buenos Aires S.A. (the “Issuer”)

Ladies and Gentlemen: Reference is hereby made to the Indenture, dated as of July 19, 2016 (as amended and supplemented from time to time, the “Indenture”), among the Issuer, The Bank of New York Mellon, as trustee, co-registrar, principal paying agent and principal transfer agent (the “Trustee”), Banco de Valores S.A., as representative of the Trustee in Argentina (under the conditions set forth in the Indenture) and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and transfer agent. Capitalized terms used herein but not defined herein shall have the respective meanings given them in the Indenture and/or in Regulation S (as defined below), as applicable.

This letter relates to U.S.$ aggregate principal amount of the Issuer’s Subordinated Resettable Notes Class II due 2026 (the “Notes”) [in the case of a transfer of an interest in a Rule 144A Global Note: , which represent an interest in a Rule 144A Global Note (CUSIP: 059538 AR9; ISIN: US059538AR97; Common Code: 145501938)] beneficially owned by the undersigned (the “Transferor”). The Transferor hereby requests the transfer of such Notes in exchange for an equivalent beneficial interest in the Regulation S Global Note (CUSIP: P0R66C AA6; ISIN: USP0R66CAA64; Common Code: 145501903).

In connection with such request, the Transferor confirms that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor represents that: (a) the offer of the Notes was not made to a person in the United States; (b) either (i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on the Transferor’s behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither the Transferor nor any person acting on the Transferor’s behalf knows that the transaction has been pre-arranged with a buyer in the United States;

C-1

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (e) the Transferor is the beneficial owner of the principal amount of Notes being transferred.

In addition, if the sale is made during a Distribution Compliance Period and the provisions of Rule 904(b)(1) or Rule 904(b)(2) of Regulation S are applicable thereto, the Transferor confirms that such sale has been made in accordance with the applicable provisions of Rule 904(b)(1) or Rule 904(b)(2), as the case may be.

You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

Very truly yours,

[Name of Transferor]

By:

Authorized Signature

C-2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT D

FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO RULE 144

[Date]

The Bank of New York Mellon 101 Barclay Street, Floor 7 East New York, New York 10286

Re: Subordinated Resettable Notes Class II due 2026 of Banco de Galicia y Buenos Aires S.A. (the “Issuer”)

Ladies and Gentlemen: Reference is hereby made to the Indenture, dated as of July 19, 2016 (as amended and supplemented from time to time, the “Indenture”), among the Issuer, The Bank of New York Mellon, as trustee, co-registrar, principal paying agent and principal transfer agent (the “Trustee”), Banco de Valores S.A., as representative of the Trustee in Argentina (under the conditions set forth in the Indenture) and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and transfer agent. Capitalized terms used herein but not defined herein shall have the respective meanings given them in the Indenture.

This letter relates to U.S.$ aggregate principal amount of the Issuer’s Subordinated Resettable Notes Class II due 2026 (the “Notes”) [in the case of a transfer of an interest in a Rule 144A Global Note: , which represent an interest in a Rule 144A Global Note (CUSIP: 059538 AR9; ISIN: US059538AR97; Common Code: 145501938)] beneficially owned by the undersigned (the “Transferor”). The Transferor hereby confirms that such sale has been effected pursuant to and in accordance with Rule 144 under the Securities Act.

You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

Very truly yours,

[Name of Transferor]

By:

Authorized Signature

D-1

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SCHEDULE A

PROJECTED PAYMENT SCHEDULE

Projected Payment per $1,000 Principal Payment Dates Amount January 19, 2017 US$41.250 July 19, 2017 US$41.250 January 19, 2018 US$41.250 July 19, 2018 US$41.250 January 19, 2019 US$41.250 July 19, 2019 US$41.250 January 19, 2020 US$41.250 July 19, 2020 US$41.250 January 19, 2021 US$41.250 July 19, 2021 US$41.250 January 19, 2022 US$47.585 July 19, 2022 US$47.585 January 19, 2023 US$47.585 July 19, 2023 US$47.585 January 19, 2024 US$47.585 July 19, 2024 US$47.585 January 19, 2025 US$47.585 July 19, 2025 US$47.585 January 19, 2026 US$47.585 July 19, 2026 US$1,047.585

A-1

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 4.11 Execution Copy

INVESTMENT NUMBER 38134

Master Loan Agreement

between

BANCO DE GALICIA Y BUENOS AIRES S.A.

and

INTERNATIONAL FINANCE CORPORATION

Dated May 24, 2016

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document TABLE OF CONTENTS

Article/ Section Item Page No. ARTICLE I 4 Definitions and Interpretation 4 Section 1.01. Definitions 4 Section 1.02. Financial Calculations 15 Section 1.03. Interpretation 15 Section 1.04. Business Day Adjustment 15 Section 1.05. Loan Agreements 16 ARTICLE II 16 The Loans 16 Section 2.01. Amount and Purpose 16 Section 2.02. Commitment and Disbursement Procedure 17 Section 2.03. Interest 18 Section 2.04. Default Interest Rate 20 Section 2.05. Repayment 20 Section 2.06. Prepayment 20 Section 2.07. Fees 20 Section 2.08. Currency and Place of Payment 21 Section 2.09. Allocation of Partial Payments 21 Section 2.10. Increased Costs 21 Section 2.11. Unwinding Costs 21 Section 2.12. Taxes 22 Section 2.13. Expenses 22 Section 2.14. The Notes 22 ARTICLE III 23 Representations and Warranties 23 Section 3.01. Representations and Warranties 23 Section 3.02. IFC Reliance 24 ARTICLE IV 24 Conditions of Disbursement 24 Section 4.01. Conditions of First Disbursement of the Loans 24 Section 4.02. Conditions of All Disbursements 25 Section 4.03. Conditions for IFC Benefit 26 ARTICLE V 27 Particular Covenants 27 Section 5.01. Affirmative Covenants 27 Section 5.02. Negative Covenants 29

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 5.03. Financial Covenants 30 Section 5.04. Reporting Requirements 31 Section 5.05. Insurance 33 Section 5.06. General Requirements Relating to Eligible Sub-loans 34 Section 5.07. Special Reporting Requirements for Eligible Sub-Loans 35 ARTICLE VI 36 Events of Default 36 Section 6.01. Acceleration after Default 36 Section 6.02. Events of Default 36 Section 6.03. Effects of Insolvency 37 ARTICLE VII 38 Miscellaneous 38 Section 7.01. Saving of Rights 38 Section 7.02. Notices 38 Section 7.03. English Language 39 Section 7.04. Applicable Law and Jurisdiction 39 Section 7.05. Disclosure of Information 40 Section 7.06. Successors and Assignees 40 Section 7.07. Amendments, Waivers and Consents 41 Section 7.08. Counterparts 41

ANNEXES:

Annex A: INSURANCE REQUIREMENTS Annex B: PROHIBITED ACTIVITIES Annex C: ANTI-CORRUPTION GUIDELINES Annex D: COPY OF SEMS PLAN Annex E: ESCASANY, AYERZA AND BRAUN FAMILY MEMBERS Annex F: ELIGIBILITY CRITERIA FOR ELIGIBLE SUB-PROJECTS FOR TRANCHE B

SCHEDULES:

Schedule 1: FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY Schedule 2: FORM OF LOAN REQUEST Schedule 3: FORM OF LOAN AGREEMENT Schedule 4: FORM OF SERVICE OF PROCESS LETTER Schedule 5: FORM OF LETTER TO AUDITORS Schedule 6: FORM OF QUARTERLY AND ANNUAL REVIEW OF OPERATIONS REPORT Schedule 7: FORM OF PORTFOLIO REPORT Schedule 8: FORM OF S&E PERFORMANCE REPORT Schedule 9: FORM OF NOTE Schedule 10: FORM OF ELIGIBLE SUB-LOANS REPORT

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document MASTER LOAN AGREEMENT

MASTER LOAN AGREEMENT dated May 24, 2016, between BANCO DE GALICIA Y BUENOS AIRES S.A., a banking institution organized and existing under the laws of the Republic of Argentina (the “Borrower”), and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the Republic of Argentina (“IFC”).

ARTICLE I Definitions and Interpretation

Section 1.01. Definitions.

Wherever used in this Agreement, the following terms have the meanings opposite them:

“Accounting Standards” means International Financial Reporting Standards (“IFRS”) promulgated by the International Accounting Standards Board (“IASB”) (which include standards and interpretations approved by the IASB and International Accounting Standards issued under previous constitutions), together with its pronouncements thereon from time to time, and applied on a consistent basis or the banking accounting standards of the Country;

“Adjusted Interest Rate Gap” means for any time period listed in the first column of the following chart (each, a “Time Period”), the result obtained by multiplying: (i) the Interest Rate Gap for such Time Period; by (ii) the weighting factor listed opposite such Time Period in the second column of the following chart:

Time Period Weighting Factor 0 to and including 180 days 1.0 % Greater than 180 days to and including 360 days 3.5 % Greater than 1 year to and including 3 years 8.0 % Greater than 3 years to and including 5 years 13.0 % Greater than 5 years to and including 10 years 18.0 % Greater than 10 years 20.0 %

“Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, such Person (where “control” means the power to direct the management or policies of a Person, directly or indirectly, provided that the direct or indirect ownership of 20% or more of the voting share capital of a Person is deemed to constitute control of such Person, and “controlling” and “controlled” have corresponding meanings);

“Aggregate Foreign Exchange Open Position” means the aggregate of all Foreign Exchange Open Positions of the Borrower;

“Aggregate Foreign Exchange Risk Ratio” means the result obtained by dividing: (i) the Aggregate Foreign Exchange Open Position; by (ii) Total Capital;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Aggregate Interest Rate Risk Ratio” means the result obtained by dividing: (i) the aggregate of all Adjusted Interest Rate Gaps in all Time Periods; by (ii) Total Capital, it being understood that positive and negative Adjusted Interest Rate Gaps should be netted in such calculation;

“Aggregate Large Exposures Ratio” means the result obtained by dividing: (i) the aggregate of all Large Exposures; by (ii) Total Capital;

“Aggregate Negative Maturity Gap Ratio” means for Foreign Currencies and local currencies, the result obtained by dividing: (i) the aggregate of each Currency Maturity Gap which is a negative number; by (ii) Total Capital;

“Agreement” means this Master Loan Agreement, as may be amended from time to time;

“AML/CFT Officer” means a senior officer of the Borrower whose duties include oversight or supervision of the implementation and operation of, and compliance with, the Borrower’s anti-money laundering and combating the financing of terrorism (AML/CFT) policies, procedures and controls;

“Applicable S&E Law” means all applicable statutes, laws, ordinances, rules and regulations of the Country, including but not limited to any license, permit or other governmental Authorization imposing liability or setting standards of conduct concerning any environmental, social, labor, health and safety or security risks of the type contemplated by the Performance Standards;

“Argentine Central Bank” means the Banco Central de la República Argentina;

“Auditors” means, as of the date hereof, Price Waterhouse & Co. S.R.L. or such other firm that the Borrower appoints from time to time as its auditors pursuant to Section 5.01(c) (Affirmative Covenants);

“Authority” means any national, supranational, regional or local government or governmental, administrative, fiscal, judicial, or government-owned body, department, commission, authority, tribunal, agency or entity, or central bank (or any Person, whether or not government owned and howsoever constituted or called, that exercises the functions of a central bank);

“Authorization” means any consent, registration, filing, agreement, notarization, certificate, license, approval, permit, authority or exemption from, by or with any Authority, whether given by express action or deemed given by failure to act within any specified time period and all corporate, creditors’ and shareholders’ approvals or consents;

“Authorized Representative” means any natural person who is duly authorized by the Borrower to act on its behalf for the purposes specified in, and whose name and a specimen of whose signature appear on, the Certificate of Incumbency and Authority most recently delivered by the Borrower to IFC;

“Banking Regulations” means the laws and regulations applicable to banking and financial institutions in the Country, including any rules, regulations and/or directives issued by the Argentine Central Bank or any Person exercising the functions of a central bank or that otherwise has authority to regulate the banking sector in the Country;

“Business Day” means a day when banks are open for business in New York, New York or, solely for the purpose of determining the applicable Interest Rate other than pursuant to Section 2.03(e)(ii) (Interest), London, England;

“CAO” means Compliance Advisor Ombudsman, the independent accountability mechanism for IFC that impartially responds to environmental and social concerns of affected communities and aims to enhance outcomes;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Category “A” Activity” means any activity of an Eligible Sub-borrower which is likely to have significant adverse environmental impacts that are sensitive, diverse or unprecedented;

“Certificate of Incumbency and Authority” means a certificate provided to IFC by the Borrower in the form of Schedule 1 (Form of Certificate of Incumbency and Authority);

“CFO” means the chief financial officer of the Borrower;

“Change of Control” means any of the following: (i) the Escasany, Ayerza and Braun Family Members, at any time and for any reason cease to Control or to own 100% of the voting and economic interests in EBA Holding S.A.; (ii) EBA Holding S.A. at any time and for any reason ceases to own at least 58% of the voting interests and at least 21% of the economic interests in Grupo Galicia (determined on a fully diluted basis); (iii) any Person other than EBA Holding S.A. shall have obtained the power (whether or not exercised) to elect a majority of the board of directors of Grupo Galicia; (iv) the board of directors of Grupo Galicia shall cease to consist of a majority of continuing directors; (v) Grupo Galicia at any time and for any reason ceases to own at least 100% of the voting and economic interests in the Borrower (determined on a fully diluted basis); (vi) any Person other than Grupo Galicia. shall have obtained the power (whether or not exercised) to elect a majority of the board of directors of the Borrower; (vii) the board of directors of Grupo Galicia or the Borrower shall cease to consist of a majority of continuing directors; or (viii) a “change of control” or similar event shall occur as provided in any other loan or preferred stock documentation relating to Grupo Galicia or the Borrower;

“Charter” means, with respect to the Borrower, the estatutos;

“Coercive Practice” has the meaning assigned to it in Annex C;

“Collusive Practice” has the meaning assigned to it in Annex C;

“Commitment” means the principal amount of a Loan to be committed by IFC under the relevant Loan Agreement;

“Commitment Date” means the day in which IFC has executed the relevant Loan Agreement;

“Consolidated” or “Consolidated Basis” means with respect to any financial statements to be provided, or any financial calculation to be made, under or for the purposes of this Agreement and any other Transaction Document the method referred to in Section 1.02(c) (Financial Calculations); and the entities whose accounts are to be consolidated with the accounts of the Borrower are all the Subsidiaries of the Borrower;

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise, and the verb “Control” and the terms “Controlling” and “Controlled” have the meanings correlative to the foregoing; provided that any controller (veedor) appointed by the Argentine Central Bank to oversee the operations of the Borrower shall not be construed as “Controlling” the direction of the management and/or policies of the Borrower;

“Corrupt Practice” has the meaning assigned to it in Annex C;

“Country” means the Republic of Argentina;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Currency Maturity Gap” means for assets and liabilities denominated in the same currency, the difference between: (i) the aggregate of all on- and off-balance sheet assets maturing within 90 days; and (ii) the aggregate of all on- and off-balance sheet liabilities maturing within 90 days;

“Directly Export Oriented SME” means any SME operating in directly export oriented sectors;

“Disbursement” means any disbursement of a Loan;

“Disbursement Request” means a request delivered by the Borrower to IFC in the form and substance of Schedule 3 (Schedule 1 of the form of the Loan Agreement) soliciting a Disbursement;

“Dollars” and “$” means the lawful currency of the United States of America;

“Economic Group” means, with respect to any Person, all Persons that are Affiliates, Related Parties or Linked Parties of such Person;

“Economic Group Exposure Ratio” means, the result obtained by dividing: (i) the Exposure of the Borrower to any Person or Economic Group; by (ii) Total Capital;

“Eligible Sub-borrower” means, indistinctively, an Eligible Sub-borrower for Tranche A or an Eligible Sub-borrower for Tranche B, as the context may require;

“Eligible Sub-borrower for Tranche A” means any legal entity organized and existing under the laws of the Country which: (i) is privately owned, i.e., with participation in its voting and non-voting capital by public sector entities not exceeding 49%; (ii) is locally owned, i.e., with aggregate participation in its voting and non-voting capital by foreign Persons not exceeding 49%; (iii) has annual sales of less than $40,000,000 equivalent; (iv) is not a Related Party or an Affiliate of the Borrower; (v) conducts its business and operations primarily in the Country; (vi) is either a Directly Export Oriented SME or an Indirectly Export Oriented SME; (vii) complies with the environmental requirements of the Country; (viii) is not primarily engaged in any of the activities on the Exclusion List; and (ix) is a Person to whom the Borrower makes a Eligible Sub-loan for Tranche A;

“Eligible Sub-borrower for Tranche B” means any legal entity organized and existing under the laws of the Country which: (i) is privately owned, i.e., with participation in its voting and non-voting capital by public sector entities not exceeding 49%; (ii) is not a Related Party or an Affiliate of the Borrower; (iii) conducts its business and operations primarily in the Country; (iv) complies with the environmental requirements of the Country; (v) is not primarily engaged in any of the activities on the Exclusion List; and (vi) is a Person to whom the Borrower makes a Eligible Sub-loan for Tranche B;

“Eligible Sub-loan” means, indistinctively, an Eligible Sub-loan for Tranche A or an Eligible Sub-loan for Tranche B, as the context may require;

“Eligible Sub-loan for Tranche A” means any loan which is made by the Borrower to an Eligible Sub-borrower for Tranche A to finance an Eligible Sub-project for Tranche A which meets all of the following criteria: (i) is denominated in Dollars; (ii) has a principal amount at origination not exceeding $2,000,000; (iii) has a minimum tenor of 1 year from the date of execution of the relevant agreement providing for the Eligible Sub-loan for Tranche A; (iv) is evidenced by an agreement containing such provisions as would enable the Borrower to comply with the requirements set out in this Agreement; (v) has been approved in full compliance with the Borrower’s internal credit underwriting policies and standards; and (vi) proceeds thereof are applied solely and exclusively by the Eligible Sub-borrower for the financing of an Eligible Sub-project for Tranche A;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Eligible Sub-loan for Tranche B” means any loan which is made by the Borrower to an Eligible Sub-borrower for Tranche B to finance an Eligible Sub-project for Tranche B which meets all of the following criteria: (i) is denominated in Dollars; (ii) for Eligible Sub-loans granted to finance RE Eligible Sub-projects for Tranche B, has a principal amount at origination not exceeding $ 10,000,000; (ii) has a minimum tenor of 3 years from the date of execution of the relevant agreement providing for such Eligible Sub-loan for Tranche B; (iii) is evidenced by an agreement containing such provisions as would enable the Borrower to comply with the requirements set out in this Agreement; and (iv) has been committed by the Borrower not earlier than 6 months prior to the execution and delivery of the Loan Agreement providing for the Tranche B Loan which funds will be in turn applied by the Borrower towards financing thereof;

“Eligible Sub-project” means, indistinctively, an Eligible Sub-project for Tranche A or an Eligible Sub-project for Tranche B, as the context may require;

“Eligible Sub-project for Tranche A” means any capital expenditure program, expansion of capacity or any combination thereof in the Country, that (i) complies with the Applicable Laws of the Country, and consisting of activities not on the Exclusion List; (ii) complies with the provisions of Section 5.06(c) (General Requirements Relating to Eligible Sub-Loans); and (iii) is financed by an Eligible Sub-loan for Tranche A;

“Eligible Sub-project for Tranche B” means any project that: (i) meets the eligibility criteria set out in Annex F; (ii) consists of activities which are not on the Exclusion List, located in the Country, which comply with applicable laws of the Country and comply with the provisions of Section 5.06(c) (General Requirements Relating to Eligible Sub-Loans); and (iii) is financed by an Eligible Sub-loan for Tranche B;

“Equity to Assets Ratio” means the result obtained by dividing: (i) Shareholders’ Equity; by (ii) Total Assets;

“Escasany, Ayerza and Braun Family Members” any members of the Escasany, Ayerza and Braun families who are holders of Class “A” Shares of EBA Holding S.A., or their heirs, descendants and spouses who receive shares as a result of dissolution of marriage, or otherwise, which holders of Class “A” Shares and the Fundación Banco de Galicia y Buenos Aires S.A. are (to the extent applicable) identified in the shareholders’ meeting minutes, Number 1 of EBA Holding S.A. dated October 12, 1999, and registered before the Registro Público de Comercio under number 18,036, Libro VIII, Tomo de Sociedades por Acciones, Número Correlativo IGJ 1670663, the names of which are identified in Annex E;

“Event of Default” means any one of the events specified in Section 6.02 (Events of Default);

“Exclusion List” means the list of prohibited activities set forth in Annex C;

“Existing Liabilities” means the Liabilities owed by the Borrower to FMO/Proparco, which outstanding principal amount as of March 31, 2016 is of $ 3,125,000 and $ 4,148,888.90, maturing on January 15, 2017 and January 15, 2018;

“Export-Oriented SME” means either a Direct Export Oriented SME or an Indirect Export Oriented SME;

“Exposure” means with respect to any Person or Economic Group, the aggregate of all on-balance sheet assets (including equity) and off-balance sheet commitments and contingencies of the Borrower to such Person or Economic Group, less any related cash collateral; provided, however, that any on-balance sheet assets (including equity), or off-balance sheet commitments or contingencies to the Argentine Central Bank denominated in Pesos shall not be included in the calculation of the Exposure of the Borrower to such Person or Economic Group;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Financial Year” means the accounting year of the Borrower commencing each year on January 1 and ending on the following December 31, or such other period as the Borrower, with IFC’s consent, from time to time designates as its accounting year;

“Fixed Assets Plus Equity Participations Ratio” means the result obtained by dividing: (i) the aggregate of net fixed assets and equity investments, less (A) investments in unconsolidated banking and financial subsidiary companies, and (B) investments in capital of other banks and financial institutions; by (ii) Total Capital;

“Foreign Currency” means any currency other than Pesos;

“Foreign Currency Maturity Gap Ratio” means for each Foreign Currency representing more than 5% of the Borrower’s assets, the result obtained by dividing: (i) the Currency Maturity Gap; by (ii) Total Capital;

“Foreign Exchange Open Position” means with respect to any Foreign Currency, the absolute difference between assets and liabilities in that Foreign Currency, after giving effect to all Qualifying Off-Balance Sheet Hedges;

“Fraudulent Practice” has the meaning assigned to it in Annex C;

“Grupo Galicia” means Grupo Financiero Galicia S.A., a corporation (sociedad anonima) organized and existing under the laws of the Country;

“IFC’s Board Approval” means the formal approval by the board of directors of IFC approving the execution of this Agreement dated May 17, 2016;

“IFC Exposure” means with respect to any Person or Economic Group, the aggregate of all on-balance sheet assets (including equity) and off-balance sheet commitments and contingencies of the IFC to such Person or Economic Group, less any related cash collateral; provided, however, that any on-balance sheet assets (including equity), or off-balance sheet commitments or contingencies to the Argentine Central Bank denominated in Pesos shall not be included in the calculation of the IFC Exposure to such Person or Economic Group;

“IFC Loan #1” has the meaning ascribed to it in Section 2.01(a)(x) (Amount and Purpose);

“IFC Loan #2” has the meaning ascribed to it in Section 2.01(a)(y) (Amount and Purpose);

“IFC Loan #3” has the meaning ascribed to it in Section 2.01(a)(z) (Amount and Purpose);

“Increased Costs” means the amount certified in an Increased Costs Certificate to be the net incremental costs of, or reduction in return to, IFC or any Participant in connection with the making or maintaining of the Loan or its Participation that result from: (i) any change in any applicable law or regulation or directive (whether or not having force of law) or in its interpretation or application by any Authority charged with its administration; or (ii) compliance with any request from, or requirement of, any central bank or other monetary or other Authority; which, in either case, after the date of this Agreement: (A) imposes, modifies or makes applicable any reserve, special deposit or similar requirements against assets held by, or deposits with or for the account

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of, or loans made by, IFC or that Participant; (B) imposes a cost on IFC as a result of IFC having made the Loan or on that Participant as a result of that Participant having acquired its Participation reduces the rate of return on the overall capital of IFC or that Participant that it would have achieved, had IFC not made the Loan or that Participant not acquired its Participation, (C) changes the basis of taxation on payments received by IFC in respect of the Loan or by that Participant with respect to its Participation (otherwise than by a change in taxation of the overall net income of IFC or that Participant imposed by the jurisdiction of its incorporation or in which it books its Participation or in any political subdivision of any such jurisdiction); or (D) imposes on IFC or on that Participant any other condition regarding the making or maintaining of the Loan or that Participant’s Participation in the Loan; but excluding any incremental costs of making or maintaining a Participation that are a direct result of that Participant having its principal office in the Country or having or maintaining a permanent office or establishment in the Country, if and to the extent that permanent office or establishment acquires that Participation;

