BMA Banco Macro SA

 

 

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

 

May 27, 2021

 

 

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

 

 

 

 

 

 

Banco Macro Announces Results for the First Quarter of 2021

 

Buenos Aires, Argentina, May 27, 2021 – Banco Macro S.A. (NYSE: BMA; BYMA: BMA) (“Banco Macro” or “BMA” or the “Bank”) announced today its results for the first quarter ended March 31, 2021 (“1Q21”). 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 2020 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2021.

 

Summary

 

• The Bank’s net income totaled Ps.2.2 billion in 1Q21. This result was 39% lower than the result posted in 4Q20 and 77% lower than in 4Q19. In 1Q21, the annualized return on average equity (“ROAE”) and the annualized return on average assets (“ROAA”) were 5.4% and 1.1%, respectively.

 

• Operating income (after G&A and personnel expenses) was Ps.18.9 billion in 1Q21, 16% or Ps.2.6 billion higher than in 4Q20 and 19% or Ps.4.5 billion lower than a year ago.

 

• In 1Q21, Banco Macro’s financing to the private sector decreased 9% or Ps.25.8 billion quarter over quarter (“QoQ”) totaling Ps.259.4 billion and 17% or Ps.54.1. billion year over year (“YoY”).

 

• In 1Q21, Banco Macro’s total deposits decreased 17% or Ps.94.8 billion QoQ, totaling Ps.457.3 billion and representing 77% of the Bank’s total liabilities. Private sector deposits decrased 14% or Ps.66.9 billion QoQ.

 

• Banco Macro continued showing a strong solvency ratio, with an excess capital of Ps.157.4 billion, 37.7% regulatory capital ratio – Basel III and 30.3% Tier 1 Ratio. In addition, the Bank’s liquid assets remained at an adequate level, reaching 94% of its total deposits in 1Q21.

 

• In 1Q21, the efficiency ratio reached 35.7%, improving from the 38.8% posted in 4Q20 and higher than the 31.1% posted a year ago.

 

• In 1Q21, the Bank’s non-performing to total financing ratio was 0.92% and the coverage ratio reached 387.82%.

 

1Q21 Earnings Release Conference Call
		IR Contacts in Buenos Aires:
Friday, May 28, 2021
Time: 11:00 a.m. Eastern Time | 12:00 p.m. Buenos Aires Time		Jorge Scarinci
		Chief Financial Officer
To participate, please dial:
Argentina Toll Free:		Nicolás A. Torres
(011) 3984 5677		Investor Relations
Participants Dial In (Toll Free):	Webcast Replay: click here
+1 (844) 450 3847		Phone: (54 11) 5222 6682
Participants International Dial In:	Available from 05/28/2021 through 06/11/2021	E-mail: investorelations@macro.com.ar
+1 (412) 317 6370
Conference ID: Banco Macro		Visit our website at:
Webcast: click here		www.macro.com.ar/relaciones-inversores

 

  

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.

 

 

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. As of fiscal year 2021, the monetary result accrued by items of a monetary nature measured at fair value with changes in Other Comprehensive Income (OCI), is recorded in the Result form the Net Monetary Position integrating the Net Result of the period in accordance with Communication “A” 7211 of the Central Bank of Argentina. Previous quarters of 2020 have been restated in accordance with said Communication in order to make a comparison possible.

 

Results

 

Earnings per outstanding share were Ps.3.41 in 1Q21, 39% lower than in 4Q20 and 77% lower than the result posted a year ago.

 

EARNINGS PER SHARE		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Net income -Parent Company- (M $)			9,604				8,246				6,078				3,587				2,187				-39	%			-77	%
Average # of shares outstanding (M)			639				639				639				639				639				0	%			0	%
Average #of treasury stocks (shares repurchased) (M)			0				0				0				-				-				-				-100	%
Book value per avg. Outstanding share ($)			266				253				264				262				266				2	%			0	%
Shares Outstanding (M)			639				639				639				639				639				0	%			0	%
Earnings per avg.  outstanding share ($)			15.02				12.90				9.51				5.61				3.41				-39	%			-77	%
EOP FX (Pesos per USD)			64.4697				70.4550				76.1750				84.1450				91.9850				9	%			43	%
Book value per avg. issued ADS (USD)			41.26				35.91				34.66				31.14				28.92				-7	%			-30	%
Earnings per avg. outstanding ADS (USD)			2.33				1.83				1.25				0.67				0.37				-44	%			-84	%

 

Banco Macro’s 1Q21 net income of Ps.2.2 billion was 39% or Ps.1.4 billion lower than the previous quarter and 77% or Ps.7.4 billion lower YoY. This result represented an annualized ROAE and ROAA of 5.4% and 1.1% respectively.

 

Net operating income (before G&A and personnel expenses) was Ps.37.2 billion in 1Q21, increasing 5% or Ps.1.8 billion compared to 4Q20. In the quarter the improvement in Net Operating income was due to lower loan loss provisions and higher income from financial instruments at fair value through profit or loss. On a yearly basis Net operating income decreased 10% or Ps.4.1 billion compared due to lower net interest income and lower net fee income.

 

In 1Q21 Provision for loan losses totaled Ps.2 million, Ps.2.4 billion lower than in 4Q20, given that in previous quarters 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 no additional provisions were deemed necessary.

 

Operating income (after G&A and personnel expenses) was Ps.18.9 billion in 1Q21, 16% or Ps.2.6 billion higher than in 4Q20 and 19% or Ps.4.5 billion lower than a year ago.

 

It is important to emphasize that this result was obtained with a leverage of only 4.5x assets to equity ratio.

 

 

INCOME STATEMENT		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Net Interest Income			30,386				27,130				26,607				24,590				23,829				-3	%			-22	%
Net fee income			6,321				6,293				6,628				6,394				5,928				-7	%			-6	%
Net Interest Income + Net Fee Income			36,707				33,423				33,235				30,984				29,757				-4	%			-19	%
Net Income from financial instruments  at fair value through P&L			2,348				3,072				3,395				3,708				4,562				23	%			94	%
Income from assets at amortized cost			1,216				25				77				142				60				-58	%			-95	%
Differences in quoted prices of gold  and foreign currency			760				1,063				1,518				1,437				1,216				-15	%			60	%
Other operating income			1,568				1,439				1,486				1,572				1,649				5	%			5	%
Provision for loan losses			1,229				3,171				2,200				2,439				2				-100	%			-100	%
Net Operating Income			41,369				35,852				37,510				35,405				37,242				5	%			-10	%
Employee benefits			6,742				7,763				7,795				7,744				7,258				-6	%			8	%
Administrative expenses			3,815				3,931				4,275				4,402				3,415				-22	%			-10	%
Depreciation and impairment of assets			1,193				1,246				1,277				1,257				1,288				2	%			8	%
Other operating expenses			6,167				5,561				5,767				5,636				6,357				13	%			3	%
Operating Income			23,453				17,351				18,395				16,366				18,924				16	%			-19	%
Result from associates & joint ventures			29				11				19				-67				23				-134	%			-21	%
Result from net monetary postion			-8,252				-5,591				-8,357				-12,016				-14,443				20	%			75	%
Result before taxes from continuing operations			15,230				11,771				10,057				4,283				4,504				5	%			-70	%
Income tax			5,626				3,525				3,979				696				2,317				233	%			-59	%
Net income from continuing operations			9,604				8,246				6,078				3,587				2,187				-39	%			-77	%
							-				-
Net Income of the period			9,604				8,246				6,078				3,587				2,187				-39	%			-77	%
Net income of the period attributable  to parent company			9,604				8,245				6,078				3,587				2,187				-39	%			-77	%
Net income of the period attributable  to minority interest			-				1				-				-				-				-				-
Other Comprehensive Income			-997				1,230				960				-134				588				-				-
Foreign currency translation differences in financial statements conversion			-10				105				65				-25				-97				-				-
Profits or losses from financial assets measured at fair value  through other comprehensive income (FVOCI)  (IFRS 9(4.1.2)(a)			-987				1,125				895				-109				685				-				-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD			8,607				9,476				7,038				3,453				2,775				-20	%			-68	%
Total Comprehensive Income attributable to parent Company			8,607				9,476				7,038				3,453				2,775				-20	%			-68	%
Total Comprehensive Income attributable to non-controlling interests			-				-				-				-				-				-				-

 

The Bank’s 1Q21 net interest income totaled Ps.23.8 billion, 3% or Ps.761 million lower than in 4Q20 and 22% or Ps.6.6 billion lower YoY as a result of different regulations adopted that set caps on lending rates and floors on deposit rates.

