6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

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

Securities Exchange Act of 1934

For the month of July, 2018

Commission File Number: 0-30852

GRUPO FINANCIERO GALICIA S.A.

(the “Registrant”)

Galicia Financial Group S.A.

(translation of Registrant’s name into English)

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

(CP1038AAJ) Buenos Aires, Argentina

(address of principal executive offices)

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

Form 40-F.

Form 20-F   X       Form 40-F         

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

Yes            No   X

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

FORM 6-K

Commission File No. 0-30852

Month Filed	Event and Summary	Exhibit No.
July, 2018	Condensed Interim Financial Statements of the Registrant for the period that commenced on January 1, 2018 and ended on March 31, 2018, presented in comparative format.	99.1

SIGNATURES

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

	GRUPO FINANCIERO GALICIA S.A.
	(Registrant)
Date: July 25, 2018	By:	/s/ Pedro Alberto Richards
		Name:  Pedro Alberto Richards
		Title:    Chief Executive Officer

EX-99.1

Exhibit 99.1

GRUPO FINANCIERO GALICIA S.A.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

GRUPO FINANCIERO GALICIA S.A.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

TABLE OF CONTENTS

CONSOLIDATED CONDENSED INTERIM BALANCE SHEET	2
CONSOLIDATED CONDENSED INTERIM INCOME STATEMENT	4
CONSOLIDATED CONDENSED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME	5
CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY	6
CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS	7
NOTE 1. ACCOUNTING STANDARDS AND BASIS FOR PREPARATION	9
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES	23
NOTE 3. TRANSITION TO IFRS	25
NOTE 4. FAIR VALUES	38
NOTE 5. EQUITY INVESTMENTS AND RELATED PARTIES	41
NOTE 6. INFORMATION ABOUT THE SHAREHOLDERS’ EQUITY AND THE STATEMENT OF CASH FLOWS	44
NOTE 7. NON-FINANCIAL ASSETS	45
NOTE 8. OTHER DISCLOSURES REQUIRED BY IFRS	46
NOTE 9. INCOME STATEMENT BREAKDOWN	51
NOTE 10. ADDITIONAL INFORMATION REQUIRED BY THE ARGENTINE CENTRAL BANK	53
SCHEDULE A – BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES	68
SCHEDULE B – CLASSIFICATION OF LOANS AND OTHER FINANCING ACTIVITIES BY STATUS AND GUARANTEES RECEIVED	70
SCHEDULE D – BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING ACTIVITIES	72
SCHEDULE H – CONCENTRATION OF DEPOSITS	75
SCHEDULE I – BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERM	76
SCHEDULE J – CHANGES IN PROVISIONS	77
SCHEDULE L – FOREIGN CURRENCY BALANCES	78
SCHEDULE L – FOREIGN CURRENCY BALANCES (Continued)	79
SCHEDULE O – DERIVATIVE INSTRUMENTS	80
SCHEDULE R – VALUE ADJUSTMENT BY LOSSES – ALLOWANCE FOR LOAN LOSSES	81
ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017	82
SUPPLEMENTARY AND EXPLANATORY STATEMENT BY THE BOARD OF DIRECTORS	100
SEPARATE CONDENSED INTERIM BALANCE SHEET	108
SEPARATE CONDENSED INTERIM INCOME STATEMENT	110
SEPARATE CONDENSED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME	111
SEPARATE CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY	112
SEPARATE CONDENSED INTERIM STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS	113
NOTE 1. ACCOUNTING STANDARDS AND BASIS FOR PREPARATION	114
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES	122

GRUPO FINANCIERO GALICIA S.A.

NOTE 3. TRANSITION TO IFRS	123
NOTE 4. FAIR VALUES	126
NOTE 5. EQUITY INVESTMENTS AND RELATED PARTIES	128
NOTE 6. INFORMATION ABOUT THE SHAREHOLDERS’ EQUITY AND THE STATEMENT OF CASH FLOWS	129
NOTE 7. NON-FINANCIAL ASSETS	130
NOTE 8. OTHER DISCLOSURES REQUIRED BY IFRS	131
NOTE 9. INCOME STATEMENT BREAKDOWN	132
NOTE 10. ADDITIONAL INFORMATION REQUIRED BY THE ARGENTINE CENTRAL BANK	133
SCHEDULE A – BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES	137
SCHEDULE F – CHANGES IN PROPERTY, PLANT AND EQUIPMENT	138
SCHEDULE L – FOREIGN CURRENCY BALANCES	139
ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017	140
ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS	146
INDEPENDENT AUDITOR’S REVIEW REPORT	148
INDEPENDENT AUDITOR’S REVIEW REPORT	151
REPORT OF THE SUPERVISORY SYNDICS’ COMMITTEE	154

GRUPO FINANCIERO GALICIA S.A.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Fiscal Year No. 20, commenced January 1, 2018

Legal Domicile: Tte. Gral. Juan D. Perón No. 430 – 25th floor, Buenos Aires – Argentina -

Principal Line of Business: Financial and Investment Activities

Registration No. with the Corporation Control Authority (I.G.J.): 12,749

Sequential Number – Corporation Control Authority (I.G.J.): 1,671,058

Date of Registration with the Corporation Control Authority (I.G.J.):

Of Bylaws: September 30, 1999

Date of Latest Amendment to Bylaws: July 16, 2010

Date of Expiration of the Company’s Bylaws: June 30, 2100

Information on the Controlling Company:

Company’s Name: EBA HOLDING S.A.

Principal Line of Business: Financial and Investment Activities

Interest Held by the Controlling Company in Shareholders’ Equity as of 03.31.18: 19.71%

Interest Held by the Controlling Company in Votes as of 03.31.18: 55.11%

Capital Status as of 03.31.18 (Note 6):

Figures Stated in Thousands of Pesos, except for “Amount” and “Voting Rights per Share”

Shares
Amount	Type	Voting Rights per Share	Subscribed	Paid-in	Registered
281,221,650	Ordinary Class “A”, Face Value of 1	5	281,222	281,222	281,222
1,145,542,947	Ordinary Class “B”, Face Value of 1	1	1,145,543	1,145,543	1,145,543
1,426,764,597			1,426,765	1,426,765	1,426,765

1

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM BALANCE SHEET

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Notes		03.31.18		12.31.17		01.01.17
Assets
Cash and Bank Deposits		6		46,441,210		58,945,315		65,767,565
Cash				10,346,929		8,783,324		7,335,069
Financial Institutions and Correspondents				36,094,281		47,556,791		53,446,453
Argentine Central Bank (B.C.R.A.)				35,565,996		46,832,439		51,124,620
Other Local and Foreign Financial Institutions				528,285		724,352		2,321,833
Others				-		2,605,200		4,986,043
Fair value debt securities with changes to income		4		31,372,512		28,978,240		16,346,812
Derivative Instruments		4		137,474		525,362		124,521
Repo Transactions				4,505,248		9,676,101		-
Other Financial Assets				6,664,485		6,918,422		3,500,400
Loans and Other Financing Activities (Schedules B, C, D, R)				210,427,233		194,538,223		135,614,976
Non-financial Public Sector				6,365		5,795		14,359
Argentine Central Bank				5,484		2,441		2,886
Other Financial Institutions				4,555,932		4,661,902		2,752,464
To the Non-financial Private Sector and Residents Abroad				205,859,452		189,868,085		132,845,267
Other Debt Securities (Schedules B, C y D)				3,582,367		2,708,652		908,464
Financial Assets Pledged as Collateral		4		8,856,242		6,330,557		5,478,853
Current Income Tax Assets		8		343,875		236,982		255,771
Investments in Equity Instruments				12,709		-		33,200
Investments in Subsidiaries, Associates and Joint Ventures		5		21,573		20,867		183,916
Property, Plant and Equipment (Schedule F)		7		9,901,131		9,816,820		8,694,729
Intangible Assets (Schedule G)		7		1,076,852		888,881		831,143
Deferred Income Tax Assets		8		603,650		559,807		563,890
Other Non-financial Assets				3,446,385		2,966,265		2,097,867
Non-current Assets Held for Sale		7		228,365		1,183,802		1,224,843
Total Assets				327,621,311		324,294,296		241,626,950

The accompanying Notes and Schedules are an integral part of these consolidated condensed interim financial statements.

2

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM BALANCE SHEET (Continued)

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Notes		03.31.18		12.31.17		01.01.17
Liabilities
Deposits (Schedules H and I)				198,364,119		200,722,787		150,377,066
Non-financial Public Sector				2,492,751		1,164,127		1,294,439
Financial Sector				165,415		115,152		62,957
Non-financial Private Sector and Residents Abroad				195,705,953		199,443,508		149,019,670
Fair Value liabilities with changes to income		4		1,796,550		-		-
Derivative Instruments				180,989		573,218		152,553
Repo Transactions (Schedule I)				2,014,918		1,131,127		1,644,714
Other Financial Liabilities (Schedule I)				34,969,838		39,281,886		33,040,927
Loans from the Argentine Central Bank and Other Financial Institutions (Schedule I)				11,292,008		7,869,048		6,896,318
Notes Issued (Schedule I)		8		14,372,971		13,739,066		11,857,719
Current Income Tax Liabilities		8		4,078,536		3,074,155		1,822,540
Subordinated Notes (Schedule I)		8		5,079,134		4,828,018		4,065,255
Provisions		8		788,082		557,455		334,876
Deferred Income Tax Liabilities		8		319,116		708,104		956,012
Other Non-financial Liabilities				8,113,618		8,686,242		5,871,474
Total Liabilities				281,369,879		281,171,106		217,019,454
Shareholders’ Equity
Capital Stock		6		1,426,765		1,426,765		1,300,265
Non-capitalized Contributions				10,951,132		10,951,132		219,596
Capital Adjustment				278,131		278,131		278,131
Profit Reserves				17,895,401		17,390,568		12,536,829
Retained Income				11,124,122		2,518,733		-
Other Accumulated Comprehensive Income				2,854		17,279		284,182
Net Income for the Period/Year				2,999,488		8,605,389		8,536,610
Shareholders’ Equity Attributable to the Controlling Company’s Shareholders				44,677,893		41,187,997		23,155,613
Shareholders’ Equity Attributable to Non-controlling Interests				1,573,539		1,935,193		1,451,883
Total Shareholders’ Equity				46,251,432		43,123,190		24,607,496

The accompanying Notes and Schedules are an integral part of these consolidated condensed interim financial statements.

3

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM INCOME STATEMENT

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Notes	03.31.18		03.31.17
Interest Income	9		11,066,878		7,970,394
Interest Expense	9		(4,888,824)		(3,706,628)
Net Interest from Income			6,178,054		4,263,766
Commission Income	9		2,073,540		1,697,134
Commission Expense	9		(560,739)		(549,372)
Net Fee and Commission Income			1,512,801		1,147,762
Net Income from Measurement of Fair Value Financial Instruments with changes to income	9		1,833,713		677,775
Income from Derecognition of Assets Measured at Amortized Cost			15,777		-
Exchange Rate Differences on Gold and Foreign Currency			773,919		459,506
Other Operating Income	9		4,115,005		3,244,896
Underwriting Income	9		642,009		524,335
Loan loss provisions			(1,621,868)		(1,041,373)
Net Operating Income			13,449,410		9,276,667
Employee Benefits	9		(3,095,064)		(2,472,329)
Administrative Expenses	9		(2,924,700)		(2,095,015)
Depreciation and Impairment of Assets	9		(257,481)		(234,037)
Other Operating Expenses	9		(2,702,453)		(1,742,979)
Operating Income			4,469,712		2,732,307
Income (Loss) for Associates and Joint Ventures			579		24,182
Income before Tax from Continuing Activities			4,470,291		2,756,489
Income Tax from Continuing Activities			(1,379,516)		(983,939)
Net Income from Continuing Activities			3,090,775		1,772,550
Income (Loss) from Discontinued Operations	7		74,774		-
Income Tax from Discontinued Activities	7		(22,882)		(185,362)
Net Income for the Period			3,142,667		1,587,188
Net Income for the Period Attributable to the Controlling Company’s Shareholders			2,999,488		1,427,808
Net Income for the Period Attributable to Non-controlling Interests			143,179		159,380
	Notes	03.31.18		03.31.17
Earnings per Share
Net Earnings Attributable to the Controlling Company’s Shareholders			2,999,488		1,427,808
Plus: Dilutive Effects of Potential Ordinary Shares			-		-
Net Earnings Attributable to the Controlling Company’s Shareholders Adjusted for Dilution			2,999,488		1,427,808
Weighted-Average of Ordinary Shares Outstanding for the Period
Plus: Weighted-Average of Dilutive Additional Ordinary Shares			-		-
Weighted-Average of Ordinary Shares Outstanding for the Period Adjusted for Dilution			1,426,765		1,300,265
Basic Earnings per Share			2.10		1.10
Diluted Earnings per Share			2.10		1.10

The accompanying Notes and Schedules are an integral part of these consolidated condensed interim financial statements.

4

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Notes	03.31.18		03.31.17
Net Income for the Period			3,142,667		1,587,188
Items of Other Comprehensive Income that will be Reclassified to Profit or Loss for the Period
Income or Loss from Financial Instruments at Fair Value with changes in OCI (Other Comprehensive Income) (item 4.1.2a of IFRS 9)
Net Income (Loss) for the Period from Financial Instruments at Fair Value with changes in OCI (*)			(14,425)		3,527
Total Other Comprehensive Income that will be Reclassified to Profit or Loss for the Period			(14,425)		3,527
Total Other Comprehensive Income (Loss)			(14,425)		3,527
Total Comprehensive Income			3,128,242		1,590,715
Total Comprehensive Income (Loss) Attributable to the Controlling Company’s Shareholders			2,985,063		1,431,335
Total Comprehensive Income (Loss) Attributable to Non-controlling Interests			143,179		159,380

(*) Net of Income Tax.

The accompanying Notes and Schedules are an integral part of these consolidated condensed interim financial statements.

5

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Movements	Note	Capital Stock		Non- capitalized Contributions		Adjustments to Shareholders’ Equity		Other Comprehensive Income				Profit Reserves				Retained Income		Total Shareholders’ Equity Attributable to Controlling Interests		Total Shareholders’ Equity Attributable to Non- controlling Interests		Total Shareholders’ Equity
		Outstanding		Additional Paid-in Capital				Accumulated Income (Loss) from Financial Instruments at Fair Value with changes in OCI		Others		Legal Reserve		Others
Balances as of 12.31.17			1,426,765		10,951,132		278,131		-		-		315,679		17,999,029		8,329,468		39,300,204		-		39,300,204
Adjustments to IFRS-based Accounting Framework	3		-		-		-		17,279		-		-		(924,140)		2,794,654		1,887,793		1,935,193		3,822,986
Balances as of 12.31.17			1,426,765		10,951,132		278,131		17,279		-		315,679		17,074,889		11,124,122		41,187,997		1,935,193		43,123,190
Acquisition of Interests from Minority Shareholders	3		-		-		-		-		-		-		504,833		-		504,833		(504,833)		-
Total Comprehensive Income for the Period			-		-		-		(14,425)		-		-		-		2,999,488		2,985,063		143,179		3,128,242
Net Income for the Period			-		-		-		-		-		-		-		2,999,488		2,999,488		143,179		3,142,667
Other Comprehensive Income (Loss) for the Period			-		-		-		(14,425)		-		-		-		-		(14,425)		-		(14,425)
Balances as of 03.31.18			1,426,765		10,951,132		278,131		2,854		-		315,679		17,579,722		14,123,610		44,677,893		1,573,539		46,251,432
Balances as of 01.01.17			1,300,265		219,596		278,131		-		-		315,679		12,221,150		6,017,877		20,352,698		-		20,352,698
Adjustments to IFRS-based Accounting Framework	3		-		-		-		284,182		-		-		-		2,518,733		2,802,915		1,451,883		4,254,798
Adjusted Balances as of 01.01.17			1,300,265		219,596		278,131		284,182		-		315,679		12,221,150		8,536,610		23,155,613		1,451,883		24,607,496
Disposal of Equity Interest in Tarjeta del Mar S.A.			-		-		-		-		-		-		-		-		-		(49,861)		(49,861)
Total Comprehensive Income for the Period			-		-		-		3,527		-		-		-		1,427,808		1,431,335		159,380		1,590,715
Net Income for the Period			-		-		-		-		-		-		-		1,427,808		1,427,808		159,380		1,587,188
Other Comprehensive Income for the Period			-		-		-		3,527		-		-		-		-		3,527		-		3,527
Balances as of 03.31.17			1,300,265		219,596		278,131		287,709		-		315,679		12,221,150		9,964,418		24,586,948		1,561,402		26,148,350

6

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Notes	03.31.18		03.31.17
OPERATING ACTIVITIES CASH FLOW
Net Income for the Period before Income Tax			4,470,291		2,756,489
Adjustment to obtain the operating activities flows:
Net Income from Interest			(6,178,054)		(4,263,766)
Net Income from Measurement of Fair Value Financial Instruments with changes to income			(1,833,713)		(677,775)
Loan loss provisions			1,621,868		1,041,373
Depreciation and Impairment of assets			257,481		234,037
Other Allowances			213,308		40,792
Exchange Rate Differences			(601,675)		393,345
Income (Loss) for Associates and Joint Ventures			(579)		(24,182)
Loss from Derecognition of Assets Measured at Amortized Cost			(15,777)		-
Other Operations			982,998		(1,105)
Net Increases/(Decreases) from Operating Assets:
Fair value debt securities with changes to income			(1,368,185)		133,561
Derivative Instruments			387,888		11,277
Repo Transactions			9,152		(9,516)
Other Financial Assets			90,015		(1,894,076)
Loans and other financing activities
- Non-financial Public Sector			(81)		(138)
- Other Financial Institutions			402,748		(394,141)
- Non-financial Private Sector and Residents Abroad			(2,623,322)		(1,164,015)
Other Debt Securities			(854,184)		(605,613)
Financial Assets Pledged as Collateral			(2,525,522)		1,684,942
Investments in Equity Instruments			(12,709)		-
Other Non-financial Assets			(238,802)		(1,176,343)
Net Increases/(Decreases) from Operating Liabilities:
Deposits
- Non-financial Public Sector			1,328,624		157,809
- Financial Sector			50,263		(35,796)
- Non-financial Private Sector and Residents Abroad			(12,676,920)		4,676,887
Fair Value liabilities with changes to income			1,796,550		-
Derivative Instruments			(403,867)		(104,608)
Repo Transactions			883,791		(1,644,714)
Other Financial Liabilities			(4,657,433)		(2,913,658)
Provisions			(2,284)		12,244
Other Non-financial Liabilities			1,073,851		104,417
Income Tax Collections/Payments			(845,059)		(644,926)
TOTAL OPERATING ACTIVITIES (A)			(21,269,338)		(4,307,199)
INVESTMENTS ACTIVITIES CASH FLOW
Payments:
Purchase of PP&E, Intangible Assets and Other Assets			(524,348)		(635,911)
Purchase of Unconsolidated Interests			(924,140)		-
Other Payments Related to Investing Activities			31,552		-
Collections:
Sale of PP&E, Intangible Assets and Other Assets			6,224		4,756
Winding-up of Subsidiaries and Joint Ventures			248		-
Discontinued Operations in Associates and Joint Ventures			909,921		60,622
TOTAL INVESTMENT ACTIVITIES (B)			(500,543)		(570,533)

7

GRUPO FINANCIERO GALICIA S.A.

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS (Continued)

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Notes	03.31.18		03.31.17
FINANCING ACTIVITIES CASH FLOW	6
Payments:
Unsubordinated Notes			(946,410)		(2,061,907)
Argentine Central Bank			(3,760)		(2,390)
Subordinated Notes			(195,560)		(163,522)
Loans from Local Financial Institutions			(80,121)		(168,378)
Banks and International Entities			-		(74,717)
Other Payments Related to Financing Activities			(18,421)		(2,569)
Collections:
Unsubordinated Notes			754,539		2,853,647
Argentine Central Bank			365		122
Loans from Local Financial Institutions			282,950		910,053
Banks and International Entities			1,461,304		117,258
Other Collections Related to Financing Activities			120,152		11,981
TOTAL FINANCING ACTIVITIES (C)			1,375,038		1,419,578
EFFECT OF CHANGES IN EXCHANGE RATE (D)			2,740,094		(1,063,781)
CASH AND CASH EQUIVALENTS NET REDUCTIONS (A+B+C+D)			(17,654,749)		(4,521,935)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	6		89,367,283		77,950,926
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	6		71,712,534		73,428,991

8

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

NOTE 1. ACCOUNTING STANDARDS AND BASIS FOR PREPARATION

Grupo Financiero Galicia S.A. (the “Company”, and collectively with its subsidiaries, the “Group”) was constituted on September 14, 1999, as a financial service holding company organized under the laws of Argentina. The Company’s main asset is its interest in Banco de Galicia y Buenos Aires S.A. (the “Bank”). Banco de Galicia y Buenos Aires S.A. is a private-sector bank that offers a full spectrum of financial services both to individual and corporate customers. In addition, the Company has a controlling interest in Tarjetas Regionales S.A., which maintains investments related to the issuance of credit cards and supplementary services; Sudamericana Holding S.A., a company engaged in the insurance business; Galicia Administradora de Fondos S.A., a mutual fund manager, and Galicia Warrants S.A., a company engaged in the issuance of warrants.

These consolidated condensed interim financial statements were approved and authorized for publication through Minutes of Board of Directors’ Meeting No. 566 dated May 24, 2018.

1.1        ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

In the light of the fact that the Group is subject to the Periodical Reporting Requirements contained in the provisions of Article 2 – Section I – Chapter I of Title IV of the Argentine National Securities Commission (“C.N.V.”) regulations, the Group is required to present its consolidated financial statements in accordance with the valuation and disclosure criteria set forth by the Argentine Central Bank. Pursuant to the foregoing sentence, we hereby report that:

- the Company’s corporate purpose is exclusively related to financial and investment activities;

- the equity investment in the Bank and Tarjetas Regionales S.A., the latter being subject to the consolidated supervision requirements prescribed by the Argentine Central Bank (Communiqué “A” 2989, as supplemented), accounts for 93.20% of the Company’s assets and constitutes the Company’s main asset;

- 88.47% of the Company’s income is derived from its share of profit (loss) in the entities referred to in the preceding paragraph; and

- the Company has a 100% equity interest in the Bank and an 83% equity interest in Tarjetas Regionales S.A., thus having control over both entities.

The Argentine Central Bank, through Communiqué “A” 5541, as amended, set forth a convergence plan towards the International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), which was addressed to entities under the Argentine Central Bank’s supervision, effective for the fiscal year that commenced January 1, 2018, except for item 5.5 (Impairment) of IFRS 9 “Financial Instruments”, which has been temporarily waived until January 1, 2020, at which time entities will be required to apply the provisions on Impairment of Financial Assets.

Entities are also required to prepare their opening financial statements since January 1, 2017, which will serve as comparative basis to the financial statements commencing on January 1, 2018, under these standards with the interim financial statements as of March 31, 2018 being the first interim financial statements being prepared under these standards.

The Group’s consolidated condensed interim financial statements for the three-month period then ended have been prepared in accordance with IAS 34 “Interim Financial Reporting” and IFRS 1 “First-time Adoption of International Financial Reporting Standards.” The consolidated condensed interim financial statements have been prepared in accordance with the criteria the Group expects to adopt in preparing its annual consolidated financial statements as of December 31, 2018.

Comparative figures and figures as of the transition date (January 1, 2017) have been modified to reflect the adjustments to the aforementioned accounting framework.

Note 3 presents a reconciliation of the figures disclosed in the balance sheet, statement of comprehensive income, statement of other comprehensive income and statement of cash flows and cash equivalents comprising the consolidated condensed interim financial statements issued under the previous accounting framework to the figures disclosed in these consolidated condensed interim financial statements according to the IFRS-based accounting framework.

9

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

These consolidated condensed interim financial statements should be read together with the Group’s annual financial statements as of December 31, 2017 prepared in accordance with the accounting framework described above. Furthermore, the Note entitled “Additional Information as of December 31, 2017 for the Consolidated Condensed Interim Financial Statements” included in these consolidated condensed interim financial statements contains certain information under the IFRS-based accounting framework which is required to understand these consolidated condensed interim financial statements.

It has been concluded that these consolidated condensed interim financial statements fairly present the Group’s financial position, financial performance and cash flows.

1.2        BASIS FOR PREPARATION

These consolidated condensed interim financial statements have been prepared in accordance with the accounting framework set forth by the Argentine Central Bank, as described in Note 1.1.

In preparing these consolidated condensed interim financial statements, the Group is required to make estimates and assessments to determine the reported amounts of assets and liabilities, and contingent assets and liabilities disclosed as of the date of these consolidated condensed interim financial statements, as well as the reported amounts of income and expenses.

The areas involving a higher degree of judgment or complexity or the areas in which the assumptions and estimates are material for these consolidated condensed interim financial statements are described in Note 2.

(a)        Going Concern

As of the date of these consolidated condensed interim financial statements, there are no uncertainties as to developments or circumstances that may call into question the likelihood that the Group will continue operating normally as a going concern.

(b)        Measurement Unit

The Group’s consolidated condensed interim financial statements reflect the effects of the changes in the purchasing power of currency until February 28, 2003, the date on which the adjustment for inflation was discontinued, as required by Decree No. 664/03 of the Argentine 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 C.N.V. Resolution M.D. No. 41/03 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires (C.P.C.E.C.A.B.A), which ultimately resulted in the discontinuation of the recognition of the changes in the purchasing power of currency effective October 1, 2003.

IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be stated in terms of the current measurement unit as of the reporting period-end, and sets out the factors that should be considered to conclude that a hyperinflationary economy actually exists.

In recent years, certain macroeconomic variables affecting the Group’s business, such as labor costs and prices for supplies, have experienced considerably substantial changes year over year. Even though the controlling agencies have not issued a decision in this regard, at period-end, the conditions for the application of the adjustment for inflation would not be met. However, when reading and analyzing these financial statements, consideration should be given to the existence of fluctuations in significant economic variables, which took place during the past fiscal years.

(c)        Changes in Accounting Criteria/New Accounting Standards

As provided for in the Argentine Central Bank’s Organic Charter and the Financial Institutions Law, as new IFRS are approved or amended, or as the IFRS currently in force are repealed, and once these changes are adopted by way of Adoption Circulars handed down by the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.), the Argentine Central Bank will decide whether to approve such changes for financial institutions. In general terms, the early adoption of any given IFRS will not be admitted, unless specifically admitted at the time of adoption.

10

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Below is a summary of the new standards, changes and interpretations which have been published but have not yet come into force for fiscal year commencing on January 1, 2018, and which have not been adopted earlier.

IFRS 16 “Leases”: In January 2016, the IASB issued IFRS 16 “Leases” which sets out a new accounting model for leases. Under IFRS 16, a contract is or contains a lease if the contract confers the lessee a right to control the use of an identified asset for a period of time, for consideration. IFRS 16 requires that the lessee recognize the liability arising from the lease reflecting the lease’s future payments and a right of use of the assets for substantially all leases, other than certain short-term leases and leases of low-value assets. Lessor accounting is maintained as provided for in IAS 17. However, the new accounting model for lessee is expected to have an impact on negotiations between lessors and lessees. Entities are required to apply IFRS 16 for fiscal years commencing on or after January 1, 2019. The Group is assessing the impact the adoption of such standard will have on its financial statements.

IFRS 17 “Insurance Contracts”: On May 18, 2017, the IASB issued IFRS 17 “Insurance Contracts”, establishing a comprehensive accounting framework based on measurement and disclosure principles for insurance contracts. The new standard supersedes IFRS 4 “Insurance Contracts”, and requires that insurance contracts be measured using current fulfillment cash flows and that revenues be recognized as the insurance service is delivered during the term of the coverage. Entities are required to apply IFRS 17 for fiscal years commencing on or after November 1, 2021. The Group is assessing the potential impact this standard will have on its financial statements.

IFRIC 23 “Uncertainty over Income Tax Treatment”: This interpretation clarifies how the recognition and measurement requirements of IAS 12 “Income Tax” should be applied when there is uncertainty over the income tax treatment. IFRIC 23 was published in June 2017 and entities will be required to apply it for fiscal years commencing on or after January 1, 2019.

To date, there are no other IFRS or IFRIC interpretations which have not yet come into force and which are expected to have a material impact on the Group.

1.3        CONSOLIDATION

A subsidiary is an entity, including structured entities, over which the Group has control because (i) it has the power to direct the investee’s relevant activities substantially affecting its returns, (ii) it has exposure to, or rights in, variable returns by reason of its involvement with the investee, and (iii) it has the ability to use its power over the investee to affect the amount of the investor’s returns. The existence and effect of substantive rights, including potential voting rights, is taken into account when assessing whether the Group has influence on another entity. In order for a right to be substantive, it must be exercisable by its holder when decisions about the direction of the entity’s relevant activities need to be made. The Group may have control over an entity, even if it is entitled to less than a majority of voting rights.

In addition, other investors’ protective rights, such as those related to substantive changes to the investee’s activities or only applicable under exceptional circumstances, do not prevent the Group from having power over an investee. Subsidiaries are consolidated as of the date control is transferred to the Group, and are removed from consolidation as of the date on which control ceases.

The following table shows the subsidiaries consolidated into the Group’s consolidated condensed interim financial statements, at their different levels:

11

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Company	Country		Local and	Closing Date		Percentage Interest (%)
						03.31.18				12.31.17				01.01.17
			Functional Currency			Direct		Direct and Indirect		Direct		Direct and Indirect		Direct		Direct and Indirect
Banco de Galicia y Buenos Aires S.A.		Argentina	ARP		03.31.18		100.0		100.0		100.0		100.0		100.0		100.0
Cobranzas Regionales S.A.		Argentina	ARP		03.31.18		-		83.0		-		77.0		-		77.0
Galicia Administradora de Fondos S.A.		Argentina	ARP		03.31.18		95.0		100.0		95.0		100.0		95.0		100.0
Galicia Broker Asesores de Seguros S.A.		Argentina	ARP		03.31.18		-		99.9		-		99.9		-		99.9
Galicia Retiro Compañía de Seguros S.A.		Argentina	ARP		03.31.18		-		99.9		-		99.9		-		99.9
Galicia Seguros S.A.		Argentina	ARP		03.31.18		-		99.9		-		99.9		-		99.9
Galicia Valores S.A.		Argentina	ARP		03.31.18		1.0		100.0		1.0		100.0		-		100.0
Galicia Warrants S.A.		Argentina	ARP		03.31.18		87.5		100.0		87.5		100.0		87.5		100.0
Financial Trust Galtrust I		Argentina	ARP		03.31.18		-		-		-		100.0		-		100.0
Financial Trust Saturno Créditos		Argentina	ARP		03.31.18		-		100.0		-		100.0		-		100.0
Net Investment S.A. (in Liquidation)(*)		Argentina	ARP		03.31.18		-		-		87.5		100.0		87.5		100.0
Ondara S.A. (former Procesadora Regional S.A.)		Argentina	ARP		03.31.18		-		83.9		-		78.2		-		78.2
Sudamericana Holding S.A.		Argentina	ARP		03.31.18		87.5		100.0		87.5		100.0		87.5		100.0
Tarjeta Naranja S.A.		Argentina	ARP		03.31.18		83.0		83.0		-		77.0		-		77.0
Tarjetas del Mar S.A.		Argentina	ARP		03.31.18		-		-		-		-		-		60.0
Tarjetas Regionales S.A.		Argentina	ARP		03.31.18		83.0		83.0		-		77.0		-		77.0

(*) The financial distribution was paid out on January 9, 2018.

As result of the application of IFRS 10 “Consolidation,” the Group has started to recognize Financial Trusts Saturno Créditos and Financial Trust Galtrust I in its consolidated financial statements, and has ceased to recognize Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as these two companies have been classified as held for sale.

For purposes of the consolidation, the Group relied on Banco de Galicia y Buenos Aires S.A.’s and Tarjetas Regionales S.A.’s financial statements for the three-month period ended March 31, 2018, which reflect the same period of time as the Group’s financial statements. The financial statements of the other subsidiaries have been adjusted in order for them to reflect similar criteria as those applied by the Group in preparing its consolidated condensed interim financial statements.

Accounts receivable and payable and gains (losses) from inter-company transactions were eliminated from the consolidated condensed interim financial statements.

A non-controlling interest is a subsidiary’s share of net income (loss) and shareholders’ equity attributable to interests which are not owned by the Company, either directly or indirectly. Non-controlling interests are disclosed as a separate item of the Group’s shareholders’ equity.

According to the provisions set forth in IFRS 3 “Business Combinations,” the acquisition of subsidiaries is accounted for by applying the acquisition method. The identifiable assets and liabilities acquired and the contingent liabilities assumed in a business combination are measured at fair value on the acquisition date.

Goodwill is measured as the difference between the net resulting amount, as of the acquisition date, of the identifiable assets acquired, the liabilities assumed, the value of the consideration transferred, the amount of the non-controlling interest in the investee and the fair value of an interest in the investee before the acquisition date.

The consideration transferred in a business combination is measured at the fair value of the assets transferred by the acquirer, the liabilities owing by such acquirer to the investee’s former owners, and the equity instruments issued by the acquirer. Transaction costs are recognized as expenses in the periods in which costs were incurred and services were received, other than transaction costs incurred in issuing equity instruments, which are deducted from equity, and the transaction costs incurred in issuing debt instruments, which are deducted from their carrying amount.

1.4        TRANSACTIONS WITH THE NON-CONTROLLING INTEREST

The Group considers transactions with the non-controlling interest as if they were transactions with the Group’s shareholders. When acquiring a non-controlling interest, the difference between the price paid and the respective interest in the carrying amount of the subsidiary’s net assets acquired is recognized in shareholders’ equity. The gains and losses on the disposal of equity interests are also recognized in shareholders’ equity, to the extent control is maintained.

12

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

1.5        ASSOCIATES

Associates are entities over which the Group has significant influence (either directly or indirectly), but not control, usually associated to a 20%-50% interest in voting rights. Investments in associates are accounted for using the equity method and are initially recognized at cost. The carrying amount of associates includes the goodwill identified in the acquisition, net of accumulated impairment losses, if any. Dividends received from associates reduce the carrying amount of the investment in associates. Other changes subsequent to the acquisition in the Group’s interest in an associate’s net assets are recognized as follows: (i) the Group’s interest in the profits or losses of the associates is accounted for in the income statement under Income (Loss) for Associates and Joint Ventures, and (ii) the Group’s interest in other comprehensive income is recognized in the statement of other comprehensive income and is disclosed separately. However, when the Group’s share of losses of an associate is equal to or higher than its interest in such associate, the Group ceases to recognize its share of additional losses, unless it has incurred liabilities or has made payments on behalf of the associate.

Unrealized gains in transactions between the Group and its associates are eliminated on a proportional basis to the Group’s interest in the associates; unrealized losses are also eliminated, unless the transaction evidences that the transferred asset has been impaired.

1.6        SEGMENT REPORTING

An operating segment is a component of an entity (a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), (b) whose operating results are reviewed regularly to make decisions about resources to be allocated to the segment and assess its performance and (c) for which confidential financial information is available.

Operating segments are reported consistently with the internal reports submitted to the Board of Directors, which is responsible for making the Group’s strategic decisions, allocating resources and assessing the performance of the operating segments.

1.7        FOREIGN CURRENCY TRANSLATION

(a)        Functional Currency and Reporting Currency

The figures disclosed in the consolidated condensed interim financial statements for each of the Group’s entities are stated in their functional currency, that is, the currency of the main economic environment in which they operate. These consolidated condensed interim financial statements are stated in Argentine Pesos, which is the Group’s functional and reporting currency.

(b)        Transactions and Balances

Transactions in foreign currency are translated to functional currency at the exchange rates prevailing on the transaction or valuation dates when items are measured at closing. Gains and losses in foreign currency on the settlement of these transactions and on the translation of monetary assets and liabilities to foreign currency at the exchange rates prevailing at closing are recognized in the income statement under “Exchange Rate Differences on Gold and Foreign Currency,” except when deferred in equity as in the case of qualifying cash flow hedges, where applicable.

Assets and liabilities in foreign currency are measured at the reference exchange rate of the U.S. dollar set by the Argentine Central Bank prevailing at the close of operations on the last working day of each month.

As of March 31, 2018, December 31, 2017, March 31, 2017 and January 1, 2017, balances in U.S. Dollars were converted applying the reference exchange rate ($20.1433, $18.7742, $15.3818 and $15.8502, respectively) set by the Argentine Central Bank. Assets and liabilities valued in foreign currencies other than the U.S. Dollar were converted into the latter currency using swap rates reported by the Argentine Central Bank.

13

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

1.8.        CASH AND BANK DEPOSITS

The item Cash and Bank Deposits includes cash available and unrestricted deposits held in banks, which are short-term liquid instruments and have a maturity of less than three months from the origination date.

The assets disclosed under cash and cash equivalents are accounted for at amortized cost which approximates its fair value.

1.9.        FINANCIAL INSTRUMENTS

Initial Recognition

The Group recognizes a financial asset or liability in its consolidated condensed interim financial statements, as the case may be, when it becomes a party to the financial instrument contract. Purchases and sales are recognized on the trading date on which the Group buys or sells these instruments.

Upon initial recognition, the Group measures financial assets and liabilities at fair value, plus or less, in the case of instruments that are not recognized at fair value with changes in profit or loss, the transaction costs directly attributable to the acquisition, such as fees and commissions.

Where the fair value differs from the acquisition cost at the time of initial recognition, the Group recognizes the difference as follows:

a. When the fair value is consistent with the financial asset or liability market value, or is based on a valuation method relying on market values only, the difference is recognized as profit or loss, as the case may be.

b. In other cases, the difference is deferred, with recognition of the profit or loss over time being determined case by case. The difference is amortized during the life of the instrument until such time as the fair value can be measured on the basis of market values.

Financial Assets

a.        Debt Instruments

The Group classifies as debt instruments such instruments that are considered financial liabilities for the issuer, including loans, government and private securities, bonds, and accounts receivable from customers.

Classification

As set out in IFRS 9, the Group classifies financial assets as subsequently measured at amortized cost, at fair value with changes in other comprehensive income or at fair value with changes in profit or loss, on the basis of:

- the Group’s business model to manage financial assets; and

- the characteristics of contractual cash flows of the financial asset.

Business Model

The business model is the manner in which the Group manages a set of financial assets to achieve a specific business goal. It represents the manner in which the Group maintains instruments for cash generation.

The Group may follow several business models; whose objective is:

- Holding instruments until maturity;

- Holding instruments in portfolio to collect cash flows and, in turn, sell them if deemed convenient; or

- Holding instruments for trading.

The Group’s business model does not depend on the intended purpose of an individual instrument. Accordingly, this condition is not an approach for classification of instruments on an individual basis. Instead, such classification is determined at a higher level of aggregation.

The Group only reclassifies an instrument if and when the business model for managing financial assets has changed. Such reclassification takes place as from the commencement of the period in which the change has occurred. Such changes are not expected to be frequent, with no changes having occurred during the reporting period.

14

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Characteristics of Cash Flows

The Group assesses whether the return on cash flows from the aggregated instruments does not substantially differ from the contribution it would receive as interest only; otherwise, such instruments should be measured at fair value with changes in profit or loss.

Based on the aforementioned, Financial Assets are classified into three categories:

(i) Financial assets measured at amortized cost:

Financial assets are measured at amortized cost when:

(a) the financial asset is held within a business model whose objective is to maintain financial assets to collect contractual cash flows; and

(b) the contractual conditions of the financial asset give rise, on certain specified dates, to cash flows which are only principal and interest payments on the outstanding principal amount.

These financial instruments are initially recognized at fair value plus the incremental and directly attributable transaction costs, and are subsequently measured at amortized cost.

The amortized cost of a financial asset is equal to its acquisition cost, net of accumulated amortization plus accrued interest (calculated applying the effective rate method), net of impairment losses, if any.

(ii) Financial assets at fair value with changes in other comprehensive income:

Financial assets are measured at fair value with changes in other comprehensive income when:

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

(b) the contractual conditions of the financial asset give rise, on certain specified dates, to cash flows which are only principal and interest payments on the outstanding principal amount.

These instruments are initially recognized at fair value plus the incremental and directly attributable transaction costs, and are subsequently measured at fair value with changes in other comprehensive income. The gains and losses arising from the changes in fair value are included in other comprehensive income under a separate component of equity. Losses or impairment reversals, interest income, and exchange gains and losses are charged to income. Upon the sale or disposal of the instrument, the accumulated gains or losses previously recognized in other comprehensive income are reclassified from equity to the income statement.

(iii) Financial assets at fair value with changes in profit or loss:

Financial assets at fair value with changes in profit or loss include:

- Instruments held for trading;

- Instruments specifically designated at fair value with changes in profit or loss; and

- Instruments whose contractual terms do not represent cash flows but rather principal or interest payments only on outstanding principal amount.

These financial instruments are initially recognized at fair value and the gains or losses derived from them are charged to the income statement as realized.

The Group classifies a financial instrument as held for trading if such instrument is acquired or incurred for the main purpose of selling or repurchasing it in the short term, or if it is part of a portfolio of financial instruments which are managed jointly and for which there is evidence of short-term profits, or if it is a derivative which does not qualify as a hedging instrument. Derivatives and trading securities are classified as held for trading and are measured at fair value.

Furthermore, financial assets may be measured at fair value with changes in profit or loss when, in doing so, the Group eliminates or substantially reduces a measurement or recognition inconsistency.

15

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

b.        Equity Instruments

Equity instruments are those considered as such by the issuer; in other words, instruments which do not entail a contractual payment obligation and which evidence a residual interest on the issuer’s assets after deducting all of its liabilities.

Such instruments are measured at fair value with changes in profit or loss, except where management has availed, at the time of their initial recognition, of the irrevocable option to measure them at fair value with changes in other comprehensive income. This method may only be applied when instruments are not held for trading and their respective gains or losses will be accounted for in Other Comprehensive Income, with no reclassification being allowed, even if already realized. Dividends receivable from such instrument will be charged to income only at the time the Group becomes entitled to receive payment.

Financial Liabilities

Classification

The Group classifies its financial liabilities at amortized cost using the effective rate method, except for:

- Financial liabilities measured at fair value with changes in profit or loss, including derivative instruments.

- Liabilities resulting from the transfer of financial assets that do not meet the derecognition requirements.

- Financial guarantee contracts.

- Loan commitments at lower than market rates.

Financial liabilities measured at fair value with changes in profit or loss: The Group may, upon initial recognition, avail of the irrevocable option to designate a liability at fair value with changes in profit or loss, if and only if exercising such option results in a better measurement of financial information because:

- the Group eliminates or substantially reduces measurement or recognition inconsistencies which would otherwise be revealed in valuation;

- if financial assets and liabilities are managed and performance is assessed on a fair value basis, according to a documented investment or risk management strategy; or

- if a host contract contains one or more embedded derivatives and the entity has opted for designating the entire contract at fair value with changes in profit or loss.

Financial guarantee contracts: Financial guarantee contracts require that the issuer make specified payments to reimburse the holder for the loss it may incur if a specific debtor fails to make payment when due under the original or modified terms of a debt instrument.

Financial guarantee contracts and loan commitments at lower than market rates are initially measured at fair value and then remeasured at the higher value resulting from a comparison between the commission pending accrual at year-end and the applicable allowance for impairment.

Derecognition of Financial Instruments

Financial Assets

A financial asset or, where applicable, a portion of a financial asset or a portion of a group of similar financial assets, is derecognized when: (i) the rights to receive cash flows from the asset have been extinguished or (ii) the Group has transferred its rights to receive cash flows from the asset or has assumed the obligation to pay right away all cash flows received to a third party under a pass-through agreement; and substantially all risks and rewards inherent to the asset have been transferred or, if substantially all risks and rewards inherent to the asset have not been transferred or retained, when control over such asset has been transferred.

When the contractual rights to receive the cash flows generated by the asset have been transferred or a pass-through agreement has been entered into, the entity will assess whether or not, and to which extent, it has retained the risks and rewards inherent to ownership of an asset. If an entity has neither transferred nor retained substantially all risks and rewards inherent to ownership of an asset, nor has it transferred control over such asset, then it will continue recognizing such asset in its financial statements to the extent of its continuing involvement with the same.

16

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

In this case, the entity will also recognize the related liability. The transferred asset and the related liability are measured in such a manner as to reflect the rights and obligations the Group has retained.

When continuing involvement takes the form of collateral over the transferred asset, it is measured at the lower of (i) the original carrying amount, and (ii) the maximum amount of the consideration received which the entity could be required to repay.

Financial Liabilities:

A financial liability is derecognized when the payment obligation ends, is canceled or expires. When an existing financial liability is exchanged for another with the same borrower under substantially different terms, or the prevailing terms are substantially modified, such exchange or modification will be treated as a derecognition of the original liability, and a new liability will be recognized. The difference between the carrying amount of the initial financial liability and the consideration paid is recognized in the consolidated income statement.

1.10        DERIVATIVE INSTRUMENTS

Derivative instruments, including foreign exchange contracts, interest rate futures, forwards, interest rate and currency swaps, and currency and interest rate options, are carried at fair value.

All derivative instruments are accounted for as assets when fair value is positive and as liabilities when fair value is negative, relative to the agreed-upon price. Changes in the fair value of derivative instruments are charged to income for the period.

The Group has not applied hedge accounting in these consolidated condensed interim financial statements.

1.11        REPO TRANSACTIONS

Reverse Repo Transactions

According to the derecognition principles set out in IFRS 9, these transactions are treated as secured loans for the risk has not been transferred to the counterparty.

Loans granted in the form of reverse repo agreements are accounted for under “Repo Transactions”, classified by counterparty (financial debtors, Argentine Central Bank and non-financial debtors), and also classified by the type of assets received as collateral.

At the end of each month, accrued interest income is charged against “Repo Transactions” with its corresponding offsetting entry in “Interest Income.”

The underlying assets received in respect of the reserve repo transactions are accounted for in Off-balance Sheet Items. These accounts reflect, as of each month-end, the notional amounts of current transactions measured at fair value and converted to their equivalent amounts in Pesos, where applicable. The assets received and sold by the entity are not deducted, but rather derecognized at the end of the repo transaction, and an in-kind liability is recorded to reflect the obligation of delivering the security disposed of.

Repo Transactions

Loans granted in the form of repo agreements are accounted for under “Repo Transactions”, classified by counterparty (financial creditors, Argentine Central Bank and non-financial creditors) and also by the type of asset pledged as collateral.

In these transactions, when the recipient of the underlying asset becomes entitled to sell it or pledge it as collateral, it is reclassified to “Financial Assets Pledged as Collateral.” At the end of each month, these assets are measured according to the category they were classified into before the repo transaction, and results are charged against the applicable accounts, depending on the type of asset.

At the end of each month, accrued interest expense is charged against “Repo Transactions” with its corresponding offsetting entry in “Interest Expense.”

1.12        ALLOWANCES FOR LOAN LOSSES

As concerns allowances for loan losses, the “Minimum Allowances for Loan Losses” set out in Section 8 of the Liquidity and Solvency Circular (LISOL) still remain in force and are detailed below:

17

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Entities are required to apply the following guidelines on minimum allowances for loan losses in respect of total debts owing by their customers:

Commercial Loan Portfolio	Consumer or Consumer Comparable Loan Portfolio	With Preferred Guarantees			Without Preferred Guarantees
Normal	Normal		1	%		1	%
Under Observation	Low Risk		3	%		5	%
Under Negotiation or under Refinancing Agreements	N/A		6	%		12	%
With Problems	Medium Risk		12	%		25	%
High Risk of Insolvency	High Risk		25	%		50	%
Uncollectible	Uncollectible		50	%		100	%
Uncollectible due to Technical Reasons	Uncollectible due to Technical Reasons		100	%		100	%

Loans backed with preferred guarantees “A” require a provision of 1% independently of the customer category.

The aforementioned categories of debtors are broken down as follows:

- Commercial Loan Portfolio: It includes all loans other than:

• Consumer and mortgage loans.

• Commercial loans for up to the equivalent of 40% of the reference value set out in the standard.

- Consumer Loan Portfolio: It includes all loans excluded from the preceding item.

On the other hand, the status assigned to each debtor within the commercial loan portfolio is determined, in the first instance, on the basis of the debtor’s repayment capacity and, in the second instance, on the basis of the foreclosure of its assets, while the status assigned to debtors within the consumer and consumer comparable loan portfolio is assigned on the basis of the degree of fulfillment of their respective obligations.

