Q4 2023 Banco Macro SA Earnings Call
[music].
Good morning, ladies and gentlemen, and thank you for waiting.
Operator: Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's fourth quarter 2023 earnings conference call. We would like to inform you that the fourth quarter 2023 press release is available to download at the Investor Relations website of Banco Macro, and that is www.macro.com.ar slash relaciones dash inversores slash. Also, this event is being recorded, and all participants will be in listen-only mode during the company's presentation.
At this time, we would like to welcome everyone to Banco macros fourth quarter 2023 earnings conference call.
We would like to inform you that E L F.
The fourth quarter 2023 press release is available to download at the Investor Relations website.
Banco macro.
That is www dot micro dot com that's a R.
Less and less join us dash in their sort of flash.
Also this event is being recorded and all participants will be in listen only mode. During the company's presentation.
Operator: After the company's remarks are completed, there will be a question and answer session. At this time... Pardon me, at that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to signal the operator.
After the company's remarks are completed there will be a question and answer session.
At this time.
Pardon me at that time further instructions will be given.
Should any participants need assistance during this call. Please press star zero just signal the operator.
It is now my pleasure to introduce our speakers joining us from Argentina are Mr. Gustavo Manriquez, Chief Executive Officer Mrs.
Operator: It is now my pleasure to introduce our speaker. Joining us from Argentina are Mr. Gustavo Marriquez, Chief Executive Officer; and Mr. Jorge Scarinci.
Mr. Jorge Scud N C.
Nicolas Torres: Chief Financial Officer, and Mr. Nicolas Torres, Investor Relations. Now, I'll turn the conference over to Mr. Torres. You may begin your conference. Thank you. Good morning and welcome to Banco Macro's COP COSET 2023 conference. Any comment we may make today may include forward-looking statements, which are subject to various conditions, and these are outlined in our 20-F, which was filed with the FCC, and it's available on our website. Fourth quarter 2023, Rest in peace, was instituted yesterday, and it's available on our website.
Chief Financial Officer, and Mr. Nicholas stories Investor Relations.
Now I'll turn the conference over to Mr. Doris you may begin your conference.
Thank you.
And welcome to Banco Macros fourth quarter 2023 conference call any comments, we may make today may include forward looking statements, which are subject to various conditions and these are blind 20-F filed to the SEC.
Fourth quarter 2023.
But if it did it yesterday and it's all good.
We never had a website.
Nicolas Torres: All figures are in Argentine pesos and have been restated in terms of the measuring unit quoted at the end of the recording video. As of 2020, the bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29 as established by the Central Bank. For each of the comparisons, periods of previous quarters have been restated, applying IAS 29 to reflect the accumulated effects of the inflation adjustment for each period through December 30, 2023. I will now briefly comment on the bank's fourth quarter 2023 financial results. Banco Macro's net income for the quarter was $460 billion pesos, $3,894% higher, or $448 billion pesos higher than in the third quarter, and 789%, or 408 billion pesos higher than the result posted a year ago. The bank's accumulated ROE and ROA of 33.2% and 8.7%, respectively, remain healthy and show the bank's earnings potential.
Alright in Argentine pesos and had been their stated in terms of measuring unit.
At the end of the reporting period.
That's it for 2020, the bank began reporting results applying hyperinflation accounting in accordance with <unk>.
<unk> 29.
Center.
For ease of comparison with the previous quarters have been restated.
920 kicked the accumulated inflation adjustment for each period through December 30.
2023.
I will now briefly comment on the banks fourth quarter 2023 financial results.
Net income for the quarter was 460 billion pesos, 3894% high here.
Kind of a putting a convenient basis higher than the third.
Quarter.
789% or 108 billion higher than themselves.
The banks accumulated ROE another way 33, 2% and 8%.
7%, respectively remains healthy and shows the bank earnings potential.
Nicolas Torres: In fiscal year 2023, net income totaled $587.7 billion, 338% higher than in fiscal year 2022. Total Comprehensive Income totaled $627 billion and was 438% higher than fiscal year 2022. Net operating income before GDP and P&E for Q4 2023 was $1.3 trillion, increasing $778 billion quarter on quarter. On an annual basis, net operating income before GDP and P&E increased 224% or $915 billion.
In fiscal year 'twenty, three net income totaled 580 <unk>.
What kind of a 38% higher than in fiscal year 'twenty.
Two.
Total comprehensive income totaled 602.
<unk> 7 billion and was 438% higher than in fiscal year 'twenty two.
Net operating income before general administrative and personnel expenses for the fourth quarter of one two and three with one 3 billion pesos increasing.
