Banco Macro SA (BMA) 2015 Q1 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 1Q 2015 earnings conference call. We would like to inform you that 1Q 2015 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, 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's first-quarter 2015 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 20-F, which was filed to the SEC and is available at our website.

First-quarter 2015 press release was distributed yesterday and 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 434 branches. Even though we are a universal bank, we focus on the 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 first-quarter 2015 financial results. Banco Macro's net income for the quarter was ARS1.1 billion or 6% lower than the ARS1.2 billion earned one year ago. Had FX results been excluded, net income would have been ARS1.0 billion in first-quarter 2015 and ARS507.4 million in first-quarter 2014.

The Bank's accumulated first-quarter 2015 ROE and ROA of 36.6% and 5.9% respectively remains healthy and shows the Bank's earnings potential.

In the quarter, net financial income totaled ARS2.7 billion or 9% higher than the ARS1.8 billion registered one year ago. This performance can be traced to a 17% year-on-year increase in financial income and a 29% year-on-year increase financial expenses.

Within financial income, interest on loans rose 24% year on year due to a 131-basic point increase in the average private sector lending interest rate and to a 16% growth in the average private loan portfolio.

In first-quarter 2015, interest on loans represented 73% of the total financial income. On the other hand, net income from government and private securities increased 308% year on year due to the increase in the market price of the Bank's equity portfolio which the Bank had invested in the previous quarter.

Meanwhile, within financial expenses, interest on deposits grew 24% year on year due to a 15% increase in the average volume of interest-bearing deposits and to a 150-basic point increase in the average time deposit interest rates.

Excluding asset gains, the former combined effect resulted in an increase of the Bank's net interest margin from 15.7% as of the first-quarter 2014 to 20.8% as of the first quarter of 2015. Had we also excluded income from government and private securities and warranty loans including further adjustments on the calculation, the Bank's net interest margin would have been 15.9% from last year's levels of 15%.

The Bank's net fee income grew 28% year on year based on fee charged on deposit accounts and debit and credit card fees.

Administrative expenses rose 30% year on year, mainly due to an increase in personnel expenses, primarily higher salaries and higher other operating expenses. The accumulated efficiency ratio reached 43.3% in the first quarter of 2015.

In the first-quarter 2015, Banco Marco's effective income tax rate was 37.6% compared to the 36.9% registered in the first quarter of 2014.

In terms of loan growth, the Bank's financing to the private sector grew 9% quarter over quarter. On a yearly basis, the Bank's financing to the private sector increased 20% year on year, among which commercial loans for the productive investments have been included. Personal loans and credit cards also grew year over year.

On the funding side, total deposits grew 7% quarter on quarter and 24% year over year. Private sector deposits grew 8% on a quarterly basis, while public sector deposits grew 2%. As of March 2015, Banco Marco's transactional accounts represented approximately 46% of the total deposits, and therefore, the Bank's consolidated average cost of funds was 9.9%.

In terms of asset quality, Banco Marco's non-performing to total financing ratio reached 1.92% from last year's levels of 1.88%. The coverage ratio reached 131.94%.

In terms of capitalization, Banco Marco accounted an excess capital of ARS6.2 billion, which represented a capitalization ratio of 23.6%. The Bank's aim is to make the best use of this excess capital.

The Bank's liquidity remains appropriate. Liquid assets to total deposits ratio reached 39.5%.

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 our efficiency standards. We have one of the cleanest balance sheets in Argentine banking sector and we keep a well-optimized deposit base.

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

At this time we are going to open it up for questions and answers. (Operator Instructions). [Alexandra Aranda], Itau.

I wanted to see what's your view for the future regarding results, are we going to see such strong results in the future? Of note is there is a strong position that you have on the central bank notes and I was wondering what we could expect from that position in the future and also from trading results.

This is Jorge Scarinci. Regarding the position on results of the instrument on central bank debt, that's one of the instrument that we use for allocating excess liquidity. So we are going to balance that portfolio depending on the loan demand coming for the rest of the year. With that we are forecasting that we are going to grow our loan book in 2015 between 20% to 25%.

So depending on that, we are going to balance that leverage portfolio. In terms of the trading gains in the first quarter, you can see in our press release there was an income coming from our equity portfolio that was a loss in the fourth quarter of the previous year. We are going to keep that liquidity portfolio for the long run. We are not going to do trading on that portfolio. In terms of the results going forward, we expect Banco Macro to continue posting good results, beating ROE for 2015 in the area of the mid 30s. We are not expecting big surprises for the moment.

Okay. Thank you very much.

Welcome.

Federico Rey, Raymond James.

Please could you comment a little bit about intermediation spreads, what's your view going forward considering the new regulations in place by the end of last year on CDs and the impact of the productive lines? Thank you.

We talked in the press release the net interest margin excluding basically gains on our equity and fixed income portfolio and you can see that there was a slight expansion there close to 16% of the net interest margin. But we are expecting to be -- to have a stable margin going forward, even though that regulation on the CDs you can see that the short-term interest rates on the [levers] is slightly going down month after month. So we are forecasting stable margins for the rest of the year.

Okay. Thank you very much.

Welcome.

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

Thank you all for your interest in Banco Macro. We appreciate your time and look forward to speaking to you again. Goodbye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.