From a liquidity perspective, we have never been stronger, as we issued our first rated unsecured debt offering for $500,000,000 in January, which gives us greater flexibility and makes us less reliant on short-term warehouse lines. This new capital will help us execute our long-term plan of growing book value and maximizing shareholder returns. Looking forward, we have great momentum and are well positioned to continue our growth. That concludes my prepared remarks, and we will turn over to Page three in t ...

Financial Data and Key Metrics Changes - In Q4 2025, Banco Macro's net income totaled ARS 100 billion, with a fiscal year total of ARS 290.7 billion, recovering from a loss in the previous quarter but 26% lower than Q4 2024 [4] - Excluding ARS 82.9 billion of non-recurring expenses in Q4 2025, net income would have been ARS 183 billion, and fiscal year 2025 net income would have been ARS 393.7 billion, with accumulated ROE and ROA at 6.6% and 1.8% respectively [5][6] - Total comprehensive income for fiscal year 2025 was ARS 303 billion, 1% higher than fiscal year 2024 [5] Business Line Data and Key Metrics Changes - In Q4 2025, net interest income was ARS 836.5 billion, a 13% increase from Q3 2025 and a 19% increase year-on-year [7] - Provision for loan losses in Q4 2025 totaled ARS 169.3 billion, 1% lower than Q3 2025 but 243% higher year-on-year [7] - Other operating income in Q4 2025 was ARS 73.3 billion, 3% lower than Q3 2025 but 13% higher year-on-year [13] Market Data and Key Metrics Changes - Total financing reached ARS 10.71 trillion, increasing 2% quarter-on-quarter and 40% year-on-year [19] - Total deposits increased 8% quarter-on-quarter to ARS 13.7 trillion and 24% year-on-year [20] - Banco Macro's market share of private sector loans as of December 2025 was 8.3%, up 30 basis points from December 2024 [19] Company Strategy and Development Direction - The bank aims to optimize its excess capital of ARS 3.6 trillion, with a Capital Adequacy Ratio of 30.6% [22] - The bank plans to continue reducing its branch network and headcount while gaining market share in private sector loans and deposits [16][17] - The strategy includes maintaining a tight monetary policy and focusing on reducing inflation while ensuring fiscal surplus [45] Management's Comments on Operating Environment and Future Outlook - Management expects a real growth of 20% in loans and 6% in deposits for 2026, adjusting for macroeconomic changes [28][29] - The cost of risk is projected to decrease to 5.2% in 2026, with NPLs expected to trend down to mid to low threes [91] - The government is expected to introduce tax reforms and continue with labor reforms, which could positively impact the banking sector [42][46] Other Important Information - The bank's net interest margin in Q4 2025 was 21.7%, higher than Q3 2025 but lower than Q4 2024 [12] - The restructuring expenses of ARS 82.9 billion in Q4 2025 were related to early retirement plans and severance payments [5][15] - The bank's liquidity remains strong, with a liquid assets to deposit ratio of 73% [22] Q&A Session Summary Question: Update on guidance after the election - Management indicated a potential modification in guidance due to reduced GDP growth expectations and higher inflation forecasts for 2026 [28][29] Question: Recurring nature of security gains - Management attributed the strong security gains in Q4 to a reversal of trends from previous volatility, with a positive outlook on local peso securities [30] Question: Gap between loans and deposits - Management explained that while loan growth is expected to outpace deposit growth, they have securities to finance any gaps [32] Question: Consumer asset quality and cost of risk - Management noted a reduction in the speed of deterioration in consumer asset quality and expects a stable outlook for early 2026 [38] Question: Political landscape and reforms - Management highlighted the government's focus on labor and tax reforms, which are expected to improve the economic landscape [42][46] Question: Mark to market on securities - Management discussed the volatility of trading gains and suggested modeling based on inflation expectations [52] Question: Risk-adjusted NIMs for 2026 - Management indicated that Q4 2025 is a reasonable starting point for risk-adjusted NIMs, with slight pressure expected going forward [57] Question: Impact of restructuring costs on ROE - Management estimated that restructuring charges would impact ROE by approximately 3 percentage points in 2026 [79]

