SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
November 8, 2019
Commission File Number: 001-32827
MACRO BANK INC.
(Translation of registrant’s name into English)
Avenida Eduardo Madero 1182
Ciudad Autónoma de Buenos Aires C1106 ACY
Tel: 54 11 5222 6500
(Address of registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
| Form 20-F | x | Form 40-F | ¨ |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
| Yes | ¨ | No | x |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
| Yes | ¨ | No | x |
 | 3Q19 Earnings Release |
Banco Macro Announces Results for the Third Quarter of 2019
Buenos Aires, Argentina, November 8, 2019 – Banco Macro S.A. (NYSE: BMA; BCBA: BMA) (“Banco Macro” or “BMA” or the “Bank”) announced today its results for the third quarter ended September 30, 2019 (“3Q19”). All figures are in Argentine pesos (Ps.)
Summary
• The Bank’s net income totaled Ps.13.2 billion in 3Q19. This result was 87% higher than the Ps.7 billion posted in 2Q19 and 243% higher than in 3Q18. In 3Q19, the accumulated annualized return on average equity (“ROAE”) and the accumulated annualized return on average assets (“ROAA”) were 57.3% and 9.4%, respectively. In 3Q19 Recurring Net Income totaled Ps.15.5 billion increasing 99% or Ps.7.7 billion compared with the previous quarter.
• In 3Q19, Banco Macro’s financing to the private sector grew 10% or Ps.18.1 billion quarter over quarter (“QoQ”) totaling Ps.192.8 billion and increased 15% or Ps.24.5 billion year over year (“YoY”). In the quarter, growth was driven by commercial loans, among which Overdrafts stand out, with a 78% increase QoQ. Meanwhile within consumer loans, credit card loans increased 12% QoQ.
• In 3Q19, Banco Macro’s total deposits decreased 9% or Ps.25.1 billion QoQ, totaling Ps.259.2 billion and representing 79% of the Bank’s total liabilities. Private sector deposits decreased 8% or Ps.22 billion QoQ.
• Banco Macro continued showing a strong solvency ratio, with excess capital of Ps.60.0 billion, 26.5% regulatory capital ratio – Basel III and 18.9% Tier 1 Ratio. In addition, the Bank’s liquid assets remained at an adequate level, reaching 61% of its total deposits in 3Q19.
• As of 3Q19, the efficiency ratio reached 32.5%, improving from the 37.6% posted in 3Q18.
• In 3Q19, the Bank’s non-performing to total financing ratio was 1.9% and the coverage ratio reached 124.16%.
| 3Q19 Earnings Release Conference Call | IR Contacts in Buenos Aires: | |
| Friday, November 12, 2019 Time: 10:00 a.m. Eastern Time | 12:00 p.m. Buenos Aires Time | Jorge Scarinci Chief Financial Officer | |
| To participate, please dial: | Nicolás A. Torres | |
| Argentina Toll Free: | Webcast Replay:click here | Investor Relations |
| (011) 3984 5677 | ||
| Participants Dial In (Toll Free): | Available from 11/12/2019 through | Phone: (54 11) 5222 6682 |
| +1 (844) 450 3847 | 11/26/2019 | E-mail: investorelations@macro.com.ar |
| Participants International Dial In: | ||
| +1 (412) 317 6370 | Visit our website at: | |
| Conference ID: Banco Macro | www.macro.com.ar/relaciones-inversores | |
| Webcast:click here | ||
2
| | 3Q19 Earnings Release |
Disclaimer
This press release includes forward-looking statements. We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Many important factors could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things: inflation; changes in interest rates and the cost of deposits; government regulation; adverse legal or regulatory disputes or proceedings; credit and other risks of lending, such as increases in defaults by borrowers; fluctuations and declines in the value of Argentine public debt; competition in banking and financial services; deterioration in regional and national business and economic conditions in Argentina; and fluctuations in the exchange rate of the peso.
The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this press release because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this press release might not occur and are not guarantees of future performance.
This report is a summary analysis of Banco Macro's financial condition and results of operations as of and for the period indicated. For a correct interpretation, this report must be read in conjunction with all other material periodically filed with the Comisión Nacional de Valores (www.cnv.gob.ar), the Securities and Exchange Commission (www.sec.gov), Bolsas y mercados Argentinos (www.byma.com.ar) and the New York Stock Exchange (www.nyse.com). In addition, the Central Bank (www.bcra.gov.ar) may publish information related to Banco Macro as of a date subsequent to the last date for which the Bank has published information.
Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Consequently, any matters of interpretation should be referred to the original version in Spanish.
3
| | 3Q19 Earnings Release |
This Earnings Release has been prepared in accordance with the accounting framework established by the Central Bank of Argentina (“BCRA”), based on International Financial Reporting Standards (“I.F.R.S.”) and the resolutions adopted by the International Accouting Standards Board (“I.A.S.B”) and by the Federación Argentina de Consejos Profesionales de Ciencias Económicas (“F.A.C.P.E.”) with the exception of (i) Expected losses of IFRS 9 “Financial Instruments” and (ii) IAS 29 “Financial Reporting in Hyperinflationary Economies” both temporarily excluded by the Central Bank of Argentina from the applicable accounting framework for Financial Institutions. Data and figures shown in this Earnings Release may differ from the ones shown in the 20-F annual report which shows the impact of the application of I.F.R.S 9 and IAS 29.
Results
Earnings per outstanding share were Ps.20.59 in 3Q19, 87% higher than 2Q19 and 256% higher than the result posted a year ago. On a yearly basis Net Income increased 244% while Earnings per Share increased 256%, given that the average amount of shares outstanding decreased in 3Q18, 4Q18 and 1Q19 due to the Share buyback program.
| EARNINGS PER SHARE | MACRO Consolidated | Variation | |||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | ||||||||||||||||
| Net income -Parent Company- (M $) | 3,828 | 5,243 | 7,343 | 7,033 | 13,158 | 87 | % | 244 | % | ||||||||||||||
| Average # of shares outstanding (M) | 662 | 643 | 639 | 639 | 639 | 0 | % | -3 | % | ||||||||||||||
| Average #of treasury stocks (shares repurchased) (M) | 7 | 26 | 30 | 30 | 14 | -53 | % | 102 | % | ||||||||||||||
| Book value per avg. Outstanding share ($) | 76 | 82 | 93 | 94 | 117 | 24 | % | 54 | % | ||||||||||||||
| Shares Outstanding (M) | 648 | 641 | 639 | 639 | 639 | 0 | % | -1 | % | ||||||||||||||
| Earnings per avg. outstanding share ($) | 5.78 | 8.15 | 11.49 | 11.01 | 20.59 | 87 | % | 256 | % | ||||||||||||||
| Book value per avg. issued ADS (USD) | 18.62 | 22.16 | 21.41 | 22.14 | 20.33 | -8 | % | 9 | % | ||||||||||||||
| Earnings per avg. outstanding ADS (USD) | 1.41 | 2.16 | 2.65 | 2.59 | 3.58 | 38 | % | 153 | % | ||||||||||||||
Banco Macro’s 3Q19 net income of Ps.13.2 billion was 87% or Ps.6.1 billion higher than the previous quarter and 243% or Ps.9.3 billion higher YoY. This result represented an accumulated ROAE and ROAA of 57.3% and 9.4% respectively.
In 3Q19 Recurring Net Income was Ps.15.5 billion, 99% or Ps.7.7 billion higher than the result posted in 2Q19. (See table below for recurring net income)
4
| | 3Q19 Earnings Release |
| INCOME STATEMENT RECURRING | MACRO Consolidated | Variation | ||||||||||||||||||
| In MILLION $ | 4Q18(¹) | 1Q19(²) | 2Q19(³) | 3Q19(4) | QoQ | |||||||||||||||
| Net Interest Income | 12,288 | 12,931 | 16,785 | 20,057 | 19 | % | ||||||||||||||
| Net fee income | 3,259 | 3,310 | 3,391 | 3,753 | 11 | % | ||||||||||||||
| Subtotal (Net Interest Income + Net Fee Income) | 15,547 | 16,241 | 20,176 | 23,810 | 18 | % | ||||||||||||||
| Net Income from financial instruments at fair value through P&L | 364 | 605 | 133 | 659 | 395 | % | ||||||||||||||
| Income from assets at amortized cost | 1 | -17 | 0 | -1 | - | |||||||||||||||
| Differences in quoted prices of gold and foreign currency | 729 | -167 | 333 | 1,497 | 350 | % | ||||||||||||||
| Other operating income | 413 | 736 | 817 | 1,071 | 31 | % | ||||||||||||||
| Provision for loan losses | 836 | 800 | 848 | 824 | -3 | % | ||||||||||||||
| Net Operating Income | 16,218 | 16,598 | 20,611 | 26,212 | 27 | % | ||||||||||||||
| Employee benefits | 3,124 | 3,133 | 4,007 | 4,308 | 8 | % | ||||||||||||||
| Administrative expenses | 2,105 | 2,096 | 2,301 | 2,903 | 26 | % | ||||||||||||||
| Depreciation and impairment of assets | 215 | 290 | 317 | 366 | 15 | % | ||||||||||||||
| Other operating expenses | 2,916 | 3,104 | 2,886 | 4,382 | 52 | % | ||||||||||||||
| Operating Income | 7,858 | 7,975 | 11,100 | 14,253 | 28 | % | ||||||||||||||
| Result from associates & joint ventures | 33 | 26 | 23 | 17 | -26 | % | ||||||||||||||
| Result before taxes from continuing operations | 7,891 | 8,001 | 11,123 | 14,270 | 28 | % | ||||||||||||||
| Income tax | 2,440 | 2,307 | 3,319 | -1,263 | - | |||||||||||||||
| Net income from continuing operations | 5,451 | 5,694 | 7,804 | 15,533 | 99 | % | ||||||||||||||
| Recurring Net Income of the period | 5,451 | 5,694 | 7,804 | 15,533 | 99 | % | ||||||||||||||
| Non recurring income/loss of the period | -208 | 1,649 | -772 | -2,374 | 208 | % | ||||||||||||||
| Net Income (Recurring + Non Recurring) | 5,243 | 7,343 | 7,032 | 13,159 | 87 | % | ||||||||||||||
(¹) Excluding provisions for class actions, deferred tax
(²) Excluding Prisma & Molinos Cañuelas
(³) Excluding results related to social security contributions (Employee benefits & Other Operating income), sale of real estate (Other Operating income), Prisma dividends (Result from associates & joint ventures) and Income tax
(4) Excluding IFRS adjustment on Government Securities, Severance Pay and provisions for class actions
Net operating income (before G&A and personnel expenses) was Ps.26.2 billion in 3Q19, increasing 26% or Ps.5.4 billion compared to 2Q19 and 103% or Ps.13.3 billion compared to the previous year.
Operating income (after G&A and personnel expenses) was Ps.11.9 billion in 3Q19, 28% or Ps.2.6 billion higher than in 2Q19 and 114% or Ps.6.3 billion higher than a year ago.
It is important to emphasize that this result was obtained with a leverage of 5.3x assets to equity ratio.
