Banco Macro SA (BMA) 2016 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 2Q 2016 Earnings Conference Call. We would like to inform you that 2Q 2016 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 Board of Directors; Mr. Gustavo Manriquez, General Manager; Mr. Jorge Scarinci, Finance and IR Manager; Ines Lanusse, Head of IR and other members of the Bank's Management team.

Now, I will turn the conference over to Ms. Ines Lanusse, Head of IR. You may begin your conference.

Good morning and welcome to Banco Macro's Second Quarter 2016 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 in our website. Second quarter 2016 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 438 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 2016 financial results. Banco Macro's net income for the quarter was ARS1.8 billion or 119% higher than the ARS824.2 million earned one year ago based on higher net financial income and higher fees. The Bank's accumulated annualized second quarter 2016 ROE and ROA of 36.7% and 5.7% respectively remains healthy and shows the Bank's earning potential.

In the quarter, net financial income totaled ARS4.1 billion or 96% higher than the ARS2.1 billion registered one year ago. This performance can be traced to 80% year-over-year increase in financial income and 64% year-over-year increase in financial income, interest on loans rose 50% year-over-year due to a 285 basis points increase in the average private sector lending interest rate and to a 36% growth in the average private loan portfolio.

In the second quarter 2016, interest on loans represented 71% of the total financial income. In addition, net income from government and private securities increased 317% year-over-year. Meanwhile, within financial expenses, interest on deposits grew 70% year-over-year due to a 51% increase in the average volume of the interest bearing deposits of time deposits and to a 280 basis points increase in the average time deposit interest rate.

Excluding FX gains, the former combined effect resulted in an increase of the Bank's net interest margin from 17.6% as of the second quarter of 2015 to 18.8% as of the second quarter 2016. Had we also excluded income from government and private securities and guaranteed loans, including some adjustments on the calculation, the Bank's net interest margin would have been 15.3% as of the second quarter of 2016 from 16.1% as of the second quarter of 2015.

The Bank's net fee income grew 19% year-over-year based on fee charges on deposit accounts and debit and credit card fees. Administrative expenses rose 40% year-over-year, mainly due to an increase in personnel expenses, primarily salary increases and other concepts and had higher other operating expenses. The accumulated efficiency ratio reached 46.3% in the second quarter of 2016. In the second quarter of 2016, Banco Macro's effective income tax rate was 35% compared to the 36.2% registered in the second quarter of 2015.

In terms of loan growth, the Bank's financing to the private sector increased 30% quarter-over-quarter. On a yearly basis, the Bank's financing to the private sector increased 37% year-over-year among which commercial loans for the productive investments have been included. Credit cards and personal loans also grew year-over-year.

On the funding side, total deposits grew 9% quarter-over-quarter and 41% year-over-year. Private sector deposits grew 8% on a quarterly basis, while public sector deposits also increased 15%. As of June 2016, Banco Macro's transactional accounts represent approximately 45% of the total deposits and therefore the Bank's consolidated average cost of funds was 12.5%.

In terms of asset quality, Banco Macro's non-performing to the total financing ratio reached 1.52%, improving from last year's levels of 1.92%. The coverage ratio reached 150.51%. In terms of capitalization, Banco Macro accounted an excess capital of ARS9.0 billion, which represented a regulatory capitalization ratio and Basel III of 16.2%. 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 41%.

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

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

Hi, operator, at this time, we can enter the Q&A section, please.

Thank you. At this time, we're going to open it up for questions and answers. (Operator Instructions). Nicholas Riva, Citibank.

So, I've a question on the securities portfolio. So, you earned ARS2 billion in the interest income from the securities portfolio in the second quarter and I see there is ARS1.1 billion in interest income from your portfolio of LEBACs and then there's another ARS900 million in interest income. I would assume this is from the equity portfolio, but if you can explain to me if this is the mark-to-market realized gains and dividend income from the equity portfolio and also how big right now your equity portfolio is and what's kind of normal level of interest income that you can get from this equity portfolio? And also in the quarter, your net income was ARS1.8 billion, net of the funding cost and net of taxes, how much of the ARS1.1 billion is coming from the securities portfolio? Thank you.

