Banco Macro (NYSE:BMA) reported first-quarter financial results on Thursday. The transcript from the company's first-quarter earnings call has been provided below.
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
The full earnings call is available at https://mzgroup.zoom.us/webinar/register/WN_U0Mwh9voTqOQ1IoDvvgg2g#/registration
Summary
Banco Macro S.A. reported a net income of 139.8 billion pesos in Q1 2026, marking a 28% increase from the previous quarter and a 131% increase year-over-year.
The annualized return on average equity and assets were 10% and 2.4%, respectively, with operating income before expenses decreasing by 3% compared to Q4 2025 but increasing by 15% year-over-year.
The company maintained its guidance for loan growth at 42% nominal and deposit growth at 34% nominal for 2026, with real growth dependent on an assumed inflation rate of 28%.
Banco Macro continues to prioritize efficiency, reducing its branch network by 24 branches and headcount by 3%, and aims to maintain negative real expense growth in the coming quarters.
Asset quality showed some deterioration, with a non-performing loan ratio of 5.4%, although coverage remains robust at nearly 110%, and the company expects cost of risk to be between 5.5% and 6%.
Management remains conservative in their approach, with a current ROE guidance around 8%, awaiting further quarters to potentially revise this outlook upwards.
Full Transcript
OPERATOR
good morning ladies and gentlemen and thank you for waiting at this time we would like to welcome everyone to banco macro's first quarter twenty twenty six earnings conference call we would like to inform you that the first quarter twenty six press release is available to download at the investor relations website of Banco Macro SA website www.macro.com.ar 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 it is now my pleasure to introduce our
speakers joining us from argentina are mister jorge iscarincini and chief financial officer and mister nicolas tojis ir now i will turn the conference over to mister nicolas tojis you may begin your conference
Nicolas Tojis
good morning and welcome to Banco Macro SA's first quarter twenty twenty six conference call any comments 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 in the SEC and is available at our
website. The first quarter twenty twenty six press release was distributed yesterday and is available at our website all figures are in argentine pesos and have investigated some of the measuring unit current at the end of the reporting period as of twenty twenty the bank began borrowing sources applying hyperinflationary accounting in accordance with ifrs ias twenty nine as established by the central bank for ease of comparison figures of previous quarters have been restated applying ias twenty nine to reflect the accumulated effect of the inflation adjustment for each period to march thirty first twenty twenty six i will now briefly comment
on the bank's first quarter twenty twenty six financial results bank of america's net income totaled one hundred thirty nine point eight billion pesos in the first quarter of twenty twenty six twenty eight percent or thirty point two billion pesos higher than the result posted in the previous quarter and and one hundred and thirty one percent or seventy nine point two billion pesos higher than a year ago in the first quarter of twenty twenty six the annualized return on average equity and the analyzed return on average assets were ten percent and two point four percent respectively excluding the suffering expenses twelve point nine billion pesos
after cash the first quarter twenty twenty six net income will have totaled one hundred fifty two point nine billion pesos and the annualized roe and roa would have been ten point nine and two point six percent respectively in the first quarter of twenty twenty six operating income before general administrative and personal expenses totaled one point two three trillion pesos three percent or forty three point six billion pesos lower than the fourth quarter of twenty twenty five and fifteen percent or one hundred sixty nine point two billion pesos higher than the
same period of last year in the first quarter of twenty twenty six operating income after general interest and personal expenses was five hundred and sixty nine point eight billion pesos fifteen percent or seventy three point eight billion pesos higher than in the fourth quarter of twenty twenty five and twenty four percent or one hundred and eight point six billion pesos
higher than a year ago Banco Macro SA's first quarter twenty twenty six net interest income totaled nine hundred seventy five point two billion pesos seven percent or fifty nine point seven billion pesos higher than in the fourth quarter of twenty twenty five and twenty seven percent or two hundred seven point two million pesos higher
year on year this result is due to a five percent decrease in interest income and a twenty one percent decrease in interest expense in the fourth quarter of twenty twenty six interest on loans represent seventy two percent of total interest income in the first quarter of twenty twenty six the bank strategy to remain short in us dollars proved successful the combination of the short dollar position together with the long futures position and the allocation of the pesos generated by said scheme of us dollars resulted in an
