June 22, 2018 | 4:56:30
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OUR BEGINNINGS

Our legal name is Grupo Financiero Galicia S.A. We are a financial services holding company that was incorporated as a "sociedad anónima" ("a stock corporation") on September 14, 1999, under the laws of Argentina.

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

Following Grupo Financiero Galicia's formation, the holding companies that held the shares in Banco Galicia on behalf of the controlling 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.1.00. During this extraordinary shareholders' meeting, all of our existing shareholders decided to launch an exchange offer of the new shares for shares of Banco Galicia waiving 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. At the date of 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. This capital increase was carried out in connection with the restructuring of the Bank'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.1.00. The preferred shares were converted into class B shares on May 13, 2005.

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%.

During September 2013 Grupo Financiero Galicia announced being entered in a Merger Agreement to implement the incorporation by merger of Lagarcué S.A. and Theseus S.A. with Grupo Financiero being the surviving corporation of such merger. The consolidated financial statements prepared specially for this contemplated merger were as of June 30th, 2013 and the effective date for such merger has been as of September 1st, 2013.

This merger posed a further consolidation of Grupo Financiero Galicia´s ownership interest in its principal subsidiary Banco Galicia by adding 25,454,193 of Class “B” shares of Banco Galicia representing 4.5% of the total capital stock of Banco Galicia owned by Lagarcué S.A. and Theseus S.A.

Consequently, Grupo Financiero increases its capital by issuing new 58,857,580 Class "B" shares representing 4.5% of the outstanding stock of Grupo Financiero to be delivered to the shareholders of Lagarcué S.A. and Theseus S.A.

Additionally, the parties signed together with Banco Galicia and the shareholders of Lagarcué S.A. and Theseus S.A. a supplemental agreement governing operational issues that accounts for the reconciliation and reciprocal withdrawal of outstanding litigations.

At the Extraordinary Shareholders´ Meeting of Grupo Financiero Galicia held on November 21st, 2013, it was approved all the related documentation, the exchange ratio and a capital increase of $ 58,857,580 through the issuance of 58,857,580 Class B ordinary shares, with a face value of $1, one vote per share, entitled to participate in the profits of the financial year beginning on January 1st, 2013.

On December 18th, 2013, it was subscribed into a public deed, the Definitive Merger Agreement under the terms of paragraph 4th of article 83 of the Commercial Corporations Law with effect from September 1st, 2013. Therefore, 25,454,193 Class "B" of the subsidiary Banco de Galicia y Buenos Aires SA, representing 4.5 % of the share capital owned by Lagarcué S.A. and Theseus and S.A. were incorporated to Grupo Financiero Galicia. Consequently, Grupo Financiero Galicia happens to be in control of 560,199,603 shares of Banco Galicia that represent 99.6 % of the share capital and 99.6 % of the vote.

On February 25th, 2014, the Board of Directors of Grupo Financiero Galicia resolved to issue an unilateral declaration to acquire all the third parties remaining shares of Banco Galicia amounting 2,123,962 shares, to a price fixed at $ 23.22 per share. On April 24th the Board of Directors of the Comision Nacional de Valores (CNV) approved the declaration of acquisition of shares provided by Article 94 of the Law No. 26,831. Grupo Financiero Galicia S.A. proceeded to make all the publications required and deposit the total amount of the remaining shares held by third parties of Banco Galicia y Buenos Aires S.A. . On August 4, 2014, the above-mentioned statement of willingness to acquire was executed by public deed.

Moreover, on February 27th, 2014, by Resolution No. 17,300, the Board of the National Securities Commission consented to the merger of Grupo Financiero Galicia (as absorbing company) with Lagarcué S.A. Theseus and S.A and the increase in capital of Grupo Financiero Galicia, ordering its registration.

In addition, on April 15, 2014, the Board of Directors approved the purchase of 19,000 shares representing 95% of Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión’s capital stock (hereinafter “Galicia Administradora de Fondos” or “GAF”) from Banco Galicia.

On October 28, 2015, Mercado Abierto Electrónico (MAE), through Resolution "C" 4916, autorized the listing and trading of Grupo Financiero Galicia S.A.´s Class B Book-entry Ordinary Shares, with face value of Ps. 1 each, and entitled to one vote per share.

GRUPO FINANCIERO GALICIA TODAY

Nowadays, Grupo Financiero Galicia owns 100% of the outstanding shares of Banco Galicia, which is our most significant asset. Total outstanding shares of Grupo Galicia amount to 1,426.7 million shares composed of 281.2 million of Class A shares and 1,145.5 million of Class B shares. Class A shares entitle 5 votes, Class B entitle have one vote.

