Q1 2025 Banco Macro SA Earnings Call
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 1 Quarter 25 Earnings Conference. We would like to inform you that the first quarter 2025 press release is available to download at the Investor Relations website of Banco Macro. www.macro.com.ar slash Relaciones dash Inversorios Also, this event is being recorded and all participants will be in a listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer session. At that time, further instructions will be given.
At this time, we would like to welcome everyone to Banco macros, one quarter 25 earnings conference call, we would like to inform you that the first quarter 2025 press release is available to download at the Investor Relations website of Banco macro www Dot Macrolith dotcom Dot H R Slash Sheila.
Jonas Dash inverse. So it is also this event is being recorded and all participants will be in a listen only mode. During the company's presentation.
After the company's remarks are completed there will be a question and answer session at that time further instructions will be given.
Operator: It is now my pleasure to introduce our speaker.
Speaker Change: It is now my pleasure to introduce our speakers joining us from Argentina, Mr. Jorge is cutting <unk>, Chief Financial Officer, Andrey Sydney Galactoid is higher now.
Operator: Joining us from Argentina, Mr. Jorge Scarinci, Chief Financial Officer, and Mr. Nicolás Torres, Now I will turn the conference over to Mr. Nicolas Torres. You may begin your conference.
Speaker Change: Now I will turn the conference over to Mr. Nick collectively you may begin your conference.
Speaker Change: Thank you.
Nick: Good morning, and welcome to Banco Macros first quarter 2025 conference call.
Nicolas Torres: Good morning and welcome to Banco Macro's first quarter 2025 conference call. Any comment we may make today may include forward-looking statements which are subject to various conditions, and these are outlined in our 20th, which was filed to the SEC, and it's available at our website. The first quarter 2025 press release was distributed yesterday and it's available at our website. All figures are in Argentine Pesos and have been restated in terms of the measuring unit current at the end of the reporting period. As of 2020, the Bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29 as established by the Central Bank.
Nick: 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 to the SEC and its already number at our website.
Nick: First quarter of 2020 press release was distributed yesterday and it's available at our website.
Nick: Alright in Argentine pesos and have been restated in terms of the Michigan unit at the end of the reporting period.
Nick: So for 2020, the bank began reporting subs applying hyperinflation accounting in accordance with idea for S. Ias 29 as established by the Central Bank.
Nicolas Torres: For ease of comparison, figures of previous quarters have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2025.
Nick: For ease of comparison P or previous quarters have been restated our prime Aes 'twenty nine to reflect the accumulated effect of the inflation adjustment for each period from March 30, <unk> 2025.
Speaker Change: I will now briefly comment on the bank's first quarter 2020.
Nicolas Torres: I will now briefly comment on the bank's first quarter 2025 financial results. In the first quarter of 2025, Banco Macro's net income totaled 45.7 billion pesos. This result was 59 percent or 65.3 billion pesos lower than the fourth quarter of 2024. This result was mainly due to lower net income from financial assets and liabilities for value to profit or loss, and the bigger loss related to the result from the net monetary position. Higher inflation was observed in the quarter. which was partially upset by higher other operating income and lower employee benefits and administrative expenses. The annualized return on average equity and the accumulated annualized return on average assets were 3.8 and 1.2 percent respectively.
Speaker Change: Financial results.
Speaker Change: In the first quarter of 2025, Banco macros net income totaled 45 7 billion pesos. This result was 59% or $65 3 billion peso slower than the fourth quarter of 2024.
Speaker Change: This result was mainly due to lower net income from financial assets and liabilities for everybody if the profit or loss.
Speaker Change: The bigger loss related to the results from the net monetary position higher inflation was observed in the quarter.
Speaker Change: Which was partially offset by higher other operating income and lower employee benefits and other administrative expenses.
Speaker Change: The annualized return on average equity and the accumulated annualized return on average assets were at three eight and $1 two.
Speaker Change: Respectively.
Nicolas Torres: In the first quarter of 2025, net operating income before general and administrative expenses was 801 billion pesos. nine percent or 82.6 billion pesos lower compared to the fourth quarter of 2024 due to lower income from interest on government security. On a yearly basis, net operating income before general and personal expenses decreased 68% or 1.7 trillion pesos. In the first quarter of 2025, provision for loan losses totaled 66 billion pesos, 62% or 25.3 billion pesos higher than the fourth quarter of 2024, given the loan growth experience in the quarter. On a yearly basis, provision for loan losses increased 124% or 36.6 billion pesos.
Speaker Change: In the first quarter of 2025, net operating income before general and administrative expenses.
Speaker Change: 801 billion pesos.
Speaker Change: 9% or $82 6 billion pesos lower compared to the fourth quarter was trying to refer you to lower income from interest and government securities on a yearly basis net operating income before general and I know you said, Unfortunately expenses decreased 68% or $1 70 pretty insightful.
Speaker Change: In the first quarter of 2025 provision for loan losses totaled 66 billion pesos, 62% or $25 3 million pesos higher than in the fourth quarter of 2024, given the loan growth experienced in the quarter on a yearly basis provision for loan losses increased 124% or $36 6 billion pesos.
Speaker Change: In the quarter net interest income totaled $579 2 billion pesos 1 billion higher than the fourth quarter of 2024, and 122% or 318 billion higher year on year.
