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Banco Macro S.A.(BMA) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Banco Macro's net income for Q2 2022 was ARS 4 billion, which is 41% lower than Q1 2021 and 45% lower than the same quarter last year [5] - The annualized ROE and ROA for Q2 2022 were 5.1% and 1.3%, respectively, indicating the bank's earnings potential remains healthy [5] - Net operating income before general and administrative expenses was ARS 81.3 billion, ARS 6 billion higher quarter-on-quarter and increased by 26% or ARS 16.6 billion year-on-year [6] Business Line Data and Key Metrics Changes - Net interest income totaled ARS 53.1 billion, an increase of 8% or ARS 4 billion from Q1 2022 and 27% or ARS 11.3 billion from Q2 2021 [7] - Net fee income for Q2 2022 was ARS 11.9 billion, slightly lower than Q1 2022 but up 8% or ARS 842 million year-on-year [13] - Other operating income increased by 68% year-on-year to ARS 3.9 billion [15] Market Data and Key Metrics Changes - Banco Macro's market share of private sector loans as of June 2022 was 7.2% [21] - Total deposits reached ARS 858.2 billion, an increase of 8% or ARS 63.4 billion quarter-on-quarter and 65% or ARS 50.9 billion year-on-year [22] - The bank's market share of private sector deposits was 5.9% as of June 2022 [23] Company Strategy and Development Direction - The bank aims to optimize its deposit base and improve efficiency standards while maintaining a solid financial position [27] - The bank has excess capital of ARS 284.3 billion, with a total regulated capital ratio of 40.5% and a Tier 1 ratio of 35.9% [25] Management's Comments on Operating Environment and Future Outlook - Management expects inflation in Argentina to range between 85% to 95% for 2022, with nominal interest rates likely to increase slightly by year-end [29] - Loan growth is anticipated to align with inflation rates, indicating a sluggish demand for loans [31] - The target for ROE by year-end is around 10% [32] Other Important Information - The efficiency ratio deteriorated to 31.3% from 29.6% in Q1 2022, with expenses increasing by 20% [17] - The bank's non-performing loans ratio was 0.25%, with a coverage ratio of 159.7% [24] Q&A Session Summary Question: Macro outlook on inflation and interest rates - Management expects inflation to be between 85% to 95% and slight increases in nominal interest rates by year-end [29] Question: Loan growth expectations - Loan growth is expected to be similar to inflation rates, indicating no major positive increase anticipated [31] Question: Target ROE for the year - The target for ROE is around 10% by year-end [32] Question: 2026 bond tender offer considerations - Management indicated that they would need permission from the Central Bank for any tender or buyback [36] Question: Exposure to the public sector and Leliqs - Management expressed confidence in the low risk of restructuring and the ability to manage exposure to the public sector [38]