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Summary of Risk Factors
The following summarizes some, but not all, of the principal risks provided below. Please carefully consider all of the information discussed in this Item 3.D “Risk Factors” in this annual report for a detailed description of these and other risks.
● Our business is largely dependent upon macroeconomic, political, regulatory and social conditions in Argentina.
● The measures implemented by the current Argentine government may affect our business and results of operations.
● If the levels of inflation increase, the Argentine economy and our business and financial condition could be adversely affected.
● A decrease in international prices for the main commodities exported by Argentina or a significant decline in their production could negatively affect Argentina’s economic condition.
● The return to a persistent fiscal deficit could result in long lasting adverse consequences for the Argentine economy.
● Fluctuations in the value of the Peso could adversely affect the Argentine economy.
● The maintenance or implementation of additional exchange controls regulations, restrictions on transfers abroad and capital inflow restrictions could limit the availability of international credit and could threaten the financial system.
● The Argentine government’s ability to obtain financing from the international loan and capital markets may be limited or costly, which may impair its ability to implement reforms and foster economic growth.
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● Developments in other countries may adversely affect the Argentine economy and our financial performance.
● We operate in a highly regulated environment, and our operations are subject to regulations adopted, and measures taken, by several regulatory agencies.
● The stability of the Argentine financial system depends upon the ability of financial institutions, including the Bank, to retain the confidence of depositors.
● The growth and profitability of the Argentine financial system partially depend on the development of medium and long-term funding sources.
● The asset quality of financial institutions, including ourselves, may continue deteriorating if the Argentine private sector is affected by adverse macroeconomic conditions in Argentina, due to volatility in interest rates and in the event of loss of disposable income.
● Argentine financial institutions, including us, have significant exposure to public sector debt and its repayment or refinancing capacity, which in periods of uncertainty may negatively affect their results of operations.
● Changes in market conditions and any associated risks, including interest rate and currency exchange volatility, could materially and adversely affect our results of operations and financial condition.
● Reduced spreads between interest rates on loans and those on deposits could adversely affect the Bank’s profitability.
● Due to our exposure to middle and lower-middle-income individuals and SMEs, the quality of our loan portfolio is more susceptible to economic downturns and recessions.
● Our estimates and established reserves for credit risk and potential credit losses may prove to be insufficient, which may materially and adversely affect our asset quality and our results of operations and financial condition.
● The Bank’s revenues from its business with senior citizens could decrease or cease to grow if the agreement with ANSES is terminated or not renewed.
● Cybersecurity events could negatively affect our reputation, results of operations and financial condition.
● Our controlling shareholder has the ability to direct our business, and potential conflicts of interest could arise.
You should carefully consider the risks described below, as well as the other information in this annual report. Our business, results of operations, financial condition or prospects could be materially and adversely affected if any of these risks occurs. In general, investors take more risk when they invest in the securities of issuers in emerging countries such as Argentina than when they invest in the securities of issuers in the United States and other more developed markets. The risks described below are those known to us and that as of the date of this annual report we believe may materially affect us.
Risks Relating to Argentina
Our business is largely dependent upon macroeconomic, political, regulatory and social conditions in Argentina.
Substantially all of our assets, property and customers are located in Argentina. As a result, the quality of our assets, our financial condition and the results of our operations are dependent upon the macroeconomic, political, regulatory and social conditions prevailing in Argentina from time to time. These conditions include growth rates, inflation rates, exchange rates, taxes, foreign exchange controls, changes to interest rates, changes to government policies, social instability, and other political, economic or international developments either taking place in, or otherwise affecting, Argentina. Argentina is an emerging country and investing in such markets generally carries additional risks.
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The Argentine economy has experienced significant volatility in the past decades, including multiple periods of low or negative growth and high levels of inflation and currency depreciation, and may experience further volatility in the future. In 2025, Argentina’s GDP increased by 4.4% compared to 2024, according to data published by the Argentine Institute of Statistics and Census (Instituto Nacional de Estadística y Censos de la República Argentina or “INDEC”). A significant portion of this growth reflected a statistical carryover effect from the recovery in activity towards the end of 2024, mainly driven by an increase in agriculture and financial intermediation activities. In addition, economic activity strengthened towards the end of 2025, led by agriculture, which offset a decline in manufacturing and retail activities.
Argentine economic conditions are dependent on a variety of factors, including the following: (i) domestic production, international demand and prices for Argentina’s principal commodity exports; (ii) the competitiveness and efficiency of domestic industries and services; (iii) the stability and competitiveness of the Peso against foreign currencies; (iv) the rate of inflation; (v) the government’s fiscal deficits or surpluses and the level of expenditure by the Argentine government; (vi) the government’s public debt levels; (vii) foreign and domestic investment and financing; (viii) governmental policies and the legal and regulatory environment; (ix) fluctuations in the Argentine Central Bank’s international reserves; (x) labor disputes and work stoppages; (xi) the level of unemployment; and (xii) political instability and social tensions. Government policies and regulation –which at times have been implemented through informal or de facto measures and have been subject to radical shifts– that have had a significant impact on the Argentine economy in the past have included, among others: (i) monetary policy, including exchange controls, capital controls, high interest rates and a variety of measures to curb inflation; (ii) restrictions on exports and imports; (iii) price controls; (iv) mandatory wage increases or prohibition of dismissals; (v) taxation; and (vi) government intervention in the private sector.
On December 10, 2023, Javier Milei took office as President of Argentina and pledged to implement significant economic reforms. Following President Milei’s inauguration, the Argentine Executive Branch enacted Decree No. 70/2023, which outlines a series of measures aimed at reducing the size of the public administration and public expenses, as well as de-regulating the Argentine economy. In addition, on June 28, 2024, the Argentine Congress approved the draft bill entitled “Bases and Starting Points for the Freedom of the Argentine People” (the “Ley de Bases”). The Ley de Bases established a series of legal, institutional, and tax reforms affecting various sectors of the economy. The Argentine administration has indicated that it intends to implement business friendly policies, but we cannot assure you that it will be able to implement these policies, considering that it does not hold a majority of the representatives in either chamber of the Argentine Congress. Political uncertainty in Argentina regarding the policies adopted and that may be adopted in the future by the current Argentine administration could lead to further volatility in the market prices of the securities of Argentine issuers and could have a material adverse effect on the economy or on Argentina’s ability to meet its obligations, which in turn could adversely affect our financial condition and results of operations.
On September 7, 2025, provincial mid-term legislative elections were held in the Province of Buenos Aires. The political party Fuerza Patria obtained 47.3% of the votes, whilst President Milei’s party, La Libertad Avanza, received 33.7% of the votes. Following the election, the international and domestic capital markets responded negatively, resulting in increased volatility in Argentine assets and a decline in equity and bond prices. On October 26, 2025, national mid-term legislative elections were held across Argentina to renew half of the seats in the Chamber of Deputies of the Argentine Congress and one third of the seats in the Senate. President Milei’s party, La Libertad Avanza, obtained approximately 40.7% of the votes for the Chamber of Deputies and approximately 42.0% for the Senate, while the main opposition coalition, Fuerza Patria, obtained approximately 31.7% of the votes for the Chamber of Deputies and approximately 28.4% for the Senate. Even with the new composition of the Argentine Congress, the Argentine Executive Branch still requires consensus to implement its agenda, including its ability to push forward the deregulation measures foreseen in the Ley de Bases.
In September 2025, the Senate approved a bill intended to restrict the authority of the executive branch to issue Decrees of Necessity and Urgency, thereby increasing legislative oversight of future policymaking. In addition, the Argentine Congress has recently reinstated certain regulations that were previously vetoed by the executive branch. The ongoing tensions between the legislative and executive branches may result in further changes to the regulatory framework, which could adversely affect our business, operations, financial condition and results of operations.
In this context, the Argentine government has continued to promote legislative reforms, including Law No. 27,799 which introduced tax reforms, such as establishing a new tax innocence regime, and Law No. 27,802, which introduced a labor reform, including substantial changes to hiring modalities, severance calculations, leave entitlements, working hours, collective labor disputes and the collective bargaining regime. On March 1, 2026, President Milei announced his intention to submit a broad package of structural reforms aimed at redesigning the institutional framework of the government. The proposed package consists of approximately 90 bills across multiple ministries and includes amendments to the Argentine Civil and Commercial Code, the Argentine Civil and Commercial
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Procedure Code, and the Argentine Customs Code and the Criminal Code, and reforms affecting the tax system, education, the electoral system, the judiciary and the armed forces. As of the date of this annual report, it is uncertain whether these proposed reforms will be approved, and, if approved, their impact remain uncertain.
The measures implemented by the current Argentine government may affect our business and results of operations.
The Argentine government exercises substantial control over the economy and may increase its level of intervention in certain areas of the economy, including through the regulation of market conditions and prices.
In the past, the Argentine government increased state intervention in the economy, including through expropriation and nationalization measures, price controls, exchange controls, establishment of minimum salary levels and mandatory employee benefits and restrictions on capital flows. For example, in 2008, the administration absorbed and replaced the former private pension system for a public “pay-as-you-go” pension system. As a result, all resources administered by the private pension funds, including significant equity interests in a wide range of listed companies, have since been administered by the Argentine Social Security Administration (Administración Nacional de la Seguridad Social or “ANSES”). In 2014, the Argentine government enacted law No. 26,991, which enables the Argentine government to intervene in certain markets when it considers that any party to the market is trying to impose prices or supply restrictions in the market. This law applies to all economic processes linked to goods, facilities and services which, either directly or indirectly, satisfy basic needs of the population (so-called “basic needs goods”), and grants broad powers to the enforcing agency (Secretariat of Commerce) to become involved in such processes.
The current Argentine administration faces significant macroeconomic challenges, such as continuing to reduce the inflation rate, achieving and sustaining commercial and fiscal surpluses, accumulating reserves, supporting the peso, refinancing debt owed to private creditors, and improving the competitiveness of the Argentine economy based on different factors that affect it, including the conflict between Ukraine and Russia, and the conflict in the Middle East, the trade policies implemented by the new U.S. administration, including the imposition of new tariffs that could affect cross-border commerce, and the political and economic situation in Venezuela.
Since the current Argentine administration took office, a large number of measures aimed at deregulating the Argentine economy and limiting government intervention in the private sector have been implemented, and it is expected that further measures will be adopted in the future. However, several of these measures have been challenged in Congress and submitted to judicial proceedings.
The Argentine executive branch enacted Decree No. 70/2023 contemplating several measures to reduce the size of the public administration and public expenses and to de-regulate the economy. In addition, on June 28, 2024, the Argentine Congress approved the Ley de Bases which declared a public emergency in administrative, economic and financial matters until July 8, 2025, and delegated a series of legislative powers to the Argentine executive branch until that date. As of the date of this annual report, the impact that the reforms adopted by the current Argentine administration will have on the Argentine economy as a whole, and the financial sector in particular, remains uncertain and cannot be predicted. Despite the announced measures from the current Argentine administration aimed at reducing state intervention in the private sector, the level of intervention in the economy by the Argentine government may increase, which may adversely affect Argentina’s economy and, in turn, our business, results of operations and financial condition.
If the levels of inflation increase, the Argentine economy and our business and financial condition could be adversely affected.
In the past, inflation has materially undermined the Argentine economy and Argentina’s ability to create conditions that would permit growth. High inflation may also undermine Argentina’s competitiveness abroad and lead to a decline in private consumption which, in turn, could also affect employment levels, salaries and interest rates. Moreover, a high inflation rate could undermine confidence in the Argentine financial system, reducing the Peso deposit base and negatively affecting long-term credit markets.
