BMA - Earnings call transcript Q2 2022

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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 Second Quarter 2022 Earnings Conference Call. We would like to inform you that the 2Q '22 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. are will remarks session. a company’s the completed, be there question-and-answer After that be will further At instructions given. time Instructions] [Operator It speakers. is to pleasure introduce now our my

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

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

begin may You conference. your

Nicolas Torres

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

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

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

lower increased or quarters quarter last compared billion ARSXX.X of quarter deposits ROE result to and billion billion, higher the XXX deposits than than the one XXXX sector quarter the the basis quarter basis, Bank's Bank's to deposits Banco In ago. points a result On a of ARSXX.X ease have from adjustment profit showed interest billion. increased higher XX% at X%. securities. repos ARSX In the quarter average or and billion higher X% XX% through XX% first XX% XX% fee higher healthy In quarter income higher XXXX, X% points yearly second quarter of XX% XX% year ARSXX.X was or deposits period financial posted posted yearly billion ARSX billion ARSXXX expenses. or ROA second increased income. XXXX, increased income of For the or average quarter net a billion the posted private assets basis, yearly for increased to net government was remained of of margin, in operating higher or XX.X%, of general, interest net the interest net a the increased second XXXX million XXXX, billion income related ARSXX financing XXXX, ARSX.X to other the gains. liabilities of interest basis. second and or for XX% annualized the and XXXX. interest results. or administrative than billion billion, XXXX. applying lower than or operating higher interest through Bank's the XXXX of income earnings the XX% to On peso second operating than briefly quarter-on-quarter, in ARSXXX million. other basis quarter Securities, including In of totaled year, of decreased of the million. or and gains and second million. of on quarter, In billion or ARSX.X XXXX, or government ARSX.X second in the from from to higher, than which net expenses quarter-on-quarter, investments the totaled XX% ARSXXX paid gain, quarter-on-quarter ARSXX.X previous the the quarter and and the quarter result of loss first billion, on In income. a than Within represented ARSX than year increased private XXXX Government billion. the net lending second XXXX, respectively, after second higher ago. or totaled ARSXX.X XX% of of posted basis, income higher, or fee ARSXX.X the net income financial June quarter billion XXXX, securities billion the interest X.X% value than yearly the or or the XXXX, than quarter financial ARSXX.X quarter. XXXX. ARSXX increased due higher XXXX. million general Bank's from financial billion X.X%, ARSX.X or the expenses or higher in and and or higher X% previous Compared the before on billion while result X% second totaled the income XX% income year. on the On ARSXX.X the I than of the for the government mainly personnel through position Bank's the in totaled effect quarter of on a billion ARSXXX In value billion volume ARSXX.X ARSXX.X Macro's operating profit and billion, than net quarter XX.X% In and ARSXX.X income reflect income million, fair previous first billion. the gain, interest year. in XX% to in billion, higher or higher XX% is XXXX, interest of or totaled which average first higher income the billion income ARSXX.X ARSXX the than X.X% second year XXXX and dilutive XXXX first on basis ARSXXX and the the income rate. or or X% increased FX, the of bank's on On expenses, from during IAS quarter the billion XXXX deposits, the ARSXX.X loans Within lower quarter a the of in posted higher rate net net previous in first of billion of Interest billion Net and inflation Banco increased was administrative each comment XX, the income ARSX.X XX% compared was increase second net XXXX quarter XX% lower XX% XX% ARSX.X fair the loss of administrative quarter and ARSX from of at total billion, of quarter quarter ago. restated of been income XX.X% now increase higher yearly totaled to interest XXXX, depreciation assets in of the and quarter-on-quarter, ARSXX.X and long to accumulated quarter or In previous expenses million totaled was XX% On quarter ARSXX.X will and higher than private first year-on-year. interest expenses XXX second This Net In Macro's XX% interest million income XXXX first income represented ARSXX.X or income ARSX.X first billion due comparison, the in mostly interest billion, driven from registered ARSXX.X higher figures higher to yearly and second quarter, previous by quarter liabilities income a the or In securities the a XX, billion, basis, loans increased and ARSX.X quarter fee due on in FX FX and potential. of Operating second mainly income totaled due ARSX.X than XXXX dollar net including higher ARSX.X income, or quarter. personnel the billion than interest interest ARSXX.X XXXX quarter due billion, of the quarter. ARSX totaled In increase personnel XX% our XX% X% The second and

while XX% on increased billion. or with the increases personnel X% expenses expenses of ARSX.X basis and yearly salary admistrative increased agreed personnel As a as administrative increased expenses XX% Union, consequence a and

