Banco Macro SA (BMA) 2014 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 2014 earnings conference call. We would like to inform you that the second quarter 2014 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 sessions. At that time, further instructions will be given. Should any participant need assistance during this call, please press star, then zero to signal the operator.

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

Good morning, and welcome to Banco Macro second quarter 2014 conference call. Any comment 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 2014 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 431 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 second quarter 2014 financial results. Banco Macro's net income for the quarter was ARS732.6 million, or 59% higher than the ARS460.4 million earned one year ago. In the quarter, net financial income totaled ARS1.7 billion, or 44% higher than the ARS1.2 billion registered one year ago. This performance can be traced to a 63% year-on-year increase in financial income and an 88% year-on-year increase in financial expenses.

Within financial income, interest on loans rose 47% year on year due to an increase of 580 basis points in the average price at lending interest rates. In second quarter 2014, interest on loans represented 80% of the total financial income compared to the 69% in the first quarter of 2014.

On the other hand, net income from government and private securities increased 109% quarter over quarter due to higher income from government securities, especially [Levax] and [Novax], and a higher volume also of these [Levax] and [Novax].

Income from foreign currency also decreased 74% year on year due to a lower FX position [revaluation] caused by a deceleration in depreciation of the Argentine peso. Meanwhile, within financial expenses, interest on deposits grew 100% year on year due to an increase of 810 basis points in the average time deposit interest rate and a higher average volume of these deposits.

Excluding asset gains, the [form combined] effect resulted in an increase of the bank's net interest margin from 12.3% as of the second quarter 2013 to 14.7% as of the second quarter of 2014. Had we also excluded bond gains and guaranteed loans on this calculation, the bank's net interest margin would have also remained stable on a yearly basis.

The bank's net fee income grew 29% year on year, mainly driven by fee charges on deposit accounts and debit and credit card fees. Administrative expenses rose 31% year on year, mainly due to an increase in personnel expenses, mainly higher salaries, and other operating expenses. The increase in personnel expenses is based on the effective payment for salary increases in line with the salary increases agreed with the unions on April 2014.

The [assimilated efficiency] ratio reached 44%, largely improving [for the 52.8%] levels posted on the second quarter of 2013. As of June 2014, Banco Macro's effective income tax rate was 34.7% compared to the 38.9% registered as of June 2013.

In terms of loan growth, the bank's financing to the private sector slightly decreased 0.5% quarter on quarter and increased 16% year on year, among which commercial loans from productive investments have been included.

Credit cards and personnel loans also grew year on year. On the funding side, total deposits grew 9% quarter on quarter and 30% year on year. Private sector deposits grew 7% on a quarterly basis and public sector deposits also grew 22%. Also, on a quarterly basis, within private-sector deposits, an increase in foreign currency and peso deposit was observed of 13% and 6% respectively. As of June 2014, Banco Macro's transactional account represented approximately 46% of the total deposits, and therefore, the bank's average annualized cost of funds was 12%.

In terms of asset quality, Banco Macro's [nonperforming to total] financing ratio reached 2.02% from last year's levels of 1.88%. The covered ratio reached 133.07%. In terms of capitalization, Banco Macro accounted an [excess of] capital of ARS5.1 billion. We represented a capitalization ratio of 23.2%. The bank's aim is to make the best use of these excess capital.

The bank's liquidity remained healthy. Liquid assets to total deposits ratio reached 44.3%. 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 our efficiency standards. We have one of the cleanest balance sheets in Argentina's banking sector, and we keep a well itemized deposit base with one of the lowest cost of funds in Argentine's banking sector.

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

At this time, we're going to open it up for questions and answers. [Operator Instructions] First question comes from Chris Delgado of JPMorgan. Please go ahead.

Hi, good morning. Thanks for taking my call. Just a quick question in terms of consumer loans. I know that they recently announced rate caps on consumer loans. I just wanted to get a sense of what you thought the financial impact might be in terms of net interest margin and then also in terms of loan growth.

Hi, Chris. This is Jorge Scarinci. In terms of those caps, I think that's the impact on the net interest margin is not going to be a big one. Of course, I think that it is hard to say or to quantify right now the impact on net interest margin, but what we have seen in the quarter is that this decrease in the margin was basically a consequence of decline on the [assistance rates].

Going forward, in terms of loan demand, I think that this [cut rate] maybe could marginally help in terms of loan demand, but I think that the pace of the economy in Argentina are much more going to influence on the loan demand, rather than the caps on the interest rates.

So bottom line, and I'm not seeing major impacts on this -- cap on this rates in order to influence the loan demand, I mean.

Okay, great, thanks.

You're welcome.

[Operator Instructions] The next question comes from Santiago Ruiz of Raymond James. Please go ahead.

Hi, my question has already been answered. Thank you.

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

Okay, thank you for your time. Have a good day. Bye.

The conference has ended. You may disconnect your line.