BMA - Earnings call transcript Q1 2021

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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 First Quarter 2021 Earnings Conference Call. We would like to inform you that the first quarter 2021 press release is available to download at the Investor Relations website of Banco Macro at www.macro.com.ar/relaciones-inversores/. Also this event is being recorded and all participants will be in a listen-only mode during the Company's presentation. [Operator Instructions] It is now my pleasure to introduce our speakers.

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

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

your You sir. begin may conference,

Nicolas Torres

Banco conference Thank which first include was our SEC and forward-looking subject the may welcome these morning are you. may and to filed which on various Good make today, to quarter Any our call. is XX-F to XXXX statements comment, are we and in website. Macro's available conditions outlined

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

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

than or of of Bank's first the due XX a quarter X.X% ROE Operating IAS ARSX.X income financial the X% administrative or on inflation instruments March Macro's general XX% For to XX% posted loss. from and ARSXX.X profit ARSXX.X and and earnings Net ARSX.X lower income. income higher billion briefly expenses interest ARSX.X ago. Bank's billion to higher billion healthy will operating restated quarters ARSXXX and XX% ago. of for to to in XXXX potential. and The due of quarter the net ARSX.X remained was and one expenses quarter result or operating the respectively results. On for billion, in lower income net fair now reflect and lower net before previous totaled lower of billion, value ROA net billion, after quarter, ARSXX.X first income year and of quarter-on-quarter than XX, each billion first fourth XXXX a the lower lower annualized XXXX fee and million personnel was quarter ease XXXX. billion, result personnel basis, the the been the quarter and fourth accumulated for decreased XXXX posted or than quarter X.X% increasing interest show the XXXX period Bank's was through in result lower quarter first lower effect I of adjustment XX% have XXXX applying ARSX.X income XX% financial quarter of Banco comparison, in the XXXX. the net the income fourth at the XX% or or than than In posted than income level the yearly of X% provisions general, year comment

ARSX.X to first management. ARSXXX billion quarter, fourth on loans of from higher cost the On income lower increased first driven Securities the reached is In strict "A" first in quarter, or the mostly to included, million on interest quarter of billion compared net the of billion income loss lower the yearly than result of expenses, through ARSXXX administrative In X% lending margin, ARSXX.X quarter in ARSX the from spot quarter basis. ARSXX.X ago. quarter on previous partially of higher the lower by rate XXXX ARSX.X XXXX. quarter. or XX% the net from result yearly including interest income XX%, XXXX, million. XXXX, and totaled which adopted XX% and represented gain, or loss FX, due decreased the income or registered was of the In peso income expenses ARSXXX in fee higher the quarter-on-quarter, quarter quarter billion billion fee the XXXX, Net the securities the the billion. of In the Macro's expenses adopted from a regulations XXXX financial X% operating of in the up on lower other posted in XXXX, while dilutive quarter quarter rates. expenses of net the profit fourth the first against the billion. of XX% fourth net loss. and higher Within million first in in billion to paid than the first a a other the equity efficiency quarter policies value ARSX.X income our dollar instruments and ARSX.X due Bank's private net a a or income. ARSX.X long In quarter represented employee the increased totaled gain, to at position XX% X% improving on ratio quarter to basis, than instruments, XX% This first quarter quarter XXXX, quarter set XXXX gains is to financial deposits quarter ARSXXX XXXX, and basis, In during increased billion, In in year-on-year. operating the the the billion, quarter FX basis XX.X% or quarter mainly Within higher the floors U.S. the In than including income billion the lower XXXX. XXXX, ARSX.X billion financing from that and shown Argentine X%. fourth ARSXXX one was from through interest income PRISMA mainly XX% totaled interest and the quarter the basis, one Argentina decreased XX% posted investment to XXXX, income profit the interest XXXX lower Compared Bank's the the XXXX, from to income than deposits government XX.X%, XXXX. fourth of XX.XX% XX.X%, first yearly investments interest gains the private Central Bank is mark loss, On million. X% gain or lower of deposits. totaled quarter X% of our billion. first decreased X% yearly ARSX.X average interest XX.X% of first of decreased of a XX.X% position the ARSX.X On benefits. increased XX% depreciation or expenses and inflation net financial from monetary yearly interest Leliqs interest year which or higher first was operating fee Banco posted expenses. at the deposit Central loans in decrease or million related or or totaled XX% quarter in basis, the than going previously net of XX.X% increase liabilities the was On compared fourth adjustment ARSXX ago. net income of monetary or XX.XX%. or totaled fourth the related of which point pursuant assets ARSXX.X This personnel position. rates And quarter by the which and quarter the In and income value billion million In previous XX basis, the registered million. higher observed first interest As administrative in or the of from net offset of rate gain quarter to decreased ARSX.X securities X% registered result ARSX XXXX administrative ARSX.X the or first which of on billion fourth net tax interest quarter XX% yearly position decreased or fair XXX different previous ARSX.X other quarter-on-quarter, Banco interest due lower caps On due X% In is year. of personnel a or control than income increased ARSXXX of to quarter ARSX.X and of first to Bank and interest increasing the XXXX. a basis by government a fair or a ARSX.X expenses volume Communication ARSXX.X of effective million Government XX% plus in Macro's XXXX X% inflation in dollar XXXX, year on income, billion ARSX.X the The ARSXXX quarter billion, or points than billion, the basis, XXXX, XX% the showing or the was In a yearly by interest fourth time XX.X%, Bank's in X% securities stake. in XX.X% average on market totaled In XXXX, the total deposits and is deposits, X% income FX decreased the on other than of of from lower shown securities. monetary than or on income X.X% totaled and loss Bank's XXXX, X% plus senior government on In decreased fourth higher billion the to government than quarter quarter-on-quarter of higher XX% billion,