In recent years, Argentina has confronted high inflationary pressures, and continues to do so. In 2023, the INDEC registered an increase in CPI of 211.4% and an increase in WPI of 276.4%, which represents the highest annual inflation since 1991. In 2024, the INDEC registered an increase in CPI of 117.8% and an increase in WPI of 67.1%. In 2025, the INDEC registered an increase in CPI of 31.5% and an increase in WPI of 26.2%. The CPI published by the INDEC for the months of January and February 2026 was 2.9%.
In June 2018, the International Practices Task Force categorized Argentina as a country with a projected three-year cumulative inflation rate greater than 100%. Pursuant to IAS 29 (Financial Reporting in Hyperinflationary Economies), the financial statements of
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entities whose functional currency is that of a hyperinflationary economy must be restated in a suitable general price index to control the effects of changes. Argentine companies applying IFRS are required to apply IAS 29 to their financial statements for periods ending on and after July 1, 2018. In addition, certain regulatory authorities, such as the CNV, have required that financial statements submitted to the CNV for the periods ended on and after December 31, 2018 be restated for inflation in accordance with IAS 29.
On March 5, 2026, the Argentine Central Bank announced that the new inflation estimate for 2026 is 26.1% pursuant to its survey of market expectations (Relevamiento de Expectativas de Mercado). We cannot assure you whether inflation rates will decrease, remain flat or escalate in the future or that the measures adopted or that may be adopted by the administration to control inflation will be effective or successful. If inflation levels rise, the development of the Argentine economy and the Argentine financial system could be negatively impacted and, in particular, our costs of operation could increase, which may negatively affect our business, financial condition and results of operations.
A decrease in international prices for the main commodities exported by Argentina or a significant decline in their production could negatively affect Argentina’s economic condition.
Argentina’s economy has historically been centered on the production and export of certain commodities, including agricultural products such as cereals, fats and oils, beef and dairy products, and oil. Argentina’s reliance on the production and export of these commodities has made the country more vulnerable to fluctuations in their prices. A decrease in commodity prices may adversely affect the Argentine government’s fiscal revenues and the Argentine economy as a whole and, as a result, negatively impact our business, financial condition and results of operations.
Given the reliance of the Argentine economy on agricultural commodities, which represent a significant portion of Argentina’s export revenues, Argentina is vulnerable to weather events. In 2018 and 2023, droughts occurred in Argentina which negatively affected the production of Argentina’s agricultural commodities, reducing fiscal revenues and the inflow of U.S. dollars. The negative impact that these droughts had on the agriculture sector in Argentina was exacerbated by the historic drop in the Paraná river (Argentina’s main river) and a large number of fire outbreaks in multiple Argentine provinces during 2022. In addition, in 2024, rainfall in the core region of Argentina, the most productive area of the country, was close to the historical average, although in December 2024 rainfall was below the historical average. If any severe weather events, including droughts, occur in the future, productive activities in Argentina, the level of foreign exchange reserves in the Central Bank and the Argentine economy as a whole could be adversely affected.
In addition, in recent years oil has become an increasingly relevant export commodity for Argentina. Argentina has recently become a net exporter of crude oil, largely due to increased production from unconventional shale formations, including the Vaca Muerta shale oil and gas formation, and oil production volumes are expected to continue increasing as the development of these resources progresses. As a result, fluctuations in international oil prices or adverse developments affecting oil production could also negatively affect Argentina’s economic condition and, in turn, our business, financial condition and results of operations.
The conflict in the Middle East and the conflict between Russia and Ukraine have had and could continue to have a material adverse impact on global growth and international prices of oil, gas and other commodities, including those produced by Argentina. A long-term decrease in the international price of these commodities could negatively impact the prospects of Argentina and result in a decrease in foreign investment in Argentina. We cannot predict the impact that these policies may have on production levels and international prices, and how these impacts may affect the Argentine economy, including the development of oil and gas resources in Vaca Muerta.
If the international prices for the main commodities exported by Argentina decrease or if the country’s production of commodities is diminished, Argentina’s economy could be adversely affected. In addition, such circumstances could have a negative impact on the government’s tax revenues, including its ability to repay its debt, and on the availability of foreign currency. Any such developments may adversely affect Argentina’s economy and, as a result, our business, results of operations and financial condition.
The return to a persistent fiscal deficit could result in long lasting adverse consequences for the Argentine economy.
During the past, the Argentine government has sustained high levels of fiscal deficit, and has resorted regularly to the Central Bank to source part of its funding requirements. In 2023, public sector revenues decreased approximately 4.7%, mainly as a result of the significant drop in income as a result of the drought which occurred in Argentina in 2023, public expenditures decreased 4.9%, mainly due to a reduction in real terms in social benefits and subsidies, and the government achieved a primary fiscal deficit of 2.7% of Argentina’s GDP. However, in 2024, public sector revenues increased approximately 7.2% in real terms and public expenditures
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decreased 4.4% compared to 2023, mainly due to the reduction of public works, and the government achieved a primary fiscal surplus of 1.8% of Argentina’s GDP. In 2025, public sector revenues increased approximately 4.6% in real terms and public expenditures increased 6.7% compared to 2024, mainly due to an increase in social benefits partially offset by lower subsidies, and the government achieved a primary fiscal surplus of 1.1% of Argentina’s GDP. As a result, the current Argentine administration has achieved two consecutive years of primary fiscal surplus, marking a significant shift from the persistent fiscal deficits recorded in prior years.
On December 27, 2025, the Argentine Congress approved the National Budget for fiscal year 2026, which is the first budget passed under the current administration, which projects a primary surplus of 1.2% of GDP and a zero fiscal deficit. According to legislators involved in the approval process, this marks the first time in 13 years that Argentina has approved a budget with a zero deficit target.
Despite the commitment from the current Argentine administration to eliminate the fiscal deficit, we cannot assure you that such levels of public expenditures and public sector revenues can be sustained by the Argentine government. As a result, we cannot assure you that in the future the Argentine government will not seek to finance its deficit by gaining access to the liquidity available in the local financial institutions. In that case, government initiatives that increase the exposure of local financial institutions to the public sector could affect the liquidity and asset quality of the financial system and may have a negative effect on clients’ confidence in the financial system.
Fluctuations in the value of the Peso could adversely affect the Argentine economy.
Fluctuations in the value of the Peso have affected the Argentine economy in the past. Since January 2002, the value of the Peso has fluctuated significantly. Persistent high inflation, exchange controls and restrictions on foreign trade have resulted in the loss of competitiveness of Argentine production, impeded investment and caused economic stagnation. In 2023, 2024 and 2025, the Peso depreciated against the U.S. dollar 356.4%, 27.7% and 41.4%, respectively. As of April 1, 2026, the exchange rate was Ps. 1,387.7212 per U.S.$1.00.
The depreciation of the Peso may have a negative impact on the ability of Argentine businesses to service their foreign currency denominated debt, lead to inflation, significantly reduce real wages and jeopardize the stability of businesses whose success depends on domestic market demand, and also adversely affect the Argentine government’s ability to honor its foreign debt obligations. In addition, the Argentine Central Bank could intervene in the foreign exchange market to influence exchange rates which could lead to a decrease in its international reserves, which may have an adverse impact on Argentina’s ability to withstand external shocks to the economy. In turn, a significant appreciation of the Peso against the U.S. dollar also presents risks for the Argentine economy, including the possibility of a reduction in exports as a consequence of the loss of external competitiveness. Any such appreciation could also have a negative effect on economic growth and employment and reduce tax revenues in real terms.
The maintenance or implementation of additional exchange controls regulations, restrictions on transfers abroad and capital inflow restrictions could limit the availability of international credit and could threaten the financial system.
In the past, the Argentine government has increased controls on the sale of foreign currency, limiting transfers of funds abroad. Measures taken by the Argentine government significantly curtailed access to the official foreign exchange market, including by establishing mandatory refinancing requirements on foreign currency-denominated indebtedness. As a result, an unofficial U.S. dollar trading market developed in which the Peso-U.S. dollar exchange rate differed substantially from the official Peso-U.S. dollar exchange rate.
The current administration has adopted measures to ease foreign exchange restrictions, including lifting substantially all the restrictions that applied to individuals who seek to access the official exchange market. On April 11, 2025, Argentina adopted a managed floating exchange rate regime with intervention bands, allowing the U.S. dollar rate to fluctuate within a predetermined range. On December 15, 2025, the Central Bank announced a new monetary policy phase effective January 1, 2026, adjusting the bands monthly based on prevailing inflation levels to mitigate episodes of excessive volatility while allowing the exchange rate to fluctuate according to market conditions. In the first months of 2026, the Central Bank purchased approximately U.S.$4.0 billion in foreign currency under this policy. However, we cannot assure that the Central Bank will be able to continue purchasing foreign currency at the current pace, the frequency of such purchases, or whether these purchases will be sufficient to meet Argentina’s upcoming foreign currency-denominated debt obligations, which could adversely affect Argentina's access to international financing and, consequently, our business, financial condition and results of operations. As a result of these measures, the gap between the official exchange rate and
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other informal exchange rates that arise implicitly from certain capital market transactions narrowed significantly in 2025. For further information, see “Item 10.D. Exchange Controls”.
We cannot anticipate how long the current measures will be in force or if additional restrictions will be imposed. The Argentine government could maintain or impose new exchange controls, restrictions and take other measures in response to capital flight or a significant depreciation of the Peso, which could in turn limit access to the international capital markets and affect the Argentine economy. In addition, the evolving exchange control restrictions and measures may result in Argentine Central Banks’s information requests, enforcement actions and penalties due to diverging interpretations of foreign exchange regulations.
The Argentine government could maintain a single official exchange rate or create multiple exchange rates for different types of transactions, substantially modifying the applicable exchange rate at which we acquire currency for different purposes. Furthermore, existing or future measures could undermine the Argentine government’s public finances, which could adversely affect Argentina’s economy, which, in turn, could adversely affect our business, results of operations and financial condition.
The Argentine government’s ability to obtain financing from the international loan and capital markets may be limited or costly, which may impair its ability to implement reforms and foster economic growth.
The Argentine government has repeatedly faced difficulties in the payment of its sovereign debt in the past. As a result, the Argentine government may not have access to international financing, or its access may be costly, which would limit its ability to make investments and foster economic growth. Additionally, Argentine companies may also have difficulty accessing international financing, at reasonable costs or at all.
Between 2018 and 2022, the Argentine government undertook several debt restructuring processes, including a three-year loan agreement with the IMF for U.S.$57.1 billion (the “IMF Agreement”), the restructuring of approximately U.S.$65 billion in global bonds issued under foreign law, a renegotiation of outstanding debt with the Paris Club members extending maturities to September 2028, and a 30-month extended fund facility with the IMF, totaling approximately U.S.$44 billion, to refinance principal maturities under the IMF Agreement. In June 2021, Morgan Stanley Capital International reclassified the Argentine market from an “emerging market” to a “standalone” market due to the prolonged severity of capital controls, resulting in a negative impact on the price of securities of several Argentine companies and potentially limiting their ability to obtain financing.