“Increased Costs Certificate” means a certificate provided from time to time by IFC (based on a certificate to IFC from any Participant) certifying: (i) the circumstances giving rise to the Increased Costs; (ii) that the costs of IFC or, as the case may be, that Participant have increased or the rate of return of either of them has been reduced; (iii) that, IFC or, as the case may be, that Participant has, in its opinion, exercised reasonable efforts to minimize or eliminate the relevant increase or reduction, and (iv) the amount of Increased Costs;

“Indirectly Export Oriented SME” means any SME operating in indirectly export oriented sectors;

“Interest Determination Date” means, except as otherwise provided in Section 2.03(e)(ii) (Interest), the second Business Day before the beginning of each Interest Period;

“Interest Payment Date” means June 15 and December 15 in each year;

“Interest Period” means each period of 6 months beginning on an Interest Payment Date and ending on the day immediately before the next following Interest Payment Date, except in the case of the first period applicable to each Disbursement when it means the period beginning on the date on which that Disbursement is made and ending on the day immediately before the next following Interest Payment Date;

“Interest Rate” means, for any Interest Period, the rate at which interest is payable on the Loan during that Interest Period, determined in accordance with Section 2.03 (Interest);

“Interest Rate Gap” means, for any Time Period, the difference between: (i) on- and off-balance sheet assets repricing or maturing in such Time Period, and (ii) on- and off-balance sheet liabilities maturing or repricing in such Time Period;

“Interest Rate Risk Ratio” means, for each Time Period, the result obtained by dividing: (i) the Adjusted Interest Rate Gap for such Time Period; by (ii) Total Capital;

“Large Exposure” means, with respect to any Person or Economic Group, the Exposure of the Borrower to such Person or Economic Group which is in excess of 10% of the Borrower’s Total Capital;

“Liability” or “Liabilities” means with respect to any Person, the aggregate of all obligations (actual or contingent) of such Person to pay or repay money;

“LIBOR” means the interbank offered rates for deposits in the Loan Currency by the ICE Benchmark Administration Limited (“ICE”) (or NYSE Euronext or any applicable successor entity) which appear on the relevant page of the Reuters Service (currently page LIBOR01) or, if not available, on the relevant pages of any other service (such as Bloomberg Financial Markets Service) that displays such rates;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provided that if the ICE (or NYSE Euronext, or any applicable successor entity) for any reason ceases (whether permanently or temporarily) to publish interbank offered rates for deposits in the Loan Currency for the relevant Interest Period, “LIBOR” shall mean the rate determined pursuant to Section 2.03(e) (Interest);

“Lien” means any mortgage, pledge, charge, assignment, hypothecation, security interest, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker’s lien, privilege or priority of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law;

“Linked Party” means, with respect to any Person (“Person A”), all Persons who have received a loan or other extension of credit from the Borrower and (a) have provided proceeds of a loan or extension of credit for Person A’s direct benefit (where “direct benefit” means when the proceeds, or assets purchased with the proceeds, are transferred to another Person, other than in a bona fide arm’s length transaction); or (b) have a financial interest in a common enterprise with Person A, where a common enterprise is deemed to exist when the expected source of repayment for each loan or extension of credit to either Person is the same for each Person and neither Person A nor the other Person has another source of income from which the loan (together with such Person’s other obligations) may be fully repaid; and it is understood that an employer will be treated as the source of repayment for credit to an employee of such employer under this clause (b) so that any employee of such Person who has received a loan or other extension of credit from the Borrower shall be considered a Linked Party of such Person;

“Loan” or “Loans” have the meaning ascribed to them in Section 2.01(a)(z) (Amount and Purpose);

“Loan Agreement” means any Loan Agreement that instruments a Loan in the form of Schedule 3;

“Loan Currency” means Dollars;

“Loan Request” means a request delivered by the Borrower to IFC in the form and substance of Schedule 2 soliciting a Loan;

“Long-Term Debt” means that part of the Liabilities of the Borrower whose final maturity falls due more than 1 year after the date it is incurred (including the current maturities thereof);

“Market Disruption Event” means that, before the close of business in London on the Interest Determination Date for the relevant Interest Period, the cost to IFC or Participants whose Participations in the Loan represent in the aggregate 30% or more of the outstanding principal amount of the Loan (as notified to IFC by such Participants) of funding the Loan or such Participations (as applicable) would be in excess of LIBOR;

“Material Adverse Effect” means a material adverse effect on: (i) the Borrower, its assets or properties; (ii) the Borrower’s business prospects or financial condition; (iii) the implementation of, or the carrying on of, the Borrower’s business or operations; or (iv) the ability of the Borrower to comply with its obligations under this Agreement or under any other Transaction Document to which the Borrower is a party;

“Notes” has the meaning assigned to it in Section 2.14(a) (The Notes);

“Obstructive Practice” has the meaning assigned to it in Annex C;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Open Credit Exposures Ratio” means the result obtained by dividing: (i) Problem Exposures less total provisions; by (ii) Total Capital;

“Participant” means any Person who acquires a Participation in the Loan;

“Participation” means a participating interest in the Loan, or as the context requires, in any Disbursement;

“Performance Standards” means IFC’s Performance Standards on Social & Environmental Sustainability, dated January 1, 2012 and available at http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainabi lity/Sustainability+Framework/Sustainability+Framework+-+2012/;

“Person” means any natural person, corporation, company, partnership, firm, voluntary association, joint venture, trust, unincorporated organization, Authority or any other entity whether acting in an individual, fiduciary or other capacity;

“Pesos” means the lawful currency of the Country;

“Potential Event of Default” means any event or circumstance which would, with notice, lapse of time, the making of a determination or any combination thereof, become an Event of Default;

“Problem Exposures” means the aggregate of: (i) Exposures where any portion of such Exposures are, on non-accrual status, 90 days or more in arrears, or for which there is otherwise doubt that payments will be made in full; (ii) Exposures where any portion of such Exposure has been a Restructured Troubled Loan within the past consecutive 12 months; (iii) assets received in lieu of payment (including, but not limited to, real estate and equity shares); and (iv) claims on other Persons that are unreconciled, unsettled or otherwise unresolved for 90 days or longer;

“Qualifying Off-Balance Sheet Hedges” means hedging instruments with regulated banks rated investment grade on the national scale by any of Standard & Poor’s, Moody’s Investors Service or Fitch Ratings, Ltd.;

“RE Eligible Sub-project for Tranche B” has the meaning assigned to it in Section (iv)(a) of Annex F;

“Related Party” means, with respect to any Person, any other Person meeting any of the following criteria: (i) each member of such Person’s board of directors, supervisory board or equivalent body; (ii) each member of such Person’s executive management; (iii) each Person holding, directly or indirectly, more than five percent (5%) of the voting or non-voting share capital of such Person; (iv) each of the parents, children and siblings of the Persons falling under clauses (i) through (iii) above; (v) each of the spouses of the Persons falling under clauses (i) through (iv) above; and (vi) each of the Affiliates and Linked Parties of the Persons falling under clauses (i) through (v) above;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Related Party Exposure Ratio” means the result obtained by dividing: (i) the Exposure of the Borrower to all Related Parties of the Borrower, less any Exposure of the Borrower to any operating subsidiary of the Borrower involved in leasing, factoring, consumer finance, mortgage finance, or merchant/investment banking; by (ii) Total Capital; provided that a “subsidiary”, for purposes of this definition, is defined as a corporate entity that is controlled by another corporate entity, the parent; and provided further that “control”, for purposes of this definition, is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities (control is assumed when a corporate entity owns, holds, or controls 50% or more of the voting power in another corporate entity, the subsidiary);

“Relevant Financing Operations” means any Eligible Sub-loan made to an Eligible Sub-borrower to finance to an Eligible Sub-project;

“Relevant Spread” means collectively, the Tranche A Loans Relevant Spread and the Tranche B Loans Relevant Spread;

“Restructured Troubled Loans” means those loans and leases whose terms have been modified (including by reduction in interest rate, partial principal write-off, extension of tenor), because of deterioration in the financial condition of the borrower, to provide for a reduction in the principal, or interest repayment, or other terms and conditions; once an obligation has been restructured because of such credit problems, it continues to be considered restructured until paid in full or until the borrower complies with the restructured terms through regular principal and interest repayments, for at least 12 consecutive months, not counting any grace period provided at restructuring time; provided, however, that a loan extended or renewed at a stated interest rate equal to the current interest rate for a debt with similar risk is not considered a Restructured Troubled Loan;

“Risk Weighted Assets” means, with respect to the Borrower, the amount the Activos Ponderados por Riesgo (APR) as computed in accordance with the Argentine Central Bank Regulations prevailing as of the date of this Agreement (specifically, Communication “A” 5889), which for the avoidance of doubt includes credit, operational and market risk;

“Risk Weighted Capital Adequacy Ratio” means the result obtained by dividing: (i) Total Capital; by (ii) Risk Weighted Assets;

“Sanctionable Practice” means any Corrupt Practice, Fraudulent Practice, Coercive Practice, Collusive Practice, or Obstructive Practice, as those terms are defined herein and interpreted in accordance with the Anti-Corruption Guidelines attached to this Agreement as Annex C;

“SEMS Officer” means a senior officer of the Borrower to be responsible for administration and oversight of the S&E Management System, initially appointed in accordance with Section 4.01(j) (Conditions of First Disbursement of the Loans);

“SEMS Plan” means the plan or plans to be implemented by the Borrower, a copy of which is attached hereto as Annex D, setting out the specific measures, modifications and enhancements to be undertaken by the Borrower in respect of the S&E Management System;

“SME” means small and medium-sized enterprises, incorporated in the Country;

“Shareholders Equity” means total equity as calculated under the Accounting Standards;

“Shell Bank” means a bank incorporated in a jurisdiction in which it has no physical presence and which is not an Affiliate of a regulated (i) bank or (ii) financial group;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Single Currency Foreign Exchange Risk Ratio” means for each Foreign Currency, the result obtained by dividing: (i) the Foreign Exchange Open Position; by (ii) Total Capital;

“Subsidiary” means, with respect to any Person, any entity over 50% of whose capital is owned, directly or indirectly, by that Person; or for which that Person may nominate or appoint a majority of the members of the board of directors or persons performing similar functions; or which is otherwise effectively controlled by that Person;

“S&E Management System” means the social and environmental management system of the Borrower, as implemented and/or in effect from time to time, that enables the Borrower to identify, assess and manage the social and environmental risks in respect of the Eligible Sub-loans;

“S&E Performance Report” means a written report prepared by the Borrower, in form and substance satisfactory to IFC substantially in the form of Schedule 8, evaluating the social and environmental performance of Eligible Sub-borrowers for the previous fiscal year, describing in reasonable detail (i) implementation and operation of the S&E Management System and (ii) the environmental and social performance of the Eligible Sub-borrowers;

“S&E Requirements” means the social and environmental obligations to be undertaken by the Borrower to ensure compliance of the Relevant Financing Operations with: (i) the Exclusion List; (ii) Applicable S&E Laws; and (iii) the Performance Standards, and (iv) any other requirements established by the S&E Management System;

“Taxes” means any present or future taxes, withholding obligations, duties and other charges of whatever nature levied by any Authority;

“Time Period” has the meaning set forth in the definition of Adjusted Interest Rate Gap;

“Total Amount” has the meaning ascribed to it in Section 2.01 (Amount and Purpose);

“Total Assets” means total assets, as calculated under the Accounting Standards;

“Total Capital” means the Borrower’s “Responsabilidad Patrimonial Computable” as defined in accordance with the Argentine Central Bank Regulations prevailing as of the date of this Agreement (specifically, Communication “A” 5889);

“Tranche A” has the meaning ascribed to it in Section 2.01(a)(i) (Amount and Purpose);

“Tranche A Loan” means any and each of the Loans committed and disbursed by IFC in favor of the Borrower under the Tranche A, as specified in Section 2.01 (a) (Amount and Purpose), or, as the context requires, its corresponding principal amount from time to time outstanding;

“Tranche A Loans Relevant Spread” means (i) with respect to each of the Tranche A Loans committed within the first 6 months as from the date of IFC’s Board Approval, 4.5% per annum, and (ii) with respect to each of the Tranche A Loans committed after 6 months as from the date of IFC’s Board Approval, the spread set forth in the respective Loan Agreement relating to such Tranche A Loan, as agreed thereupon by the Parties;

“Tranche B” has the meaning ascribed to it in Section 2.01(a)(ii) (Amount and Purpose);

“Tranche B Loan” means any and each of the Loans committed and disbursed by IFC in favor of the Borrower under the Tranche B, as specified in Section 2.01 (a) (Amount and Purpose), or, as the context requires, its corresponding principal amount from time to time outstanding;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Tranche B Loans Relevant Spread” means (i) with respect to each of the Tranche B Loans committed within the first 6 months as from the date of IFC’s Board Approval, 4.75% per annum, and (ii) with respect to each of the Tranche B Loans committed after 6 months as from the date of IFC’s Board Approval, the spread set forth in the respective Loan Agreement relating to such Tranche B Loan, as agreed thereupon by the Parties;

“Transaction Documents” means (i) this Agreement (jointly with all the related Loan Requests); (ii) the Loan Agreements (jointly with all the related Disbursement Requests and receipts); (iii) the Notes; and (iv) any other documents or agreements in relation therewith, in implementation therewith, supplemental thereto on in replacement thereof; and

“World Bank” means the International Bank for Reconstruction and Development, an international organization established by Articles of Agreement among its member countries.

Section 1.02. Financial Calculations.

(a) All financial calculations to be made under, or for the purposes of, this Agreement and any other Transaction Document shall be made in accordance with the Accounting Standards and, except as otherwise required to conform to any provision of this Agreement, shall be calculated from the then most recently issued quarterly financial statements which the Borrower is obligated to furnish to IFC under Section 5.04 (a) (Reporting Requirements).

(b) Where quarterly financial statements from the last quarter of a Financial Year are used for the purpose of making certain financial calculations then, at IFC’s option, those calculations may instead be made from the audited financial statements for such Financial Year.

(c) If a financial calculation is to be made under or for the purposes of this Agreement or any other Transaction Document on a Consolidated Basis, that calculation shall be made by reference to the sum of all amounts of similar nature reported in the relevant financial statements of each of the entities whose accounts are to be consolidated with the accounts of the Borrower plus or minus the consolidation adjustments customarily applied to avoid double counting of transactions among any of those entities, including the Borrower.

Section 1.03. Interpretation. In this Agreement, unless the context otherwise requires:

(a) headings are for convenience only and do not affect the interpretation of this Agreement;

(b) a reference to an Annex, Article, party, Schedule or Section is a reference to that Article or Section of, or that Annex, party or Schedule to, this Agreement;

(c) words importing the singular include the plural and vice versa;

(d) a reference to a document includes an amendment or supplement to, or replacement or novation of, that document but disregarding any amendment, supplement, replacement or novation made in breach of this Agreement; and

(e) a reference to a party to any document includes that party’s successors and permitted assigns.

Section 1.04. Business Day Adjustment. (a) When an Interest Payment Date is not a Business Day, then such Interest Payment Date shall be automatically changed to the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) When the day on or by which a payment (other than a payment of principal or interest) is due to be made is not a Business Day, that payment shall be made on or by the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

Section 1.05. Loan Agreements. (a) This Agreement, including its definitions, conditions of disbursement, representations and warranties, covenants, events of default, principles of construction, rules of interpretation and its jurisdiction, governing law and notice provisions, is made a part of each of the Loan Agreements. This Agreement and each of the Loan Agreements shall be read and construed together as one agreement.

(b) If any provision of this Agreement conflicts with any provision of any Loan Agreement, then the provisions of the relevant Loan Agreement shall prevail.

ARTICLE II The Loans

Section 2.01. Amount and Purpose. (a) Subject to the provisions of this Agreement and each Loan Agreement, IFC agrees to lend, and the Borrower agrees to borrow, certain financial loans for a principal amount up to a maximum aggregate of up to $ 130,000,000 (the “Total Amount”), consisting of 2 tranches, as follows: (i) a tranche in an amount of up to $ 105,000,000 (the “Tranche A”); and (ii) a tranche in an amount of up to $ 50,000,000 (the “Tranche B”), to be committed in up to 3 loan commitments, as follows: (x) a loan commitment in an amount of $ 30,000,000 (of which the entire amount shall be disbursed under Tranche A) (the “IFC Loan #1”); (y) a loan commitment in a minimum amount of $ 30,000,000 and a maximum amount of up to $ 50,000,000 (of which an amount equivalent to, at least, 25% shall be disbursed under Tranche B) (the “IFC Loan #2”); and (z) a loan commitment equal to the remaining balance of the Total Amount (of which an amount equivalent to, at least, 25% shall be disbursed under Tranche B, unless the Tranche B cumulatively has been committed and fully disbursed for an amount of, at least, $ 25,000,000) (the “IFC Loan #3”, together with the IFC Loan #1 and the IFC Loan #2, the “Loans”, and individually any of such Loans, a “Loan”).

Each Loan shall be committed individually pursuant to a relevant Loan Agreement, for the individual principal amount agreed upon in the relevant Loan Agreement, and disbursed pursuant to the conditions set forth in this Agreement and in the relevant Loan Agreement.

There shall be no commitment of funds by IFC unless and until IFC executes the relevant Loan Agreement, in which case IFC shall only commit funds to the extent of such Commitment, and in the terms and conditions set forth in this Agreement and in the relevant Loan Agreement.

(b) The purpose of the Loans is (i) for the Tranche A Loans, to provide the Borrower with funding to be used by the Borrower for financing the origination and/or acquisition of a pool of Eligible Sub-loans for Tranche A; provided that at least 30% of the aggregate amount of the Eligible Sub-loans for Tranche A shall be represented by Eligible Sub-loans for Tranche A granted to Eligible Sub-borrowers for Tranche A with annual sales of up to $ 25,000,000 equivalent; and (ii) for the Tranche B Loans, to provide the Borrower with funding to be used by the Borrower for financing the origination and/or acquisition of a pool of Eligible Sub-loans for Tranche B.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.02. Commitment and Disbursement Procedure. (a) The Borrower and IFC shall instrument each Loan through a particular Loan Agreement to be executed by both Parties. The Borrower may request the Commitment of a Loan to IFC, by delivering to IFC a Loan Request substantially in the form of Schedule 2. The relevant Loan Agreement, upon agreement by the Parties shall be executed by the Parties after receipt by IFC of the relevant Loan Request, provided that (i) no Event of Default and no Potential Event of Default has occurred and is continuing, and (ii) for any relevant Loan Agreement to be executed after 6 months of IFC’s Board Approval, IFC and the Borrower have agreed on the applicable Relevant Spread for such Commitment.

(b) The Commitment for (i) the IFC Loan #1, has been agreed by the Parties; (ii) the IFC Loan #2, shall be agreed by the Parties within 36 months from IFC’s Board Approval (but in no event earlier than July 1, 2016), if and when the IFC Loan #1 shall have been fully disbursed; and (iii) the IFC Loan #3, shall be agreed by the Parties within 36 months from IFC’s Board Approval, if and when the IFC Loan #2 shall have been fully disbursed. The Parties shall execute the Loan Agreement for the IFC Loan #1 jointly with the execution of this Agreement.

(c) Once the relevant Loan Agreement is executed by both Parties, the Borrower may request the corresponding Disbursement by delivering to IFC, at least 10 Business Days prior to the proposed date of disbursement, a Disbursement Request in the form of Schedule 3 (Schedule 1 of the form of Loan Agreement).

(d) Each Disbursement (other than the last one) shall be made in an amount of not less than $5,000,000 for each Tranche of each Loan. There shall be no more than 3 Disbursements for each Tranche of each Loan.

(e) Subject to the fulfillment of the conditions precedent set forth in this Agreement, each Disbursement shall be made by IFC at a bank in New York, New York for further credit to the Borrower’s account at a bank in the Country, or any other place acceptable to IFC, all as agreed by the Parties in the relevant Loan Agreement.

(f) The Borrower shall deliver to IFC a receipt, substantially in the form of Schedule 3 (Schedule 2 of the form of Loan Agreement), with the signatures and capacities of the Borrower’s representatives duly certified and authenticated by an Argentinean notary public acting within its capacities, within 5 Business Days following each Disbursement by IFC. The Borrower hereby expressly and unconditionally agrees that in the event that the Borrower fails to deliver such receipt, evidence of the transfer of funds to the Borrower’s correspondent bank account (as set forth in Section 2.02(e)) shall be considered as sufficient evidence of receipt.

(g) IFC may, by notice to the Borrower, suspend the right of the Borrower to Commitments and Disbursements or cancel the undisbursed portion of a Loan in whole or in part, if: (i) the first Disbursement of each Loan has not been made (a) in the case of the Tranche A, within 3 months from the date of the execution of the relevant Loan Agreement; and (b) in the case of the Tranche B, within 9 months from the date of the execution of the relevant Loan Agreement; (ii) the last Disbursement of each Loan has not been made within 12 months from the date of the execution of the relevant Loan Agreement; (iii) any Event of Default has occurred and is continuing or the Event of Default specified in Section 6.02(d) (Events of Default) is, in the reasonable opinion of IFC, imminent;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iv) any event or condition has occurred which has or can reasonably be expected to have a Material Adverse Effect; or (v) on or after the date that is 36 months as from the IFC’s Board Approval.

Upon any cancellation, the Borrower shall, subject to subsection (e) of this Section 2.02, pay to IFC all fees and other amounts accrued (whether or not then due and payable) under this Agreement and the relevant Loan Agreements up to the date of that cancellation.

(h) The Borrower may, by notice to IFC, irrevocably request IFC to cancel any part of the uncommitted Total Amount or any undisbursed portion of a Loan on the date specified in that notice (which shall be a date not earlier than 30 days after the date of that notice) provided that IFC has received all fees and other amounts accrued (whether or not then due and payable) under this Agreement and the relevant Loan Agreements up to such specified date.

(i) In the case of partial cancellation of a Loan pursuant to subsection (g) or (h) of this Section 2.02, interest on the amount then outstanding of the Loans remains payable as provided in Section 2.03 (Interest).

(j) Any portion of the Total Amount, or of a Loan, that is cancelled under this Section 2.02 may not be reinstated or disbursed.

(k) In the case of a cancellation of the undisbursed portion of a committed Loan pursuant to subsection (g) or (h) of this Section 2.02, the Borrower shall pay to IFC a cancellation fee of 2% of the undisbursed committed amount that is being cancelled.

Section 2.03. Interest. (a) Subject to the provisions of Section 2.04 (Default Interest Rate), the Borrower shall pay interest on the Loans in accordance with this Section 2.03 and with the relevant Loan Agreements pursuant to which the Loans were made.

(b) During each Interest Period, the Loans shall bear interest at the applicable Interest Rate for that Interest Period.

(c) Interest on each Loan shall accrue from day to day, be prorated on the basis of a 360-day year for the actual number of days in the relevant Interest Period and be payable in arrears on the Interest Payment Date immediately following the end of that Interest Period; provided that with respect to any Disbursement made less than 15 days before an Interest Payment Date, interest on that Disbursement shall be payable commencing on the second Interest Payment Date following the date of that Disbursement.

(d) The Interest Rate for any Interest Period shall be the rate which is the sum of: (i) the Relevant Spread; and (ii) LIBOR on the Interest Determination Date for that Interest Period for 6 months (or, in the case of the first Interest Period for any Disbursement, for 1 month, 2 months, 3 months or 6 months, whichever period is closest to the duration of the relevant Interest Period (or, if two periods are equally close, the longer one) rounded upward to the nearest 3 decimal places.

(e) If, for any Interest Period, IFC cannot determine LIBOR by reference to the Reuters Service (or if the Reuters Service is not available, with reference to any other service (such as Bloomberg Financial Markets Service) that displays such rates as may be specified by IFC) or if the ICE (or NYSE

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Euronext, or any other applicable successor entity) for any reason ceases (whether permanently or temporarily) to publish interbank offered rates for deposits in the Loan Currency for the relevant Interest Period, IFC shall notify the Borrower, and shall instead determine LIBOR: (i) on the second Business Day before the beginning of the relevant Interest Period by calculating the arithmetic mean (rounded upward to the nearest 3 decimal places) of the offered rates advised to IFC on or around 11:00 a.m., London time, for deposits in the Loan Currency and otherwise in accordance with subsection (d)(ii) of this Section 2.03, by any 4 major banks active in the Loan Currency in the London interbank market, selected by IFC; provided that if less than four quotations are received, IFC may rely on the quotations so received if not less than 2; or (ii) if less than 2 quotations are received from the banks in London in accordance with subsection (i) above, on the first day of the relevant Interest Period, by calculating the arithmetic mean (rounded upward to the nearest 3 decimal places) of the offered rates advised to IFC on or around 11:00 a.m., New York time, for loans in the Loan Currency and otherwise in accordance with subsection (d)(ii) of this Section 2.03, by a major bank or banks in New York, New York selected by IFC.

