Banco Macro SA (BMA) 2013 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's second-quarter 2013 earnings conference. We would like to inform you that the second-quarter 2013 press release is available to download at the Investor Relations website of Banco Macro, www.ri-macro.com.ar. Also, this event is being recorded and all participants will be in 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 Instructions).

It is now my pleasure to introduce our speakers.

Joining us from Argentina are Mr. Jorge Pablo Brito, member of the Executive Committee; Mr. Guillermo Goldberg, Commercial Deputy General Manager; and Mr. Jorge Scarinci, Finance and IR Manager; and other members of the Bank's management team.

Now I will turn the conference over to Mrs. Ines Lanusse, IR officer. You may begin your conference.

Good morning and welcome to Banco Macro's second-quarter 2013 conference call. Any comments we may make today will 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 is available at our website. Second-quarter 2013 press release was distributed yesterday and it is also available at our website.

Banco Macro is one of the leading private banks in Argentina with a strong presence in the interior of the country and a brand network of 428 branches. Even though we are a universal bank, we focus in low to middle income individuals and SMEs.

Banco Macro is the financial agent of four provinces in Argentina -- Salta, Jujuy, Misiones, and Tucuman.

I will now briefly comment on the Bank's second-quarter 2013 financial results results. Banco Macro's net income for the quarter was ARS460.4 million, or 39% higher than the ARS332.1 million earned one year ago. The Bank's accumulated annualized second-quarter 2013 ROE and ROA were 27.3% and 3.6%, respectively remains healthy and shows the Bank's earnings potential. In the quarter, net financial income totaled ARS1.2 billion or 20% higher than the ARS1.7 billion registered one year ago.

This performance can be traced to a 29% year on year increase in financial income and 42% year on year increase in financial expenses. Within financial income, interest on loans rose 39% year on year due to a 28% growth in the average loan portfolio and a 141 basis point increase in the average private sector lending interest rates.

In second-quarter 2013, interest on loans represented 89% of total financial income compared to the 82% in second-quarter 2012. On the other hand, net income from government and private securities decreased 79% year on year due to less volume of [Nevex and Novex] and lower market price of other government securities. Meanwhile within financial expenses, interest on deposits grew 42% year on year due to a 19% increase in the average volume of interest-bearing deposits and a 239 basis point increase in the average time deposit interest rate.

The formal combined effects resulted in an increase of the Bank's net interest margin from 11.5% as of the second-quarter 2012 to 12.6% as of the second quarter of 2013. Had we excluded bond gains and warranty loans on the calculation, the Bank's net interest margin would have risen to a further 13.3% from last year's levels of 12%.

The Bank's net fee income grew 32% year on year, based on credit-related fees and debit and credit card fees.

Administrative expenses rose 32% year on year, mainly due to an increase in personnel expenses and higher other operating expenses. The increase in personnel expenses can be traced to the 24% annual average salary increase agreed with the unions back in May 2013 and other additional provisions accounted for bonuses. The accumulative efficiency ratio reached 52.8% compared to the 50.9% posted in the second quarter of 2012.

As of June 2013, Banco Marco's effective income tax rate was 38.9% compared to 43.1% registered as of June 2012. In terms of loan growth, the Bank's financing to the private sector was 3% quarter on quarter and 26% year on year among which commercial loans for productive investments have been included. Credit card loans on personal loans also grew during the quarter.

On the funding side, total deposits grew 1% quarter on quarter and 18% year on year. Private sector deposits grew 4% on a quarterly basis while public sector deposits [decreased] 7%.

As of June 2013, Banco Macro's transactional accounts represented approximately 47% of total deposits and, therefore, the Bank's average annualized cost of funds was 8.5%.

In terms of asset quality, Banco Macro's nonperforming to total financing ratio reached [1.82 -- 88%], sorry, from last year's levels of 1.58%. The coverage ratio reached 143.94%.

In terms of capitalization, Banco Macro accounted an excess capital of ARS3.0 billion which represented a capitalization ratio of 21.7%. The Bank's aim is to make the best use of this excess capital. The Bank's liquidity remained appropriate. Liquid assets to total deposits ratio reached 29.5%.

Banco Macro accounted for another positive quarter. We continued showing a solid financial position. Asset quality is under control and closely monitored. We continue working to improve more of our efficiency standards. We have one of the cleanest balance sheets in Argentina's banking sector and we keep our well optimized deposit base with one of the lowest cost of funds in Argentina's banking sector.

At this time we would like to take the questions you may have.

(Operator Instructions). Santiago Ruiz, Raymond James.

Hello. My question is how do you see NIMs at the end of 2013 considering the increase in the standing rates on the [larger] market? Thank you.

What we have seen in the first two quarters of the year was also a slight increase in funding rates. As you can see now in our press release, the net income margin of the Bank is slightly widened.

So going forward, what we are looking for, slightly continuous upward trend on the funding side. And in terms of the margin source spreads, we are seeing them single leveled in the second quarter of 2013 or slightly widened.

(Operator Instructions). [Sandro Pesas of ATG Pactual].

Good morning, this is (technical difficulty). Wanted to ask you, (technical difficulty) maybe you can comment on (technical difficulty) reclassification at (inaudible).

We can barely hear you. But I think that your question was related to the NPL ratio. As we have stated in the press release, the increase was not related to [retention] of our client. Basically on the Shubert segment -- Shubert Company that was downgraded to category five and that affected the warranty and ratio that was a deterioration in their ratio was justified by that.

Going forward we are seeing the ratio in the area of 2% by the end of the year, and of course the covered ratio would continue being about 100%. We do have a quantity target in terms of coverage ratio, but of course we will be always about 100%. I think that that was your question, but we can barely hear you.

(technical difficulty). That answers my question. Thanks.

(Operator Instructions). There are no questions at this time. This concludes the question-and-answer session. I will now turn the conference back over to Mrs. Ines Lanusse for final considerations.

Okay. This ends the conference call. 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.

This conference for Banco Macro has ended. You may now disconnect your lines. Thank you.