On March 11, 2025, the Argentine government issued the Emergency Decree No. 179/2025 which approved a new 10-year agreement with the IMF to refinance liabilities, including non-transferable treasury bills and the remaining amounts pending amortization under the IMF Agreement. On April 8, 2025, the IMF and the Argentine government entered into a new financing arrangement (the “New IMF Agreement”) for a total amount of approximately U.S.$20 billion and on April 11, 2025, the IMF approved an initial disbursement of U.S.$12 billion under the New IMF Agreement with an additional disbursement of U.S.$2 billion scheduled for June 2025. The New IMF Agreement has a ten-year maturity and an annual interest rate of approximately 5.63%. According to the IMF, Argentina is implementing an ambitious stabilization plan focused on the establishment of a strong fiscal anchor along with policies to bring down inflation. The success of these measures will depend on the Argentine government's ability to continue implementing economic reforms and maintain the political and social support necessary to achieve macroeconomic stability and sustainable economic growth. The IMF monitors Argentina’s compliance with the agreement at the end of each quarter. We cannot assure that the conditions of the IMF Agreement will not affect Argentina’s ability to implement reforms and public policies and boost economic growth, nor the impact that the IMF Agreement may have in Argentina’s ability to access international capital markets (and indirectly in our ability to access those markets). The success of these measures will depend on the Argentine government’s ability to continue implementing economic reforms and maintain the political and social support necessary to achieve macroeconomic stability and sustainable economic growth. On April 11, 2025, the World Bank and the Inter-American Development Bank (“IDB”) approved the granting of financial assistance to Argentina under multi-year programs in the amounts of U.S.$12 billion and U.S.$10 billion, respectively. On July 24, 2025, the IDB approved two additional loans totaling U.S.$ 1.2 billion to strengthen fiscal sustainability, improve the business climate, and boost competitiveness under the IDB’s new 2025-2028 country strategy for Argentina. These loans are part of the U.S.$10 billion financing package that the IDB will provide to Argentina’s public and private sectors over the next three years.
In September 2025, the Argentine government and the U.S. Treasury announced a framework for a bilateral currency swap line of up to approximately U.S.$20 billion, under which the Central Bank may draw U.S. dollars in exchange for Pesos. The agreement aims to support Argentina’s macroeconomic stability, with a particular focus on preserving price stability and promoting sustainable economic growth. The agreement sets forth the terms and conditions for bilateral currency swap transactions between the parties, which
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are expected to expand the Central Bank’s monetary and exchange policy toolkit and strengthen the liquidity of its international reserves. See “—Our business is largely dependent upon macroeconomic, political, regulatory and social conditions in Argentina.” As of the date of this annual report, the Argentine government has been disbursed approximately U.S.$2.5 billion under this swap line, which was fully repaid by the Argentine government on January 9, 2026. Although this swap line may help Argentina mitigate pressure on its foreign currency reserves in the short term, the full conditions—including the interest rate, maturity, collateral terms, and the timing and volume of future draws— have not been fully disclosed.
Due to past or potential future defaults on its indebtedness, and despite recent developments, we cannot assure you that Argentina will have access to international financing in the future, on reasonable terms or at all. If Argentina is not able to access financing, it may not be able to foster economic growth and invest in the country. As a result, we cannot assure you that private companies in Argentina, including us, will have access to financing on reasonable terms or at all, which could adversely affect our business, financial condition and results of operations.
Developments in other countries may adversely affect the Argentine economy and our financial performance.
Argentina’s economy remains vulnerable to external shocks that could be caused by adverse regional or global developments. A significant decline in the economic growth of any of Argentina’s major trading partners (including Brazil, the European Union, China and the United States) could have a material adverse impact on Argentina’s balance of trade and adversely affect Argentina’s economy. In addition, Argentina may be affected by economic and market conditions in markets worldwide, as was the case in 2008 when the global economic crisis led to a sudden economic decline in Argentina in 2009, or in 2020 when the COVID-19 pandemic severally affected global economies.
In the past, emerging market economies have been affected by changes in U.S. monetary policy, at times resulting in the unwinding of investments and increased volatility in the value of their currencies. During 2018, the interest rate curve in the United States shifted upward, generating a generalized devaluation in emerging markets, with the Turkish Lira and the Peso being the most affected currencies against the U.S. dollar. However, in July 2019, the U.S. Federal Reserve cut rates for the first time since 2008, indicating an expectation of lower growth in the future, with long-term rates remaining low during 2020 and 2021. In March 2022, the U.S. Federal Reserve increased the federal funds rate by 0.25% for the first time since December 2018. During 2022, the U.S. Federal Reserve further increased the federal funds rate to a range between 4.25% and 4.50%. In February, March, May and July 2023, the U.S. Federal Reserve further increased the federal funds rate to 4.75%, 5.0%, 5.25% and 5.50%, respectively. However, in September, November and December 2024, the U.S. Federal Reserve decreased the federal funds rate to 5.0%, 4.75% and 4.50%, respectively. In September, October and December 2025, the U.S. Federal Reserve decreased the federal funds rate to 4.25%, 4.00% and 3.75%, respectively. If interest rates rise significantly in developed economies, including the United States, emerging market economies, including Argentina, could find it more difficult and expensive to borrow capital and refinance existing debt, which would negatively affect their economic growth.
On November 3, 2024, the United States held a presidential election in which President Trump was elected president of the United States. Mr. Trump assumed the presidency on January 20, 2025. The U.S. political environment may be affected by the congressional midterm elections scheduled for November 2026, which will determine control of both chambers of the U.S. Congress for the following legislative term. These elections will involve all seats in the U.S. House of Representatives and a portion of the seats in the U.S. Senate, and their outcome could influence the administration’s ability to advance its legislative agenda. Depending on the electoral outcome, changes in congressional leadership could affect the scope or implementation of U.S. economic and trade policies, including measures that may influence tariffs, supply chains, or market access for international exporters operating in or trading with the United States.
On February 5, 2026, Argentina and the United States signed a bilateral trade and investment agreement intended to reduce tariff and non-tariff barriers and expand investment between the two countries. Although the agreement is expected to facilitate increased trade between the two countries, its implementation, scope and interaction with existing or future tariff and trade measures remain subject to regulatory developments and policy decisions. As of the date of this annual report, the agreement has not been approved by the Argentine Congress.
On January 3, 2026, the United States conducted a joint U.S. Justice Department and military operation to apprehend and arrest Nicolás Maduro and his wife and bring them to trial in New York, which included airstrikes against certain targets in Venezuela, and President Donald Trump has indicated that the U.S. will oversee a transition of the Venezuelan government. As of the date of this annual report,, it is difficult to predict the development of the security, political and economic situation in Venezuela and the region, and further
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developments, including the escalation of military conflict and the potential for civil and social unrest, could may adversely affect and lead to increased volatility in financial and securities markets.
In June 2025, following Israeli strikes on Iranian military infrastructure, the United States launched a major air attack targeting Iran’s nuclear facilities at Fordow, Natanz, and Isfahan. The U.S. strikes caused significant damage and marked a dramatic escalation in U.S.-Iran tensions, raising fears of a wider regional war. On February 28, 2026, the United States and Israel further conducted several air strikes on Iran and in retaliation Iran fired ballistic missiles at Israel and targeted at least four U.S. military bases in the Persian Gulf. Since that date, intense military actions and bombings by the United States, Israel and Iran have continued in the Middle East, including reported attacks in other countries, such as Iraq, Saudi Arabia, Qatar and Bahrain. Continuation and further escalation of these conflicts could lead to the involvement of other countries in the conflict. The Argentine administration has publicly expressed its alignment with the United States and Israel in foreign policy matters, which could expose Argentina to diplomatic or trade repercussions from countries or blocs that oppose such positions.
In addition, the Russian invasion of Ukraine has disrupted global markets, contributing to significant volatility in commodity prices, particularly energy, and raising concerns about the security of global energy supplies. See “–A decrease in international prices for the main commodities exported by Argentina or a significant decline in their production could negatively affect Argentina’s economic condition.” The extent to which the conflicts described above may affect Argentina international relations, trade flows and overall economy remains uncertain, and any adverse consequences could in turn negatively impact our business, financial condition and results of operations.
The economic activity of Brazil, one of Argentina’s main trade partners, also has an impact on Argentina’s economy. A depreciation of the Brazilian Real against the U.S. dollar has in the past (including the recent months) and would again in the future put additional pressure on the exchange rate for the Argentine Peso against the U.S. dollar. Likewise, weak economic performance from Brazil would affect Argentine exports, particularly in the case of industrial goods, many of which Argentina exports to Brazil.
These developments have had, and are likely to continue to have, a significant impact on international commodity prices, supply chains and inflationary pressures globally. Due to the uncertainties inherent in the scale and duration of these events and their direct and indirect effects, it is not reasonably possible to estimate the full impact on the world economy and global financial markets, on the Argentine economy and, consequently, on our business, financial condition and results of operations. Any such disruptions may also magnify the impact of other risks described in this annual report. We cannot assure you that events in other market countries will not adversely affect our financial performance.
Government or labor pressure to grant salary increases and/or additional benefits may affect business conditions in Argentina.
In the past, the Argentine government has passed laws and regulations forcing privately owned companies to maintain certain wage levels and provide added benefits to their employees. Additionally, both public and private sector employers have been subject to significant pressure from the workforce and trade unions to grant salary increases and other benefits. The Argentine government has increased the minimum monthly salaries on numerous opportunities. In addition, in the past the Argentine government has arranged other measures to mitigate the impact of inflation and exchange rate fluctuation in wages, or the consequences of the COVID-19 pandemic.
Labor relations in Argentina are governed by specific legislation, such as Labor Law No. 20,744, the Labor Reform (as defined below) and Collective Bargaining Law No. 14,250 (as amended from time to time, the “Collective Bargaining Law”), which, among other things, dictate how salary and other labor negotiations are to be conducted. Most industrial or commercial activities are regulated by a specific collective bargaining agreement that groups together companies by industry and trade unions. While the process of negotiation is standardized, each chamber of industrial or commercial activity negotiates the increases of salaries and labor benefits with the relevant trade union of such commercial or industrial activity. Parties are bound by the final decision once it is approved by the labor authority and must observe the established salary increases for all employees that are represented by the respective union and to whom the collective bargaining agreement applies.
In March 2026, the Labor Modernization Law No. 27,802 (the “Labor Reform”) was enacted. As of the date of this annual report, the Labor Reform has not been fully implemented. The Labor Reform introduces substantial changes to the labor framework, including provisions related to hiring modalities, severance calculations, leave permits, working hours, collective labor disputes, the regulation of essential services, the collective bargaining regime, and the treatment of compensation structures. The Labor Reform also
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modifies the treatment of workplace assemblies and establishes new parameters governing the exercise of the right to strike in certain activities deemed essential. Since its enactment, the Labor Reform has been subject to a number of judicial challenges brought by labor unions and the General Confederation of Labor (Confederación General del Trabajo, or “CGT”), among others. While the injunction sought by the CGT to suspend certain provisions of the Labor Reform was rejected, the Argentine courts have suspended the applicability of 83 articles of the Labor Reform. As of the date of this annual report, the Argentine government has announced that it will appeal such suspension. We cannot predict the ultimate outcome of these or any future judicial challenges, whether additional claims may be brought, or the extent to which court decisions may affect the implementation or scope of the Labor Reform. For more information about the Labor Reform, see “Item 6. Directors, Senior Management and Employees–Employees–Compensation.”
We cannot assure you that the current Argentine administration will not adopt future measures requiring that employers increase salaries and/or employee benefits, prohibition of dismissals, duplication of severance payments or that our employees and/or labor unions will not pressure for such measures themselves. Any such increase could result in an increase in our operating expenses and, therefore, adversely affect our results of operations.
Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect Argentina’s economy, which in turn could adversely affect our business, financial condition and results of operations.
A lack of a solid institutional framework and corruption have been identified as, and continue to be a significant problem for Argentina. In Transparency International’s 2025 Corruption Perceptions Index survey of 182 countries, Argentina was ranked 104th.
