SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

 

 

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

February 19, 2018

 

 

 

Commission File Number: 001-32827

 

 

 

MACRO BANK INC.

(Translation of registrant’s name into English)

 

 

 

Sarmiento 447

Buenos Aires C1 1041

Tel: 54 11 5222 6500

 

(Address of registrant’s principal executive offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes ¨ No x

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes ¨ No x

 

 

 

 

 

 

4Q17 Earnings Release

 

Banco Macro Announces Results for the Fourth Quarter of 2017

 

Buenos Aires, Argentina, February 19, 2018 – Banco Macro S.A. (NYSE: BMA; BCBA: BMA) (“Banco Macro” or “BMA” or the “Bank”) announced today its results for the fourth quarter ended December 31, 2017 (“4Q17”). All figures are in Argentine pesos (Ps.) and have been prepared in accordance with Argentine GAAP.

 

Summary

 

·   The Bank’s net income totaled Ps.3.01 billion in 4Q17. This result was 16% higher than the Ps.2.60 billion posted in the third quarter of 2017 (“3Q17”) and 78% higher than the result posted in the fourth quarter of 2016 (“4Q16”). In 4Q17, the accumulated annualized return on average equity (“ROAE”) and the accumulated annualized return on average assets (“ROAA”) were 28.6% and 5.2%, respectively. Net Income of Ps.9.39 billion in FY2017 was 44% higher than net income in FY2016.

 

·   In 4Q17, Banco Macro’s financing to the private sector grew 10% or Ps.11.7 billion quarter over quarter (“QoQ”) totaling Ps.129.1 billion and increased 49% or Ps. 42.2 billion year over year (“YoY”). In the quarter, growth was driven by commercial loans, among which Documents and Others stand out, which grew 20% and 10% QoQ, respectively. Meanwhile within consumer loans, mortgage loans, credit cards and personal loans rose 29% and 16% and 12% QoQ, respectively.

 

·   In 4Q17, the accumulated efficiency ratio reached 42.5%, lower than the 43.2% posted in 3Q17 and the 47.5% in 4Q16. Net fee income over administrative expenses was 56.8%, higher than the 53.8% registered in 4Q16.

 

·   In 4Q17, Banco Macro’s total deposits grew 6% QoQ, totaling Ps.144.2 billion and representing 80% of the Bank’s total liabilities. Private sector deposits grew 9% QoQ.

 

·   Banco Macro continued showing a strong solvency ratio, with excess capital of Ps.35.1 billion (28.1% regulatory capital ratio – Basel III). In addition, the Bank’s liquid assets remained at an adequate level, reaching 50.4% of its total deposits in 4Q17.

 

·   In 4Q17, the Bank’s non-performing to total financing ratio was 1.07% and the coverage ratio reached 183.14%.

 

4Q17 Earnings Release Conference Call
 
Wednesday, February 21, 2018
Time: 11:00 a.m. Eastern Time | 1:00 p.m. Buenos Aires Time
 

IR Contacts in Buenos Aires :

 

Jorge Scarinci

Chief Financial Officer

         

To participate, please dial:

Argentina Toll Free:

(0800) 444 2930

Participants Dial In (Toll Free):

+1 (844) 839 2185

Participants International Dial In:

+1 (412) 317 2506

 

Conference ID: Banco Macro

Webcast: click here

 

 

 

Webcast Replay: click here

 

Available from 02/21/2018 through 03/07/2018

 

 

Nicolás A. Torres
Investor Relations

 

Phone: (54 11) 5222 6682

E-mail: investorelations@macro.com.ar

 

Visit our website at: www.ri-macro.com.ar

 

With the presence of: Jorge Pablo Brito (Director), Gustavo Manriquez (CEO), Jorge Scarinci (CFO)

 

 

 

 

4Q17 Earnings Release

 

Disclaimer

 

This press release includes forward-looking statements. We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Many important factors could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things: inflation; changes in interest rates and the cost of deposits; government regulation; adverse legal or regulatory disputes or proceedings; credit and other risks of lending, such as increases in defaults by borrowers; fluctuations and declines in the value of Argentine public debt; competition in banking and financial services; deterioration in regional and national business and economic conditions in Argentina; and fluctuations in the exchange rate of the peso.

 

The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this press release because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this press release might not occur and are not guarantees of future performance.

 

This report is a summary analysis of Banco Macro's financial condition and results of operations as of and for the period indicated. For a correct interpretation, this report must be read in conjunction with all other material periodically filed with the Comisión Nacional de Valores (www.cnv.gob.ar), the Securities and Exchange Commission (www.sec.gov), the Bolsa de Comercio de Buenos Aires (www.bolsar.com) and the New York Stock Exchange (www.nyse.com). In addition, the Central Bank (www.bcra.gov.ar) may publish information related to Banco Macro as of a date subsequent to the last date for which the Bank has published information.

 

Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Consequently, any matters of interpretation should be referred to the original version in Spanish.

 

  2

 

 

4Q17 Earnings Release

 

Results

 

Earnings per outstanding share were Ps.4.50 in 4Q17, 16% higher than in 3Q17 and 55% higher than 4Q16. On a yearly basis a 78% increase in net income was experienced while the average number of shares outstanding grew 15%.

 

EARNINGS PER SHARE   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Net income (M $)     1,695.3       1,764.0       2,015.3       2,597.8       3,011.7       6,540.8       9,388.8       44 %
Average # of shares outstanding (M)     584.5       584.5       593.5       668.2       669.7       584.5       629.3       8 %
Book value per avg. Outstanding share ($)     37.82       40.84       60.40       60.00       64.4       37.8       68.5       81 %
Shares Outstanding (M)     584.5       584.5       658.5       669.7       669.7       584.5       669.7       15 %
Earnings per avg.  outstanding share ($)     2.90       3.02       3.40       3.89       4.50       11.19       14.92       33 %
                                                                 
Book value per avg. issued ADS (USD)     23.86       26.55       36.39       34.65       34.31       23.86       34.31       44 %
Earnings per avg. outstanding ADS (USD)     1.83       1.96       2.05       2.24       2.40       7.06       8.65       22 %

 

Banco Macro’s 4Q17 net income of Ps.3.01 billion was 16% or Ps.414 million higher than the previous quarter and 78% or Ps.1.3 billion higher YoY.

 

In FY2017 Banco Macro´s net income was Ps.9.39 billion, 44% higher than the Ps.6.54 billion posted in FY2016. This result represented a ROAE and ROAA of 28.6% and 5.2% respectively.

 

The operating result for 4Q17 was Ps.4.92 billion, increasing 13% or Ps.559 million QoQ and 89% or Ps.2.3 billion on a yearly basis. Had Income from government and private securities and income on guaranteed loans and in CER adjustments been excluded, operating result would have been 150% higher than the result posted in 4Q16

 

In FY2017, the operating result of Ps.15.80 billion was 59% higher than the FY2016 result.

 

It is important to emphasize that this result was obtained with a leverage of 5.2x assets to equity ratio.

 

INCOME STATEMENT   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Net financial income     4,242.1       4,640.4       5,244.8       6,026.7       7,042.7       15,634.5       22,954.6       47 %
Provision for loan losses     -354.0       -361.4       -469.0       -342.5       -422.3       -1,073.1       -1,595.2       49 %
Net fee income     1,532.2       1,667.0       1,800.2       1,874.3       1,962.8       5,364.9       7,304.3       36 %
      5,420.3       5,946.0       6,576.0       7,558.5       8,583.2       19,926.3       28,663.7       44 %
Administrative expenses     -2,814.8       -2,963.5       -3,044.2       -3,195.0       -3,660.3       -9,970.7       -12,863.0       29 %
Operating result     2,605.5       2,982.5       3,531.8       4,363.5       4,922.9       9,955.6       15,800.7       59 %
Minority interest in subsidiaries     -16.7       -15.8       -19.1       -19.2       -30.7       -54.6       -84.8       55 %
Net other income     -52.7       -0.8       -189.0       -92.1       -261.0       117.2       -542.9       -563 %
Net income before income tax     2,536.1       2,965.9       3,323.7       4,252.2       4,631.2       10,018.2       15,173.0       51 %
Income tax     -840.8       -1,201.9       -1,308.4       -1,654.4       -1,619.5       -3,477.4       -5,784.2       66 %
NET INCOME     1,695.3       1,764.0       2,015.3       2,597.8       3,011.7       6,540.8       9,388.8       44 %

 

The Bank’s 4Q17 financial income totaled Ps.11.0 billion, increasing 15% (Ps.1.4 billion) compared to 3Q17 and increasing 45% (Ps.3.4 billion) YoY.