nk the bank's first quarter twenty twenty six interest expense total four hundred and eighty five point seven billion pesos decreasing twenty one percent or one hundred and thirty two point seven billion pesos compared to the previous quarter and twenty seven percent one hundred corporate pesos higher compared to the first quarter of
twenty twenty five in the first quarter of twenty twenty six interest costs contributed to ninety percent of the bank's total interest expense decreasing twenty two percent or one hundred thirty nine point one billion pesos quarter on quarter due to a four hundred and seventy basis point decrease in the average rate payment process while the average foreign private sector deposits increased one percent on a yearly basis interest and costs increased twenty four percent or eighty seven point one billion pesos in the first quarter of twenty twenty six the bank's net interest margin including fs was twenty five point three percent higher than the
twenty one point seven percent posted in the fourth quarter of twenty twenty five and the twenty three point two percent posted in the first
quarter of twenty twenty in the first quarter of twenty twenty six bank members and network expenses for independents totaled three hundred and forty nine point eight million pesos twenty two percent or one hundred and one point five million dollars lower than the previous quarter due to lower employee benefits which decreased twenty eight percent and lower administrative expenses which decreased nine percent on a yearly basis administrative expenses plus employee benefits increased three percent on yearly basis employee benefits decreased twenty eight percent or eighty nine point six billion pesos quarter on quarter compensation and bonuses decreased
sixty one percent or seventy four point eight billion pesos in the first quarter of twenty twenty six the bank recorded nineteen per annum pesos restructuring expenses related to early retirement plans and several payment provisions on a yearly basis employee guidance increased three percent or six billion pesos and excluding expenses employee benefits would have decreased eight percent or eighteen point seven billion pesos quarter on quarter and six percent or thirteen point nine billion pesos year on year it is worth mentioning that in the first quarter of twenty twenty six panama reduced branch network by twenty four branches down to four hundred
and twenty from four hundred forty four in december of twenty twenty five and reduced its headcount by
three percent in the first quarter of twenty twenty six the result from the net monetary position totaled three hundred forty nine point eight million pesos lows fifteen percent or forty six million pesos higher than the yields posted in the fourth quarter of twenty and or four percent point four billion lower than the dollar level one year ago higher inclusion was observed during the quarter one hundred and fifty eight basis points above the fourth quarter of twenty twenty five inflation was nine point four four percent in the first quarter of twenty twenty six compared to seven point eight six percent in the fourth quarter of twenty twenty five
in the quarter in the first quarter of twenty twenty six income tax rate was thirty four point three percent in the first quarter of twenty twenty five to twenty twenty six fast max total financial decreased nine percent or one point one trillion pesos quarter on quarter
two hundred ten point six three billion pesos and increased five percent or four hundred fifty eight point nine billion pesos year on year in the first quarter of twenty twenty-six six peso financing decreased nine percent while us dollar financing decreased six percent it is important to mention that Banco Macro SA's market share of private sector loans as of march twenty twenty-six six with eight point two percent decreasing forty basis points compared to december twenty twenty-six
five on the funding side, Banco Macro SA's
total deposits decreased seven percent from nine hundred and ninety three point seven billion pesos quarter on quarter and increased ten percent from one point two trillion pesos year on year totaling thirteen point nine nine trillion pesos and representing seventy six percent of the bank's total liabilities private capital deposits decreased eight percent or one point one million pesos for one quarter and in the first quarter of twenty twenty six peso deposits decreased four percent while the us dollar deposits decreased seven percent bank of macro's market share over private sector deposits as of march twenty twenty six totaled seven point nine
and changed from the previous quarter in terms of asset quality bank of max non performing total financial ratio reached five point four percent this quarter mentioned, Banco Macro SA's non-performing from total financing ratio under expected freight losses stage three plus ninety days past new notes if you created any four basis funds during the first quarter of twenty twenty six totaling three point six four percent versus two point eight percent in the fourth
quarter of twenty twenty five the final non performing ratio is affected by mandatory participation of customers and the central bank rules taking into consideration customers behavior across the financial system bank of mattress number from october financial ratio excluding mandatory limitations of customers increased one hundred nine basis points reaching four point seven three percent in the first quarter of twenty twenty