Recognizing that the failure to address these issues could increase the risk of political instability, distort decision-making processes and adversely affect Argentina’s international reputation and ability to attract foreign investment, the former Macri administration announced several measures aimed at strengthening Argentina’s institutions and reducing corruption. These measures included the reduction of criminal sentences in exchange for cooperation with the government in corruption investigations, increased access to public information, the seizing of assets from corrupt officials, increasing the powers of the Anticorruption Office (Oficina Anticorrupción) and the passing of a new public ethics law, among others. The current Argentine administration’s ability and determination to implement these initiatives taken by the former Macri administration remains uncertain. We cannot assure whether the implementation of these or other anti-corruption measures will be successful.
The Argentine government’s inability to accurately address actual and perceived risks of institutional deterioration and corruption might adversely affect the Argentine economy which, in turn, could adversely affect our business, results of operations and financial condition.
The outbreak and spread of a pandemic and other large-scale public health events could have a significant impact on the Argentine economy and have a material adverse effect on our business, results of operations and financial condition.
Pandemics or other global health crises, such as the COVID-19 pandemic, could disrupt our business operations, affect our workforce and supply chain, and limit the availability of transportation or essential services. Measures adopted by governments in response to such events, including quarantines, travel restrictions or shutdowns, may affect business continuity and our ability to maintain normal operations.
Risks Relating to the Argentine Financial System
We operate in a highly regulated environment, and our operations are subject to regulations adopted, and measures taken, by several regulatory agencies.
Financial institutions are subject to significant regulation relating to functions that historically have been determined by the Central Bank, the Financial Information Unit (Unidad de Información Financiera or “UIF”) and the CNV. These regulations include: (i) minimum capital requirements; (ii) mandatory reserve requirements; (iii) requirements for investments in fixed rate assets; (iv) lending limits and other credit restrictions, including mandatory allocations; (v) limits and other restrictions on fees; (vi) reduction of the period for the financial institutions to deposit the amount of sales made with credit cards in the corresponding accounts of the sellers; (vii) limits on the amount of interest banks can charge or pay, or on the period for capitalizing interest; (viii) accounting and statistical requirements; (ix) limits on dividends; (x) reporting or controlling regimes as agents or legally bound reporting parties; and (xi) changes in the deposit insurance regime. Even though the current Argentine administration has started to de-regulate certain aspects
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of the Argentine financial system, including by eliminating existing floor rates on time deposits and by terminating the requirement to obtain the prior approval of the Central Bank to close or transfer bank branches, a significant number of regulations are still in force. See “Item 4—Information of the Company—Argentine Banking Regulation Overview”.
We have no control over governmental regulations or the rules governing all aspects of our operations. The Central Bank may penalize our main subsidiary, the Bank, in case of any breach of applicable regulations. Similarly, the CNV, which regulates the public markets in Argentina and authorizes our securities offerings, has the authority to impose sanctions on us, our subsidiaries and our Board of Directors for breaches of corporate governance.
The absence of a stable regulatory framework in Argentina for financial institutions and the imposition of measures that affect the profitability of financial institutions and limit the possibility of covering their positions against currency fluctuations result may limit the decisions that financial institutions, including the Bank, can make on asset allocation, which may adversely affect future financial activities and our result of operations. We cannot foresee whether the Argentine government will continue to de-regulate the Argentine financial system and, if so, how the new measures may affect us and our business. Likewise, there can be no assurances that new and tighter regulations will not be implemented in the future, which could cause uncertainty and could negatively affect our future financial activities and results of operations. In addition, existing or future legislation and regulation may require us to make material expenditures to avoid any material adverse effect on our operations.
Changes adopted by the Argentine government to the regulatory regime applicable to the Argentine financial sector may adversely affect financial institutions, including us.
During 2025, the Argentine government has enacted several regulations amending the regulatory framework for financial institutions, including changes to minimum cash requirements, reserve requirement calculation methods, and the allocation of reserve requirements to government securities.
In July 2025, the Central Bank discontinued the use of LEFIs, as part of a broader monetary policy tightening. The phase-out of the LEFI program, combined with higher reserve requirements and the increase in policy and market interest rates, resulted in a significant contraction of financial systems liquidity. These measures increased short-term funding costs, reduced the availability of lendable funds, and led to greater volatility in interbank and deposit rates. See “Item 5. Operating and Financial Review and Prospects—Material Trends Related to Argentina and the Argentine Financial System” in this annual report.
We cannot assure you that future changes in the regulations and the policies of the Argentine government will not adversely affect financial institutions in Argentina, including us, our business, results of operations and financial condition. An unstable regulatory framework would impose significant limitations on the activities of the financial system, including ours, and it would give rise to uncertainty in regards to our future financial performance.
The stability of the Argentine financial system depends upon the ability of financial institutions, including the Bank, to retain the confidence of depositors.
The measures implemented by the Argentine government in the past, in particular the restrictions imposed on depositors to withdraw money freely from banks and the pesification and restructuring of their deposits, resulted in losses for many depositors and undermined their confidence in the Argentine financial system.
In addition, financial deepening in Argentina remains limited. As of December 31, 2025, private sector deposits represented approximately 21.1% of GDP, compared to approximately 19.3% as of December 31, 2024. This limited level of deposits relative to GDP may constrain the growth and resilience of the financial system and may exacerbate the effects of adverse macroeconomic conditions on financial institutions.
Although liquidity levels are currently reasonable, no assurances can be given that these levels will not be reduced in the future due to adverse economic conditions that could negatively affect the Bank’s business. Any massive withdrawal of deposits, including as a result of an adverse economic development in Argentina, could cause liquidity constraints in the financial sector, including a contraction in credit supply.
If, in the future, depositor confidence further weakens and the deposit base contracts, such loss of confidence and contraction of deposits will have a substantial negative impact on the ability of financial institutions, including the Bank, the main subsidiary of the Group, to operate as financial intermediaries. If the Bank is not able to act as a financial intermediary, its results of its operations could
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be adversely affected or limited, which in turn could affect our results of operations and financial condition. Loss of confidence in the international financial markets may also adversely affect the confidence of Argentine depositors in local banks.
The growth and profitability of the Argentine financial system partially depend on the development of medium and long-term funding sources.
Since the majority of our term deposits are short-term deposits with a maturity of less than three months, a relevant portion of our loans have very short maturities, and there is a small portion of medium- and/or long-term credit lines. The short-term nature of the deposit base of the Argentine financial system could lead to a reduction in liquidity levels and limit the long-term expansion of financial intermediation.
If longer-term financial intermediation activity does not grow, the ability of financial institutions, including us, to generate profits will be negatively affected. In addition, if Argentine financial institutions, including the Bank, are unable to access adequate sources of medium and long-term funding or if they are required to pay high costs in order to obtain the same, this may adversely affect their ability to grow their loan portfolio and profitability.
The potential mismatch between the maturities of funding sources and those of loan portfolios as a result of the increase in private sector credit in Argentina during 2024 and 2025 could adversely affect Argentina’s economy and the Argentine financial sector.
As of December 31, 2025, private sector credit in Argentina relative to GDP increased to 14.8%, compared to 10.7% as of December 31, 2024, in accordance with data published by the Central Bank. The expansion of new credit within the Argentine financial system depends on sustained deposit levels. The short-term nature of the Argentine financial system’s deposit base could lead to a reduction in liquidity levels due to the mismatch between the maturities of funding sources and those of the loan portfolio. Although current liquidity indicators remain adequate, the recent tightening of monetary conditions, including the elimination of LEFI instruments and the increase in reserve requirements, could exacerbate liquidity risks in the event of deposit withdrawals or shifts in market sentiment. There can be no assurance that liquidity levels will not deteriorate in the future due to adverse economic conditions. In the medium term, the growth of credit will continue to depend mainly on the rise in deposit levels. If Argentine financial institutions, including us, are unable to access adequate sources of medium- and long-term funding or are required to pay high costs to obtain such funding, their capacity, as well as ours, to broaden their loan portfolios may be negatively impacted.
The asset quality of financial institutions, including ourselves, may continue deteriorating if the Argentine private sector is affected by adverse macroeconomic conditions in Argentina, due to volatility in interest rates and in the event of loss of disposable income.
The capacity of many Argentine private sector debtors to repay their loans deteriorated significantly in 2025, as a result of Argentina’s macroeconomic environment, significant volatility in interest rates, particularly the sharp increase in rates during the second half of 2025, a loss of disposable income, and uneven economic performance across industries, which affected debtors differently depending on the sector in which they operated. As a result, the asset quality of financial institutions, including the Bank, was adversely affected. According to data published by the INDEC, Argentina’s GDP increased by 4.4% in 2025. A significant portion of this growth reflected a statistical carryover effect from the recovery in activity towards the end of 2024, mainly driven by an increase in agriculture and financial intermediation activities. In addition, economic activity strengthened towards the end of 2025, led by agriculture, which offset a decline in manufacturing and retail activities.
The Argentine economy remains fragile and volatile, with high inflation rates (117.8% in 2024 and 31.5% in 2025) affecting, among others, the purchase power of consumers. Although in December 2025 the wage index increased by 38.2% compared to December 31, 2024, mainly driven by increases of 28.7% in the registered private sector, 28.9% in the public sector, and 87.9% in the unregistered private sector, wage growth did not fully offset the impact of inflation, reduced disposable income and tightened financial conditions for many borrowers.
As a result, in 2025 the non-performing ratio of credit to private sector showed a significant deterioration compared to 2024, increasing from 1.5% in December 2024 to 5.5% in December 2025. As of December 31, 2025, the non-performing loan ratio for loans granted to individuals and the non-performing loan ratio for loans granted to companies increased to 10.6% and 2.5%, respectively, compared to 2.5% and 0.7% as of December 31, 2024, respectively. Additionally, the Argentine financial system reduced its coverage, with provisions representing 98% of the non-performing loan portfolio as of December 31, 2025, below the levels recorded in 2024.
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If Argentina’s economic activity deteriorates, including through continued pressure on household and corporate disposable income, sustained interest-rate volatility, further tightening of financial conditions or uneven sectoral growth, there could be a substantial increase in the incidence of non-performing loans, which could have a material adverse effect on our business, results of operations and financial condition. If customers are not able to repay their loans, the quality of the Bank’s assets may deteriorate and loan loss provisions may increase, which could, in turn, adversely affect our results of operations and financial condition.
Argentine financial institutions, including us, have significant exposure to public sector debt and its repayment or refinancing capacity, which in periods of uncertainty may negatively affect their results of operations.
To some extent, the value of the assets held by Argentine financial institutions, as well as their income generation capacity, is dependent on the public sector’s creditworthiness, which is in turn dependent on the Argentine government’s ability to promote sustainable long-term economic growth, generate tax revenues and control public spending.
Argentine financial institutions usually hold public sector debt issued by the national, provincial and municipal governments and securities issued by the Central Bank as part of their portfolios. During 2025, the exposure by Argentine financial institutions to public sector debt continued decreasing, transferring a significant portion of such credit to the private sector. As a result, the real balance of credit to the private sector accumulated an increase of 36.7% as of December 31, 2025 compared to 2024.
As of December 31, 2025, the exposure of the financial institutions to the public sector represented 26% of total assets. As of December 31, 2025, our exposure to the public sector amounted to Ps. 1,529 billion, representing 20% of our total assets as of that date. As a result, our income-generating capacity may be materially impacted by the Argentine public sector’s debt repayment capacity and the performance of public sector bonds, which, in turn, is dependent on the factors referred to above.
