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

 

November 30, 2020

 

 

 

Commission File Number: 001-32827

 

 

 

MACRO BANK INC.

(Translation of registrant’s name into English)

 

 

 

Avenida Eduardo Madero 1182

Ciudad Autónoma de Buenos Aires C1106 ACY

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

 

 

 

 

 

 


 

 

    3Q20 Earnings Release

 

Banco Macro Announces Results for the Third Quarter of 2020

 

Buenos Aires, Argentina, November 30, 2020 – Banco Macro S.A. (NYSE: BMA; BYMA: BMA) (“Banco Macro” or “BMA” or the “Bank”) announced today its results for the third quarter ended September 30, 2020 (“3Q20”). All figures are in Argentine pesos (Ps.) and have been restated in terms of the measuring unit current at the end of the reporting period. As of 1Q20, the Bank began reporting results applying Hyperinflation Accounting, in accordance with IFRS IAS 29 as established by the Central Bank. For ease of comparison, figures of previous quarters of 2019 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through September 30, 2020.

 

Summary

 

• The Bank’s net income totaled Ps.6.1 billion in 3Q20. This result was 12% lower than the result posted in 2Q20 and 33% lower than in 3Q19. In 3Q20, the accumulated annualized return on average equity (“ROAE”) and the accumulated annualized return on average assets (“ROAA”) were 21.5% and 4.6%, respectively.

 

• In 3Q20, Banco Macro’s financing to the private sector decreased 2% or Ps.3.9 billion quarter over quarter (“QoQ”) totaling Ps.232.2 billion and 12% or Ps.31.9 billion year over year (“YoY”). In the quarter consumer loans stood out, among which Credit card loans stood out; with a 8% increase QoQ, meanwhile within commercial loans Others stood out with a 7% increase QoQ, mainly driven by the 24% loans to SMEs.

 

• In 3Q20, Banco Macro’s total deposits increased 13% or Ps.55.6 billion QoQ, totaling Ps.493 billion and representing 83% of the Bank’s total liabilities. Private sector deposits increased 4% or Ps.14.2 billion QoQ.

 

• Banco Macro continued showing a strong solvency ratio, with an excess capital of Ps.116.9 billion, 34.8% regulatory capital ratio – Basel III and 27.3% Tier 1 Ratio. In addition, the Bank’s liquid assets remained at an adequate level, reaching 87% of its total deposits in 3Q20.

 

• In 3Q20, the Bank’s non-performing to total financing ratio was 1.14% and the coverage ratio improved to 302.9%.

 

 3Q20 Earnings Release Conference Call

 

Tuesday, December 1, 2020
Time: 10:00 a.m. Eastern Time | 12:00 p.m. Buenos Aires Time

 

 

 IR Contacts in Buenos Aires:

 

Jorge Scarinci

Chief Financial Officer

 

Nicolás A. Torres

Investor Relations

 

Phone: (54 11) 5222 6682

E-mail: investorelations@macro.com.ar

 

Visit our website at:
www.macro.com.ar/relaciones-inversores

 

 To participate, please dial:

Argentina Toll Free:

(011) 3984 5677

Participants Dial In (Toll Free):

+1 (844) 450 3847

Participants International Dial In:

+1 (412) 317 6370

Conference ID: Banco Macro

Webcast: click here

 

 

 

 

Webcast Replay: click here

 

Available from 12/01/2020 through 12/15/2020

 

 

2 

 

 

    3Q20 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), Bolsas y mercados Argentinos (www.byma.com.ar) 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.

 

3 

 

 

    3Q20 Earnings Release

 

This Earnings Release has been prepared in accordance with the accounting framework established by the Central Bank of Argentina (“BCRA”), based on International Financial Reporting Standards (“I.F.R.S.”) and the resolutions adopted by the International Accouting Standards Board (“I.A.S.B”) and by the Federación Argentina de Consejos Profesionales de Ciencias Económicas (“F.A.C.P.E.”). As of January 2020 the Bank started reporting with the application of (i) Expected losses of IFRS 9 “Financial Instruments” and (ii) IAS 29 “Financial Reporting in Hyperinflationary Economies”. Data and figures shown in this Earnings Release may differ from the ones shown in the 20-F annual report.

 

Results

 

Earnings per outstanding share were Ps.9.51 in 3Q20, 12% lower than 2Q20 and 33% lower than the result posted a year ago.

