Release Date: February 27, 2025

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 91.3 billion pesos, which is a 293% increase compared to the same period in 2023.
• The bank's net interest income rose by 167% quarter-on-quarter, driven by a 23% increase in interest income and a 40% decrease in interest expenses.
• Loan growth was strong, with total financials reaching 4.55 trillion pesos, marking a 17% increase quarter-on-quarter and a 28% increase year-on-year.
• The bank's capital adequacy ratio stood at a robust 32.8%, with a tier one ratio of 31.3%, indicating a strong capital position.
• Banco Macro SA (BUE:BMA) maintained a high liquidity position, with a liquid assets to total deposit ratio of 91%.

Negative Points

• The bank experienced a 50 billion pesos 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, totaling 23 billion pesos.
• 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 expenses relative to income.
• Net income from financial assets and liabilities at fair value through profit or loss decreased by 24% in the quarter.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Sign with BUE:BMA.

Q: Can you provide updates on loan growth prospects for 2024 and 2025, and how this might affect ROE and capital consumption? A: Jorge Carini, CFO, stated that loan demand has increased since May 2024, driven by declining inflation and FX stability. They expect a positive real growth rate of 25-35% for 2024 and around 40% for 2025. ROE is projected to be around 10% for 2024 and slightly higher for 2025. The bank has sufficient excess capital to support this growth without needing additional capital.

Q: What are your assumptions for inflation and FX for next year, and how will this affect your securities position? A: Jorge Carini, CFO, mentioned that inflation expectations for next year range from 25% to 40%, with FX depreciation expected between 15% to 25%. The bank holds a long position in bonds tied to inflation but none linked to FX. They anticipate net interest income to grow by 30-35% in real terms next year.

Q: How do you foresee asset quality and NPL ratios evolving with the expansion of the loan book? A: Jorge Carini, CFO, indicated that asset quality is under control, with a slight deterioration expected. The NPL ratio is projected to remain below 2% by December next year.

Q: Are there any plans to raise debt in the international market, considering the maturity of your 2026 tier 2 bond? A: Jorge Carini, CFO, confirmed that there are no current plans to raise new debt in the international markets, and the 2026 tier 2 bond is due at the end of 2026.

Q: How are you managing the excess USD deposits, and what impact do they have on your margins? A: Jorge Carini, CFO, explained that the bank received significant USD deposits due to a tax amnesty, but a large portion could be withdrawn soon. They are cautious with liquidity management. The compression in USD margins is driven by competition, but they expect stability and potential improvement in margins by the second half of 2025.

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