(f) Subject to any alternative basis agreed as contemplated by Section 2.03(g) below, if a Market Disruption Event occurs in relation to all or any part of the Loans for any Interest Period, IFC shall promptly notify the Borrower of such event and the relevant Interest Rate for the relevant portion of the Loans for that Interest Period shall be the rate which is the sum of: (i) the Relevant Spread; and (ii) either (A) the rate which expresses as a percentage rate per annum the cost to IFC (or the relevant Participant, as notified to IFC as soon as practicable and in any event not later than the close of business on the first day of the relevant Interest Period) of funding the Loans or its Participation (as applicable) from whatever source it may reasonably select or (B) at the option of IFC (or any such Participant, as applicable), LIBOR for the relevant period as determined in accordance with Section 2.03(e)(ii) above;

(g) (i) If a Market Disruption Event occurs in relation to the Loans and IFC or the Borrower so requires, within 5 Business Days of the notification by IFC pursuant to Section 2.03(f) above, IFC and the Borrower shall enter into good faith negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest applicable to the Loans. (ii) Any alternative basis agreed pursuant to sub-paragraph (i) above shall take effect in accordance with its terms and be binding on each party hereto. (iii) If agreement cannot be reached, the Borrower may prepay the relevant portion of the Loans in accordance with Section 2.06 (a).

(h) On each Interest Determination Date for any Interest Period, IFC shall determine the Interest Rate applicable to that Interest Period and promptly notify the Borrower of that rate.

(i) The determination by IFC, from time to time, of the applicable Interest Rate shall be final and conclusive and bind the Borrower (unless the Borrower shows to IFC’s satisfaction that the determination involves manifest error).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.04. Default Interest Rate. (a) Without limiting the remedies available to IFC under this Agreement or otherwise (and to the maximum extent permitted by applicable law), if the Borrower fails to make any payment of principal or interest (including interest payable pursuant to this Section) or any other payment provided for in Section 2.07 (Fees) when due as specified in this Agreement or in the relevant Loan Agreements (whether at stated maturity or upon acceleration), the Borrower shall pay interest on the amount of that payment due and unpaid at the rate which shall be the sum of 2% per annum (or such higher rate being charged by other lenders, but not exceeding 5% per annum) and the Interest Rate in effect from time to time.

(b) Interest at the rate referred to in Section 2.04 (a) shall accrue from the date on which payment of the relevant overdue amount became due until the date of actual payment of that amount (as well after as before judgment), and shall be payable on demand or, if not demanded, on each Interest Payment Date falling after any such overdue amount became due.

Section 2.05. Repayment. (a) Subject to Section 1.04 (Business Day Adjustment), the Borrower shall repay (i) each Tranche A Loan on the relevant Interest Payment Dates, in 7 approximately equal semiannual installments starting on the relevant Interest Payment Date following the second anniversary of the applicable Commitment Date, and as set forth in detail by the Parties in the relevant Loan Agreements; and (ii) each Tranche B Loan on the relevant Interest Payment Dates, in 9 approximately equal semiannual installments starting on the relevant Interest Payment Date following the third anniversary of the applicable Commitment Date, and as set forth in detail by the Parties in the relevant Loan Agreements.

(b) Any principal amount of any Loan repaid under this Agreement or the applicable Loan Agreement may not be re-borrowed.

Section 2.06. Prepayment. (a) Without prejudice to Section 2.10 (Increased Costs), the Borrower may prepay on any Interest Payment Date all or any part of any Tranche, on not less than 30 days’ prior notice to IFC, but only if, simultaneously with the prepayment, the Borrower pays all accrued interest on the amount of the Tranche to be prepaid, together with all amounts payable under Section 2.11 (Unwinding Costs) and a prepayment premium equal to (i) 4% of the amount of the Tranche to be prepaid, if the prepayment occurs within the first 2 years as from the relevant Commitment Date (ii) 3% of the amount of the Tranche to be prepaid, if the prepayment occurs between the third and the fourth year as from relevant Commitment Date, and, (iii) thereafter, 2% of the amount of the Tranche to be prepaid. The premium shall apply for each full year from the date of prepayment to the final maturity of each Tranche (for any period less than 1 year, the premium shall be pro-rated on the basis of a 360-day year for the actual number of days in such period). Any partial prepayment shall: (i) be in an amount of not less than $5,000,000; and (ii) be applied to the remaining repayment installments of the prepaid Tranche in inverse order of maturity.

(b) Upon delivery of a notice in accordance with Section 2.06 (a), the Borrower shall make the prepayment in accordance with the terms of that notice.

(c) Any principal amount of the Loans prepaid under this Agreement may not be re-borrowed.

Section 2.07. Fees. (a) The Borrower shall pay to IFC: (i) a commitment fee on any undisbursed amount of each Loan at the rate of (y) 0.5% per annum, within 90 days from the date of such relevant Loan Agreement, or (z) 1% thereafter, beginning to accrue on the date of the relevant Loan Agreement, prorated on the basis of a 360-day year for the actual number of days elapsed and payable, in arrears, on each Interest Payment Date, the first such payment to be due on the first Interest Payment Date after the date of the relevant Loan Agreement;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) a front-end fee of 1 % of the amount of each Loan, to be paid on the earlier of (A) the date which is 30 days after the date of each Commitment Date and (B) the date immediately preceding the date of the first Disbursement of each Loan; and (iii) a portfolio monitoring fee of $ 10,000 per annum, payable upon receipt of a statement from IFC.

(b) If the Borrower and IFC agree to restructure all or part of any Loan, the Borrower and IFC shall negotiate in good faith an appropriate amount to compensate IFC for the additional work of IFC staff required in connection with such restructuring.

Section 2.08. Currency and Place of Payment. (a) The Borrower shall pay all amounts due to IFC under this Agreement and each Loan Agreement in the Loan Currency, in same day funds, to the account of IFC at Citibank, N.A., 111 Wall Street, New York, New York, U.S.A., ABA#021000089, for credit to IFC’s account number 36085579 unless a different account has been designated from time to time by IFC.

(b) The payment obligations of the Borrower under this Agreement and each Loan Agreement shall be discharged or satisfied only to the extent that (and as of the date when) IFC actually receives funds in the Loan Currency in the account referred to in subsection (a) above, notwithstanding the tender or payment (including by way of recovery under a judgment) of any amount in any currency other than the Loan Currency.

(c) Accordingly, the Borrower shall, as a separate obligation, or by way of indemnity, as the case may be, pay such additional amount as is necessary to enable IFC to receive, after conversion to the Loan Currency at a market rate and transfer to that account, the full amount due to IFC under this Agreement in the Loan Currency and in the account referred to in subsection (a) above.

(d) Notwithstanding the provisions of Section 2.08 (a) and Section 2.08 (b) above, IFC may require the Borrower to pay (or reimburse IFC) for any Taxes, fees, costs, expenses and other amounts payable under Section 2.12 (a) (Taxes) and Section 2.13 (Expenses) in the currency in which they are payable, if other than the Loan Currency.

Section 2.09. Allocation of Partial Payments. If IFC at any time receives less than the full amount then due and payable under this Agreement or the relevant Loan Agreements, IFC may allocate and apply the amount received as IFC in its sole discretion determines, notwithstanding any instruction of the Borrower to the contrary.

Section 2.10. Increased Costs. On each Interest Payment Date, the Borrower shall pay, in addition to interest, the amount which IFC from time to time notifies to the Borrower in an Increased Costs Certificate as being the aggregate Increased Costs accrued and unpaid prior to that Interest Payment Date.

Section 2.11. Unwinding Costs. (a) If IFC or any Participant incurs any cost, expense or loss as a result of the Borrower: (i) failing to borrow in accordance with a Loan Request and a Disbursement Request made pursuant to Section 2.02 (Commitment and Disbursement Procedure); (ii) failing to prepay in accordance with a notice of prepayment; (iii) prepaying all or any portion of the Loans on a date other than an Interest Payment Date; or (iv) after acceleration of the Loans, paying all or a portion of the Loans on a date other than an Interest Payment Date; then the Borrower shall immediately pay to IFC the amount that IFC from time to time notifies to the Borrower as being the amount of those costs, expenses and losses incurred.

(b) For the purposes of this Section, “costs, expenses or losses” include any premium, penalty or expense incurred to liquidate or obtain third party deposits, borrowings, hedges or swaps in order to make, maintain, fund or hedge all or any part of any Commitment, Disbursement or prepayment of the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan, or any payment of all or part of the Loans upon acceleration.

Section 2.12. Taxes. The Borrower shall pay or cause to be paid all Taxes (other than Taxes, if any, payable on the overall income of IFC) on or in connection with the payment of all amounts due under this Agreement and the other Transaction Documents, and make all payments under this Agreement and the other Transaction Documents without deducting any present or future taxes whatsoever by whomsoever levied or imposed in connection with the payment of any amount under this Agreement and the other Transaction Documents; provided that, if the Borrower is prevented from making payments without deduction, the Borrower shall, in each case, pay to IFC an increased amount such that, after deduction, IFC receives the full amount it would have received had that payment been made without deduction.

Section 2.13. Expenses. (a) The Borrower shall pay, or reimburse IFC for any amount paid by IFC on account of, all taxes (including stamp taxes), duties, fees or other charges payable on or in connection with the execution, issue, delivery, registration or notarization of the Transaction Documents and any other documents related to them.

(b) The Borrower shall pay to IFC or as IFC may direct, the fees and expenses of IFC’s counsel, accountants and consultants incurred in connection with: (i) the preparation, review, execution, translation and, where appropriate, registration of the Transaction Documents and any other documents related to them; (ii) the preparation, administration and implementation by IFC of the investment provided for in this Agreement, the Loan Agreements or otherwise in connection with any amendment, supplement or modification to, or waiver under, any Transaction Document; (iii) the giving of any legal opinions required by IFC under this Agreement and any other Transaction Document; and (iv) the occurrence of any Event of Default or Potential Event of Default.

(c) The Borrower shall pay to IFC, or as IFC may direct, the costs and expenses incurred by IFC in relation to efforts to enforce or protect its rights under this Agreement and any Transaction Document, or the exercise of its rights or powers consequent upon or arising out of the occurrence of any Event of Default or Potential Event of Default, including legal and other professional consultants’ fees.

Section 2.14. The Notes. (a) In connection with and at the time of each Disbursement, the Borrower shall execute and deliver to IFC a non-endorsable promissory note (pagaré), payable on demand, for, and in the principal amount of, each Disbursement of each Tranche and dated the date on which the Borrower receives that Disbursement (each such promissory note, a “Note”), which shall be in the form attached hereto as of Schedule 9 appropriately completed, with the signatures and capacities of the applicable Borrower’s representatives duly certified and authenticated by an Argentinean notary public acting within its capacities, and complying with all other conditions required by the laws of the Country to constitute, at all times, a “título ejecutivo” and deliver it to IFC.

(b) The issuance of any of the Notes provided for hereunder is not intended to, and shall hence not, constitute a novation of any of the Borrower’s obligations hereunder.

(c) The Borrower represents and agrees that at the time of delivery of each Note, each Note shall constitute in the Country a valid and binding obligation of the Borrower in accordance with its terms, enforceable by way of summary proceedings (juicio ejecutivo) in the Country. If IFC so requests, the Borrower shall furnish to IFC evidence satisfactory to IFC that all formalities required for that purpose have been satisfied. The Borrower agrees to indemnify IFC for all costs and expenses associated with the enforcement of the Notes.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE III Representations and Warranties

Section 3.01. Representations and Warranties. The Borrower represents and warrants that:

(a) Organization and Authority. It is a banking institution duly incorporated and validly existing under the laws of the Country and has the corporate power to own its assets, conduct its business as presently conducted and to enter into, and comply with its obligations under, this Agreement and the Transaction Documents to which it is a party or will be a party;

(b) Validity. Each Transaction Document to which the Borrower is a party has been, or will be, duly authorized and executed by the Borrower and constitutes or will when executed, constitute a valid and legally binding obligation of the Borrower enforceable in accordance with its terms;

(c) No Conflict. Neither the making of this Agreement or any Transaction Document to which the Borrower is a party nor (when all the Authorizations referred to in Section 4.01(c) (Conditions of First Disbursement of the Loans) have been obtained) the compliance with its terms will conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default or require any consent under, any indenture, mortgage, agreement or other instrument or arrangement to which it is a party or by which it is bound, or violate any of the terms or provisions of its Charter or any Authorization, judgment, decree or order or any statute, rule or regulation applicable to it;

(d) Status of Authorizations. All Authorizations (other than Authorizations that are of a routine nature and are obtained in the ordinary course of business) needed by the Borrower to conduct its business and execute, and comply with its obligations under, this Agreement and each of the other Transaction Documents to which it is a party or under which the Borrower is in any manner obligated have been obtained and are in full force and effect, and the Borrower has not received any notice of proceedings relating to the revocation, cancellation, expropriation or modification of any such Authorizations;

(e) No Amendments to Charter. The Borrower’s Charter has not been amended since June 26, 2006;

(f) No Immunity. Neither the Borrower nor any of its property enjoys any right of immunity from set-off, suit or execution with respect to its assets or its obligations under this Agreement or any other Transaction Document;

(g) Financial Condition. Since December 31, 2015: (i) it has not suffered any change that has a Material Adverse Effect or incurred any substantial loss or liability; and (ii) has not undertaken or agreed to undertake any substantial obligation which could cause or could reasonably be expected to cause a Material Adverse Effect;

(h) Financial Statements. The financial statements of the Borrower for the period ending on December 31, 2015 have been prepared in accordance with the Accounting Standards, and give a true and fair view of its financial condition as of the date as of which they were prepared and the results of the Borrower’s operations during the period then ended;

(i) Compliance with Law. To the best of its knowledge and belief after due inquiry, the Borrower is not in violation of any statute or regulation of any Authority;

(j) Environmental Matters. (i) to the best of the Borrower’s knowledge and belief, after due inquiry, there are no material social or environmental risks or issues other than those identified by the S&E Management System; and (ii) the Borrower has not received nor is aware of: (A) any existing or threatened complaint, order, directive, claim, citation or notice from any Authority; or (B) any material written

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document communication from any Person concerning the failure by any Eligible Sub-borrower to undertake its operations and activities in accordance with the S&E Requirements;

(k) Litigation. To the best of its knowledge and belief after due inquiry, it is not in violation of any statute or regulation of any Authority, and is not engaged in nor threatened by any litigation, arbitration or administrative proceedings, the outcome of which could reasonably be expected to have a Material Adverse Effect, is not subject to any criminal investigations or proceedings, or any freezing of assets by a government authority with regard to money laundering or financing of terrorism; and no judgment or order has been issued which has or may reasonably be expected to have a Material Adverse Effect;

(l) Title to Assets and Liens. It has good and marketable title to all of the assets purported to be owned by it and possesses a valid leasehold interest in all assets which it purports to lease, in all cases free and clear of all Liens, and no contracts or arrangements, conditional or unconditional, exist for the creation by the Borrower of any Lien, except for Liens permitted pursuant to Section 5.02 (d) (Negative Covenants);

(m) Taxes. All tax returns and reports of the Borrower required by law to be filed have been duly filed and all Taxes, obligations, fees and other governmental charges upon the Borrower, or its properties, or its income or assets, which are due and payable or to be withheld, have been paid, or withheld, other than those presently payable without penalty or interest;

(n) Sanctionable Practices. Neither the Borrower, nor any Affiliates, nor any Person acting on its or their behalf, has committed or engaged in, with respect to its banking license or any transaction contemplated by this Agreement, any Sanctionable Practice;

(o) UN Security Council Resolutions. The Borrower maintains and applies policies and procedures for sanctions complying with applicable laws and regulations and with the financial sanctions promulgated pursuant to resolutions of the United Nations Security Council under Chapter VII of the United Nations Charter; and

(p) No Material Omissions. None of the representations and warranties in this Section 3.01 omits any matter the omission of which makes any of such representations and warranties misleading in any material respect.

Section 3.02. IFC Reliance. The Borrower acknowledges that it makes the representations and warranties in Section 3.01 (Representations and Warranties) with the intention of inducing IFC to enter into this Agreement and that IFC enters into this Agreement on the basis of, and in full reliance on, each of such representations and warranties.

ARTICLE IV Conditions of Disbursement

Section 4.01. Conditions of First Disbursement of the Loans. IFC is not obligated to make the first Disbursement of any Loan unless and until the following conditions have been met:

(a) Transaction Documents. This Agreement, the relevant Loan Agreement and the Notes to be issued evidencing the first Disbursement of the relevant Loan, in form and substance satisfactory to IFC, have been entered into by all parties thereto, or issued, as the case may be, and have become (or, as the case may be, remain) unconditional and fully effective in accordance with their respective terms;

(b) Charter. The Borrower’s Charter is in form and substance satisfactory to IFC;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) Authorizations. The Borrower has obtained, and provided to IFC copies of, all Authorizations that may become necessary for: (i) the Loans; (ii) the business of the Borrower as it is presently carried on and is contemplated to be carried on; (iii) the execution of, and performance by the Borrower of its obligations under, this Agreement and the other Transaction Documents; and (iv) the remittance to IFC in Dollars of all monies payable with respect to this Agreement and the Transaction Documents; and all those Authorizations are in full force and effect;

(d) Auditor’s Certification. IFC has received a certification from the Auditors confirming that, as at a date not earlier than 60 days prior to the date of the first Disbursement of the IFC Loan #1, the Borrower is in compliance with the provisions of Section 5.01 (b) (Affirmative Covenants) and containing a brief description of the systems and records in place;

(e) Legal Opinions. IFC has received legal opinion(s) in form and substance satisfactory to it, from IFC’s counsel in the Country and covering such other matters relating to the transactions contemplated by this Agreement as IFC may reasonably request, concurred in by the Borrower’s counsel if IFC so requires;

(f) Insurance. (i) IFC has received copies of all insurance policies required to be obtained pursuant to Section 5.05 (Insurance) and Annex A and a certification of the Borrower’s insurers or insurance agents confirming that such policies are in full force and effect and all premiums then due and payable under those policies have been paid; and (ii) the Borrower has established insurance requirements, and has implemented and maintains procedures to monitor such requirements, with respect to Eligible Sub-loans, and has delivered to IFC a description of such requirements and procedures;

(g) Fees. IFC has received the fees which Section 2.07 (Fees) requires to be paid before the Disbursement and all other amounts then due under this Agreement including but not limited to, reimbursement of all invoiced fees and expenses of IFC’s counsel, if IFC so requires;

(h) Certificate of Incumbency; Authorization of Auditors. IFC has received from the Borrower (i) a Certificate of Incumbency and Authority; and (ii) a copy of the authorization to the Auditors referred to in Section 5.01(c) (Affirmative Covenants);

(i) Appointment of Agent. The Borrower has delivered to IFC evidence, substantially in the form of Schedule 4, of appointment of an agent for service of process pursuant to Section 7.04 (Applicable Law and Jurisdiction); and

(j) Environmental Matters. The Borrower (i) has completed the applicable SEMS plan milestones prior to the Commitment or the Disbursement of the relevant Loan, as the case may be; and (ii) has designated in writing a SEMS Officer reasonably acceptable to IFC.

Section 4.02. Conditions of All Disbursements. IFC is not obligated to make any Disbursement under any Loan, including the first Disbursement of any Loan, unless and until the following conditions have been met:

(a) No Default. No Event of Default and no Potential Event of Default has occurred and is continuing;

(b) Use of Proceeds. The proceeds of the Disbursement under the requested Loan: (i) are, at the date of the relevant request, needed by the Borrower for the purpose specified in Section 2.01 (b) (Amount and Purpose), or will be needed for that purpose within 3 months, in the case of Disbursements under Tranche A, or 12 months, in the case of Disbursements under Tranche B, as the case may be, of that date; and (ii) are not in reimbursement of, or to be used for, any purpose other than on-lending to an Eligible Sub-borrower for the financing of an Eligible Sub-project;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) No Material Adverse Effect. Since the date of this Agreement nothing has occurred which has or can reasonably be expected to have a Material Adverse Effect;

(d) Representations and Warranties. The representations and warranties made in Article III are true and correct in all material respects on and as of the date of the relevant Disbursement (as the case may be) with the same effect as if those representations and warranties had been made on and as of the date of that Disbursement, as the case may be (but in the case of Section 3.01 (c) (Representations and Warranties), without the words in parentheses);

(e) No Violations. After giving effect to the requested Disbursement, the Borrower would not be in violation of: (i) its Charter; (ii) any provision contained in any document to which the Borrower is a party (including this Agreement) or by which the Borrower is bound; or (iii) any law, rule, regulation, Authorization or agreement or other document binding on the Borrower directly or indirectly limiting or otherwise restricting the Borrower’s borrowing power or authority or its ability to borrow;

(f) Financial Ratios. Without limiting the generality of Section 4.02 (f), after taking into account the amount of the requested Disbursement and any other Liabilities incurred by the Borrower after the date of the latest financial statements of the Borrower delivered to IFC pursuant to Section 5.04 (a) (Reporting Requirements), the Borrower would be in compliance with each of the financial covenants set out in Section 5.03 (Financial Covenants);

(g) Borrower’s Certifications. IFC has received the relevant Disbursement Request as set forth in Section 2.02 (Commitment and Disbursement Procedure) and the Borrower’s certifications set out in Schedule 3 (Schedule 1 of the form of the Loan Agreement) are true and accurate;

(h) Fees. IFC has received the fees which Section 2.07 (Fees) requires to be paid before the Disbursement and all other amounts then due under this Agreement and the relevant Loan Agreement including but not limited to, reimbursement of all invoiced fees and expenses of IFC’s counsel, if IFC so requires;

(i) The Notes. IFC has received one or more Notes, as applicable;

(j) Auditor’s Certification. IFC has received a certification from the Auditors confirming that, as of the last year prior to the date of the requested Disbursement, the Borrower is in compliance with the provisions of Section 5.01 (b) (Affirmative Covenants) and containing a brief description of the systems and records in place;

(k) Certificate of Incumbency; Authorization of Auditors. IFC has received from the Borrower an updated Certificate of Incumbency and Authority (if such update is needed);

(l) Pipeline of Eligible Sub-loans for Tranche B. The Borrower shall have provided IFC a preliminary pipeline of proposed Eligible Sub-loans for Tranche B to be financed with proceeds of the Disbursement, and IFC shall have validated such pipeline; and

(m) Other Evidence. IFC has received such evidence as IFC may reasonably request of the proposed utilization of the proceeds of that Disbursement or the utilization of the proceeds of any prior Disbursement.