 

EARNINGS PER SHARE   MACRO Consolidated   Change  
In MILLION $ (Measuring Unit Current at EOP)     3Q19     4Q19     1Q20     2Q20     3Q20     QoQ       YoY  
Net income -Parent Company- (M $)     9,112     6,956     8,025     6,885     6,076     -12 %     -33 %
Average # of shares outstanding (M)     639     639     639     639     639     0 %     0 %
Average #of treasury stocks (shares repurchased) (M)     19     -     -     -     -     -       -100 %
Book value per avg. Outstanding share ($)     184     201     211     201     210     4 %     14 %
Shares Outstanding (M)     639     639     639     639     639     0 %     0 %
Earnings per avg.  outstanding share ($)     14.26     10.89     12.56     10.77     9.51     -12 %     -33 %
                                               
EOP FX (Pesos per USD)     57.5583     59.8950     64.4700     70.4550     76.1750     8 %     32 %
Book value per avg. issued ADS (USD)     31.97     33.56     32.73     28.53     27.57     -3 %     -14 %
Earnings per avg. outstanding ADS (USD)     2.48     1.82     1.95     1.53     1.25     -18 %     -50 %

 

Banco Macro’s 3Q20 net income of Ps.6.1      billion was 12% or Ps.809 million lower than the previous quarter and 33% or Ps.3 billion lower YoY. This result represented an accumulated ROAE and ROAA of 21.5% and 4.6% respectively.

 

Net operating income (before G&A and personnel expenses) was Ps.19.6 billion in 3Q20, decreasing 18% or Ps.4.3 billion compared to 2Q20 and decreased 5% or Ps.1.1 billion compared to the previous year.

 

In 3Q20 Provision for loan losses totaled Ps.1.8 billion, 31% or Ps.774 million lower than in 2Q20. In the previous quarter loan loss provisions were explained by additional provisions made by the Bank based on estimations of the macroeconomic impact of the current Covid-19 pandemic. In this quarter three main groups showing signs of credit deterioration were included in the estimates; i) Ps.617 million related to loans with deferred installments (both commercial and consumer), ii) Ps.600 million related to refinancing of outstanding credit card balances and iii) Ps.531 million related to the 24% loans extended to SMEs, from sectors or activities which the Bank considered troubled o likely to have some trouble.

 

Operating income (after G&A and personnel expenses) was Ps.4.4 billion in 3Q20, 52% or Ps.4.8 billion lower than in 2Q20 and Ps.4.5 billion higher than a year ago.

 

It is important to emphasize that this result was obtained with a leverage of only 5.5x assets to equity ratio.

 

4 

 

 

  3Q20 Earnings Release

 

INCOME STATEMENT   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)   3Q19     4Q19     1Q20     2Q20     3Q20     QoQ     YoY  
Net Interest Income     28,731       28,958       24,164       21,576       21,159       -2 %     -26 %
Net fee income     5,395       5,237       5,027       5,004       5,271       5 %     -2 %
Net Interest Income + Net Fee Income     34,126       34,195       29,191       26,580       26,430       -9 %     -17 %
Net Income from financial instruments at fair value through P&L     -16,732       -315       -4,643       -2,163       -7,541       249 %     -55 %
Income from assets at amortized cost     0       66       967       20       61       205 %     -  
Differences in quoted prices of gold and foreign currency     2,138       1,670       604       846       1,207       43 %     -44 %
Other operating income     1,510       1,147       1,247       1,145       1,182       3 %     -22 %
Provision for loan losses     393       1,776       977       2,523       1,749       -31 %     345 %
Net Operating Income     20,649       34,987       26,389       23,905       19,590       -9 %     27 %
Employee benefits     6,350       6,339       5,361       6,174       6,199       0 %     -2 %
Administrative expenses     4,153       4,190       3,034       3,126       3,400       9 %     -18 %
Depreciation and impairment of assets     956       950       948       992       1,015       2 %     6 %
Other operating expenses     9,334       5,879       4,905       4,412       4,587       4 %     -51 %
Operating Income     -144       17,629       12,141       9,201       4,389       -24 %     -  
Result from associates & joint ventures     24                       9       15       67 %     -38 %
Result from net monetary postion     8,185       32       23       479       4,836       910 %     -41 %
Result before taxes from continuing operations     8,065       -5,644       335       9,689       9,240       -22 %     20 %
Income tax     -1,047       12,017       12,499       2,804       3,164       13 %     -402 %
Net income from continuing operations     9,112       5,061       4,474       6,885       6,076       -14 %     111 %
              -       -                                  
Net Income of the period     9,112       6,956       8,025       6,885       6,076       -14 %     111 %
Net income of the period attributable to parent company     9,112       6,956       8,025       6,885       6,076       -12 %     -33 %
Net income of the period attributable to minority interest     0       -       -       0       0       -       -  

 

The Bank’s 3Q20 net interest income totaled Ps.21.2 billion, 2% or Ps.417 million lower than in 2Q20 and 26% or Ps.7.6 billion lower YoY.

 

In 3Q20 interest income totaled Ps.36.8 billion, 15% or Ps.4.9 billion higher than in 2Q20 (due to higher income from securities) and 28% or Ps.14.3 billion lower than in 3Q19.

