Banco Macro S.A.(US:BMA)2024-02-29 19:14Financial Data and Key Metrics Changes - In fiscal year 2023, net income totaled ARS587.7 billion, a 338% increase compared to fiscal year 2022 [3] - Total comprehensive income reached ARS627 billion, up 438% from fiscal year 2022 [3] - Operating income after general, administrative, and personnel expenses was ARS1 trillion, a 189% increase quarter-on-quarter and a 327% increase year-on-year [4] - The efficiency ratio improved to 18.6%, down from 23% in the previous quarter and 28.6% a year ago [9] - The bank's accumulated ROE and ROA were 33.2% and 8.7% respectively, indicating strong earnings potential [37] Business Line Data and Key Metrics Changes - Income from government and private securities decreased by 66% quarter-on-quarter and 72% year-on-year, totaling ARS1.1 trillion for fiscal year 2023, a 3% increase from fiscal year 2022 [5] - Net fee income for the fourth quarter was ARS55.6 billion, a 2% increase from the previous quarter and a 5% increase year-on-year [7] - Interest income from loans and other financing totaled ARS372 billion, a 36% increase quarter-on-quarter and a 73% increase year-on-year [33] - Provision for loan losses increased by 144% quarter-on-quarter and 131% year-on-year, totaling ARS45.9 billion for fiscal year 2023 [38] Market Data and Key Metrics Changes - Total deposits increased by 9% quarter-on-quarter to ARS3.4 trillion but decreased by 16% year-on-year [10] - Private sector deposits increased by 13% quarter-on-quarter, while public sector deposits decreased by 31% [10] - The bank's market share over private sector loans reached 9.1% as of December 2023 [62] - The liquidity ratio of liquid assets to total deposits was 118%, indicating a strong liquidity position [66] Company Strategy and Development Direction - The bank switched from Leliq to dual bonds to mitigate potential risks, aiming for better yields linked to inflation and FX evolution [47] - The legal merger with Itaú is expected to occur in the second half of 2024, with operational integration anticipated between August and October [23][24] - The bank aims to maintain a well-atomized deposit base and improve efficiency standards [66] Management Comments on Operating Environment and Future Outlook - Management indicated that the first quarter of 2024 will see more normalized performance in securities gains compared to the previous quarter [72] - The bank expects ROEs to normalize between 15% to 20% in 2024, reflecting a more challenging environment [48][70] - The bank's strategy focuses on increasing funding on the asset side, enhancing loan and securities growth despite negative real interest rates [25] Other Important Information - The acquisition of Itaú Argentina was completed for $50 million, with potential adjustments based on future performance [14] - The effective tax rate for the fourth quarter was 31.4%, with a full-year rate of 32.5% [60] Q&A Session Summary Question: Can you elaborate on your investment securities and FX positions? - Management indicated that they switched from Leliq to dual bonds and benefited from the devaluation of the official FX in December [18] Question: What should we expect in the first and second quarters of the year? - Management expects a more normalized behavior of securities gains in the first and second quarters of 2024 [72] Question: When do you expect to integrate the newly acquired asset, Itaú? - The operational merger with Itaú is expected in the second half of 2024, specifically between August and October [24] Question: How should we think about loan growth for this year? - Management indicated that Banco Macro should have no problem delivering ROEs around 20% in a normalized scenario, with a forecast of around 15% for 2024 [70]