financial statements as of march 31, 2011 jointly …...financial statements as of march 31, 2011...

Financial statements as of March 31, 2011 Jointly with the Limited Review Report on Interim F inancial Statements and the Statutory Audit Committee’s Report.

BANCO PATAGONIA S.A.

FINANCIAL STATEMENTS AS OF MARCH 31, 2011 (NOTE 2.1 )

TABLE OF CONTENTS

Page

Limited Review Report on Interim Financial Statements

Cover page ......................................................................................................................... 1

Balance sheets ................................................................................................................... 2

Statements of income ......................................................................................................... 7

Statements of changes in shareholders’ equity.................................................................... 9

Statements of cash flows .................................................................................................... 10

Notes to the financial statements......................................................................................... 12

Exhibit A - Breakdown of government and private securities ............................................. 45

Exhibit B - Financing facilities classified by status and guarantees received ..................... 47

Exhibit C - Financing-facilities concentration ..................................................................... 49

Exhibit D - Financing facilities broken down by term.......................................................... 50

Exhibit E - Breakdown of investments in other companies ................................................ 52

Exhibit F - Changes in bank premises and equipment, and miscellaneous assets............. 53

Exhibit G - Breakdown of intangible assets ....................................................................... 54

Exhibit H - Deposits concentration .................................................................................... 55

Exhibit I - Breakdown by term of deposits, other liabilities from financial intermediation and subordinated corporate bonds .................................................................. 56

Exhibit J - Changes in allowances and provisions ............................................................ 57

Exhibit K - Capital structure .............................................................................................. 58

Exhibit L - Amounts in foreign currency ........................................................................... 59

Exhibit N - Credit assistance to related parties ................................................................. 60

Exhibit O - Derivative financial instruments ...................................................................... 61

Schedule I - Consolidated financial statements ................................................................... 62

Statutory Audit Committee’s Report

LIMITED REVIEW REPORT ON INTERIM-PERIOD FINANCIAL STATEMENTS To the Shareholders and Directors of BANCO PATAGONIA S.A. Registered office: Tte. Gral. J. D. Perón 500 1.1.2. Buenos Aires, Argentina We have performed a limited review of the accompanying balance sheet of BANCO PATAGONIA S.A.

as of March 31, 2011, and the related statements of income, changes in shareholders’ equity and cash

flows for the three-month period then ended. In addition, we have performed a limited review of the

accompanying consolidated balance sheet of BANCO PATAGONIA S.A. and its subsidiaries as of

March 31, 2011, and the related consolidated statements of income and cash flows for the three-

month period then ended, which are disclosed as supplementary information in Schedule I. These

financial statements are the responsibility of the Bank’s Management.

We performed our limited review in accordance with the provisions of FACPCE (Argentine Federation

of Professional Councils in Economic Sciences) Technical Resolution No. 7 applicable to a limited

review of interim financial statements and with the “Minimum external auditing standards” issued by

BCRA (Central Bank of Argentina) applicable to the review of quarterly financial statements. Under

such standards, a limited review consists primarily in applying analytical procedures to the accounting

information and making inquiries of the persons in charge of accounting and financial matters. A

limited review is substantially less in scope than an audit of financial statements, the objective of which

is to express an opinion on the financial statements taken as a whole. Therefore, we do not express

such an opinion.

As mentioned in note 3 to the accompanying financial statements, the financial statements mentioned

in paragraph (1) were prepared by the Bank in conformity with the accounting standards established

by the BCRA, which differ from the professional accounting standards approved by the CPCECABA

(Professional Council in Economic Sciences of the City of Buenos Aires), Argentina, in certain

valuation and disclosure aspects described and quantified in such note.

Based on our review, we have not become aware of any facts or circumstances that would require

making significant changes to the financial statements mentioned in paragraph (1) for them to be

presented in conformity with the standards established by the B.C.R.A. and, except for the effect of the

matters mentioned in paragraph (3), with the professional accounting standards effective in Buenos

Aires City, Argentina.

In connection with the stand-alone and consolidated balance sheets of BANCO PATAGONIA S.A. as of

December 31, 2010, and the stand-alone and consolidated statements of income and changes in cash

flows, and statement of changes in shareholders' equity for the three-month period ended March 31,

2010, presented for comparative purposes, we report that:

On February 16, 2011, we issued our auditors’ report on the financial statements of BANCO

PATAGONIA S.A. as of December 31, 2010, for the year then ended, to which we refer, which

included an exception regarding differences between BCRA standards applied and professional

accounting standards effective in Buenos Aires City, Argentina, which are detailed in note 3 to the

accompanying financial statements. We have not audited any financial statements as of any date

or for any period subsequent to December 31, 2010.

On May 10, 2010, we issued our limited review report on the financial statements of

BANCO PATAGONIA S.A. for the three-month period ended March 31, 2010, to which we refer,

which included an exception regarding differences between BCRA standards applied and

professional accounting standards effective in Buenos Aires City, Argentina, which are detailed in

note 3 to the accompanying financial statements.

In compliance with current legal requirements, we further report that:

The accompanying financial statements were transcribed into the Financial Statements Book.

The financial statements of BANCO PATAGONIA S.A result from books kept, in their formal

respects, in conformity with current legal requirements and BCRA standards and in conformity

with the provisions of CNV Resolution EMI No. 4,810 dated October 21, 2008.

As of March 31, 2011, liabilities accrued in employer and employee contributions to the ANSeS

(federal social security administration) resulting from the Bank’s accounting books amount to ARS

5,807,600, none of which was due and payable as of that date.

Buenos Aires, May 09, 2011

PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L. C.P.C.E.C.A.B.A. Vol. 1 - Fo. 13

Pablo M. Moreno Partner

Public Accountant (U.B.A.) C.P.C.E.C.A.B.A. Vol. 164 - Fo. 235

Marcelo A. Iadarola Rubén M. Iparraguirre Jorge G. Stuart Milne Accounting Manager General Assistant Manager Chairman

Administration and Finance Area

Signed for identification purposes with

our report dated 05/09/2011 On behalf of Statutory Audit Committee


our report dated 05/09/2011 PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

C.P.C.E.C.A.B.A. Vol. 1 Fo. 13

Alberto M. Tenaillon Statutory Auditor

Pablo M. Moreno (Partner) Public Accountant (U.B.A.)

C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 1


Registered office:

Teniente Gral. Juan D. Perón 500 – Buenos Aires – Argentina

Main business activity: Commercial bank C.U.I.T. (Argentine tax identification number) : 30 - 50000661 – 3

Incorporation date: May 4, 1928

(1) Of the articles of incorporation: 18/09/1928 Date

(2) Of the last amendment: 14/08/2007

Stock Corporations Book: 36

Registration with the Public Registry of Commerce

Buenos Aires Book

Number: 13.424

Expiry of the articles of incorporation: August 29, 2038

Fiscal year No. 88

Beginning date: January 1, 2011 Closing date: December 31, 2011

Capital structure (Note 1 and 4 and Exhibit K)

In Argentine pesos Number and characteristics of shares

Subscribed Paid-in

719,264,737 book-entry shares of common stock of ARS 1 face value and entitled to one vote each

719,264,737 719,264,737

Information required by the BCRA (Central Bank of A rgentina)

Name of the undersigned auditor: Pablo M. Moreno

Professional firm: Pistrelli, Henry Martin Asociados S.R.L.

Report for the three-month period ended March 31, 2011 8 (quarterly closing – unqualified,

as per BCRA regulations)


BALANCE SHEETS AS OF 03/31/2011 AND 12/31/2010

(Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 2

ASSETS 03/31/11 12/31/10

A. Cash and due from banks Cash on hand 619,600 484,138 Financial institutions and correspondents 1,428,511 996,860 BCRA (Central Bank of Argentina) 1,205,605 732,919 Others in Argentina 23,768 19,616 Others abroad 199,138 244,325 2,048,111 1,480,998 B. Government and private securities (Exhibit A) Holdings booked at fair market value 801,964 865,202 Holdings booked at cost plus yield 30,365 10,230 Instruments issued by the BCRA 2,530,404 2,684,880 3,362,733 3,560,312 C. Loans To the nonfinancial government sector (Exhibits B, C and D) 90,218 90,636 To the financial sector (Exhibits B, C and D) 308,630 241,128

Interbank loans - (call options sold) 117,824 104,956 Other financing facilities granted to local financial institutions 184,599 130,903 Accrued interest, adjustments and listed-price differences receivable 6,207 5,269

To the nonfinancial private sector and foreign residents (Exhibits B, C and D) 7,257,895 7,060,707 Overdrafts 1,136,315 1,031,913 Notes 3,143,284 3,047,257 Mortgage loans 78,366 82,348 Collateral loans 15,295 18,899 Personal loans 1,320,297 1,188,613 Credit cards 873,498 814,747 Other 640,911 828,070 Accrued interest, adjustments and listed-price differences receivable 68,416 67,298 (Unearned discount) (18,487) (18,438) (Allowances) (Exhibit J) (157,286) (157,502) 7,499,457 7,234,969













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 3

ASSETS – Continued 03/31/11 12/31/10

D. Other receivables from financial intermediation BCRA 175,869 185,034 Amounts receivable from spot and forward sales pending settlement 376,228 612,520 Securities and foreign currency receivable from spot and forward purchases pending settlement

190,758 600

Unlisted corporate bonds (Exhibits B, C and D) 7,563 3,585 Other not covered by Debtor Classification Standards 39,682 25,833 Other covered by debtor classification standards (Exhibits B, C and D) 8,151 13,657 Accrued interest and adjustments receivable covered by Debtor Classification Standards (Exhibits B, C and D)

549 458

(Allowances) (Exhibit J) (1,508) (1,652) 797,292 840,035 E. Receivables from financial leases Receivables from financial leases (Exhibits B, C and D) 266,130 234,958 Accrued interest and adjustments receivable (Exhibits B, C and D) 2,291 1,947 (Allowances) (Exhibit J) (3,961) (3,642) 264,460 233,263 F. Investments in other companies (Exhibit E) In financial institutions (Note 20) 242,343 230,253 Other 44,363 43,863 (Negative goodwill) (Note 20) (63,404) (67,133) 223,302 206,983 G. Miscellaneous receivables Trade receivables (Exhibits B, C and D) 4,574 7,822 Other (Note 17) 431,752 411,964 Accrued interest and adjustments receivable related to trade receivables (Exhibits B, C and D)

4 6

Other accrued interest and adjustments receivable 85 94 (Allowances) (Exhibit J) (2,224) (2,318) 434,191 417,568 H. Bank premises and equipment (Exhibit F) 177,411 176,057 I. Miscellaneous assets (Exhibit F) 81,596 71,821

J. Intangible assets (Exhibit G) - - K. Items pending allocation 630 558

TOTAL ASSETS 14,889,183 14,222,564













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 4

LIABILITIES 03/31/11 12/31/10

L. Deposits (Exhibits H and I) Nonfinancial government sector 1,747,722 1,550,373 Financial sector 19,367 56,612 Nonfinancial private sector and foreign residents 9,018,173 8,691,757 Checking accounts 1,728,572 1,614,820 Savings accounts 2,631,594 2,741,645 Certificate of deposit 4,229,757 3,988,195

Investment accounts 1,007 1,072 Other 396,660 313,149 Accrued interest, adjustments and listed-price differences payable 30,583 32,876 10,785,262 10,298,742 M. Other liabilities from financial intermediation BCRA (Exhibit I) 867 1,022 Banks and international organizations (Exhibit I) 142,927 129,421 Amounts payable for spot and forward purchases pending settlement 187,500 704 Securities and foreign currency to be delivered under spot and forward sales pending settlement

402,298 679,875

Other (Exhibit I) (Note 17) 512,628 483,988 Accrued interest, adjustments and listed-price differences payable (Exhibit I)

1,454 732

1,247,674 1,295,742 N. Miscellaneous liabilities Other (Note 17) 561,668 448,072 561,668 448,072 O. Provisions (Exhibit J) (Note 6) 61,250 68,054 P. Subordinated corporate bonds - - Q. Items pending allocation 1,013 962

TOTAL LIABILITIES 12,656,867 12,111,572

SHAREHOLDERS’ EQUITY (as per related statements) 2,232,316 2,110,992

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 14,889,1 83 14,222,564













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 5

MEMORANDUM ACCOUNTS 03/31/11 12/31/10

DEBIT BALANCE Contingent Loans obtained (unused amounts) 63,529 63,137 Guarantees received 3,782,440 3,844,701 Contingent debit-balance contra accounts 231,117 382,675 4,077,086 4,290,513 Control Receivables classified as irrecoverable 326,650 322,347 Other (Note 17) 3,297,603 3,189,321 Control debit-balance contra accounts 1,069,859 1,061,473 4,694,112 4,573,141 Derivatives (Exhibit O and note 13) Notional value of forward transactions without delivery of underlying asset 5,000 466,239 Interest rate swap 15,000 15,000 Derivatives debit-balance contra account 46,312 492,302

66,312 973,541 Trust activity (Note 11) Trust funds 724,136 525,715

724,136 525,715

TOTAL DEBIT-BALANCE MEMORANDUM ACCOUNTS 9,561,646 10,362,910













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 6

MEMORANDUM ACCOUNTS – Continued 03/31/11 12/31/10

CREDIT BALANCE Contingent Loans granted (unused amounts) covered by Debtor Classification Standards (Exhibits B, C and D)

50,000 184,907

Other guarantees provided covered by debtors classification standards (Exhibits B, C and D) 39,769 38,505 Other guarantees provided not covered by debtors classification standards 336 33,828 Other covered by debtors classification standards (Exhibits B, C and D) 60,884 56,057 Other not covered by debtor classification standards 80,128 69,378 Contingent credit-balance contra accounts 3,845,969 3,907,838 4,077,086 4,290,513 Control Checks and securities to be credited 205,428 199,739 Other 864,431 861,734 Control credit-balance contra accounts 3,624,253 3,511,668 4,694,112 4,573,141 Derivatives (Exhibit O and Note 13) Notional value of put options sold 26,312 25,721 Notional value of forward transactions without delivery of underlying asset 20,000 466,581 Derivatives credit-balance contra accounts 20,000 481,239 66,312 973,541 Trust activity (Note 11) Trust activity credit-balance contra accounts 724,136 525,715 724,136 525,715

TOTAL CREDIT-BALANCE MEMORANDUM ACCOUNTS 9,561,646 10,362,910

The accompanying notes 1 through 24, exhibits A through L, N and O, and Schedule I are an integral part of these financial statements.


