Galicia in talks to open Uruguayan branch next yr.

Argentina's Banco Galicia (Galicia) is holding talks with Uruguay's central bank in a bid to get the go-ahead to open a branch in Uruguay next year, the bank's senior VP of corporate comunications Diego Videla told BNamericas. The new branch will initially focus on non-credit operations such as current accounts, saving accounts and e-banking, Videla said, adding that a subsequent entry into the lending segment will depend on the country's economic development and that the bank has made no decision on this issue as yet. According to Videla, the bank will continue to concentrate on the financial needs of Argentine clients but accepts that the capture of Uruguayan customers remains a difficult task given that the Uruguayan population has traditionally remained loyal to local state and private institutions. On August 20, Uruguay's central bank further extended the suspension of local bank Galicia Uruguay until November 30. Galicia Uruguay was intervened and suspended in February last year due to a liquidity crunch sparked by a run on deposits involving its numerous Argentine clients. The central bank has extended the bank's intervention status several times since its original intervention. Banco Galicia Uruguay's deposits are currently frozen and the bank is in the process of returning funds to clients through a government-backed plan that has so far worked very well with full compliance to the pre established repayment timetable. Banco Galicia Uruguay began the process of returning the funds to its customers in January with the plan to place 100% interest on dollar deposits held by investor, according to regulations laid down by Uruguay's central bank. Banco Galicia was among the hardest hit by the recent economic and financial crisis in Argentina. The bank is the main asset of Argentine financial group Grupo Financiero Galicia (Nasdaq: GGAL).