XXXX, more plus provided the tax quarter of income in increased XX%, XXXX, quarter plus to XXXX. XXXX, of interest reached XX.X% XXX or higher deteriorating quarter, As the the of first in efficiency quarter XX.X% second rate quarter of is second Inflation due ARSX.X posted in XXXX, posted of the while above compared of net the XXXX. expenses second the XX%, of in which billion of ratio from points In increased In quarter quarter than income net the financial first XX% In monetary totaled the position to billion quarter the quarter second of in was basis XXXX, our compared operating fee statements. loss the XXXX. first the higher X%, first the ARSXX.X from information which the net XX.X% Banco first loss, XXXX, other results the XX.X% income was effective Macro's of inflation second was in was of XXXX. quarter observed to quarter the

XX%, increasing market credit In important commercial XX% share increased sector personal It X%, billion, billion terms XX% and quarter-on-quarter stand while or overdrafts a ARSX.X to year-on-year. to or loans respectively. private X.X%. of or within increased while higher XX% the Within lending, billion, June peso billion U.S. financing increase, X%. loan with private of X% ARSX.X financing X% that million. card sector Banco others ARSXXX as X% growth, documents lending increased XXXX the financing, totaled mention sector ARSX.X with Bank's and decreased private is out consumer or reached Macro’s Meanwhile, financing and Within loans dollar loans ARSXX

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

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

loans quarter, total In which commercial second previous in improved expected from reached portfolio totaled mainly XXX% in due the points, down signs XXX losses to shows of ratio measured of non-performing non-performing quality, of Macro’s under to basis SME portfolio the rules our Banco quarter, Central previous XXXX, in ratio quarter client, quarter. to non-performing XXX% [indiscernible] while of terms improved deterioration first down credit non-performing Consumer the points asset of allowances credit the our loans X.XX% XXX.X%. X.XX% total from basis in The XX to X.XX%. as under financial loans Bank our coverage

total a XX.X% represented Macro's terms of Banco XXth, noted Argentina, capital X XX.X%. Tier should of the of accounted [indiscernible] a -- equal ARSXXX.X and which capital installments. of ratio of in in capitalization, an of profits the it inform be ratio It Macro May aggregate out excess regulated of Banco In billion. And the Bank on on distribute approximately billion, the authorized be to kind that and Central that carried should amount cash for distribution us and/or consecutive ARSXX.X

bank billion, paid capital. best The date, than use the this the have ratio XX%. X, in amount billion, to Liquid installment which the deposit in cash to and dividend cash a bank's seven the July is of installment positive which liquidity accounted The X. X, is to quarter. remained billion, of August correspond amount more on assets appropriate. for As ARSX.X total reached another dividend of bank's we June on X amount Overall, dividend the which ARSX.X make cash excess in has of this of aim through ARSX.X on installments was X, a a

solid We financial continue showing a position.

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

Operator

Ernesto Please At with America. it go going we first this [Operator Bank of questions-and-answers. open ahead. are question for Gabilondo time, from to is Instructions] The

Ernesto Gabilondo

questions from good your Gustavo, morning, three side. you I Nicolas. and my Jorge presentation. for Thank Hi, have

of on do if see Argentina inflation that have this you bold growth. you next some it the you macro end? for year is Then Also, loan think Or from how like translate And into you something see my more is second from first normalization the ROE that when the on how potential last the hear Thank you and do point the still hear question loan by like you. you see the the given year? do my especially you in real see The be could considering inflation year? in you year? to do will do question outlook higher think is indicators, at growth we'd you And Do peso lower the rates one it's considering to when we'd depreciation? achievable? interest for the levels, rate then

Jorge Scarinci

This are here. what the be terms is Good the will Ernesto. ranging And you? catch XX% range of economics to interest in Scarinci. nominally the that year-end your of is inflation On of they local rates, are economies to in Hi, first increased the according XXXX morning. is to consensus seeing Jorge that maybe up should the we slightly between by order inflation pace. How speaking, the XX% question, in

our slightly have big in expanding. nominal for interest our margin on the we that rates are real but in help by rates, seeing We not interest net that interest are have to that view going to to a year-end, we should moment higher going keep are

maybe the that Honestly, [indiscernible] the the economies least But we question. FX. problem is a predicting like we FX to give means starting more year-end, the local the pace of understand order sector for is inflation not faster speaking a move in finish official kind speed, selling some agribusiness million well start suite official looking devaluation see moment understand with at could the have before Argentina. economic dollar to also FX behind should believe a speed complex here monthly a at to dollars. FX, rate to terms on devaluation the a the of higher higher monthly is of maybe that program In official in what that are the that is We would We a the lot. helping at towards economy the

rates, sluggish. inflation growth, And we after similar of terms XXXX rate. second that In mean, we we're the are are maybe what seeing think a on by that at demand increase the interest finish growing seeing is going to the big your more loan we question, I loans looking the year-end, loan nominal with to bit

but we not So it's this by by we terms be question in And easy like the seeing in answer third of area longer real to question, are we of to XX% not reattempting a in end. positive year-end. are major or increase would in ROE, positive year ROE targeting

be year-end X% for they and be did X% and would between XX% that So or XX% XX% to around XXXX.