STATEMENTS OF INCOME For the three-month periods ended 03/31/2011, and 0 3/31/2010











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 7

BREAKDOWN 03/31/11 03/31/10

A. FINANCIAL INCOME Interest on cash 26 39 Interest on loans to the financial sector 7,855 7,473 Interest on overdrafts 53,128 37,466 Interest on notes 87,596 48,049 Interest on mortgage loans 2,356 2,755 Interest on collateral loans 624 1,438 Interest on credit card loans 36,602 21,902 Interest on financial leases 11,326 5,814 Interest on other loans 114,375 75,079 Interest on other receivables from financial intermediation 638 280 Net income from government and private securities 97,249 100,345 Income from PGN (loans granted by the Argentine Government and secured by bonds) – Presidential Decree No. 1,387/01

3 89

Adjustments under CER clause 817 94 Adjustments under CVS (salaries variation coefficient) clause 28 29 Gold and foreign currency quoted price difference 22,330 26,622 Other 8,752 10,273 443,705 337,747 B. FINANCIAL EXPENSE Interest on savings-account deposits 1,563 1,328 Interest on certificates of deposit 123.384 61.349 Interest on interbank loans received (call options received) 444 932 Interest on other financing facilities from financial institutions 165 94 Interest on other liabilities from financial intermediation 987 387 Interest from subordinated corporate bonds - 443 Other interest 295 74 Adjustments under CER clause 20 23 Contribution to the deposit guarantee fund 4,550 2,912 Other 21,456 28,610 152,864 96,152 GROSS INTERMEDIATION MARGIN 290,841 241,595 C. PROVISION FOR LOAN LOSSES 9,227 6,291 D. SERVICE-CHARGE INCOME Related to lending transactions 57,989 41,660 Related to borrowing transactions 80,720 65,769 Other fees 8,390 7,354 Other 30,749 25,279 177,848 140,062


STATEMENTS OF INCOME For the three-month periods ended 03/31/2011, and 0 3/31/2010











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 8

BREAKDOWN - Continued 03/31/11 03/31/10

E. SERVICE-CHARGE EXPENSE Fees 20,946 18,465 Other (Note 17) 30,285 23,474 51,231 41,939 F. ADMINISTRATIVE EXPENSES Personnel expenses 167,874 118,046 Directors’ and statutory auditors’ fees 2,220 1,961 Other professional fees 7,373 5,605 Advertising 8,877 6,856 Taxes 11,235 8,233 Depreciation of bank premises and equipment 3,993 3,508 Other operating expenses 47,683 36,723 Other 10,548 8,477 259,803 189,409

NET INCOME (LOSS) FROM FINANCIAL INTERMEDIATION 148,428 144,018 G. OTHER INCOME Income from long-term investments 17,260 2,480 Punitive interest 474 450 Receivables recovered and allowances reversed 4,822 2,252 Other (Note 17) 24,251 8,701 46,807 13,883 H. OTHER EXPENSE Punitive interest and charges payable to the BCRA 6 12 Charge for uncollectibility of miscellaneous receivables, and other allowances

853 802

Losses and depreciation of miscellaneous assets 231 516 Other (Note 17) 3,821 6,996 4,911 8,326

NET INCOME BEFORE INCOME TAX 190,324 149,575

I. INCOME TAX (Note 2.4.s) 69,000 50,550

NET INCOME FOR THE PERIOD 121,324 99,025



STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY For the three-month periods ended

03/31/2011, and 03/31/2010 (Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 9

Changes Capital stock

(1)

Non-capitalized

contributions

Additional paid-in

capital (1)

Appropriated

retained earnings

Legal

reserve

Unappropriated

retained earnings

(2)

Total as of 03/31/2011

Total as of 03/31/2010

Balance at beginning of year, restated 719,265 217,191 330,092 844,444 2,110,992 1,854,001

Net income for the period - - - 121,324 121,324 99,025

Balance at end of period 719,265 217,191 330,092 965,768 2,232,316 1,953,026


(1) See notes 4.1 and 4.2. (2) See note 23.


STATEMENTS OF CASH FLOWS For the three-month periods ended











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 10

Changes in cash and cash equivalents 03/31/11 03/31/10

Cash at beginning of year 1,480,998 1,510,076 Cash at end of period 2,048,111 1,568,192 Net increase in cash 567,113 58,116

Causes of changes in cash Operating activities

Net collections / (payments) for: Government and private securities (168,413) (31,375)

Loans 61,654 166,912 To the financial sector (59,647) 169,638 To the nonfinancial government sector 1,238 (99,207) To the nonfinancial private sector and foreign residents 120,063 96,481

Other receivables from financial intermediation 240,851 (38,375)

Receivables from financial leases (19,703) 4,431

Deposits 327,001 127,146 To the financial sector (37,245) 7,765 To the nonfinancial government sector 197,349 (1,973) To the nonfinancial private sector and foreign residents 166,897 121,354

Other liabilities from financial intermediation 208,240 (9,413) Financial sector or interbank loans (call options received) (444) (932) Other (except for the obligations included under financing activities) 208,684 (8,481)

Collections related to service-charge income 177,743 140,093

Payments related to service-charge expense (50,920) (41,248)

Administrative expenses paid (213,389) (241,060)

Net collections for punitive interest 468 438

Collection of dividends from other companies 1,801 1,200

Other collections / (Payments) related to miscellaneous income and loss 17,312 (5,888)

Net payments for other operating activities (30,867) (811)

Income tax paid (28,664) (2,243)

Net cash flow provided by operating activities 523,114 69,807


STATEMENTS OF CASH FLOWS For the three-month periods ended











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 11

03/31/11 03/31/10 Investing activities

Net collections for bank premises and equipment 11,815 7,517

Net payments for miscellaneous assets (6,777) (14,283)

Payments for the acquisition of investments in other companies - 3

Net cash flow provided by / (used in) investing act ivities 5,038 (6,763)

Financing activities

Banks and international organizations (payments) / collections 13,506 (27,562)

Subordinated corporate bonds payments - (895)

Net cash flow provided by / (used in) financing act ivities 13,506 (28,457)

Financial income (expense) and holding gains (losse s) from cash and cash equivalents (including interest and monetary gain (loss))

25,455 23,529

Net increase in cash 567,113 58,116



NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2011 (Note 2.1)











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 12

NOTE 1: Transfer of majority control over the outs tanding capital stock and votes of Banco Patagonia

S.A. to Banco do Brasil S.A.

On April 21, 2010, the group of majority shareholders of Banco Patagonia S.A., who own 61.5827% of the outstanding capital stock and votes, agreed in a stock purchase agreement (“Agreement”) to sell Class "B” book-entry shares of common stock for a face value of ARS 366,825,016 that they own, representing 51% of the outstanding capital stock and votes of Banco Patagonia S.A. to Banco do Brasil S.A., a corporation organized under Brazilian laws, the majority shareholder of which is the Brazilian Treasury. Accordingly, the purchaser acquired a controlling interest in Banco Patagonia S.A. The purchase price for the total shares being sold stands at USD 479,660,391, equal to USD 1.3076 per share. To complete the transaction, all of the conditions precedent set forth in the Agreement were first verified and were found to have been met as per the following:

On June 16, 2010, the Special Shareholders’ Meeting of Banco do Brasil S.A. approved the acquisition of shares in Banco Patagonia S.A. and ratified the agreement signed on April 21, 2010.

On October 21, 2010, the Central Bank of Brazil authorized such transaction and, on October 28, 2010, it authorized an increase in Banco do Brasil S.A.'s interest in Banco Patagonia, by 51% and up to 75% of the outstanding capital stock and voting rights as a result of the mandatory acquisition public offering (“mandatory APO”) as provided by the Agreement.

On February 3, 2011, the Board of Governors of the BCRA approved this transaction through Resolution No. 16 and the potential acquisitions resulting from such Mandatory APO. On April 5, 2011, the Ministry of Economy and Public Finance authorized the transaction through Resolution No. 56 issued by the Department of Argentine Trade, in compliance with the provisions set forth in section 8, Law No. 25,156, Anti-Trust Law.

In view of the above, on April 12, 2011, the Agreement was executed, transferring 51% of the Bank’s outstanding shares of the capital stock and votes to Banco do Brasil S.A. In addition, on that date Banco do Brasil S.A. and the Sellers executed a Shareholders’ Agreement, whereby, among other matters, certain call and put options were granted, exercisable as from the third anniversary of the execution date, for the purchase by the Buyers of the ownership interests that the Sellers will hold in the Bank, at the strike price equaling the price in US dollars per share in the Offer. The maximum possible shares that can be included in the options is 25% of the Bank’s capital stock and votes.













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 13

Additionally, on April 7, 2011, Banco do Brasil S.A., in compliance with Argentine regulations, notified Banco Patagonia S.A that it would hold a Mandatory APO in Argentina, as mentioned above, with regard to all of the remaining shares of Banco Patagonia S.A., at the price of USD 1.3140 (the purchase price received by the Sellers under the Agreement, with the adjustment provided for the period between the date of such Agreement and the closing date). In this regard, on April 15, 2011, the Board of Directors of Banco Patagonia S.A. rendered a favorable opinion on the fairness of the price offered by Banco do Brasil S.A. in the Mandatory APO and stated that the abovementioned offer meets current regulation requirements. By means of the mandatory APO and pursuant to a joint purchase system agreed by the parties, the Sellers would be allowed to purchase up to 25% of the outstanding capital stock and voting rights of Banco Patagonia S.A.; as from such cap, the Purchaser would be the only acquirer of any surplus offered. Finally, on April 27, the Purchaser requested the CNV (Argentine securities commission) for a final authorization of the abovementioned Mandatory APO. At the date of issue of these financial statements, authorization from such oversight agency is still pending.

NOTE 2: Significant accounting policies

These financial statements were prepared in conformity with the accounting standards established by the BCRA and arise from the Bank’s books of account kept in accordance with effective legal requirements and regulations.

1. Comparative information

Under BCRA (Central Bank of Argentina) standards, the balance sheet as of March 31, 2011, and certain exhibits that specify so are presented comparatively with the amounts as of the prior year-end, while the statement of income, statement of changes in shareholders' equity and statement of cash flows for the three-month period ended March 31, 2011, are presented comparatively with those for the same period of the prior fiscal year. Through Communiqués “A” 5047 and “A” 5180, as supplemented, the BCRA made amendments to the accounting methods of financial leases, applied starting July 1, 2010, and to nonfinancial government sector debt instruments and to BCRA monetary regulations, as from March 1, 2011, respectively. Consequently, certain accounts and items on the balance sheet as of December 31, 2010, and the statement of income for the three-month period ended March 31, 2011, as well as certain related supplementary information, was reclassified due to













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 14

application of these communiqués, solely for comparative purposes with these financial statements, without affecting the shareholders' equity or income (loss) of prior years in any way.

Figures stated in thousands of Argentine pesos

The amounts disclosed in these financial statements are stated in thousands of Argentine pesos as required by BCRA standard “CONAU 1 –111” (Communiqué “A” 3,359).

Restatement in constant pesos

BCRA and professional accounting standards establish that the financial statements should be stated in constant pesos. In a monetary stability context, the face and constant value of Argentine pesos is the same, but, in an inflationary or deflationary context, the financial statements should be stated in pesos reflecting the purchasing power as of their closing date by recognizing the changes in the domestic WPI published by the INDEC (Argentine Institute of Statistics and Censuses), in accordance with the restatement method set by FACPCE (Argentine Federation of Professional Council in Economic Sciences) Technical Resolution No. 6. The Bank’s financial statements recognize the changes in the currency purchasing power through February 28, 2003, as required by Presidential Decree No. 664/2003, CNV General Resolution No. 441 and BCRA Communiqué “A” 3,921. Professional accounting standards provide for discontinuing the application of the restatement method set forth in FACPCE Technical Resolution No. 6 as from October 1, 2003. The effects of failing to recognize the changes in the currency purchasing power through such date were not material as to these financial statements taken as whole.

Main valuation and disclosure methods

The main valuation and disclosure methods followed in the preparation of the financial statements as of March 31, 2011, and comparative figures (see note 2.1) are:

a) Assets and liabilities in foreign currency

Assets and liabilities denominated in US dollars have been valued at the benchmark foreign exchange rate set by the BCRA for the US dollar at the closing of operations of the last business day of each period or fiscal year, as applicable. In addition, assets and liabilities denominated in other foreign currencies were converted at the exchange rates published by the BCRA. Foreign exchange differences were charged to the statement of income for each period.













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 15

b) Government and private securities

On February 25, 2011, BCRA Communiqué “A” 5180, as supplemented, introduced changes to the valuation and disclosure methods for debt instruments relating to the nonfinancial government sector and changes to BCRA monetary regulations, applicable as from March 1, 2011, as shown below:

2.5 Holdings booked at fair market value They were valued at the listed price prevailing on the MVBA (Buenos Aires securities market) or MAE (electronic over-the-counter market) or current prices reported by the BCRA as of March 31, 2011, plus the coupons pending collection. Listed-price and current price differences were charged to the statement of income for each period.

As of December 31, 2010, the holdings of Argentine Government Bonds in ARS private BADLAR + 350 basis points maturing in 2013, which as of that date were booked under Unlisted government securities, were valued in accordance with the guidelines of BCRA Communiqué “A” 4898, as supplemented, considering the current values reported by the BCRA, the book values and the use of the respective offset accounts.

2.5 Holdings booked at cost plus yield As of March 31, 2011, they were valued at cost of addition increased by the accrual of the internal rate of return, net of the related offset account, compared, at the same time, with the current values calculated by the Bank. The addition value mentioned above is the current value of each security at March 1, 2011, or date of subsequent addition, as the case may be. As of December 31, 2010, in conformity with the provisions set forth in BCRA Communiqué “A” 4898, as supplemented, those holdings were valued at book value as of January 31, 2009, or at subsequent addition cost, net of the financial services collected subsequently to that date and of the related offset account. Accrued interest and, as the case may be, the adjustment from application of the CER (benchmark stabilization coefficient) were booked in that offset account. As of December 31, 2010, these holdings were booked under Holdings for trading or intermediation transactions.

2.5 Instruments issued by the BCRA













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Holdings with volatility published by the BCRA (own portfolio and tied to swap transactions): They were valued in accordance with the last current listed price for each instrument as of March 31, 2011, and December 31, 2010. The listed price differences were charged to income (loss) for each period. Holdings without volatility published by the BCRA (own portfolio and tied to swap transactions): They were valued at addition cost (adjusted by the CER, as the case may be) increased based on the internal rate of return as of March 31, 2011, and December 31, 2010. The internal rate of return accruals mentioned above were allocated to income (loss) for each period.

c) Credit assistance to the nonfinancial government sector

PGN (loans granted to the Argentine Government and secured by bonds) - Presidential Decree No. 1,387/01:

As of March 31, 2011, the PGNs under Presidential Decree No. 1387/2001, were valued as provided by BCRA Communiqué “A” 5180, as supplemented, which establishes that they should be booked at addition value, increased monthly based on the internal rate of return. The addition value is the book value as of February 28, 2011, net of its respective offset account. When the net book value of the offset account exceeds the current value reported by the BCRA, the bank should charge the total monthly accrual of its internal rate of return to the offset account. When the book value is equal to or lower than the present value published by the BCRA, the bank should reverse the respective offset account up the resulting amount of the difference between the current value and the net book value of the offset account. As of December 31, 2010, those PGNs were valued as provided in BCRA Communiqué “A” 4,898, which establishes that they should be booked at the higher value of the present value published by the BCRA and the book value as of January 31, 2009, net of financial services collected subsequent to that date and of the related offset account, as per the methods set forth in such Communiqué. As of March 31, 2011, and December 31, 2010, this credit assistance was booked under Loans – to the nonfinancial government sector in the amount of 621 and 692, respectively (See note 5). d) Interest accrual













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Interest has been accrued for on the basis of compounding, except in the cases of foreign-trade transactions, savings-account balances and authorized overdraft balance, which have been accrued for by the simple interest method. The Bank decided directly to interrupt the accrual of interest whenever the collection of principal granted or the payments of loans were in default (generally, with delays over 90 days) and the recoverability of the principal loaned and of accrued interest was uncertain. Interest accrued until the interruption is deemed part of the payable upon determining the amount of loan provisions. Subsequently, interest is only recognized based on collection, once the receivable for previously accrued interest has been settled.

e) Accrual of the adjustment by CER

As of March 31, 2011, and December 31, 2010, certain receivables and payables were adjusted by CER as follows:

1. PGNs

They were adjusted pursuant to Resolution 50/2002 of the Ministry of Economy, which provided that the payment of principal and interest of these loans should be adjusted by CER of 10 (ten) business days prior to the related service maturity date, and that the residual principal should be adjusted through the last day of each period, as the case may be. (See note 2(4)c).