778 billion quarter on quarter on a yearly basis net operating income before general.
First one on expenses.
24%, and then kind of a big pitch.
In fiscal year 2023, net operating income before general and personal expenses totaled $2 80 for premium 83% higher than in fiscal year 2022.
Nicolas Torres: In fiscal year 2023, net operating income before general and personal expenses totaled $2.84 trillion, 83% higher than in fiscal year 2022. In the fourth quarter of 2023, provision for loan losses totaled $18.2 billion pesos, 144% or $10.7 billion pesos higher than in the previous quarter. On a yearly basis, provision for loan losses increased 131% or $10.3 billion pesos.
In the fourth quarter 2023, probably shouldn't Parliament is 18 contributing one.
144%.
Kevin This is higher than in the previous quarter.
Maintenance brochure farnell increased 131% or $10 3 billion pesos.
Nicolas Torres: In fiscal year 2023, provision for loan losses totaled 49.9 billion pesos and was 125% higher than in fiscal year 2022. Operating income after general, administrative, and personal expenses was 1 trillion pesos, 189% or 680 billion pesos higher than in the third quarter of 2023, and 627% or 796 billion pesos higher than in the fourth quarter of 2022. In fiscal year 2023, operating income after general and initial demand, and personal expenses totaled 2 trillion pesos, 123% higher than in fiscal year 2022. In the quarter, net interest income totaled 183.7 billion pesos, 6% or 10.9 billion pesos higher than the result posted in the third quarter of 2023, and 29% or 77 billion pesos lower than the result posted one year ago. In fiscal year 2023, net interest income totaled 829 billion pesos and was 13% lower than in fiscal year 2022. Interest income increased 28% while interest expenses decreased 30%.
In fiscal year 'twenty, three provision for loan losses totaled $49 90.
91, pixel and were 125% higher than in fiscal year 2022.
Operating income after general admin.
Working on expenses with one pretty impressive, 189% or 680 billion, but it was higher in the third quarter of 2023, and 327% or 796 million pesos higher than in the fourth quarter of trying to.
In fiscal year 2023 operating income after agenda I'd like to read my impression that totaled.
They'll go to freedom Mitchell, 103% higher than in fiscal year 'twenty two.
In the quarter net interest income totaled $103 7 billion picks up 6% or pinpoint 90 million pesos higher than in the third quarter of 123, and 29% or seven 7 billion pesos lower than they were so close to one year ago.
Cause near 23 net interest income totaled 849 billion pesos and was 13% lower than fiscal year 2022.
Income increased 28% while interest expenses decreased.
Great.
2%.
In the fourth quarter of 2023 interest income totaled 500.
Nicolas Torres: In the fourth quarter of 2023, interest income totaled 573 billion pesos, 13% or 4.5 billion pesos lower than in the first quarter of 2023, and 7% or 45.3 billion pesos lower than the previous year. Income from interest on loans and other financing totaled 372 billion pesos, 36% or 98.5 billion pesos higher compared with the previous quarter, mainly due to a 68% increase in the average volume of private sector loans, which was partially offset by a 1,211 basis points decrease in the average lending rate. On a yearly basis, income from interest on loans increased 73%, or 157.4 billion pesos. In fiscal year 2023, income from interest on loans and other financing totaled 1.1 trillion pesos, 43% higher than in fiscal year 2022. In the fourth quarter of 2003, interest on loans and advances represented 64% of total interest income.
3 billion pesos, 13% or four point.
Slower than.
What else, putting 23, 7% or 45 3 billion, but slower than the previous year.
Income from interest on loans and other financing totaled 372 billion pesos, 36% or 98 5 million, but it was higher compared with the previous quarter, mainly due to a 68% in.
Average volume relative to loans, which was partially upset by.
1211 basis point decrease in the average lending rate.
On a yearly basis income from interest on loans increased seven 3% or 157 4 billion pesos.
In fiscal year 'twenty three income from interest on loans and other financing totaled $1, one pretty ambitious 43% higher than in fiscal year 'twenty two.
In the fourth quarter of two and three interest on loans represented 64% of total interest income.
In the fourth quarter of 2023 income from government and private securities.
Nicolas Torres: In the fourth quarter of 2023, income from government and private security decreased 66% or 209.5 billion pesos quarter on quarter due to the unwinding of our NELIC portfolio and decreased 72% or 271.6 billion pesos compared with the same period of last year. In fiscal year 2023, income from government and private security totaled 1.1 trillion pesos, 3% higher than in fiscal year 2022. In the fourth quarter of 2023, income from RIPOs totaled $8.4.2 billion pesos, 46% or $26.6 billion pesos higher than in the previous quarter, and 287% of $62.4 billion pesos higher than a year ago. In the fourth quarter of 2023, FX income totaled 182.7 billion pesos, 50% or 182.2 billion pesos lower than the previous quarter, and 92% The FX income gain was due to the 131% Argentine peso depreciation against the U.S. dollar and the bank's non-dollar position during the quarter, including dollar yield and dual bond. It is important to note that the bank's long dollar position decreased 43% during the quarter.