 

In FY2017, financial income totaled Ps.36.5 billion, 26% higher than in FY2016.

 

  3

 

 

4Q17 Earnings Release

 

Interest on loans represented 73% of total financial income in 4Q17. Interest on loans was 13% or Ps.912 million higher than 3Q17’s level due to an 11% increase in the average volume of the loan portfolio and a 60bp increase in the average interest lending rates. On an annual basis, interest on loans grew 38% or Ps.2.2 billion.

 

In FY2017, interest on loans totaled Ps.27.5 billion, 27% higher than in FY2016; this was as a result of a 51% increase in average private sector loans and a 486bp decrease in lending interest rates.

 

In 4Q17, net income from government and private securities increased 35% or Ps.630 million QoQ, mainly due to higher LEBACs income and income from other government and private securities. On an annual basis, net income from government and private securities grew 52% or Ps.826 million.

 

In FY2017, net income from government and private securities totaled Ps.6.4 billion, and was 3% higher compared to FY2016.

 

In the quarter, an increase of 117% or Ps.66 million in income from Guaranteed Loans and in CER Adjustment was observed (mainly related to UVA mortgage loans). On an annual basis, income from Guaranteed Loans and in CER Adjustment increased 84% or Ps.56 million.

 

Income from differences in quoted prices of gold and foreign currency decreased 49% or Ps.299 million QoQ mainly due to an 85% decrease in foreign currency position in 4Q17. On an annual basis, an increase of Ps.229 million was experienced.

 

Also in the quarter, other financial income increased 179% or Ps.83 million compared to 3Q17 mainly due to higher rates on reverse repurchase agreements. On an annual basis, an increase of 244% or Ps.92 million was experienced.

 

FINANCIAL INCOME   MACRO Consolidated     Variation  
In MILLION  $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Interest on cash and due from banks     0.1       0.8       0.1       6.1       6.7       1.2       13.7       1042 %
Interest on loans to the financial sector     88.0       101.2       98.9       125.5       177.5       248.1       503.1       103 %
Interest on overdrafts     650.5       650.4       621.4       679.0       752.7       2,494.4       2,703.5       8 %
Interest on documents     399.7       374.0       390.1       430.0       492.2       1,559.1       1,686.3       8 %
Interest on mortgages loans     176.6       179.0       186.6       201.9       216.1       729.8       783.6       7 %
Interest on pledges loans     86.3       97.7       111.2       126.8       140.0       360.7       475.7       32 %
Interest on credit cards loans     1,041.1       1,071.8       1,085.9       1,064.3       1,212.3       3,950.9       4,434.3       12 %
Interest on financial leases     20.6       20.1       22.2       28.6       32.2       89.9       103.1       15 %
Interest on other loans     3,333.6       3,565.4       3,906.3       4,415.6       4,960.5       12,197.6       16,847.8       38 %
Net Income from government & private securities (1)     1,583.0       868.9       1,360.7       1,778.7       2,409.1       6,222.8       6,417.4       3 %
Interest on other receivables from financial interm.     1.6       0.9       4.0       2.3       1.1       6.2       8.3       34 %
Income from Guaranteed Loans - Decree 1387/01     8.9       3.1       0.0       0.1       0.0       33.7       3.2       -91 %
CER adjustment     57.7       28.6       32.2       56.3       122.4       255.9       239.5       -6 %
CVS adjustment     0.2       0.1       0.1       0.2       0.2       0.8       0.6       -25 %
Difference in quoted prices of gold and foreign currency     86.9       159.5       423.9       614.5       315.6       516.9       1,513.5       193 %
Other     37.8       478.9       110.9       46.6       130.0       267.3       766.4       187 %
Total financial income     7,572.6       7,600.4       8,354.5       9,576.5       10,968.6       28,935.3       36,500.0       26 %
                                                                 
Income from Interest on loans     5,796.4       6,059.6       6,422.6       7,071.7       7,983.5       21,630.5       27,537.4       27 %
                                                                 
(1) Net Income from government & private securities                                                                
LEBACs     1,200.8       537.5       1,270.5       1603.6       1,984.2       4,046.0       5,395.7       33 %
Other Govermnet & Private Securities     382.2       331.4       90.2       175.1       424.9       2,176.8       1,021.7        -53
Net Income from government & private securities     1,583.0       868.9       1,360.7       1,778.7       2,409.1       6,222.8       6,417.4       3 %

 

The Bank’s 4Q17 financial expense totaled Ps.3.9 billion, increasing 11% (Ps.376 million) compared to the previous quarter and 18% (Ps.595 million) compared to 4Q16.

 

In FY2017, financial expense totaled Ps.13.5 billion, 2% higher than in FY2016.

 

In 4Q17, interest on deposits represented 68% of the Bank’s total financial expense, increasing 11% or Ps.266 million QoQ. This increase was mainly driven by a 6% increase of the average volume of time deposits and an 80bp increase in the average time deposit interest rate. On a yearly basis, interest on deposits grew 7% or Ps.175 million.

 

  4

 

 

4Q17 Earnings Release

 

In FY2017, interest on deposits totaled Ps.9.3 billion, 10% lower than in FY2016, as a consequence of a 554bp decrease in time deposit interest rates and a 21% increase in the average volume of time deposits.

 

Other financial expense grew 12% or Ps.94million QoQ mainly due to higher provincial taxes and increased 32% or Ps.207 million YoY.

 

FINANCIAL EXPENSE   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Interest on checking accounts     0.0       0.0       0.0       0.0       0.0       0.0       0.0       0 %
Interest on saving accounts     23.5       24.0       26.1       30.7       29.4       89.9       110.2       23 %
Interest on time deposits     2,452.8       2,109.8       2,117.0       2,354.2       2,621.8       10,283.7       9,202.8       -11 %
Interest on interfinancing received loans     1.2       1.4       2.1       10.1       4.6       3.0       18.2       507 %
Interest on other financing from the finan. institu.     -0.5       0.0       0.5       5.0       4.3       0.0       9.8       100 %
Interest on subordinated bonds     117.2       105.2       106.9       117.8       122.6       277.2       452.5       63 %
Other Interest     0.8       0.7       0.7       0.8       1.0       4.2       3.2       -24 %
Interest on other liabilities from fin intermediation     38.9       16.2       122.3       210.8       214.3       145.8       563.6       287 %
CER adjustment     2.9       2.8       5.1       4.2       12.5       12.1       24.6       103 %
Contribution to Deposit Guarantee Fund     44.5       49.4       50.5       54.2       59.4       215.0       213.5       -1 %
Other     649.2       650.5       678.5       762.0       856.0       2,269.9       2,947.0       30 %
Total financial expense     3,330.5       2,960.0       3,109.7       3,549.8       3,925.9       13,300.8       13,545.4       2 %
                                                                 
Financial Expenses from interest on deposits     2,476.3       2,133.8       2,143.1       2,384.9       2,651.2       10,373.6       9,313.0       -10 %

 

As of 4Q17, the Bank’s accumulated net interest margin was 17.7%, higher than the 17.3% posted in 3Q17 and lower than the 18.2% posted in 4Q16. Had income from government and private securities and guaranteed loans including CER adjustments been excluded, the Bank’s accumulated net interest margin would have been 16.1% in 4Q17, slightly lower than the 16.2% posted in 3Q17 and higher than the 15.3% posted in 4Q16.

