- Net Income: ARS93.1 billion for the six months ended June 30, 2024, 55% lower than the same period in 2023.
- Return on Average Equity: 5.4% annualized for the second quarter of 2024.
- Return on Average Assets: 1.7% annualized for the second quarter of 2024.
- Operating Income Before Expenses: ARS2.38 trillion for the first half of 2024, 36% higher than the same period in 2023.
- Net Operating Income Before Expenses: ARS1.59 trillion for the first half of 2024, 41% higher than the same period in 2023.
- Net Income (Q2 2024): ARS233.2 billion loss, ARS559.6 billion lower than the previous quarter and ARS397.3 billion lower year-on-year.
- Provision for Loan Losses: ARS16.5 billion in Q2 2024, 26% lower than Q1 2024 and 20% lower year-on-year.
- Net Interest Income: ARS188 billion in Q2 2024, 6% lower than Q1 2024 and 53% lower year-on-year.
- Interest Income: ARS619.7 billion in Q2 2024, 27% lower than Q1 2024 and 46% lower year-on-year.
- Interest Expense: ARS431.7 billion in Q2 2024, 33% lower than Q1 2024 and 42% lower year-on-year.
- Net Interest Margin: 19.9% in Q2 2024, down from 26.2% in Q1 2024 and 38.3% in Q2 2023.
- Net Fee Income: ARS95.7 billion in Q2 2024, 8% higher than Q1 2024 and 2% lower year-on-year.
- Administrative Expenses + Employee Benefits: ARS203.5 billion in Q2 2024, 15% lower than Q1 2024 and 14% higher year-on-year.
- Efficiency Ratio: 22.2% in Q2 2024, deteriorating from 14.7% in Q1 2024.
- Total Loans: ARS3.47 trillion in Q2 2024, 17% higher quarter-on-quarter and 5% higher year-on-year.
- Total Deposits: ARS6.74 trillion in Q2 2024, 13% higher quarter-on-quarter and 5% lower year-on-year.
- Nonperforming Loan Ratio: 1.23% in Q2 2024.
- Capital Adequacy Ratio: 35.7% in Q2 2024.
- Tier 1 Ratio: 34% in Q2 2024.
- Liquidity Ratio: 98% in Q2 2024.
Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Banco Macro SA (BUE:BMA, Financial) reported a significant increase in operating income before general, administrative, and personnel expenses, totaling ARS2.38 trillion, a 36% increase compared to the same period in 2023.
- The bank's provision for loan losses decreased by 26% quarter-on-quarter and 20% year-on-year, indicating improved asset quality.
- Total deposits increased by 13% quarter-on-quarter, reaching ARS6.74 trillion, with private sector deposits increasing by 11%.
- Banco Macro SA (BUE:BMA) maintained a strong capital adequacy ratio of 35.7% and a Tier 1 ratio of 34%, reflecting a robust capital position.
- The bank's liquidity remained strong, with liquid assets to total deposit ratio reaching 98% in the second quarter of 2024.
Negative Points
- Banco Macro SA (BUE:BMA) reported a net income loss of ARS233.2 billion for the second quarter of 2024, significantly lower than the previous quarter and year-on-year.
- Net interest income decreased by 6% quarter-on-quarter and 53% year-on-year, reflecting a challenging interest rate environment.
- FX income dropped by 73% quarter-on-quarter and 91% year-on-year, impacted by the Argentine peso depreciation and a reduced long dollar position.
- The bank's net interest margin, including FX, declined to 19.9%, down from 26.2% in the first quarter of 2024 and 38.3% in the second quarter of 2023.
- Administrative expenses plus employee benefits increased by 14% year-on-year, indicating rising operational costs.
Q & A Highlights
Q: My first question will be on your loan growth and asset quality expectations for this next year? And my second question is if you can elaborate a little bit more on the puts that Macro executed with the central bank. And also, if you know the timeline and the implications of the repos that the Central Bank is proposing. And also, can you remind us how much is your position on securities linked to inflation? And what would be your strategy going forward with these instruments? And finally, my last question is on ROE. How do you see it for the end of the year? And where do you think will be the sustainable level?