6%, what's in front of it.
Right.
5 billion basis quarter on quarter due to the unwinding of our lending portfolio and 72% a $271 6 billion bushels compared with the same figure of last year.
In fiscal year 2020 free income from Lauren private securities totaled $1, one trillion basis, 3% higher than in fiscal year 2022.
In the fourth quarter of 2023 income from <unk> totaled $4 2 billion, because 46% or $26 6 million pets is higher than the previous quarter, and 287% or $62 4 billion bricks is higher than a year ago.
In the fourth quarter of 243, FX income totaled 182, 7 billion pesos, 50% or 109.
$2 2 billion lower than the previous quarter, and 92% or $87 5 million pets is higher than a year ago.
<unk> income gain was due to the 131% Argentine peso depreciation.
And the maximum dollar position during the quarter, including Berlin and do a box.
It is important to note that the banks the long dollar position decreased 47, 42% during the quarter.
Nicolas Torres: The typical year 2023 affects income totaling 798.2 billion pesos, 312% above the result posted in typical year 2022. In the fourth quarter of 2023, interest expense totaled 389 billion pesos, 20% or 95.5 billion pesos lower compared to the third quarter of 2023, and 9% or 31.4 billion pesos higher on a yearly basis. Within interest expenses, interest on deposits decreased 21% by 97.6 million pesos quarter on quarter, mainly driven by a 2,750 basis points increase in the average interest rate on deposits, while the average volume of private sector deposits increased 38%. On a yearly basis, interest on deposits increased 7% at $25.5 billion.
Yeah, Quinn three fixed income.
Kevin kind of 98 2 billion pesos, 312% above themselves.
2022.
Yeah.
In the fourth quarter of 2023 interest expense.
389 billion pesos, 20% or 95 5 million lower compared to the third quarter of 2023, 9% or 31 4 billion pesos higher on a yearly basis.
What do you mean interest expenses interest on deposits decreased 21% from 97 6 million versus quarter on quarter, mainly driven by a 2750 basis points increase endeavor.
Right right on deposits, while the average volume of private sector deposits decreased 38%.
On a yearly basis interest on deposits increased seven.
7% or $25 5 billion pesos.
In the fourth quarter of 'twenty three interest on deposits represented 97% a whole bunch of financial expenses.
Nicolas Torres: In the fourth quarter of 2023, interest on deposits represented 97% of the bank's financial expenses. In the fourth quarter of 2023, the bank's net interest margin, including effects, was 33.8%, lower than the 58.7% posted in the first quarter of 2023 and the 32.7% posted in the fourth quarter of 2022. In the fourth quarter of 2023, Banco Macro's net income totaled 55.6 billion pesos, 2% or 1.2 billion pesos higher than in the third quarter of 2023, and was 5% or 2.4 billion pesos higher than the same period of last year. In fiscal year 2023, net fee income totaled 220.8 billion pesos, 4% higher than fiscal year 2022.
The fourth quarter I'm pretty pleased with the bank's net interest margin, including FX 33, 8% lower than the eight 7% posted in the third quarter of one country.
32, 7% posted in the fourth quarter FY 'twenty two.
Yeah.
Fourth quarter pinpoint free Banco macros net income totaled.
$5 6 million British Super Center for one 2 million pets is higher than third quarter of twin for three and one 5% or $2 4 billion was higher than the same period last year.
Fiscal year 'twenty net fee income totaled 228 million, 4% higher than the fiscal year 'twenty two.
In the fourth quarter of 2023, net income from financial assets and liabilities for everybody as a broker loss totaled 895 basis gain mainly due to the mark to market of some government securities mainly due of bumps, which represented $835 2 billion pesos.
The fiscal year 'twenty from the group net income from financial out Tonight, Didnt everybody's got enough totaled 972 billion between 555% higher than a year.
Our 2022.
In the quarter other operating income totaled $25 2 billion, increasing 45% or $7 9 million because it's compared to the third quarter was 123.
