Eduardo Escasany

CHAIRMAN OF GRUPO FINANCIERO GALICIA

Argentina 2018  I  Finance  I  Leader

BIOGRAPHY With a degree in Economics from the Universidad Católica Argentina, he is associated with Banco Galicia since 1973. He served as Chairman of the Argentine Bankers Association and was elected a lifetime trustee and Chairman of the Banco Galicia Foundation. Under his leadership, Banco Galicia became a reference in sustainable management within its social environment.

“I BELIEVE THAT ARGENTINA IS PREPARED TO BECOME A MORE DEVELOPED COUNTRY THAN WHAT IT IS TODAY, IN SOCIAL, ECONOMIC AND FINANCIAL TERMS.”

WHAT IS YOUR OPINION ON THE CURRENT ECONOMIC SITUATION OF ARGENTINA?

 

Until the recent turmoil, the Government of President Mauricio Macri had been successful in promoting a virtuous cycle in Argentina, one that combined lower inflation and interest rates with higher levels of local savings. We expect these conditions, which are needed for increasing loan volumes and are one of the most crucial growth factors in the economy, to gradually return. This will also help to reduce poverty, one of the Government’s main priorities. The change in the international context has undoubtedly affected Argentina, which had a higher exposure than its emerging piers to such events as it was amidst a transformation process. Fortunately, the Government rose to the occasion and was prompt in reacting to this new scenario. The Macri Administration has already implemented a wide array of measures — accelerating the reduction of the fiscal deficit and reinforcing the Central Bank’s independence, for example — that aim to moderate the effect that the reversal of international capital flows has had on the local economy. Though these past few months have been challenging, we expect the economy to recover and to regain the virtuous cycle of sustainable growth.

 

Another critical challenge faced by our country is the informal economy — one of the priorities of the G20 — which is around 35% to 40% in Argentina. If the Government succeeds in reducing the current poverty levels, this will boost economic growth in the country as we will be able to include more people in the banking system, focusing on financial inclusion. Currently, these people are not able to apply for loans and to benefit from lower interest rates, as their only resource are informal loans with much higher interest rates. I believe that Argentina is prepared to become a more developed country than what it is today, in social, economic and financial terms. The country is undergoing a transformation and there are not many countries that have succeeded in making such profound changes within a democratic framework. Argentina has learned this the hard way, which makes for a more resilient economy. We can return to being one of the world’s leading economies as we were in the past, when Argentina was the sixth largest economy in the world in 1920. 

 

ARGENTINA IS TURNING THE PAGE AFTER MANY YEARS OF IMBALANCE. WHAT IS BEHIND THIS TRANSFORMATION?

 

Our country has chosen the path of more transparency in the public and private sectors and we are reinforcing our institutions, following the international trend. Argentina is a democratic country and is going through a process, which we have to respect. There is a willingness to also improve the political and justice systems. Overall, I believe we are going in the right direction, and while there are challenges, it is undoubtedly the best way to improve our country’s economy. These efforts have improved the confidence of investors in the country, despite the recent episodes. They also give value to the fact that the Government doesn’t have the majority in Congress, which obliges the Macri Administration to negotiate with the opposition. The results are more balanced laws and regulations with a long-term perspective. Argentina is focused on its competitiveness, and the labor reform will play a key role. Other countries have followed the same path and have proven that the results are very positive, not only for the country’s economy but for the whole society. 

 

WHAT IS THE FUTURE OF THE BANKING SECTOR IN ARGENTINA AND HOW BANCO GALICIA IS POSITIONING ITSELF TO BENEFIT FROM THE ECONOMIC GROWTH?

 

In September 2017, we increased our capital by $630 million to better prepare the bank for the important growth we are expecting in the market. Currently, Argentina’s financial sector is very fragmented, having 70 financial institutions, with the top five banks representing 50% of the total sector. The industry is moving towards a greater concentration and even though we are not actively looking to buy another bank, we remain attentive to attractive investment opportunities. Our priority for the moment is the organic growth of the bank’s operations, opening more branches, offering better quality products and services in order to provide a distinct experience to our customers, while continuing to improve the business operating efficiency. 

 

AS A PIONEER IN SUSTAINABILITY, HOW BANCO GALICIA CONTINUES TO BE A RELEVANT SOCIAL PLAYER?

 

Transparency, governance and management best practices are part of our DNA. Banco Galicia was the first Latin American bank to be listed in the US, in 1993, with a public offering that raised $60 million in the international capital markets. Also in that year, Banco Galicia became the first private Latin American bank to raise funds in the U.S. domestic capital market by floating a $200 million ten-year bond. In 2000, Grupo Financiero Galicia was also established as a listed company. 

 

Sustainability is among our bank’s main objectives and we have done a very important work in this area, which is now also one of the priorities of the G20. We were very proud to inaugurate last year the new Banco Galicia green building, with 30% of green spaces. We also enjoy providing a good environment for our employees and in the “Great Place to Work 2017” survey Banco Galicia and Tarjeta Naranja were positioned 1st and 2nd, respectively, in the ranking of the best companies to work at with over 1,000 employees, while Galicia Seguros ranked 3rd among the best companies to work at with 251-1,000 employees. We also have specific programs to improve health, education and employment in all the country. In the future, we will continue creating value through our companies, offering products and services that contribute to the social and economic growth of Argentina.