 

In 1Q21 interest income totaled Ps.45.1 billion, 4% or Ps.1.9 billion lower than in 4Q20 and 2% or Ps.1 billion higher than in 1Q20.

 

Income from interest on loans and other financing totaled Ps.22.3 billion, 1% or Ps.184 million higher compared with the previous quarter. On a yearly basis Income from interest on loans decreased 20% or Ps.5.4 billion.

 

In 1Q21 income from government and private securities decreased 6% or Ps.1.3 billion QoQ (due to lower income from Government securities) and 31% or Ps.4.9 billion compared with the same period of last year. This result is explained 88% by income from government and private securities through other comprehensive income

 

(Leliqs and Other government securities) and the remaining 12% is explained by income from sovereign bonds in pesos at amortized cost.

 

 

In 1Q21 income from Repos totaled Ps.2.1 billion, 26% or Ps.741 million lower than the previous quarter and 303% or Ps.1.6 billion higher than a year ago.

 

In 1Q21 FX income totaled Ps.1.2 billion, 15% or Ps.221 million lower than the previous quarter and 60% or Ps.456 million higher than a year ago. FX income gain was due to the 9% argentine peso depreciation against the US dollar, the Bank’s long spot dollar position during the quarter and FX trading results.

 

FX INCOME		MACRO Consolidated												Variation
In MILLION $ (Measuring Unit Current at EOP)		1Q20				4Q20				1Q21				QoQ				YoY
(1) Differences in quoted prices of  gold and foreign currency			760				1,437				1,216				-15	%			60	%
Translation of FX assets and liabilities to Pesos			690				1,210				1,094				-10	%			59	%
Income from foreign currency exchange			70				227				122				-46	%			75	%
(2) Net Income from financial assets and liabilities at fair value through P&L			51				7				0				-100	%			-100	%
Income from investment in derivative financing instruments			51				7				0				-100	%			-100	%
(1) +(2) Total Result from Differences in quoted prices of gold and foreign currency			811				1,444				1,216				-16	%			50	%

 

 

 

INTEREST INCOME		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Interest on Cash and due from Banks			87				19				36				3				3				0	%			-97	%
Interest from government securities			14,901				13,191				20,914				21,829				20,565				-6	%			38	%
Interest from private securities			833				469				332				183				103				-44	%			-88	%
Interest on loans and other financing
To the financial sector			359				338				247				198				168				-15	%			-53	%
To the public non financial sector			1,208				842				730				557				462				-17	%			-62	%
Interest on overdrafts			5,379				3,557				1,726				1,551				1,697				9	%			-68	%
Interest on documents			1,816				1,236				1,002				1,322				1,384				5	%			-24	%
Interest on mortgages loans			2,564				2,019				1,951				2,586				3,054				18	%			19	%
Interest on pledged loans			152				130				133				122				111				-9	%			-27	%
Interest on personal loans			9,498				9,439				8,999				8,989				9,246				3	%			-3	%
Interest on credit cards loans			3,903				3,087				3,150				2,861				2,715				-5	%			-30	%
Interest on financial leases			32				15				6				11				22				100	%			-31	%
Interest on other loans			2,842				3,749				4,390				3,951				3,473				-12	%			22	%
Interest on Repos
From the BCRA			459				1,984				2,634				2,798				2,078				-26	%			353	%
Other financial institutions			60				1				12				35				14				-60	%			-77	%
Total Interest income			44,093				40,076				46,262				46,996				45,095				-4	%			2	%
Income from Interest on loans			27,753				24,412				22,334				22,148				22,332				1	%			-20	%

 

The Bank’s 1Q21 interest expense totaled Ps.21.3 billion, decreasing 5% or Ps.1.1 billion compared to the previous quarter and 55% or Ps.7.6 billion higher compared to 1Q20.

 

In 1Q21, interest on deposits represented 95% of the Bank’s total interest expense, decreasing 5% or Ps.1 billion QoQ, due to a 7% decrease in the average volume of deposits from the private sector which was partially offset by a 64 b.p. increase in the average rate paid on deposits. On a yearly basis, interest on deposits increased 61% or Ps.7.7 billion.

 

 

INTEREST EXPENSE		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Deposits
Interest on checking accounts			172				151				532				1,377				727				-47	%			323	%
Interest on saving accounts			208				167				156				208				231				11	%			11	%
Interest on time deposits			12,112				11,407				17,796				19,567				19,189				-2	%			58	%
Interest on other financing from BCRA and financial inst.			31				19				22				40				43				8	%			39	%
Repos
Other financial institutions			94				27				2				98				55				-44	%			-41	%
Interest on corporate bonds			406				486				437				419				352				-16	%			-13	%
Interest on subordinated bonds			654				674				694				686				664				-3	%			2	%
Interest on other financial liabilities			29				16				16				11				5				-55	%			-83	%
Total financial expense			13,706				12,947				19,655				22,406				21,266				-5	%			55	%
Expenses from interest on deposits			12,492				11,725				18,484				21,152				20,147				-5	%			61	%

 

In 1Q21, the Bank’s net interest margin (including FX) was 17.4%, higher than the 16.3% posted in 4Q20 and lower than the 25.2% posted in 1Q20.

 

In 1Q21 Net Interest Margin (excluding FX) was 16.5%, higher than the 15.4% posted in 4Q20 and lower than the 24.6% posted in 1Q20.

 

In 1Q21 Net Interest Margin (Pesos) was 18.6%, higher than the 17.7% posted in 4Q20 and lower than the 30.3% posted in 1Q20; meanwhile Net Interest Margin (USD) was 2.3%, higher than the 2% posted in 4Q20 and lower than the 3.9% registered in 1Q20.

 

