Financial Sector - EMIS Insight... · 2015-10-28 · Financial Sector Highlights The fact that the financial system remains underdeveloped suggests a strong growth potential should

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Financial SectorArgentina

August 2015

AR_52_0001_Aug’2015_FL_SM



Table of Contents

I. Financial Sector Overview

1. Financial Sector Highlights

2. Economic Importance

3. Foreign Direct Investment

II. Banking Sector

1. Deposits & Loans Forecast

2. Banking Sector Structure – Market Share

3. Banking Sector Structure – Number of Enterprises

4. Banking Sector Structure – Branches and ATMs

5. Banking Sector Descriptives

6. Banking Sector Profitability

7. Banking Sector Liquidity & Efficiency

8. Deposit Base

9. Private Sector Local Currency Deposits

10. Deposit Interest Rates

11. Loans

12. Loans (cont’d)

13. Private Sector Loans

14. Loan Interest Rates

15. Delinquency Rates

16. Loan Portfolio Quality

17. Government Policy

18. Basel III – Capital Adequacy Ratio

III. Insurance Sector

1. Insurance Sector Forecast

2. Insurance Sector Structure – Market Share

3. Insurance Sector Structure – Number of Enterprises

4. Insurance Sector Structure – Branches & Agencies

5. Insurance Penetration & Density Rates

6. Insurance Sector Profitability

7. Insurance Sector Solvency

8. Insurance Sector Efficiency

9. Insurance Premiums Issued

10. Insurance Premiums Issued (cont’d)

11. Insurance Policies Issued

12. Insurance Claims

13. Reinsurance

14. Government Policy



Table of Contents

IV. Main Players

1. Top M&A Deals

2. M&A Activity, 2014-H1’2015

3. Banco de la Nación Argentina

4. Banco de la Nación Argentina (cont’d)

5. Banco de la Provincia de Buenos Aires

6. Banco de la Provincia de Buenos Aires (cont’d)

7. Banco Santander Río S.A.

8. Banco Santander Río S.A. (cont’d)

9. Banco de Galicia y Buenos Aires S.A.

10.Banco de Galicia y Buenos Aires S.A. (cont’d)

11.BBVA Banco Francés S.A.

12.BBVA Banco Francés S.A. (cont’d)

13.Banco Macro S.A.

14.Banco Macro S.A. (cont’d)

15.HSBC Bank Argentina S.A.

16.HSBC Bank Argentina S.A. (cont’d)

17. Allianz Argentina Compañía de Seguros S.A.

18.Sancor Cooperativa de Seguros Ltda.



I. Financial Sector Overview



Financial Sector Highlights

The fact that the financial system remains underdeveloped suggests a strong growth potential should the right type of macroeconomic policies and regulatory

framework be deployed by the newly appointed government, following the elections in October 2015. For this to bear fruit, a more vigilant control over inflation and

more stable and predictable policies are required. This would allow entities to expand through organic growth and compete for services to reach the large unbanked

population. The huge stock of assets in terms of deposits and financial investments held by Argentines overseas (approximately USD 226bn as of December 2014,

equivalent to 42% of GDP, according to the official statistics provided by the National Institute of Statistics and Census of Argentina (INDEC) could prove a

significant source of financing for the sector, if the local conditions become more friendly for savers.

The main players in the banking sector are both private (domestic or foreign-owned) and state-owned banks. While the latter have a prominent position in terms of

market share, mainly due to the solidly placed state-run Banco de la Nacion (given its unmatched geographical reach), private banks have proved increasingly

active since 2012. Although there is no clear-cut differentiation between the public and private entities in terms of strategy and target client base, they tend to

specialise in different business segments. Public banks are financial agents of the national and provincial governments and they have a strong sway in

agribusiness, for example. Private banks are mostly focused on consumer financing and short-term corporate loans.

After experiencing a strong shock during the 2001-2002 macroeconomic crisis, the financial sector in Argentina has recovered fully to expand at a CAGR of 13%

between 2009 and 2014, outperforming the overall GDP growth of 4.3%. Unlike most other countries in Latin America and due to the numerous financial crises,

high inflation and local currency devaluation, the Argentinean financial system remains underdeveloped. The local population tends to save in currencies different

from the Argentine peso, which resulted in marked capital outflow of USD 87.2bn between 2007 and Q1 2015. These funds are being kept in safety boxes in

commercial banks in the country or held in overseas accounts. As a result, the financial system is mainly transactional (fees represent an important chunk of banks’

income) and is small compared to size of the national economy. Notably, the share of total deposits and loans in the country’s GDP reached only 18.4% and 13.3%,

respectively, as of December 2014. In spite of this, the financial system remains profitable, well capitalised, liquid and with adequate risk exposure. The average

ROE surpassed 34% in 2014, while liquid assets represented 26.2% of total deposits and non-performing loans amounted to only 1.8% in December 2014.

Overview

Sector Structure

Prospects



Source:

Economic Importance

Main Sector Indicators

Central Bank of Argentina, National Institute of Statistics and Census of Argentina (INDEC), Bloomberg

2010 2011 2012 2013 2014

GDP, current prices (ARS bn) 1,810.8 2,312.0 2,765.6 3,406.3 4,412.4

GDP, current prices (USD bn) 463.1 559.8 607.8 621.6 543.4

GDP, constant prices (yoy change, %) 9.5% 8.4% 0.8% 2.9% 0.5%

Investment, constant prices (yoy change, %) 22.0% 19.4% -7.0% 3.1% -5.5%

Investment (% of GDP) 20.6% 22.7% 21.0% 21.0% 19.8%

Term deposits interest rate (Badlar, year-average) 10.1% 13.3% 13.9% 17.0% 22.6%

ARS/USD exchange rate (year-end) 3.98 4.30 4.92 6.52 8.55

Gross savings (% of GDP) 19.1% 19.7% 17.0% 18.6% 19.9%

Outstanding total deposits (ARS bn, year-end) 362.8 442.7 581.9 722.1 916.3

Outstanding total deposits (% of GDP) 17.4% 18.0% 18.4% 18.9% 18.4%

Private sector deposits in ARS (% of GDP) 9.7% 10.2% 11.5% 12.6% 12.5%

Outstanding total loans (ARS bn, year-end) 218.3 321.5 419.2 539.2 634.8

Outstanding total loans (% of GDP) 10.3% 11.7% 13.1% 13.9% 13.3%

Loans to the private sector in ARS (% of GDP) 7.6% 8.7% 10.4% 11.7% 11.4%

Non-performing loans (year-end, %) 1.8% 1.2% 1.5% 1.5% 1.8%



Comments

Source:

In recent years, the foreign direct investment (FDI) in Argentina has been substantially lower than in other comparable countries in Latin

America. While in the period 2009-2014 FDI in Argentina totalled USD 52bn, according to the Economic Commission for Latin America

(ECLAC), in Brazil it reached USD 342bn (+6.6x). The increasingly interventionist policies and rising economic uncertainty restrained the flow

of funds to the country. In the banking sector, most of the registered FDI since 2009 was composed of reinvested earnings. Particularly since

2012, when capital controls were imposed, financial entities were unable to send remittances abroad. As a result, they had no other option but

to reinvest profits, resulting in overestimated FDI statistics.

Net FDI In the Banking Sector (USD mn) Net FDI in the Insurance Sector (USD mn)

CEIC, Economic Commission for Latin America (ECLAC), Central Bank of Argentina

879 750 723

1,3141,6374

0 144

90

99

0-255

53

63

0

-500

0

500

1,000

1,500

2,000

2009 2010 2011 2012 2013

Reinvested Earnings Capital Contribution Mergers & Acquisitions

-133-64

0

-261

-510

-600

-500

-400

-300

-200

-100

0

100

2009 2010 2011 2012 2013

Foreign Direct Investment



II. Banking Sector



Comments

Source:

Deposits & Loans Forecast

In a context of macroeconomic policy normalisation that could bring inflation down and regenerate confidence in the local currency, the financial sector is

likely to have more room to expand from the current low intermediation ratios. This scenario is subject to the policy that a new government would

implement, which at this time remains unknown. Higher interest rates in real terms could spur deposit expansion, which might allow banks to extend loans

at longer terms. Moreover, higher activity expansion brought by an improving macroeconomic scenario could push the demand for loans. EMIS Insight

estimates that deposits would expand at an 8.7% CAGR over 2015-2019, while credit would grow at a 9.1% CAGR. As a result, the deposits and loans to

the private sector are expected to reach 22% and 19% of the GDP by 2019, respectively, up from 12.5% and 11.4% in 2014.

Outstanding Deposits Evolution (USD mn) Outstanding Loans Evolution (USD mn)

EMIS Insight

69,429 66,410

80,26989,423

98,365

2015f 2016f 2017f 2018f 2019f

80,058 77,15890,577

101,700111,870

2015f 2016f 2017f 2018f 2019f



Source:

Banking Sector Structure – Market Share

Market Share of Top 20 Largest Banks, April 2015

The main players in the Argentinean banking sector

are both state-owned banks and private banks.