 

ASSETS & LIABILITIES PERFORMANCE   MACRO Consolidated  
In MILLON $   4Q16     1Q17     2Q17     3Q17     4Q17  
Yields & rates in annualized nominal %   AVERAGE
BALANCE
    INT     AVERAGE
BALANCE
    INT     AVERAGE
BALANCE
    INT     AVERAGE
BALANCE
    INT     AVERAGE
BALANCE
    INT  
                                                             
Interest-earning assets                                                            
Goverment Securities     25,904.9       23.2 %     14,625.4       22.9 %     24,753.8       21.7 %     31,533.9       21.2 %     31,490.5       26.5 %
Loans     80,012.5       29.2 %     89,747.5       27.6 %     98,881.9       26.2 %     112,017.0       25.2 %     124,154.3       25.9 %
Private Sector     78,975.2       29.1 %     88,893.2       27.5 %     98,275.7       26.2 %     110,316.1       25.2 %     122,336.1       25.8 %
Public Sector     1,037.3       35.2 %     854.3       32.8 %     606.2       28.5 %     1,700.9       28.3 %     1,818.2       32.0 %
Financial trusts     393.5       35.3 %     739.1       25.9 %     697.7       25.4 %     765.3       26.0 %     803.2       21.0 %
Other interest-earning assets     2,586.2       11.4 %     9,578.4       19.4 %     3,296.4       11.1 %     4,043.5       9.3 %     5,196.4       30.7 %
Total interest-earning assets     108,897.1       27.3 %     114,690.4       26.3 %     127,629.8       24.9 %     148,359.7       24.0 %     161,644.4       26.1 %
                                                                                 
Non interest-earning assets     38,880.4               41,251.0               38,319.7               46,129.8               46,129.8          
Total Average Assets     147,777.5               155,941.4               165,949.5               194,489.5               210,280.6          
                                                                                 
Interest-bearing liabilities                                                                                
Checking accounts (*)     1,727.6       0.0 %     1,051.7       0.0 %     1,639.3       0.0 %     1,728.4       0.0 %     1,213.6       0.0 %
Saving accounts (*)     20,217.1       0.5 %     24,245.1       0.4 %     26,043.1       0.4 %     30,764.4       0.4 %     34,134.3       0.3 %
Time deposits (*)     54,751.6       17.8 %     54,146.9       15.8 %     54,977.2       15.5 %     61,526.7       15.2 %     65,208.9       16.0 %
Corporate Bonds     7,561.5       8.0 %     6,932.6       6.8 %     9,100.5       9.9 %     11,641.8       10.9 %     11,735.2       11.1 %
BCRA     0.2       0.0 %     0.2       0.0 %     0.2       0.0 %     0.1       0.0 %     0.1       0.0 %
Other interest-bearing liabilities     543.3       15.2 %     571.4       17.7 %     560.9       13.8 %     2,261.0       13.1 %     1,724.5       11.2 %
Total interest-bearing liabilities     84,801.3       12.4 %     84,801.3       10.6 %     92,321.2       10.4 %     107,922.4       10.2 %     114,016.6       10.6 %
                                                                                 
Non interest-bearing liabilities                                                                                
Demand deposits (*) (*)     30,224.8               33,339.6               33,383.3               32,794.1               37,444.6          
Other non interest-bearing libilities & equity     32,751.4               35,653.9               40,245.0               53,773.0               58,819.4          
Total non interest-bearing liab. & equity     62,976.2               68,993.5               73,628.3               86,567.1               96,264.0          
                                                                                 
Total Average Liabilities & Equity     147,777.5               155,941.4               165,949.5               194,489.5               210,280.6          
                                                                                 
Assets Performance             7,485.0               7,439.8               7,931.7               8,958.7               10,649.7  
Liabilities Performance             2,652.4               2,278.3               2,390.8               2,782.4               3,036.2  
Net Interest Income             4,832.6               5,161.5               5,540.9               6,176.3               7,613.5  
Total interest-earning assets             108,897.1               114,690.4               127,629.8               148,359.7               161,644.4  
Net Interest Margin (NIM)             17.7 %             18.3 %             17.4 %             16.5 %             18.7 %

 

(*) The average cost of funds is calculated only considering deposits with and without interest-bearnig cost.

 

  5

 

 

4Q17 Earnings Release

 

In 4Q17, Banco Macro’s net fee income totaled Ps.2.0 billion, 5% or Ps.89 million higher than 3Q17, and 28% or Ps.431 million higher than 4Q16.

 

In the quarter, fee income increased 6% or Ps.175 million. Fees charged on debit and credit card and deposit accounts fees stand out, which increased 8% and 4% respectively. On a yearly basis, fee income increased 27% or Ps.615 million, having the same concepts stand out (25% increase each).

 

In the quarter, total fee expenses grew 10% or Ps.87 million, with higher charges paid to debit/credit card brands and higher other fee expenses (13% and 10% increase respectively). On a yearly basis, fee expenses increased 24% or Ps.184 million, with similar concepts standing out (33% and 52% respectively).

 

In FY2017, net fee income totaled, Ps.7.3 billion, 36% higher than in FY2016.

 

NET FEE INCOME   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Fee charges on deposit accounts     1,296.1       1,377.5       1,467.0       1,563.2       1,623.7       4,597.2       5,946.2       29 %
Debit and credit card fees     685.4       694.5       707.0       793.4       855.3       2,538.4       3,135.9       24 %
Other fees related to foreign trade     33.4       33.0       36.3       44.5       47.0       134.8       160.8       19 %
Credit-related fees     69.6       55.9       96.5       66.2       72.3       152.6       290.9       91 %
Lease of safe-deposit boxes     35.1       37.4       42.7       44.5       49.0       119.9       173.6       45 %
Other     188.3       203.0       226.0       235.3       275.2       425.8       939.0       121 %
Total fee income     2,307.9       2,401.3       2,575.5       2,747.1       2,922.5       7,968.7       10,646.4       34 %
                                                                 
Debit and Credit card expenses     380.8       364.7       402.7       447.3       505.8       1,295.4       1,720.5       33 %
Turnover tax and municipal assessments     119.2       137.7       151.6       166.3       180.9       427.5       636.5       49 %
Comission paid to lending agencies     47.3       34.7       44.5       59.2       52.4       255.8       190.8       -25 %
Foreign trade comissions     5.0       4.2       4.2       5.5       6.2       12.3       20.1       63 %
Others     223.4       193.0       172.3       194.5       214.4       612.8       774.2       26 %
Total fee expense     775.7       734.3       775.3       872.8       959.7       2,603.8       3,342.1       28 %
                                                                 
Net fee income     1,532.2       1,667.0       1,800.2       1,874.3       1,962.8       5,364.9       7,304.3       36 %

 

In 4Q17 Banco Macro’s administrative expenses totaled Ps.3.7 billion, 15% or Ps.465 million higher than the previous quarter. Administrative expenses increased 30% or Ps.845 million YoY due to an increase in personnel expenses (mainly higher salaries and other concepts) and other operating expenses.

 

Personnel expenses grew 13% or Ps.245 million QoQ, basically due to the back pay originated on 2017 inflation being higher than the salary increase agreed with the Union at the beginning of the year. On yearly basis personnel expenses increased 27% or Ps.453 million.

 

In FY2017, administrative expenses totaled Ps.12.9 billion, 29% higher than in FY2016.

 

As of December 2017, the accumulated efficiency ratio reached 42.5%, compared to the 43.3% posted in 3Q17 and 47.5 posted in 4Q16. In FY2017 Administrative expenses grew 29%, in line with the Bank’s focus of improving efficiency, while net financial income and net fee income grew 44% as whole.