ASSETS & LIABILITIES PERFORMANCE (AR$)		MACRO Consolidated
In MILLION $		1Q20												2Q20												3Q20												4Q20												1Q21
(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			8,884				17.8	%			54.7	%			8,486				15.0	%			39.9	%			6,319				11.9	%			46.0	%			4,663				1.7	%			47.5	%			3,720				-1.4	%			50.4	%
Financial Sector			3,021				11.4	%			46.3	%			3,202				17.0	%			42.3	%			2,423				7.6	%			40.4	%			2,114				-5.4	%			37.3	%			1,988				-12.0	%			34.3	%
Private Sector			240,580				7.1	%			40.7	%			251,194				10.9	%			34.9	%			253,533				0.9	%			31.6	%			252,925				-9.2	%			31.7	%			240,643				-11.8	%			34.6	%
Other debt securities
Central Bank Securities (Leliqs)			103,129				10.9	%			45.7	%			114,875				13.1	%			37.5	%			153,058				5.4	%			37.5	%			135,986				-5.5	%			37.1	%			136,403				-9.9	%			37.5	%
Government & Private Securities			28,765				18.7	%			55.9	%			38,646				7.4	%			30.6	%			90,758				-0.6	%			29.7	%			113,258				-8.5	%			32.7	%			90,358				-10.8	%			36.1	%
Repos			4,761				9.5	%			43.8	%			46,225				-3.5	%			17.3	%			54,992				-8.7	%			19.1	%			33,501				-7.9	%			33.6	%			23,441				-10.7	%			36.2	%
Total interest-earning assets			389,140				9.3	%			43.6	%			462,628				9.9	%			33.6	%			561,083				1.1	%			31.9	%			542,447				-7.9	%			33.6	%			496,553				-10.9	%			35.9	%
Non interest-earning assets			128,690												138,881												87,812												102,351												102,333
Total Average Assets			517,830												601,509												648,895												644,798												598,886
Interest-bearing liabilities
Deposits
Public Sector			16,548				-4.5	%			25.4	%			24,769				-0.3	%			21.3	%			65,565				-4.3	%			24.8	%			63,278				-12.0	%			27.6	%			36,906				-14.9	%			29.8	%
Private Sector			202,270				-6.9	%			22.3	%			242,266				-3.8	%			17.0	%			281,971				-7.9	%			20.2	%			281,519				-14.8	%			23.6	%			278,584				-17.9	%			25.3	%
BCRA and other financial institutions			490				-3.9	%			26.3	%			537				-4.2	%			16.5	%			513				-8.5	%			19.4	%			617				-12.4	%			27.1	%			674				-16.7	%			27.1	%
Corporate bonds			7,781				-7.9	%			21.0	%			6,547				6.8	%			29.9	%			6,241				-2.0	%			27.9	%			5,674				-10.8	%			29.4	%			5,077				-16.0	%			28.1	%
Repos			1,641				-6.4	%			23.0	%			1,180				-10.2	%			9.2	%			62				-13.5	%			12.8	%			1,284				-10.1	%			30.4	%			712				-13.9	%			31.3	%
Total int.-bearing liabilities			228,730				-6.8	%			22.5	%			275,299				-3.2	%			17.7	%			354,352				-7.2	%			21.1	%			352,372				-14.2	%			24.5	%			321,953				-17.5	%			25.9	%
Total non int.-bearing liabilities			133,295												174,956												186,900												188,514												169,770
Total Average Liabilities			362,025												450,255												541,252												540,886												491,723
Assets Performance							42,146												38,609												45,015												45,784												43,899
Liabilities Performance							12,811												12,098												18,838												21,665												20,563
Net Interest Income							29,335												26,511												26,177												24,119												23,336
Total interest-earning assets							389,140												462,628												561,083												542,447												496,553
Net Interest Margin (NIM)							30.3	%											23.0	%											18.6	%											17.7	%											18.6	%

 

 

ASSETS & LIABILITIES PERFORMANCE USD		MACRO Consolidated
In MILLION $		1Q20												2Q20												3Q20												4Q20												1Q21
(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
Cash and Deposits in Banks			43,924				0.3	%			0.8	%			54,712				13.0	%			0.1	%			56,083				1.7	%			0.3	%			57,364				-2.4	%			0.0	%			58,856				-9.7	%			0.0	%
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			656				6.2	%			6.7	%			86				18.2	%			4.7	%			70				7.2	%			5.7	%			30				0.0	%			0.0	%			23				0.0	%			0.0	%
Private Sector			60,082				11.6	%			12.2	%			49,425				26.1	%			11.7	%			31,283				16.8	%			15.2	%			27,357				14.8	%			17.6	%			24,165				8.1	%			19.7	%
Other debt securities
Government & Private Securities			3,992				1.7	%			2.2	%			5,592				13.5	%			0.5	%			5,763				2.5	%			1.1	%			6,738				0.0	%			0.0	%			5,657				-8.5	%			1.3	%
Total interest-earning assets			108,654				6.7	%			7.2	%			109,815				19.0	%			5.4	%			93,199				6.8	%			5.3	%			91,489				2.8	%			5.3	%			88,701				-4.7	%			5.5	%
Non interest-earning assets			62,266												56,702												116,985												106,277												112,020
Total Average Assets			170,920												166,517												210,184												197,766												200,721
Interest-bearing liabilities
Deposits
Public Sector			2,822				0.6	%			1.1	%			1,784				13.9	%			0.9	%			976				1.8	%			0.4	%			928				-2.0	%			0.4	%			1,454				-9.4	%			0.3	%
Private Sector			80,659				0.5	%			1.0	%			64,597				14.1	%			1.0	%			63,309				2.1	%			0.7	%			53,812				-2.1	%			0.3	%			56,399				-9.5	%			0.2	%
BCRA and other financial institutions			1,814				5.7	%			6.2	%			813				20.7	%			6.9	%			643				7.1	%			5.6	%			636				2.5	%			5.0	%			385				-5.9	%			4.2	%
Subordinated bonds			36,861				6.6	%			7.1	%			37,992				20.9	%			7.1	%			38,742				8.6	%			7.1	%			38,241				4.6	%			7.1	%			37,901				-3.3	%			7.1	%
Total int.-bearing liabilities			122,156				2.4	%			2.9	%			105,186				16.5	%			3.2	%			103,670				4.6	%			3.1	%			93,617				0.7	%			3.1	%			96,139				-7.0	%			3.0	%
Total non int.-bearing liabilities			39,306												50,491												49,310												45,910												46,334
Total Average liabilities			161,462												155,677												152,980												139,527												142,473
Assets Performance							1,947												1,467												1,247												1,212												1,196
Liabilities Performance							895												849												817												741												703
Net Interest Income							1,052												618												430												471												493
Total interest-earning assets							108,654												109,815												93,199												91,489												88,701
Net Interest Margin (NIM)							3.9	%											2.3	%											1.8	%											2.0	%											2.3	%

 

In 1Q21 Banco Macro’s net fee income totaled Ps.5.9 billion, 7% or Ps.466 million lower than in 4Q20 and 6% or Ps.393 million lower than the same period of last year.

 

In the quarter, fee income totaled Ps.6.5 billion, 7% or Ps.472 million lower than in 4Q20. Fees charged on credit cards decreased 19% QoQ and were partially offset by increases in AFIP & Collection services (8%) and ATM fees (3%). On a yearly basis, fee income decreased 6% or Ps.415 million.

 

In the quarter, total fee expense decreased 1% or Ps.7 million. On a yearly basis, fee expenses decreased 4% or Ps.22 million.

 

NET FEE INCOME		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Fees charged on deposit accounts			2,535				2,594				2,795				2,500				2,455				-2	%			-3	%
Credit card fees			1,533				1,393				1,448				1,496				1,205				-19	%			-21	%
Corporate services fees			768				578				693				697				690				-1	%			-10	%
ATM transactions fees			578				559				644				637				655				3	%			13	%
Insurance fees			440				452				452				463				431				-7	%			-2	%
Debit card fees			360				406				438				467				427				-9	%			19	%
Financial agent fees (Provinces)			341				348				351				381				352				-8	%			3	%
Credit related fees			216				285				165				155				147				-5	%			-32	%
Mutual funds & securities fees			121				137				189				168				129				-23	%			7	%
AFIP & Collection services			34				21				25				25				27				8	%			-21	%
ANSES fees			16				16				15				13				10				-23	%			-38	%
Total fee income			6,943				6,790				7,215				7,000				6,528				-7	%			-6	%
Total fee expense			622				496				587				607				600				-1	%			-4	%
Net fee income			6,321				6,294				6,628				6,393				5,928				-7	%			-6	%

 

In 1Q21 Net Income from financial assets and liabilities at fair value through profit or loss totaled a Ps.4.6 billion gain, 23% or Ps.854 million higher than the previous quarter. This gain is mostly related to higher income from Government Securities and investment in equity instruments (mainly the mark to market of our PRISMA stake).

 

On a yearly basis Net income from financial assets and liabilities at fair value through profit or loss increased 94% or Ps.2.2 billion.

 

 

NET INCOME FROM FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Profit or loss from government securities			1,896				2,729				3,259				3,498				4,042				16	%			113	%
Profit or loss from private securities			323				138				344				153				162				6	%			-50	%
Profit or loss from investment in derivative financing instruments			51				26				2				7				0				-100	%			-100	%
Profit or loss from other financial assets			-8				15				-5				0				-10				-				-
Profit or loss from investment in equity instruments			129				111				-134				-50				398				-				209	%
Profit or loss from the sale of financial assets at fair value			-43				53				-71				100				-30				-				-
Income from financial assets at fair value through profit or loss			2,348				3,072				3,395				3,708				4,562				23	%			94	%
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			2,348				3,072				3,395				3,708				4,562				23	%			94	%

 

 

 

In the quarter Other Operating Income totaled Ps.1.6 billion, 5% or Ps.77 million higher than in 4Q20. On a yearly basis Other Operating Income increased 5% or Ps.81 million.