Hi, Nicholas. On first part of your question, the income from the securities portfolio is a combination of the LEBACs, the equity portfolio and also the sovereign bonds portfolio that we have. All of them are mark-to-market. So, in terms of the income, the income there was basically, because of the increase in the prices of the equity portfolio and the sovereign bond portfolio that sums up to the ARS900 million that you were talking about, plus the ARS1.1 billion income coming from the LEBACs. It's only mark-to-market, the results, we are not considering there the dividends or any other interest, everything is mark-to-market.

In the second part of your question, going forward basically, now the decision that the bank made was to start reducing this equity portfolio, so the equity portfolio will be reduced by 30% in the next 30 to 45 days. As of today this equity portfolio is ARS1.1 billion, and will go down to maybe ARS900 million in the next month or so.

Going forward, honestly this is almost impossible to forecast basically the income coming from this portfolio, because you will have to forecast the price behavior of these seven or eight stocks that are forming the equity portfolio. So it's basically hard for us to give a guidance there. So, I will leave that job to you. I can't remember that the last question that you made --.

Yes. The last part was net of the funding cost and net of taxes in the second quarter, how much did you get in net income really from this equity portfolio? We already know that the mark-to-market was ARS900 million.

Hold on, one second. Hi, Nicholas, let's -- give me some time I can send (multiple speakers)

Tell me what was the target by that question, what you're trying to get there?

I was just trying to get the contribution to the net income, so I already know what's your contribution to the interest income, but net of the funding costs and net of taxes, how much of the ARS1.8 billion of net income, how much are you getting really from the equity portfolio, net of everything, the funding cost and taxes?

The funding cost, there we can put all the marginal funding cost or the average funding cost of the bank, it depends. So you have (multiple speakers).

It's fine, we can take it offline. The only thing is the reduction in the equity portfolio of 30% has to do with more money being reallocated really to the loan portfolio and acceleration of loan growth going forward or --?

Partly for that and partly because we believe that the priorities on the equities have grown quite far for the moment. So, we are trying to do some trading there and reducing the portfolio. But let me give you some more explanation in terms of the income coming from this equity portfolio, so that -- the bond portfolio. Basically we have excess liquidity because we are expecting a stronger loan growth demand to come in the future and that's why we are allocating this excess liquidity in different financial instruments, like LEBACs, like the equity portfolio and sovereign bonds.

So, if we were not expecting this positive trend in loans in the future, we will have to take the opposite decision is to reduce the excessive liquidity, but at the same time we will be reducing CDs. So, we will be reducing our balance sheet; however, on the P&L you will have a neutral or maybe positive impact. What I mean here is that what we have been reading in many analyst reports on the results on Banco Macro, not this quarter but in different quarter was that the income coming from the security portfolio was to be et cetera, et cetera. Basically, this is where we allocate excess liquidity. We cannot put that money at 0% interest. Imagine that if allocating that at the repo the Central Bank gives me 25% on the rate in one day.

So from then onwards or upwards we are going to get an extra income coming through this excess portfolio. So if we cannot allocate that in loans, we have to allocate that in other financial opportunities that we have. So if not, we would have to reduce our balance sheet by reducing CDs and in that case reducing the excess liquidity. So, this is part of the business of the bank. So, I want to make that clear because I have been reading these for many quarters on this from analysts commenting on these security portfolios income in Banco Macro. Is that clear?

Carlos Macedo, Goldman Sachs.

Thanks. Good morning gentlemen. I have a couple of questions. First question is on fees, I understand that you have some constraints in changing the prices for the fees you charged, I understand also that's coming out in September. I just wanted to understand how far back you can be and what should our outlook be for fee expansion say for the next 12 months as opposed to the last six months?

Second question, just following up a little bit on growth, loan growth specifically. We did see a significant growth on the corporate book in this quarter driven by the productive lines that you've been engaging in, just trying to get an idea, what the outlook is there, if you could give us some color of how those lines can work and how far you can grow -- how much further you can grow those portfolios? Thanks.

