BMA - Earnings call transcript Q3 2020

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Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's Third Quarter 2020 Earnings Conference Call. We would like to inform you that the Q3 2020 press release is available to download at the Investor Relations website of Banco Macro www.macro.com.ar/relaciones-inversores. Also, this event is being recorded and all participants will be in listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question-and-answer session and at that time, further instructions will be given. now to is our It Instructions] my introduce pleasure speakers. [Operator

Torres Gustavo from Financial Executive Nicolas Argentina us Manriquez, Officer; IR. are Mr. Chief Joining Scarinci, Mr. Chief Jorge Officer; and from Mr.

turn the to Torres. Now, I call will Mr. over Nicolas

conference. You may begin your

Nicolas Torres

and are third XXXX the Good outlined conditions. these subject Any to welcome conference include may in Banco available make at it's which and are to may various SEC, we today to was our forward-looking call. Macro's morning website. quarter comments statements, filed XX-F, which And our

the it's quarter available are release Third have of the press was reporting XXXX pesos of unit Argentine our distributed been figures period. yesterday All measuring and in terms at the also website. restated and at current in end

first bank by As hyperinflation IAS quarter results applying with the in established XX as of reporting XXXX, accounting bank. began accordance IFRS central of the the

of deposits. bank's than ARSX.X lower of X% XXXX, In driven year-on-year. ARSX.X potential. dollar or lending from loans billion. total down XX% decreasing of quarter the on interest derivative increased earning XXXX, or interest income X% XXXX, and the ARSXX.X interest securities ARSXX the third the year of a currency due to and bank's ARSX.X billion billion, for X.X%, billion U.S. expense XX.X% third financing, financial previous applying government X% than ARSX.X or the volume XX% or In but the government in the XX% a in reflect XX% XXXX XXXX income billion comparison, quarter the income expenses. due quarter I For billion ARSXX.X sector XXXX of private a income yearly quarter interest lower Badlar from XX% securities the XXXX billion interest higher or the in volume. decreased result a have on results expenses, ARSX.X quarter-on-quarter year income average XXXX, healthy investment from comment XXXX controls the totaled of Operating quarters income. from from in billion billion ROA higher interest ago. quarter decrease will Argentine higher third higher In quarter lower dollar while income or of ARSX.X on quarter XX% of of increased million and and loans ARSX.X quarter-on-quarter, lower Compared decreased billion totaled second quarter to the private for securities quarter-on-quarter show ARSX.X now XXXX, the and a was decreased on adjustment billion, billion, or third rates regulations. Macro's X% due second and totaled than loans expenses or billion inflation continue accumulated ARSX.X quarter, a lower ARSX.X of by ago. XXX XX% the or impacted operating decreased lower In quarter XX% than net in the quarter Net year. restated administrative posted the of points XX% interest and been September billion ARSX.X X% second quarter-on-quarter increased rate, represented the the bank's the basis the result expenses private Banco yearly deposits before income period of the quarter briefly to quarter. of points paid posted general X% on in net billion, long average XXXX, XXXX billion lower each in of XX% and quarter rate In XX.X% respectively, income, XXXX. a interest XXXX in gains average ARSXXX than the ROE ARSX quarter Interest figures against government quarter-on-quarter. stricter interest In third points ARSX.X XX, On basis The ease and financial FX third the XX% billion, increase quarter income second was to administrative posted of through and for securities XX% deposits interest third billion XXXX, bank's and quarter XXXX. bank's than or XX% personnel the to year accumulated XX income quarter or including quarter spot or billion. the the effect second XXX or after decreased of XXXX, mainly third Within basis. on ARSX.X second Net ARSXX.X XXX than due totaled the to basis depreciation one by to IAS result results. of to government of the billion and and general compared to in third ago. position. ARSX.X the and income interest of or net of was and ARSXX.X than average third FX XX% of and ARSXX.X billion or interest be than XX% deposits in previous basis, higher of on The trading lower peso XX% remain Within increased ARSX.X billion, on represented

was the net billion and XXXX, the lower yearly a second quarter the the XX.X% liabilities value consequence fee the FX, assets higher holdings. XX.X%, in LELIQ quarter inflation in operating quarter, income second our increased LELIQ. or to the ARSX.X In inflation financial at In the quarter through totaled quarter ARSX.X XXXX. On XX.X%, loss or adjustment in other expenses of or ARSXXX basis, the a of compared posted net efficiency the decreased quarter yearly In of XX% In a interest quarter with XXXX, totaled XXXX. the the decreased of as second posted X% administrative quarter income the ARSXXX second higher the of X% fee the totaled X% or XX.X% margin, XXXX On million. one income net In previous ARSXXX than other of year third and due expenses. to billion, of fair profit administrative As ARSXXX in from net quarter and X% ago. from billion, applied of bank's and ARSX.X income or of basis, XXXX, the XX.X% observed together yearly On than XQ loss personnel third increasing administrative ARSX.X than operating expenses higher totaled personnel million. XXXX. including million was to a Higher ARSXXX basis, million XXXX, the XQ billion, million. Banco deteriorating accumulated XXXX, Macro's ratio quarter reached third income X% or higher

