Banco Macro Announces Results for the First Quarter of 2024

Rhea-AI Summary

Banco Macro (NYSE: BMA; BYMA: BMA) reported its 1Q24 results, with net income at Ps.275.2 billion, a 61% drop from 4Q23 but a 626% increase from 1Q23. Operating income before G&A and personnel expenses was Ps.1.62 trillion, 19% lower QoQ, but 149% higher YoY.

After G&A and personnel expenses, operating income totaled Ps.1.25 trillion, a 20% decrease QoQ, but 211% higher YoY. Total financing decreased 10% QoQ and 8% YoY to Ps.2.5 trillion. Total deposits fell 1% QoQ and 11% YoY to Ps.5 trillion. Peso deposits increased 10% while USD deposits dropped 32%.

Banco Macro maintained strong solvency with Ps.2.6 trillion excess capital, a 46.5% Capital Adequacy Ratio, and a 44.5% Tier 1 Ratio. Non-performing to total financing ratio was 1.14%, with a coverage ratio of 222.7%.

Positive

• Net income increased 626% YoY to Ps.275.2 billion in 1Q24.
• Operating income before G&A and personnel expenses rose 149% YoY to Ps.1.62 trillion.
• Operating income after G&A and personnel expenses grew 211% YoY to Ps.1.25 trillion.
• Banco Macro's solvency remains strong with Ps.2.6 trillion in excess capital.
• Capital Adequacy Ratio stands at 46.5%, and Tier 1 Ratio is 44.5%.
• Non-performing to total financing ratio is low at 1.14%.
• Coverage ratio is robust at 222.7%.

Negative

• Net income fell 61% QoQ to Ps.275.2 billion.
• Operating income before G&A and personnel expenses decreased 19% QoQ.
• Operating income after G&A and personnel expenses dropped 20% QoQ.
• Total financing decreased 10% QoQ and 8% YoY to Ps.2.5 trillion.
• Total deposits fell 1% QoQ and 11% YoY to Ps.5 trillion.
• Private sector deposits decreased 6% QoQ.
• USD deposits decreased significantly by 32%.

Insights

Financial Analyst

Banco Macro's first-quarter results present a mixed financial picture for investors. The Ps.275.2 billion net income, despite being a 61% decrease QoQ, marks a significant 626% increase YoY. The sharp QoQ decline in net income warrants scrutiny, particularly given inflationary pressures in Argentina. Banco Macro's annualized ROAE at 37.4% and ROAA at 11.9% remain strong, suggesting efficient capital and asset use. However, the 19% QoQ drop in operating income before expenses indicates near-term challenges. The decline in total financing (10% QoQ) and deposits (1% QoQ) may raise concerns about the bank's growth strategy and its ability to attract new capital in a fluctuating economic climate.

The solvency ratio and capital adequacy metrics are robust, with an excess capital of Ps.2.6 trillion and a 46.5% capital adequacy ratio. These figures underscore the bank's ability to withstand financial shocks, a significant plus for long-term investors. Notably, the non-performing loan ratio at 1.14% and a coverage ratio of 222.7% suggest prudent risk management practices. However, the reduction in USD financing and deposits signals potential challenges in foreign currency operations, especially important in an economy with high inflation and currency volatility.

In summary, while the financial outlook shows resilience with strong capital adequacy, the QoQ declines in key metrics and the challenges in foreign currency financing highlight areas for cautious monitoring. Investors should weigh these factors against the overall economic backdrop in Argentina.

Market Research Analyst

Banco Macro's Q1 2024 performance reveals several market dynamics at play. The significant 626% YoY increase in net income is primarily due to inflation adjustments and prior year comparatives, rather than organic growth. The Argentine market's high inflation is a double-edged sword; it inflates nominal figures but complicates true performance assessment. The 37.4% ROAE remains robust, reflective of strong equity returns, yet the 20% QoQ decline in operating income after expenses points to operational cost pressures.

Sector-wise, the decline in private sector deposits (6% QoQ) signals a shift in consumer trust or liquidity needs, likely influenced by the economic volatility. Conversely, the 10% increase in peso deposits might indicate a preference for local currency holdings amidst currency instability. This fluctuation in deposits suggests a wary consumer base, balancing between domestic confidence and forex exposure.

Banco Macro's extensive branch network and digital customer base provide a competitive advantage. Serving 5.18 million retail customers indicates extensive market penetration, though the slight reduction in overall deposits despite this base could suggest heightened competition or economic strain on households and businesses.