5
| | 3Q19 Earnings Release |
| INCOME STATEMENT | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Net Interest Income | 10,323 | 12,288 | 12,931 | 16,785 | 20,057 | 19 | % | 94 | % | |||||||||||||||||||
| Net fee income | 2,869 | 3,259 | 3,310 | 3,391 | 3,753 | 11 | % | 31 | % | |||||||||||||||||||
| Subtotal (Net Interest Income + Net Fee Income) | 13,192 | 15,547 | 16,241 | 20,176 | 23,810 | 18 | % | 80 | % | |||||||||||||||||||
| Net Income from financial instruments at fair value through P&L | 499 | 364 | 1,974 | 133 | 659 | 395 | % | 32 | % | |||||||||||||||||||
| Income from assets at amortized cost | -3 | 1 | -17 | 0 | -1 | - | - | |||||||||||||||||||||
| Differences in quoted prices of gold and foreign currency | -1,244 | 729 | -51 | 333 | 1,497 | 350 | % | -220 | % | |||||||||||||||||||
| Other operating income | 1,202 | 413 | 3,114 | 983 | 1,071 | 9 | % | -11 | % | |||||||||||||||||||
| Provision for loan losses | 732 | 836 | 2,154 | 848 | 824 | -3 | % | 13 | % | |||||||||||||||||||
| Net Operating Income | 12,914 | 16,218 | 19,107 | 20,777 | 26,212 | 26 | % | 103 | % | |||||||||||||||||||
| Employee benefits | 2,720 | 3,124 | 3,133 | 4,916 | 4,428 | -10 | % | 63 | % | |||||||||||||||||||
| Administrative expenses | 1,776 | 2,105 | 2,096 | 2,301 | 2,903 | 26 | % | 63 | % | |||||||||||||||||||
| Depreciation and impairment of assets | 187 | 215 | 290 | 317 | 366 | 15 | % | 96 | % | |||||||||||||||||||
| Other operating expenses | 2,693 | 3,213 | 3,104 | 3,950 | 6,636 | 68 | % | 146 | % | |||||||||||||||||||
| Operating Income | 5,538 | 7,561 | 10,484 | 9,293 | 11,879 | 28 | % | 114 | % | |||||||||||||||||||
| Result from associates & joint ventures | 12 | 33 | 26 | 613 | 17 | -97 | % | 42 | % | |||||||||||||||||||
| Result before taxes from continuing operations | 5,550 | 7,594 | 10,510 | 9,906 | 11,896 | 20 | % | 114 | % | |||||||||||||||||||
| Income tax | 1,718 | 2,351 | 3,166 | 2,874 | -1,263 | - | - | |||||||||||||||||||||
| Net income from continuing operations | 3,832 | 5,243 | 7,344 | 7,032 | 13,159 | 87 | % | 243 | % | |||||||||||||||||||
| Net Income of the period | 3,832 | 5,243 | 7,344 | 7,032 | 13,159 | 87 | % | 243 | % | |||||||||||||||||||
| Net income of the period attributable to parent company | 3,828 | 5,243 | 7,343 | 7,033 | 13,159 | 87 | % | 244 | % | |||||||||||||||||||
| Net income of the period atributable to minority interest | 4 | 0 | 1 | -1 | 1 | - | -75 | % | ||||||||||||||||||||
The Bank’s 3Q19 net interest income totaled Ps.20.1 billion, 19% or Ps.3.3 billion higher than in 2Q19 and 94% or Ps.9.7 billion higher YoY.
In 3Q19 interest income totaled Ps.35.6 billion, 14% or Ps.4.3 billion higher than in 2Q19 and 112% or Ps.18.8 billion higher than in 3Q18.
Income from interest on loans and other financing totaled Ps.16.1 billion, 9% or Ps.1.4 billion higher compared with the previous quarter. On a yearly basis Income from interest on loans increased 30% or Ps.3.7 billion.
In 3Q19 income from government and private securities increased 30% or Ps.4.5 billion QoQ and 336% or Ps.15 billion compared with the same period of last year. This result is explained 88% by income from government and private securities through other comprehensive income (Central Bank Notes) and the remaining 12% is explained by income of government and private securities at amortized cost.
In 3Q19 Differences foreign currency totaled a Ps.1.5 billion gain, due to the 36% argentine peso depreciation against the US dollar and the Bank’s long spot dollar position during the quarter and FX trading results (Ps.1.2 billion). It should be noted that if income from investment in derivative financing instruments is added then differences in quoted prices of gold and foreign currency in 3Q19 resulted in a Ps.2.2 billion gain.
6
| | 3Q19 Earnings Release |
| DIFFERENCES IN QUOTED PRICES OF GOLD AND FOREIGN CURRENCY | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| (1) Differences in quoted prices of gold and foreing currency | -1,244 | 729 | -51 | 333 | 1,496 | 349 | % | - | ||||||||||||||||||||
| Translation of FX assets and liabilities to Pesos | -1,759 | 354 | -481 | -129 | 332 | - | - | |||||||||||||||||||||
| Income from foreign currency exchange | 515 | 375 | 430 | 462 | 1,164 | 152 | % | 126 | % | |||||||||||||||||||
| (2) Net Income from financial assets and liabilities at fair value through P&L | 235 | -22 | 301 | -12 | 735 | - | 213 | % | ||||||||||||||||||||
| Income from investment in derivative financing instruments | 235 | -22 | 301 | -12 | 735 | - | 213 | % | ||||||||||||||||||||
| (1) +(2) Total Result from Differences in quoted prices of gold and foreign currency | -1,009 | 707 | 250 | 321 | 2,231 | 595 | % | - | ||||||||||||||||||||
| INTEREST INCOME | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Interest on Cash and due from Banks | 5 | 15 | 31 | 35 | 86 | 146 | % | 1620 | % | |||||||||||||||||||
| Interest from government securities | 4,380 | 7,898 | 9,515 | 14,951 | 19,026 | 27 | % | 334 | % | |||||||||||||||||||
| Interest from private securities | 71 | 2 | 1 | 0 | 379 | 100 | % | 434 | % | |||||||||||||||||||
| Interest on loans and other financing | ||||||||||||||||||||||||||||
| To the financial sector | 312 | 546 | 494 | 355 | 375 | 6 | % | 20 | % | |||||||||||||||||||
| Interest on overdrafts | 1,448 | 2,442 | 1,872 | 1,739 | 3,351 | 93 | % | 131 | % | |||||||||||||||||||
| Interest on documents | 856 | 1,089 | 1,201 | 1,086 | 961 | -12 | % | 12 | % | |||||||||||||||||||
| Interest on mortgages loans | 1,101 | 1,795 | 1,310 | 1,673 | 1,471 | -12 | % | 34 | % | |||||||||||||||||||
| Interest on pledged loans | 142 | 148 | 129 | 124 | 129 | 4 | % | -9 | % | |||||||||||||||||||
| Interest on personal loans | 5,447 | 5,676 | 5,785 | 6,005 | 6,162 | 3 | % | 13 | % | |||||||||||||||||||
| Interest on credit cards loans | 1,788 | 2,371 | 2,567 | 2,677 | 2,589 | -3 | % | 45 | % | |||||||||||||||||||
| Interest on financial leases | 40 | 57 | 44 | 43 | 28 | -35 | % | -30 | % | |||||||||||||||||||
| Interest on other loans | 1,211 | 1,447 | 1,124 | 1,029 | 1,018 | -1 | % | -16 | % | |||||||||||||||||||
| Interest on Repos | ||||||||||||||||||||||||||||
| From the BCRA | 0 | 0 | 9 | 0 | 0 | 0 | % | 0 | % | |||||||||||||||||||
| Other financial institutions | 8 | 328 | 313 | 1,617 | 7 | -100 | % | -13 | % | |||||||||||||||||||
| Total Interest income | 16,809 | 23,814 | 24,395 | 31,334 | 35,582 | 14 | % | 112 | % | |||||||||||||||||||
| Income from Interest on loans | 12,345 | 15,571 | 14,526 | 14,731 | 16,084 | 9 | % | 30 | % | |||||||||||||||||||
The Bank’s 3Q19 interest expense totaled Ps.15.5 billion, increasing 7% (Ps.1 billion) compared to the previous quarter and 139% (Ps.9 billion) compared to 3Q18.
In 3Q19, interest on deposits represented 91% of the Bank’s total interest expense, increasing 5% or Ps.614 million QoQ. On a yearly basis, interest on deposits increased 149% or Ps.8.5 billion.
7
| | 3Q19 Earnings Release |
| INTEREST EXPENSE | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||
| Interest on checking accounts | 142 | 491 | 118 | 52 | 105 | 102 | % | -26 | % | |||||||||||||||||||
| Interest on saving accounts | 91 | 140 | 97 | 153 | 113 | -26 | % | 24 | % | |||||||||||||||||||
| Interest on time deposits | 5,464 | 10,013 | 10,372 | 13,368 | 13,969 | 4 | % | 156 | % | |||||||||||||||||||
| Interest on other financing from BCRA and financial inst. | 48 | 45 | 43 | 62 | 62 | 0 | % | 29 | % | |||||||||||||||||||
| Repos | ||||||||||||||||||||||||||||
| Other financial institutions | 66 | 64 | 71 | 107 | 54 | -50 | % | -18 | % | |||||||||||||||||||
| Interest on corporate bonds | 406 | 478 | 452 | 470 | 787 | 67 | % | 94 | % | |||||||||||||||||||
| Interest on subordinated bonds | 252 | 267 | 280 | 311 | 386 | 24 | % | 53 | % | |||||||||||||||||||
| Interest on other financial liabilities | 17 | 28 | 31 | 26 | 49 | 88 | % | 188 | % | |||||||||||||||||||
| Total financial expense | 6,486 | 11,526 | 11,464 | 14,549 | 15,525 | 7 | % | 139 | % | |||||||||||||||||||
| Expenses from interest on deposits | 5,697 | 10,644 | 10,587 | 13,573 | 14,187 | 5 | % | 149 | % | |||||||||||||||||||
As of 3Q19, the Bank’s net interest margin (including FX) was 19.1%, higher than the 17.6% posted in 2Q19 and the 14% in 3Q18.