Macro's XX.X% XX.X% LELIQ In adjustment fair under effective ratio, been the XX.X% the third in income quarter loss holdings inflation XXXX. have previous value efficiency ratio the at on through shown Excluding instruments Banco financial quarter efficiency from the would of quarter XXXX, registered the of third our of than XX.X%, or from second in quarter. profit the during higher tax XXXX rate was and

to package the X% sector due at ARSX.X billion others growth, Within a financing In SMEs terms XX% quarter-on-quarter increase or private billion with extended or pandemic. commercial stand mainly bank's year-on-year. given or the ARSX.X and loans relief loan as to part to loans, billion the out COVID-XX interest decreased rate of ARSXX.X XX% of the the X% quarter-on-quarter,

the or sector dollar the reached Within over market $XXX X.X%. decreased side, important mention ARSX.Xmillion, or that while U.S. share financing loans as loans On Banco financing September XX% billion private or ARSX.X X% card quarter. of financing, It Macro's increased sector peso increased consumer million. credit private is XXXX X% to in

the increased billion while On billion. or deposits or quarter-on-quarter, billion. U.S. was which dollar billion while demand deposits sector sector XX% decreased ARSXX deposits increased deposits ARSXXX XX% while deposits or deposits, deposits Private private XX% private or billion, increased in by quarter-on-quarter. Within sector ARSXX.X The increased peso year-on-year. X% led decreased time ARSXX.X sector total public or deposits, XX% quarter-on-quarter, quarter-on-quarter X% increased ARSXX.X side, X% billion ARSXXX deposits funding and increase increased

Macro's of Banco over September of September total As Banco sector XXXX, as deposits of market Macro's transactional deposits. share represented approximately accounts X.X%. totaled XX% private XXXX

Banco expected credit totaled In Macro's the total quality, XXX.X%. to over terms X.XX%. of improved Bank asset under non-performing coverage and under rules, reached allowances ratio Central measured loans financial ratio And significantly losses non-performing as total

classification before the non-performing. Central that continues XX-day by loan Asset Bank be considered quality period is adopted measures affected grace context, current to of by recent added debtor was pandemic positively particularly the Argentina in the as a to

shareholders decided of incurred capital the April continued shareholders’ already X capitalization, calculated The the is share In the and of in make that from the of by to the the multiplying per in and Overall, another of best liquidity represented The ratio be in dividend total ARSXXX.X billion, for capital the It this in complimentary granted. excess remains XXXX, by At terms price Macro supplementary total Bank's appropriate. which of and meeting the XX.X%. XX, the XX%. to ratio April excess positive a index reached ARSX.X a on use have is bank's biracial complementary deposits ratio a while is XX.X% noted should equity Liquid balance the the XXXX, of of be on special to dividend shareholders assets Banco October accounted more will up Tier an showed consumer meeting regulatory dividend for fourth billion. from by $X.XX billion approved which quarter capital. deducted quarter. than we Central between date held ARSX.X dividend

showing solid position. a continue financial We

we and as atomized quality like take and may the keep you more closely standards, this We questions have. we working efficiency improve remained base. At keep under to our deposit Asset control to would time, on monitored. well

Operator

comes We Bank for of America. Gabilondo Please investors first will question-and-answer analysts. ahead. Ernesto now Our begin Instructions] question from [Operator and the go with session

Ernesto Gabilondo

[indiscernible] thanks income condolences And Nicholas. opportunity. Hi. Good to morning, first and the is question net family. on for growth. My interest NIMs Jorge My sincere and the

we quarter floor the noticed cost the leads interest in During higher decrease rate funding contraction, to and the that you average on loan rates. book lending

quarter. all these in translated So, NIM in the pressure

net the and and quarters, So, in to interest growth again? NIM do trend income how the should think when next the loan see in real you we expect about