Among the former, Banco de la Nacion Argentina

stands as the principal player, accounting for 29% of

total deposits and 21% of the loans as of April 2015.

Banco de la Provincia de Buenos Aires, which

ranked second (10% of deposits and loans), is also a

state-owned entity.

Private banks are usually divided into those with

foreign shareholders and those with a major local

shareholder participation.

The combined market share of the top five banks in

the country in terms of assets was only 54% as of

April 2015, well below the ratio in comparable Latin

American countries such as Peru (87%, May 2014),

Mexico (74%, May 2014), Chile (73%, May 2014)

and Brazil (67%, March 2014).

The banking system is characterised by the

presence of a large number (more than 60) of

smaller banks, with assets of less than USD 1bn.

The relatively large number of private banks

suggests a strong consolidation potential that can be

realised in case a more friendly macroeconomic

scenario materialises.

Top 10 Banks by Assets, April 2015

Comments

Central Bank of Argentina, EMIS Insight

BankAssets

(ARS bn)

Loans

(ARS bn)

Deposits

(ARS bn)

Net Worth

(ARS bn)

Nacion Argentina 351.6 133.2 276.7 45.9

Provincia de Buenos Aires 111.0 63.2 98.1 8.6

Santander Rio 105.1 58.4 77.9 13.1

Galicia 100.6 53.1 72.2 11.1

Frances 80.3 42.8 57.1 11.1

Macro 75.2 43.1 52.6 12.3

HSBC 52.2 28.8 38.6 7.1

Credicoop 47.6 21.6 41.8 3.7

Ciudad de Buenos Aires 46.8 29.9 37.9 5.8

Patagonia 44.4 22.8 31.2 6.0

Banking Sector Total 1,252 628.0 948.0 160.0

54% 50%56%

51%

73% 71%76%

70%

90% 90% 92% 87%

Assets Loans Deposits Net worth

Top 5 Top 10 Top 20



Source:

Banking Sector Structure – Number of Enterprises

Number of Certified Entities in the Financial Sector Comments

Argentina ended May 2015 with a total of 80 active

entities in the financial sector (of which 65 were

banks).

The number of banks has decreased slightly in the

last years (by eight entities since 2004), but the

decrease has proved to be limited so far.

A wave of consolidation of state-run banks has taken

place during the 1990s, mostly during the

privatisation wave. In most cases, these banks were

acquired by private entities.

At present, the remaining state-owned banks are

mostly medium-sized provincial banks (La Pampa,

Cordoba) and Banco de la Ciudad de Buenos Aires

as well as the giant players Banco de la Nacion and

Banco de la Provincia de Buenos Aires.

A takeover of these banks seems very unlikely in the

near future given that they are seen as key

instruments for the implementation of the main

government policies both in the crucial Buenos Aires

province and on a national level.

A consolidation wave in the near future is more likely

to take place among private banks.

16 14 13 16 15 14 13 12 12 12 12 12 12 12 12 12 12

7675

7362

60 59 58 6055 55 54 52 52 53 54 53 53

2424

22

2121

1818 18

18 17 1714 14 14 15 15 15

0

20

40

60

80

100

120

1999 2001 2003 2005 2007 2009 2011 2013 May-15

Public banks Private banks Non-banks entities




Source:

Banking Sector Structure – Branches and ATMs

Branches and ATMs Geographic Distribution, April 2015 Comments

Bank services tend to be concentrated in the city of

Buenos Aires and the province of Buenos Aires, which

together comprise the most populous districts in

Argentina, encompassing more than 46% of the

population. Other important provinces are Cordoba and

Santa Fe.

Since March 2014, the Central Bank has taken some

measures to promote the penetration of bank services in

less populated areas or those which are deemed relatively

less profitable. One of the measures is lower reserve

requirements based on where the deposits are made, with

higher discounts for less developed areas. For example,

in the case of local currency sight deposits, reserve

requirements in the city of Buenos Aires stand at 17%,

while for the rest of the country they are 200 bps lower. In

the case of term deposits, reserve requirements in the city

of Buenos Aires range between 13% and 0% (depending

on the term) and in the rest of the country they stand at

100 bps lower.

The state-owned Banco de la Nacion Argentina has a

wider geographical reach than any other bank, with

branches in the majority of the medium-sized towns

nationwide. However, in recent years many privately-

owned banks such as Santander Rio and Banco Galicia

have taken steps to expand their presence in less

serviced areas.

Central Bank of Argentina

Province Branches ATMsLimited Service

Offices

Buenos Aires 1,396 6,174 652

City of Buenos Aires 821 4,070 329

Santa Fe 468 1,979 124

Cordoba 449 1,639 159

Mendoza 162 755 71

Entre Rios 142 542 22

La Pampa 109 154 11

Neuquen 103 282 29

Chubut 101 304 15

Corrientes 96 250 28

Tucuman 83 469 38

Rio Negro 72 348 19

Chaco 65 265 66

Salta 65 433 29

Misiones 63 363 12

Santiago del Estero 54 213 12

San Luis 52 211 22

Santa Cruz 47 193 6

San Juan 39 248 19

Jujuy 33 245 17

La Rioja 29 102 11

Tierra del Fuego 27 127 7

Formosa 26 136 15

Catamarca 25 122 5

Total 4,527 19,624 1,718



Source:

Banking Sector Descriptives

Number of Bank Accounts (mn)

Number of Credit Cards and Credit Card Owners (mn)

Number of Term Deposit Transactions (mn)

Number of Loan Transactions (mn)


11.014.1

16.518.2

20.2 21.3 21.2 22.8 24.1

28.631.3

33.7

1.9 2.3 2.6 2.7 3.1 3.4 3.2 3.3 3.5 4.3 4.5 4.8

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

# of current saving accounts # of current accounts

0.05 0.11 0.05 0.06 0.07 0.07 0.06 0.06 0.07 0.07 0.07 0.07

0.90.8

0.9

1.3 1.3 1.3 1.31.4

1.51.6

1.71.8

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

# terms deposits (wholesale) # terms deposits (retail)

0.5 0.4 0.6 0.7 0.9 1.0 1.3 0.9 1.0 1.1 1.2 1.9

6.88.3

10.612.5

14.215.3

16.718.2

19.5

22.523.8 24.3

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

# loans transactions (wholesale) # loans transactions (retail)

7.5 8.310.6

13.516.0

18.220.0

21.323.7

28.1

30.9 31.1

5.1 5.9 6.98.9

11.4 12.013.3 14.1

15.5

18.420.6 20.9

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

# credit cards # credit card owners



Source:

Banking Sector Profitability

Banking Sector Profitability

Banking Sector Profitability (ROE) Breakdown By Ownership

Banking Sector Net Profit Evolution (USD mn)

Comments


Despite being heavily transactional, the banking sector remains

quite profitable in nominal terms.

Banks have proved flexible and adapted to the inflationary

scenario by pushing up margins amid increasing interest rates,

resulting in consistently rising ROE ratio.

Net profits measured in USD terms expanded at a healthy

CAGR of 19% between 2006 and 2014.

In the present Argentine context, the financial system proves to

be one of the most profitable sectors.

15.5%12.0% 13.1%

19.8%

25.7% 27.2% 26.8%

30.6%34.2%

1.9% 1.5% 1.6% 2.4% 2.9% 2.8% 3.1% 3.6% 4.3%

2006 2007 2008 2009 2010 2011 2012 2013 2014

ROE ROA

15.3%

10.9% 15.2%

22.9% 24.5%25.6% 26.4%

29.1%32.1%

12.3%

5.7%

15.5%

28.3% 28.0%26.3% 27.0%

29.7%33.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Private State-owned

948 7891,078

1,613 1,902 2,1752,656

3,172 3,312407 402

377452

1,0101,260

1,462

2,0202,225

0

1,000

2,000

3,000

4,000

5,000

6,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Private banks Publlic banks



Source:

Banking Sector Liquidity & Efficiency

Liquid Assets (% of total deposits)

Deposits / Number of Employees (ARS mn)

Operating Margin / Recurring Expenses (%)

Comments


Strong deposit expansion coupled with weaker loan demand since

May 2014 has translated into swelling liquidity. Banks maintain a

large percentage of deposits in reserve requirements, overnight

repos and Central Bank bonds (Lebacs), leaving the risk of a bank

run quite minor.

Given that Lebacs yields are higher than term deposit rates,

excess liquidity is being parked in these instruments for a profit.

Despite the ongoing growth in expenses (due to the high-inflation

scenario and rising wages), bank entities have high efficiency

ratios. In general, operating margins cover a significant amount of

recurring expenses (64.2% as of January 2015).