A: This is Jorge speaking. About your first question in terms of asset quality. I think that on the level that we are showing is extremely good and know. I think that going forward, if the economy will recover as is expected for 2025, we are going to be a bit more aggressive in growing in lending. And therefore, delinquency could rise a little bit, but to manageable levels. Again, I think that this is already commented before. But since 2008, the peak that we had in our delinquency rate was 3% in 2009. So I think without any problems, we could be rising this -- the current ratio to levels of between 2 and 2.5 without any problem in the case that we become more aggressive in lending. I will go to your third question. I will leave your second question for the last one. The third question about the bonds that we have that are adjusted to inflation. Currently, we have a level of ARS3.7 billion or in your case, it's trillion, bonds that are tied to inflation. This is approximately 120% of the equity, and it's also 110% of the monetary position. The monetary position is the one that is basically the one that adjusted our income statement to inflation. And in that sense, we are linked to hedge against inflation. Going forward, I think that depending on what's happened with the inflation rates that in last month was 4% on a monthly basis. And we believe that inflation is going to continue in the upward trend. However, we are according to the economy that we listen they are not expecting inflation to become below the 2% unless until November and December and the probability of that is maybe in the order of 50%. So for the moment, we are going to keep this portfolio tied to inflation. And if market conditions change, we are going to, at some point, maybe exercise the put option or make it to a swap into fixed rate notes depending on market conditions. In terms of your fourth question in terms of ROE going forward for 2024, we think that we would be ranging between 10% or 13% in real terms going forward in a more sustainable level, we think that we could be delivering between 15% to 20% ROE in real terms. And your second question about the exercise of the put option that we did on July 1, basically, the ALCO decided to execute half of the position of the bonds that we have tied to inflation after the conference that (inaudible) and the President of the Central Bank held saying that the amount of pesos was going to be fixed in the market. Therefore, we decided to execute that position in order to get extra liquidity and to have more elements in order to be more addressing in future lending. And on repos that the Central Bank is offering, I mean, for banks would have some transitionary liquidity problems, I think they are okay. In our case, we are extremely liquid. We are not, of course, using those repos. But the repos are always the -- they have been always there. And the only thing this new thing is that the Central Bank reduced the interest rates on the repos to a level of 48%. So to make it more accessible for banks in order to get extra liquidity. So I think these answered all your questions, Ernesto.
Q: Just a follow-up. The first one is -- well, two follow-ups. One, in terms of the loan growth. So any color on what could be the pace of loan growth for this year and for next year? And then the other follow-up, you were mentioning that you executed half of the puts. So can you just remind us how was the amount of those securities that you held before?
A: Yeah. In terms of, your second question, yeah, related to the half of the puts options that we had, it was like ARS2 trillion in bonds that we exercised and sell to the Central Bank, and that amount of pesos, we see that as extra liquidity. And currently, we hold another ARS2 billion -- sorry, ARS2 trillion in put options in case that we want to exercise this inflation-linked bonds to the Central Bank. Going to the loan growth for 2024, we expect to have positive rates in the order of maybe 15% area for 2024. And we believe that with a recovery on GDP in 2025, we could be at least 30%, 35% positive rates of growth in loans for next year.
Q: I wanted to ask on NIMs, right? Because as you say, repos are still helping, but I think the average earn yields are decreasing. Also, you have some relief on the deposit base. I don't think it's a very hard question, right, because it's a very fluid environment. When do you think NIMs could stabilize? I think that's my first question. And then on the second one, you mentioned capital, right? Do you have any updates on any regulatory changes that would allow you to distribute maybe higher dividend yields going forward.
A: Brian, to answer your second question first. I mean we have to wait till next year. For the moment, we haven't seen any new regulation coming. Remember that when we have to pay dividends essentially when the Board proposed to the shareholders' meeting the payment of dividends is in March, so we have to wait till next year. That time is basically when the Central Bank always puts up new regulation on the amount of dividend that basically could be delivered on the amount of installments. Remember that last year, the number determined was six, this year, the number determined was reduced to 3. So I think that we are positive in the way that it's the economy conditions improved and the Central Bank reserves increase going forward. We are positive that we could be allowed to pay dividends maybe in only 1 installment that would be positive. In terms of your first question and NIM, if you have a chance to go through the press release, the NIM in pesos increased or expanded a little bit, basically, you're right, there were some -- little increase in the cost of funds. Remember that in our case, the amount of transaction deposits where we paid almost 3%, there is almost 45% of total deposits. And on the time deposit side, basically in those that we are the financial agent of the 4 provinces, we could be paying slightly below average interest rates. So this give us a kind of
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