comes of Bank's demand. private decreased billion, mention XXXX the loans important sector to the decreased X.X%. Within that of or or loan billion, Credit which ARSXX.X financing and while Others economic loans to dollar as part XX% SMEs X% as and over market billion, reached terms COVID-XX year-on-year XX% billion. peso started consequence U.S. decreasing decreased during that weak card Consumer ARSX.X out decreased growth, ARSXX.X affected billion a Argentina the to of Banco of $XX ARSXX.X financing the sector of as decreased financing, loans extended quarter-on-quarter billion lower share is package loan ARSXX.X or XXXX private or X% relief the given lending as loans private among XX% ARSXXX.X million. In Commercial or totaled X% to Macro's financing come. It pandemic sector X%. March recession

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

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

deteriorated non-performing the In Macro's of ratio Bank coverage reached rules over - the Consumer basis non-performing in allowances total totaled XX measured up first the expected portfolio losses in from basis loans while asset under loans coverage XXX.XX%. of terms X.XX% Central quarter, quality, X.XX% XX as non-performing Banco and to commercial total quarter points to portfolio non-performing loans credit under previous measured the deteriorated points X.XX% financial XXXX. ratio

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

billion we The XX.X%. accounted shareholders of an of to capitalization, It as cash is entities from suspended of from another Bank ARSXXX.X June that capital. the shareholders billion distribution a dividend X more on subject XXXX Argentina, second a capital equity which effective ratio The be positive In XX, deducted meeting have from Liquid of than The the and billion, Bank's noted accounted Tier is a dividend Overall, liquidity or Pursuant reached Bank's capital dividend assets Central Macro in the the by to XXXX, ratio ARSXX make aim to represented remained Banco appropriate. in dividend ARSXX Bank's XXXX. of to up should approved shareholders' of profits the XX.X% regulatory deposit XX, the Central ratio the kind. be total terms April in for will distribution until quarter of best the "A" authorization. financial excess meeting to The by Communication use of XXXX. total approved the of is quarter. excess XX%.

solid financial a showing continue We position.

quality closely monitored. Asset and under control remain

keep will will deposit efficiency on may that improve more a We we would working time, this our like take and keep we to to the base. optimized well questions have. standards At you

Operator

ahead. go Citigroup. [Operator Pedro question Instructions] come And the Please first from Nobrega will with