Among other specific provisions, the Bank has opted for discontinuing interest accrual for customers classified in an irregular status.

1.13        LEASES

1.13.1.        Operating Leases

Leases where the lessor retains a substantial portion of the risks and rewards of ownership are classified as operating leases. Payments made under operating leases (net of lease incentives) are recognized in profit or loss on a straight-line basis over the term of the lease.

1.13.2.        Financial Leases

Financial leases are capitalized at the commencement of the lease at the lower of the fair value of the leased asset and the present value of minimum lease payments.

Each lease payment is distributed between liabilities and financial charges. The respective lease liabilities, net of financial charges, are included in other financial liabilities. The interest component of the financial cost is charged to income during the lease term in such a manner as to obtain a constant periodical interest rate on the remaining balance of the liability for each period. Assets acquired under a financial lease are depreciated during the shorter of the asset useful life and the lease term.

1.14        PROPERTY, PLANT AND EQUIPMENT

The Group has availed of the option set out in IFRS 1 “First-time Adoption of IFRS” and has adopted the fair value as attributed cost for certain items of property, plant and equipment as of the transition date to the IFRS discussed in Note 3.

18

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Assets are measured at acquisition or construction cost, net of accumulated depreciation and/or impairment losses, if any. The cost includes expenses directly attributable to the acquisition or construction of the items.

The items of property, plant and equipment acquired in business combinations were initially measured at their estimated fair value at the time of the acquisition.

Subsequent costs are included in the value of the asset and are recognized as a separate asset, as the case may be, if and only if future economic benefits are expected to flow to the Group and its cost can be measured reliably. When improvements are introduced to the asset, the carrying amount of the asset being replaced is derecognized, and the new asset is depreciated over its remaining useful life.

Repair and maintenance expenses are recognized in the consolidated income statement for the period/year in which they were incurred.

Depreciation is calculated on a straight-line basis, using annual rates sufficient to extinguish the value of the assets at the end of their estimated useful life. If an asset is comprised by significant components with varying useful lives, such components will be recognized and depreciated as separate items.

Property, plant and equipment residual values, useful lives and depreciation methods are reviewed and adjusted, as needed, as of each year-end or when indicators of impairment exist.

The carrying amount of property, plant and equipment is immediately reduced to its recoverable value when the carrying amount exceeds the estimated recoverable value.

Gains and losses from the disposal of items of property, plant and equipment are calculated by comparing the proceeds from the disposal to the carrying amount of the respective asset and are charged to income.

1.15        INTANGIBLE ASSETS

1.15.1. Licenses

Licenses acquired individually are initially measured at cost, while licenses acquired through business combinations are measured at their estimated fair value on the acquisition date.

As of the date of these consolidated condensed interim financial statements, intangible assets with a definite useful life are disclosed net of accumulated amortization and/or impairment losses, if any. These assets are tested for impairment on an annual basis or when indicators of impairment exist.

Licenses acquired by the Group were classified as intangible assets with a definite useful life and are amortized on a straight-line basis over the license term.

Intangible assets with an indefinite useful life are those arising from contracts or other legal rights renewable at no significant cost and for which, on the basis of an analysis of all relevant factors, there is no foreseeable time limit during which the asset is expected to generate net cash flows for the Group. These intangible assets are not amortized, but are rather tested for impairment on an annual basis or when indicators of impairment exist, either individually or at the cash-generating unit level. The determination of the indefinite useful life is reviewed on an annual basis to confirm whether it is still applicable.

1.15.2.    Software

Costs associated with software maintenance are recognized as an expense when incurred. Development, acquisition and deployment costs, unique and identifiable and directly attributable to the design and testing of software controlled by the Group, are recognized as assets.

Costs incurred in software development, acquisition and deployment recognized as intangible assets are amortized on a straight-line basis during the estimated useful life.

1.16        ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

1.16.1.        Assets Held for Sale

The assets, or group of assets, classified as available for sale pursuant to IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations,” are disclosed separately from the other assets.

19

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

An asset may be classified as available for sale (including the loss of control over a subsidiary) if its carrying amount is fundamentally recoverable as a result of a sale transaction, in lieu of the continued use of such asset.

In order for an asset to be included in the preceding classification, it will have to meet the following conditions:

- it must be available for immediate sale in its current condition;

- management must be committed to a plan to sell the asset and must have initiated an active program to locate a buyer and complete the plan;

- the asset must be actively marketed for sale at a reasonable price in relation to its current fair value;

- the sale must be expected to be completed within 12 months from the reclassification date;

- it is unlikely that the plan will be significantly changed or withdrawn.

Assets, or groups of assets, classified as available for sale pursuant to IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations,” are measured at the lower of the carrying amount and fair value less costs to sell at closing.

The asset will not be depreciated for as long as it is classified as held for sale, or as long as it is part of a disposal group of assets classified as held for sale.

1.16.2.        Discontinued Operations

A discontinued operation is a Group’s component that either has been disposed of or classified as held for sale and meets any of the following conditions:

- represents either a separate major line of business or a geographical area of operations;

- is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or

- is an independent entity exclusively acquired for resale.

Any gain or loss on the remeasurement of an asset (or disposal group) classified as held for sale which does not meet the requirements to be classified as a discontinued operation will be recognized in income (loss) from continuing operations.

1.17        IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets with an indefinite useful life are not amortized, but are rather tested for impairment on an annual basis. Unlike the preceding assumption, amortizable assets are tested for impairment when events or circumstances occur indicating that their carrying amounts may not be recoverable or, at least, on an annual basis.

Impairment losses are recognized when the carrying amount of an asset exceeds its recoverable value. The recoverable value of an asset is the higher of the net proceeds that would be derived from its disposal or its value in use. For purposes of the impairment test, assets are grouped at the lowest level for which identifiable cash flows are generated (cash-generating units or CGU). The carrying amount of non-financial assets, other than goodwill, which have experienced impairment is reviewed at each reporting date to check for potential impairment reversal.

1.18        TRUST ASSETS

Assets held by the Group in its capacity as trustee are not reported in the consolidated balance sheet. Commissions and fees earned on trust activities are disclosed in Commission Income.

1.19        OFFSETTING

Financial assets and liabilities are offset by reporting the net amount in the consolidated balance sheet only to the extent the entity currently has a legally enforceable right of set-off, and intends to settle on a net basis, or realize the asset and settle the liability simultaneously.

1.20        LOANS FROM THE ARGENTINE CENTRAL BANK AND OTHER FINANCIAL INSTITUTIONS

The amounts owing to other financial institutions are recorded at the time the bank disburses the proceeds to the economic group. The non-derivative financial liability is measured at amortized cost. Where the Group buys back its own debt, such debt will be removed from its consolidated condensed interim financial statements and the difference between the residual value of the financial liability and the amount paid will be recognized as financial income or expense, as the case may be.

20

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

1.21        PROVISIONS / CONTINGENCIES

According to the IFRS-based accounting framework adopted by the Argentine Central Bank, a provision will be recognized when:

a. an entity has a present obligation (legal or constructive) as a result of a past event;

b. it is probable that an outflow of resources embodying future economic benefits will be required to settle the obligation; and

c. a reliable estimate can be made of the amount of the obligation.

An entity will be deemed to have a constructive obligation where (a) the entity has assumed certain responsibilities as a consequence of past practices or public policies and (b) as a result, the entity has created an expectation that it will discharge those responsibilities.

The Group recognizes the following provisions:

For labor, civil and commercial lawsuits: These provisions are calculated on the basis of attorneys’ reports about the status of the proceedings and the estimate about the potential losses the Group may sustain, as well as on the basis of past experience in proceedings of these kinds.

For miscellaneous risks: These provisions are set up to address contingencies that may trigger obligations for the Group. In estimating the provision amounts, the Group evaluates the likelihood of occurrence taking into consideration the opinion of its legal and professional advisors.

The provision amount recognized by the Group must be the best estimate at the reporting period-end of the disbursement required to settle the current obligation.

Where the financial effect of the discount is material, the provision amount must be the present value of the disbursements expected to be required to settle the obligation applying a pre-tax interest rate that reflects prevailing market conditions on the value of money and the risks specific to such obligation. The increase in the provision due to the passage of time is recognized under Financial Income (Loss), Net in the income statement.

The Group will not account for positive contingencies, other than those arising from deferred taxes and those whose occurrence is virtually certain.

As of the date of these consolidated condensed interim financial statements, the Group’s management believes there are no elements leading to the determination of the existence of contingencies that might be materialized and have a negative impact on these consolidated condensed interim financial statements other than those set forth in Note 8.3.

The Group evaluates, at the end of the reporting period, the adjustment of insurance liabilities that have been recognized, using the current estimates of future cash flows from insurance contracts. If the evaluation shows that the carrying amount of its liabilities for insurance contracts (less deferred acquisition costs and related intangible assets) is not adequate, considering the estimated future cash flows, the total amount of the inadequacy will be recognized in profit or loss. According to IFRS 4, the Group will be required to determine the adequacy of the carrying amount recorded pursuant to the guidelines set out in IAS 37.

1.22        OTHER NON-FINANCIAL LIABILITIES

Non-financial accounts payable are accrued when the counterparty has discharged its contractual obligations and are measured at amortized cost.

1.23        NOTE ISSUED

The notes Issued by the Group are measured at amortized cost. Where the Group buys back its own notes, the liability in respect of such notes will be deemed discharged and, accordingly, the notes will be derecognized.

1.24        SHAREHOLDERS’ EQUITY

Shareholders’ equity accounts are stated in a currency which does not reflect the changes in the price index since February 2003, except for the item “Capital Stock”, which is carried at face value. The restatement adjustment is included in “Adjustments to Shareholders’ Equity.”

21

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Ordinary shares are recognized in shareholders’ equity and carried at face value. When any company comprising the Group buys shares of the Company’s capital stock (treasury stock), the payment made, including any cost directly attributable to the transaction (net of taxes), is deducted from shareholders’ equity until the shares are either canceled or disposed of.

1.25        PROFIT RESERVES

Pursuant to Section 70 of the General Corporations Law, the Company and its subsidiaries, other than the Bank, are required to appropriate 5% of the net income for the fiscal year to the legal reserve until such reserve is equal to 20% of capital stock.

With respect to the Bank, according to the regulations set forth by the Argentine Central Bank, 20% of net income for the fiscal year, net of previous years’ adjustments, if any, is required to be appropriated to the legal reserve. Notwithstanding the aforementioned, in appropriating amounts to other reserves, financial institutions are required to comply with the provisions laid down by the Argentine Central Bank in the revised text on distribution of dividends described in Note 10.8.

1.26        DISTRIBUTION OF DIVIDENDS

The distribution of dividends to the Group’s shareholders is recognized as a liability in the consolidated condensed interim financial statements for the fiscal year in which dividends are approved by the Group’s shareholders.

1.27        REVENUE RECOGNITION

Financial income and expense is recognized in respect of all debt instruments in accordance with the effective rate method, pursuant to which all gains and losses which are an integral part of the transaction effective rate are deferred.

Gains or losses included in the effective rate embrace disbursements or receipts relating to the creation or acquisition of a financial asset or liability, such as payments received for the analysis of the customer’s financial position, negotiation of the instrument terms, preparation and processing of the documents required to consummate the transactions, and payments received for the extension of credit arrangements expected to be used by the customer. The Group accounts for its non-derivative financial liabilities at amortized cost, except for those included in “Fair Value liabilities with changes to income,” which are measured at fair value.

Fees and commissions earned by the Group on the origination of syndicated loans are not part of the product effective rate, and are recognized in the income statement at the time the service is delivered, to the extent the Group does not retain a portion of the same, or such effective rate is maintained under the same conditions as the other participants. Commissions and fees earned by the Group on negotiations in third parties’ transactions are not part of the effective rate either, and are recognized at the time the transactions are executed.

The Group’s income from services is recognized in the income statement as performance obligations are fulfilled, thus differing income from customer loyalty programs, which are accounted for at the fair value of the points and the redemption rate, until such time as points are redeemed by customers and may be charged to profit or loss for the period.

1.28    INCOME TAX AND MINIMUM PRESUMED INCOME TAX

1.28.1.    Income Tax

The income tax expense for the period includes current and deferred tax. Income tax is recognized in the consolidated income statement, except for items required to be recognized directly in other comprehensive income. In this case, the income tax liability related to such items is also recognized in such statement.

The current income tax expense is calculated on the basis of the tax laws enacted or substantially enacted as of the balance sheet date in the countries where the Group operates and generates taxable income. The Group periodically assesses the position assumed in tax returns in connection with circumstances in which the tax laws are subject to interpretation. On the other hand, when required, the Group sets up provisions in respect of the amounts expected to be required to pay to the tax authorities.

22

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Deferred income tax is determined, in its entirety, by applying the liability method on the temporary differences arising from the carrying amount of assets and liabilities and their tax base. However, the deferred tax arising from the initial recognition of an asset or liability in a transaction other than a business combination which, at the time of the transaction does not affect income or loss for accounting or tax purposes, is not recorded. The deferred tax is determined using tax rates (and laws) enacted as of the balance sheet date and that are expected to be applicable when the deferred tax assets are realized or the deferred tax liabilities are settled.

Deferred tax assets are recognized only to the extent future tax benefits are likely to arise against which the temporary differences might be offset.

The Group recognizes a deferred tax liability for taxable temporary differences related to investments in subsidiaries and affiliates, except that the following two conditions are met:

(i) the Group controls the timing on which temporary differences will be reversed;

(ii) such temporary differences are not likely to be reversed in the foreseeable future.

The balances of deferred tax assets and liabilities are offset when a legal right exists to offset current tax assets against current tax liabilities and to the extent such balances are related to the same tax authority of the Group or its subsidiaries, where tax balances are intended to be, and may be, settled on a net basis.

1.28.2.        Minimum Presumed Income Tax

The Group determines the minimum presumed income tax at the effective rate of 1% of the computable assets at each fiscal year-end. This tax is supplementary to income tax. The Group’s tax liability is equal to the higher of the two taxes. However, if the minimum presumed income tax were to exceed income tax in a given fiscal year, such excess may be computed as a payment on account of the income tax that could be generated in any of the next ten fiscal years.

The minimum presumed income tax credit disclosed under Other Non-current Receivables is the portion expected to be offset against the income tax in excess of minimum presumed income tax to be generated in the following ten fiscal years.

1.29        EARNINGS PER SHARE

Basic earnings per share are calculated as income (loss) attributable to the Group’s ordinary shareholders, excluding the after-tax effect of benefits attached to preferred shares, divided by average ordinary shares outstanding.

Diluted earnings per share are calculated by adjusting income (loss) attributable to shareholders and average ordinary shares outstanding for the effects of the potential conversion into equity instruments of all convertible notes held by the Group at period-end.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The preparation of these consolidated condensed interim financial statements in accordance with the IFRS-based accounting framework requires the use of certain significant accounting estimates. It also requires that management make judgments in applying the accounting standards set forth by the Argentine Central Bank to define the Bank’s accounting criteria.

The Group has identified the following areas which involves a higher degree of judgment or complexity, or the areas in which the assumptions and estimates are material for these condensed interim financial statements, as essential to understand the underlying accounting/financial reporting risks.

a.        FAIR VALUE OF DERIVATE INSTRUMENTS AND OTHER INSTRUMENTS

The fair value of financial instruments not listed in active markets is determined using valuation techniques. Such techniques are validated and reviewed periodically by qualified personnel independent from the area which developed them. All models are assessed and adjusted before being put into use in order to ensure that results reflect current information and comparable market prices. Where possible, models rely on observable information only; however, certain factors, such as the Group’s own and the counterparty’s credit risk, volatilities and correlations, require the use of estimates. Changes in the assumptions about these factors may affect the reported fair value of financial instruments.

23

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

b.    IMPAIRMENT LOSSES ON LOANS AND ADVANCES

The Group makes estimates about its customers’ repayment capacity to determine the provision level it is required to set up according to the Argentine Central Bank regulations.

Such estimates are made as frequently as required by the minimum loan loss provisions set forth by the Argentine Central Bank.

Requirements for Allowances for Loan Losses

The Argentine Central Bank requires that minimum allowances for loan losses be setup for the different categories in which customers are classified. The rates vary by category 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 allowances for the other categories are individually allocated. The regulations require the suspension of interest accrual or the setup of allowances for the 100% of interest for customers classified as “With Problems”, “Medium Risk,” or lower.

c.        IMPAIRMENT OF NON-FINANCIAL ASSETS

Intangible assets with definite useful life and property, plant and equipment are amortized or depreciated on a straight-line basis during their estimated useful lives. The Group monitors the conditions associated with these assets to determine whether the events and circumstances warrant a review of the remaining amortization or depreciation term and whether there are factors or circumstances indicating impairment in the value of the asset which might not be recoverable.

Identifying the indicators of impairment of property, plant and equipment and intangible assets requires the use of judgment. The Group has concluded that there were no indicators of impairment for any of the periods reported in its consolidated condensed interim financial statements.

d.        INCOME TAX AND DEFERRED TAX

The assessment of current and deferred tax assets and liabilities requires a significant level of judgment. Current income tax is accounted for according to the amounts expected to be paid, while deferred income tax is accounted for on the basis of the temporary differences between the carrying amount of assets and liabilities and their tax base, at the rates expected to be in force at the time of reversal of such differences.

A deferred tax asset is recognized when future taxable income is expected to exist to offset such temporary differences, based on management’s assumptions about the amounts and timing of such future taxable income. Then, management needs to determine whether deferred tax assets are likely to be used and offset against future taxable income. Actual results may differ from these estimates, for instance, changes in the applicable tax laws or the outcome of the final review of the tax returns by the tax authorities and tax courts.

Future taxable income and the number of tax benefits likely to be available in the future are based on a medium-term business plan prepared by management, on the basis of expectations which are deemed reasonable.

e.        SUBSEQUENT EVENTS

Grupo Financiero Galicia S.A.

Allocation of Retained Income

The Shareholders’ Meeting held on April 24, 2018 authorized the allocation of Retained Income as of December 31, 2017, as follows:

- To Legal Reserve	$	25,300
- To Cash Dividends	$	1,200,000
- To Discretionary Reserve for Future Distributions of Profits	$	7,104,168

24

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Banco de Galicia y Buenos Aires S.A.

Issuance of Class V Notes

Subsequent to period-end, the C.N.V. approved the issuance of Class V, Series I and Series II simple, short-, medium-, and long-term notes. A summary of the issuance follows:

- Series I for an aggregate principal amount of $4,209,250, maturing within 24 months from the issuance and settlement date and accruing interest at an annual nominal rate of 25.98%. Interest and principal will be repaid in a lump sum upon maturity.

- Series II for an aggregate principal amount of $ 2,032,833, maturing within 36 months from the issuance and settlement date and accruing interest at variable rate equal to the simple arithmetic average of private Badlar, plus a 3.50% cutoff margin, which will be payable quarterly. Principal in respect of the Series II notes will be repaid upon maturity.

Prisma Medios de Pago S.A.

The General Ordinary Shareholders’ Meeting held on April 9, 2018 authorized an increase in capital stock of $15,386. According to the Bank’s equity interest, it is required to contribute $2,260, 25% of which has already been subscribed.

The General Ordinary Shareholders’ Meeting held on May 8, 2018 approved the distribution of cash dividends. According to the Bank’s equity interest, it is entitled to dividends in the amount of $ 371,515.

Tarjeta Naranja S.A.

In addition, on April 10, 2018, the Company issued and placed Class XL Notes for an aggregate principal amount of $2,000,000. The issuance was carried out in two Series: (i) Series I for an aggregate principal amount of $597,500 and (ii) Series II for an aggregate principal amount of $1,402,500, maturing on October 10, 2019 and October 10, 2020, respectively. Principal in respect of Series I and Series II will be repaid upon maturity.

Class XXXVI Series I Notes were partially canceled through such issuance for an aggregate amount of $81,559, since it paid in kind the issuance of Class XL Notes.

Procesadora Regional S.A.

The Ordinary and Extraordinary Shareholders’ Meeting held on April 17, 2018 authorized, among other things, a) the change of the corporate name of “Procesadora Regional S.A.” to “Ondara S.A.” and b) the amendment of the corporate purpose of the company to include the following activities: i) finance and investments; ii) real estate; iii) marketing, and iv) services.

NOTE 3. TRANSITION TO IFRS

3.1.    REQUIREMENTS FOR THE TRANSITION TO IFRS

The following is a reconciliation between the shareholders’ equity, income statement, other comprehensive income and statement of cash flows amounts related to the consolidated financial statements issued according to the accounting framework in effect prior to the transition date (January 1, 2017), the adoption date (December 31, 2017) and the closing date of the comparative period (March 31, 2017) and the amounts presented according to the IFRS-based accounting framework (see Note 1.1) in these consolidated condensed interim financial statements, as well as the effects of adjustments to cash flows.

25

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Consolidated Balance Sheet	Prior Accounting Framework 12.31.17		Reclassifications		Adjustments		References(*)		IFRS-based Accounting Framework (See Note 1.1) 12.31.17
ASSETS
Cash and Bank Deposits		56,659,196		2,605,201		(319,082)		(**)		58,945,315
Government and Private Securities		38,770,736		(38,770,736)		-				-
Loans and other financing activities		197,335,168		(197,335,168)		-				-
Other Receivables Resulting from Financial Brokerage		33,358,644		(33,358,644)		-				-
Receivables from Financial Leases		1,676,637		(1,676,637)		-				-
Investments in Subsidiaries, Associates and Joint Ventures		28,704		(8,671)		834		(a)		20,867
Miscellaneous Receivables		3,809,643		(3,809,643)		-				-
Property, Plant and Equipment		4,469,499		280,584		5,066,737		(b)		9,816,820
Miscellaneous Assets		623,762		(623,762)		-				-
Intangible Assets		3,577,022		-		(2,688,141)		(c)		888,881
Unallocated Items		71,277		(71,277)		-				-
Other Assets		632,272		(632,272)		-				-
Fair value debt securities with changes to income		-		38,320,337		(9,342,097)		(d)		28,978,240
Derivative Instruments		-		525,349		13		(e)		525,362
Repo Transactions		-		9,676,101		-				9,676,101
Other Financial Assets		-		7,186,446		(268,024)		(f)		6,918,422
Loans and other financing activities		-		201,429,479		(6,891,256)		(g)		194,538,223
Other Debt Securities		-		4,171,959		(1,463,307)		(h)		2,708,652
Financial Assets Pledged as Collateral		-		(4,379,321)		10,709,878		(j)		6,330,557
Current Income Tax Assets		-		844,990		(608,008)		(**)		236,982
Investments in Equity Instruments		-		8,671		(8,671)		(i)		-
Deferred Income Tax Assets		-		-		559,807		(p)		559,807
Other Non-financial Assets		-		1,415,924		1,550,341		(k)		2,966,265
Non-current Assets Held for Sale		-		-		1,183,802		(l)		1,183,802
TOTAL ASSETS		341,012,560		(14,201,090)		(2,517,174)				324,294,296

(*) The references are related to the explanations included in Note 3.5.

(**) The adjustments are related to the deconsolidation of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as detailed in Note 7.3.

26

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Consolidated Balance Sheet	Prior Accounting Framework 12.31.17		Reclassifications		Adjustments		References(*)		IFRS-based Accounting Framework (See Note 1.1) 12.31.17
LIABILITIES
Deposits		203,450,563		-		(2,727,776)		(**)		200,722,787
Other Liabilities Resulting from Financial Brokerage		81,343,100		(81,343,100)		-				-
Miscellaneous Liabilities		8,570,780		(8,570,780)		-				-
Provisions		713,208		-		(155,753)		(m)		557,455
Subordinated Notes		4,828,018		-		-				4,828,018
Unallocated Items		55,673		(55,673)		-				-
Minority Interest		1,935,139		(1,935,139)		-				-
Other Liabilities		815,875		(815,875)		-		(r)		-
Fair Value liabilities with changes to income		-		-		-				-
Derivative Instruments		-		573,218		-				573,218
Repo Transactions		-		1,131,127		-				1,131,127
Other Financial Liabilities		-		39,280,576		1,310		(n)		39,281,886
Loans from the Argentine Central Bank and Other Financial Institutions		-		8,500,029		(630,981)		(o)		7,869,048
Notes Issued		-		16,042,727		(2,303,661)		(**)		13,739,066
Current Income Tax Liabilities		-		3,962,748		(888,593)		(**)		3,074,155
Deferred Income Tax Liabilities		-		-		708,104		(p)		708,104
Other Non-financial Liabilities		-		7,093,913		1,592,329		(q)		8,686,242
TOTAL LIABILITIES		301,712,356		(16,136,229)		(4,405,021)				281,171,106
SHAREHOLDERS’ EQUITY
Capital Stock, Contributions and Reserves		30,970,736		-		(924,140)		(s)		30,046,596
Retained Income		-		-		2,518,733				2,518,733
Other Accumulated Comprehensive Income		-		-		17,279				17,279
Net Income for the Fiscal Year		8,329,468		-		275,921				8,605,389
Shareholders’ Equity Attributable to the Controlling Company’s Shareholders		39,300,204		-		1,887,793				41,187,997
Shareholders’ Equity Attributable to Non-controlling Interests		-		1,935,139		54				1,935,193
TOTAL SHAREHOLDERS’ EQUITY		39,300,204		1,935,139		1,887,847				43,123,190

(*) The references are related to the explanations included in Note 3.5.

(**) The adjustments are related to the deconsolidation of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as detailed in Note 7.3.

27

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Consolidated Balance Sheet	Prior Accounting Framework 03.31.17		Reclassifications		Adjustments		References(*)		IFRS-based Accounting Framework (See Note 1.1) 03.31.17
ASSETS
Cash and Bank Deposits		50,221,334		(64,658)		(268,356)		(**)		49,888,320
Government and Private Securities		25,590,478		(25,590,478)		-				-
Loans and other financing activities		146,442,679		(146,442,679)		-				-
Other Receivables Resulting from Financial Brokerage		20,772,835		(20,772,835)		-				-
Receivables from Financial Leases		970,006		(970,006)		-				-
Investments in Subsidiaries, Associates and Joint Ventures		54,042		(11,421)		160,719		(a)		203,340
Miscellaneous Receivables		4,210,507		(4,210,507)		-				-
Property, Plant and Equipment		3,133,028		1,027,326		4,618,384		(b)		8,778,738
Miscellaneous Assets		1,287,978		(1,287,978)		-				-
Intangible Assets		2,677,381		-		(1,752,428)		(c)		924,953
Unallocated Items		183,729		(183,729)		-				-
Other Assets		484,373		(484,373)		-				-
Fair value debt securities with changes to income		-		24,829,976		(3,471,561)		(d)		21,358,415
Derivative Instruments		-		127,514		(14,270)				113,244
Repo Transactions		-		6,592,735		-				6,592,735
Other Financial Assets		-		4,495,409		(319,765)		(f)		4,175,644
Loans and other financing activities		-		148,706,248		(5,072,512)		(g)		143,633,736
Other Debt Securities		-		4,746,061		(3,237,675)		(h)		1,508,386
Financial Assets Pledged as Collateral		-		(3,479,336)		7,273,154		(j)		3,793,818
Current Income Tax Assets		-		1,927,894		(930,199)		(**)		997,695
Investments in Equity Instruments		-		11,421		26,629		(i)		38,050
Deferred Income Tax Assets		-		-		607,403		(p)		607,403
Other Non-financial Assets		-		1,470,761		1,060,859		(k)		2,531,620
Non-current Assets Held for Sale		-		-		974,831		(l)		974,831
TOTAL ASSETS		256,028,370		(9,562,655)		(344,787)				246,120,928

(*) The references are related to the explanations included in Note 3.5.

(**) The adjustments are related to the deconsolidation of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as detailed in Note 7.3.

28

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Consolidated Balance Sheet	Prior Accounting Framework 03.31.17		Reclassifications		Adjustments		References(*)		IFRS-based Accounting Framework (See Note 1.1) 03.31.17
LIABILITIES
Deposits		158,652,301		-		(1,958,531)		(**)		156,693,770
Other Liabilities Resulting from Financial Brokerage		62,480,062		(62,480,062)		-				-
Miscellaneous Liabilities		6,334,558		(6,334,558)		-				-
Provisions		469,870		-		(80,893)		(m)		388,977
Subordinated Notes		3,864,720		-		-				3,864,720
Unallocated Items		64,173		(64,173)		-				-
Minority Interest		651,120		(651,120)		-				-
Other Liabilities		1,558,114		(1,558,114)		-		(r)		-
Fair Value liabilities with changes to income		-		-		-				-
Derivative Instruments		-		47,945		-				47,945
Repo Transactions		-		-		-				-
Other Financial Liabilities		-		29,461,768		(67,369)		(n)		29,394,399
Loans from the Argentine Central Bank and Other Financial Institutions		-		7,672,443		(629,100)		(o)		7,043,343
Notes Issued		-		14,351,516		(1,053,379)		(**)		13,298,137
Current Income Tax Liabilities		-		3,152,924		(883,572)		(**)		2,269,352
Deferred Income Tax Liabilities		-		-		1,146,995		(p)		1,146,995
Other Non-financial Liabilities		-		5,280,662		544,278		(q)		5,824,940
TOTAL LIABILITIES		234,074,918		(11,120,769)		(2,981,571)				219,972,578
SHAREHOLDERS’ EQUITY
Capital Stock, Contributions and Reserves		14,334,821		-		-				14,334,821
Retained Income		6,017,878		-		2,518,732				8,536,610
Other Accumulated Comprehensive Income		-		-		287,709				287,709
Net Income for the Fiscal Year		1,600,753		-		(172,945)				1,427,808
Shareholders’ Equity Attributable to the Controlling Company’s Shareholders		21,953,452		-		2,633,496				24,586,948
Shareholders’ Equity Attributable to Non-controlling Interests		-		1,558,114		3,288				1,561,402
TOTAL SHAREHOLDERS’ EQUITY		21,953,452		1,558,114		2,636,784				26,148,350

(*) The references are related to the explanations included in Note 3.5.

(**) The adjustments are related to the deconsolidation of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as detailed in Note 7.3.

29

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Consolidated Balance Sheet	Prior Accounting Framework 01.01.17		Reclassifications		Adjustments		References(*)		IFRS-based Accounting Framework (See Note 1.1) 01.01.17
ASSETS
Cash and Bank Deposits		61,166,250		4,986,074		(384,759)		(**)		65,767,565
Government and Private Securities		13,700,800		(13,700,800)		-				-
Loans and other financing activities		137,451,655		(137,451,655)		-				-
Other Receivables Resulting from Financial Brokerage		18,178,275		(18,178,275)		-				-
Receivables from Financial Leases		955,346		(955,346)		-				-
Investments in Subsidiaries, Associates and Joint Ventures		52,964		(10,813)		141,765		(a)		183,916
Miscellaneous Receivables		3,440,115		(3,440,115)		-				-
Property, Plant and Equipment		2,873,552		947,590		4,873,587		(b)		8,694,729
Miscellaneous Assets		1,221,237		(1,221,237)		-				-
Intangible Assets		2,582,255		-		(1,751,112)		(c)		831,143
Unallocated Items		89,035		(89,035)		-				-
Other Assets		539,140		(539,140)		-				-
Fair value debt securities with changes to income		-		8,314,106		8,032,706		(d)		16,346,812
Derivative Instruments		-		114,772		9,749		(e)		124,521
Repo Transactions		-		10		(10)				-
Other Financial Assets		-		4,195,156		(694,756)		(f)		3,500,400
Loans and other financing activities		-		140,098,179		(4,483,203)		(g)		135,614,976
Other Debt Securities		-		8,757,551		(7,849,087)		(h)		908,464
Financial Assets Pledged as Collateral		-		5,676,404		(197,551)		(j)		5,478,853
Current Income Tax Assets		-		1,169,395		(913,624)		(**)		255,771
Investments in Equity Instruments		-		10,813		22,387		(i)		33,200
Deferred Income Tax Assets		-		-		563,890		(p)		563,890
Other Non-financial Assets		-		1,245,289		852,578		(k)		2,097,867
Non-current Assets Held for Sale		-		-		1,224,843		(l)		1,224,843
TOTAL ASSETS		242,250,624		(71,077)		(552,597)				241,626,950

(*) The references are related to the explanations included in Note 3.5.

(**) The adjustments are related to the deconsolidation of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as detailed in Note 7.3.

30

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Consolidated Balance Sheet	Prior Accounting Framework 01.01.17		Reclassifications		Adjustments		References(*)		IFRS-based Accounting Framework (See Note 1.1) 01.01.17
LIABILITIES
Deposits		151,688,147		-		(1,311,081)		(**)		150,377,066
Other Liabilities Resulting from Financial Brokerage		57,793,653		(57,793,653)		-				-
Miscellaneous Liabilities		5,804,284		(5,804,284)		-				-
Provisions		384,484		-		(49,608)		(m)		334,876
Subordinated Notes		4,065,255		-		-				4,065,255
Unallocated Items		70,530		(70,530)		-				-
Minority Interest		1,462,189		(1,462,189)		-				-
Other Liabilities		629,384		(629,384)		-		(r)		-
Fair Value liabilities with changes to income		-		-		-				-
Derivative Instruments		-		143,040		9,513		(e)		152,553
Repo Transactions		-		1,782,573		(137,859)		(**)		1,644,714
Other Financial Liabilities		-		33,755,344		(714,417)		(n)		33,040,927
Loans from the Argentine Central Bank and Other Financial Institutions		-		7,465,446		(569,128)		(o)		6,896,318
Notes Issued		-		13,012,842		(1,155,123)		(**)		11,857,719
Current Income Tax Liabilities		-		2,651,971		(829,431)		(**)		1,822,540
Deferred Income Tax Liabilities		-		-		956,012		(p)		956,012
Other Non-financial Liabilities		-		5,415,558		455,916		(q)		5,871,474
TOTAL LIABILITIES		221,897,926		(1,533,266)		(3,345,206)				217,019,454
SHAREHOLDERS’ EQUITY
Capital Stock, Adjustments and Reserves		14,334,821		-		-				14,334,821
Retained Income		6,017,877		-		2,518,733				8,536,610
Other Accumulated Comprehensive Income		-		-		284,182				284,182
Net Income for the Fiscal Year		-		-		-				-
Shareholders’ Equity Attributable to the Controlling Company’s Shareholders		20,352,698		-		2,802,915				23,155,613
Shareholders’ Equity Attributable to Non-controlling Interests		-		1,462,189		(10,306)				1,451,883
TOTAL SHAREHOLDERS’ EQUITY		20,352,698		1,462,189		2,792,609				24,607,496

(*) The references are related to the explanations included in Note 3.5.

(**) The adjustments are related to the deconsolidation of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A., as detailed in Note 7.3.

31

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

CONSOLIDATED INCOME STATEMENT	Prior Accounting Framework 03.31.17		Reclassifications		Adjustments		IFRS-based Accounting Framework (See Note 1.1) 03.31.17
Financial Income		9,987,690		(9,987,690)		-		-
Financial Expenses		(5,117,218)		5,117,218		-		-
Provisions for Loan Losses		(1,156,765)		(5,388)		120,780		(1,041,373)
Income from Services		4,852,958		(4,852,958)		-		-
Expenses from Services		(1,392,147)		1,392,147		-		-
Administrative Expenses		(5,130,692)		2,866,596		169,081		(2,095,015)
Underwriting Income		525,207		-		(872)		524,335
Minority Interest		(181,386)		181,386		-		-
Miscellaneous Income		316,605		(316,605)		-		-
Miscellaneous Losses		(132,695)		132,695		-		-
Income Tax		(970,804)		970,804		-		-
Interest Income		-		9,513,223		(1,542,829)		7,970,394
Interest Expense		-		(3,882,369)		175,741		(3,706,628)
Commission Income		-		1,827,065		(129,931)		1,697,134
Commission Expense		-		(565,346)		15,974		(549,372)
Net Income from Measurement of Fair Value Financial Instruments with changes to income		-		(337,745)		1,015,520		677,775
Income from Derecognition of Assets Measured at Amortized Cost		-		-		-		-
Exchange Rate Differences on Gold and Foreign Currency		-		471,668		(12,162)		459,506
Other Operating Income		-		3,340,872		(95,976)		3,244,896
Employee Benefits		-		(2,605,918)		133,589		(2,472,329)
Depreciation and Impairment of Assets		-		(263,468)		29,431		(234,037)
Other Operating Expenses		-		(1,849,920)		106,941		(1,742,979)
Income for Associates and Joint Ventures		-		5,923		18,259		24,182
Income Tax from Continuing Activities		-		(970,804)		(13,135)		(983,939)
Income (Loss) from Discontinued Operations		-		-		-		-
Income Tax from Discontinued Activities		-		-		(185,362)		(185,362)
Net Income for the Period		1,600,753		181,386		(194,951)		1,587,188
Other Comprehensive Income		-		-		3,527		3,527
Total Comprehensive Income (Loss)		1,600,753		181,386		(191,424)		1,590,715
Total Comprehensive Income (Loss) Attributable to the Controlling Company’s Shareholders		1,600,753		-		(169,418)		1,431,335
Total Comprehensive Income (Loss) Attributable to Non-controlling Interests		-		181,386		(22,006)		(159,380)

The significant adjustments to Cash Flows, as required by IFRS 1, paragraph 25, are as follows:

a. Under the prior accounting framework, Cash and Due from Banks and highly-liquid investments originally due in three months or less were considered to be Cash and Cash Equivalents. Under the IFRS-based accounting framework, Cash and Bank Deposits, including foreign currency purchases and sales pending settlement originally due in three months or less, and highly-liquid investments originally due in three months or less are considered to be Cash and Cash Equivalents.

b. Under the prior accounting framework, cash and cash equivalents of equity investments in Compañía Financiera Argentina S.A. (CFA) and Cobranzas y Servicios S.A. (CyS) were consolidated with those of the Group. Under the IFRS-based accounting framework, both companies are disclosed under Non-current Assets Held for Sale and, consequently, have not been consolidated.

32

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

The reconciliation of cash and cash equivalents is as follows:

Cash and Cash Equivalents	Prior Accounting Framework 03.31.17		CFA + CyS     Discontinued     Operations		Adjustments		IFRS-based         Accounting         Framework 03.31.17
Cash and Bank Deposits		50,221,334		(274,213)		(53,427)		49,893,694
Argentine Central Bank Bills and Notes Maturing within up to 90 days		11,579,700		-		(978)		11,578,722
Receivables from Reverse Repo Transactions		6,583,219		-		-		6,583,219
Local Interbank Loans		955,891		323,591		(93,591)		1,185,891
Overnight Placements in Banks Abroad		2,261,601		-		-		2,261,601
Other Cash Equivalents		1,935,508		-		(9,644)		1,925,864
Total		73,537,253		49,378		(157,640)		73,428,991
Cash and Cash Equivalents	Prior Accounting Framework 01.01.17		CFA + CyS Discontinued Operations		Adjustments		IFRS-based Accounting Framework 01.01.17
Cash and Bank Deposits		61,166,250		(395,201)		4,996,516		65,767,565
Argentine Central Bank Bills and Notes Maturing within up to 90 days		6,635,954		-		267,655		6,903,609
Receivables from Reverse Repo Transactions		862,300		-		-		862,300
Local Interbank Loans		1,227,101		-		-		1,227,101
Overnight Placements in Banks Abroad		3,196,060		-		(5,709)		3,190,351
Total		73,087,665		(395,201)		5,258,462		77,950,926

c. Under the prior accounting framework, cash flows from Intangible Assets, Dividends Earned for Investments in Associates and Cash Flows with the Argentine Central Bank were disclosed as cash flows provided by operating activities. Under the IFRS-based accounting framework, cash flows from Intangible Assets and Dividends Earned for Investments in Subsidiaries and Associates are disclosed as cash flows provided by investing activities, while those from loans from the Argentine Central Bank are disclosed as cash flows provided by financing activities.

d. Cash flows from CFA and CyS, as mentioned in subsection b. above, have not been consolidated in accordance with the IFRS-based accounting framework.

The reconciliation of cash flows is as follows:

Cash and Cash Equivalents	Prior Accounting Framework 03.31.17		CFA + CyS     Discontinued     Operations		Adjustments		IFRS-based         Accounting         Framework 03.31.17
Operating Activities (I)		574,223		(33,021)		(4,848,401)		(4,307,199)
Investing Activities (II)		(332,695)		6,509		(244,347)		(570,533)
Financing Activities (III)		1,262,355		147,500		9,723		1,419,578
Effect of Changes in the Exchange Rate		(1,054,295)		-		(9,486)		(1,063,781)
Total		449,588		120,988		(5,092,511)		(4,521,935)
(I) Operating Activities
Cash Flows According to Argentine Central Bank Regulations as of 03.31.17								574,223
CFA + CyS Discontinued Operations								(33,021)
Adjustments that Affect Cash Flows from Operating Activities								(5,095,892)
Intangible Assets								245,101
Loans from the Argentine Central Bank								2,390
Cash Flows According to the IFRS-based Accounting Framework as of 03.31.17								4,307,199

33

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

(II) Investing Activities
Cash Flows According to Argentine Central Bank Regulations as of 03.31.17	(332,695)
CFA + CyS Discontinued Operations	6,509
Adjustments to Determine Investing Activities	754
Intangible Assets	(245,101)
Cash Flows According to the IFRS-based Accounting Framework as of 03.31.17	(570,533)
(III) Financing Activities
Cash Flows According to Argentine Central Bank Regulations as of 03.31.17	1,262,355
CFA + CyS Discontinued Operations	147,500
Adjustments to Determine Financing Activities	12,113
Loans from the Argentine Central Bank	(2,390)
Cash Flows According to the IFRS-based Accounting Framework as of 03.31.17	1,419,578
Effect of Changes in the Exchange Rate
Cash Flows According to Argentine Central Bank Regulations as of 03.31.17	(1,054,295)
Adjustments to Determine Financing Activities	(9,486)
Cash Flows According to the IFRS-based Accounting Framework as of 03.31.17	(1,063,781)

3.2.    OPTIONAL EXEMPTIONS TO IFRS

IFRS 1 allows entities that adopt IFRS for the first time to consider certain one-time exceptions. Such exceptions have been established by the IASB to make the first application of certain IFRS simpler, eliminating the mandatory nature of their retroactive application.

Below are the optional exemptions applicable to the Group under IFRS 1:

1. Attributed Cost of Bank Property, Plant and Equipment and Investment Properties: The current value of bank property, plant and equipment and investment properties has been adopted as attributed cost as of the date of transition to IFRS.

2. Business Combinations: The Group has opted for not applying IFRS 3 “Business Combinations” retroactively for business combinations prior to the date of transition to IFRS.

3. Assets and Liabilities of Subsidiaries that Have Already Applied IFRS: The Group has adopted IFRS for the first time after its subsidiary Tarjetas Regionales S.A. and its related subsidiaries. Consequently, it has measured the assets and liabilities of such subsidiaries in its consolidated condensed interim financial statements for the same carrying amounts disclosed in their financial statements.

The Group has not made use of other exemptions available in IFRS 1.

3.3.    MANDATORY EXCEPTIONS TO IFRS

Below are the mandatory exceptions applicable to the Group under IFRS 1:

1. Estimates: The estimates made by the Group according to IFRS as of January 1, 2017 (date of transition to IFRS) are consistent with the estimates made as of the same date according to the Argentine Central Bank’s accounting standards, considering what is described in Note 1.1 (non-application of the impairment chapter of IFRS 9).

2. Accounting derecognition of financial assets and liabilities: The Group applied the criteria of accounting derecognition of financial assets and liabilities under IFRS 9 prospectively for transactions occurred after January 1, 2017.

34

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

3. Classification and measurement of financial assets: The Group has considered the existing events and circumstances as of January 1, 2017 in its evaluation of whether the financial assets meet the characteristics to be classified as assets measured at amortized cost or at fair value with changes in profit or loss or at fair value with changes in other comprehensive income.

4. Other mandatory exceptions established by IFRS 1 that have not been applied because of their immateriality to the Group are:

- Hedge accounting

- Non-controlling interests

- Embedded derivatives

- Government loans

The other exceptions established by IFRS 1 have not been applied because of their immateriality to the Group.

3.4.    RECLASSIFICATIONS

The items recognized under the prior accounting framework, which were reclassified according to the IFRS-based accounting framework and as detailed in point 3.1., are described below.

3.4.1.     Assets

Spot Purchases and Sales Pending Settlement: According to standards in effect until December 31, 2017, these transactions were recorded as Other Receivables Resulting from Financial Brokerage and Other Liabilities Resulting from Financial Brokerage, respectively. Upon using the criterion of the date of closing, a spot purchase transaction pending settlement will imply recording the security to be received in the respective account, with the applicable measurement criterion, while the spot sale pending settlement will imply the derecognition of the security. The currency transactions pending settlement have been reclassified as cash equivalents and those of securities have been included in the respective holdings.

Reverse Repo Transactions: Under the prior accounting framework, the security in such transactions was recognized in the holding and the obligation to deliver it at the end of the transaction in Other Liabilities Resulting from Financial Brokerage. The loan granted was recorded in Other Receivables Resulting from Financial Brokerage. Under the IFRS-based accounting framework, the financial assets acquired through reverse repo transactions for which the risks and benefits have not been transferred shall be recognized as a loan granted with securities offered as collateral. Therefore, the reclassification between the accounts mentioned above has been made.

Leasehold Improvements: According to the prior accounting framework, they were disclosed under Intangible Assets. According to the IFRS-based accounting framework, those leasehold improvements are part of Property, Plant and Equipment.

Equity Investments: As discussed in Prisma Medios de Pago S.A.’s Ordinary and Extraordinary Shareholders’ Meeting held on August 31, 2017, the shareholders wished to transfer all of the shares of the company. Therefore, according to IFRS 5 this is considered as Non-current Assets Held for Sale and valued at cost or fair value, whichever lower. Likewise, Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. are disclosed under Equity Investments, under the prior accounting framework. As mentioned above regarding IFRS 5, it has been reclassified in the same account.

3.4.2.     Income Statement

Commissions on Origination of Loans and Lending Expenses: According to the prior accounting framework, commissions on structuring should be disclosed under Income from Services and lending expenses, under Expenses from Services. According to IFRS 9, such commissions are part of the necessary cash flows to calculate the IRR on loans. Accordingly, the respective reclassification has been made to Interest Income.

3.5.    Adjustments by Applying IFRS as of the Date of Transition

As of the date of transition, according to the prior accounting framework, the Group also consolidated Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A.

35

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. have been classified as Held for Sale under IFRS 5 since the respective agreements for their transfer have been signed. The effect is disclosed in all the accounts that were consolidated according to the prior accounting framework, as detailed in Note 3.1.

According to IFRS, an investor controls a subsidiary if it is exposed to or is entitled to variable returns due to its involvement in such entity and if it is capable of allocating such returns through its power over the subsidiary. By applying the principle of control under IFRS 10, the Financial Trust Galtrust I and the Financial Trust Saturno Créditos, which were not considered as controlled entities under Argentine Central Bank regulations, have been consolidated.

The following are additional adjustments that have been made as a result of applying the IFRS-based accounting framework, which were made to amounts recognized under the prior accounting framework, and are detailed in Note 3.1.

(a) Investments in Subsidiaries, Associates and Joint Ventures: Upon applying the equity method, the financial statements of the subsidiaries and of Prisma Medios de Pago S.A. have been consolidated. The shareholders’ equity arising from their financial statements has been adjusted by the effect the application of the IFRS-based accounting framework has had thereon.

(b) Property, Plant and Equipment: The value resulting as adjustment arises from adopting fair values as attributed cost, as described in 3.2, net of the related impact on accumulated depreciation.

(c) Intangible Assets: The prior accounting framework allowed the inclusions in intangible assets of items such as organization and reorganization expenses, among other items, the capitalization of which is not allowed under the IFRS-based accounting framework. Such assets have been derecognized and the amortization generated under the prior accounting framework has been reversed.

(d) Fair value debt securities with changes to income: The accounting valuation system of government and private securities set forth by the Argentine Central Bank until December 2017 established, in general, the valuation at fair value for those securities published in the list of volatilities periodically issued by such institution. The securities not included in those lists were measured at acquisition cost plus the IRR.

The adjustment disclosed is that resulting from measuring at fair value with changes in profit or loss the securities classified in this business model.

