Banco Macro S.A.(US:BMA)2023-02-24 19:43Financial Data and Key Metrics Changes - In Q4 2022, net operating income before general, administrative, and personnel expenses was Ps.131.3 billion, an 8% decrease quarter-on-quarter [5] - For fiscal year 2022, net operating income before general, administrative, and personnel expenses totaled Ps.498.2 billion, a 36% increase year-on-year [6] - Net income for Q4 2022 was Ps.16.6 billion, a 59% increase from Q3 2022 but a 19% decrease year-on-year [27] - The efficiency ratio improved to 28.6% in Q4 2022 from 29.1% in Q3 2022 [13] Business Line Data and Key Metrics Changes - Net interest income in Q4 2022 was Ps.83.6 billion, a 12% increase quarter-on-quarter and a 20% increase year-on-year [7] - Interest on loans increased by 7% quarter-on-quarter and 21% year-on-year, representing 35% of total interest income in Q4 2022 [8] - Net fee income totaled Ps.17 billion in Q4 2022, a 2% increase from Q3 2022, remaining unchanged year-on-year [33] Market Data and Key Metrics Changes - Banco Macro's market share of private sector loans reached 7.4% as of December 2022 [15] - The bank's market share of private sector deposits was 6.3% as of December 2022 [16] - Total deposits decreased by 2% quarter-on-quarter but increased by 13% year-on-year [38] Company Strategy and Development Direction - The bank aims to optimize its excess capital of Ps.410 billion, with a total regulatory capital ratio of 39.9% and a Tier 1 ratio of 36.6% [17] - The strategy is to focus on public sector assets due to high inflation and low private sector demand, with plans to return to private sector loan demand as the economic scenario improves [64] Management Comments on Operating Environment and Future Outlook - Management expects inflation in 2023 to remain similar to 2022 levels, with no short-term movement in interest rates anticipated [44] - The political outlook is uncertain, with potential candidates for the upcoming elections still being discussed, and management believes the new administration will face a tougher scenario than in 2015 [60][68] Other Important Information - The effective tax rate for fiscal year 2022 was 31.1%, significantly higher than the 5.8% in fiscal year 2021 due to inflation adjustments [14] - The bank's non-performing loans ratio improved to 1.25%, with a coverage ratio of 151.7% [16] Q&A Session Summary Question: What is the political and macro outlook? - Management indicated that it is early to discuss potential presidential candidates, with primary elections in August [69] Question: How should we think about loan growth in 2023? - Loan growth is expected to be flat in real terms, with inflation likely to remain high [21][44] Question: Can you explain the mechanics of mark-to-market in government securities? - Management confirmed that mark-to-market is done mechanically and is reflected in the income statement [49] Question: What is the expected ROE for 2023? - Management aims to maintain an ROE around 10% for the year, barring any unusual events [70] Question: How does the bank plan to utilize its excess capital? - The bank is inclined to distribute part of its excess capital but also wants to retain some for potential future opportunities [61]