Nicolas Torres: In the quarter, net interest income totaled 579.2 billion pesos, one billion pesos higher than the fourth quarter of 2024, and 122 percent or 318 billion pesos higher year on year. This result is due to an 8 percent decrease in interest expense and a 3 percent decrease in interest income. In the quarter, a 21 percent decrease in income from net from interest on government securities stands out. In the first quarter of 2025, interest income totaled $866.7 billion pesos, 3% or $22.6 billion pesos lower than in the fourth quarter of 2024, and 22% or $247.8 billion pesos lower than in the first quarter of 2024.
Speaker Change: As a result.
Speaker Change: Two 8% decrease in interest expense and a 3% decrease in interest income in the quarter at 21% decrease in income from net it from either on government.
Speaker Change: A standout.
Speaker Change: In the first quarter of 2025 interest income totaled $866 7 billion pesos, 3% or $22 6 million for slower than in the fourth quarter of 2024, and 22% or $247 8 billion. This is lower than in the first quarter of 2024.
Nicolas Torres: Income from interest on loans and other financing totaled $592.3 billion, 9% or $49.6 billion higher compared with the previous quarter, mainly due to an 18% increase in the average volume of private sector loans, which was partially offset by a 200 basis points decrease in the average lending rate. On a yearly basis, income from interest on loans decreased 18% or 132.2 billion pesos. In the first quarter of 2025, interest renowns represented 68% of total interest income. In the first quarter of 2025, income from government and private securities decreased 21% or 71.5 billion pesos quarter on quarter, mainly due to lower income from Bonus del Peso Nacional and Inflation Justice Bond.
Speaker Change: Income from interest on loans and other financing totaled $592 3 billion pesos, 9% or $49 6 million pesos higher compared with the previous quarter, mainly due to an 18% increase in the average volume of private sector loans, which was partially offset by a 200 basis points decrease in the average lending rate.
Speaker Change: On a yearly basis income from interest on loans decreased 18% or $132 2 billion pesos.
Speaker Change: In the first quarter of 2020 private interest on loans represented 68% of total interest income.
Speaker Change: In the first quarter of 2020.
Speaker Change: Income from government and private securities decreased 21% or $71 5 billion basis quarter on quarter.
Speaker Change: Mainly due to lower income from one of the sovereign and inflation adjusted bonds.
Speaker Change: And increased 83% or 123 billion pesos compared with the same period of last year.
Nicolas Torres: and increased 83% or 123 billion pesos compared with the same period of last year. This result is explained 93% by income from government and private securities at amortized cost, and the remaining 7% is explained by income from government securities valued at fair value rather than comprehensive income. In the first quarter of 2025, income from RIPOs totaled $864 million pesos, 79% or $302 million pesos higher than the previous quarter, and almost 100% or $236 million pesos lower than a year ago. It is worth noting that as of July 22, 2024, the Central Bank decided to terminate RIPOs.
Speaker Change: These result is explained 93% by income from government and private securities and amortized cost and the remaining 7% is explained by income from government securities valued at fair value.
Speaker Change: Comprehensive income.
Speaker Change: First quarter of 225 income from Repos totaled 864 million pesos, 79% of our refineries 2 million pesos higher than the previous quarter, and almost 100% of 236 million, but slower than a year ago.
Speaker Change: It is worth noting that as of July 22, 2024 different bank decided to terminate <unk> plus.
Nicolas Torres: and I replaced them with LEFIs, which are now issued by the Treasury. In the first quarter of 2025, FX income totals a $6.4 billion gain, 95% or $190 billion. In the quarter, the Argentine peso depreciated 4% against the U.S. dollar at the Central Bank of Argentina, lowered the current impact from 2% per month to 1% per month, effective as of February 2025. In the first quarter of 2025, interest expense totaled $207.6 billion pesos, decreasing 8% or $23.5 billion pesos compared to the previous quarter, and 66% or $565.8 billion pesos lower compared to the first quarter of 2024.
Speaker Change: And replace them with legacy which are now issued by the Treasury.
Speaker Change: In the first quarter of 225, FX income totaled $6 4 billion bushels gain 95% or 109.
Speaker Change: Pinpoint champion for slower than a year ago.
Speaker Change: In the quarter, the Argentine peso depreciated, 4% against the U S. Dollar at the Central Bank of Argentina lowered the Carlin back from 2% per month to one person per month effective as of February 2025.
Speaker Change: In the first quarter of 2025 interest expense totaled 200, 876 billion pesos decreased <unk>, 8% or $23 5 billion pesos compared to the previous quarter, and 66% or $565 8 billion pesos lower compared to the first quarter rainfall.
Speaker Change: Within interest expenses interest on deposits represented 95% of the bank's total interest expense decreasing 8% or 22 3 billion pesos quarter on quarter Detracted 74 basis points a decrease in the average rate paid on deposits, while the average volume.
Nicolas Torres: Within interest expenses, interest on deposits represents 95% of the bank's total interest expense, decreasing 8% or 22.3 billion pesos quarter on quarter due to a 274 basis points decrease in the average rate paid on deposits, while the average volume of private-sector deposits increases 15% On a yearly basis, interest on the process decreased 67% or 547.9 billion pesos. In the first quarter of 2025, the bank's net interest margin, including FX, was 23.2%, lower than the 24.7% posted in the fourth quarter of 2024, and the 26.1% posted in the first quarter of 2024. In the quarter, the income totaled 169.8 billion pesos, 1% or 943 million pesos lower than in the fourth quarter of 2024.