Should the public sector fail to fulfill its commitments in due time and proper form, this could have an adverse effect on our business, results of operations and financial condition.
Reduced spreads between interest rates on loans and those on deposits could adversely affect the Bank’s profitability.
Historically, the Argentine financial system witnessed a decrease in spreads between the interest rates on loans and deposits as a result of increased competition in the banking sector and the Argentine government’s tightening of monetary policy in response to inflation concerns. Such increased competition in the banking and financial sector could reduce prices and margins (including spread between the interest rates on loans and deposits) and the volume of operations and our market share. Frequent regulatory changes, high inflation and frequent currency devaluations have also led to fluctuations in interest rates which could also impact spreads.
We expect competition in the banking and financial sector to continue to increase, including as a result of the expansion of digital banks, which has put pressure on market interest rates and has required us to adjust the rates we offer in order to remain competitive. If we are not able to maintain profitable spreads between interest that we earn on the loans that we grant and the interest that we pay on the deposits that we hold (including those held in payroll accounts and SME accounts that pay interests), our results of operations and financial condition may be materially adversely impacted.
In addition, a change in the composition of the source of funding, which includes a relevant portion of non-interest-bearing deposits, could also put downward pressure on margins. A change in the composition of the source of funding could result from lower interest rates, higher demand of credit and therefore a need to increase the amount of time deposits or other types of bearing interest liabilities. Further reduction in spreads could have a material adverse effect on our business, results of operation and financial condition. We cannot guarantee that interest rate spreads will remain attractive.
If financial intermediation activity volumes relative to Argentina’s GDP does not increase to significant levels, the capacity of financial institutions, including the Bank, our main subsidiary, to generate profits may be negatively affected.
As a result of the 1999-2002 financial crisis, which adversely affected the Argentine economy, the volume of financial intermediation activity dropped dramatically: private sector credit plummeted from 24% of Argentina’s GDP in December 2000 to 7.7% in June 2004 and total deposits as a percentage of GDP fell from 31% to 23.2% during the same period. The depth of that crisis and the effect it had on depositors’ confidence in the financial system created uncertainty regarding its ability to act as an intermediary between savings and credit. Although private credit relative to GDP grew after the 1999-2002 financial crisis, the ratio of the total financial system’s private-sector deposits and loans to GDP remains low when compared to international levels and continues to be lower than
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the periods prior to the 1999-2002 crisis. As of December 31, 2025, the ratio of private sector deposits and loans to GDP was 21.1% and 14.8%, respectively, compared to 19.3% and 10.7% in 2024.
There is no assurance that financial intermediation activities will continue in a manner sufficient to reach the necessary volumes and businesses to provide financial institutions, including the Bank, with sufficient capacity to generate greater income, which may, in turn, impact our results of operations.
Enforcement of creditors’ rights in Argentina may be limited, costly and lengthy.
In the past, in order to protect debtors affected by the economic crisis in 2001 and 2002, the Argentine government adopted measures in the beginning of 2002 that suspended proceedings to enforce creditors’ rights upon debtor default, including mortgage foreclosures and bankruptcy petitions. More recently, the Argentine government took other temporary measures, such as the suspension of mortgage foreclosures during the COVID-19 pandemic, which limited the ability to enforce creditors’ rights.
Any such measures, and any other measures which may limit the ability of creditors, including us, to bring legal actions to recover unpaid loans or restricting creditors’ rights generally could have a material adverse effect on the financial system and on our business.
The Consumer Protection Law and the Credit Card Law may limit some of the rights afforded to us and our subsidiaries.
The application of the Argentine Consumer Protection Law No. 24,240 (as amended, the “Consumer Protection Law”), which establishes a number of rules and principles for the protection of consumers, and the Law No. 25,065 (as amended, the “Credit Card Law”), which sets forth several mandatory regulations designed to protect credit card holders, has increased the levels of intervention by administrative authorities and federal, provincial and municipal courts. Moreover, administrative and judicial authorities have issued various rules and regulations aimed at strengthening consumer protection.
In this context, the Central Bank issued regulations with respect to the protection of financial services customers, which grants broad protection to financial services customers, and limits fees and charges that financial institutions may validly collect from their clients. In addition, the Argentine Supreme Court created the Public Registry of Collective Proceedings to register collective proceedings (such as class actions) filed with national and federal courts. In the event that we or our subsidiaries are found liable for violations of any of the provisions of the Consumer Protection Law or the Credit Card Law, the potential penalties could limit some of our rights or our subsidiaries’ rights, for example, with respect to the ability to collect payments due from services and financing provided by the Bank or its subsidiaries, which could adversely affect our results of operations.
Furthermore, the rules that govern the credit card business provide for variable caps on the rates and fees that financial entities may charge to clients, and enable courts to decrease the interest rates and fees agreed upon by the parties if they are deemed excessively high. The maintenance of limits imposed by the Central Bank and any further reduction in credit and debit card sales commissions could adversely affect our profitability, results of operation and financial condition.
A change in the applicable law or court decisions lowering the cap on interest rates and fees would reduce the Bank’s revenues, which could negatively affect our consolidated results.
The implementation of measures regarding the charging of fees and regulated rates could adversely affect our financial condition and results of operations.
In the past, the Central Bank enacted regulations imposing limits on the fee amounts and interest rates that Argentine financial entities, including the Bank, can charge to their customers. As of the date of this annual report, these limitations apply only to certain financial products, including maximum interest rates on credit card transactions and fees on specific deposit accounts. These limits may affect the interest rates and fees earned by us, potentially resulting in a reduction in our income or in the customer demand for our products. Additionally, if we increased the interest rates and fees that we charge to our customers (or if these interest rates and fees were raised by the Central Bank), the debt service obligations for our customers could expand, potentially leading to higher levels of delinquent loans or discouraging customers from borrowing. We cannot assure that the current limitations will remain unchanged or that the Central Bank may extend, tighten, or introduce additional restrictions in the future.
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Interest rates and regulated fees are highly sensitive to many factors beyond our control, including domestic and international economic and political conditions, and increased competition in the banking sector. Changes in the demand for our services or increases in the levels of delinquency among our customers could have a material and adverse effect on our business and could negatively impact our results of operations and financial condition.
Class actions against financial institutions for an undetermined amount may adversely affect the profitability of the financial system and of some of our subsidiaries, such as the Bank and InvertirOnline S.A.U.
Certain public and private organizations have initiated class actions against financial institutions in Argentina, including the Bank and InvertirOnline S.A.U. See “Item 8.A. Consolidated Statements and Other Financial Information—Legal Proceedings.” The Argentine constitution and the Consumer Protection Law contain certain provisions regarding class actions, although their guidance with respect to procedural rules for class action cases is limited. Argentine courts have admitted class actions in various lawsuits against financial entities related to “collective interests” such as alleged overcharging on products commissions and interest rates. Some of these lawsuits have been settled by the parties. These settlements typically involved an undertaking by the financial institution to adjust the fees and charges. If class action plaintiffs were to prevail against financial institutions, their success could have an adverse effect on the financial industry and on our business.
In the future, court and administrative decisions may increase the degree of protection afforded to our debtors and other customers or be favorable to the claims brought by consumer groups or associations. This could affect the ability of financial institutions, including us, to freely determine charges, fees or expenses for their services and products, therefore affecting their business and results of operations.
We are exposed to compliance risks.
Due to the nature of our activities, we are exposed to certain compliance risks. We must comply with regulations regarding customer conduct, market conduct, the prevention of money laundering and the financing of terrorist activities, the protection of personal data, the restrictions established by national or international sanctions programs and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977, the violations of which could lead to very significant penalties. As part of our business, we directly or indirectly, through third parties deal with entities whose employees are considered to be government officials. Our activities are also subject to complex customer protection and market integrity regulations.
Although we have adopted multiple policies, procedures, internal control systems and other measures to manage compliance risk, their effectiveness dependent on our employees and external suppliers for the implementation of these policies, procedures, systems and other measures, and we cannot assure you that these are sufficient or that our employees or other persons related to us or our business partners, agents and/or other third parties with a business or professional relationship with us do not circumvent or violate current regulations or our ethics and compliance regulations, acts for which such persons could be held ultimately responsible and/or that could damage our reputation. In particular, acts of misconduct by any employee, and particularly by senior management, could erode trust and confidence and damage our reputation among existing and potential clients and other stakeholders. Actual or alleged misconduct by us in any number of activities or circumstances, including operations, employment-related offenses such as sexual harassment and discrimination, regulatory compliance, the use and protection of data and systems, and the satisfaction of client expectations, and actions taken by regulators or others in response to such misconduct, could lead to, among other things, sanctions, fines and reputational damage, any of which could have a material adverse effect on our business, results of operations and financial condition.
We may not be able to prevent third parties from using the banking network in order to launder money or carry out illegal or inappropriate activities. Moreover, financial crimes continually evolve and emerging technologies, such as cryptocurrencies and blockchain, could limit our ability to track the movement of funds. Additionally, in adverse economic conditions, it is possible that financial crime attempts will increase significantly.
If there is a breach of the applicable regulations or our ethics and compliance regulations or if the competent authorities consider that the Bank or one of our other subsidiaries do not perform the necessary due diligence inherent to their activities, such authorities could impose limitations on our activities, the revocation of our authorizations and licenses, and economic penalties, in addition to having significant consequences for our reputation, which could have a significant adverse impact on our business, results of operations and financial condition. Furthermore, we may conduct investigations related to violations of ethics and compliance regulations, and any such investigation or any related procedure could be time consuming and costly, and its results difficult to predict.
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Exposure to multiple federal, provincial and/or municipal legislation and regulations could adversely affect our business or results of operations.
The Argentine government has historically exercised significant influence over the economy and financial institutions. In the past, several different bills to amend the Argentine Financial Institutions Law No. 21,526 (the “FIL”) have been put forth for review by the Argentine Congress, seeking to amend different aspects of the FIL, including an increase in governmental regulations on activities of financial entities and initiatives to make financial services more widely available.
Laws and regulations currently governing the economy and the banking sector may continue to change in the future, and any changes may adversely affect our business, financial condition and results of operations. In particular, a thorough amendment of the FIL would have a substantial effect on the banking system as a whole. If such a bill were passed, or any other amendment to the FIL be made, the subsequent changes in banking regulations may have adverse effects on financial institutions in general, and on our business, results of operations and financial condition.
In addition, Argentina has a federal system of government with 23 provinces and the Autonomous City of Buenos Aires, each of which, under the Argentine national constitution, has full power to enact legislation concerning taxes and other matters. Likewise, within each province, municipal governments have broad powers to regulate such matters. Due to the fact that our branches are located in multiple provinces, we are also subject to multiple provincial and municipal legislation and regulations. Future developments in provincial and municipal legislation concerning taxes, provincial regulations or other matters may adversely affect our business or results of operations.
As an example of the aforementioned, in the second half of 2020 and after the suspension of the 2017 fiscal consensus in late 2019, certain Argentine provinces (Córdoba, San Luis, Buenos Aires and the Autonomous City of Buenos Aires) raised the tax rate on the turnover tax for banks. Additionally, in October 2020, the Autonomous City of Buenos Aires also eliminated a tax exemption on interest income received from instruments issued by the Central Bank as part of its monetary policy.
In January 2021, a legal action was filed against the Autonomous City of Buenos Aires in order to declare Laws No. 6,382 and No. 6,383 unconstitutional, which seek to burden the returns derived from securities, bonds, bills, certificates of participation (equity) and other instruments issued or to be issued in the future by the Argentine Central Bank with turnover tax. Such legal action was filed under File No. CAF 18156/2020 (“ADEBA Asociación Civil de Bancos Argentinos y otros c/GCBA y otro s/Proceso de Conocimiento”) by the Association of Banks and most of its members. The Central Bank has filed a legal action for the same purpose.