six versus three hundred sixty four percent in the fourth quarter of twenty twenty five consumer portfolio nonperforming loans determined one hundred and sixty eight basis points up to six point nine two percent compared to twenty three percent in the fourth quarter of twenty twenty five while commercial performed the non performing levels deteriorated sixty six basis points in the first quarter of twenty twenty six up to one point three four percent from zero point six eight percent in the fourth quarter
of twenty twenty five the coverage ratio measures several allowances under predictive credit losses over non performed lows and the center bank rules reached one hundred nine point zero seven percent in the first quarter of twenty twenty six at the
coverage ratio being nine percent which is similar to the coverage ratio of other private banks in argentina main england in the first quarter of twenty twenty six would have totaled two hundred nineteen point seven billion pesos representing an adjusted roe of fifteen point seven percent
baja macro continued showing a strong soil seed ratio with an excess capital of four trillion pesos thirty two point four percent capital adequacy ratio and thirty two point four
percent tier one equation in addition the balance sheet with assets at an adequate level reaching seventy eight percent of its total deposits in the first quarter of twenty twenty six Banco Macro SA made the best use of this excess capital overall we have accounted for another positive quarter we continue showing a solid financial position asset portions remain under control and closing, we we keep on working to improve more efficiency standards and we keep a well atomized deposit base at this time we would like to take the questions you may have
OPERATOR
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 and 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 our first question comes from Brian Flores with SICI
Brian Flores (Equity Analyst)
hi tim good morning and thank you for the opportunity to ask questions the first one is the usual one we have if you have any revision on guidance we know some of your peers have revised growth a bit in both loans and deposits so just checking with you if the previous ranges you provided are still valid and then i wanted to maybe do a double click on asset quality we saw still obviously some NPL deterioration and we know you kept the coverage ratio at healthy levels i just wanted to check with you if going forward are you already seeing better trends in terms of provisioning and customer behavior thank you
Jorge Iscarincini (Chief Financial Officer)
hi brian this is Corke Currency on your first question about guidance in terms of growth loans and deposits for the moment we are maintaining the guidance that we gave last quarter what we are seeing basically is that the first quarter when you look at growth in loans there was a decline there was an increase in real time when you compare that on a yearly basis something to mention here is when you have a look at advances sorry overdrafts that is one of the components of our loans this line is usually used as a way of allocating excess liquidity as of march twenty twenty six the market share in this line was fourteen point six percent well below
the eighteen point one percent market share that we posted one year ago so this is quite affecting that's why the five percent growth on annual basis however when you have a look at other lines like pledges personal loans discounted documents or mortgages they are growing about twenty percent on a yearly basis so because of this and also because of what we've seen in april credit demand both in pesos and in dollars and what is going on in may that we are seeing a recovery in loan demand that's why that we are maintaining our guidance for loans similar trend with the deposits we are maintaining the guidance on the deposits even though on a quarterly
basis there was a decrease we are seeing some upward trend in current quarter onwards
in terms of your second question asset quality i think that it's worth mentioning here that even though there was a deterioration that we've seen in the whole portfolio that reached five point four percent
we are still showing the best NPLs to total loan ratio among our peers and also when you look at the coverage ratio that is almost one hundred ten percent this is also a ratio that we are showing the highest among our peers we commented in the press release that if we would be going down to a level of ninety percent of coverage and that is the average of our peers the adjusted ROE for the quarter of course annualized would have been fifteen point seven percent
it is also worth mentioning that what we saw between february and march and also between march and april there was positive behavior on the consumer Stage 3 trend so what we saw is that february apparently was a kind of a peak for the Stage 3 consumer having march and april showing better trends or positive trends there and also we saw in terms of commercial that the deterioration speed was a slowdown in bolt mass so going forward we are also maintaining our cost of risk guidance and we believe that we are close to the peak on this iteration of asset quality trend that we have seen in the last twelve months so
Brian Flores (Equity Analyst)