Speaker Change: If the Emerson.
Speaker Change: On a yearly basis interest on deposits decreased 67%.
Speaker Change: 547.9 billion pesos.
Speaker Change: In the first quarter of 2025, the bank's net interest margin, including FX was 23, 2% lower than the 24, 7% posted in the fourth quarter of 'twenty 'twenty four and the 26, 1% posted in the first quarter of 2024.
Speaker Change: In the quarter fee income totaled $169 8 billion pesos, 1% or 943 million.
Speaker Change: I mean in pesos lower than the fourth quarter of 2020 Forum.
Nicolas Torres: In the quarter, ATM transactions fees decreased 18% or 1.9 billion pesos and credit card fees decreased 2% or 635 million pesos, which were partially offset by a 3% or 1.7 billion pesos increase in fees charged on deposit account. On a yearly basis, fee income increased 29% or 38.5 billion pesos. In the first quarter of 2025, net income from financial assets and liabilities at fair value to profit or loss totaled 66.4 billion pesos gain, decreasing 55% or 80 billion pesos compared to the fourth quarter of 2024. This result is mainly due to lower income from government securities.
Speaker Change: In the quarter.
Speaker Change: M transactions.
Speaker Change: The decreased 18% or 1.9 billion pesos and credit card fees decreased 2% or 635 million pesos, which were partially offset by a 3% or $1.7 million increase in fees charged on deposit accounts.
Speaker Change: On a yearly basis fee income increased 29% or $38 5 billion pesos.
Speaker Change: In the first quarter of 2025 net income from financial assets and liabilities at fair value for Parker to loss totaled $66 4 million pesos gain decreased 55% or 80 billion pesos compared to the fourth quarter of 2000 and for this result is mainly due to lower income from government securities on a yearly basis net income from financial assets and liabilities for our bodies.
Nicolas Torres: On a yearly basis, net income from financial assets and liabilities at fair value to profit or loss decreased 97% or 1.9 trillion pesos. In the quarter, other operating income totaled 68.5 billion pesos, 29% or 15.5 billion pesos higher than the fourth quarter 2024 due to higher other service rated fees. which increased 29% or 6.2 billion pesos and higher income from credit and debit cards. On a yearly basis, other operating income decreased 2% or 1.4 billion pesos. In the first quarter of 2025, Banco Macro's administrative expenses plus employee benefits totaled 257 billion pesos, 10% or 27.3 pesos lower than the previous quarter, due to lower employees benefits, which decreased 9% and lower administrative expenses, which decreased 11%.
Speaker Change: Perfect.
Speaker Change: It was 97% or $1 93 in pesos.
Speaker Change: In the quarter other operating income totaled $68 5 billion pesos, 29% or 15 point pipe.
Speaker Change: William Thanks was higher than the fourth quarter of 2024 due to higher other service related base.
Speaker Change: Which increased 29% or six 2 billion pesos on higher income from credit cards.
Speaker Change: On a yearly basis other operating income decreased 2% or $1 4 billion pesos.
Speaker Change: In the first quarter of 2025, Microseism Ace of expenses plus employee benefits totaled 257 billion pesos, 10% or 27 three.
Speaker Change: Lower than the previous quarter due to lower employee benefits, which decreased 9% and lower admin expenses, which decreased 11% on a yearly basis administrative expenses plus employee benefits decreased 19% of $58 5 billion pesos in.
Nicolas Torres: On a yearly basis, administrative expenses plus employee benefits decreased 19% or 58.5 billion pesos. In the first quarter of 2025, efficiency rates have reached 38.2%, improving from the 39.4% posted in the fourth quarter of 2024, and deteriorating from the 14.7% posted a year ago. In the first quarter of 2025, expenses decreased 10%, while net interest income plus net fee income plus FX income, another operating income, and plus net income from financial assets provided to profit or loss decreased 7% compared to the fourth quarter of 2020. In the first quarter of 2025, the result from the net monetary position totaled 267.1 billion pesos lost, 11% or 27.1 billion pesos higher than the loss posted in the previous quarter, and 81% or 1.1 trillion pesos lower than the loss posted one year ago.
Speaker Change: In the first quarter of 2005 efficiency ratio reached 38, 2% improving from the 39, 4% posted in the fourth quarter of 'twenty 'twenty, four and deteriorating from the $14 seven.
Speaker Change: <unk> posted a year ago.
Speaker Change: In the first quarter of 'twenty private expenses decreased 10%, while net interest income plus net income.
Speaker Change: FX income and other operating income.
Speaker Change: Net income from financial assets at fair value at the property loss decreased 7% compared to the fourth quarter of 'twenty.
Speaker Change: In the first quarter of 2025, the result from the net monetary position totaling 266.
Speaker Change: $67 1 billion, plus 11% of $27 1 billion higher than the loss posted in the previous quarter, and 81% or $1, one trillion basis lower than the loss posted one year ago.
Nicolas Torres: Higher inflation was observed during the quarter, 54 as basis points above the fourth quarter of 2024, up to 8.6% from 8% in the fourth quarter of 2024. In the first quarter of 2025, Banco Macro's effective income tax rate was 43%, higher than the one registered in the fourth quarter of 2024. Further information is provided in note 21 to our financial statement.