 

OTHER OPERATING INCOME		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Credit and debit cards			35				23				35				45				52				16	%			49	%
Lease of safe deposit boxes			191				224				244				222				206				-7	%			8	%
Other service related fees			688				491				548				386				420				9	%			-39	%
Other adjustments and interest from other receivables			288				232				236				260				270				4	%			-6	%
Initial recognition of loans			0				24				-15				-9				3				-				-
Sale of property, plant and equipment			0				1				6				2				2				0	%			-
Others			366				444				432				666				696				5	%			90	%
Other Operating Income			1,568				1,439				1,486				1,572				1,649				5	%			5	%

 

In 1Q21 Banco Macro’s administrative expenses plus employee benefits totaled Ps.10.7 billion, 12% or Ps.1.5 billion lower than the previous quarter, due to lower administrative expenses (-22%) and employee benefits. On a yearly basis administrative expenses plus employee benefits decreased 1% or Ps.116 million.

 

Employee benefits decreased 6% or Ps.486 million QoQ. On a yearly basis Employee benefits increased 8% or Ps.516 million.

 

In 1Q21 administrative expenses decreased 22% or Ps.1 billion, due to lower Directors and statutory auditors fees (85% or Ps.577 million), lower advertising and publicity fees (71% or Ps.141 million) and lower maintenance and conservation fees (20% or Ps.145 million).

 

In 1Q21, the efficiency ratio reached 35.7%, improving from the 38.8% posted in 4Q20 and higher than the 31.1% posted a year ago. In 1Q21 expenses (employee benefits + G&A expenses + depreciation and impairment of assets) decreased 11%, 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 3% compared to 4Q20.

 

 

PERSONNEL & ADMINISTRATIVE EXPENSES		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Employee benefits			6,742				7,763				7,795				7,744				7,258				-6	%			8	%
Remunerations			4,968				5,869				5,805				5,584				5,232				-6	%			5	%
Social Security Contributions			1,104				1,306				1,288				1,286				1,178				-8	%			7	%
Compensation and bonuses			521				466				518				699				691				-1	%			33	%
Employee services			149				122				184				175				157				-10	%			5	%
Administrative Expenses			3,815				3,931				4,275				4,402				3,415				-22	%			-10	%
Taxes			549				492				509				544				541				-1	%			-1	%
Maintenance, conservation fees			578				621				638				727				582				-20	%			1	%
Directors & statutory auditors fees			433				387				332				682				105				-85	%			-76	%
Security services			419				406				389				384				377				-2	%			-10	%
Electricity & Communications			444				443				429				412				399				-3	%			-10	%
Other professional fees			262				243				258				240				254				6	%			-3	%
Rental agreements			33				37				12				21				31				48	%			-6	%
Advertising & publicity			82				112				94				199				58				-71	%			-29	%
Personnel allowances			48				30				31				37				29				-22	%			-40	%
Stationary & Office Supplies			28				25				27				24				20				-17	%			-29	%
Insurance			37				51				54				52				46				-12	%			24	%
Hired administrative services			1				1				2				0				2				-				100	%
Other			901				1,083				1,500				1,080				971				-10	%			8	%
Total Administrative Expenses			10,557				11,694				12,070				12,146				10,673				-12	%			1	%
Total Employees			8,732				8,706				8,651				8,561				8,459
Branches			463				463				463				463				463
Efficiency ratio			31.1	%			36.3	%			36.8	%			38.8	%			35.7	%
Accumulated efficiency ratio			50.7	%			43.6	%			40.2	%			45.9	%			35.7	%

 

In 1Q21, Other Operating Expenses totaled Ps.6.4 billion, increasing 13% or Ps.721 million QoQ, due to higher Turnover Tax (19% or Ps.556 million). On a yearly basis Other Operating Expenses increased 3% or Ps.190 billion.

 

OTHER OPERATING EXPENSES		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Turnover Tax			3,487				3,151				3,135				2,940				3,496				19	%			0	%
Other provision charges			428				265				329				244				399				64	%			-7	%
Deposit Guarantee Fund Contributions			173				194				232				237				225				-5	%			30	%
Donations			154				31				1				5				1				-80	%			-99	%
Insurance claims			21				22				16				12				11				-8	%			-48	%
Initial loan recognition			4				-4				0				54				0				-100	%			-100	%
Others			1,900				1,902				2,054				2,144				2,225				4	%			17	%
Other Operating Expenses			6,167				5,561				5,767				5,636				6,357				13	%			3	%

 

In 1Q21 the result from the net monetary position totaled a Ps.14.4 billion loss, 20% or Ps.2.4 billion lower than the loss posted in 4Q20. On a yearly basis the loss related to the net monetary position increased 75% or Ps.62 billion. This is the first quarter in which the result from net monetary position is shown pursuant to Communication “A” 7211 of the Central Bank of Argentina in which the inflation adjustment on our Leliqs and other government securities holdings is included (previously shown in Net Income from financial instruments at fair value through P&L). Previous quarters of 2020 have been restated in accordance with Communication “A” 7211 in order to make a comparison possible. Also higher inflation was observed during the quarter (163 b.p. above 4Q20 level, up from 11.33% to 12.95%) generating a negative result.

 

OPERATING RESULT		MACRO consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Operating Result (exc. Loss from net monetary position)			23,453				17,351				18,395				16,366				18,924				16	%			-19	%
Result from net monetary position (i.e. inflation adjustment)			-8,252				-5,591				-8,357				-12,016				-14,443				20	%			75	%
Operating Result (Inc. Loss from net monetary position)			15,201				11,760				10,038				4,350				4,481				3	%			-71	%

 

 

 

In 1Q21 Banco Macro's effective income tax rate was 51.4%, higher than the 16.3% effective tax rate of 4Q20 and the 36.9% registered one year ago. For more information see note 15 to our Financial Statements.

 

Financial Assets

 

Private sector financing

 

The volume of “core” financing to the private sector (including loans, financial trust and leasing portfolio) totaled Ps.259.4 billion, decreasing 9% or Ps.25.8 billion QoQ and 17% or Ps.54.1 billion YoY as a consequence of the economic recession that affected Argentina during 2020.

 

Commercial loans decreased 13% or Ps.17.9 billion, among which Others stand out (mostly loans extended to SMEs at 24% interest rate as part of the Covid-19 relief package)

 

Consumer lending decreased 5% or Ps.7.6 billion. Credit card loans decreased 9%, returning to average levels of the beginning of 2020.

 

Within private sector financing, peso financing decreased 9% or Ps.23.9 billion, while US dollar financing decreased 15% or USD 47 million.

 

As of 1Q21, Banco Macro´s market share over private sector loans was 7.3%.

 

FINANCING TO THE PRIVATE SECTOR		MACRO Consilidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Overdrafts			45,877				27,715				21,615				19,287				14,513				-25	%			-68	%
Discounted documents			32,677				29,579				26,861				29,562				26,808				-9	%			-18	%
Mortgage loans			18,202				17,557				17,167				15,230				14,110				-7	%			-22	%
Pledged loans			5,311				4,994				4,550				3,681				3,318				-10	%			-38	%
Personal loans			82,165				78,197				76,215				75,786				74,828				-1	%			-9	%
Credit Card loans			63,174				61,542				66,165				72,150				65,488				-9	%			4	%
Others			39,775				51,892				55,453				44,515				36,029				-19	%			-9	%
Interest			22,332				22,810				21,830				22,321				21,927				-2	%			-2	%
Total loan portfolio			309,513				294,286				289,856				282,532				257,021				-9	%			-17	%
Total loans in Pesos			253,823				255,461				261,677				257,384				233,646				-9	%			-8	%
Total loans in USD			55,690				38,825				28,179				25,148				23,375				-7	%			-58	%
Financial trusts			2,357				1,133				457				643				294				-54	%			-88	%
Leasing			280				210				168				134				124				-7	%			-56	%
Others			1,367				1,317				1,563				1,850				1,933				4	%			41	%
Total other financing			4,004				2,660				2,188				2,627				2,351				-11	%			-41	%
Total other financing in Pesos			2,628				1,293				1,004				1,462				1,266				-13	%			-52	%
Total other financing in USD			1,376				1,367				1,184				1,165				1,085				-7	%			-21	%
Total financing to the private sector			313,517				296,946				292,044				285,159				259,372				-9	%			-17	%
EOP FX (Pesos per USD)			64.4697				70.4550				76.1750				84.1450				91.9850				9	%			43	%
USD financing / Financing to the private sector			18	%			14	%			10	%			9	%			9	%

 

 

Public Sector Assets

 

In 1Q21, the Bank’s public sector assets (excluding LELIQs) to total assets ratio was 16.9%, lower than the 17.5% registered in the previous quarter, and higher than the 5% posted in 1Q20.