2. Other loans and other assets:

They were adjusted pursuant to BCRA Communiqué “A” 3,507, as supplemented, which provided that, until December 31, 2002, payments should be made under the original terms and conditions of each transaction, and that they should be allocated as payments on account, whereas principal was adjusted as from February 3, 2002, by the CER of December 31, 2002, deducting the abovementioned payments on account since payment date, except for those subject to Law No. 25,713, which excludes from CER application certain lines of mortgage, collateral, and personal loans.

3. Deposits

They were adjusted by the CER as from the date of each deposit through each period-end or year-end, as the case may be.

f) Accrual of the adjustment by CVS













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Under BCRA Communiqué “A” 4,103, the loans specified therein were adjusted through March 31, 2004, applying the CVS (salaries variation coefficient) instead of being adjusted by CER. g) Loans and deposits of government securities

They were valued according to the effective listed prices for each security as of each period or year-end, as the case may be, plus the related accrued interest. Listed-price differences were charged to the statement of income for each period.

h) Allowance for loan losses, provision for contingent commitments and provision for other

contingencies

1. Allowance for loan losses and provision for contingent commitments

The loan loss reserve was booked based on the estimated uncollectibility risk of the Bank’s credit assistance, which results from assessing the compliance from borrowers and the guarantees supporting the related transactions in conformity with BCRA Communiqué “A” 2,950, as supplemented.

2. Provision for other contingencies:

Covers the amounts estimated by the Bank necessary to bear likely contingencies that, if verified, will result in a loss for the Bank.

i) Other receivables from financial intermediation

1. Amounts receivable and amounts payable from spot and forward sales and purchases pending

settlement

They were valued at the prices agreed upon for each transaction plus the related premiums accrued as of each period- or year-end, as the case may be. These premiums were charged to income for each period.

2. Securities and foreign currency receivable or payable from spot or forward purchases or sales pending settlement

a. Listed: They were valued at the effective price listed for each security and foreign

currency on Mercado de Valores de Buenos Aires or Mercado Abierto Electrónico as of each period- or year-end, as the case may be. Listed-price differences were charged to the statement of income for each period.













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b. Unlisted: They were valued at cost increased exponentially applying the internal rate of

return as of each period or year end, as the case may be. The related accrual was allocated to income for each period.

3. Unlisted corporate bonds

They were valued at cost increased exponentially applying the internal rate of return.

4. Other not covered by Debtor Classification Standards – Financial Trusts

They were valued at cost adjusted by CER, where applicable, and increased exponentially applying the internal rate of return. j) Receivables from financial leases

In accordance with BCRA Communiqué “A” 5047 as supplemented, they were valued at the discounted value of the sum of minimum installments pending collection (exclusive of any contingent installments), the residual value previously agreed and the purchase options, for the financial lease agreements in which the Bank acts as lessor. The discounted value is calculated by applying the imputed interest rate of each lease agreement. As of March 31, 2011, and December 31, 2010, the effective financial lease agreements do not represent significant amounts with respect to the total financing granted by the Bank. Additionally, their characteristics are among the usual ones for this kind of transactions, there being no differentiating issue of any kind compared with the transactions agreed on the Argentine financial market. These transactions are atomized among the Bank’s customers and there are no preestablished contingent installments or automatic renewal clauses.

k) Investments in other companies

As of March 31, 2011, and December 31, 2010, the equity interests in other companies were valued as follows:

2.2 Subsidiaries













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Banco Patagonia (Uruguay) S.A. I.F.E.: At the amount calculated by the equity method as of each period or year-end, as the case may be, converted into Argentine pesos, as described in note 2(4)a.

Patagonia Valores S.A. Sociedad de Bolsa y Patagonia Inversora S.A. Sociedad Gerente de Fondos Comunes de Inversión: At the amount calculated by the equity method as of each period or year-end, as the case may be. GPAT Compañía Financiera S.A.: by the equity method as of each period or year-end, as the case may be, net of the negative goodwill, resulting from the negative difference between the acquisition cost of GPAT Compañía Financiera S.A. and the equity method value at the time of acquisition. Goodwill depreciation is calculated based on a maximum 60-month term. The month of addition is depreciated in full whereas the month of retirement is not. (See note 20). 2. Other companies At cost restated applying the process described in note 2(3) or by the equity method, whichever lower, considering each company’s latest available financial statements.

l) Bank premises and equipment, and miscellaneous assets

These assets were booked at cost, restated following the procedure described in note 2(3). In addition, the Bank has booked an allowance for impairment in value of real property to adjust the value of such assets to their market value. Depreciation was calculated based on the months of useful life. The assets were fully depreciated in the month of addition, but were not depreciated in the month of retirement. The residual value of bank premises and equipment, and other, taken as a whole, does not exceed the recoverable value of such assets.

m) Other miscellaneous assets













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These assets were booked at cost, restated following the procedure described in note 2(3).

Depreciation, when appropriate, was calculated based on the months of useful life. The assets were fully depreciated in the month of addition, but were not depreciated in the month of retirement.

The residual value of these assets, taken as a whole, does not exceed their recoverable value.

n) Intangible assets

2.3 The account “Differences from court resolutions - Not deductible from computable equity – Original value” reflects the difference between the amount in original foreign currency converted at the exchange rate applied for the return of deposits under recursos de amparo (constitutional rights protection actions) and the amount booked according to the regulations effective as of the payment date (switching into pesos at the ARS 1.40-to-USD 1 exchange rate or the equivalent in other foreign currencies, plus the CER application).

As of March 31, 2011, and December 31, 2010, the amount booked was 234,226 and according to the criterion adopted by the Bank, it was amortized in full and charged to income through December 31, 2007.

Additionally, for the cases pending resolution, the Bank estimated an additional amount

between its update according to the rulings mentioned in note 2(4)u and its book value, allocating it directly to income (loss).

3.3 In the account “Differences from court deposits dollarization - deductible from computable

equity – Original value”, as required by BCRA Communiqué “A” 4,686, dated July 4, 2007, the difference between the equivalent value in pesos, considering the court deposits in the currency in which they were made and the book value of such deposits made in foreign currency which, as of January 5, 2002, fell under the scope of Law 25,561 and Decrees No. 214/02.

As of March 31, 2011, and December 31, 2010, the amount booked was 1,725 and according to the criterion adopted by the Bank, it was amortized in full and charged to income. (See note 2.4.u). o) Items pending allocation













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This account comprises the items that, due to administrative organization reasons or the special nature of the relationship with third parties, were not directly allocated to the related accounts.

p) Shareholders’ equity accounts

Capital stock remained at its original value.

q) Memorandum accounts - Derivatives 1. Forward transactions without delivery of underlying asset: They were valued according to the

effective price listed for the underlying asset on the MAE as of each period- or year-end, as the case may be. Listed-price differences were charged to the statement of income for each period.

2. Interest rate swap transactions: they were valued at the notional value on which the Bank

agrees to pay or charge a fixed interest rate and charge or pay a floating interest rate. The difference between such rates was charged to the statement of income for each period.

3. Put options sold on BODEN 2012 and 2012 coupons: they were booked at the swap value of

the bonds plus interest and CER accrued as of each period or year-end, as the case may be.

r) Statement of income

The accounts comprising monetary transactions occurred in each period (financial income (expense), service-charge income (expense), loan loss provision, administrative expenses, etc.) were computed at their historical amounts on a monthly accrual basis.

The accounts reflecting the impact on income (loss) from the sale, retirement or consumption of nonmonetary assets were computed based on the values of those assets.

Income (loss) from interests in subsidiaries was computed based on the income (loss) of those companies.

s) Income tax and minimum presumed income tax

The Bank calculates income tax by applying the effective 35% rate to taxable income for each period or year, as the case may be, without considering the effect of temporary differences between book and taxable income. It also assesses minimum presumed income tax, which was established by Law No. 25,063 for a ten-year term for fiscal years ended as from December 31, 1998. At present, after successive













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extensions, such tax is effective through December 31, 2019. This tax is supplementary to income tax because, while the latter is levied on taxable income for the year, minimum presumed income tax is a minimum levy determined by applying the current 1% rate on the potential income of certain productive assets. Therefore, the Bank’s tax obligation will be equal to the higher of the two taxes. In the case of institutions governed by Financial Institutions Law, the abovementioned law sets forth that they shall consider as taxable income 20% of their taxable assets, previously deducting those assets defined as non-computable. However, should minimum presumed income tax exceed income tax in a given year, such excess may be computed as a payment on account of any income tax in excess of minimum presumed income tax that may occur in any of the following ten years, once accumulated NOLs have been used. As of March 31, 2011, and 2010, the Bank assessed income tax charges based on taxable income of 69,000 and 50,550, respectively, which was recorded under “Miscellaneous liabilities” and was charged to income for each year under “Income tax”. Those amounts exceeded minimum presumed income tax amounts for each period; therefore, no accrual was booked in this regard.

t) Severance pay

The Bank allocates severance pay directly to expenses.

u) Legal actions

As a result of the measures taken by the Argentine Government in connection with the de-dollarization of deposits originally denominated in US dollars, and the rescheduling of bank deposits from early 2002, a significant number of legal actions were brought by individuals and companies against financial institutions, including this bank, on grounds that these measures breached constitutional rights, among others. These constitutional rights protection actions resulted in a significant withdrawal of deposits from those entities because they should reimbursed rescheduled deposits (mostly, deposits in US dollars before the de-dollarization) at the freely-floating exchange rate instead of the amount booked according to the regulations effective as of the payment date (switch into Argentine pesos at the ARS 1.40-to-USD 1 exchange rate or the equivalent in other foreign currencies, plus the CER application), at which deposits were de-dollarized and recorded.

As mentioned in note 2(4)n(1), the Bank records in the “Differences from court resolutions - Not deductible from computable equity – Original value” account, the difference between the amount in original foreign currency converted at the exchange rate applied for the return of













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deposits under constitutional rights protection actions and the amount booked according to the regulations effective as of the payment date.

Applying the criterion defined by the Bank in this connection, the abovementioned amounts have been fully written off and charged to income.

Also, during 2006, and 2007, the Argentine Supreme Court entered different judgments ordering and/or clarifying both the calculation method and the computation of advance payments with respect to the deposits involved. Finally, in Communiqué “A” 4,686 dated July 4, 2007, consistent with what was mentioned above, the BCRA established that the court deposits should be considered at the value at which they were made in the original currency converted into Argentine pesos as of the period or year end, as the case may be. For this calculation, the partial payments made shall be considered as having been paid in foreign currency. Furthermore, the BCRA set forth that the financial institutions shall be able to capitalize the difference resulting from such calculation and book value of the deposit. (See note 2(4)n(2)).

2.4 Use of accounting estimates

In preparing the financial statements, in certain cases the Bank is required to make estimates to determine the book values of assets and liabilities as well as their disclosure, as of each date on which the accounting information is presented. Bank bookings are based on the best estimate regarding the probability of occurrence of different future events and, therefore, the final amount may differ from such estimates, which may have a positive or negative impact on future periods.

NOTE 3: Main differences between BCRA standards an d professional accounting standards effective in Argentina

The professional accounting standards effective in Buenos Aires City, Argentina, differ in certain valuation and disclosure aspects from BCRA accounting standards. The following are the differences between the standards identified by the Bank and those deemed material to these financial statements.

Valuation standards













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2.1 Deferred income tax

The Bank calculates income tax by applying the effective 35% rate to taxable income for each period or year, as the case may be, without considering the effect of temporary differences between book and taxable income. In accordance with professional accounting standards, income tax should be booked by the deferred tax method, which consists in recognizing (as receivable or payable) the tax effect of temporary differences between the book and tax valuation of assets and liabilities, and in subsequently charging them to income for the periods, as the case may be, in which such differences are reversed, having duly considered the likelihood of using such NOLs in the future, if applicable. Had the deferred method been applied, as of March 31, 2011, and December 31, 2010, it would have been appropriate to record an additional asset for 86,034, and 65,913, respectively, at stand-alone level, and an additional asset as of those dates in the amount of 89,048, and 68,794, respectively, at consolidated level. In addition, the income tax charge for the three-month period ended March 31, 2011, would have decreased by 20,121 at stand-alone level and 20,254 at consolidated level.

3.1 Instruments issued by the BCRA registered at cost plus yield.

As of March 31, 2011, and December 31, 2010, the Bank posted 1,556,675, and 1,754,099 respectively, in the account "Government securities - Instruments issued by the BCRA", at a stand-alone level, and 1,556,675 and 1,764,286, respectively, at a consolidated level, recorded as mentioned in note 2(4)b(3). In addition, following that criterion, the Bank posted 482 and 2,189, respectively, in the account “Other receivables from financial intermediation – BCRA”, at a stand-alone level, for unlisted BCRA notes and bills. According to professional accounting standards, these assets should be measured at their current value. According to this valuation criterion, assets as of March 31, 2011, and December 31, 2010, would have increased by 3,248 and 4,278, respectively, at a stand-alone level, and by 4,278 and 3,275 at a consolidated level. Additionally, income (loss) for the three month period ended March 31, 2011, would have increased at stand-alone and consolidated levels by 1,030 and 1,003, respectively.

c) Derivative financial instruments

As explained in note 2(4)q(2), the Bank recorded the effects of interest rate swap agreements as of March 31, 2011, and December 31, 2010, according to BCRA standards.













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Under professional accounting standards, derivative financial instruments should be measured at their net realizable value, which, in this case, may be estimated by using mathematical models that reflect the way in which the parties to these agreements set prices and include reliable data. Thus, an estimated fair value applicable to swap rights or obligations arises.

As of March 31, 2011, and December 31, 2010, the Bank estimated the fair value of these agreements at about (324) and (452), respectively. These amounts represent the present value of differences between future interest cash flows determined by applying fixed and variable (estimated) interest rates to notional values of agreements. The valuation model used considers future behavior assumptions for BADLAR (variable) interest rates applicable to the respective agreements. Limitations on valuation models and possible inaccuracies in the assumptions used may cause that the estimated fair value of a financial instrument does not agree with the price at which it may be purchased or sold on the valuation date. Under this valuation method, income (loss) for the six-month period ended March 31, 2011, would have increased by 128.

d) Business combinations Under the standards set forth by the BCRA, business acquisitions are recorded according to the book values of the acquired company. Consequently, the difference between the purchase price and its interest valued by the equity method in the books of the acquirer, is booked as positive goodwill (when the purchase price is higher than the interest valued by the equity method) or negative goodwill (when the purchase price is lower than the interest valued by the equity method), as the case may be. If goodwill is negative, BCRA Communiqué “A” 3984 establishes specific amortization methods; the maximum amortization allowed per annum is 20%. According to professional accounting standards, business combinations are booked based on the fair values of the acquired company’s identifiable net assets. Consequently, the difference between the purchase price and the identifiable net asset measurement value is booked as positive or negative goodwill, as the case may be. If goodwill is negative, such goodwill will be allocated to income (loss) in accordance with the changes in the specific circumstances that that brought about such negative goodwill. Under BCRA standards, the Bank’s acquisition of GPAT Compañía Financiera S.A. (former GMAC Compañía Financiera S.A) generated an original booking of negative goodwill in the amount of 74,593. As of March 31, 2011, and December 31, 2010, this goodwill is booked under Investments in other companies in the amount of 63,404 and 67,133, respectively. Pursuant to professional accounting standards, considering first of all that there are no expectations of future expenses or losses for the acquired Entity and the amount of non-monetary assets added, the abovementioned acquisition would have generated: a) the booking of negative













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goodwill in the amount of 8,769 for the non-monetary assets added and b) the recognition in the income (loss) account, at the time of the acquisition, of the amount resulting from the difference between the acquisition cost and the present values of net assets added and the amount mentioned in point (a) above. Therefore, had the professional accounting standards been applied, shareholders’ equity as of March 31, 2011, and December 31, 2010, would have increased 63,087 and 66,640, respectively, and income (loss) for the three-month period ended March 31, 2011, would have increased by 3,553.