Nicolas Torres: In the fourth quarter of 2023, net income from financial assets and liabilities of third parties to profit or loss totaled 895.2 billion pesos, a gain, mainly due to the mark-to-market of some government securities, mainly dual bonds, which represent 835.2 billion pesos. In fiscal year 2023, net income from financial assets in violation of third-party value profit or loss totaled 972 billion pesos In the quarter, other operating income totaled 25.2 billion pesos, increasing 45% or 7.9 billion pesos compared to the third quarter of 2023. On a yearly basis, our operating income increased 40% or 7.2 billion pesos. In fiscal year 2023, adult operating income totaled $72.9 billion, 11% higher than in fiscal year 2022. In the fourth quarter of 2023, Banco Macro's administrative expenses plus employee benefits totaled 152.5 billion pesos, 50% of 51 billion pesos higher than in the previous quarter, due to higher employee benefits, which increased 35%, and higher administrative expenses, which increased 80%. On a yearly basis, administrative expenses plus employee benefits increase by 68% or $61.5 billion. In fiscal year 2023, administrative expenses plus employee benefits increased 22% compared to fiscal year 2022.
On a yearly basis other operating income increased 40% or $7 2 billion pesos.
Your 2023 other operating income totaled $72 19, impetus in 9% higher than in fiscal year 2022.
In the fourth quarter of 2023, Banco macro side, Nathan with expenses flat until he benefits totaling $152 5 billion pesos, 50%.
This is higher than the previous quarter.
Higher employee benefits, which increased 35% and higher.
Which increased 80%.
On a yearly basis administrative expenses, plus employee benefits increased 68% or $61 5 billion pixels.
In fiscal year 2023.
Next question please.
<unk> 22 per cent compared to fiscal year 'twenty two.
So the fourth quarter was 23 efficiency ratio reached 18, 6% improving from the 23% posted in the third quarter of one three and the $28 six per ton.
One year ago.
In the fourth quarter of 2023 expenses increased 51%.
Net income provided operating income increased 149%.
In the fourth quarter of goodness.
The results from the next month or so.
If I kind of $25 8 billion pesos.
$194 8 million, because it's higher than the loss posted in third quarter of 2023, and 196% or $348 4 billion, because it's higher than one.
One year ago.
You're doing patient observed during the quarter, which was 18, 5% higher.
That's what I'm, putting currency inflation in the quarter was three.
<unk> 30 per cent compared to 34, 8%.
Third quarter of 2023.
In fiscal year 2023.
Nicolas Torres: As of the fourth quarter of 2023, the efficiency ratio reached 18.6%, improving from the 23% posted in the third quarter of 2023 and the 28.6% posted one year ago. In the fourth quarter of 2023, expenses increased 51%, while net income plus operating income increased 149%. In the fourth quarter of 2023, the result from the net monetary position totaled a $525.8 billion pesos loss, $194.8 billion pesos higher than the loss posted in the third quarter of 2023, and 196%, or $348.4 billion pesos higher than the loss posted one year ago. Higher inflation was observed during the quarter, which was 18.5% higher than in the third quarter of 2023. Inflation in the quarter was 53.3% compared to 34.8% in the third quarter of 2023. In fiscal year 2023, the result from the net monetary position totaled a 1.3 trillion pesos loss, 88% higher than the one posted in fiscal year 2022. Inflation in 2023 reached 211% compared to 94.8% registered in 2022.
From the net monetary position totaled 1.3 picked us and I want them to be bringing a bunch of stuff.
Okay.
And higher than the one posted in fiscal year 2022.
Inflation in 'twenty, three which 211% compared to the 94, 8% registered in 2022.
In the fourth quarter of 'twenty, three Banco macros effective tax rate of 31, 4% and 23 effective income tax rate of $32, 5% higher than the 31, 1% registered in fiscal year 'twenty two.
That information is provided in the 25 to our financial statements.
In terms of the bank's total financing.
One eight pretty ambitious increasing 4% about 60 to $65 6 billion quarter on quarter and decreasing 2% year on year.
Within commercial loans overdrafts stand out when a 66% or $114 19, the business increase another 30% or 75.
Billion pesos increase.
What are your consumer lending personal loans decreased 22% or $65 9 billion puts us well credit card loans decreased 7% for $38 4 billion pesos.
In fiscal year 'twenty three overdraft documents another standout went up 80, 833 and 48%.
Respectively.
It is important to mention that Banco macros market share over private sector loans as of December 20th born free reached nine 1%.
On the funding side total deposits grew 9% or 294 basis quarter on quarter totaling 3.4 premium basis and between 16% or 663, 71% year on year.
