Banco Macro SA (BMA) 2013 Q4 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 4Q 2013 earnings conference call. We would like to inform you that the 4Q 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; Mr. Jorge Scarinci, Finance and IR Manager; Ines Lanusse, IR Officer; and other members of the Bank's Management team.

Now I would like to turn the conference over to Ms. Ines Lanusse, IR Officer. You may begin your conference.

Good morning and welcome to Banco Macro's fourth quarter 2013 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 to the SEC and is available at our website.

Fourth quarter 2013 press release was distributed last Wednesday 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 branch network of 430 branches. Even though we are a universal bank, we focus on low to middle-income individuals and SMEs. Banco Macro is a financial agent of four provinces in Argentina; Salta, Jujuy, Misiones, and Tucuman.

I will now briefly comment on the Bank's fourth quarter 2013 financial results. Banco Macro's net income for the quarter was ARS953.4 million or 124% higher than the ARS425.8 million earned one year ago. The Bank's accumulated fourth quarter 2013 ROAE and ROAA of 33.3% and 4.6% respectively remains healthy and shows the Bank's earning potential.

On a fiscal year basis, Banco Macro earned ARS2.4 billion in 2013, or 64% higher than the ARS1.5 billion earned in 2012. In the quarter, net financial income totaled ARS1.8 billion or 62% higher than the ARS1.1 billion registered one year ago. This performance can be traced to a 55% year-on-year increase in the financial income and 46% year-on-year increase in financial expenses.

Within financial income, interest on loans rose 45% year on year due to a 360 basis points increase in the average private sector lending interest rate and to a 24% growth in the average loan portfolio.

In fourth quarter 2013, interest on loans represented 81% of total financial income. On the other hand, net income from government and private securities increased 27% year on year due to a high income from government securities.

Also income from foreign currency increased 201% year on year due to a higher FX position revaluation caused by a faster depreciation of the Argentine peso.

Meanwhile within financial expenses, interest on deposits grew 46% year on year due to a 19% increase in the average volume of interest-bearing deposits and 293 basis points increase in the average time deposit interest rates.

The formal combined effect resulted in an increase of the Bank's net interest margin from 12.1% as of fourth quarter 2012 to 13.7% at the fourth quarter 2013. Had we excluded bond gains and guaranteed loans including CER adjustment on the calculation, the Bank's net interest margin would have widened to a further 13.9% from last year's level of 12.6%.

The Bank's net fee income grew 39% year on year based on debit and credit card fees and fees on deposits.

Administrative expenses rose 23% year on year mainly due to an increase in personnel expenses, primarily higher salaries, and higher other operating expenses. The increase in personnel expenses can be traced to salary increase agreed with the unions back in May 2013.

The accumulated efficiency ratio reached 48.7% compared to the 51.6% posted in fourth quarter 2012.

As of December 2013, Banco Macro's effective income tax rate was 35.3%, compared to 36.4% registered as of December 2012.

In terms of loan growth, the Bank's financing to the private sector grew 7% quarter on quarter. On a yearly basis, the Bank's financing to the private sector grew 24% among which pledge and mortgages loan stand out indicating the impact of the productive investment loans in our loan portfolio.

Credit card loans and personal loans also grew during the quarter.

On the funding side, total deposits grew 4% quarter on quarter and 20% year on year. Private sector deposits grew 9% on a quarterly basis, while public sector deposits decreased 17%.

As of December 2013, Banco Macro's transactional accounts represent approximately 47% of total deposits and therefore the Bank's average annualized cost of funds was 9.8%.

In terms of asset quality, Banco Macro's nonperforming to total financing ratio reached 1.7%, better than the last year's levels of 1.78% (sic - see slide 10, "1.76%"). The coverage ratio reached 149.06%.

In terms of capitalization, Banco Macro accounted an excess of capital of ARS4.2 billion, which represent a capitalization ratio of 25.3%. The Bank's aim is to make the best use of this excess capital.

The Bank's liquidity remained appropriate. Liquid asset to total deposits ratio reached 33.3%.

Banco Macro accounted for another positive quarter. We continue 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 the Argentine banking sector, and we keep a well-optimized deposit base, with one of the lowest cost of funds in Argentine banking sector.

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

Thank you. At this time, we are going to open it up for questions and answers. (Operator Instructions).

Santiago Ruiz, Raymond James.

My question is [provided] the recent increase in the interest rates, what ability does the Bank have on (inaudible) higher funding causing to higher activity rates going forward?

Basically it's the capacity of the Bank to re-price on the asset side when the liability price goes up. It's the capacity, the Bank has to do so.

Walter Chiarvesio, Santander.

Kind of following up with Ruiz's question on the ability to keep margins, the (inaudible) of increasing rates and also the risk of reducing the share of high deposit to your cost against increasing in term deposits in the financing base for the banks in (inaudible) Argentina, what do you state on that?

Do you think that the share of term deposits will continue to grow in this, and the high interest rates will result in depositors to go there? And I understand that despite that you have the ability to re-price on the loan portfolio to offset increasing funding costs, but any guidance on the margin, do you think that to remain stable in the coming year, or do you see some risk that -- of decline in margins due to this dynamic of increased interest rates for the higher deposits, if you can provide some color on that, I will appreciate.

We were seeing -- because of the [concept] we are seeing time deposit slightly increasing. Despite that we're still seeing margins stable towards the end of 2014.

And one more question, any guidance on volume growth for this year in deposit or in loans?

Yes, loans, we have seen them grow for 2014 around mid-20%s, growing with the systems that will be private loans, and total deposits growing 28% with the system as well.

[Peter Boone, Channels Trust].

I had two questions actually. One was if you could just comment on dividend policy and any changes to that. I know you're restricted, by what you can pay.

And then secondly, I believe there were changes to the FX regulations after the year, and I wondered if you could comment on how that's changed your net FX exposures.

Regarding your dividend questions, as you know, Banco Macro has reached a buffer, [as I assume] we are allowed to distribute dividends. The decision will be taken by the general shareholders' meeting in April this year. There is one -- the Management will decide if to distribute and how much to distribute.

Regarding the FX decision, yes, there was some change in regulation during February this year. We are complying with (inaudible) recommendation. We have -- basically you have to have 30% of the total integrated capital in dollars, and we are complying with that position. We are okay with the position we have right now.

So could I just ask, does that mean the numbers we see for end-year are roughly similar now?

I don't understand your question.

For the net FX exposure, you have listed on the press release numbers showing the net FX exposure. Can we --

That position is as of December 2013 where we had a longer position. We have to (inaudible) our situation as of February this year, because we only are allowed to have 30% of the total integrated capital in dollars.

Could you just give an idea of how much of a change that is compared to December 31st?

It's marginal, the change. It's not something that will change.

It's marginal. Okay.

(Operator Instructions) There appears to be no further questions at this time. This concludes the question-and-answer session. I would now like to turn the conference back over to Ms. Ines Lanusse for final considerations.

Okay. Thank you all for your interest in Banco Macro. We appreciate your time and look forward to speaking you again. Have a good day.

Thank you very much. The conference is now concluded. You may disconnect your lines.