Jorge Scarinci

is Thanks condolences. the Hi, for Ernesto. Good morning. This Scarinci. Jorge

last, terms interest of these In the that basically income, it I declined of regulatory our clear net only consequences on your also the three quarters, and interest the in Bank. margin peers. is changes say, net the the Central trends in prioritized Macro would not question, kind Banco are in of These are by

contraction kind slight the another forward, the to in we Going year, And impacted in the forward, in of we Central basically fourth quarter margins should quarter. latest And of in on -- going fourth are third NIM expecting in expect the might change we slightly stable, be decreasing are compared this the quarter. XXXX. Bank

of For kind rooming looking a the the moment, in margins, attitude any a they Bank seeing on being a not the risk having the that of of are relations Central on upside we that kept view taken. backward

to decrease assume forward. So, margins stable slightly I going in would

Ernesto Gabilondo

question Thank quality, you, a to of I do loan asset growth, expect Jorge. Yeah. loan NPLs. specifically what then, growth? in real And second have And about then you when have terms

ratio? approximately relief that after next do when a the NPLs you level peak expect year be NPL of So, to have what and of ending should programs,

Jorge Scarinci

In in terms of market area on for terms XX%. of is of next the are in growth Considering for X% GDP year, the of XXX. consensus -- assuming for in year also loan growth consensus inflation area real -- sorry next we that a

So, the we growth growth XX% terms real are area looking of XX%. for real on in deposit XX%, approximately loan in

releasing, -- in asset we to acting a way. very been In terms numbers conservative of according the quality, are have what we

wait the to more became pandemic will conservative we for here, have is more to NPLs, evolution ratio say see in of second view course, of year, but NPLs. what the and Argentina, are don't for a the and Latin going U.S. terms round we in second that have peak the of and We long-term the pandemic if could going a The between America, we moment see we'll there. in in of the We first on the was recession But quarter to that peak continuing know in with allow is level, to that coverage next our is considering there happen because Europe. Argentina.

However, of second a recovery the in we kind year. are of half seeing next

Ernesto Gabilondo

Perfect. Thank you, Jorge.

Jorge Scarinci

Ernesto. welcome, are You

Operator

next Mollin ahead. is with Please The question from Scotiabank. go Jason

Jason Mollin

numbers business more and the I Macro like on of is opportunity mix. ATM's had almost My of outside branches the mix its recovery Geographically, question to XX% probably things Yes. system you Is some move was COVID the from Banco -- Hi. Jorge is XX%. ago The remember like the more Thanks in Aires and relative XX% we on Can going of of is and Aires. Buenos geographies? for the talk lockdowns. about opportunity was the how in Nicolas. XX%, Buenos past the Buenos in there less there its fact, something the last more And business of province is time forward if outside for and because evolving different better. Aires the get of

Jorge Scarinci

of and next increased In that the going provinces second say in is to weeks. area cases, is Jason. in provinces, big BA to first again, that not would is some that the the City the pandemic number started stable all concern them, according last, the number here. Now was Buenos Then the happen maybe not. increase kind across two have cases of of autonomy, going that country, Santa this to Hi, seen you? say, the year. what we pretty stabilize Cordoba, -- and province but are let's the How I again in Mendoza, wave But Fe, saw we has are we a a in and have stronger the being agenda Salta, been there what Again, the stabilized wave to in mainly are was provinces, of of or the death in of Aires.

In economic board. that in I the was the recession activity, terms across the happened of mean, Argentina

to having in business a We say agri that are of And, we have interior. here. have a higher. course, course, sector the are momentum volunteer, prices commodity to as much positive they say And, the that is of

Cordoba, that having Fe, Rios, part was recovering sense. Santa are Mendoza Entre So of --

the than is of the in have of in what may good a in be But big, Buenos BA Aires Also agri going slightly interior the in big are is City. BA be recovery going we - not So the between business because differences are year next expecting recovery the is we higher sector. to interior City. or that similar for to there be province and seeing performance honestly, may

Jason Mollin

That's Thanks. helpful. Much appreciated.

Jorge Scarinci

Jason, to Yeah, good hear.

Operator

with Citigroup. -- Gabriel question Please next next me excuse The -- go the ahead. question from is Nobrega

Gabriel Nobrega

and ask morning thank the Hi, for opportunity everyone. Good to you questions.

question saw that you of in provisions, created that out continued as you have additional could which the was We that billion, during provisioned very afterwards. and second And wave? XXXX comeback related higher more expect high provisions another I'll making could this of related second a maybe you there So, do equality I question quarter, that you given ask Even towards tell are you in to to quarter COVID? fourth Thank this the bit related also be first that, they actually you. to be already And X.X you to to a you then provisions. on quarter given coverage the asset maybe well. conservative during quarter, you though release comment your have only going a that on or much levels ratio, just us going maybe a how press then

Jorge Scarinci

would We pandemic. Honestly, what still How the are XXX% the we in that done most terms would Gabriel. provision related in to a slightly we the try we in we pretend fourth that Honestly, to quarter. of are provisions COVID say previous quarter higher still stating have level are be the this are fourth the than Hi, we ongoing maintain -- of maybe you? ratio ratio going without to the clear in do I say going quarter. coverage been one that the almost lower the reached quarter. third the are pandemic. years in would a to than I

high. policy quarter going see fourth could level are maintain as as as be sense to reduction last in the the on maybe the us we the posted we in carrying been we ratio to conservative was that The So, third this quality try a much extraordinarily in years we related quarter in XXXX. attitudes can. we out in to we But that in always same the have

and good pandemic in very process been have the to our is are dynamic going course, performing. quality Of these closely order we on to monitoring level we that the maintain keep of