Speaker Change: Inflation was observed during the quarter 54.
Speaker Change: Basis points above the fourth quarter of 2020 for up to eight 6% from 8% in the fourth quarter of FY 'twenty four.
Speaker Change: In the first quarter of 2025, Banco macros effective income tax rate was 43% higher than the one registered in the fourth quarter of 2020 for further information is provided in note 21 to our financial statements.
Speaker Change: In terms of loan growth the bank's total financing bridge seven seven trillion pesos, increasing 22% or one port pretty impressive support on our water and it was 97% of our frequent a per unit basis year on year in the first quarter of 2025 private sector loans increased 22% or one three trillion pesos on a yearly basis private sector loans increased 94%.
Nicolas Torres: In terms of loan growth, the bank's total financing reached 7.7 trillion pesos, increasing 22 percent or 1.4 trillion pesos quarter on quarter and increasing 97 percent or 3.8 trillion pesos year on year. In the first quarter of 2025, private sector loans increased 22 percent or 1.3 trillion pesos. On a yearly basis, private sector loans increased 94 percent or 3.6 trillion pesos. Within commercial loans, overdrafts and others stand out with a 107% or 628.7 billion pesos increase, and a 16 or 188.4 billion pesos increase respectively. Within consumer lending, almost all product lines increased during the first quarter of 2025.
Speaker Change: Cent or $3 six trillion pitch.
Speaker Change: Within commercial loans, overdrafts, and olive standout without 107% or $628 7 billion increase in 16 or $188 4 billion this increase respectively.
Speaker Change: Within consumer lending almost all product lines increased during the first quarter of 'twenty, Frank why personal loans and credit card loans standout went up 28% or $354 1 billion pesos increase and a 4% or $65 2 billion business increase respectively.
Nicolas Torres: Personal loans and credit card loans stand out with a 28% or $354.1 billion increase and a 4% or $65.2 billion increase respectively. In the first quarter of 2025, peso financing increased 21% or one trillion pesos, while U.S. dollar financing increased 22% or $262 million. It is important to mention that Banco Macro's market share over private sector loans as of March 2025 reached 9.5%. On the funding side, total deposits increased 5% or 485.4 billion pesos, quarter on quarter, totaling 9.6 trillion pesos, and increased 23% or 1.8 trillion pesos year on year. Private sector deposits increased 4% or 349.6 billion pesos, quarter on quarter, while public sector deposits increased 20% or 136.6 billion pesos, quarter on quarter.
Speaker Change: In the first quarter of 2025 peso financing increased 21% or one trillion versus where the U S dollar financing increased 22% or $262 million.
Speaker Change: It is important to mention that Banco macros market share over private sector loans as of March 2025 reached nine 5%.
Speaker Change: On the funding side total deposits increased 5% or four.
Speaker Change: $485 4 billion pesos quarter on quarter totaling $9 six trillion pesos and increased 23% a $1 eight trillion pesos year on year private sector deposits increased 4% or $349 6 billion basis quarter on quarter, while public sector deposits increased 20% or $136 6 billion basis quarter on quarter.
Speaker Change: The increase in private sector deposits was led by time deposits, which increased 83% or $1 eight trillion pesos.
Nicolas Torres: The increase in private sector deposits was led by time deposits, which increased 83% or 1.8 trillion pesos. while Demon Deposits decreased 22% or 1.2 trillion pesos quarter on quarter. Within private sector deposits, peso deposits increased 15% or 899.5 billion pesos while US dollar deposits decreased 17% or for $497 million. As of March 2025, Banco Macro's transactional accounts represented approximately 48% of total deposits. Banco Macro's market share over private deposits as of March 2025 totaled 7.8%.
Speaker Change: Demand deposits decreased 22% or one two trillion pesos quarter on quarter.
Speaker Change: Within private sector deposits peso deposits increased 15% or $899 5 billion pesos, while U S dollar deposits decreased 17% or four.
Speaker Change: $497 million.
Speaker Change: As of March 'twenty, 'twenty, five Banco macros transactional accounts represented approximately 48%.
Speaker Change: Total deposits.
Speaker Change: Banco macros market share over private deposits as of March 2025 totaled seven 8%.
Speaker Change: In terms of asset quality, Banco macros nonperforming total financial ratio reached 144% the coverage ratio measured as total allowances under expected credit losses over a number from our loans under Central Bank rules, which 163 30.
Nicolas Torres: In terms of asset quality, Banco Macro's non-performing total financial ratio reached 1.44%, the coverage ratio measured as total allowances under expected credit losses over non-performing loans under central bank rules reached 163.34%. Consumer Portfolio Non-Performing Loans deteriorated 37 basis points, up to 181.81% from 144% in the previous quarter, while Commercial Portfolio Non-Performing Loans improved 22 basis points in the first quarter of 2025, down to 0.66% from 0.88% in the previous quarter. In terms of capitalization, Banco Macro counted an excess capital of 3.2 trillion pesos, which represented a capital adequacy ratio of 34.3% and a tier one ratio of 33.6%.
Speaker Change: 34%.
Speaker Change: Consumer portfolio nonperforming loans deteriorated 37 basis points up to 180 point, 81% from one part in the previous quarter, while commercial portfolio nonperforming loans improved 22 basis points in the first quarter of 2025 down to 66% from 88% Liberty This quarter.