Ernesto Gabilondo

for Jorge. Perfect. Thank you very much

Jorge Scarinci

Your welcome.

Operator

[Operator Bank of is from with go ahead. next Please also Instructions] Nicolas question The America. Riva

Nicolas Riva

on reposition, ARSXXX use Thanks if a very ask I premium in that only dollars Jorge it at from losing is capital at to much, to any my bond, your for still your bond the taking to second given My if par first get so and you public year, my could offer Nicolas tender questions. XXXX would treatment. Or wanted for the most current you you consider doing have the two you plus is my then exposure you question that can tender question. do last but if And offer the questions, first, that's when issue the the time? a understanding on trading need the bond? my XXs part, to this call the bond, because the buyback and dollars, marketplace Bank once million could kept And you any Central is understanding I you sector.

to In on which this, I pesos. debt? about peso FX total, So roughly the risk the you risk, -- and rate the this would interest zero, have these great using of in close a Central in public by second average government The case in bonds investment assume right? you a worst have is going even the that of Leliqs it's on June, means to in ARSX.X the Leliqs. the Bank be ARSX.X million earned your the denominated is compares on retial and the the of your ARSX.X on weight you And XX% government equity, end of annually at to in default sector billion so a be quarter, peso you reported which course, scenario the to And of million Leliqs. But exposure you. for

So to this And and Bank reuse exposure about the you the you have these how Leliqs Central worst any the the -- exposed to banks Can there exposure think scenario? been government sector? case discussions Thanks. and between easily in these do this government about a of all public bonds? and

Jorge Scarinci

Hi, Nicolas.

bond, XXXX Your bond. subordinated question it because about first our has

permission that's ask Bank Central have all, to of And or we whatever. of in the point. or tender any buyback first First to kind

of I position use the moment, have in in do have allow the the Honestly, dolalrs sense, kind those time buyback us we if Central a point, that. dollars. dollars, to for are we this And have on for see we would our and but in dollars know any position wait the tender. Bank don't Second to that we

the them Second with side. question kind the in did there Bank the sector domestic the pesos, conversations we've successfully kind Bank they in the debt the putting the the on until during in and what to public that be in is that that of have Mr. all the maximum Central quarter, is to the that pesos we restructuring by recently, the the Bank sale And Central beats of continue so according the October swap Central are going Leliqs the on end on financial or sense. according we to the a We economy the is in attitude, similar in mid -- (ph) to that [Masa] that kind bid secure in sector, moving a and putting we Central sale second I mean, refinance is in exposure that for of Also, year the a And pressure is at pesos in on last in of next happened not of can or that on debt the -- then XX-years. Bank was acting on kind Bank Central had terms moment. risk rapidly debt any the when in the a pesos since looking curb and exposure And have, regulation. debt we the pesos. in in of big minor think the we've think CDs the risk that think doing seen Leliqs XXX% a the we of almost the We in of peso forward something local into could in risk for are what have the to to have we that year. the seeing they debt for almost terms Argentina idea according that doing

on of for to pesos. terms the a to at dollars, restructuring we have probability the inflation kind we are hedge exposure get putting since terms some of to are Also our moment equity much that debt cap as we we the can the exposure. very In of -- we a treasury, as a in in low again, the trying of low have point,

of to in Central that in any So it the we sell moment, the the Bank that Central is side the is beach at case. crisis, the it just notice also that on that on curve, update issuing so Bank market, banks put for of case hold potential on plus to important the the has to options, ideas the treasury, can kind continue is to been is Central once the Bank

for the the that this kind assuming of are the probability restructuring moment. we for extremely that, low is said So

Nicolas Riva

about that Central easily running with Economy about Leliqs for changed last And to, Leliqs, you you to Central by you money easily that a could do the perhaps from the point Would if the lower Masa not wanted think the and Bank? Bank. you the bringing that, with on the money very decide view Central Bank at Central of On much follow-up the Thanks Jorge. renew the Ministry less has being all your risk get with Bank?

Jorge Scarinci

last in additive took think was I renewing the that we or of I -- partially month, No. maybe did it mean, terms that we Leliqs.

any the without receive will problem. We money

though I think no we exposure that's moment, there's of the mean, Bank. the basically its to even meters, and Central in decreasing the is terms doing, that exposure for of job Central all. economy Masa’s Leliqs terms in No, problem So the Bank there

Nicolas Riva

Thanks Jorge. very much,

Jorge Scarinci

You’re welcome.

Operator

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

Nicolas Torres

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

Operator

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

disconnect. now may You

Banco Macro (BMA) 25 Aug 222022 Q2 Earnings call transcript