Nicolas Torres: In the 4th quarter of 2023, Banco Macro's effective tax rate was 31.4%, and in fiscal year 2023, its effective income tax rate was 32.5%, higher than the 31.1% registered in fiscal year 2022. Further information is provided in note 25 to our financial statement. In terms of loan wealth, the bank's total financial reached 1.8 trillion pesos, increasing 4% of 65.6 billion pesos quarter on quarter and increasing 2% of 30 billion pesos year on year. Within commercial loans, overdrafts stand out with a 66% or 114.9 billion pesos increase, and others with a 30% or 75 billion pesos increase. Within consumer lending, personal loans decreased 32% or 65.9 billion pesos, while credit card loans decreased 7% or 38.4 billion pesos.
But I would pick up deposits increased 13% or 368 billion quarter on quarter, but that would be temporary.
31% or 80 pipe, one 3 billion pesos.
Sure.
The increase in private sector deposits was led by demand deposits.
41% or $62 8 billion pesos when time deposit decreased 23%.
Yes.
Within private sector deposits.
10% or $252 6 million British degree.
8% or 107 million Bucks.
I thought the December timeframe brain, Banco macros transactional accounts represented approximately 59%.
Total deposits.
Banco macros market share overtime.
As of December three.
Six 2%.
The fact of quality bank of micro simple permanent total financing ratio reached 149% pro rata ratio measured total allowance.
As for the nonperforming loans.
What's remained stable at 291%.
Consumer portfolio nonperforming loans improved 13 basis points down to 135% from <unk> 48 in the previous quarter.
Nicolas Torres: In fiscal year 2023, overdraft documents and others stand out with an 88, 33, and 48% increase, respectively. It is important to mention that Banco Macro's market share over private sector loans as of December 23 reached 9.1%. On the funding side, total deposits increased 9% or 290.4 billion pesos quarter-on-quarter, totaling 3.4 trillion pesos, and decreased 16% or 663.7 billion pesos year-on-year. Private sector deposits increased 13% or 360.8 billion pesos quarter on quarter, while public sector deposits decreased 31% or 85.3 billion pesos quarter on quarter. The increase in private sector deposits was led by demand Within private sector deposits, Mexico's deposits decreased 10% or $252.6 million pesos, while U.S. dollar deposits decreased 8% or $107 million.
Most of the portfolio nonperforming loans deteriorated six basis points from the fourth quarter.
Great.
One 2% from 114% this quarter.
In terms of capitalization Banco macro accounted an excess capital of 175 trillion fixes would represented capital adequacy ratio of 35, 4% and tier one ratio of 30 to 32, 8%.
The bank's aim is to make the best use of excess capital and.
Liquidity remained more than appropriate.
Great.
One kind of an 18% overall.
Overall, we have accounted for another positive quarter, we continue showing a solid financial position asset quality.
We remain under control and closely monitor we keep on working to bookmark Arlington standards, and we'll keep it at a nice deposit base.
On November 2nd 223, Central Bank of Argentina, the failure.
Now bancolombia to Banco macro Banco macro has now acquired 100% sure and both are unclear.
And computers.
The management and the.
The price of the agreement.
Nicolas Torres: As of December 2023, Banco Macro's transactional accounts represented approximately 59% of total deposits. Banco Macro is marked with a chair. Profit as of December 23, totaled 6.2%. In terms of asset quality, Banco Macro's non-performing total financial ratio reached 1.29%. The coverage ratio measured as total allowances under expected credit losses over non-performing loans under certain bank rules remained stable at 200.91%.
Median bonus which was paid on November 3rd at.
And at least another month, we're taking from a potential adjustment that would be right for them based.
Based on data obtained by Banco.
And you can see what used to be April 133, and the social bank and will be there to mine at.
In a few days.
There was no from the equity and the income from associates and joint ventures, and totaled 156 million pesos.
And it's shown in the fourth quarter of 2023 more information is provided in notes to our financial statements. At this time, we would like the questions that you may have.
Yeah.
Thank you.
We are going to open it up for question and answers and if you would like to ask a question. Please press star one on your Touchtone phone.
Nicolas Torres: Consumer Portfolio Non-Performing Loans improved 13 basis points, down to 1.35% from 1.48% in the previous quarter, while Commercial Portfolio Non-Performing Loans deteriorated 6 basis points in the fourth quarter of 2003, up to 1.2% from 1.14% in the previous quarter. In terms of capitalization, Banco Macro had an excess capital of $1.75 trillion, which represented a capital adequacy ratio of 35.4% and a The bank's aim is to make the best use of this excess capital so that the bank's liquidity remains more than adequate. Liquid assets equal the deposit ratio, which is 118%.
Yeah.
Again, it is star one.
One called please mute your phone and record your name clearly when prompted.
One moment, please while we gather the first question.