Section 4.03. Conditions for IFC Benefit. The conditions referred in Section 4.01 and Section 4.02 are for the benefit of IFC and may be waived only by IFC in its sole discretion.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE V Particular Covenants

Section 5.01. Affirmative Covenants. Unless IFC otherwise agrees, the Borrower shall and shall cause its Subsidiaries to:

(a) Corporate Existence; Conduct of Business; Compliance with Laws; Taxes. (i) Maintain its corporate existence and comply with its Charter, (ii) conduct its business with due diligence and efficiency, in accordance with sound banking, financial and business practices, (iii) conduct is business in compliance, in all material respects, with all applicable requirements of law, maintain all rights, licenses, permits, privileges, titles to property, franchises and the like, and keep property in good working conditions; and (iv) file by the date due all returns, reports and filings in respect of Taxes required to be filed by it and pay, when due, all Taxes due and payable by it;

(b) Accounting and Financial Management. Maintain an accounting and control system, management information system and books of account and other records, which together adequately give a fair and true view of the financial condition of the Borrower and the results of its operations in conformity with the Accounting Standards;

(c) Auditors. Maintain internationally recognized independent auditors acceptable to IFC as auditors of the Borrower and authorize them, in the form of Schedule 5, to communicate directly with IFC; provided that the Borrower shall replace the Auditors’s partner in charge of the account periodically, in accordance with the Banking Regulations; and provided further that, notwithstanding any Banking Regulation to the contrary, the Borrower shall replace the Auditors’s partner in charge of the account at least once every 5 years; and provided finally further, that such next replacement shall take place on January 1, 2019;

(d) Access. Upon IFC’s request, permit representatives of IFC and CAO to visit and inspect any of the premises where the business of the Borrower is conducted and to have access to its books of account and records and to its employees and agents;

(e) Authorizations. Obtain, renew and maintain in force and comply with all Authorizations, which are necessary for the carrying out of the Borrower’s business and operations generally, including, without limitation, for the making of Eligible Sub-loans, and the compliance by the Borrower with all its obligations under this Agreement and any other Transaction Document; and comply with all the conditions and restrictions contained in, or imposed on the Borrower by, those Authorizations;

(f) Affiliated Transactions. Ensure that all transactions with Affiliates, Related Parties and Linked Parties are on terms and conditions no more favorable than those extended to similarly situated non-related persons;

(g) Shell Banks. At all times institute, maintain and comply with appropriate internal procedures and controls to ensure that: (i) any financial institution with which the Borrower conducts business or enters into any transaction, or through which the Borrower transmits any funds, does not have correspondent banking relationships with any Shell Bank; and (ii) the Borrower does not conduct business or enter into any transaction with, or transmit any funds through a Shell Bank;

(h) Money Laundering; Financing of Terrorist Activity. At all times institute, maintain and comply with appropriate internal procedures and controls for anti-money laundering and combating the financing of terrorism (AML/CFT) consistent with the business and customer profile of the Borrower, in compliance with national laws and regulations, and in furtherance of applicable international AML/CFT best practices; including but not limited to: (i) a board-approved policy on AML/CFT; (ii) appointment of an AML/CFT Officer; (iii) customer due diligence, including identification and monitoring of high risk

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document customers such as politically exposed persons; (iv) monitoring of customer activity for suspicious transactions; (v) establishing and monitoring correspondent accounts, where applicable; (vi) record keeping; (vii) identification and internal reporting of, suspicious transactions; (viii) reporting of suspicious transactions to authorities, where required; (ix) AML/CFT training for staff; and (x) internal and/or external auditing of AML/CFT-related policies, procedures and controls;

(i) UN Security Council Resolutions. At all times institute, maintain and comply with internal procedures and controls consistent with its business and customer profile for the purpose of ensuring that the Borrower will not enter into any transaction (i) with, or for the benefit of, any of the persons or entities named on lists promulgated by, or (ii) related to any activity prohibited by, the United Nations Security Council or its committees pursuant to any resolution under Chapter VII of the United Nations Charter;

(j) SEMS Plan. Undertake and implement the SEMS Plan in accordance with the requirements and schedule specified therein;

(k) S&E Management System. Use all reasonable efforts to ensure the continuing operation of the S&E Management System in compliance with the S&E Requirements including, without limitation, any requirements implied by Applicable S&E Law, the Exclusion List and the Performance Standards; and in the event any successor or replacement SEMS Officer is appointed, ensure that such SEMS Officer shall be reasonably acceptable to IFC;

(l) Amendment of the S&E Management System. Without limiting any other right, remedy or claim of IFC hereunder, if the Borrower becomes aware of any change in the scope of the Relevant Financing Operations, advise and consult with IFC regarding any material social or environmental risk posed by such development and, if requested by IFC, amend the S&E Management System to identify, assess and manage such risks;

(m) S&E Requirements. If the Borrower becomes aware that any Eligible Sub-borrower has undertaken Eligible Sub-projects in a manner that is not in accordance with the S&E Requirements, promptly: (i) agree with the relevant Eligible Sub-borrower, or require the relevant Eligible Sub-borrower to undertake, as appropriate or necessary in the Borrower’s reasonable judgment, corrective measures to remedy such inconsistency or breach; and (ii) if the relevant Eligible Sub-borrower does not implement corrective measures as provided in (i), use reasonable efforts to dispose of the Borrower’s investment in such Eligible Sub-borrower on commercially reasonable terms, taking into account liquidity, market constraints and fiduciary responsibilities;

(n) [RESERVED];

(o) On-Lending. Cause and ensure that, at all times from time to time: (i) all and any funds arising out from all and any Disbursements of the Loans be and remain applied, entirely and exclusively, towards the origination and/or acquisition of Eligible Sub-loans; (ii) at least 30% of the aggregate amount of Eligible Sub-loans for Tranche A originated and/or acquired from time to time be represented by Eligible Sub-loans for Tranche A granted to Eligible Sub-borrowers for Tranche A with annual sales below $25,000,000 equivalent; (iii) each Eligible Sub-borrower continues to meet the eligibility criteria to qualify as such, and notify IFC if any Eligible Sub-borrower ceases to qualify as such;

(p) Repayment of Eligible Sub-loans. To the extent that any amounts repaid or prepaid by any Eligible Sub-borrower that were originated with proceeds of the Loans, are not reused by the Borrower to make Eligible Sub-loans to Eligible Sub-borrowers within a period of 12 months from the relevant date or dates of repayment or prepayment, if IFC so requires, immediately make a proportional prepayment of the Loan in accordance with the provisions of Section 2.06 (Prepayment), subject to the then applicable Banking Regulations;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (q) Eligible Sub-loans Report. Deliver to IFC, within 90 days following each Disbursement, a report with a detail of the Eligible Sub-loans for which such Disbursement was requested; and

(r) Exchange Transaction Laws and Regulations. Timely provide, complete, execute, file and register any information, forms, affidavits and any other documents, and cause any action and perform any foreign exchange transaction required to comply with all applicable laws and regulations relating to exchange transactions and payments outside of the Country, including but not limited to any regulations of the Argentine Central Bank, and any successor regulations or laws, or as may be reasonably requested by IFC, and that may be required in connection with any of the Loans and to complete any payment under this Agreement or any other Transaction Document by transferring funds from the Country, including, but not limited to, as of the date hereof, the following obligations of the Borrower to: (i) notify the Argentine Central Bank of any Disbursement of any of the Loans in accordance with Communication “A” 3,602 (as amended) of the Argentine Central Bank, and (ii) deliver any information reasonably required to comply with applicable reporting obligations established by regulations of the Argentine Central Bank.

Section 5.02. Negative Covenants. Unless IFC otherwise agrees, the Borrower shall not and shall cause its Subsidiaries (with respect to such Subsidiaries, to the extent applicable), not to:

(a) Dividends. Declare or pay any dividend or make any distribution on its share capital (other than dividends or distributions payable in shares of the Borrower) other than in accordance with the Banking Regulations to date;

(b) Redemptions. Purchase, redeem or otherwise acquire any shares of the Borrower or any option over them;

(c) Liabilities. Incur, create, assume or permit to exist any Liability that is secured (other than for any Liability which is secured as permitted under Section 5.02 (d) below) or ranks prior or senior to the Loans other than the Existing Liabilities;

(d) Permitted Liens. Create or permit to exist any Lien on any property, revenues or other assets, present or future, of the Borrower, except for (i) any tax or other Lien arising by operation of law while the obligation underlying that Lien is not yet due, or if due, is being contested in good faith by appropriate proceedings and so long as the Borrower has set aside adequate reserves sufficient to promptly pay in full any amounts that the Borrower may be ordered to pay on final determination of any such proceedings; (ii) Liens which the Borrower is required to constitute with or in favor of any Authority pursuant to the Banking Regulations and other statutory preferences which are generally applicable to deposit-taking institutions; (iii) other Liens constituted or otherwise arising in the ordinary course of banking business provided that they fall within the limits permitted by the Banking Regulations; and (iv) any Lien created in the ordinary course of its banking business and on the basis of arm’s-length arrangements and within the limits permitted by the Banking Regulations under a repurchase agreement involving the sale and repurchase of securities;

(e) Arm’s Length Transactions. Enter into any transaction except in the ordinary course of business on ordinary commercial terms and on the basis of arm’s-length arrangements;

(f) Profit Sharing Arrangements. Enter into or establish any partnership, profit-sharing or royalty agreement or other similar arrangement whereby the Borrower’s income or profits are, or might be, shared with any other Person; or enter into any management contract or similar arrangement whereby its business or operations are managed by any other Person;

(g) Subsidiaries. Form or have any Subsidiary other than in strict accordance with the Banking Regulation to date;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (h) Fundamental Changes. Change: (i) its Charter in any manner which would be inconsistent with the provisions of this Agreement or any other Transaction Document; (ii) its Financial Year; or (iii) the nature or scope of its present or contemplated business or operations;

(i) Merger, Consolidation or Reorganization. Undertake or permit any merger, spin-off, consolidation or reorganization; or sell, transfer, lease or otherwise dispose of all or a substantial part of its assets, other than assets acquired in the enforcement of security created in favor of the Borrower in the ordinary course of its banking business, whether in a single transaction or in a series of transactions, related or otherwise;

(j) Prepayment of Long-term Debt. Prepay (whether voluntarily or involuntarily) or repurchase any Long-term Debt (other than the Loan and subordinated debt issued on May 1, 2004, which outstanding amount to date is $ 253,884,884 and which final maturity date is January 1, 2019), unless the Borrower gives IFC at least 30 days’ advance notice of its intention to make the proposed prepayment and, if IFC so requires, contemporaneously makes a proportional prepayment of the Loans in accordance with the provisions of Section 2.06 (Prepayment) except that there shall be no minimum amount or advance notice period for that prepayment;

(k) Use of Proceeds. Use the proceeds of any Disbursement in the territories of any country that is not a member of the World Bank or for reimbursements of expenditures in those territories or for goods produced in or services supplied from any such country;

(l) Amendment of the S&E Management System. Amend, waive the application of, or otherwise materially restrict the scope or effect of, the S&E Management System (including the SEMS Plan and the S&E Requirements);

(m) Exclusion List. In respect of Relevant Financing Operations, provide Eligible Sub-loans to Eligible Sub-borrowers engaged in any of the activities on the Exclusion List;

(n) Sanctionable Practices. Engage in (nor authorize or permit any Affiliate, any Eligible Sub- borrower or any other Person acting on its or their behalf to engage in) with respect to its banking license or any transaction contemplated by this Agreement, any Sanctionable Practices. The Borrower further covenants that should IFC notify the Borrower of its concerns that there has been a violation of the provisions of this Section or of Section 3.01(n) of this Agreement, it shall cooperate in good faith with IFC and its representatives in determining whether such a violation has occurred, and shall respond promptly and in reasonable detail to any notice from IFC, and shall furnish documentary support for such response upon IFC’s request;

(o) Shell Banks. Conduct business or enter into any transaction with, or transmit any funds through, a Shell Bank;

(p) Category “A” Activities. Use any proceeds of any of the Loans to finance Eligible Sub- projects consisting of Category “A” Activities; or

(q) Change of Control. Enter into any transaction or allow any action that shall cause a Change of Control.

Section 5.03. Financial Covenants. The Borrower shall prudently manage its financial position in accordance with sound banking and financial practices, applicable laws and the Argentine Central Bank prudential standards. To the extent that the Banking Regulations impose financial requirements or ratios that are more stringent than the ones set out in paragraphs (i) through (xiii) of this Section 5.03, the Borrower shall observe and comply with those more stringent requirements or ratios. Notwithstanding the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document above, unless IFC otherwise agrees, the Borrower shall at all times maintain, and abstain from any action which may result in the breach of, the financial parameters provided below: (i) a Risk Weighted Capital Adequacy Ratio of not less than (x) 9%, from the date of the signing of this Agreement and until and including September 30, 2016; (y) 11%, from September 30, 2016 until and including December 31, 2017; and (z) 11.5%, thereafter; (ii) an Equity to Assets Ratio of not less than 5%; (iii) an Economic Group Exposure Ratio of not more than 15%; provided that such limit shall increase to 25% as long as any additional Exposure above 15% is guaranteed by preferred guarantees, and excluding from the definition of Exposure for the purpose of the calculation of this financial covenant any amounts held in correspondent accounts in investment grade banks (rated A+ or higher) and any amount held to repay any installment of the Borrower’s external debt; (iv) an Aggregate Large Exposures Ratio of not more than 400%; (v) a Related Party Exposure Ratio of not more than 15%; (vi) an Open Credit Exposures Ratio of not more than 25%; (vii) a Fixed Assets Plus Equity Participations Ratio of not more than 35%; (viii) an Aggregate Foreign Exchange Risk Ratio of not more than 25%; excluding Dollar long positions, and if Dollar long positions were to be included, such Foreign Exchange Risk Ratio shall not exceed 40%; (ix) a Single Currency Foreign Exchange Risk Ratio of not more than 10%; except for long positions in Dollars, in which case the Single Currency Foreign Exchange Risk Ratio shall not exceed 40%; (x) an Interest Rate Risk Ratio of not less than -10% and not more than ten percent 10%; (xi) an Aggregate Interest Rate Risk Ratio of not less than -20% and not more than 20%; (xii) a Foreign Currency Maturity Gap Ratio of not less than (i.e. more negative than) -150%; and (xiii) an Aggregate Negative Maturity Gap Ratio of not be less than (i.e. more negative than) - 300%. Section 5.04. Reporting Requirements. Unless IFC otherwise agrees, the Borrower shall: (a) Quarterly Financial Statements and Reports. As soon as available but in any event within 45 days after the end of each quarter of each Financial Year, deliver to IFC a copy of the Borrower’s Consolidated and unconsolidated financial statements for such quarter prepared in accordance with the Accounting Standards, certified by the CFO, together with: (i) a report on any factors that have or could reasonably be expected to have a Material Adverse Effect; and (ii) a report (in the form pre-agreed by IFC), signed by the CFO, concerning compliance with the negative covenants contained in Sections 5.02 (a), (b), (c), (d), (e), and (k) (Negative Covenants) and the financial covenants contained in Section 5.03 (Financial Covenants) including a clear description of the methodology used in the respective calculations;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Annual Financial Statements and Reports. As soon as available but in any event within 90 days after the end of each Financial Year, provide to IFC a copy of: (i) its complete and annual Consolidated and unconsolidated financial statements for such Financial Year prepared in accordance with the Accounting Standards, together with its Auditors’ audit report thereon, all in form satisfactory to IFC; (ii) a management letter and any other communication from its Auditors commenting, inter alia, on the adequacy of the Borrower’s financial control procedures, policies and controls, accounting systems and management information systems; (iii) a report (in the form pre-agreed by IFC), signed by the CFO or the internal head of accounting and reviewed by its Auditors, concerning compliance with the negative covenants contained in Sections 5.02 (a), (b), (c), (d), (e), and (k) (Negative Covenants) and the financial covenants contained in Section 5.03 (Financial Covenants) including a clear description of the methodology used in the respective calculations; (iv) a report, signed by the CFO or the internal head of accounting, in the form of, and addressing the topics listed in Schedule 6, based on the audited financial statements of the Borrower for the relevant Financial Year; (v) a report, in the form of Schedule 7, signed by the CFO or the internal head of accounting concerning the Borrower’s portfolio; (vi) a certification (in a form pre-agreed by IFC) signed by the CFO or the internal head of accounting, certifying (A) compliance of the Eligible Sub-borrowers with the eligibility criteria set forth in Section 5.06 (General Requirements Relating to Eligible Sub-loans) and (B) that all transactions between the Borrower and each of its Affiliates, Related Parties and Linked Parties, if any, during that Financial Year, were on the basis of arm’s-length arrangements and providing a list of each such transactions;

(c) Management Letters. Deliver to IFC, promptly following receipt, a copy of any management letter or other communication sent by the Auditors (or any other accountants retained by the Borrower) to the Borrower or its management in relation to the Borrower’s financial, accounting and other systems, management or accounts, if not provided pursuant to Section 5.04 (b) (ii);

(d) S&E Performance Report. Within 90 days after the end of each Financial Year, deliver to IFC the S&E Performance Report including such information as IFC shall reasonably require to measure the ongoing development results of the Eligible Sub-borrowers against the indicators specified in Schedule 8, which information IFC may hold and use in accordance with IFC’s Access to Information Policy (dated January 1, 2012), the link of which is http://www.ifc.org/wps/wcm/connect/98d8ae004997936f9b7bffb2b4b33c15/ IFCPolicyDisclosureInformation.pdf?MOD=AJPERES;

(e) Notice of Accidents, Etc. Within 3 days after becoming aware of the occurrence, notify IFC of any social, labor, health and safety, security or environmental incident, accident or circumstance with respect to any Eligible Sub-borrower or in relation to any Eligible Sub-projects having, or which could reasonably be expected to have, any Material Adverse Effect or a material adverse impact on the implementation or operation of the Eligible Sub-projects in compliance with the S&E Requirements, specifying in each case the nature of the incident, accident, or circumstance and the impact or effect arising or likely to arise therefrom, and the measures being taken, or plans to be taken, to address them and prevent any future similar event; and keep IFC informed of the on-going implementation of those measures;

(f) Corporate Matters. As soon as available, deliver to IFC copies of (i) all notices, reports and other communications of the Borrower to its shareholders, (ii) the minutes of all the shareholders’ meetings, and (iii) upon IFC’s reasonable request provide the minutes of all the board of directors’ meetings;

(g) Litigation, Etc. Promptly upon becoming aware of (i) any litigation, arbitration, administrative or regulatory investigations or proceedings before any Authority or arbitral body which has or may reasonably be expected to have a Material Adverse Effect; (ii) any criminal investigations or proceedings against the Borrower; or (iii) any freezing of assets by a government authority involving the Borrower, its employees or board members with regard to money laundering or financing of terrorism, notify IFC by facsimile of that event specifying the nature of the action, litigation, arbitration, investigation

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or proceedings and the steps the Borrower is taking or proposes to take with respect thereto; (h) Default. Promptly upon the occurrence of an Event of Default or Potential Event of Default, notify IFC by facsimile specifying the nature of that Event of Default or Potential Event of Default and any steps the Borrower is taking to remedy it;

(i) Regulatory Reviews. Upon IFC’s reasonable request, and to the extent permitted by the Argentine Central Bank, promptly provide IFC with copies of any documents prepared in connection with any reviews conducted by the Argentine Central Bank or any other Authority;

(j) Sub-borrower Communications. As soon as possible but no later than 10 days after receipt of any communications from any Eligible Sub-borrower pursuant to Section 5.06 (c)(iv) (General Requirements Relating to Eligible Sub-loans), provide a copy of that communication to IFC together with the measures that the Borrower, or as the case may be, the Eligible Sub-borrower proposes to take to secure the implementation of appropriate remedial measures satisfactory to IFC;

(k) AML/CFT Reporting Requirements. On an annual basis, provide to IFC at least one of the following: (i) a report by the AML/ CFT Officer on the implementation of, and compliance with, the Borrower’s AML/CFT policies, procedures and controls; (ii) an internal or external auditor’s assessment on the adequacy of the Borrower’s policies, procedures and controls for AML/CFT; or (iii) a report by the AML/CFT regulator of the Borrower concerning the Borrower’s compliance with local AML/CFT laws and regulations;

(l) Information for Participants. Promptly provide to IFC such information about the Borrower, its assets and the Eligible Sub- loans which have not been provided already as part of IFC’s due diligence or as part of regular reporting, that IFC requests from time to time on behalf of any Participant for such Participants to satisfy requirements under applicable law and regulations, including those concerning AML/CFT;

(m) Trading Activities. Upon IFC’s reasonable request provide IFC information regularly on the Borrower’s trading activities, including: (i) whether the Borrower is a licensed government bond trader, and any associated commitments; and (ii) the type of instruments traded and for each instrument type: (a) whether the Borrower is a market maker, (b) the volume traded in the relevant quarter, (c) the Borrower’s internal trading limits, (d) the maximum exposure in the relevant quarter, and (e) the profit or loss on trading in the quarter;

(n) Eligible Sub-loans Status Report. On June 30 and December 31 of each year, provide to IFC a report, in the form of Schedule 10, on the status of all Eligible Sub-loans as of the immediately preceding Interest Payment Date; and

(o) Other Information. Promptly provide to IFC such other information as IFC from time to time requests about the Borrower, its assets, operations and other matters relating to the implementation of this Agreement and any other Transaction Document.

Section 5.05. Insurance.

(a) Insurance Requirements and Borrower’s Undertakings. Unless IFC otherwise agrees, the Borrower shall: (i) insure and keep insured, with financially sound and reputable insurers, its assets and business against insurable losses including the insurances specified in Annex A; (ii) punctually pay any premium, commission and any other amounts necessary for effecting and maintaining in force each required insurance policy; (iii) promptly notify the relevant insurer of any claim under any policy written by that insurer and diligently pursue that claim; (iv) comply with all warranties and conditions under each insurance policy; (v) not do or omit to do, or permit to be done or not done, anything which might prejudice the

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Borrower’s right to claim or recover under any insurance policy; and (vi) not vary, rescind, terminate, cancel or cause a material change to any insurance policy required in Annex A (to the extent such variation, termination, cancelation or change would result in a reduction in coverage).

(b) Policy Provisions. Unless IFC otherwise agrees each insurance policy required to be obtained pursuant to this Section 5.05 shall be on terms and conditions acceptable to IFC, and shall contain provisions to the effect that no policy can be terminated, canceled or suspended by the Borrower or the insurer for any reason unless IFC and, in the case of termination or if cancellation or suspension is initiated by the insurer, the Borrower receive at least 45 days’ written notice (or such lesser period as IFC may agree) prior to the effective date of such termination, cancellation or suspension;

(c) Reporting Requirements. Unless IFC otherwise agrees, the Borrower shall provide to IFC the following: (i) within 30 days of renewal of an insurance policy required in Annex A (other than those required by applicable laws and regulations), a copy of that policy (or other form of evidence of renewal acceptable to IFC); (ii) any other insurance-related information or documents as IFC requests from time to time; and (iii) at the Borrower’s financial year end, advise IFC if physical/immovable assets exceed 25% of Total Capital, and if so, provide copies of policies insuring assets and public liability as required in Annex A.

Section 5.06. General Requirements Relating to Eligible Sub-loans. (a) Assessment. The Borrower shall apply prudent banking criteria in the evaluation and assessment of Eligible Sub-projects and Eligible Sub-borrowers and determination of the terms and conditions of, including security for, Eligible Sub-loans.

(b) Sub-loan Forms. Each Eligible Sub-loan shall be made upon such terms and conditions as shall, at a minimum, cover all financial expenses incurred by the Borrower in connection with the making, implementation and enforcement of that Eligible Sub-loan, and be evidenced by an agreement or agreements conferring upon the Borrower valid and enforceable rights and imposing upon the relevant Sub-borrower valid and enforceable obligations, all as necessary and appropriate to protect the interests of the Borrower.

(c) Sub-loan Terms and Conditions. The Borrower shall make all appropriate arrangements to ensure that each Eligible Sub-loan is made in such form and upon such terms and conditions as to require each Eligible Sub-borrower to: (i) carry out the relevant Eligible Sub-project and conduct its business with due diligence and efficiency and in accordance with sound financial and business practices including, without limitation, making and maintaining in effect insurance arrangements as set out in the Borrower’s procedures referred to in Section 5.05(a)(vi) (Insurance); (ii) at all times comply with, and/or (as the case may be) fulfill all the requirements and conditions for the qualification of Eligible Sub-borrowers and Eligible Sub-projects; (iii) design, construct, operate and maintain and monitor all of its sites, plant, equipment and facilities included in the relevant Eligible Sub-project in accordance with the S&E Requirements; (iv) as soon as possible, but no later than 10 days after its occurrence, notify the Borrower of any incident, accident or circumstance occurring on any site, plant, equipment or facility included in the relevant Eligible Sub-project or in any manner associated with its implementation and/or operation having or which could reasonably be expected to have a material adverse impact on the implementation or operation of the relevant Eligible Sub-project in compliance with the S&E Requirements, or an adverse effect on the environment, health or safety, including without limitation, explosions, spills or workplace accidents which result in death, serious or multiple injury or major pollution, specifying, in each case, the nature of the incident, accident or circumstance and the impact or effect arising or likely to arise therefrom, and the measures to be taken, or plans to be taken, to address them and prevent any future similar event; and keep the Borrower informed of the on-going implementation of those measures; (v) in each year submit to the Borrower a report on that Eligible Sub-borrower’s performance in connection with the S&E Requirements containing the necessary information to support the Borrower’s S&E Performance Report to be delivered to IFC pursuant to Section 5.04 (d) (Reporting Requirements); (vi) permit representatives of IFC, the CAO and/or the Borrower to visit any sites, plants, equipment or facilities included in the relevant

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Sub-project and any premises where the business of the Eligible Sub-borrower associated with that Eligible Sub-project is conducted and to have access to that Eligible Sub-borrower’s books of account and records and to its employees and agents; (vii) provide such information as the Borrower or IFC may from time to time reasonably require with respect to the operations and financial condition of that Eligible Sub-borrower and the relevant Eligible Sub-project; and (viii) ensure that the proceeds of the relevant Eligible Sub-loan are not used in reimbursement of, or used for, expenditures in the territories of any country which is not a member of the World Bank or for goods produced or services supplied from such territories.