Gabriel Nobrega

This here. is Gabriel

Or quality a asset Did no almost you So here. just saw we any your are Thank forward? wanted don't ask think to in on the so I if year? you us how should confident question the could really create in you booked be done I'll need check maybe And reversed on you profile risk you you give bit of provisions? front last to may these you second of lastly, just you. And with and that this just going which color quarter. We provisions had uncomfortable provisions provisions, then afterwards. current just

Jorge Scarinci

Gabriel, Hi, Scarinci. think conservative and answer level the Jorge of reasonable this that to basically a provisioning is we we're question we Yes, is have in your very that XXXX.

the of what that of is situation book, on we the the we enough expecting rest considering what for of going our loan and coming consider the is considering So quarters. now level provisions are

a and as estimate whole the cost risk for XXXX. assume would say, I forward, X.X% let's of X% between, Going

Gabriel Nobrega

And question, capital if to looking Tier dividends, ratio capital, I recent have we That's base, my above your were still dividends would from XX%. at right. these understand All already second common X but equity very from be you clear. your your declared subtract that's even

acquisition are this excess just pursuing Bank an there capital that you strategies makes now? to understand So think which wanted other the I may right on sense any is that

Jorge Scarinci

a regulations has - Bank. I Central Banco years, the strategy. our for present is lot so established strategy last the be There do Macro XX by And mean, considering growth been could element inorganic an that always in not to

we open another excess apart capital, have that in Of but to we not finding put But lift an see if have honestly. could however, to possibilities, game, are alternative. attractive we we moment that, willing - is - to there to where any bank any element the course, be order for to put are the from

Operator

with go The from Gabilondo Bank Ernesto Please ahead. next question America. come of will

Ernesto Gabilondo

the compared on When you morning, little to normalizing then Do could higher inflation, expectations results your very the the for also then be to and it position? expect the bit looking already can would it you effective want Jorge rest to Good us of net the is year? question share second coming rate will Just how Nicolas. April and it's when for at monetary be helpful. impacting a interest inflation. And so in My of tax XX%, know in higher March. quarter you. the quarters be the and rates Thank

Jorge Scarinci

Hi, Ernesto.

In say we local of do of what be that Expectations showing should approx. are we for coming highest that inflation, trying inflation, to The XXXX but inflation, quarters the to the XX% measure know terms - yes, bit XX%, of according inflation. not you a they first quarter economies the that between lower was mechanism consider those quarter. estimate

So and we inflation levels be should third in seeing second, quarter. fourth lower

posted the that position the basically in to the going So be not is for monetary on the any level for that rates is our are because in quarter. seeing interest income rates, positive terms going to going impact we below think quarter. be We maintained. let's level of is the movement the the should that moment And of honestly, we - level have, say, statement in second in interest be to the first guidance

seeing I according to local they XXX and However, basis don't increasing think rate in macroeconomic front. year, that fourth movement the the economies, guidance an local should fourth the for mean, showing however, we level Central they higher when points. quarter rate. according third, any maybe But are Honestly, at of saying also we is or any I in expecting the the nominal XXX needed interest quarter, some, third look be that in increase be some a of interest should you between and that are Bank variables, here, economies, know. not to

of and quarter considering I of current this terms of would level expect year, I fourth of assume the saw for average the forward, Going of last quarter rates. second, we interest between quarter an year would fourth year and third first in in this the margins, what

purposes, what for a rate, tax for XX% rate accounting as average a and - In XX% the accounting that would of between yes, this income we're of and version local rates our expecting I we you in terms kind balance assume is pockets. year that taxes income have of a in the in America I balance And tax - estimation is effective here an tax for P&L. XX% know its year. starting for what mean, bit Argentina, to of mean, I for and according IFRS

Ernesto Gabilondo

to anything For rates any subsidiary for my cap or regulation, second or there to we is example, or expect continue if update related should question, else? floors

Jorge Scarinci

I moment after be least regulations of the the what are the Honestly, mid-term know we are the the but of second elections, year and in think we the have quarter by for going that are we to maintained. that end maintained. regulations going breadth not at part mean, quarter, for third seeing to be the do we and big