The first question comes from Ernesto coffee alone That'd be London from Bank of America at Nashville. Please go ahead.
Thank you hi, good morning, Gustavo Jorge unequal.
Thanks for the opportunity and congrats on your strong earnings.
My first question is on your investment Securities and FX positions.
Nicolas Torres: Overall, we have accounted for another positive quarter. We continue to show a solid financial position. Asset quality remains under control and closely monitored.
Elaborate on how the positions benefited because of the high inflation high rates on the FX.
And how should we think about the valuation of these positions in 'twenty to 'twenty four.
Nicolas Torres: We keep on working to improve our efficiency standards, and we keep a well-optimized deposit base. Finally, on November 2, 2023, the Central Bank of Argentina approved the sale of Ita Argentina, now Banco VMA, to Banco Macro. Banco Macro has now acquired 100% of the shares and both of Banco Ita Argentina and its subsidiaries, Ita Asset Management and Ita Valores.
We continued to see higher inflation or FX depreciation.
Should we continue to see a positive results or how should we think about them.
And also related to this question up how.
How much of.
Hopefully leaks Ah did you continue to hold.
Nicolas Torres: The price of the agreement was set at $50 million, which was paid on November 3. An additional amount resulting from a potential adjustment that will be eventually cut based on the results obtained by Banco Ita Argentina and is considered between April 1, 2023 and the closing date and will be determined at a future date. The result from the acquisition is shown under income from associate and joint ventures, a total of 156 billion pesos, and it's shown in the fourth quarter of 2023. More information is provided in the notes to our financial statement. At this time, we would like any questions that you may have.
Then my second question is on loan growth I'm pretty sure that macro would be one of the few.
Banks in Argentina.
Real loan growth in 'twenty three.
Having said that we saw that it was driving by commercial loans, but the retail part.
Continues to be still very weak.
So how should we think about.
Gross real loan growth for this year.
And for my last question is on your or are we.
Operator: Thank you. We are going to open it up for questions and answers, and if you would like to ask a question, please press star 1 on your touchtone phone. Again, it is star one. When you are called, please unmute your phone and record your name clearly when prompted.
We saw the 20th free Arrow.
Yeah closer around the 30th sleep per cent.
But again he was highly drive in because of the gains on investment securities.
Operator: One moment, please, while we gather the first question. The first question comes from Ernesto Gabilondo from Bank of America. Ernesto, please go ahead.
So considering that you have a tougher G overdue base in 'twenty four.
Jorge Francisco Scarinci: Thank you. Hi, good morning, Gustavo, Jorge, and Nico. Thanks for the opportunity and congratulations on your strong earnings. My first question is about your investment securities and FX positions. Can you elaborate on how the positions benefited because of the high inflation, the high rates, and the FX? And what should we think about the valuation of these positions in 2024? If we continue to see higher inflation or effective depreciation, should we continue to see positive results, or how should we think about... and also related to this question, how much of LELICS do you continue to hold? Then my second question is about Long Road.
How should we think about the arrow.
India's year.
Thank you.
Okay.
So how are you thanks for your questions.
Let's start with.
The first one.
Remember wrongly.
In terms of.
The strategy that we carried out in the in the last quarter of 23, three basically at some point we were forecasting.
And that there would be some troubles with the leagues will be so we decided to switch from the league's E. Two.
Do all bonds those ones that are yielding.
He'll be inflation or something else.
Each Olympics they fire.
Basically that we're going to see that that time, Dod, saying the week between the deepening of the week between the Central Bank and the Treasury was almost the same. So we were the first bank to switch the portfolio up in the league.
Jorge Francisco Scarinci: I'm pretty sure that Macro will be one of the few banks in Argentina with real long-term growth in 2023. Having said that, we saw that it was driven by commercial loans, but the retail part continues to be very weak. So how should we think about long roads, really long roads, for this year?
At the end of November we got no the league.
We used reaching to do all the bonds basically.
Jorge Francisco Scarinci: And my last question is on your ROE. We saw the 23 ROE close around 33%. But again, it was highly driven because of the gains on investments in securities.
We were also benefited by the devaluation of all their Pizza Olympics in December.
Basically that was the.
Those numbers were reflecting that in the fourth quarter, we saw that very we both of these data basically yesterday.
Jorge Francisco Scarinci: So considering that you will have a tougher G over G base in 24, how should we think about the ROE this year? Thank you. Hi Ernesto, how are you? Thanks for your questions. Let's start with the first one, if I remember correctly.
In 2024.
Part of those bonds, we were like.