(d) Sub-project Monitoring. The Borrower shall supervise and monitor the implementation of Eligible Sub-projects, diligently exercise its rights under the agreements evidencing the Eligible Sub-loans, and use its best efforts to enforce the provisions of those agreements.

Section 5.07. Special Reporting Requirements for Eligible Sub-Loans Tranche B. (a) On an annual basis, but no later than 90 days after the end of each Financial Year, the Borrower shall deliver to IFC a report on the approved Eligible Sub-projects for Tranche B using IFC’s CAFI Tool including the following information:

(b) The Borrower shall provide the following information on the Eligible Sub-loans for Tranche B originated with the proceeds of the Loan: (i) Renewable Energy: Information about RE Eligible Sub-projects for Tranche B financed, including renewable energy technology type, installed capacity (megawatts), and annual electricity generation (megawatt-hours/year) produced); (ii) Energy efficiency: Information about Energy Efficient Eligible Sub-projects financed including information about estimated energy savings expressed as a percentage of estimated baseline energy consumption per unit output for all fuels plus electricity; (iii) Savings for energy efficiency can be defined as follows: (A) annual electricity savings (megawatt-hours/year) from energy efficiency projects; (B) annual fuel savings (Joules/year or tons of oil equivalent/year) from energy efficiency projects with type(s) of fossil fuel identified; (iv) Manufacturing of renewable energy and energy efficient technology equipment: description for the type of renewable energy and energy efficient equipment or finished goods being financed; (v) Water efficiency: description of investment to demonstrate a reduction in water use, such as annual water savings (cubic meter per year); water use per unit of output (water use per tonne; water use per guest night (in hotel); water use per square meter (commercial building or shopping mall); water use per “equivalent product (pharmaceutical plant); percentage of wastewater discharged; evidence of a water management strategy signed by the CEO of the organization that will result in 10% reductions in water use. This should be uploaded to CAFI as an attachment. (vi) Green building: Information in the form of the following table, a copy of which should be uploaded to the CAFI transaction entry as an attachment:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Total Green Loan Name of project Loan Built # of Stage of Certification Green certification # development City cost amount Currency Tenor area units construction status certification number e.g. USD (months) (m.sq) e.g. Design / e.g. Design e.g. IFC’s / EUR Under Certified / EDGE / Construction Post LEED / / Construction BREEAM / Constructed Certified etc. (b) Each Eligible Sub-loan financed under the Loans must demonstrate that it meets IFC’s eligibility criteria for climate business. To this end, each Eligible Sub-loan shall maintain the necessary data and records to demonstrate the expected energy generation resulting from the implementation of the relevant Eligible Sub-project. The Borrower shall validate these calculations and report on the expected impacts to IFC based on pre-agreed indicators and reporting templates. (c) IFC will supply the Borrower with a tool (the “CAFI Tool”) that will simplify and standardize the reporting framework for these calculations. The Borrower shall only report on the projected energy generation of the Eligible Sub-project (i.e. based on the information available at the time of booking the Sub-loan). Green House Gas savings will then be computed by the IFC based on data obtained from the Borrower. (d) Every 3 years after implementation, IFC or an IFC appointed independent agency may visit a sample (5-10%) of the financed Sub-loans to validate expected outcomes as compared to real outcomes (“Post-implementation verification”). Post- implementation verification is at IFC’s cost, and the Borrower shall facilitate IFC’s access to data and its clients for that purpose.

ARTICLE VI Events of Default

Section 6.01. Acceleration after Default. If any Event of Default occurs and is continuing, IFC may, by notice to the Borrower, require the Borrower to repay any and all the Loans immediately. On receipt of any such notice, the Borrower shall immediately repay the Loans and pay all accrued interest on it, the prepayment premium specified in Section 2.06 (Prepayment) and any other amounts payable under this Agreement, provided that the prepayment premium specified in Section 2.06 (Prepayment) shall not be applicable if acceleration occurred (only) as a consequence of the Event of Default set forth in Section 6.02 (e). The Borrower waives any right that it might have to further notice, presentment, demand or protest with respect to that demand for immediate payment.

Section 6.02. Events of Default. It shall be an Event of Default if:

(a) Failure to Pay Principal or Interest. The Borrower fails to pay when due any principal of or interest on any of the Loans and such failure continues for 5 days;

(b) Failure to Comply with Obligations. The Borrower fails to comply with any of its obligations under this Agreement or any other Transaction Document or any other agreement between the Borrower and IFC (other than for the payment of principal of, or interest on, the Loans or any other loan from IFC to the Borrower) and such failure continues for a period of 30 days after the date on which IFC notifies the Borrower, or after the Borrower comes aware, of such failure;

(c) Misrepresentation. Any representation or warranty made in Article III or in connection with the execution of, or any request (including a Loan Request or a Disbursement Request) under, this Agreement or any other Transaction Document is found to be incorrect in any material respect;

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Expropriation; Nationalization, Etc. Any Authority condemns, nationalizes, seizes, expropriates or otherwise assumes custody or control of all or any substantial part of the business, operations, property or other assets of the Borrower or of its share capital, or takes any action for the dissolution of the Borrower or any action that would prevent the Borrower or its officers from carrying on all or a substantial part of its business or operations;

(e) Bankruptcy Proceedings. (i) A court finds the Borrower bankrupt or insolvent, or approves as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Borrower under any applicable law, or appoints a receiver, liquidator, trustee, sequestrator (or similar official) of the Borrower or of any substantial part of its property or other assets, or orders the winding up or liquidation of its affairs; (ii) the Borrower itself institutes proceedings to be adjudicated bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it, or files a petition or answer or consent seeking reorganization or relief under any applicable law, or consents to the filing of any such petition or to the appointment of a receiver, liquidator, trustee, sequestrator (or other similar official) of the Borrower or of any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due; (iii) the Argentine Central Bank (x) initiates a proceeding under Section 34 of the Argentine Financial Entities Act 21,526 requesting the Borrower or any Subsidiary to submit a regularization plan or (y) orders a temporary, total or partial suspension of the activities of the Borrower pursuant to Section 49 of the Argentine Central Bank’s charter; (iv) an attachment, sequestration, distress or execution (or analogous process) is levied or enforced upon or issued against the whole or any material part of the undertaking or assets or property of the Borrower; or (v) any other event occurs which under any applicable law and/or Banking Regulations would have an effect similar to any of those events listed above in this subsection;

(f) Cross-Default. The Borrower fails to make any payment in respect of any of its Liabilities (other than the Loan) or to perform any of its obligations under any agreement pursuant to which there is outstanding any Liability, and any such failure continues for more than any applicable period of grace or any such Liability becomes prematurely due and payable or is placed on demand;

(g) Failure to Maintain Authorizations. Any Authorization necessary for the Borrower to comply with its obligations under this Agreement or any other Transaction Document, or to carry on its business or operations, is not obtained when required or is rescinded, terminated, lapses or otherwise ceases to be in full force and effect, and is not restored or reinstated within 30 days of notice by IFC to the Borrower;

(h) Revocation, Etc. This Agreement or any other Transaction Document or any of their respective provisions for any reason is repudiated or its validity or enforceability at any time is challenged by any Person unless such repudiation or challenge is withdrawn within 30 days of IFC’s notice to the Borrower, except that no such notice shall be required or, as the case may be, the notice period shall terminate if and when that repudiation or challenge becomes effective; or

(i) Change of Control. A Change of Control occurs.

Section 6.03. Effects of Insolvency. If the Borrower is in any of the situations described in Section 6.02 (e) above, the Loans, all interest accrued on them and any other amounts payable under this Agreement and the other Transaction Documents will become immediately due and payable without any presentment, demand, protest or notice of any kind, all of which the Borrower waives.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ARTICLE VII Miscellaneous

Section 7.01. Saving of Rights.

(a) The rights and remedies of IFC in relation to any misrepresentation or breach of warranty on the part of the Borrower shall not be prejudiced by any investigation by or on behalf of IFC into the affairs of the Borrower, by the execution or the performance of this Agreement or by any other act or thing by or on behalf of IFC in connection with this Agreement and which might, apart from this Section, prejudice such rights or remedies.

(b) No course of dealing and no failure or delay by IFC in exercising any power, remedy, discretion, authority or other right under this Agreement or any other agreement shall impair, or be construed to be a waiver of or an acquiescence in, that or any other power, remedy, discretion, authority or right under this Agreement, or in any manner preclude its additional or future exercise.

Section 7.02. Notices.

Any notice, request or other communication to be given or made under this Agreement shall be in writing. Subject to Section 5.04 (h) and (i) (Reporting Requirements) and Section 7.04 (Applicable Law and Jurisdiction) any such communication shall be deemed to have been duly given or made when it is delivered by hand, airmail, established courier service, facsimile to the party’s address specified below or at such has from time to time, designated by notice to the other party hereto, and shall be effective upon receipt.

For the Borrower: BANCO DE GALICIA Y BUENOS AIRES S.A. Tte. Gral. Juan Domingo Perón 407 (C1038AAI) Buenos Aires República Argentina Facsimile: (54-11) 3329-6429 Attention: Carlos López SVP International Division

For IFC: International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 United States of America Facsimile: (1-202) 947-4300 Attention: Paulo de Bolle Regional Industry Head, Financial Institutions Group, Latin America and the Caribbean With a copy (in the case of communications relating to payments) sent to the attention of the Director, Department of Financial Operations, at: Facsimile: 202-522-7419.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 7.03. English Language.

All documents to be provided or communications to be given or made under this Agreement originated from the Borrower and its Subsidiaries shall be in English and where the original version of any such document is not in English, shall be accompanied or followed (no later than five Business Days since the delivery date of the relevant document in a language other than the English language) by an English translation certified by an Authorized Representative to be a true and correct translation of the original. IFC may, if it so requires, obtain an English translation of any document or communication received in any other language at the cost and expense of the Borrower.

Section 7.04. Applicable Law and Jurisdiction. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America.

(b) For the exclusive benefit of IFC, the Borrower irrevocably agrees that any legal action, suit or proceeding arising out of or relating to this Agreement may be brought in the courts of the United States of America located in the Southern District of New York or in the courts of the State of New York located in the Borough of Manhattan. By the execution of this Agreement, the Borrower irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding. Final judgment against the Borrower in any such action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the Country, by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the judgment, or in any other manner provided by law.

(c) Nothing in this Agreement shall affect the right of IFC to commence legal proceedings or otherwise sue the Borrower in the Country or any other appropriate jurisdiction, or concurrently in more than one jurisdiction, or to serve process, pleadings and other legal papers upon the Borrower in any manner authorized by the laws of any such jurisdiction.

(d) The Borrower hereby irrevocably designates, appoints and empowers CT Corporation System, with offices currently located at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its authorized agent solely to receive for and on its behalf service of any summons, complaint or other legal process in any action, suit or proceeding IFC may bring in the State of New York in respect of this Agreement.

(e) As long as this Agreement remains in force, the Borrower shall maintain a duly appointed and authorized agent to receive for and on its behalf service of any summons, complaint or other legal process in any action, suit or proceeding IFC may bring in New York, New York, United States of America, with respect to this Agreement. The Borrower shall keep IFC advised of the identity and location of such agent.

(f) The Borrower also irrevocably consents, if for any reason its authorized agent for service of process of summons, complaint and other legal process in any action, suit or proceeding is not present in New York, New York, to the service of such papers being made out of the courts of the United States of America located in the Southern District of New York and the courts of the State of New York located in the Borough of Manhattan by mailing copies of the papers by registered United States air mail, postage prepaid, to the Borrower, at its address specified pursuant to Section 7.02 (Notices). In such a case, IFC shall also send by facsimile, or have sent by facsimile, a copy of the papers to the Borrower.

(g) Service in the manner provided in Sections 7.04 (d), (e) and (f) in any action, suit or proceeding will be deemed personal service, will be accepted by the Borrower as such and will be valid and binding upon the Borrower for all purposes of any such action, suit or proceeding.

(h) The Borrower irrevocably waives to the fullest extent permitted by applicable law:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) any objection which it may have now or in the future to the laying of the venue of any action, suit or proceeding in any court referred to in this Section; (ii) any claim that any such action, suit or proceeding has been brought in an inconvenient forum; (iii) its right of removal of any matter commenced by IFC in the courts of the State of New York to any court of the United States of America; and (iv) any and all rights to demand a trial by jury in any such action, suit or proceeding brought against such party by IFC.

(i) To the extent that the Borrower may be entitled in any jurisdiction to claim for itself or its assets immunity in respect of its obligations under this Agreement or any other Transaction Document to which it is a party, from any suit, execution, attachment (whether provisional or final, in aid of execution, before judgment or otherwise) or other legal process or to the extent that in any jurisdiction that immunity (whether or not claimed) may be attributed to it or its assets, the Borrower irrevocably agrees not to claim and irrevocably waives such immunity to the fullest extent permitted now or in the future by the laws of such jurisdiction.

(j) The Borrower hereby acknowledges that IFC shall be entitled under applicable law, including the provisions of the International Organizations Immunities Act, to immunity from a trial by jury in any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby brought against IFC in any court of the United States of America. The Borrower hereby waives any and all rights to demand a trial by jury in any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated by this Agreement, brought against IFC in any forum in which IFC is not entitled to immunity from a trial by jury.

(k) To the extent that the Borrower may, in any action, suit or proceeding brought in any of the courts referred to in Section 7.04 (b) or a court of the Country or elsewhere arising out of or in connection with this Agreement or any other Transaction Document to which the Borrower is a party, be entitled to the benefit of any provision of law requiring IFC in such action, suit or proceeding to post security for the costs of the Borrower, or to post a bond or to take similar action, the Borrower hereby irrevocably waives such benefit, in each case to the fullest extent now or in the future permitted under the laws of the Country or, as the case may be, the jurisdiction in which such court is located.

Section 7.05. Disclosure of Information. IFC may, notwithstanding the terms of any other agreement between the Borrower and IFC, disclose any documents, records or information about this transaction or the Borrower to (i) its outside counsel, auditors and rating agencies, (ii) any Person who intends to purchase a Participation, and (iii) any other Person as IFC may deem appropriate in connection with the administration of any Loan, including for the purpose of exercising any power, remedy, right, authority, or discretion relevant to any Transaction Document, or in connection with any proposed sale, transfer, assignment or other disposition of IFC’s rights as contemplated by Section 7.07. IFC represents that is bound by the IFC’s Access to Information Policy (dated January 1, 2012), the link of which is http://www.ifc.org/wps/wcm/connect/98d8ae004997936f9b7bffb2b4b33c15/ IFCPolicyDisclosureInformation.pdf?MOD=AJPERES.

Section 7.06. Successors and Assignees. This Agreement binds and benefits the respective successors and assignees of the parties. However, the Borrower may not assign or delegate any of its rights or obligations under this Agreement without the prior written consent of IFC.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 7.07. Amendments, Waivers and Consents. Any amendment or waiver of, or any consent given under, any provision of this Agreement shall be in writing and, in the case of an amendment, signed by the parties.

Section 7.08. Counterparts. This Agreement may be executed in several counterparts, each of which is an original, but all of which together constitute one and the same agreement.

(signature page follows)

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names and to be delivered, as of the date first above written.

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title:

By: Name: Title:

INTERNATIONAL FINANCE CORPORATION

By: /s/ PAULO DE BOLLE Name: PAULO DE BOLLE Title: REGIONAL INDUSTRY HEAD/SENIOR MANAGER

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX A

INSURANCE REQUIREMENTS

General Provisions The insurances required to be arranged by the Borrower are those customarily expected of a prudent financial institution, including but not limited to the following:

At all times: (a) Financial Institution Bond (Bankers Blanket Bond) with cover to include, without limitation, the following: (i) infidelity of employees; (ii) forgery or alteration; (iii) cash including securities and any negotiable instruments or documents at premises, in transit and in safe; and (iv) electronic and computer crime; and (b) all insurances required by applicable laws and regulations.

The following insurance policies will only be required as long as physical and immovable assets constitute 25% or more of Total Capital: (c) fire and named perils (including natural perils, and strike, riot & civil commotion), or property all risks on assets, with the sum insured based on new replacement cost; and (d) public liability.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX B

EXCLUSION LIST (See Section 5.02 of the Agreement)

• Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCB’s, wildlife or products regulated under CITES. • Production or trade in weapons and munitions1. • Production or trade in alcoholic beverages (excluding beer and wine)1 • Production or trade in tobacco1. • Gambling, casinos and equivalent enterprises1. • Production or trade in radioactive materials. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where IFC considers the radioactive source to be trivial and/or adequately shielded. • Production or trade in unbonded asbestos fibers. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%. • Drift net fishing in the marine environment using nets in excess of 2.5 km. in length. • Production or activities involving harmful or exploitative forms of forced labor2/harmful child labor3. • Commercial logging operations for use in primary tropical moist forest. • Production or trade in wood or other forestry products other than from sustainably managed forests.

The Borrower shall not provide loans, funding, investments or other support that represents, in the aggregate more than 1.0% of the Borrower’s loan portfolio, to clients engaged in the following activity and where such client’s operations primarily consist of: • Production or trade in tobacco1.

1 This does not apply to project sponsors who are not substantially involved in these activities. “Not substantially involved” means that the activity concerned is ancillary to a project sponsor’s primary operations. 2 Forced labor means all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty. 3 Harmful child labor means the employment of children that is economically exploitive, or is likely to be hazardous to, or to interfere with, the child’s education, or to be harmful to the child’s health, or physical, mental, spiritual, moral, or social development.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX C

SANCTIONABLE PRACTICES (See Section 1.01 of the Agreement)

ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS

The purpose of these Guidelines is to clarify the meaning of the terms “Corrupt Practices”, “Fraudulent Practices”, “Coercive Practices”, “Collusive Practices” and “Obstructive Practices” in the context of IFC operations.

1. Corrupt Practices A “Corrupt Practice” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party.

Interpretation

A. Corrupt practices are understood as kickbacks and bribery. The conduct in question must involve the use of improper means (such as bribery) to violate or derogate a duty owed by the recipient in order for the payor to obtain an undue advantage or to avoid an obligation. Antitrust, securities and other violations of law that are not of this nature are excluded from the definition of corrupt practices.

B. It is acknowledged that foreign investment agreements, concessions and other types of contracts commonly require investors to make contributions for bona fide social development purposes or to provide funding for infrastructure unrelated to the project. Similarly, investors are often required or expected to make contributions to bona fide local charities. These practices are not viewed as Corrupt Practices for purposes of these definitions, so long as they are permitted under local law and fully disclosed in the payor’s books and records. Similarly, an investor will not be held liable for corrupt or fraudulent practices committed by entities that administer bona fide social development funds or charitable contributions.

C. In the context of conduct between private parties, the offering, giving, receiving or soliciting of corporate hospitality and gifts that are customary by internationally-accepted industry standards shall not constitute corrupt practices unless the action violates applicable law.

D. Payment by private sector persons of the reasonable travel and entertainment expenses of public officials that are consistent with existing practice under relevant law and international conventions will not be viewed as Corrupt Practices.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX C

E. The World Bank Group does not condone facilitation payments. For the purposes of implementation, the interpretation of “Corrupt Practices” relating to facilitation payments will take into account relevant law and international conventions pertaining to corruption.

2. Fraudulent Practices A “Fraudulent Practice” is any action or omission, including misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation.

Interpretation

A. An action, omission, or misrepresentation will be regarded as made recklessly if it is made with reckless indifference as to whether it is true or false. Mere inaccuracy in such information, committed through simple negligence, is not enough to constitute a “Fraudulent Practice” for purposes of this Agreement.

B. Fraudulent Practices are intended to cover actions or omissions that are directed to or against a World Bank Group entity. It also covers Fraudulent Practices directed to or against a World Bank Group member country in connection with the award or implementation of a government contract or concession in a project financed by the World Bank Group. Frauds on other third parties are not condoned but are not specifically sanctioned in IFC, MIGA, or PRG operations. Similarly, other illegal behavior is not condoned, but will not be considered as a Fraudulent Practice for purposes of this Agreement.

3. Coercive Practices A “Coercive Practice” is impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party.

Interpretation

A. Coercive Practices are actions undertaken for the purpose of bid rigging or in connection with public procurement or government contracting or in furtherance of a Corrupt Practice or a Fraudulent Practice.

B. Coercive Practices are threatened or actual illegal actions such as personal injury or abduction, damage to property, or injury to legally recognizable interests, in order to obtain an undue advantage or to avoid an obligation. It is not intended to cover hard bargaining, the exercise of legal or contractual remedies or litigation.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX C

4. Collusive Practices A “Collusive Practice” is an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party.

Interpretation

Collusive Practices are actions undertaken for the purpose of bid rigging or in connection with public procurement or government contracting or in furtherance of a Corrupt Practice or a Fraudulent Practice.

5. Obstructive Practices An “Obstructive Practice” is (i) deliberately destroying, falsifying, altering or concealing of evidence material to the investigation or making of false statements to investigators, in order to materially impede a World Bank Group investigation into allegations of a corrupt, fraudulent, coercive or collusive practice, and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (ii) acts intended to materially impede the exercise of IFC’s access to contractually required information in connection with a World Bank Group investigation into allegations of a corrupt, fraudulent, coercive or collusive practice.

Interpretation

Any action legally or otherwise properly taken by a party to maintain or preserve its regulatory, legal or constitutional rights such as the attorney-client privilege, regardless of whether such action had the effect of impeding an investigation, does not constitute an Obstructive Practice.