The Group has classified the following financial assets into this category: Holdings in government and private securities, in instruments issued by the Argentine Central Bank, in notes and certain investments in debt securities in financial trusts.

Galicia Valores S.A. has measured at fair value with changes in profit or loss the securities classified in this business model.

(e) Derivative Instruments: Adjustment resulting from applying the techniques specified in Note 4 to the Group’s option portfolio.

(f) Other Financial Assets: Upon the consolidation of the financial assets adjusted to the IFRS-based accounting framework of Financial Trust Galtrust I and Financial Trust Saturno Créditos, which are not considered as controlled entities under the prior accounting framework.

(g) Loans and other financing activities: According to the effective measurement criteria until the convergence to IFRS, these were recorded at their acquisition cost plus interest accrued based on the contractual rate. In compliance with the provisions set out in IFRS 9, the applicable adjustment has been made to the measurement at amortized cost.

(h) Other Debt Securities: As described in the preceding paragraph, the adjustment relates to debt securities of the financial trusts included in the amortized cost business model.

The Financial Trust Galtrust I has adjusted the measurement of its holding of government securities at fair value with changes in other comprehensive income, since it relates to the classification within such business model for the IFRS-based accounting framework.

36

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

(i) Investments in Equity Instruments: Galicia Valores S.A. has measured such investments at fair value with changes in profit or loss share investments, according to the IFRS-based accounting framework.

(j) Other Financial Assets Pledged as Collateral: Adjustment from the measurement at fair value with changes in profit or loss of monetary regulation instruments offered as collateral.

(k) Other Non-financial Assets: The adjustment is made up of the derecognition of advances for systems purchased, the capitalization of which is not allowed by the IFRS-based accounting framework, the measurement of guarantees granted according to paragraph 4.2.1. c) of IFRS 9, and the adoption of fair value as attributed cost of miscellaneous assets.

(l) Non-current Assets Held for Sale: Relates to the adjustment of Prisma Medios de Pago S.A. due to the application of the equity method prior to its reclassification as Non-current Assets Held for Sale, as described in Note 3.5.

(m) Provisions: Relates to the adjustment for the valuation according to the likelihood criteria of IAS 37 (“more likely than not”) regarding the contingencies for labor and commercial legal actions.

(n) Other Financial Liabilities: Adjustment to the measurement of guarantees granted, according to paragraph 4.2.1 c) of IFRS 9.

(o) Loans from the Argentine Central Bank and Other Financial Institutions: Adjustment to the measurement at amortized cost, according to the IFRS-based accounting framework, of those loans received, the interest on which had been accrued applying the contractual rate of the prior accounting framework.

(p) Deferred Income Tax Assets and Liabilities: The deferred tax is recognized according to the liability method, the arising temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and is determined using tax rates (and laws) approved or about to be approved as of the balance sheet date and expected to be applicable when the related deferred tax assets are realized or the deferred tax liabilities are settled.

By applying Argentine Central Bank regulations, the Bank only recognized the current tax for the fiscal year, according to the prior accounting framework.

(q) Other Non-financial Liabilities: Relates to the deferred income for the Quiero! customer loyalty program, which is measured at the fair value of the point granted and considering the redemption rate, according to the IFRS-based accounting framework.

(r) Liabilities Recognized by Insurance Companies: Under the IFRS-based accounting framework, an insurance company will evaluate, at the end of the period reported, the adjustment of insurance liabilities that have been recognized, using the current estimates of future cash flows from insurance contracts. If the evaluation shows that the carrying amount of its liabilities for insurance contracts (less deferred acquisition costs and related intangible assets) is not adequate, considering the estimated future cash flows, the total amount of the inadequacy will be recognized in profit or loss. Under the prior accounting framework, the accounting policies followed by the insurance company do not require performing a test of adjusting liabilities that meets the minimum conditions established by the IFRS-based accounting framework. According to IFRS 4, in this case, the insurance company shall determine the adjustment of the carrying amount recorded according to the guidelines set out in IAS 37.

(s) Liability from Purchase of Minority Interests: As of December 31, 2017, a financial liability has been recognized for the purchase of a 6% interest in Tarjetas Regionales S.A. IFRS 32, paragraph 23, sets forth that a commitment to buy treasury shares is to be accounted for as a financial liability for the present value of the selling price. The liability is recognized with its corresponding offsetting entry in equity, for the risks and rewards associated with the shares are retained by the minority shareholders until the actual transfer of such shares. The transaction totaled $924,140 and the amount recognized against other shareholders’ equity reserves was $419,307.

37

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

NOTE 4. FAIR VALUES

The Group classifies the fair values of financial instruments in three levels, according to the quality of data used to determine them.

Fair Value Level 1: The fair value of financial instruments traded in active markets (such as, publicly-traded derivatives, notes or available for sale) is based on the quoted prices of markets (unadjusted) as of the date of the reporting period. If the quote price is available and there is an active market for the instrument, it will be included in Level 1.

Fair Value Level 2: The fair value of financial instruments that are not traded in active markets, such as the derivatives available over the counter, is determined using valuation techniques that maximize the use of observable information and relies the least possible on the Group’s specific estimates. If all the material variables to establish the fair value of a financial instrument are observable, the instrument is included in Level 2.

Fair Value Level 3: If one or more material variables are not based on observable market information, the instrument is included in Level 3. This is the case of unquoted equity instruments.

The Group’s financial instruments measured at fair value at period-end are as follows:

Instruments Portfolio as of 03.31.18	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Assets
- Argentine Central Bank Bills and Notes		1,819,748		14,353,307		123,655
- Government Securities		9,988,363		86,478		3,054,314
- Private Securities		460,651		-		1,485,996
- Derivative Instruments		-		137,474		-
- Other Financial Assets		2,470,639		-		-
- Financial Assets Pledged as Collateral		-		998,444
Liabilities
- Fair Value liabilities with changes to income		-		-		(1,796,550)
- Derivative Instruments		-		(180,989)		-
Total		14,739,401		15,394,714		2,867,415
Instruments Portfolio as of 12.31.17	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Assets
- Argentine Central Bank Bills and Notes		16,920,090		938,674		-
- Government Securities		7,115,812		27,626		2,307,904
- Private Securities		278,191		-		1,389,943
- Derivative Instruments		-		525,362		-
- Other Financial Assets		3,058,208		-		-
- Financial Assets Pledged as Collateral		391,287		-		-
Liabilities
- Derivative Instruments		-		(573,218)		-
Total		27,763,588		918,444		3,697,847

The Group’s policy is to recognize transfers among the fair value levels only as of the year-end dates, there being no changes in relation to the financial instruments held in portfolio as of December 31, 2017.

Changes in instruments included in fair value Level 3 are as follows:

Level 3 as of 03.31.18	Government     Securities		Private Securities		Liabilities at Fair   Value		Total Fair Value
Fair Value as of 12.31.17		2,307,904		1,389,943		-		3,697,847
Purchases		3,054,314		1,485,996		1,796,550		6,336,860
Sales		(2,307,904)		(1,389,943)		-		(3,697,847)
Fair Value as of 03.31.18		3,054,314		1,485,996		1,796,550		3,336,860

38

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Valuation Techniques

Valuation techniques to determine fair values include:

- Market or quoted prices of similar instruments.

- Determining the estimated present value of instruments.

The valuation technique to determine the fair value Level 2 is based on inputs other than the quoted price included in Level 1 that are observable for the asset or liability, both directly (i.e., prices) and indirectly (i.e., price derivatives). For those instruments for which there is no secondary trading and, if positions should be disposed of, the Group should sell to the Argentine Central Bank at the originally agreed-upon rate, as established by the regulatory agency, the price has been prepared based on such rate accrual.

The valuation technique to determine fair value Level 3 of financial instruments is based on the price prepared by curve, which is a method that compares the existing spread between the curve of sovereign bonds and the average hurdle rates of primary issuances, representing the different segments, according to the different risk ratings. If there are no representative primary issuances during the month, the following variants will be used:

(i) secondary market prices of securities under the same conditions, which have been quoted in the month of evaluation.

(ii) prior-month bidding and/or secondary market prices will be taken depending on how representative they are.

(iii) spread calculated in the prior month and will be applied to the sovereign curve, according to the reasonableness thereof.

(iv) An specific margin is applied, determined based on historical returns of instruments of similar conditions, based on justified reasons therefor.

As stated above, the rates and spreads to be used to discount future cash flows and originate the price of the instrument are determined.

All the changes to valuation methods are previously discussed and approved by the Group’s key personnel.

Fair Value of Other Financial Instruments

The Group has financial instruments that are not measured at fair value. For most of them, the fair value does not substantially differ from its residual value, since the interest rate payable or receivable is similar to the market rates or the instrument is short-term.

Off-Balance Sheet Items

In the normal course of business and in order to meet customers’ financing needs, off-balance sheet transactions are performed. These instruments expose the Group to the credit risk, in addition to loans recognized in assets. These financial instruments include credit lending commitments, letters of credit reserve, guarantees granted and acceptances.

The same credit policies for agreed credits, guarantees and loan granting are used. Outstanding commitments and guarantees do not represent an unusual credit risk.

Agreed Credits

They are commitments to grant loans to a customer in a future date, subject to compliance with certain contractual agreements that usually have fixed maturity dates or other termination clauses and may require a fee payment.

Commitments are expected to expire without resorting to them. The total amounts of agreed credits do not necessarily represent future cash requirements. Each customer’s solvency is evaluated case by case.

39

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Guarantees Granted

The issuing bank commits to reimbursing the loss to the beneficiary if the secured debtor does not comply with its obligation upon maturity.

Export and Import Documentary Credits

They are conditional commitments issued by the Group to secure a customer’s compliance towards a third party.

Responsibilities for Foreign Trade Transactions

They are conditional commitments for foreign trade transactions.

Our exposure to credit loss upon the other party’s default in the financial instrument is represented by the contractual notional amount of the same investments.

The credit exposure for these transactions is detailed below.

	03.31.18		12.31.17
Agreed Credits		11,666,796		11,665,185
Export and Import Documentary Credits		1,819,020		1,358,550
Guarantees Granted		2,549,063		2,366,349
Responsibilities for Foreign Trade Transactions		483,990		456,567

As of March 31, 2018 and December 31, 2017, the fees and commissions related to the items mentioned above amounted to $2,579 and $19,338 for agreed credits, $10,774 and $40,103 for Export and Import Documentary Credits, and $11,424 and $44,378 for Guarantees Granted.

The credit risk of these instruments is essentially the same as that involved in lending credit facilities to customers.

To grant guarantees to our customers, we may require counter-guarantees, which, classified by type, amount to:

	03.31.18		12.31.17		01.01.17
Other Preferred Guarantees Received		79,299		45,400		60,648
Other Guarantees Received		328,303		319,350		241,575

Additionally, checks to be debited and credited, as well as other elements in the collection process, such as, notes, invoices and miscellaneous items, are recorded in memorandum accounts until the related instrument is approved or accepted.

The risk of loss in these offsetting transactions is not significant.

	03.31.18		12.31.17		01.01.17
Checks and Drafts to be Debited		2,021,674		2,106,757		2,013,574
Checks and Drafts to be Credited		2,880,093		3,084,228		2,559,608
Values for Collection		22,850,768		23,037,677		18,309,418

The Group acts as trustee by virtue of trust agreements to secure obligations derived from several agreements between parties. As of March 31, 2018 and December 31, 2017, trust funds amounted to $8,869,060 and $8,916,957, respectively. In addition, as of March 31, 2018 and December 31, 2017, securities held in custody amounted to $440,073,737 and $374,391,939, respectively.

Derivative Instruments

FORWARD PURCHASE-SALE OF FOREIGN CURRENCY WITHOUT DELIVERY OF THE UNDERLYING ASSET

Mercado Abierto Electrónico (MAE) and Rosario Futures Exchange (ROFEX) have trading environments for the closing, recording and settlement of financial forward transactions carried out among its agents, the Bank being one of them. The general settlement mode for these transactions is without delivery of the traded underlying asset. Settlement is carried out on a daily basis, in Pesos, 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.

The transactions are recorded in Off-Balance Sheet Items for the notional value traded. The accrued balances pending settlement are disclosed in the “Derivative Instruments” line of Assets and/or Liabilities, as the case may be.

40

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

INTEREST RATE SWAPS

These transactions are conducted within the environment created by the MAE, and the settlement thereof is carried out on a daily or monthly basis, in Pesos, for the difference between the cash flows calculated using a variable rate (Badlar for private banks for time deposits of 30 to 35 days) and the cash flows calculated using a fixed rate, or vice versa, on the notional value agreed, the difference in price being charged to income.

The amounts of transactions conducted as of the dates indicated below are as follows:

	Underlying Asset		Type of Settlement		03.31.18(*)		12.31.17(*)
Forward Purchase – Sale of Foreign Currency
Purchases		Foreign currency		Daily difference		32,572,146		20,417,503
Sales		Foreign currency		Daily difference		26,963,328		18,726,582
Purchases by Customers		Foreign currency		Daily difference		2,062,410		395,014
Sales by Customers		Foreign currency		Daily difference		5,619,463		3,706,769
Interest Rate Swaps
Swaps		Others		Other		1,000		1,000
Repo Transactions
Forward Purchases		Government securities		With delivery of the underlying asset		2,050,033		9,697,406
Forward Sales		Government securities		With delivery of the underlying asset		4,506,003		1,132,573

(*) Notional values.

NOTE 5. EQUITY INVESTMENTS AND RELATED PARTIES

5.1.    BUSINESS COMBINATIONS

Banco Finansur S.A.’s operation was temporarily suspended by the Argentine Central Bank from November 9, 2017 to February 9, 2018. On January 12, 2018, the Bank disclosed its participation in the potential acquisition of certain assets and the assumption of secured liabilities of Banco Finansur S.A., under the framework of Section 35 bis of the Argentine Financial Institutions Law, by submitting a non-binding offer to such company. In addition, on March 9, 2018, the Bank reported that the Argentine Central Bank approved the transfer of certain assets and secured liabilities of Banco Finansur S.A. in its favor, by creating a Private Financial Trust called Fidensur.

The Bank has up to 12 months from the acquisition date to complete the accounting of such transaction classified, under IFRS, as business combination. Therefore, the amounts considered below are provisional.

The amounts received are as follows:

ASSETS
Cash	24,878
Transfers to Checking Accounts with the Argentine Central Bank	215,000
Transfers Pending to Be Received Abroad	45,771
TOTAL ASSETS	285,649
LIABILITIES
Deposits	416,440
DEBT SECURITY ESTIMATED FACE VALUE	130,791

5.2.       EQUITY INVESTMENTS

5.2.1.    Equity Investments in Subsidiaries

The basic information regarding the Company’s consolidated controlled companies is detailed as follows:

41

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Company	Direct and Indirect Shareholding				Equity Investment %
	03.31.18		12.31.17		03.31.18		12.31.17
Banco de Galicia y Buenos Aires S.A.		668,549,353		795,973,974		100.00		100.00
Cobranzas Regionales S.A.		8,300		7,700		83.00		77.00
Galicia Administradora de Fondos S.A.		20,000		20,000		100.00		100.00
Galicia Broker Asesores de Seguros S.A.		71,310		71,310		99.99		99.99
Galicia Retiro Compañía de Seguros S.A.		7,727,271		7,727,271		99.99		99.99
Galicia Seguros S.A.		1,830,883		1,830,883		99.99		99.99
Galicia Valores S.A.		1,000,000		1,000,000		100.00		100.00
Galicia Warrants S.A.		1,000,000		1,000,000		100.00		100.00
Financial Trust Galtrust I		-		-		-		100.00
Financial Trust Saturno Créditos		-		-		100.00		100.00
Net Investment S.A. (in Liquidation)(*)		-		12,000		-		100.00
Ondara S.A. (former Procesadora Regional S.A.)		13,636,990		12,709,967		83.85		78.15
Sudamericana Holding S.A.		185,653		185,653		100.00		100.00
Tarjeta Naranja S.A.		2,343		2,174		83.00		77.00
Tarjetas Regionales S.A.		894,552,668		829,886,212		83.00		77.00

(*) The financial distribution was paid out on January 9, 2018.

Company	IFRS-based Accounting Framework (*)
	03.31.18
	Assets		Liabilities		Shareholders’       Equity		Net Income
Banco de Galicia y Buenos Aires S.A.		283,887,768		249,486,474		34,401,294		1,955,725
Cobranzas Regionales S.A.		62,988		27,325		35,663		185
Galicia Administradora de Fondos S.A.		534,329		344,131		190,198		167,654
Galicia Broker Asesores de Seguros S.A.		42,517		24,270		18,247		13,944
Galicia Retiro Compañía de Seguros S.A.		203,424		161,904		41,520		3,122
Galicia Seguros S.A.		2,033,481		1,240,750		792,731		354,590
Galicia Valores S.A.		204,877		39,140		165,737		13,357
Galicia Warrants S.A.		264,266		86,985		177,281		11,566
Financial Trust Saturno Créditos		24,643		1,626		23,027		1,060
Ondara S.A. (former Procesadora Regional S.A.)		29,982		9,001		20,981		128
Sudamericana Holding S.A.		2,617,630		1,417,698		1,199,932		167,354
Tarjeta Naranja S.A.		39,229,338		30,538,319		8,691,019		840,208
Tarjetas Regionales S.A.		40,264,712		31,008,599		9,256,113		842,230

(*) The balances are related to consolidated accounts.

Company	IFRS-based Accounting Framework (*)
	12.31.17						03.31.17
	Assets		Liabilities		Shareholders’       Equity		Net Income
Banco de Galicia y Buenos Aires S.A.		289,772,694		250,846,840		38,925,854		1,297,986
Cobranzas Regionales S.A.		57,921		22,443		35,478		1,234
Galicia Administradora de Fondos S.A.		736,680		276,479		460,201		89,079
Galicia Broker Asesores de Seguros S.A.		31,599		19,605		11,994		8,100
Galicia Retiro Compañía de Seguros S.A.		195,821		155,244		40,577		1,852
Galicia Seguros S.A.		1,884,259		1,149,537		734,722		388,464
Galicia Valores S.A.		175,436		23,056		152,380		6,071
Galicia Warrants S.A.		258,143		92,427		165,716		5,965
Financial Trust Galtrust I		140,994		341		140,653		24,225
Financial Trust Saturno Créditos		23,372		1,413		21,959		540
Net Investment S.A. (in Liquidation)(**)		284		-		284		8
Ondara S.A. (former Procesadora Regional S.A.)		25,000		4,147		20,853		1,013
Sudamericana Holding S.A.		2,372,332		1,326,995		1,045,337		108,987
Tarjeta Naranja S.A.		36,025,069		28,174,258		7,850,811		606,295
Tarjetas Regionales S.A.		37,016,634		28,601,708		8,414,926		691,778

(*) The balances are related to consolidated accounts.

(*) The financial distribution was paid out on January 9, 2018.

The non-controlling equity investment percentages as of the dates indicated below are as follows:

42

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Company	03.31.18		12.31.17
Cobranzas Regionales S.A.		17.00		23.00
Galicia Broker Asesores de Seguros S.A.		0.01		0.01
Galicia Retiro Compañía de Seguros S.A.		0.01		0.01
Galicia Seguros S.A.		0.01		0.01
Ondara S.A. (former Procesadora Regional S.A.)		16.15		21.85
Tarjeta Naranja S.A.		17.00		23.00
Tarjetas Regionales S.A.		17.00		23.00

5.2.2.    Related Parties

Related parties are considered to be all those entities that directly, or indirectly through other entities, have control over another, are under the same control or may have significant influence on another entity’s financial or operational decisions.

The Group controls another entity when it has the power over other entities’ financial and operating decisions and also has a share of profits thereof.

Additionally, the Group considers that it has joint control when there is an agreement between parties regarding the control of a common economic activity.

Finally, the Group considers that it has joint control in those cases where the Group has significant influence due to its capacity to take part in decisions about the company’s financial policy and operations. Those shareholders who hold an equity investment equal to or higher than 20% of the total votes of the Group or its subsidiaries are considered to have significant influence. To determine those situations, not only are the legal aspects observed, but so are the nature and substance of the relationship.

Furthermore, the key personnel of the Group’s Management (Board of Directors members and Managers of the Group and its subsidiaries), as well as the entities over which the key personnel may have significant influence or control are considered as related parties.

Controlling Entity

The Group is controlled by:

Name	Nature	Principal Line of Business	Place of Business	Equity Investment %
EBA Holding S.A.	55.11% of voting rights	Financial and Investment Activities	Autonomous City of Buenos Aires - Argentina	19.71%

Key Personnel’s Compensation

The compensation earned by the Group’s key personnel as of March 31, 2018 and December 31, 2017 amounts to $256,110 and $437,027, respectively.

Key Personnel’s Structure

Key personnel’s structure as of the dates indicated below is as follows:

	03.31.18		12.31.17
Directors		59		60
General Manager		1		1
Division Managers		9		9
Department Managers		56		51
Total		125		121

Related Party Transactions

The following table shows the total credit assistance granted by the Group to key personnel, syndics, majority shareholders, as well as all individuals who are related to them by a family relationship of up to the second degree of consanguinity or first degree by affinity (pursuant to the Argentine Central Bank’s definition of related individual) and any entity affiliated with any of these parties, not required to be consolidated.

43

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

	03.31.18		12.31.17
Total Amount of Credit Assistance		718,837		677,236
Number of Recipients (Amounts)		344		364
- Natural Persons		281		299
- Artificial Persons		63		65
Average Amount of Credit Assistance		2,090		1,861
Maximum Assistance		224,129		195,122

Financial assistance, including the one that was restructured, 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. Such financial assistance did not involve more than the normal risk of loan losses or present other unfavorable features.

NOTE 6. INFORMATION ABOUT THE SHAREHOLDERS’ EQUITY AND THE STATEMENT OF CASH FLOWS

6.1.       CAPITAL STOCK

The capital stock structure as of the dates indicated below is as follows:

	Face Value		Restated
Balances as of 01.01.17		1,300,265		1,578,396
Capital Increase		126,500		126,500
Balances as of 12.31.17		1,426,765		1,704,896
Balances as of 03.31.18		1,426,765		1,704,896

The Ordinary and Extraordinary Shareholders’ Meeting of Grupo Financiero Galicia S.A. held on August 15, 2017 decided to approve an increase in capital stock by means of the issuance of up to 150,000,000 ordinary book-entry Class “B” shares, entitled to one vote per share and with a face value of $1 each and were also entitled to dividends equal to such ordinary book-entry shares outstanding at the time of the issuance of such shares.

On September 7, 2017, the Board of Directors of the C.N.V., by means of Joint Resolution No. RESFC-2017-18927-APN-DIR#CNV, decided to authorize the public offering of 130,434,600 ordinary book-entry Class “B” shares, with a face value of $1 and one vote per share and, in case of over-subscription, an increase in such offering up to 19,565,190 ordinary book-entry Class “B” shares, with a face value of $1 and one vote each to be offered for public subscription, with preemptive and accretion rights.

The primary offering year ended on September 26, 2017, with 109,999,996 Class “B” shares having been subscribed at a price of U.S. $5 each. On September 29, 2017, such shares were issued and paid in.

The Company granted over-subscription rights to international placement agents who, on October 2, 2017, enforced such rights and were awarded additional 16,500,004 Class “B” shares at a price of U.S. $5 each, the issuance and payment of which took place on October 4, 2017.

The capital increase amounted to $11,004,383, the expenses related thereto amounted to $146,346 and were deducted from additional paid-in capital.

On November 8, 2017, the capital increase was registered with the Public Registry of Commerce.

6.2.       EARNINGS PER SHARE

Earnings per share are calculated by dividing income attributable to the Group’s shareholders by the weighted average of outstanding common shares during the year. As the Group does not have preferred shares or debt convertible into shares, basic earnings are equal to diluted earnings per share.

	03.31.18		03.31.17
Net Income for the Period Attributable to the Controlling Company’s Shareholders		2,999,488		1,427,808
Subscribed Shares Weighted Average		1,426,765		1,300,265
Earnings per Share		2.10		1.10

44

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

6.3.       STATEMENT OF CASH FLOWS

Cash and cash equivalents break down as follows:

	03.31.18		12.31.17		03.31.17		01.01.17
Cash and Bank Deposits		46,441,210		58,945,315		49,893,694		65,767,565
Cash and Bank Deposits from Tarjetas Regionales S.A.		-		542,699		-		-
Argentine Central Bank Bills and Notes Maturing within up to 90 days		14,955,913		17,107,571		11,578,722		6,903,609
Receivables from Reverse Repo Transactions		4,492,816		9,654,517		6,583,219		-
Local Interbank Loans		1,231,778		935,000		1,185,891		862,300
Overnight Placements in Banks Abroad		1,461,845		288,991		2,261,601		1,227,101
Mutual Funds		2,339,553		1,887,021		995,719		2,193,056
Time Deposits		9,278		6,169		-		3,598
Government Securities		780,141		-		930,145		993,697
Total Cash and Cash Equivalents		71,712,534		89,367,283		73,428,991		77,950,926

NOTE 7. NON-FINANCIAL ASSETS

7.1.       PROPERTY, PLANT AND EQUIPMENT

Changes in Property, Plant and Equipment are detailed in Schedule F.

7.2.       INTANGIBLE ASSETS

The Group’s Intangible Assets are detailed in Schedule G.

7.3.       NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

The Group has classified the following assets as Assets Held for Sale and Discontinued Operations:

	03.31.18		12.31.17
Equity Investments		208,972		1,181,474
Prisma Medios de Pago S.A.		208,972		208,972
Compañía Financiera Argentina S.A.		-		965,500
Cobranzas y Servicios S.A.		-		7,002
Other Debt Securities		17,065		-
Financial Trust Agro IV		17,065		-
Property, Plant and Equipment		2,328		2,328
Real Estate		2,328		2,328
Total		228,365		1,183,802

Prisma Medios de Pago S.A.: As discussed at the company’s Ordinary and Extraordinary Shareholders’ Meeting held on August 31, 2017, the shareholders authorized the transfer all of the shares of the company in a one-year term. Therefore, according to IFRS 5, this is considered as Non-current Assets Held for Sale and valued at cost or market value, whichever lower, less selling expenses, the carrying amounts of which stood at $208,972 as of March 31, 2018 and December 31, 2017.

Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A.: The Bank’s Board of Directors accepted an offer to buy all treasury shares, made by Mr. Julio Alfredo Fraomeni and Galeno Capital S.A.U. In accordance with Resolution No. 414, the Argentine Central Bank authorized such transaction.

The sale of the shares in both companies was consummated on February 2, 2018, with the new holders having been registered in each of these companies’ books. The sale price was subject to the buyers’ consent, who were entitled to raise objections for a term of up to 45 consecutive days to be counted as from January 29, 2018. On March 26, 2018, the sale of shares in Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. was completed, establishing a final price of $1,025,705 and $21,572, respectively. The proceeds from the sale of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. amounted to $60,205 and $14,569, respectively. The income tax impact for discontinued operations is disclosed separately in the “Income Tax from Discontinued Operations” account, which amounts to $22,882 as of March 31, 2018.

As of March 31, 2018, the Financial Trust Agro IV was classified as available for sale since the Bank agreed to an irrevocable commitment to making its best business efforts so that within one year all of its rights as Beneficiary of the trust are sold to an independent third party.

45

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

NOTE 8. OTHER DISCLOSURES REQUIRED BY IFRS

8.1.       SEGMENT REPORTING

The Group determines segments based on management reports that are reviewed by the Board of Directors and updated as they show changes.

Reportable segments are made up of one or more operating segments with similar economic characteristics, distribution channels and regulatory environments.

Below there is a description of each business segment’s composition:

a. Banks: It represents the banking business operation results.

b. Regional Credit Cards: This segment represents the results of operations of the regional credit card business and includes the results of operations of Tarjetas Regionales S.A. consolidated with its subsidiaries, as follows: Cobranzas Regionales S.A., Procesadora Regional S.A. and Tarjeta Naranja S.A.

c. Insurance: This segment represents the results of operations of the insurance companies’ business and includes the results of operations of Sudamericana Holding S.A. consolidated with its subsidiaries, as follows: Galicia Retiro Cía. de Seguros S.A., Galicia Seguros S.A. and Galicia Broker Asesores de Seguros S.A.

d. Other Businesses: This segment shows the results of operations of Galicia Administradora de Fondos S.A., Galicia Warrants S.A., Net Investment S.A. (in liquidation), Galicia Valores S.A. and Grupo Financiero Galicia S.A., the last two net of eliminations of the income from equity investments.

e. Adjustments: This segment includes consolidation adjustments and eliminations of transactions among subsidiaries.

The operating income of the Group’s different operating segments are monitored separately in order to make decisions on resource allocation and the evaluation of each segment’s performance. Segment performance is evaluated based on operating income or losses and is consistently measured with the operating income and losses of the consolidated income statement.

When any transaction occurs, the transfer pricing among operating segments is at arm’s length similarly to transactions performed with third parties. Income, expenses and income (losses) resulting from the transfers among operating segments are then eliminated from consolidation.

The relevant segment reporting as of the dates indicated below is as follows:

46

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

	Banks		Regional Credit Cards		Insurance		Others		Adjustments		Total as of     03.31.18
Net Income from Interest (Expense)		4,154,424		1,929,493		76,052		18,085		-		6,178,054
Net Commission Income (Expense)		1,081,905		401,418		-		(522)		30,000		1,512,801
Net income from Measurement of Fair Value Financial Instruments with changes to income		1,639,934		107,415		19,360		67,004		-		1,833,713
Income from Derecognition of Assets Measured at Amortized Cost		15,777		-		-		-		-		15,777
Exchange Rate Differences on Gold and Foreign Currency		744,119		3,538		901		25,361		-		773,919
Other Operating Income		2,326,348		1,822,620		3,087		266,566		(303,616)		4,115,005
Underwriting Income		-		-		369,441		-		272,568		642,009
Loan loss provisions		(963,053)		(658,694)		(121)		-		-		(1,621,868)
Employee Benefits		(2,123,011)		(848,107)		(99,108)		(24,838)		-		(3,095,064)
Administrative Expenses		(1,767,388)		(1,048,099)		(63,570)		(47,759)		2,116		(2,924,700)
Depreciation and Impairment of Assets		(185,807)		(60,391)		(11,082)		(201)		-		(257,481)
Other Operating Expenses		(2,219,222)		(437,250)		(29,444)		(16,537)		-		(2,702,453)
Operating Income		2,704,026		1,211,943		265,516		287,159		1,068		4,469,712
Income for Associates and Joint Ventures		31,334		-		-		2,971,793		(3,002,548)		579
Income before Taxes from Continuing Activities		2,735,360		1,211,943		265,516		3,258,952		(3,001,480)		4,470,291
Income Tax from Continuing Activities		(830,579)		(369,713)		(98,165)		(81,059)		-		1,379,516
Net Income (Loss) from Continuing Activities		1,904,781		842,230		167,351		3,177,893		(3,001,480)		3,090,775
Income (Loss) from Discontinued Operations		72,970		-		-		1,804		-		74,774
Income Tax from Discontinued Operations		(21,893)		-		-		(989)		-		(22,882)
Net Income (Loss) for the Period		1,955,858		842,230		167,351		3,178,708		(3,001,480)		3,142,667
Other Comprehensive Income		(3,259)		-		(12,761)		(14,425)		16,020		(14,425)
Net Income (Loss) for the Period Attributable to Non-controlling Interests		(133)		-		3		-		(143,049)		(143,179)
Net Income (Loss) for the Period Attributable to the Controlling Company’s Shareholders		1,952,466		842,230		154,593		3,164,283		(3,128,509)		2,985,063
	Banks		Regional Credit Cards		Insurance		Others		Adjustments		Total as of 03.31.17
Net Income from Interest (Expense)		2,719,805		1,490,220		61,559		(7,831)		13		4,263,766
Net Commission Income (Expense)		709,548		438,419		-		(193)		(12)		1,147,762
Net income from Measurement of Fair Value Financial Instruments with changes to income		680,259		(11,635)		-		9,151		-		677,775
Income from Derecognition of Assets Measured at Amortized Cost		-		-		-		-		-		-
Exchange Rate Differences on Gold and Foreign Currency		453,956		6,214		(430)		(234)		-		459,506
Other Operating Income		1,930,802		1,467,339		(17,057)		161,632		(297,820)		3,244,896
Underwriting Income		-		-		235,649		-		288,686		524,335
Loan loss provisions		(531,397)		(509,238)		(617)		(121)		-		(1,041,373)
Employee Benefits		(1,668,752)		(692,142)		(68,821)		(42,614)		-		(2,472,329)
Administrative Expenses		(1,233,307)		(779,684)		(67,419)		(22,741)		8,136		(2,095,015)
Depreciation and Impairment of Assets		(179,299)		(47,900)		(4,981)		(1,857)		-		(234,037)
Other Operating Expenses		(1,456,656)		(306,210)		28,289		(8,294)		(108)		(1,742,979)
Operating Income (Loss)		1,424,959		1,055,383		166,172		86,898		(1,105)		2,732,307
Income for Associates and Joint Ventures		40,106		-		1,306		1,471,752		(1,488,982)		24,182
Income before Taxes from Continuing Activities		1,465,065		1,055,383		167,478		1,558,650		(1,490,087)		2,756,489
Income Tax from Continuing Activities		(514,166)		(363,554)		(58,491)		(47,728)		-		(983,939)
Net Income (Loss) from Continuing Activities		950,899		691,829		108,987		1,510,922		(1,490,087)		1,772,550
Income (Loss) from Discontinued Operations		-		-		-		-		-		-
Income Tax from Discontinued Operations		(185,362)		-		-		-		-		(185,362)
Net Income (Loss) for the Period		765,537		691,829		108,987		1,510,922		(1,490,087)		1,587,188
Other Comprehensive Income (Loss)		4,257		-		(834)		3,527		(3,423)		3,527
Net Income (Loss) for the Period Attributable to Non-controlling Interests		(159,329)		(51)		-		-		-		(159,380)
Net Income (Loss) for the Period Attributable to the Controlling Company’s Shareholders		610,465		691,778		108,153		1,514,449		(1,493,510)		1,431,335

47

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

	Banks		Regional Credit Cards		Insurance		Others		Adjustments			Total as of 03.31.18
ASSETS
Cash and Bank Deposits		45,843,373		661,437		38,685		17,555		(119,840)			46,441,210
Fair value debt securities with changes to income		29,307,604		233,302		688,580		1,310,940		(167,914)			31,372,512
Derivative Instruments		137,474		-		-		-		-			137,474
Repo Transactions		4,505,248		-		-		-		-			4,505,248
Other Financial Assets		3,840,567		2,058,971		904,061		525,115		(664,229)			6,664,485
Loans and other financing activities		175,485,186		35,537,823		19,908		103,037		(718,721)			210,427,233
Other Debt Securities		2,996,903		-		585,464		-		-			3,582,367
Financial Assets Pledged as Collateral		8,851,427		4,815		-		-		-			8,856,242
Current Income Tax Assets		17,115		21,242		161,906		143,612		-			343,875
Investments in Equity Instruments		216		-		-		12,493		-			12,709
Investments in Subsidiaries, Associates and Joint Ventures		358,852		-		-		43,479,123		(43,816,402)			21,573
Property, Plant and Equipment		9,076,259		678,235		143,270		3,367		-			9,901,131
Intangible Assets		715,262		292,732		68,775		419,390		(419,390)			1,076,852
Deferred Income Tax Assets		-		594,104		6,230		3,316		-			603,650
Other Non-financial Assets		2,491,738		182,051		751		164,430		607,415			3,446,385
Non-current Assets Held for Sale		228,365		-		-		-		-			228,365
TOTAL ASSETS		283,855,589		40,264,712		2,617,630		46,182,378		(45,298,998)			327,621,311
LIABILITIES
Deposits		198,489,273		-		-		-		(125,154)			198,364,119
Fair Value liabilities with changes to income		1,796,550		-		-		-		-			1,796,550
Derivative Instruments		180,989		-		-		-		-			180,989
Repo Transactions		2,014,918		-		-		-		-			2,014,918
Other Financial Liabilities		18,328,174		16,973,146		-		17,131		(348,613)			34,969,838
Loans from the Argentine Central Bank and Other Financial Institutions		10,193,106		1,284,111		3,274		-		(188,843)			11,292,008
Notes Issued		4,475,397		10,065,488		-		-		(167,914)			14,372,971
Current Income Tax Liabilities		2,609,586		802,711		214,848		451,391		-			4,078,536
Subordinated Notes		5,079,134		-		-		-		-			5,079,134
Provisions		670,309		53,767		59,556		4,450		-			788,082
Deferred Income Tax Liabilities		258,857		-		56,262		3,997		-			319,116
Other Non-financial Liabilities		5,359,660		1,828,327		1,083,758		52,182		(210,309)			8,113,618
TOTAL LIABILITIES		249,455,953		31,007,550		1,417,698		529,151		(1,040,473)			281,369,879
	Banks		Regional Credit Cards		Insurance		Others		Adjustments			Total as of 12.31.17
ASSETS
Cash and Bank Deposits		58,460,898		536,969		23,394		67,715		(143,661)			58,945,315
Fair value debt securities with changes to income		26,572,295		250,631		791,155		1,595,204		(231,045)			28,978,240
Derivative Instruments		525,362		-		-		11,638		(11,638)			525,362
Repo Transactions		9,676,101		-		-		-		-			9,676,101
Other Financial Assets		3,955,342		2,169,245		867,815		1,691,363		(1,765,343)			6,918,422
Loans and other financing activities		162,638,529		32,364,414		9,488		63,099		(537,307)			194,538,223
Other Debt Securities		2,105,938		-		393,627		209,087		-			2,708,652
Financial Assets Pledged as Collateral		6,325,905		4,652		-		-		-			6,330,557
Current Income Tax Assets		19,393		20,473		86,021		111,095		-			236,982
Investments in Subsidiaries, Associates and Joint Ventures		6,802,872		-		-		40,447,495		(47,229,500)			20,867
Property, Plant and Equipment		8,990,442		669,495		143,679		13,204		-			9,816,820
Intangible Assets		582,587		249,895		56,316		84		(1)			888,881
Deferred Income Tax Assets		-		557,904		70		1,833		-			559,807
Other Non-financial Assets		1,962,195		192,956		767		156,109		654,238			2,966,265
Non-current Assets Held for Sale		1,154,835		-		-		28,967		-			1,183,802
TOTAL ASSETS		289,772,694		37,016,634		2,372,332		44,396,893		(49,264,257)			324,294,296
LIABILITIES
Deposits		200,884,407		-		-		-		(161,620)			200,722,787
Fair Value liabilities with changes to income		-		-		-		-		-			-
Derivative Instruments		584,856		-		-		-		(11,638)			573,218
Repo Transactions		1,131,127		-		-		-		-			1,131,127
Other Financial Liabilities		23,023,417		16,532,609		-		1,394		(275,534)			39,281,886
Loans from the Argentine Central Bank and Other Financial Institutions		7,728,585		331,990		3,462		-		(194,989)			7,869,048
Notes Issued		4,488,602		9,481,509		-		-		(231,045)			13,739,066
Current Income Tax Liabilities		1,801,243		804,444		122,541		345,927		-			3,074,155
Subordinated Notes		4,828,018		-		-		-		-			4,828,018
Provisions		450,598		48,263		55,797		2,797		-			557,455
Deferred Income Tax Liabilities		630,211		-		53,658		24,235		-			708,104
Other Non-financial Liabilities		5,295,776		1,402,893		1,091,565		969,181		(73,173)			8,686,242
TOTAL LIABILITIES		250,846,840		28,601,708		1,327,023		1,343,534		(947,999	)		281,171,106

48

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

8.2.    LEASES

Operating Leases

The Group records contractual obligations derived from the lease of certain properties used as part of the distribution network. The estimated future lease payments related to these properties are:

Year	$
2018		666,991
2019		607,659
2020		524,497
2021		410,075
2022		300,607
2023 and Thereafter		797,445
Total		3,307,274

8.3.    PROVISIONS

Changes in the Provisions account are detailed in Schedule J.

8.4.    INCOME TAX/DEFERRED TAX

The following is a reconciliation of income tax charged to income as of March 31, 2018 to that which would result from applying the tax rate in force to book income:

	03.31.18
Income for the Period Before Income Tax		4,401,886
Effective Tax Rate		30	%
Income for the Period at the Tax Rate		1,320,566
Permanent Differences at the Tax Rate
- Income (Loss) from Equity Investments		(22,881)
- Non-taxable Income (Loss)		(11,244)
- Donations and Other Non-deductible Expenses		9,808
- Other		60,830
- Allowance for Impairment of Value		1,888
- Law 27430 Rate Adjustment		38,625
Total Income Tax Charge for the Period		1,402,398
	03.31.18
Current Income Tax		1,823,269
Deferred Tax Charge		(422,759)
Allowance for Impairment of Value		1,888
Total Income Tax Charge for the Period		1,402,398

The change in deferred income tax assets and liabilities, regardless of the balance offsetting within the same tax jurisdiction, is as follows:

49

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Item	12.31.17		Charges for the Period		Expiration of Tax Loss Carry- forwards		Others		Allowance for Impairment of Value		03.31.18
Deferred Tax Assets
Trade Receivables		554,489		37,821		-		-		-		592,310
Property, Plant and Equipment		(47,562)		(1,479)		-		-		-		(49,041)
Other Liabilities		(363)		-		-		(140)		-		(503)
Employee Benefits		2,105		(621)		-		-		-		1,484
Exchange Rate Differences		192		(47)		-		-		-		145
Provisions for Contingencies		44,717		(6,847)		-		-		-		37,870
Other Items		21,379		(23,017)		-		18,000		-		16,362
Financial Charges		19,067		522		-		-		-		19,589
Investments		(35,706)		18,148		-		-		-		(17,558)
Equity Investments in Subsidiaries		3,301		(3,301)		-		-		-		-
Tax Loss Carry-forwards		5,383		6,692		(5,226)		-		(3,765)		3,084
Taxes		(92)		-		-		-		-		(92)
Total Deferred Tax Assets		566,910		27,871		(5,226)		17,862		(3,765)		603,650
Item	12.31.17		Charges for the Period		Expiration of Tax Loss Carry- forwards		Others		Allowance for Impairment of Value		03.31.18
Deferred Tax Liabilities
Valuation of Securities		26,066		22,702		-		-		-		48,768
Provisions for Loan Losses		295,458		66,093		-		-		-		361,551
Loans		112,918		(386)		-		-		-		112,532
Property, Plant and Equipment		(1,326,099)		11,868		-		(1,846)		-		(1,316,077)
Miscellaneous		(36,070)		38		-		-		-		(36,032)
Other Items		(148,713)		16,625		-		-		-		(132,088)
Assets Available for Sale		(245,702)		185,361		-		-		-		(60,341)
Intangible Assets		210,993		-		-		-		-		210,993
Other Liabilities and Provisions		419,265		82,226		-		(4,054)		-		497,437
Other Financial Assets		(16,220)		10,361		-		-		-		(5,859)
Total Deferred Tax Liabilities		(708,104)		394,888		-		(5,900)		-		(319,116)
Deferred Tax Assets/(Liabilities)		(141,194)		422,759		(5,226)		11,962		(3,765)		284,534

A provision for the deferred tax asset was set as of March 31, 2018 and December 31, 2017 amounting to $3,765 and $7,103, respectively, as it is believed that the recovery thereof is not likely as of the date of these financial statements.

In September 2017, the Bank filed with A.F.I.P. both actions for recovery of income tax paid in excess for fiscal years 2014 and 2016, totaling $433,815 and $944,338, respectively. These actions were grounded on case law that declared unconstitutional certain rules and regulations banning the application of the inflation adjustment for tax purposes, with the ensuing confiscatory effects. As of period-end, the Bank has not recorded balances in respect of the contingent assets stemming from the aforementioned actions.

Tax Reform

On December 29, 2017, the National Executive Branch enacted Income Tax Law No. 27430. This law has introduced several changes to the previous income tax treatment. Some of the key changes involved in the reform include:

- Income Tax Rate: The income tax rate for Argentine companies shall be gradually reduced from 35% to 30% for fiscal years commencing on January 1, 2018 until December 31, 2019, and to 25% for fiscal years commencing on, and including, January 1, 2020.

- Tax on Dividends: The law has introduced a tax on dividends or profits distributed by Argentine companies or permanent establishments, among others, to: individuals, undivided interests or foreign beneficiaries, subject to the following considerations: (i) dividends distributed out of the profits made during fiscal years commencing on January 1, 2018 until December 31, 2019 shall be subject to withholding at a 7% rate; and (ii) dividends distributed out of the profits made during fiscal years commencing on January 1, 2020 onwards shall be subject to withholding at a 13% rate.

50

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Dividends distributed from profits earned until the fiscal year before that fiscal year that commenced on January 1, 2018 shall remain subject, in respect of all beneficiaries, to withholding at the 35% rate on the amount in excess of tax-free distributable accumulated profits (equalization tax transition period).

- Optional Tax Revaluation: Regulations establish that, at the companies’ option, the tax revaluation of assets located in the country and that are used for generating taxable income may be made. The special tax on the revaluation amount depends on the asset: 8% is for real estate that does not qualify as inventories, 15% for real estate that qualifies as inventories and 10% for personal property and the remaining assets. Once the option for a given asset is exercised, all the other assets of the same category should be revalued. Taxable income resulting from the revaluation is not subject to income tax and the special tax on the revaluation amount will not be deductible from such tax.

NOTE 9. INCOME STATEMENT BREAKDOWN

The income statement as of the dates indicated below breaks down as follows:

Interest Income	03.31.18		03.31.17
On Cash and Bank Deposits		124		18
On Private Securities		84,126		85,246
On Government Securities		72,686		76,917
On Loans and other financing activities
Financial Sector		203,877		107,783
Non-financial Private Sector
Overdrafts		944,738		655,363
Mortgage Loans		433,311		98,995
Collateral Loans		67,918		18,289
Personal Loans		1,652,900		994,493
Credit Card Loans		4,611,155		3,692,175
Financial Leases		94,392		88,541
Others		2,837,788		1,890,578
On Repo Transactions		-		-
Argentine Central Bank		63,863		261,996
Total		11,066,878		7,970,394
Interest Expense	03.31.18		03.31.17
On Deposits
Non-financial Public Sector		-		-
Financial Sector		148,837		90,880
Non-financial Private Sector
Savings Accounts		1,067		762
Time Deposit and Term Investments		3,404,161		2,664,942
Others		224,070		10,131
On Repo Transactions
Argentine Central Bank		6,192		19
Other Financial Institutions		17,402		102,915
On Other Financial Liabilities		984,600		756,423
On Other Notes		102,495		80,556
Total		4,888,824		3,706,628

51

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Commission Income	03.31.18		03.31.17
Fee and Commissions Related to Notes		1,018,137		768,368
Fee and Commissions Related to Credits		683,748		671,392
Fee and Commissions Related to Loan Commitments and Financial Guarantees		40,172		29,024
Fee and Commissions Related to Transferable Securities		162,806		105,346
Fee and Commissions on Collection Proceedings		6,290		7,555
Rental of Safe Deposit Boxes		-		-
Fee and Commissions on Foreign and Exchange Rate Transactions		162,387		115,449
Others		-		-
Total		2,073,540		1,697,134
Commission Expense	03.31.18		03.31.17
Portfolio Transfer Management Services		-		-
Fees and Commissions Related to Transactions with Securities		8,902		3,084
Others		551,837		546,288
Total		560,739		549,372
Net Income from Measurement of Fair Value Financial Instruments at with changes to income	03.31.18		03.31.17
From Measurement of Financial Assets at Fair Value with changes in Profit or Loss
Income (loss) from Government Securities		1,606,490		856,744
Income (loss) from Private Securities		256,372		111,960
Income (Loss) from Derivative Instruments		-		-
Forward Transactions		74,103		-
Rate Swaps		424		(31)
Options	-		2,062
From Measurement of Financial Assets at Fair Value with changes in Profit or Loss
Income (Loss) from Derivative Instruments
Forward Transactions		(103,676)		(289,214)
Options		-		(3,746)
Total		1,833,713		677,775
Underwriting Income	03.31.18		03.31.17
Premiums and Surcharges Accrued		907,589		773,090
Claims Accrued		(94,877)		(96,878)
Surrenders		(230)		(1,446)
Life and Ordinary Annuities		(1,695)		(1,259)
Underwriting and Operating Expenses		(174,328)		(158,435)
Other Income and Expenses		5,550		9,263
Total		642,009		524,335
Employee Benefits	03.31.18		03.31.17
Salaries		2,001,729		1,507,945
Social Security Contributions on Salaries		424,000		384,472
Severance Payments and Personnel Bonuses		492,148		480,903
Services to Personnel and Others		177,187		99,009
Total		3,095,064		2,472,329

52

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Administrative Expenses	03.31.18		03.31.17
Fees and Compensation for Services		233,264		101,700
Directors’ and Syndics’ Fees		36,865		25,518
Advertising, Promotion and Research Expenses		220,865		145,001
Taxes and Assessments		666,854		492,926
Maintenance and Repairs		210,863		135,136
Electricity and Communications		155,924		131,310
Entertainment and Transportation Expenses		29,869		18,760
Stationery and Office Supplies		40,844		31,714
Rentals		137,880		109,962
Administrative Services Hired		311,422		240,886
Security		164,740		137,294
Insurance		16,562		11,628
Others		698,748		513,180
Total		2,924,700		2,095,015

Depreciation and Impairment of Assets	03.31.18		03.31.17
Depreciation of Property, Plant and Equipment		183,442		99,331
Amortization of Organization and Development Expenses		73,433		99,410
Amortization of Other Intangible Assets		-		34,613
Others		606		683
Total		257,481		234,037

Other Operating Income	03.31.18		03.31.17
Other Adjustments and Interest from Miscellaneous Receivables		158,517		46,669
Rental of Safe Deposit Boxes		90,548		70,442
Credit Card-Related		2,739,557		2,121,588
Fee and Commission on Product Package		501,640		372,619
Others		624,743		633,578
Total		4,115,005		3,244,896

Other Operating Expenses	03.31.18		03.31.17
Contributions to the Guarantee Fund		82,449		63,838
Turnover Tax		1,439,383		1,064,052
Claims		40,942		23,569
Charges for Other Provisions		221,286		44,318
Loyalty Program		462,559		266,508
Others		455,834		280,694
Total		2,702,453		1,742,979

NOTE 10. ADDITIONAL INFORMATION REQUIRED BY THE ARGENTINE CENTRAL BANK

10.1.    CONTRIBUTION TO THE DEPOSIT INSURANCE SYSTEM

Law No. 24485 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 established the maximum amount for this insurance system to demand deposits and time deposits denominated either in Pesos and/or in foreign currency. Such limit was currently set at $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 the Bank, either directly or indirectly, deposits of securities, acceptances or guarantees and those deposits set up at an interest rate exceeding the one established regularly by the Argentine Central Bank.