As of 3Q19 Net Interest Margin (excluding FX) was 18.5%, higher than the 17.5% posted in 2Q19 and the 15.2% in 3Q18. This result shows the Bank’s ability to defend its margin.
| ASSETS & LIABILITIES PERFORMANCE (AR$) | MACRO Consolidated | |||||||||||||||||||||||||||||||||||||||
| In MILLON $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | |||||||||||||||||||||||||||||||||||
| Yields & rates in annualized nominal % | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | ||||||||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||||||||||||||||||
| Cash and Deposits in Banks | 24,596 | 0.0 | % | 31,969 | 0.0 | % | 32,270 | 0.0 | % | 34,030 | 0.0 | % | 24,551 | 0.0 | % | |||||||||||||||||||||||||
| Goverment & Securities at fair value trhough P&L | 1,114 | -10.0 | % | 1,355 | 35.1 | % | 1,715 | 14.9 | % | 1,438 | 9.5 | % | 2,375 | -23.4 | % | |||||||||||||||||||||||||
| Loans & Other Financing | ||||||||||||||||||||||||||||||||||||||||
| Public Sector | 2,112 | 46.2 | % | 2,069 | 69.8 | % | 1,401 | 57.0 | % | 952 | 49.7 | % | 1,533 | 66.8 | % | |||||||||||||||||||||||||
| Financial Sector | 3,827 | 31.7 | % | 4,247 | 50.3 | % | 4,736 | 41.7 | % | 3,143 | 44.4 | % | 2,974 | 49.5 | % | |||||||||||||||||||||||||
| Private Sector | 121,071 | 37.2 | % | 123,050 | 45.2 | % | 122,286 | 43.5 | % | 116,892 | 46.0 | % | 124,450 | 46.4 | % | |||||||||||||||||||||||||
| Other debt securities | 39,796 | 45.4 | % | 52,738 | 60.0 | % | 71,886 | 54.1 | % | 92,118 | 64.9 | % | 112,092 | 68.7 | % | |||||||||||||||||||||||||
| Other interest-earning assets | 7,033 | 12.5 | % | 8,752 | 23.9 | % | 10,259 | 72.7 | % | 16,603 | 43.0 | % | 9,614 | 2.8 | % | |||||||||||||||||||||||||
| Total interest-earning assets | 199,549 | 33.1 | % | 224,180 | 41.7 | % | 244,553 | 41.9 | % | 265,176 | 46.3 | % | 277,589 | 49.3 | % | |||||||||||||||||||||||||
| Non interest-earning assets | 12,709 | 13,107 | 14,266 | 20,860 | 15,991 | |||||||||||||||||||||||||||||||||||
| Total Average Assets | 212,258 | 237,287 | 258,819 | 286,036 | 293,580 | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||||||||||||
| Public Sector | 9,970 | 21.5 | % | 14,323 | 35.5 | % | 16,375 | 33.0 | % | 16,069 | 34.8 | % | 12,752 | 34.8 | % | |||||||||||||||||||||||||
| Financial Sector | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | |||||||||||||||||||||||||
| Private Sector | 94,478 | 20.9 | % | 112,920 | 32.0 | % | 122,198 | 29.7 | % | 137,077 | 34.4 | % | 146,717 | 34.2 | % | |||||||||||||||||||||||||
| BCRA and other financial institutions | 1,155 | 14.4 | % | 492 | 36.3 | % | 898 | 19.4 | % | 513 | 47.7 | % | 510 | 46.7 | % | |||||||||||||||||||||||||
| Corporate bonds | 7,120 | 22.6 | % | 6,359 | 29.8 | % | 6,189 | 29.6 | % | 6,161 | 30.6 | % | 6,083 | 51.3 | % | |||||||||||||||||||||||||
| Subordinated bonds | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | 0 | 0.0 | % | |||||||||||||||||||||||||
| Other interest-bearing liabilities | 586 | 48.7 | % | 453 | 56.1 | % | 723 | 40.4 | % | 1,133 | 38.6 | % | 366 | 46.7 | % | |||||||||||||||||||||||||
| Total int.-bearing liabilities | 113,309 | 21.2 | % | 134,547 | 32.4 | % | 146,383 | 30.1 | % | 160,953 | 34.4 | % | 166,428 | 35.0 | % | |||||||||||||||||||||||||
| Total non int.-bearing liab. & equity | 43,257 | 46,582 | 52,988 | 60,779 | 61,607 | |||||||||||||||||||||||||||||||||||
| Total Average Liabilities & Equity | 156,566 | 181,129 | 199,371 | 221,732 | 228,035 | |||||||||||||||||||||||||||||||||||
| Assets Performance | 16,660 | 23,554 | 25,293 | 30,590 | 34,497 | |||||||||||||||||||||||||||||||||||
| Liabilities Performance | 6,044 | 10,980 | 10,857 | 13,808 | 14,692 | |||||||||||||||||||||||||||||||||||
| Net Interest Income | 10,616 | 12,574 | 14,436 | 16,782 | 19,805 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 199,549 | 224,180 | 244,553 | 265,176 | 277,589 | |||||||||||||||||||||||||||||||||||
| Net Interest Margin (NIM) | 21.1 | % | 22.3 | % | 23.9 | % | 25.4 | % | 28.3 | % | ||||||||||||||||||||||||||||||
8
| | 3Q19 Earnings Release |
| ASSETS & LIABILITIES PERFORMANCE (USD) | MACRO Consolidated | |||||||||||||||||||||||||||||||||||||||
| In MILLON $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | |||||||||||||||||||||||||||||||||||
| Yields & rates in annualized nominal % | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | AVERAGE BALANCE | INT | ||||||||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||||||||||||||||||
| Cash and Deposits in Banks | 28,743 | 0.1 | % | 36,428 | 0.2 | % | 41,863 | 0.3 | % | 51,749 | 0.3 | % | 61,991 | 0.6 | % | |||||||||||||||||||||||||
| Goverment & Securities at fair value trhough P&L | 275 | -53.4 | % | 342 | -9.3 | % | 209 | 34.9 | % | 279 | 8.6 | % | 284 | 18.2 | % | |||||||||||||||||||||||||
| Loans & Other Financing | ||||||||||||||||||||||||||||||||||||||||
| Financial Sector | 407 | 5.8 | % | 489 | 6.5 | % | 486 | 7.5 | % | 489 | 9.0 | % | 292 | 10.9 | % | |||||||||||||||||||||||||
| Private Sector | 33,833 | 5.1 | % | 43,259 | 5.8 | % | 47,627 | 6.1 | % | 55,590 | 6.0 | % | 59,228 | 6.1 | % | |||||||||||||||||||||||||
| Other debt securities | 74 | 10.7 | % | 86 | 9.2 | % | 31 | 13.1 | % | 0 | 0.0 | % | 0 | 0.0 | % | |||||||||||||||||||||||||
| Other interest-earning assets | 1,740 | 0.0 | % | 2,162 | 0.2 | % | 2,943 | -0.1 | % | 3,084 | -0.1 | % | 3,357 | -0.2 | % | |||||||||||||||||||||||||
| Total interest-earning assets | 65,072 | 2.5 | % | 82,766 | 3.1 | % | 93,159 | 3.4 | % | 111,191 | 3.2 | % | 125,152 | 3.2 | % | |||||||||||||||||||||||||
| Non interest-earning assets | 4,123 | 3,231 | 2,724 | 93 | 3,960 | |||||||||||||||||||||||||||||||||||
| Total Average Assets | 69,195 | 85,997 | 95,883 | 111,284 | 129,112 | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||||||||||||
| Public Sector | 412 | 0.0 | % | 534 | 0.0 | % | 873 | 0.0 | % | 1,517 | 0.0 | % | 1,818 | 0.0 | % | |||||||||||||||||||||||||
| Private Sector | 44,096 | 1.6 | % | 53,499 | 1.9 | % | 60,155 | 2.0 | % | 71,749 | 2.3 | % | 76,150 | 2.1 | % | |||||||||||||||||||||||||
| BCRA and other financial institutions | 1,740 | 3.9 | % | 2,455 | 4.5 | % | 2,468 | 4.9 | % | 2,117 | 4.7 | % | 2,612 | 5.2 | % | |||||||||||||||||||||||||
| Subordinated bonds | 12,987 | 7.7 | % | 15,024 | 7.1 | % | 15,868 | 7.2 | % | 17,821 | 7.0 | % | 20,564 | 7.4 | % | |||||||||||||||||||||||||
| Other interest-bearing liabilities | 2 | 0.0 | % | 1 | 0.0 | % | 9 | 0.0 | % | 1 | 0.0 | % | 1 | 0.0 | % | |||||||||||||||||||||||||
| Total int.-bearing liabilities | 59,237 | 3.0 | % | 71,513 | 3.0 | % | 79,373 | 3.1 | % | 93,205 | 3.2 | % | 101,145 | 3.3 | % | |||||||||||||||||||||||||
| Total non int.-bearing liab. | 13,381 | 16,873 | 16,378 | 19,027 | 23,812 | |||||||||||||||||||||||||||||||||||
| Total Average Liabilities | 72,618 | 88,386 | 95,751 | 112,232 | 124,957 | |||||||||||||||||||||||||||||||||||
| Assets Performance | 413 | 645 | 775 | 887 | 1,010 | |||||||||||||||||||||||||||||||||||
| Liabilities Performance | 442 | 547 | 606 | 741 | 832 | |||||||||||||||||||||||||||||||||||
| Net Interest Income | -29 | 98 | 169 | 146 | 178 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 65,072 | 82,766 | 93,159 | 111,191 | 125,152 | |||||||||||||||||||||||||||||||||||
| Net Interest Margin (NIM) | -0.2 | % | 0.5 | % | 0.7 | % | 0.5 | % | 0.6 | % | ||||||||||||||||||||||||||||||
In 3Q19 Banco Macro’s net fee income totaled Ps.3.8 billion, 11% or Ps.362 million higher than in 2Q19 and 31% or Ps.885 million higher than the same period of last year.
In the quarter, fee income totaled Ps.4.1 billion, 13% or Ps.470 million higher than in 2Q19. Fees charged on deposit accounts and credit card fees stand out; with a 10% and 21% increase respectively QoQ. On a yearly basis, fee income increased 37% or Ps.1.1 billion.
In the quarter, total fee expenses increased 39% or Ps.108 million. On a yearly basis, fee expenses increased 167% or Ps.242 million.
| NET FEE INCOME | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| AFIP & Collection services | 20 | 21 | 22 | 23 | 24 | 4 | % | 20 | % | |||||||||||||||||||
| Fees charged on deposit accounts | 1,408 | 1,594 | 1,528 | 1,450 | 1,599 | 10 | % | 14 | % | |||||||||||||||||||
| Mutual funds & securities fees | 21 | 16 | 21 | 94 | 51 | -46 | % | 143 | % | |||||||||||||||||||
| ATM transactions fees | 14 | 16 | 158 | 180 | 232 | 29 | % | 1557 | % | |||||||||||||||||||
| ANSES fees | 9 | 8 | 8 | 9 | 8 | -11 | % | -11 | % | |||||||||||||||||||
| Insurance fees | 181 | 173 | 225 | 233 | 230 | -1 | % | 27 | % | |||||||||||||||||||
| Corporate services fees | 279 | 317 | 332 | 404 | 496 | 23 | % | 78 | % | |||||||||||||||||||
| Financial agent fees (Provinces) | 153 | 170 | 172 | 210 | 216 | 3 | % | 41 | % | |||||||||||||||||||
| Debit card fees | 138 | 188 | 181 | 192 | 229 | 19 | % | 66 | % | |||||||||||||||||||
| Credit card fees | 642 | 778 | 757 | 727 | 883 | 21 | % | 38 | % | |||||||||||||||||||
| Credit related fees | 148 | 195 | 147 | 148 | 172 | 16 | % | 16 | % | |||||||||||||||||||
| Total fee income | 3,013 | 3,476 | 3,551 | 3,670 | 4,140 | 13 | % | 37 | % | |||||||||||||||||||
| Total fee expense | 145 | 217 | 241 | 279 | 387 | 39 | % | 167 | % | |||||||||||||||||||
| Net fee income | 2,868 | 3,259 | 3,310 | 3,391 | 3,753 | 11 | % | 31 | % | |||||||||||||||||||
In 3Q19 Net Income from financial assets and liabilities at fair value through profit or loss totaled Ps.659 million, increasing 395% or Ps.526 million compared to 2Q19. Profit from investment in derivative financing instruments and profit from sale of financial assets at fair value stand out with a Ps.747 million and Ps.199 million increase respectively. Income from government securities decreased Ps.367 million in 3Q19.