Risks Relating to Our Business
Changes in market conditions and any associated risks, including interest rate and currency exchange volatility, could materially and adversely affect our results of operations and financial condition.
We are directly and indirectly affected by changes in market conditions. Market risk, or the risk that values of assets and liabilities or revenues will be adversely affected by variations in market conditions, including interest rate and currency exchange volatility, is inherent in the products and instruments associated with our operations, including loans, deposits (including our recent expansion on demand deposits, through the launch of payroll accounts and SME accounts that pay interests), long-term debt and short-term borrowings, and our investments. A deterioration in the capital markets may cause us to record impairments due to a decrease in the value of our investment portfolios, in addition to losses caused by the volatility in financial market prices, even if the economy overall is not affected.
In particular, our results of operations depend to a great extent on our net financial income. In 2023, 2024 and 2025, net financial income represented 97.5%, 97.8% and 88.6%, respectively, of our net operating revenue. Changes in market interest rates could affect the interest rates earned on our interest-earning assets differently from the interest rates paid on our interest-bearing liabilities, leading to a reduction in our net financial income or a decrease in customer demand for our loan or deposit products. In addition, increases in interest rates could result in higher debt service obligations for our customers, which could, in turn, result in higher levels of delinquent loans or discourage customers from borrowing. Interest rates are highly sensitive to many factors beyond our control, including the minimum reserve policies of the Central Bank, regulation of the financial sector in Argentina, domestic and international economic and political conditions and other factors.
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In addition to deposits from our customers, a percentage of our liquidity is derived from local banks and the local capital markets. As of December 31, 2025, our liquidity ratio was 48%, as measured by liquid assets, including cash, bank loans, government securities, net interbank loans, short-term placements with correspondent banks and repurchase agreement transactions in the local market, as a percentage of total deposits.
Any changes in interest rates and currency exchange rates could adversely affect our business, our future financial performance and the price of our securities.
Due to our exposure to middle and lower-middle-income individuals and SMEs, the quality of our loan portfolio is more susceptible to economic downturns and recessions.
Our loan portfolio is exposed to the segments of SMEs and middle and lower-middle-income individuals, which are more vulnerable to economic recessions than large corporations and higher income individuals. The quality of our portfolio of loans to SMEs and to individuals is therefore dependent to a large extent on domestic and international economic conditions. Consequently, we may experience higher levels of past due amounts, which could result in higher provisions for loan losses.
The loan portfolio of our Personal & Business Banking segment includes individuals, small businesses and SMEs. As of December 31, 2025, our Personal & Business Banking segment (including commercial off balance sheet guarantees) represented approximately 53% of the consolidated loan portfolio (net of provisions), of which 37% corresponded to individuals and 15% corresponded to small businesses and SMEs. In addition, (i) 52% of our retail loan portfolio to individuals corresponded to loans granted to payroll and pension clients (including senior citizens who receive their pensions and benefits through the Bank), (ii) 57% of our open market customers loan portfolio has collateral, (iii) 86% of the personal loans that we originate correspond to payroll and pension customers, and (iv) 59% of credit card volumes correspond to payroll and pension customers. A significant downturn in the Argentine economy could materially and adversely affect the liquidity, businesses and financial condition of our customers, which may in turn cause us to experience higher levels of non-performing loans, thereby resulting in higher provisions for loan losses and subsequent write-offs. This may materially and adversely affect the credit quality of our loan portfolio, our asset quality, our results of operations and our financial condition.
Our estimates and established reserves for credit risk and potential credit losses may prove to be insufficient, which may materially and adversely affect our asset quality and our results of operations and financial condition.
Pursuant to IFRS 9, the Bank, establish reserves for potential credit risk and losses related to changes in the levels of income of debtors/borrowers, increased rates of inflation, increased levels of non-performing loans or an increase in interest rates. This process requires a complex and subjective analysis whereby we rely on several models that estimate the distribution of possible losses arising out of the loan portfolio to calculate expected losses. The Bank’s models estimate distribution of possible loan portfolio losses, which depend on counterparties’ probability of default (“PD”), as well as the exposure at the time of default (“EAD”) and the proportion of each unfulfilled loan that the entity is able to recover (i.e., loss given default or “LGD”). Based on these parameters, we estimate our expected loss (“PE”) and economic capital At the same time, we assess expected credit losses (“ECL”), on a forward-looking basis, incorporating the impact of updated macroeconomic scenarios in the variables which we consider affect credit risk.
If we are unable to effectively control the level of non-performing or poor credit quality loans in the future, if our loan loss reserves are insufficient to cover future loan losses, or if we are required to increase our loan loss reserves due to an increase in the amount of our non-performing loans, our asset quality and our results of operations and financial condition may be materially and adversely affected.
We are a holding company and, as a result, we depend on our subsidiaries’ ability to pay dividends to us.
As a holding company, we conduct our operations through our subsidiaries, the largest of which is the Bank. Consequently, we do not operate or hold substantial assets, except for equity investments in our subsidiaries and temporary liquidity. Except for such assets, our ability to invest in our business developments and to repay obligations we may have in the future is subject to the funds generated by our subsidiaries and their ability to pay cash dividends. In the absence of such funds, we may have to resort to financing options at unappealing prices, rates and conditions. Additionally, such financing could be unavailable when we may need it.
Each of our subsidiaries is a separate legal entity and due to legal or contractual restrictions, as well as to their financial condition and operating requirements, they may not be able to distribute dividends to us. Our ability to develop our business, meet our payment obligations and pay dividends to our shareholders could be limited by restrictions preventing our subsidiaries from paying us
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dividends. Investors should take such restrictions into account when analyzing our investment developments and our ability to cancel our obligations.
We may seek potential acquisitions or expand our business, but we may not be able to complete such acquisitions or expansion, or successfully integrate businesses that we acquire.
In the past, in addition to organic growth, we have expanded our business through acquisitions. We expect to continue considering acquisition opportunities that we believe may add value and are compatible with our business strategy. In addition, we may continue to implement business strategies in order to expand our business.
In this respect, we may not be able to continue to identify opportunities or consummate acquisitions, or implement business strategies, leading to economically favorable results. We cannot assure you that any future acquisition or other actions taken to expand our business will, if required, be authorized by the Central Bank, which would limit our ability to implement our growth strategy. In addition, in the event that an acquisition opportunity or business strategy is identified and authorized, successful integration of the acquired business or strategy entails significant risks, including compatibility of operations and systems, unexpected contingencies, employee retention, compliance, customer retention, and delays in the integration process.
The Bank’s revenues from its business with senior citizens could decrease or cease to grow if the agreement with ANSES is terminated or not renewed.
Since 1996, the Bank has acted as one of the paying agents of social security payments to senior citizens on behalf of the government pursuant to an agreement with ANSES that must be signed by any bank that intends to pay pensions or benefits on behalf of ANSES. The agreement between any such bank and ANSES expired on June 30, 2023. On July 25, 2023, ANSES issued Resolution No. 151/2023 which sets forth the new procedure of, and establishes new requirements for, the payment of social benefits, and the obligation of the banks that pay pensions or benefits on behalf of ANSES to sign new agreements with ANSES. The banks (including Banco Supervielle) are in the process of negotiating a new agreement with ANSES. In December 2025, the Bank made payments on behalf of ANSES to approximately 532,000 senior citizens and beneficiaries, and payments under approximately 210,000 social plans. Offering this service to senior citizens allows the Bank ready access to a pool of potential consumers of financial services. The Bank derives an important part of its revenues (19.7% in 2025) from the sale of financial services to senior citizens. The Bank has invested in cutting-edge service models and products that facilitate its senior citizen customers to make transactions. The Bank is prepared to continue to offer its services within the framework of the new agreement to be entered into with ANSES and to continue to be a leading bank in providing pension service payments.
The termination of the agreement with ANSES or ANSES’s failure to add new senior citizens to the payment service could have a negative effect on our business and results of operations.
Our controlling shareholder has the ability to direct our business, and potential conflicts of interest could arise.
Our controlling shareholder, Julio Patricio Supervielle, directly or beneficially owned as of March 31, 2026, 61,738,188 Class A shares with 5 votes per share and 50,621,289 Class B shares with one vote per share. Virtually all decisions made by shareholders will continue to be directed by our controlling shareholder. He may, without the concurrence of the remaining shareholders, elect a majority of our directors, effect or prevent a merger, sale of assets or other business acquisition or disposition, cause us to issue additional equity securities, effect a redemption of shares, effect a related party transaction and determine the timing and amounts of dividends, if any. According to our bylaws, a two-thirds vote by our Class A shares is required, regardless of the percentage of our total capital they represent, in order for us to duly resolve a merger with another company, a voluntary dissolution, our relocation abroad, and a fundamental change in our corporate purpose. As of the date of this annual report, Mr. Supervielle owns 100 % of Class A shares. Mr. Supervielle’s interests may conflict with your interests as a holder of Class B shares or ADSs, and he may take actions that might be desirable to him but not to other stakeholders.
Operational risks may negatively impact our business and results of operations.
Operational risks could arise in our business, including potential losses resulting from inadequate or failed internal and external processes, systems, or human error, fraud, the effects of natural or man-made catastrophic events (such as natural disasters or pandemics)
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or from other external events. Exposure to such events could disrupt our systems and operations significantly, which may result in financial losses and reputational damage.
Financial institutions are also susceptible to fraud by employees or external parties, unauthorized transactions, adverse legal outcomes, and operational errors, including technology failures. Given the high volume of transactions that we process, errors may occur and, in some cases, remain undetected for a period of time. Moreover, non-automated processes increase the likelihood of human error or manipulation, making it more difficult to detect and address potential losses in a timely manner. The occurrence of any one or more of the above events could have a material adverse impact on our business, results of operations and financial condition.
Cybersecurity events could negatively affect our reputation, results of operations and financial condition.
We rely on the efficient and uninterrupted operation of our platforms, data processing networks, communication, and internet-based information exchange, including systems related to the operation of our online platforms and ATM network. We have access to large amounts of confidential financial information and control substantial financial assets belonging to our customers and each of our companies. Additionally, we provide our customers with continuous remote access to their accounts and the ability to securely transfer substantial financial assets through electronic means. Therefore, a cybersecurity breach represents a significant risk for us.
Cybersecurity incidents, such as computer intrusions, viruses, ransomware, denial-of-service attacks, phishing, identity theft, and other disruptions, could adversely affect the security of the information stored and transmitted through our computer systems and network infrastructure, potentially causing existing and potential customers to refrain from doing business with us. The global context and the adoption of hybrid work methodologies (in-person/home-office) mean that a portion of our workforce works remotely, as well as the increased use of digital channels and third party services, which can exacerbate certain risks for our business, including increased reliance on information technology (“IT”) resources, higher phishing risk and other cybersecurity attacks, and increased risk of unauthorized dissemination of sensitive personal data.