General Interpretation

A person should not be liable for actions taken by unrelated third parties unless the first party participated in the prohibited act in question.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX D

COPY OF SEMS PLAN

TYPE OF ACTION SUGGESTED ACTION DELIVERABLE TIMEFRAME ESMS The Borrower shall develop an ESMS enhancement and staff ESMS enhancement On or prior to enhancement and training plan to ensure that its Relevant Financing Operations are in and staff training plan first Disbursement Staff training Plan compliance with the S&E Requirements, i.e. application of the of the IFC Loan #1 Exclusion List, the Applicable E&S Laws for the Relevant Financing Operations and the IFC Performance Standards for the Eligible Sub-projects for Tranche B. Enhance ESMS The Borrower shall enhance its S&E Management System to ensure Copy of written 6 Months after and develop a that its Relevant Financing Operations comply with the S&E procedures and first Disbursement capacity building Requirements, i.e. application of the Exclusion List, the Applicable materials to support of the IFC Loan #1 program S&E Laws and for any Eligible Sub-loan for Tranche B made to an the ESMS Eligible Sub-borrower for Tranche B to finance to an Eligible implementation Sub-project for Tranche B, the IFC Performance Standards. The S&E Management System enhancement will include: (i) amendment of existing E&S policy, (ii) enhancement of due diligence procedure scope and monitoring procedures. Staff training The Borrower shall submit a report specifying the schedule of Copy of training 6 Months after first Implementation training programs delivered and applicable staff attendance. program Disbursement of Report IFC Loan #1 Delivery of dates the 12 Months after training was first Disbursement conducted and the of IFC Loan #1 number of staff trained. List of external 12 Months after consultants/advisors first Disbursement of IFC Loan #1 ESMS The Borrower will implement the ESMS and provide IFC examples Submission of the Prior to each Implementation of Eligible Tranche B Sub-loans E&S due diligence prepared and E&S due diligence relevant Eligible report an ESMS implementation report to ensure its adequacy. documents for the Sub-loan for first three RE Tranche B approval Eligible Sub-projects for Tranche B reviewed Implementation 6 months after the report first Disbursement of the IFC Loan #1.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Enhance its External Enhance its external Copy of written procedures 6 months after the first Communications Mechanism communications mechanism and materials Disbursement of the IFC Loan #1

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX E

ESCASANY, AYERZA AND BRAUN FAMILY MEMBERS

Escasany, Maria Ofelia

Escasany, Eduardo José

Vila Moret, Silvestre

Ayerza, Abel

Ayerza de Gutiérrez, Adela Maria

Ayerza, Maria Teresa

Ayerza, Josefina Maria

Braun, Federico

Guerrero de Authier, Mercedes

Guerrero de Romero, Isabel

Guerrero de Aduriz, Francisca

Braun, Santiago

Braun de Santillán, Susana

Braun, Maria

Braun, Ledesma lnés

Braun, Ledesma Pablo

Braun Malenchini, Sonia

Braun, Miguel

Fundación Banco de Galicia y Buenos Aires

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX F

ELIGIBILITY CRITERIA FOR ELIGIBLE SUB-PROJECTS FOR TRANCHE B

(i) Eligible Sub-projects for Tranche B should only involve third parties of good reputation and that have been cleared by the Borrower as appropriate business partners; (ii) Eligible Sub-projects for Tranche B should be in activities conforming with the Exclusion List, the local and national E&S laws and regulations, IFC climate business eligibility criteria (as detailed below), and the Performance Standards or, where an acquired company does not comply at the time of acquisition, an action plan to bring this company into compliance in a reasonable time has been adopted; (iii) No Relevant Financing Operation for tranche B shall result in a politically exposed person holding an interest, a directorship or any other top executive position (other than in his/her official capacity) in an operating company, without the prior agreement of IFC; (iv) Eligible Sub-projects for Tranche B should be within at least 1 of the following eligible criteria: a. Renewable Energy (RE) Eligible Sub-projects for Tranche B (each, a “RE Eligible Sub-project for Tranche B”), defined as the installation or construction measure aimed at investing into fixed assets that are designed to produce electricity, heat, cooling and any other form of energy that displaces fossil fuel use by utilizing renewable energy resources. Renewable energy resources may include but not be limited to solar, wind, geothermal, biomass, biogas, waste- to- energy, but shall exclude any form of hydropower. b. Energy Efficiency (EE) Eligible Sub-projects for Tranche B (each, a “EE Eligible Sub-project for Tranche B”), defined as the reconstruction, renovation or refurbishment measure aimed at investing into fixed assets that are designed to decrease energy consumption for every unit of service output of the corporate/medium entity or utilizing renewable or waste energy, both with the primary objective of improving the efficiency of energy use (or reducing specific energy consumption) of the system directly affected by the Eligible Sub-project based on minimum requirements. c. Eligible Sub-projects can include the manufacturers of EE and RE technology equipment intended for Energy Efficiency (EE) Eligible Sub-projects for Tranche B and Renewable Energy (RE) Eligible Sub-projects for Tranche B: i. In the case of EE technology equipment, the Eligible Sub-project should be directly manufacturing the energy- efficient technology equipment or appliance, and should be considered energy-efficient based on a reasonable benchmark in the market the technology is being sold. The products of the corporate/medium manufacturer must be supplied to EE projects. ii. In the case of RE technology equipment, the Eligible Sub-project should be directly manufacturing a component that is exclusively for the purpose of producing RE and not for other purposes. The products of the corporate/medium manufacturer must be supplied to RE projects. d. Water Efficiency (WE) Eligible Sub-Projects for Tranche B, defined as an investment that materially reduces the use of water per unit of production. The specific eligibility of such projects

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document will need to be confirmed by IFC. This can be through retrofit of an existing facility, a water recycle/reuse project or a project that will use alternative water sources such as ground water, desalinated water or tertiary advanced tertiary treated sewage measure implemented within the premises of a corporate/medium entity and aimed at investing into fixed assets that are designed to decrease water consumption, provided that the decrease in water utilization from baseline is greater than or equal to 10%. e. Eligible Green Buildings are buildings, which are compliant with green buildings standards as evidenced by: i. Leadership in Energy and Environmental Design (LEED) certificate as defined by the U.S. Green Building Council, or ii. “BRE” Environmental Assessment Method (BREEAM) certificate as defined by the Building Research Establishment, or iii. IFC’s Excellence in Design for Greater Efficiencies (EDGE) certificate. (v) Financing, which may be in the form of Eligible Sub-loans, must be for new Eligible Sub-projects and not refinancing of an existing loan. (vi) Minimum requirements:

Eligibility Criteria Data Reporting Energy Decrease in energy consumption from baseline ³ 15% or 25,000 tC02, Technical data to be Efficiency calculated on the overall eligible portfolio level, (the aggregate of the EE collected and reported Eligible Sub-projects for Tranche B) through CAFI Tool Renewable Eligible by default Technical data to be Energy collected and reported through CAFI Tool (vii) Excluded sub-projects: a. All hydropower projects shall be excluded; b. Category “A” Activity projects shall be excluded; and c. Projects exceeding generation of 15 MW shall be excluded.

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FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY

(See Section 1.01, Section 4.01 and Section 4.02 of the Agreement)

[Borrower’s Letterhead]

[Date]

International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 United States of America

Attention: Director, Financial Institutions Group

Ladies and Gentlemen:

Investment No. 38134 Certificate of Incumbency and Authority

With reference to the Master Loan Agreement between us, dated May 24, 2016 (the “Agreement”), I, the undersigned [Chairman/ Director] of Banco de Galicia y Buenos Aires S.A. (the “Borrower”) duly authorized to do so, hereby certify that the following are the names, offices and true specimen signatures of the persons [each] [any two] of whom are, and will continue to be (until you receive authorized written notice from the Borrower that they, or any of them, no longer continue to be), authorized: (a) to sign on behalf of the Borrower the request for the disbursement of funds provided for in Section 2.02 of the Agreement and in each Loan Agreement, and such other certificates, requests and documents required or permitted to be made thereunder on behalf of the Borrower; and (b) to take, in the name of the Borrower, any other action required or permitted to be taken, done, signed or executed under the Agreement and any Loan Agreement, or any other agreement to which IFC and the Borrower may be parties.

*Name Office Specimen Signature

* As many, or as few, names may be included as the Borrower shall desire.

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You may assume that any such person continues to be so authorized until you receive authorized written notice from the Borrower that they, or any of them, is no longer so authorized.

Yours truly,

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title: [Chairman/Director]

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FORM OF LOAN REQUEST

(See Section 2.02 of the Agreement)

[Borrower’s Letterhead]

[Date]

International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 United States of America

Attention: Director, Financial Institutions Group

Ladies and Gentlemen:

Investment No. 38134 Request for Loan No. [ ]*

1. Please refer to the Master Loan Agreement (the “Agreement”) dated May 24, 2016, between Banco de Galicia y Buenos Aires S.A. (the “Borrower”) and International Finance Corporation (“IFC”). All terms defined in the Agreement shall bear the same meanings herein.

2. The Borrower hereby requests a Loan for the amount of ( ) (the “Loan”), consisting of (i) a Tranche A Loan in an amount of $ ; and (ii) a Tranche B Loan in an amount of $ , in accordance with the provisions of Section 2.02 of the Agreement.

[3. Attached hereto is a preliminary pipeline of proposed Eligible Sub-loans for Tranche B to be financed with proceeds of the Disbursement, and IFC shall have validated such pipeline.]

Yours faithfully,

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title: [Authorized Representative]**

Copy to: Director, Department of Financial Operations International Finance Corporation

* Each to be numbered in series. ** As named in the Borrower’s Certificate of Incumbency and Authority (see Schedule 1).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SCHEDULE 3

FORM OF LOAN AGREEMENT

(See Section 2.02 of the Agreement)

INVESTMENT NUMBER 38134

Loan Agreement No. [ ]

between

BANCO DE GALICIA Y BUENOS AIRES S.A.

and

INTERNATIONAL FINANCE CORPORATION

Dated , 201[ ]

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document LOAN AGREEMENT No. [ ]

LOAN AGREEMENT (this “Loan Agreement”) dated , , 20 between BANCO DE GALICIA Y BUENOS AIRES S.A., a banking institution organized and existing under the laws of the Republic of Argentina (the “Borrower”); and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the Republic of Argentina (“IFC”).

RECITALS

On or about the date hereof, the Borrower and IFC have entered into a Master Loan Agreement;

According to that Master Loan Agreement dated May 24, 2016 (the “Master Loan Agreement”), the Borrower has requested a Loan (as below defined) to IFC, in order to use the proceeds of such Loan to finance Eligible Sub-loans (as below defined) for Eligible Sub-projects (as below defined) to be carried on by Eligible Sub-borrowers(as below defined); and

IFC is willing to provide the requested Loan upon the terms and conditions set forth in this Loan Agreement and the Master Loan Agreement.

ARTICLE I Definitions and Interpretation

Section 1.01. Definitions. Wherever used in this Loan Agreement, and except as otherwise defined herein, terms defined below shall have the meaning ascribed to them in this Section 1.01, and terms that are not defined in this Section 1.01 or in this Loan Agreement, shall have the meaning ascribed to them in the Master Loan Agreement:

“Interest Rate” means, for any Interest Period, the rate at which interest is payable on the Loan during that Interest Period, determined in accordance with Section 2.02 (Interest);

“Loan” means the loan specified in Section 2.01 (The Loan) or, as the context requires, its principal amount from time to time outstanding;

“Loan Disbursement” means the disbursement of the Loan;

“Master Loan Agreement” has the meaning set forth in the Recitals; and

“Relevant Spread” means collectively, the Tranche A Loans Relevant Spread and the Tranche B Loans Relevant Spread;

“Tranche A Loans Relevant Spread”4 means % per annum; and

“Tranche B Loans Relevant Spread”5 means % per annum.

4 To be completed once the final terms are determined. 5 To be completed once the final terms are determined.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1.02. Financial Calculations, Interpretation, Business Day Adjustment. (a) This Agreement is the Loan Agreement referred to in the Master Loan Agreement.

(b) Sections 1.02. (Financial Calculations), 1.03 (Interpretation) and 1.04 (Business Day Adjustment) of the Master Loan Agreement are incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan Agreement in full.

(c) In the context of this Loan Agreement, and except as otherwise provided in this Loan Agreement, a reference to a time of day is a reference to New York time.

(d) In the context of this Loan Agreement, and except as otherwise provided in this Loan Agreement, any reference to “the date of this Loan Agreement” or any similar reference, is a reference to the date of execution of this Loan Agreement.

(e) Any reference to Sections in this Loan Agreement, except as otherwise provided in this Loan Agreement, is a reference to a Section to this Loan Agreement.

Section 1.03. Conflict with Master Loan Agreement. In the event of any conflict between the terms of this Loan Agreement and the terms of the Master Loan Agreement, the terms of this Loan Agreement will prevail as between the parties to this Loan Agreement.

ARTICLE II The Loan

Section 2.01. The Loan. (a) Subject to the provisions of this Loan Agreement and the Master Loan Agreement (including Section 2.02 (Commitment and Disbursement Procedure), Section 4.01 (Conditions of First Disbursement of the Loans), if applicable, and Section 4.02 (Conditions of All Disbursements) of the Master Loan Agreement), IFC agrees to commit the availability of the Loan in an aggregate principal amount of $ [ ] consisting of: (i) a Tranche A Loan in an amount of $ [ ]; and (ii) a Tranche B Loan in an amount of up to $ [ ].

(b) The Borrower may request the corresponding Loan Disbursement by delivering to IFC, at least 10 Business Days prior to the proposed date of disbursement: (i) a Disbursement Request, in accordance with Schedule 1 of this Loan Agreement as set forth in Section 2.02 (c) of the Master Loan Agreement; and (ii) a Note evidencing each Tranche as set forth in Section 2.14 of the Master Loan Agreement.

(c) Loan Disbursement shall be made by IFC at a bank in New York, New York for further credit to the Borrower’s account at a bank in the Country, as indicated by the Borrower in the Disbursement Request.

(d) The Borrower shall deliver to IFC in accordance with Section 2.02 (f) of the Master Loan Agreement, a receipt, substantially in the form of Schedule 2 of this Loan Agreement, with the signatures and capacities of the Borrower’s representatives duly certified and authenticated by an Argentinean notary public, within 5 Business Days following Loan Disbursement by IFC. The Borrower hereby expressly and unconditionally agrees that in the event that the Borrower fails to deliver such receipt, evidence of the transfer of funds to the Borrower’s correspondent bank account shall be considered as sufficient evidence of receipt.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.02. Interest. Subject to Section 2.04 (Default Interest Rate) of the Master Loan Agreement, the Borrower shall pay interest on the Loan in accordance with this Section 2.02 (Interest).

(a) During each Interest Period, the Loan shall bear interest at the Interest Rate for that Interest Period.

(b) Interest on the Loan shall accrue from day to day, be prorated on the basis of a 360-day year for the actual number of days in the relevant Interest Period and be payable in arrears on the Interest Payment Date immediately following the end of that Interest Period; provided that in case the Loan Disbursement is made less than 15 days before an Interest Payment Date, interest on the Loan shall be payable commencing on the second Interest Payment Date following the date of the Loan Disbursement.

(c) The Interest Rate for any Interest Period shall be the rate which is the sum of: (i) the applicable Relevant Spread; and (ii) LIBOR on the Interest Determination Date for that Interest Period for six (6) months (or, in the case of the first Interest Period for any Loan Disbursement, for 1 month, 2 months, 3 months or 6 months, whichever period is closest to the duration of the relevant Interest Period (or, if 2 periods are equally close, the longer one)) rounded upward to the nearest 3 decimal places.

(d) The Interest Rate shall be determined as provided in Section 2.03 (Interest) of the Master Loan Agreement.

(e) The Interest Rate shall be subject to adjustment upon the occurrence of a Market Disruption Event as provided in Section 2.03 (Interest; Market Disruption) of the Master Loan Agreement.

(f) The determination by IFC, from time to time, of the applicable Interest Rate shall be final and conclusive and bind the Borrower (unless the Borrower shows to the IFC’s satisfaction that the determination involves manifest error).

Section 2.03. Repayment. (a) The Borrower shall repay the Tranche A Loan in accordance with Section 2.05 (Repayment) of the Master Loan Agreement, as detailed in the schedule below:

Interest Payment Date Principal Amount

(b) The Borrower shall repay the Tranche B Loan in accordance with Section 2.05 (Repayment) of the Master Loan Agreement, as detailed in the schedule below:

Interest Payment Date Principal Amount

(c) Any principal amount of any Tranche of the Loan repaid under this Agreement may not be re-borrowed.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 2.04. Prepayment. (a) The Borrower may prepay any Tranche of the Loan in accordance with Section 2.06 (Prepayment) of the Master Loan Agreement.

(b) Amounts of principal prepaid under this Section 2.04 and Section 2.06 (Prepayment) of the Master Loan Agreement shall be applied by IFC to all the outstanding installments of principal of the Loan in inverse order of maturity.

Section 2.05. Fees and Other Payments. (a) The Borrower shall pay to IFC the commitment fee, the front-end fee, the portfolio monitoring fee, and any other applicable fee, expenses and taxes, as provided in the Master Loan Agreement, as applicable to this Loan.

Section 2.06. Currency and Place of Payments. The Borrower shall make all payments of principal, interest, fees and any other amount due to IFC under this Loan Agreement in accordance with Section 2.08 (Currency and Place of Payments) of the Master Loan Agreement.

Section 2.07. Suspension and Cancellation. (a) IFC may suspend the right of the Borrower to Loan Disbursement or cancel the undisbursed portion of the Loan in whole or in part in accordance with Section 2.02 (h) of the Master Loan Agreement.

(b) The Borrower may request that IFC cancel all or part of the undisbursed portion of the Loan in accordance with Section 2.02 (i) of the Master Loan Agreement.

ARTICLE III Common Terms

Section 3.01. Representations and Warranties. (a) The representations and warranties set out in Section 3.01 (Representations and Warranties) of the Master Loan Agreement are incorporated herein by reference and shall be made and are deemed to be made herein, mutatis mutandis, for the benefit of IFC as if set out in this Loan Agreement in full.

(b) The Borrower acknowledges that IFC enters into this Loan Agreement and the other Transaction Documents to which it is a party on the basis of, and in full reliance on, each of the representations and warranties referred to in Section 3.01 (Representations and Warranties) of the Master Loan Agreement.

Section 3.02. Conditions of Disbursement. The obligation of IFC to make the Loan Disbursement is subject to the fulfillment prior to or concurrently with the making of the Loan Disbursement of the conditions set forth in Section 4.01 (Conditions of First Disbursement of the Loans), if applicable, and Section 4.02 (Conditions of All Disbursements) of the Master Loan Agreement.

Section 3.03. Covenants. (a) So long as any amount of the Loan remains available for disbursement or any amount is outstanding under any of the Transaction Documents, the covenants set out in Article V (Particular Covenants) of the Master Loan Agreement are incorporated herein by reference and shall apply herein,

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document mutatis mutandis, for the benefit of IFC as if set out in this Loan Agreement in full.

(b) The Borrower undertakes to cause the proceeds of the Loan to be applied to [provide a preliminary description of Eligible Sub-loans, Eligible Sub-projects, and Eligible Sub-borrowers] and to provide evidence to that effect to IFC.

Section 3.04. Events of Default. (a) The Events of Default set out in Section 6.02 (Events of Default) of the Master Loan Agreement are incorporated herein by reference and shall each constitute an event of default under this Loan Agreement.

(b) If any Event of Default occurs and is continuing (whether it is voluntary or involuntary, or results from operation of law or otherwise), IFC may, by notice to the Borrower, require the Borrower to repay the Loan or such part of the Loan as is specified in that notice. On receipt of any such notice, the Borrower shall immediately repay the Loan (or that part of the Loan specified in that notice) and pay all interest accrued on it, the prepayment premium specified in Section 2.06 (Prepayment) of the Master Loan Agreement, and any other amounts then payable under this Loan Agreement and the other Transaction Documents, provided that the prepayment premium specified in Section 2.06 (Prepayment) shall not be applicable if acceleration occurred (only) as a consequence of the Event of Default set forth in Section 6.02 (e) of the Master Loan Agreement. The Borrower waives any right it might have to further notice, presentment, demand or protest with respect to that demand for immediate payment.

(c) If the Borrower is in any of the situations described in Section 6.02 (e) of the Master Loan Agreement, the Loan, all interest accrued on it and any other amounts payable under this Loan Agreement and the other Transaction Documents will become immediately due and payable without any presentment, demand, protest or notice of any kind, all of which the Borrower waives.

ARTICLE IV Miscellaneous

Section 4.01. Notices. Any notice, request or other communication to be given or made under this Loan Agreement shall be given in accordance with Section 7.02 (Notices) of the Master Loan Agreement.

Section 4.02. Term of Agreement. This Loan Agreement shall continue in force until all monies payable under it have been fully paid in accordance with its provisions.

Section 4.03. Saving of Rights. Section 7.01 (Saving of Rights) of the Master Loan Agreement is incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan Agreement in full.

Section 4.04. Applicable Law and Jurisdiction. (a) This Loan Agreement is governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Section 7.04 (Applicable Law and Jurisdiction) of the Master Loan Agreement is incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan Agreement in full.

Section 4.05. Successors and Assignees. (a) This Loan Agreement binds and benefits the respective successors and assignees of the parties. However, the Borrower may not assign or delegate any of its rights or obligations under this Loan Agreement without the prior consent of IFC.

(b) IFC may sell, transfer, assign, novate or otherwise dispose of all or part of its rights or obligations under this Loan Agreement.

Section 4.06. Disclosure of Information. Section 7.06 (Disclosure of Information) of the Master Loan Agreement is incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan Agreement in full.

Section 4.07. Amendments, Waivers and Consents. (a) No provision of this Loan Agreement may be amended, supplemented, modified or waived, except by a written instrument signed by the parties to this Loan Agreement.

(b) Any waiver or amendment, supplement or modification made or entered into in accordance with Section 4.07(a) shall be binding upon the parties to this Loan Agreement.

Section 4.08. Counterparts. This Loan Agreement may be executed in several counterparts, each of which is an original, but all of which together constitute one and the same agreement.

Section 4.09. English Language. (a) All documents to be provided or communications to be given or made under this Loan Agreement shall be in the English language.

(b) To the extent that the original version of any document to be provided, or communication to be given or made, to IFC under this Loan Agreement is in a language other than English, that document or communication shall be accompanied or followed (no later than five Business Days since the delivery date of the relevant document in a language other than the English language) by an English translation certified by an Authorized Representative to be a true and correct translation of the original, and the Borrower shall provide to IFC, promptly upon the reasonable request of IFC, an English translation of any document not in the English language or accompanied by such an English translation. IFC may, if it so requires, obtain an English translation of any document or communication received in a language other than English at the cost and expense of the Borrower.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties have caused this Loan Agreement to be signed in their respective names as of the date first above written.

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title:

By: Name: Title:

INTERNATIONAL FINANCE CORPORATION

By: Name: Title:

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FORM OF DISBURSEMENT REQUEST

(See Section 2.02 of the Master Loan Agreement and 2.01 (b) of the Loan Agreement)

[Borrower’s Letterhead]

[Date]

International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433, United States of America

Attention: Director, Financial Institutions Group

Ladies and Gentlemen:

Investment No. 38134 Disbursement Request No. [ ] under Loan No. [ ]*

1. Please refer to the Master Loan Agreement (the “Agreement”) dated May 24, 2016, between Banco de Galicia y Buenos Aires S.A. (the “Borrower”) and International Finance Corporation (“IFC”), and to the Loan Agreement No. [ ] (the “Loan Agreement”) dated , 20[ ], between the Borrower and IFC. All terms defined in the Agreement and in the Loan Agreement shall bear the same meanings herein.

2. The Borrower hereby requests the disbursement on , (or as soon as practicable thereafter) of the amount of ( ) under the Loan (the “Disbursement”) in accordance with the provisions of Section 2.02 of the Agreement and Section 2.01 (b) of the Loan Agreement. You are requested to pay such amount to the account in [New York] of [name of Borrower] [name of correspondent Bank], Account No. at [name and address of Bank] [for further credit to the Borrower’s Account No. at [name and address of Bank] in [city and country].

3. For the purpose of Article (IV) of the Agreement and Section 3.01 of the Loan Agreement, the Borrower certifies as follows:

(a) No Event of Default and no Potential Event of Default has occurred and is continuing;

(b) The proceeds of that Disbursement: (i) are, at the date of this Disbursement Request, needed by the Borrower for the purpose specified in Section 2.01 (b) (Amount and Purpose) of the Agreement, or will be needed for that purpose within [3][12] months of such date; and (ii) the proceeds of that Disbursement are not in reimbursement of, or to be used for, any purpose other than on-lending to an Eligible Sub-borrower for the financing of an Eligible Sub-project;

(c) Since the date of the Agreement nothing has occurred which has or can reasonably be expected to have a Material Adverse Effect;

(d) The representations and warranties made in Article III (Representations and Warranties) of the Agreement and Section 3.01 of the Loan Agreement are true on and as of the date of this

* Each to be numbered in series.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Disbursement Request and will be true as of the date of Disbursement with the same effect as if those representations and warranties had been made on and as of each such date (but in the case of Section 3.01 (c) (Representations and Warranties) of the Agreement, without the words in parentheses);

(e) After giving effect to that Disbursement, the Borrower would not be in violation of: (i) its Charter; (ii) any provision contained in any document to which the Borrower is a party (including the Agreement and the Loan Agreements) or by which the Borrower is bound; or (iii) any law, rule, regulation, Authorization or agreement or other document binding on the Borrower directly or indirectly limiting or otherwise restricting the Borrower’s borrowing power or authority or its ability to borrow; and

(f) After taking into account the amount of that Disbursement and any other Liabilities incurred by the Borrower after the date of the latest financial statements of the Borrower delivered to IFC pursuant to Section 5.04 (a) (Reporting Requirements) of the Agreement, the Borrower would be in compliance with each of the financial covenants set out in Section 5.03 (Financial Covenants) of the Agreement.

The above certifications are effective as of the date of this Disbursement Request and shall continue to be effective as of the date of the Disbursement. If any of these certifications is no longer valid as of or prior to the date of the requested Disbursement, the Borrower will immediately notify IFC and will repay the amount disbursed upon demand by IFC if Disbursement is made prior to the receipt of such notice.

Yours faithfully,

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title: [Authorized Representative]**

Copy to: Director, Department of Financial Operations, International Finance Corporation

** As named in the Borrower’s Certificate of Incumbency and Authority (see Schedule 1).

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FORM OF LOAN DISBURSEMENT RECEIPT

(See Section 2.02 of the Master Loan Agreement and Section 2.01 (d) of the Loan Agreement)

[Borrower’s Letterhead]

International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 United States of America

Attention: Director, Financial Institutions Group

Ladies and Gentlemen:

Investment No. 38134 Disbursement Receipt No. [ ]* (Loan No. [ ])

We, Banco de Galicia y Buenos Aires S.A., hereby acknowledge receipt on the date hereof, of the sum of ( ) disbursed to us by International Finance Corporation (“IFC”) under the Loan No. [ ] provided for in the Loan Agreement dated , 20[ ] between our company and IFC, in accordance with the Master Loan Agreement dated May 24, 2016 between our company and IFC.