 

  6

 

 

4Q17 Earnings Release

 

ADMINISTRATIVE EXPENSES   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Personnel expenses     1,684.0       1,844.9       1,832.9       1,891.8       2,136.8       6,039.0       7,706.4       28 %
Directors & statutory auditors´fees     82.5       86.7       98.6       121.5       138.3       314.5       445.1       42 %
Other professional fees     85.7       78.0       87.0       94.9       107.5       283.2       367.4       30 %
Advertising & publicity     75.0       43.5       38.3       56.0       95.1       197.5       232.9       18 %
Taxes     149.9       162.5       178.4       180.6       207.1       534.4       728.6       36 %
Depreciation of equipment     56.6       59.0       60.2       63.5       66.8       205.1       249.5       22 %
Amortization of organization costs     54.0       60.1       64.1       71.4       79.4       197.1       275.0       40 %
Other operating expenses     386.4       399.5       417.3       458.5       530.2       1,399.9       1,805.5       29 %
Other     240.7       229.3       267.4       256.8       299.1       800.0       1,052.6       32 %
Total Administrative Expenses     2,814.8       2,963.5       3,044.2       3,195.0       3,660.3       9,970.7       12,863.0       29 %
                                                                 
Total Employees     8,617       8,675       8,702       8,721       8,774       8,617       8,774       2 %
Branches     444       445       449       448       445       444       445       0 %
Efficiency ratio     48.7 %     47.0 %     43.2 %     40.4 %     40.6 %                        
                                                                 
Accumulated efficiency ratio     47.5 %     47.0 %     45.0 %     43.3 %     42.5 %     47.5 %     42.5 %        

 

In 4Q17, the Bank’s net other income/losses totaled a Ps.261 million loss. This loss was due to Other income totaling Ps.241 (12% or Ps. 26 million higher than in 3Q17)among which Others stand out (mostly income from Banco Macro’s stake in Prisma); and Other expense totaling Ps.502 million (63% higher than in 3Q17), among which Charges for other receivables uncollectibility and other allowances stand out.

 

In FY2017, net other income/losses totaled a Ps.543 million loss, compared to the Ps.117.2 million gain in FY2016.

 

NET OTHER INCOME/LOSSES   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     2016     2017     FY17/FY16  
                                                 
Other Income                                                                
Penalty interest     19.5       17.0       19.3       26.4       21.8       83.1       84.5       2 %
Recovered loans and  reversed allowances     85.5       88.2       139.3       65.9       53.9       229.6       347.3       51 %
Other     49.3       39.3       145.5       123.5       165.7       285.8       474.0       66 %
Total Other Income     154.3       144.5       304.1       215.8       241.4       598.5       905.8       51 %
                                                                 
Other Expense                                                                
Charges for other receivables uncollectibility and other allowances     79.7       69.6       134.8       171.4       343.2       203.3       719.2       254 %
Goodwill amortization     1.4       1.4       1.4       1.4       16.4       10.1       20.6       104 %
Other Expense     125.9       74.3       356.9       135.1       142.8       267.9       709.1       165 %
Total Other Expense     207.0       145.3       493.1       307.9       502.4       481.3       1,448.9       201 %
                                                                 
Net Other Income/Losses     -52.7       -0.8       -189.0       -92.1       -261.0       117.2       -543.1       -563 %

 

In FY2017, Banco Macro's effective income tax rate was 38.1%, compared to 34.7% in FY2016.

 

Financial Assets

 

Private sector financing

 

The volume of “core” financing to the private sector (including loans, financial trust and leasing portfolio) totaled Ps.129.1 billion, increasing 10% or Ps.11.7 billion QoQ and 49% or Ps.42.2 billion YoY.

 

Within commercial loans, growth was driven by documents and others, which grew 20% and 10% QoQ, respectively.

 

  7

 

 

4Q17 Earnings Release

 

The growth in consumer loans was mainly driven by mortgage loans, credit card loans, and personal loans which grew 29%, 16% and 12% QoQ, respectively.

 

As of 4Q17, Banco Macro´s market share over private sector loans was 7.9%.

 

FINANCING TO THE PRIVATE SECTOR   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Overdrafts     8,837.7       10,264.7       9,638.2       12,170.4       8,829.3       -27 %     0 %
Discounted documents     11,198.9       10,679.5       12,332.3       14,435.9       17,272.1       20 %     54 %
Mortgages loans     4,158.6       4,498.2       5,195.5       6,247.0       8,057.5       29 %     94 %
Pledges loans     2,285.1       2,471.5       3,263.4       3,551.3       4,150.1       17 %     82 %
Personal loans     29,784.8       33,365.0       37,342.5       42,361.4       47,376.8       12 %     59 %
Credit Card loans     18,851.6       19,526.1       20,590.9       21,507.2       24,971.9       16 %     32 %
Others     10,465.8       11,739.1       15,281.5       15,356.2       16,884.7       10 %     61 %
Total loan portfolio     85,582.5       92,544.1       103,644.3       115,629.4       127,542.4       10 %     49 %
                                                         
Financial trusts     954.7       1,028.8       1,121.5       1,281.8       1,011.8       -21 %     6 %
Leasing     369.1       376.9       478.9       524.6       585.0       12 %     58 %
Total financing to the private sector     86,906.3       93,949.8       105,244.7       117,435.8       129,139.2       10 %     49 %
                                                         
Market share over loan portfolio     8.1 %     8.3 %     8.3 %     8.2 %     7.9 %                

 

Public Sector Assets

 

In 4Q17, the Bank’s public sector assets (excluding LEBACs) to total assets ratio was 1.5%, lower than the 2.5% posted in 3Q17 and the 3.7% posted in 4Q16.

 

In 4Q17, a 55% or Ps.1.7 billion decrease in other government securities position (peso denominated securities) stands out.

 

PUBLIC SECTOR ASSETS   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
LEBACs     15,964.3       11,406.9       24,544.4       26,454.1       35,641.8       35 %     123 %
Other     4,205.4       2,411.3       2,975.4       3,171.2       1,440.8       -55 %     -66 %
Government securities     20,169.7       13,818.2       27,519.8       29,625.3       37,082.6       25 %     84 %
Guaranteed loans     717.6       0.0       0.0       0.0       0.0       0 %     0 %
Provincial loans     814.9       480.0       497.3       1,834.3       1,797.3       -2 %     121 %
Loans     1,532.5       480.0       497.3       1,834.3       1,797.3       -2 %     17 %
Purchase of government bonds     37.0       36.1       38.3       39.5       42.1       7 %     14 %
Other receivables     37.0       36.1       38.3       39.5       42.1       7 %     14 %
                                                         
TOTAL PUBLIC SECTOR ASSETS     21,739.2       14,334.3       28,055.4       31,499.1       38,922.0       24 %     79 %
                                                         
TOTAL PUBLIC SECTOR LIABILITIES     23.6       19.5       15.2       10.2       4.8       -53 %     -80 %
                                                         
Net exposure     21,715.6       14,314.8       28,040.2       31,488.9       38,917.2       24 %     79 %
                                                         
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC / NOBAC )     5,774.9       2,927.4       3,511.0       5,045.0       3,280.2       -35 %     -43 %
                                                         
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC / NOBAC) /TOTAL ASSETS     3.7 %     1.9 %     1.9 %     2.5 %     1.5 %                

 

  8

 

 

4Q17 Earnings Release

 

Funding

 

Deposits

 

Banco Macro’s deposit base totaled Ps.144.2 billion in 4Q17, growing 6% or Ps.7.6 billion QoQ and 29% or Ps.32.3 billion YoY and representing 80% of the Bank’s total liabilities.

 

On a quarterly basis, private sector deposits increased 9% or Ps.11.2 billion while public sector deposits decreased 22% or Ps.3.6 billion. Within private sector deposits, sight deposits grew 17% or Ps.9.3 billion, and time deposits grew 4% or Ps.2.5 billion QoQ. Also in the quarter peso deposits increased 11% or Ps.10.0 billion while foreign currency deposits decreased 4% or USD 55 million.

 

As of 4Q17, Banco Macro´s market share over private sector deposits was 6.7%.