Speaker Change: In terms of capitalization Banco macro accounted an excess capital.
Speaker Change: 3.2 premium basis, which represented at capital adequacy ratio of 34, 3% and a tier one ratio of 33, 6%.
Nicolas Torres: The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate. Liquid assets during deposit ratio reached 68 percent.
Speaker Change: The bank's aim is to make the best use of this excess capital.
Speaker Change: The bank's liquidity remained more than appropriate liquid acid sterile post Brexit reached 68%.
Nicolas Torres: Overall, we have accounted for another positive quarter. We continue showing a solid financial position. We keep a well-optimized deposit base. Asset quality remain under control and closing monitor. And we can keep on working to improve more our efficiency standard.
Speaker Change: Overall, we have accounted for another positive quarter, we continue showing a solid financial position, we keep a well optimized deposit base asset quality remain under control and closely monitor and we keep on working to improve our efficiency standards.
Operator: At this time, we would like the questions that you may have. Okay, at this time we are going to open it up for questions and answers.
Speaker Change: At this time, we would like the questions.
Speaker Change: They have.
Speaker Change: Okay. At this time, we are going to open it up for questions and answers. If you would like to ask a question. Please press the Q&A button at the bottom of the screen or to ask a question on audio click on race haunt you will then receive a request to activate your Microsoft.
Operator: If you would like to ask a question, please press the Q&A button at the bottom of the or to ask a question on audio, click on Raise Hand. You will then receive a request to activate your microphone. One moment, please, for the first question.
Speaker Change: One moment please for the first question.
Speaker Change: Our first question comes from Brian <unk> with Citi.
Brian Flores: Our first question comes from Brian Flores with Hi Tim, good morning. Thank you for the opportunity to ask questions. The first one is just a quick update on guidance to see if anything has changed. We remember you discussed maybe a real loan growth of 60 percent, deposits at around 30, an ROE ranging between 12 and 15, and with the core equity T1 ratio maybe at 25-26 percent. So I just wanted to know if there are any updates on that.
Brian: Hi, Good morning, Thank you for the opportunity to last question. The first one is just a.
Speaker Change: A quick update on our guidance to see if anything has changed we remember Judy scores, maybe a real loan growth was 60% deposits at around 30, a narrowly ranging between 12 and 15.
Brian: With a core equity tier one ratio maybe Ed.
Brian: 25, 26%. So just wanted to know if there are any albeit some nuts.
Brian Flores: And then a second just to maybe seize the opportunity on capital, right, because you benefited from capital, you have one of the strongest positions in the system. So I just wanted to hear your thoughts on that, if you're going to focus completely on organic growth or if at some point inorganic growth is also an opportunity. Thank you.
Brian: Secondly, just to maybe seize the opportunity or capital right because.
Brian: You benefited from capital you have.
Brian: One of the strongest positions in the system. So just wanted to hear your thoughts on that if youre going to focus completely on organic growth or if at some point in organic growth is also an opportunity. Thank.
Brian: Thank you.
Brian: Good morning, Brian Dcs or just how do you see.
Jorge Scarinci: Good morning, Brian. This is Jorge Scarinci. For your first question... We are going to keep some of the guidance that we gave on the last quarter and we are going to change a little bit some of them. In terms of long growth, we continue to maintain the 60% long growth in real terms for 2025. In deposits, we are forecasting a real growth of 45%. In terms of capital ratio, we should maybe increase a little bit our forecast. The capital ratio by the end of 2025 should be ranging in the area of 28-29%. And in terms of ROE.
Speaker Change: On your first question.
Speaker Change: <unk>.
Speaker Change: We're going to keep some of the guidance that we gave on the last quarter on where we are going to change a little bit some of them in terms of loan growth. We continue to maintain a 60% loan growth in real terms for 2025.
Speaker Change: In deposits, we are forecasting a real growth so 45%.
Speaker Change: And in terms of the capital ratio.
Speaker Change: We should maybe increase a little detail, where our forecast the copy that ratio by Gandalf.
Speaker Change: 25 years should be ranging anda of joined the age 29%.
Speaker Change: The <unk>.
Speaker Change: In tons sold.
Speaker Change: Our OE.
Jorge Scarinci: We are downgrading a little bit from the former conference, we expect to have between 8 to 10% ROE for 2025, of course this is going to be or could be affected by the evolution of bond prices. This 8% to 10% is considering ordinary evolution of prices. If we see prices improving, ROE could be ranging slightly above 10%. but let's say 8 to 10 is the range that we are forecasting as a normal scenario in 2025.
Speaker Change: We are downgrading, a little bit from the former conference we expect to have between 8% to 10% Roe.
Speaker Change: For 2025.
Speaker Change: Of course, this is going to be or could be affected by.
Speaker Change: The evolution of bond prices.
Speaker Change: These eight to 10 percentage considering.
Speaker Change: Ordinary evolution of prices.
Speaker Change: We see.
Speaker Change: Prices, improving ROE it couldnt be ranging slightly above 10%.
Speaker Change: <unk>.
Speaker Change: Let's say eight to Chinese the range that we are forecasting a normalized scenario in 2025.
Speaker Change: In terms of your second question on the capital structure, Yes.