Deposits acquired through endorsement, placements made as a result of incentives other than interest rates and locked-up balances from deposits and other excluded transactions are also excluded. 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.

53

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

The monthly contribution institutions should make to the FGD is 0.015% on the monthly average of total deposits.

10.2.    RESTRICTED ASSETS

As of March 31, 2018, the ability to freely dispose of the following assets is restricted, as follows:

Banco de Galicia y Buenos Aires S.A.

a) Cash and Government Securities

	$
- For margin requirements and reverse and repo transactions		612,347
- For transactions carried out at RO.F.EX.		758,007
- For debit / credit cards transactions		1,361,766
- For attachments		221
- Liquidity required to conduct transactions as agents at the C.N.V.		17,964
- For the contribution to the M.A.E.’s Joint Guarantee Fund (Fondo de Garantía Mancomunada)		14,182
- For other transactions		8,429

b) Special Guarantees Accounts

Special guarantee accounts have been opened at the Argentine Central Bank as collateral for transactions involving electronic clearing houses, checks for settling debts and other similar transactions, which amounted to $3,820,007.

c) Deposits in favor of the Argentine Central Bank

	$
- Unavailable deposits related to foreign exchange transactions		533

d) Equity Investments

The account “Equity Investments” includes 1,222,406 non-transferable non-endorsable registered ordinary shares in Electrigal S.A., the transfer of which is subject to approval by the national authorities, according to the terms of the previously executed concession contract.

e) Contributions to Garantizar S.G.R.’s Risk Fund

The Bank, in its capacity as sponsoring partner of Garantizar S.G.R.’s Risk Fund, is committed to maintaining the contributions made to the fund for two (2) years. As of March 31, 2018, the Bank’s contribution amounts to $152,000.

f) Guarantees Granted for Direct Obligations

	$
PROPARCO’s credit lines		42,628

g) The Bank records $208,692 for monetary regulation instruments deposited as collateral of the credit lines from the Inter-American Development Bank (IDB).

Galicia Valores S.A.

	$
- Liquidity required to conduct transactions as agents at the C.N.V.		4,975

Tarjeta Naranja S.A.

	$
- Attachments in connection with lawsuits		878
- Guarantees related to lease agreements		4,814

54

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Galicia Administradora de Fondos S.A.

	$
- Liquidity required to operate as agent for the management of collective investment products corresponding to mutual funds, as required by the C.N.V.		3,051

As of March 31, 2018, the total amount of restricted assets for the aforementioned items in the aforementioned controlled companies was $7,010,494, whereas as of the prior year-end and as of January 1, 2017, it was $5,724,783 and $4,734,297, respectively.

10.3.    TRUST ACTIVITIES

a) 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 Banco de Galicia y Buenos Aires S.A., as fiduciary property, amounts to be applied according to the following breakdown:

Date of Contract	Trustor	Balances of Trust Funds				Maturity Date(1)
		$		US$
12.07.10	Fondo Fiduciario Aceitero		276		-	12.31.18
04.17.12	Exxon Mobil		4,794		-	04.19.19
04.29.13	Profertil		1,481		116,500	12.31.18
10.21.13	Sinteplast		11		-	12.31.18
12.20.13	Los Cipreses		8		-	12.31.18
09.12.14	Coop. de Trab. Portuarios		1,037		-	09.12.18
09.30.15	Las Blondas IV and V		180		-	11.28.18
04.14.16	Rios Belt		213		-	04.14.19
06.28.17	Dist. Gas del Centro		38,212		-	06.28.18
07.19.17	Dist. Gas Cuyana		102,320		-	07.19.18
08.08.17	Dist. Gas del Centro		66,147		-	08.08.18
	Total		214,679		116,500

(1) These amounts shall be released monthly until settlement date of trustor obligations or maturity date, whichever occurs first.

b) Financial Trust Contracts:

Purpose: To administer and exercise the fiduciary ownership of the trust assets until the redemption of debt securities and participation certificates:

Date of Contract	Trust	Balances of Trust     Funds	Maturity Date(2)
12.06.06	Gas I	51,123	12.31.22
05.06.08	Agro Nitralco II	30	12.31.22
05.14.09	Gas II	4,985,611	12.31.22
02.10.11	Cag S.A.	439	12.31.18
06.08.11	Mila III	8,812	12.31.18
09.01.11	Mila IV	1,022	12.31.18
09.14.11	Cag S.A. II	674	12.31.18
12.27.12	Pla I	57	12.31.18
09.18.13	Don Mario Semillas Series I	112	12.31.18
11.21.13	Comafi Prendas I	46	09.29.18
02.13.14	Mila V	1,284	05.20.20
06.06.14	Mila VI	1,131	10.20.20
06.18.14	Red Surcos II	1,355	12.31.18
07.08.14	Don Mario Semillas Series II	127	12.31.18
07.24.14	Fideicred Atanor III	72	12.31.18
07.22.14	Don Mario Semillas Series III	148	12.31.18
10.03.14	Mila VII	1,667	01.20.21
12.02.14	Mas Cuotas Series I	136	12.31.18
01.13.15	Red Surcos III	766	12.31.18
01.27.15	Mila VIII	6,173	06.15.21
05.18.15	Mila IX	9,317	09.15.21
12.02.14	Mas Cuotas Series II	209	12.31.18
08.24.15	Mila X	11,955	12.20.21

55

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Date of Contract	Trust	Balances of Trust     Funds	Maturity Date(2)
10.30.15	Mila XI	16,347	01.15.22
01.07.16	Mas Cuotas Series III	225	12.31.18
01.14.16	Mila XII	21,820	11.15.21
02.05.16	Red Surcos IV	1,000	12.31.18
05.13.16	Mila XIII	35,623	09.15.22
06.15.16	Mas Cuotas Series IV	51	12.31.18
09.01.16	Mila XIV	38,109	01.31.23
09.15.16	Mas Cuotas Series V	1,052	12.31.18
10.27.16	Mila XV	50,754	03.31.23
12.06.16	Mas Cuotas Series VI	162	12.31.18
01.10.17	Mila XVI	63,384	06.30.23
02.24.17	Mila XVII	95,227	09.30.23
03.23.17	Mas Cuotas Series VII	1,814	12.31.18
05.29.17	Fedeicred Agro Series IV	220,569	09.30.18
06.12.17	Mila XVIII	104,501	01.31.24
06.21.17	Mas Cuotas Series VIII	1,311	12.31.18
08.16.17	Mas Cuotas Series IX	13,305	12.31.18
10.20.17	Mas Cuotas Series X	324,784	10.15.18
10.27.17	Mila XIX	179,555	05.31.24
02.16.18	Mila XX	55,828	09.30.24
	Totals	6,307,687

(2) Estimated date, since maturity date shall occur at the time of the distribution of all of trust assets.

c) Activities as Security Agent:

c.1) The Bank has been appointed Security Agent 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 as Trustee of the “ENARSA-BARRAGAN” and “ENARSA-BRIGADIER LOPEZ” financial trusts.

Said endorsement guarantees the secure payment of all obligations arising from the above-mentioned trusts.

The Bank, in its capacity as Security Agent, will take custody of the documents regarding the Argentine 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 March 31, 2018, as of December 31, 2017 and January 1, 2017, the balances recorded from these transactions amount to U.S. $1,364,097 and $408, respectively.

c.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, a transaction that was completed on June 18, 2013, which additionally secures all the obligations undertaken.

As of March 31, 2018, December 31, 2017 and January 1, 2017, the balances recorded from these transactions amounts to U.S. $116,500.

All the transactions detailed above are recorded in off-balance sheet items—trust funds.

10.4. COMPLIANCE WITH THE REGULATIONS REQUIRED BY THE C.N.V.

10.4.1. Agents – Minimum Liquidity Requirement

Within the framework of Resolution No. 622/13 of the C.N.V., the Bank has been registered, in such agency’s registry, as settlement and clearing agent –comprehensive— No. 22 (ALyC and AN – INTEGRAL), custodial agent of collective investment products corresponding to mutual funds No. 3 (ACPIC FCI), and manager of collective investment products at the registry of financial trustees No. 54.

As of December 31, 2017, the Bank’s Shareholders’ Equity exceeds that required by the C.N.V. to act as agent in the categories in which the Bank has been registered. Such requirement amounts to $28,000 with a minimum liquidity requirement of $14,000, which the Bank paid with Argentine Central Bank’s monetary regulation instruments, which are held in custody at Caja de Valores (Depositor No. 100100) in the amount of $17,988.

56

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Additionally, Galicia Valores S.A. has received the authorization to act as “Settlement and Clearing Agent and Trading Agent – Own”, as established by C.N.V.’s General Resolution No. 622/13. According to the minimum requirements established, the minimum shareholders’ equity required to act in this agent’s category amounts to $3,500 and the minimum liquidity amounts to $1,750.

As of March 31, 2018, the minimum liquidity is made up of a sight account opened at the Bank in the amount of U.S. $250.

10.4.2.    Custodial Agent of Collective Investment Products Corresponding to Mutual Funds

In compliance with Section 7 of Chapter II, Title V of that Resolution, in its capacity as custodial agent of collective investment products corresponding to mutual funds (depository) of the “FIMA ACCIONES”, “FIMA P.B. ACCIONES”, “FIMA RENTA EN PESOS”, “FIMA AHORRO PESOS”, “FIMA RENTA PLUS”, “FIMA PREMIUM”, “FIMA AHORRO PLUS”, “FIMA CAPITAL PLUS”, “FIMA ABIERTO PYMES”, “FIMA MIX I”, “FIMA RENTA DÓLARES I” and “FIMA RENTA DOLARES II” funds, as of March 31, 2018, the Bank holds a total of 12,995,225,006 units under custody for a market value of $91,723,508, which is included in the “Depositors of Securities Held in Custody” account. As of previous fiscal year-end and January 1, 2017, the securities held in custody totaled 10,254,289,765 and 7,777,368,861 units and their market value amounted to $67,972,574 and $37,337,855, respectively.

The balances of the Mutual Funds as of the dates indicated below are detailed as follows:

Mutual Fund	03.31.18		12.31.17		01.01.17
FIMA Acciones		629,661		412,803		117,805
FIMA P.B. Acciones		1,728,584		1,143,324		305,310
FIMA Renta en pesos		771,442		525,826		239,066
FIMA Ahorro pesos		25,998,491		20,823,171		15,955,347
FIMA Renta Plus		585,427		369,949		247,293
FIMA Premium		10,690,382		10,098,362		7,130,327
FIMA Ahorro Plus		25,542,287		17,238,677		10,194,730
FIMA Capital Plus		708,872		379,178		561,800
FIMA Abierto PyMES		272,592		264,206		187,124
FIMA Mix I		571,628		164,890		151,487
FIMA Renta Dólares I		17,521,501		12,384,341		2,245,266
FIMA Renta Dólares II		6,702,641		4,167,847		2,300
Total		91,723,508		67,972,574		37,337,855

All the transactions detailed above are recorded in off-balance sheet items – securities held in custody.

The mutual funds detailed above have not been consolidated as the Group is not a controlling company thereof, since the depository role does not imply in this case, as outlined below:

- power over the trust to run material activities;

- exposure or right to variable returns;

- capacity to have influence on the amount of returns to be received for the involvement.

10.4.3.    Storage of Documents

Pursuant to General Resolution No. 629 of the C.N.V., the Bank notes that it has supporting documents regarding accounting and management transactions, which are stored at AdeA (C.U.I.T. No. 30-68233570-6), Plant III located at Ruta Provincial 36 km 31.5 No. 6471 (CP 1888) Bosques, Province of Buenos Aires, with legal domicile at Av. Pte. Roque Sáenz Peña 832 Piso 1, C.A.B.A.

57

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

10.5. ACCOUNTS SHOWING COMPLIANCE WITH MINIMUM CASH REQUIREMENTS:

As of March 31, 2018, the balances recorded as computable items are as follows:

Item	$		US$			Euros(*)
Checking Accounts at the Argentine Central Bank		10,700,000		1,232,818	(1)		17	(3)
Special Guarantees Accounts at the Argentine Central Bank		3,667,326		9,200	(2)		-
Total Computable Items to Meet Minimum Cash Requirements		14,367,326		1,242,018			17

(*) Stated in thousands of US$.

(1) Equivalent to $24,833,023

(2) Equivalent to $185,318

(3) Equivalent to $342

10.6. PENALTIES IMPOSED ON BANCO DE GALICIA Y BUENOS AIRES S.A. AND SUMMARY PROCEEDINGS COMMENCED BY THE ARGENTINE CENTRAL BANK

Penalties Imposed on Banco de Galicia y Buenos Aires S.A. Existing as of March 31, 2018:

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. Consequently, the members of Banco de Galicia y Buenos Aires S.A.’s Board of Directors then effective were punished with a fine amounting to $1,353. Status of the pending proceedings: On March 27, 2018, the Argentine Supreme Court of Justice (CSJN, as per its initials in Spanish) declared inadmissible (Section 280 of the National Code of Civil and Commercial Procedures) the extraordinary appeal denied filed against the judgment passed by the Argentine Federal Court of Appeals in Administrative Matters, which, in turn, had dismissed the appeal filed by the damaged parties against the penalties applied. Therefore, the penalty applied became firm. 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. As a consequence of the aforementioned summary proceedings, the Bank, one of its directors and one of its officers were punished with a fine in the amount of $4,483. Status of the proceedings: Division I of the Argentine Federal Court of Appeals in Administrative Matters partially revoked the penalties, releasing Eduardo A. Fanciulli from any liability and reducing the fines imposed. The U.I.F., Banco de Galicia y Buenos Aires S.A. and Mr. Enrique M. Garda Olaciregui filed federal extraordinary appeals before the CSJN. Accounting treatment: As of March 31, 2018, a provision for $5,306 is recorded, whereas a provision for $4,983 and $5,500 was recorded as of December 31, 2017 and January 1, 2017, respectively.

Summary Proceedings Commenced by the Argentine Central Bank (with no Penalties) Pending as of March 31, 2018:

Summary Proceedings No. 6075: Notification date: 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: the Bank and certain relevant officers. 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. 6669: Notification date: December 29, 2015. Charges filed: Alleged breach of Section 1, Subsections c), e) and f) of Act No. 19359, integrated into Argentine Central Bank’s Communiqué “A” 3471, 3826 and 5264. Individuals subject to summary proceedings: the Bank and certain relevant officers. Status of the proceedings: A defense brief was filed and the lack of definition by the most favorable criminal law was put forward, which is being analyzed by the Argentine Central Bank’s Management Division of Foreign Exchange Litigation Matters.

Summary Proceedings No. 6670: Notification date: February 16, 2016. Charges filed: Alleged breach of Section 1, Subsections c), e) and f) of Act 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 and certain relevant officers. 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.

58

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Summary Proceedings No. 6988: Notification date: August 25, 2016. Charges filed: Alleged breach of Section 1, Subsections c), e) and f) of Act No. 19359, integrated into Argentine Central Bank’s Communiqué “A” 3471, 3826, 5264 and 5265. Individuals subject to summary proceedings: certain relevant officers. 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. 1544: Notification date: March 6, 2018. Charges filed: Alleged breach of the provisions set out in Argentine Central Bank’s Communiqué “A” 6242, SINAP 1—61. Individuals subject to summary proceedings: the Bank and certain relevant officers. 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.

10.7. ISSUANCE OF NOTES

The following is a breakdown of the Global Programs for the Issuance of Notes outstanding:

Company	Authorized       Amount(*)	Type of Notes	Term of     Program	Date of Approval by   Shareholders’   Meeting	Approval by the C.N.V.
Grupo Financiero Galicia S.A.	US$ 100,000	Simple notes, not convertible into shares	5 years	03.09.09 confirmed on 08.02.12	Resolution No. 16113 dated 04.29.09 and extended through Resolution No. 17343 dated 05.08.14 Authorization of the increase, Resolution No. 17064 dated 04.25.13
Banco de Galicia y Buenos Aires S.A.	US$ 2,100,000	Simple notes, not convertible into shares, subordinated or not, to be adjusted or not, secured or unsecured.	5 years	04.28.05, 04.14.10, 04.29.15 and 11.09.16	Resolution No. 15228 dated 11.04.05 and extended through Resolution No. 16454 dated 11.11.10 and Resolution No. 17883 dated 11.20.15 Increase of the amount approved by Resolutions Nos. 17883 dated 11.20.15, No. 18081 dated 06.10.16, No. 18480 dated 01.26.17 and No. 19520 dated 05.17.18
Tarjeta Naranja S.A.	US$ 650,000	Simple notes, not convertible into shares	5 years	03.08.12	Resolution No. 16822 dated 05.23.12 and extended through Resolution No. 17676 dated 05.21.15
Tarjetas Cuyanas S.A.	US$ 250,000	Simple notes, not convertible into shares	5 years	03.30.10 confirmed on 04.06.10 and 02.15.13	Resolution No. 16,328 dated 05.18.10 Authorization of the increase, Resolution No. 17072 dated 05.02.13

(*) Or its equivalent in any other currency.

The Company has the following Unsubordinated Notes outstanding issued under the Global Programs detailed in the table above as of the close of the period/fiscal year, net of repurchases of its own notes:

59

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Company	Date of Placement	Currency	Class No.	Face Value	Type (**)	Term	Maturity Date	Rate	Carrying Amount(*)				Issuance
									03.31.18		12.31.17		Authorized by     the C.N.V.
Banco de Galicia y Bs. As. S.A.	02.17.17	$	-	US$ 150,537(1)	Simple	36 months	-	(1)(3)		2,415,678		2,431,324	02.06.17
Banco de Galicia y Bs. As. S.A.	05.18.17	$	-	$2,000,000	Simple	36 months	-	(2)(4)		2,059,719		2,057,278	05.08.17
Tarjeta Naranja S.A.	04.13.16	$	XXXIII Series II	$366,908	Simple	1,095 days	04.13.19	Minimum 37% Rate/Badlar +5.40%		386,562		374,489	03.28.16
Tarjeta Naranja S.A.	06.29.16	$	XXXIV Series II	$475,397	Simple	1,461 days	06.29.20	Minimum 32% Rate/Badlar +4.67%		507,348		472,171	06.21.16
Tarjeta Naranja S.A.	09.27.16	$	XXXV Series I	$225,611	Simple	546 days	03.27.18	Minimum 26% Rate/Badlar +2.99%		-		227,175	09.15.16
Tarjeta Naranja S.A.	09.27.16	$	XXXV Series II	$774,389	Simple	1,461 days	09.27.20	Minimum 26% Rate/Badlar +3.99%		757,864		757,099	09.15.16
Tarjeta Naranja S.A.	12.07.16	$	XXXVI Series I	$210,571	Simple	547 days	06.07.18	Minimum 25.25% Rate/Badlar + 3.25%		210,362		212,651	11.23.16
Tarjeta Naranja S.A.	12.07.16	$	XXXVI Series II	$636,409	Simple	1,095 days	12.07.19	Minimum 25.25% Rate/Badlar + 4.00%		635,956		625,125	11.23.16
Tarjeta Naranja S.A.	04.11.17	$	XXXVII	$3,845,700	Simple	1,826 days	04.11.22	Minimum 15% Rate/Badlar + 3.50%		4,035,881		4,023,299	03.30.17
Tarjeta Naranja S.A.	11.13.17	$	XXXVIII	$503,333	Simple	546 days	05.13.19	Minimum 29.05% Rate/MR20 + 4%		468,220		516,616	11.07.17
Tarjeta Naranja S.A.	02.14.18	$	XXXIX	$754,538	Simple	546 days	09.14.19	Minimum 26.75% Rate/MR 20 +3.4%		768,173		-	02.02.18
Tarjeta Naranja S.A.	04.10.18	$	XL(5)	$2,000,000	Simple	(5)	(5)	(5)		(6)		-
Tarjeta Naranja S.A. (***)	05.05.16	$	XXIV Series II	$234,309	Simple	1,095 days	05.05.19	Minimum 37% Rate/Badlar + 4.98%		207,291		207,246	04.22.16
Tarjeta Naranja S.A. (***)	07.26.16		$XXV	$400,000	Simple	1,461 days	07.26.20	Minimum 30% Rate/Badlar + 3.94%		417,738		419,518	07.13.16
Tarjeta Naranja S.A. (***)	10.24.16	$	XXVI Series I	$149,763	Simple	547 days	04.24.18	Minimum 26% Rate/Badlar + 2.75%		157,635		156,939	10.14.16
Tarjeta Naranja S.A. (***)	10.24.16	$	XXVI Series II	$350,237	Simple	1,461 days	10.24.20	Minimum 26% Rate/Badlar + 4.00%		334,647		303,388	10.14.16
Tarjeta Naranja S.A. (***)	02.10.17	$	XXVII Series II	$500,000	Simple	1,095 days	02.10.20	Minimum 23.5% Rate/Badlar + 3.50%		513,090		515,806	02.02.17
Tarjeta Naranja S.A. (***)	06.09.17	$	XXVIII Series I	$128,175	Simple	730 days	06.09.19	Minimum 25% Rate/Badlar + 3.05%		129,826		129,167	05.29.17
Tarjeta Naranja S.A. (***)	06.09.17	$	XXVIII Series II	$371,825	Simple	1,461 days	06.09.21	Minimum 25% Rate/Badlar + 3.70%		356,987		309,775	05.29.17
Total										14,372,971		13,739,066

(*) Includes principal and interest.

(**) Not convertible into shares.

(***) Notes merged into by Tarjeta Naranja S.A. following its merger with Tarjetas Cuyanas S.A.

(1) As specified in the terms and conditions of the issuance, they were converted to $2,360,360 Investor assumes the exchange rate risk since the service of interest and principal is calculated on the basis of the principal amount in Pesos converted into US Dollars on each payment date.

(2) The net proceeds from this issuance of notes was applied to investments in working capital, other loans and other uses envisaged by the provisions of the Law on Notes and the Argentine Central Bank regulations.

(3) Variable rate equal to the simple arithmetic average of private Badlar, plus 2.69%, which will be payable quarterly as from May 17, 2017.

(4) Variable rate equal to the simple arithmetic average of private Badlar, plus 2.98%, which will be payable quarterly as from August 18, 2017.

(5) Issuance made in two Series, Series I for an amount of $597,500 and Series II for an amount of $1,402,500 with maturity date on October 10, 2019 and October 10, 2020, respectively.

Additionally, as of period/year-end, the following issuances of Subordinated Notes issued are outstanding:

Company

Date of Placement

Currency

Class No.

Face Value

Type (**)

Term

Maturity Date

Rate

Carrying Amount(*)

Issuance

03.31.18

12.31.17

Authorized by     the C.N.V.

Banco de Galicia y Bs. As. S.A.

07.19.16

US$

-

US$ 250,000

Subordinated

120 months(1)

-

(2)(3)

5,079,134

4,828,018

06.23.16

(*) Includes principal and interest.

(**) Not convertible into shares.

60

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

(1) Amortization shall be fully made upon maturity, on July 19, 2026, unless redeemed, at the issuer’s option, fully at a price equal to 100% of the outstanding principal plus accrued and unpaid interest.

(2) Fixed 8.25% rate (as from the issuance date to July 19, 2021, inclusively); and margin to be added to the nominal Benchmark Readjustment Rate of 7.156% p.a. to the due date of Notes. Such interest shall be payable semiannually on January 19 and July 19 as from 2017.

(3) The net proceeds from this issuance of notes was applied to investments in working capital, other loans and other uses envisaged by the provisions of the Law on Notes and the Argentine Central Bank regulations.

The repurchases of the Group’s own notes as of the dates indicated below are as follows:

Company	Note Class	Face Value				Carrying Amount(*)
		03.31.18		12.31.17		03.31.18		12.31.17
Banco de Galicia y Buenos Aires S.A.	Class III		US$290		US$290		13,417		4,648
Tarjeta Naranja S.A.	Class XXXIII Series II		2,500		13,231		2,681		14,514
Tarjeta Naranja S.A.	Class XXXIII Series II		-		2,111		-		2,154
Tarjeta Naranja S.A.	Class XXXV Series II		15,500				15,810		-
Tarjeta Naranja S.A.	Class XXXVI Series I		-		2,000		-		2,026
Tarjeta Naranja S.A.	Class XXXVI Series II		14,691		10,000		15,218		10,166
Tarjeta Naranja S.A.	Class XXXVIII		2,000		-		2,067		-
Tarjeta Naranja S.A.	Class XXXIX		49,550		-		52,329		-
Tarjeta Naranja S.A.(**)	Class XXIV Series II		35,000		35,000		36,952		37,225
Tarjeta Naranja S.A.(**)	Class XXVI Series II		20,000		50,540		21,344		53,565
Tarjeta Naranja S.A.(**)	Class XXVII Series II		2,871		-		2,963		-
Tarjeta Naranja S.A.(**)	Class XXVIII Series II		18,254		58,405		18,549		59,713
							181,330		184,011

(*) It includes principal and interest.

(**) Notes merged into by Tarjeta Naranja S.A. following its merger with Tarjetas Cuyanas S.A.

10.8. RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF PROFITS

Pursuant to Section 70 of the General Corporations Law, the Company should transfer 5% of the net income for the year to the Legal Reserve until 20% of the capital stock is reached.

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 Retained income: The difference between the carrying amount 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.

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 Retained Income 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.

The prior authorization of the Argentine Regulatory Agency of Financial and Foreign Exchange Institutions (SEFyC, as per its initials in Spanish) shall not be required for the distribution of profits, except in the cases where a financial institution is within the capital conservation buffer and to determine distributable profits the Tier 1 common capital range had not been increased by 1 percentage point, net of deductible items. Such restriction was established until March 31, 2020.

61

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Tarjeta Naranja S.A.’s Ordinary and Extraordinary Shareholders’ Meeting held on March 16, 2006 authorized the establishment of a 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 $300,000.

Pursuant to the Pricing Supplement of the Class XXXVII Notes, Tarjeta Naranja S.A. has agreed not to distribute dividends that may exceed 50% of the company’s net income. This restriction also applies in the event of any excess over certain indebtedness ratios.

10.9. CAPITAL MANAGEMENT AND CORPORATE GOVERNANCE TRANSPARENCY POLICY

Grupo Financiero Galicia S.A.

The Company’s Board of Directors is the highest management body of the Company. It is made up of nine directors and three alternate directors, who must have the necessary knowledge and skills to clearly understand their responsibilities and duties within the corporate governance, and to act with the loyalty and diligence of a good businessman.

As set out in its bylaws, the term of office for both directors and alternate directors is three (3) years; they are partially changed every year and may be reelected indefinitely.

The Company complies with the appropriate standards regarding total number of directors, as well as the number of independent directors. Furthermore, its bylaws provide for the flexibility necessary to adapt the number of directors to the possible changes in the conditions in which the Company carries out its activities, from three (3) to nine (9) directors.

The Board of Directors complies, in every relevant respect, with the recommendations included in the Code on Corporate Governance as Schedule IV to Title IV of the regulations issued by the National Securities Commission (Text amended in 2013).

It also monitors the application of the corporate governance policies provided for by the regulations in force through the Audit Committee and the Committee for Information Integrity. Periodically, the Committees provide the Board of Directors with information, and the Board gets to know the decisions of each Committee. What is appropriate is transcribed in the minutes drafted at the Board of Directors’ meetings.

The Audit Committee set by Capital Markets Law No. 26831 and the C.N.V.’s regulations is formed by three independent directors, and the Committee for Information Integrity’s mission is to comply with the provisions of U.S. Sarbanes-Oxley Act.

Corporate risk management is monitored by the Audit Committee, which also gathers and analyzes the information submitted by the main controlled companies.

Basic Holding Structure

Grupo Financiero Galicia S.A. is a company whose sole purpose is to conduct financial and investment activities as per Section 31 of the Argentine General Corporations Law. That is to say, it is a holding company whose activity involves managing its equity investments, assets and resources.

Within the group of companies in which the Company has an interest, the Bank stands out, in which the Company has a controlling equity interest, being its main asset as well. Banco de Galicia y Buenos Aires S.A., as a bank institution, is subject to certain regulatory restrictions imposed by the Argentine Central Bank. In particular, the Bank can only hold a 12.5% interest in the capital stock of companies that do not carry out activities considered supplementary by the Argentine Central Bank. Therefore, the Company holds, either directly or indirectly, the remaining interests in several companies. In addition, the Company indirectly holds a number of equity investments in supplementary companies that belong to the Bank as the controlling company.

Since the Company is a holding company, it has a limited personnel structure, and, therefore, many of the business organization requirements, common for big productive institutions, cannot be applied to this company.

62

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

To conclude, it is noteworthy that the Company is under the control of a pure holding company, EBA Holding S.A., which holds the majority of votes at the Shareholders’ Meetings, although it does not have any managerial functions over the Company and the Company has no group relationship with EBA Holding S.A.

Compensation Systems

Directors’ compensation is defined by the General Shareholders’ Meeting and is fixed within the limits established by law and the corporate bylaws.

The Audit Committee expresses its opinion on whether compensation proposals for Directors are reasonable, taking into consideration market standards.

Business Conduct Policy

The Company has consistently shown respect for the rights of its shareholders, reliability and accuracy in the information provided, transparency as to its policies and decisions, and caution with regard to the disclosure of strategic business issues.

Code of Ethics

The Company has a formally approved Code of Ethics that guides its policies and activities. It considers business objectivity and conflict-of-interests related-aspects, and how the employee should act upon identifying a breach of the Code of Ethics.

Banco de Galicia y Buenos Aires S.A.

The Bank’s Board of Directors is the Bank’s highest management body. As of the date of preparation of these consolidated condensed interim financial statements, it is currently made up of seven (7) directors and four (4) alternate directors, who have the necessary knowledge and skills to clearly understand their responsibilities and duties within the corporate governance, and act with the loyalty and diligence of a good businessman.

The Bank complies with the appropriate standards regarding total number of directors, as well as number of independent directors. Furthermore, its bylaws provide for the flexibility necessary to adapt from three (3) to nine (9) directors to the possible changes in the conditions in which the Bank carries out its activities.

The General Shareholders’ Meeting has the power to establish the number of directors, both independent and non-independent ones, and appoint them. Out of the seven directors, two are independent. In addition, one of the alternate directors is independent. The independence concept is defined in the regulations set forth by the C.N.V. and the Argentine Central Bank regulations.

As regards prevention of conflicts of interest, the provisions set forth in the General Corporations Law and the Capital Markets Law are applicable.

As set out in the bylaws, the term of office for both directors and alternate directors is three (3) years; two thirds of them (or a fraction of at least three) are changed every year and may be reelected indefinitely.

The Board of Directors’ meeting is held at least once a week and when required by any director. The Board of Directors is responsible for the Bank’s general management and makes all the necessary decisions to such end. The Board of Directors’ members also take part, to a greater or lesser extent, in the commissions and committees created. Therefore, they are continuously informed about the Bank’s course of business and become aware of the decisions made by such bodies, which are transcribed into minutes.

Additionally, the Board of Directors receives a monthly report prepared by the general manager (the “General Manager”), the purpose of which is to report the material issues and events addressed at the different meetings held between the General Manager and Senior Management. The Board of Directors becomes aware of such reports, as evidenced in the minutes.

In connection with directors’ training and development, the Bank has a program, which is reviewed every six months, whereby they regularly attend courses and seminars of different kinds and subjects.

The Bank’s executive officers, including directors, have proven updated knowledge and skills; and the Board of Directors performs its duties in the most effective manner in line with the current dynamics of such a Board.

63

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

According to the activities carried out by the Bank, effective laws and corporate strategies, the following committees have been created to achieve an effective control over all activities performed by the Bank:

- Risk and Capital Allocation Committee

This committee is in charge of approving and analyzing capital allocation, establishing risk policies and monitoring the Bank’s risk.

- High Credit Committee

This committee’s function is to approve and sign credit ratings and grant transactions related to high-risk groups and customers, i.e., greater than 2.5% of the Bank’s individual Computable Regulatory Capital, loans to financial institutions (local or foreign) and related customers, in which case two thirds of the Board of Directors is required to participate.

- Low Credit Committee

This committee’s function is to approve and sign the credit ratings and grant transactions related to medium-risk groups and customers, equal to amounts greater than 1% of the Bank’s individual Computable Regulatory Capital.

- Asset and Liability Management Committee

This committee is in charge of analyzing the fundraising and its placement in different assets, the follow-up and control of liquidity, interest-rate and currency mismatches, and management thereof.

- Information Technology Committee

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.

- Audit Committee

The Audit Committee is responsible for helping the Board of Directors, in performing the control function of the Bank and its controlled companies and the companies in which it owns a stake, in order to fairly ensure the following objectives:

• Effectiveness and efficiency of operations;

• Reliability of the accounting information;

• Compliance with applicable laws and regulations; and

• Compliance with the goals and strategy set by the Board of Directors.

- Committee for the Control and Prevention of Money Laundering and Funding of Terrorist Activities (CPLA/FT, as per its initials in Spanish)

This committee is in charge of planning, coordinating and ensuring compliance with the policies on anti-money laundering and funding of terrorist activities set and approved by the Board of Directors.

- Committee for Information Integrity

This committee is in charge of encouraging compliance with the provisions of Sarbanes-Oxley (2002).

- Human Resources and Governance Committee

This committee is in charge of presenting the succession of the General Manager and Division Managers, analyzing and establishing the General Manager’s and Division Managers’ compensation, and monitoring the performance matrix of Department and Division Managers.

- Performance Reporting Committee

64

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

This committee is in charge of monitoring the performance and results of operations, and evaluating the macro situation.

- Liquidity Crisis Committee

This committee is in charge of evaluating the situation upon facing a liquidity crisis and deciding the steps to be implemented to tackle it.

- Strategy and New Businesses Committee

This committee is in charge of analyzing new businesses.

- Compliance Committee

This committee is in charge of reporting to Senior Management about the critical risks as regards compliance and the reputational framework.

The Bank considers the General Manager and Division Management reporting to the General Manager as Senior Management. These are detailed as follows:

Retail Banking Division

Wholesale Banking Division

Finance Division

Comprehensive Corporate Services Division

Organizational Development and Human Resources Division

Risk Management Division

Strategic Planning and Management Control Division

Customer’s Experience Division

Senior Management’s main duties are as follows:

- Ensure that the Bank’s activities are consistent with the business strategy, the policies approved by the Board of Directors and the risks to be assumed.

- Implement the necessary policies, procedures, processes and controls to manage operations and risks cautiously, meet the strategic goals set by the Board of Directors and ensure that the latter receives material, full and timely information so that it may assess management and analyze whether the responsibilities assigned are effectively fulfilled.

- Monitor the managers from different divisions, in line with the policies and procedures set by the Board of Directors and establish an effective internal control system.

Basic Holding Structure

The Bank’s majority shareholder is the Company, which has full control of its shares and votes.

In turn, the Bank holds equity investments in supplementary companies as controlling company, as well as minority interests in companies whose controlling company is its own controlling company. From a business point of view, this structure allows the Bank to take advantage of significant synergies that guarantee the loyalty of its customers and additional businesses. All business relationships with these companies, whether permanent or occasional in nature, are fostered under the normal and usual market conditions and this is true when the Bank holds either a majority or minority interest. The Company’s Board of Directors submits to the Shareholders’ Meeting’s vote which shall be the Company’s vote in its capacity as controlling company at the Bank’s Shareholders’ Meeting. The same method of transparency and information as to its controlled companies and the companies it owns a stake in is applied at the Bank’s Shareholders’ Meetings, which are always attended by directors and officers thereof and the Board of Directors always provides detailed information about the Company’s activities.

65

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Business Conduct Policy and/or Code of Ethics

The Bank has a formally approved Code of Ethics that guides its policies and activities. It considers business objectivity and conflict of interest related aspects, and how the employee should act upon identifying a breach of the Code of Ethics, with the involvement of the Conduct Committee.

Information Related to Personnel Economic Incentive Practices

The Human Resources and Governance Committee, composed of two (2) Directors, the General Manager and the Organizational Development and Human Resources Division Manager, is in charge of establishing the compensation policy for the Bank’s personnel.

It is the policy of the Bank to manage the full compensation of its personnel based on the principles of fairness, meritocracy and justice, within the framework of the legal regulations in force.

The aim of this policy is to provide an objective and fair basis, through the design and implementation of tools for the management of the fixed and variable compensation paid to each employee, based on the scope and complexity of each position’s responsibilities, individual performance with regard to compliance thereof, contribution to the Bank’s results and conformity to market values, with the purpose of:

a) Attracting and creating loyalty with regard to quality personnel suitable for the achievement of the business strategy and goals.

b) Being an individual motivation means.

c) Easing the decentralized management of compensation administration.

d) Allowing the effective budget control of personnel costs.

e) Guaranteeing internal fairness.

In order to monitor and guarantee both external and internal fairness with regard to the payment of fixed and variable compensation, the Compensation area uses, and puts at the disposal of the Senior Management and the Human Resources Committee, market surveys published by consulting firms specialized in compensation issues, pursuant to the market positioning policies defined by the management division for the different corporate levels.

With the purpose of gearing individuals towards the achievement of attainable results that contribute to the global performance of the Bank/Area, and to the increase in motivation for the common attainment of goals, differentiating individual contribution, the Bank has different variable compensation systems:

1) Business Incentives and/or Incentives through Commissions system for business areas.

2) Annual Bonus System for management levels, officers and the rest of the employees who are not included in the business incentives system. The annual bonus is determined based on individual performance and the Bank’s results, and is paid in the first quarter of the next fiscal year. To determine the variable compensation for the Senior Management and Middle Management, the Bank uses the Management Performance Assessment System. This system has been designed including both qualitative and quantitative KPI (Key Performance Indicators). In particular, quantitative Key Performance Indicators are designed with respect to at least three minimum aspects:

a) Results.

b) Business volume or size.

c) Projections: Indicators that protect the business for the future (For example: Quality, internal and external customer satisfaction, risk coverage, work environment, etc.).

The significance or impact of each of them is monitored and adjusted yearly pursuant to the strategy approved by the Board of Directors.

The interaction among these three aspects seeks to make incentives related to results and growth consistent with the risk thresholds determined by the Board of Directors. In turn, there is no deferred payment of variable compensation subject to the occurrence of future events or in the long term, taking into consideration that the business environment in the Argentine financial system is characterized by being mainly transactional, with lending and borrowing transactions with a very short seasoning term.

66

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Annual budget and management control – the latter carried out monthly in a general manner and quarterly in a more detailed manner – include different risk ratios, including the ratio between compensation and risks undertaken.

Variable compensation is only paid in cash. There are no share-based payments.

Every change to this policy is submitted to the Bank’s Human Resources Committee for its consideration.

67

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE A – BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Holdings									Position
Item		Fair Value		Fair Value Level		Carrying Amount				Without Options		Options		Final
						03.31.18		12.31.17
FAIR VALUE DEBT SECURITIES WITH CHANGES TO INCOME							31,372,512		28,978,240		31,372,512		-		31,372,512
Argentine:							31,371,534		28,977,320		31,371,534		-		31,371,534
Government Securities			-		Level 1, 2 and 3		13,128,177		9,450,422		13,128,177		-		13,128,177
Argentine Central Bank’s Bills			-		Level 2 and 3		16,296,710		17,858,764		16,296,710		-		16,296,710
Private Securities			-		Level 1, 2 and 3		1,946,647		1,668,134		1,946,647		-		1,946,647
Foreign							978		920		978		-		978
Government Securities			-		Level 1		978		920		978		-		978
Private Securities			-				-		-		-		-		-
OTHER DEBT SECURITIES							3,582,367		2,708,652		3,582,367		-		3,582,367
Measurement at Amortized Cost			-				3,582,367		2,708,652		3,582,367		-		3,582,367
Argentine:			-				3,582,367		2,708,652		3,582,367		-		3,582,367
Other Debt Securities			-		Level 3		3,582,367		2,708,652		3,582,367		-		3,582,367
Argentine Central Bank’s Bills			-				-		-		-		-		-
Argentine Central Bank’s Notes			-				-		-		-		-		-
Private Securities			-				-		-		-		-		-
Foreign			-				-		-		-		-		-
Government Securities			-				-		-		-		-		-
Private Securities			-				-		-		-		-		-

68

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE A – BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES (Continued)

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Holdings									Position
Item		Fair Value		Fair Value Level		Carrying Amount				Without Options		Options		Final
						03.31.18		12.31.17
MEASUREMENT AT AMORTIZED COST			-				-		-		-		-		-
Argentine:			-				-		-		-		-		-
Government Securities			-				-		-		-		-		-
Argentine Central Bank’s Bills			-				-		-		-		-		-
Argentine Central Bank’s Notes			-				-		-		-		-		-
Private Securities			-				-		-		-		-		-
Foreign			-				-		-		-		-		-
Government Securities			-				-		-		-		-		-
Private Securities			-				-		-		-		-		-
EQUITY INSTRUMENTS			-				12,709		-		12,709		-		12,709
Measured at Fair Value with changes in Profit or Loss			-				12,709		-		12,709		-		12,709
Argentine:			-				12,709		-		12,709		-		12,709
Private Securities			-		Level 1		12,709		-		12,709		-		12,709
Foreign			-				-		-		-		-		-
Measured at Fair Value with changes in Other Comprehensive Income			-				-		-		-		-		-
Argentine:			-				-		-		-		-		-
Foreign			-				-		-		-		-		-

69

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE B – CLASSIFICATION OF LOANS AND OTHER FINANCING ACTIVITIES BY STATUS AND GUARANTEES RECEIVED

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	03.31.18		12.31.17
COMMERCIAL LOAN PORTFOLIO
Normal		95,096,813		88,891,096
Backed by Preferred Guarantees and Counter-guarantees “A”		260,650		63,783
Backed by Preferred Guarantees and Counter-guarantees “B”		6,227,792		5,392,043
With No Preferred Guarantees or Counter-guarantees		88,608,371		83,435,270
With Special Follow-Up – Under Observation		114,685		51,014
With Problems		344,422		156,280
High Risk of Insolvency		240,606		184,252
Uncollectible		183,342		18,915
TOTAL COMMERCIAL LOAN PORTFOLIO		95,979,868		89,301,557
CONSUMER AND HOUSING LOAN PORTFOLIO
Normal Performance		131,235,266		121,665,984
Backed by Preferred Guarantees and Counter-guarantees “A”		13,804		13,508
Backed by Preferred Guarantees and Counter-guarantees “B”		8,193,472		5,301,381
With No Preferred Guarantees or Counter-guarantees		123,027,990		116,351,095
Low Risk		4,096,130		2,879,295
Medium Risk		2,150,824		1,853,174
High Risk		2,625,812		2,350,217
Uncollectible		1,531,101		1,027,057
Uncollectible due to Technical Reasons		6,607		6,670
TOTAL CONSUMER AND HOUSING LOAN PORTFOLIO		141,645,740		129,782,397
GRAND TOTAL(1)		237,625,608		219,083,954

(1) Reconciliation between Schedule B and the Balance Sheet:

	03.31.18		12.31.17
Loans and other financing activities		210,427,217		194,538,207
Other Debt Securities		3,582,367		2,708,652
Off-Balance Sheet Agreed Loans and Guarantees Granted		16,518,869		15,846,651
Plus Allowances for Loan Losses		7,466,227		6,217,649
Plus Adjustments under the IFRS-based Accounting Framework that Are Not Computable for the Statement of Debtors’ Status		346,163		377,731
Less Securities and Other Non-computable Items for the Statement of Debtors’ Status		715,235		604,936
Total		237,625,608		219,083,954

70

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE C – CONCENTRATION OF LOANS AND OTHER FINANCING ACTIVITIES

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	LOANS
Number of Customers	03.31.18				12.31.17
	Outstanding   Balance		% of Total   Portfolio		Outstanding   Balance		% of Total   Portfolio
10 Largest Customers		16,812,048		7		15,224,729		7
50 Following Largest Customers		26,896,121		11		26,224,276		12
100 Following Largest Customers		14,365,259		6		12,175,865		6
Remaining Customers		179,552,180		76		165,459,084		75
TOTAL(1)		237,625,608		100		219,083,954		100

(1) Reconciliation between Schedule B and the Balance Sheet:

	03.31.18		12.31.17
Loans and other financing activities		210,427,217		194,538,207
Other Debt Securities		3,582,367		2,708,652
Off-Balance Sheet Agreed Loans and Guarantees Granted		16,518,869		15,846,651
Plus Allowances for Loan Losses		7,466,227		6,217,649
Plus Adjustments under the IFRS-based Accounting Framework that Are Not Computable for the Statement of Debtors’ Status		346,163		377,731
Less Securities and Other Non-computable Items for the Statement of Debtors’ Status		715,235		604,936
Total		237,625,608		219,083,954

71

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE D – BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING ACTIVITIES

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Past-due Loan		Terms Remaining to Maturity												Total
	Portfolio		1 Month		3 Months		6 Months		12 Months		24 Months		Over 24 Months
Non-financial Public Sector		-		6,531		-		-		-		-		-		6,531
Financial Sector		-		1,948,746		78,096		282,886		785,187		702,092		1,278,855		5,075,862
Non-financial Private Sector and Residents Abroad		4,163,615		111,649,325		33,639,105		23,514,727		19,084,075		15,446,504		25,045,864		232,543,215
TOTAL		4,163,615		113,604,602		33,717,201		23,797,613		19,869,262		16,148,596		26,324,719		237,625,608

(1) Reconciliation between Schedule B and the Balance Sheet:

	03.31.18
Loans and other financing activities		210,427,217
Other Debt Securities		3,582,367
Off-Balance Sheet Agreed Loans and Guarantees Granted		16,518,869
Plus Allowances for Loan Losses		7,466,227
Plus Adjustments under the IFRS-based Accounting Framework that Are Not Computable for the Statement of Debtors’ Status		346,163
Less Securities and Other Non-computable Items for the Statement of Debtors’ Status		715,235
Total		237,625,608