that's it brian perfect so five point two or approximately five point two cost of risk real ROE close to eight percent right just confirming here yeah well
Jorge Iscarincini (Chief Financial Officer)
i mean in terms of i mean i was talking about guidance for growth in terms of loans and deposits and also in terms of asset quality cost of risk yes it's going to be i think more than between five point five and six in terms of profitability it is pretty clear that we posit a i would say the best quarter among argentine banks and it was slightly above the annualized ROV guidance that we gave last quarter also because of what we are seeing in terms of growth in the second quarter should be another good quarter for the bank for the moment i think that we are going to be maintaining the ROE guidance of area eight percent depending on the adjusted
ROE that is without the non recurring items that we are showing in the quarter we would like to wait another quarter to see if we are going to increase our ROE guidance so for the moment ROE guidance is the same eight percent area for the exact ROE
Brian Flores (Equity Analyst)
super clear thank you jorge
OPERATOR
our next question comes from Tito Labasta with Goldman Sachs
Tito Labasta
hi good morning jorge and nipolas thanks for the call and taking my question i guess following up on the ROE guidance in particular more you know if we look at the trends right if cost of risk is likely to come down as asset quality maybe stabilizes you had some good NIM production performance in the quarter mainly due on lower funding costs do you expect that to revert where NIM should come down for the rest of the year or can you sustain this level of NIM which would then imply perhaps upside risk to that ROE guidance just maybe thinking how the NIM should evolve from here and
impact profitability thank you
Jorge Iscarincini (Chief Financial Officer)
in terms of NIMs we are seeing going forward i think a small contraction i would say that the NIM for the first q was slightly above the one that we were expecting so i would say that the average of the year should be quite similar than the average of last year so i think that is one of the reasons that could be at some point compensating the level of maintaining the same cost of risk going forward so that's why we are maintaining this roe guideline but again we want to be here a bit conservative and wait one more quarter to see or to crystallize if the bottom line is performing
Tito Labasta
better than expected okay no that's clear jorge thanks for that maybe just to follow up there the pressure on nim would it come because you expect funding cost to go up or you think there'll be some pressure on the asset yields as rates have come down also because you're growing loans faster than deposits could that also put some pressure on nim just to understand where the nim pressure could come from thank you
Jorge Iscarincini (Chief Financial Officer)
yeah what we are seeing is that inflation levels should be going slightly down on a monthly basis going forward that is going to bring nominal interest rates will slightly down but i would say that we could be seen slightly more pressure from assets yields compared to the funding cost is also going to go down but be more pressure on the asset side
Tito Labasta
okay that's clear thank you jorge
OPERATOR
our next question comes from Ernesto Gabilondo with Bank of America
Ernesto Gabilondo
hi hi good morning juan jorge and nicolas congrats on your results and thanks for the opportunity to ask questions my first question will be a follow up on ryan's questions on asset quality you mentioned in the press release you made a recalibration of your model based on the behavior of the customers of the system and that this was required by the central bank in mexico we follow a similar practice and in the first quarter the mexican banks also created higher provisions based on expected losses of the system and they were considering the asset quality deterioration of the fintechs having said that i asked your peers in their conference
calls if these practices follow in argentina and they say no so it came to my surprise that you were the only one implementing it during the quarter so can you elaborate on why are you implementing it and the other banks don't and especially as it was required by the regulator and also you are the only bank with an adequate reserve coverage ratio above one hundred percent the others don't so i also just want to understand if you are conservative in your ratio or you are just following the international standards
Juan Parma
thank you hermes so this is juan thanks for your question let me take this one as you saw in the release we are quoting three metrics of delinquency five point four four point seven and three point six okay five point four is the more acid one which includes the loans that are delinquent with us plus the loans with us that are not delinquent plus delinquencies outside Banco Macro SA that's the most active one and is the one that central bank uses for rewarding there's the second indicator four point seven which is the loans that are delinquent with us plus the loans that are current with us on the same customer so basically what you do is you
include in your delinquency ratio assets that are current in your books but that are attracted by assets with the same customer that are delinquent stage three is the methodology that we use for provisioning so the cost of credit that you see in our results is driven by the stage three delinquency calculation that stage three delinquency calculation is driven by our model which is in