Hi, Carlos. On terms of fees, yes, there were some constraints that were released in the past. Of course, we have to announce any fee increase with 90 days in advance, so the impact that we are going to see is in September. We are going to increase our fees across the board. So, I think that in 2016, we are going to finish with a fee increase that is going to be in the area of 30%. And for next year, we are looking forward to be more in the area of 25% since the inflation also will be going down next year.

In terms of loan growth, yes, the increase that you see in the second quarter was very good. Also, it is important to mention that in terms of economic activity the second quarter was really low here in Argentina. We expect the third and fourth quarter to be not very positive, but of course better than the second quarter, so we are expecting similar levels of growth for the third and fourth quarter of this year; so we should be finishing the calendar 2016 with an increase in loans in the area of 40%.

And for next year, we are also expecting GDP to be positive and real growth in the area of 3% to 3.5%. So for next year, we are also being optimistic in terms of loan growth being -- with a forecast of the area of 30% to 35% in loan growth for 2017.

Okay. Thanks. Just going back to -- just try and understand a little bit more of the product itself, as you mentioned here the credit line for productive financing and financial inclusion, I mean does that explain much of the increase or was it more distributed along several different products?

No, I think it was across the board. Of course those lines also collaborate, but that was not the main reason for the increase. Also, there are other lines that were explaining that.

Okay. Fantastic, thank you so much.

Also remember that it's only 9% of the financing to the private sector comes from those credit lines that you mentioned.

Marcelo Telles, Credit Suisse.

I have a couple of questions. The first one, when we look in terms of your deposits at the Central Bank, which I believe is the primary reserve requirements, we saw there was kind of a decline versus the previous quarter and if you compare that level of reserve requirements to your amount of deposits, that ratio came down quite a bit and when you look at your peer that also reported yesterday, there was a big increase.

So I was wondering if you could explain me what happened there, I mean because in theory reserve requirements were supposed -- they were increased in June and was wondering if this reduction helped you let's say earn more on the government bond side, because you had, let's say more free cash to invest in government securities -- for sure this is a possible reason for that, but if you could explain I would appreciate, why the different trends versus your peer.

And the other question is, we saw a big jump in revolving credit lines overdraft. So can you elaborate a little bit more exactly what happened there? Is that something that is sustainable or you think that could be some sort of correction in the quarters to come, because that was a big contributor to your loan growth for the quarter? Thank you.

In your third question, can you tell me which is the table or the page on the press release that you are looking at that information please?

Yeah the information would be when you look at your cash and due from banks, you have the breakdown, you have cash, then you have deposits at the Central Bank. I understand this line has a component of, let's say, the reserve requirements that are being deposited at Central Bank. And we see -- if you compare the ratio of those deposits at the Central Bank versus your amount of deposits, it actually came down quite a bit, I think from 23% to 18%, I was expecting that to happen to go the other way, right, given the increasing reserve requirements in June?

Yes. But let me explain you that what you are seeing in that table that the peers have cash, it involves not only the reserve requirements, it also involves the cash or the money that you have on the branches, on the ATMs, et cetera. So that was -- the difference between us and maybe some of our peers is that we have much less cash in branches and ATMs than our peers. And this has come from a problem we are having with the Central Bank that was not accepting cash in this first -- I would say four or five months of the year. That was a problem for many banks here in the [season]. However, we were very efficient in that area by keeping a low level of cash in branches and ATMs and that's why you are seeing a reduction there, I mean, our peers you can see an increase in that line.

But if you compare the evolution from the first to the second quarter, I think this overall number, there was a decline or you're saying that the decline was led by the cash at the ATMs, let's say your working capital and not on the reserve requirements of the Central Bank, is that correct?

Yes.

Okay. Perfect. Thank you.