Investors should consider the broader economic context, with inflationary pressures and currency volatility being critical variables. While the bank's capitalization remains commendable, shifts in deposit patterns and financing mix reflect underlying economic uncertainties that could influence Banco Macro's future performance.

BUENOS AIRES, Argentina, May 22, 2024 /PRNewswire/ -- 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, 2024 ("1Q24"). 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. For ease of comparison, figures of previous quarters of 2023 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2024

Summary

As of December 2023, Banco Macro consolidated includes Banco Macro + subsidiaries + Banco BMA (formerly Banco Itaú Argentina)

THE BANK'S NET INCOME totaled Ps.275.2 billion in 1Q24. This result was 61% lower than the Ps.679.3 billion posted in 4Q23 and 626% higher than the Ps.37.9 billion posted in 1Q23. In 1Q24 the annualized return on average equity ("ROAE") and the annualized return on average assets ("ROAA") were 37.4% and 11.9%, respectively. In 1Q24, OPERATING INCOME (before G&A and personnel expenses) totaled Ps.1.62 trillion, 19% or Ps.388 billion lower than in 4Q23 and 149% or Ps.969.3 billion higher than the same period of last year. In 1Q24, OPERATING INCOME (after G&A and personnel expenses) totaled Ps.1.25 trillion, 20% or Ps.322.7 billion lower than in 4Q23 and 211% or Ps.850.8 billion higher than the same period of last year. In 1Q24, BANCO MACRO'S TOTAL FINANCING decreased 10% or Ps.279.6 billion quarter over quarter ("QoQ") totaling Ps.2.5 trillion and decreased 8% or Ps.205.9 billion year over year ("YoY"). In 1Q24 peso financing decreased 20% while USD financing increased 75%. In 1Q24, BANCO MACRO'S TOTAL DEPOSITS decreased 1% or Ps.74.3 billion QoQ and 11% or Ps.644 billion YoY, totaling Ps.5 trillion and representing 76% of the Bank's total liabilities. Private sector deposits decreased 6% or Ps.291.2 billion QoQ. In 1Q24, Peso deposits increased, 10% while USD deposits decreased 32%.

Banco Macro continued showing a strong solvency ratio, with an EXCESS CAPITAL of Ps.2.6 trillion, 46.5% Capital Adequacy Ratio – Basel III and 44.5 % Tier 1 Ratio. In addition, the Bank's LIQUID ASSETS remained at an adequate level, reaching 124% of its total deposits in 1Q24. In 1Q24, the Bank's NON-PERFORMING TO TOTAL FINANCING RATIO was 1.14% and the COVERAGE RATIO reached 222.7%. As of 1Q24, through its 517 branches and 9.166 employees Banco Macro serves 5.18 million retail customers (2.19 million digital customers) across 23 of the 24 Provinces in Argentina and over 149,770 corporate customers.

1Q24  Earnings Release Conference Call
Friday, May 24, 2024

Time:
12:00 p.m. Eastern Time
01:00 p.m. Buenos Aires Time

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 05/24/2024 through 06/7/2024

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 

View original content:https://www.prnewswire.com/news-releases/banco-macro-announces-results-for-the-first-quarter-of-2024-302153472.html

SOURCE Banco Macro S.A.

FAQ

What were Banco Macro's net income results for 1Q24?

Banco Macro reported a net income of Ps.275.2 billion for 1Q24.

How did Banco Macro's net income in 1Q24 compare to 1Q23?

Net income increased by 626%, from Ps.37.9 billion in 1Q23 to Ps.275.2 billion in 1Q24.

How did Banco Macro's operating income before G&A and personnel expenses change in 1Q24?

Operating income before G&A and personnel expenses decreased by 19% QoQ but increased by 149% YoY to Ps.1.62 trillion.

What was the change in Banco Macro's total financing in 1Q24?

Total financing decreased by 10% QoQ and 8% YoY to Ps.2.5 trillion in 1Q24.

How did Banco Macro's total deposits perform in 1Q24?

Total deposits fell by 1% QoQ and 11% YoY to Ps.5 trillion in 1Q24.

What is Banco Macro's solvency ratio as of 1Q24?

Banco Macro reported a 46.5% Capital Adequacy Ratio and a 44.5% Tier 1 Ratio in 1Q24.

What is the non-performing to total financing ratio for Banco Macro in 1Q24?

The non-performing to total financing ratio for Banco Macro was 1.14% in 1Q24.

How did Banco Macro's USD deposits change in 1Q24?

USD deposits at Banco Macro decreased by 32% in 1Q24.