Grupo Financiero Galicia: Still Mispriced For The Next Credit Upswing (Rating Upgrade)

Banco Galicia is moving through a risk‑normalization phase, with NPLs that spiked after the 2025 shock but are now showing early signs of stabilization. A credit storm hit in 2025 and early 2026, driven by positive real rates and electoral noise, raised consolidated NPL to 9.6% in 1Q26. Even with elevated NPLs, the bank is already cutting provisions, supported by early improvement in delinquency trends for individuals. Management argues that the cost of risk peaked in 4Q25 and expects sequential declines through 2026, paving the way for a gradual recovery in profitability. If disinflation continues, sovereign risk improves, and politics do not derail the economic program, GGAL offers an attractive opportunity to a renwed credit expansion in Argentina at current valuations.

In my last article on Grupo Financiero Galicia (GGAL), I anticipated a year-end marked by high volatility in the shares of Argentina’s largest private bank, amid the election cycle that took place between September and October.