No problem. In terms of loan growth here in the quarter or what's going on in Argentina, I would say that what we are seeing is, of course, this is going to be a year for recession in the economy with a real GDP going down between 1.5% and 2%, according to local economists. Therefore, we are expecting a positive loan growth demand coming third quarter, fourth quarter. Next year we're expecting real GDP growth. So, I think that we are coming from many years of -- some I would say (inaudible) macroeconomic variables, and the current government is trying to put those variables in [cadence]. Of course, that is not easy, and will not happen from one day to the other. But we are positive on that and that's why we are trying to be as aggressive as we can. Of course, we think that what's going on in Argentina is more of a demand problem, more than a supply problem. However, we are optimistic that in the future in the next six to nine months the picture is going to change and we are going to see more positive figures in terms of GDP and of course we are going to see higher levels of loan growth in our balance sheet, since we are very well prepared for tackling an increase in demand. We want to be the winners in this process of Argentina coming back to the growth path again.

Jorge Kuri, Morgan Stanley.

First question is on operating expenses. For the first half, you grew expenses roughly in line with inflation around 37% or so. However, your revenues didn't grow much more than that. Can you walk us through what the outlook is for the next 12 months or so? To what extent you can grow revenues below inflation -- expenses below inflation or at least below the revenue growth? What is it that you can do in order to have an expansion in efficiency ratios as we move forward? And my second question is if you can give us an update on the process of Citibank selling its assets. Do you have any dates or likely timeframe for the transaction to be announced and whether or not you are looking at it? Thank you..

And of course the Bank's target is to continue improving efficiency and we are working on that direction. Going forward, I think that we are positive in the sense that we could see expenses growing in line with inflation and since we are forecasting inflation to go down in the future and salaries are basically 65% of expenses and basically they grew vis-a-vis inflation. We are seeing expenses growing nominally in a lower rate in the future. However in the positive side, since we are forecasting an increase in loan demand, we expect revenues to grow above inflation and the result for that is an improvement in efficiency. So I think that we have a very good mix going forward with inflation going down, loan demand going up, the increase in banking penetration in Argentina, and since Banco Macro is one of the main participants there and we will be one of the, I would say again, the winners in the process of Argentina growing the financial pie. I would say that the combination is ideal for us to improve efficiency. Of course, I would say that being on the low 40 for next year or maybe high 30s for 2018 is our target and we are going to work on that direction.

In terms of your second question -- in terms of the process with Citi, we do not have any official announcement. We're involved in that process. We are going to have some news in the next -- I don't know 20, 30, 40 days, of course, it doesn't depend on us. But, honestly we do not have official information more than that. But we're involved, we are working there; news will come in the next month or so.

Ricardo Cavanagh, Itau.

My question pertains to the tax amnesty bill, I mean there is a wide range of expectations regarding adherence and well some very positive that this might be a game changer for the financial industry. So interested to see your views and specifically how do you see the possibility that it attracts to the market, high net worth clients that might be out these days?

Yes, I think that this new law, the tax amnesty would be positive for the country. At some point it would be good for the financial sector. Of course we are not promoting this law, trying to be proactive contacting clients. We are more honestly reacting or reactive. Honestly, I don't know if this is the best way to tackle high worth clients. We are, in that sense, trying to focus more on the increase on Argentina's economy going forward and to work on that front. And of course, that's why we are also involved in the process of Citi, trying to tackle that high worth people or clients. But, honestly we don't have a clear picture on these -- on the result, on this [fiscal] tax amnesty law and the impact on the high net worth clients for the banking sector. Of course, we have some doubts there. Meanwhile, we continue working on the process with Citi. We continue working on the process of growing organically and being prepared for what we think that will come in the future, is more growth in the economy and we want to keep on gaining market shares and being a very important participant in the process and in the financial sector in Argentina.

And then a second and last one that would be, well, beyond what is taking place this year as the economy is in recession, but on the provinces that you are very active, how do you see basically the economy prospects for next year?

I think that the whole economy is going to be better next year than 2016, that this is more a transitionary year with high inflation, recession, of course, target rebalancing with pros and cons. We are positive in the sense that going forward, also the agriculture sector is going to have a better 2017, than 2016. So in that sense, we are seeing that also with positive view.

Carlos Gomez, HSBC.

Congratulations on the results. I had two questions. First on the economic assumptions that you're using. You may have mentioned this, but what do you expect for inflation for this year, next year, and a year after, and of course everybody would like to know; but we would like to know what you are projecting there and when you give us the growth numbers? Obviously they are nominal, so you're implicitly assuming a certain level of real growth.