Switching to our inflation linked bonds of course, I cannot give you much of the detail because he said not public information, but basically we were switching a little bit they're dwelling too sir being bonds.
Jorge Francisco Scarinci: In terms of the strategy that we carried out in the last quarter of 2023, basically at some point we were forecasting that there could be some trouble with the LELICs, so we decided to switch from the LELICs into dual bonds, the ones that are yielding inflation or evolution of the official effects, the higher, since basically that we considered at that time that the difference of the risk between the central bank and the treasury was almost the same, so we were the first bank to switch the portfolio of LELICs, so at the end of November we had no LELIC and we switched into dual bonds and basically, We were also benefitted by the evaluation of the official effects in December, and basically that was.., those numbers were reflecting that in the fourth quarter results that we posted basically yesterday. In 2024, part of those dual bonds, we were like switching into inflation-linked bonds. Of course, I cannot give you much of the details because it's not public information, but basically we were switching a little bit of the dual into SIR-linked bonds.
Of course.
And as I mentioned also the leaks, we have zero so at the end of November.
In terms of loan growth that was another question I think the second question that you asked yes.
Yes commercial loans showed a good performance. Please consider there that we are including those portfolio mainly commercial so that's why the comparison on the increase that you are showing the numbers I think that that it's well explained in the press release.
And of course in terms of ROE is yes. They are.
That would be both within 20 feet Walsh at spectacular going forward, we think that we should be in more normalized level of between 15% to 20% positive Roe.
Jorge Francisco Scarinci: Of course, as I mentioned also, the league will have zeroes at the end of November. In terms of loan growth, that was another question, I think the second question that you asked. Yes, the commercial launch showed a good performance. Please consider that we are including Ita's portfolio, mainly commercial, so that's why the comparison and the increase that you are showing in the numbers. I think that that is well explained in the press release. And of course, in terms of ROEs, yes, the ROE that we posted in 2023 was spectacular. Going forward, we think that we should be at more normalized levels between a 15 to 20% positive ROE. Excellent. Very helpful, Jorge.
Excellent Super Council call consult for 'twenty four we should stick are always between 15 to 20 or is it something that could start to show up more than 25.
Yeah.
I think in a normalized scenario I think that Banco macro should have no broken into the Levered ROE in the area of 20%.
And 2024.
Yeah, it's tough to tough to forecast right now.
Say around 15, and we are the terms that we could be fine tuning beach in coming quarters.
Excellent. Thank you very much okay.
You like them.
Okay.
And now we have a question from Carlos Gomez from HSBC.
Jorge Francisco Scarinci: So, for 24, we should expect ROEs between 15 to 20, or this is something that could start to show up more in 25. I think in a normalized scenario, I think that Banco Macro should have no problem delivering ROEs in the area of 20%. 2024 is tough to forecast right now, let's say around 15% in real terms, and we could be fine-tuning this in the coming quarters.
Please go ahead.
Yeah.
Hello can you hear me.
Okay.
Yes Carlo.
Please.
Hi.
That was always the Langley school, so first of all the diligence on that result.
Okay.
Okay.
Okay.
Right.
The conditions in which we're operating in this first quarter of the year meeting with relatively high inflation with much lower swap rates from the central Bank.
Jorge Francisco Scarinci: Excellent. Thank you very much. You'll like that.
Operator: And now we have a question from Carlos Gomez from HSBC. Carlos, please go ahead. Hello, can you hear me? and Edgar Lojaez Plita.
Is it that we should expect in this first and second quarter of the year and then what do you expect to see Washington.
Carlos Gomez: Hi. So, first of all, congratulations on the result. What are the conditions in which you are operating in this first quarter of the year, meaning relatively high inflation and much lower swap rates from the central bank? What is it that we should expect in this first and second quarters of the year? And then what do you expect to see once things normalize by the end of the year? I'm talking, in particular, about securities gains and, essentially, your margin from financial intermediation.
Normalized by the end of the year and took in particular about securities gains.
And.
Your margin.
From potential interpretation and taken any views on the U S. It'd be different update on what you are going to do what's your newly acquired asset Ito.
When do you expect to integrate it and whether you've seen that they have more I should say.
Unfortunately for you in the coming year.
Jorge Francisco Scarinci: And second, if you can give us a bit of an update on what you are going to do with your newly acquired asset, ITAO, when you expect to integrate it, and whether you think that there are more assets that could come up for sale for you in the coming quarters or years. Thank you. Hi Carlos, I couldn't hear the first part of your question, but the last part of your first question was talking about security in the first quarter of this year. Of course, it is not possible to repeat the spectacular performance we had in the last quarter of last year.
Thank you.
Yeah.