 

Income from interest on loans and other financing totaled Ps.17.8 billion, 9% or Ps.1.7 billion lower compared with the previous quarter, due to a 155 b.p. decrease in the average lending rate (down from 31.5% in 2Q20 to 30% in 3Q20), while the average volume of private sector loans decreased 5%. On a yearly basis Income from interest on loans decreased 23% or Ps.5.4 billion.

 

In 3Q20 income from government and private securities increased 56% or Ps.6 billion QoQ (due to higher income from Government securities) and increased 39% or Ps.11 billion compared with the same period of last year. This result is explained 90% by income from government and private securities through other comprehensive income (Central Bank Notes) and the remaining 10% is explained by income from government and private securities at amortized cost.

 

In 3Q20 income from Repos totaled Ps.2.1 billion, 33% or Ps.525 million higher than the previous quarter and Ps.2 billion higher than a year ago.

 

In 3Q20 FX income totaled a Ps.1.2 billion gain, due to the 8% argentine peso depreciation against the US dollar and the Bank’s long spot dollar position during the quarter and FX trading results (Ps.457 million).

 

5 

 

 

  3Q20 Earnings Release

 

FX INCOME   MACRO Consolidated     Variation  
In MILLION $ (Measuring Unit Current at EOP)   3Q19     2Q20     3Q20     QoQ     YoY  
(1) Differences in quoted prices of gold and foreign currency     2,138       846       1,207       43 %     -44 %
Translation of FX assets and liabilities to Pesos     481       683       750       10 %     56 %
Income from foreign currency exchange     1,656       162       457       181 %     -72 %
                                         
(2) Net Income from financial assets and liabilities at fair value through P&L     1,062       20       2       -90 %     -100 %
Income from investment in derivative financing instruments     1,062       20       2       -90 %     -100 %
                                         
(1) +(2) Total Result from Differences in quoted prices of gold and foreign currency     3,200       866       1,209       40 %     -62 %

 

INTEREST INCOME   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)   3Q19     4Q19     1Q20     2Q20     3Q20     QoQ     YoY  
Interest on Cash and due from Banks     125       84       69       15       29       93 %     -77 %
Interest from government securities     27,357       11,458       11,850       10,490       16,633       59 %     -39 %
Interest from private securities     520       1,223       662       373       264       -29 %     -49 %
Interest on loans and other financing                                                        
To the financial sector     540       559       286       269       196       -27 %     -64 %
To the public non financial sector     103       348       630       418       509       22 %     394 %
Interest on overdrafts     4,783       8,856       4,608       3,081       1,443       -53 %     -70 %
Interest on documents     1,383       1,599       1,444       983       796       -19 %     -42 %
Interest on mortgages loans     2,114       2,844       2,039       1,605       1,552       -3 %     -27 %
Interest on pledged loans     185       160       121       104       105       1 %     -43 %
Interest on personal loans     8,870       8,158       7,553       7,507       7,156       -5 %     -19 %
Interest on credit cards loans     3,730       3,670       3,104       2,455       2,505       2 %     -33 %
Interest on financial leases     40       36       25       13       4       -69 %     -90 %
Interest on other loans     1,363       2,005       2,261       2,979       3,494       17 %     156 %
Interest on Repos                                                        
From the BCRA     0       480       365       1,578       2,094       33 %     -  
Other financial institutions     11       411       47       1       10       900 %     -9 %
Total Interest income     51,124       41,891       35,064       31,871       36,790       15 %     -28 %
                                                         
Income from Interest on loans     23,111       28,235       22,071       19,414       17,760       -9 %     -23 %

 

The Bank’s 3Q20 interest expense totaled Ps.15.6 billion, increasing 52% or Ps.5.3 billion compared to the previous quarter and decreasing 30% (Ps.6.8 billion) compared to 3Q19.

 

In 3Q20, interest on deposits represented 94% of the Bank’s total interest expense, increasing 58% or Ps.5.4 billion QoQ, due to a 300 b.p. increase in the average rate paid on deposits (up from 13.6% in 2Q20 to 16.6% in 3Q20, this increase can be traced to a 458 b.p QoQ increase in the average Badlar rate). The average volume of deposits from the private sector increased 13%. On a yearly basis, interest on deposits decreased 28% or Ps.5.8 billion.

 

6 

 

 

  3Q20 Earnings Release

 

INTEREST EXPENSE   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)   3Q19     4Q19     2Q20     2Q20     3Q20     QoQ     YoY  
Deposits                                                        
Interest on checking accounts     152       34       136       120       424       253 %     179 %
Interest on saving accounts     164       230       165       133       124       -7 %     -24 %
Interest on time deposits     20,153       11,710       9,632       9,069       14,155       56 %     -30 %
Interest on other financing from BCRA and financial inst.     90       59       25       15       17       13 %     -81 %
Repos                                                        
Other financial institutions     77       40       74       22       2       -91 %     -97 %
Interest on corporate bonds     1,136       247       323       386       348       -10 %     -69 %
Interest on subordinated bonds     553       547       520       536       552       3 %     0 %
Interest on other financial liabilities     68       66       25       14       9       -36 %     -87 %
Total financial expense     22,393       12,933       10,900       10,295       15,631       52 %     -30 %
                                                         
Expenses from interest on deposits     20,469       11,974       9,933       9,322       14,703       58 %     -28 %

 

As of 3Q20, the Bank’s accumulated net interest margin (including FX) was 20.3%, lower than the 22.3% posted in 2Q20 and the 21.5% posted in 3Q19.

