Banco Macro S.A.(BMA)2024-12-02 18:07Financial Data and Key Metrics - Net income for Q3 2024 totaled Ps 91.3 billion, a 293% increase compared to Q3 2023 [5] - Operating income before general, administrative, and personnel expenses was Ps 829.2 billion, up 61% QoQ but down 25% YoY [6] - Net interest income increased by 167% QoQ to Ps 569.1 billion, driven by higher interest income and lower interest expenses [9] - Provision for loan losses increased by 24% QoQ to Ps 23 billion, reflecting higher credit risk [9] - Net fee income rose by 8% QoQ to Ps 117.8 billion, supported by increased transaction volumes [13] - The efficiency ratio deteriorated to 25.5% in Q3 2024, up from 22.2% in Q2 2024 [15] Business Line Performance - Income from government and private securities increased by 143% QoQ to Ps 253 billion, though it decreased by 33% YoY [11] - FX income declined by 43% QoQ to Ps 16.3 billion, impacted by peso depreciation and the bank's dollar loan position [12] - Net income from financial assets and liabilities at fair value decreased by 24% QoQ to Ps 103.6 billion, driven by lower income from government and private securities [14] Market and Regional Performance - Total financing increased by 17% QoQ to Ps 4.55 trillion, with commercial loans growing by 46% and consumer loans by 43% [18] - Private sector deposits increased by 6% QoQ to Ps 8.1 trillion, driven by demand deposits, while time deposits decreased by 32% [19] - The bank's market share in private sector loans reached 9.2%, and its market share in private sector deposits was 7.4% as of September 2024 [20] Strategic Direction and Industry Competition - The bank aims to optimize its excess capital of Ps 2.53 trillion, with a capital adequacy ratio of 32.8% and a Tier 1 ratio of 31.3% [21] - Loan growth is expected to reach 25%-35% in 2024 and 40% in 2025, supported by declining inflation and stable FX rates [27] - The bank plans to shift from securities to loan growth, which is expected to drive net interest income growth of 30%-35% in real terms for 2025 [39] Management Commentary on Operating Environment and Outlook - Inflation eased to 12.1% in Q3 2024, down from 18.6% in Q2 2024, positively impacting the bank's net monetary position [16] - The bank expects GDP growth of 5%-6% in real terms for 2025, driven by improving economic conditions [28] - Management anticipates a slight deterioration in asset quality but expects the NPL ratio to remain below 2% by the end of 2025 [41] Other Key Information - The bank exercised put options on inflation-adjusted securities, resulting in a Ps 50 billion loss, but it continues to hold put options on remaining positions [7][8] - The bank's liquidity remains strong, with a liquid assets-to-total deposits ratio of 91% [22] Q&A Session Summary Question: Loan Growth and ROE Forecast - Loan growth is expected to be 25%-35% in 2024 and 40% in 2025, driven by declining inflation and stable FX rates [27] - ROE is forecasted to be around 10% for 2024 and in the low to mid-teens for 2025 [28] - The bank has sufficient excess capital to support aggressive loan growth without needing additional capital [29] Question: Inflation-Linked Securities and FX Position - The bank holds a long position in inflation-linked securities but no FX-linked bonds [37] - Inflation expectations for 2025 range from 25% to 40%, with peso depreciation expected to be between 15% and 25% [37] Question: NII Growth and Asset Quality - NII is expected to grow by 30%-35% in real terms in 2025, driven by the shift from securities to loan growth [39] - Asset quality is expected to remain under control, with the NPL ratio projected to stay below 2% by the end of 2025 [41] Question: International Debt Issuance - The bank has no plans to raise new debt in international markets, despite the upcoming maturity of its 2026 Tier 2 bond [46] Question: USD Deposits and Margin Compression - USD deposits increased significantly due to the Tax Amnesty, but loan demand in USD has not kept pace, leading to margin compression [53] - Competition has driven USD margins down to 4%-5%, but the bank expects margins to stabilize and potentially improve in the second half of 2025 [58]