Banco Macro S.A.(US:BMA)2025-12-01 17:02Financial 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 compared to the previous quarter, primarily due to higher loan loss provisions and administrative expenses [3][4] - 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][4] - 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 [4] - Provision for loan losses increased to ARS 156.8 billion, up 45% from the previous quarter and 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][5] - Net fee income was ARS 177.3 billion, down 7% from Q2 2025, with credit card fees decreasing by 22% [9] Market Data and Key Metrics Changes - Private sector loans increased by 3% quarter-on-quarter and 67% year-on-year, with commercial loans showing significant growth [14][15] - Total deposits increased by 5% quarter-on-quarter, totaling ARS 11.8 trillion, with private sector deposits increasing by 6% [15] - Banco Macro's market share in private sector loans reached 9% as of September 2025 [15] Company Strategy and Development Direction - The bank aims to grow loans by 35% in real terms and deposits by 25% in real terms for 2026, with a focus on both commercial and consumer sectors [22][38] - The bank is exploring M&A opportunities due to its excess capital of ARS 3.3 trillion, with potential developments expected in the next 12-18 months [31][32] Management's Comments on Operating Environment and Future Outlook - Management noted that the increase in provisions was due to a peak in non-performing loans (NPLs) and unexpected additional expenses [21] - The bank expects the peak of NPLs to occur between October and November, with a cost of risk forecasted to be around 5% in 2026 [29][30] - Management remains optimistic about the bond portfolio performance improving in Q4 2025 [57] Other Important Information - The efficiency ratio deteriorated to 39.1% from 35.9% in Q2 2025, indicating increased operational costs [11] - The non-performing total finance ratio reached 3.02%, with a coverage ratio of 120.87% [16] Q&A Session Summary Question: Was the result worse than anticipated? - Management acknowledged that the results were impacted by higher provisions for NPLs and unexpected expenses, along with margin compression due to interest rate fluctuations [21][22] Question: What are the expectations for loan growth next year? - The bank forecasts a 35% growth in loans and a 25% growth in deposits for 2026, with an expected ROE in the low 10s [22][30] Question: Can you provide details on the extra expenses? - The additional expenses were primarily related to early retirement plans that were not anticipated [24] Question: When do you expect the peak of NPLs? - Management expects the peak to occur between October and November, with a cost of risk around 6.5% for Q4 [29][30] Question: What factors will drive deposit growth in 2026? - Positive real interest rates are expected to drive deposit growth, with a forecast of 25% growth in real terms [61] Question: What is the plan for the $400 million bond maturing in 2026? - Management is considering various options, including rolling over the bond or issuing a new senior bond, with a decision expected by mid-2026 [72][74]