 

In 3Q20 Net Interest Margin (excluding FX) was 19.5%, lower than the 21.6% posted in 2Q20 and than the 20.8% posted in 3Q19.

 

In 3Q20 Net Interest Margin (Pesos) was 18.6%, lower than the 23% posted in 2Q20 and than the 34.3% in 3Q19; meanwhile Net Interest Margin (USD) was 1.8%, lower than the 2.3% posted in 2Q20 and higher than the 0.6% registered in 3Q19.

 

ASSETS & LIABILITIES
PERFORMANCE (AR$)
  MACRO Consolidated  
In MILLION $   3Q19     4Q19     1Q20     2Q20     3Q20  
(Measuring Unit Current at EOP)     AVERAGE       REAL INT       NOMINAL       AVERAGE       REAL INT       NOMINAL       AVERAGE       REAL INT       NOMINAL       AVERAGE       REAL INT       NOMINAL       AVERAGE       REAL INT       NOMINAL  
Yields & rates in annualized nominal %     BALANCE       RATE       INT RATE       BALANCE       RATE       INT RATE       BALANCE       RATE       INT RATE       BALANCE       RATE       INT RATE       BALANCE       RATE       INT RATE  
Interest-earning assets                                                                                                                        
Loans & Other Financing                                                                                                                        
      Public Sector     2,094       -20.1 %     19.5 %     3,512       -4.9 %     39.3 %     7,065       3.4 %     35.9 %     6,749       2.7 %     24.9 %     5,025       7.5 %     40.3 %
      Financial Sector     4,063       1.7 %     52.1 %     4,062       5.1 %     54.0 %     2,403       11.4 %     46.4 %     2,547       17.0 %     42.3 %     1,927       7.5 %     40.3 %
      Private Sector     170,025       -0.1 %     49.4 %     212,840       1.2 %     48.2 %     191,320       7.6 %     41.4 %     199,761       11.3 %     35.4 %     201,621       1.0 %     31.8 %
Other debt securities                                                                                                                        
      Central Bank Securities (Leliqs)     133,981       15.5 %     72.7 %     27,756       37.2 %     101.0 %     82,013       10.9 %     45.7 %     91,354       13.1 %     37.5 %     121,719       5.4 %     37.5 %
      Government & Private Securities     19,159       12.7 %     68.5 %     25,407       27.8 %     87.2 %     22,875       18.7 %     55.9 %     30,733       7.3 %     30.5 %     72,175       -0.6 %     29.7 %
Repos     46       30.3 %     94.9 %     4,372       23.5 %     80.9 %     3,786       9.5 %     43.8 %     36,760       -3.5 %     17.3 %     43,732       -8.7 %     19.1 %
Total interest-earning assets     329,368       6.8 %     59.8 %     277,949       7.6 %     57.6 %     309,462       9.3 %     43.6 %     367,904       9.9 %     33.6 %     446,199       1.1 %     31.9 %
                                                                                                                         
Non interest-earning assets     71,723                       112,387                       102,340                       110,445                       69,832                  
Total Average Assets     401,091                       390,336                       411,802                       478,349                       516,031                  
                                                                                                                         
Interest-bearing liabilities                                                                                                                        
Deposits                                                                                                                        
      Public Sector     17,422       -8.6 %     36.7 %     9,775       -5.1 %     39.0 %     13,159       -4.6 %     25.3 %     19,698       -0.3 %     21.3 %     52,140       -4.3 %     24.8 %
      Private Sector     200,446       -8.9 %     36.2 %     148,160       -12.0 %     28.9 %     160,855       -6.9 %     22.3 %     192,661       -3.8 %     17.0 %     224,237       -7.9 %     20.2 %
BCRA and other financial institutions     697       1.9 %     52.4 %     266       32.4 %     94.0 %     390       -4.2 %     25.8 %     427       -3.8 %     17.0 %     408       -7.6 %     20.5 %
Corporate bonds     8,311       3.1 %     54.2 %     7,035       -22.3 %     13.9 %     6,188       -7.9 %     21.0 %     5,206       6.7 %     29.8 %     4,963       -2.0 %     27.9 %
Repos     488       8.7 %     62.6 %     317       2.5 %     50.1 %     1,305       -6.1 %     23.4 %     939       -10.0 %     9.4 %     49       -10.9 %     16.2 %
Total int.-bearing liabilities     227,364       -8.4 %     37.0 %     165,553       -11.9 %     29.0 %     181,897       -6.8 %     22.5 %     218,931       -3.2 %     17.7 %     281,797       -7.1 %     21.2 %
                                                                                                                         