84.1%85.5% 84.8%

85.9%84.9%

83.2%80.9%

77.7%

64.2%

May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15

7.667.82 7.78

8.038.13

8.40

8.77

9.19 9.27

May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15

22.5% 23.0%

27.9% 28.6% 28.0%

24.7%26.8% 26.8% 26.2%

23.7% 25.7%

34.1%

29.8%

26.0%26.7%

27.6% 29.2% 27.2%

20.9%19.2% 19.4%

26.9%

30.1%

22.1%25.9% 24.1% 25.2%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Total Private banks Public banks



Comments

Source:

Deposit Base

The deposits in Argentine peso constitute the only meaningful funding source for the banking sector, given the difficulties to borrow abroad

(high cost and risk of currency mismatches) and the array of restrictions on cross-border loans. In part because of the rigid capital controls

prevailing at the moment and due to the perception of low probability of peso devaluation before December 2015, private sector deposits in

local currency expanded by 11.3% between December 2013 and June 2015. On the other hand, USD deposits decreased by 49% between

2010 and 2013, due to the deployment of capital controls and public use of USD proceeds to pay back debt. However, between June 2013

and June 2015, they rose by 22%, as a result of the increasing dollarisation of the private sector.

ARS Deposit Stock by Origin, USD mn (year-end) USD Deposit Stock by Origin, USD mn (year-end)


40,94351,319

60,95975,979 74,298 72,977

82,69416,098

24,691

28,156

31,055 28,103 24,951

22,456

810

526

714

552308

350369

0

20,000

40,000

60,000

80,000

100,000

2009 2010 2011 2012 2013 2014 June2015

Private sector Public sector External sector

10,02511,526 12,001

7,7016,573 7,217 8,123

1,790

4,376

1,118

1,620

1,5021,570

1,708

28

14

13

156

1918

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2009 2010 2011 2012 2013 2014 June2015

Private sector Public sector External sector



Comments

Source:

Private Sector Local Currency Deposits

The private sector’s deposits in local currency are the most important funding source for the banking sector (78% of all ARS deposit base as

of June 2015) as well as the most reliable and the least volatile. In June 2015, the ARS deposits segment recorded annual growth rates of

between 31% and 39%. Sight deposits are related mainly to retail clients and their expansion is highly dependant on salaries and

employment growth. As of June 2015, salaries were increasing at a 30% average annual rate, while the number of employees remained

stagnant. Current account and term deposits are mostly associated with corporate clients and have a relatively short deposit tenure: 77% of

them were deposited for 90 days or for shorter periods.

ARS Deposit Stock, ARS mn (year-end) ARS Deposit Evolution (yoy change, %)


44,369 60,109 74,319 100,054 120,289160,410 176,035

39,76953,373

69,64896,378

126,558

161,516180,067

63,78981,656

107,442

162,843

220,255

281,396

366,249

7,683

9,16210,824

13,582

17,537

21,739

24,859

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2009 2010 2011 2012 2013 2014 Jun-15

Other

Termdeposits

Sightdeposits

Currentaccount

-10%

0%

10%

20%

30%

40%

50%

Jan-09 Jan-11 Jan-13 Jan-15

Current account Sight deposits Term deposits

Other Total



Comments

Source:

Deposit Interest Rates

The interest rates on sight deposits in local currency are regulated by the Central Bank of Argentina and remain at very low levels (less than

0.2% p.a.). Term deposit interest rates in Argentine pesos depend on the relative liquidity in the financial system and they have hovered

around 20% p.a. since September 2014. Given the ample spread between them, most banks encourage customers to make sight deposits

using different marketing strategies, thus minimising funding costs. After the exchange rate devaluation by 18% in January 2014, interest rates

on term deposits increased significantly. Since then, a lower exchange rate depreciation (less than 1% per month) resulted in stronger growth

of ARS deposits, which allowed interest rates to stabilise at the current levels.

Interest Rates on ARS Deposits (% p.a.) Interest Rates on USD Deposits (% p.a.)


0%

5%

10%

15%

20%

25%

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Sight Deposits Term Deposits

0.0%

0.5%

1.0%

1.5%

2.0%


Sight Deposits Term Deposits



Comments

Source:

Loans

Most of the loans offered by both private and state-run banks are directed to the private sector (90% as of June 2015). The rate of credit

expansion has followed a downward trend since the beginning of 2014, as a result of the lower economic growth, stagnating real wages and

concerns about the future economic policy of the next government, which is to take office on December 10, 2015. Higher uncertainty has put

off investment decisions, which has hurt the demand for corporate loans. Moreover, consumer credit demand has shrunk due to higher

inflation and lower real salaries growth. As a result of the quicker pace of foreign exchange depreciation in 2014, the outstanding loans

measured in USD terms decreased by 8.6% between December 2013 and December 2014.

Loan Stock, USD mn (year-end) Loan Stock Evolution (yoy change, %)


-20%

0%

20%

40%

60%

80%

100%


To the private sector To the public sector Total

36,89948,374

66,30775,221 74,525

68,269 68,4004,279

4,954

6,496

8,272 7,756

6,966 7,812

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2009 2010 2011 2012 2013 2014 Jun-15

To the private sector To the public sector



Source:

Comments

Loans (cont’d)

In the past two decades, banks concentrated their efforts on consumer loans, due to the uncertain economic environment. During 1991-1999

and in line with the economic stability, the share of consumer loans averaged 22% and was higher than that of any other sector. In 2001, the

public sector emerged as the most important recipient of loans. However, the 2002 government default was a watershed in terms of loan

distribution. The exposure to the government plummeted, while loans for consumers reached new heights, peaking at almost 35% in

December 2014. The high-inflation environment coupled with negative real interest rates, expectations for exchange rate depreciation and

short tenure of deposits encouraged banks to grant short-term and profitable consumer loans.

Outstanding Loans by Sector* (year-end)

Central Bank of Argentina, EMIS Insight, - * Other includes: Fishing, Mining, Utilities (electricity, gas and water), Construction, Other nes.

7% 8% 7% 5% 5% 7% 9% 9% 10% 10% 10% 10% 11% 10% 10% 9%

15% 12% 9%8% 9%

13%16% 17% 16% 16% 15% 16% 16% 17% 16% 16%

10%9%

6%4% 4%

5%6% 7% 7% 7% 6% 7% 7% 7% 8% 9%

15% 21%

14%

12% 11%

13%

14%18% 18% 15% 14% 16% 16% 16% 15% 14%

12% 9%

11%

12% 13%

13%9%

9% 8% 10% 9% 9% 8% 8% 8% 9%

13% 17%28% 43% 41%

33% 23% 14%9% 8% 11% 10% 9% 9% 8% 7%

28% 25% 24%17% 16% 17%

23% 26%31% 34% 33% 33% 33% 33% 35% 35%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Agriculture Industry Commerce Services Other Public sector Consumption



Comments

Source:

Private Sector Loans

Loans to the private sector in pesos are divided in two main categories: loans to corporate clients (overdraft and documental) and retail credit

(mortgages, car loans, consumer and credit cards). After a period of weak growth rates since early 2013, corporate credit activity picked up in

the first half of 2015. This was in part due to the effects of a directed credit programme launched by the government in June 2012, under

which commercial banks were required to lend up to 7.5% of their deposit base at subsidised interest rates, mostly to small and medium

enterprises. Consumer and credit card loans were the main driving forces of the credit growth. Between December 2014 and June 2015 they

accounted for 61% of the total loan stock growth.

Outstanding Loans by Type, ARS mn (year-end) Outstanding Loans by Region, March 2015


Buenos Aires City 44.4%

Greater Buenos Aires

10.5%

Buenos Aires Province11.5%

North-West4.3% North-East

3.4%

Centre 17.7%

West 3.4%

South 4.7%

47,948 56,687 66,838 78,063

77,781111,403

133,884143,208

35,028

43,075

47,50248,978

22,409

31,299

32,67734,187

75,385

98,484

117,261

138,879

57,609

80,420

110,737

131,050

31,036

40,927

46,143

48,976

0

100,000

200,000

300,000

400,000

500,000

600,000

2012 2013 2014 Jun-15

Other

Credit card

Consumer

Car loans

Mortgages

Documental

Overdraft



Source:

Loan Interest Rates

Retail Loans Interest Rates (% p.a.)

Active and Passive Rate Spreads

Wholesale Loans Interest Rates (% p.a.)

Comments


In the context of high inflation and rising interest rates, banks

have managed to maintain or increase spreads between

average deposit and loan interest rates in order to prop up

profitability.

In 2014, the Central Bank of Argentina increasingly intervened

by putting caps and floors for interest rates as a way to spur

both deposit and credit demand. For example, most rates on

consumer loans were linked to the short-term Lebac yield,

which is determined by the monetary authority. The rates on

retail term deposits (up to ARS 1mn) were also linked to the

same policy rate.