Yours truly,

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title: [Authorized Representative]***

Copy to: Director, Department of Financial Operations, International Finance Corporation.

* To correspond with number of the Disbursement request. See Schedule 2. *** As named in the Borrower’s Certificate of Incumbency and Authority (see Schedule 1).

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FORM OF SERVICE OF PROCESS LETTER

(See Section 4.01 of the Agreement)

[Letterhead of Agent for Service of Process]

[Date]

International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 Attention: Director, Financial Institutions Group

Investment No. 38134 ARGENTINA: BANCO DE GALICIA Y BUENOS AIRES S.A.

Ladies and Gentlemen:

Reference is made to Section 7.04 of the Master Loan Agreement dated May 24, 2016 (the “Agreement”) between Banco de Galicia y Buenos Aires S.A. (the “Borrower”) and International Finance Corporation (“IFC”), and to the Loan Agreements to be entered into thereby between the Borrower and IFC. Unless otherwise defined herein, capitalized terms used herein shall have the meaning specified in the Agreement.

Pursuant to Section 7.04 (d) of the Agreement, the Borrower has irrevocably designated and appointed the under- signed, [ ] with offices currently located at [ ], New York, New York [ ], United States of America, as its authorized agent to receive for and on its behalf service of process in any legal action or proceeding with respect to each of the Agreement and the Loan Agreements in the courts of the United States of America for the Southern District of New York or in the courts if the State of New York located in the Borough of Manhattan.

The undersigned hereby informs you that it has irrevocably accepted that appointment as process agent as set forth in Section 7.04 (d) of the Agreement, from 6 until 7 and agrees with you that the undersigned (i) shall inform IFC promptly in writing of any change of its address in New York, (ii) shall perform its obligations as such process agent in accordance with the relevant provisions of Section 7.04 of the Agreement, and (iii) shall forward promptly to the Borrower any legal process received by the undersigned in its capacity as process agent.

As process agent, the undersigned and its successor or successors agree to discharge the above-mentioned obligations and will not refuse fulfillment of such obligations as provided under Section 7.04 (d) of the Agreement.

Very truly yours,

[PROCESS AGENT]

By: Name: Title: cc: BANCO DE GALICIA Y BUENOS AIRES S.A.

6 Insert date of effectiveness of appointment. 7 Insert date which is 3 months after the last repayment of the Loan.

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FORM OF LETTER TO BORROWER’S AUDITORS

(See Section 4.01 and Section 5.01 of the Agreement)

[Borrower’s Letterhead]

[Date]

[NAME OF AUDITORS] [ADDRESS]

Investment No. 38134 Republic of Argentina: BANCO DE GALICIA Y BUENOS AIRES S.A.

Ladies and Gentlemen:

We hereby authorize and request you to give to International Finance Corporation (“IFC”) of 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of America, all such information as IFC may reasonably request with regard to (i) the financial statements of the undersigned company, both audited and unaudited, and (ii) any management letter and other communications from you to our company or its management, all of which we have agreed to supply under the terms of a Master Loan Agreement between the undersigned company and IFC dated May 24, 2016 (the “Agreement”). For your information, we enclose a copy of the Master Loan Agreement.

For our records, please ensure that you send us (i) a copy of all written communications you receive from IFC immediately upon receipt thereof, and (ii) a copy of all communications made by you to IFC immediately upon issuance thereof.

Yours truly,

BANCO DE GALICIA Y BUENOS AIRES S.A.

By Name: Title: [Authorized Representative]*

Enclosure cc: Director, Financial Institutions Group International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 United States of America

* As named in the Borrower’s Certificate of Incumbency and Authority (see Schedule 1).

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FORM OF ANNUAL REVIEW OF OPERATIONS REPORT

(See Sections 5.04 of the Agreement) (1) Sponsors and Shareholdings. Information on significant changes in share ownership of Borrower, the reasons for such changes, and the identity of major new shareholders. (2) Country Conditions and Government Policy. Report on any material changes in local conditions, including government policy changes, that directly affect the Borrower (e.g. changes in government economic strategy, taxation, foreign exchange availability, price controls, and other areas of regulations.) (3) Management and Technology. Information on significant changes in (i) the Borrower’s senior management or organizational structure, and (ii) technology used by the Borrower, including technical assistance arrangements. (4) Corporate Strategy. Description of any changes to the Borrower’s corporate or operational strategy, including changes in products, degree of integration, and business emphasis. (5) Markets. Brief analysis of changes in Borrower’s market conditions (both domestic and export, if so applicable), with emphasis on changes in market share and degree of competition. (6) Operating Performance. Discussion of major factors affecting the year’s financial results (sales by value and volume, operating and financial costs, profit margins, capacity utilization, capital expenditure, etc.). (7) Financial Condition. Key financial ratios for previous year, compared with ratios covenanted in the Loan Agreement. (8) Development Impact Indicators. Provide the following data related to the Eligible Sub-loans for Tranche B portfolio.

Eligible Sub-loans for Tranche B portfolio 2016 2017 2018 2019 2020 Volume outstanding (US$) Number of loans (#)

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FORM OF PORTFOLIO REPORT

(See Section 5.04(b)(v) of the Agreement)

Table 1.

Name of Financial Institution Institution ID Country Total Number of Employees in your financial institution of which female employees: Total Number of Clients Individual Clients Microenterprises Clients (please provide definition below) SME Clients (please provide definition below) Corporate Clients Government Clients Other Out of Total Number of clients Mobile Money clients Internet Banking clients Out of Total Number of Clients, women / women-owned (if available) Individual Clients Microenterprises Clients SME Clients Specify your definition of the following : “Microenterprise clients” “SME clients” “Women-owned firm” Delivery Channels Number of Branches Number of Sub-Branches / Kiosks / Outlets Number of Agents Number of ATMs Number of POS Terminals

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table 2 Loan Portfolio Reporting Table Please provide loan data in US dollars in grey cells, using the Year end exchange rate

Loan data for fiscal year (“the Year”), ending on: Exchange rate used (local currency units per 1 US Dollar):

Outstanding Loan Balance Past Due Loans Over 90 Days Total actual / (at the end of last fiscal year) (at the end of last fiscal year) estimated number of full-time employees Number of clients in employed by clients LOANS each loan/loan size Number of Amount Number of Amount (#) (based on a size AT ORIGINATION) category (#) Loans (#) (US Dollars) Loans (#) (US Dollars) (if available) RETAIL LOANS 0 0 Mortgage Loans 0 $ — $ — Purchase of Newly Constructed Houses Purchase of Existing Houses Home Equity Loans/ Improvements Student Loans Other Retail Loans COMMERCIAL LOANS 25 0 0 0 0 (MSME & Corporate) US$0 - US$1,000 US$1,001 - US$10,000 US$10,001 - US$100,000 US$100,001 - US$1,000,000 US$1,000,001 - US$2,000,000 >US$2,000,000 TOTAL LOAN PORTFOLIO 25 0 $ — 0 $ — 0 o/w Climate/Green Financing Portfolio Gender-disaggregated loan data (if available). Mandatory for Banking on Women and Blended Finance Program Clients. LOANS TO WOMEN- OWNED ENTERPRISES [OUT OF TOTAL COMMERCIAL] 0 $ — 0 $ — 0 US$0 - US$1,000 US$1,001 - US$10,000 US$10,001 - US$100,000 US$100,001 - US$1,000,000 US$1,000,001 - US$2,000,000 >US$2,000,000 Please Respond to below questions using drop-down menu and leaving comments as needed Please explain what the women-owned enterprise data is Please select what applies by clicking here based on: Gender Data Please explain what the full-time employees data is based Please select what applies by clicking here on: Job Data

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Comments:

Note: Please use the pre-established loan size categories from this table as IFC will aggregate the data across clients, thus requires this for comparability.

Table 3. Liability Accounts Portfolio Reporting Table (deposits, current/transactional accounts, e-money accounts, etc): The objective of this table is to describe the breakdown of your liability accounts Please provide data in US dollars, using the exchange rate at the end of the last fiscal year.

Validate Liabilities Tab

Outstanding Balance at the end of last fiscal year ACCOUNTS (LIABILITY) Number of Number of Deposits, current / transactional accounts, e-money accounts, etc) clients accounts Amount in US$ PORTFOLIO OF LIABILITY ACCOUNTS - TOTAL 0 0 $ — Individuals Micro enterprises Commercial (SMEs) Corporate Government (local and federal) Gender-disaggregated data (if available). Mandatory for Banking on Women and Blended Finance Program Clients. LIABILITY ACCOUNTS BY WOMEN-OWNED ENTERPRISES [OUT OF TOTAL] 0 0 $ — Individuals Micro enterprises Commercial (SMEs)

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Guidelines for completing these tables Table 1. Number of Employees, Clients and Delivery Channels • In the first section, please, provide total number of employees in your financial institution at the end of fiscal year. The unit of account is a permanent full-time equivalent paid job. Please include part-time employees in equivalents (e.g., two part-time jobs = one full-time job) • Total Number of Clients includes all the commercial and retail borrowers, depositors, credit/debit card users, etc. Please avoid double counting and provide total number of unique client/customer IDs. • Number of Individual Clients - Individual/retail customers that use financial services for personal financial needs. • Number of Microenterprise Clients - Customers that use financial services for micro business purposes (based on the client’s judgment and definition of a Microenterprise client). • Number of SME Clients - Commercial small and medium enterprises (SME) customers that use any financial services for the needs of SMEs (per the client’s definition of SME) • Number of Corporate Clients - Commercial clients representing larger enterprises that use financial services for the needs of their corporations (per the client’s definition of a Corporate client). • Number of Government Clients - Customers who use financial services for government financial needs. • Number of Mobile Banking Clients - Customers receiving banking services through the mobile banking channel (using mobile phones, smart phones, etc.). • Number of Internet Banking Clients - Customers receiving banking services through the Internet banking channel (on-line banking customers, etc.). • Number of Women among Individual Clients - Individual/retail female customers that use financial services for personal financial needs. • Number of Women-owned Microenterprises Clients - Customers that use financial services for micro business purposes (based the client’s judgment definition of a women-owned Microenterprise client). • Number of Women-owned SME Clients - Commercial small and medium enterprises (SME) customers that use any financial services for the needs of women-owned SMEs (per the client’s definition of women-owned SME) • Number of Women-owned Corporate Clients - Commercial clients representing larger enterprises that use financial services for the needs of the women-owned corporations (per the client’s definition of a corporate client). • Provide your financial institution definitions for ‘Microenterprise clients’, ’SME clients’, ‘Women-owned enterprise/firm’. • Delivery Channels - Channels through which your financial institution delivers financial services to the clients/customers. • Sub-Branches / Kiosks / Outlets - Small branches/outlets/kiosks that provide limited face-to-face and automated financial services to its customers. • Agents - Individuals affiliated with the financial institution that are authorized to provide financial services to the customers on behalf of the bank/financial institution. • ATMs - Automatic teller machines that customers use to receive basic services, such as making deposits and cash withdrawals from remote locations, available twenty-four hours a day. • POS Terminals - Point of Sales Terminal - type of electronic-transaction terminal, including a computer, a cash register and other equipment or software used for selling goods or services. A place where a retail transaction is completed. It is the point at which a customer makes a payment to the merchant in exchange for goods or services (credit/debit card payment/reading machines, etc.).

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table 2. Loan Portfolio • Please provide data as of the final day of the financial institution’s financial year unless otherwise specified. • Provide data in US Dollars, using the exchange rate (Local Currency/US$) at the end of the financial institution’s financial year if applicable. • Total Loan portfolio in this section represent all loans issued by your financial institution [and which have an outstanding balance greater than zero] at the end of fiscal year. It should be equal to the Total Loan Book of your institution. • It is important that the table be filled in exactly as it is presented above, using the pre-established loan size categories as IFC will be aggregating data across clients and requires this for comparability. • Loans should be put into loan type categories based on the size of the loan at origination. For example, for a $150,000 loan at origination, of which $50,000 is outstanding at the end of fiscal year, the $50,000 outstanding loan should be included in the US$100,001-US$1,000,000 row (not the US$10,001 - US$100,000 row). • Loans to individuals for business purposes should be included in commercial loans, not consumer loans. • Purchase of Newly Constructed Houses - Loans to purchase newly constructed houses and loans for homes under construction. • Home Equity Loans - Consumer loans secured by a house. • Other Retail Loans - Consumer loans, credit cards, auto loans, and others. • Climate/Green Finance Aggregated Loan Data - Total loan amounts outstanding for Retail/SME/Commercial/Corporate to finance loans for Renewable Energy (biomass, geothermal, hydro, solar, wind, ocean, etc.); Wastes (waste-to-energy, recycling, waste management, solid and hazardous waste disposal, etc.); Energy and energy efficiency (cogeneration, energy distribution for renewables, energy efficient products, industrial energy efficiency, smart grid, etc.); Green buildings; Green products and materials; Carbon capture & storage; Transport (rail, urban rail/metro, electric vehicles, hybrids, alternative fuel vehicles, bus Rapid Transit, bicycle, biofuels, biofuels for aviation, transport logistics, etc.); Water (water efficiency/conservation, water supply, wastewater treatment, etc.); Adaptation (adaptation of infrastructure, conservation, bio-system adaptation, disaster prevention/risk management, etc.); Environment protection (soil remediation, pollution control, prevention and treatment, biodiversity conservation, ecological restoration, nature protection, etc.); Sustainable land management (sustainable agriculture, sustainable forestry, etc.) • Provide the commercial loan data for women-owned enterprises. For certain projects that involve the financing specifically for women or blended finance these data may be mandatory, for other cases it is desirable. • Confirm/provide the definition/source of the reported women-owned enterprise loan data by selecting from the following drop- down menu options: actual loan data based on IFC definition (see below); actual loan data based on our own definition (specify the definition in the comments); no data on women is available; estimated loan data (specify the methodology in the comments); estimated loan data provided (specify the methodology in the comments), but we plan to report on actual data soon; no data on women available, but we plan to track this data soon. Please leave a comment on any other/unusual aspects of the women-owned data, or aberrations from these guidelines. • IFC definition for loans to woman-owned enterprises - loans issued for commercial purposes and not for personal use to women- owned enterprises. According to IFC, a woman-owned enterprise is: (a) ³ 51% owned by woman/women; or (b) ³ 20% owned by woman/women; and have ³ 1 woman as CEO/COO (President/Vice-President); and have ³ 30% of the board of directors comprised of women where a board exists • Provide the total number of employees (full-time employee equivalent) in the companies associated with each loan exposure size (loan size at origination category). For example, how many employees

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the client companies that receive loans $10,001-$100,000 employ? These data are optional but highly desirable. This can be estimated or actual data. • Confirm/provide the definition/source of the reported number of employees data by selecting from the following drop-down menu options: actual # employees data from MIS; estimated # employees based on recordings in the loan files; estimated data (specify the estimation methodology); estimated data (specify the estimation methodology), but we plan to report on actual data soon; no data is available; no data is available, but we plan to track this data in the future; other (please leave a comment). Please leave a comment on any other/unusual aspects of the number of employees’ data, or aberrations from these guidelines. • IFC may add optional survey to inquire about certain aspects of development impact data. • IFC may change/adjust the data collection template based on the evolving needs for monitoring and evaluation of IFC’s development impact. • For overdue loans (usually 90 days overdue) please report total loan amounts outstanding for loans on which payments have been delinquent (and not just the overdue portion) as of end of fiscal year. Please do not include penalties, interests, and fees in the outstanding balances. For Housing Loans please include any over 90 days past due loans and/or loans that have missed 3 housing payments. • Please provide comments on any unusual aspects of the date in this table, or aberrations from these guidelines.

Table 3. Liability Accounts • In this table please provide number of clients that have opened current / transactional accounts, interest bearing accounts, e-money accounts in each category: Individuals, Micro, SME, Corporate, and Government. Exclude client having only loan type accounts. • Provide number and volume of the accounts such clients hold. • Please also provide the data for women and women-owned enterprises. For certain projects that involve the financing specifically for women or blended finance these data may be mandatory, for other cases it is desirable.

Notes • IFC may modify from time to time the above indicators based on evidence building to meet the development impact monitoring demands of IFC and the World Bank Group. • IFC may outsource the collection of the above information to 3rd party vendors subject to appropriate confidentiality agreements.

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FORM OF S&E PERFORMANCE REPORT

(See Section 5.04 of the Agreement)

Annual Environmental & Social Performance Report for Financial Intermediary (FI) Clients (Universal Banks)

Name of Organization Completed by (name): Position in organisation: Date: Reporting period From: To:

Introduction IFC’s Investment/Legal Agreement(s) requires Client Company to prepare a comprehensive Annual Environmental and Social Performance Report (AEPR) describing (i) the implementation and operation of the Environmental and Social Management System (ESMS), and (ii) the environmental and social performance of the sub-borrowers/clients of the Financial Institution. This document comprises IFC’s preferred format for E&S performance reporting. The following template may be supplemented with annexes as appropriate to ensure all relevant information on project performance is reported.

Content: • Client’s Representation Statement by authorized representative • Performance Standard 1: ESMS • Performance Standard 2: Labor and Working Conditions; and Life, Fire and Safety • Client’s Feedback • Portfolio Information

Notes: (1) Please provide responses to all questions and as detailed information as possible to avoid follow-up requests. If information is not available, please provide a brief explanation. Please ensure all documents were required (as indicated) are attached to your AEPR.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (2) A selected number of questions (indicated with *) requires the provision of client specific information. If you are not allowed as per the local legislation to share information such as the name of the client, please indicate so and use ‘Client 1, 2, 3, ..’ instead of the name.

Part 1: Client’s Representation Statement by authorized representative I (name) in my role of (position) and representing Client Company’s certify that a) Beyond what is reported in this AEPR for the current reporting period, to the best of my knowledge and belief, after due inquiry I confirm: • There are no material social and environmental risks and issues in respect of the relevant financing operations other than those identified through the application of the ESMS. • (Add name of Bank) has not received nor is aware of (a) any existing or threatened complaint, order, directive, claim, citation or notice from any authority, or (b) any material written communication from any person concerning the failure by any client/sub-borrower to undertake its operations and activities in accordance with the E&S requirements. • We have not amended, waived or materially restricted the scope or effect of the ESMS. • There have been no changes in the scope of the relevant financing operations since the loan/shareholders agreement with IFC has been signed. • We are using all reasonable efforts to ensure the continued operation of the ESMS to identify, assess and manage the social and environmental performance of the relevant financing operations in compliance with the E&S requirements. • If a client/sub-borrower has not undertaken its activities in accordance with the E&S requirements, we have (a) agreed with the client/sub-borrower to undertake corrective actions to remedy these, (ii) if the client/sub-borrower failed to implement the corrective actions used all reasonable efforts to dispose of the client/sub-borrower. • We have informed IFC during the reporting period of all proposed Cat A activities we have become aware of and ensured that the ESMS has sufficient capacity to review the E&S performance of these activities. • We have informed IFC of all social, labor, health and safety, security or environmental incident, accidents or circumstance in relations to any client/sub-borrower in accordance with the legal agreements. b) All information contained in this AEPR is true, complete and accurate in all respects at the time of submission and no such document or material omitted any information the omission of which would have made such document or material misleading.

Signature Date

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Part 2: Performance Standard 1: Development and Implementation of Environmental and Social Management System A) POLICIES AND PROCEDURES 2.1) Does your organization have a functioning ESMS which was approved by senior management during the reporting period?

☐ Yes ☐ No Date of Approval: If yes, please attach a copy of the ESMS to this report

2.2) If there has been an ESMS already in place and agreed upon with IFC, have there been any revisions/updates to the ESMS (policy and/or procedures) adopted by your organization during the reporting period?

☐ Yes ☐ No If yes, please provide the details of the revisions made and reasons for the same (i) (ii) (iii) (iv)

Please attach a copy of the revised ESMS.

2.3) Please describe your loan/credit review process and how E&S assessments have been incorporated into this process (only in case it was not provided earlier) Credit Review Process: E&S Assessment Process (including assessment of compliance with Exclusion List, national laws and the Performance Standards, if applicable):

2.4) Please provide three sample internal E&S assessment reports conducted for projects considered in the year under review. Documents provided: (i) (ii) (iii)

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2.5) Please provide the following information regarding the E&S Risk profile of your portfolio and E&S assessments undertaken.

Number of Number of Number of Number of Accidents/ field visits field visits Number of Loans Incidents conducted conducted by Loans screened for reported by by staff to staff to review Number screened E&S issues clients review E&S E&S aspects of Loans for E&S during the Number of during the aspects after loan in issues to reporting Loans/Clients reporting during loan appraisal Type of Financing Portfolio date period categorized as period appraisal (monitoring) CRK Specialist to define with the client and insert here the various products provided by the client, e.g. retail, SME, corporate finance, trade etc A B C FI

2.6) Please give details of any transactions rejected on environmental, health, safety or social grounds during the reporting period. Number of Loans/Clients: Details including name of clients and reasons for rejection*: (i) (ii) (iii)

2.7) Please provide details of loans/clients in portfolio that have become Non-Performing Loans (NPLs) due to E&S issues during the reporting period (indicate if information is not available). Number of Loans/Clients: Details including name of clients and reasons for becoming NPLs*: (i) (ii) (iii)

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document B) E&S CAPACITY 2.8) Please provide the name and contact information of the Environmental Officer or Coordinator who has the overall responsibility for the implementation of ESMS. Name: Contact Information: Position:

2.9) Please provide details of any other core persons in the organization involved with ESMS implementation (name, contact details, position), (including internal staff and external consultants if utilized). (i) (ii)

2.10) Please describe the training or learning activities the Environmental Officer/Coordinator/other E&S staff, as well as other staff attended in the year under review. (i) E&S staff: (ii) Other staff:

2.11) Please provide information on your training programs available to new and existing staff, training materials developed and budget allocation for ESMS development and implementation during the reporting period: (iii) Training Programs: (iv) Budget allocation (e.g. including for external consultants, training etc):

C) MONITORING 2.12) Do you require clients to provide any E&S reports?

☐ Yes ☐ No ☐ Sometimes

If yes, describe the monitoring requirements:

If yes, please provide two of such reports provided within the last year.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2.13) Please describe how you monitor the E&S performance of clients after credit disbursement, including compliance with national laws and applicable Performance Standards and implementation of corrective action plans (only required if not provided earlier already).

Monitoring Procedure:

Please provide three sample monitoring reports conducted for projects by staff to review environmental and social aspects.

Documents provided: (i) (ii) (iii)

2.14) Please give details of any material adverse environmental and social issues associated with clients during the reporting period. Include details of any major accidents/incident, non-compliances, fines levied, negative media attention, complaints raised against your clients etc. (i) (ii) (iii)

D) REPORTING AND AUDITING 2.15) Please describe your internal process for reporting social and environmental issues to Senior Management, including which information is provided. (If your internal reporting process had already been discussed and agreed upon with IFC, please provide details on where it is included in your ESMS).

If newly developed or revised, describe your Reporting Process and information provided: Indicate in which section of the ESMS your reporting mechanism is included:

2.16) Has your organization conducted any internal audit of the implementation of the ESMS?

☐ Yes ☐ No

If yes, please provide the following details of the audit: Date of audit: Findings of the audit: Recommendations from the audit:

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document E) EXTERNAL COMMUNICATION MECHANISM 2.17) Do you have a mechanism in place to receive, register and respond to external communication regarding your activities? Describe the mechanism and how often it has been used.

☐ Yes ☐ No If yes, please provide the following information: Description of mechanism including how you screen, assess and address concerns received, as well as track and document them internally: Number of complaints/inquiries to date: Number of complaints/inquiries received during the reporting period: Key issues raised in complaints/inquires:

Part 3: Performance Standard 2: Labor and Working Conditions; and Life, Fire and Safety Measures 3.1) Were your organization’s HR Policy and Procedures revised in the year under review?

☐ Yes ☐ No

If yes please describe in detail the changes to the previous policy/procedures. (i) (ii) (iii)

Please attach a copy of the revised HR Policy/Procedures

3.2) Were there any labor-related issues in the year under review? (Labor issues include – e.g. court cases, union disputes, staff grievances, sexual harassment complaints, negative media report on labor issues). Did your organization retrench a substantial8 number of employees in the year under review? Labor related Issues: If yes, please provide details. (i) (ii)

8 Substantial means retrenchment of more than 50 persons or 5% of the total number of employees within a three month period

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (iii) Retrenchment:

☐ Yes ☐ No

If yes, please provide details on the retrenchment: (i) Number of employees retrenched: (ii) Cause of retrenchment: (iii) Retrenchment plan:

3.3) Did you retain valid Fire Safety permits for all buildings during the reporting period and undertake regular fire drills? Have there been any fire incidents during the reporting period in any of your offices or branches?