 

DEPOSITS   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Public sector     9,552.2       13,007.6       10,804.0       16,461.9       12,890.7       -22 %     35 %
                                                         
Financial sector     55.8       50.9       57.4       54.6       81.3       49 %     46 %
                                                         
Private sector     102,331.7       102,124.4       112,796.0       120,096.3       131,253.9       9 %     28 %
Checking accounts     17,686.2       18,559.7       19,951.1       20,950.4       20,778.6       -1 %     17 %
Savings accounts     27,896.0       27,117.5       34,087.9       35,046.4       44,531.9       27 %     60 %
Time deposits     47,652.4       47,495.8       53,428.8       59,247.0       61,702.3       4 %     29 %
Other     9,097.1       8,951.4       5,328.2       4,852.5       4,241.1       -13 %     -53 %
Total     111,939.7       115,182.9       123,657.4       136,612.8       144,225.9       6 %     29 %
                                                         
Pesos     88,640.4       93,023.1       100,308.9       106,746.2       113,075.4       6 %     28 %
Foreign Currency     23,299.3       22,159.8       23,348.5       29,866.6       31,150.5       4 %     34 %
                                                         
Market share over private deposits     6.8 %     6.7 %     6.9 %     7.1 %     6.7 %                

 

Other sources of funds

 

In 4Q17, the total amount of other sources of funds increased 7% or Ps.3.5 billion compared to 3Q17. In 4Q17 shareholder’s equity increased 8% or Ps.3.0 billion which was mainly driven by 4Q17 positive results.

 

OTHER SOURCES OF FUNDS   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Central Bank of Argentina     8.4       8.4       10.4       9.8       11.5       17 %     37 %
Banks and international institutions     129.9       133.0       347.1       427.1       169.7       -60 %     31 %
Financing received from Argentine financial institutions     142.7       49.3       78.8       607.5       846.5       39 %     493 %
Subordinated corporate bonds     6,407.8       6,322.3       6,709.1       7,117.0       7,589.9       7 %     18 %
Non-subordinated corporate bonds     1,684.9       0.0       4,620.6       4,620.6       4,620.6       0 %     174 %
Shareholders´ equity     22,105.9       23,869.9       35,827.5       40,118.9       43,130.5       8 %     95 %
Total other source of funds     30,479.6       30,382.9       47,593.5       52,900.9       56,368.7       7 %     85 %

 

In 4Q17, Banco Macro’s average cost of funds reached 7.4%. This was mainly due to the decrease in the liabilities interest rate, and to Banco Macro’s transactional deposits, which represent approximately 52% of its total deposit base as of 4Q17. These accounts are low cost and are not sensitive to interest rate increases.

 

  9

 

 

4Q17 Earnings Release

 

Liquid Assets

 

In 4Q17, the Bank’s liquid assets amounted to Ps.72.7 billion, showing a 5% or Ps.3.4 billion increase QoQ and a 36% or Ps.19.4 billion increase on a yearly basis.

 

In 4Q17, Banco Macro’s LEBAC own portfolio and Reverse Repos from LEBAC increased 25% and 80% respectively; this increase in the LEBAC position was partially offset by a 9% decrease in Cash.

 

In 4Q17 Banco Macro’s liquid assets to total deposits ratio reached 50.4%.

 

LIQUID ASSETS   MACRO Consolidated     Variation  
In MILLION  $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Cash     36,089.2       29,014.7       36,477.2       37,705.2       34,267.6       -9 %     -5 %
Guarantees for compensating chambers     2,094.0       2,101.6       2,174.3       3,739.6       4,005.7       7 %     91 %
Call     5.0       115.0       235.0       410.0       146.0       -64 %     2820 %
Reverse repos from other securities     -       0.8       38.6       413.0       10.9       -97 %     0 %
Reverse repos from LEBAC/NOBAC     19.4       8,609.4       2,242.7       877.0       1,580.4       80 %     8046 %
LEBAC / NOBAC own portfolio     15,125.9       11,632.3       24,593.8       26,149.6       32,670.5       25 %     116 %
Total     53,333.5       51,473.8       65,761.6       69,294.4       72,681.1       5 %     36 %
                                                         
Liquid assets to total deposits     47.6 %     44.7 %     53.2 %     50.7 %     50.4 %                

 

Solvency

 

Banco Macro continued showing high solvency levels in 4Q17 with an integrated capital (RPC) of Ps.49.5 billion over a total capital requirement of Ps.14.4 billion. Banco Macro´s excess capital in 4Q17 was 243% or Ps.35.1 billion.

 

The regulatory capital ratio (as a percentage of risk-weighted assets- RWA) was 28.1% in 4Q17, TIER1 Ratio was 23.1%.

 

The Bank´s aim is to make the best use of this excess capital.

 

  10

 

 

4Q17 Earnings Release

 

MINIMUM CAPITAL REQUIREMENT   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Credit risk requirement     7,634.6       7,945.2       9,410.4       10,942.8       11,023.2       1 %     44 %
Market risk requirement     267.2       115.6       863.4       711.8       184.4       -74 %     -31 %
Operational risk requirement     2,368.0       2,503.9       2,715.0       2,959.5       3,219.3       9 %     36 %
Total capital requirements     10,269.8       10,564.8       12,988.8       14,614.0       14,426.9       -1 %     40 %
                                                         
Ordinary Capital Level 1 (COn1)     21,258.3       23,047.6       34,887.9       38,899.1       41,709.1       7 %     96 %
Deductible concepts Level 1 (COn1)     -684.3       -791.9       -819.5       -928.5       -1,022.0       10 %     49 %
Aditional Capital Level 1 (CAn1)     0.0       12.8       14.6       16.9       18.1       7 %     0 %
Capital Level 2 (COn2)     7,217.9       7,113.5       7,715.5       8,139.3       8,836.5       9 %     22 %
Integrated capital - RPC (i)     27,791.9       29,381.9       41,798.4       46,126.8       49,541.6       7 %     78 %
                                                         
Excess capital     17,522.1       18,817.1       28,809.6       31,512.7       35,114.7       11 %     100 %
                                                         
Risk-weighted assets - RWA (ii)     125,593.1       129,167.1       158,934.5       178,691.4       176,323.3       -1 %     40 %
                                                         
Regulatory Capital ratio [(i)/(ii)]     22.1 %     22.7 %     26.3 %     25.8 %     28.1 %                
                                                         
Ratio TIER 1 [Capital Level 1/RWA]     16.4 %     17.2 %     21.4 %     21.3 %     23.1 %                

 

RWA - (ii): Risk Weighetd Assets, considering total capital requirements.

 

Asset Quality

 

In 4Q17, Banco Macro’s non-performing to total financing ratio reached a level of 1.07%, higher than the 1% posted in 3Q17, and lower than the 1.14% posted in 4Q16.

 

Commercial portfolio non-performing loans slightly increased 12bp (Note that in 3Q17 a specific commercial client cancelled its debt driving Commercial portfolio non-performing loans lower), from 0.26% in 3Q17 to 0.38% in 4Q17; meanwhile consumer portfolio showed an improved performance with non-performing loans decreasing from 1.48% in 3Q17 to 1.45% in 4Q17.

 

The coverage ratio reached 183.14% in 4Q17.

 

The Bank is committed to continue working in this area to maintain excellent asset quality standards.