Had professional accounting standards been applied, the Bank’s shareholders' equity as of March 31, 2011, and December 31, 2010, would have increased by 153,075 and 135,349, respectively. Additionally, income (loss) for the three-month periods ended March 31, 2011 and 2010 would have increased by about 24,832 and 1,771, respectively.

Disclosure aspects The Bank does not disclose segment information or income (loss) per share.

NOTE 4: Capital stock

� Capital structure

On July 20, 2007, under a capital increase approved by the Regular and Special General Shareholders' Meeting of Banco Patagonia S.A., held on April 24, 2007, the shares of the Bank began to be traded on the BCBA (Buenos Aires stock exchange) and on the BOVESPA (Sao Paolo stock exchange) as Certificates of Deposit in Brazil (BDRs). The CNV authorized Caja de Valores S.A. to handle the Bank’s Registry of Shares through Regulation No. 1,373.

Furthermore, on July 23, 2007, the Board of Directors of Banco Patagonia S.A. decided to approve the amount subscribed for the Class "B" shares issuance of face value ARS 75,000,000 shares in order to register the capital stock increase with the Buenos Aires City Public Registry of Commerce. The Bank’s capital stock is made up of 748,155,678 shares, comprising 22,768,818 Class "A" shares and 725,386,860 Class "B" shares, all of them book-entry shares with a face value of ARS 1 each and entitled to one vote per share. Finally, on August 14, 2007, such capital increase was registered with the Public Registry of Commerce of the City of Buenos Aires, under No. 13,424, Stock Corporations Book 36. Class “A” shares represent the interest held by the Province of Río Negro, whereas Class “B” shares account for the interest held by private capital.













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� Capital stock reduction On March 9, 2010, the Bank's Board of Directors approved the proposal to reduce capital stock by 28,891, by cancelling a face value amount of ARS 28,890,941Class "B” book-entry shares of common stock with a face value of ARS 1 and one vote per share acquired under the treasury stock acquisition program implemented by the Bank in the period between July 31, 2008, and December 9, 2009. On April 23, 2010, the BCBA authorized such capital reduction and on July 19, 2010, it was unanimously approved by the Bank’s Special Shareholders’ Meeting. On February 2, 2011, the CNV issued Resolution No 16,150 to partly cancel authorization for the public offering that had been granted to the Bank in the face value amount of ARS 28,890,941, related to the capital stock reduction, and on March 30, 2011, the BCBA (Buenos Aires Stock Exchange) decided to cancel the duly granted authorization to list the shares. Finally, and as mentioned above, the Bank’s capital stock is made up of 719,264,737 shares, comprising 22,768,818 Class "A" shares and 696,495,919 Class "B" shares, all of them book-entry shares with a face value of ARS 1 each and entitled to one vote per share.













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NOTE 5: Restricted assets As of March31, 2011, and as of December 31, 2010, the Bank held the following restricted

assets:

Item 03/31/11 12/31/10 Other receivables from financial intermediation

BCRA - Special guarantee accounts for transactions related to

electronic clearing houses 175,387 182,845 Government securities under guarantee of offset forward

transactions (MAE): 482 2,189 Guarantees for repurchase agreements 6,245 - Miscellaneous receivables Government securities and PGNs as security - IADB loan -

Global Credit Program for micro, small- and medium-sized

enterprises

22,360 33,492 Security deposits – Credit card managers 29,491 28,243 Deposits made to guarantee lawsuits 809 809 Security deposits - Other 1,271 1,147

TOTAL 236,045 248,725 NOTE 6: Allowances

Below are the amounts estimated by the Bank to meet contingencies of likely occurrence:

Item 03/31/11 12/31/10 Labor and legal contingencies 59,409 66,292 Difference from court deposits dollarization Communiqué "A" 4,686 1,529 1,492 Contingent commitments 312 270

TOTAL 61,250 68,054













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NOTE 7: Contribution to the ISSB (Banking Health Se rvices Institute)

The contribution provided in section 17 (f), Law No. 19,322 - originally 2% on income and commissions charged by banks - was reduced to 1% from July 1, 1996, through July 1, 1997; as from which date, the abovementioned contribution was abrogated (Presidential Decrees Nos. 263, dated March 20, 1996, and 915, dated August 7, 1996). The Argentine Bank Employees’ Association (ABA) filed a constitutional rights protection action seeking that the abovementioned decrees be declared unconstitutional. The Federal Administrative-Contentious Court of Appeals ruled in favor of the constitutional protection action, reversing the original decision, and declared both decrees illegal. Subsequently, on November 4, 1997, the Federal Supreme Court of Justice declared the extraordinary appeal brought against the Federal Administrative Contentious Court of Appeals ruling by the Executive Branch to be inadmissible on formal grounds (the Supreme Court did not rule on the substance of the matter). After the abovementioned resolutions, different judicial and out-of-court proceedings were brought by the OSBA (Argentine Bank Employees’ Health Care Organization) to return the contributions. This situation affected the financial system as a whole, which led to the related answers from financial institutions.

Notwithstanding the situation described above, the Bank entered into out-of-court agreements with OSBA on behalf of Banco Patagonia Sudameris S.A. (currently Banco Patagonia S.A.) on November 24, 2003, and on behalf of former Lloyds TSB Bank plc, on January 3, 2005, with the dual objective of minimizing any contingency that might arise from the abovementioned claims and obtaining significant improvements in the quality of the services received by the Bank’s employees enrolled in such health care organization.

NOTE 8: Restriction on distribution of earnings

BCRA Communiqué “A” 5072 established the general procedure to distribute earnings. Pursuant to this procedure, a distribution may only be made with the express authorization of the BCRA, provided that there are no records of financial assistance from that entity due to illiquidity or shortfalls as regards minimum capital requirements or minimum cash requirements, among other previous conditions that must be met, as set forth in such communiqué.

As described in note 23, the Regular General Shareholders’ Meeting held on April 27, 2011, related to the year ended December 31, 2010, approved the distribution of earnings which includes the payment of cash dividends in the amount of 240,702. On March 18, 2011, the BCRA’s Superintendencia de Entidades Financieras y Cambiarias (Regulatory Agency of Financial and Exchange Institutions) authorized such cash dividend payment,













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which equals ARS 0.3347 per outstanding share, and which shall be made available to the Shareholders within thirty calendar days as from the date of such Shareholders’ Meeting.

NOTE 9: Transactions with companies under section N o. 33, Law No. 19,550 (subsidiaries and affiliates)

The following table shows the Bank’s receivables from / payables to subsidiaries and affiliates as of March 31, 2011, and December 31, 2010:

03/31/11 12/31/10 Patagonia Valores S.A. Sociedad de Bolsa

Miscellaneous receivables – Sundry receivables 47 45 Deposits - Checking accounts 1,185 1,372 Deposits – Special checking account 354 340 Memorandum accounts – Items in custody 6,153 167,614

Patagonia Inversora S.A. Sociedad Gerente de F.C.I.

Miscellaneous receivables – Sundry receivables 110 102 Deposits - Checking accounts 107 1,019 Deposits – Special checking account - 1 Memorandum accounts – Items in custody 2,305 -

Banco Patagonia (Uruguay) S.A. I.F.E

Other receivables from financial intermediation – Receivables from spot sales of government securities pending settlement

404 198

Other receivables from financial intermediation – Spot purchases of government securities pending settlement

339 306

Deposits - Checking accounts 1 3 Deposits – Special checking account 4 4 Other liabilities from financial intermediation – Government securities pending settlement payable

339 306

Other liabilities from financial intermediation – Spot sales of government securities pending settlement

404 198

Memorandum accounts – Items in custody 92,341 126,114 Memorandum accounts – Guarantees received 36,618 31,003













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03/31/11 12/31/10 GPAT Compañía Financiera S.A. (See Note 20).

Loans - Other financing facilities granted to local financial institutions

52,014 3,183

Other receivables from financial intermediation - Unlisted corporate bonds

4,664 -

Deposits - Checking accounts 1,325 - Other liabilities from financial intermediation – Accrued commissions payable

777 228

Memorandum accounts – Items in custody 25,666 57,584 The table below shows the income (loss) as of March 31, 2011, and 2010, from transactions with subsidiaries with which the Bank consolidates its financial statements as required by BCRA Communiqué “A” 2,227: 03/31/11 03/31/10 Patagonia Valores S.A. Sociedad de Bolsa

Interest on deposits - 5 Fees and commissions earned 111 123 Fees and commissions paid 20 21

Patagonia Inversora S.A. Sociedad Gerente de F.C.I. Interest on deposits - 2 Fees and commissions earned 257 272

Banco Patagonia (Uruguay) S.A. I.F.E.

Fees and commissions earned 1 1

GPAT Compañía Financiera S.A. (See Note 20). Interest on overdrafts 2 - Interest on interbank loans to local institutions 999 - Fees and commissions earned 925 - Fees and commissions paid 689 -

The Bank’s interest in subsidiaries is disclosed in note 1 to the consolidated financial statements with subsidiaries. (See Note 20).













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 33

NOTE 10: Deposit Guarantee Insurance System

Law No. 24,485 and Presidential Decree No. 540/95 created a limited and mandatory Deposit Guarantee Insurance System for valuable consideration designed to provide coverage for risks inherent in bank deposits, as a subsidiary and supplementary protection to the one offered by the system of bank deposit privileges and protection created by the Financial Institutions Law.

Such law created Seguros de Depósitos S.A. (SEDESA) for the exclusive purpose of managing the deposit guarantee fund, the shareholders of which, as amended by Presidential Decree No. 1,292/96, shall be the BCRA with at least one share, and the trustees of the trust agreement created by financial institutions in the proportion established by the BCRA based on their contributions to the deposit guarantee fund. Such company was created in August 1995. The Bank's equity interest therein is 4.0901% according to the percentages determined by BCRA Communiqué “B” 10,060 dated April 04, 2011. This system shall cover the deposits in Argentine pesos and foreign currency with the participating institutions as checking accounts, savings accounts, certificates of deposit or any other types determined by the BCRA, as long as fulfilling the requirements under Presidential Decree No. 540/95 and any others established by the enforcement authority. The system will not include: (a) financial institutions’ deposits with other intermediaries, including the certificates of deposit acquired through secondary negotiation; (b) deposits made by persons related, either directly or indirectly, to the bank, according to BCRA current or future regulations; (c) time deposits of securities, acceptances or guarantees; d) deposits made after July 1, 1995, for which the interest rate agreed upon exceeded by two annual percentage points the BCRA deposit rate for equivalent certificates of deposit, effective on the date before the day the deposit was made; the BCRA is empowered to modify the reference rate established in this point; and (e) other deposits that the enforcement authority may exclude in the future.

NOTE 11: Trust activities

The Bank executed a series of agreements with other companies whereby it was appointed trustee of certain financial trusts. The corpus assets of these trusts were mainly loans. As of March 31, 2011, the Bank managed the following financial trusts subject to public offering:













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 34

Financial trust Trustor Date of

agreement

Assets as of

12/31/2010 Corpus assets

Shareholders’ Equity as

of 12/31/2010

Banco Piano XIII Banco Piano S.A. 05/28/09 (*)623 Personal loans -

Banco Piano XIV Banco Piano S.A. 09/09/09 (*)726 Personal loans -

Banco Piano XV Banco Piano S.A. 12/04/09 1,955 Personal loans 72

Banco Piano XVI Banco Piano S.A. 03/29/10 9,884 Personal loans 7,851

Banco Piano XVII Banco Piano S.A. 07/05/10 18,273 Personal loans 5,977

Banco Piano XVIII Banco Piano S.A. 10/04/10 48,915 Personal loans 8,771

Banco Piano XIX Banco Piano S.A. 12/07/10 46,429 Personal loans 5,212

Cetrogar IX Cetrogar S.A. 03/23/10 5,156 Personal loans 3,690

Cetrogar X Cetrogar S.A. 11/11/10 22,512 Personal loans 2,197

Basf II Basf Argentina S.A. 12/17/10 21,714 Credit invoices originated by the Trustor

-

CMR Falabella XXII CMR Falabella 06/17/10 41,793 Loans arising from the use of credit cards -

CMR Falabella XXIII CMR Falabella 09/10/10 69,174 Loans arising from the use of credit cards -

CMR Falabella XXIV CMR Falabella 11/17/10 130,116 Loans arising from the use of credit cards -

GMAC I GMAC Compañía Financiera S.A.(1) 09/05/08 9,915 Loans backed by security agreements on automobiles

6,979

GMAC II GMAC Compañía Financiera S.A.(1) 12/12/08 20,646 Loans backed by security agreements on automobiles 18,429

GMAC III GMAC Compañía Financiera S.A.(1) 02/20/09 12,335 Loans backed by security agreements on automobiles

8,258

IRSA I Inversora Bolívar S.A. y Baldovinos

S.A., IRSA Inversiones y Representaciones S.A.

12/17/01 1,271 Personal loans and mortgage loans on real property 912

Lucaioli IV Casa Humberto Lucaioli S.A. 10/13/10 24,914 Consumer loans documented in promissory notes 8,033

Ribeiro XXXIII Series Ribeiro S.A.C.I.F.A. e I. 10/05/09 (*)724 Consumer loans -

Ribeiro XXXIV Series Ribeiro S.A.C.I.F.A. e I. 11/04/09 (*)786 Consumer loans -

Ribeiro XXXV Series Ribeiro S.A.C.I.F.A. e I. 12/11/09 3,536 Consumer loans 2,782

Ribeiro XXXVI Series Ribeiro S.A.C.I.F.A. e I. 01/25/10 8,579 Consumer loans 7,837

Ribeiro XXXVII Series Ribeiro S.A.C.I.F.A. e I. 02/23/10 10,459 Consumer loans 9,801













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 35

Financial trust Trustor Date of

agreement

Assets as of

12/31/2010 Corpus assets

Shareholders’ Equity as

of 12/31/2010

Ribeiro XXXVIII Series Ribeiro S.A.C.I.F.A. e I. 04/16/10 19,047 Consumer loans 18,492

Ribeiro XXXIX Series Ribeiro S.A.C.I.F.A. e I. 08/13/10 53,384 Consumer loans 19,852

Ribeiro XL Series Ribeiro S.A.C.I.F.A. e I. 09/29/10 53,266 Consumer loans 19,621

Ribeiro XLI Series Ribeiro S.A.C.I.F.A. e I. 11/24/10 87,344 Consumer loans 26,699

Tarjeta Sáenz III Banco Sáenz S.A. 11/26/08 (*)660 Loans arising from the use of credit cards -

TOTAL 724,136

(*) As per liquidation financial statements issued on 12/31/2010. (1) See note 20.

Public financial trusts authorized by the CNV, the financial statements of which are required after 03/31/2011

Financial trust Trustor Date of agreement

Corpus assets

Banco Piano XX Banco Piano S.A. 03/15/11 Personal loans

CMR Falabella XXV CMR Falabella 02/01/11 Loans arising from the use of credit cards

Ribeiro XLII Series Ribeiro S.A.C.I.F.A. e I. 01/13/11 Consumer loans

Ribeiro XLIII Series Ribeiro S.A.C.I.F.A. e I. 03/10/11 Consumer loans

Private financial trusts

Financial trust Trustor Date of agreement

Corpus assets

Metro Pedro López e Hijos S.A. 09/10/02 Real property located in Buenos Aires City and the Province of Mendoza

Inmobiliario Balbín 4100 Novecento Emprendimientos S.R.L. 07/02/07 Real property located in Buenos Aires City













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 36

Financial trusts – in guarantee

Financial trust Trustor Date of agreement Corpus assets

Bogar Class I Series II Province of Río Negro 06/11/09 Percentage of the daily provincial tax revenues

Bogar Class II Series I Province of Río Negro 12/26/03 Percentage of the daily provincial tax revenues

Bogar Class II Series II Province of Río Negro 06/11/09 Percentage of the daily provincial tax revenues

The Bank acts as trustee of the abovementioned trusts, and in no case will it answer for the obligations undertaken in executing these trusts with its own assets; these obligations will only be covered with and up to the combination of corpus assets and the proceeds therefrom. In addition, the trustee shall not encumber corpus assets or dispose of them beyond the limits established in the related trust agreements. The commissions earned by the Bank for acting as trustee are calculated under the terms of the related agreements.

