Banco Macro S.A.(BMA) - 2025 Q4 - Earnings Call Transcript

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]