 

ASSET QUALITY   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Commercial portfolio     34,989.5       36,653.4       41,052.2       48,541.0       48,851.6       1 %     40 %
Non-performing     194.9       320.1       265.4       127.7       187.6       47 %     -4 %
Consumer portfolio     56,613.1       61,045.6       68,524.1       75,910.0       87,734.1       16 %     55 %
Non-performing     853.6       1,003.0       1,130.4       1,121.5       1,275.9       14 %     49 %
Total portfolio     91,602.6       97,699.0       109,576.3       124,451.0       136,585.7       10 %     49 %
Non-performing     1,048.5       1,323.1       1,395.8       1,249.2       1,463.5       17 %     40 %
Total non-performing/ Total portfolio     1.14 %     1.35 %     1.27 %     1.00 %     1.07 %                
                                                         
Total allowances     1,850.7       2,063.3       2,346.1       2,489.0       2,680.2       8 %     45 %
Coverage ratio w/allowances     176.51 %     155.94 %     168.08 %     199.25 %     183.14 %                

 

  11

 

 

4Q17 Earnings Release

 

CER Exposure and Foreign Currency Position

 

CER EXPOSURE   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
CER adjustable ASSETS                                                        
Guaranteed loans     717.5       -       -       -       -       0 %     0 %
Private sector loans (*)     98.8       288.7       756.9       1,752.8       3,582.2       104 %     3526 %
Other loans     0.2       0.2       1.7       4.7       10.5       123 %     5150 %
Total CER adjustable assets     816.5       288.9       758.6       1,757.5       3,592.7       104 %     340 %
                                                         
CER adjustable LIABILITIES                                                        
Deposits (*)     48.7       38.4       77.3       98.1       86.7       -12 %     78 %
Other liabilities from financial intermediation     23.4       19.3       15.1       10.0       4.4       -56 %     -81 %
Total CER adjustable liabilities     72.1       57.7       92.4       108.1       91.1       -16 %     26 %
                                                         
NET CER EXPOSURE     816.5       231.2       666.2       1,649.4       3,501.6       112 %     329 %

 

(*) Includes Loans &Time Deposits CER adjustable (UVAs)

 

FOREIGN CURRENCY POSITION   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Cash     21,394.9       16,141.8       21,575.2       25,191.5       19,735.3       -22 %     -8 %
Government and private securities     1,636.4       1,602.8       1,976.5       2,025.5       1,052.9       -48 %     -36 %
Loans     10,088.3       11,390.1       16,555.9       18,869.4       18,693.6       -1 %     85 %
Other receivables from financial intermediation     524.1       476.1       1,061.9       896.4       2,313.7       158 %     341 %
Other assets     346.1       429.9       534.0       568.0       714.6       26 %     106 %
Total Assets     33,989.8       30,040.7       41,703.5       47,550.8       42,510.1       -11 %     25 %
Deposits     23,299.4       22,159.9       23,348.6       29,866.5       31,150.6       4 %     34 %
Other liabilities from financial intermediation     1,142.5       1,205.3       2,360.3       3,501.1       2,653.5       -24 %     132 %
Non-subordinated corporate bonds     1,684.9       0.0       0.0       0.0       0.0       0 %     0 %
Subordinated corporate bonds     6,407.8       6,322.3       6,709.1       7,117.0       7,589.9       7 %     18 %
Other liabilities     1.8       2.2       5.9       6.6       49.8       655 %     2667 %
Total Liabilities     32,536.4       29,689.7       32,423.9       40,491.2       41,443.8       2 %     27 %
                                                         
NET FX POSITION     1,453.4       351.0       9,279.6       7,059.6       1,066.3       -85 %     -27 %

 

  12

 

 

4Q17 Earnings Release

 

Relevant and Recent Events

 

· Credit Line for Productive Financing and Financial Inclusion 2017. As of December 31, 2017 the Bank successfully fulfilled the quota established under “Credit Line for Productive Financing and Financial Inclusion” for the second semester of 2017.

· Senior Management Changes. On November 8, 2017 Banco Macro’s Board of Directors appointed Gustavo Manriquez as Chief Executive Officer (previously General Manager) and Jorge Scarinci as Chief Financial Officer (previously Finance & Investor Relations Manager).

 

Regulatory Changes

 

· International Financial Reporting Standards (IFRS) As of December 31, 2017 according to IFRS the adjustment to Banco Macro’s equity would be Ps.3.4 billion totaling Ps.46.5 billion, 8% higher than the Ps.43.1 billion reported under BCRA’s rules.

 

  13

 

 

4Q17 Earnings Release

 

QUARTERLY BALANCE SHEET   MACRO Consolidated     Variation  
In MILLION $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
ASSETS     154,999.0       166,992.3       187,767.9       206,345.1       224,242.7       9 %     45 %
Cash     36,089.2       29,014.7       36,477.2       37,705.2       34,267.6       -9 %     -5 %
Government and Private Securities     19,846.3       23,777.6       31,363.9       32,118.4       36,624.6       14 %     85 %
-LEBAC/NOBAC     15,145.3       20,241.7       26,836.5       27,026.6       34,250.9       27 %     126 %
-Other     4,701.0       3,535.9       4,527.4       5,091.8       2,373.7       -53 %     -50 %
Loans     87,973.0       94,083.3       105,369.4       119,762.1       132,000.2       10 %     50 %
to the non-financial government sector     1,532.5       480.0       497.3       1,834.3       1,797.3       -2 %     17 %
to the financial sector     1,730.6       1,890.1       2,251.8       3,027.3       3,271.8       8 %     89 %
to the non-financial private sector and foreign residents     86,540.4       93,757.3       104,970.2       117,364.3       129,585.6       10 %     50 %
-Overdrafts     8,837.7       10,264.7       9,638.2       12,170.4       8,829.3       -27 %     0 %
-Documents     11,198.9       10,679.5       12,332.3       14,435.9       17,272.1       20 %     54 %
-Mortgage loans     4,158.6       4,498.2       5,195.5       6,247.0       8,057.5       29 %     94 %
-Pledge loans     2,285.1       2,471.5       3,263.4       3,551.3       4,150.1       17 %     82 %
-Personal loans     29,784.8       33,365.0       37,342.5       42,361.4       47,376.8       12 %     59 %
-Credit cards     18,851.6       19,526.1       20,590.5       21,507.2       24,971.9       16 %     32 %
-Other     10,465.8       11,739.1       15,281.5       15,356.2       16,884.7       10 %     61 %
-Accrued interest, adjustments, price differences receivables and unearned discount     957.9       1,213.2       1,325.9       1,734.9       2,043.2       18 %     113 %
Allowances     -1,830.5       -2,044.1       -2,322.9       -2,463.8       -2,654.5       8 %     45 %
Other receivables from financial intermediation     5,313.6       13,716.9       7,784.2       9,166.5       13,000.7       42 %     145 %
Receivables from financial leases     370.2       378.1       479.8       526.3       587.5       12 %     59 %
Investments in other companies     11.4       9.3       32.6       91.4       128.8       41 %     1030 %
Other receivables     1,277.1       1,530.8       1,567.9       1,793.9       2,068.7       15 %     62 %
Other assets     4,118.2       4,481.6       4,665.9       5,181.3       5,564.6       7 %     35 %
LIABILITIES     132,893.1       143,122.4       151,940.4       166,226.2       181,112.2       9 %     36 %
Deposits     111,939.7       115,182.9       123,657.4       136,612.8       144,225.9       6 %     29 %
From the non-financial government sector     9,552.2       13,007.6       10,804.0       16,461.9       12,890.7       -22 %     35 %
From the financial sector     55.8       50.9       57.4       54.6       81.3       49 %     46 %
From the non-financial private sector and foreign residents     102,331.7       102,124.4       112,796.0       120,096.3       131,253.9       9 %     28 %
-Checking accounts     17,686.2       18,559.7       19,951.1       20,950.4       20,778.6       -1 %     17 %
-Savings accounts     27,896.0       27,117.5       34,087.9       35,046.4       44,531.9       27 %     60 %
-Time deposits     47,652.4       47,495.8       53,428.8       59,247.0       61,702.3       4 %     29 %
-Other     9,097.1       8,951.4       5,328.2       4,852.5       4,241.1       -13 %     -53 %
Other liabilities from financial intermediation     10,528.5       17,219.2       17,433.7       17,245.6       22,560.8       31 %     114 %
Subordinated corporate bonds     6,407.8       6,322.3       6,709.1       7,117.0       7,589.9       7 %     18 %
Other liabilities     4,017.1       4,398.0       4,140.2       5,250.8       6,735.6       28 %     68 %
SHAREHOLDERS' EQUITY     22,105.9       23,869.9       35,827.5       40,118.9       43,130.5       8 %     95 %
                                                         
LIABILITIES + SHAREHOLDERS' EQUITY     154,999.0       166,992.3       187,767.9       206,345.1       224,242.7       9 %     45 %

 

  14

 

 

4Q17 Earnings Release

 

ANNUAL BALANCE SHEET   MACRO Consolidated     Variation  
In MILLION $   2015     2016     2017     FY17/FY16  
                         