Financial Data and Key Metrics Changes - In Q3 2025, Banco Macro reported a net income loss of ARS 33.1 billion, a decrease of ARS 191.5 billion from the previous quarter, primarily due to higher loan loss provisions and administrative expenses [3] - Total comprehensive income for the quarter was an ARS 28.4 billion loss, with net income for the first nine months of 2025 totaling ARS 176.7 billion, down 35% year-on-year [3] - The annualized ROE and ROA as of Q3 2025 were 4.5% and 1.5%, respectively [3] Business Line Data and Key Metrics Changes - Net operating income before general and administrative expenses was ARS 779.6 billion, down 23% from Q2 2025 and down 29% year-on-year [4] - Provision for loan losses increased to ARS 156.8 billion, up 45% from Q2 2025 and up 424% year-on-year [4] - Net interest income totaled ARS 686.2 billion, a decrease of 7% from Q2 2025 and 8% year-on-year [4] - Net fee income was ARS 177.3 billion, down 7% from Q2 2025 but up 14% year-on-year [10] Market Data and Key Metrics Changes - Total financials reached ARS 10.1 trillion, increasing 3% quarter-on-quarter and 69% year-on-year [13] - Private sector loans increased 3% quarter-on-quarter and 67% year-on-year, with commercial loans showing significant growth [14] - Total deposits increased 5% quarter-on-quarter and 11% year-on-year, with demand deposits leading the growth [16] Company Strategy and Development Direction - The bank aims to utilize its excess capital of ARS 3.3 trillion for potential M&A opportunities, with a capital adequacy ratio of 29.9% [17] - The strategy includes a focus on both commercial and consumer loan growth, with expectations of a 35% real growth in loans for 2026 [25] - The bank's market share in private sector loans reached 9% as of September 2025, with a focus on maintaining a well-optimized deposit base [16] Management's Comments on Operating Environment and Future Outlook - Management indicated that the delinquency rate was higher than expected, leading to increased provisions [20] - For 2026, the bank forecasts loan growth of 35% in real terms and deposits to grow around 25% in real terms, with an expected ROE in the low 10s [21] - The peak in non-performing loans (NPLs) is anticipated to occur between October and November 2025, with a cost of risk expected to decrease to around 5% in 2026 [23] Other Important Information - The bank's non-performing total finance ratio reached 3.02%, with a coverage ratio of 120.87% [17] - Employee benefits increased by 20% due to provisions for early retirement plans, impacting administrative expenses [12] - The bank's liquidity ratios remain strong, with a liquid assets to total deposit ratio of 67% [17] Q&A Session Summary Question: Was the result worse than anticipated? - Management acknowledged that the results were impacted by higher provisions and unexpected expenses, along with bond price performance [20] Question: What are the expectations for loan growth and returns next year? - The bank forecasts a 35% real growth in loans and a low 10s ROE for 2026 [21] Question: What additional expenses were incurred? - The unexpected expenses were primarily related to early retirement plans [22] Question: When is the peak of NPLs expected? - The peak is anticipated to occur between October and November, with a cost of risk of 6.5% in Q3 [23] Question: What is the plan for the $400 million bond maturing in 2026? - Management stated that various options are being considered, including potential bond issuance or cancellation [39]

Summary of Conference Call on China Financials Industry Overview - The conference call focused on the **China financials sector**, including banks, insurance firms, and non-performing loan asset management companies (NPL AMCs) [1][3]. Key Points and Arguments 1. Revenue and Profit Growth Expectations - Financial firms anticipate a **rebound in revenue and profit growth** in 2026, driven by stable credit costs and a potential recovery in net interest margins (NIM) [1][3]. - The expectation is supported by stable rates and a stabilizing NIM, with most banks indicating that new loan yields have stabilized due to rational competition and reduced window guidance [1][7]. 