72

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE F – CHANGES IN PROPERTY, PLANT AND EQUIPMENT

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Value at Beginning of		Estimated Useful		Additions		Disposals		Transfers		Depreciation								Net Book Value as of
	Fiscal Year		Life in Years								Accumulated		Disposals		For the Period		At Period-end		03.31.18		12.31.17
Measurement at Cost
Real Estate		7,874,683		50		1,194		(237,803)		6,251		649,850		(126,273)		27,479		551,056		7,093,269		7,224,833
Furniture and Fixtures		708,911		10		39,697		(87,389)		130,621		315,139		(87,068)		19,233		247,304		544,536		393,772
Machines and Equipment		2,503,007		3 and 5		89,813		(64,038)		4,940		1,098,776		(156,712)		107,783		1,049,847		1,407,517		1,404,231
Vehicles		37,408		5		4,790		(400)		-		14,132		(400)		1,854		15,586		26,212		23,276
Personal Property Acquired for Financial Leases		7,956		5		-		-		-		7,956		-		-		7,956		-		-
Miscellaneous		383,232		5 and 10		20,436		(214)		(3,012)		108,458		(23)		27,093		135,528		341,272		274,774
Work in Progress		495,934		-		131,191		-		(138,800)		-		-		-		-		488,325		495,934
Total		12,011,131				287,121		389,844		-				(370,476)		183,442		2,007,277		9,901,131		9,816,820

Item	Value at Beginning of		Estimated Useful		Additions		Disposals		Transfers		Depreciation										Net Book Value as of
	Fiscal Year		Life in Years								Accumulated		Disposals		For the Fiscal Year		Transfers		At Period-end		12.31.17		01.01.17
Measurement at Cost
Real Estate		6,864,714		50		113,621		(74,925)		992,082		581,489		(58,323)		130,576		16		653,626		7,241,866		6,283,225
Furniture and Fixtures		550,008		10		132,036		(23,051)		49,918		280,358		(22,072)		56,624		(230)		315,140		393,771		269,650
Machines and Equipment		1,706,289		3 and 5		691,501		(34,286)		139,503		806,810		(30,139)		322,047		(58)		1,098,776		1,404,231		899,479
Vehicles		29,652		5		9,650		(6,676)		4,782		11,229		(3,389)		6,292		-		14,132		23,276		18,423
Personal Property Acquired for Financial Leases		7,956		5		-		-		-		7,956		-		-		-		7,956		-		-
Miscellaneous		221,999		5 and 10		30,647		(5,555)		136,141		40,683		-		67,933		158		108,458		274,774		181,316
Work in Progress		1,042,636		-		717,208		(34,912)		(1,246,030)		-		-		-		-		-		478,902		1,042,636
Total		10,423,254				1,694,663		(179,405)		76,396		1,728,525		(113,923)		583,472		(114)		2,198,088		9,816,820		8,694,729

73

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE G – CHANGES IN INTANGIBLE ASSETS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Value at Beginning of Fiscal Year		Estimated Useful Life in Years		Additions		Disposals		Amortization								Net Book Value as of
									Accumulated		Disposals		For the Period		At Period-end		03.31.18		12.31.17
Measurement at Cost
Licenses		1,722,441		5		96,156		(613,739)		1,025,116		(633,918)		40,361		431,559		773,299		452,455
Intangible Assets Acquired for Financial Lease		26,352		5		-		-		25,753		-		599		26,352		-		599
Other Intangible Assets		1,476,421		5		115,835		(5,310)		1,035,567		(280)		248,106		1,283,393		303,553		435,827
Total		3,225,214				211,991		(619,049)		2,086,436		(634,198)		289,066		1,741,304		1,076,852		888,881

Item	Value at Beginning of Fiscal Year		Estimated Useful Life in Years		Additions		Disposals			Amortization									Net Book Value as of
										Accumulated		Disposals			For the Period		At Period-end		12.31.17		01.01.16
Measurement at Cost
Licenses		827,048		5		283,287		(1,928	)		472,383		(1,306	)		185,169		656,246		452,161		354,665
Intangible Assets Acquired for Financial Lease		26,352		5		-		-			23,119		-			2,634		25,753		599		3,233
Other Intangible Assets		1,397,070		5		75,861		(1,525	)		923,825		-			111,460		1,035,285		436,121		473,245
Total		2,250,470				359,148		(3,453	)		1,419,327		(1,306	)		299,263		1,717,284		888,881		831,143

74

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE H – CONCENTRATION OF DEPOSITS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	DEPOSITS
Number of Customers	03.31.18				12.31.17
	Outstanding Balance		% of Total Portfolio		Outstanding Balance		% of Total Portfolio
10 Largest Customers		10,353,938		5		10,218,113		5
50 Following Largest Customers		10,945,042		6		11,244,990		6
100 Following Largest Customers		7,363,802		4		6,930,668		3
Remaining Customers		169,701,337		85		172,329,016		86
TOTAL		198,364,119		100		200,722,787		100

75

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE I – BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERM

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Terms Remaining to Maturity												Total
	1 Month		3 months		6 months		12 months		24 months		Over 24 Months
Deposits (1)		173,847,414		13,677,200		5,270,223		5,349,327		207,782		12,173		198,364,119
Non-financial Public Sector		2,230,368		262,383		-		-		-		-		2,492,751
Financial Sector		165,415		-		-		-		-		-		165,415
Non-financial Private Sector and Residents Abroad		171,451,631		13,414,817		5,270,223		5,349,327		207,782		12,173		195,705,953
Fair Value liabilities with changes to income		1,796,550		-		-		-		-		-		1,796,550
Derivative Instruments		180,989		-		-		-		-		-		180,989
Repo Transactions		2,014,918		-		-		-		-		-		2,014,918
Other Financial Liabilities		34,809,189		5,092		8,439		19,310		37,847		89,961		34,969,838
Loans from the Argentine Central Bank and Other Financial Institutions		1,883,261		1,443,338		1,526,772		2,750,502		1,144,191		2,543,944		11,292,008
Notes Issued		437,044		458,447		-		1,870,073		4,012,673		7,594,734		14,372,971
Subordinated Notes		-		-		81,937		-		-		4,997,197		5,079,134
TOTAL		214,969,365		15,584,077		6,887,371		9,989,212		5,402,493		15,238,009		268,070,527

(1) Maturities in the first month include:

- Checking Accounts $31,200,914

- Savings Accounts $91,056,384

- Time Deposit $49,870,313

- Other Deposits $1,719,803

76

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE J – CHANGES IN PROVISIONS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Balances at Beginning of Fiscal Year		Increases		Decreases				Balances as of 03.31.18		Balances as of 12.31.17
					Reversals		Uses
INCLUDED IN LIABILITIES
Provisions for Contingent Commitments		-		-		-		-		-		-
For Administrative, Disciplinary and Criminal Penalties		4,983		12,348		774		-		16,557		4,983
Contingencies with the Argentine Central Bank		-		-		-		-		-		-
Provisions for Restructuring		-		-		-		-		-		-
Provisions for Contracts for Valuable Consideration		-		-		-		-		-		-
Provisions for Out-of-Service, Restoration and Rehabilitation Costs		-		-		-		-		-		-
Provisions for Post-Employment Benefit Plans		-		-		-		-		-		-
Provisions for Termination Benefits		74,025		42,010		1,129		18,308		96,598		74,025
Others		478,447		234,015		542		36,993		674,927		478,447
TOTAL PROVISIONS		557,455		288,373		2,445		55,301		788,082		557,455

77

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE L – FOREIGN CURRENCY BALANCES

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Items	Head Office and Argentine Branches		03.31.18		03.31.18								12.31.17
					Dollar		Euro		Real		Others
ASSETS
Cash and Bank Deposits		28,455,009		28,455,009		27,914,480		483,641		2,283		54,605		37,257,534
Fair value debt securities with changes to income		10,644,325		10,644,325		10,644,325		-				-		5,818,448
Derivative Instruments		14		14		14		-		-		-		13
Other Financial Assets		319,081		319,081		319,081		-		-		-		752,169
Loans and other financing activities		47,410,228		47,410,228		47,335,725		74,483		-		20		40,080,040
Non-financial Public Sector		-		-		-		-		-		-		-
Argentine Central Bank		2,011		2,011		2,011		-		-		-		1,908
Other Financial Institutions		451,552		451,552		451,552		-		-		-		361,416
To the Non-financial Private Sector and Residents Abroad		46,956,665		46,956,665		46,882,162		-		-		-		39,716,716
Other Debt Securities		2,511,098		2,511,098		2,511,098		-		-		-		1,583,413
Financial Assets Pledged as Collateral		191,045		191,045		191,045		-		-		-		140,320
Current Income Tax Assets		-		-		-		-		-		-		-
Investments in Equity Instruments		-		-		-		-		-		-		-
Investments in Subsidiaries, Associates and Joint Ventures		10,244		10,244		10,244		-		-		-		9,542
Property, Plant and Equipment		-		-		-		-		-		-		-
Intangible Assets		-		-		-		-		-		-		-
Other Non-financial Assets		15,179		15,179		15,179		-		-		-		21,358
Non-current Assets Held for Sale		-		-		-		-		-		-		-
TOTAL ASSETS		89,556,223		89,556,223		88,941,191		558,124		2,283		54,625		85,662,837

78

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE L – FOREIGN CURRENCY BALANCES (Continued)

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except Otherwise Noted

Items	Head Office and Argentine Branches		03.31.18		03.31.18								12.31.17
					Dollar		Euro		Real		Others
LIABILITIES
Deposits		73,050,949		73,050,949		73,050,949		-		-		-		70,399,366
Non-financial Public Sector		826,563		826,563		826,563		-		-		-		6,166
Financial Sector		1,555		1,555		1,555		-		-		-		3,994
Non-financial Private Sector and Residents Abroad		72,222,831		72,222,831		72,222,831		-		-		-		70,389,206
Fair Value liabilities with changes to income		1,796,550		1,796,550		1,796,550		-		-		-		1,796,550
Derivative Instruments		-		-		-		-		-		-		-
Repo Transactions		2,014,918		2,014,918		2,014,918		-		-		-		-
Other Financial Liabilities		2,843,530		2,843,530		2,731,959		99,799		11,772		-		3,023,991
Loans from the Argentine Central Bank and Other Financial Institutions		7,534,787		7,534,787		7,458,127		76,660		-		-		5,450,640
Notes Issued		-		-		-		-		-		-		-
Subordinated Notes		5,079,134		5,079,134		5,079,134		-		-		-		4,828,018
Provisions		-		-		-		-		-		-		-
Other Non-financial Liabilities		55,959		55,959		55,935		24		-		-		973,529
TOTAL LIABILITIES		92,375,827		92,375,827		92,187,572		176,483		11,772		-		84,675,544

79

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE O — DERIVATIVE INSTRUMENTS

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except Otherwise Noted

Type of Contract

Purpose of Transactions

Underlying Asset

Type of Settlement

Trading Environment or Counterparty

Originally- Agreed Weighted Average Term

Residual Weighted Average Term

Weighted Average Term for Settlement of Differences

Amount(*)

Foreign Currency Forwards

OTC - Purchases

Brokerage - own account

Foreign currency

Daily settlement of the difference

MAE

4

3

1

487,586

OTC - Sales

Brokerage - own account

Foreign currency

Daily settlement of the difference

MAE

5

4

1

2,169,784

ROFEX - Purchases

Brokerage - own account

Foreign currency

Daily settlement of the difference

ROFEX

5

4

1

32,084,560

ROFEX - Sales

Brokerage - own account

Foreign currency

Daily settlement of the difference

ROFEX

5

3

1

24,793,544

Forwards with Customers

Purchases

Brokerage - own account

Foreign currency

Upon maturity of differences

OTC - Residents in Argentina - Non- financial sector

5

3

140

2,062,410

Sales

Brokerage - own account

Foreign currency

Upon maturity of differences

OTC - Residents in Argentina - Non- financial sector

5

4

163

5,619,463

Repo Transactions

Forward Purchases

Brokerage - own account

Argentine government securities

With delivery of the underlying asset

MAE

-

-

-

2,050,033

Forward Sales

Brokerage - own account

Argentine government securities

With delivery of the underlying asset

MAE

-

-

-

4,506,003

Swaps

Fixed for Variable Interest Rate Swaps

Brokerage - own account

Others

Others

MAE

19

9

1

1,000

Swaps with Customers

Variable for Fixed Interest Rate Swaps

Brokerage - own account

Others

Others

OTC - Residents in Argentina - Financial sector

24

22

1

377,333

(*) Relates to the notional amount.

80

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE R — VALUE ADJUSTMENT BY LOSSES — ALLOWANCE FOR LOAN LOSSES

FOR THE PERIOD COMMENCED JANUARY 1 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except Otherwise Noted

Item	Balances at Beginning of Fiscal Year		Increases		Decreases					Balances as of 03.31.18		Balances as of 12.31.17
					Reversals		Uses
Loans and other financing activities
Non-financial Private Sector and Residents Abroad
Overdrafts		148,135		35,029		-		(13,465	)		169,699		148,135
Mortgage Loans		37,208		10,648		-		(2,656	)		45,200		37,208
Collateral Loans		4,051		828		-		(367	)		4,512		4,051
Personal Loans		457,123		196,065		-		(12,337	)		640,851		457,123
Credit Card Loans		3,126,734		877,706		-		(150,684	)		3,853,756		3,126,734
Financial Leases		3,246		177		-		(569	)		2,854		3,246
Others		2,302,670		386,385		-		(73,802	)		2,615,253		2,302,670
Private Securities		133,686		12,324		-		-			146,010		133,686
TOTAL ALLOWANCES		6,212,853		1,519,162		-		(253,880	)		7,478,135		6,212,853

81

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

The following information is current as of December 31, 2017 and has been prepared in accordance with the accounting framework set forth by the Argentine Central Bank. The following information is required to understand the consolidated condensed interim financial statements presented herein.

1. CASH AND BANK DEPOSITS

Cash equivalents are held to meet short-term payment commitments, rather than for investment-related or similar purposes. In order for a financial investment to be classified as a cash equivalent, it should be readily convertible into a certain amount of cash and should bear an immaterial risk of change in value. Accordingly, an investment will be classified as a cash equivalent if it matures within three months or less from the acquisition date. Equity interests are excluded from cash equivalents.

The table below shows a breakdown of items comprising cash and cash equivalents:

	12.31.17		01.01.17
Cash and Bank Deposits		58,945,315		65,767,565
Cash and Bank Deposits from Tarjetas Regionales S.A.		542,699		-
Argentine Central Bank’s Bills and Notes Maturing within up to 90 Days		17,107,571		6,903,609
Receivables from Reverse Repo Transactions		9,654,517		-
Local Interbank Loans		935,000		862,300
Overnight Placements in Banks Abroad		288,991		1,227,101
Mutual Funds		1,887,021		2,193,056
Time Deposits		6,169		3,598
Government Securities		-		993,697
Total Cash and Cash Equivalents		89,367,283		77,950,926

2. FINANCIAL INSTRUMENTS

As of the dates indicated below, the Group maintains the following portfolios of financial instruments:

Instruments Portfolio as of 12.31.17	Fair Value - Net Income (Loss)		Amortized Cost		Fair Value – OCI
Assets
Argentine Central Bank’s Bills and Notes		17,858,764		-		-
Government Securities		9,370,692		-		80,650
Private Securities		1,668,134		-		-
Derivative Instruments		525,362		-		-
Repo Transactions		-		9,676,101		-
Other Financial Assets		3,058,208		3,860,214		-
Loans and Other Financing Activities		-		194,538,223		-
Other Debt Securities (Trusts and Notes)		-		2,612,171		96,481
Financial Assets Pledged as Collateral		391,287		5,939,270		-
Investments in Subsidiaries, Associates and Joint Ventures		-		-		-
Liabilities
Deposits		-		200,722,787		-
Derivative Instruments		573,218		-		-
Repo Transactions		-		1,131,127		-
Other Financial Liabilities		-		39,281,886		-
Loans from the Argentine Central Bank and Other Financial Institutions		-		7,869,048		-
Notes Issued		-		13,739,066		-
Subordinated Notes		-		4,828,018		-

82

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Instruments Portfolio as of 01.01.17	Fair Value - Net Income (Loss)		Amortized Cost		Fair Value – OCI
Assets
Argentine Central Bank’s Bills and Notes		8,769,478		-		-
Government Securities		5,242,488		-		-
Private Securities		2,334,846		-		-
Derivative Instruments		124,521		-		-
Repo Transactions		-		-		-
Other Financial Assets		2,462,623		1,037,777		-
Loans and other financing activities		-		135,614,976		-
Other Debt Securities (Trusts and Notes)		-		403,590		504,874
Financial Assets Pledged as Collateral		636,865		4,841,988		-
Investments in Subsidiaries, Associates and Joint Ventures		-		33,200		-
Liabilities
Deposits		-		150,377,066		-
Derivative Instruments		152,553		-		-
Repo Transactions		-		-		-
Other Financial Liabilities		-		33,040,927		-
Loans from the Argentine Central Bank and Other Financial Institutions		-		6,896,318		-
Notes Issued		-		11,857,719		-
Subordinated Notes		-		4,065,255		-

3. FAIR VALUES

The Group classifies the fair values of financial instruments in three levels, according to the quality of data used to determine them.

Below is a detail of the Bank’s financial instruments measured at fair value as of the dates indicated below:

Instruments Portfolio as of 12.31.17	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Assets
- Argentine Central Bank’s Bills and Notes		16,920,090		938,674		-
- Government Securities		7,115,812		27,626		2,307,904
- Private Securities		278,191		-		1,389,943
- Derivative Instruments		-		525,362		-
- Other Financial Assets		3,058,208		-		-
- Financial Assets Pledged as Collateral		391,287		-		-
Liabilities
- Fair Value liabilities with changes to income		-		573,218		-
Total		27,763,588		906,806		3,697,847
Instruments Portfolio as of 01.01.17	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Assets
- Argentine Central Bank’s Bills and Notes		8,769,478		-		-
- Government Securities		4,475,434		77,616		689,438
- Private Securities		701,279		-		1,633,567
- Derivative Instruments		-		124,521		-
- Other Financial Assets		2,462,623		-		-
- Financial Assets Pledged as Collateral		636,865		-		-
Liabilities
- Fair Value Liabilities with Changes to Income		-		152,553		-
Total		17,045,679		49,584		2,323,005

Valuation methods are detailed in Note 4.

83

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Changes in instruments included in Level 3 fair value are as follows:

	Government Securities		Private Securities		Total Level 3   Fair Value
Fair Value as of 01.01.17		689,438		1,633,567		2,323,005
Purchases		2,307,904		1,389,943		3,697,847
Sales		(689,438)		(1,630,237)		(2,319,675)
Income (Loss)		-		(3,330)		(3,330)
Fair Value as of 12.31.17		2,307,904		1,389,943		3,697,847

All items included in Level 3 are assumed as instruments recognized and derecognized in the same year.

The Group’s policy is to recognize transfers among fair value levels only as of year-end dates, there being no changes to financial instruments held in portfolios as of December 31, 2017.

4 REPO TRANSACTIONS

Below is a detail of the residual value of assets transferred under repo transactions:

	12.31.17
Reverse Repo Transactions Carried in Off-Balance Sheet Items		9,697,406
Repo Transactions Carried in Financial Assets Pledged as Collateral		1,132,573

5. PROVISIONS

Below is a detail of the movements in provisions, including administrative, disciplinary and criminal penalties, severance payments, and other contingencies:

	12.31.17
Balance at the Beginning		334,876
Increases		367,867
Reversals		43,550
Uses		101,738
Balance at Year-End		557,455

6. OTHER FINANCIAL ASSETS

The table below shows a breakdown of other financial assets as of the dates indicated below:

	12.31.17		01.01.17
Debtors from Foreign Exchange Brokerage		2,404,843		3,212
Debtors from Spot Sales of Government Securities Pending Settlement		1,016,345		731,163
Sundry Debtors		377,952		29,181
Unlisted Mutual Funds		2,984,956		2,460,238
Others		134,326		276,606
Total		6,918,422		3,500,400

7. TRANSFER OF FINANCIAL ASSETS

All transfers of financial assets qualify for derecognition of financial assets in their entirety.

In derecognizing a financial asset, the difference between the carrying amount and the amount received as consideration is attributed to income.

The Company mainly consummates non-recourse portfolio sales, with the assigned portfolio in the 2017 fiscal year having amounted to $903,197 and cash flows from portfolio sales to $1,016,478.

8. PROPERTY, PLANT AND EQUIPMENT

Changes in “Property, Plant and Equipment” are detailed in Schedule F.

9. INTANGIBLE ASSETS

The Group’s “Intangible Assets” are detailed in Schedule G.

84

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

10. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

As of the dates indicated below, the Group had the following assets held for sale and discontinued operations:

	12.31.17		01.01.17
Equity Investments in Subsidiaries
Prisma Medios de Pago S.A.		208,972		-
Compañía Financiera Argentina S.A.		965,500		1,215,513
Cobranzas y Servicios S.A.		7,002		7,002
Property, Plant and Equipment
Real Estate		2,328		2,328
Total		1,183,802		1,224,843

The information below is related to the Group’s discontinued operations (Compañía Financiera Argentina S.A. and Cobranzas and Servicios S.A.):

Cash Flows	12.31.17			01.01.17
Operating Activities		(372,099)			(359,745)
Investing Activities		(37,608)			(21,322)
Financing Activities		333,197			384,019
Total Cash and Cash Equivalents		(76,510	)		2,952

Below is a summary of balance sheet data about these companies:

Compañía Financiera Argentina S.A.	12.31.2017
Assets
Cash and Due from Banks		395,201
Securities		16,776
Loans		4,916,476
Miscellaneous Receivables		208,374
Equity Investments		4,303
Bank Property, Plant and Equipment		39,670
Miscellaneous Assets		2,013
Intangible Assets		61,038
Liabilities
Deposits		1,412,974
Notes		1,250,531
Other Liabilities Resulting from Financial Brokerage		1,649,704
Miscellaneous Liabilities		322,589
Allowances		42,553
Cobranzas y Servicios S.A.	12.31.2017
Assets
Cash and Due from Banks		296
Securities		12,867
Miscellaneous Receivables		16,743
Liabilities
Miscellaneous Liabilities		22,904

Assets	12.31.17		01.01.17
Equity Investments in Subsidiaries
Compañía Financiera Argentina S.A.		965,500		1,215,513
Cobranzas y Servicios S.A.		7,002		7,002
Total Assets		972,502		1,222,515

The table below shows a breakdown of income from discontinued activities and net income recognized from the remeasurement of assets held for sale:

Net Income (Loss)	12.31.17
Income before Taxes from Discontinued Operations		-
Taxes		(185,362)
Net Income (Loss) from Discontinued Operations for the Period		(185,362	)

85

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

11. SHAREHOLDERS’ EQUITY STRUCTURE

	12.31.17		01.01.17
Capital Stock		1,426,765		1,300,265
Non-Capitalized Contributions		10,951,132		219,596
Capital Adjustments		278,131		278,131
Profit Reserves		17,390,568		12,536,829
Retained Income		2,518,733		8,536,610
Other Accumulated Comprehensive Income(1)		17,279		284,182
Net Income for the Fiscal Year		8,605,389		-
Shareholders’ Equity Attributable to the Controlling Company’s Shareholders		41,187,997		23,155,613
Shareholders’ Equity Attributable to Non-Controlling Interests		1,935,193		1,451,883
Total Shareholders’ Equity		43,123,190		24,607,496

(1) Attributable to gains from financial instruments at fair value with changes in other comprehensive income.

12. EARNINGS PER SHARE

Earnings per share are calculated by dividing income attributable to the Group’s shareholders by the weighted average of outstanding common shares during the year. As the Group does not have preferred shares or debt convertible into shares, basic earnings are equal to diluted earnings per share.

	12.31.17
Income attributable to the Group’s Shareholders		8,605,389
Weighted Average of Ordinary Shares Outstanding (Thousands)		1,332,617
Earnings per Share		6.46

13. INTEREST INCOME/COMMISSION INCOME

Interest Income	12.31.17
On Cash and Bank Deposits		112
On Private Securities		912,427
On Government Securities		225,030
On Other Financial Liabilities		-
On Loans and other Financing Activities
Non-Financial Public Sector		-
Argentine Central Bank		-
Financial Sector		691,026
Non-Financial Private Sector		-
Overdrafts		2,749,192
Mortgage Loans		269,096
Collateral Loans		116,890
Personal Loans		4,850,390
Credit Card Loans		15,282,098
Financial Leases		333,491
Others		8,308,394
Residents Abroad		-
On Repo Transactions
Argentine Central Bank		1,138,786
Other Financial Institutions		5,697
Total		34,882,629
Commission Income	12.31.17
Fee and Commissions Related to Notes		3,462,306
Fee and Commissions Related to Credits		3,179,922
Fee and Commissions Related to Loan Commitments and Financial Guarantees		129,249
Fee and Commissions Related to Transferable Securities		501,285
Fee and Commissions on Collection Proceedings		27,298
Fee and Commissions on Foreign and Exchange Rate Transactions		488,071
Total		7,788,131

86

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

14       INTEREST EXPENSE/COMMISSION EXPENSE

Interest Expense	12.31.17
On Deposits
Non-Financial Public Sector		-
Financial Sector		439,106
Non-Financial Private Sector
Checking Accounts		646
Savings Accounts		3,493
Time Deposit and Term Investments		10,448,278
Others		484,148
Residents Abroad		121
Loans from the Argentine Central Bank and Other Financial Institutions
On Repo Transactions
Argentine Central Bank		19
Other Financial Institutions		222,834
On Other Financial Liabilities		3,450,992
On Notes Issued		-
On Other Subordinated Notes		349,907
Total		15,399,544
Commission Expense	12.31.17
Portfolio Transfer Management Services		-
Fee and Commissions Related to Transactions with Securities		18,655
Others		2,517,559
Total		2,536,214

15.       UNDERWRITING INCOME

The breakdown of Underwriting Income as of December 31, 2017 was as follows:

	12.31.17
Premiums and Surcharges Accrued		3,262,307
Claims Accrued		(410,050)
Surrenders		(4,355)
Life and Ordinary Annuities		(5,607)
Underwriting and Operating Expenses		(745,720)
Other Income and Expenses		22,708
Total		2,119,283

16.       EXPENSES BY FUNCTION AND NATURE

The Group utilized the expenditure function method in assembling its statement of comprehensive income. Under this method, expenses are classified according to their function as part of the item, “Administrative Expenses.”

The table below provides the required additional information about expenses by nature and function:

Administrative Expenses	12.31.17
Fees and Compensation for Services		578,106
Directors’ and Syndics’ Fees		76,832
Advertising, Promotion and Research Expenses		814,386
Taxes and Assessments		2,217,644
Maintenance and Repairs		662,617
Electricity and Communications		622,607
Entertainment and Transportation Expenses		100,150
Stationery and Office Supplies		136,762
Rentals		457,912
Administrative Services Hired		1,112,693
Security		605,652
Insurance		47,943
Others		2,409,697
Total		9,843,001

87

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Depreciation and Impairment of Assets	12.31.17
Depreciation of Property, Plant and Equipment		494,445
Amortization of Organization and Development Expenses		395,262
Amortization of Other Intangible Assets		129,236
Others		2,550
Total		1,021,493

17. EMPLOYEE BENEFITS

The breakdown of the items disclosed under, “Employee Benefits,” as of December 31, 2017 is as follows:

	12.31.17
Salaries		6,540,475
Social Security Contributions on Salaries		1,593,672
Severance Payments and Personnel Bonuses		2,022,318
Services to Personnel and Others		526,806
Total		10,683,271

18. INCOME TAX

The following is a reconciliation of income tax charged to income as of December 31, 2017 to the application of the current tax rate to book income:

	12.31.17
Income for the Period Before Income Tax		13,183,967
Effective Tax Rate		35%
Income for the Period at the Tax Rate		4,614,388
Permanent Differences at the Tax Rate
- Income (Loss) from Equity Investments		(151,436)
- Non-Taxable Income (Loss)		(64,572)
- Donations and Other Non-Deductible Expenses		59,786
- Others		443,394
- Fines		43
Reversal Under Law No. 27430		(179,956)
Total Income Tax Charge for the Period		4,578,578

	12.31.17
Current Income Tax		4,827,361
Deferred Tax Charge		(105,714	)
		(143,069	)
Total Income Tax Charge for the Period		4,578,578

The change in deferred income tax assets and liabilities, regardless of the balance offsetting within the same tax jurisdiction, is as follows:

Item	12.31.17		Charges for the     Period	Others		Allowance for     Impairment		03.31.18
Deferred Tax Assets
Trade Receivables		553,695	794		-		-		554,489
Property, Plant and Equipment		(43,375)	(4,187)		-		-		(47,562)
Other Liabilities		(792)	4,998		(4,569)		-		(363)
Employee Benefits		2,675	(592)		22		-		2,105
Exchange Rate Difference		5,130	(4,938)		-		-		192
Provisions for Contingencies		44,251	466		(1,720)		-		42,997
Other Items		18,720	2,659		-		-		21,379
Financial Charges		-	19,067		-		-		19,067
Investments		(15,229)	(20,477)		-		-		(35,706)
Equity Investments in Subsidiaries		-	3,301		-		-		3,301
Tax Loss Carry-Forwards		148,986	(143,812)		1,929		(7,103)		-
Taxes		-	(92)		-		-		(92)
Total Deferred Tax Assets		714,061	(142,813)		(4,338)		(7,103)		559,807

88

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Item	12.31.17		Charges for the     Period	Others		Allowance for     Impairment		03.31.18
Deferred Tax Liabilities
Valuation of Securities		(3,275)	29,341		-		-		26,066
Allowances for Loan Losses		299,204	(3,746)		-		-		295,458
Loans		94,149	18,769		-		-		112,918
Property, Plant and Equipment		(1,836,082)	509,983		-		-		(1,326,099)
Miscellaneous		2,724	(32,504)		(6,290)		-		(36,070)
Other Items		(156,164)	1,534		5,917		-		(148,713)
Assets Available for Sale		-	(245,702)		-		-		(245,702)
Intangible Assets		309,874	(98,881)		-		-		210,993
Other Liabilities and Provisions		351,507	67,757		1		-		419,265
Other Financial Assets		(17,949)	1,976		(247)		-		(16,220)
Total Deferred Tax Liabilities		(956,012)	248,527		(619)		-		(708,104)
Deferred Tax Assets/(Liabilities)		(241,951)	105,714		(4,957)		(7,103)		(148,297)

Provisions for the deferred tax asset as of Sunday, December 31, 2017 and Sunday, January 1, 2017, amounting to $7,103 and $150,171, respectively, were included, as it is believed that the recovery thereof is not likely as of the date of these financial statements.

In September 2017, the Bank filed with A.F.I.P. certain actions for recovery of income tax paid in excess for the 2014 and 2016 fiscal years, totaling $433,815 and $944,338, respectively. These actions were predicated on case law that declared unconstitutional certain rules and regulations banning the application of the inflation adjustment for tax purposes, with ensuing confiscatory effects. As of period-end, the Bank has not recorded balances in respect of the contingent assets stemming from the aforementioned actions.

Tax Reform

On December 29, 2017, the National Executive Branch enacted Income Tax Law No. 27430. This law has introduced several changes to the previous income tax treatment. Some of the key changes implicated by the reform include:

- Income Tax Rate: The income tax rate for Argentine companies shall be gradually reduced from 35% to 30% for the fiscal years commencing on January 1, 2018 until December 31, 2019, and to 25% for the fiscal years commencing on, and including, January 1, 2020.

- Tax on Dividends: The law has introduced a tax on dividends or profits distributed by Argentine companies or permanent establishments, among others, to individuals, undivided interests or foreign beneficiaries, subject to the following considerations: (i) dividends distributed out of the profits made during fiscal years commencing on January 1, 2018 until December 31, 2019 shall be subject to withholding at a 7% rate; and (ii) dividends distributed out of the profits made during fiscal years commencing on January 1, 2020 onwards shall be subject to withholding at a 13% rate.

Dividends distributed from profits earned until the fiscal years before that which commenced on January 1, 2018 shall remain subject, in respect of all beneficiaries, to withholding at the 35% rate on the amount in excess of tax-free distributable accumulated profits (equalization tax transition period).

- Optional Tax Revaluation: Regulations establish that, at the companies’ option, assets that are located in the country and are used for generating taxable income may be subject to tax reevaluation. The special tax on the revaluation amount depends on the asset: 8% for real estate that does not qualify as inventory, 15% for real estate that qualifies as inventory and 10% for personal property and the remaining assets. Once the option for a given asset is exercised, all other assets of the same category should be revalued. Taxable income resulting from the revaluation is not subject to income tax and the special tax on the revaluation amount will not be deductible from such tax.

19. SEGMENT REPORTING

The Group determines segments based on management reports that are reviewed by the Board of Directors and updated to reflect any changes.

Reportable segments are made up of one or more operating segments with similar economic characteristics, distribution channels and regulatory environments.

Below there is a description of each business segment’s composition:

89

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

a. Banks: This segment represents the banking business operation results.

b. Regional Credit Cards: This segment represents the results of operations of the regional credit card business and includes the results of operations of Tarjetas Regionales S.A. consolidated with the following subsidiaries: Cobranzas Regionales S.A., Procesadora Regional S.A. and Tarjeta Naranja S.A.

c. Insurance: This segment represents the results of operations of the insurance companies’ business and includes the results of operations of Sudamericana Holding S.A. consolidated with the following subsidiaries: Galicia Retiro Cía. de Seguros S.A., Galicia Seguros S.A. and Galicia Broker Asesores de Seguros S.A.

d. Other Businesses: This segment shows the results of operations of Galicia Administradora de Fondos S.A., Galicia Warrants S.A., Net Investment S.A. (in liquidation), Galicia Valores S.A. and Grupo Financiero Galicia S.A., the last two net of eliminations of income from equity investments.

e. Adjustments: This segment includes consolidation adjustments and eliminations of transactions among subsidiaries.

The operating income (loss) of the Group’s different operating segments is monitored separately in order to make decisions on resource allocation and the evaluation of each segment’s performance. Segment performance is evaluated based on operating income or losses and is consistently measured with the operating income and losses of the consolidated income statement.

When any transaction occurs, the transfer pricing among operating segments is at arm’s length similar to transactions performed with third parties. Income, expenses and income (losses) resulting from the transfers among operating segments are then eliminated from consolidation.

The relevant segment reporting as of the dates indicated below is as follows:

	Banks		Regional Credit Cards		Insurance		Others		Adjustments		Total as of 12.31.17
Net Income from Interest (Expense)		12,681,954		6,407,034		297,145		113,958		(17,006)		19,483,085
Net Commission Income (Expense)		3,184,222		1,743,125		-		1,748		326,318		5,251,917
Net income from Measurement of Fair Value Financial Instruments with Changes to Income		4,191,458		6,175		(18,638)		693,139		(77,889)		4,794,245
Exchange Rate Differences on Gold and Foreign Currency		2,078,152		9,239		1,345		91,527		11,638		2,191,901
Other Operating Income		8,460,532		6,616,029		(8,271)		844,312		(1,442,099)		14,470,503
Underwriting Income		-		-		1,027,099		-		1,092,184		2,119,283
Loan Loss Provisions		2,586,445		2,017,613		5,221		(4,494)		-		4,604,785
Employee Benefits		7,095,734		3,142,164		339,021		106,352		-		10,683,271
Administrative Expenses		5,876,800		3,593,098		275,671		121,763		(24,331)		9,843,001
Depreciation and Impairment of Assets		791,103		203,253		23,910		3,227		-		1,021,493
Other Operating Expenses		7,208,024		1,439,814		(58,009)		47,346		7		8,637,182
Operating Income		7,038,212		4,385,660		712,866		1,466,994		82,530		13,521,202
Income for Associates and Joint Ventures		2,492,568		-		2,072		8,026,546		(10,232,154)		289,032
Income before Taxes from Continuing Activities		9,530,780		4,385,660		714,938		9,493,540		(10,314,684)		13,810,234
Income Tax from Continuing Activities		2,182,886		1,664,596		252,394		293,340		-		4,393,216
Net Income (Loss) from Continuing Activities		7,347,894		2,721,064		462,544		9,200,200		(10,314,684)		9,417,018
Income (Loss) from Discontinued Operations		-		-		-		-		-		-
Income Tax from Discontinued Operations		185,362		-		-		-		-		185,362
Net Income (Loss) for the Period		7,162,532		2,721,064		462,544		9,200,200		10,314,684		9,231,656
Net Income (Loss) for the Period Attributable to Non-Controlling Interests		7,162,532		2,720,769		462,541		9,200,200		10,940,653		8,605,389
Net Income for the Period		-		295		3		-		625,975		626,267

90

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

	Banks		Regional Credit Cards		Insurance		Other		Adjustments		Total as of 12.31.17
ASSETS
Cash and Bank Deposits		58,460,898		536,969		23,394		67,715		(143,661)		58,945,315
Fair Value Debt Securities with Changes to Income		26,572,295		250,631		791,155		1,595,204		(231,045)		28,978,240
Derivative Instruments		525,362		-		-		11,638		(11,638)		525,362
Repo Transactions		9,676,101		-		-		-		-		9,676,101
Other Financial Assets		3,955,342		2,169,245		867,815		1,691,363		(1,765,343)		6,918,422
Loans and Other Financing Activities		162,638,529		32,364,414		9,488		63,099		(537,307)		194,538,223
Other Debt Securities		2,105,938		-		393,627		209,087		-		2,708,652
Financial Assets Pledged as Collateral		6,325,905		4,652		-		-		-		6,330,557
Current Income Tax Assets		19,393		20,473		86,021		111,095		-		236,982
Investments in Equity Instruments		-		-		-		-		-		-
Investments in Subsidiaries, Associates and Joint Ventures		6,802,872		-		-		40,447,495		(47,229,500)		20,867
Property, Plant and Equipment		8,990,442		669,495		143,679		13,204		-		9,816,820
Intangible Assets		582,587		249,895		56,316		84		(1)		888,881
Deferred Income Tax Assets		-		557,904		70		1,833		-		559,807
Other Non-Financial Assets		1,962,195		192,956		767		156,109		654,238		2,966,265
Non-Current Assets Held for Sale		1,154,835		-		-		28,967		-		1,183,802
TOTAL ASSETS		289,772,694		37,016,634		2,372,332		44,396,863		(49,264,257)		324,294,296
LIABILITIES
Deposits		200,884,407		-		-		-		(161,620)		200,722,787
Fair Value Liabilities with Changes to Income		-		-		-		-		-		-
Derivative Instruments		584,856		-		-		-		(11,638)		573,218
Repo Transactions		1,131,127		-		-		-		-		1,131,127
Other Financial Liabilities		23,023,417		16,532,609		-		1,394		(275,534)		39,281,886
Loans from the Argentine Central Bank and Other Financial Institutions		7,728,585		331,990		3,462		-		(194,989)		7,869,048
Notes Issued		4,488,602		9,481,509		-		-		(231,045)		13,739,066
Current Income Tax Liabilities		1,801,243		804,444		122,541		345,927		-		3,074,155
Subordinated Notes		4,828,018		-		-		-		-		4,828,018
Provisions		450,598		48,263		55,797		2,797		-		557,455
Deferred Income Tax Liabilities		630,211		-		53,658		24,235		-		708,104
Other Non-Financial Liabilities		5,295,776		1,402,893		1,091,565		969,181		(73,173)		8,686,242
TOTAL LIABILITIES		250,846,840		28,601,708		1,326,993		1,343,534		(947,999)		281,171,106

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GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

	Banks		Regional Credit Cards		Insurance		Other		Adjustments			Total as of 01.01.17
ASSETS
Cash and Bank Deposits		65,404,369		461,148		65,025		89,699		(252,676)			65,767,565
Fair Value Debt Securities with Changes to Income		15,138,269		51,370		1,037,773		149,303		(29,903)			16,346,812
Derivative Instruments		124,521		-		-		-		-			124,521
Repo Transactions		-		-		-		-		-			-
Other Financial Assets		1,588,872		2,040,428		658,470		329,883		(1,117,253)			3,500,400
Loans and Other Financing Activities		108,058,715		27,078,374		22,035		1,321,168		(865,316)			135,614,976
Other Debt Securities		872,431		3,749		207,209		531,761		(706,686)			908,464
Financial Assets Pledged as Collateral		5,357,096		121,664		-		93		-			5,478,853
Current Income Tax Assets		115,449		20,888		99,672		19,762		-			255,771
Investments in Equity Instruments		-		-		-		33,200		-			33,200
Investments in Subsidiaries, Associates and Joint Ventures		5,177,651		-		14,716		23,324,315		(28,332,766)			183,916
Property, Plant and Equipment		7,755,542		606,008		147,385		185,794		-			8,694,729
Intangible Assets		602,130		194,254		33,310		1,449		-			831,143
Deferred Income Tax Assets		-		582,137		(18,725)		478		-			563,890
Other Non-Financial Assets		1,307,067		246,175		1,482		34,416		508,727			2,097,867
Non-Current Assets Held for Sale		1,188,363		-		-		36,480		-			1,224,843
TOTAL ASSETS		212,690,475		31,406,195		2,268,352		26,057,801		(30,795,873)			241,626,950
LIABILITIES
Deposits		150,639,153		-		-		-		(262,087)			150,377,066
Fair Value Liabilities with Changes to Income		-		-		-		-		-			-
Derivative Instruments		143,373		118,223		-		-		(109,043)			152,553
Repo Transactions		1,644,714		-		-		-		-			1,644,714
Other Financial Liabilities		18,816,180		13,743,887		-		737,639		(256,779)			33,040,927
Loans from the Argentine Central Bank and Other Financial Institutions		4,693,232		2,378,628		7,028		228,048		(410,618)			6,896,318
Notes Issued		4,738,931		7,336,619		-		518,749		(736,580)			11,857,719
Current Income Tax Liabilities		990,143		505,315		250,194		76,888		-			1,822,540
Subordinated Notes		4,065,255		-		-		-		-			4,065,255
Provisions		253,904		48,540		29,333		3,099		-			334,876
Deferred Income Tax Liabilities		877,963		-		-		78,049		-			956,012
Other Non-Financial Liabilities		3,783,739		1,191,921		912,615		105,009		(121,810)			5,871,474
TOTAL LIABILITIES		190,646,587		25,323,133		1,199,170		1,747,481		(1,896,917	)		217,019,454

20.        DIVIDENDS PER SHARE

Dividends paid in fiscal year 2017 to the Group’s shareholders amounted to $240,000, accounting for $0.18 (figure stated in Pesos) per share.

21.        CORPORATE RISKS AND GOVERNANCE

The tasks related to risk information and internal control of each of the companies controlled by Grupo Financiero Galicia S.A. are defined and carried out rigorously.

Apart from applicable local regulations, Grupo Financiero Galicia S.A., in its capacity as a listed company in the United States of America, complies with the certification of its internal controls pursuant to Section 404 of the Sarbanes Oxley Act (“Sarbanes Oxley”). Corporate risk management is monitored by the Audit Committee, which also gathers and analyzes the information submitted by the main controlled companies.

With regard to potential risks, the Bank embraces a policy that takes into consideration several aspects of the business and operations, abiding by the main guidelines of internationally accepted standards.

From this approach, the Bank defines its internal structure, functions and roles by hierarchical levels and invests resources in monitoring and streamlining risk management, with independence of duties as it reports to the General Manager.

The specific function of the comprehensive management of the Bank’s risks has been allocated to the Risk Division, guaranteeing its independence from the rest of the business areas since it directly reports to the Bank’s General Division and, at the same time, is involved in the decisions made by each area. In addition, the control and prevention of risks related to asset laundering, funding of terrorist activities and other illegal activities is allocated to the

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Prevention of Asset Laundering Division, which reports to the Board of Directors. The aim of both divisions is to guarantee the Board of Directors is fully aware of the risks that the Bank is exposed to, and to design and propose policies and procedures necessary to identify, assess, follow up, control and mitigate such risks.

The Bank has developed the Capital Adequacy Assessment Process (“Proceso de Evaluación de Suficiencia de Capital – PESC,” or, asreflected in the Capital Adequacy Report, “IAC,” as per its acronym in Spanish) to assess the relationship between the Bank’s own resources available and necessary resources to maintain an appropriate risk profile. This process shall also allow for the identification of both the economic capital needs and the sources to meet such needs.

The minimum capital requirement with regard to each risk is determined according to the Argentine Central Bank regulations.

In addition, the Bank has specified a risk appetite framework, which has risk acceptance levels, both on an individual and a consolidated basis. Within this framework, metrics have been established —calculated based on current and stress ratios—which are monitored in order to detect situations that may affect the normal course of business, the noncompliance with the strategy and undesired results and/or situations of vulnerability in the face of changes in market conditions. The Risk and Capital Allocation Committee considers and controls the Bank’s risk profile through a risk appetite report, and defines the actions to be carried out in case of potential deviations from the thresholds set.

Financial Risk Factors

Short- and medium-term financial risks are managed within the framework of policies approved by the Board of Directors, which establishes limits to the different risk exposure and also considers their interrelation. Management is supplemented by “contingency plans” devised to face adverse market situations.

Furthermore, “stress tests” that make it possible to assess risk exposure under historical and simulated scenarios are created, which identify critical levels of the different risk factors.

a) Credit Risk:

The Bank uses credit assessment and risk monitoring tools to allow its management on a prompt and controlled basis to control its level of exposure to potential risks and encourages a proper portfolio diversification, both in individual terms and by economic sector.

Strategically, the Bank has decided to deepen its customers’ knowledge expressed in a specific policy, which allows for providing credit assistance to them according to their financing needs and based on their evaluated attributes, purposes and perspectives.

The Bank’s credit granting and analysis system is applied in a centralized manner and is based on the concept of “opposition of interests,” with specific duties concerning risk, credit and commercial management for the several business areas.

This allows for an ongoing and efficient monitoring of the quality of assets, an early management of problem loans, aggressive write-offs of uncollectible loans, and a conservative policy on allowances for loan losses.

The credit quality of Government Securities, Private Securities and Lebacs is shown as follows, while the credit quality of loans granted is detailed in Schedule B.

Rating	12.31.17
Government Securities (Excluding Lebacs)
Fair Value with Changes in Profit or Loss
AAA		6,070,474
AA+		682,798
AA-		65,282
A+		67,318
A3		189,143
BBB		748
BB-		873,328
Baa1		135,962
Baa2		16,350
Baa3		1,200,500
Total		9,301,903

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ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Private Securities
Fair Value with Changes in Profit or Loss
AAA	422,237
AA+	83,043
AA	578,985
AA-	369,607
Aa2	38,534
Aa3	9,034
A+	127,776
A	87,122
A-	37,745
A1	14,532
A2	2,562
BBB+	3,036
BBB	1,020
Baa1	10,775
B2	3,622
B	7,822
B-	20,123
Total	1,817,575

Impairment of Financial Instruments

The Group accounts for loans according to the type of loan portfolio, by performing an individual analysis of each customer within the “Commercial Loan Portfolio” or “Consumer Comparable Loan Portfolio” and a massive analysis based on days in arrears for customers within the “Consumer Loan Portfolio.” The criteria followed by the Group in setting up allowances are detailed in Note 1.

Loans classified as uncollectible for 7 months are eliminated from the Group’s assets and are recognized in off-balance sheet items.

The impact of allowances on net income (loss) as of the dates indicated below is detailed below:

	12.31.17		01.01.17
Allowances for Consumer Loan Portfolio		3,254,499		2,264,529
Allowances for Commercial Loan and Comparable Loan Portfolio		519,217		251,284
Total		3,773,716		2,515,813

According to the guidelines followed by the Group to set up allowances, loans to the financial sector and performing liabilities should not result in impairment losses.

b) Market Risk:

Trading of and/or investment in government and private securities, currencies, derivatives and debt instruments issued by the Argentine Central Bank, which is listed in capital markets and the value of which varies pursuant to the variation of the market prices thereof, is included within the policy which limits the maximum authorized losses during a year.

The “price risk” (market) is managed on a daily basis according to the approved strategy, the purpose of which is to keep the Bank present in the different derivatives, variable- and fixed-income markets, while obtaining the maximum possible return on trading, without exposing the latter to excessive risk levels. Finally, the designed policy contributes to providing transparency and facilitates the perception of the risk levels to which it is exposed.

In order to measure and monitor risks derived from the variation in the price of financial instruments that form the trading securities portfolio, a model known as “Value at Risk” (also known as “VaR”) is used. This model determines, for the Bank individually, the possible loss that could be generated by the positions in securities, derivative instruments and currencies under the following parameters.