Jorge Scarinci: In terms of your second question on the capital structure, yes, we know that we have the best capital in the Argentine banking sector. That's why we are speeding up in increasing organic growth as much as we can and taking advantage of loan demand. And that is what we are focusing for the moment. We believe that in the future there will be some other opportunities, maybe for M&A. Honestly, there's nothing that we are studying right now, but we are positive that in the next couple of years or three years, the number of banks in Argentina might shrink.
Speaker Change: We know that we have the best capital in the Argentine banking sector.
Speaker Change: Thats why we are speeding up in increasing organic growth as much as we can and taking advantage of loan demand and that is what we are focusing for a moment.
Speaker Change: Believed.
Speaker Change: In the future there will be some other opportunities maybe for a month.
Speaker Change: Honestly there is nothing that we are selling right now.
Speaker Change: We are positive that in the next couple of years, all three years, the number of banks in Argentina might shrink.
Jorge Scarinci: And we are going to be on alert and trying to analyse any acquisition target that should appear in the market.
Speaker Change: Yes.
Speaker Change: We are going to be on auto John trying to analyze any acquisition target that should appear in the market.
Speaker Change: Thank you Jorge and if I may just a follow up on what you mentioned on deposits is this increase because at significant rates from 30 to 45.
Operator: Thank you, Jorge.
Brian Flores: And if I may just follow up on what you mentioned on deposits, is this increase, because it's significant, right? It's from 30 to 45. Is this driven by maybe looking to compete on remunerated accounts that some of your competition is doing? Or what is driving these better prospects on deposit growth? Well, the thing is that in the first quarter, in terms of volume growth, both in loans and deposits, but more in deposits were slightly ahead of expectations. That's why we are increasing that time. And also because we are seeing maybe dollar deposit growth slightly stronger than what we had expected.
Speaker Change: Is this driven by maybe.
Speaker Change: Looking to compete on remunerated accounts that some of your competition is doing or what is driving these better prospects on deposit growth.
Speaker Change: Well the thing is that the first quarter.
Speaker Change: In terms of volume growth both in E.
Speaker Change: You also had deposit above more than deposits.
Speaker Change: We're slightly ahead of expectations that's why.
Speaker Change: We are an issue.
Speaker Change: So because we are seeing maybe dollar deposit growth slightly stronger than what we had expected.
Operator: Super clear, thank you.
Speaker Change: Super clear thank you.
Brian: Youre welcome Brian.
Operator: Don't wait, come right in.
Speaker Change: Our next question comes from <unk> <unk> with Bank of America.
Ernesto Gabilondo: Our next question comes from Ernesto Gabilondo with Bank of America. Thank you. Hi, good morning, Jorge and Nico. Thanks for the opportunity to ask questions.
Jorge Nicole: Thank you hi, good morning, Jorge Nicole Thanks for the opportunity to ask questions.
Ernesto Gabilondo: My first question will be on your macro expectations. Just wondering what are you expecting in terms of interest rates, inflation, GDP growth and effects for this and next year?
Jorge Nicole: My first question will be on your macro expectations.
Speaker Change: Just wondering what are you expecting in terms of interest rates inflation GDP growth and FX for this and next year.
Ernesto Gabilondo: And my second question will be on operating expenses. As you mentioned in your remarks, there was a decline in the first quarter. So just wondering, how should we think about the OPEC's growth this year?
Speaker Change: And my second question will be on operating expenses.
Speaker Change: As you mentioned in your remarks, there was some decline in the first quarter.
Speaker Change: So just wondering.
Speaker Change: How should we think about the opex growth this year.
Ernesto Gabilondo: And then my second question will be on your loan to deposit ratio and your strong capital ratio. On your loan to deposit ratio, I believe it's already at 86 percent. So how are you expecting the evolution of this ratio, especially considering a loan growth of 60 percent and that now you're expecting deposits to grow at 45 percent? And then your capital ratio, it seems very strong. No, you have an excess of capital.
Speaker Change: And then my second question will be on your loan to deposit ratio and your strong capital ratio.
Speaker Change: On your loan to deposit ratio I believe is already at 86%.
Speaker Change: So how are you expecting the evolution of this ratio.
Speaker Change: Especially considering.
Speaker Change: A long road over 60% and now you're expecting the proceeds to road at 45%.
Speaker Change: And then your capital ratio it seems very strong no you have.
Speaker Change: And excess of capital.
Speaker Change: So a follow up to the.
Ernesto Gabilondo: So a follow-up to the first question is, if there could be M&A in the sector, and this especially considering that if we have a positive outcome on the midterm elections next October, probably will be a good timing to do it before that, or do you think there was still chance to do it after that, but considering to pay a higher multiples in a potential consolidation in the sector? So I just wanted to hear your thoughts on that. Thank you.
Speaker Change: First question is.
Speaker Change: There could be M&A in the sector and these especially considering that if we have a positive outcome on the midterm elections next October.
Speaker Change: Probably it will be a good timing to do it before that or do you seeing there will still chance to do it after that both considering to pay a higher.
Speaker Change: Higher multiples in a potential consolidation in the sector. So I just wanted to hear your thoughts on that thank you.