 

In 1Q21, a 16% or Ps.23.5 billion decrease in Leliqs and a 15% or Ps.21.7 billion decrease in Government Securities stand out. Since 2Q20 the Bank decided to invest in CER adjustable and Badlar bonds.

 

PUBLIC SECTOR ASSETS		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Leliqs			101,911				142,696				158,988				145,343				121,861				-16	%			20	%
Other			30,032				70,370				157,738				147,947				126,276				-15	%			320	%
Government securities			131,943				213,066				316,726				293,290				248,137				-15	%			88	%
Provincial loans			5,766				8,562				4,890				3,889				3,138				-19	%			-46	%
Loans			5,766				8,562				4,890				3,889				3,138				-19	%			-46	%
Purchase of government bonds			173				176				175				173				166				-4	%			-4	%
Other receivables			173				176				175				173				166				-4	%			-4	%
TOTAL PUBLIC SECTOR ASSETS			137,882				221,804				321,791				297,352				251,441				-15	%			82	%
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)			35,971				79,108				162,803				152,009				129,580				-15	%			260	%
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)/TOTAL ASSETS			5.0	%			9.3	%			17.7	%			17.5	%			16.9	%

 

Funding

 

Deposits

 

Banco Macro’s deposit base totaled Ps.457.3 billion in 1Q21, decreasing 17% or Ps.94.8 billion QoQ and a 3% or Ps.13.2 billion decrease YoY and representing 77% of the Bank’s total liabilities.

 

On a quarterly basis, both public and private sector deposits decreased with a 33% or Ps.27.3 billion decrease and a 14% or Ps.66.9 billion decrease respectively.

 

The decrease in private sector deposits was led by demand deposits, which decreased 16% or Ps.37.3 billion, while time deposits decreased 13% or Ps.29.7 billion QoQ.

 

Within private sector deposits, peso deposits decreased 19% or Ps.90.6 billion, while US dollar deposits decreased 13% or USD 134 million.

 

As of 1Q21, Banco Macro´s market share over private sector deposits was 5.6%.

 

 

DEPOSITS		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Public sector			38,957				80,776				132,834				83,094				55,361				-33	%			42	%
Financial sector			415				473				555				787				694				-12	%			67	%
Private sector			404,715				468,387				486,179				468,167				401,232				-14	%			-1	%
Checking accounts			76,581				96,652				90,169				73,872				69,534				-6	%			-9	%
Savings accounts			136,160				143,842				135,494				156,500				122,929				-21	%			-10	%
Time deposits			181,598				215,501				250,459				229,258				199,544				-13	%			10	%
Other			10,376				12,392				10,057				8,537				9,225				8	%			-11	%
Total			444,087				549,636				619,568				552,048				457,287				-17	%			3	%
Pesos			332,961				445,537				520,532				464,961				374,407				-19	%			12	%
Foreign Currency (Pesos)			111,126				104,099				99,036				87,087				82,880				-5	%			-25	%
EOP FX (Pesos per USD)			64.4697				70.4550				76.1750				84.1450				91.9850				9	%			43	%
Foreign Currency (USD)			1,724				1,478				1,300				1,035				901				-13	%			-48	%
USD Deposits / Total Deposits			25	%			19	%			16	%			16	%			18	%

 

Banco Macro’s transactional deposits represent approximately 49% of its total deposit base as of 1Q21. These accounts are low cost and are not sensitive to interest rate increases.

 

Other sources of funds

 

In 1Q21, the total amount of other sources of funds increased 1% or Ps.1.8 billion compared to 4Q20. On a yearly basis other sources of funds decreased 1% or Ps.2.4 billion. In 1Q21 Shareholder’s Equity increased 2% or Ps.2.8 billion; also in the quarter subordinated corporate bonds decreased 2% or Ps.594 million while non subordinated corporate bonds decreased 9% or Ps.511 million.

 

It should be noted that the Shareholders’ meeting held on April 30, 2021 approved a Ps.10 billion dividend. This amount will be deducted from reserved earnings and therefore subtracted from Shareholders’ Equity during 2Q21.

 

OTHER SOURCES OF FUNDS		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Central Bank of Argentina			23				25				24				23				20				-13	%			-13	%
Banks and international institutions			741				744				505				401				521				30	%			-30	%
Financing received from Argentine financial institutions			468				678				335				614				608				-1	%			30	%
Subordinated corporate bonds			37,953				38,787				39,648				38,743				38,149				-2	%			1	%
Corporate bonds			7,793				6,564				6,311				5,565				5,054				-9	%			-35	%
Shareholders' equity			169,851				161,365				168,403				167,259				170,035				2	%			0	%
Total other source of funds			216,829				208,163				215,226				212,605				214,387				1	%			-1	%

 

Liquid Assets

 

In 1Q21, the Bank’s liquid assets amounted to Ps.427.6 billion, showing a 14% or Ps.70 billion decrease QoQ, and a 33% or Ps.105.9 billion increase on a yearly basis.

 

In 1Q21, Net Repos decreased 71% or Ps.30.4 billion while LELIQs own portfolio decreased 16% or Ps.23.5 billion and Other government securities decreased 15% or Ps.21.3 billion.

 

In 1Q21 Banco Macro’s liquid assets to total deposits ratio reached 94%.

 

 

LIQUID ASSETS		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Cash			175,915				140,648				142,011				146,802				153,515				5	%			-13	%
Guarantees for compensating chambers			12,409				15,273				13,743				13,600				11,952				-12	%			-4	%
Call			856				0				189				56				1,100				1864	%			29	%
Leliq own portfolio			101,911				142,696				158,988				145,343				121,861				-16	%			20	%
Net Repos			585				91,336				67,867				43,829				12,890				-71	%			2103	%
Other government & private securities			30,032				70,370				157,738				147,947				126,276				-15	%			320	%
Total			321,708				460,323				540,536				497,577				427,594				-14	%			33	%
Liquid assets to total deposits			72	%			84	%			87	%			90	%			94	%

 

Solvency

 

Banco Macro continued showing high solvency levels in 1Q21 with an integrated capital (RPC) of Ps.201 billion over a total capital requirement of Ps.43.5 billion. Banco Macro’s excess capital in 1Q21 was 362% or Ps.157.4 billion. Since the beginning of 2020 and due to inflation adjustments Equity has increased significantly leading to higher solvency levels (shown under Ordinary Capital Level 1).

 

The regulatory capital ratio (as a percentage of risk-weighted assets- RWA) was 37.7% in 1Q21; TIER1 Ratio stood at 30.3%.