It is widely known that there has been an exponential increase in the number of cybersecurity attacks conducted via email, instant messaging systems and social networks, including the emergence of artificial intelligence (“AI”). As cyberattacks evolve and become more sophisticated, companies strengthen their prevention and monitoring mechanisms and adopt new measures to mitigate cybersecurity risks, including those related to remote work security and third parties. We seek to integrate security earlier in the product lifecycle, including during pre-design, to reduce late-stage remediation, frictionless delivery and mitigate operational disruptions. Although we have insurance policies that protect us against cyber incidents, our monitoring capabilities have been reinforced, paying special attention to critical assets supporting business processes to prevent the materialization of threats, and, when necessary, to identify and respond immediately to any security incident that may occur. We have focused on improving automation to detect and prioritize remediation of misconfiguration that could affect resilience and security, aiming to reduce response time, while also reducing repetitive manual work to increase our capacity for higher-value analysis and prevention activities. Additionally, monitoring the Clear, Deep, and Dark Web to protect our customers by identifying and acting preventively against possible phishing, smishing, and brand abuse attacks. Our operating systems and networks have been, and will continue to be, subject to cybersecurity threats that are constantly evolving, and in the same way, our security technology platforms and operational procedures evolve to prevent damage.
Although we intend to continue implementing and updating our security technology devices and operational procedures to prevent cybersecurity damage, our systems may not be free from vulnerability and these security countermeasures may be defeated. If any of these events occur, our reputation could be damaged, entailing serious costs and affecting our business, as well as our results of operations and financial condition.
Our business is highly dependent on properly functioning IT systems, including artificial intelligence, and improvements to such systems.
Our business is highly dependent on the ability of our teams to develop solutions according to what our customers need, having technology systems that allow an effective management and enable processing a large number of transactions across numerous and diverse markets, products and regulations in a timely manner. In addition, our customers have the possibility to access to their finances remotely, whenever they want or wherever they are, and to transfer substantial financial assets by electronic means. The proper functioning of our financial control, risk and fraud management, accounting, cybersecurity, customer service and other data processing systems is critical to our business and to our ability to compete effectively, as we are a customer centric company. Also, as our business activities may be materially disrupted if there were a partial or complete failure of any of our IT systems or our communication networks, we have implemented a contingency framework, supported by a business continuity program and an IT risk management program.
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Additionally, we have established a Cybersecurity Center of Excellence within our operating model. Although from time to time we may face events that might be caused by, among other things, software bugs, computer virus attacks or intrusions, phishing, identity theft or conversion errors due to system upgrading, we have implemented remediate plans to reduce their frequency. In addition, any security breach caused by unauthorized access to information or systems, or intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, could have a material adverse effect on our customers’ experience, as well as on our business, financial condition and results of operations.
Our ability to remain competitive and achieve further growth will depend on the loyalty of our customers and on our ability to keep our IT systems upgraded with all the features that our customers need. In addition, our IT systems must be available without interruptions in order to increase our capacity on a timely and cost-effective basis. Any disruption or substantial failure to improve or upgrade IT systems effectively or on a timely basis could materially affect us.
We use AI, which could expose us to liability or adversely affect our business.
We utilize, and will continue exploring further uses of, artificial intelligence in connection with our business, products and services. However, there are significant risks involved in utilizing artificial intelligence and no assurance can be provided that its use will enhance its products or services or produce the intended results. For example, artificial intelligence algorithms may be flawed, insufficient, of poor quality, reflect unwanted forms of bias or contain other errors or inadequacies, any of which may not be easily detectable. Artificial intelligence has been known to produce false inferences or outputs, may subject us to new or heightened legal, regulatory, ethical or other challenges, and may involve inappropriate or controversial data practices by developers and end-users.
If the artificial intelligence solutions that we create or use are deficient, inaccurate or controversial, it could incur operational inefficiencies, competitive harm, legal liability, brand or reputational harm, or other adverse impacts on its business and financial results. Additionally, if any of our employees, contractors, vendors or service providers use any third-party artificial intelligence-powered solutions in connection with our business, it may lead to the inadvertent public disclosure of our proprietary, confidential, sensitive or personal information which may impact our ability to realize the benefit of our intellectual property or proprietary, confidential, sensitive or personal information, harming our competitive position and business. If we do not have sufficient rights to use the data or other material or content on which our artificial intelligence solutions or other artificial intelligence tools we use or relies, we may also incur in liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party.
Our policies and procedures may not be able to detect money laundering and other illegal or improper activities fully or on a timely basis, which could expose us to fines and other liabilities.
We are required to comply with applicable anti-money laundering laws, anti-terrorism financing laws and other regulations. These laws and regulations require us, among other things, to adopt and enforce “know your customer” policies and procedures and to report suspicious or large transactions to the applicable regulatory authorities. While we have adopted policies and procedures aimed at detecting and preventing the use of banking networks for money laundering activities and by terrorists and terrorist-related organizations and individuals generally, such policies and procedures may not completely eliminate instances where they may be used by other parties to engage in money laundering and other illegal or improper activities. Further, we could become subject to future regulatory requirements beyond those currently proposed, adopted or contemplated. In addition, applicable regulations may provide for the imposition of fines or penalties for noncompliance even though such noncompliance was inadvertent or unintentional.
If we fail to fully comply with applicable laws and regulations, the relevant government authorities to which they report have the power and authority to impose fees, fines, penalties or restrictions on our business. In addition, our businesses and reputation could be negatively affected if customers use our financial institutions for money laundering or illegal or improper purposes and, as a result, we could lose customers or be exposed to other negative consequences, which could have a material adverse effect on our business results of operations and financial condition. As of the date of this annual report, we have not been subject to material fines or other penalties, and we have not suffered business or reputational harm, as a result of any money laundering activities in the past.
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We are exposed to risks in connection with climate change.
We are exposed to risks in connection with climate change as a result of our financial activities. These risks may be classified into two types of risks:
1)physical risks, which arise from climate changes that impact the economy such as flooding, wildfires, earthquakes and extreme weather impacts, including extreme heat and sea level rise. These events could have a negative impact on our operations or those of our customers or third parties on which we rely and do business with.; and
2)transition risks, which arise from the transition to a low-carbon economy through changes in regulations, policies, technologies and consumer preferences, among others, which could negatively impact our expenses, investments and business strategies.
These categories of risks could materialize, among others, in the following risks:
●Legal and regulatory risks. Banking regulators, such as the Basel Committee on Banking Supervision and the Argentine Central Bank, supervisory authorities, investors and other stakeholders have increasingly showed interest in the role of financial institutions as key actors to address the risks related to climate change. Regulatory changes regarding how banks manage climate risk may result in higher compliance, operational and credit risks and costs.
●Technological risks. Certain of our counterparties, customers or related parties may be adversely affected by the progressive transition to a low-carbon economy and/or risks associated with new low-carbon technologies. If our customers and counterparties fail to adapt to the transition to a low-carbon economy, or if the costs of doing so adversely affect their creditworthiness, this could adversely affect our loan portfolio.
●Market and liquidity risks. The funding costs of businesses that are perceived to be more exposed to climate and environmental risks could increase, which may result in the deterioration of their creditworthiness and credit ratings, adversely affecting our loan portfolio. The Group could also be adversely affected by changes in demand brought by climate change, as well as changes in energy and commodity prices, corporate bonds, equities and certain derivatives contracts.
●Reputational risks. The perception of our customers or the communities in which we operate on our practices related to climate change and the transition to a lower-carbon economy may damage our reputation. In addition, increased scrutiny of climate change-related policies and disclosure may result in litigation and regulatory investigations and/or actions.
We are also exposed to potential long-term risks arising from climate change and environmental damage, such as a deterioration of credit assets due to the impairment of macroeconomic conditions as a result of climate-related risks.
We take climate change into consideration within our social economic and environmental risk policies and we are committed to enhance processes to embed climate risk considerations into our core processes and risk management cycle. However, the nature of the risk drivers related to climate change may not be predictable and is rapidly evolving. Therefore, our risk management strategies may not be effective in mitigating climate risk exposure. As the risks, perspective and focus of regulators, shareholders, customers, employees, and other stakeholders regarding climate change are evolving rapidly, it can be challenging to evaluate the real impact of climate change-related risks, compliance risks, and uncertainties on our activity. Any of these factors may have a material adverse effect on our business, results of operations and financial condition.
Increasing scrutiny and changing expectations from investors and other market participants with respect to our Environmental, Social and Governance policies may impose additional costs on us or expose us to additional risks.
Companies across multiple industries are facing increasing scrutiny relating to their environmental, social and governance (“ESG”) policies. Investor advocacy groups, certain institutional investors and other market participants are increasingly focused on ESG practices and in recent years have focused on the implications and social cost of their investments. We may face increasing pressures from investors and other market participants, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint, and promote sustainability. As a result, we may be required to implement changes to our ESG policies, which could increase our costs. If we do not adapt to investor or other industry shareholder expectations and standards, which
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are evolving, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, we may suffer from reputational damage and, as a result, our business and financial condition could be materially and adversely affected.
On March 6, 2024, the U.S. Securities and Exchange Commission (“SEC”) adopted final rules requiring extensive climate-related and ESG-related disclosures in companies’ annual reports and registration statements. These final rules would add extensive and prescriptive disclosure items requiring companies to disclose climate-related risks and certain emissions. However, these rules were challenged in the U.S. federal courts and, in April 2024, the SEC announced that it would voluntarily stay the effectiveness of the rules pending judicial review. On February 11, 2025, the acting chairperson of the SEC stated that the rules were deeply flawed, and requested the Eighth Circuit Court of Appeals to pause the litigation. It is unclear if the rules will be enforced or repealed. Costs of compliance with these new rules, if they are enacted, may be significant and may have a material adverse effect on our results of operations and financial position.
The evolving nature of ESG regulations and the potential adoption of new climate-related rules by the SEC create uncertainty regarding future compliance requirements and enforcement actions. Failure to anticipate or adapt to regulatory developments in a timely manner could expose us to regulatory scrutiny, penalties and legal disputes, which could have material adverse effects on our business, financial condition, and results of operations.
Risks Relating to Our Class B Shares and the ADSs
Holders of our Class B shares and the ADSs may not receive any dividends.
We are a holding company and our ability to pay dividends depends on the cash flow and distributable income of our operating subsidiaries. We and our subsidiaries are subject to contractual, legal and regulatory requirements affecting our ability to pay dividends. In particular, dividend distribution by the Bank is subject to the requirements established by the rules of the Central Bank, as amended from time to time. Pursuant to such regulations, dividend distributions shall be admitted as long as none of the following circumstances apply: (i) the financial institution is subject to a liquidation procedure or the mandatory transfer of assets ordered by the Central Bank in accordance with section 34 or 35 bis of the FIL; (ii) the financial institution is receiving financial assistance from the Central Bank; (iii) the financial institution is not in compliance with its reporting obligations to the Central Bank; (iv) the financial institution is not in compliance with minimum capital requirements (both on an individual and consolidated basis and excluding any individual franchise granted by the Superintendency) (Superintendencia de Entidades Financieras y Cambiarias, or “Superintendency”) and with minimum cash reserves (on average), whether in Pesos, foreign currency or securities issued by the public sector; (v) if the average minimum cash reserve is lower than the amount of cash required by the latest reported position or the pro forma position after making the dividend payment; and/or (vi) if the financial institution did not comply with the applicable Additional Capital Margins (as defined below). Financial institutions that comply with all of the above mentioned conditions may distribute dividends up to an amount equal to: (i) the positive balance of the account “unappropriated earnings” (resultados no asignados) at the end of the fiscal year, plus (ii) voluntary reserves for future payments of dividends, minus (iii) voluntary reserves and mandatory statutory reserves registered as of that date and other items, such as (a) 100% of the debit balance of each of the items recorded under “Other accumulated comprehensive income,” (b) the result from the revaluation of property, plant, equipment and intangible assets and investment properties, (c) the net positive balance of the book-value and the market-value of certain public debt securities and Central Bank notes that the financial institution owns that are not marked to market, (d) unrecorded adjustments of asset value informed by the Superintendency or mentioned by external auditors on their report, and (e) individual exemptions for asset valuation granted by the Superintendency.