ASSETS     104,952.0       154,999.0       224,242.7       45 %
Cash     19,402.8       36,089.2       34,267.6       -5 %
Government and Private Securities     15,391.4       19,846.3       36,624.6       85 %
-LEBAC/NOBAC     8,303.0       15,145.3       34,250.9       126 %
-Other     7,088.4       4,701.0       2,373.7       -50 %
Loans     62,332.4       87,973.0       132,000.2       50 %
to the non-financial government sector     748.1       1,532.5       1,797.3       17 %
to the financial sector     227.4       1,730.6       3,271.8       89 %
to the non-financial private sector and foreign residents     62,852.9       86,540.4       129,585.6       50 %
-Overdrafts     4,707.9       8,837.7       8,829.3       0 %
-Documents     6,550.2       11,198.9       17,272.1       54 %
-Mortgage loans     3,508.5       4,158.6       8,057.5       94 %
-Pledge loans     2,152.6       2,285.1       4,150.1       82 %
-Personal loans     23,231.6       29,784.8       47,376.8       59 %
-Credit cards     14,793.3       18,851.6       24,971.9       32 %
-Other     7,078.5       10,465.8       16,884.7       61 %
-Accrued interest, adjustments, price differences receivables and unearned discount     830.3       957.9       2,043.2       113 %
Allowances     -1,496.0       -1,830.5       -2,654.5       45 %
Other receivables from financial intermediation     3,295.3       5,313.6       13,000.7       145 %
Receivables from financial leases     433.9       370.2       587.5       59 %
Investments in other companies     10.9       11.4       128.8       1030 %
Other receivables     978.9       1,277.1       2,068.7       62 %
Other assets     3,106.4       4,118.2       5,564.6       35 %
LIABILITIES     89,075.9       132,893.1       181,112.2       36 %
Deposits     76,521.6       111,939.7       144,225.9       29 %
From the non-financial government sector     9,588.4       9,552.2       12,890.7       35 %
From the financial sector     40.1       55.8       81.3       46 %
From the non-financial private sector and foreign residents     66,893.1       102,331.7       131,253.9       28 %
-Checking accounts     14,062.9       17,686.2       20,778.6       17 %
-Savings accounts     15,507.9       27,896.0       44,531.9       60 %
-Time deposits     34,719.8       47,652.4       61,702.3       29 %
-Other     2,602.5       9,097.1       4,241.1       -53 %
Other liabilities from financial intermediation     7,537.4       10,528.5       22,560.8       114 %
Subordinated corporate bonds     1,957.6       6,407.8       7,589.9       18 %
Other liabilities     3,059.3       4,017.1       6,735.6       68 %
SHAREHOLDERS' EQUITY     15,876.1       22,105.9       43,130.5       95 %
                                 
LIABILITIES + SHAREHOLDERS' EQUITY     104,952.0       154,999.0       224,242.7       45 %

 

  15

 

 

4Q17 Earnings Release

 

QUARTERLY INCOME STATEMENT   MACRO Consolidated     Variation  
In MILLION  $   4Q16     1Q17     2Q17     3Q17     4Q17     QoQ     YoY  
                                           
Financial income     7,572.6       7,600.4       8,354.5       9,576.5       10,968.6       15 %     45 %
Interest on cash and due from banks     0.1       0.8       0.1       6.1       6.7       10 %     6600 %
Interest on loans to the financial sector     88.0       101.2       98.9       125.5       177.5       41 %     102 %
Interest on overdrafts     650.5       650.4       621.4       679.0       752.7       11 %     16 %
Interest on documents     399.7       374.0       390.1       430.0       492.2       14 %     23 %
Interest on mortgage loans     176.6       179.0       186.6       201.9       216.1       7 %     22 %
Interest on pledge loans     86.3       97.7       111.2       126.8       140.0       10 %     62 %
Interest on credit card loans     1,041.1       1,071.8       1,085.9       1,064.3       1,212.3       14 %     16 %
Interest on financial leases     20.6       20.1       22.2       28.6       32.2       13 %     56 %
Interest on other loans     3,333.6       3,565.4       3,906.3       4,415.6       4,960.5       12 %     49 %
Income from government & private securities, net     1,583.0       868.9       1,360.7       1,778.7       2,409.1       35 %     52 %
Interest on other receivables from fin. intermediation     1.6       0.9       4.0       2.3       1.1       -52 %     -31 %
Income from Guaranteed Loans - Decree 1387/01     8.9       3.1       0.0       0.1       0.0       -100 %     -100 %
CER adjustment     57.7       28.6       32.2       56.3       122.4       117 %     112 %
CVS adjustment     0.2       0.1       0.1       0.2       0.2       0 %     0 %
Difference in quoted prices of gold and foreign currency     86.9       159.5       423.9       614.5       315.6       -49 %     263 %
Other     37.8       478.9       110.9       46.6       130.0       179 %     244 %
Financial expense     -3,330.5       -2,960.0       -3,109.7       -3,549.8       -3,925.9       11 %     18 %
Interest on checking accounts     0.0       0.0       0.0       0.0       0.0       0 %     0 %
Interest on saving accounts     -23.5       -24.0       -26.1       -30.7       -29.4       -4 %     25 %
Interest on time deposits     -2,452.8       -2,109.8       -2,117.0       -2,354.2       -2,621.8       11 %     7 %
Interest on interfinancing received loans     -1.2       -1.4       -2.1       -10.1       -4.6       -54 %     283 %
Interest on other financing from the financial institutions     0.5       0.0       -0.5       -5.0       -4.3       -14 %     -960 %
Interest on subordinated bonds     -117.2       -105.2       -106.9       -117.8       -122.6       4 %     5 %
Other Interest     -0.8       -0.7       -0.7       -0.8       -1.0       25 %     25 %
Interests on other liabilities from fin. intermediation     -38.9       -16.2       -122.3       -210.8       -214.3       2 %     451 %
CER adjustment     -2.9       -2.8       -5.1       -4.2       -12.5       198 %     331 %
Contribution to Deposit Guarantee Fund     -44.5       -49.4       -50.5       -54.2       -59.4       10 %     33 %
Other     -649.2       -650.5       -678.5       -762.0       -856.0       12 %     32 %
Net financial income     4,242.1       4,640.4       5,244.8       6,026.7       7,042.7       17 %     66 %
Provision for loan losses     -354.0       -361.4       -469.0       -342.5       -422.3       23 %     19 %
                                                         
Fee income     2,307.9       2,401.3       2,575.5       2,747.1       2,922.5       6 %     27 %
Fee expense     -775.7       -734.3       -775.3       -872.8       -959.7       10 %     24 %
Net fee income     1,532.2       1,667.0       1,800.2       1,874.3       1,962.8       5 %     28 %
                                                         
Administrative expenses     -2,814.8       -2,963.5       -3,044.2       -3,195.0       -3,660.3       15 %     30 %
Minority interest in subsidiaries     -16.7       -15.8       -19.1       -19.2       -30.7       60 %     84 %
Net other income     -52.7       -0.8       -189.0       -92.1       -261.0       183 %     395 %
Earnings before income tax     2,536.1       2,965.9       3,323.7       4,252.2       4,631.2       9 %     83 %
Income tax     -840.8       -1,201.9       -1,308.4       -1,654.4       -1,619.5       -2 %     93 %
                                                         
Net income     1,695.3       1,764.0       2,015.3       2,597.8       3,011.7       16 %     78 %

 

  16

 

 

4Q17 Earnings Release

 

ANNUAL INCOME STATEMENT   MACRO Consolidated     Variation  
In MILLION  $   2015     2016     2017     FY17/FY16  
                         