Operator

question Aranda go will ahead. come next from Itau. Alejandra The Please with

Alejandra Aranda

morning, Good a thinking are how measure second was really on call. then looks next seeing the the yesterday and the to the is treasury Jorge three you deposit ARSX.X Nicolas. which liability Bank over bit have for of And about had from color management. to roll quite that the Central and we uninspiring. and months, just And in that thing little billion what you on Thank challenging side saw the the a it you're

think going the expect there we terms in you months? do forward? you in measures - expect that could of coming them additional So from what What that do

Jorge Scarinci

deposits of is, are growing. course, we the deposits, in you? mean, nominal I seen the how of is of level system Alejandra, what in have terms

best to deposit liability timid that like you picking we because, have are management, speed. a trying as know, level very the the we which is but is In of terms should demand loan and find of up, in our asset

we So repos an to liquidity of apply aggressive deposit in base. order funding we rate, interest of either the the if the to in in aggressive we attractive have excess - level the not or increasing deposits, that increase that treasury a rate. the lot to Bank in order or compensate have to of terms Therefore, are Central deposit our

bank. want is of going moment, keeping of the as to eye out have bank. profitability share the are if do best is We trying not to the affect For an always that on the which level market find we always the we done the to increase profitability

So, profitability. in first place, we put

Central In the according that a the year terms of the we mean, mentioned your is of in level in coming understand kind and question, this regulation and increase level second out date, way order to to in put of of lot Bank Bank. pesos Central puts a treasury element as that public a reserve at you of the reduce the the the future as I of local requirement bonds to financing and Leliq needs voluntary that a

are Of system. as of better Bank the be regulations, debtor Central of the the banking going analyzing measure. having think the know having - than And treasury is We risk a I don't course, as but the banks these to are debtor. will what the - use consider the rest we public reaction the that I a owned that

still know to So don't again, are do. we what we going

is And, a question keeping We here the depositors eye is public being the conservative to reserve these deposit that with if applied key sector form would trying requirements of to Macro. be, find bonds. which comfortable Banco the of are on depositors course, feel for close their going best out course, in of this pretty on

is keep going So what are eye we to an that on.

Operator

Alonso Garcia The go from next with will Please Suisse. come Credit ahead. question

Alonso Garcia

demand report My question. your XXXX. in do but my observed starting is mean, question was on also fourth taking Thank you also is that, the know to at low the some you the seasonality loan how to I we this you. And else? higher not Banco of quarter. even rest side. is you. volume expect inflation on for evolve compared on you in please peers how on in how as only real But your on the quarter in fact terms the the that remainder are you to And side, in Macro, the something Thank seeing retail Thank that the commercial year? I has you dynamics something in with of your volumes and comment both appetite side? side the Could for risk there the first moment?

Jorge Scarinci

here loan is mean, in demand, I pretty tied expectations not that to of it Alonso. expectation Hi, is, course, Argentina. new

compared return XX% mentioned Argentina around between For is a is what GDP of it Inflation, expected that big is X% market recovery and before, is the the But be expecting. up GDP in the the 'XX. to moment, suffering that I decline between XX% to recovery and X%. the as to

companies for So demanding continue capital term the working short we in moment, see pesos. to

having that what corner around bearing government new the know a is depending the question could that the be big will mark result, mid-term something You taken. on the is election be the that policies

the of a to we the nominal to But with between the tied salaries, and the companies. continue in unions the the are have consumers, seeing tied you pandemic to what of negotiations terms is demand us. we have consumer bit level consider increase In increase of that to in

The reduce having the Sunday, of in of close this slightly the last order in - last was below vaccine here amount level You of economy here COVID-XX. to population the kind doses having is is two to days the a of or the X%. there this know of big Argentina that level of and people the the commuting - nine going next vaccine and

as behavior is in motion be in a quarter, is demand. - to low the the consumers. we pickup of and loan the third year, think So end terms. What - expect going of so between we is slightly the real And see Macro it to loan increase the that going And in speed. affecting very Banco that also so by that positive fourth slow

Operator

with HSBC, ahead. from The New Gomez York. next will go question come Carlos Please

