• Net Income: ARS91.3 billion, 293% higher than Q3 2023.
• Return on Average Equity: 6.8% annualized.
• Return on Average Assets: 2.1% annualized.
• Operating Income: ARS829.2 billion, 61% higher than Q2 2024.
• Net Operating Income: ARS403.7 billion, 263% higher than Q2 2024.
• Net Interest Income: ARS569.1 billion, 167% higher than Q2 2024.
• Interest Income: ARS857.6 billion, 23% higher than Q2 2024.
• Interest Expense: ARS288.4 billion, 40% higher than Q2 2024.
• Net Interest Margin: 31.5%, higher than 20% in Q2 2024.
• Net Fee Income: ARS117.8 billion, 8% higher than Q2 2024.
• Administrative Expenses: ARS251.9 billion, 11% higher than Q2 2024.
• Efficiency Ratio: 25.5%, deteriorated from 22.2% in Q2 2024.
• Loan Growth: Total financing reached ARS4.55 trillion, 17% higher than Q2 2024.
• Total Deposits: ARS8.1 trillion, 7% higher than Q2 2024.
• Nonperforming Loan Ratio: 1.15%.
• Capital Adequacy Ratio: 32.8%.
• Tier 1 Ratio: 31.3%.
• Liquidity Ratio: Liquid assets to total deposit ratio at 91%.

• Warning! GuruFocus has detected 5 Warning Signs with VXTRF.

Release Date: December 02, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Banco Macro SA (BUE:BMA) reported a significant increase in net income for the third quarter of 2024, totaling ARS91.3 billion, which is 293% higher than the same period in 2023.
• The bank's net interest income saw a substantial rise, increasing by 167% quarter-on-quarter and 63% year-on-year, driven by higher interest income and reduced interest expenses.
• Loan growth was robust, with total financing reaching ARS4.55 trillion, marking a 17% increase quarter-on-quarter and a 28% increase year-on-year.
• Banco Macro SA (BUE:BMA) maintained a strong capital position with an excess capital of ARS2.53 trillion, representing a capital adequacy ratio of 32.8%.
• The bank's asset quality remained stable, with a nonperforming loan ratio of 1.15% and a coverage ratio of 177.6%.

Negative Points

• Banco Macro SA (BUE:BMA) experienced a ARS50 billion loss related to the exercise of put options on inflation-adjusted securities.
• Provision for loan losses increased by 24% quarter-on-quarter and 53% year-on-year, indicating rising credit risk.
• Interest income from loans decreased by 28% year-on-year, primarily due to a decrease in the average lending rate.
• The bank's efficiency ratio deteriorated to 25.5% from 22.2% in the previous quarter, indicating higher administrative and personnel expenses.
• FX income saw a significant decline, with a 43% decrease quarter-on-quarter and a 98% decrease year-on-year, impacted by peso depreciation against the US dollar.

Q & A Highlights

Q: Can you provide updates on loan growth prospects for 2024 and 2025, and how this affects your ROE and capital consumption? A: We anticipate a positive real growth rate of 25% to 35% for loans in 2024 and around 40% in 2025, driven by increased demand and stable inflation. For ROE, we expect around 10% for 2024 and slightly higher in 2025. Our strong capital position allows us to support this growth without needing additional capital.

Q: What are your expectations for inflation and FX next year, and how will this impact your securities position? A: Inflation expectations range from 25% to 40%, with FX depreciation between 15% to 25%. We currently hold a long position in inflation-linked bonds but none in FX-linked bonds. We expect net interest income to grow by 30% to 35% in real terms next year.

Q: How do you foresee asset quality and NPL ratios evolving with the planned loan book expansion? A: Asset quality is under control, and we expect only slight deterioration. By the end of next year, the NPL ratio should remain below 2%.

Q: Are there any plans to raise debt in international markets, especially with the upcoming maturity of the 2026 Tier 2 bond? A: Currently, we have no plans to raise new debt in international markets. The 2026 Tier 2 bond is due at the end of 2026, and we feel comfortable with our current capital position.

Q: How are you managing the excess USD deposits, and what impact do they have on your margins? A: The recent tax amnesty led to an influx of USD deposits, but many are below $100,000 and can be withdrawn soon. We are cautious with liquidity management. The compression in USD margins is driven by competition, but we expect stabilization and potential improvement in the second half of 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.