Total non int.-bearing liabilities     84,179                       106,478                       106,002                       139,133                       148,631                  
                                                                                                                         
Total Average Liabilities     311,543                       272,031                       287,899                       358,064                       430,428                  
                                                                                                                         
Assets Performance             49,668                       40,321                       33,516                       30,703                       35,798          
Liabilities Performance             21,195                       12,103                       10,188                       9,620                       14,983          
Net Interest Income             28,473                       28,218                       23,328                       21,083                       20,815          
Total interest-earning assets             329,368                       277,949                       309,462                       367,904                       446,199          
Net Interest Margin (NIM)             34.3 %                     40.3 %                     30.3 %                     23.0 %                     18.6 %        

 

7 

 

 

    3Q20 Earnings Release

 

ASSETS & LIABILITIES
PERFORMANCE USD
In MILLION $
  MACRO Consolidated  
(Measuring Unit Current at EOP)   3Q19     4Q19     1Q20     2Q20     3Q20  
Yields & rates in annualized   AVERAGE     REAL INT     NOMINAL     AVERAGE     REAL INT     NOMINAL     AVERAGE     REAL INT     NOMINAL     AVERAGE     REAL INT     NOMINAL     AVERAGE     REAL INT     NOMINAL  
nominal %   BALANCE      RATE      INT RATE      BALANCE    RATE      INT RATE      BALANCE      RATE      INT RATE      BALANCE      RATE      INT RATE      BALANCE      RATE      INT RATE   
Interest-earning assets                                                                                          
Cash and Deposits in Banks     84,692       62.3 %     0.6 %     33,313       -20.0 %     1.0 %     34,930       0.3 %     0.8 %     43,510       13.0 %     0.1 %     44,600       1.7 %     0.3 %
Loans & Other Financing                                                                                                                        
Public Sector     0       0.0 %     0.0 %     0       0.0 %     0.0 %     0       0.0 %     0.0 %     0       0.0 %     0.0 %     0       0.0 %     0.0 %
Financial Sector     399       71.0 %     6.0 %     385       -15.8 %     6.2 %     522       6.4 %     6.9 %     68       19.6 %     5.9 %     56       8.6 %     7.1 %
Private Sector     80,918       71.6 %     6.4 %     48,321       -11.3 %     11.9 %     47,780       11.6 %     12.2 %     39,305       26.1 %     11.7 %     24,878       16.8 %     15.2 %
Other debt securities                                                                                                                        
Government & Private Securities     0       0.0 %     0.0 %     2,104       -16.9 %     4.9 %     3,174       1.7 %     2.2 %     4,447       13.5 %     0.5 %     4,583       2.5 %     1.1 %
Total interest-earning assets     166,009       66.9 %     3.5 %     84,123       -14.9 %     7.4 %     86,406       6.7 %     7.2 %     87,330       19.0 %     5.4 %     74,117       6.8 %     5.3 %
                                                                                                                         
Non interest-earning assets     10,384                       55,971                       49,517                       45,092                       93,032                  
Total Average Assets     176,393                       140,094                       135,923                       132,422                       167,149                  
                                                                                                                         
Interest-bearing liabilities                                                                                                                        
Deposits                                                                                                                        
Public Sector     2,484       64.4 %     1.9 %     1,309       -18.6 %     2.7 %     2,244       0.6 %     1.1 %     1,418       13.9 %     0.9 %     776       1.9 %     0.5 %
Private Sector     104,037       64.8 %     2.2 %     65,184       -19.6 %     1.4 %     64,143       0.5 %     1.0 %     51,370       14.1 %     1.0 %     50,346       2.1 %     0.7 %
BCRA and other financial institutions     3,569       70.0 %     5.4 %     3,159       -16.1 %     5.9 %     1,443       5.9 %     6.4 %     647       20.6 %     6.8 %     511       6.9 %     5.4 %
Subordinated bonds     28,095       73.9 %     7.8 %     31,038       -15.2 %     7.0 %     29,314       6.6 %     7.1 %     30,213       20.9 %     7.1 %     30,809       8.6 %     7.1 %
Total int.-bearing liabilities     138,185       66.8 %     3.4 %     100,690       -18.1 %     3.3 %     97,144       2.4 %     2.9 %     90,236       2.4 %     3.0 %     82,442       4.6 %     3.1 %
                                                                                                                         
Total non int.-bearing liabilities     32,532                       31,385                       31,258                       40,153                       39,213                  
                                                                                                                         
Total Average liabilities     170,717                       132,075                       128,402                       123,801                       121,655                  
                                                                                                                         
Assets Performance             1,456                       1,570                       1,548                       1,168                       992          
Liabilities Performance             1,198                       830                       712                       675                       650          
Net Interest Income             258                       740                       836                       493                       342          
Total interest-earning assets             166,009                       84,123                       86,406                       87,330                       74,117          
Net Interest Margin (NIM)             0.6 %                     3.5 %                     3.9 %                     2.3 %                     1.8 %        

 

In 3Q20 Banco Macro’s net fee income totaled Ps.5.3 billion, 5% or Ps.267 million higher than in 2Q20 and 2% or Ps.124 million lower than the same period of last year.

