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][5] - Excluding ARS 82.9 billion of non-recurring expenses in Q4 2025, net income would have been ARS 183 billion, with accumulated ROE and ROA at 6.6% and 1.8% respectively [5][6] - The accumulated annualized return on average equity and average assets were 5.1% and 1.4% respectively for Q4 2025 [4] Business Line Data and Key Metrics Changes - In Q4 2025, net interest income reached ARS 836.5 billion, a 13% increase from Q3 2025 and 19% higher year-on-year [7][8] - Provision for loan losses totaled ARS 169.3 billion in Q4 2025, a 1% decrease from Q3 2025 but a 243% increase year-on-year [7] - Other operating income in Q4 2025 was ARS 73.3 billion, a 3% decrease from Q3 2025 but a 13% increase 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, with private sector deposits increasing 11% [20][21] - 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 capital base and has reduced its branch network by 75 branches, down to 444 from 519 [16] - The bank is focusing on maintaining a tight monetary policy and fiscal surplus while pushing for labor and tax reforms to improve economic competitiveness [45][46] - The acquisition of 50% of Personal Pay is part of a strategy to develop a Banking as a Service model, leveraging Telecom's customer base [73][75] Management's Comments on Operating Environment and Future Outlook - Management expects a real loan growth of 20% and deposit growth of 6% in 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][100] - The bank is prepared to finance projects in energy and mining sectors, leveraging its strong capital base [92][99] Other Important Information - The effective tax rate for fiscal year 2025 was 43.1%, significantly higher than the previous year [18] - 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 to guidance, expecting real loan growth of 20% and deposit growth of 6% in 2026 due to changes in GDP growth and inflation expectations [28][29] Question: Nature of security gains - Management attributed the strong security gains in Q4 to a reversal of trends from previous volatility, with declining interest rates positively impacting local securities [30] Question: Asset quality indicators - Management noted a reduction in the speed of deterioration in consumer asset quality and expects a stable outlook for the first half of 2026 [38][39] Question: Political landscape and reforms - Management highlighted the government's agenda focusing on labor and tax reforms, which are expected to improve economic conditions [42][46] Question: NPL trends and loan growth - Management confirmed expectations for NPLs to trend down in 2026, with a focus on maintaining market share in loans and deposits [91][72]