Carlos Gomez

there you Do future liquidity you it Thank alternative the and that? for obligation requirements. in My Central point that might have that optional your that a any understand the you. of at Any U.S. very clear is from Treasury pacer think to We legal paper you possibility you be made against to buy have the that question particular Bank. an you the have this credit a prefer follow-up is the government? recourse is it might on

Jorge Scarinci

Yes, for for it's if sector. Carlos. no the in be will because what Hi, to it in to the moment we be see going is is, know forced the the voluntary. going legal that Argentina we to it to alternative experiences that would continue was had If to Honestly, I voluntary. are of in to to if And to we're we country, that. type But - say case, going go of that. good, nor conclusion past is again, going for the I for and guess, or be are future don't is go. the we to a is that if had or ending moment. I is these not I'm for the the the if be going That guessing think there banking it But not

not very be - we - is are be occurrence going probability are the banks sending going mean, for that I We a that. to low that are to of

Carlos Gomez

quarter? high have adjustment or because especially accounting adjustment very in inflation down, of can And something Thank inflation level that follow-up, this goes lower if clear. change because but we you. normal not there you understand particularly was also a there expect in was a That's and the do it was in is it in but I future, bigger quarter? the only should quarter, fourth the I

Jorge Scarinci

decline loss going No, nothing going the think this that inflation, of go - monetary to downwards. level And special. we is forward, in with these

Operator

Please will come question next Templeton. go Petri ahead. with The Santiago from

Santiago Petri

mean, us question stated how if related this reserve percentage as to Can directly does requirements public is new I limit percentage these can finally, holdings? sector this of And reserve you these Thank remind limit? total you assets? what's now? to asset already regulation - new [indiscernible] reserve requirement has what's can regulation. my the what to is the of be into And remind you. us limit the - And this requirement

Jorge Scarinci

right of we bonds as for deposits. I reducing Leliqs. to to going treasury right honestly, billion In get regulation in deposits moment, forward, of level through a And Nacion is more time room going working for And XX% to financing there. to next to we Leliq, Tuesday, mean, a or of no transactional now. working have leaving terms the this we the the now of Bank ARSXXX of Provincia financing we Banco with and close very - think way - Banco sovereign Xst not the XX% going of But we have continue more Central June, for that maybe that's pesos. up these are bonds are continue - exposure as, extra the beginning of huge June, of we can starting are or regulations putting targeting a in Leliq. going they this besides, continue we are is and Leliqs, is of that amount say, are sovereign the in And to this have we

Santiago Petri

Excellent.

us moment? remind mean, I what at that the limit so - sector customer the to it's you the limit? public holdings can So is

Jorge Scarinci

in the that of the sector, terms below and public denominated ARSXXX assets. I we mean, In approaching total of XX%, in public have - around is billion in XX% bonds pesos, pesos

Operator

Nistor Rodrigo with from Partners. come Please will question go AR next The ahead.

Rodrigo Nistor

rates not level regarding the many that policy your sector of results My like banking it inflation question monetary determine strategy. are is the of under control. the seems and that margins Well,

is us front? can't with what on my your So the approach that you control? question virus share with is What you can

Jorge Scarinci

in the are a liability how work profitability in whole we to asset and of as maybe to level of mean, and carrying And XXXX have, to of and in we we work trying affecting are about are expenses, mean, on basically, deposits best - I a pandemic and country did are Rodrigo. the bank the do no, trying the is is that again, - that the and the as because that share. we I and market economy Hi, XXXX, to the not of undergoing always on mean management. the quality we that match we trying I on looking credit risk to do

something for a Macro and to alternatives, we And in is capital that have in the excess for the the any are that is of So XX there last possibility to the use that. going if the best. Banco is years. to that study been continue looking for goal we idea And in

before. Banco Macro a that on So are and is working daily here in basis those I we that mentioned what issues

Operator

this questions As time, for any the more sir. would like at over back there Please question-and-answer Torres this session. to Nicolas closing remarks. concludes no I are ahead, turn conference go Mr. to the

Nicolas Torres

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

Operator

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

may disconnect. You now

Banco Macro (BMA) 28 May 212021 Q1 Earnings call transcript