The second question refers to your Forex position. We noticed that it declined very significantly this quarter to essentially nothing. So we wanted to know if that also expresses a view about the market and about where the currency is today. Thank you.

Hi, Carlos. For inflation assumptions for this year, we are working with a 40% inflation assumption. Of course, we do not calculate inflation; we get that from our consensus for the market. For next year, we are working with a 23% to 25% inflation assumption and for 2018, 17%. So those are the assumptions that we are using for inflation.

And these are all presumably the year-end numbers, not average for the year, year-end numbers?

Yes.

Alright. Thank you very much.

That's right. In terms of the Forex, yes, what we believe that you got in the race, let's say, between Forex and interest rates, we think that the interest rate will be the winner, so that's why we reduced our Forex position and (inaudible) pesos in LEBACs, in sovereign bonds, in other pesos financial alternatives, so that was the main reason for the reduction in the Forex position.

So it is intentional? It is a market position?

Yes.

Domingos Falavina, J.P. Morgan.

Congratulations on the very strong set of figures that you published. I also have an addition to the revenue line with securities and I completely understand the answer you gave on the excessive liquidity being channeled towards securities and government investments as an alternative to loans. But it did spend out towards like the ROA as being unusually high. So another way, I guess, I would like to ask you is, if you work with a more normalized ROA or if you look at the results you published with securities from government and private securities around ARS2 billion, what would be more the normalized level that you believe this line should be [printing]?

I think that going forward, if we are thinking on a higher level of penetration in the banking sector, with of course the loans to deposit ratio being much higher than the 79% that we have right now, and of course, in that sense, we could see narrower margins. I think that a more stable and reasonable ROA could be in the area of 3%. So, that is what we are thinking that our numbers will be in the next I would say -- let's say five years, for example, that will be a more reasonable ratio in terms of ROA to work with.

And my second question is on asset quality. We saw a stabilization Q-on-Q and SKU significantly lower than last year, but obviously there is a base effect there that sometimes helps, when the growth is so fast. So when you look at the numbers, my question is more on a qualitative basis -- when you look at your loan book, do you see any -- even though it's still very underpenetrated, do you see any signs of potential problematic loans, I don't overdraft because of fast growth or any specific clients or credit cards?

No. Honestly, in terms of problematic loans, no. It is also clear that again in the scenario that I mentioned before with the higher banking penetration et cetera, et cetera, I think that we could see our NPL ratio higher than the 1.5% that we are having right now, because you will have of course low inflation, so higher NPL ratio will be more reasonable to see there. But, honestly for the moment we are not seeing problematic loans in our book. So of course, you can see that in the last, I would say, five quarters, the ratio was below 2%, that was not because of luck, because I would say that we have been working a lot in terms of asset quality indoors. So, I think this is a combination of -- I would say, at some point the inflation that is also helping, but a lot of work that we have been doing indoors in order to have a good level of asset quality.

But one of your competitors mentioned that there is a seasonal renegotiation of salaries that take place now and you are supposed to have the NPLs a little bit higher in the middle of the year and then improve in the second half, should the same trend work for you or no?

Honestly, well you can see that the NPLs remain pretty stable in the last three quarters. So, honestly, if there is an improvement in the second half, I think it will be marginal and if there is going to be deterioration, would be also marginal. So I'm not seeing many changes -- a lot of changes in the next six months.

Tunde Ojo, Harding Loevner.

My first question is around your outlooks for your net interest margin. I know the BCRA has reviewed the rate on the balance for the productive financing and financial inclusion credit line. And I was wondering if I add that to the fact that interest rate has been dropping on the LEBAC. Do you expect any contraction in your net interest margin for the rest of the year or you expect it to be stable because of lower cost of funding? That's my first question.

Honestly what we are seeing is some stability in the net interest margin. I mean, in the adjusted net interest margin without considering income from securities in the area of between 15% and 15.5%. So, that's what the level that we're forecasting for the next two quarters of the year.