99% Confidence Level: Holding period as per the depth of market at each time and estimated volatility based on the history of the last 252 sessions.

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ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

The following table shows a sensitivity analysis of income (loss) and shareholders’ equity to reasonable changes in the preceding exchange rates relative to the Group’s functional currency.

In 2017, the Group assigned a holding period to each instrument based on depth of market (previously, the time horizon was 10 sessions for all trading activities).

The Group’s exposure to the foreign exchange risk as of year-end by type of currency is shown below:

Currency	Balances as of 12.31.17
	Monetary Financial Assets		Monetary Financial Liabilities			Derivative Instruments			Net Position
U.S. Dollar		85,602		(81,386	)		(2,814	)		1,402
Euro		537		(141	)		-			396
Canadian Dollar		20		(4	)		-			16
Real		12		-			-			12
Swiss Franc		11		(6	)		-			5
Others		22		(1	)		-			22
Total		86,204		(81,537	)		(2,814	)		1,853
Currency	Balances as of 01.01.17
	Monetary Financial Assets		Monetary Financial Liabilities			Derivative Instruments			Net Position
U.S. Dollar		63,563		(65,305	)		3,474			1,732
Euro		285		(119	)		-			165
Canadian Dollar		12		(4	)		-			9
Real		21		-			-			21
Swiss Franc		9		(2	)		-			6
Others		28		(1	)		-			27
Total		63,918		(65,431	)		3,474			1,960

Currency			Balances as of 12.31.17				Balances as of 01.01.17
	Change		Income (Loss)		Shareholders’ Equity		Income (Loss)		Shareholders’ Equity
U.S. Dollar		10%		140		1,542		173		1,905
		-10%		(140)		1,262		(173)		1,559
Euro		10%		40		436		17		182
		-10%		(40)		357		(17)		149
Canadian Dollar		10%		2		18		1		9
		-10%		(2)		14		(1)		8
Real		10%		1		14		2		23
		-10%		(1)		11		(2)		19
Swiss Franc		10%		-		5		1		7
		-10%		-		4		(1)		6
Others		10%		2		24		3		30
		-10%		(2)		20		(3)		24

c)    Interest Rate Risk

The Bank’s exposure to the “interest rate risk,” as a result of interest rate fluctuations and the different sensitivity of assets and liabilities, is managed according to the approved strategy. On the one hand, it considers a short-term horizon, seeking to keep the net financial margin within the levels set by the policy. On the other hand, it considers a long-term horizon, the purpose of which is to mitigate the negative impact on the present value of the Bank’s shareholders’ equity in the face of changes in interest rates.

From a comprehensive viewpoint of risk exposure and contributing to including a “risk premium” in the pricing process, the aim is to systematically estimate the “economic capital” used up by the structural risk as per the financial statements (the “interest rate risk”) and the contribution of the “price risk,” in its different expressions, in using up the capital.

The Group’s exposure to the interest rate risk is detailed below. This table shows the residual value of assets and liabilities, classified by the sooner of the interest renegotiation date or the maturity date.

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ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Assets and Liabilities at Variable	Term (in Days)										Total
Rate	Up to 30		30 to 90		90 to 180		180 to 365		Over 365
As of 01.01.17
Total Financial Assets		73,846,356		27,467,682		20,228,823		21,514,578		77,047,533		220,104,972
Total Financial Liabilities		110,337,918		19,156,631		6,111,272		3,302,279		69,101,557		208,009,657
Net Amount		(36,491,562)		8,311,051		14,117,551		18,212,299		7,945,976		12,095,315
As of 12.31.17
Total Financial Assets		117,479,410		33,891,057		27,115,814		29,825,596		100,217,105		308,528,982
Total Financial Liabilities		143,515,844		21,611,612		5,899,377		5,448,117		93,820,191		270,295,141
Net Amount		(26,036,434)		12,279,445		21,216,437		24,377,479		6,396,914		38,233,841

The table below shows the sensitivity to potential additional changes in interest rates in the next fiscal year, taking into account the breakdown as of December 31, 2017. The percentage change budgeted by the Group for the 2017 fiscal year was determined considering 100 bps and changes that are considered reasonably possible on the basis of an observation of market conditions:

	Additional Changes to the     Interest Rate	Increase/(Decrease) in Income   before Income Tax in Pesos			Increase/(Decrease) in   Shareholders’ Equity in Pesos
Decrease in Interest Rate	-100 bps		17,862		+0.1%
Increase in Interest Rate	+100 bps		(17,862	)	-0.1%

d. Liquidity Risk

Daily liquidity is managed according to the set strategy, which seeks to maintain adequate liquid resources to mitigate the adverse effects caused by irregular variations in loans and deposits, in addition to coping with “stress” situations.

The current liquidity policy provides for the setting of limits and monitoring of a) liquidity as it relates to stock, for which a level of “Management Liquidity Requirement” was established as the excess over legal minimum cash requirements, taking into consideration the characteristics and behavior of the Group’s different liabilities, and the liquid assets that make up such liquidity; and b) cash flow liquidity, for which gaps between the contractual maturities of consolidated financial assets and liabilities are analyzed and monitored. There is a cap for the gap between maturities, determined based on the gap accumulated against total liabilities permanently complied with during the first year.

Furthermore, the policy sets forth a contingency plan, by currency type, that determines the steps to be taken and the assets from which additional liquid resources can be obtained.

With the purpose of mitigating the liquidity risk that arises from deposit concentration per customer, the Bank has a policy that regulates the concentration of deposits among the main customers.

The table below shows an analysis of maturity of assets and liabilities, based on the period remaining on the contractual maturity dates as of the balance sheet date and on undiscounted cash flows:

	Less than 1     Month		1 to 6     Months		6 to 12     Months		12 Months to     5 Years		More than 5     Years		Total
Assets
Fair Value Debt Securities with Changes to Income		27,593,320		638,163		245,217		1,337,602		163,040		29,977,343
Derivative Instruments		497,299		-		-		-		-		497,299
Repo Transactions		9,894,218		-		-		-		-		9,894,218
Other Financial Assets		6,881,880		25,085		1,941		19,094		3,708		6,931,708
Loans and Other Financing Activities		67,907,606		68,695,134		34,585,090		46,897,259		5,231,050		223,316,138
Other Debt Securities		2,218,395		8,843		901		20,882		-		2,249,022
Financial Assets Pledged as Collateral		6,330,558		-		-		-		-		6,330,558
Liabilities
Deposits		182,095,623		16,506,727		4,274,906		82,491		9		202,959,757
Derivative Instruments		573,218		-		-		-		-		573,218
Repo Transactions		1,156,832		-		-		-		-		1,156,832
Other Financial Liabilities		31,437,463		7,849,672		92		-		-		39,287,228
Loans from the Argentine Central Bank and Other Financial Institutions		5,152,272		471,194		388,222		2,147,084		239,317		8,393,088
Notes Issued		562,883		1,762,474		915,472		14,422,262		-		17,663,091
Subordinated Notes		174,248		189,568		193,254		1,537,606		6,414,645		8,509,320

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ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

22.      CAPITAL MANAGEMENT

The Group has the following goals concerning capital management:

- Complying with the requirements set forth by the Argentine Central Bank in Communiqué “A” 6260, as amended; and

- Supporting the Bank’s operations to prevent potential situations that may endanger its operations.

The Bank’s senior management is responsible for monitoring, overseeing, adjusting and ensuring compliance with its stated goals concerning capital management.

According to the guidelines set out by the Argentine Central Bank, financial institutions are required to maintain capital ratios to mitigate the associated risks. As of December 31, 2017, the Bank complied with the minimum capital requirement established by the Argentine Central Bank regulations.

Computable Regulatory Capital (“R.P.C.,” as per the initials in Spanish) is made up of core capital and supplementary capital. The balances of such items as of December 31, 2017 were as follows:

	12.31.17
Core Capital		22,581,424
Tier 1 Common Capital		26,244,839
(Deductible Items)		(3,663,415)
Additional Tier 1 Capital		-
Supplementary Capital		6,947,945
Tier 2 Capital		6,947,945
(Deductible Items)		-
Computable Regulatory Capital (“R.P.C.”)		29,529,369

The breakdown of the minimum capital requirement determined for the Group is shown below:

	12.31.17
Credit Risk		17,263,077
Market Risk		1,126,159
Operational Risk		4,220,503
Minimum Capital Requirement		22,609,739
Paid-in		29,529,369
Excess		6,919,630

Financial Risks

Short- and medium-term financial risks are managed within the framework of policies approved by the Board of Directors, which establishes limits to the different risk exposure and also considers their interrelation. Management is supplemented by “contingency plans” devised to face adverse market situations. Furthermore, “stress tests” that make it possible to assess risk exposure under historical and simulated scenarios are created, which identify critical levels of the different risk factors.

Cross Border Risk

The Group’s foreign trade transactions and management of “treasury” resources imply assuming cross-border risk positions. These exposures related to cross-border assets are in line with the Bank’s business and financial strategy, the purpose of which is to provide customers with efficient commercial assistance and to improve the management of available liquid resources within an appropriate risk and yield environment.

Transfer Risk

The possibility of diversifying funding sources, as contemplated by the liquidity strategy, by obtaining resources in foreign capital markets, involves the possible exposure to potential regulatory changes that hinder or increase the cost of the transfer of foreign currency abroad to meet liability commitments. The policy that manages the risk of transferring foreign currency abroad thus contributes to the liquidity strategy and pursues the goal of reaching an adequate balance between liabilities payable to local counterparties and those payable to foreign counterparties in a return-risk proportion that is adequate for the Bank’s business and growth.

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ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Exposure to the Non-Financial Public Sector

With the purpose of regulating risk exposure with regard to the non-financial public sector, the Bank defined a policy which by design envisages risk exposure in the national, provincial and municipal jurisdictions, and set the limits on the direct and total assistance for each of those jurisdictions.

Operational and IT Risk

In line with best practices and the guidelines set out by the Argentine Central Bank, the Bank has a management framework in place that embraces policies, practices, procedures and structures for the appropriate management of this risk. Operational risk is the risk of losses due to the lack of conformity or due to failure of internal processes, the acts of people or systems, or due to external events. It includes legal risk, but does not include strategic and reputational risks.

The Bank manages the operational and IT risks inherent to its products, activities and business processes. It also manages the risk associated with the material information systems, technology and information security processes. IT risk is the business risk associated with the use, ownership, operation, involvement, influence and/or adoption of IT solutions at the Bank. To this end, business, IT and information security processes are reviewed. Finally, the Bank manages risks derived from subcontracted activities and from services rendered by providers.

Furthermore, before launching or introducing new products, activities, processes or systems, their associated risks are properly assessed.

This way, the Bank has the necessary structure and resources to be able to determine the operational and IT risk profile and thus take the corresponding corrective measures, complying with the regulations set forth by the Argentine Central Bank on guidelines for operational and IT risk management in financial institutions and operational risk events database.

An appropriate management of operational and IT risks also helps improve our customer service quality.

In compliance with Communiqué “A” 5398, securitization, concentration, reputational and strategic risks were identified as significant risks, and a computation and measurement method was developed. These risks, together with those mentioned previously, were included in the Capital Adequacy Assessment Report (“I.A.C.,” as per its acronym in Spanish), within the framework of Communiqué “A” 5515.

Securitization Risk

Securitization is an alternative source of financing and a mechanism for the transfer of risks to investors. Notwithstanding the foregoing, securitization activities and the fast innovation with regard to the techniques and instruments used in such activities also generate new risks, including the following:

i. Credit, market, liquidity, concentration, legal and reputational risks, due to the securitization positions held or invested, including, among others, liquidity facilities and credit enhancements granted; and

ii. Credit risk due to the underlying exposures with regard to securitization.

Concentration Risk

Risk concentration has to do with exposure or groups of exposures with similar characteristics, for instance, when they belong to the same debtor, business, product or economic sector, with the possibility of generating:

i. Losses with regard to income, regulatory capital, assets or the global risk level, that are significant enough to affect the financial strength of the financial institution or the ability to keep the financial institution’s main transactions;

ii. A major change in the Bank’s risk profile.

Reputational Risk

Reputational risk is defined as the risk associated with a negative perception of the financial institution by customers, counterparties, shareholders, investors, account holders, market analysts and other significant market players, which adversely affects the financial institution’s ability to keep existing business relationships or establish new relationships and its continued access to funding sources such as the interbank market or the securitization market.

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ADDITIONAL INFORMATION FOR THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Strategic Risk

Strategic risk is that which arises from an inappropriate business strategy or an adverse change in forecasts, parameters, goals and other functions that support such strategy. Even though estimating this risk is complex, institutions must develop new management techniques that include all related aspects.

Asset Laundering Risk

As regards the control and prevention of asset laundering and funding of terrorist activities, the Bank complies with the regulations set forth by the Argentine Central Bank, the Financial Information Unit and Law No. 25246, as amended, which creates the Financial Information Unit (“U.I.F.”), within the purview of Argentina’s Ministry of Treasury and Public Finance with functional autarchy. The Financial Information Unit is in charge of analyzing, addressing and reporting the information received, in order to prevent and avoid both asset laundering and funding of terrorist activities.

The Bank has promoted the implementation of measures designed to fight against the use of the international financial system by criminal organizations. For such purposes, the Bank has control policies, procedures and structures that are applied using a “risk-based approach,” which allows for the monitoring of transactions pursuant to the “customer profile” (defined individually based on the information and documentation related to the economic and financial condition of the customer) in order to detect such transactions that should be considered unusual, and to report them to the U.I.F. in applicable cases. The Anti-Money Laundering Management Division (“PLA,” as per its initials in Spanish) is in charge of managing this activity, through the implementation of control and prevention procedures as well as the communication thereof to the rest of the organization by drafting the related handbooks and training all employees. In addition, the management of this risk is regularly reviewed by Internal Audit.

The Bank has appointed a director as a compliance officer, pursuant to Resolution 121/11, as amended, issued by the U.I.F., which such officer shall be responsible for ensuring compliance with and implementation of the proceedings and obligations on the issue.

The Bank contributes to the prevention and mitigation of risks from these transaction-related criminal behaviors, by being involved in the international regulatory standards adoption process.

In compliance with Communiqué “A” 5394, as amended, issued by the Argentine Central Bank, the Bank publishes on its website (http://www.bancogalicia.com.ar) on a quarterly basis a document entitled, “Disciplina de Mercado,” which contains information related to the structure and adequacy of regulatory capital, the exposure to the different risks and the management thereof.

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GRUPO FINANCIERO GALICIA S.A.

SUPPLEMENTARY AND EXPLANATORY STATEMENT BY THE BOARD OF DIRECTORS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except Otherwise Noted

Pursuant to the provisions of the Rules regarding accounting documentation of the Córdoba Stock Exchange Regulations, the Board of Directors hereby submits the following supplementary and explanatory information.

A. CURRENT ASSETS

a) Receivables:

1) See Schedules B, C, D.

2) See Schedules B, C, D.

3) See Note 1.12 to these consolidated condensed interim financial statements.

b) Inventories:

As of March 31, 2018 and December 31, 2017, the Company did not have any inventories.

B. NON-CURRENT ASSETS

a) Receivables: See Note 1.12 to these consolidated condensed interim financial statements and Schedule B.

b) Inventories:

As of March 31, 2018 and December 31, 2017, the Company did not have any inventories.

c) Investments:

See Note 5 to the separate condensed interim financial statements.

d) Fixed Assets:

1) As of March 31, 2018 and December 31, 2017, the Company did not have any fixed assets that have been technically appraised.

2) As of March 31, 2018 and December 31, 2017, the Company did not have any obsolete fixed assets which have a book value.

e) Intangible Assets:

1) See Note 1.15, 3.5.1. and Schedule G.

2) As of March 31, 2018 and December 31, 2017, there were no deferred charges.

C. CURRENT LIABILITIES

a) Liabilities:

1) See Schedules D, I.

2) See Schedules B, D, I, R.

D. PROVISIONS

See Schedule J.

E. FOREIGN CURRENCY ASSETS AND LIABILITIES

See Note 1.5.b to these consolidated condensed interim financial statements.

See Schedule G.

100

GRUPO FINANCIERO GALICIA S.A.

SUPPLEMENTARY AND EXPLANATORY STATEMENT BY THE BOARD OF DIRECTORS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except Otherwise Noted

F. SHAREHOLDERS’ EQUITY

1) As of March 31, 2018 and December 31, 2017, the shareholders’ equity did not include the “Irrevocable Advances towards Future Share Issues” account.

2) As of March 31, 2018 and December 31, 2017, the Company had not set up any technical appraisal reserve, nor has it reversed any reserve of that kind.

G. MISCELLANEOUS

1) The Company is engaged in financial and investment activities; therefore, the restrictions of Section 31 of Law No. 19550 do not apply to its equity investments in other companies.

2) See Notes 5.2 and 3.4.1 to these consolidated condensed interim financial statements and Note 5 to the separate condensed financial statements.

3) As of March 31, 2018 and December 31, 2017, there were no receivables from or loans granted to directors or syndics or their affiliates up to the second degree inclusive.

4) See Notes 5.2 and 3.4.1 to these consolidated condensed interim financial statements and Note 5 to the separate condensed interim financial statements.

5) As of March 31, 2018 and December 31, 2017, the breakdown of insurance policies taken out by the Company for its fixed assets was as follows:

Insured Assets	Risks Covered	Insured Amount as of 03.31.18	Carrying Amount as of 03.31.18	Carrying Amount as of 12.31.17
Vehicles	Theft, Robbery, Fire or Total Loss			1,827

6) As of March 31, 2018 and December 31, 2017, there were no contingencies highly likely to occur which have not been given accounting recognition.

7) As of March 31, 2018 and December 31, 2017, the Company did not have any receivables including implicit interest or index adjustments.

The Company has complied with the requirements of Section 65 of Law No. 19550 in these financial statements.

Buenos Aires, May 24, 2018

101

GRUPO FINANCIERO GALICIA S.A.

INFORMATIVE REVIEW AS OF MARCH 31, 2018

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

The Company’s purpose is to strengthen its position as a leading company devoted to providing comprehensive financial services and, at the same time, to continue to strengthen the Bank’s position as one of the leading companies in Argentina. This strategy shall be carried out by supplementing the operations and business conducted by the Bank through equity investments in companies and undertakings, either existing or to be created, engaged in financial activities as they are understood in the modern economy.

The income for the period ended March 31, 2018 amounted to $3,008,710. This income has been generated mainly as a consequence of the valuation of equity investments in the Company’s subsidiaries.

At the Ordinary and Extraordinary Shareholders’ Meeting held on August 15, 2017, the shareholders approved the increase in the Company’s capital stock by means of the issuance of up to 150,000,000 ordinary book-entry Class “B” shares, entitled to one vote per share and with a face value of $1 each and also entitled to dividends on an equal footing with such ordinary book-entry shares outstanding at the time of the issuance, to be offered for public subscription in the country and/or abroad.

On September 26, 2017, once the offering term had elapsed, 109,999,996 new class “B” shares with a face value of $1 and one vote per share were placed, for a subscription price of U.S. $5 (five U.S. Dollars) each.

On September 28, 2017, the capital increase from the primary subscription was fully paid for an aggregate amount of U.S. $549,999.

On October 2, 2017, the international placement agents enforced their over-subscription rights, subscribing 16,500,004 ordinary class “B” shares with a face value of $1 and one vote per share, for a subscription price of U.S. $5 (five U.S. Dollars) each. Payment of the aforementioned over-subscription was made on October 4, 2017, with the Company having received U.S. $82,500. (See Note 16. to the financial statements).

In August 2017, the Company accepted the irrevocable offers to sell, accounting for 6% of Tarjetas Regionales S.A.’s issued and outstanding shares, for a total price of U.S. $49,000.

At the General Extraordinary Shareholders’ Meeting of Grupo Financiero Galicia S.A. held on December 14, 2017, the shareholders approved the corporate reorganization process consisting of splitting a portion of the Bank’s shareholders’ equity made up of its shares held in Tarjetas Regionales S.A. representing 77% of its capital stock for its later inclusion in the Company’s shareholders’ equity, effective as from January 1, 2018. The final spin-off/merger agreement was signed on January 23, 2018.

The Company, in its capacity as single shareholder and holder of 100% of the Bank’s capital stock, on December 27, 2017, paid a capital contribution with LEBAC (Argentine Central Bank’s bills), I17E8 security, for a face value of 10,168,285,119, which was valued at market price, based on the trading price of $0.98345 as of December 26, 2017 per M.A.E.’s session, totaling $10,000,000. The Argentine Central Bank, through Resolution No. 35 dated January 11, 2018, authorized the capital contribution.

The sale of shares of Compañía Financiera Argentina S.A. took place on February 2, 2018, establishing a total price of $30,771.

102

GRUPO FINANCIERO GALICIA S.A.

INFORMATIVE REVIEW AS OF MARCH 31, 2018

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

The General Ordinary and Extraordinary Shareholders’ Meeting held on April 24, 2018 authorized, pursuant to the rules and regulations in force, the allocation of retained income as of December 31, 2017, as follows:

- To Legal Reserve	$	25,300
- To Cash Dividends	$	1,200,000
- To Discretionary Reserve for Future Distributions of Profits	$	7,104,168

FINANCIAL STRUCTURE – MAIN ACCOUNTS OF THE CONSOLIDATED BALANCE SHEET

Items	03.31.18		03.31.17
Assets
Cash and Bank Deposits		46,441,210		49,888,320
Fair Value Debt Securities with Changes to Income		31,372,512		21,358,415
Derivative Instruments		137,474		113,244
Repo Transactions		4,505,248		6,592,735
Other Financial Assets		6,664,485		4,179,851
Loans and Other Financing Activities		210,427,233		143,633,736
Other Debt Securities		3,582,367		1,508,386
Financial Assets Pledged as Collateral		8,856,242		3,793,818
Current Income Tax Assets		343,875		997,695
Investments in Equity Instruments		12,709		38,050
Investments in Subsidiaries, Associates and Joint Ventures		21,573		203,340
Property, Plant and Equipment and Intangible Assets		10,977,983		9,703,691
Deferred Income Tax Assets		603,650		607,403
Other Assets		3,674,750		3,502,244
Total Assets		327,621,311		246,120,928
Liabilities
Deposits		198,364,119		156,693,770
Fair Value Liabilities with Changes to Income		1,796,550		-
Derivative Instruments		180,989		47,945
Repo Transactions		2,014,918		-
Other Financial Liabilities		34,969,838		29,394,399
Loans from the Argentine Central Bank and Other Financial Institutions		11,292,008		7,043,343
Notes Issued		14,372,971		13,298,137
Current Income Tax Liabilities		4,078,536		2,269,352
Subordinated Notes		5,079,134		3,864,720
Deferred Income Tax Liabilities		319,116		1,146,995
Other Liabilities		8,901,700		6,213,917
Total Liabilities		281,369,879		219,972,578
Shareholders’ Equity Attributable to the Controlling Company’s Shareholders		44,677,893		24,586,948
Shareholders’ Equity Attributable to Non-Controlling Interests		1,573,539		1,561,402
Total Shareholders’ Equity		46,251,432		26,148,350

103

GRUPO FINANCIERO GALICIA S.A.

INFORMATIVE REVIEW AS OF MARCH 31, 2018

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

INCOME STATEMENT – MAIN ACCOUNTS OF THE CONSOLIDATED INCOME STATEMENT

	03.31.18		03.31.17
Net Income from Interest		6,178,054		4,263,766
Net Commission Income		1,512,801		1,147,762
Other Financial Income		2,623,409		1,137,281
Other Operating Income		4,115,005		3,244,896
Underwriting Income		642,009		524,335
Loan Loss Provisions		1,621,868		1,041,373
Net Operating Income		13,449,410		9,276,667
Employee Benefits		3,095,064		2,472,329
Administrative Expenses		2,924,700		2,095,015
Other Operating Expenses		2,959,934		1,977,016
Operating Income		4,469,712		2,732,307
Income for Associates and Joint Ventures		579		24,182
Income before Taxes from Continuing Activities		4,470,291		2,756,489
Income Tax from Continuing Activities		(1,370,696)		(983,939)
Net Income from Continuing Activities		3,090,775		1,772,550
Income (Loss) from Discontinued Operations		74,774		-
Income Tax from Discontinued Activities		(22,882)		(185,362)
Net Income for the Period		3,142,667		1,587,188
Other Comprehensive Income		(14,425)		(3,527)
Total Comprehensive Income, Net		3,128,242		1,590,715
Net Income for the Period Attributable to the Controlling Company’s Shareholders		2,985,063		1,431,335
Net Income for the Period Attributable to Non-controlling Interests		143,179		159,380

STRUCTURE OF THE CONSOLIDATED STATEMENT OF CASH FLOWS

	03.31.18		03.31.17
Total Operating Activities Cash Flow		(21,269,338)		(4,307,199)
Total Investment Activities Cash Flow		(500,543)		(570,533)
Total Financing Activities Cash Flow		1,375,038		1,419,578
Effect of Changes in the Exchange Rate		2,740,094		(1,063,781)
Total Funds Used		(17,654,749)		(4,521,935)

RATIOS

LIQUIDITY

Since the consolidated accounts mainly stem from the Bank, the individual liquidity ratio for the Bank is detailed as follows:

	03.31.18		03.31.17
Liquid Assets(*) as a Percentage of Transactional Deposits		63.73		84.11
Liquid Assets(*) as a Percentage of Total Deposits		38.99		49.89

(*) Liquid Assets include cash due from banks, Lebacs and Nobacs, net call money, short-term placements in correspondent banks, Special Guarantees Accounts at the Argentine Central Bank and repo and reverse repo transactions with the local market.

SOLVENCY

	03.31.18		03.31.17
Solvency		16.44		15.34

CAPITAL ASSETS

	03.31.18		03.31.17
Capital Assets(*)		3.36		3.31

(*) Investments in subsidiaries, associates and joint ventures plus property, plant and equipment plus intangible assets over total assets

104

GRUPO FINANCIERO GALICIA S.A.

INFORMATIVE REVIEW AS OF MARCH 31, 2018

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

PROFITABILITY

	03.31.18		03.31.17
Return on Average Assets(*)		3.66		2.34
Return on Average Shareholders’ Equity(*)		27.33		24.72

(*) Annualized.

EQUITY INVESTMENTS

BANCO DE GALICIA Y BUENOS AIRES S.A.

Founded in 1905, the Bank is one of the largest private-sector banks in the Argentine financial system, and one of the leading providers of financial services in the country.

As a universal bank with a variety of distribution channels, the Bank offers a full spectrum of financial services to customers, both individual and corporate ones. The Bank also operates one of the most extensive and diversified distribution networks of the Argentine private financial sector, offering 308 branches.

In comparing the consolidated results of operations for the first quarter of 2018 to the same period the previous year, consideration should be given to the fact that the Company and the Bank entered into a spin-off/merger agreement, pursuant to which the Bank split from its shareholders’ equity its 77% interest in Tarjetas Regionales S.A. for its later inclusion in the Company’s shareholders’ equity, effective as from January 1, 2018. Accordingly, the income statement as of March 31, 2017 unconsolidated with Tarjetas Regionales S.A., was also included for increased consistency in analyzing the changes.

During the first quarter of 2018, the Bank recorded comprehensive income in the aggregate amount of $1,952,599, $650,087 higher than that recorded during the first quarter of the previous fiscal year, representing a 50% increase. The increase in comprehensive income as compared to the first quarter of 2017 was mainly attributable to an $1,434,618 increase in net income from interest, a $46,331 increase in net commission income, and $1,265,615 in other financial income (loss). Such increase was mainly offset by a rise in: i) administrative expenses in the amount of $534,333, ii) employee benefits in the amount of $453,579, and iii) other operating expenses in the amount of $753,457.

Total loans to the private sector amounted to $195,521,648, showing a 23% increase during the last twelve months, and total deposits reached $198,479,034, growing 27% when compared to the same period of the previous fiscal year. As of March 31, 2018, the Bank’s estimated share in loans to the private sector was 9.54%, while in deposits from the private sector was 9.67%, when compared to 9.80% and 10.09%, respectively, for the same quarter of the previous fiscal year.

SUDAMERICANA HOLDING S.A.

Sudamericana Holding S.A. is a holding company providing life, retirement, property, and casualty insurance and insurance brokerage services. The equity interest held by the Company in Sudamericana Holding S.A. is 87.50%. The Bank holds the remaining 12.50% equity interest.

This investment represents another step forward in the Company’s plan to consolidate its leadership as a financial services provider.

Joint production of the insurance companies controlled by Sudamericana Holding S.A. in the life, retirement and property insurance business amounted to $887,964 during the period commenced on January 1, 2018 and ended on March 31, 2018. As of March 31, 2018, these companies had approximately 3 million policies/certificates in their insurance lines.

From a commercial standpoint, within a more favorable context, the company maintains its purpose of taking advantage of the greater demand for insurance coverage to significantly increase sales.

105

GRUPO FINANCIERO GALICIA S.A.

INFORMATIVE REVIEW AS OF MARCH 31, 2018

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

As a result of this effort, the premium volume for the first quarter of 2018 exceeded that for the same period of the previous year by 14.30%.

GALICIA WARRANTS S.A.

Galicia Warrants S.A. was established in 1993 and, since then, has become a leading company. It renders services to the productive sector as an additional credit instrument, also rendering a full spectrum of services related to inventory management.

Its shareholders are the Company, which holds an 87.5% equity interest, and the Bank, which holds a 12.5% interest.

Galicia Warrants S.A. has its corporate headquarters in Buenos Aires and an office in the city of San Miguel de Tucumán, through which it carries out its transactions in the warrants market as well as other services related to its main activity, for different regional economies and geographic areas of the country.

Based on the experience and understanding of the warrant as a security instrument in the financial market, the company established a policy to spread the quality of the service provided and improve it through the certification of ISO 9001 Standards; its main focus is the improvement of merchandise storage and custody and marketing processes.

As of March 31, 2018, the amount of deposit certificates and warrants issued was $1,069,899, which pertains to merchandise under custody located in different productive regions throughout the country, whereas income from services amounted to $19,971.

Galicia Warrants S.A. continues to operate with the purpose of rendering the best quality and most reliable service for its customers that is best tailored to meet their needs.

GALICIA ADMINISTRADORA DE FONDOS S.A.

Galicia Administradora de Fondos S.A.’s shareholders are the Company, holding 95% of its shares, and Galicia Valores S.A., holding the remaining 5%.

Galicia Administradora de Fondos S.A. administers the FIMA mutual funds distributed by the Bank, in its capacity as custodial agent of collective investment products corresponding to mutual funds, through its broad channel network, such as branches, electronic banking, phone banking, and to different customer segments (such as institutional, corporate and individual customers).

The mutual funds invest in a variety of assets, depending on their investment goals (such as government and private securities, equity or time deposits, and others).

During the first quarter of 2018, FIMA funds increased by 34.9% when compared to the fiscal year ended December 31, 2017. On March 28, 2018, the volume of funds managed reached $91,724 million, representing a 13.3% market share (that is, a quarterly increase of 90 basis points in market share).

The outlook for fiscal year 2018 is that mutual funds and the business related thereto will continue to grow within the framework of the new Productive Financing Law and its implementing regulations.

TARJETAS REGIONALES S.A.

Tarjetas Regionales S.A. was incorporated as a corporation (“sociedad anónima”) on September 23, 1997. It is engaged in financial and investment activities, and its core business is maintaining (or holding) investments in issuers of non-banking credit cards and companies that deliver supplementary services to such activities.

In 2017, Regional Cards continued consolidating their leading position in the Argentine credit card market. As per official surveys and private market research, Tarjetas Regionales S.A. has a privileged market position, as it is the main credit card issuer at the national level and the leading brand in the Argentine provinces.

106

GRUPO FINANCIERO GALICIA S.A.

INFORMATIVE REVIEW AS OF MARCH 31, 2018

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

As of March 31, 2018, Tarjetas Regionales S.A. posted a profit of $842 million, accounting for a 22% increase compared to the same quarter of the previous fiscal year. Net operating income for the quarter amounted to $3,596 million, accounting for a 25% increase in comparison to 2017, while net income from interest and other operating income rose by 35% and 24%, respectively. The loan loss provisions for the quarter amounted to $659 million, 29% higher than the $509 million recorded in the same quarter of the previous fiscal year.

OUTLOOK

For the 2018 fiscal year 2018, the Company’s results of operations will mainly depend on the development of the Argentine economy, and, particularly, the evolution of the financial system as a whole.

Buenos Aires, May 24, 2018

107

GRUPO FINANCIERO GALICIA S.A.

SEPARATE CONDENSED INTERIM BALANCE SHEET

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Items	Notes	03.31.18	12.31.17	01.01.17
Assets
Cash and Bank Deposits		5,677	3,688	3,044
Cash		19	19	20
Financial Institutions and Correspondents		5,658	3,669	3,024
Argentine Central Bank		-	-	-
Other Local and Foreign Financial Institutions		5,658	3,669	3,024
Fair Value Debt Securities with Changes to Income		1,133,395	1,565,669	138,073
Derivative Instruments		-	11,638	-
Other Financial Assets		89,754	74,367	27,732
Loans and Other Financing Activities		21,352	19,713	2,853
To the Non-Financial Private Sector and Residents Abroad		21,352	19,713	2,853
Current Income Tax Assets		7,853	8,076	2,518
Investments in Subsidiaries, Associates and Joint Ventures		43,888,920	40,424,485	23,313,978
Property, Plant and Equipment		1,768	1,827	-
Deferred Income Tax Assets		3,316	1,803	478
Other Non-Financial Assets		2,234	1,791	27,897
Non-Current Assets Held for Sale		-	28,967	36,480
Total Assets		45,154,269	42,142,024	23,553,053

The accompanying Notes and Schedules are an integral part of these separate condensed interim financial statements.

108

GRUPO FINANCIERO GALICIA S.A.

SEPARATE CONDENSED INTERIM BALANCE SHEET (Continued)

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Notes	03.31.18	12.31.17	01.01.17
Liabilities
Notes Issued		-	-	360,692
Current Income Tax Liabilities		31,164	14,941	-
Deferred Income Tax Liabilities		2,595	2,979	478
Other Non-Financial Liabilities		23,310	11,967	36,270
Total Liabilities		57,069	29,887	397,440
Shareholders’ Equity
Capital Stock		1,426,765	1,426,765	1,300,265
Non-Capitalized Contributions		10,951,132	10,951,132	219,596
Capital Adjustments		278,131	278,131	278,131
Profit Reserves		18,314,708	18,314,708	12,536,829
Retained Income		11,124,122	2,518,733	-
Other Accumulated Comprehensive Income		2,854	17,279	284,182
Net Income for the Period/Year		2,999,488	8,605,389	8,536,610
Total Shareholders’ Equity		45,097,200	42,112,137	23,155,613

The accompanying Notes and Schedules are an integral part of these separate condensed interim financial statements.

109

GRUPO FINANCIERO GALICIA S.A.

SEPARATE CONDENSED INTERIM INCOME STATEMENT

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Notes	03.31.18	03.31.17
Interest Income		5,401	424
Interest Expense		-	(17,792)
Net Income from Interest		5,401	(17,368)
Net Income from Measurement of Fair Value Financial Instruments with Changes to Income		42,183	9,151
Income from Derecognition of Assets Measured at Amortized Cost		-	-
Exchange Rate Differences on Gold and Foreign Currency		23,880	(23)
Other Operating Income		6	12
Loan Loss Provisions		-	(121)
Net Operating Income		71,470	(8,349)
Employee Benefits		(920)	(25,580)
Administrative Expenses		(27,786)	(9,960)
Depreciation and Impairment of Assets		(60)	-
Other Operating Expenses		(371)	(55)
Operating Income (Loss)		42,333	(43,944)
Income for Associates and Joint Ventures		2,969,677	1,471,752
Income before Taxes from Continuing Activities		3,012,010	1,427,808
Income Tax from Continuing Activities		(13,337)	-
Net Income from Continuing Activities		2,998,673	1,427,808
Income from Discontinued Operations		1,804	-
Income Tax from Discontinued Activities		(989)	-
Net Income for the Period		2,999,488	1,427,808
	Notes	03.31.18	03.31.17
Earnings per Share
Net Earnings Attributable to the Controlling Company’s Shareholders		2,999,488	1,427,808
Plus: Dilutive Effects of Potential Ordinary Shares		-	-
Net Earnings Attributable to the Controlling Company’s Shareholders Adjusted for Dilution		2,999,488	1,427,808
Weighted-Average of Ordinary Shares Outstanding for the Period
Plus: Weighted-Average of Dilutive Additional Ordinary Shares		-	-
Weighted-Average of Ordinary Shares Outstanding for the Period Adjusted for Dilution		1,426,765	1,300,265
Basic Earnings per Share		2.10	1.10
Diluted Earnings per Share		2.10	1.10

The accompanying Notes and Schedules are an integral part of these separate condensed interim financial statements.

110

GRUPO FINANCIERO GALICIA S.A.

SEPARATE CONDENSED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Notes	03.31.18	03.31.17
Net Income for the Period		2,999,488	1,427,808
Items of Other Comprehensive Income that will be Reclassified to Profit or Loss for the Period
Income (Loss) for the Period Attributable to Share of Profit or Loss in OCI of Subsidiaries		(14,425)	3,527
Total Other Comprehensive Income that will be Reclassified to Profit or Loss for the Period		(14,425)	3,527
Total Other Comprehensive Income (Loss)		(14,425)	3,527
Total Comprehensive Income		2,985,063	1,431,335

The accompanying Notes and Schedules are an integral part of these separate condensed interim financial statements.

111

GRUPO FINANCIERO GALICIA S.A.

SEPARATE CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Movements	Note	Capital Stock		Non-capitalized Contributions		Adjustments to Shareholders’ Equity		Other Comprehensive Income (Loss)		Profit Reserves				Retained Earnings		Total Shareholders’ Equity
		Outstanding		Additional Paid- in Capital				Others		Legal Reserve		Others
Balances as of 12.31.17			1,426,765		10,951,132		278,131		-		315,679		17,999,029		8,329,468		39,300,204
Adjustment to IFRS-based Accounting Framework			-		-		-		17,279		-		-		2,794,654		2,811,933
Balances as of 12.31.17			1,426,765		10,951,132		278,131		17,279		315,679		17,999,029		11,124,122		42,112,137
Total Comprehensive Income (Loss) for the Period			-		-		-		(14,425)		-		-		2,999,488		2,985,063
Net Income for the Period			-		-		-		-		-		-		2,999,488		2,999,488
Other Comprehensive Income (Loss) for the Period			-		-		-		(14,425)		-		-		-		(14,425)
Balances as of 03.31.18			1,426,765		10,951,132		278,131		2,854		315,679		17,999,029		14,123,610		45,097,200
Balances as of 01.01.17			1,300,265		219,596		278,131		-		315,679		12,221,150		6,017,877		20,352,698
Adjustments			-		-		-		284,182		-		-		2,518,733		2,802,915
Adjusted Balances as of 01.01.17			1,300,265		219,596		278,131		284,182		315,679		12,221,150		8,536,610		23,155,613
Total Comprehensive Income for the Period			-		-		-		3,527		-		-		1,427,808		1,431,335
Net Income for the Period			-		-		-		-		-		-		1,427,808		1,427,808
Other Comprehensive Income for the Period			-		-		-		3,527		-		-		-		3,527
Balances as of 03.31.17			1,300,265		219,596		278,131		287,709		315,679		12,221,150		9,964,418		24,586,948

112

GRUPO FINANCIERO GALICIA S.A.

SEPARATE CONDENSED INTERIM STATEMENT OF CASH FLOWS AND CASH EQUIVALENTS

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Notes	03.31.18	03.31.17
OPERATING ACTIVITIES CASH FLOWS
Net Income for the Period before Income Tax		3,012,010	1,427,808
Adjustment to Obtain the Operating Activities Flows:
Net Income (Loss) from Interest		(5,401)	17,368
Net Income (Loss) from Measurement of Fair Value Financial Instruments at with Changes to Income		(42,184)	(9,151)
Depreciation and Impairment of Assets		60	-
Income (Loss) for Associates and Joint Ventures		(2,969,677)	(1,471,752)
Net Increases/(Decreases) from Operating Assets:
Other Financial Assets		20,023	7,086
Net Increases/(Decreases) from Operating Liabilities:
Other Non-Financial Liabilities		27,181	7,663
TOTAL OPERATING ACTIVITIES (A)		42,012	(20,978)
INVESTMENT ACTIVITIES CASH FLOWS
Payments:
Acquisition of Interests in Associates and Joint Ventures		(924,140)	-
Collections:
Disposal of Interests in Associates and Joint Ventures		28,967	4,121
Winding-Up of Associates		248	-
Collection of Dividends		415,774	187,008
TOTAL INVESTMENT ACTIVITIES (B)		(479,151)	191,129
FINANCING ACTIVITIES CASH FLOWS
Payments:
Unsubordinated Notes		-	(100,287)
Collections:
Other Collections Related to Financing Activities		-	-
TOTAL FINANCING ACTIVITIES (C)		-	(100,287)
EFFECT OF CHANGES IN EXCHANGE RATE (D)		23,880	(23)
INCREASE/(DECREASE) IN CASH, NET (A+B+C+D)		(413,259)	69,841
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR		1,663,437	162,825
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		1,250,178	232,666

113

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

NOTE 1. ACCOUNTING STANDARDS AND BASIS FOR PREPARATION

Grupo Financiero Galicia S.A. (the “Company”) was constituted on September 14, 1999, as financial services holding company organized under the laws of Argentina. The Company’s main asset is its interest in Banco de Galicia y Buenos Aires S.A. (the “Bank”). The Bank is a private-sector bank that offers a full spectrum of financial services both to individual and corporate customers. In addition, the Company has a controlling interest in Tarjetas Regionales S.A., which maintains investments related to the issuance of credit cards and supplementary services; Sudamericana Holding S.A., a company engaged in the insurance business; Galicia Administradora de Fondos S.A., a mutual fund manager, and Galicia Warrants S.A., a company engaged in the issuance of warrants.

These separate condensed interim financial statements were approved and authorized for publication through Minutes of Board of Directors’ Meeting No. 566 dated May 24, 2018.

1.1. ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

In the light of the fact that the Group is subject to the provisions of Article 2 – Section I – Chapter I of Title IV: Periodical Reporting Requirements of the National Securities Commission (“C.N.V.”) regulations, it is required to present its financial statements in accordance with the valuation and disclosure criteria set forth by the Argentine Central Bank. As required by the aforementioned article, we hereby report that:

- the Company’s corporate purpose is exclusively related to financial and investment activities;

- the equity investment in the Bank and Tarjetas Regionales S.A., the latter being subject to the consolidated supervision requirements established by the Argentine Central Bank (Communiqué “A” 2989, as supplemented), accounts for 93.20% of Grupo Financiero Galicia S.A.’s assets and is the Company’s main asset;

- 88.47% of the Company’s income is derived from its share of profit in the entities referred to in the preceding paragraph; and

- the Company has a 100% equity interest in the Bank and an 83% equity interest in Tarjetas Regionales S.A., thus having control over both entities.

The Argentine Central Bank, through Communiqué “A” 5541, as amended, sets forth a convergence plan towards the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”), addressed to entities under the Argentine Central Bank’s supervision, effective for fiscal years commenced January 1, 2018, except for item 5.5 (Impairment) of IFRS 9, “Financial Instruments,” which has been temporarily waived until January 1, 2020, at which time entities will be required to apply the provisions on “Impairment of Financial Assets.”

Entities are also required to prepare their opening financial statements since January 1, 2017, which will serve as a comparative basis to the financial statements commencing on January 1, 2018, with the interim financial statements as of March 31, 2018 being the first interim financial statements prepared under these standards.

The Company’s separate condensed interim financial statements for the three-month period then ended have been prepared in accordance with IAS 34, “Interim Financial Reporting,” and IFRS 1, “First-time Adoption of International Financial Reporting Standards.” The separate condensed interim financial statements have been prepared in accordance with the criteria the Company expects to adopt in preparing its annual consolidated financial statements as of December 31, 2018.

Comparative figures and figures as of the transition date (January 1, 2017) have been modified to reflect the adjustments to the aforementioned accounting framework.

Note 3 presents a reconciliation of the figures disclosed in the balance sheet, income statement, and statement of other comprehensive income comprising the consolidated condensed interim financial statements issued under the previous accounting framework to the figures disclosed according to the IFRS-based accounting framework in these separate condensed interim financial statements, as well as the effects of adjustments to cash flows as of the transition date (January 1, 2017), as of the adoption date (December 31, 2017) and as of the end of the comparative period (March 31, 2017).

114

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

These separate condensed interim financial statements should be read together with the Company’s annual financial statements as of December 31, 2017, prepared in accordance with the accounting framework set out by the Argentine Central Bank. Furthermore, the Note entitled, “Additional Information as of December 31, 2017 for the Separate Condensed Interim Financial Statements,” included in these financial statements contains certain information under the IFRS-based accounting framework which is required to understand the consolidated condensed interim financial statements.

It is believed that these separate condensed interim financial statements fairly present the Group’s financial position, financial performance and cash flows.

1.2. BASIS FOR PREPARATION

These separate condensed interim financial statements have been prepared in accordance with the accounting framework set forth by the Argentine Central Bank described in Note 2.

In preparing these separate condensed interim financial statements, the Group is required to make estimates and assessments affecting the reported amounts of assets and liabilities, and contingent assets and liabilities disclosed as of the date of these separate condensed interim financial statements, as well as the reported amounts of income and expenses.

(a) Going Concern

As of the date of these separate condensed interim financial statements, there are no uncertainties as to developments or circumstances that may call into question the likelihood that the Company will continue operating normally as a going concern.

(b) Measurement Unit

The Group’s financial statements reflect the effects of the changes in the purchasing power of the currency until February 28, 2003, the date on which the adjustment for inflation was discontinued, as required by Decree No. 664/03 of the Argentine 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 C.N.V. Resolution M.D. No. 41/03 of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires (“C.P.C.E.C.A.B.A.”), which established the discontinuation of the recognition of the changes in the purchasing power of the currency effective October 1, 2003.

IAS 29, “Financial Reporting in Hyperinflationary Economies,” requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be stated in terms of the current measurement unit as of the reporting period-end, and sets out the factors that should be considered to conclude that a hyperinflationary economy actually exists.

In recent years, certain macroeconomic variables affecting the Group’s business, such as labor costs and prices for supplies, have experienced considerably substantial changes year after year. Even though the controlling agencies have not issued a decision in this regard, at period-end, the conditions for the application of the adjustment for inflation would not be met. However, when reading and analyzing these financial statements, consideration should be given to the existence of fluctuations in significant economic variables, which took place during the past fiscal years.

(c) Changes in Accounting Criteria/New Accounting Standards

As provided for in the Argentine Central Bank’s Organic Charter and the Financial Institutions Law, as new IFRS are approved or amended, or as the IFRS currently in force are repealed, and once these changes are adopted by way of Adoption Circulars handed down by the Argentine Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E.”), the Argentine Central Bank will decide whether to approve such changes for financial institutions. In general terms, the early adoption of any given IFRS will not be admitted, unless specifically admitted at the time of adoption.

Below is a detail of the new standards, changes and interpretations which have been published but have not yet been effectuated for the fiscal years commencing on January 1, 2018, and which have not been previously adopted.

115

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

IFRS 16 “Leases”: In January 2016, the IASB issued IFRS 16, “Leases,” which sets out a new accounting model for leases. Under IFRS 16, a contract is or contains a lease if the contract confers the lessee a right to control the use of an identified asset for a period of time. IFRS 16 requires that the lessee recognize the liability arising from the lease reflecting the future lease payments and a right of use of the assets for substantially all leases, other than certain short-term leases and leases of low-value assets. Lessor accounting is maintained as provided for in IAS 17. However, the new accounting model for lessees is expected to have an impact on negotiations between lessors and lessees. Entities are required to apply IFRS 16 for fiscal years commencing on or after January 1, 2019. The Group is assessing the impact of the adoption of such standard on its financial statements.

IFRS 17 “Insurance Contracts”: On May 18, 2017, the IASB issued IFRS 17, “Insurance Contracts,” establishing a comprehensive accounting framework based on measurement and disclosure principles for insurance contracts. The new standard supersedes IFRS 4, “Insurance Contracts,” and requires that insurance contracts be measured using current fulfillment cash flows and that revenues be recognized as the insurance service is delivered during the term of the coverage. Entities are required to apply IFRS 17 for fiscal years commencing on or after November 1, 2021. The Group is assessing the potential impact this standard will have on its financial statements.