NOTE 12: Global Corporate Bond Issuance Program

The Bank has a global corporate bond issuance program in effect for a maximum amount

outstanding at any given time of up to USD 150 million approved by the Shareholders’ Meeting of February 27, 1996, and by the CNV through certificate No. 115 dated June 4, 1996, maturing between six months to twenty years as from the date if issue.

Under the referred program, the Bank issued a series of subordinated corporate bonds amounting to USD 80 million, which was approved by the Shareholders’ Meeting of June 27, 2000, and by the CNV through certificate No. 271 dated August 15, 2000, and issued on December 27, 2000, maturing in ten years from such date. On September 27, 2010, such series was finally paid by settling USD 16,000,000 related to the last principal installment. The nominal rate applicable to the 20th and final six-month interest payment was 2.6375% p.a. The Bank's Board of Directors decided that the funds obtained from this placement be added to the Bank’s working capital in Argentina, i.e. be included in the Bank’s funding structure.

As of the date of issuance of these financial statements, there is no issuance of corporate bonds effective under the abovementioned program.













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 37

NOTE 13: Derivative financial instruments

As of March 31, 2011, and December 31, 2010, the Bank held the following derivative financial instruments:

a) Forward - futures transactions: includes forward purchases and sales of foreign currency and

the BADLAR rate without delivery of the underlying asset. They are valued at their listed price as of each period- or year-end, as the case may be, on Mercado Abierto Electrónico and these transactions are performed by the Bank for the purpose of intermediation for its own account. As of March 31, 2011, and 2010, the Bank booked earnings and losses in the amount of 530 and 16,238, respectively, resulting from foreign currency transactions, and as of March 31, 2010, it booked losses in the amount of 12 in BADLAR rate transactions.

b) Boden put options: Includes the amount representing contingent obligations assumed by the

Bank derived from put options sold on principal and interest coupons of Argentine Government Bonds in US dollars - Boden 2012 and Boden 2013 -, established in Presidential Decree No. 905/02 and 1,836/02, related to customers who requested such option. They are valued at technical value as of each period- or year-end, as the case may be.

c) Reverse repurchase and repurchase agreements – forward contracts: includes the reverse

repurchase and repurchase agreements on Argentine government securities pending settlement. These transactions are valued as mentioned in note 2(4)i(1) and (2) and are performed by the Bank for the purpose of intermediation for its own account. As of March 31, 2011, and 2010, the Bank booked income in the amount of 5,679 and 6,549, respectively.

d) Interest rate swap transactions in Argentine pesos:

With the BCRA: Includes an agreement with the right to collect monthly the positive difference between the BADLAR interest rate established by the BCRA and a fixed nominal rate of 15% p.a., applied to total notional values of 10,000,000. Should the difference between rates be negative, the Bank will be required to pay such difference. These transactions are governed by BCRA Communiqué “A” 4776 as supplemented and, as of March 31, 2011, the Bank granted financing facilities in Argentine pesos at fixed rate for an amount equal to the agreement’s notional value. With financial institutions: Includes the agreements with the right to collect monthly the positive difference between the BADLAR interest rate established by the BCRA and the fixed nominal rate p.a. agreed for each transaction. Should the difference between rates be negative, the Bank will be required to pay such difference. As of March 31, 2011, and December 31, 2010, the Bank had an agreement for notional values of 5,000,000.













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 38

They are recorded under “Debit balance memorandum accounts – Derivatives – Interest rate swaps" and "Credit balance memorandum accounts - Derivatives - credit-balance contra accounts". These transactions resulted in a loss as of March 31, 2011, and 2010 for 203 and 594, respectively.

NOTE 14: CNV requirement for acting as OTC agent

Under CNV General Resolution No. 368/01, as supplemented, the financial institutions authorized

by the BCRA are exempt from the minimum shareholders’ equity and counter-guarantee requirement established in such regulations. As the Bank meets the equity requirements provided by the BCRA, it is entitled to such exemption.

NOTE 15: Mutual fund custodian

Under section 32, Chapter XI (11), of the revised text of CNV regulations, below is the information on the total amount in custody as of March 31, 2011, of the portfolio of the following mutual funds for which the Bank acts as depository institution:

Name Deposits Other

Total assets

Lombard income in ARS mutual fund 302,572 33,854 336,426 Fondo Nuevo income in USD mutual fund – (a) 138 - 138 Lombard Acciones mutual fund 35 7,656 7,691 Lombard fixed income premium mutual fund – (b) - - - Lombard fixed income mutual fund 2,370 15,981 18,351 Lombard Ahorro mutual fund 12,250 - 12,250 Lombard Capital F.C.I. 9,231 34,249 43,480

TOTAL 326,596 91,740 418,336 Mutual funds settlement

On October 7, 2005, Patagonia Inversora S.A. Sociedad Gerente Fondos Comunes de Inversión and Banco Patagonia S.A. (manager and depository, respectively) approved to begin the “Fondo Nuevo Renta en Dólares Fondo Común de Inversión” and “Fondo Común de Inversión Lombard Renta Fija Premium” liquidation process pursuant to the provisions of CNV General Resolution No. 439/03. On April 25, 2006, the CNV notified the resolution of not authorizing the beginning of the liquidation process, due to the existence of legal actions brought by holders of shares in such mutual funds pending court resolution. Therefore, as from that date, the funds mentioned above were only authorized to receive redemptions. As of the date of issue of these financial statements, the situation of each one of the funds is as follows:













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 39

a. Fondo Nuevo income in USD mutual fund On March 28, 2011, the depository and manager approved the decision to recommence the fund liquidation process, in view of the court orders that state that the legal actions filed by holders of shares do not constitute an impediment for the CNV to authorize the fund’s liquidation.

b. Lombard fixed income premium mutual fund

On July 5 and 19, 2010, the depository and manager, respectively, approved to begin settling “Fondo Común de Inversión Lombard Renta Fija Premium” and requested the CNV to approve such settlement as the unresolved legal actions concluded and no new claims were brought. Therefore, as from July 21, 2010, the transactions related to such fund were suspended. On September 08, 2010, through Resolution No. 16406, the CNV approved the liquidation process of such fund. On September 20, 2010, the fund’s asset realization process was concluded and the financial statements for winding-up purposes were issued. December 20, 2010, marked the end of the period for total payment to the holders of shares and, on December 29, 2010, the remaining shares were redeemed; thus the fund liquidation process was ended. Finally, on April 14, 2011, the CNV was requested to cancel and deregister the abovementioned fund.

NOTE 16: Financial agent of the Province of Río Neg ro

Under Law No. 2,929 of the Province of Río Negro, and the agreement signed on May 27, 1996, the Bank acted as financial agent of the Provincial Government, being in charge of the banking duties established in section 1(2) of the abovementioned agreement. On February 28, 2006, such agreement expired. Through successive extensions it remained effective through December 31, 2006, under the same terms and conditions as those of the abovementioned agreement. Furthermore, through Argentine public bidding No. 1/2006, the Ministry of Finance, Public Works and Services of the Province of Río Negro called for the engagement of a bank to render services as agent. The bids opening date was August 4, 2006, and Banco Patagonia has submitted the related bid. Finally, as a result of such bidding process, on December 14, 2006, the Río Negro Province Banking and Financial Services Agreement was signed for a 10-year term as from January 1,













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 40

2007. Such duties do not include the obligation to provide financial aid to the Province of Río Negro under conditions other than those consistent with the private bank nature of this bank.

NOTE 17: Breakdown of items in “Other” accounts with amounts exceeding 20% of the respective account’s total balance

Balance sheet items 03/31/11 12/31/10 A. Miscellaneous receivables

Prepaid taxes 281,300 249,594 Security deposits 53,621 63,380 Sundry receivables 38,432 39,447 Advance payments 14,569 14,512 Other 43,830 45,031

431,752 411,964

B. Other liabilities from financial intermediation Credit and debit card consumption charges payable 210,267 212,817 Foreign trade payment orders 168,676 150,667 Tax withholdings payable 61,189 64,385 Collections and other transactions on account and behalf of

others 32,629

27,328

IADB loan No. 1192/OC-AR 6,195 7,144 Other 33,672 21,647

512,628 483,988 C. Miscellaneous liabilities

Taxes payable 383,325 315,491 Salaries and payroll taxes payable 115,064 80,562 Sundry payables 56,151 48,057 Other 7,128 3,962

561,668 448,072













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 41

Balance sheet items 03/31/11 12/31/10 D. Memorandum accounts – Debit-balance control acco unts

Other items in custody 2,803,175 2,771,798 Checks and securities to be collected 274,427 260,175 Checks and securities to be debited 220,001 157,348

3,297,603 3,189,321

Income-statement items 03/31/11 03/31/11 E. Service-charge expense

Credit card expenses 13,882 9,962 ATM expenses 8,054 7,254 Turnover tax 8,089 6,036

Other 260 222 30,285 23,474 F. Miscellaneous income

Gain (loss) from the sale of bank premises and equipment 14,109 6,347 Adjustments and interest on miscellaneous receivables 1,789 1,545 Other 8,353 809 24,251 8,701

G. Miscellaneous losses

Shareholders’ personal assets taxes 1,912 1,646 Donations 223 246 Turnover tax 118 3,688 Other 1,568 1,416

3,821 6,996 NOTE 18: Minimum cash requirement

The following table shows the items booked by the Bank as minimum cash requirement, as provided by the related BCRA standards, as of March 31, 2011, and December 31, 2010:













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 42

Item 03/31/11 12/31/10 Cash Cash on hand 351,827 270,410 Cash held by armored car companies 266,637 212,917 BCRA – Checking account 1,205,605 732,919 Other receivables from financial intermediation BCRA – Special guarantee accounts 175,387 182,845

Total 1,999,456 1,399,091 NOTE 19: Statement of cash flows The statements of cash flows as of March 31, 2011, and 2010 explain the changes in cash and

cash equivalents and for such purpose, only the total amount included under “Cash and due from banks” was considered cash. Additionally, there are no transactions related to investment or financing activities which have an impact on cash and which should be disclosed as a result of their significance.

NOTE 20: Acquisition of GPAT Compañía Financiera S. A. (former GMAC Compañía Financiera S.A.)

by Banco Patagonia S.A.

On August 27, 2009, an agreement to purchase shares in GMAC Compañía Financiera S.A. (GMAC CFSA) was signed between GMAC INC. and Pardo Rabello Inversiones S.R.L., as sellers, and Banco Patagonia S.A. and Mr. Jorge Guillermo Stuart Milne, as purchasers for 100% of the capital stock. Through this agreement the sellers agreed to transfer on the Agreement date GMAC CFSA shares of common stock representing 99% of GMAC CFSA’s capital stock and voting rights at a face value of ARS 85,968,713 for a price of USD 22,770,990 (US dollars twenty two million seven hundred and seventy thousand nine hundred and ninety) to Banco Patagonia S.A. and shares of common stock representing 1% GMAC CFSA’s capital stock and voting rights at a face value of ARS 868,370 to Mr. Jorge Guillermo Stuart Milne. On July 15, 2010, the transaction was authorized by Resolution No. 143 issued by the BCRA Board of Governors, and was completed on July 26, 2010, having settled the full price and transferring all of GMAC CFSA’s capital stock.













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 43

On October 13, 2010, the IGJ (Argentine business associations regulatory agency) registered the change of name from GMAC Compañía Financiera S.A. to GPAT Compañía Financiera S.A., which was published on November 12, 2010, through BCRA Communiqué “B” 9951.

NOTE 21: Transactions with directors

No transactions falling under the provisions of section No. 271, Law No. 19,550, have been identified.

NOTE 22: Financial statements publication

Under Communiqué “A” 2,813, as supplemented, prior intervention by the BCRA is not required for the publication of these financial statements.

NOTE 23: Subsequent events

The Regular and Special Shareholders’ Meeting, held on April 27, 2011, related to the fiscal year ended December 31, 2010, approved the following distribution of earnings:

To legal reserve 96,281 To cash dividend distribution (see note 8) 240,702

To unappropriated retained earnings 507,461 Total 844,444

The abovementioned distribution of earnings contemplates the off-balance sheet adjustments under BCRA Communiqué “A” 5072, as amended for a total of 1,041, which is then included in the 507,461 that will remain in “Unappropriated retained earnings”. Also, income for the fiscal year ended December 31, 2010, addressed at the abovementioned Shareholders’ Meeting, was net of 7,650 booked in the account “Other expense” for the fiscal year then ended, which was related to the Shareholders’ personal assets tax – Law No. 25,585. On March 18, 2011, the BCRA’s Superintendencia de Entidades Financieras y Cambiarias (Regulatory Agency of Financial and Exchange Institutions) authorized such cash dividend payment, which equals ARS 0.3347 per outstanding share, and which shall be made available to the Shareholders as from May 17, 2011. Under Law No. 25,063, the dividends to be distributed, either in cash or in kind, in excess of accumulated taxable income as of the year-end immediately preceding the payment or distribution date, will be subject to a 35% income tax withholding as single and definitive payment.













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 44

Income to be considered in each fiscal year shall result from deducting from taxable income the tax amount paid for the tax year/s in which income being distributed was generated or the relevant proportion, and from adding the dividends or earnings from other capital companies not computed in the assessment of that income in the same tax period/s.

NOTE 24: Situation of the financial and capital mar kets

As a result of the volatility experienced by international financial markets in the past few years, the Bank’s Management continuously monitors the evolution of the abovementioned situations on international and domestic markets to determine the possible actions to be taken and identify potential effects on its financial position that should be reflected in the financial statements for future periods.