9
| | 3Q19 Earnings Release |
| NET INCOME FROM FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Profit or loss from government securities | 215 | 165 | 165 | 39 | -328 | - | - | |||||||||||||||||||||
| Profit or loss from private securities | 66 | 168 | 149 | 145 | 136 | -6 | % | 107 | % | |||||||||||||||||||
| Profit or loss from investment in derivative financing instruments | 235 | -22 | 301 | -12 | 735 | - | 213 | % | ||||||||||||||||||||
| Profit or loss from other financial assets | 61 | 65 | 51 | 49 | 12 | -76 | % | -80 | % | |||||||||||||||||||
| Profit or loss from investment in equity instruments | 1 | 4 | 1,401 | 9 | 0 | -100 | % | -100 | % | |||||||||||||||||||
| Profit or loss from the sale of financial assets at fair value | -85 | -16 | -91 | -97 | 102 | - | - | |||||||||||||||||||||
| Income from financial assets at fair value through profit or loss | 493 | 364 | 1,976 | 133 | 657 | 394 | % | 33 | % | |||||||||||||||||||
| Profit or loss from derivative financing instruments | 6 | 0 | -2 | 0 | 2 | 100 | % | -67 | % | |||||||||||||||||||
| Income from financial liabilities at fair value through profit or loss | 6 | 0 | -2 | 0 | 2 | 100 | % | -67 | % | |||||||||||||||||||
| NET INCOME FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS | 499 | 364 | 1,974 | 133 | 659 | 395 | % | 32 | % | |||||||||||||||||||
In the quarter Other Operating Income totaled Ps.1.1 billion, increasing 9% or Ps.88 million compared to 2Q19. On a yearly basis Other Operating Income increased 11% or Ps.131 million.
| OTHER OPERATING INCOME | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| IN MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Credit and debit cards | 0 | 0 | 37 | 55 | 44 | -20 | % | 100 | % | |||||||||||||||||||
| Lease of safe deposit boxes | 57 | 62 | 72 | 80 | 91 | 14 | % | 60 | % | |||||||||||||||||||
| Other service related fees | 240 | 192 | 257 | 170 | 319 | 88 | % | 33 | % | |||||||||||||||||||
| Sale of real estate and other non-financial assets | 0 | 24 | 4 | 166 | 0 | -100 | % | 0 | % | |||||||||||||||||||
| Other adjustments and interest from other receivables | 73 | 69 | 133 | 168 | 165 | -2 | % | 125 | % | |||||||||||||||||||
| Initial recognition of loans | 47 | -51 | 28 | 42 | -8 | - | - | |||||||||||||||||||||
| Sale of property, plant and equipment | 1 | 36 | 2 | 3 | 5 | 67 | % | 400 | % | |||||||||||||||||||
| Others | 784 | 81 | 2,581 | 299 | 455 | 52 | % | -42 | % | |||||||||||||||||||
| Other Operating Income | 1,202 | 413 | 3,114 | 983 | 1,071 | 9 | % | -11 | % | |||||||||||||||||||
In 3Q19 Banco Macro’s administrative expenses plus employee benefits totaled Ps.7.3 billion, 2% or Ps.114 million higher than the previous quarter. On a yearly basis administrative expenses plus employee benefits increased 63% or Ps.2.8 billion, due to higher expenses related to employee benefits (salary increases and severance pay) and other administrative expenses (including Director’s fees).
Employee benefits decreased 10% or Ps.488 million QoQ (the main driver for the decrease were lower social security contributions (Ps.887 million)). On a yearly basis Employee benefits increased 63% or Ps.1.7 billion.
As of 3Q19, the accumulated efficiency ratio reached 32.5%, improving from the 33.5% posted in 2Q19 and improving from the 37.6% posted in 3Q18. In 3Q19 expenses (employee benefits + G&A expenses + depreciation and impairment of assets) increased 2%, while income (net interest income + net fee income + differences in quoted prices of gold and foreign currency + other operating income + net income from financial assets at fair value through profit or loss – (Turnover Tax + Insurance on deposits)) increased 26% compared to 2Q19.
10
| | 3Q19 Earnings Release |
| PERSONNEL & ADMINISTRATIVE EXPENSES | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Employee benefits | 2,720 | 3,124 | 3,133 | 4,916 | 4,428 | -10 | % | 63 | % | |||||||||||||||||||
| Remunerations | 2,076 | 2,350 | 2,299 | 3,004 | 3,156 | 5 | % | 52 | % | |||||||||||||||||||
| Social Security Contributions | 403 | 453 | 476 | 1,555 | 668 | -57 | % | 66 | % | |||||||||||||||||||
| Compensation and bonuses | 174 | 235 | 278 | 276 | 491 | 78 | % | 182 | % | |||||||||||||||||||
| Employee services | 67 | 86 | 80 | 81 | 113 | 40 | % | 69 | % | |||||||||||||||||||
| Administrative Expenses | 1,776 | 2,105 | 2,096 | 2,301 | 2,903 | 26 | % | 63 | % | |||||||||||||||||||
| Taxes | 214 | 236 | 266 | 300 | 322 | 7 | % | 50 | % | |||||||||||||||||||
| Maintenance, conservation fees | 243 | 293 | 280 | 316 | 335 | 6 | % | 38 | % | |||||||||||||||||||
| Directors & statutory auditors´fees | 174 | 233 | 323 | 290 | 555 | 91 | % | 219 | % | |||||||||||||||||||
| Security services | 200 | 195 | 212 | 220 | 253 | 15 | % | 27 | % | |||||||||||||||||||
| Electricity & Communications | 154 | 201 | 208 | 235 | 242 | 3 | % | 57 | % | |||||||||||||||||||
| Other professional fees | 145 | 191 | 164 | 199 | 219 | 10 | % | 51 | % | |||||||||||||||||||
| Rental agreemets | 88 | 105 | 53 | 48 | 38 | -21 | % | -57 | % | |||||||||||||||||||
| Advertising & publicity | 81 | 146 | 51 | 92 | 103 | 12 | % | 27 | % | |||||||||||||||||||
| Personnel allowances | 30 | 32 | 33 | 40 | 43 | 8 | % | 43 | % | |||||||||||||||||||
| Stationary & Office Supplies | 17 | 16 | 18 | 19 | 27 | 42 | % | 59 | % | |||||||||||||||||||
| Insurance | 15 | 24 | 21 | 25 | 28 | 12 | % | 87 | % | |||||||||||||||||||
| Hired administrative services | 5 | 5 | 4 | 4 | 2 | -50 | % | -60 | % | |||||||||||||||||||
| Other | 410 | 429 | 463 | 513 | 736 | 43 | % | 80 | % | |||||||||||||||||||
| Total Administrative Expenses | 4,496 | 5,229 | 5,229 | 7,217 | 7,331 | 2 | % | 63 | % | |||||||||||||||||||
| Total Employees | 9,096 | 9,028 | 8,978 | 8,893 | 8,843 | |||||||||||||||||||||||
| Branches | 473 | 471 | 464 | 463 | 462 | |||||||||||||||||||||||
| Efficiency ratio | 39.1 | % | 35.8 | % | 28.6 | % | 38.3 | % | 31.1 | % | ||||||||||||||||||
| Accumulated efficiency ratio | 37.6 | % | 37.9 | % | 28.6 | % | 33.5 | % | 32.5 | % | ||||||||||||||||||
In 3Q19, Other Operating Expenses totaled Ps.6.6 billion, increasing 68% or Ps.2.7 billion QoQ. Turnover Tax and Others stand out with a 16% (Ps.284 million) increase and a 125% (Ps.2.1 billion) increase respectively QoQ. The increase in Others is related to losses in the amount of Ps.2.6 billion due to the reprofiling of short term debt (Lecaps, Lelinks, Letes, Lecer notes) announced by the Government of Argentina on August 29, 2019 and higher credit card charges and taxes. On a yearly basis Other Operating Expenses increased 146% or Ps. 3.9 billion.
| OTHER OPERATING EXPENSES | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Turnover Tax | 1,600 | 1,749 | 1,855 | 1,831 | 2,115 | 16 | % | 32 | % | |||||||||||||||||||
| Other provision charges | 224 | 527 | 185 | 236 | 471 | 100 | % | 110 | % | |||||||||||||||||||
| Deposit Guarantee Fund Contributions | 82 | 91 | 104 | 118 | 135 | 14 | % | 65 | % | |||||||||||||||||||
| Donations | 20 | 18 | 35 | 37 | 36 | -3 | % | 80 | % | |||||||||||||||||||
| Insurance claims | 16 | 17 | 11 | 10 | 13 | 30 | % | -19 | % | |||||||||||||||||||
| Others | 751 | 811 | 914 | 1,718 | 3,866 | 125 | % | 415 | % | |||||||||||||||||||
| Other Operating Expenses | 2,693 | 3,213 | 3,104 | 3,950 | 6,636 | 68 | % | 146 | % | |||||||||||||||||||
In 3Q19 Banco Macro's income tax resulted in a Ps.1.3 billion gain. During this quarter and in accordance with applicable Income Tax Law and regulations and the evolution of Consumer Price Index the Bank decided to adjust income tax by inflation.
11
| | 3Q19 Earnings Release |
Financial Assets
Private sector financing
The volume of “core” financing to the private sector (including loans, financial trust and leasing portfolio) totaled Ps.192.8 billion, increasing 10% or Ps.18.1 billion QoQ and 15% or Ps.24.5 billion YoY.
Within commercial loans, growth was driven by Overdrafts; with a 78% or Ps.12.3 billion increase QoQ.
The main growth in consumer lending was driven by credit card loans which grew 12% or Ps.3.4 million QoQ.