As a holding company we do not have operations of our own and conduct our business through our subsidiaries. By this way, Grupo Galicia participates in the banking sector through Banco Galicia, in the retail business through Tarjetas Regionales S.A., in the insurance business by its subsidiary Sudamericana Holding S.A and in the business of issuance of certificates of deposit of goods through Galicia Warrants S.A.. In addition, Grupo Financiero participates in the mutual and investment funds through Galicia Administradora de Fondos S.A.

Our principal executive offices are located at Teniente General Juan D. Perón 430, twentieth fifth Floor, (C1038AAJ), Buenos Aires, Argentina.

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.

On January 12, 2017, Grupo Financiero Galicia together with its main subsidiary, Banco Galicia, decided to accept an offer made by Mr. Julio A. Fraomeni and Galeno Capital S.A.U. to purchase the 100% of Banco Galicia’s subsidiary, Compañía Financiera Argentina S.A. On December 4, 2017, through Resolution No. 414, the Argentine Central Bank authorized the sale of Compañía Financiera Argentina S.A. During the first quarter of fiscal year 2018, payments were completed, so the Company received a total amount of Ps.31,281,034 for its 3% of participation. This amount is subject to the buyers´ agreement that have the power to object it for up to 45 consecutive days starting on January 29, 2018.

On May 16, 2017, the Board of Directors of Grupo Financiero Galicia accepted an offer to acquire 10,000 book-entry shares with a nominal value of Ps.1 per share, representing 1% of the share capital of Galicia Valores S.A. owned by Compañía Financiera Argentina S.A. for Ps.906,524.15.

During August 2017, Grupo Financiero Galicia accepted a series of irrevocable sales offer for the acquisition of a 6% of the issued and outstanding share capital of the subsidiary Tarjetas Regionales S.A. On January 5, 2018, a total price of US$49,000,000 was paid and the transaction was completed on January 8, 2018, with the transference of 22,633,260 Class A common shares, book-entry, with a par value of Ps.1 per share and 5 votes per share, and 42,033,196 Class B common shares, book-entry, with a par value of Ps.1 per share and 1 vote per share.

On October 12, 2017, the Board of Directors resolved to iniciate a process to carry out a corporate reorganization between this company and Banco Galicia, said reorganization consisted in the divestiture of Banco Galicia´s shares in Tarjetas Regionales S.A., which represented 77% of such company´s share capital, and the incorporation of said participation into the assets of Grupo Financiero Galicia, effective from January 1, 2018.

On January 19, 2018, the Argentine Central Bank, through note number 312/04/2018, informed that, having taken the needed intervention, there were no considerations or objections to be formulated regarding the corporate reorganization involving Banco Galicia and Grupo Financiero Galicia. Consecuently, Grupo Financiero Galicia reached an 83% stake in the capital of Tarjetas Regionales S.A.

On October 23, 2017, Grupo Financiero Galicia settled at its due date its Class VI Series II Negotiable Obligations for Ps.116.8 million, thus having no outstanding debt within the negotiable obligations program that was initiated during fiscal year 2009.

The Ordinary and Extraordinary General Shareholders' Meeting held on August 15, 2017, approved an increase of Grupo Financiero Galicia capital by issuing up to a maximum of 150,000,000 of new Class B shares, book-entry, with a right to one (1) vote and a face value of Ps.1 (one peso) per share.

On September 26, 2017, the global primary follow-on offering period ended and 109,999,996 Class B shares were subscribed for a price of US$ 5 per share. On September 29, 2017, the aforementioned shares were issued and integrated. The Company granted the international underwriters the option to purchase additional Class B ordinary shares from Grupo Financiero Galicia at the offering price per share, and on October 2, 2017, they were awarded a total of 16,500,004 additional Class B shares at US $ 5 per share, whose issuance and integration was completed on October 4, 2017.

Therefore, 126,500,000 ordinary Class B shares, book-entry, with a right to one (1) vote and a face value of Ps.1 (one peso) per share were issued, leaving the subscribed capital of the company at Ps.1,426,764,597, represented by 281,221,650 ordinary Class A shares, book-entry, entitled to five (5) votes per share and a face value of Ps.1 (one peso) per share and 1,145,542,947 ordinary Class B shares, book-entry, entitled to one (1) vote and a face value of Ps.1 (one peso) per share.

On December 27, 2017, Grupo Financiero Galicia, within the process of the corporate reorganization, as previously resolved by the Board of Directors and the Extraordinary Shareholders´ Meeting held on December 14, 2017, made effective a capital contribution equivalent to the amount of Ps.10,000,000,000 to its main subsidiary Banco Galicia.

The following is a description of the subsidiary companies´ operations during the fiscal year.