 

In the quarter, fee income totaled Ps.5.7 billion, 6% or Ps.340 million higher than in 2Q20. Fees charged on deposit accounts, Corporate Services fees and ATM transaction fees stand out; with an 8% and 20% and 15% increase respectively QoQ. On a yearly basis, fee income decreased 4% or Ps.209 million.

 

In the quarter, total fee expense increased 19% or Ps.73 million. On a yearly basis, fee expenses decreased 15% or Ps.85 million.

 

NET FEE INCOME   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)     3Q19     4Q19     1Q20     2Q20     3Q20     QoQ       YoY  
Fees charged on deposit accounts     2,338       2,042       2,018       2,060       2,223       8 %     -5 %
Credit card fees     1,286       1,166       1,219       1,107       1,152       4 %     -10 %
Corporate services fees     709       686       611       460       551       20 %     -22 %
ATM transactions fees     326       498       459       445       512       15 %     57 %
Insurance fees     331       336       350       361       359       -1 %     8 %
Debit card fees     319       291       286       323       349       8 %     9 %
Financial agent fees (Provinces)     274       410       271       277       279       1 %     2 %
Credit related fees     248       197       172       226       131       -42 %     -47 %
Mutual funds & securities fees     72       79       96       109       151       39 %     110 %
AFIP & Collection services     32       72       27       17       20       18 %     -38 %
ANSES fees     12       14       13       13       11       -15 %     -8 %
Total fee income     5,947       5,791       5,522       5,398       5,738       6 %     -4 %
                                                         
Total fee expense     552       554       495       394       467       19 %     -15 %
                                                         
Net fee income     5,395       5,237       5,027       5,004       5,271       5 %     -2 %

 

In 3Q20 Net Income from financial assets and liabilities at fair value through profit or loss totaled a Ps.7.5 billion loss, higher than the Ps.2.1 billion loss posted in the previous quarter. This loss can be traced to a higher loss related to sale of financial assets at fair value as a consequence of the inflation adjustment applied to our Leliq holdings (higher inflation was observed during 3Q20) which was partially offset by a Ps.422 million increase in profit from government securities.

 

8 

 

 

    3Q20 Earnings Release

 

NET INCOME FROM FINANCIAL ASSETS AND LIABILITIES
AT FAIR VALUE THROUGH PROFIT OR LOSS
  MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)     3Q19     4Q19     1Q20     2Q20     3Q20     QoQ       YoY  
Profit or loss from government securities     -535       2,498       1,508       2,170       2,592       19 %     -  
Profit or loss from private securities     189       337       257       111       273       146 %     44 %
Profit or loss from investment in derivative
financing instruments
    1,062       292       41       20       2       -90 %     -100 %
Profit or loss from other financial assets     14       64       -7       12       -4       -       -  
Profit or loss from investment in equity instruments     -14       17       103       87       -107       -       664 %
Profit or loss from the sale of financial assets at fair value     -17,448       -3,523       -6,545       -4,563       -10,297       126 %     -41 %
Income from financial assets at fair value through profit or loss     -16,732       -315       -4,643       -2,163       -7,541       249 %     -55 %
                                                         
Profit or loss from derivative financing instruments     0       0       0       0       0       -       -  
Income from financial liabilities at fair value through profit or loss     0       0       0       0       0       -       -  
                                                         
NET INCOME FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS     -16,732       -315       -4,643       -2,163       -7,541       249 %     -55 %

 

In the quarter Other Operating Income totaled Ps.1.2 billion, 3% or Ps.37 million higher than in 2Q20. On a yearly basis Other Operating Income decreased 22% or Ps.328.

 

OTHER OPERATING INCOME   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)     3Q19     4Q19     1Q20     2Q20     3Q20     QoQ       YoY  
Credit and debit cards     63       55       28       18       28       56 %     -56 %
Lease of safe deposit boxes     132       141       152       178       194       9 %     47 %
Other service related fees     453       340       547       390       436       12 %     -4 %
Other adjustments and interest
from other receivables
    234       233       229       184       188       2 %     -20 %
Initial recognition of loans     -12       45       0       19       -12       -       0 %
Sale of property, plant and equipment     0       0       0       0       6       -       -  
Others     640       333       291       356       342       -4 %     -47 %
Other Operating Income     1,201       1,147       1,247       1,158       1,064       -8 %     -11 %

 

In 3Q20 Banco Macro’s administrative expenses plus employee benefits totaled Ps.9.6 billion, 3% or Ps.299 million higher than the previous quarter, due to higher administrative expenses (9%). On a yearly basis administrative expenses plus employee benefits decreased 9% or Ps.904 million.