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 45

EXHIBIT “A”

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES AS OF 12/31/11 AND 12/31/10


Holdings

Name Identification Market value

Book balances

as of 03/31/2011

Book balances

as of 12/31/10

Position without

options (1)

Final position

Government securities at fair market value - Argentine Government Bonds in ARS private BADLAR + 300 basis points 2015 5441 218,680 218,680 250,707 242,159 242,159

- Argentine Government Bonds in ARS private BADLAR + 275 basis points 2014 5439 137,318 137,318 154,667 151,900 151,900

- Argentine Government Bond in USD 7% 2013 5435 139,136 139,136 139,100 145,366 145,366 - Argentine Government Bonds in USD Libor 2012 (Boden) 5426 115,279 115,279 91,916 134,591 134,591 - Argentine Government Bonds in ARS private BADLAR + 350 basis points 2013 5438 50,820 50,820 51,500 50,820 50,820

- Social security debt consolidation bond in ARS 4th Series 2% 2429 49,066 49,066 53,148 49,286 49,286 - Discount bonds in ARS + GDP Variation Securities in ARS 45696 42,490 42,490 35,236 42,116 42,116 - Secured bonds in ARS, Presidential Decree No. 1,579/02 (Bogar) 2405 24,774 24,774 25,006 24,510 24,510 - Debt consolidation bond 6th Series 2420 7,894 7,894 - - - - Par bonds in ARS Step-Up 2038 + GDP Variation Securities in ARS 45695 6,855 6,855 7,568 2,650 2,650 - Debt consolidation bond in ARS 4th Series 2% 2449 5,597 5,597 1,945 - - - Argentine Government Bonds in USD 7% p.a. 2015 5433 2,408 2,408 9,716 39,779 39,779 - Argentine Government Bonds in ARS 2% 2014 5431 1,433 1,433 - - - - Par bond in USD (Argentine law) 45699 203 203 188 - - - Debt consolidation bond in ARS 4th Series 2439 11 11 - 11 11 - Argentine Government Bond in ARS 10.50% 2012 (Bonar Arg ARS V) 5437 - - 43,088 - - - Argentine Government Bond in USD 2013 1st Series 5427 - - 1,417 - -

Total government securities at fair market value 801,964 801,964 865,202 883,188 883,188

Government securities at cost plus yield - Buenos Aires Province bills in ARS maturing 04/28/11 2660 - 10,212 10,000 10,212 10,212 - Buenos Aires Province bills in ARS maturing 08/11/2011 2696 - 10,153 - 10,153 10,153 - Buenos Aires Province bills in ARS maturing 09/22/2011 2899 - 10,000 - 10,000 10,000 - Other - - - 230 - -

Total government securities at cost plus yield 30,365 10,230 30,365 30,365

Instruments issued by the BCRA - BCRA bills – at fair market value - - 289,799 - - - BCRA bills – Maturity: 01/05/2011 46106 - - 240,511 - - - BCRA bills – Maturity: 02/16/2011 46117 - - 49,288 - - - BCRA bills – Under repo transactions 279,488 279,488 582,159 - - - BCRA bills – Maturity: 02/08/2011 46125 279,488 279,488 389,541 - - - BCRA bills – Maturity: 03/02/2011 46126 - - 46,135 - - - BCRA bills – Maturity: 02/16/2011 46117 - - 40,416 - - - BCRA bills – Maturity: 06/15/2011 46110 - - 35,126 - - - BCRA bills – Maturity: 03/30/2011 46129 - - 23,356 - - BCRA bills – Maturity: 04/13/2011 46131 - - 23,239 - - - BCRA bills – Maturity: 04/27/2011 46018 - - 12,528 - - - BCRA bills – Maturity: 03/23/2011 46121 - - 6,840 - - - BCRA bills – Maturity: 01/19/2011 46077 - - 4,978 - -











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 46

EXHIBIT “A”

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES AS OF 03/31/2011 AND 12/31/2010


Holdings

Name Identification Market value

Book balances

as of 03/31/2011

Book balances

as of 12/31/10

Position without

options (1)

Final position

- BCRA bills – at cost plus yield - - 196,816 - - - BCRA bills – Maturity: 02/23/2011 46036 - - 196,816 - - - BCRA notes – at fair market value 694,241 694,241 - 694,241 694,241 - BCRA notes in ARS maturing 08/17/2011 46157 308,610 308,610 - 308,610 308,610 - BCRA notes in ARS maturing 07/20/2011 46148 259,625 259,625 - 259,625 259,625 - BCRA notes in ARS variable coupon (BADLAR) maturing 06/08/2011 46144 101,550 101,550 - 101,550 101,550 - BCRA notes in ARS maturing 08/31/2011 46145 24,456 24,456 - 24,456 24,456 - BCRA notes – Under repo transactions 58,823 - - - BCRA notes in ARS variable coupon (BADLAR) maturing 05/26/2011 46119 - - 40,579 - - - BCRA notes in ARS variable coupon (BADLAR) maturing 06/08/2011 46144 - - 12,147 - - - BCRA notes in ARS variable coupon (BADLAR) maturing 05/18/2011 45879 - - 6,097 - - - BCRA notes – at cost plus yield - 1,556,675 1,557,283 1,572,247 1,572,247 - BCRA notes in ARS maturing 05/26/2011 46119 - 405,372 406,403 405,372 405,372

- BCRA notes in ARS maturing 09/07/2011 46170 - 253,503 - 253,503 253,503 - BCRA notes in ARS maturing 08/24/2011 46161 - 245,393 - 255,424 255,424 - BCRA notes in ARS maturing 08/03/2011 46150 - 205,892 - 205,892 205,892

- BCRA notes in ARS maturing 04/13/2011 46134 - 204,734 204,924 204,734 204,734 - BCRA notes in ARS maturing 07/13/2011 46146 - 200,148 202,054 200,630 200,630

- BCRA notes in ARS maturing 06/01/2011 46094 - 36,541 - 46,692 46,692 - BCRA notes in ARS maturing 02/22/2011 46120 - 5,092 - - -

- BCRA notes in ARS variable coupon (BADLAR) maturing 03/09/2011 46073 - - 502,196 - - - BCRA notes in ARS variable coupon (BADLAR) maturing 03/30/2011 46128 - - 200,958 - - - BCRA notes in ARS maturing 02/16/2011 46116 - - 40,748 - -

Total instruments issued by the BCRA 2,530,404 2,684,880 2,266,488 2,266,488

Total government and private securities 3,362,733 3,560,312 3,180,041 3,180,041

(1) Includes “Holdings" plus “Deposits offered as security” “Loans" and “Spot and forward purchases pending settlement” less “Deposits” and “Spot and forward sales pending settlement”.











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 47

EXHIBIT “B” FINANCING FACILITIES CLASSIFIED BY STATUS AND GUARA NTEES RECEIVED

AS OF 12/31/11 AND 12/31/10 (Figures stated in thousands of Argentine pesos)

Commercial loan portfolio 03/31/11 12/31/10

Performing 5,056,228 5,106,724 - With “A” preferred guarantees and counter-guarantees 496,612 372,780 - With “B” preferred guarantees and counter-guarantees 404,711 355,022 - Without preferred guarantees or counter-guarantees 4,154,905 4,378,922 Subject to special monitoring 6,950 4,000 In observation 6,251 3,331 - With “B” preferred guarantees and counter-guarantees 1,091 - - Without preferred guarantees or counter-guarantees 5,160 3,331 In negotiation or under refinancing agreements 699 669 - With “B” preferred guarantees and counter-guarantees 368 351 - Without preferred guarantees or counter-guarantees 331 318 Troubled 903 1.330 - With “B” preferred guarantees and counter-guarantees - 418 - Without preferred guarantees or counter-guarantees 903 912 With high risk of insolvency 6.126 8.020 - With “B” preferred guarantees and counter-guarantees 1.185 1.419 - Without preferred guarantees or counter-guarantees 4.941 6.601 Irrecoverable 13.493 14.646 - Without preferred guarantees or counter-guarantees 13.493 14.646

Total commercial loan portfolio 5,083,700 5,134,720











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 48

EXHIBIT “B” FINANCING FACILITIES CLASSIFIED BY STATUS AND GUARA NTEES RECEIVED


Consumer and/or home loan portfolio 03/31/11 12/31/10

Performing 2,897,641 2,687,698 - With “A” preferred guarantees and counter-guarantees 22,447 21,732 - With “B” preferred guarantees and counter-guarantees 214,789 228,329 - Without preferred guarantees or counter-guarantees 2,660,405 2,437,637 Low risk 46,388 41,420 - With “A” preferred guarantees and counter-guarantees 313 263 - With “B” preferred guarantees and counter-guarantees 8,163 5,293 - Without preferred guarantees or counter-guarantees 37,912 35,864 Medium risk 13,785 13,397 - With “A” preferred guarantees and counter-guarantees - 4 - With “B” preferred guarantees and counter-guarantees 1,211 2,881 - Without preferred guarantees or counter-guarantees 12,574 10,512 High risk 33,834 35,653 - With “B” preferred guarantees and counter-guarantees 1,288 1,037 - Without preferred guarantees or counter-guarantees 32,546 34,616 Irrecoverable 21,064 21,254 - With “B” preferred guarantees and counter-guarantees 321 333 - Without preferred guarantees or counter-guarantees 20,743 20,921 Irrecoverable according to BCRA regulations 246 231 - With “B” preferred guarantees and counter-guarantees 25 25 - Without preferred guarantees or counter-guarantees 221 206

Total consumer and/or home loan portfolio 3,012,958 2,799,653

Grand total 8,096,658 7,934,373











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 49

EXHIBIT “C” FINANCING FACILITIES CONCENTRATION AS OF 03/31/2011 , AND 12/31/2010


Financing facilities

Number of customers 03/31/11 12/31/10

Outstanding amount

% of total portfolio

Outstanding amount


10 largest customers 564,204 6.97 % 504,604 6.36 %

50 next largest customers 1,065,969 13.17 % 1,088,389 13.72 %

100 next largest customers 995,059 12.29 % 1,096,210 13.82 %

Rest of customers 5,471,426 67.57 % 5,245,170 66.10 %

Total 8,096,658 100.00 % 7,934,,373 100.00 %











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 50

EXHIBIT “D”

FINANCING FACILITIES BROKEN DOWN BY TERM AS OF 03/3 1/2011 (Figures stated in thousands of Argentine pesos)

Terms remaining to maturity Item

Matured

1 month 3 months 6 months 12

months 24 months

Over 24 months

Total

Nonfinancial government sector - 5,224 1,300 582 119 57,620 38,349 103,194

Financial sector - 121,305 34,478 66,302 39,907 51,113 2,465 315,570

Nonfinancial private sector and foreign residents

140,724 2,805,930 1,013,926 1,147,269 512,958 682,475 1,374,612 7,677,894

Total 140,724 2,932,459 1,049,704 1,214,153 552,984 791,208 1,415,426 8,096,658











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 51

EXHIBIT “E” BREAKDOWN OF INVESTMENTS IN OTHER COMPANIES

AS OF 12/31/11 and 12/31/10 (Figures stated in thousands of Argentine pesos)

Stock and/or membership interests Amount Identification

Name

Class Face value per unit

Votes per

share Number 03/31/11 12/31/10

In financial institutions, supplementary and

authorized activities – Subsidiaries – In Argentina

30678564822 GPAT Compañía Financiera S.A. (1) Common $ 1 1 85,968,713 132,679 118,373 30654325126 Patagonia Valores S.A. Sociedad de Bolsa Common $ 1 1 13,862,507 17,209 17,202 30608298815 Patagonia Inversora S.A. Soc. Gte. F.C.I. Common $ 1 1 13,317,233 20,960 20,468 Subsidiaries – Abroad 00034UY0117 Banco Patagonia (Uruguay) S.A. I.F.E. Common USD 100 1 50,000 46,186 44,674 Nonsubsidiaries – In Argentina 30604796357 Banelco S.A. Common $ 1 1 1,287,561 2,883 2,883 30598910045 Visa Argentina S.A. Common $ 0,0001 1 871,503 1,341 1,341 33663293309 Provincanje S.A. Common $ 1 1 600,000 679 679 30682415513 Seguros de Depósitos S.A. Common $ 1 1 40,901 493 493 30690783521 Interbanking S.A. Common $ 1 1 134,600 284 284 30525698412 Mercado a Término de Buenos Aires S.A. Common $ 39.252 1 1 73 73 33628189159 Mercado Abierto Electrónico S.A, Common $ 1.200 1 4 65 65 30542421289 Bolsa de Comercio de Mar del Plata S.A. Common $ 1 5 106 56 56 30688964306 Argencontrol S.A. Common $ 1 1 48,906 53 53 30692264785 Compensadora Electrónica S.A. Common $ 1 1 31,242 46 46 Other 16 16 Nonsubsidiaries - Abroad 00034US0001 Banco Latinoamericano de Exportaciones S.A. Class B USD 16.92 1 5,033 70 69 00034US0001 Banco Latinoamericano de Exportaciones S.A. Preferred USD 10 1 125 4 4 30590221275 S.W.I.F.T. Common €1 1 1 15 14 In other companies – Nonsubsidiaries – In

Argentina

30605114969 Sanatorio Las Lomas S.A. Common $ 1 1 52,979 84 84 Other 106 106

Total investments in other companies 223,302 206,983

(1) Net of negative goodwill amounting to 63,404 (see note 20).











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 52

EXHIBIT “E”

BREAKDOWN OF INVESTMENTS IN OTHER COMPANIES AS OF 12/31/11 and 12/31/10


Information regarding the issuer – Latest annual fi nancial statement information

Name Main business activity Year-end date Capital Shareholders’ equity

Income (loss) for the year

In financial institutions, supplementary and authorized activities – Subsidiaries – In Argentina

GPAT Compañía Financiera S.A. Financial company 31-12-10 86,837 187,380 43,639 Patagonia Valores S.A. Sociedad de Bolsa Brokerage house 31-12-10 13,863 17,203 1,354 Patagonia Inversora S.A. Soc. Gte. F.C.I. Mutual funds management 31-12-10 13,317 20,468 2,560 Subsidiaries – Abroad Banco Patagonia (Uruguay) S.A. I.F.E. Foreign bank 31-12-10 19,879 44,674 3,182 Nonsubsidiaries – In Argentina Banelco S.A. ATM network management 31-12-10 23,599 66,210 19,034 Visa Argentina S.A. Credit card issuing company 31-05-10 15,000 151,461 91,332 Provincanje S.A. Clearing house of provincial banks 31-12-10 7,200 8,715 500

Seguros de Depósitos S.A. Deposit insurance fund resource administration 31-12-10 1,000 15,637 609

Interbanking S.A. Interbank transfer services 31-12-10 1,346 65,880 45,373

Mercado a Término de Buenos Aires S.A. Performance bond and settlement of agreements of miscellaneous assets 30-06-10 21,936 45,452 5,690

Mercado Abierto Electrónico S.A. Coordination of securities trading 31-12-10

242

14,431

1,856

Bolsa de Comercio de Mar del Plata S.A. Coordination of securities trading 31-12-09

13

10,463

2,535

Argencontrol S.A. Agent in charge of settling capital market transactions

31-12-10

700

964

5

Compensadora Electrónica S.A. Electronic clearing account network management 31-12-09 1,000 2,033 200

Nonsubsidiaries - Abroad Banco Latinoamericano de Exportaciones S.A. Foreign bank 31-12-10 1,113,144 2,771,331 160,388 S.W.I.F.T. Interbank telecommunication service 31-12-09 537,140 1,375,707 74,188 In other companies – Nonsubsidiaries – In Argentina

Sanatorio Las Lomas S.A. Medical services center 30-06-10 8,889 19,702 1,864











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 53

EXHIBIT “F”

CHANGES IN BANK PREMISES AND EQUIPMENT, AND MISCELL ANEOUS ASSETS AS OF 12/31/11 and 12/31/10


(1) See note 2(4)l and 2(4)m.

Depreciation for the period

Item

Restated residual values at

beginning of fiscal year

Additions Transfers

Retirements

Changes in allowances

and provisions

Years of useful life Amount

Residual value as of 03/31/2011

Bank premises and equipment (1)

Real property 138,421 1,395 - - 300 50 795 139,321

Furniture and fixtures 8,551 1,661 (1,323) 7 - 10 868 8,014

Machinery and equipment 27,128 2,135 1,323 21 - 5 2,194 28,371

Vehicles 1,808 - - 249 - 5 124 1,435

Other 149 133 - - - 5 12 270

Total 176,057 5,324 - 277 300 3,993 177,411

Miscellaneous assets (1)

Prepayments for the purchase of assets 8,863 3,181 - 531 - - - 11,513

Works of art 805 - - - - - - 805 Stationery and office supplies 1,456 915 - 1,373 - - - 998

Other miscellaneous assets

60,697 14,059 - 6,245 - 50 231 68,280

Total 71,821 18,155 - 8,149 - - 231 81,596











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 54

EXHIBIT “G”

BREAKDOWN OF INTANGIBLE ASSETS AS OF 12/31/11 and 12/31/10


Amortization for the period

Item

Residual value at

beginning of year

Additions (1) Years of useful life assigned

Amount

Residual value as of 03/31/2011

Organization and development expenses - - - - -

Total - - - - -

(1) See notes 2(4)n(1) and (2).