Hi, Carlos I couldn't hear exactly the first part of your question.
Question, but the last part of your first question was talking about securities.
In the first quarter of D C or of course.
He said not possibly two.
We peaked at Jackalope performance, we've had in the last quarter of last year. So I think we're going to have a more normalized behavior.
Jorge Francisco Scarinci: So I think we are going to have a more normalized behavior of security gains in the first and second quarters. Again, it will depend on market conditions, on volatility, and, of course, bond prices. And I mean, we have demonstrated in the past that we can switch the portfolio into those bonds that deliver the best results. So I think that the result is going to be good. Not again, not that spectacular one that we posted in the last quarter of last year.
These gains in the first and second quarter.
And again, it will depend on market conditions.
So on the volatility kind of correspond bright teach them I mean, we have demonstrated in the past that we can be switching the portfolio in <unk>.
Those bonds that delivers the best result, so I think that's where we started is going to be good not again not a spectacular is the one that we bought in the last quarter of last year.
Jorge Francisco Scarinci: In terms of the Ita merge, I would say that it's going to happen in the second half of this year, the legal merger with Ita, so that in the last part of the year, you are going to see consolidated and normalized numbers including Ita in all the figures, and so okay, so that is the legal measure. In terms of operationally putting your systems in place, putting your brand in the bank, how long do you Sorry Carlos, could you repeat that, please? Yes, my apologies again for the line. I was asking when you think you will have the operational merger with Ita and when you will be using a single brand. Carlos, that is going to happen in the second half of the year, exactly. We believe that it's going to be between August and October, but we do not have an exact time, but the second half for sure. Thank you very much. Uhh...
So ito emerge.
Would you say that is going to happen in the second half of this year.
The the legal merger off where we did go.
So that in the last part of the year, you're going to see the I mean, the consolidated normalized numbers, including <unk>.
In all the theaters.
And so okay. So that is the legal merger.
Operationally being bullied give assistance, putting your Brent and the bank how long do you think that process would take.
Yeah.
Okay.
Sorry could you repeat that please.
Yeah, My apologies again for the time I was asking when do you can do with the operational merger with Dell and when would you be using a single brand.
Yeah.
Yeah.
Okay.
Carlos is going to go up in the second couple of V or exactly we believe that is going to be between August all.
All of a sudden October blocks are still do not have the exact time, but second half for sure.
Alright.
And going back to the game.
We tend to build margin.
Jorge Francisco Scarinci: I mean, yes, the environment here with negative real interest rates and... basically, now that you have to take into consideration that when you compare the average cost of funds of the bank and the yield that we are getting on loans and on securities, even though they are still negative in real terms, the margins there are quite attractive. Take into consideration that almost 50 percent of our deposits are close to zero percent, and the other 50 percent are close to 100. So we assume that the average cost of funds is in the area of between 55 and 60 percent. Then you have to assume that loans are yielding in the area of 110 or 115, perhaps, and then the securities.
With the swap rate piece with negative real rates today.
What do you mean.
Mark do you believe these conditions really.
Okay.
Uh huh.
I mean, yeah.
The environment here with Mega team real interest rate and.
He's basically.
I mean, that's what you have to take into consideration that when you compare the average cost of funds of the bank.
And the yield that we're getting on loans and on the securities even though they are.
I think in real terms the margins here are quite attractive.
Into consideration that almost 50% of our deposits.
Zero percent.
The other 50% close to Congress. So we assume that the average cost of funding in the area of between 55 and 60% then you've got to assume that loans are usually in the area of 110 115 Bronx.
And then the securities therefore margins look quite attractive for it to be.
Jorge Francisco Scarinci: Therefore, margins look to be quite attractive for banking intermediation here, and that's why we continue to increase our funding on the asset side, increasing loans or securities the better. Thank you very much. Welcome. And There are no further questions at this time. This concludes the question and answer session. I will turn the conference back over to Mr. Nicolas Torres for some final considerations. Thank you all for your interest in Banco Macro. We appreciate your time and look forward to speaking with you again. Good day. The conference has now concluded. Thank you for attending, and have a great day. You may now disconnect.
Getting to mediation here and therefore, that's why we continue to increase our funding.
On the asset side, increasing loans or securities debenture.
Yeah.
Yes.
Okay. Thank you very much.
Okay.
And there are no further questions at this time. So this concludes the question and answer session I will turn the conference back over to Mr. Nicolas Torres for some final considerations.
Okay.
Thank you all for your interest in Banco macro we appreciate your time and look forward to speaking with you again.
Good day.
The conference has now concluded thank you for attending.
And have a great day, you may now disconnect.