 

Employee benefits increased Ps.25 million QoQ (remunerations and social security contributions were 1% lower but were offset by higher compensation a bonuses and employee services which increased 11% and 49% respectively QoQ). On a yearly basis Employee benefits decreased 2% or Ps.151 million.

 

In 3Q20 administrative expenses increased 9% or Ps.274 million, due to higher other administrative expenses (38% or Ps.329 million) related to legal expenses which were partially offset by lower (14% or Ps.44 million) Directors and auditors fees.

 

In 3Q20, the efficiency ratio reached 45.9%, deteriorating from the 41.6% posted in 2Q20. In 3Q20 expenses (employee benefits + G&A expenses + depreciation and impairment of assets) increased 3%, while income (net interest income + net fee income + differences in quoted prices of gold and foreign currency + other operating income + net income from financial assets at fair value through profit or loss – (Turnover Tax + Insurance on deposits)) decreased 22% compared to 2Q20.

 

9 

 

 

    3Q20 Earnings Release

 

If we had excluded from the efficiency ratio calculation the inflation adjustment on our Leliqs holding (as per Central Bank rules shown under profit/loss from financial instruments at fair value through P&L), efficiency ratio would have been 34.7% in 3Q20 and 33.7% in 2Q20

 

PERSONNEL & ADMINISTRATIVE EXPENSES   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)     3Q19     4Q19     1Q20     2Q20     3Q20     QoQ       YoY  
Employee benefits     6,350       6,339       5,361       6,174       6,199       0 %     -2 %
              Remunerations     4,536       4,601       3,951       4,667       4,617       -1 %     2 %
              Social Security Contributions     961       1,043       878       1,039       1,024       -1 %     7 %
              Compensation and bonuses     691       527       414       370       412       11 %     -40 %
              Employee services     162       168       118       98       146       49 %     -10 %
Administrative Expenses     4,153       4,190       3,034       3,126       3,400       9 %     -18 %
              Taxes     464       450       436       392       405       3 %     -13 %
              Maintenance, conservation fees     480       626       460       493       508       3 %     6 %
              Directors & statutory auditors fees     790       717       344       308       264       -14 %     -67 %
              Security services     363       364       333       323       310       -4 %     -15 %
              Electricity & Communications     348       366       353       352       341       -3 %     -2 %
              Other professional fees     313       323       208       194       205       6 %     -35 %
              Rental agreements     55       52       26       29       10       -66 %     -82 %
              Advertising & publicity     149       195       66       88       75       -15 %     -50 %
              Personnel allowances     62       59       38       23       25       9 %     -60 %
              Stationary & Office Supplies     39       25       22       20       21       5 %     -46 %
              Insurance     39       38       29       41       42       2 %     8 %
              Hired administrative services     3       0       1       0       2       -       -33 %
             Other     1,048       975       718       863       1,192       38 %     14 %
Total Administrative Expenses     10,503       10,529       8,395       9,300       9,599       3 %     -9 %
                                                         
Total Employees     8,843       8,768       8,732       8,706       8,651                  
Branches     462       463       463       463       463                  
Efficiency ratio     64.3 %     34.5 %     39.8 %     43.3 %     57.1 %                
                                                         
Accumulated efficiency ratio     60.3 %     50.7 %     39.8 %     41.6 %     45.9 %                

 

In 3Q20, Other Operating Expenses totaled Ps.4.6 billion, increasing 4% or Ps.175 million QoQ. Others and Other provision charges stand out with a 9% (Ps.132 million) increase and a 25% (Ps.52 million) increase respectively QoQ. On a yearly basis Other Operating Expenses decreased 51% or Ps.4.7 billion.