2. Loan Yield and NIM Trends - Most banks believe that **loan yields have likely bottomed**, paving the way for stabilizing or rebounding NIM in 2026 [7][10]. - ICBC expects a modest decline in NIM by approximately **2 basis points** in Q4 2025, with a year-over-year decline of less than **10 basis points** in FY26 [10]. 3. Credit Quality and NPL Management - Credit quality pressures are deemed manageable, with retail and property NPL pressures persisting but not accelerating [2][10]. - Banks have been digesting around **Rmb4 trillion** in NPLs annually through various means, including write-offs and sales [2][13]. - The recovery of property NPLs is maturing, and new risks are being well controlled [2][3]. 4. Positive Outlook for Investment - The outlook for China financials is considered **attractive**, with expectations of strong double-digit growth in household financial assets [3][5]. - Potential fiscal support for mortgage interest payments in 2026 is expected to mitigate property-related credit risks [3][20]. 5. Specific Bank Strategies - **Minsheng Bank** has set KPIs to lift loan yield by **2 basis points** per quarter and is focusing on deposit cost control to support NIM [1][11]. - ICBC is adjusting its bond trading strategy to shorten duration in anticipation of a rebound in bond yields [10]. 6. NPL Formation and Recovery - Mortgage NPL formation remains stable, with ICBC reporting that its mortgage loan-to-value (LTV) ratio is below **42%** overall [14][20]. - Cinda reported that banks are expected to continue large-scale NPL disposals, with corporate NPLs projected to be around **Rmb400-500 billion** and retail NPLs over **Rmb150 billion** [13][16]. 7. Regulatory Environment - Strict constraints on local government financing remain, with no new policies introduced this year, but existing measures are firmly in place [17][18]. Additional Important Insights - The conference highlighted the importance of **self-disciplinary measures** in improving the competitive environment for loan pricing [11]. - The potential for **foreclosure and auction** of property collateral is linked to defaulted inclusive loans rather than mortgages, indicating a shift in risk management strategies [16][20]. This summary encapsulates the key insights and trends discussed during the conference call regarding the China financials sector, emphasizing the expectations for recovery and growth amidst ongoing challenges.

Investment Rating - The industry view for China's financial sector is rated as Attractive [4] Core Insights - China's banks have sufficient capacity to absorb potential risks from increased US tariffs, with stable earnings and dividends expected to support share performance [1][12] - The potential industrial non-performing loan (NPL) ratio is forecasted to rise to 10-11% from 8.4% at the end of 2024 due to tariff impacts [15][20] - The analysis indicates that approximately 4% of total loans, primarily export-related credits, are exposed to tariff risks, with electronics and electrical equipment being the most affected sectors [10][12] Summary by Sections Financial Stability - Major Chinese banks are expected to maintain stable earnings and dividends despite potential delays in net interest margin (NIM) and fee income recovery [1][58] - The banking sector has been digesting over RMB 3 trillion of total NPLs annually, with a consistent provision charge of around RMB 1.3 trillion [18][19] Risk Assessment - The incremental NPL from higher tariffs could be 2-3% for industrial loans, translating to an increase of 40-60 basis points in total loans [7][12] - The forecast suggests that if tariffs affect one-third of export-oriented manufacturing credits, the cumulative industrial NPL ratio could reach 15-16% [20][22] Sector-Specific Insights - The electronics sector accounts for 22% of exports to the US, while apparel and furniture have higher revenue exposure, indicating varying levels of risk across sectors [10][11] - Continued capital expenditure rationalization in the industrial sector is expected to ease some risks associated with industrial loans [33][37] Market Dynamics - The ongoing tariff dynamics are anticipated to create uncertainties in the A-share market, affecting both fundamentals and investor sentiment [58] - A shift in preference back to defensive banks from insurance is noted, reflecting market volatility and the need for stable earnings [56][58]