© 2013 SAP AG. All rights reserved. 1

SAP CMO SUCCESS CASE @ BANCO GALICIA

GO BEYOND TRADITIONAL CORE BANKING TO OPTIMIZE

CASH OPERATIONS

Eduardo Agra – CIO Banco Galicia

SAPPHIRE Now, Orlando, May 15th, 2013

© 2013 SAP AG. All rights reserved. 2

BANCO GALICIA’S PROFILE

ARGENTINA’S LEADING PRIVATE BANK

Founded in 1905, Banco de Galicia y Buenos Aires S.A. («Banco Galicia» and /or «Galicia», Buenos Aires Stock

Exchange: GALI) is one of the largest private sector banks in the Argentine financial system and a leading financial services

provider with 6.3 million Customers, 2.6 million Deposit accounts and 9.8 million of Credit cards

The Bank's main shareholder is Grupo Financiero Galicia S.A., an Argentine leading financial services holding company

As per the information published by the Argentine Central Bank, Banco Galicia ranked third in terms of assets and deposits

and second in terms of its loan portfolio within private-sector banks

Banco Galicia operates one of the most extensive and diversified distribution networks among private-sector banks in Argentina,

offering 257 bank branches, +820 ATM’s and other 470 points of contact with clients

Net income for the fourth quarter of FY2012 amounted to ARS 361,3 million, accumulating a ARS 1.301,1 million profit in

FY2012, 17.5% higher than in FY2011. Operating income grew 36.4% in 2012, mainly as a consequence of a significant

increase in the volume of activity with the private sector

For more information, please visit Grupo Financiero Galicia S.A. holding website: www.gfgsa.com

© 2013 SAP AG. All rights reserved. 3

Q4’2008 / 2009

Phase 1

2010

Phase 2

2011

Phase 3

2012-2013

Phase 3

Q2’2008

• Agreement OK

• SAP Banking

Services (BS)

6.0 Installation

2009

• 1st. New Product

on BS: Savings

Account (Q4)

• Upgrade to SAP

Banking 7.0 (Q2)

• New Fixed Term

Deposits for

Internet & Phone

Banking (Q4)

• SAP GRC V3 went

live (Q4)

• SAP CMO start

(Q4’)

• High Income new

product “Eminent”

implemented using

SAP BS Master

Contract (Q3)

• SAP CMO Phase 1

completed (Q4)

• SAP GRC Rollout

completed (Q4)

• BS Release 1: Fixed Term Deposits

in All Channels w/new functionality

+ Corporate Loans implemented

(Q1’12), Branch roll-out (Q2’12)

• BS Release 2.1 to 2.3: Savings

Accounts (Q4’12 - Q4’13)

• BS Release 3.2 to 3.4 Corporate

Loans (Q4’12 – Q4’13)

• BS Release 4.1 Collaterals (Q4’13)

• SAP CMO Phase 2 ended (Q3’12)

• SAP GRC V10 Upgrade (Q2’13)

SAP EVOLUTION@GALICIA

SAP BANKING (“GALAXIA” CORE PROGRAM) + CMO & GRC PROJECTS

© 2013 SAP AG. All rights reserved. 4

SAP BANKING PROGRAM ROADMAP 2012-2014

January

Febru

ary

Octo

ber

Nove

mb

er

Decem

ber

2013

Septe

mb

er

Marc

h

April

May

June

July

August

2012 O

cto

ber

Nove

mb

er

Decem

ber

Septe

mb

er

May

June

July

August

Rele

as

es

an

d W

ork

str

ea

ms

January

Febru

ary

Marc

h

April

May

2014

June

Release 2.1 Technical Framework (LCO,

ATM’s, Virtual Branch)

Octo

ber

Nove

mb

er

Septe

mb

er

August

Decem

ber

Release

1.2 -1.4

July

Data Migration Project (Savings and Current Accounts) and Transition Processes

Release 3.4 +Functionality for Loans (Warrants, Interest in advance, Consumer)

Release 4.1 Collaterals Release 5 Retail Loans

Release 3.1 Pledge Loans

Release 3.2 More Functionality for

Corporate Loans

Program Governance and Management -Technical Solution Mgmt. -SAP BS Maintenance - Run SAP

Release 2.2 Basic Functionality for Savings Accounts (SA)

over Virtual Branch

Release 2.3 Full Functionality for SA over Pilot Branch and then

rollout to all branches

Release 3.3 Corporate Loans

Enhancements

Release 2.4 Current Accounts over Pilot Branch

SAP CORE BANKING ROADMAP 2012-2014

PROGRAM «GALAXIA»

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Objective • Achieve a significant cost reduction and improve Cash Management operations