10%

20%

30%

40%

50%

60%


Overdrafts Mortgages Personal Credit card

10%

15%

20%

25%

30%

35%


Overdrafts Discounted notes Pledge loans Bills Other

12.6% 13.4%15.7%

17.2%16.0% 15.7%

18.1%19.9%

24.1%

3.1% 3.6%4.8% 4.9%

3.8% 4.4%5.4%

6.6%8.7%9.5% 9.8%

11.0%12.3% 12.2% 11.4%

12.7% 13.3%15.4%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Implicit active rate Implicit passive rate Spread



Comments

Source:

Delinquency Rates

The 2001-2002 macroeconomic collapse led to a sharp increase in the non-performing loans (NPLs) amid strong deterioration in companies’

balance sheets and household income. However, the robust economic growth combined with employment creation and real salaries growth

since 2003 have significantly diminished the probability of rising delinquency rates. Also, banks took a more cautious approach by

streamlining risk, monitoring processes and enhancing selection systems, which resulted in high coverage ratios. Going forward, the expected

realignment of the macroeconomic indicators during a new government taking office in December 2015 and the subsequent higher volatility

could result in a gradual increase of the NPLs although both the corporate sector and households remain relatively low-leveraged.

Non-Performing Loans (% of total loan portfolio) (year-end) Coverage Ratio* (year-end)

Central Bank of Argentina, EMIS Insight, - * Coverage ratio refers to total provisions as a percentage of non-performing loans

0%

5%

10%

15%

20%

25%

NPL (total) NPL (private banks - total) NPL (public banks - total)

50%

90%

130%

170%

210%

Coverage ratio Coverage ratio (public banks)

Coverage ratio (private banks)



Source:

Comments

Loan Portfolio Quality

During the macroeconomic crisis of 2001-2002, credit quality deteriorated significantly with loans in arrears peaking at 23.7% of the total loan

portfolio of the banking sector at the end of 2002. The economic recovery observed since 2003 has allowed banks to enhance their credit

portfolio. By April 2015, the share of loans considered to be of high or medium-risk stood at only 1.3%, while defaulted loans amounted to

1.7%. Going forward, if the macroeconomic backdrop turns to be less supportive in case the new government deploys a plan to face

imbalances, the credit quality could be somewhat affected. However, it is very unlikely that the ratios observed back in 2002 be witnessed

again in the near future.

Loan Portfolio Quality* (year-end)

Central Bank of Argentina, EMIS Insight, - * In arrears includes loans that were not repaid in schedule at least 90 days after the expected date and range

from low risk (under surveillance) loans to irrecoverable loans

83.7%76.3% 77.0%

86.4% 92.2% 95.2% 96.0% 95.8% 95.8% 97.3% 97.9% 97.3% 97.5% 97.3% 97.2%

16.3%23.7% 23.0%

13.6% 7.8% 4.8% 4.1% 4.2% 4.2% 2.2% 1.9% 2.7% 2.2% 2.4% 2.8%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Apr-15

Normal In arrears



Source:

Government Policy

Government

Intervention

Since mid-2012, the Central Bank of Argentina has taken numerous steps to increase public intervention in the banking

system as a way to curb profit margins and influence the way credit is distributed among the economic sectors. In an

inflationary scenario, the financial companies are relatively well-hedged against price increases, which renders them

relatively profitable compared to other sectors and thus makes them likely targets of public intervention. Among the

measures are different reserve requirements (based on the geographic location to foster banking coverage in less

populated areas) and control on fee increases. Actually, banks have to ask for permission to hike different kind of fees (a

sizeable part of their income) and inform clients once the permission is granted by the Central Bank.

Interest

Rates Caps

and Floors

The Central bank of Argentina has imposed caps and floors on the interest rates offered by the banks in the country. Retail

term deposits of up to ARS 1mn have a mandatory minimum interest rate, which is related to the short-term Lebac rate

(currently at 26% p.a.). The factor to estimate the yield ranges from 0.91 (30 to 44 days) to 0.99 (for deposits made for 180

days or longer). Also, consumption, credit card and car loans directed at individuals have a cap, which is calculated based

on the short-term Lebac cut-off yield. The factor to estimate the final interest rate goes from 1.25 to 2 for larger entities and

from 1.4 to 2 for smaller banks, depending on the loan type.

Directed

Credit

In July 2015, the Central Bank of Argentina launched the seventh tranche of the Productive Credit Programme, which

essentially consists of a directed credit scheme. Commercial banks are obliged to grant at least 7.5% of their deposit base

to small and medium enterprises (SMEs) at a subsidised interest rate (up to 18% p.a.), which lies well below the marginal

funding cost of approximately 21% p.a., before considering reserve requirements costs. The scheme has a duration of six

months (until December 2015) and there is an option to reopen a new tranche with similar conditions in 2016. This, in

effect, dents commercial banks’ margins, as they are forced to lend at a loss. The objective of the measure is to increase

the investments by SMEs and, therefore, boost economic growth. However, this is being hampered by a variety of factors,

such as high inflation, economic and political uncertainty, compressing margins and foreign exchange risk.




Source:

Basel III – Capital Adequacy Ratio

Tier I

Requirements

The Basel II basic indicator approach to define the capital requirements for operational risk was adopted in Argentina in2012. In addition, the standardised approach for credit risk determination was approved. However, the standard approachto determine the risk weight which is based on exogenous ratings is not used yet. Instead, a table of risk-weighted factorsis employed.

The Basel III minimum coverage ratios for eligible capital were also incorporated in local regulation. As a result, the Tier 1capital (common shares), the additional Tier 1 capital (preferred shares) and the Tier 2 capital (subordinated debt subjectto write-offs or conversion to common shares) shall be issued in such a way that common equity, Tier 1 and total capitalcover 4.5%, 6% and 8% of the risk-weighted assets, respectively.

Pillar II

Since February 2013, banks have included the Pillar II guidelines (supervisory review process) to their risk management

procedures, comprising guidelines for the management of risks related to credit, liquidity, markets, interest rates,

operations, securitisation, concentration, reputation and strategy. These, combined with the information requirements on

business models, constitute the inputs for the capital adequacy self-assessment (Internal Capital Adequacy Assessment

Process). In order to comply with these requirements, banks started to apply internal processes to evaluate the sufficiency

of their economic capital adjusted by risk profile and to determine a methodology to preserve Tier 1 capital.

Pillar III

The Pillar III requirements (market discipline) outline the minimum information that should be published so that market

participants may assess financial institutions’ liquidity, solvency and risk management. From February 2013, the financial

institutions in Argentina are required to unveil qualitative and quantitative information based on the Basel II and Basel III

standards. While the leverage ratio norms are expected to be fully put into effect by January 2018, those related to the

liquidity coverage ratio are planned to be accomplished in 2019.




III. Insurance Sector



Source:

Comments

Insurance Sector Forecast

The development of the insurance market over the next five years will depend heavily on the kind of policies that the new government, which

is to take office in December 2015, would apply. The last years were characterised by an increasingly interventionist public stance and growing

uncertainty. In case the new government deploys a more market-friendly regulation, the insurance sector, and likewise the banking system,

has a strong potential to expand, increase its penetration and density. EMIS Insight estimates that in the best case scenario, total premiums

issued (measured at constant prices) would expand at a CAGR of 19.7% between 2015 and 2019 with GDP growth averaging 2.6% in the

same period.

Insurance Premiums Issued Forecast (constant ARS mn)

EMIS Insight

98,990 111,509138,022

168,745

202,891

0

50,000

100,000

150,000

200,000

250,000

2015f 2016f 2017f 2018f 2019f



Source:

Insurance Sector Structure – Market Share

Insurance Premiums Market Share Evolution (%)

In recent years, the market share of the top

insurance companies in Argentina remained quite

stable, although a mild consolidation trend could be

discerned.

The ten largest insurance companies accounted for

just 42.9% of the total premiums issued as of March

2015, highlighting the strong consolidation potential

of the domestic market.

However, a better macroeconomic backdrop is

needed for that scenario to materialise.

Other important conditions for the development and

consolidation of the insurance market are a decline

in the inflation rate and price stability.

A revamp of the regulatory framework combined with

higher economic and political stability are also

desirable.

Top 10 Insurance Companies by Premiums, March 2015

Comments

National Insurance Superintendence (SSN), EMIS Insight

26 24 25 24 25 24 25 25 26 26 26

40 39 39 38 40 39 41 40 42 42 43

60 60 60 59 61 60 63 62 63 65 64

Sep

-12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

Top 5 Top 10 Top 20

No Insurance CompanyMarket Share

(% of total insurance premiums issued)

1 Federacion Patronal 6.5%

2 Caja Generales 5.3%

3 Prevencion ART 5.1%

4 Galeno ART 4.9%

5 Sancor 4.5%

6 Provincia ART 4.2%

7 Nacion 3.4%

8 Allianz 3.2%

9 San Cristobal 3.1%

10 Asociar ART 2.8%

TOP 10 42.9%



Comments

Source:

Insurance Sector Structure – Number of Enterprises

The number of enterprises in the insurance sector remained relatively stable during the last five years, with a total of 185 active companies at

the end of December 2014. On the other hand, the number of employees in the sector increased by almost 17% in 2009-2014, exceeding

29,000 people. The market is highly fragmented, with the first ten entities accounting for only 43% of the insurance premiums issued as of

December 2014. Even more than in the case of the banking sector, the insurance market has a strong potential for consolidation. For that to

occur, improved macroeconomic conditions and a more market-friendly regulatory framework stand as prerequisites.