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 55

EXHIBIT “H” DEPOSITS CONCENTRATION


31/03/11 31/12/10

Number of customers Outstanding amount


Outstanding amount


10 largest customers 1,485,322 13.77 % 1,472,128 14.29 %

50 next largest customers 1,596,239 14.80 % 1,458,031 14.16 %

100 next largest customers 889,179 8.24 % 760,557 7.38 %

Rest of customers 6,814,522 63.19 % 6,608,026 64.17 %

Total 10,785,262 100.00 % 10,298,742 100.00 %











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 56

EXHIBIT “I” DEPOSITS, OTHER LIABILITIES FROM FINANCIAL INTERMED IATION AND SUBORDINATED

CORPORATE BONDS BROKEN DOWN BY TERMS AS OF 03/31/20 11 (Figures stated in thousands of Argentine pesos)

Terms remaining to maturity

Item 1 month 3 months 6 months 12 months 24 months

Over 24 months

Total

Deposits 8,720,907 1,338,249 328,263 331,779 66,033 31 10,785,262

Other liabilities from financial intermediation

BCRA 867 - - - - - 867

Banks and international organizations

10,398 41,789 19,258 - - 72,936 144,381

Other 503,296 1,278 1,311 2,674 2,774 1,295 512,628

Total other liabilities from financial intermediation

514,561 43,067 20,569 2,674 2,774 74,231 657,876

TOTAL 9,235,468 1,381,316 348,832 334,453 68,807 74,262 11,443,138











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 57

EXHIBIT “J” CHANGES IN ALLOWANCES AND PROVISIONS


Decreases in constant pesos Breakdown

Balance at beginning of year, restated

Increases in constant

pesos Reversals Uses

Balances as of 03/31/11

Allowances

Loans – for uncollectibility risk and impairment in value

157,502 8,908 - 9,124 157,286

Other receivables from financial intermediation – for uncollectibility risk and impairment in value

1,652 - - 144 1,508

Receivables from financial leases – for uncollectibility risk and impairment in value

3,642 319 - - 3,961

Miscellaneous receivables – for uncollectibility risk

2,318 - - 94 2,224

Total 165,114 9,227 - 9,362 164,979

Provisions

Contingent commitments 270 42 - - 312

Other contingencies 67,784 811 518 7,139 60,938

Total 68,054 853 518 7,139 61,250











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 58

EXHIBIT “K”

CAPITAL STRUCTURE AS OF 03/31/2011


Shares (1) Capital stock

Issued (1) Class Number

Votes per share Outstanding

Paid-in (1)

Class “A” shares of common stock

22,768,818 1 22,769 22,769

Class “B” shares of common stock

696,495,919 1 696,496 696,496

Total 719,264,737 719,265 719,265 (1) See note 4.











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 59

EXHIBIT “L” AMOUNTS IN FOREIGN CURRENCY AS OF 03/31/2011 AND 12/31/2010


ITEMS

Head office and

branches in Argentina

Total as of

03/31/2011

Euro US dollar Pound sterling

Swiss franc

Yen Other Total as

of 12/31/10

ASSETS

Cash 796,756 796,756 57,177 729,609 613 298 67 8,992 886,371

Government and private securities 257,026 257,026 - 257,026 - - - - 242,337

Loans 1,329,835 1,329,835 5,469 1,324,358 8 - - - 1,108,054

Other receivables from financial intermediation 130,649 130,649 - 130,649 - - - - 3,315

Receivables from financial leases 25,551 25,551 - 25,551 - - - - 29,252

Investments in other companies 46,275 46,275 15 46,260 - - - - 44,761

Miscellaneous receivables 4,366 4,366 - 4,366 - - - - 40,996

Items pending allocation 1 1 - 1 - - - - -

Total 2,590,459 2,590,459 62,661 2,517,820 621 298 67 8,992 2,355,086

LIABILITIES

Deposits 1,550,923 1,550,923 29,425 1,521,498 - - - - 1,456,819

Other liabilities from financial intermediation 404,201 404,201 27,996 375,705 49 81 - 370 312,732

Miscellaneous liabilities 3,820 3,820 - 3,820 - - - - 945

Items pending allocation - - - - - - - - 2

Total 1,958,944 1,958,944 57,421 1,901,023 49 81 - 370 1,770,498

MEMORANDUM ACCOUNTS

Debit-balance

Contingent 1,583,370 1,583,370 40,951 1,542,419 - - - - 1,366,786

Control 895,270 895,270 24,423 870,061 - 209 577 - 875,079

Total 2,478,640 2,478,640 65,374 2,412,480 - 209 577 - 2,241,865

Credit-balance

Contingent 170,200 170,200 6,132 164,005 63 - - - 188,675

Control 2,366 2,366 - 2,366 - - - - 2,322

Total 172,566 172,566 6,132 166,371 63 - - - 190,997










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 60

EXHIBIT “N”

CREDIT ASSISTANCE TO RELATED PARTIES AS OF 03/31/2011 AND 12/31/2010


Total Item Performing

03/31/11 12/31/10

1. Loans 53,245 53,245 4,427

Overdrafts 50 50 214 - With “A” preferred guarantees and counter-guarantees - - - - Without preferred guarantees or counter-guarantees 50 50 214 Notes 774 774 827 - With “A” preferred guarantees and counter-guarantees 255 255 355 - Without preferred guarantees or counter-guarantees 519 519 472 Credit cards 407 407 386 - With “A” preferred guarantees and counter-guarantees 5 5 6 - Without preferred guarantees or counter-guarantees 402 402 380

Other 52,014 52,014 3,000 - Without “A” preferred guarantees or counter-guarantees 52,014 52,014 3,000

2. Other receivables from financial intermediation 4,674 4,674 6 3. Receivables from financial leases 335 335 311 4. Investments in other companies 217,034 217,034 200,717

Total 275,288 275,288 205,461

Allowances 583 583 47










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 61

EXHIBIT “O” DERIVATIVE FINANCIAL INSTRUMENTS

AS OF 03/31/2011 (Figures stated in thousands of Argentine pesos)

Weighted average term

Type of contract

Purpose of transaction

s

Underlying asset

Type of settlement

Negotiation environmen

t or counter-

party

Originally agreed

- in months -

Residual - in months -

Calculation of

differences - in days -

Amount

Options Other hedging Argentine pesos

Other Other

Argentine markets

128 21 365 26,312

Swaps Intermediation,

for own account

Other Upon

maturity of differences

MAE 24 5 30 5,000

Swaps Interest rate hedge

Other Upon

maturity of differences

MAE 36 13 30 10,000

Repo transactions

Intermediation, for own account

Argentine government

securities and instruments

issued by the BCRA

With delivery of underlying

asset MAE - - 6 366,432

Futures Intermediation,

for own account

Other Daily

settlement of differences

MAE 1 - 1 25,000

BANCO PATAGONIA S.A. SCHEDULE I

CONSOLIDATED BALANCE SHEETS (Section 33 - Law No. 1 9,550) as of 03/31/2011, and 12/31/2010




Signed for identification purposes with our

report dated 05/09/2011 On behalf of Statutory Audit Committee






C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 62

ASSETS 03/31/11 12/31/10

A. Cash and due from banks Cash on hand 619,604 484,141 Financial institutions and correspondents 1,671,540 1,099,532

BCRA (Central Bank of Argentina) 1,223,396 744,616 Others in Argentina 114,609 25,142 Others abroad 333,535 329,774

2,291,144 1,583,673 B. Government and private securities Holdings for trading or intermediation transactions 825,166 889,756 Holdings booked at cost plus yield 30,365 10,230

Instruments issued by the BCRA 2,534,120 2,710,130 Investments in listed private securities 28 29

3,389,679 3,610,145 C. Loans To the nonfinancial government sector (Exhibit 1) 90,218 90,636 To the financial sector (Exhibit 1) 256,616 237,945

Interbank loans (call options sold) 65,824 101,956 Other financing facilities granted to local financial institutions 184,599 130,722 Accrued interest, adjustments and listed-price differences receivable 6,193 5,267

To the nonfinancial private sector and foreign residents (Exhibit 1) 7,661,946 7,323,297 Overdrafts 1,190,535 1,078,234 Notes 3,143,284 3,047,257 Mortgage loans 78,366 82,348 Collateral loans 362,685 232,712 Personal loans 1,320,297 1,188,613 Credit cards 873,498 814,747 Other 640,911 828,070 Accrued interest, adjustments and listed-price differences receivable 70,857 69,754 (Unearned discount) (18,487) (18,438) (Allowances) (161,692) (160,588) 7,847,088 7,491,290













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 63

ASSETS – Continued 03/31/11 12/31/10

D. Other receivables from financial intermediation BCRA 175,892 185,038 Amounts receivable from spot and forward sales pending settlement 375,824 612,322 Securities and foreign currency receivable from spot and forward purchases pending settlement

190,419 294

Unlisted corporate bonds (Exhibit 1) 2,947 3,585 Other not covered by Debtor Classification Standards 71,805 69,360 Other covered by debtor classification standards (Exhibit 1) 169,534 188,135 Accrued interest and adjustments covered by Debtors Classification Standards (Exhibit 1)

607 479

(Allowances) (1,633) (1,772) 985,395 1,057,441

E. Receivables from financial leases Receivables from financial leases (Exhibit 1) 266,130 234,958 Accrued interest and adjustments receivable (Exhibit 1) 2,291 1,947 (Allowances) (3,961) (3,642) 264,460 233,263

F. Investments in other companies In financial institutions 74 73 Other 8,258 8,257 8,332 8,330

G. Miscellaneous receivables Trade receivables (Exhibit 1) 4,574 7,822 Other 450,172 427,667

Accrued interest and adjustments receivable related to trade receivables (Exhibit 1)

4 6

Other accrued interest and adjustments receivable 85 94 (Allowances) (2,224) (3,595) 452,611 431,994

H. Bank premises and equipment 182,605 181,241 I. Miscellaneous assets 81,606 71,826 J. Intangible assets - - K. Items pending allocation 630 558

TOTAL ASSETS 15,503,550 14,669,761













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 64

LIABILITIES 03/31/11 12/31/10

L. Deposits Nonfinancial government sector 1,747,722 1,550,373 Financial sector 18,042 56,612 Nonfinancial private sector and foreign residents 9,345,071 8,900,586 Checking accounts 1,727,279 1,612,426 Savings accounts 2,631,236 2,741,300 Certificate of deposit 4,229,757 3,988,195

Investment accounts 1,007 1,072 Other 725,209 524,717 Accrued interest, adjustments and listed-price differences payable 30,583 32,876 11,110,835 10,507,571 M. Other liabilities from financial intermediation BCRA 867 1,022 Banks and international organizations 142,927 129,421 Unsubordinated corporate bonds 43,384 - Amounts payable for spot and forward purchases pending settlement 187,161 398 Securities and foreign currency to be delivered under spot and forward sales pending settlement

401,894 679,677

Financing facilities received from local financial institutions 39,011 40,034 Interbank (call options received) 39,000 40,000 Accrued interest payable 11 34 Other 612,598 581,974 Accrued interest, adjustments and listed-price differences payable 1,630 732 1,429,472 1,433,258 N. Miscellaneous liabilities Fees - 10 Other 603,028 479,435 603,028 479,445 O. Provisions 124,799 135,332 P. Subordinated corporate bonds - - Q. Items pending allocation 1,120 1,289 Minority interests in consolidated institution s and companies 1,980 1,874

TOTAL LIABILITIES 13,271,234 12,558,769

SHAREHOLDERS’ EQUITY 2,232,316 2,110,992

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 15,503,5 50 14,669,761













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 65

MEMORANDUM ACCOUNTS 03/31/11 12/31/10

DEBIT BALANCE Contingent Loans obtained (unused amounts) 63,529 63,137 Guarantees received 4,133,168 4,061,060 Contingent debit-balance contra accounts 232,414 383,948 4,429,111 4,508,145 Control Receivables classified as irrecoverable 326,654 322,352 Other 4,607,815 4,869,704 Control debit-balance contra accounts 1,069,859 1,061,473 6,004,328 6,253,529 Derivatives Notional value of forward transactions without delivery of underlying asset 5,000 466,239 Interest rate swap 15,000 15,000 Derivatives debit-balance contra account 46,312 492,302 66,312 973,541

Trust activity Trust funds 724,136 525,715

724,136 525,715

TOTAL DEBIT-BALANCE MEMORANDUM ACCOUNTS 11,223,887 12,260,930













C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 66

MEMORANDUM ACCOUNTS - Continued 03/31/11 12/31/10

CREDIT BALANCE Contingent Loans granted (unused amounts) covered by debtor classification standards (Exhibit 1) 50,000 184,907 Other guarantees provided covered by debtor classification standards (Exhibit 1) 41,066 39,778 Other guarantees provided not covered by Debtor Classification Standards 336 33,828 Other covered by debtor classification standards (Exhibit 1) 60,884 56,057 Other not covered by debtor classification standards 80,128 69,378 Contingent credit-balance contra accounts 4,196,697 4,124,197 4,429,111 4,508,145 Control Checks and securities to be credited 205,428 199,739 Other 864,431 861,734 Control credit-balance contra accounts 4,934,469 5,192,056 6,004,328 6,253,529 Derivatives Notional value of put options sold 26,312 25,721 Notional value of forward transactions without delivery of underlying asset 20,000 466,581 Derivatives credit-balance contra accounts 20,000 481,239 66,312 973,541 Trust activity Trust activity credit-balance contra accounts 724,136 525,715 724,136 525,715

TOTAL CREDIT-BALANCE MEMORANDUM ACCOUNTS 11,223,887 12,260,930

The accompanying notes 1 through 7 and Exhibit 1 are an integral part of these consolidated financial statements.