Scope

• Branch network and ATM prevision needs

• Facilitate the exchange of surplus cash between Banks

Expected Benefits

• Reduce Cash Transportation and related costs

• Minimize Cash operative stock in the Branches

• Integrated vision of Cash movements in the Bank’s Network

• Improve Galicia’s negotiation position with Cash Handling and Security providers

• Integrate and standardize Bank’s Cash-in Transit processes

• Accounting integrated to the Operating process

Project phases

• SAP CMO (Cash Management & Optimization) modules implemented: MM (Materials

Mgmt.), SD (Sales & Distribution), SNP (Supply Network Planning) and DP (Demand Planning)

• Phase 1 (Dec.2010-Dec.2011): Cash Logistics Execution

• Phase 2 (Jan.2012-Aug.2012): Cash Planning and Optimization

SAP CMO PROJECT IN BANCO GALICIA (I)

INNOVATION IN THE BANK CASH MANAGEMENT & OPTIMIZATION

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Obtained Achievements

• Better information visibility of Cash availability in Galicia’ network (Branches, ATM’s ..)

• Integration between Cash demand planning and Cash replenishment processes

• Reduction of opportunity costs of keeping immobilized Cash flows

• Decrease of Administrative and Transportation costs related to Cash handling

• Better Information to negotiate and control Cash Transportation and Security services

• Cash-in Transit Rationalization

• Operating Efficiency Increase

• Better service level to Customers

• Gain agility in regulations adaptations -> Time-to-Market reduction

Roll-out Stages

1. Legacy Front-end (workflow) and spreadsheet replacement by SAP CMO

2. Cash Transportation providers Integration with Galicia’s SAP CMO

3. Forecast of demands and Cash surplus

4. Planning Proposals for sends and Cash withdrawals

5. Online Information to Centralized areas and Bank' Management for decision making

SAP CMO PROJECT IN BANCO GALICIA (II)

GREAT SAVING, MORE EFFICIENCY AND CUSTOMER SATISFACTION!!

© 2013 SAP AG. All rights reserved. 7

CMO

Billed Amount due

to Money Transportation

In Store Branch Rates

Accuracy in Kilometers

Galicia’s clients with

deposits in other Banks

$ 2,360,000 ARS *

$ 900,000 ARS

No data

$ 213,000 ARS

* 2011 y 2012

IMPLEMENTED IMPROVEMENTS

CASH TRANSPORTATION BILLING CONTROL

Recovered Future Benefit

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Timely Count of

Bills

On Time Schedule

Arrival to Branches

Bill Quality

in Remittances

Neutral ATMs

Availability in the day for the

Cash conditioned at the carrier

Recovery of the added cost of security

(police) for late remittances

Differential rate for lack of quality

Bills required

Travel Planning

Assurance of bank bills’ quality

CMO

Recovered Future Benefit

ONGOING NEGOTIATIONS

SERVICE DEFICIENCIES

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Redundant counting and

rides to Central Bank

Inefficient role for

cash distribution

by zone

Excess of inter

Warehouses’ tranfers

Urgent Requests

$ 1,320,000 ARS

$ 65,000 ARS

$ 147,000 ARS

$ 204,000 ARS

Recovered Future Benefit

IMPLEMENTED OPERATIONAL IMPROVEMENTS

OWN PROCESS INEFFICIENCIES REDUCTION

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Improve technology of collector

Branches near ARG Central Bank (10) $ 552,000 ARS

$ 0 ARS

$ 85,000 ARS

$ 0 ARS

$ 553,000 ARS

$ 10,800,000 ARS *

$ 5,800,000 ARS **

$ 435,000 ARS

Investment Yearly Recovery

Maximize usage of branch treasures

* 8% of Total Annual Expenses ** waiting for new Argentinean Central Bank regulations

Cash provisioning synergies with CFA

for Buenos Aires and suburbs

Custodian Acounts according to

ARG Central Bank Regulation “A” 3208

Conditioning branch 75

for “Naranja” Card central treasury $ 135,000 ARS $ 245,000 ARS

NEW IMPROVEMENTS OPPORTUNITIES

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Billing Control $ 3,473,000 ARS

$ 1,736,000 ARS

$ 17,833,000 ARS

Recovered Projected

Own Inefficiency

Identified Opportunities

Total Cost $ 12,763,575 ARS

SAP CMO IMPLEMENTATION SUMMARY

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Galicia

58,20%

Main Competitor

89%

* 1º half 2011 vs 1º half 2012

Year 2011

20%

Year 2012

12%

** % Lower efficiency of Galicia compared with Main Competitor

Datos Relevantes

Cash Transportation expenses increase *

Efficiency in terms of average expenditure Branches **

RELEVANT INFORMATION

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¡Muchas gracias!