Number of Insurance Enterprises (year-end) Number of Employees (thou, year-end)


150 153 152 152 158 157

22 22 22 2222 22

3 3 3 32 2

3 3 3 44 4

0

20

40

60

80

100

120

140

160

180

2009 2010 2011 2012 2013 2014

Public

Foreignprivate

Cooperatives

Local private

21 21 21 22 23 23

4 4 44

5 50.2 0.2

0.30.3

0.30.3

0.2 0.20.3

0.30.3

0.3

0

5

10

15

20

25

30

2009 2010 2011 2012 2013 2014

Public

Foreignprivate

Cooperatives

Local private



Source:

Insurance Sector Structure – Branches & Agencies

Branches and Agencies Geographic Distribution, Dec 2014 Comments

The insurance sector ended December 2014 with a

total of 185 active companies with a network of 33

branches throughout Argentina.

As in many other sectors, both insurance activity and

company locations are heavily concentrated in the

city of Buenos Aires and the province of Buenos

Aires, followed by Santa Fe and Mendoza.

The insurance products in Argentina are typically

marketed by independent contractors (brokerage

agencies), which have strong local presence

throughout the country. Agencies are usually retail

brokers (unrelated to insurances companies), which

serve as intermediaries between the insurance

companies and the end clients.

National Insurance Superintendence (SSN)

Province Headquarters BranchesBrokerage

Agencies

City of Buenos Aires 137 5 77

Buenos Aires 12 4 303

Catamarca 0 0 13

Cordoba 2 3 91

Corrientes 0 1 21

Chaco 0 1 23

Chubut 0 2 24

Entre Rios 3 1 40

Formosa 0 0 5

Jujuy 2 1 15

La Pampa 0 0 15

La Rioja 0 0 7

Mendoza 5 1 78

Misiones 1 2 26

Neuquen 0 0 36

Rio Negro 1 0 28

Salta 6 1 38

San Juan 0 0 20

San Luis 0 0 15

Santa Cruz 0 0 6

Santa Fe 14 1 75

Santiago del Estero 1 0 9

Tierra del Fuego 0 9 7

Tucuman 1 1 41

Total 185 33 1,013



Comments

Source:

Insurance Penetration & Density Rates

The Argentinean insurance sector is relatively underdeveloped when compared to that in the developed economies, although it remains

similar to the insurance markets in other countries in Latin America. The insurance penetration rate ranged from 2.1% to 2.8% of the country’s

GDP over the period 2010-2014, recording a slight declining trend, suggesting that the regulatory hurdles and the unsupportive

macroeconomic environment had dampened activity. However, when compared to the population, the insurance activity has followed an

upward trend.

Insurance Penetration Rate* (% of GDP) Insurance Density Rate** (ARS per capita)

National Insurance Superintendence (SSN), National Institute of Statistics and Census of Argentina (INDEC), EMIS Insight, - * Total premiums issued

as a percentage of GDP, ** Total premiums issued per capita. Referring to property insurance and people insurance (life and pension)

2.3% 2.1% 2.1% 2.0%1.7%

0.5%0.5% 0.5% 0.5%

0.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2010 2011 2012 2013 2014

Property People

1,0201,204

1,3961,659 1,744

244

287

351

406420

0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014

Property People



Comments

Source:

Insurance Sector Profitability

In the context of high inflation, the technical result* remains under pressure, due to the increasing costs and claims payments, while the

income (premium collection) expands at a lower pace than inflation. As a result, most insurance companies rely heavily on their financial

result** in order to prop up the overall profitability. Also, inflation hampers demand for the more profitable products such as life and pension

insurance, further affecting the capacity to generate higher returns.

Financial Result** / Claims Paid (%) Technical* and Financial** Result / Net Worth (%)

National Insurance Superintendence (SSN), EMIS Insight, - * Difference between premiums collected and insurance losses (result specific to the

insurance activity), ** Financial investment policy result, excluding the insurance activity inflows and outflows

56.3

71.1

32.8 34.141.7

-19.7

-30.0

-12.5-16.9

-10.5

Mar-14 Jun-14 Sep-14 Dec-14 Mar-15

Financial Result / Net Worth Technical Result / Net Worth

29.0 27.9

48.7

22.019.3

Mar-14 Jun-14 Sep-14 Dec-14 Mar-15



Source:

Insurance Sector Solvency

Debt to Net Worth Ratio

Loans to Assets (%)

Cash + Investments to Debt with Insured Parties Ratio* (%)

Comments

National Insurance Superintendence (SSN), EMIS Insight, - * Ratio of the highly liquid assets (cash + deposits) and investment positions (bonds + other

financial assets) to outstanding liabilities with insured parties

Solvency indicators reveal a fairly robust position of Argentine

insurance companies as of March 2015.

If the new government decides to amend some of the

regulations introduced since the end of 2011, it is estimated

that there will be more scope for further improvement in the

solvency ratios of the sector.

2.08

2.12

2.06

2.21

2.14

23.4

22.4

21.8

22.922.7

223

220

227

214216



Source:

Insurance Sector Efficiency

Number of Employees per Company

Insurance Premiums Issued per Employee* (ARS mn)

Insurance Premiums Issued per Company* (ARS mn)

Comments

National Insurance Superintendence (SSN), - * Constant prices

In the context of an almost constant number of market players,

the expanding payroll suggests increasing insurance activity,

mostly between 2010 and 2012.

Despite the growing number of employees, the efficiency,

measured as the number of premiums issued per employee,

rose by almost 60% over the 2009-2014 period.

This resulted in a 78% growth in the real (i.e. price adjusted)

insurance premiums issued per company for the period.

141143

151

156 156158

2009 2010 2011 2012 2013 2014

330 340

410

477

555590

2009 2010 2011 2012 2013 2014

2.34 2.38

2.72

3.07

3.573.73

2009 2010 2011 2012 2013 2014



Comments

Source:

Insurance Premiums Issued

Unlike more mature markets, property products rather than pension or life insurance dominate the insurance sector in Argentina. As of March

2015, property insurance accounted for almost 82% of the total premiums issued, while life insurance had a 17% share, with pension

insurance taking up the remaining 2%. This situation is attributable to the fact that in the midst of the 2008 international financial crisis, the

government nationalised the private pension system, as a way to ensure fresh funds to the budget. As a result, the private pension insurance

activity was significantly reduced, being replaced by a broad public pension scheme.

Insurance Premiums Issued (ARS mn) Insurance Premiums Issued by Category, March 2015


8,785 9,340 9,875 9,56310,442

12,09811,078 10,866

1,9181,986

2,0071,898

1,941

2,117

2,109 2,242

169186

207186

199

288

209 263

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Pension

Life

Property

Property81.7%

Life 16.6%

Pension 1.7%



Source:

Insurance Premiums Issued (cont’d)

Insurance Premiums Issued* (%) Comments

The insurance activity in Argentina is highly

concentrated in the city and province of Buenos

Aires, which accounted for 63% of the insurance

premiums issued in the period between July 2013

and June 2014.

Notably, property products prevailed in the majority

of the regions of the country.

Relatively wealthy areas such as the city of Buenos

Aires had a higher share of personal (life and

pension) insurance premiums than other

jurisdictions.

National Insurance Superintendence (SSN), - * Insurance premiums issued between July 2013 and June 2014

Province Property Personal Total

City of Buenos Aires 26.4 50.9 31.2

Buenos Aires 34.8 19.6 31.8

Catamarca 0.3 0.2 0.3

Cordoba 7.7 5.7 7.3

Corrientes 1.0 0.9 0.9

Chaco 1.0 1.3 1.1

Chubut 1.6 1.0 1.4

Entre Rios 2.4 1.7 2.3

Formosa 0.3 0.3 0.3

Jujuy 0.6 0.6 0.6

La Pampa 0.8 0.4 0.7

La Rioja 0.3 0.4 0.3

Mendoza 3.5 2.4 3.2

Misiones 1.1 0.8 1.1

Neuquen 1.8 1.2 1.7

Rio Negro 1.5 0.9 1.3

Salta 1.1 1.8 1.2

San Juan 1.1 0.7 1.0

San Luis 0.7 0.3 0.6

Santa Cruz 0.9 0.6 0.8

Santa Fe 8.4 5.1 7.8

Santiago del Estero 0.5 1.1 0.6

Tierra del Fuego 0.7 0.4 0.7

Tucuman 1.4 2.0 1.5

Unclassified 0.3 0.0 0.2

Total 100 100 100



Comments

Source:

Insurance Premiums Issued (cont’d)

Both life and pension products have a low penetration rate in Argentina. In the property insurance segment, the automotive insurance is by far

the largest segment with more than a third of total insurance premium generation in the period July 2012 - June 2013. Due to many years of

economic instability, stubbornly high inflation and financial crises, Argentineans avoid getting insured against long-term risks such as pension

(publicly covered) and life (a product that targets the upper end of the market). Another important segment with a share of 27% in the same

period, is workplace safety, which is mandatory for all employers. The latter covers risks related to the activities of the employee in the

workplace or during commuting to and from the workplace.