And the other question I have is on your fee expense growth, which has been high over the last two quarters because of the promotional campaign that you're doing on credit and debit card. I was wondering if you can give any color on, if that is going to continue for the rest of the year or when do you expect to end this campaign?

No. This campaign basically has been slowing down. I would say that the main effect happening in the past and what we will see in the future is the result of this campaign in terms of the income coming from the fees on credit cards and debit cards for example, but the major part of the campaign has finished.

Yes. So my question is -- so if I look at your fee income -- net fee income right now, it's lower than inflation, and the reason is not -- your fee income is growing in line or somewhat higher rate. We will see expenses growing really faster and that you allude to the fact that given more promotional campaign for the debit and credit card. So, I was just wondering is that ending soon, so we expect net fee income to grow at an accelerated rate or you expect that sort of slower net fee income to continue into the foreseeable future, that's really my question?

You should expect net fee income growing at a higher rate.

When? Next year or from next quarter?

This year because as I mentioned in some previous questions, we have some constraints in terms of increasing fees, because those were regulations that the former administration passed through, and they were released in the second quarter of this year, since we had to announce 90 days in advance an increasing fees, the impact on these fee increases we'll have in the third and fourth quarter of this year.

And another question I have is -- sorry, I have some more questions. The other question I have is on the fact that the BCRA has removed this restriction on having additional margin of 75% of the minimum capital requirement for [energy] distribution. Would have that in any way -- would you consider increasing the dividend payment just on the back of that or you just maintain it at -- that is right now?

No. Basically, we are not thinking in increasing the dividend policy. Honestly, they bank as in the past wants to find an equilibrium in terms of a cash dividend to have a solid capital position, and of course having excess capital for organic or inorganic growth. So in that sense, we are planning our future, so for the moment we are not planning on increasing the dividend policy.

The last question from me is just basically getting a clarification from the question you answered before. So pardon me for repeating this question. In your press release you have this ARS2 billion for the quarter coming from net income from government and private securities. And I know that Nicholas asked that question earlier. My question is, if I take that ARS2 billion, is it safe to assume what you said earlier that ARS900 millions of out of that is trading gains, which is mark-to-market gain and the remaining ARS1.1 billion is interest income from your securities, basically your look-back and all the corporate bonds. Is that correct? Just wanted to be clear before I let this go on that?

Is it possible for you to repeat me the question, because I couldn't get that because it was interruption in the (multiple speakers).

So if I look at -- so for the second quarter, you had ARS2 billion net income from private and government securities. So, I know embedded in that you said you had some mark-to-market gains and you had some interest income. I just want to be clear that the mark-to-market part of it is ARS900 million and the remaining ARS1.1 billion is interest income, is that a correct way to look at it or is there any other way you want to make me look at this, that particular line item?

It could be an approximation, but is not the exact figures, because also the ARS1.1 million -- sorry ARS1.1 billion that is coming from LEBACs are the combination of interest plus, mark-to-market income.

So let me understand, so the ARS900 million that you talked about earlier, that's just equities alone?

No, the ARS900 million is income from mark-to-market on the equity portfolio and the sovereign bond portfolio.

And the sovereign bond portfolio. Correct. And the remaining ARS1.1 billion, can you give a split between interest income and trading gains. Is that possible right now or something I should follow-up on?

Yes, from the LEBAC portfolio.

Yes, so I am saying can you give a split of that into interest income and trading gains, is that something (multiple speakers).

I do not have that right now, but I can get back to you afterwards.

Carlos Gomez, HSBC

I want to ask you about the new mortgages and the new index product that has been introduced similar to the US, in Chile. Are you already offering this product and what are your realistic expectations for it in the next one or two or three years? Thank you.

Yes, we're offering both mortgages and CDs on -- tied to let's say to inflation. Of course, it's meaningless the amount of operations that we have right now, I think that this could grow in the future vis-a-vis with reduction in inflation. Maybe in two or three years, we could see a higher volume of these transactions, but for the moment this is meaningless.

And mortgages as such -- where they are tied to this index or to any other, is there already any significant production or it's too early?

It's too early I would think.

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

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

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