 

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

 

MINIMUM CAPITAL REQUIREMENT		MACRO Consolidated																				Change
In MILLION $		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Credit risk requirement			23,808				24,046				23,972				28,025				29,047				4	%			22	%
Market risk requirement			694				1,122				1,172				1,556				1,538				-1	%			121	%
Operational risk requirement			8,606				9,493				10,604				11,777				12,934				10	%			50	%
Total capital requirements			33,108				34,660				35,749				41,358				43,519				5	%			31	%
Ordinary Capital Level 1 (COn1)			115,532				116,048				131,531				146,350				171,410				17	%			48	%
Deductible concepts Level 1 (COn1)			-12,442				-10,011				-11,768				-9,150				-9,889				8	%			-21	%
Capital Level 2 (COn2)			26,427				30,427				32,854				36,248				39,442				9	%			49	%
Integrated capital - RPC (i)			129,517				136,464				152,618				173,449				200,964				16	%			55	%
Excess capital			96,409				101,804				116,869				132,091				157,445				19	%			63	%
Risk-weighted assets - RWA (ii)			405,179				424,501				438,129				506,766				533,407				5	%			32	%
Regulatory Capital ratio [(i)/(ii)]			32.0	%			32.1	%			34.8	%			34.2	%			37.7	%
Ratio TIER 1 [Capital Level 1/RWA]			25.4	%			25.0	%			27.3	%			27.1	%			30.3	%

 

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

 

 

Asset Quality

 

In 1Q21, Banco Macro’s non-performing to total financing ratio (under Central Bank rules) reached a level of 0.92%, up from 0.78% in 4Q20, and down from the 1.14% posted in 1Q20.

 

Consumer portfolio non-performing loans increased 16b.p. (up to 0.89% from 0.73%) while Commercial portfolio non-performing loans increased 10b.p. in 4Q20 (up to 1% from 0.9%).

 

Consumer portfolio non-performing loans ratio continues to be positively impacted by recent measures adopted by the Central Bank of Argentina in the current Covid19 pandemic context, particularly the 60 day grace period that was added to debtor classification before a loan is considered as non performing and the possibility to refinance outstanding credit card balances.

 

The coverage ratio (measured as total allowances under Expected Credit Losses over Non Performing loans under Central Bank rules) reached to 387.82% in 1Q21. Write-offs over total loans totaled 0.36%.

 

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

 

ASSET QUALITY		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Commercial portfolio			141,728				110,633				95,611				86,356				75,912				-12	%			-46	%
Non-performing			1,930				1,709				1,484				779				757				-3	%			-61	%
Consumer portfolio			192,468				212,917				218,424				219,074				201,700				-8	%			5	%
Non-performing			2,618				3,203				2,096				1,592				1,795				13	%			-31	%
Total portfolio			334,196				323,550				314,035				305,430				277,612				-9	%			-17	%
Non-performing			4,548				4,911				3,580				2,370				2,552				8	%			-44	%
Commercial non-perfoming ratio			1.36	%			1.54	%			1.55	%			0.90	%			1.00	%
Consumer non-perfoming ratio			1.36	%			1.50	%			0.96	%			0.73	%			0.89	%
Total non-performing/ Total portfolio			1.36	%			1.52	%			1.14	%			0.78	%			0.92	%
Total allowances			7,890				10,345				10,846				11,359				9,897				-13	%			25	%
Coverage ratio w/allowances			173.48	%			210.65	%			302.96	%			479.28	%			387.82	%
Write Offs			745				686				793				1,122				993				-12	%			33	%
Write Offs/ Total portfolio			0.22	%			0.21	%			0.25	%			0.37	%			0.36	%

 

Expected Credit Losses (E.C.L) (I.F.R.S.9)

 

The Bank records an allowance for expected credit losses for all loans and other debt financial assets not held at fair value through profit or loss, together with loan commitments and financial guarantee contracts, in this section all referred to as ‘financial instruments’. Equity instruments are not subject to impairment under IFRS 9. The ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the 12 months expected credit loss.(For further information please see our 2020 20-F)

 

 

CER Exposure and Foreign Currency Position

 

CER EXPOSURE		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
CER adjustable ASSETS
Government Securities			3,687				26,514				55,592				57,827				71,288				23	%			1833	%
Loans (*)			22,456				22,219				21,700				21,059				20,666				-2	%			-8	%
Private sector loans			9,974				9,294				8,732				7,921				7,201				-9	%			-28	%
Mortgage loans (UVA adjusted)			12,478				12,921				12,963				13,130				13,457				2	%			8	%
Other loans			4				4				5				8				8				0	%			100	%
Total CER adjustable assets			26,143				48,733				77,292				78,886				91,954				17	%			252	%
CER adjustable LIABILITIES
Deposits (*)			1,598				3,029				1,201				1,558				3,618				132	%			126	%
UVA Unemployment fund			882				818				873				875				916				5	%			4	%
Total CER adjustable liabilities			2,480				3,847				2,074				2,433				4,534				86	%			83	%
NET CER EXPOSURE			23,663				44,886				75,218				76,453				87,420				14	%			269	%

 

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

 

FOREIGN CURRENCY POSITION		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Cash and deposits in Banks			97,819				108,272				116,128				119,414				117,240				-2	%			20	%
Cash			6,406				5,892				9,705				11,075				7,921				-28	%			24	%
Central Bank of Argentina			44,420				46,926				73,212				46,732				55,301				18	%			24	%
Other financial institutions local and abroad			46,987				55,448				33,206				61,601				54,012				-12	%			15	%
Others			6				6				6				6				6				0	%			0	%
Net Income from financial instruments at fair value through P&L			200				45				5				7				38				443	%			-81	%
Other financial assets			5,799				5,554				5,745				5,622				5,651				1	%			-3	%
Loans and other financing			56,960				40,109				29,382				26,308				24,453				-7	%			-57	%
Other financial institutions			101				80				49				24				24				0	%			-76	%
Non financial private sector & foreign residents			56,858				40,028				29,332				26,284				24,429				-7	%			-57	%
Other debt securities			5,301				5,796				5,695				6,653				3,936				-41	%			-26	%
Guarantees received			2,981				2,899				1,982				2,058				1,806				-12	%			-39	%
Investment in equity instruments			9				10				11				13				12				-8	%			33	%
Total Assets			169,069				162,685				158,948				160,076				153,137				-4	%			-9	%
Deposits			111,126				104,099				99,036				87,087				82,880				-5	%			-25	%
Non financial public sector			4,457				4,572				3,189				4,742				4,089				-14	%			-8	%
Financial sector			351				364				495				648				634				-2	%			81	%
Non financial private sector & foreign residents			106,318				99,163				95,352				81,697				78,157				-4	%			-26	%
Other liabilities from financial intermediation			8,282				7,377				7,153				20,839				18,455				-11	%			123	%
Financing from the Central Bank and other fin. Inst			981				961				679				530				604				14	%			-38	%
Subordinated corporate bonds			37,953				38,787				39,648				38,743				38,149				-2	%			1	%
Other non financial liabilities			44				81				70				23				26				13	%			-41	%
Total Liabilities			158,386				151,306				146,586				147,222				140,114				-5	%			-12	%
NET FX POSITION (Pesos)			10,683				11,379				12,362				12,854				13,023				1	%			22	%
EOP FX (Pesos per USD)			64.4697				70.4550				76.1750				84.1450				91.9850				9	%			43	%
NET FX POSITION (USD)			166				162				162				153				142				-7	%			-15	%

 

 

Relevant and Recent Events

 

·

Interest and Principal Payment of Class C Peso denominated Notes. In April 2021, the Bank paid quarterly interest on Class C Peso denominated notes in the amount of Ps.223,752,035.96 and principal in the amount of Ps.2,413,000,000.

 

·

Interest Payment Class A Subordinated Notes. In May 2021, the Bank paid semiannual interest on Class A subordinated notes in the amount of USD 13,500,000.

 

·

Interest Payment Class B Peso denominated Notes. In May 2021, the Bank paid semiannual interest on Class B Peso denominated notes in the amount of Ps.252,804,212.

 

·

General and Extraordinary Shareholders’ meeting. The Shareholders’ Meeting held on April 30, 2021, resolved to distribute as dividend to the shareholders the amount of up to Ps.10,000,425,701.12, a cash dividend or dividend in kind, in this case valued at market price, or in any combination of both alternatives, which represents AR$15.64 per share, and delegated to the Board the powers to determine how, when and under what terms shall such dividend be made available thereof to the shareholders in proportion to their respective shareholdings. The effective distribution of the dividends as approved on the date hereof is subject to BCRA’s authorization. Pursuant to the provisions of Communication “A”7181 issued by the BCRA, the distribution of profits by financial entities is suspended until June 30,2021. As to the total amount of dividends to be distributed, please be advised that it is subject to a 7% withholding rate according to section 97 of the abovementioned Income Tax Law, as amended and restated in 2019.