As of 3Q19, Banco Macro´s market share over private sector loans was 7.7%.
| FINANCING TO THE PRIVATE SECTOR | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Overdrafts | 16,121 | 16,897 | 11,132 | 15,832 | 28,131 | 78 | % | 74 | % | |||||||||||||||||||
| Discounted documents | 22,281 | 24,218 | 26,250 | 21,380 | 21,669 | 1 | % | -3 | % | |||||||||||||||||||
| Mortgages loans | 12,999 | 12,667 | 12,733 | 12,172 | 12,944 | 6 | % | 0 | % | |||||||||||||||||||
| Pledged loans | 5,010 | 4,333 | 4,325 | 3,934 | 4,507 | 15 | % | -10 | % | |||||||||||||||||||
| Personal loans | 56,691 | 56,413 | 57,095 | 56,459 | 56,200 | 0 | % | -1 | % | |||||||||||||||||||
| Credit Card loans | 27,701 | 29,567 | 29,515 | 29,676 | 33,108 | 12 | % | 20 | % | |||||||||||||||||||
| Others | 21,091 | 19,717 | 23,393 | 24,766 | 23,633 | -5 | % | 12 | % | |||||||||||||||||||
| Interest | 4,912 | 6,900 | 7,366 | 8,518 | 10,136 | |||||||||||||||||||||||
| Total loan portfolio | 166,806 | 170,712 | 171,809 | 172,737 | 190,328 | 10 | % | 14 | % | |||||||||||||||||||
| Total loans in Pesos | 121,837 | 125,374 | 117,783 | 119,172 | 136,488 | 15 | % | 12 | % | |||||||||||||||||||
| Total loans in USD | 44,969 | 45,338 | 54,026 | 53,565 | 53,840 | 1 | % | 20 | % | |||||||||||||||||||
| Financial trusts | 630 | 1,384 | 1,373 | 985 | 1,371 | 39 | % | 118 | % | |||||||||||||||||||
| Leasing | 485 | 446 | 386 | 335 | 292 | -13 | % | -40 | % | |||||||||||||||||||
| Others | 407 | 367 | 434 | 650 | 840 | 29 | % | 106 | % | |||||||||||||||||||
| Total other financing | 1,522 | 2,197 | 2,193 | 1,970 | 2,503 | 27 | % | 64 | % | |||||||||||||||||||
| Total other financing in Pesos | 1,215 | 1,787 | 1,578 | 1,017 | 1,500 | 47 | % | 23 | % | |||||||||||||||||||
| Total other financing in USD | 307 | 410 | 615 | 953 | 1,003 | 5 | % | 227 | % | |||||||||||||||||||
| Total financing to the private sector | 168,328 | 172,909 | 174,002 | 174,707 | 192,831 | 10 | % | 15 | % | |||||||||||||||||||
| EOP FX (Pesos per USD) | 40.8967 | 37.8083 | 43.3533 | 42.4483 | 57.5583 | 36 | % | 41 | % | |||||||||||||||||||
| USD financing / Financing to the private sector | 27 | % | 26 | % | 31 | % | 31 | % | 28 | % | ||||||||||||||||||
12
| | 3Q19 Earnings Release |
Public Sector Assets
In 3Q19, the Bank’s public sector assets (excluding LELIQs) to total assets ratio was 4.9%, higher than the 2.9% registered in the previous quarter, and higher than the 3.4% posted in 3Q18.
In 3Q19, a 36% or Ps.30.5 billion decrease in LELIQs securities position stands out. Banco Macro’s strategy during the quarter was to allocate excess liquidity in loans and other financial instruments.
In 3Q19 Other government securities increased 82% or Ps.8.7 billion.
| PUBLIC SECTOR ASSETS | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Lebacs | 651 | 0 | 0 | 0 | 1,020 | 0 | % | 57 | % | |||||||||||||||||||
| Leliqs | 34,260 | 55,070 | 98,918 | 85,344 | 54,898 | -36 | % | 60 | % | |||||||||||||||||||
| Other | 8,770 | 10,333 | 10,901 | 10,630 | 19,346 | 82 | % | 121 | % | |||||||||||||||||||
| Government securities | 43,681 | 65,403 | 109,819 | 95,974 | 75,264 | -22 | % | 72 | % | |||||||||||||||||||
| Provincial loans | 1,856 | 1,685 | 1,197 | 976 | 340 | -65 | % | -82 | % | |||||||||||||||||||
| Loans | 1,856 | 1,685 | 1,197 | 976 | 340 | -65 | % | -82 | % | |||||||||||||||||||
| Purchase of government bonds | 60 | 75 | 0 | 0 | 0 | 0 | % | -100 | % | |||||||||||||||||||
| Other receivables | 60 | 75 | 0 | 0 | 0 | 0 | % | -100 | % | |||||||||||||||||||
| TOTAL PUBLIC SECTOR ASSETS | 45,597 | 67,163 | 111,016 | 96,950 | 75,604 | -22 | % | 66 | % | |||||||||||||||||||
| TOTAL PUBLIC SECTOR LIABILITIES | 0 | 0 | 0 | 0 | 0 | 0 | % | 0 | % | |||||||||||||||||||
| Net exposure | 45,597 | 67,163 | 111,016 | 96,950 | 75,604 | -22 | % | 66 | % | |||||||||||||||||||
| TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ) | 10,686 | 12,093 | 12,098 | 11,606 | 19,686 | 70 | % | 84 | % | |||||||||||||||||||
| TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)/TOTAL ASSETS | 3.4 | % | 3.5 | % | 3.1 | % | 2.9 | % | 4.9 | % | ||||||||||||||||||
Funding
Deposits
Banco Macro’s deposit base totaled Ps.259.2 billion in 3Q19, decreasing 9% or Ps.25.1 billion QoQ and increasing 22% or Ps.46.6 billion YoY and representing 79% of the Bank’s total liabilities.
On a quarterly basis, private sector deposits decreased 8% or Ps.22 billion, while public sector deposits decreased 13% or Ps.3.1 billion.
The decrease in private sector deposits was led by time deposits, which decreased 19% or Ps.28.4 billion, while demand deposits increased 4% or Ps.4.4 billion QoQ.
Within private sector deposits, peso deposits decreased 6% or Ps.9.8 billion, while US dollar deposits decreased 36% or USD765 million.
In line with Banco Macro’s strategy of reducing Leliq exposure during the quarter, the Bank proactively decided to reduce its peso deposit base.
As of 3Q19, Banco Macro´s market share over private sector deposits was 6.5%.
13
| | 3Q19 Earnings Release |
| DEPOSITS | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Public sector | 20,074 | 19,354 | 28,192 | 23,565 | 20,438 | -13 | % | 2 | % | |||||||||||||||||||
| Financial sector | 150 | 148 | 211 | 244 | 293 | 20 | % | 95 | % | |||||||||||||||||||
| Private sector | 192,345 | 218,452 | 244,208 | 260,450 | 238,471 | -8 | % | 24 | % | |||||||||||||||||||
| Checking accounts | 23,808 | 24,375 | 24,510 | 29,161 | 35,112 | 19 | % | 37 | % | |||||||||||||||||||
| Savings accounts | 64,110 | 68,695 | 66,673 | 78,759 | 77,195 | 18 | % | 47 | % | |||||||||||||||||||
| Time deposits | 98,431 | 118,034 | 148,833 | 147,678 | 119,235 | -1 | % | 84 | % | |||||||||||||||||||
| Other | 5,996 | 7,348 | 4,192 | 4,852 | 6,929 | 16 | % | -2 | % | |||||||||||||||||||
| Total | 212,569 | 237,954 | 272,611 | 284,259 | 259,202 | -9 | % | 22 | % | |||||||||||||||||||
| Pesos | 140,558 | 166,597 | 187,632 | 191,752 | 178,844 | -7 | % | 27 | % | |||||||||||||||||||
| Foreign Currency (Pesos) | 72,010 | 71,358 | 84,978 | 92,507 | 80,358 | -13 | % | 12 | % | |||||||||||||||||||
| EOP FX (Pesos per USD) | 40.8967 | 37.8083 | 43.3533 | 42.4483 | 57.5583 | 36 | % | 41 | % | |||||||||||||||||||
| Foreign Currency (USD) | 1,761 | 1,887 | 1,960 | 2,179 | 1,396 | -36 | % | -21 | % | |||||||||||||||||||
| USD Deposits / Total Deposits | 34 | % | 30 | % | 31 | % | 33 | % | 31 | % | ||||||||||||||||||
Banco Macro’s transactional deposits represent approximately 47% of its total deposit base as of 3Q19. These accounts are low cost and are not sensitive to interest rate increases.
Other sources of funds
In 3Q19, the total amount of other sources of funds decreased 24% or Ps.21.1 billion compared to 2Q19. In 3Q19 Shareholder’s Equity increased 22% or Ps.13.6 billion due to the positive result registered in the quarter. Subordinated corporate bonds increased 38% or Ps.6.5 billion QoQ as a consequence of the argentine peso devaluation against the US dollar registered during the quarter.
| OTHER SOURCES OF FUNDS | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Central Bank of Argentina | 22 | 24 | 20 | 24 | 31 | 29 | % | 41 | % | |||||||||||||||||||
| Banks and international institutions | 2,389 | 2,568 | 2,345 | 1,743 | 2,660 | 53 | % | 11 | % | |||||||||||||||||||
| Financing received from Argentine financial institutions | 815 | 406 | 745 | 430 | 652 | 52 | % | -20 | % | |||||||||||||||||||
| Subordinated corporate bonds | 16,796 | 15,288 | 17,836 | 17,192 | 23,726 | 38 | % | 41 | % | |||||||||||||||||||
| Corporate bonds | 6,513 | 6,377 | 6,314 | 6,193 | 6,008 | -3 | % | -8 | % | |||||||||||||||||||
| Shareholders' equity | 50,963 | 54,636 | 62,085 | 62,733 | 76,373 | 22 | % | 50 | % | |||||||||||||||||||
| Total other source of funds | 77,498 | 79,299 | 89,345 | 88,315 | 109,450 | 24 | % | 41 | % | |||||||||||||||||||
Liquid Assets
In 3Q19, the Bank’s liquid assets amounted to Ps.158.8 billion, showing a 16% or Ps.30 billion decrease QoQ, and a 44% or Ps.48.8 billion increase on a yearly basis.
In 3Q19, LELIQs own portfolio decreased 36% or Ps.30.5 billion, in line with the strategy adopted by the Bank to reduce its exposure to Central Bank Notes.
In 3Q19 Banco Macro’s liquid assets to total deposits ratio reached 61%.
| LIQUID ASSETS | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Cash | 68,919 | 74,766 | 75,309 | 96,427 | 96,609 | 0 | % | 40 | % | |||||||||||||||||||
| Guarantees for compensating chambers | 5,384 | 5,720 | 5,735 | 5,992 | 7,102 | 19 | % | 32 | % | |||||||||||||||||||
| Call | 720 | 405 | 178 | 990 | 150 | -85 | % | -79 | % | |||||||||||||||||||
| LEBAC own portfolio | 651 | 0 | 0 | 0 | 0 | 0 | % | -100 | % | |||||||||||||||||||
| Leliq own portfolio | 34,260 | 55,070 | 98,918 | 85,344 | 54,898 | -36 | % | 60 | % | |||||||||||||||||||
| Total | 109,934 | 135,961 | 180,140 | 188,753 | 158,759 | -16 | % | 44 | % | |||||||||||||||||||
| Liquid assets to total deposits | 51.7 | % | 57.1 | % | 66.1 | % | 66.4 | % | 61.0 | % | ||||||||||||||||||
14
| | 3Q19 Earnings Release |
Solvency
Banco Macro continued showing high solvency levels in 3Q19 with an integrated capital (RPC) of Ps.86.8 billion over a total capital requirement of Ps.26.8 billion. Banco Macro’s excess capital in 3Q19 was 224% or Ps.60.1 billion.
The regulatory capital ratio (as a percentage of risk-weighted assets- RWA) was 26.5% in 3Q19, TIER1 Ratio stands at 18.9%.
