Grupo Financiero Galicia: Synergy Between Traditional Banking And Digital Transformation
Bet on Argentinean revival and digital banking
This is the test drive section. It answers the following question: What will you miss if you do not become a paid subscriber?
In four separate articles, I present reports on energy, mining, shipping, and banking companies. My goal is to introduce my analytical framework for each industry. The analyses were published on Seeking Alfa and my Bulgarian site, Investo.bg. In one additional article, I will show a portfolio example.
The first company is Gruppo Galicia, GGAL, one of the largest Argentinean banks. The article was published on Seeking Alpha in September 2023 and was selected for Editor’s pick.
Grupo Financiero Galicia (GGAL) is one of the largest traditional banks in Argentina. Besides that, it is the best positioned among its peers to capitalize on the ongoing digital banking transformation. The company covers all banking aspects through its subsidiaries, including digital banking. Naranja X is the third to Mercado Pago and BNA+ banking apps.
Mercado Pago is owned by Mercado Libre (MELI) and Banco de la Nacion owns BNA+. The former is LATAM's leading e-commerce platform, while the latter is the biggest bank in Argentina. As the name suggests, Banco de la Nacion is a state enterprise. Gruppo Galicia is the sole traditional bank with a strong presence in digital services. Banco Macro (BMA) lags significantly behind. However, Banco BBVA Argentina (BBAR) is advancing.
Apart from traditional and digital banking, Grupo Galicia manages insurance, securities, and investment subsidiaries. The company has a solid standing due to its neat balance sheet compositions, providing risk mitigation.
Neonbanks are the bridge between traditional banking and digital services. The largest neobank in the world is NU Holdings. The image below shows the major players in the LATAM fintech industry:
Brazil leads with the highest number of fintech companies. All other countries are lagging significantly. From an entrepreneur’s standpoint, this represents unserved demand; from an investor`s view, it means new growth investments. The traditional banks in the region are facing fierce competition from the neo-banks. Some of them are more adaptive than others. Examples of the former are Banco BBVA Argentina and Banco Macro.
Respecting Seeking Alpha rules, I can publish up to 250 words. So, to continue reading, click the link: Grupo Galicia.
Everything described in this report has been created for educational purposes only. It does not constitute advice, recommendation, or counsel for investing in securities.
The opinions expressed in such publications are those of the author and are subject to change without notice. You are advised to do your own research and discuss your investments with financial advisers to understand whether any investment suits your needs and goals.