Segment-wise Insurance Premiums Issued* Insurance Premiums Issued by Type of Insurance* (%)

National Insurance Superintendence (SSN), - * Insurance premiums issued between July 2012 and June 2013

Type of Insurance ARS mn

Automobiles 29,299

Workplace safety 22,889

Fire 2,774

Housing 1,977

Other 10,860

Property insurance 67,800

Life (collective) 10,278

Life (individual) 2,149

Accidents 2,147

Pension 1,738

Other 710

Personal insurance 17,021

Total 84,821

Automobiles34.5%

Workplace safety 27.0%

Other 13.6%

Life 14.6%

Fire 3.3%

Accidents 2.5%

Housing 2.3%

Pension 2.0%



Comments

Source:

Insurance Policies Issued

The number of insurance policies issued in the automotive segment reveals the strong growth in car purchases in the last years. Between

2007 and 2013, new car sales expanded by 71%, reaching almost 970,000 vehicles. However, due to increasing economic difficulties, sales

slowed down in 2014 and 2015 to less than 600,000 cars per year, which affected the number of insurance policies. Going forward, the

development of the market is highly dependant on the economic policies that the next government will apply.

Number of Property Insurance Policies Issued (thou) Number of Personal Insurance Policies Issued (thou)


0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q1' 2008 Q1' 2009 Q1' 2010 Q1' 2011 Q1' 2012 Q1' 2013

Life Funeral Health Personal accidents

0

1,000

2,000

3,000

4,000

5,000

6,000

Q1'2002

Q1'2003

Q1'2004

Q1'2005

Q1'2006

Q1'2007

Q1'2008

Q1'2009

Q1'2010

Q1'2011

Q1'2012

Q1'2013

Fire & Housing Automobiles Transport

Burglary Hail Other



Comments

Source:

Insurance Claims

According to the latest information provided by the National Insurance Superintendence (SSN), paid claims grew at a record 33% annual

pace in the first quarter of 2013, after expanding by 11.4% y/y in 2012. As the automotive segment remains the largest insurance market, and

given the high event rate, almost 70% of the paid claims were related to car risk. The strong growth in car sales (+209% between 2004 and

2013) resulted in a rapid increase in the insurance claims of the segment. However, in 2014, car sales plummeted by 36% y/y, which is

expected to have curbed the expansion of the claims.

Numbers of Insurance Claims Paid Segment-wise Insurance Claims Paid, 2012 (%)


Fire 8.3%

Automobiles69.8%

Work 0.0%

Personal 12.5%

Transport 0.4%

Theft 0.4%

Hail 1.3%

Other 7.2%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Q1'2002

Q1'2003

Q1'2004

Q1'2005

Q1'2006

Q1'2007

Q1'2008

Q1'2009

Q1'2010

Q1'2011

Q1'2012

Q1'2013



Comments

Source:

Reinsurance

The reinsurance market in Argentina remains underdeveloped. As in the banking and insurance markets, the regulations have become more

stringent in recent years. Since 2011, when the Resolution 36,615 was adopted, foreign reinsurance companies are not allowed to directly

take risks from local insurers unless they establish a local subsidiary. In addition, they can only cover the risks that local reinsurance

companies are not able to manage. Some market players believe that the resolution further restricts the scope of the reinsurance possibilities

in the country. Notably, the reinsurance capacity in Argentina was limited before the adoption of the resolution and most of the risks were

reinsured overseas.

Reinsurance Premiums Evolution* (% of total) Top 10 Reinsurance Companies, July 2013 – June 2014

National Insurance Superintendence (SSN), - * Referring to property insurance and people insurance (life and pension)

21.8 21.2

23.4

28.5

22.7

20.6

18.217.4 16.9

14.015.0 14.3

12.110.6 11.3

18.1

14.7

8.2

3.5 4.2 4.0 4.7 4.8 5.5

7.4 7.7 7.5 7.4

4.3 3.6

200020012002200320042005200620072008200920102011201220132014

% Reinsured Premiums (Property) % Reinsured Premiums (People)

Reinsurance Company

Reinsurance

Premiums

(ARS mn)

Claims

(ARS mn)

Fees

(ARS mn)

American Home 1,096.0 327.7 250.7

Mapfre Re 911.2 355.7 121.0

Punto Sur Reaseguradora 901.1 492.5 123.8

Allianz Re 871.5 397.4 132.4

Zurich Reaseguradora 729.6 540.3 61.6

Hannover Ruck 581.4 633.6 65.5

Reunion Re 423.7 126.7 60.3

Nacion Reaseguros 421.1 2,514.0 10.6

Ace American Insurance 398.0 105.5 118.5

Scor Global 375.0 143.4 76.5

Reinsurance Total 10,690 8,335 1,695



Source:

Government Policy

Regulation

The insurance activity in Argentina is regulated by the National Insurance Superintendence (SSN), a decentralisedgovernment body within the Ministry of Economy. Its main objective is to supervise and regulate the insurance andreinsurance activities in order to ensure compliance with the existing law and regulations by all market players. Among themain regulatory acts for the sector are the Law Nº 17,418 (from 1967), which sets out the general conditions anddefinitions to perform insurance activity in the country, including the types of insurance and the technical features ofinsurance contracts and policies, insurance premiums, contract execution, etc. The Law Nº 20,091 (1973) deals with thecompanies that are authorised to act as insurers, the permits they should obtain and their supervision. The Law Nº 22,400(1981) regulates the activities of intermediary parties like brokers and advisors. The Law Nº 25,246 (2000) deals with theconcealment and money laundering of illegal activities.

Government

Intervention

Since December 2011, when the Resolution 36,162/2011 was adopted, all insurance companies have been required to

invest their entire investment portfolio in domestic assets with a ban on investing abroad. As a result, the companies were

forced to divest their positions overseas and reinvest in Argentina. The measure was implemented in an effort to increase

the supply of US dollars on the foreign exchange market amid mounting exchange rate pressure and imposition of other

capital controls. In February 2014, the regulation on the investment activity of the insurance companies was modified.

Since then, the insurance entities with life or property portfolios as well as the reinsurers were obliged to invest at least

18% of their assets in financial instruments issued by non-financial companies, while those with pension and labour risk

portfolios at least 14% and 8% of their assets, respectively.

National

Strategic

Insurance

Plan

At the end of 2012, the government unveiled a long-term plan, called National Strategic Insurance Plan, which was

expected to be fully implemented by 2020. The plan had a more interventionist bend and attributed to the insurance sector

a social role. However, the plan has not had any practical implications on the insurance activity so far. Its real execution is

a function of the policy towards the insurance sector to be adopted by the newly appointed government, following the

elections in October 2015.

National Insurance Superintendence (SSN)



IV. Main Players



Source:

Top M&A Deals

Top 15 M&A Deals in the Financial Sector* in Argentina (2014-H1’2015)

EMIS DealWatch, - * NAICS code: 52

Date Target Company Deal Type BuyerCountry of

Buyer

Deal Value

USD (mn)

Stake

(%)

Feb-15 QBE Argentina Aseguradora de Riesgos del Trabajo SA Acquisition Grupo Werthein (Werthein Group) Argentina95.0

(Official data)100.0

Aug-14La Caja de Ahorro y Seguro SA; Caja de Seguros SA;

Europ Assistance Argentina SAAcquisition Assicurazioni Generali SpA Italy

70.3

(Official data)n.a.

Aug-14 Banelco SA Acquisition Visa Argentina SA Argentina29.2


Jan-14 Empresa Distribuidora Sur SA (Edesur)Minority stake

purchaseUndisclosed investor(s) n.a.

12.8

(DW estimate)10.9

Nov-14

Gasoducto del Pacifico SA; Gasoducto del Pacifico

(Argentina) SA; Innergy Holdings SA; Gasoducto del

Pacifico (Cayman) Ltd

Acquisition Gasco SA Chile9.4

(Official data)30.0

May-15 Volkswagen Credit Compania Financiera SA Acquisition Banco Bilbao Vizcaya Argentaria SA (BBVA) Spain5.9

(Official data)51.0

Mar-14Liberty Seguros Argentina SA; Liberty Compania Argentina

de Reaseguros SAAcquisition Kranos Capital United States

4.5


May-14 Tarjetas del Mar SAMinority stake

purchase

SA Importadora y Exportadora de la Patagonia

(La Anonima)Argentina

4.0

(Official data)40.0

Dec-14 Los Grobo SGRMinority stake

purchaseLos Grobo Agropecuaria SA Argentina

2.0

(Official data)24.7

Jun-15 BACS Banco de Credito y Securitizacion SAMinority stake

purchaseIRSA Inversiones y Representaciones SA Argentina

1.4

(Official data)6.1

Mar-15 Mercado de Valores de Buenos Aires SA (Merval)Minority stake

purchaseSociedad Militar Seguro de Vida (SMSV) Argentina

1.0

(Official data)0.5

Jun-15 Mercado de Valores de Buenos Aires SA (Merval)Minority stake

purchaseAllaria Ledesma & Cia Argentina

1.0

(Official data)0.5

Nov-14 Comercio Interior SA Acquisition Inversora Juramento SA Argentina1.0

(Official data)65.0

Jun-15 Boston Compania Argentina de Seguros SA Acquisition Testimonio Compania de Seguros SA Argentina n.a. 100.0