The Bank’s aim is to make the best use of this excess capital.
| MINIMUM CAPITAL REQUIREMENT | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Credit risk requirement | 15,338 | 15,609 | 16,329 | 16,641 | 19,343 | 16 | % | 26 | % | |||||||||||||||||||
| Market risk requirement | 303 | 212 | 284 | 421 | 778 | 85 | % | 157 | % | |||||||||||||||||||
| Operational risk requirement | 4,199 | 4,616 | 5,189 | 5,959 | 6,627 | 11 | % | 58 | % | |||||||||||||||||||
| Total capital requirements | 19,840 | 20,437 | 21,802 | 23,021 | 26,748 | 16 | % | 35 | % | |||||||||||||||||||
| Ordinary Capital Level 1 (COn1) | 49,097 | 52,285 | 58,520 | 59,406 | 69,629 | 17 | % | 42 | % | |||||||||||||||||||
| Deductible concepts Level 1 (COn1) | -3,186 | -3,047 | -3,708 | -4,160 | -7,807 | 88 | % | 145 | % | |||||||||||||||||||
| Aditional Capital Level 1 (CAn1) | 0 | 0 | 0 | 0 | 0 | 4 | % | 6 | % | |||||||||||||||||||
| Capital Level 2 (COn2) | 18,058 | 16,875 | 19,092 | 18,740 | 24,972 | 33 | % | 38 | % | |||||||||||||||||||
| Integrated capital - RPC (i) | 63,969 | 66,113 | 73,903 | 73,986 | 86,793 | 17 | % | 36 | % | |||||||||||||||||||
| Excess capital | 44,129 | 45,676 | 52,101 | 50,965 | 60,045 | 18 | % | 36 | % | |||||||||||||||||||
| Risk-weighted assets - RWA (ii) | 242,411 | 249,781 | 266,581 | 281,700 | 327,312 | 16 | % | 35 | % | |||||||||||||||||||
| Regulatory Capital ratio [(i)/(ii)] | 26.4 | % | 26.5 | % | 27.7 | % | 26.3 | % | 26.5 | % | ||||||||||||||||||
| Ratio TIER 1 [Capital Level 1/RWA] | 18.9 | % | 19.7 | % | 20.6 | % | 19.6 | % | 18.9 | % | ||||||||||||||||||
| RWA - (ii): Risk Weighetd Assets, considering total capital requirements. | ||||||||||||||||||||||||||||
Asset Quality
In 3Q19, Banco Macro’s non-performing to total financing ratio reached a level of 1.9%, down from 2.12% in 2Q19, and higher than the 1.63% posted in 3Q18.
Consumer portfolio non-performing loans were unchanged while Commercial portfolio non-performing loans decreased 33bp in 3Q19.
The coverage ratio reached 124.16% in 23Q19. Write-offs over total loans totaled 0.4%.
The Bank is committed to continue working in this area to maintain excellent asset quality standards.
| ASSET QUALITY | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Commercial portfolio | 69,497 | 71,202 | 68,794 | 72,524 | 88,833 | 22 | % | 28 | % | |||||||||||||||||||
| Non-performing | 624 | 917 | 618 | 575 | 414 | -28 | % | -34 | % | |||||||||||||||||||
| Consumer portfolio | 110,948 | 113,538 | 114,936 | 112,938 | 116,576 | 3 | % | 5 | % | |||||||||||||||||||
| Non-performing | 2,316 | 2,617 | 3,111 | 3,363 | 3,490 | 4 | % | 51 | % | |||||||||||||||||||
| Total portfolio | 180,445 | 184,740 | 183,730 | 185,462 | 205,409 | 11 | % | 14 | % | |||||||||||||||||||
| Non-performing | 2,940 | 3,534 | 3,729 | 3,938 | 3,904 | -1 | % | 33 | % | |||||||||||||||||||
| Commercial non-perfoming ratio | 0.90 | % | 1.29 | % | 0.90 | % | 0.79 | % | 0.47 | % | ||||||||||||||||||
| Consumer non-perfoming ratio | 2.09 | % | 2.30 | % | 2.71 | % | 2.98 | % | 2.99 | % | ||||||||||||||||||
| Total non-performing/ Total portfolio | 1.63 | % | 1.91 | % | 2.03 | % | 2.12 | % | 1.90 | % | ||||||||||||||||||
| Total allowances | 3,853 | 4,161 | 4,446 | 4,573 | 4,847 | 6 | % | 26 | % | |||||||||||||||||||
| Coverage ratio w/allowances | 131.05 | % | 117.74 | % | 119.23 | % | 116.14 | % | 124.16 | % | ||||||||||||||||||
| Write Offs | 383 | 556 | 967 | 649 | 830 | 28 | % | 117 | % | |||||||||||||||||||
| Write Offs/ Total portfolio | 0.21 | % | 0.30 | % | 0.53 | % | 0.35 | % | 0.40 | % | ||||||||||||||||||
15
| | 3Q19 Earnings Release |
CER Exposure and Foreign Currency Position
| CER EXPOSURE | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| CER adjustable ASSETS | ||||||||||||||||||||||||||||
| Private sector loans(*) | 6,754 | 6,801 | 6,776 | 6,753 | 6,980 | 3 | % | 3 | % | |||||||||||||||||||
| Other loans | 1 | 1 | 1 | 3 | 3 | 0 | % | 200 | % | |||||||||||||||||||
| Total CER adjustable assets | 6,755 | 6,802 | 6,777 | 6,756 | 6,983 | 3 | % | 3 | % | |||||||||||||||||||
| CER adjustable LIABILITIES | ||||||||||||||||||||||||||||
| Deposits(*) | 835 | 929 | 348 | 273 | 199 | -27 | % | -76 | % | |||||||||||||||||||
| Total CER adjustable liabilities | 835 | 929 | 348 | 273 | 199 | -27 | % | -76 | % | |||||||||||||||||||
| NET CER EXPOSURE | 5,920 | 5,873 | 6,429 | 6,483 | 6,784 | 5 | % | 15 | % | |||||||||||||||||||
| (*) Includes Loans &Time Deposits CER adjustable (UVAs) | ||||||||||||||||||||||||||||
| FOREIGN CURRENCY POSITION | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| In MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Cash and deposits in Banks | 38,954 | 42,745 | 46,286 | 57,164 | 55,629 | -3 | % | 43 | % | |||||||||||||||||||
| Cash | 3,351 | 3,287 | 3,031 | 3,367 | 9,746 | 189 | % | 191 | % | |||||||||||||||||||
| Central Bank of Argentina | 25,970 | 25,617 | 33,803 | 36,741 | 19,732 | -46 | % | -24 | % | |||||||||||||||||||
| Other financial institutions local and abroad | 9,354 | 13,385 | 9,450 | 17,053 | 26,147 | 53 | % | 180 | % | |||||||||||||||||||
| Others | 279 | 456 | 2 | 3 | 4 | 33 | % | -99 | % | |||||||||||||||||||
| Net Income from financial instruments at fair value through P&L | 250 | 388 | 298 | 380 | 237 | -38 | % | -5 | % | |||||||||||||||||||
| Derivatives | 0 | 3 | 1 | 0 | 0 | 0 | % | 0 | % | |||||||||||||||||||
| Other financial assets | 1,698 | 1,547 | 1,724 | 1,771 | 2,639 | 49 | % | 55 | % | |||||||||||||||||||
| Loans and other financing | 45,775 | 46,040 | 54,891 | 54,591 | 54,793 | 0 | % | 20 | % | |||||||||||||||||||
| Other financial institutions | 567 | 480 | 513 | 453 | 193 | -57 | % | -66 | % | |||||||||||||||||||
| Non financial private sector & foreign residents | 45,208 | 45,560 | 54,378 | 54,138 | 54,600 | 1 | % | 21 | % | |||||||||||||||||||
| Other debt securities | 3,105 | 1,217 | 1,313 | 3,143 | 1,487 | -53 | % | -52 | % | |||||||||||||||||||
| Guarantess received | 988 | 929 | 1,756 | 1,241 | 1,713 | 38 | % | 73 | % | |||||||||||||||||||
| Investment in equity instruments | 7 | 6 | 7 | 7 | 10 | 43 | % | 43 | % | |||||||||||||||||||
| Investment in associates and joint ventures | 0 | 0 | 1 | 0 | -1 | - | - | |||||||||||||||||||||
| Total Assets | 90,777 | 92,875 | 106,277 | 118,297 | 116,507 | -2 | % | 28 | % | |||||||||||||||||||
| Deposits | 72,011 | 71,358 | 84,978 | 92,507 | 80,358 | -13 | % | 12 | % | |||||||||||||||||||
| Non financial public sector | 2,348 | 2,295 | 2,102 | 2,807 | 2,772 | -1 | % | 18 | % | |||||||||||||||||||
| Financial sector | 114 | 100 | 167 | 163 | 220 | 35 | % | 93 | % | |||||||||||||||||||
| Non financial private sector & foreign residents | 69,549 | 68,963 | 82,709 | 89,537 | 77,366 | -14 | % | 11 | % | |||||||||||||||||||
| Derivatives | 1 | 0 | 0 | 1 | 0 | -100 | % | -100 | % | |||||||||||||||||||
| Other liabilities from financial intermediation | 3,516 | 2,619 | 3,749 | 3,457 | 4,947 | 43 | % | 41 | % | |||||||||||||||||||
| Non-subordinated corporate bonds | 2,405 | 2,599 | 2,541 | 1,924 | 2,872 | 49 | % | 19 | % | |||||||||||||||||||
| Subordinated corporate bonds | 16,796 | 15,288 | 17,836 | 17,192 | 23,726 | 38 | % | 41 | % | |||||||||||||||||||
| Other liabilities | 40 | 35 | 43 | 43 | 61 | 42 | % | 53 | % | |||||||||||||||||||
| Total Liabilities | 94,769 | 91,899 | 109,147 | 115,124 | 111,964 | -3 | % | 18 | % | |||||||||||||||||||
| NET FX POSITION (Pesos) | -3,992 | 976 | -2,870 | 3,173 | 4,543 | 43 | % | - | ||||||||||||||||||||
| EOP FX (Pesos per USD) | 40.8967 | 37.8083 | 43.3533 | 42.4483 | 57.5583 | 36 | % | 41 | % | |||||||||||||||||||
| NET FX POSITION (USD) | -97.6 | 25.8 | -66.2 | 74.7 | 78.9 | 6 | % | - | ||||||||||||||||||||
16
| | 3Q19 Earnings Release |
Relevant and Recent Events
| · | Interest Payment Class C Peso denominated Notes.In October 2019, the Bank paid quarterly interest on Class C Peso denominated notes in the amount of Ps.457,223,242.10 |
| · | Interest Payment Class A Subordinated Notes.In November 2019, the Bank paid semiannual interest on Class A Subordinated notes in the amount of USD.13,500,000. |
| · | Interest Payment Class B Peso denominated Notes.In November 2019, the Bank paid semiannual interest on Class B Peso denominated notes in the amount of Ps.252,804,212 |
| · | Repurchase of Class C Peso denominated Notes.During 3Q19 the Bank repurchased Class C Peso denominated notes in the aggregate amount of Ps.227,500,000. |
| · | Repurchase of Class B peso denominated notes.During 3Q19, the Bank repurchased an aggregate amount of Ps.353,906,000 of Class B peso denominated notes. |
| · | Capital Reduction (Share Cancellation) in August 2019 the capital stock of the Bank was reduced in the amount of Ps.30,265,275 pursuant to the resolutions adopted by the Special and General Shareholders’ meeting held on April 30th, 2019. |
| · | Class B peso denominated notes cancellation. In Octobter 2019, the Bank cancelled class B peso denominated notes in the aggregate amount of Ps.501,861,000. |
| · | Merger with Banco del Tucumán. On October 11,2019 through Communication “C” 84993 the Central Bank of Argentina announced that Banco Macro had completed the merger with Banco del Tucumán. |