IFRIC 23 “Uncertainty over Income Tax Treatment”: This interpretation clarifies how the recognition and measurement requirements of IAS 12, “Income Tax,” should be applied when there is uncertainty over the income tax treatment. IFRIC 23 was published in June 17 and entities will be required to apply it for fiscal years commencing on or after January 1, 2019.

To date, there are no other IFRS or IFRIC interpretations which have not yet come into force and which are expected to have a material impact on the Group.

1.3. SUBSIDIARIES

Subsidiaries are all such entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights in, variable returns by reason of its involvement with the investee, and has the ability to use its power to direct the entity’s operating and financial policies to affect such returns. Subsidiaries are consolidated as from the time on which control is transferred to the Company, and are excluded from consolidation on the date such control ceases.

Associates are entities over which the Company has significant influence, that is, the power to interfere with the decisions made as to the investee’s financial and operating policies, without exerting control.

Pursuant to IAS 27 and IAS 28, entities are required to recognize investments in subsidiaries and associates in their separate financial statements according to the “equity method.”

When using the equity method, investments are initially recognized at cost and such amount is increased or reduced to recognize the investor’s share of profit or loss of the investee, subsequent to the acquisition or incorporation date. In addition, identifiable net assets and contingent liabilities acquired in the initial investment in a subsidiary and/or associate are originally recognized at fair value as of the investment date. Where applicable, the value of equity interests in subsidiaries and associates includes the goodwill recognized as of such date. When the Group’s share of loss is equal to or higher than the value of the interest in such entities, the Company does not recognize additional losses, except when it has legal or assumed obligations of providing funds or making payments against them.

The share of profit (loss) of subsidiaries and associates is recognized in, “Income (Loss) for Associates and Joint Ventures,” in the separate condensed interim income statement. The share of profit (loss) of subsidiaries and associates is recognized in, “Equity Interests in Associates and Joint Ventures Accounted for under the Equity Method,” in the separate condensed interim statement of other comprehensive income.

As of each reporting date, the Company determines whether objective evidence exists indicating that an investment in a subsidiary or associate is not recoverable. In that case, it quantifies the impairment as the difference between the recoverable value of such investment and its carrying amount, and recognizes the resulting amount in, “Income (Loss) for Associates and Joint Ventures,” in the separate condensed interim income statement.

1.4. FOREIGN CURRENCY TRANSLATION

(a) Functional Currency and Reporting Currency

116

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

The figures disclosed in the separate condensed interim financial statements for each of the Group’s entities are stated in their functional currency, that is, the currency of the main economic environment in which they operate. The separate condensed interim financial statements are stated in Argentine Peso, which is the Company’s functional and reporting currency.

(b) Transactions and Balances

Transactions in foreign currency are translated to functional currency at the exchange rates prevailing on the transaction or valuation dates when items are measured at closing. Gains and losses in foreign currency on the settlement of these transactions and on the translation of monetary assets and liabilities to foreign currency at the exchange rates prevailing at closing and are recognized in the income statement under, “Exchange Rate Differences on Gold and Foreign Currency,” except when deferred in equity as in the case of qualifying cash flow hedges, where applicable.

Assets and liabilities in foreign currency are measured at the reference exchange rate of the U.S. dollar set by the Argentine Central Bank prevailing at the close of operations on the last working day of each month.

As of March 31, 2018, December 31, 2017, March 31, 2017 and January 1, 2017, balances in U.S. Dollars were converted applying the reference exchange rate ($20.1433, $18.7742, $15.3818 and $15.8502, respectively) set by the Argentine Central Bank. Assets and liabilities valued in foreign currencies other than the U.S. Dollar were converted into the latter currency using swap rates reported by the Argentine Central Bank.

1.5. CASH AND BANK DEPOSITS

The item, “Cash and Bank Deposits,” includes cash available, unrestricted deposits held in banks, cash equivalents and other short-term highly-liquid investments with original maturity within three months or less.

The assets disclosed under cash and cash equivalents are accounted for at amortized cost which approximates its fair value.

1.6. FINANCIAL INSTRUMENTS

1.6.1. Initial Recognition

The Company recognizes a financial asset or liability in its separate condensed interim financial statements, as the case may be, when it becomes a party to the financial instrument contract. Purchases and sales are recognized on the trading date on which the Company buys or sells these instruments.

Upon initial recognition, the Company measures financial assets and liabilities at fair value, more or less, in the case of instruments that are not recognized at fair value with changes in profit or loss, with the transaction costs directly attributable to the acquisition, such as fees and commissions.

When the fair value differs from the acquisition cost at the time of initial recognition, the Company recognizes the difference as follows:

- When the fair value is consistent with the financial asset or liability market value, or is based on a valuation method relying on market values only, the difference is recognized as profit or loss, as the case may be.

a. Financial Assets

Debt Instruments

The Company classifies as debt instruments such instruments that are considered financial liabilities for the issuer, including loans, government and private securities, and bonds.

Classification

As set out in IFRS 9, the Company classifies financial assets as subsequently measured at amortized cost, at fair value with changes in other comprehensive income, or at fair value with changes in profit or loss, on the basis of:

- the business model to manage financial assets; and

- the characteristics of contractual cash flows of the financial asset.

117

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Business Model

The business model is the manner in which the Company manages a set of financial assets to achieve a specific business goal. It represents the manner in which the Company maintains instruments for cash generation.

The Group may follow several business models; whose objective is:

- holding instruments until maturity;

- holding instruments in portfolio to collect cash flows and, in turn, sell them if deemed convenient; or

- holding instruments for trading.

The business model does not depend on the intended purpose of an individual instrument. Accordingly, this condition is not an approach for classification of instruments on an individual basis. Instead, such classification is determined at a higher level of aggregation.

The Company only reclassifies an instrument if and when the business model for managing financial assets has changed. The Company’s business model has not experienced changes during the period.

Characteristics of Cash Flows

The Company assesses whether the return on cash flows from the aggregated instruments does not substantially differ from the contribution it would receive as interest only; otherwise, such instruments should be measured at fair value with changes in profit or loss.

Based on the aforementioned, financial assets are classified into three categories:

(i) Financial assets measured at amortized cost:

Financial assets are measured at amortized cost when:

(a) the financial asset is held within a business model whose objective is to maintain financial assets to collect contractual cash flows; and

(b) the contractual conditions of the financial asset give rise, on certain specified dates, to cash flows which are only principal and interest payments on the outstanding principal amount.

These financial instruments are initially recognized at fair value plus the incremental and directly attributable transaction costs, and are subsequently measured at amortized cost.

The amortized cost of a financial asset is equal to its acquisition cost, net of accumulated amortization plus accrued interest (calculated applying the effective rate method), net of impairment losses, if any.

(ii) Financial assets at fair value with changes in other comprehensive income:

Financial assets are measured at fair value with changes in other comprehensive income when:

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

(b) the contractual conditions of the financial asset give rise, on certain specified dates, to cash flows which are only principal and interest payments on the outstanding principal amount.

These instruments are initially recognized at fair value plus the incremental and directly attributable transaction costs, and are subsequently measured at fair value with changes in other comprehensive income. The gains and losses arising from the changes in fair value are included in other comprehensive income under a separate component of equity. Losses or impairment reversals, interest income, and exchange gains and losses are charged to income. Upon the sale or disposal of the instrument, the accumulated gains or losses previously recognized in other comprehensive income are reclassified from equity to the income statement.

(iii) Financial assets at fair value with changes in profit or loss:

Financial assets at fair value with changes in profit or loss include:

- instruments held for trading;

118

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

- instruments specifically designated at fair value with changes in profit or loss; and

- instruments whose contractual terms do not represent cash flows but rather principal or interest payments only on outstanding principal amount.

These financial instruments are initially recognized at fair value and the gains or losses derived from them are charged to the income statement as realized.

The Company classifies a financial instrument as held for trading if such instrument is acquired or incurred for the main purpose of selling or repurchasing it in the short term, or if it is part of a portfolio of financial instruments which are managed jointly and for which there is evidence of short-term profits, or if it is a derivative which does not qualify as a hedging instrument. Derivatives and trading securities are classified as held for trading and are measured at fair value.

b.         Financial Liabilities

Classification

The Company classifies its financial liabilities at amortized cost using the effective rate method, except for:

- Financial liabilities measured at fair value with changes in profit or loss, including derivative instruments.

- Liabilities resulting from the transfer of financial assets that do not meet the derecognition requirements.

- Financial guarantee contracts.

- Loan commitments at lower than market rates.

Financial liabilities measured at fair value with changes in profit or loss: The Company may, upon initial recognition, avail itself of the irrevocable option to designate a liability at fair value with changes in profit or loss, if and only if exercising such option results in a better measurement of financial information because:

- the Company eliminates or substantially reduces measurement or recognition inconsistencies which would otherwise be revealed in valuation;

- if financial assets and liabilities are managed and performance is assessed on a fair value basis, according to a documented investment or risk management strategy; or if a host contract contains one or more embedded derivative and the Company has opted for designating the entire contract at fair value with changes in profit or loss.

Financial guarantee contracts: Financial guarantee contracts require that the issuer make specified payments to reimburse the holder for the loss it may incur if a specific debtor fails to make payment when due under the original or modified terms of a debt instrument.

Financial guarantee contracts and loan commitments at lower than market rates are initially measured at fair value and then remeasured at the higher value resulting from a comparison between the commission pending accrual at year-end and the applicable allowance for impairment.

1.6.2.         Derecognition of Financial Instruments

a. Financial Assets

A financial asset or, where applicable, a portion of a financial asset or a portion of a group of similar financial assets, is derecognized when: (i) the rights to receive cash flows from the asset have been extinguished; or (ii) the Company has transferred its rights to receive cash flows from the asset or has assumed the obligation to pay right away all cash flows received to a third party under a pass-through agreement; and substantially all risks and rewards inherent to the asset have been transferred or, if substantially all risks and rewards inherent to the asset have not been transferred or retained, when control over such asset has been transferred.

When the contractual rights to receive the cash flows generated by the asset have been transferred or a pass-through agreement has been entered into, the entity will assess whether or not, and to which extent, it has retained the risks and rewards inherent to ownership of an asset. If an entity has neither transferred nor retained substantially all risks and rewards inherent to ownership of an asset, nor has it transferred control over such asset, then it will continue recognizing such asset in its financial statements to the extent of its continuing involvement with the same.

119

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

In this case, the entity will also recognize the related liability. The transferred asset and the related liability are measured in such a manner as to reflect the rights and obligations the Company has retained.

When continuing involvement takes the form of collateral over the transferred asset, it is measured at the lower of (i) the original carrying amount, and (ii) the maximum amount of the consideration received the entity could be required to repay.

b. Financial Liabilities

A financial liability is derecognized when the payment obligation ends, is canceled or expires. When an existing financial liability is exchanged for another with the same borrower under substantially different terms, or the prevailing terms are substantially modified, such exchange or modification will be treated as a derecognition of the original liability, and a new liability will be recognized. The difference between the carrying amount of the initial financial liability and the consideration paid, is recognized in the consolidated income statement.

1.7.        PROPERTY, PLANT AND EQUIPMENT

Assets are measured at acquisition or construction cost, net of accumulated depreciation and/or impairment losses, if any. The cost includes expenses directly attributable to the acquisition or construction of these items.

Subsequent costs are included in the value of the asset and are recognized as a separate asset, as the case may be, if and only if future economic benefits are expected to flow to the Company and its cost can be measured reliably. When improvements are introduced to the asset, the carrying amount of the asset being replaced is derecognized, and the new asset is depreciated over its remaining useful life.

Repair and maintenance expenses are recognized in the consolidated income statement for the period/year in which they were incurred.

Depreciation is calculated on a straight-line basis, using annual rates sufficient to extinguish the value of the assets at the end of their estimated useful life. If an asset is comprised by significant components with varying useful lives, such components will be recognized and depreciated as separate items.

Property, plant and equipment residual values, useful lives and depreciation methods are reviewed and adjusted, as needed, as of each year-end or when indicators of impairment exist.

The carrying amount of property, plant and equipment is immediately reduced to its recoverable value when the carrying amount exceeds the estimated recoverable value.

Gains and losses from the disposal of items of property, plant and equipment are calculated by comparing the proceeds from the disposal to the carrying amount of the respective asset and are recognized in the consolidated statement of comprehensive income.

1.8.         ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Discontinued Operations

A discontinued operation is a Company’s component that either has been disposed of, or classified as held for sale, and meets any of the following conditions:

- represents either a separate major line of business or a geographical area of operations;

- is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or

- is an independent entity exclusively acquired for resale.

Any gain or loss on the remeasurement of an asset (or disposal group) classified as held for sale which does not meet the requirements to be classified as a discontinued operation will be recognized in income from continuing operations.

120

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

1.9.         IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets with indefinite useful life are not amortized, but are rather tested for impairment on an annual basis. Unlike the preceding assumption, amortizable assets are tested for impairment when events or circumstances occur indicating that their carrying amounts may not be recoverable or, at least, on an annual basis.

Impairment losses are recognized when the carrying amount of an asset exceeds its recoverable value. The recoverable value of an asset is the higher of the net proceeds that would be derived from its disposal or its value in use. For purposes of the impairment test, assets are grouped at the lowest level for which identifiable cash flows are generated (cash-generating units or “CGU”). The carrying amount of non-financial assets, other than goodwill, which have experienced impairment is reviewed at each reporting date to check for potential impairment reversal.

1.10.         OFFSETTING

Financial assets and liabilities are offset by reporting the net amount in the consolidated balance sheet only to the extent the entity currently has a legally enforceable right of set-off, and intends to settle on a net basis, or realize the asset and settle the liability simultaneously.

1.11.         OTHER NON-FINANCIAL LIABILITIES

Non-financial accounts payable are accrued when the counterparty has fulfilled its contractual obligations and are measured at amortized cost.

1.12.         CAPITAL STOCK AND CAPITAL ADJUSTMENTS

Shareholders’ equity accounts are stated in a currency which does not reflect the changes in the price index since February 2003, except for the item, “Capital Stock,” which is carried at face value. The restatement adjustment is included in, “Adjustments to Shareholders’ Equity.”

Ordinary shares are recognized in shareholders’ equity and carried at face value. When any company comprising the Group buys shares of the Company’s capital stock (treasury stock), the payment made, including any cost directly attributable to the transaction (net of taxes), is deducted from shareholders’ equity until the shares are either canceled or disposed of.

1.13.         PROFIT RESERVES

Pursuant to Section 70 of the General Corporations Law, the Company should transfer 5% of the net income for the fiscal year to the Legal Reserve until 20% of the capital stock is reached.

1.14.         DISTRIBUTION OF DIVIDENDS

The distribution of dividends to the Company’s shareholders is recognized as a liability in the separate financial statements for the fiscal year in which dividends are approved by the shareholders.

1.15.         REVENUE RECOGNITION

Financial income and expense is recognized in respect of all debt instruments in accordance with the effective rate method, pursuant to which all gains and losses which are an integral part of the transaction effective rate are deferred.

Income included in the effective rate includes revenues or expenses related to the creation or acquisition of the financial asset or liability.

1.16.         INCOME TAX AND MINIMUM PRESUMED INCOME TAX

1.16.1.      Income Tax

The income tax expense for the year includes current and deferred tax. Income tax is recognized in the consolidated income statement, except for items required to be recognized directly in other comprehensive income. In this case, the income tax liability related to such items is also recognized in such statement.

The current income tax expense is calculated on the basis of the tax laws enacted or substantially enacted as of the balance sheet date in the countries where the Group operates and generates taxable income. The Group periodically assesses the position assumed in tax returns in connection with circumstances in which the tax laws are subject to interpretation. On the other hand, when required, the Group sets up provisions in respect of the amounts expected to be required to pay to the tax authorities.

121

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Deferred income tax is determined, in its entirety, by applying the liability method on the temporary differences arising from the carrying amount of assets and liabilities and their tax base. However, the deferred tax arising from the initial recognition of an asset or liability in a transaction other than a business combination which, at the time of the transaction, does not affect income or loss for accounting or tax purposes, is not recorded. The deferred tax is determined using tax rates (and laws) enacted as of the balance sheet date and that are expected to be applicable when the deferred tax assets are realized or the deferred tax liabilities are settled.

Deferred tax assets are recognized only to the extent future tax benefits are likely to arise against which the temporary differences might be offset.

The Company recognizes a deferred tax liability for taxable temporary differences related to investments in subsidiaries and affiliates, except that the following two conditions are met:

(i) the Company controls the timing on which temporary differences will be reversed;

(ii) such temporary differences are not likely to be reversed in the foreseeable future.

The balances of deferred income tax assets and liabilities are offset when a legal right exists to offset current tax assets against current tax liabilities and to the extent such balances are related to the same tax authority, where tax balances are intended to be, and may be, settled on a net basis.

1.16.2.         Minimum Presumed Income Tax

The Company determines the minimum presumed income tax at the effective rate of 1% of the computable assets at each fiscal year-end. This tax is supplementary to income tax. The Company’s tax liability is equal to the higher of the two taxes. However, if the minimum presumed income tax were to exceed income tax in a given fiscal year, such excess may be computed as a payment on account of the income tax that could be generated in any of the next ten fiscal years.

The minimum presumed income tax credit disclosed under, “Other Non-Current Receivables,” is the portion expected to be offset against the income tax in excess of minimum presumed income tax to be generated in the following ten fiscal years.

1.17.         EARNINGS PER SHARE

Basic earnings per share are calculated as income for the year attributable to the Company’s ordinary shareholders, excluding the after-tax effect of benefits attached to preferred shares, if any, divided by average ordinary shares outstanding.

Diluted earnings per share are calculated by adjusting income for the year attributable to shareholders and average ordinary shares outstanding for the effects of the potential conversion into equity instruments of all convertible notes held by the Company at year-end.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The preparation of condensed interim financial statements in accordance with the IFRS-based accounting framework established by the Argentine Central Bank requires the use of certain significant accounting estimates.

The Company has identified the following areas which involve a higher degree of judgment or complexity, or the areas in which the assumptions and estimates are material to the condensed interim financial statements, as essential to understand the underlying accounting/financial reporting risks.

a.         IMPAIRMENT OF NON-FINANCIAL ASSETS

Intangible assets with definite useful life and property, plant and equipment are amortized or depreciated on a straight-line basis during their estimated useful life. The Company monitors the conditions associated with these assets to determine whether the events and circumstances warrant a review of the remaining amortization or depreciation term and whether there are factors or circumstances indicating impairment in the value of the asset which might not be recoverable.

Identifying the indicators of impairment of property, plant and equipment and intangible assets requires the use of judgment. The Group has concluded that there were no indicators of impairment for any of the periods reported in its separate condensed interim financial statements.

122

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

b.         INCOME TAX AND DEFERRED TAX

The assessment of current and deferred tax assets and liabilities requires a significant level of judgment. Current income tax is accounted for according to the amounts expected to be paid, while deferred income tax is accounted for on the basis of the temporary differences between the carrying amount of assets and liabilities and their tax base, at the rates expected to be in force at the time of reversal of such differences.

A deferred tax asset is recognized when future taxable income is expected to exist to offset such temporary differences, based on management’s assumptions about the amounts and timing of such future taxable income. Then, management needs to determine whether deferred tax assets are likely to be used and offset against future taxable income. Actual results may differ from these estimates, for instance, changes in the applicable tax laws or the outcome of the final review of the tax returns by the tax authorities and tax courts.

Future taxable income and the number of tax benefits likely to be available in the future are based on a medium-term business plan prepared by management, on the basis of expectations which are deemed reasonable.

c.         SUBSEQUENT EVENTS

Allocation of Retained Income

The shareholders’ meeting held on April 24, 2018 authorized the allocation of retained income as of December 31, 2017, as follows:

- To Legal Reserve	$	25,300
- To Cash Dividends	$	1,200,000
- To Discretionary Reserve for Future Distributions of Profits	$	7,104,168

NOTE 3. TRANSITION TO IFRS

3.1.         REQUIREMENTS FOR THE TRANSITION TO IFRS

The following is a reconciliation between the shareholders’ equity, income statement and other comprehensive income amounts related to the separate financial statements issued according to the accounting framework prior to the transition date (January 1, 2017), the adoption date (December 31, 2017) and the closing date of the comparative period (March 31, 2017) and the amounts presented according to the IFRS-based accounting framework (see Note 1.1) in these separate condensed interim financial statements, as well as the effects of adjustments to cash flows.

Separate Balance Sheet	Prior Accounting Framework 01.01.17		Reclassifications		IFRS Adjustments		Ref.	IFRS-based     Accounting Framework 01.01.17
ASSETS
Cash and Bank Deposits		320		2,724		-			3,044
Government and Private Securities		138,547		(138,547)		-			-
Loans and Other Financing Activities		-		2,853		-			2,853
Other Receivables Resulting from Financial Brokerage		24,432		(24,432)		-			-
Investments in Subsidiaries, Associates and Joint Ventures		20,544,691		(36,480)		2,805,767	(a)		23,313,978
Miscellaneous Receivables		39,292		(39,292)		-			-
Intangible Assets		5,642		-		(5,642)			-
Fair Value Debt Securities with Changes to Income		-		138,547		(474)			138,073
Other Financial Assets		-		27,732		-			27,732
Current Income Tax Assets		-		2,518		-			2,518
Deferred Income Tax Assets		-		478		-			478
Other Non-Financial Assets		-		27,897		-			27,897
Non-Current Assets Held for Sale		-		36,480		-			36,480
TOTAL ASSETS		20,752,924		478		2,799,651			23,553,053
LIABILITIES
Other Liabilities Resulting from Financial Brokerage		363,956		(363,956)		-			-
Miscellaneous Liabilities		36,270		(36,270)		-			-
Notes Issued		-		363,956		(3,264)			360,692
Deferred Income Tax Liabilities		-		478		-			478
Other Non-financial Liabilities		-		36,270		-			36,270
TOTAL LIABILITIES		400,226		478		(3,264)			397,440
SHAREHOLDERS’ EQUITY
Capital, Contributions and Reserves		14,334,821		-		-			14,334,821
Other Accumulated Comprehensive Income		-		-		284,182			284,182
Retained Income		6,017,877		-		2,518,733			8,536,610
TOTAL SHAREHOLDERS’ EQUITY		20,352,698		-		2,802,915			23,155,613
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		20,752,924		478		2,799,651			23,553,053

123

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Separate Balance Sheet	Argentine Central Bank		Reclassifications		IFRS Adjustments		Ref.	IFRS
	03.31.17							03.31.17
ASSETS
Cash and Bank Deposits		239		2,627		-			2,866
Government and Private Securities		224,186		(224,186)		-			-
Loans and Other Financing Activities		-		2,769		-			2,769
Other Receivables Resulting from Financial Brokerage		8,584		(8,584)		-			-
Investments in Subsidiaries, Associates and Joint Ventures		21,982,546		(28,966)		2,633,944	(a)		24,587,524
Miscellaneous Receivables		27,117		(27,117)		-			-
Intangible Assets		3,225				(3,225)			-
Fair Value Debt Securities with Changes to Income		-		224,186		(343)			223,843
Other Financial Assets		-		26,568		-			26,568
Current Income Tax Assets		-		2,617		-			2,617
Deferred Income Tax Assets		-		162		-			162
Other Non-Financial Assets		-		1,122		-			1,122
Non-Current Assets Held for Sale		-		28,967		-			28,967
TOTAL ASSETS		22,245,897		165		2,630,376			24,876,438
LIABILITIES
Other Liabilities Resulting from Financial Brokerage		281,317		(281,317)		-			-
Miscellaneous Liabilities		11,128		(11,128)		-			-
Notes Issued		-		281,317		(3,120)			278,197
Deferred Income Tax Liabilities		-		162		-			162
Other Non-Financial Liabilities		-		11,131		-			11,131
TOTAL LIABILITIES		292,445		165		(3,120)			289,490
SHAREHOLDERS’ EQUITY
Capital, Contributions and Reserves		14,334,821		-		-			14,334,821
Other Accumulated Comprehensive Income		-		-		287,709			287,709
Retained Income		7,618,631		-		2,345,787			9,964,418
TOTAL SHAREHOLDERS’ EQUITY		21,953,452		-		2,633,496			24,586,948
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		22,245,897		165		2,630,376			24,876,438

Separate Balance Sheet	Prior Accounting   Framework 12.31.17		Reclassifications		IFRS Adjustments		Ref.	IFRS-based Accounting Framework 12.31.17
ASSETS
Cash and Bank Deposits		364		3,324		-			3,688
Government and Private Securities		1,565,669		(1,565,669)		-			-
Loans and Other Financing Activities		-		19,713		-			19,713
Other Receivables Resulting from Financial Brokerage		109,043		(109,043)		-			-
Investments in Subsidiaries, Associates and Joint Ventures		37,641,520		(28,967)		2,811,933	(a)		40,424,486
Miscellaneous Receivables		4,198		(4,198)		-			-
Property, Plant and Equipment		1,827		-		-			1,827
Fair Value Debt Securities with Changes to Income		-		1,565,669		-			1,565,669
Derivative Instruments		-		11,638		-			11,638
Other Financial Assets		-		74,367		-			74,367
Current Income Tax Assets		-		8,076		-			8,076
Deferred Income Tax Assets		-		1,803		-			1,803
Other Non-Financial Assets		-		1,791		-			1,791
Non-Current Assets Held for Sale				28,967		-			28,967
TOTAL ASSETS		39,322,621		7,471		2,811,933			42,142,025
LIABILITIES
Miscellaneous Liabilities		22,417		(22,417)		-			-
Current Income Tax Liabilities		-		14,941		-			14,941
Deferred Income Tax Liabilities		-		2,979		-			2,979
Other Non-Financial Liabilities		-		11,967		-			11,967
TOTAL LIABILITIES		22,417		7,470		-			29,887
SHAREHOLDERS’ EQUITY
Capital, Contributions and Reserves		30,970,736		-		-			30,970,736
Other Accumulated Comprehensive Income		-		-		17,279			17,279
Retained Income		8,329,468		-		2,794,654			11,124,122
TOTAL SHAREHOLDERS’ EQUITY		39,300,224		-		2,811,933			42,112,137
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		39,322,621		(7,471)		2,811,933			42,142,025

124

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Separate Income Statement	Prior Accounting   Framework		Reclassifications		IFRS Adjustments		Ref.	IFRS-based Accounting Framework
	03.31.17							03.31.17
Financial Income		9,422		(9,422)		-			-
Financial Expenses		(17,677)		17,677		-			-
Provisions for Loan Losses		-		(121)		-			(121)
Administrative Expenses		(35,540)		25,580		-			(9,960)
Miscellaneous Income		1,647,107		(1,647,107)		-			-
Miscellaneous Losses		(2,559)		(2,559)		-			-
Interest Income		-		424		-			424
Interest Expense		-		(17,648)		(144)			(17,792)
Commission Income		-
Commission Expense		-
Net Income from Measurement of Fair Value Financial Instruments with Changes to Income		-		9,021		130			9,151
Exchange Rate Differences on Gold and Foreign Currency		-		(23)		-			(23)
Other Operating Income		-		12		-			12
Employee Benefits		-		(25,580)		-			(25,580)
Depreciation and Impairment of Assets		-		(2,419)		2,419			-
Other Operating Expenses		-		(48)		(7)			(55)
Income (Loss) for Subsidiaries		-		1,647,095		(175,343)	(a)		1,471,752
Net Income (Loss) for the Period		1,600,753		-		(172,945)			1,427,808
Other Comprehensive Income		-		-		3,527			3,527
Total Comprehensive Income (Loss)		1,600,753		-		(169,418)			1,431,335

Adjustments to Arrive to Cash and Cash Equivalents as of 03.31.17:

Cash and Cash Equivalents	Prior Accounting Framework		Adjustments		IFRS-based Accounting Framework
Cash and Bank Deposits		5,635		-		5,635
Argentine Central Bank Bills and Notes		224,186		(343)		223,843
Mutual Funds		3,188		-		3,188
Total		233,009		(343)		232,666

Classification of Cash Flows as of 03.31.17	Prior Accounting Framework		Adjustments		IFRS-based Accounting Framework
Operating Activities		147,681		(168,659)		(20,978)
Investing Activities		4,121		187,008		191,129
Financing Activities		(82,092)		(18,195)		(100,287)
Effect of Changes in the Exchange Rate		-		(23)		(23)
Total		69,710		(131)		69,841

Operating Activities	Prior Accounting Framework
Cash Flow According to Prior Accounting Framework		147,681
Collection of Dividends		(187,008)
Supplier, Employee and Tax Payments		18,349
Total		(20,978)

125

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Investing Activities	Prior Accounting Framework
Cash Flow According to Prior Accounting Framework		4,121
Collection of Dividends		187,008
Total		191,129

Financing Activities	Prior Accounting Framework
Cash Flow According to Prior Accounting Framework		(82,092)
Collection of Sundry Debtors		(8,750)
Payment of Interest, Net		90,842
Payment of Unsubordinated Notes		(100,287)
Total		(100,287)

3.2.         OPTIONAL EXEMPTIONS TO IFRS

IFRS 1 allows entities that adopt IFRS for the first time to consider certain one-time exceptions. Such exceptions have been established by the IASB to make the first application of certain IFRS simpler, eliminating the mandatory nature of their retroactive application.

Below are the optional exemptions applicable to the Group under IFRS 1:

- Business Combinations: The Company has opted for not applying IFRS 3, “Business Combinations,” retroactively for business combinations prior to the date of transition to IFRS.

The Company has not made use of other exemptions available in IFRS 1.

3.3.         MANDATORY EXCEPTIONS TO IFRS

Below are the mandatory exceptions applicable to the Company under IFRS 1:

1. Estimates: The estimates made according to the IFRS-based accounting framework as of January 1, 2017 (date of transition to IFRS) are consistent with the estimates made as of the same date according to the Argentine Central Bank’s accounting standards, considering what is described in Note 1 (non-application of the impairment chapter of IFRS 9).

2. Accounting derecognition of financial assets and liabilities: The Company applied the criteria of accounting derecognition of financial assets and liabilities under IFRS 9 prospectively for transactions occurring after January 1, 2017.

3. Classification and measurement of financial assets: The Company has considered the existing events and circumstances as of January 1, 2017 in its evaluation of whether the financial assets meet the characteristics to be classified as assets measured at amortized cost or at fair value with changes in profit or loss or at fair value with changes in other comprehensive income.

4. Other mandatory exceptions established by IFRS 1 that have not been applied because of immateriality to the Group are:

- Hedge accounting

- Non-controlling interests

- Embedded derivatives

- Government loans

3.4.         RECONCILIATIONS REQUIRED

The following are the most significant adjustments made by applying the IFRS-based accounting framework, which were made to amounts recognized under the prior accounting framework, and are detailed in point 3.1.

(a) Investments in Subsidiaries, Associates and Joint Ventures: Subsidiaries’ financial statements have been used in applying the equity method. If applicable, the shareholders’ equity arising from the financial statements has been adjusted to account for the effect of the application of the IFRS-based accounting framework.

NOTE 4. FAIR VALUES

The Company classifies the fair values of financial instruments in three levels, according to the quality of data used to determine them.

126

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Level 1 Fair Value: The fair value of financial instruments traded in active markets (such as, publicly-traded derivatives, notes or available for sale) is based on the quoted prices of markets (unadjusted) as of the date of the reporting period. If the quote price is available and there is an active market for the instrument, it will be included in Level 1.

Level 2 Fair Value: The fair value of financial instruments that are not traded in active markets, for example, the derivatives available over the counter, is determined using valuation techniques that maximize the use of observable information and relies to the least possible extent on the Group’s specific estimates. If all the material variables to establish the fair value of a financial instrument are observable, the instrument is included in Level 2.

Level 3 Fair Value: If one or more material variables is not based on observable market information, the instrument is included in Level 3. This is the case of unquoted equity instruments.

The Group’s financial instruments measured at fair value at period-end are as follows:

Instruments Portfolio as of 03.31.18	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Assets
- Argentine Central Bank’s Bills		1,133,395		-		-
- Other Financial Assets		89,754		-		-
Total		1,223,149		-		-

The Group’s policy is to recognize transfers among the fair value levels only as of the year-end dates, there being no changes in relation to the financial instruments held in portfolio as of December 31, 2017.

Derivative Instruments

FORWARD PURCHASE-SALE OF FOREIGN CURRENCY WITHOUT DELIVERY OF THE UNDERLYING ASSET

Mercado Abierto Electrónico (“MAE”) and Rosario Futures Exchange (“ROFEX”) have trading environments for the closing, recording and settlement of financial forward transactions carried out among its agents, the Bank being one of them. The general settlement mode for these transactions is without delivery of the traded underlying asset. Settlement is carried out on a daily basis, in Pesos, 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.

The transactions are recorded in Off-Balance Sheet Items for the notional value traded. The accrued balances pending settlement are disclosed in the “Derivative Instruments” line of Assets and/or Liabilities, as the case may be.

The amounts of transactions conducted as of the dates indicated below are as follows:

	Underlying Asset		Type of Settlement		03.31.18		12.31.17
Forward Purchase – Sale of Foreign Currency
Purchases		Foreign currency		Daily difference		-		919,936

Other Financial Assets

Other financial assets are broken down as follows as of the dates indicated below:

Item	03.31.18		12.31.17
Listed Mutual Funds		89,754		74,367
Total		89,754		74,367

127

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

NOTE 5. EQUITY INVESTMENTS AND RELATED PARTIES

5.1.         EQUITY INVESTMENTS

5.1.1.         Equity Investments in Subsidiaries

The basic information regarding subsidiaries is detailed as follows:

Company	Direct and Indirect Shareholding				Equity Investment %
	03.31.18		12.31.17		03.31.18		12.31.17
Banco de Galicia y Buenos Aires S.A.		795,973,974		795,973,974		100.00		100.00
Galicia Administradora de Fondos S.A.		20,000		20,000		100.00		100.00
Galicia Valores S.A.		1,000,000		1,000,000		100.00		100.00
Galicia Warrants S.A.		1,000,000		1,000,000		100.00		100.00
Net Investment S.A. (in Liquidation)(*)		-		12,000		-		100.00
Sudamericana Holding S.A.		185,653		185,653		100.00		100.00
Tarjetas Regionales S.A.		894,552,668		77.00		83.00		77.00

  (*) The financial distribution was paid out on January 9, 2018.

	03.31.18
Company	Assets		Liabilities		Shareholders’   Equity		Income
Banco de Galicia y Buenos Aires S.A.		283,887,768		249,486,474		34,401,294		1,955,725
Galicia Administradora de Fondos S.A.		534,329		344,131		190,198		167,654
Galicia Valores S.A.		204,877		39,140		165,737		13,357
Galicia Warrants S.A.		264,266		86,985		177,281		11,566
Sudamericana Holding S.A.		2,617,630		1,417,698		1,199,932		167,354
Tarjetas Regionales S.A.		9,291,556		3,543		9,256,113		842,230

  (*) The balances are related to consolidated accounts.

	12.31.17						03.31.17
Company	Assets		Liabilities		Shareholders’   Equity		Income
Banco de Galicia y Buenos Aires S.A.(*)		289,772,694		250,846,840		38,925,854		1,297,986
Galicia Administradora de Fondos S.A.		736,680		276,479		460,201		89,079
Galicia Valores S.A.		175,436		23,056		152,380		6,071
Galicia Warrants S.A.		258,143		92,427		165,716		5,965
Net Investment S.A. (in Liquidation)(**)		283		-		283		8
Sudamericana Holding S.A.(*)		2,372,332		1,326,995		1,045,337		108,987

  (*) The balances are related to consolidated accounts.

  (*) The financial distribution was paid out on January 9, 2018.

5.2.2.        Related Parties

Related parties are considered to be all those entities that directly, or indirectly through other entities, have control over another, are under the same control or may have significant influence on another entity’s financial or operational decisions.

The Company considers one to have control over another entity when it has power over the entity’s financial and operating decisions and also has a share of profits thereof.

Additionally, the Company considers one to have joint control when there is an agreement between parties regarding the control of a common economic activity.

Finally, the Company considers one to have significant influence where it has power and influence on another entity’s financial and operating decisions, but control over them cannot be exerted. Those shareholders who hold an equity investment equal to or higher than 20% of the total votes of the Company or its subsidiaries are considered to have significant influence.

To determine those situations, not only are the legal aspects observed, but also the nature and substance of the relationship.

Furthermore, the key personnel of the Company’s management (including the Board of Directors and managers), as well as the entities over which the key personnel may have significant influence or control, are considered related parties.

Controlling Entity

The Group is controlled by:

Name	Nature	Principal Line of Business	Place of Business	Equity Investment %
EBA Holding S.A.	55.11% of voting rights	Financial and Investment Activities	Buenos Aires - Argentina	19.71%

Key Personnel’s Compensation

The compensation earned by the Company’s key personnel as of March 31, 2018 and December 31, 2017 amounts to $9,346 and $39,000, respectively.

128

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Key Personnel’s Structure

The key personnel’s structure as of the dates indicated below is as follows:

	03.31.18		12.31.17
Directors		9		9
Total		9		9

Related Party Transactions

The Company has not been a party to or performed transactions or granted loans to:

(i) The companies that directly or indirectly through one or more intermediaries control or are controlled by the Company.

(ii) Associates (i.e., a consolidated company on which the Company has significant influence or that has a significant influence on the Company).

(iii) Persons who directly or indirectly have an equity investment with voting power at the Company giving significant influence on the Company and, as the case may be, the person’s ancestors, descendants, spouses or siblings (i.e., close relatives who may have influence or may be influenced by that person in their relationships with the Company).

(iv) Key management personnel.

(v) Companies with a substantial interest and whose ownership is held by any of the persons described in (iii) or (iv) and/or that are capable of having a significant influence on the Company. For the purposes of this paragraph, this includes companies owned by the directors or majority shareholders of the Company that have a key management member in common with the Company, as applicable.

Corporations Section 33 of General Corporations Law

The transactions performed with subsidiaries as of the dates indicated below are as follows:

Banco de Galicia y Buenos Aires S.A.	03.31.18		12.31.17
Assets
Cash and Bank Deposits		2,350		473
Derivative Instruments		-		11,638
Total		2,350		12,111
Liabilities
Other Non-Financial Liabilities		45		342
Total		45		342
Net Income (Loss)
Interest Expense		-		(10,653)
Net Income from Measurement of Fair Value Financial Instruments with Changes to Income		-		11,638
Administrative Expenses		(1,058)		(3,815)
Total		(1,058)		(2,830)

NOTE 6. INFORMATION ABOUT THE SHAREHOLDERS’ EQUITY AND THE STATEMENT OF CASH FLOWS

6.1.       CAPITAL STOCK

The capital stock structure as of the dates indicated below is as follows:

	Face Value		Restated
Balances as of 01.01.17		1,300,265		1,578,396
Capital Increase		126,500		126,500
Balances as of 12.31.17		1,426,765		1,704,896
Balances as of 03.31.18		1,426,765		1,704,896

The shareholders at the Ordinary and Extraordinary Shareholders’ Meeting of Grupo Financiero Galicia S.A. held on August 15, 2017 approved an increase in capital stock by means of the issuance of up to 150,000,000 ordinary book-entry Class “B” shares, entitled to one vote per share and with a face value of $1 each and also entitled to dividends on an equal footing with such ordinary book-entry shares outstanding at the time of the issuance.

129

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

On September 7, 2017, the Board of Directors of the C.N.V., by means of Joint Resolution No. RESFC-2017-18927-APN-DIR#CNV, decided to authorize the public offering of 130,434,600 ordinary book-entry Class “B” shares, with a face value of $1 and one vote per share and, in case of over-subscription, an increase in such offering up to 19,565,190 ordinary book-entry Class “B” shares, with a face value of $1 and one vote each to be offered for public subscription, with preemptive and accretion rights.

The primary offering year ended on September 26, 2017, with 109,999,996 Class “B” shares having been subscribed at a price of U.S. $5 each. On September 29, 2017, such shares were issued and paid.

The Company granted over-subscription rights to international placement agents who, on October 2, 2017, enforced such rights and were awarded additional 16,500,004 Class “B” shares at a price of U.S. $5 each, the issuance and payment of which took place on October 4, 2017.

The capital increase amounted to $11,004,383, and the expenses related thereto amounted to $146,346 and were deducted from additional paid-in capital.

On November 8, 2017, the capital increase was registered with the Public Registry of Commerce.

6.2.        EARNINGS PER SHARE

Earnings per share are calculated by dividing income attributable to the Group’s shareholders by the weighted average of outstanding common shares during the year. As the Group does not have preferred shares or debt convertible into shares, basic earnings are equal to diluted earnings per share.

	03.31.18		03.31.17
Income Attributable to the Group’s Shareholders		2,999,488		1,427,808
Weighted-Average of Ordinary Shares Outstanding (Thousands)		1,426,765		1,300,265
Earnings per Share		2.10		1.10

6.3.        STATEMENT OF CASH FLOWS

Cash and cash equivalents are broken down as follows:

Cash and Cash Equivalents	03.31.18		12.31.17		03.31.17		01.01.17
Cash and Bank Deposits		5,677		3,668		1,275		1,409
Argentine Central Bank’s Bills Maturing within up to 90 Days		1,133,395		1,565,669		223,843		138,073
Mutual Funds		89,754		74,367		3,188		18,855
Overnight Placements in Banks Abroad		21,352		19,713		4,360		4,488
Total Cash and Cash Equivalents		1,250,178		1,663,437		232,666		162,825

NOTE 7. NON-FINANCIAL ASSETS

7.1.        PROPERTY, PLANT AND EQUIPMENT

Changes in “Property, Plant and Equipment” are detailed in Schedule F.

7.2.        OTHER NON-FINANCIAL ASSETS

The breakdown of the account as of the dates indicated below is as follows:

	03.31.18		12.31.17
Value Added Tax – Tax Credit		1,035		986
Payments in Advance		1,199		805
Total		2,234		1,791

130

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

7.3.        NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

The Company has classified the following assets as “Assets Held for Sale and Discontinued Operations”:

	03.31.18		12.31.17
Equity Investments
Compañía Financiera Argentina S.A.		-		28,967
Total		-		28,967

On January 12, 2017, the Company accepted an offer made by Mr. Julio Alfredo Fraomeni and Galeno Capital S.A.U. to buy its whole minority interest in Compañía Financiera Argentina S.A. The sale of the shares in both companies was consummated on February 2, 2018, with the new holders having been registered in each of these companies’ books. The sale price was subject to the buyers’ consent, who were entitled to raise objections for up to 45 consecutive days beginning on January 29, 2018. On March 26, 2018, the sale of shares in Compañía Financiera Argentina S.A. was completed, establishing a final price of $30,771. The proceeds from the sale of Compañía Financiera Argentina S.A. amounted to $1,804. The income tax impact for discontinued operations is disclosed separately in the “Income Tax from Discontinued Activities” account, which amounts to $989 as of March 31, 2018.

NOTE 8. OTHER DISCLOSURES REQUIRED BY IFRS

8.1.        OPERATING LEASES

The Company records contractual obligations derived from the lease of administrative offices. The estimated future lease payments in connection thereof are as follows:

Year	US$
2018	20
2019	27
2020	27
2021	27
2022	13

8.2.        INCOME TAX

The following table shows the reconciliation of income tax charged to income to that which would result from applying the current tax rate to the book income as of the dates indicated below:

	03.31.18	03.31.17
Income for the Period Before Income Tax	3,013,814	1,427,808
Effective Tax Rate	30%	35%
Income for the Period at the Tax Rate	904,144	499,733
Permanent Differences at the Tax Rate
- Income (Loss) from Equity Investments	(891,220)	(515,469)
- Other Non-Deductible Expenses	92	502
- Allowance for Impairment of Value	1,888	16,039
- Others	(2)	(805)
Law 27430 Adjustment	(576)	-
Total Income Tax Charge for the Period (*)	14,326	-

  (*) The total includes the balance related to discontinued operations.

	03.31.18	03.31.17
Current Tax	20,277	-
Deferred Tax Charge	(7,839)	(16,039)
Allowance for Impairment	1,888	16,039
Total Income Tax Charge	14,326	-

131

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Changes in deferred income tax assets and liabilities are as follows:

Items	Balances as of 12.31.17		Expiration of Tax Loss Carry- forwards		Charge to Income		Allowance for Impairment		Others		Balances as of 03.31.18
Deferred Tax Assets
Tax Loss Carry-Forwards		5,226		(5,226)		6,692		(3,765)		-		2,927
Equity Investments in Subsidiaries		3,301		-		(3,301)		-		-		-
Allowances		251		-		-		-		-		251
Employee Benefits		128		-		10		-		-		138
Total Deferred Tax Assets		8,906		(5,226)		3,401		(3,765)		-		3,316
Deferred Tax Liabilities
Property, Plant and Equipment		(29)		-		(14)		-		-		(43)
Other Financial Assets		1,477		-		1,126		-		-		2,603
Directors’ Fees		-		-		(4,054)		-		4,054		-
Others		1,531		-		(1,496)		-		-		35
Total Deferred Tax Liabilities		2,979		-		(4,438)		-		4,054		2,595
Total, Net		5,927		(5,226)		7,839		(3,765)		(4,054)		721

The Company set a provision for the deferred tax asset as of March 31, 2018 and December 31, 2017 amounting to $3,765 and $7,103, respectively, as it is believed that the recovery thereof is not likely as of the date of these financial statements.

Tax Reform

On December 29, 2017, the National Executive Branch enacted Income Tax Law No. 27430. This law has introduced several changes to the previous income tax treatment. Some of the key changes involved in the reform include:

- Income Tax Rate: The income tax rate for Argentine companies shall be gradually reduced from 35% to 30% for the fiscal years commencing on January 1, 2018 until December 31, 2019, and to 25% for fiscal years commencing on, and including, January 1, 2020.

- Tax on Dividends: The law has introduced a tax on dividends or profits distributed by Argentine companies or permanent establishments, among others, to individuals, undivided interests or foreign beneficiaries, subject to the following considerations: (i) dividends distributed out of the profits made during fiscal years commencing on January 1, 2018 until December 31, 2019 shall be subject to withholding at a 7% rate; and (ii) dividends distributed out of the profits made during fiscal years commencing on January 1, 2020 onwards shall be subject to withholding at a 13% rate.

Dividends distributed from profits earned until the fiscal year before that commenced on January 1, 2018 shall remain subject, in respect of all beneficiaries, to withholding at the 35% rate on the amount in excess of tax-free distributable accumulated profits (the equalization tax transition period).

- Optional Tax Revaluation: Regulations establish that, at the companies’ option, the tax revaluation of assets located in the country and that are used for generating taxable income may be made. The special tax on the revaluation amount depends on the asset: 8% is for real estate that does not qualify as inventories, 15% for real estate that qualifies as inventories and 10% for personal property and the remaining assets. Once the option for a given asset is exercised, all the other assets of the same category should be revalued. Taxable income resulting from the revaluation is not subject to income tax and the special tax on the revaluation amount will not be deductible from such tax.

NOTE 9. INCOME STATEMENT BREAKDOWN

The income statement as of the dates indicated below is broken down as follows:

Interest Income	03.31.18		03.31.17
On Cash and Bank Deposits		104		3
On Private Securities		5,297		421
Total		5,401		424

132

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Interest Expense	03.31.18		03.31.17
On Other Financial Liabilities		-		17,792
Total		-		17,792
Net Income (Loss) from Measurement of Fair Value Financial Instruments with Changes to Income	03.31.18		03.31.17
From Measurement of Financial Assets at Fair Value with Changes in Profit or Loss
Income (Loss) from Government Securities		(55,291)		(9,151)
Income (Loss) from Derivative Instruments		13,108		-
Total		(42,183)		(9,151)
Employee Benefits	03.31.18		03.31.17
Salaries		662		1,653
Social Security Contributions on Salaries		101		387
Severance Payments and Personnel Bonuses		66		23,492
Services to Personnel and Others		91		48
Total		920		25,580
Administrative Expenses	03.31.18		03.31.17
Fees and Compensation for Services		3,668		2,002
Directors’ and Syndics’ Fees		21,677		6,546
Advertising, Promotion and Research Expenses		3		5
Taxes and Assessments		786		738
Electricity and Communications		-		13
Entertainment and Transportation Expenses		65		11
Stationery and Office Supplies		363		-
Administrative Services Hired		154		162
Insurance		151		93
Others		919		390
Total		27,786		9,960
Depreciation and Impairment of Assets	03.31.18		03.31.17
Depreciation of Property, Plant and Equipment		60		-
Total		60		-
Other Operating Income	03.31.18		03.31.17
Others		371		55
Total		371		55
Other Operating Expenses	03.31.18		03.31.17
Others		6		12
Total		6		12

NOTE 10. ADDITIONAL INFORMATION REQUIRED BY THE ARGENTINE CENTRAL BANK

10.1.        ISSUANCE OF NOTES

The following is a breakdown of the Global Programs for the Issuance of Notes outstanding:

133

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Company	Authorized       Amount(*)	Type of Notes	Term of     Program	Date of Approval by   Shareholders’   Meeting	Approval by the C.N.V.
Grupo Financiero Galicia S.A.	US$ 100,000	Simple notes, not convertible into shares	5 years	03.09.09 confirmed on 08.02.12	Resolution No. 16,113 dated 04.29.09 and extended through Resolution No. 17,343 dated 05.08.14 Authorization of the increase, Resolution No. 17,064 dated 04.25.13

  (*) Or its equivalent in any other currency.