Jorge Scarinci: Hi Ernesto, how are you? Well, let's start from the first question in terms of macroeconomic expectations. For GDP, we are forecasting a real growth for this year of 5% and 3% for 2026. In terms of inflation, we are expecting according to the consensus 30% area inflation in 2025 and 22% area inflation for 2026. in terms of interest rates, we believe that we are going to see in 2025, at least some declining trend in domestic interest rates. And according to the margins, I think that These are going to be slightly positive for the margins of the sector and Banco Macro, basically because our deposits reprice faster than our loans, plus that the mixing in loans that we are lending faster in consumer.
Speaker Change: So how are you.
Speaker Change: Well, let's start from the first question in terms of macroeconomic expectations.
Speaker Change: While GDP, we are forecasting a real.
Speaker Change: Growth for this year of 5%.
Speaker Change: On 3% for 2026.
Speaker Change: In terms of installation.
Speaker Change: Expecting according to the consensus 30% area inflation in 2025.
Speaker Change: 82% area installation for 2026.
Speaker Change: In terms of.
Speaker Change: Interest rates, we believe.
Jorge Scarinci: We are going to see in 2025 at least some declining trend in domestic interest rates.
Speaker Change: According to the margins I think that these are going to be slightly positive for the margin so the sector and Banco macro basically because.
Speaker Change: Our deposits reprice faster than our loans plus that <unk> seen in loans that we are lending fostering consumer.
Jorge Scarinci: Doug is the segment that showed the highest rates that is going to help to maybe spend a little bit the margins along 2025.
Jorge Scarinci: that is the segment that shows the highest rates, that is going to help to maybe span a little bit the margins along 2025. In terms of operating expenses, yes, we had some decrease in the first quarter compared to the fourth quarter of last year. If I have to assume for 2025, I would assume operating expenses to move close to inflation rate. So let's say in the area of 30%, maybe in the in the bottom part of the area of 30%, maybe one or two percentage points below inflation, but let's assume Close to inflation for 2025.
Speaker Change: In terms of.
Speaker Change: Operating expenses, yes.
Speaker Change: Yes, so we had.
Speaker Change: With some decrease in the first quarter compared to the fourth quarter of last year.
Speaker Change: If I had to.
Speaker Change: Assume for 2025, Ashish, you'll expand operating expenses to move.
Speaker Change: Close to inflation rate so.
Speaker Change: Let's say in the area of <unk>.
Speaker Change: 30%, maybe in the in the bottom part of the area of 30%, maybe 1% two percentage points below inflation, but let's assume <unk>.
Speaker Change: You will see inflation for 2025.
Speaker Change: Yes.
Jorge Scarinci: In terms of the loan-to-deposit ratio, yes, we are... increasing that ratio. Also, we are increasing the other ratio that is loans as a percentage of total assets. Remember that one year ago, loans represented only 25% of total assets. And in the first quarter of this year, loans represented 48% of total assets. So that's a big increase. Even in the quarter, we jumped from 40% in the fourth quarter loans to assets to 48% in the current quarter. So we are speeding up in terms of moving from low levels of loans as a percentage of assets, also reducing the exposure to the public sector and increasing the exposure on the private sector.
Speaker Change: <unk>.
Speaker Change: In terms of the loan to deposit ratio, yes, we are.
Speaker Change: Increasing that ratio also we are increasing.
Speaker Change: The other ratio that is loans.
Speaker Change: As a percentage of total assets remember that one year ago.
Speaker Change: <unk> represented only 25% of total assets and in the first quarter of this year's loans represented 48% of total assets. So thats, a big increase even in the quarter, we jumped from 40% in the fourth quarter loss to assets to 48% in the current quarter. So we are speeding up.
Speaker Change: In terms of moving from.
Speaker Change: Low levels of loans as a percentage of assets also reducing the exposure to the public sector and increasing the exposure on the private sector going forward this ratio could be.
Jorge Scarinci: Going forward, this ratio could be in the area of 90 or low 90s by the end of 2025. And in terms of your last question, according to capital ratio. Again, We, I have been stating this, but on the buy side of the table, we believe that we are the only ones. Honestly, it's not depending a lot on us when we are going to maybe acquire a bank or the multiples. We have to see if there is an opportunity on the table. As I mentioned before, we are not analysing anything for the moment. So we have to be patient and see when the opportunity appears.
Speaker Change: <unk> 90, or low ninety's by the end of 2025.
Speaker Change: And in terms of your last question according to capital ratio.
Speaker Change: Again.
Speaker Change: We.
Speaker Change: <unk>.
Speaker Change: On the buy side of the table, we believe that we are the only ones honestly.
Speaker Change: No I'd say, depending a lot on us when we are going to maybe pointed out a bank.
Speaker Change: The multiples we have to see if there is an opportunity on the table as I mentioned before we are not analyzing anything for the moment. So we have to be patient.
Speaker Change: When the opportunity appears.
Jorge Scarinci: also I also mentioned this before, but depending on the scenario in March, April of 2026. The board also could be considering some increase in the dividends for next year in order to maybe trim down a little bit the excess of capital that we have, but that is something that is going to be considered next year depending on macroeconomic expectations. By then, if there is an opportunity of M&A, so we are conscious that. We do not feel that comfortable with this excess capital, so the idea is to work on different strategies in order to reduce it in the most efficient way for the bank.
Speaker Change: Also.
Speaker Change: I also mentioned these before but depending on the scenario in the March April of 2026.
Speaker Change: The board also could be considering some increase in the dividends.