| · | Rating Actions. Banco Macro’s ratings downgraded.Following the downgrading of the Government of Argentina’s Bond Ratings, Fitch Ratings and Moody’s Investor Services downgraded Banco Macro’s global ratings. Particularly Banco Macro’s senior unsecured debt rating to CCC/RR4 from B/RR4, and the foreign currency subordinated debt rating to CCC-/RR6 from B-/RR6 (Fitch Ratings) and in the case of Moody’s investor services the senior unsecured debt rating to Caa2 from B2, and the foreign currency subordinated debt rating to Caa3 from B3. |
Regulatory Changes
| · | Inflation Adjustment.In February 2019, through Communication “A” 6651 the Central Bank of Argentina (BCRA) established that financial institutions should restate financial statements in accordance with IAS 29 starting from January 1st, 2020. As of the date of this report the Bank has quantified the effects of the application of Expected losses of IFRS 9 “Financial Instruments” and IAS 29 “Financial Reporting in Hyperinflationary Economies”. As of September 30, 2019 equity would be approximately Ps.88.7 billion, and net income for the nine months ended September 30, 2019 would be ~Ps.12.547 billion. |
| · | “Reprofiling” of Short term financial assets.On August 28th 2019, the Government of Argentina through Decree 596/2019 of the Executive Branch announced the “reprofiling” of short term debt notes, extending maturities of LECAPs (notes that capitalize interest), LETEs (USD denominated notes), LECER (inflation linked notes) and LELINKs (notes linked to USD). The above mentioned Decree established a new schedule for payments: 15% of face value on the original maturity date, 25% at 90 days from the original maturity date, and the remaining 60% 180 days after the original maturity date. In the case of LECAPs with maturities after January 1st 2020, any remaining payment will be canceled 90 days after the original maturity date. |
| Banco Macro held some of the financial assets included in the “reprofiling” announced by the Government, prior to the “reprofiling” the book value of these financial assets totaled Ps.8.5 billion and after the “reprofiling” the book value totaled Ps.5.9 billion resulting in a Ps.2.6 billion loss registered in Other operating expenses. As of September 30, 2019 the book value of these “reprofiled” financial assets totaled Ps.6 billion. |
17
| | 3Q19 Earnings Release |
| · | Income Tax. Inflation Adjustment. Fiscal Reform Law 27,430 as amended by Law 27,468 established the terms and conditions for inflation adjustments for tax purposes for fiscal years starting from January 2018. |
| o | Inflation adjustment will be applicable in any fiscal year in which CPI exceeds a 100% increase over the last 36 months. |
| o | Inflation adjustment will be applicable if CPI exceeds 55% for the first fiscal period, 30% for the second fiscal period, 15% for the third fiscal period. |
| o | The resulting inflation adjusted tax should be considered as follows: one third during the first fiscal year, and the rest in same proportions over the next two fiscal years. |
| · | Dividend Payments. Central Bank’s Approval. In August 2018 the Central Bank of Argentina through Communication “A” 6768 established that effective August 30, 2019 all financial institutions should get Central Bank’s approval before paying dividends. The Central Bank will consider and assess the impact of the application of I.F.R.S9 Expected Losses and Inflation accounting pursuant to communication “A” 6551. |
| · | Dividend Payments. Central Bank’s Approval. In August 2018 the Central Bank of Argentina through Communication “A” 6768 established that effective August 30, 2019 all financial institutions should get Central Bank’s approval before paying dividends. The Central Bank will consider and assess the impact of the application of I.F.R.S9 Expected Losses and Inflation accounting pursuant to communication “A” 6551. |
| · | Currency Controls. In September 2019 through Decree 609/2019 of the Executive Branch and Communication “A” 6770 the Central Bank of Argentina established currency controls: |
| o | Individuals are allowed to buy up to USD 10,000 per month. Transactions above USD 1,000 have to be made electronically and no cash transactions are allowed above that limit. |
| o | Corporates are not allowed to buy USD for saving purposes, they can still buy USD to pay imports or for servicing debt, and will need Central Bank’s approval for pre canceling debt, paying dividends abroad, transferring USD abroad. |
| o | Global Net Position (FX): the global position (on daily basis) cannot be higher than USD 2,500,000 or 4% of integrated capital (down from 5%) |
| · | Currency Controls. In October 2019 the Central Bank of Argentina through Communication “A” 6815 and effective from October 28, 2019 resolved to update and tighten the measures adopted in Communication “A” 6670 so as to lower the limit for USD purchases for individuals from USD 10,000 to USD 200 per month and sets a limit of USD 100 for cash purchases. |
| · | Reserve Requirements. On October 28, through Communication “A” 6817 the Central Bank of Argentina (BCRA) established that starting November 1st, 2019 reserve requirements on demand deposits (checking and saving accounts) could no longer be set up with Leliqs. As of this date reserve requirements for demand deposits stand at 45% (40% should be set up in cash and up to 5% can be set up with Treasury Bonds 2020) |
18
| | 3Q19 Earnings Release |
| QUARTERLY BALANCE SHEET | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| IN MILLIONS $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||
| Cash and deposits in Banks | 68,919 | 74,766 | 75,309 | 96,427 | 96,609 | 0 | % | 40 | % | |||||||||||||||||||
| Cash | 8,828 | 10,697 | 8,770 | 9,247 | 15,478 | 67 | % | 75 | % | |||||||||||||||||||
| Central Bank of Argentina | 50,418 | 50,211 | 57,079 | 70,116 | 54,967 | -22 | % | 9 | % | |||||||||||||||||||
| Other locan & foreign entities | 9,394 | 13,402 | 9,456 | 17,062 | 26,160 | 53 | % | 178 | % | |||||||||||||||||||
| Other | 279 | 456 | 4 | 2 | 4 | 100 | % | -99 | % | |||||||||||||||||||
| Debt securities at fair value through profit & loss | 1,760 | 2,635 | 2,964 | 1,980 | 1,496 | -24 | % | -15 | % | |||||||||||||||||||
| Derivatives | 71 | 17 | 42 | 17 | 56 | 229 | % | -21 | % | |||||||||||||||||||
| Repo Transactions | - | - | - | - | - | 0 | % | 0 | % | |||||||||||||||||||
| Other financial assets | 3,309 | 3,000 | 3,170 | 4,100 | 4,080 | 0 | % | 23 | % | |||||||||||||||||||
| Loans & other recievables | 174,288 | 178,875 | 177,717 | 178,851 | 194,354 | 9 | % | 12 | % | |||||||||||||||||||
| Non Financial Public Sector | 1,943 | 1,776 | 1,304 | 1,105 | 471 | -57 | % | -76 | % | |||||||||||||||||||
| Financial Sector | 4,647 | 5,574 | 3,784 | 4,024 | 2,423 | -40 | % | -48 | % | |||||||||||||||||||
| Non Financial private sector and foreign | 167,698 | 171,525 | 172,629 | 173,722 | 191,460 | 10 | % | 14 | % | |||||||||||||||||||
| Other debt securities | 44,976 | 64,585 | 109,048 | 97,381 | 76,570 | -21 | % | 70 | % | |||||||||||||||||||
| Financial assets in guarantee | 6,241 | 6,756 | 7,300 | 7,157 | 10,710 | 50 | % | 72 | % | |||||||||||||||||||
| Investments in equity instruments | 52 | 52 | 1,504 | 1,510 | 1,512 | 0 | % | 2808 | % | |||||||||||||||||||
| Investments in other companies (subsidiaries and joint ventures) | 85 | 109 | 124 | 124 | 135 | 9 | % | 59 | % | |||||||||||||||||||
| Property, plant and equipment | 7,898 | 9,003 | 9,849 | 10,112 | 10,691 | 6 | % | 35 | % | |||||||||||||||||||
| Intangible assets | 1,147 | 1,401 | 1,548 | 1,869 | 2,049 | 10 | % | 79 | % | |||||||||||||||||||
| Deferred income tax assets | 57 | 47 | 60 | 77 | 2,776 | 3505 | % | 4770 | % | |||||||||||||||||||
| Other non financial assets | 2,216 | 833 | 1,078 | 986 | 1,178 | 19 | % | -47 | % | |||||||||||||||||||
| Non-current assets held for sale | 127 | 804 | 583 | 441 | 441 | 0 | % | 247 | % | |||||||||||||||||||
| TOTAL ASSETS | 311,146 | 342,883 | 390,296 | 401,032 | 402,657 | 0 | % | 29 | % | |||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||||
| Deposits | 212,569 | 237,954 | 272,611 | 284,259 | 259,202 | -9 | % | 22 | % | |||||||||||||||||||
| Non Financial Public Sector | 20,074 | 19,354 | 28,192 | 23,565 | 20,438 | -13 | % | 2 | % | |||||||||||||||||||
| Financial Sector | 150 | 148 | 211 | 244 | 293 | 20 | % | 95 | % | |||||||||||||||||||
| Non Financial private sector and foreign | 192,345 | 218,452 | 244,208 | 260,450 | 238,471 | -8 | % | 24 | % | |||||||||||||||||||
| Liabilities at fair value through profit & loss | - | - | - | - | - | 0 | % | 0 | % | |||||||||||||||||||
| Derivatives | 212 | 1 | 111 | 11 | 147 | 1236 | % | -31 | % | |||||||||||||||||||
| Repo Transactions | - | 165 | - | 278 | 2,167 | 679 | % | 100 | % | |||||||||||||||||||
| Other financial liabilities | 12,795 | 15,319 | 16,622 | 14,833 | 16,711 | 13 | % | 31 | % | |||||||||||||||||||
| Financig received from Central Bank and Other Financial Institutions | 3,246 | 2,998 | 3,111 | 2,198 | 3,345 | 52 | % | 3 | % | |||||||||||||||||||
| Issued Corporate Bonds | 6,513 | 6,377 | 6,314 | 6,193 | 6,008 | -3 | % | -8 | % | |||||||||||||||||||
| Current income tax liabilities | 2,109 | 2,947 | 4,567 | 4,149 | 4,508 | 9 | % | 114 | % | |||||||||||||||||||
| Subordinated corporate bonds | 16,796 | 15,288 | 17,836 | 17,192 | 23,726 | 38 | % | 41 | % | |||||||||||||||||||