As of March 31, 2018 and December 31, 2017, the Company had not issued notes.

10.2.        RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF PROFITS

Pursuant to Section 70 of the 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 capital stock is reached. In the event that said reserve is reduced for any reason, no profits can be distributed until its total refund.

10.3.        CAPITAL MANAGEMENT AND CORPORATE GOVERNANCE TRANSPARENCY POLICY

The Company’s Board of Directors is the Company’s highest management body. It is made up of nine directors and three alternate directors, who must have the necessary knowledge and skills to clearly understand their responsibilities and duties within the corporate governance, and to act with the loyalty and diligence of a good businessman.

As set out in its bylaws, the term of office for both directors and alternate directors is three (3) years; they are partially changed every year and may be reelected indefinitely.

The Company complies with the appropriate standards regarding total number of directors, as well as the number of independent directors. Furthermore, its bylaws provide for the flexibility necessary to adapt the number of directors to the possible changes in the conditions in which the Company carries out its activities, from three (3) to nine (9) directors.

The Board of Directors complies, in every relevant respect, with the recommendations included in the Code on Corporate Governance as Schedule IV to Title IV of the regulations issued by the Argentine National Securities Commission (Text amended in 2013).

It also monitors the application of the corporate governance policies provided for by the regulations in force through the Audit Committee and the Committee for Information Integrity. Periodically, the Committees provide the Board of Directors with information, and the Board gets to know the decisions of each Committee. Appropriate matters are transcribed in the minutes drafted at the Board of Directors’ meetings.

The Audit Committee set by Capital Markets Law No. 26831 and the C.N.V.’s regulations is formed by three independent directors, and the Committee for Information Integrity’s mission is to comply with the provisions of the U.S. Sarbanes-Oxley Act.

Basic Holding Structure

The Company is a company whose sole purpose is to conduct financial and investment activities as per Section 31 of the General Corporations Law. That is to say, it is a holding company whose activity involves managing its equity investments, assets and resources.

Within the group of companies in which the Company has an interest, the Bank, in which the Company has a controlling equity interest, stands out, and is the Company’s main asset. The Bank, as a bank institution, is subject to certain regulatory restrictions imposed by the Argentine Central Bank. In particular, the Bank can only hold a 12.5% interest in the capital stock of companies that do not carry out activities considered supplementary by the Argentine Central Bank. Therefore, the Company holds, either directly or indirectly, the remaining interests in several companies. In addition, the Company indirectly holds a number of equity investments in supplementary companies that belong to the Company as the controlling company.

134

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

Since the Company is a holding company, it has a limited personnel structure, and, therefore, many of the business organization requirements, common for big productive institutions, cannot be applied to this company.

To conclude, it is noteworthy that the Company is under the control of a pure holding company, EBA Holding S.A., which has the number of votes necessary to hold the majority of votes at the shareholders’ meetings, although it does not have any managerial functions over the Company and the Company has no group relationship with EBA Holding S.A.

Compensation Systems

Directors’ compensation is defined by the General Shareholders’ Meeting and is fixed within the limits established by law and the corporate bylaws.

The Audit Committee expresses its opinion on whether compensation proposals for Directors are reasonable, taking into consideration market standards.

Business Conduct Policy

The Company has consistently shown respect for the rights of its shareholders, reliability and accuracy in the information provided, transparency as to its policies and decisions, and caution with regard to the disclosure of strategic business issues.

Code of Ethics

The Company has a Code of Ethics formally approved that guides its policies and activities. It considers business objectivity and conflict-of-interests related aspects, and how the employee should act upon identifying a breach of the Code of Ethics.

10.4.         COMPLIANCE WITH THE REGULATIONS REQUIRED BY THE C.N.V.

10.4.1.        Agents – Minimum Liquidity Requirement

Within the framework of Resolution No. 622/13 of the C.N.V., the Bank has been registered, in such agency’s registry, as a settlement and clearing agent (No. 22 (ALyC and AN – INTEGRAL)), a custodial agent of collective investment products corresponding to mutual funds (No. 3 (ACPIC FCI)), and manager of collective investment products at the registry of financial trustees (No. 54).

As of December 31, 2017, the Bank’s shareholders’ equity exceeds that required by the C.N.V. to act as agent in the categories in which the Bank has been registered. Such requirement amounts to $28,000 with a minimum liquidity requirement of $14,000, which the Bank paid with the Argentine Central Bank’s monetary regulation instruments, which are held in custody at Caja de Valores (Depositor No. 100100) in the amount of $17,988.

Moreover, Galicia Valores S.A. has received the authorization to act as “Settlement and Clearing Agent and Trading Agent – Own,” as established by C.N.V.’s General Resolution No. 622/13. According to the minimum requirements established, the minimum shareholders’ equity required to act in this agent’s category amounts to $3,500 and the minimum liquidity amounts to $1,750.

As of March 31, 2018, the minimum liquidity is made up of a sight account opened at the Bank in the amount of U.S. $250.

10.4.2.        Custodial Agent of Collective Investment Products Corresponding to Mutual Funds

Furthermore, in compliance with Section 7 of Chapter II, Title V of that Resolution, in its capacity as custodial agent of collective investment products corresponding to mutual funds (depository) of the “FIMA ACCIONES”, “FIMA P.B. ACCIONES”, “FIMA RENTA EN PESOS”, “FIMA AHORRO PESOS”, “FIMA RENTA PLUS”, “FIMA PREMIUM”, “FIMA AHORRO PLUS”, “FIMA CAPITAL PLUS”, “FIMA ABIERTO PYMES”, “FIMA MIX I”, “FIMA RENTA DÓLARES I” and “FIMA RENTA DOLARES II” funds, as of March 31, 2018, the Bank holds a total of 12,995,225,006 units under custody for a market value of $91,723,508, which is included in the “Depositors of Securities Held in Custody” account. As of previous fiscal year-end and January 1, 2017, the securities held in custody totaled 10,254,289,765 and 7,777,368,861 units and their market value amounted to $67,972,574 and $37,337,855, respectively.

135

GRUPO FINANCIERO GALICIA S.A.

NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD COMMENCED ON JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($) and Thousands of U.S. Dollars (US$), Except as Otherwise Stated

The balances of the mutual funds as of the dates indicated below are detailed as follows:

Mutual Fund	03.31.18		12.31.17		01.01.17
FIMA Acciones		629,661		412,803		117,805
FIMA P.B. Acciones		1,728,584		1,143,324		305,310
FIMA Renta en pesos		771,442		525,826		239,066
FIMA Ahorro pesos		25,998,491		20,823,171		15,955,347
FIMA Renta Plus		585,427		369,949		247,293
FIMA Premium		10,690,382		10,098,362		7,130,327
FIMA Ahorro Plus		25,542,287		17,238,677		10,194,730
FIMA Capital Plus		708,872		379,178		561,800
FIMA Abierto PyMES		272,592		264,206		187,124
FIMA Mix I		571,628		164,890		151,487
FIMA Renta Dólares I		17,521,501		12,384,341		2,245,266
FIMA Renta Dólares II		6,702,641		4,167,847		2,300
Total		91,723,508		67,972,574		37,337,855

All the transactions detailed above are recorded in off-balance sheet items - securities held in custody.

The mutual funds detailed above have not been consolidated as the Group is not a controlling company thereof, since the depository role does not imply, in this case:

- power over the trust to run material activities;

- exposure or right to variable returns;

- capacity to have influence on the amount of returns to be received for the involvement.

10.4.3.        Storage of Documents

Pursuant to General Resolution No. 629 of the C.N.V., the Bank notes that it has supporting documents regarding accounting and management transactions, which are stored at AdeA (C.U.I.T. No. 30-68233570-6), Plant III located at Ruta Provincial 36 km 31.5 No. 6471 (CP 1888) Bosques, Province of Buenos Aires, with legal domicile at Av. Pte. Roque Sáenz Peña 832 Piso 1, C.A.B.A.

136

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE A – BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item

Holdings

Position

Fair Value

Fair Value Level

Carrying Amount

Without Options

Options

Final

03.31.18

12.31.17

FAIR VALUE DEBT SECURITIES WITH CHANGES TO INCOME

Argentine:

Argentine Central Bank’s Bills

Level 1

1,133,395

1,565,669

-

-

1,133,395

137

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE F – CHANGES IN PROPERTY, PLANT AND EQUIPMENT

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

Item	Value at Beginning of Fiscal Year		Estimated Useful Life in Years		Additions		Disposals		Transfers		Depreciation								Net Book Value as of
											Accumulated		Disposals		For the Period		At Period-end		03.31.18		12.31.17
Measurement at Cost Vehicles		1,952		5		-		-		-		125		-		59		184		1,768		1,827
Total		1,952				-		-		-		125		-		59		184		1,768		1,827

Item	Value at Beginning of Fiscal Year		Estimated Useful Life in Years		Additions		Disposals		Transfers		Depreciation								Net Book Value as of
											Accumulated		Disposals		For the Period		At Period-end		12.31.17		12.31.16
Measurement at Cost Vehicles		-		5		1,952		-		-		-		-		125		125		1,827		-
Total		1,952				1,952		-		-		-		-		125		125		1,827		-

138

GRUPO FINANCIERO GALICIA S.A.

SCHEDULE L – FOREIGN CURRENCY BALANCES

FOR THE PERIOD COMMENCED JANUARY 1, 2018 AND ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

	Head Office		03.31.18		03.31.18
Items	and												12.31.17
	Argentine				Dollar		Euro		Real		Others
	Branches
ASSETS
Cash and Bank Deposits		3,443		3,443		3,443		-		-		-		3,324
Loans and other financing activities		21,352		21,352		21,352		-		-		-		19,713
Non-financial Public Sector		-		-		-		-		-		-		-
Argentine Central Bank		-		-		-		-		-		-		-
Other Financial Institutions		-		-		-		-		-		-		-
To the Non-financial Private Sector and Residents Abroad		21,352		21,352		21,352		-		-		-		19,713
TOTAL ASSETS		24,795		24,795		24,795		-		-		-		23,037
LIABILITIES								-		-		-
Other Non-financial Liabilities		6,344		6,344		6,344		-		-		-		5,753
TOTAL LIABILITIES		6,344		6,344		6,344		-		-		-		5,753

139

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

The following information as of December 31, 2017 has been prepared in accordance with the accounting framework set forth by the Argentine Central Bank and is required to understand these consolidated condensed interim financial statements.

1.        CASH AND BANK DEPOSITS

Cash equivalents are held to meet short-term payment commitments, rather than for investment or similar purposes. In order for a financial investment to be classified as cash equivalents, it should be readily convertible into a certain amount of cash and its risk of changes in value should be immaterial. Accordingly, an investment will be so classified as cash equivalents if it matures within three months or less from the acquisition date. Equity interests are excluded from cash equivalents.

The table below shows a breakdown of items comprising cash and cash equivalents:

	12.31.17		01.01.17
Cash and Bank Deposits		3,688		3,044
Argentine Central Bank’s Bills Maturing within up to 90 Days		1,565,669		138,073
Mutual Funds		74,367		18,854
Overnight Placements in Banks Abroad		19,713		2,853
Total Cash and Cash Equivalents		1,663,437		162,824

2.        FINANCIAL INSTRUMENTS

As of the dates indicated below, the Group maintains the following portfolios of financial instruments:

Instruments Portfolio	Fair Value with changes in Profit or Loss
	12.31.17		01.01.17
Assets
Argentine Central Bank’s Bills		1,565,669		138,073
Other Financial Assets		74,367		18,854
		1,640,036		156,927

3.        FAIR VALUES

The Company classifies the fair values of financial instruments in three levels, according to the quality of data used to determine them.

The Company’s financial instruments measured at fair value as of the dates indicated below are as follows:

Instruments Portfolio as of 12.31.17	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Argentine Central Bank’s Bills		1,565,669		-		-
Other Financial Assets		74,367
Total		1,640,036		-		-

Instruments Portfolio as of 12.01.17	Level 1 Fair Value		Level 2 Fair Value		Level 3 Fair Value
Argentine Central Bank’s Bills		138,073		-		-
Other Financial Assets		18,854		-		-
Total		156,927		-		-

Valuation techniques are detailed in Note 4.

140

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 (Continued)

The Company’s policy is to recognize transfers among the fair value levels only as of the year-end dates, there being no changes in relation to the financial instruments held in portfolio as of December 31, 2017.

4.        OTHER FINANCIAL ASSETS

Other Financial Assets break down as follows as of the dates indicated below:

	12.31.17		01.01.17
Listed Mutual Funds		74,367		18,854
Others		-		8,878
Total		74,367		27,732

5. EQUITY INVESTMENTS IN SUBSIDIARIES

Investments valued at the equity method are as follows:

Company	Equity Investment %		Place of Business	12.31.17		01.01.17
Banco de Galicia y Buenos Aires S.A.		100.00	Autonomous City of Buenos Aires		38,925,854		22,043,882
Galicia Administradora de Fondos S.A.		100.00	Autonomous City of Buenos Aires		437,190		196,398
Galicia Valores S.A.		100.00	Autonomous City of Buenos Aires		1,524		-
Galicia Warrants S.A.		100.00	Autonomous City of Buenos Aires		145,001		137,940
Net Investment S.A. (in Liquidation)(*)		100.00	Autonomous City of Buenos Aires		248		226
Sudamericana Holding S.A.		100.00	Autonomous City of Buenos Aires		914,668		935,532

(*) The financial distribution was paid out on January 9, 2018.

The changes that occurred during fiscal year 2017 in such investments are as follows:

Company	Balance as of 01.01.17		Capital Contributions / Purchases		Dividends Received			Other Comprehensive Income Items		Share of Profit (Loss) for the Year		Balance as of 12.31.17
Banco de Galicia y Buenos Aires S.A.		22,043,882		10,000,000		-			(280,566)		7,162,538		38,925,854
Galicia Administradora de Fondos S.A.		196,398		-		(187,008)			-		427,800		437,190
Galicia Valores S.A.		-		907		-			-		617		1,524
Galicia Warrants S.A.		137,940		-		(15,750)			-		22,811		145,001
Net Investment S.A. (in Liquidation)		226		-		-			-		22		248
Sudamericana Holding S.A.		935,532		-		(439,250	)		13,663		404,723		914,668

The assets, liabilities and income (loss) of subsidiaries are as follows:

Company	12.31.17
	Assets		Liabilities		Shareholders’ Equity		Income (Loss)
Banco de Galicia y Buenos Aires S.A.(*)								6,881,972
Galicia Administradora de Fondos S.A.		736,680		276,479		460,201		450,316
Galicia Valores S.A.		175,436		23,056		152,380		49,478
Galicia Warrants S.A.		258,143		92,427		165,716		26,070
Net Investment S.A. (in Liquidation)		283		-		283		25
Sudamericana Holding S.A.(*)								478,155

(*) The balances are related to consolidated accounts.

141

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Cash and cash equivalents break down as follows:

Company	Cash		Cash Equivalents		Total
Banco de Galicia y Buenos Aires S.A.		58,460,898		25,623,182		84,084,080
Galicia Administradora de Fondos S.A.		12,327		-		12,327
Galicia Valores S.A.		6,783		142,141		148,924
Galicia Warrants S.A.		1,240		41,055		42,295
Net Investment S.A. (in Liquidation)		284		-		284
Sudamericana Holding S.A.		17,655		976,097		993,752

6.        PROPERTY, PLANT AND EQUIPMENT

Changes in Property, Plant and Equipment are detailed in Schedule F.

7.        DEFERRED INCOME TAX ASSETS/LIABILITIES

Changes in deferred income tax assets and liabilities during the fiscal year ended December 31, 2017 are as follows:

Items	Balances as of 01.01.17		Allowance for Impairment		Charge to Income (Loss)		Others		Balances as of 12.31.17
Deferred Tax Assets
Tax Loss Carry-forwards		148,071		(7,103)		(143,054)		2,086		-
Equity Investments in Subsidiaries		-		-		3,301		-		3,301
Allowances		2,578		-		(2,327)		(1,877)		(1,626)
Employee Benefits		-		-		106		22		128
Total Deferred Tax Assets		150,649		(7,103)		(141,974)		231		1,803
Deferred Tax Liabilities
Property, Plant and Equipment		-		-		(29)		-		(29)
Other Financial Assets		451		-		779		247		1,477
Directors’ Fees		-		-		-		-		-
Others		27		-		1,520		(16)		1,531
Total Deferred Tax Liabilities		478		-		2,270		231		2,979
Total, Net		150,171		(7,103)		(144,244)		-		(1,176)

The Company set an allowance for impairment of the deferred tax asset as of December 31, 2017 and January 1, 2017 amounting to $7,103 and $150,171, respectively, as it is believed that the recovery thereof is not likely as of the date of these financial statements.

8.        NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

The Company has classified the following assets as Assets Held for Sale and Discontinued Operations as of the dates indicated below:

	12.31.17		01.01.17
Equity Investments
Compañía Financiera Argentina S.A.		28,967		36,480
Total		28,967		36,480

On January 12, 2017, the Company’s Board of Directors accepted an offer to buy all treasury shares, made by Mr. Julio Alfredo Fraomeni and Galeno Capital S.A.U. By virtue of Resolution No. 414, the Argentine Central Bank authorized the transaction.

The sale of shares took place on February 2, 2018. The purchase price of the shares was subject to the buyers’ consent, who were entitled to raise objections for a term of up to 45 consecutive days to be counted as from January 29, 2018. On March 26, 2018, the sale of shares in Compañía Financiera Argentina S.A. was completed at a final price of $30,771. The proceeds from the sale of Compañía Financiera Argentina S.A. amounted to $1,804. The income tax impact for discontinued operations is disclosed separately in the “Income Tax from Discontinued Operations” account, which amounts to $989 as of March 31, 2018.

9.        NOTES ISSUED

The following is a breakdown of the Global Programs for the Issuance of Notes outstanding:

142

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Company	Authorized Amount(*)	Type of Notes	Term of Program	Date of Approval by Shareholders’ Meeting	Approval by the C.N.V.
Grupo Financiero Galicia S.A.	US$ 100,000	Simple notes, not convertible into shares	5 years	03.09.09 confirmed on 08.02.12	Resolution No. 16,113 dated 04.29.09 and extended through Resolution No. 17,343 dated 05.08.14 Authorization of the increase, Resolution No. 17,064 dated 04.25.13

(*) Or its equivalent in any other currency.

The Company had the following Unsubordinated Notes issued and outstanding under the Global Programs detailed in the table above as of the dates indicated below:

Date of Placement	Currency	Class No.	Face Value	Type(**)	Term	Maturity Date	Rate	Carrying Amount(*)			Issuance Authorized by the C.N.V.
								12.31.17		01.01.17
01.30.14	$	V Series	$78,200	Simple	36 Months	01.31.17	Variable Badlar + 5.25%		-	81,454	04.25.13
10.23.14	$	VI Series II	$109,845	Simple	36 Months	10.23.17	Variable Badlar +4.25%		-	113,878	10.03.14
07.27.15	$	VII	$160,000	Simple	24 Months	07.27.17	(1)		-	165,360	07.16.15

(*) It includes principal and interest.

(**) Not convertible into shares.

(1) Annual nominal 27% fixed rate during the first nine months, and variable BADLAR plus a nominal annual 4.25% rate for the following 15 months.

10.        SHAREHOLDERS’ EQUITY STRUCTURE

	12.31.17		01.01.17
Capital Stock		1,426,765		1,300,265
Non-capitalized Contributions		10,951,132		219,596
Capital Adjustment		278,131		278,131
Profit Reserves		18,314,708		12,536,829
Retained Income		2,518,733		-
Other Accumulated Comprehensive Income		17,279		284,182
Net Income for the Fiscal Year		8,605,389		8,536,610
Total Shareholders’ Equity		42,112,137		23,155,613

11.        EARNINGS PER SHARE

Earnings per share are calculated by dividing income for the fiscal year by the weighted average of outstanding common shares during the year. As the Company does not have preferred shares or debt convertible into shares, basic earnings are equal to diluted earnings per share.

	12.31.17
Net Income for the Fiscal Year		8,605,389
Weighted-Average of Ordinary Shares Outstanding (Thousands)		1,332,617
Earnings per Share		6.46

12.        INTEREST INCOME

Interest Income	12.31.17
On Cash and Bank Deposits		52
On Private Securities		7,595
Total		7,647

13.        INTEREST EXPENSE

Interest Expense	12.31.17
On Other Financial Liabilities		45,163
Total		45,163

14.        EXPENSES BY FUNCTION AND NATURE

The Company presented its statements of comprehensive income under the expenditure function method. Under this method, expenses are classified according to their function as part of the item “Administrative Expenses”.

The table below provides the required additional information about expenses by nature and function:

143

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Administrative Expenses	12.31.17
Fees and Compensation for Services	14,754
Directors’ and Syndics’ Fees	27,859
Advertising, Promotion and Research Expenses	49
Taxes and Assessments	11,584
Stationery and Office Supplies	640
Entertainment and Transportation Expenses	242
Administrative Services Hired	1,255
Insurance	440
Others	2,594
Total	59,417

Depreciation and Impairment of Assets	12.31.17
Depreciation of Property, Plant and Equipment	125
Total	125

15.    EMPLOYEE BENEFITS

The breakdown of the items disclosed under Employee Benefits as of December 31, 2017 were as follows:

	12.31.17
Salaries	3,534
Social Security Contributions on Salaries	725
Severance Payments and Personnel Bonuses	23,534
Services to Personnel and Others	416
Total	28,209

16.    INCOME TAX

The following is a reconciliation of income tax charged to income as of December 31, 2017 to that which would result from applying the tax rate in force to book income.

	12.31.17
Income for the Period Before Income Tax	8,621,506
Effective Tax Rate	35%
Income for the Period at the Tax Rate	3,017,527
Permanent Differences at the Tax Rate
- Income (Loss) from Equity Investments	(2,806,474)
- Other Non-deductible Expenses	1,333
- Allowance for Impairment	(143,069)
- Others	(51,056)
Law 27430 Adjustment	(2,145)
Total Income Tax Charge for the Period	16,116

Current Tax	14,941
Deferred Tax Charge	144,244
Allowance for Impairment	(143,069	)
Total Income Tax Charge	16,116

17. DIVIDENDS PER SHARE

Dividends paid in fiscal year 2017 to the Group’s Shareholders amounted to $240,000, representing $0.18 (figure stated in Pesos) per share.

18. RISKS

Apart from applicable local regulations, the Company, in its capacity as a listed company in the United States of America, complies with the certification of its internal controls pursuant to Section 404 of the Sarbanes Oxley Act (Sarbanes Oxley). Corporate risk management is monitored by the Audit Committee, which also gathers and analyzes relevant information submitted by the main controlled companies.

144

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION FOR THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

Market Risk

The following table shows a sensitivity analysis of income (loss) and shareholders’ equity to reasonable changes in exchange rates relative to the Company’s functional currency.

In 2017, the Group assigned a holding period to each instrument based on depth of market (previously, the time horizon was 10 sessions for the entire trading activities).

The Group’s exposure to the foreign exchange risk as of year-end by type of currency is shown below:

	Balances as of 12.31.17
Currency	Monetary Financial Assets		Monetary Financial Liabilities		Derivatives		Net Position
U.S. Dollar		23,037		-		-		23,037
Total		23,037		-		-		23,037

	Balances as of 01.01.17
Currency	Monetary Financial Assets		Monetary Financial Liabilities		Derivatives		Net Position
U.S. Dollar		5,576		-		-		5,576
Total		5,576		-		-		5,576

				Balances as of 12.31.17					Balances as of 01.01.17
Currency	Change			Income (Loss)			Shareholders’ Equity		Income (Loss)			Shareholders’ Equity
U.S. Dollar		10	%		2,304			25,341		558			6,134
		-10	%		(2,304	)		20,733		(558	)		5,018

145

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

1. GENERAL ISSUES REGARDING THE COMPANY’S ACTIVITIES:

a. SIGNIFICANT SPECIFIC LEGAL SYSTEMS ENTAILING CONTINGENT EXPIRATION OR RESURGENCE OF BENEFITS ENVISAGED BY THOSE REGULATIONS

None.

b. SIGNIFICANT CHANGES IN COMPANY ACTIVITIES OR OTHER SIMILAR CIRCUMSTANCES THAT OCCURRED DURING THE FISCAL YEARS COVERED BY THE FINANCIAL STATEMENTS WHICH MAY HAVE AN EFFECT ON THEIR COMPARISON WITH THOSE PRESENTED IN PREVIOUS FISCAL YEARS, OR THOSE THAT SHALL BE PRESENTED IN FUTURE FISCAL YEARS

None.

2. CLASSIFICATION OF RECEIVABLES AND DEBT BALANCES INTO THE FOLLOWING CATEGORIES:

a. PAST DUE

As of March 31, 2018 and December 31, 2017, the Company did not have any past due receivables or debts.

b. WITHOUT DUE DATE

Receivables: See Schedules B, C, D.

Debts: See Schedules H, I.

c. TO FALL DUE

Receivables: See Schedules B, C, D.

Debts: See Schedules H, I.

3. CLASSIFICATION OF RECEIVABLES AND DEBTS IN SUCH A MANNER THAT ALLOWS KNOWING THE FINANCIAL EFFECTS OF THEIR MAINTENANCE

Receivables: See Schedules B, C, D.

Debts: See Schedules H, I.

4. BREAKDOWN OF PERCENTAGE OF EQUITY INVESTMENTS IN COMPANIES UNDER SECTION 33 OF LAW No. 19550, BOTH IN THE CAPITAL STOCK AND THE TOTAL VOTES. DEBIT AND/OR CREDIT BALANCES BY COMPANY AND CONSIDERED IN THE MANNER SET FORTH IN THE AFOREMENTIONED ITEMS 3 AND 4

See Note 5.2.2 Related Parties to the separate condensed interim financial statements.

5. RECEIVABLES FROM OR LOANS GRANTED TO DIRECTORS OR SYNDICS OR THEIR RELATIVES UP TO THE SECOND DEGREE INCLUSIVE

As of March 31, 2018 and December 31, 2017, there were no receivables from or loans granted to directors or syndics or their relatives up to the second degree inclusive.

6. PHYSICAL INVENTORY OF INVENTORIES: FREQUENCY AND SCOPE OF THE PHYSICAL INVENTORIES OF INVENTORIES

As of March 31, 2018 and December 31, 2017, the Company did not have any inventories.

146

GRUPO FINANCIERO GALICIA S.A.

ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018, PRESENTED IN COMPARATIVE FORMAT

Figures Stated in Thousands of Pesos ($), Except as Otherwise Stated

7. EQUITY INVESTMENTS IN EXCESS OF WHAT IS SET FORTH BY SECTION 31 OF LAW No. 19550 AND PLANS FOR THE REGULARIZATION OF THIS SITUATION

The Company is engaged in financial and investment activities, therefore, the restrictions of Section 31 of Law No. 19550 do not apply to its equity investments in other companies.

8. RECOVERABLE VALUES: CRITERIA FOLLOWED TO DETERMINE THE SIGNIFICANT RECOVERABLE VALUES OF INVENTORIES, FIXED ASSETS AND OTHER ASSETS, USED AS LIMIT FOR THEIR RESPECTIVE ACCOUNTING VALUATIONS

See Notes 1 and 2 to the separate condensed interim financial statements.

9. INSURANCE POLICIES FOR TANGIBLE ASSETS

As of March 31, 2018 and December 31, 2017, the breakdown of insurance policies taken out by the Company for its fixed assets was as follows:

Insured Assets	Risks Covered	Insured Amount as of 03.31.18	Carrying Amount as of 03.31.18		Carrying Amount as of 12.31.17
Vehicles	Theft, Robbery, Fire or Total Loss			1,768		1,827

10. POSITIVE AND NEGATIVE CONTINGENCIES:

a. ELEMENTS USED FOR THE CALCULATION OF PROVISIONS, THE BALANCES OF WHICH, EITHER TAKEN INTO CONSIDERATION INDIVIDUALLY OR JOINTLY, EXCEED TWO PER CENT (2%) OF SHAREHOLDERS’ EQUITY

None.

b. CONTINGENCIES WHICH, AT THE DATE OF THE FINANCIAL STATEMENTS, ARE NOT OF REMOTE OCCURRENCE, THE EFFECTS OF WHICH ON SHAREHOLDERS’ EQUITY HAVE NOT BEEN GIVEN ACCOUNTING RECOGNITION. IT SHOULD BE STATED WHETHER THE LACK OF ACCOUNTING RECOGNITION IS BASED ON THE LIKELIHOOD OF OCCURRENCE OR ON THE DIFFICULTY TO ANALYZE SUCH EFFECTS

As of March 31, 2018 and December 31, 2017, there were no contingencies which are not of remote occurrence and the effects of which on Shareholders’ Equity have not been given accounting recognition.

11. IRREVOCABLE ADVANCES TOWARDS FUTURE SHARE SUBSCRIPTIONS: STATUS OF CAPITALIZATION ARRANGEMENTS

As of March 31, 2018 and December 31, 2017, there were no irrevocable contributions towards future share subscriptions.

12. CUMULATIVE UNPAID DIVIDENDS ON PREFERRED SHARES

As of March 31, 2018 and December 31, 2017, there were no cumulative unpaid dividends on preferred shares.

13. CONDITIONS, CIRCUMSTANCES OR TERMS FOR THE TERMINATION OF THE RESTRICTIONS ON THE DISTRIBUTION OF RETAINED INCOME, INCLUDING THOSE ORIGINATED DUE TO THE USE OF THE LEGAL RESERVE FOR THE ABSORPTION OF LOSSES WHICH ARE STILL PENDING REIMBURSEMENT

See Note 10.8 to the consolidated condensed interim financial statements.

147

INDEPENDENT AUDITOR’S REVIEW REPORT

To the Chairman and Directors of

Grupo Financiero Galicia S.A.

Legal Domicile: Tte. Gral. Juan D. Perón 430 – 25th floor

Autonomous City of Buenos Aires

C.U.I.T. No. 30-70496280-7

Introduction

We have reviewed the accompanying consolidated condensed interim financial statements of Grupo Financiero Galicia S.A. (hereinafter “the Entity”), which include the Consolidated Condensed Interim Balance Sheet as of March 31, 2018, the related Consolidated Condensed Interim Income Statement and Statement of Other Comprehensive Income for the three-month period ended March 31, 2018, and the Consolidated Condensed Interim Statement of Changes in Shareholders’ Equity and Cash Flows for the three-month period then ended, as well as a summary of significant accounting policies and other explanatory information included in the notes and schedules supplementing them.

The amounts and other information for fiscal year 2017, and the related interim periods, are an integral part of the financial statements mentioned above and, therefore, shall be considered in relation with those financial statements.

Management’s Responsibility

The Entity’s Board of Directors is responsible for the preparation and presentation of the consolidated condensed interim financial statements, in accordance with the accounting framework established by the Argentine Central Bank (the B.C.R.A.). As mentioned in Note 1.1 to the accompanying financial statements, such accounting framework is based on applying the International Financial Reporting Standards (IFRS) and, particularly, the International Accounting Standard 34 “Interim Financial Reporting” (IAS 34), approved by the International Accounting Standards Board (IASB). Such standards were adopted by the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) and by the B.C.R.A., and were used in preparing the financial statements, with the only temporary exception of point 5.5 “Impairment” of IFRS No. 9 “Financial Instruments”.

Scope of our Review

Our review was limited to the application of the procedures set forth in F.A.C.P.C.E.’s Technical Pronouncement No. 37 for the review of interim financial statements and the auditing standards issued by the B.C.R.A. for limited reviews. A review of interim financial statements mainly involves making inquiries to the Entity’s staff responsible for the preparation of the information included in the consolidated condensed interim financial statements and the performance of analytical procedures and other review procedures. The scope of this review is substantially more limited than an audit examination performed according to Argentine Audit Standard, therefore, a review does not allow us to be certain that we shall be informed of all significant issues that may be identified during an audit. Therefore, we do not express an audit opinion on the Entity’s consolidated financial position, consolidated comprehensive income and consolidated cash flows.

Conclusion

Based on our review, nothing has called our attention that would make us think that the consolidated condensed interim financial statements mentioned in the first paragraph of this report are not prepared, in all significant aspects, in accordance with the accounting framework established by the B.C.R.A.

Emphasis Paragraphs

Difference between the B.C.R.A. accounting reporting framework and the IFRS

Without changing our conclusion, we call the attention to Note 1.1 to the accompanying consolidated condensed interim financial statements, which describes the difference between the B.C.R.A.- and the IFRS-based accounting framework, considering that the application of Section 5.5 “Impairment” of IFRS 9 “Financial Instruments” was temporarily excluded by the B.C.R.A. from the accounting framework applicable to financial institutions.

First fiscal year of IAS 34 application

Without changing our conclusion, we call the attention to Note 1.1, which states that the consolidated condensed interim financial statements mentioned in the first paragraph have been prepared according to the accounting framework established by the B.C.R.A., pursuant to IAS 34 (with the exception described in such note), being this the first fiscal year in which the Entity applies those standards. The effects of the changes generated by the application of this new accounting basis are disclosed in Note 3. Items and amounts included in the reconciliations contained in such note are subject to changes that may arise as a result of variations in the IFRS to be finally applied and shall only be deemed final when the annual financial statements for this fiscal year are prepared.

Report on the compliance of Regulations in force

As required by the regulations in force, we report that:

a) The consolidated condensed interim financial statements of Grupo Financiero Galicia S.A. stem from accounting records kept, in all formal aspects, in compliance with legal regulations.

b) The consolidated condensed interim financial statements of Grupo Financiero Galicia S.A. as of March 31, 2018 have been transcribed to the “Inventory and Balance Sheet” book and, insofar as concerns our field of competence, are in compliance with the provisions of the General Corporations Law, and pertinent resolutions of the B.C.R.A. and the National Securities Commission.

c) We have read the Informative Review, on which, insofar as concerns our field of competence, we have no observations to make.

d) As of March 31, 2018, Grupo Financiero Galicia S.A.’s accrued debt with the Argentine Integrated Social Security System, which stems from the accounting records, amounted to $35,442.61, which was not yet due at that date.

e) As required by Title IV, Section I, Chapter I, Article 2 of the Regulations of the National Securities Commission and as mentioned in Note 1.1 to the accompanying financial statements, we report that:

e.1) Grupo Financiero Galicia S.A.’s corporate purpose is exclusively related to financial and investment activities.

e.2) The equity investment in Banco de Galicia y Buenos Aires S.A. and Tarjetas Regionales S.A., the second one subject to the consolidated supervision requirements issued by the Argentine Central Bank (Communiqué “A” 2989, and complementary), represents 93.20% of Grupo Financiero Galicia S.A.’s assets, being the Company’s main asset.

e.3) 88.47% of Grupo Financiero Galicia S.A.’s income stems from the share of profit (loss) of the entities mentioned in e.2).

e.4) Grupo Financiero Galicia S.A. holds a 100% equity interest in Banco de Galicia y Buenos Aires S.A. and an 83% equity interest in Tarjetas Regionales S.A., thus having control over such entities.

We have read the information included in Note 10.4.1 to the consolidated condensed interim financial statements as of March 31, 2o18 regarding the requirements established by the National Securities Commission about the Minimum Shareholders’ Equity and the Minimum Liquidity, on which, insofar as concerns our field of competence, we have no observations to make.

Autonomous City of Buenos Aires, May 24, 2018.

PRICE WATERHOUSE & CO. S.R.L.

(Partner)

C.P.C.E.C.A.B.A. Vol. 1 Fo. 17

Santiago J. Mignone

Public Accountant (UBA)

C.P.C.E.C.A.B.A. Vol. 233 Fo. 237

INDEPENDENT AUDITOR’S REVIEW REPORT

To the Chairman and Directors of

Grupo Financiero Galicia S.A.

Legal Domicile: Tte. Gral. Juan D. Perón 430 – 25th floor

Autonomous City of Buenos Aires

C.U.I.T. No. 30-70496280-7

Introduction

We have reviewed the accompanying separate condensed interim financial statements of Grupo Financiero Galicia S.A. (hereinafter the “Entity”), which include the Separate Condensed Interim Balance Sheet as of March 31, 2018, the related Separate Condensed Interim Income Statement and Statement of Other Comprehensive Income for the three-month periods ended March 31, 2018, and the Separate Condensed Interim Statement of Changes in Shareholders’ Equity and Cash Flows for the three-month period then ended, as well as a summary of significant accounting policies and other explanatory information included in the notes and schedules supplementing them.

The amounts and other information for fiscal year 2017, and the related interim periods, are an integral part of the financial statements mentioned above and, therefore, shall be considered in relation with those financial statements.

Management’s Responsibility

The Entity’s Board of Directors is responsible for the preparation and presentation of the separate condensed interim financial statements, in accordance with the accounting framework established by the Argentine Central Bank (the B.C.R.A.). As mentioned in Note 1.1 to the accompanying financial statements, such accounting framework is based on applying the International Financial Reporting Standards (IFRS) and, particularly, the International Accounting Standard 34 “Interim Financial Reporting” (IAS 34), approved by the International Accounting Standards Board (IASB). Such standards were adopted by the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) and by the B.C.R.A., and were used in preparing the financial statements, with the only temporary exception of point 5.5 “Impairment” of IFRS No. 9 “Financial Instruments”.

Scope of our Review

Our review was limited to the application of the procedures set forth in F.A.C.P.C.E.’s Technical Pronouncement No. 37 for the review of interim financial statements and the auditing standards issued by the B.C.R.A. for limited reviews. A review of interim financial statements consists in making inquiries to the Entity’s staff responsible for mainly involves the preparation of the information included in the separate condensed interim financial statements and the performance of analytical procedures and other review procedures. The scope of this review is substantially more limited than an audit examination performed according to Argentine Audit Standard, therefore, a review does not allow us to be certain that we shall be informed of all significant issues that may be identified during an audit. Therefore, we do not express an audit opinion on the Entity’s separate financial position, separate comprehensive income and separate cash flows.

Conclusion

Based on our review, nothing has called our attention that would make us think that the separate condensed interim financial statements mentioned in the first paragraph of this report are not prepared, in all significant aspects, in accordance with the accounting framework established by the B.C.R.A.

Emphasis Paragraphs

Difference between the B.C.R.A. accounting reporting framework and the IFRS

Without changing our conclusion, we call the attention to Note 1.1 to the accompanying separate condensed interim financial statements, which describes the difference between the B.C.R.A.- and the IFRS-based accounting framework, considering that the application of Section 5.5 “Impairment” of IFRS 9 “Financial Instruments” was temporarily excluded by the B.C.R.A. from the accounting framework applicable to financial institutions.

First fiscal year of IAS 34 application

Without changing our conclusion, we call the attention to Note 1.1, which states that the consolidated condensed interim financial statements mentioned in the first paragraph have been prepared according to the accounting framework established by the B.C.R.A., pursuant to IAS 34 (with the exception described in such note), being this the first fiscal year in which the Entity applies those standards. The effects of the changes generated by the application of this new accounting basis are disclosed in Note 3. Items and amounts included in the reconciliations contained in such note are subject to changes that may arise as a result of variations in the IFRS to be finally applied and shall only be deemed final when the annual financial statements for this fiscal year are prepared.

Report on Compliance with Regulations in force

As required by the regulations in force, we report that:

a) The separate condensed interim financial statements of Grupo Financiero Galicia S.A. stem from accounting records kept, in all formal aspects, in compliance with legal regulations.

b) The separate condensed interim financial statements of Grupo Financiero Galicia S.A. as of March 31, 2018 have been transcribed to the “Inventory and Balance Sheet” book and, insofar as concerns our field of competence, are in compliance with the provisions of the General Corporations Law, and pertinent resolutions of the B.C.R.A. and the National Securities Commission.

c) We have read the additional information to the notes to separate condensed interim financial statements required by Title IV, Chapter III, Article 12 of the regulations of the National Securities Commission, on which, insofar as concerns our field of competence, we have no observations to make.

d) As of March 31, 2018, Grupo Financiero Galicia S.A.’s accrued debt with the Argentine Integrated Social Security System, which stems from the accounting records, amounted to $35,442.61, which was not yet due at that date.

e) As required by Title IV, Section I, Chapter I, Article 2 of the Regulations of the National Securities Commission and as mentioned in Note 1.1 to the separate condensed interim financial statements, we report that:

e.1) Grupo Financiero Galicia S.A.’s corporate purpose is exclusively related to financial and investment activities.

e.2) The equity investment in Banco de Galicia y Buenos Aires S.A. and Tarjetas Regionales S.A., the second one subject to the consolidated supervision requirements laid down by the Argentine Central Bank (Communiqué “A” 2989, and complementary), represents 93.20% of Grupo Financiero Galicia S.A.’s assets, being the Company’s main asset.

e.3) 88.47% of Grupo Financiero Galicia S.A.’s income stems from the share of profit (loss) of the entities mentioned in e.2).

e.4) Grupo Financiero Galicia S.A. holds a 100% equity interest in Banco de Galicia y Buenos Aires S.A. and an 83% equity interest in Tarjetas Regionales S.A., thus having control over such entities.

We have read the information included in Note 10.4.1 to the separate condensed interim financial statements as of March 31, 2018 regarding the requirements established by the National Securities Commission about the Minimum Shareholders’ Equity and the Minimum Liquidity, on which, insofar as concerns our field of competence, we have no observations to make.

Autonomous City of Buenos Aires, May 24, 2018.

PRICE WATERHOUSE & CO. S.R.L.

(Partner)

C.P.C.E.C.A.B.A. Vol. 1 Fo. 17

Santiago J. Mignone

Public Accountant (UBA)

C.P.C.E.C.A.B.A. Vol. 233 Fo. 237

REPORT OF THE SUPERVISORY SYNDICS’ COMMITTEE

To the Directors and Shareholders of

Grupo Financiero Galicia S.A.

Legal Domicile: Tte. Gral. Juan D. Perón 430 – 25th floor

Autonomous City of Buenos Aires

C.U.I.T. No. 30-70496280-7

1. We have reviewed the accompanying consolidated and separate condensed interim financial statements of Grupo Financiero Galicia S.A. (hereinafter “the Entity”), which include the Condensed Interim Balance Sheet as of March 31, 2018, the related Condensed Interim Income Statement and Statement of Other Comprehensive Income for the three-month period ended March 31, 2018, and the Condensed Interim Statement of Changes in Shareholders’ Equity and Cash Flows for the three-month period then ended, as well as a summary of significant accounting policies and other explanatory information included in the notes and schedules supplementing them.

The amounts and other information for fiscal year 2017, and the related interim periods, are an integral part of the financial statements mentioned above and, therefore, shall be considered in connection with those financial statements.

2. The Entity’s Board of Directors is responsible for the preparation and presentation of the financial statements, in accordance with the accounting framework established by the Argentine Central Bank (the B.C.R.A.). As mentioned in Note 1.1 to the accompanying consolidated and separate condensed interim financial statements, such accounting framework is based on applying the International Financial Reporting Standards (IFRS) and, particularly, the International Accounting Standard 34 “Interim Financial Reporting” (IAS 34), as approved by the International Accounting Standards Board (IASB). Such standards were adopted by the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) and by the C.N.V., and were used in preparing the financial statements, with the only temporary exception of point 5.5 “Impairment” of IFRS No. 9 “Financial Instruments”.

3. Our responsibility is to express a conclusion on the documents mentioned in paragraph 1., based on the reviews we conducted within the scope specified in paragraph 4.

4. Our work was conducted in accordance with standards applicable to syndics in Argentina for the review of condensed interim financial statements. These standards require that syndics review the documents detailed in paragraph 1. observing auditing standards applicable to the review of interim-period financial statements, and verify the consistency of the documents examined with the information concerning corporate decisions, as disclosed in minutes. In addition, they require that corporate decisions entered in minutes conform to the law and the bylaws with respect to formal and documentary requirements. For purposes of our professional work, we have reviewed the work performed by the external auditors of the Entity, Price Waterhouse & Co. S.R.L., who issued their unqualified limited review report on May 24, 2018. The above-mentioned external auditors conducted their reviews in accordance with Technical Pronouncement No. 37 of the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) for the review of interim-period financial statements and the auditing standards issued by the Argentine Central Bank (the B.C.R.A.) for limited reviews. A review of interim financial statements consists in making inquiries to the Entity’s staff responsible for the preparation of the information included in the condensed interim financial statements and in performing analytic and other review procedures. The scope of these reviews is substantially more limited than that of an audit conducted in accordance with Argentine auditing standards. Therefore, a review does not allow us to obtain assurance that we will be aware of all the significant matters that could be identified in an audit. Therefore, we do not express an audit opinion on the Entity’s financial position, comprehensive income and cash flows.

Given that it is not our responsibility to exercise any management control, the reviews did not extend to the business criteria and decisions of the different areas of the Entity, as these matters are the exclusive responsibility of the Board of Directors.

We also report that, in compliance with the legality control that is part of our field of competence, during this period we have applied the other procedures described in Section 294 of Law No. 19550, which we deemed necessary according to the circumstances, including, among others, the control over the creation and subsistence of the directors’ guarantee.

We believe that the work we performed provides a reasonable basis for our opinion.

5. Based on our reviews, with the scope described in point 4. above, nothing has been called to our attention that would make us think that the condensed interim financial statements mentioned in the first paragraph of this report are not prepared, in all material respects, in accordance with the Argentine Central Bank’s accounting standards.

In compliance with the legality control that is part of our field of competence, we have no observations to make.

6. Without changing our conclusion:

i) We call attention to Note 1.1 to the accompanying consolidated and separate condensed interim financial statements, where we describe the difference between the B.C.R.A.- and the IFRS-based accounting framework, considering that the application of Section 5.5 “Impairment” of IFRS 9 “Financial Instruments” was temporarily excluded by the B.C.R.A. from the accounting framework applicable to financial institutions.

ii) We call attention to Note 1.1, which states that the condensed interim financial statements mentioned in the first paragraph have been prepared according to the accounting framework established by the B.C.R.A., according to IAS 34 (with the exception described in such note), this being the first fiscal year in which the Entity applies those standards. The effects of changes resulting from applying this new accounting basis are presented in Note 3 to the consolidated and separate condensed interim financial statements. The items and figures included in the reconciliations contained in such notes are subject to changes that may result from changes in the IFRS to be finally applied and may only be considered to be final upon the preparation of the annual financial statements for this fiscal year.

7. Furthermore, we report the following:

i) The accompanying consolidated and separate condensed interim financial statements stem from accounting records kept, in all formal aspects, in compliance with legal regulations prevailing in Argentina.

ii) We have read the Informative Review accompanying the notes and the consolidated condensed interim financial statements, on which, insofar as concerns our area of competence, we have no observations to make.

iii) We have read the additional information to the notes to separate condensed interim financial statements required by Title IV, Chapter III, Article 12 of the regulations of the National Securities Commission, on which, insofar as concerns our field of competence, we have no observations to make, the assertions on future events being the exclusive responsibility of the Board of Directors.

iv) We have read the information included in Note 10.4 to the separate condensed interim financial statements as of March 31, 2018 regarding the requirements established by the National Securities Commission about the Minimum Shareholders’ Equity and the Minimum Liquidity, on which, insofar as concerns our area of competence, we have no observations to make.

Autonomous City of Buenos Aires, May 24, 2018.

Supervisory Syndics’ Committee