Latin America Corporate Coverage Report

Research evidence excerpt

Latin America Corporate Coverage Report

the company likes to mention, cost of risk appears to have peaked in 4Q25, but NPLs

continue to worsen, up 140bpqoq to 9.6%, with coverage down to 93% (from 100% in

4Q25). Fees and non-interest income were also weaker. On the positive side, NII

(including securities) was better than expected at ARS 1.9tn, up 6.0%yoy, driven by NIM

expansion at 17.8% (+140bpqoq). We also note expenses were down 9.0%yoy and

10.0%qoq with the efficiency ratio mostly flat at ~40%. Tier 1 ratio reached 25.4%, up

35bpqoq. From a valuation standpoint, we downgraded the GALIAR 7.75% '28s

following our trip to Argentina, reflecting our view that the bank’s operating performance

is likely to require time to recover meaningfully. In that context, we believe investors are

better positioned in other Argentine sectors — most notably energy — where the near-

term risk-reward profile appears more compelling. Accordingly, we remain Neutral.

Upside risks include a better global environment as well as further economic

achievements related to Argentina. Main downside risk includes the failure from the

government to continue Argentina's stabilization plan, an aggressive M&A and

persistently weak results.

Banco General * 5.25% perp Corfield PANAMA 400.0 Ba3/BB-/ Financial 96.83 6.01 211 N N We remain Neutral on the BANCOG 5.25%. We continue to like the carry and are

comfortable with the bank’s fundamentals; however, the YTC is now broadly comparable

to Chilean AT1s and the dollar price around US$96 limits further upside. Risks remain

largely Panama-centric. A scenario in which Panama avoids a Moody’s downgrade in

2026 — even if it would not trigger an IG loss for Banco General — would be

constructive.