Feb-15 Fullcarga SA Acquisition PagaTodo Holdings SAPI de CV Mexico n.a. 100.0



Source:

M&A Activity (2014-H1’2015)

Number and Value of Deals in Argentina’s Financial Sector

Number of Deals by Deal Type (%)

Number of Deals by Deal Value, USD (%)

Number of Deals by Region of Investors (%)

EMIS DealWatch, - * NAICS code: 52

17 4

99

12

96

8

4

23

5

34

Q1 Q2 Q3 Q4 Q1 Q2

2014 2015

Value of Deals (USD mn) Number of Deals

0-50mn; 52.4%

Undisclosed; 38.1%

50.1-100mn; 9.5%

Acquisition66.7%

Minority stake purchase

33.3%

Argentina63.2%

Europe 21.1%

North America10.5%

South America5.3%



Source:

Income Statement (Individual, ARS mn) Highlights

Banco de la Nación Argentina

Balance Sheet (Individual, ARS mn)

Banco de la Nacion Argentina (BNA) was established in 1891 as a state-owned bank. In a few years, it created a branch network throughout the country, becoming the largest commercial bank in Argentina in terms of outstanding loans and deposits.

The main purpose of BNA is to serve as a financial agent of the federal government, and as such it receives government deposits and makes payments for and on behalf of the republic.

An important goal of BNA is to serve the small and medium-sized enterprises, as well as the economically disadvantaged segments of the population.

BNA has 13 branches abroad and three representative offices in Caracas (Venezuela), Beijing (China) and Porto Alegre (Brazil).

BNA ended 2014 with a network of 632 branches, 62 operative offices, four mobile agencies, nine promotion points, three brokerage agencies and 1,713 ATMs throughout Argentina, and a workforce of some 17,400 people.

Company data, EMIS, Central Bank of Argentina, own calculations

222,

064

274,

690

380,

191

19,3

49

26,9

14

39,3

3892,8

51

113,

453

121,

172

2012 2013 2014

Total Assets Shareholders' Equity Total Loans

4,44

9

7,60

8

11,9

72

19,2

60

28,8

99

41,7

49

2,78

6

3,83

0

5,14

1

2012 2013 2014

Net Income Financial Revenues Service Revenues



Source:

Banco de la Nación Argentina (cont’d)

Main Operating Indicators

Segment-wise Revenues, 2014 (%) Outstanding Loans Ranking, January 2015 (ARS mn)

Outstanding Deposits Ranking, January 2015 (ARS mn)

Interest Revenues

72%

Other Financial Revenues

18%

Services Revenues

11%

Dec-2012 Dec-2013 Dec-2014

Number of accounts 799,363 979,176 1,217,974

Number of credit cards 1,795,842 2,096,078 2,059,168

Employees 16,647 17,001 17,436

ROE (%) 27.14 34.93 36.97

ROA (%) 2.47 3.32 4.15

36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

Company data, Central Bank of Argentina, own calculations



Source:



Banco de la Provincia de Buenos Aires (Banco

Provincia), founded in 1822 as a state-owned bank, is

the second largest bank in Argentina in terms of

outstanding loans and deposits.

About 80% of its loans are allocated to the

manufacturing sector, with a special focus on small

and medium-sized enterprises, which are the main

source of job creation in Argentina.

Banco Provincia also focuses on financing start-up

companies as well as production and investment

plans of the province of Buenos Aires.

The bank is an important vehicle for the government

of the province of Buenos Aires to finance projects,

which imply job creation and social inclusion.

Banco Provincia ended 2014 with a network of 342

branches and 1,569 ATMs, and a workforce of some

10,410 people.


Banco de la Provincia de Buenos Aires56

,094

77,7

49 107,

330

3,42

3

4,87

3

7,89

1

29,2

52

42,8

33 59,1

78

2012 2013 2014


660 1,44

2

3,04

2

6,52

4 10,3

97

17,2

56

2,32

5

3,06

2

4,03

1

2012 2013 2014




Source:

Banco de la Provincia de Buenos Aires (cont’d)


Segment-wise Revenues, 2014 (%)

Company data, Central Bank of Argentina

Outstanding Loans Ranking, January 2015 (ARS mn)


Interest: Overdraft 1%

Interest on Loans 21%

Interest on Mortgage Loans

4%

Interest on Credit Cards 3%

Interest on Other Loans

37%Revenue From

Government and Corporate Securities 16%

Others 4%

Dec-13 Dec-14 Jan-15 Feb-15 Mar-15

ROE 38.19% 49.19% 40.36% 38.86% 33.08%

ROA 2.10% 3.30% 2.80% 2.80% 2.40%

Dec-14

Branches 342

ATMs 1,569

Employees 10,410

36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn



Source:


Banco Santander Río S.A.


Banco Santander Rio S.A., the Argentinean subsidiary

of Spanish financial group Santander, is the leading

private bank in Argentina in terms of outstanding

deposits and loans.

The bank has five business divisions: retail banking,

small and medium enterprises (SMEs), commercial

banking, agribusiness, corporate banking. Its product

portfolio includes savings and current accounts, debit

and credit cards, consumer and commercial loans,

insurance, mortgages, fixed-term deposits, money

transfers, cash management, investment advice and

factoring operations. About 75% of its revenues come

from retail banking, with the remaining 25% deriving

from the corporate and investment banking segments.

The bank ended 2014 with 353 branches and 1,127

ATMs throughout the country.

Banco Santander Rio is listed on the Buenos Aires

Stock Exchange, and its market capitalisation stood at

ARS 32.1bn as of June 2015.


1,95

4

2,28

9

3,23

3

6,80

0 9,81

2

15,6

88

3,60

8

4,72

8

6,18

8

2012 2013 2014

Net Profit Financial Revenues Service Revenues

53,2

26

70,6

15 95,2

98

6,69

3

8,98

3

11,9

56

33,4

80

45,0

49

54,9

37

2012 2013 2014




Source:

Banco Santander Río S.A. (cont’d)






26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

Dec-12 Dec-13 Dec-14

ROE 36.16% 30.67% 32.15%

ROA 4.22 % 3.83 % 4.02 %



Interest on Mortgage Loans 2%

Interest on Credit Cards

19%


18%

Revenue from Government

and Corporate Securities 12%

Others 3%

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14

Branches 276 305 327 334 353

ATMs 887 975 1,030 1,075 1,127

ATMs self-

service814 875 928 952 1,010

Employees 6,160 6,458 6,495 6,608 6,971



Source:


Banco de Galicia y Buenos Aires S.A.


Banco de Galicia y Buenos Aires (Banco Galicia),

founded in 1905 by the members of the Escasany,

Ayerza and Braun families, is the banking unit of

Argentinean financial holding company Grupo

Financiero Galicia.

Banco Galicia is the second largest private bank in

Argentina in terms of deposits, assets and penetration

of the retail banking business.

Its strategy is based on opening new branches in

different provinces and on allocating capital to grow in

terms of market share in its corporate banking area.

Grupo Financiero Galicia is listed on the Buenos Aires

Stock Exchange, the Cordoba Stock Exchange, and

the Nasdaq Capital Market. Its market capitalisation

stood at ARS 23.6bn as of June 2015.


1,30

1

1,83

7

3,15

8

6,26

7

9,22

2

14,6

57

2,87

8

3,88

0

5,18

6

2012 2013 2014


52,5

57

69,0

00 88,7

46

4,90

4

6,74

1

9,89

9

31,9

75

41,1

41

49,0

35

2012 2013 2014




Source:

Banco de Galicia y Buenos Aires S.A. (cont’d)







Interest on loans 20%



34%


18%

Net Revenues on Debt

Securities 12%

Others 6%

36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

2014 2013 2012

Employees 12,012 12,603 13,327

Banco de Galicia y Bs. As. S.A. 5,374 5,487 5,734

Regional Credit-card Companies 5,232 5,668 6,109

Compañía Financiera Argentina S.A. 1,112 1,170 1,233

Sudamericana Holding S.A. 242 224 193

Galicia Administradora de Fondos S.A. 16 13 14

Other Companies 36 41 44

Branches 527 524 514



Source:

Income Statement (Consolidated, ARS mn) Highlights

Balance Sheet (Consolidated, ARS mn)

BBVA Banco Frances, founded in 1886 in Buenos

Aires under the name of Banco Frances del Rio de la

Plata, is the oldest private bank in Argentina.

BBVA Banco Frances was the fifth largest bank in

Argentina in terms of outstanding deposits, and the

sixth biggest in terms of outstanding loans as of

December 2014.

The bank ended 2014 with a network of 251 branches

and 1,446 ATMs, and a workforce of some 5,600

people.