CONSOLIDATED STATEMENTS OF INCOME (SECTION 33 - LAW NO. 19,550) For the three-month periods ended 03/31/2011, and 0 3/31/2010











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 67

BREAKDOWN 03/31/11 03/31/10

A. FINANCIAL INCOME Interest on cash 26 39 Interest on loans to the financial sector 6,856 7,473 Interest on overdrafts 54,793 37,466 Interest on notes 87,596 48,049 Interest on mortgage loans 2,356 2,755 Interest on collateral loans 9,925 1,438 Interest on credit card loans 36,602 21,902 Interest on financial leases 11,326 5,814 Interest on other loans 114,375 75,079 Interest on other receivables from financial intermediation 783 438 Net income from government and private securities 100,773 101,129 Income from PGN (loans granted by the Argentine Government and secured by bonds) – Presidential Decree No. 1,387/01

3 89

Adjustments under CER clause 817 94 Adjustments under CVS (salaries variation coefficient) clause 28 29 Gold and foreign currency quoted price difference 22,681 26,842 Other 8,753 10,281 457,693 338,917 B. FINANCIAL EXPENSE Interest on savings-account deposits 1,563 1,321 Interest on certificates of deposit 123,384 61,349 Interest on interbank loans received (call options received) 1,436 932 Interest on other financing facilities from financial institutions 165 94 Interest on other liabilities from financial intermediation 1,147 387 Interest on subordinated corporate bonds - 443 Other interest 295 74 Adjustments under CER clause 20 23 Contribution to the deposit guarantee fund 4,550 2,912 Other 22,613 28,610 155,173 96,145 GROSS INTERMEDIATION MARGIN 302,520 242,772 C. PROVISION FOR LOAN LOSSES 10,688 6,291 D. SERVICE-CHARGE INCOME Related to lending transactions 61,219 41,660 Related to borrowing transactions 79,957 65,769 Other fees 8,354 7,353 Other 44,081 26,946 193,611 141,728


CONSOLIDATED STATEMENTS OF INCOME (SECTION 33 - LAW NO. 19,550) For the three-month periods ended 03/31/2011, and 0 3/31/2010











C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 68

REAKDOWN 03/31/11 03/31/10

E. SERVICE-CHARGE EXPENSE Fees 19,737 18,469 Other 32,838 23,483 52,575 41,952 F. ADMINISTRATIVE EXPENSES Personnel expenses 171,091 118,593 Directors’ and statutory auditors’ fees 2,253 1,975 Other professional fees 8,690 5,915 Advertising 9,068 6,856 Taxes 11,682 8,374 Depreciation of bank premises and equipment 4,126 3,523 Other operating expenses 48,440 36,860 Other 11,186 8,497 266,536 190,593

NET INCOME (LOSS) FROM FINANCIAL INTERMEDIATION 166,332 145,664 MINORITY INTEREST (107) - G. OTHER INCOME Income from long-term investments 5,534 1,200 Punitive interest 528 450 Receivables recovered and allowances reversed 4,922 2,252 Other 23,889 8,702 34,873 12,604 H. OTHER EXPENSE Punitive interest and charges payable to the BCRA 6 12 Charge for uncollectibility of miscellaneous receivables, and other allowances 853 813 Losses and depreciation of miscellaneous assets 232 516 Other 3,919 7,014 5,010 8,355

NET INCOME BEFORE INCOME TAX 196,088 149,913

I. INCOME TAX 74,764 50,888

NET INCOME FOR THE PERIOD 121,324 99,025



CONSOLIDATED STATEMENT OF CASH FLOWS (SECTION 33 - LAW NO. 19,550)

For the three-month periods ended 03/31/2011, and 0 3/31/2010 (Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 69

Changes in cash and cash equivalents 03/31/11 03/31/10

Cash at beginning of year 1,583,673 1,635,592 Cash at end of period 2,291,144 1,662,539 Net increase in cash 707,471 26,947

Causes of changes in cash Operating activities

Net collections / (payments) for: Government and private securities (144,938) (39,470) Loans (21,102) 166,912

To the financial sector (11,815) 169,638 To the nonfinancial government sector 1,238 (99,207) To the nonfinancial private sector and foreign residents (10,525) 96,481

Other receivables from financial intermediation 273,632 (8,074) Receivables from financial leases (19,703) 4,431 Deposits 443,745 72,628 To the financial sector (38,570) 7,765 To the nonfinancial government sector 197,349 (1,973) To the nonfinancial private sector and foreign residents 284,966 66,836

Other liabilities from financial intermediation 208,370 (9,617) Financial sector or interbank loans (call options received) (2,459) (932) Other (except for the obligations included under financing activities) 210,829 (8,685)

Collections related to service-charge income 192,904 141,759 Payments related to service-charge expense (52,621) (41,261) Administrative expenses paid (226,180) (242,112) Net collections for punitive interest 522 438 Collection of dividends from other companies 1,801 1,200 Other collections / (Payments) related to miscellaneous income and loss 14,009 (5,847) Net payments for other operating activities (24,550) (822) Income tax paid (30,770) (2,544)

Net cash flow provided by operating activities 615,119 37,621


CONSOLIDATED STATEMENT OF CASH FLOWS (SECTION 33 - LAW NO. 19,550)

For the three-month periods ended 03/31/2011, and 0 3/31/2010 (Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 70

03/31/11 03/31/10

Investing activities

Net collections for bank premises and equipment 11,672 7,483

Net payments for miscellaneous assets (6,783) (14,283)

Payments for the acquisition of investments in other companies - 3

Net cash flow provided by / (used in) investing act ivities 4,889 (6,797)

Financing activities

Banks and international organizations (payments) / collections 13,506 (27,562) Issue of nonsubordinated corporate bonds 43,560 - Subordinated corporate bonds payments - (895)

Net cash flow provided by / (used in) financing act ivities 57,066 (28,457)

Financial income (expense) and holding gains (losse s) from cash and cash equivalents (including interest and monetary gain (loss)) 30,397 24,580

Net increase in cash 707,471 26,947



NOTES TO THE FINANCIAL STATEMENTS CONSOLIDATED WITH SUBSIDIARIES FOR THE THREE-

MONTH PERIOD ENDED MARCH 31, 2011 (SECTION 33 - LAW No. 19,550)

(See note 2(1) to the stand-alone financial stateme nts) (Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 71

NOTE 1: Significant accounting policies related to the information

Banco Patagonia S.A. has prepared the consolidated financial statements in accordance with the methods established by BCRA Communiqué “A” 2,227, as supplemented. To such end, as of March 31, 2011, and December 31, 2010, it consolidated its balance sheet and Exhibit 1 “Financing facilities classified by status and guarantees received” and, as of March 31, 2011, and 2010, the statements of income, changes in shareholders’ equity and cash flows with the financial statements of the following companies, except for GPAT Compañía Financiera S.A. which was consolidated as of March 31, 2011, and December 31, 2010, as mentioned in note 20 to Banco Patagonia S.A.’s stand-alone financial statements:

Shares Percentage of Company

Class Number Total capital stock Possible votes

Patagonia Valores S.A. Sociedad de Bolsa Common stock 13,862,507 99.99% 99.99%

Patagonia Inversora SA. Sociedad Gerente Fondos Comunes de Inversión

Common stock 13,317,233 99.99% 99.99%

Banco Patagonia (Uruguay) S.A. I.F.E. Common stock 50,000 100.00% 100.00%

GPAT Compañía Financiera S.A. Common stock 85,968.713 99.00% 99.00%

Banco Patagonia S.A.’s Board of Directors considers that no other companies are required to be included in the consolidated financial statements as of March 31, 2011 (see note 5).














C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 72

NOTE 2: Accounting methods used

The consolidated financial statements have been prepared based on the information included in the stand-alone financial statements of each one of the companies being consolidated, which were prepared based on similar methods to those used by the Bank to prepare its financial statements. For information on the accounting methods used, please refer to the notes to the following financial statements:

Company Financial statements as of Issuance date Note

Banco Patagonia S.A. 03/31/2011 05/09/2011 1

Patagonia Valores S.A. Sociedad de Bolsa 03/31/2011 05/09/2011 1

Patagonia Inversora SA. Sociedad Gerente Fondos Comunes de Inversión 03/31/2011 05/09/2011 1

Banco Patagonia (Uruguay) S.A. I.F.E. 03/31/2011 04/14/2011 3

GPAT Compañía Financiera S.A. 03/31/2011 05/09/2011 1

NOTE 3: Restricted assets

The companies included in these consolidated financial statements held the following restricted assets: Banco Patagonia S.A. See note 5 to Banco Patagonia S.A.’s stand-alone financial statements. Patagonia Valores S.A. Sociedad de Bolsa As of March 31, 2011, and December 31, 2010, the Company held one share in Mercado de Valores S.A. as security for the transactions performed thereby, valued at restatement cost for an amount of 2,064.














C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 73

Patagonia Inversora S.A. Sociedad Gerente Fondos Co munes de Inversión As of March 31, 2011, and December 31, 2010, the Company had no restricted assets. Banco Patagonia (Uruguay) S.A. I.F.E.

As of March 31, 2011, and December 31, 2010, it held a deposit with the Central Bank of Uruguay amounting to 2,026, and 1,988, respectively, in compliance with section 393, Compilation of Central Bank of Uruguay’s Financial System Regulation and Control Rules. GPAT Compañía Financiera S.A.

As of December 31, 2010, the Company had no restricted assets.

NOTE 4: Derivative financial instruments

See note 13 to Banco Patagonia S.A.’s stand-alone financial statements.

NOTE 5: Acquisition of GPAT Compañía Financiera S. A.

See note 20 to Banco Patagonia S.A.’s stand-alone financial statements. NOTE 6: Situation of the financial and capital mar kets

See note 24 to Banco Patagonia S.A.’s stand-alone financial statements.

NOTE 7: Subsequent events Banco Patagonia S.A. See note 23 to Banco Patagonia S.A.’s stand-alone financial statements.














C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 74

Patagonia Valores S.A. Sociedad de Bolsa The Regular Shareholders' Meeting held on April 25, 2011, approved the distribution of 1,354 related to retained earnings as of the year ended December 31, 2010, as follows. to legal reserve 5% of 1,354 68 to optional reserve 1,286 Total 1,354 Patagonia Inversora S.A. Sociedad Gerente Fondos Co munes de Inversión The Regular Shareholders' Meeting held on April 25, 2011, approved the distribution of 2,560 related to retained earnings as of the year ended December 31, 2010, as follows. to legal reserve 5% of 2,560 128 to optional reserve 2,432 Total 2,560 GPAT Compañía Financiera S.A. The Regular Shareholders' Meeting held on April 29, 2011, approved the distribution of 43,639 related to retained earnings as of the year ended December 31, 2010, as follows. to legal reserve 20% of 43,639 8,728 to unappropriated retained earnings 34,911 Total 43,639


EXHIBIT “1”

(Section 33 - Law No. 19,550) FINANCING FACILITIES CLASSIFIED BY STATUS

AND GUARANTEES RECEIVED AS OF 03/31/2011, AND 12/31 /2010 (Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 75

Commercial loan portfolio 03/31/11 12/31/10

Performing 5,566,387 5,541,903 - With “A” preferred guarantees and counter-guarantees 496,612 372,780 - With “B” preferred guarantees and counter-guarantees 404,711 355,022 - Without preferred guarantees or counter-guarantees 4,665,064 4,814,101 Subject to special monitoring 6,950 4,000 In observation 6,251 3,331 - With “B” preferred guarantees and counter-guarantees 1,091 - - Without preferred guarantees or counter-guarantees 5,160 3,331 In negotiation or under refinancing agreements 699 669 - With “B” preferred guarantees and counter-guarantees 368 351 - Without preferred guarantees or counter-guarantees 331 318 Troubled 903 1,330 - With “B” preferred guarantees and counter-guarantees - 418 - Without preferred guarantees or counter-guarantees 903 912 With high risk of insolvency 6,126 8,020 - With “B” preferred guarantees and counter-guarantees 1,185 1,419 - Without preferred guarantees or counter-guarantees 4,941 6,601 Irrecoverable 13,493 14,646 - Without preferred guarantees or counter-guarantees 13,493 14,646

Total commercial loan portfolio 5,593,859 5,569,899


EXHIBIT “1”

(Section 33 - Law No. 19,550) FINANCING FACILITIES CLASSIFIED BY STATUS

AND GUARANTEES RECEIVED AS OF 03/31/2011, AND 12/31 /2010 (Figures stated in thousands of Argentine pesos)










C.P.C.E.C.A.B.A. Vol. 164 Fo. 235 76

Consumer and/or home loan portfolio 03/31/11 12/31/10

Performing 2,897,641 2,687,698 - With “A” preferred guarantees and counter-guarantees 22,447 21,732 - With “B” preferred guarantees and counter-guarantees 214,789 228,329 - Without preferred guarantees or counter-guarantees 2,660,405 2,437,637 Low risk 46,388 41,420 - With “A” preferred guarantees and counter-guarantees 313 263 - With “B” preferred guarantees and counter-guarantees 8,163 5,293 - Without preferred guarantees or counter-guarantees 37,912 35,864 Medium risk 13,785 13,397 - With “A” preferred guarantees and counter-guarantees - 4 - With “B” preferred guarantees and counter-guarantees 1,211 2,881 - Without preferred guarantees or counter-guarantees 12,574 10,512 High risk 33,834 35,653 - With “B” preferred guarantees and counter-guarantees 1,288 1,037 - Without preferred guarantees or counter-guarantees 32,546 34,616 Irrecoverable 21,064 21,254 - With “B” preferred guarantees and counter-guarantees 321 333 - Without preferred guarantees or counter-guarantees 20,743 20,921 Irrecoverable according to BCRA regulations 246 231 - With “B” preferred guarantees and counter-guarantees 25 25 - Without preferred guarantees or counter-guarantees 221 206

Total consumer and/or home loan portfolio 3,012,958 2,799,653

Grand total 8,606,817 8,369,552

STATUTORY AUDIT COMMITTEE’S REPORT To the Shareholders and Directors of BANCO PATAGONIA S.A. Registered office: Tte. Gral. J. D. Perón 500 1.1.2. Buenos Aires, Argentina Dear Sirs,

We have performed a limited review of the accompanying balance sheet of BANCO PATAGONIA

S.A. as of March 31, 2011, and the related statements of income, changes in shareholders’ equity

and cash flows for the three-month period then ended, notes 1 through 24, and exhibits A through L,

N and O, and Schedule I that supplement them. The preparation and issuance of the documents

reviewed is the responsibility of the Bank’s Management in performing their exclusive functions.

We performed this examination in accordance with effective statutory audit rules. Such rules

require that the documents mentioned above be reviewed in accordance with the effective audit

standards for the limited review of interim financial statements and that such review include verifying

the agreement of the documents reviewed with the information on corporate decisions entered in

minutes, as well as the compliance of such decisions with legal requirements and company bylaws in

all formal and documentary respects. We have not performed any control over management

decisions or performance and, therefore, we have not assessed the business decisions or criteria

regarding administrative, financial, and marketing matters, as these are the exclusive responsibility of

the Board of Directors. To perform our professional work on the documents mentioned in the first

paragraph, we have reviewed the work performed by the firm Pistrelli, Henry Martin y Asociados

S.R.L, in their capacity as external auditors, who issued their report dated May 09, 2011, in

accordance with the effective auditing standards for the limited review of interim financial statements

and the "Minimum external auditing standards" issued by the BCRA (Central Bank of Argentina) for

the review of quarterly financial statements, and we concur with its conclusions. The review included

the verification of work planning, of the nature, scope and timing of the procedures applied and of the

results obtained, and was limited to the significant information in the documents reviewed.

As described in note 3 to the accompanying financial statements, the financial statements

mentioned in the first paragraph have been prepared by the Bank in conformity with the accounting

standards established by the BCRA, which differ from the professional accounting standards

approved by the CPCECABA (Professional Council in Economic Sciences of the City of Buenos

Aires), Argentina, in certain valuation and disclosure aspects described and quantified in such note.

Based on our work and on the report issued by Pablo M. Moreno (Partner of the firm Pistrelli,

Henry Martin y Asociados S.R.L.) dated May 09, 2011, we have not become aware of any facts or

circumstances that would require making significant changes to the financial statements mentioned in

the first paragraph above for them to be presented in conformity with the standards established by the

BCRA and, except for the effect of the issues mentioned in the third paragraph, with professional

accounting standards effective in Buenos Aires City, Argentina.

In compliance with current legal requirements, we further report that:

In the exercise of the legality control within our competence, during the

three-month period ended March 31, 2011, we have applied the remaining procedures

described in section 294, Law No. 19,550, which we deem necessary according to the

circumstances and have no observations to make in this regard.

The financial statements of BANCO PATAGONIA S.A. mentioned in the

first paragraph are taken from books kept, in their formal respects, in conformity with current

legal requirements and BCRA standards.

In conformity with CNV (Argentine Securities Commission) General

Resolution No. 340, and supplementary regulations, on the independence of the external

auditor and on the quality of the audit procedures applied by such auditor and the Bank’s

accounting policies, the external auditor’s report mentioned in the fourth paragraph includes a

representation that professional auditing standards effective in Argentina, including

independence requirements, have been applied and does not include any qualifications in

connection with the application of such standards and professional accounting standards

effective in the City of Buenos Aires, Argentina, considering the issues disclosed in the third

paragraph.

Buenos Aires, May 09, 2011

On behalf of Statutory Audit Committee


financial statements as of march 31, 2011 jointly …...financial statements as of march 31, 2011...

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