 

OTHER OPERATING EXPENSES   MACRO Consolidated     Change  
In MILLION $ (Measuring Unit Current at EOP)     3Q19     4Q19     1Q20     2Q20     3Q20     QoQ       YoY  
Turnover Tax     3,034       3,325       2,773       2,506       2,493       -1 %     -18 %
Other provision charges     660       389       341       210       262       25 %     -60 %
Deposit Guarantee Fund Contributions     194       141       137       155       184       19 %     -5 %
Donations     52       170       123       24       0       -100 %     -100 %
Insurance claims     19       19       17       17       13       -24 %     -32 %
Initial loan recognition     0       0       3       -3       0       -       -  
Others     5,375       1,834       1,511       1,503       1,635       9 %     -70 %
Other Operating Expenses     9,334       5,879       4,905       4,412       4,587       4 %     -51 %

 

In 3Q20 the result from the net monetary position (excluding Leliqs) totaled a Ps.4.8 million gain, Ps.4.4 billion higher than the Ps.479 million gain posted in 2Q20. This result is explained by the breakdown of monetary assets and monetary liabilities and their behavior during the quarter; an increase in monetary assets (loans, and government securities) and a bigger increase in monetary liabilities (deposits), and higher inflation observed during the quarter (228 b.p. above 2Q20 level, up from 5.37% to 7.65%) generating a positive result. If we include the inflation adjustment on our Leliqs holdings (a Ps.8.3 billion loss) the total result from the monetary position (including Leliqs) would be a Ps.3.4 billion loss, lower than the Ps.3.8 billion loss posted in 2Q20. On a yearly basis result from net monetary position (exc. Leliqs) decreased 41% or Ps.3.4 billion.

 

10 

 

 

    3Q20 Earnings Release

 

In 3Q20 Banco Macro's effective income tax rate 34.2%, higher than the 28.9% effective tax rate of 2Q20.

 

RESULT FROM NET MONETARY POSITION     BANCO MACRO  
In MILLION $ (Measuring Unit Current at EOP)     1Q20     2Q20     3Q20
Result from Net Monetary Position (Consolidated)     335       479       4,836  
Change in Consumer Price Index     7.7995 %     5.3746 %     7.6549 %
                         
RECPPC MONETARY ASSETS & LIABILITIES (*)                        
Monetary Assets (MA)                        
Cash and deposits in banks     -8,281       -6,212       -8,093  
Government and private securities     -1,805       -1,221       -2,745  
Loans     -18,718       -13,048       -17,367  
Other financial assets     -871       -2,544       -5,479  
Other receivables     -629       -425       -636  
Investment in other companies                     -33  
Others     -43       -30          
Total RECPPC Monetary Assets     -30,346       -23,480       -34,353  
                         
Monetary Liabilities (ML)                        
Deposits     24,452       19,249       32,300  
Other financial liabilities     2,391       1,546       2,250  
Other liabilities     1,554       1,511       2,286  
Subordinated Corporte Bonds     2,205       1,586       2,272  
Others     10       11       18  
Provisions     135       93       126  
Total RECPPC Monetary Liabilities     30,747       23,995       39,252  
                         
Result from Net Monetary Position     401       516       4,899  
                         
RECPPC Leliqs     -6,389       -4,274       -8,327  
Result from Net Monetary Position (inc. Leliqs)     -5,988       -3,758       -3,428  
                         
RECPPC: Result from changes in purchasing power of currency                        
(*)Banco Macro, not consolidated                        

 

Financial Assets

 

Private sector financing

 

The volume of “core” financing to the private sector (including loans, financial trust and leasing portfolio) totaled Ps.232.2 billion, decreasing 2% or Ps.3.9 billion QoQ and 12% or Ps.31.9 billion YoY.

 

Within commercial loans, Others stand out with a 7% or Ps.2.8 billion increase QoQ (mostly due to loans extended to SMEs at a 24% interest rate, as part of the relief package given the Covid-19 pandemic); meanwhile Overdrafts decreased 22% or Ps.4.9 billion.

 

Within consumer lending credit card loans increased 8% or Ps.3.7 billion QoQ.

 

Within private sector financing, peso financing increased 2% or Ps.4.7million, while US dollar financing decreased 32% or USD 147 million.

 

As of 3Q20, Banco Macro´s market share over private sector loans was 7.6%.

 

11 

 

 

  3Q20 Earnings Release

 

FINANCING TO THE PRIVATE SECTOR   MACRO Consilidated     Change  
In MILLION $ (Measuring Unit Current at EOP)   3Q19     4Q19     1Q20     2Q20     3Q20     QoQ     YoY  
Overdrafts     38,433       45,416       36,483       22,040       17,189       -22 %     -55 %
Discounted documents     29,605       24,038       25,986       23,523       21,361       -9 %     -28 %
Mortgage loans     17,685       15,579       14,475       13,962       13,652       -2 %     -23 %
Pledged loans     6,159       4,900       4,223       3,971       3,618       -9 %     -41 %
Personal loans     76,781       67,978       65,341       62,186       60,610       -3 %     -21 %
Credit Card loans     45,233       51,553       50,239       48,941       52,618       8 %     16 %
Others     32,933       27,694       31,630       41,268       44,099       7 %     34 %
Interest     13,848       18,921       17,760       18,139       17,360       -4 %     25 %
Total loan portfolio     260,677       256,079       246,137       234,030       230,507       -2 %     -12 %
                                                         
Total loans in Pesos     186,975       210,117       201,850       203,155       208,098       2 %     11 %