 

·

Covid-19: In early March 2020, the World Health Organization recognized Coronavirus (Covid-19) as a pandemic that is severely affecting almost all countries around the world. The spread of this disease globally has forced the authorities to take drastic health and financial measures to contain and mitigate its effects on health and economic activity. Particularly in the Argentine Republic, on March 19, 2020, through Decree No. 297/2020, the Government established the “social, preventive and compulsory isolation” measure until March 31, 2020, which was then extended until June 7, 2020. Along with health protection rules, tax and financial measures were taken to mitigate the impact on the economy associated with the pandemic, including public direct financial assistance measures for part of the population, the establishment of financial and fiscal facilities for both individuals and companies. As regards measures related to the Entity’s business, the BCRA established maturities extensions, froze the mortgage loan installments and encouraged banks to lend to companies at reduced rates. In addition, the distribution of dividends of the finance institutions was suspended until June 30, 2020. In addition, in the mandatory quarantine context, the BCRA ruled that financial institutions would not be able to open their branches for public service during that period and should continue to provide services to users remotely. They could also trade with each other and their clients in the exchange market remotely. During quarantine, remote trading of stock exchanges and capital markets authorized by the CNV, the custodians and capital market agents registered with the CNV was admitted. In view of the extension of mandatory quarantine, the BCRA then decided that financial institutions would open their branches from Friday, April 3, 2020 for public attention through previous appointments obtained by the Bank’s website. The Bank is developing its activities under the conditions detailed above, giving priority to the compliance of social isolation measures by its employees, with the primary objective of taking care of the public health and well-being of all its stakeholders (employees, suppliers, customers, among others). To this end, it has put in place contingency procedures and has enabled its staff to carry out their tasks remotely. From a commercial point of view, it has emphasized maintaining a close relationship with its customers, trying to respond to their needs at this difficult time, sustaining all virtual channels of care to ensure operability and good response to requirements, monitoring compliance with their business obligations and monitoring the active portfolio in order to detect possible delays in collection and set new conditions for them. Considering the size of the abovementioned situation, the Bank’s Management estimates that this situation could have an impact on its operations and the financial situation and the results of the Bank, which are under analysis, and will ultimately; depend on the extent an duration of the health emergency and the success of the measures taken.

 

 

Regulatory Changes

 

·

Inflation Adjustment (Other Comprehensive Income) In January 2021 through Communication “A” 7221 with starting in fiscal year 2021, the monetary result accrued with respect to items of a monetary nature that are measured at fair value with changes in Other Comprehensive Income (OCI), must be recorded in results for the period/fiscal year. Consequently, the unallocated results must be adjusted and recorded in the account "Adjustments to results from previous years" at the beginning of fiscal year 2021, in order to incorporate the accumulated monetary results of the aforementioned items as of that date that will be recorded in OCI. All the comparative information for the next periods/fiscal years must consider this change in the exposure criteria.

 

·

Mandatory Lending SMEs. The Central Bank establishes the extension of Productive Investment Financing lines (until September 30, 2021 for the 2021 quota). It also requires financial institutions to assign an official accountable for the enforcement of this credit line and to report to the Superintendence of Financial and Exchange Institutions within 10 calendar days since the issuance of this regulation.

 

·

Minimum Reserve Requirements. Universal Free Accounts. In May 2021, through Communication “A” 7254, the Central Bank established the reduction of the average minimum reserve requirement in pesos for financial institutions that implement the remote and on-site opening of Universal Free Accounts, based on

 

o

Financing granted as of April 1, 2021 to individuals and SMEs that are not reported by financial institutions in the “Financial system debtor database” (CENDEU).

o

The growth rate in the use of electronic means through sight accounts whose beneficiaries are individuals.

o

The evolution of documents issued through electronic means (ECHEQ) and electronic credit invoices (FCE).

o

Operability of ATMs

 

·

Debtor Classification. In March 2021, through Communication “A” 7245 the Central Bank of Argentina established a gradual transition in the criteria of debtor classification for clients who decided to delay installment payments (up to March 2021, with no further extensions). For this matter, financial institutions will have to extend late-payment periods to classify their debtors in stages 1, 2 and 3, both for commercial and retail portfolios, as follows

 

o

i) until March 31, 2021, in 60 days

o

ii) until May 31, 2021, in 30 days

o

iii) as of June 1, 2021, they will have to classify debtors pursuant to general criteria for non-performing loans

 

 

QUARTERLY BALANCE SHEET		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
ASSETS
Cash and deposits in Banks			175,915				140,648				142,011				146,802				153,515				5	%			-13	%
Cash			26,472				21,499				25,340				28,716				23,651				-18	%			-11	%
Central Bank of Argentina			102,449				63,582				83,454				56,471				75,836				34	%			-26	%
Other local & foreign entities			46,989				55,561				33,211				61,610				54,023				-12	%			15	%
Other			5				6				6				5				5				0	%			0	%
Debt securities at fair value through profit & loss			2,422				16,944				20,807				62,104				38,381				-38	%			1485	%
Derivatives			59				23				17				8				-				-100	%			-100	%
Repo Transactions			585				93,062				67,867				44,528				12,890				-71	%			2103	%
Other financial assets			17,394				15,179				19,577				21,333				17,467				-18	%			0	%
Loans & other receivables			321,117				307,555				298,874				290,658				265,031				-9	%			-17	%
Non Financial Public Sector			5,997				8,783				5,041				4,083				3,290				-19	%			-45	%
Financial Sector			3,960				2,959				2,246				2,059				2,663				29	%			-33	%
Non Financial private sector and foreign			311,160				295,813				291,587				284,516				259,078				-9	%			-17	%
Other debt securities			138,772				201,922				302,105				236,211				212,608				-10	%			53	%
Financial assets in guarantee			14,265				18,845				15,377				16,144				13,742				-15	%			-4	%
Investments in equity instruments			2,259				2,180				2,045				1,878				2,056				9	%			-9	%
Investments in other companies (subsidiaries and joint ventures)			240				202				228				230				247				7	%			3	%
Property, plant and equipment			39,315				38,943				38,856				38,821				38,866				0	%			-1	%
Intangible assets			5,630				5,582				5,573				5,765				5,818				1	%			3	%
Deferred income tax assets			82				88				89				71				56				-21	%			-32	%
Other non financial assets			2,084				2,633				2,611				2,522				2,567				2	%			23	%
Non-current assets held for sale			2,780				2,762				2,826				2,551				2,549				0	%			-8	%
TOTAL ASSETS			722,919				846,568				918,863				869,626				765,793				-12	%			6	%
LIABILITIES
Deposits			444,087				549,636				619,568				552,048				457,287				-17	%			3	%
Non Financial Public Sector			38,957				80,776				132,834				83,094				55,361				-33	%			42	%
Financial Sector			415				473				555				787				694				-12	%			67	%
Non Financial private sector and foreign			404,715				468,387				486,179				468,167				401,232				-14	%			-1	%
Derivatives			229				-				-				-				-				-				-100	%
Repo Transactions			-				1,726				-				699				-				-100	%			0	%
Other financial liabilities			33,501				38,977				36,008				55,591				49,875				-10	%			49	%
Financing received from Central Bank and Other Financial Institutions			1,234				1,448				865				1,038				1,149				11	%			-7	%
Issued Corporate Bonds			7,793				6,564				6,311				5,565				5,054				-9	%			-35	%
Current income tax liabilities			14,680				10,138				12,526				5,812				4,730				-19	%			-68	%
Subordinated corporate bonds			37,953				38,787				39,648				38,743				38,149				-2	%			1	%
Provisions			2,265				2,185				2,044				1,473				1,392				-5	%			-39	%
Deferred income tax liabilities			5				4,962				3,187				7,106				8,095				14	%			161800	%
Other non financial liabilities			11,319				30,778				30,301				34,289				30,025				-12	%			165	%
TOTAL LIABILITIES			553,066				685,201				750,458				702,364				595,756				-15	%			8	%
SHAREHOLDERS' EQUITY
Capital Stock			639				639				639				639				639				0	%			0	%
Issued Shares premium			12,430				12,430				12,430				12,430				12,430				0	%			0	%
Adjustment to Shareholders' Equity			58,523				58,523				58,523				58,523				58,523				0	%			0	%
Reserves			84,462				128,636				128,636				124,041				124,041				0	%			47	%
Retained earnings			4,980				-57,157				-57,157				-57,157				-29,643				-48	%			-695	%
Other accumulated comprehensive income			-787				444				1,403				1,269				1,858				46	%			-
Net income for the period / fiscal year			9,604				17,850				23,929				27,514				2,187				-92	%			-77	%
Shareholders' Equity attributable to parent company			169,851				161,365				168,403				167,259				170,035				2	%			0	%
Shareholders' Equity attributable to non controlling interest			2				2				2				3				2				-33	%			0	%
TOTAL SHAREHOLDERS' EQUITY			169,853				161,367				168,405				167,262				170,037				2	%			0	%