Since December 1996, BBVA Frances has been a

subsidiary of Spanish financial group Banco Bilbao

Vizcaya Argentaria S.A. (BBVA), which controls 76%

of its capital stock. The remaining shares are traded

on the Buenos Aires Stock Exchange, New York Stock

Exchange and Madrid Stock Exchange. Its market

capitalisation stood at USD 3.9bn at the end of June

2015.


BBVA Banco Francés S.A.43

,784 58

,523 74

,288

5,13

1

7,15

6

10,3

31

27,5

18 36,4

68

41,4

42

2012 2013 2014


1,26

3

2,02

4

3,20

4

5,58

1 8,24

3

13,2

76

2,31

7

3,45

3

4,67

8

2012 2013 2014

Net Profit Financial Revenues Service Revenues



Source:

BBVA Banco Francés S.A. (cont’d)







ROE 35.75% 37.41% 30.91% 28.98% 29.78%

ROA 4.22% 4.97% 4.19% 3.96% 4.08%

Dec-14

Branches 251

ATMs 1,446

Employees 5,584

Interest: Overdraft 16%Interest on Loans 12%

Interest on mortgage loans

2.0%


15%


21%Revenue from

Government and Corporate

Securities 13%

Others 11%

36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn



Source:



Banco Macro started operating as a non-banking

financial institution in 1978. In 1988, it received an

authorisation to operate as a retail & wholesale bank

by the Central Bank of Argentina.

Its main focus is on the retail banking in market areas

with low level of banking transactions and high growth

potential. During the privatisation process of provincial

banks in the 1990s, Banco Macro acquired several

financial entities, creating the largest private sector

branch network in Argentina.

In March 2006, the shares of Banco Macro were

floated on the New York Stock Exchange (NYSE). Its

market capitalisation stood at USD 3.7bn at the end of

June 2015.

Its controlling shareholders are Argentinean

entrepreneurs from the Brito family. The rest of the

shares are owned by the Sustainability Guarantee

Fund (managed by the National Social Security

Administration), several local and foreign investment

funds, institutional investors and retail investors.


Banco Macro S.A.43

,999

53,9

04

68,2

39

6,19

9

8,62

7

11,4

92

28,7

89

35,8

37

39,7

59

2012 2013 2014


1,49

4

2,44

4

3,48

0

6,24

0

8,84

0

13,3

01

2,45

6

3,18

2

4,30

1

2012 2013 2014




Source:

Banco Macro S.A. (cont’d)







ROE 35.34% 35.36% 31.19% 31.12% 32.35%

ROA 5.10% 5.61% 5.01% 5.01% 5.22%

Dec-14

Branches 434

ATMs 1,272

Employees 8,686

Interest: Overdraft 10%Interest on

Loans 9%



13%


40%

Revenue from Government and

Corporate Securities 13%

Others 8%

36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn



Source:

Number of Bank Branches*, December 2014

Banco Macro S.A. (cont’d)

Company data, Central Bank of Argentina, - * Includes banks with 100 branches or more; consolidated data for Galicia, Patagonia & BBVA Frances

Highlights

The government has an important participation in Banco Macro through the National Social Security Administration (ANSeS), which held a 31%

equity stake as of December 2014. The expansion of Banco Macro is a result of a series of small acquisitions of regional banks, which have

positioned it as the major private bank in terms of branches, with an important geographical coverage in the Northern region of the country.

Banco Macro was also the sixth largest bank in Argentina in terms of outstanding deposits, and the fifth biggest in terms of outstanding loans at

the end of December 2014.

29%

33%

33%

35%

40%

44%

47%

48%

60%

79%

42%

35%

35%

37%

27%

40%

28%

23%

30%

14%

29%

32%

32%

28%

33%

16%

25%

29%

10%

7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Galicia

BBVA Frances

ICBC

Santander Rio

HSBC

Credicoop

Patagonia

Supervielle

Nacion

Macro

Interior of Argentina Buenos Aires Province Buenos Aires City

Branches

434

632

110

174

256

139

353

104

251

320

Goverment31%

ADS 23%

Others 6%Controlling

shareholders 40%

Banco Macro S.A.:

Shareholder Structure



Source:

Income Statement* (Individual, ARS mn) Highlights

Balance Sheet* (Individual, ARS mn)

HSBC Bank Argentina, founded in 1903, is the

banking unit in Argentina of UK-based banking and

financial services institution HSBC.

HSBC was the eighth largest bank in Argentina in

terms of outstanding deposits and loans as of

December 2014.

The bank ended June 2015 with a network of 140

branches and 987 ATMs, and a workforce of some

4,170 people.

The company provides a complete portfolio of

banking, financial and insurance products and

services, including corporate, retail and investment

banking to over 1.2mn customers.

Company data, EMIS, Central Bank of Argentina, own calculations, - * FY between 1st July and 30th June

HSBC Bank Argentina S.A.89

8

863 1,

741

3,82

2 4,77

4

7,71

6

1,34

7

1,62

6

2,00

6

2012 2013 2014


32,5

52

36,1

62 47,1

41

3,46

8

4,33

2

6,07

3

15,3

25

19,0

40

23,7

32

2012 2013 2014




Source:

HSBC Bank Argentina S.A. (cont’d)









11%

Interest on Other Loans 10%

Revenue from Government and

Corporate Securities 11%

Others 18%

Jun-15

Branches 140

ATMs 987

Employees 4,172

Dec-13 Jun-14 Jan-15 Feb-15 Mar-15

ROE 22.48% 35.18% 14.22% 12.66% 15.31%

ROA 2.63% 4.43% 1.88% 1.69% 2.04% 36,987

38,625

48,099

51,179

65,260

70,129

95,189

290,684

HSBC

Banco Credicoop

Banco Macro

BBVA Banco Frances

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn

26,989

28,536

40,190

41,753

49,441

54,770

60,029

120,658

HSBC

Banco Ciudad

BBVA Banco Frances

Banco Macro

Banco Galicia

Santander Rio

Banco Provincia

Banco Naciòn



Source:


Allianz Argentina Compañia de Seguros S.A.


German insurance company Allianz entered Argentina

with the acquisition of three local peers: Plus Ultra

Compania Argentina de Seguros, Colon Compania de

Seguros Generales and Compania Aseguradora

Argentina de Seguros Generales. In 1988, Allianz

RAS Argentina S.A. was created.

The company had 150,000 active customers with

170,000 insurance policies and occupied the seventh

position in terms of insurance premiums issued in the

automotive sector as of December 2014.

Allianz is headquartered in Buenos Aires and has six

additional branches in Cordoba, Rosario, Mar del

Plata, Tres Arroyos, Mendoza and Bariloche.

In January 2015, Allianz launched a new product,

which offers insurance against theft of credit and debit

cards, mobile phones, wallets and briefcases.

Company data, EMIS, National Insurance Superintendence (SSN), own calculations

2,00

5

2,00

5

3,17

2

305

305 44

81,69

9

1,69

9

2,72

5

2012 2013 2014

Total Assets Shareholders' Equity Liabilities

38 38

-22

-94

-94

-116

142

142

90

48 48

-26

2012 2013 2014

Net Income Technical result Finance structure result Ordinary Operational Result



Source:


Sancor Cooperativa de Seguros Ltda.


Sancor Cooperativa de Seguros Ltda, founded in

1945, specialises in insurance products for work risks,

equity risks, automobiles and agribusiness.

The company has 51 offices and 480 points of sale in

Argentina, Uruguay, Paraguay, Brazil and Colombia,

employing more than 2,000 people.

In May 2015, Sancor acquired local medical care

company Staff Medico, which has a portfolio of

300,000 associates, 50 branches, 400 service points

and a network of 75,000 medical providers. The

strategy of insurance companies to enter into the

health insurance segment has been common in the

last five years.

Company data, EMIS, National Insurance Superintendence (SSN), EMIS DealWatch, own calculations

2,77

8

3,69

2 5,34

4

776 1,05

1 1,66

9

2,00

2 2,64

1

3,67

5

2012 2013 2014

Total Assets Shareholders' Equity Liabilities

-149

67

-25

-220 -194

-193

71

260

168

-149

67

-25

2012 2013 2014

Net Income Technical result Finance structure result Ordinary Operational Result



Contact:

Corporate Headquarters

6-8 Bouverie Street

London EC4Y 8DD

UK

Voice: +44 20 7779 8100

Fax: +44 20 7779 8224

Americas Headquarters

225 Park Avenue South

New York, New York 10003

US

Voice: +1 212 610 2900

Fax: +1 212 610 2950

Asia Headquarters

Eucharistic Congress Bldg. No.

III

4th Floor, 5 Convent Street

Mumbai 400 001

India

Voice: +91 22 22881123

Fax: +91 22 22881137

Disclaimer:

The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness

of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional

Investor PLC take no responsibility for decisions made on the basis of these opinions.

Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved. A Euromoney Institutional Investor company.

About EMIS Insight

EMIS Insight is a unit of EMIS that produces proprietary strategic research and analysis. The service features market overviews, industry trend analysis, legislation

and profiles of the leading sector companies provided by locally-based analysts.

About EMIS

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