alignment with accounting standards and includes actual delinquencies plus indicators of risk of some
loans that might be current but are higher risk for example because of its score range okay so that's the three distinctions but it's important to define that our cost of credit the provisions that we book in our results is driven by the stage three calculation in our case for the first quarter twenty twenty-six three point six four percent in that metric is where corke mentioned that for the consumer book in stage three metric we've seen from february to march and from march to april two consequent months of reduction we have not seen yet reduction on the commercial book in this state dream metric but we have seen a slowdown in the speed of the
federation have i made a complex topic clear ernesto it's not super helpful just
Ernesto Gabilondo
wanted to understand that in these plus indicators of risk you are being more conservative than the other banks or is just that your loan mix is showing you to recognize higher provisioning just wanted
Juan Parma
to understand this yes sorry we missed that second part of your question bottom line the short answer is yes we are being more conservative this does not in our view have to do with the outlook it has to do with how conservative we are in our coverage and that conservatism is reflected in two ways one is the model itself each bank has its own model the model needs to comply with standards but it might vary that's one thing the model itself but the second one is the risk integration the recalibration is something that by regulation banks need to do at least once a year and what you do when you recalibrate is see the last twelve months and recalculate
the probabilities of defaults so when you are in an upward cycle of delinquency every time you recalibrate and you take a look to the last twelve months instead of the last previous twelve months naturally the probability of default for each of the
clusters of the model increases what we've done is because the regulation says that you need to recalibrate at least once a year but you are free to recalibrate if you want every month we have been more conservative and done more frequent recalibrations to keep our coverage adequate
because if not what happens is
Ernesto Gabilondo
by the end of the year if you don't do the recalibration early on if you are in an upward cycle of delinquency you may have a hit so bottom line again we are being more conservative both on the model design itself but also on the periodicity of recalibration versus our peers the difference is significant as you've seen the average of our peers is in the ninety percent and we are almost one hundred ten naturally we should expect to as delinquency reduces to reduce the coverage as the recalibration starts reflecting those improvements but that's how we see it at best is that
Juan Parma
clear yes very clear thank you so much and i just have also a follow up just if you can repeat your guidance for long growth and deposit growth for this year i know that you are not changing it but just to double check how was it before and then also another question in terms of your opex growth can you also remind us how should we think about the recurring opex growth for this year excluding the restructuring costs and my last question is on your earnings expectations and roe evolution throughout the year i know you are right now at eleven percent and that you mentioned that you will wait for the second quarter to see if you can improve
your guidance but how should we think about the seasonality of the roes so the second quarter should be a little bit lower and then should be trending up just wanted to understand how should we think about the earnings and the roe evolution throughout the year to meet your guidance
terms of the guidance for growth we are still maintaining the long growth guidance of forty two percent nominal growth for the year and thirty four percent nominal growth in deposits for the year that
is the guidance that we are maintaining
in terms of growth sorry in real
terms it depends the inflation that you have in your model but we have an inflation level of twenty eight percent
second question in terms of expenses going forward it is pretty clear when we have explicitly commented before that we are in a process of making the bank more efficient even though we were showing excellent efficiency levels but we are in the process of becoming more efficient honestly the idea is to continue at least second quarter with the might be part of the third quarter it depends on how this evolves but in the way that we are reducing the number of employees and the number of branches of course we do not have exactly the numbers going forward but a very important proof is that when you look at expenses on a yearly basis we are in a
negative in real terms so the idea is to continue going forward in the following quarters to show slightly negative numbers in terms of the evolution of expenses in real terms and
Jorge Iscarincini (Chief Financial Officer)
if you allow me corgi this is in line also with the guidance we gave by the end of last year the fourth quarter last year regarding this map
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
Login to comment