Financial income     20,109.1       28,935.3       36,500.0       26 %
Interest on cash and due from banks     0.2       1.2       13.7       1042 %
Interest on loans to the financial sector     88.0       248.1       503.1       103 %
Interest on overdrafts     1,407.0       2,494.4       2,703.5       8 %
Interest on documents     1,146.2       1,559.1       1,686.3       8 %
Interest on mortgage loans     556.6       729.8       783.6       7 %
Interest on pledge loans     385.0       360.7       475.7       32 %
Interest on credit card loans     2,646.1       3,950.9       4,434.3       12 %
Interest on financial leases     81.7       89.9       103.1       15 %
Interest on other loans     8,811.8       12,197.6       16,847.8       38 %
Income from government & private securities, net     3,985.9       6,222.8       6,417.4       3 %
Interest on other receivables from fin. intermediation     4.1       6.2       8.3       34 %
Income from Guaranteed Loans - Decree 1387/01     25.1       33.7       3.2       -91 %
CER adjustment     58.5       255.9       239.5       -6 %
CVS adjustment     0.7       0.8       0.6       -25 %
Difference in quoted prices of gold and foreign currency     653.1       516.9       1,513.5       193 %
Other     259.1       267.3       766.4       187 %
Financial expense     -8,842.7       -13,300.8       -13,545.4       2 %
Interest on saving accounts     0.0       0.0       -110.2       0 %
Interest on time deposits     -68.2       -89.9       -9,202.8       10137 %
Interest on interfinancing received loans     -6,704.9       -10,283.7       -18.2       -100 %
Interest on other financing from the financial institutions     -7.0       -3.0       -9.8       227 %
Interest on subordinated bonds     -136.2       -277.2       -452.5       63 %
Other Interest     -2.6       -4.2       -3.2       -24 %
Interests on other liabilities from fin. intermediation     -96.0       -145.8       -563.6       287 %
CER adjustment     -4.6       -12.1       -24.6       103 %
Contribution to Deposit Guarantee Fund     -418.4       -215.0       -213.5       -1 %
Other     -1,404.8       -2,269.9       -2,947.0       30 %
Net financial income     11,266.4       15,634.5       22,954.6       47 %
Provision for loan losses     -877.1       -1,073.1       -1,595.2       49 %
                                 
Fee income     6,115.4       7,968.7       10,646.4       34 %
Fee expense     -1,714.8       -2,603.8       -3,342.1       28 %
Net fee income     4,400.6       5,364.9       7,304.3       36 %
                                 
Administrative expenses     -7,225.9       -9,970.7       -12,863.0       29 %
Minority interest in subsidiaries     -35.4       -54.6       -84.8       55 %
Net other income     -33.0       117.2       -542.9       -563 %
Earnings before income tax     7,495.6       10,018.2       15,173.0       51 %
Income tax     -2,485.7       -3,477.4       -5,784.2       66 %
                                 
Net income     5,009.9       6,540.8       9,388.8       44 %

 

  17

 

 

4Q17 Earnings Release

 

QUARTERLY ANNUALIZED RATIOS   MACRO Consolidated  
    4Q16     1Q17     2Q17     3Q17     4Q17  
Profitability & performance                                        
Net interest margin (1)     17.7 %     18.3 %     17.4 %     16.5 %     18.7 %
Net interest margin adjusted (2)     15.6 %     17.5 %     16.3 %     15.1 %     15.8 %
Net fee income ratio     26.5 %     26.4 %     25.6 %     23.7 %     21.8 %
Efficiency ratio     48.7 %     47.0 %     43.2 %     40.4 %     40.6 %
Net fee income as a percentage of adm expenses     54.4 %     56.2 %     59.1 %     58.7 %     53.6 %
Return on average assets     4.6 %     4.6 %     4.9 %     5.3 %     5.7 %
Return on average equity     31.2 %     30.5 %     30.8 %     26.3 %     28.4 %
Liquidity                                        
Loans as a percentage of total deposits     80.2 %     83.5 %     87.1 %     89.5 %     93.4 %
Liquid assets as a percentage of total deposits     47.6 %     44.7 %     53.2 %     50.7 %     50.4 %
Capital                                        
Total equity as a percentage of total assets     14.3 %     14.3 %     19.1 %     19.4 %     19.2 %
Regulatory capital as % of APR     22.1 %     22.7 %     26.3 %     25.8 %     28.1 %
Asset Quality                                        
Allowances over total loans     2.0 %     2.1 %     2.2 %     2.0 %     2.0 %
Non-performing financing as a percentage of total financing     1.1 %     1.4 %     1.3 %     1.0 %     1.1 %
Coverage ratio w/allowances     176.5 %     155.9 %     168.1 %     199.2 %     183.1 %

 

(1) Net interest margin excluding difference in quote in foreign currency

(2) Net interest margin (excluding difference in quote in foreign currency) except income from government & private securities and guaranteed loans

 

ACCUMULATED ANNUALIZED RATIOS   MACRO Consolidated  
    4Q16     1Q17     2Q17     3Q17     4Q17  
Profitability & performance                                        
Net interest margin (1)     18.2 %     18.3 %     17.8 %     17.3 %     17.7 %
Net interest margin adjusted (2)     15.3 %     17.5 %     16.9 %     16.2 %     16.1 %
Net fee income ratio     25.5 %     26.4 %     26.0 %     25.1 %     24.1 %
Efficiency ratio     47.5 %     47.0 %     45.0 %     43.3 %     42.5 %
Net fee income as a percentage of adm expenses     53.8 %     56.2 %     57.7 %     58.0 %     56.8 %
Return on average assets     5.2 %     4.6 %     4.7 %     4.9 %     5.2 %
Return on average equity     34.1 %     30.5 %     30.7 %     28.7 %     28.6 %
Liquidity                                        
Loans as a percentage of total deposits     80.2 %     83.5 %     87.1 %     89.5 %     93.4 %
Liquid assets as a percentage of total deposits     47.6 %     44.7 %     53.2 %     50.7 %     50.4 %
Capital                                        
Total equity as a percentage of total assets     14.3 %     14.3 %     19.1 %     19.4 %     19.2 %
Regulatory capital as % of APR     22.1 %     22.7 %     26.3 %     25.8 %     28.1 %
Asset Quality                                        
Allowances over total loans     2.0 %     2.1 %     2.2 %     2.0 %     2.0 %
Non-performing financing as a percentage of total financing     1.1 %     1.4 %     1.3 %     1.0 %     1.1 %
Coverage ratio w/allowances     176.5 %     155.9 %     168.1 %     199.2 %     183.1 %

 

(1) Net interest margin excluding difference in quote in foreign currency

(2) Net interest margin (excluding difference in quote in foreign currency) except income from government & private securities and guaranteed loans

 

  18

 

 

4Q17 Earnings Release

 

ACCUMULATED ANNUALIZED RATIOS   MACRO Consolidated  
    2015     2016     2017  
Profitability & performance                        
Net interest margin (1)     17.9 %     18.2 %     17.7 %
Net interest margin adjusted (2)     15.6 %     15.3 %     16.1 %
Net fee income ratio     28.1 %     25.5 %     24.1 %
Efficiency ratio     46.1 %     47.5 %     42.5 %
Net fee income as a percentage of adm expenses     60.9 %     53.8 %     56.8 %
Return on average assets     5.8 %     5.2 %     5.2 %
Return on average equity     37.2 %     34.1 %     28.6 %
Liquidity                        
Loans as a percentage of total deposits     83.4 %     80.2 %     93.4 %
Liquid assets as a percentage of total deposits     38.4 %     47.6 %     50.4 %
Capital                        
Total equity as a percentage of total assets     15.1 %     14.3 %     19.2 %
Regulatory capital as % of APR     14.6 %     22.1 %     28.1 %
Asset Quality                        
Allowances over total loans     2.3 %     2.0 %     2.0 %
Non-performing financing as a percentage of total financing     1.5 %     1.1 %     1.1 %
Coverage ratio w/allowances     151.0 %     176.5 %     183.1 %

 

(1) Net interest margin excluding difference in quote in foreign currency

(2) Net interest margin (excluding difference in quote in foreign currency) except income from government & private securities and guaranteed loans

 

  19

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

Date: February 19, 2018

 

  MACRO BANK INC.
   
  By: /s/ Jorge Scarinci
  Name:  Jorge Scarinci
  Title: Chief Financial Officer

 

 

 

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