Although distribution of dividends to us by the Bank has been authorized by the Central Bank in the past, it is possible that in the future the Central Bank may reimpose restrictions on the Bank's ability to distribute dividends. Pursuant to the applicable Central Bank regulations on earnings distributions, the Bank may distribute dividends subject to compliance with certain capital, liquidity and solvency requirements. Until December 31, 2026, any such distribution must be made in three equal, non-cumulative monthly installments, subject to prior Central Bank authorization. For further information, see “Item 4.B Business Overview—Banking Regulation and Supervision Requirements—Applicable to Dividend Distribution.”
Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may impair your ability to receive dividends and distributions on, and the proceeds for any sale of, the Class B shares underlying the ADSs.
Pursuant to the Foreign Exchange Regulations (as defined below), access to the foreign exchange market for the remittance abroad of dividends and distributions to non-resident shareholders is permitted without prior Central Bank approval, provided that the
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distributable profits arise from net income reported in audited annual financial statements for fiscal years beginning on or after January 1, 2025. However, dividends corresponding to fiscal years beginning prior to January 1, 2025 remain subject to certain restrictions imposed by the Central Bank for access to the foreign exchange market, including limitations on maximum amounts, minimum holding periods and documentation requirements. See “Item 10.D. Exchange Controls.”
In addition, as a holding company, our ability to pay dividends depends on the receipt of dividends from our subsidiaries, including the Bank. In addition to any foreign exchange restrictions that may apply to the distribution or remittance of dividends by our subsidiaries, the Bank, as a regulated financial institution, is subject to specific requirements under the Central Bank’s regulations governing earnings distributions. These regulations condition the payment of dividends on compliance with minimum capital, liquidity and solvency requirements. These regulatory requirements operate independently of, and in addition to, any foreign exchange restrictions applicable to the remittance of dividends abroad. See “Item 4.B Business Overview—Banking Regulation and Supervision Requirements—Applicable to Dividend Distribution.”
We cannot assure that the Argentine government or the Central Bank will not reimpose or expand restrictions on access to the foreign exchange market for dividend payments, or impose new conditions on the ability of financial institutions to distribute dividends, which could impair or prevent the conversion of dividends, distributions, or the proceeds from any sale of Class B shares from Pesos into U.S. dollars and the remittance of U.S. dollars abroad. If the exchange rate fluctuates significantly during a time when the Depositary (as defined in “Item 12.D. American Depositary Shares”) cannot convert or reinvest the foreign currency, you may lose some or all of the value of the dividend distribution. Also, if payments cannot be made in U.S. dollars abroad, the repatriation of any funds collected by foreign investors in Pesos in Argentina may also be subject to restriction. Moreover, available mechanisms to receive dividends in U.S. dollars may involve a significantly higher implicit exchange rate. See “Item 10.D. Exchange Controls.”
Our securities are traded on more than one market and this may result in price variations; in addition, investors may not be able to easily move shares for trading between these markets.
In addition to the trading of our ADSs in the United States and countries other than Argentina, our Class B shares are traded in Argentina. Trading in the ADSs or our Class B shares on these markets will take place in different currencies (U.S. dollars on the New York Stock Exchange (“NYSE”) and Pesos on ByMA), and at different times (resulting from different time zones, different trading days and different public holidays in the United States and Argentina). The trading prices of these securities on these two markets may differ due to these and other factors. Any decrease in the price of our Class B shares on the ByMA could cause a decrease in the trading price of the ADSs on the NYSE. Investors could seek to sell or buy our shares to take advantage of any price differences between the markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in both our share prices on one exchange, and the ADSs available for trading on the other exchange. In addition, holders of ADSs will not be immediately able to surrender their ADSs and withdraw the underlying Class B shares for trading on the other market without effecting necessary procedures with the Depositary. This could result in time delays and additional cost for holders of ADSs.
Under Argentine Corporate Law, shareholder rights may be fewer or less well defined than in other jurisdictions.
Our corporate affairs are governed by our bylaws and by the Argentine General Corporations Law, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States (such as Delaware or New York), or in other jurisdictions outside Argentina. Thus, your rights or the rights of holders of our Class B shares under the Argentine General Corporations Law to protect your or their interests relative to actions by our Board of Directors may be fewer and less well defined than under the laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine securities markets may not be as highly regulated or supervised as the U.S. securities markets or markets in some of the other jurisdictions. In addition, rules and policies against self-dealing and regarding the preservation of shareholder interests may be less well defined and enforced in Argentina than in the United States, or other jurisdictions outside Argentina, putting holders of our Class B shares and the ADSs at a potential disadvantage.
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Holders of our Class B shares and the ADSs located in the United States may not be able to exercise preemptive rights.
Under the Argentine General Corporations Law, if we issue new shares as part of a capital increase, our shareholders may have the right to subscribe to a proportional number of shares to maintain their existing ownership percentage. Rights to subscribe for shares in these circumstances are known as preemptive rights, pursuant to the Argentine General Corporations Law. Upon the occurrence of any future increase in our capital stock, United States holders of Class B shares or ADSs will not be able to exercise the preemptive rights for such Class B shares or ADSs unless a registration statement under the Securities Act is effective with respect to such Class B shares or ADSs or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to those Class B shares or ADSs. We may not file such a registration statement, or an exemption from registration may not be available. Unless those Class B shares or ADSs are registered or an exemption from registration applies, a U.S. holder of our Class B shares or ADSs may receive only the net proceeds from those preemptive rights if those rights can be sold by the Depositary; if they cannot be sold, such preemptive rights will be allowed to elapse. Furthermore, the equity interest of holders of Class B shares or ADSs located in the United States may be diluted proportionately upon future capital increases.
Your voting rights with respect to the ADSs are limited by the terms of the deposit agreement.
Holders may exercise voting rights with respect to the Class B shares underlying ADSs only in accordance with the provisions of the deposit agreement. There are no provisions under Argentine law or under our bylaws that limit ADS holders’ ability to exercise their voting rights through the depositary with respect to the underlying Class B shares, except if the depositary is a foreign entity and it is not registered with the Inspección General de Justicia (“IGJ”), and in this case, the depositary is registered with the IGJ. However, there are practical limitations upon the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with such holders. For example, Argentine Capital Markets Law requires us to notify our shareholders by publications in certain official and private newspapers of at least 20 and no more than 45 days in advance of any shareholders’ meeting. ADS holders will not receive any notice of a shareholders’ meeting directly from us. In accordance with the deposit agreement, we will provide the notice to the Depositary, which will in turn, if we so request, as soon as practicable thereafter provide to each ADS holder:
o the notice of such meeting;
o voting instruction forms; and
o a statement as to the manner in which instructions may be given by holders.
To exercise their voting rights, ADS holders must then provide instructions to the Depositary on how to vote the shares underlying ADSs. Because of the additional procedural step involves the Depositary, the process for exercising voting rights will take longer for ADS holders than for holders of Class B shares.
Except as described in this annual report, holders will not be able to exercise voting rights attaching to the ADSs.
The relative volatility and illiquidity of the Argentine securities markets may substantially limit your ability to sell Class B shares underlying the ADSs at the price and time you desire.
Investing in securities that trade in emerging countries, such as Argentina, often involves greater risk than investing in securities of issuers in the United States. The Argentine securities market is substantially smaller, less liquid, more concentrated and can be more volatile than major securities markets in the United States, and is not as highly regulated or supervised as some of these other markets. There is also significantly greater concentration in the Argentine securities market than in major securities markets in the United States. As of December 31, 2025, the ten largest companies in terms of market capitalization represented approximately 82.8% of the aggregate market capitalization of the S&P Merval index. Accordingly, although you are entitled to withdraw the Class B shares underlying the ADSs from the Depositary at any time, your ability to sell such shares at a price and time at which you wish to do so may be substantially limited. Furthermore, exchange controls imposed by the Central Bank could have the effect of further impairing the liquidity of the ByMA by making it unattractive for non-Argentines to buy shares in the secondary market in Argentina. See “Item 10.D. Exchange Controls.”
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Substantial sales of our Class B shares or the ADSs could cause the price of the Class B shares or of the ADSs to decrease.
We have shareholders, including Julio Patricio Supervielle, that own a substantial amount of our Class B shares or ADSs. If such shareholders decide to sell a substantial amount of our Class B shares or the ADSs, or if the market perceives they intend to sell a substantial amount of our Class B shares or the ADSs, the market price of our Class B shares or the ADSs could drop significantly.
Our shareholders may be subject to liability for certain votes of their securities.
Our shareholders are not liable for our obligations. Instead, shareholders are generally liable only for the payment of the shares they subscribe. However, shareholders who have a conflict of interest with us and who do not abstain from voting may be held liable for damages to us, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to the Argentine General Corporations Law or our bylaws may be held jointly and severally liable for damages to us or to other third parties, including other shareholders.
We are organized under the laws of Argentina and holders of the ADSs may find it difficult to enforce civil liabilities against us, our directors, officers and certain experts.
We are organized under the laws of Argentina. A significant portion of our and our subsidiaries’ assets are located outside the United States. Furthermore, all of our directors and officers and some advisors named in this annual report reside in Argentina. Investors may not be able to effect service of process within the United States upon such persons or to enforce against them or us in United States courts judgments predicated upon the civil liability provisions of the federal securities laws of the United States. Likewise, it may also be difficult for an investor to enforce in United States courts judgments obtained against us or these persons in courts located in jurisdictions outside the United States, including judgments predicated upon the civil liability provisions of the United States federal securities laws. It may also be difficult for an investor to bring an original action in an Argentine court predicated upon the civil liability provisions of the U.S. federal securities laws against us or such persons.
Prior to any enforcement in Argentina, a judgment issued by a U.S. court will be subject to the requirements of articles 517 through 519 of the Argentine Federal Civil and Commercial Procedure Code if enforcement is sought before federal courts or courts with jurisdiction in commercial matters of the Autonomous City of Buenos Aires. Those requirements are: (1) the judgment, which must be valid and final in the jurisdiction where rendered, was issued by a competent court in accordance with the Argentine principles regarding international jurisdiction and resulted from a personal action, or an in rem action with respect to personal property which was transferred to Argentine territory during or after the prosecution of the foreign action; (2) the defendant against whom enforcement of the judgment is sought was personally served with the summons and, in accordance with due process of law, was given an opportunity to defend against foreign action; (3) the judgment must be valid in the jurisdiction where rendered, and its authenticity must be established in accordance with the requirements of Argentine law; (4) the judgment does not violate the principles of public policy of Argentine law; and (5) the judgment is not contrary to a prior or simultaneous judgment of an Argentine court. Any document in a language other than Spanish, including, without limitation, the foreign judgment and other documents related thereto, requires filing with the relevant court of a duly legalized translation by a sworn public translator into the Spanish language.
We are subject to various corporate disclosure and accounting regulations that may limit the information available to our shareholders.
One of the main objectives of the securities laws of the United States, Argentina, and other jurisdictions is to promote the full and fair disclosure of all relevant information about companies that issue securities. However, the information available to the public regarding us may be less than the information that is typically published by or in relation to other companies listed on stock exchanges in certain countries with highly developed capital markets, such as the United States. Although we subject to the periodic reporting requirements stipulated by the Securities Act, as amended, the periodic disclosure required of non-U.S. issuers under such law is more limited than the periodic disclosure required of U.S. issuers. Furthermore, we are not required to comply with the rules established by the SEC regarding proxy powers for shareholders’ meetings.
Item 4.Information of the Company
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