| Provisions | 798 | 1,046 | 970 | 1,026 | 1,329 | 30 | % | 67 | % | |||||||||||||||||||
| Deferred income tax liabilities | 132 | 275 | 404 | 475 | 1 | -100 | % | -99 | % | |||||||||||||||||||
| Other non financial liabilities | 5,011 | 5,875 | 5,662 | 7,682 | 9,137 | 19 | % | 82 | % | |||||||||||||||||||
| TOTAL LIABILITIES | 260,181 | 288,245 | 328,208 | 338,296 | 326,281 | -4 | % | 25 | % | |||||||||||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||
| Capital Stock | 670 | 670 | 670 | 670 | 639 | -5 | % | -5 | % | |||||||||||||||||||
| Issued Shares premium | 12,429 | 12,429 | 12,428 | 12,428 | 12,428 | 0 | % | 0 | % | |||||||||||||||||||
| Adjustment to Shareholders' Equity | 5 | 5 | 5 | 5 | 5 | 0 | % | 0 | % | |||||||||||||||||||
| Reserves | 23,290 | 21,996 | 21,996 | 34,807 | 34,837 | 0 | % | 50 | % | |||||||||||||||||||
| Retained earnings | 3,265 | 3,265 | 18,994 | -211 | -211 | - | - | |||||||||||||||||||||
| Other accumulated comprehensive income | 819 | 543 | 649 | 658 | 1,141 | 73 | % | 39 | % | |||||||||||||||||||
| Net income for the period / fiscal year | 10,486 | 15,729 | 7,343 | 14,376 | 27,534 | 92 | % | 163 | % | |||||||||||||||||||
| Shareholders' Equity attributable to parent company | 50,963 | 54,636 | 62,085 | 62,733 | 76,373 | 22 | % | 50 | % | |||||||||||||||||||
| Shareholders' Equity attributable to non controlling interest | 3 | 2 | 3 | 3 | 3 | 0 | % | 0 | % | |||||||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 50,965 | 54,638 | 62,088 | 62,736 | 76,376 | 22 | % | 50 | % | |||||||||||||||||||
19
| | 3Q19 Earnings Release |
| INCOME STATEMENT | MACRO Consolidated | Variation | ||||||||||||||||||||||||||
| IN MILLION $ | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | QoQ | YoY | |||||||||||||||||||||
| Interest Income | 16,809 | 23,814 | 24,395 | 31,334 | 35,582 | 14 | % | 112 | % | |||||||||||||||||||
| Interest Expense | 6,486 | 11,526 | 11,464 | 14,549 | 15,525 | 7 | % | 139 | % | |||||||||||||||||||
| Net Interest Income | 10,323 | 12,288 | 12,931 | 16,785 | 20,057 | 19 | % | 94 | % | |||||||||||||||||||
| Fee income | 3,013 | 3,476 | 3,551 | 3,670 | 4,140 | 13 | % | 37 | % | |||||||||||||||||||
| Fee expense | 144 | 217 | 241 | 279 | 387 | 39 | % | 169 | % | |||||||||||||||||||
| Net Fee Income | 2,869 | 3,259 | 3,310 | 3,391 | 3,753 | 11 | % | 31 | % | |||||||||||||||||||
| Subtotal (Net Interest Income + Net Fee Income) | 13,192 | 15,547 | 16,241 | 20,176 | 23,810 | 18 | % | 80 | % | |||||||||||||||||||
| Net Income from financial instruments at Fair Value Through Profit & Loss | 499 | 364 | 1,974 | 133 | 659 | 395 | % | 32 | % | |||||||||||||||||||
| Result from assets at amortised cost | -3 | 1 | -17 | - | -1 | - | -67 | % | ||||||||||||||||||||
| Difference in quoted prices of gold and foreign currency | -1,244 | 729 | -51 | 333 | 1,497 | 350 | % | - | ||||||||||||||||||||
| Other operating income | 1,202 | 413 | 3,113 | 983 | 1,071 | 9 | % | -11 | % | |||||||||||||||||||
| Provision for loan losses | 732 | 836 | 2,154 | 848 | 824 | -3 | % | 13 | % | |||||||||||||||||||
| Net Operating Income | 12,914 | 16,218 | 19,107 | 20,777 | 26,212 | 26 | % | 103 | % | |||||||||||||||||||
| Personnel expenses | 2,720 | 3,124 | 3,133 | 4,916 | 4,428 | -10 | % | 63 | % | |||||||||||||||||||
| Administrative expenses | 1,776 | 2,105 | 2,096 | 2,301 | 2,903 | 26 | % | 63 | % | |||||||||||||||||||
| Depreciation and impairment of assets | 187 | 215 | 290 | 317 | 366 | 15 | % | 96 | % | |||||||||||||||||||
| Other operating expense | 2,693 | 3,213 | 3,104 | 3,950 | 6,636 | 68 | % | 146 | % | |||||||||||||||||||
| Operating Income | 5,538 | 7,561 | 10,484 | 9,293 | 11,879 | 28 | % | 114 | % | |||||||||||||||||||
| Income from associates and joint ventures | 12 | 33 | 26 | 613 | 17 | -97 | % | 42 | % | |||||||||||||||||||
| Net Income before income tax on cont. operations | 5,550 | 7,594 | 10,510 | 9,906 | 9,906 | 0 | % | 78 | % | |||||||||||||||||||
| Income tax on continuing operations | 1,718 | 2,351 | 3,166 | 2,874 | -1,263 | - | - | |||||||||||||||||||||
| Net Income from continuing operations | 3,832 | 5,243 | 7,344 | 7,032 | 13,159 | 87 | % | 243 | % | |||||||||||||||||||
| Net Income for the period | 3,832 | 5,243 | 7,344 | 7,032 | 13,159 | 87 | % | 243 | % | |||||||||||||||||||
| Net Income of the period attributable to parent company | 3,828 | 5,243 | 7,343 | 7,033 | 13,158 | 87 | % | 244 | % | |||||||||||||||||||
| Net income of the period attributable to non-controlling interests | 4 | - | 1 | -1 | 1 | - | -75 | % | ||||||||||||||||||||
| Other Comprehensive Income | 313 | -276 | 106 | 10 | 481 | 4710 | % | 54 | % | |||||||||||||||||||
| Foreign currency translation differences in financial statements conversion | 454 | -119 | 211 | -35 | 533 | - | 17 | % | ||||||||||||||||||||
| Profits or losses from financial assets measured at fair value through other comprehensive income (FVOCI) (IFRS 9(4.1.2)(a) | -141 | -157 | -105 | 45 | -52 | - | - | |||||||||||||||||||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 4,145 | 4,967 | 7,450 | 7,042 | 13,640 | 94 | % | 229 | % | |||||||||||||||||||
| Total Comprehensive Income attributable to parent Company | 4,142 | 4,967 | 7,449 | 7,043 | 13,639 | 94 | % | 229 | % | |||||||||||||||||||
| Total Comprehensive Income attributable to non-controlling interests | 3 | - | 1 | -1 | 1 | - | -67 | % | ||||||||||||||||||||
20
| | 3Q19 Earnings Release |
| QUARTERLY ANNUALIZED RATIOS | MACRO Consolidated | |||||||||||||||||||
| 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | ||||||||||||||||
| Profitability & performance | ||||||||||||||||||||
| Net interest margin | 13.4 | % | 16.9 | % | 17.2 | % | 18.0 | % | 21.2 | % | ||||||||||
| Net interest margin adjusted (exc. FX) | 15.3 | % | 16.0 | % | 17.3 | % | 17.7 | % | 19.7 | % | ||||||||||
| Net fee income ratio | 20.0 | % | 12.0 | % | 23.1 | % | 12.3 | % | 10.4 | % | ||||||||||
| Efficiency ratio | 39.1 | % | 35.8 | % | 28.6 | % | 38.3 | % | 31.1 | % | ||||||||||
| Net fee income as % of A&G Expenses | 51.0 | % | 33.7 | % | 80.9 | % | 32.2 | % | 33.4 | % | ||||||||||
| Return on average assets | 5.4 | % | 6.4 | % | 8.4 | % | 7.1 | % | 12.4 | % | ||||||||||
| Return on average equity | 29.0 | % | 38.8 | % | 50.0 | % | 44.4 | % | 74.9 | % | ||||||||||
| Liquidity | ||||||||||||||||||||
| Loans as a percentage of total deposits | 82.0 | % | 75.2 | % | 65.2 | % | 62.9 | % | 75.0 | % | ||||||||||
| Liquid assets as a percentage of total deposits | 51.7 | % | 57.1 | % | 66.1 | % | 66.4 | % | 61.0 | % | ||||||||||
| Capital | ||||||||||||||||||||
| Total equity as a percentage of total assets | 16.4 | % | 15.9 | % | 15.9 | % | 15.6 | % | 19.0 | % | ||||||||||
| Regulatory capital as % of APR | 26.4 | % | 26.5 | % | 27.7 | % | 26.3 | % | 26.5 | % | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Allowances over total loans | 2.1 | % | 2.3 | % | 2.4 | % | 2.5 | % | 2.4 | % | ||||||||||
| Non-performing financing as a percentage of total financing | 1.6 | % | 1.9 | % | 2.0 | % | 2.1 | % | 1.9 | % | ||||||||||
| Coverage ratio w/allowances | 131.1 | % | 117.7 | % | 119.2 | % | 116.1 | % | 124.2 | % | ||||||||||
| Cost of Risk | 1.8 | % | 1.9 | % | 4.9 | % | 1.9 | % | 1.7 | % | ||||||||||
| ACCUMULATED ANNUALIZED RATIOS | MACRO Consolidated | |||||||||||||||||||
| 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | ||||||||||||||||
| Profitability & performance | ||||||||||||||||||||
| Net interest margin | 14.0 | % | 14.9 | % | 17.2 | % | 17.6 | % | 19.1 | % | ||||||||||
| Net interest margin adjusted (exc. FX) | 15.2 | % | 15.4 | % | 17.3 | % | 17.5 | % | 18.5 | % | ||||||||||
| Net fee income ratio | 21.5 | % | 16.7 | % | 23.1 | % | 17.7 | % | 14.8 | % | ||||||||||
| Efficiency ratio | 37.6 | % | 37.9 | % | 28.6 | % | 33.5 | % | 32.5 | % | ||||||||||
| Net fee income as % of A&G Expenses | 57.2 | % | 44.0 | % | 80.9 | % | 52.8 | % | 45.6 | % | ||||||||||
| Return on average assets | 5.6 | % | 5.8 | % | 8.4 | % | 7.7 | % | 9.4 | % | ||||||||||
| Return on average equity | 27.8 | % | 30.7 | % | 50.0 | % | 47.0 | % | 57.3 | % | ||||||||||
| Liquidity | ||||||||||||||||||||
| Loans as a percentage of total deposits | 82.0 | % | 75.2 | % | 65.2 | % | 62.9 | % | 75.0 | % | ||||||||||
| Liquid assets as a percentage of total deposits | 51.7 | % | 57.1 | % | 66.1 | % | 66.4 | % | 61.0 | % | ||||||||||
| Capital | ||||||||||||||||||||
| Total equity as a percentage of total assets | 16.4 | % | 15.9 | % | 15.9 | % | 15.6 | % | 19.0 | % | ||||||||||
| Regulatory capital as % of APR | 26.4 | % | 26.5 | % | 27.7 | % | 26.3 | % | 26.5 | % | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Allowances over total loans | 2.1 | % | 2.3 | % | 2.4 | % | 2.5 | % | 2.4 | % | ||||||||||
| Non-performing financing as a percentage of total financing | 1.6 | % | 1.9 | % | 2.0 | % | 2.1 | % | 1.9 | % | ||||||||||
| Coverage ratio w/allowances | 131.1 | % | 117.7 | % | 119.2 | % | 116.1 | % | 124.2 | % | ||||||||||
| Cost of Risk | 1.7 | % | 1.7 | % | 4.9 | % | 3.4 | % | 2.8 | % | ||||||||||
21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: November 8, 2019
| MACRO BANK INC. | |||
| By: | /s/ Jorge Francisco Scarinci | ||
| Name: Jorge Francisco Scarinci | |||
| Title: Chief Financial Officer | |||