 

 

INCOME STATEMENT		MACRO Consolidated																				Change
In MILLION $ (Measuring Unit Current at EOP)		1Q20				2Q20				3Q20				4Q20				1Q21				QoQ				YoY
Interest Income			44,093				40,076				46,262				46,996				45,095				-4	%			2	%
Interest Expense			13,706				12,947				19,655				22,406				21,266				-5	%			55	%
Net Interest Income			30,386				27,130				26,607				24,590				23,829				-3	%			-22	%
Fee income			6,943				6,790				7,215				7,000				6,528				-7	%			-6	%
Fee expense			622				496				587				607				600				-1	%			-4	%
Net Fee Income			6,321				6,293				6,628				6,394				5,928				-7	%			-6	%
Subtotal (Net Interest Income + Net Fee Income)			36,707				33,423				33,235				30,984				29,757				-4	%			-19	%
Net Income from financial instruments  at Fair Value Through Profit & Loss			2,348				3,072				3,395				3,708				4,562				23	%			94	%
Result from assets at amortised cost			1,216				25				77				142				60				-58	%			-95	%
Difference in quoted prices of gold and foreign currency			760				1,063				1,518				1,437				1,216				-15	%			60	%
Other operating income			1,568				1,439				1,486				1,572				1,649				5	%			5	%
Provision for loan losses			1,229				3,171				2,200				2,439				2				-100	%			-100	%
Net Operating Income			41,369				35,852				37,510				35,405				37,242				5	%			-10	%
Personnel expenses			6,742				7,763				7,795				7,744				7,258				-6	%			8	%
Administrative expenses			3,815				3,931				4,275				4,402				3,415				-22	%			-10	%
Depreciation and impairment of assets			1,193				1,246				1,277				1,257				1,288				2	%			8	%
Other operating expenses			6,167				5,561				5,767				5,636				6,357				13	%			3	%
Operating Income			23,453				17,351				18,395				16,366				18,924				16	%			-19	%
Income from associates and joint ventures			29				11				19				-67				23				-134	%			-21	%
Result from net monetary position			-8,252				-5,591				-8,357				-12,016				-14,443				-				-
Net Income before income tax on cont. operations			15,230				11,771				10,057				4,283				4,504				5	%			-70	%
Income tax on continuing operations			5,626				3,525				3,979				696				2,317				233	%			-59	%
Net Income from continuing operations			9,604				8,246				6,078				3,587				2,187				-39	%			-77	%
Net Income for the period			9,604				8,246				6,078				3,587				2,187				-39	%			-77	%
Net Income of the period attributable to parent company			9,604				8,245				6,078				3,587				2,187				-39	%			-77	%
Net income of the period attributable to non-controlling interests			-				1				-				-				-				-				-
Other Comprehensive Income			-997				1,230				960				-134				588				-				-
Foreign currency translation differences in financial statements conversion			-10				105				65				-25				-97				-				-
Profits or losses from financial assets measured at fair value  through other comprehensive income (FVOCI)  (IFRS 9(4.1.2)(a)			-987				1,125				895				-109				685				-				-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD			8,607				9,476				7,038				3,453				2,775				-20	%			-68	%
Total Comprehensive Income attributable to parent Company			8,607				9,476				7,038				3,453				2,775				-20	%			-68	%
Total Comprehensive Income attributable to non-controlling interests			-				-				-				-				-				-				-

 

 

QUARTERLY ANNUALIZED RATIOS		MACRO Consolidated
		1Q20				2Q20				3Q20				4Q20				1Q21
Profitability & performance
Net interest margin			25.2	%			19.8	%			17.1	%			16.3	%			17.4	%
Net interest margin adjusted (exc. FX)			24.6	%			19.1	%			16.2	%			15.4	%			16.5	%
Net fee income ratio			11.2	%			12.3	%			13.1	%			13.9	%			11.5	%
Efficiency ratio			31.1	%			36.3	%			36.8	%			38.8	%			35.7	%
Net fee income as % of A&G Expenses			36.0	%			33.9	%			35.6	%			35.7	%			32.2	%
Return on average assets			5.6	%			4.3	%			2.8	%			1.7	%			1.1	%
Return on average equity			23.4	%			20.5	%			14.7	%			8.8	%			5.4	%
Liquidity
Loans as a percentage of total deposits			72.3	%			56.0	%			48.2	%			52.7	%			58.0	%
Liquid assets as a percentage of total deposits			72.0	%			84.0	%			87.0	%			90.0	%			94.0	%
Capital
Total equity as a percentage of total assets			23.5	%			19.1	%			18.3	%			19.2	%			22.2	%
Regulatory capital as % of APR			32.0	%			32.2	%			34.8	%			34.2	%			37.7	%
Asset Quality
Allowances over total loans			2.5	%			2.5	%			2.9	%			3.5	%			3.7	%
Non-performing financing as a percentage of total financing			1.4	%			1.5	%			1.1	%			0.8	%			0.9	%
Coverage ratio w/allowances			173.5	%			210.7	%			303.0	%			479.3	%			387.8	%
Cost of Risk			1.6	%			4.1	%			3.0	%			3.4	%			0.0	%

 

ACCUMULATED ANNUALIZED RATIOS		MACRO Consolidated
		1Q20				2Q20				3Q20				4Q20				1Q21
Profitability & performance
Net interest margin			25.2	%			22.3	%			20.3	%			19.2	%			17.4	%
Net interest margin adjusted (exc. FX)			24.6	%			21.6	%			19.5	%			18.4	%			16.5	%
Net fee income ratio			11.2	%			11.7	%			12.2	%			12.6	%			11.5	%
Efficiency ratio			31.1	%			33.6	%			34.7	%			35.7	%			35.7	%
Net fee income as % of A&G Expenses			36.0	%			34.9	%			35.1	%			35.3	%			32.2	%
Return on average assets			5.6	%			4.9	%			4.1	%			3.5	%			1.1	%
Return on average equity			23.4	%			21.9	%			19.5	%			16.8	%			5.4	%
Liquidity
Loans as a percentage of total deposits			72.3	%			56.0	%			48.2	%			52.7	%			58.0	%
Liquid assets as a percentage of total deposits			72.0	%			84.0	%			87.0	%			90.0	%			94.0	%
Capital
Total equity as a percentage of total assets			23.5	%			19.1	%			18.3	%			19.2	%			22.2	%
Regulatory capital as % of APR			32.0	%			32.2	%			34.8	%			34.2	%			37.7	%
Asset Quality
Allowances over total loans			2.5	%			2.5	%			2.9	%			3.5	%			3.7	%
Non-performing financing as a percentage of total financing			1.4	%			1.5	%			1.1	%			0.8	%			0.9	%
Coverage ratio w/allowances			173.5	%			210.7	%			303.0	%			479.3	%			387.8	%
Cost of Risk			1.6	%			2.8	%			2.9	%			3.0	%			0.0	%

 

 

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: May 27, 2021

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