Speaker Change: Next year in order to maybe train dominantly will be the excess of capital that we have but that is something that is going to be consider next year, depending on macroeconomic expectations by Dan. If there is an opportunity of M&A. So we.
Speaker Change: We are conscious of that.
Speaker Change: We do not feel that.
Speaker Change: Comfortable with this excess capital. So the idea is to work on different strategies in order to reduce it in the most efficient way.
Speaker Change: Mark.
Mark: Thank you very much Jorge.
Operator: Thank you very much, Jorge.
Speaker Change: When you come on it.
Speaker Change: Our next question comes from Carlos Gomez Lopez with HSBC.
Carlos Gomez Lopez: Our next question comes from Carlos Gomez Lopez with HSBC. Hello, and thank you for taking my question. I want to ask you about your bond portfolio, your public securities, and we want to know how you would like to be positioned. And I'm thinking about what currency, what indexator, do you prefer inflation linkers, not inflation linkers? And what your preference is as to how you want to have this classified available for sale, trading or held to maturity? Where would you like to have the bond portfolio, let's say, for the next year, and how would you contrast that to other bonds?
Speaker Change: Hello, and thank you for taking my question.
Speaker Change: I wanted to ask you about your bond portfolio.
Speaker Change: Public Securities and we want to know where how you would like to be positioned and then thinking about what currency worth index eight or do you prefer the inflation linked theres nothing placement linker.
Speaker Change: And with your preference is as to how you want to have these classified as available for sale trading or help to anticipate where where would you like to have the bond portfolio, let's say for the next year and how would you contrast that to other banks.
Jorge Scarinci: And the second question is, I think that you have your CEO here for the first time, and maybe you want to introduce him to us. Thank you. Hi, Carlos, how are you? Thanks for your questions. In terms of the bond portfolio, there is a clear table in page 20 of the press release with all the exposure and the accounting slots that we have. We are working on maybe some permutative changes. But that is related to maybe reserve requirements, just to move some bonds in place of others. Once you have... available for sale, level of maybe one billion pesos, similar to the current level, but maybe with different bonds in order to be able to trim down this public sector exposure in order to keep on fueling the long road that we are forecasting.
Speaker Change: The second question is I think that you have your CEO here for the first time Haddon, maybe you want them to be asking to us. Thank you.
Speaker Change:
Haddon: Hi, Carlos how are you thanks for your questions.
Haddon: <unk>.
Speaker Change: In terms of the loan portfolio.
Speaker Change: These are clear table in page training of the press release.
Speaker Change: All the exposure.
Speaker Change: The accounting.
Speaker Change: Slots that we have.
Speaker Change: We are working on may be some.
Speaker Change: Our motor tip changes.
Speaker Change: But that is related Tom may be reserve requirements, just to move some bonds in place of others.
Speaker Change: And once you have.
Jorge Scarinci: And available for sale level of maybe 1 billion pesos. Similarly on the current level, but maybe with different bonds in order to.
Speaker Change: Be able to train down these public sector exposure in order to keep on fueling the.
Speaker Change: The loan growth that we are forecasting and in terms of exposure.
Jorge Scarinci: And in terms of exposure, For the moment, we feel comfortable having a high exposure on inflation. For the moment, we believe that is the best way to hedge the equity of the bank.
Jorge Scarinci: Yeah.
Speaker Change: For the moment, we feel comfortable having a.
Speaker Change: Hi exposure on inflation for the moment, we believe that is the best way to hedge the equity of the bank.
Carlos Gomez Lopez: And in terms of the CEO, he has to step up for a second. He has a phone call, but if he comes back, we are going to introduce one on the call. Okay very good and I mean it's good that what you were saying so you are I mean distinctly more exposed to inflation linkers and again for you that is justified by the fact that you have more capital than your peers is that correct? Yes that's correct. Thank you very much.
Speaker Change: And in terms of the <unk> you got to.
Speaker Change: Hey, Bob for a second here has a phone call, but if he comes back we're going to introduce one on the call.
Carlos Gomez Lopez: Okay very good and it's because of what you were saying you are I mean distinctly more exposed to inflation linkage and again for you that is justified by the fact that you have more capital than your peers is that correct, yes, that's correct.
Speaker Change: Thank you very much.
Speaker Change: Carlos.
Speaker Change: Once again, if you would like to ask a question. Please press the Q&A button at the bottom of the screen.
Operator: Once again, if you would like to ask a question, please press the Q&A button at the bottom of the screen, or to ask questions on audio, click on Raise Hand. You will then receive a request to activate your microphone. Please hold while we poll for questions. There are no more questions at this time.
Speaker Change: Or to ask questions on audio click on raise hand, you will then receive a request to activate your microphone.
Speaker Change: Please hold while we poll for questions.
Speaker Change: There are no more questions at this time. This concludes the question and answer session I will now turn over to Mr. Nicolas Torres.
Nicolas Torres: This concludes the question and answer session. I will now turn over to Mr. Nicolas Torres for final consideration. Thank you all for your interest in Banco Macro. We appreciate your time and look forward to speaking with you again. Have a good day. Goodbye.
Nicolas Torres: Final considerations.
Nicolas Torres: Thank you all for your interest in Banco macro we appreciate your time and look forward to speaking with you again have a good day.
Speaker Change: Goodbye.