Fire Safety Permits valid:

☐ Yes ☐ No

If no, please provide details:

Fire Incidents:

☐ Yes ☐ No

If yes, please provide the following: Details of the incident including cause of fire: Corrective Actions taken:

Please attach a copy of the Fire Incident report

3. Client’s Feedback Please check the box that best represents your evaluation of the support received from IFC. On dealing with E&S aspects of the investment, how effective in your opinion has IFC been?

Excellent As Below No level of Above reasonably what was Areas of IFC Assistance: opinion support expectations expected expected Comments To help you understand the business case for good E&S risk management ☐ ☐ ☐ ☐ ☐

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document To provide you with guidance for the development of your ESMS and the implementation of the Environmental and Social ☐ ☐ ☐ ☐ ☐ Action Plan (ESAP) To support you during and share the outcomes of IFC’s appraisal and supervision visits to your institutions and on agreeing on ☐ ☐ ☐ ☐ ☐ corrective actions To demonstrate flexibility and creativity to guide you in the ☐ ☐ ☐ ☐ ☐ management of E&S issues Other Feedback you would like to provide: What are currently the key difficulties/challenges your institution faces in the establishment and implementation of adequate E&S risk management practices? What support is needed and/or has been identified to address these?

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Part 5: Portfolio Information (b) 5.1) FI Business Lines and portfolio distribution

Total exposure outstanding Average for most loan or recent FY Percentage transaction Smallest and Largest year end of entire size loan or transaction Product line Description (in US$) portfolio (in US$) size (in US$) CRK Specialist to define with the client and insert here the various products and descriptions provided by the client, e.g. retail SME, corporate finance, trade etc

Total

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) 5.2) Exposure by industry Sectors (for entire portfolio)

Please provide information on your entire portfolio based on industry sectors. If this sector breakdown does not match your portfolio reporting, please use any other standard classification. e.g. format required by local Central Bank or Banking Regulatory Authority.

Total Bank Industrial Sector Portfolio SME Lending Corporate/Project finance % of Outstanding Outstanding % of Outstanding Corporate/ Exposure Exposure SME Exposure Project (in US$) (in US$) Portfolio (in US$) Finance Portfolio Animal Production Apparel Chemicals Collective Investment Vehicles Common Carriers Construction and Real Estate Consumer Goods Crop Production Electrical Equipment, Appliances and Components Fabric Mills Fabricated Metal Product Manufacturing Finance & Insurance Finishing (Dyeing, Printing, Finishing, etc.) Fishing Food & Beverages Forestry Furniture and Related Products Integrated Textile Operation (Spinning, Weaving/ Knitting, but no Garment ) Internet Projects Leather and Allied Products Machinery and Other Industrial Nonmetallic Mineral Product Manufacturing Oil, Gas and Mining Plastics & Rubber Primary Metals Printing & Publishing Pulp & Paper Spinning (Yam, Including Integrated with Fiber Production) Telecommunications Textiles - Others Transport Service Transportation Equipment Utilities Warehousing & Storage Wholesale and Retail Trade covering any of the following. Gasoline stations, dry cleaners, printing, large auto and truck fleets, photographic film processing and any operations involving the use of any chemical of biological wastes or materials Wood Products Total

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1.2 5.3) Exclusion List Exposure: if any, please provide the following information on exposures in your portfolio of clients substantially involved in IFC excluded activities. (Please include both details of activities financed with IFC funds and from your own funds).

Activity Financed Outstanding from IFC Outstanding Exposure in Type of Funds/Asset Steps taken to reduce Exposure % of Name of Financing Loan Due Class? exposure (if agree upon Type of Excluded Activity in US$ Portfolio Company* provided Date (yes/no) with IFC) 1. Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCB’s, wildlife or products regulated under CITES. 2. Production or trade in weapons and munitions 3. Production or trade in alcoholic beverages (excluding beer and wine) 4. Production or trade in tobacco. 5. Gambling, casinos and equivalent enterprises 6. Production or trade in radioactive materials. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where IFC considers the radioactive source to be trivial and/or adequately shielded. 7. Production or trade in unbonded asbestos fibers. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Drift net fishing in the marine environment using nets in excess of 2.5 km. in length. 9. Production or activities involving harmful or exploitative forms of forced labor (Forced labor means all work or service, not voluntarily performed that is extracted from an individual under threat of force or penalty)/harmful child labor. 10. Commercial logging operations for use in primary tropical moist forest 11. Production or trade in wood or other forestry products other than from sustainably managed forests. Total for the Bank

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1.3 5.4) Please provide the below information regarding your top 25 Corporate/Project Finance Exposures (Please provide all the information required.)

Corrective Action(s) E&S identified Any key Type of Risk Key and reputational Financing Category E&S included Status of risk Company/ (Overdraft, Tenor of Value of assigned risks and in the Corrective associated Project Term Loan Financing exposure Industry (A, B, C, impacts legal Action Plan with the name* etc) (months) (US$ mn) Sector FI) identified agreement implementation company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* If you are not allowed as per the local legislation to share information such as the name of the client, please indicate so and use ‘Client 1, 2, 3, ..’ instead of the name.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1.4

Section 1.5 5.5) Please provide the below information regarding your top 25 SME Exposures (Please provide all the information required.)

Corrective Action(s) E&S identified Any key Type of Risk Key and reputational Financing Category E&S included Status of risk Company/ (Overdraft, Tenor of Value of assigned risks and in the Corrective associated Project Term Loan Financing exposure Industry (A, B, C, impacts legal Action Plan with the name* etc) (months) (US$ mn) Sector FI) identified agreement implementation company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* If you are not allowed as per the local legislation to share information such as the name of the client, please indicate so and use ‘Client 1, 2, 3, ..’ instead of the name.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Section 1.7 5.6) Please provide the below information for all Cat A projects in your portfolio (Please provide all the information required.)

Corrective Action(s) identified Any key Type of Key and reputational Financing E&S included Status of risk Company/ (Overdraft, Tenor of Value of risks and in the Corrective associated Project Term Loan Financing exposure Industry impacts legal Action Plan with the name* etc) (months) (US$ mn) Sector identified agreement implementation company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* If you are not allowed as per the local legislation to share information such as the name of the client, please indicate so and use ‘Client 1, 2, 3, ..’ instead of the name.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SCHEDULE 9

FORM OF NOTE

(See Section 2.02 of the Agreement)

“PAGARɔ

US$ Buenos Aires, ● de ● de 201

Por igual valor recibido en préstamo, pagaremos incondicionalmente a la vista a International Finance Corporation, sin protesto, NO A LA ORDEN, la cantidad de Dólares Estadounidenses ● millones (U$S ●).

El monto adeudado bajo el presente Pagaré devengará (i) un interés compensatorio del ● por ciento (●%) anual hasta la fecha del efectivo pago; y (ii) en caso de falta de pago a la fecha de su presentación al cobro, un interés punitorio del dos por ciento (2%) anual desde la fecha de su presentación al cobro hasta la fecha del efectivo pago.

Todos los pagos a efectuar en virtud de este Pagaré serán efectuados indefectiblemente en Dólares Estadounidenses. El suscriptor renuncia en forma incondicional e irrevocable a invocar la teoría de la imprevisión y onerosidad sobreviniente (Artículo 1091, del Código Civil y Comercial_de la República Argentina).

Todos los montos adeudados en virtud del presente Pagaré serán pagados libres de, y sin deducciones por, impuestos, tasas, gastos, derechos, y/o retenciones, presente o futuros, de cualquier naturaleza o tipo, sean éstos de jurisdicción nacional o provincial de la Argentina, o impuestos cobrados por cualquier autoridad impositiva de la Argentina. En caso de ser aplicable algún impuesto, tasa, cargo, gasto, derecho y/o retención de la índole mencionada, éste será pagado exclusivamente por el suscriptor.

En nuestro carácter de suscriptores, hacemos constar expresamente que ampliamos el plazo de presentación para el pago de este Pagaré hasta [nueve] ([9]) años a contar desde la fecha.

Lugar de pago: 2121 Pennsylvania Av. N.W., Washington DC 20433, Estados Unidos de América.

BANCO DE GALICIA Y BUENOS AIRES S.A.

[Nombre] [Cargo]

[NOTARY PUBLIC CERTIFICATION SIGNATURES & SIGNATORIES’ CAPACITY]

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SCHEDULE 10

FORM OF ELIGIBLE SUB-LOANS TRANCHE A REPORT

Eligible Sub-borrower 1 Eligible Sub-borrower 2 Eligible Sub-borrower 3 Eligible Sub-borrower 4

* Specify if fixed or floating. ** USD equivalent as of latest date available. *** Detailed description of the collateral, including latest valuation, latest valuation date, and valuation method used.

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Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document INVESTMENT NUMBER 38134

Loan Agreement No. 1

between

BANCO DE GALICIA Y BUENOS AIRES S.A.

and

INTERNATIONAL FINANCE CORPORATION

Dated May 24, 2016

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document LOAN AGREEMENT No. l

LOAN AGREEMENT (this “Loan Agreement”) dated May 24, 2016 between BANCO DE GALICIA Y BUENOS AIRES S.A., a banking institution organized and existing under the laws of the Republic of Argentina (the “Borrower”); and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the Republic of Argentina (“TFC”).

RECITALS

On or about the date hereof, the Borrower and IFC have entered into a Master Loan Agreement;

According to that Master Loan Agreement dated May 24, 2016 (the “Master Loan Agreement”), the Borrower has requested a Loan (as below defined) to IFC, in order to use the proceeds of such Loan to finance Eligible Sub-loans (as below defined) for Eligible Sub-projects (as below defined) to be carried on by Eligible Sub-borrowers (as below defined); and

IFC is willing to provide the requested Loan upon the terms and conditions set forth in this Loan Agreement and the Master Loan Agreement.

ARTICLE I Definitions and Interpretation

Section 1.01. Definitions. Wherever used in this Loan Agreement, and except as otherwise defined herein, terms defined below shall have the meaning ascribed to them in this Section 1.01, and terms that are not defined in this Section 1.01 or in this Loan Agreement, shall have the meaning ascribed to them in the Master Loan Agreement:

“Interest Rate” means, for any Interest Period, the rate at which interest is payable on the Loan during that Interest Period, determined in accordance with Section 2.02 (Interest);

“Loan” means the loan specified in Section 2.01 (The Loan) or, as the context requires, its principal amount from time to time outstanding;

“Loan Disbursement” means the disbursement of the Loan;

“Master Loan Agreement” has the meaning set forth in the Recitals; and

“Relevant Spread” means 4.5% per annum.

Section 1.02. Financial Calculations, Interpretation, Business Day Adjustment.

(a) This Agreement is the Loan Agreement referred to in the Master Loan Agreement.

(b) Sections 1.02. (Financial Calculations), 1.03 (Interpretation) and 1.04 (Business Day Adjustment) of the Master Loan Agreement are incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan Agreement in full.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) In the context of this Loan Agreement, and except as otherwise provided in this Loan Agreement, a reference to a time of day is a reference to New York time.

(d) In the context of this Loan Agreement, and except as otherwise provided in this Loan Agreement, any reference to “the date of this Loan Agreement” or any similar reference, is a reference to the date of execution of this Loan Agreement.

(e) Any reference to Sections in this Loan Agreement, except as otherwise provided in this Loan Agreement, is a reference to a Section to this Loan Agreement.

Section 1.03. Conflict with Master Loan Agreement. In the event of any conflict between the terms of this Loan Agreement and the terms of the Master Loan Agreement, the terms of this Loan Agreement will prevail as between the parties to this Loan Agreement.

ARTICLE II The Loan

Section 2.01. The Loan.

(a) Subject to the provisions of this Loan Agreement and the Master Loan Agreement (including Section 2.02 (Commitment and Disbursement Procedure), Section 4.01 (Conditions of First Disbursement of the IFC Loans), if applicable, and Section 4.02 (Conditions of All Disbursements) of the Master Loan Agreement), IFC agrees to commit the availability of the Loan in an aggregate principal amount of up to $30,000,000 consisting entirely of a Tranche A Loan.

(b) The Borrower may request the corresponding Loan Disbursement by delivering to IFC, at least 10 Business Days prior to the proposed date of disbursement: (i) a Disbursement Request, in accordance with Schedule 1 of this Loan Agreement as set forth in Section 2.02 (c) of the Master Loan Agreement; and (ii) a Note evidencing each Tranche as set forth in Section 2.15 of the Master Loan Agreement.

(c) Loan Disbursement shall be made by IFC at a bank in New York, New York for further credit to the Borrower’s account at a bank in the Country, as indicated by the Borrower in the Disbursement Request.

(d) The Borrower shall deliver to IFC in accordance with Section 2.02 (f) of the Master Loan Agreement, a receipt, substantially in the form of Schedule 2 of this Loan Agreement, with the signatures and capacities of the Borrower’s representatives duly certified and authenticated by an Argentinean notary public, within 5 Business Days following Loan Disbursement by IFC. The Borrower hereby expressly and unconditionally agrees that in the event that the Borrower fails to deliver such receipt, evidence of the transfer of funds to the Borrower’s correspondent bank account shall be considered as sufficient evidence of receipt.

Section 2.02. Interest. Subject to Section 2.04 (Default Interest Rate) of the Master Loan Agreement, the Borrower shall pay interest on the Loan in accordance with this Section 2.02 (Interest).

(a) During each Interest Period, the Loan shall bear interest at the lnterest Rate for that Interest Period.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Interest on the Loan shall accrue from day to day, be prorated on the basis of a 360-day year for the actual number of days in the relevant Interest Period and be payable in arrears on the Interest Payment Date immediately following the end of that Interest Period; provided that in case the Loan Disbursement is made less than 15 days before an Interest Payment Date, interest on the Loan shall be payable commencing on the second Interest Payment Date following the date of the Loan Disbursement.

(c) The Interest Rate for any Interest Period shall be the rate which is the sum of: (i) the Relevant Spread; and (ii) LIBOR on the Interest Determination Date for that Interest Period for six (6) months (or, in the case of the first Interest Period for any Loan Disbursement, for 1 month, 2 months, 3 months or 6 months, whichever period is closest to the duration of the relevant Interest Period (or, if 2 periods are equally close, the longer one)) rounded upward to the nearest 3 decimal places.

(d) The Interest Rate shall be determined as provided in Section 2.03 (Interest) of the Master Loan Agreement.

(e) The Interest Rate shall be subject to adjustment upon the occurrence of a Market Disruption Event as provided in Section 2.03 (Interest; Market Disruption) of the Master Loan Agreement.

(f) The determination by IFC, from time to time, of the applicable Interest Rate shall be final and conclusive and bind the Borrower (unless the Borrower shows to the IFC’s satisfaction that the determination involves manifest error).

Section 2.03. Repayment.

(a) The Borrower shall repay the Tranche A Loan in accordance with Section 2.05 (Repayment) of the Master Loan Agreement, as detailed in the schedule below:

Interest Payment Date Principal Amount June 15, 2018 $4,285,714.29 December 15, 2018 $4,285,714.29 June 15, 2019 $4,285,714.29 December 15, 2019 $4,285,714.29 June 15, 2020 $4,285,714.29 December 15, 2020 $4,285,714.29 June 15, 2021 $4,285,714.29

(b) Any principal amount of any Tranche of the Loan repaid under this Agreement may not be re-borrowed.

Section 2.04. Prepayment.

(a) The Borrower may prepay any Tranche of the Loan in accordance with Section 2.06 (Prepayment) of the Master Loan Agreement.

(b) Amounts of principal prepaid under this Section 2.04 and Section 2.06 (Prepayment) of the Master Loan Agreement shall be applied by IFC to all the outstanding installments of principal of the

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan in inverse order of maturity.

Section 2.05. Fees and Other Payments. (a) The Borrower shall pay to IFC the commitment fee, the front-end fee, the portfolio monitoring fee, and any other applicable fee, expenses and taxes, as provided in the Master Loan Agreement, as applicable to this Loan.

Section 2.06. Currency and Place of Payments. The Borrower shall make all payments of principal, interest, fees and any other amount due to IFC under this Loan Agreement in accordance with Section 2.08 (Currency and Place of Payments) of the Master Loan Agreement.

Section 2.07. Suspension and Cancellation.

(a) IFC may suspend the right of the Borrower to Loan Disbursement or cancel the undisbursed portion of the Loan in whole or in part in accordance with Section 2.02 (h) of the Master Loan Agreement.

(b) The Borrower may request that IFC cancel all or part of the undisbursed portion of the Loan in accordance with Section 2.02 (i) of the Master Loan Agreement.

ARTICLE III Common Terms

Section 3.01. Representations and Warranties.

(a) The representations and warranties set out in Section 3.01 (Representations and Warranties) of the Master Loan Agreement are incorporated herein by reference and shall be made and are deemed to be made herein, mutatis mutandis, for the benefit of IFC as if set out in this Loan Agreement in full.

(b) The Borrower acknowledges that IFC enters into this Loan Agreement and the other Transaction Documents to which it is a party on the basis of, and in full reliance on, each of the representations and warranties referred to in Section 3.01 (Representations and Warranties) of the Master Loan Agreement.

Section 3.02. Conditions of Disbursement.

The obligation of IFC to make the Loan Disbursement is subject to the fulfillment prior to or concurrently with the making of the Loan Disbursement of the conditions set forth in Section 4.01 (Conditions of First Disbursement of the IFC Loans), if applicable, and Section 4.02 (Conditions of All Disbursements) of the Master Loan Agreement.

Section 3.03. Covenants.

(a) So long as any amount of the Loan remains available for disbursement or any amount is outstanding under any of the Transaction Documents, the covenants set out in Article V (Particular Covenants) of the Master Loan Agreement are incorporated herein by reference and shall apply herein, mutatis mutandis, for the benefit of IFC as if set out in this Loan Agreement in full.

(b) The Borrower undertakes to cause the proceeds of the Loan to be applied to [provide a preliminary description of Eligible Sub- loans, Eligible Sub-projects, and Eligible Sub-borrowers] and to

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provide evidence to that effect to IFC.

Section 3.04. Events of Default.

(a) The Events of Default set out in Section 6.02 (Events of Default) of the Master Loan Agreement are incorporated herein by reference and shall each constitute an event of default under this Loan Agreement.

(b) If any Event of Default occurs and is continuing (whether it is voluntary or involuntary, or results from operation of law or otherwise), IFC may, by notice to the Borrower, require the Borrower to repay the Loan or such part of the Loan as is specified in that notice. On receipt of any such notice, the Borrower shall immediately repay the Loan (or that part of the Loan specified in that notice) and pay all interest accrued on it, the prepayment premium specified in Section 2.06 (Prepayment) of the Master Loan Agreement, and any other amounts then payable under this Loan Agreement and the other Transaction Documents, provided that the prepayment premium specified in Section 2.06 (Prepayment) shall not be applicable if acceleration occurred (only) as a consequence of the Event of Default set forth in Section 6.02 (c) of the Master Loan Agreement. The Borrower waives any right it might have to further notice, presentment, demand or protest with respect to that demand for immediate payment.

(c) If the Borrower is in any of the situations described in Section 6.02 (e) of the Master Loan Agreement, the Loan, all interest accrued on it and any other amounts payable under this Loan Agreement and the other Transaction Documents will become immediately due and payable without any presentment, demand, protest or notice of any kind, all of which the Borrower waives.

ARTICLE IV Miscellaneous

Section 4.01. Notices.

Any notice, request or other communication to be given or made under this Loan Agreement shall be given in accordance with Section 7.02 (Notices) of the Master Loan Agreement.

Section 4.02. Term of Agreement.

This Loan Agreement shall continue in force until all monies payable under it have been fully paid in accordance with its provisions.

Section 4.03. Saving of Rights.

Section 7.01 (Saving of Rights) of the Master Loan Agreement is incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan Agreement in full.

Section 4.04. Applicable Law and Jurisdiction.

(a) This Loan Agreement is governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America.

(b) Section 7.04 (Applicable Law and Jurisdiction) of the Master Loan Agreement is incorporated herein by reference and shall apply herein, mutatis mutandis, as if set out in this Loan

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, the parties have caused this Loan Agreement to be signed in their respective names as of the date first above written.

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: /s/ CARLOS E. LÓPEZ Name: CARLOS E. LÓPEZ (262) Title: SENIOR VICE PRESIDENT INTERNATIONAL DIVISION

By: /s/ PABLO LEON Name: PABLO LEON Title: EXECUTIVE VICE PRESIDENT FINANCIAL AREA

INTERNATIONAL FINANCE CORPORATION

By: Name: Title:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FORM OF DISBURSEMENT REQUEST

(See Section 2.02 of the Master Loan Agreement and 2.01 (b) of the Loan Agreement)

IN WITNESS WHEREOF, the parties have caused this Loan Agreement to be signed in their respective names as of the date first above written.

BANCO DE GALICIA Y BUENOS AIRES S.A.

By: Name: Title:

By: Name: Title:

INTERNATIONAL FINANCE CORPORATION

By: /s/ PAULO DE BOLLE Name: PAULO DE BOLLE Title: REGIONAL INDUSTRY HEAD/SENIOR MANAGER

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of the Agreement and Section 3.01 of the Loan Agreement are true on and as of the date of this Disbursement Request and will be true as of the date of Disbursement with the same effect as if those representations and warranties had been made on and as of each such date (but in the case of Section 3.01 (c) (Representations and Warranties) of the Agreement, without the words in parentheses);

(e) After giving effect to that Disbursement, the Borrower would not be in violation of: (i) its Charter; (ii) any provision contained in any document to which the Borrower is a party (including the Agreement and the Loan Agreements) or by which the Borrower is bound; or (iii) any law, rule, regulation, Authorization or agreement or other document binding on the Borrower directly or indirectly limiting or otherwise restricting the Borrower’s borrowing power or authority or its ability to borrow; and

(f) After taking into account the amount of that Disbursement and any other Liabilities incurred by the Borrower after the date of the latest financial statements of the Borrower delivered to IFC pursuant to Section 5.04 (a) (Reporting Requirements) of the Agreement, the Borrower would be in compliance with each of the financial covenants set out in Section 5.03 (Financial Covenants) of the Agreement.

The above certifications are effective as of the date of this Disbursement Request and shall continue to be effective as of the date of the Disbursement. If any of these certifications is no longer valid as of or prior to the date of the requested Disbursement, the Borrower will immediately notify IFC and will repay the amount disbursed upon demand by IFC if Disbursement is made prior to the receipt of such notice.

Yours faithfully, BANCO DE GALICIA Y BUENOS AIRES S.A. By: Name: Title: [Authorized Representative]**

Copy to: Director, Department of Financial Operations, International Finance Corporation

** As named in the Borrower’s Certificate of Incumbency and Authority (see Schedule 1).

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Certification

I, Pedro A. Richards, certify that: 1) I have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2016, of Grupo Financiero Galicia S.A.; 2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4) The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, (c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and 5) The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Date: April 28, 2017

/s/ Pedro A. Richards Pedro A. Richards Chief Executive Officer Principal Executive Officer

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Certification

I, José Luis Ronsini, certify that: 1) I have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2016, of Grupo Financiero Galicia S.A.; 2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4) The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, (c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and 5) The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Date: April 28, 2017

/s/ Jose Luis Ronsini José Luis Ronsini Chief Financial Officer

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CERTIFICATION (pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 20-F for the fiscal year ended December 31, 2016, of Grupo Financiero Galicia S.A. (the “Company”) as filed with the U.S. Securities and Exchange Commission (the “Commission”) on the date hereof (the “Report”) and pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Pedro A. Richards, Chief Executive Officer of the Company, certify, that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 28, 2017

/s/ Pedro A. Richards Pedro A. Richards Chief Executive Officer Principal Executive Officer

A signed original of this written statement required by Section 906 has been provided to Grupo Financiero Galicia S.A. and will be retained by Grupo Financiero Galicia S.A. and furnished to the Commission or its staff upon request.

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CERTIFICATION (pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report on Form 20-F for the fiscal year ended December 31, 2016, of Grupo Financiero Galicia S.A. (the “Company”) as filed with the U.S. Securities and Exchange Commission (the “Commission”) on the date hereof (the “Report”) and pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, José Luis Ronsini, Chief Financial Officer of the Company, certify, that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 28, 2017

/s/ Jose Luis Ronsini José Luis Ronsini Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Grupo Financiero Galicia S.A. and will be retained by Grupo Financiero Galicia S.A. and furnished to the Commission or its staff upon request.

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