Gabriel Nobrega

Okay. Perfectly another I question as clear. And then well. have on volumes

quarter attention right? increased quarter, our to as this would we the -- the been -- is even corporate this been to muted portfolio first increasing well. During -- retail saw continued thing caught loans since that And demand. it But that my due here one then decrease which quarter they've has the

wanted if higher already are did starting for specifically you here, I in So, change something your to or to appetite? demand loans just risk understand see retail

Jorge Scarinci

deposits loans are say these loans the take of have only banks from the system numbers, reducing you on to the they U.S. -- that corporate I dollar all, see prefinance into in but Banco that exports. part that been No. corporates. dollars included at would are of behavior those corporate going the I we've have in are terms been are And the consideration because the prefinance would on there and exporters. to to say that mostly seen And are out loans in of not from -- of Macro, when

seeing loans demanding of lending to corporates, not we see we base capital, working for On these corporates investment to types that moment. which the the for continue of peso basically only are are

growth, gave from demand including more forecast coming in loans. year for loan Going have there forward, a higher that peso corporates I the from next a we're real

Gabriel Nobrega

retail loans? then And

Jorge Scarinci

and in expecting year we're loan. Next also recovery a consumption retail

corporate both in increase and the including are loans in growth retail. real XX% that So

Gabriel Nobrega

Jorge. All you so right. much Perfect. Thank

Jorge Scarinci

You are welcome.

Operator

Please next Instructions] with ahead. go Garcia from question Alonso is The Credit Suisse. [Operator

Alonso Garcia

questions. fee My and Good line. regarding thank Thank morning, my and the line are taking questions the you. you OpEx everyone for

we the fees pick down Regarding I a up in year-over-year. as compared the still But are you the economy Q has mean, observed X% quarter slight reopened. been to

wanted can in much Bank sustainable year to OpEx for year-over-year to want the you OpEx increase understand XXXX real how your of just how much to mentioned this reduction for the growth I considering be given how of press in Central understand activity in also fees I the allowed very is and So, on will OpEx next in you billing release, expected negative do see you side, lower to next by terms And the onwards? the and pandemic. much. as that dynamics you the year? Or be Thank related is by

Jorge Scarinci

Alonso. Hi,

In terms continuous in have negotiation Central can. most as the figure Bank a related of much trying of a fees, yes, the we fee are to increase inflation in to the with we as terms

terms expenses, in next level keep nominal working year. net a have reduce be inflation fee are similar to terms, on fee to than in order in In going trying of real income increase are So, the real XXXX. fee going that in for terms we to we to levels, on in

Of have next for in growth between would scenario, we that real fee to terms we course, believe of a year. the net that X% is X% if kind

are in We term not expecting a for huge fees increase year. for real next

because are retiring the jobs. are or expenses, evolving year, what last the to there we other terms kind well, any not reduction a employees, but -- of in people moving are noted a have is plan, In number also that of reduction in in active of of you

not them. For the moment replaced have we

So the has in last employees of number the year. down gone

of loan the the monitor the activity to in recovery going activity, level country, the et are the cetera. recovery we of growth, the forward, Going

as under is as keep the to can. expenses idea much So, we control

for salaries, XX% of XX% increase inflation salaries it or that expenses. approximately add are the To moment, XXXX. in XX idea Remember you XXXX, between for going units in is give an that pretty was with the the to clear increase of total not XX% salaries total XX%. terms In are --

slightly next inflation. might below going year, that have is below to if also be units So -- the we to guess are -- increase get

a So real kind in to expenses. of control the have terms idea of

Alonso Garcia

terms XX% epilogue, Thank next in XX% loan this right? year, And … is So of for just you Understood. all mentioned much. you real very of growth,

Jorge Scarinci

in pesos. Real Yes. Yes.

Alonso Garcia

Jorge. much, All right. Thank very you

Jorge Scarinci

You welcome, Alonso. are

Operator

time. question-and-answer now Nicolas There turn considerations. are concludes at the over further I This no Mr. to for will it questions this session. Torres final

Nicolas Torres

your look you Macro. all you your in forward Good Banco for and interest appreciate to again. day. We time speaking with Thank

Operator

concluded. Thank attending The conference presentation. you now is for today's

disconnect. may You now

Banco Macro (BMA) 1 Dec 202020 Q3 Earnings call transcript