Banco Macro Announces Results for the Fourth Quarter of 2023

Rhea-AI Summary

Banco Macro S.A. announces strong financial results for the fourth quarter of 2023 with significant increases in net income, operating income, and total financing. The bank shows robust solvency ratios and continues to serve a large customer base.

Positive

• Banco Macro's net income in 4Q23 was Ps.460 billion, a substantial increase from previous quarters and FY2022.
• Operating income before and after expenses saw significant growth in 4Q23 compared to previous periods.
• Total financing increased quarter over quarter in 4Q23, while total deposits also showed positive growth.
• The bank maintained a strong solvency ratio with excess capital and adequate liquid assets in 4Q23.
• Banco Macro serves a large customer base through its branches and digital channels across Argentina.
• The non-performing to total financing ratio and coverage ratio were favorable in 4Q23.

Negative

• None.

Insights

Financial Analyst

The reported net income of Banco Macro S.A. for 4Q23 represents an extraordinary increase compared to the previous quarter and year-over-year figures. A 3894% surge from 3Q23 and a 789% rise from 4Q22 are indicators of significant earnings growth, which may reflect both operational efficiency and possibly unique financial events. The full-year net income growth of 338% also suggests a robust annual performance.

Investors should consider the context of Argentine pesos and the impact of inflation adjustments when interpreting these results. The application of IAS 29 for hyperinflationary economies means that the financials are restated to maintain the relevance and comparability of financial statements. The substantial increase in operating income, both before and after general and administrative (G&A) and personnel expenses, indicates a strong operational performance.

However, the decrease in total financing YoY and the drop in deposits in both peso and USD terms could signal a contraction in the bank's funding base, which may affect future lending capacity and interest income. The increase in private sector deposits QoQ is a positive sign but needs to be viewed in the context of the overall annual decrease.

Banking Sector Analyst

The Capital Adequacy Ratio and Tier 1 Ratio reported by Banco Macro far exceed the Basel III minimum requirements of 8% and 4.5% respectively, demonstrating a very strong capital position. This level of excess capital provides a buffer against potential loan losses and indicates that the bank is well-capitalized to withstand financial shocks.

The bank's liquidity position, with liquid assets covering 118% of its total deposits, is also a testament to its risk management and ability to meet short-term obligations. The Non-Performing to Total Financing Ratio of 1.29% is within a manageable range and a Coverage Ratio of 200.91% shows that the bank has set aside a substantial provision for potential loan losses, which is reassuring for stakeholders.

It is important for investors to monitor these ratios in conjunction with the bank's ability to grow its loan book and deposit base, especially in a volatile economic environment such as Argentina's. The bank's digital customer growth is also a positive trend, enhancing its operational efficiency and customer reach.

Economist

The financial performance of Banco Macro must be evaluated in the context of Argentina's economic environment, characterized by high inflation and economic volatility. The use of IAS 29 indicates that the bank operates in a hyperinflationary economy, which can distort financial outcomes and affect the real value of financial indicators.

While the bank's profitability ratios, such as ROAE and ROAA, appear robust, it is crucial to assess whether these are sustainable given the economic challenges. The bank's ability to sustain its profitability amidst potential monetary policy changes, currency fluctuations and inflationary pressures will be key to its long-term success.

The contraction in the bank's financing activities and the decrease in deposits in both local and foreign currency could be reflective of broader economic trends, such as reduced savings rates or capital flight, which are common in economies facing instability. The bank's strategic response to these macroeconomic challenges will be critical for its future growth trajectory.

BUENOS AIRES, Argentina, Feb. 28, 2024 /PRNewswire/ -- Banco Macro S.A. (NYSE: BMA; BYMA: BMA) ("Banco Macro" or "BMA" or the "Bank") announced today its results for the fourth quarter ended December 31, 2023 ("4Q23").  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 2022 and 2023 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through December 31, 2023.

• THE BANK'S NET INCOME totaled Ps.460 billion in 4Q23. This result was 3894% higher than the Ps.11.5 billion posted in 3Q23 and 789% higher than the Ps.51.7 billion posted in 4Q22. In FY203 net income totaled Ps.588 billion, 338% higher than in FY2022. In 4Q23, the accumulated annualized return on average equity ("ROAE") and the accumulated annualized return on average assets ("ROAA") were 33.2% and 8.7%, respectively.
• In 4Q23, OPERATING INCOME (before G&A and personnel expenses) totaled Ps.1.3 trillion, 142% or Ps.778 billion higher than in 3Q23 and 224% or Ps.915.5 billion higher than the same period of last year.
• In 4Q23, OPERATING INCOME (after G&A and personnel expenses) totaled Ps.1 trillion, 189% or Ps.679 billion higher than in 3Q23 and 327% or Ps.796 billion higher than the same period of last year.
• In 4Q23, BANCO MACRO'S TOTAL FINANCING increased 4% or Ps.66 billion quarter over quarter ("QoQ") totaling Ps.1.8 trillion and decreased 2% or Ps.30.4 billion year over year ("YoY"). In FY203 both peso an USD financing decreased 6% and 78% respectively.
• In 4Q23, BANCO MACRO'S TOTAL DEPOSITS increased 9% or Ps.290.4 billion QoQ and decreased 16% or Ps.663.7 billion YoY, totaling Ps.3.37 trillion and representing 72% of the Bank's total liabilities. Private sector deposits increased 13% or Ps.360.8 billion QoQ. In FY2023, both Peso and USD deposits decreased, 33% and 58% respectively.
• Banco Macro continued showing a strong solvency ratio, with an EXCESS CAPITAL of Ps.1.35 trillion, 35.4% Capital Adequacy Ratio – Basel III and 32.8 % Tier 1 Ratio. In addition, the Bank's LIQUID ASSETS remained at an adequate level, reaching 118% of its total deposits in 4Q23.
• In 4Q23, the Bank's NON-PERFORMING TO TOTAL FINANCING RATIO was 1.29% and the COVERAGE RATIO reached 200.91%.
• As of 4Q23, through its 519 branches and 9.192 employees Banco Macro serves 4.96 million retail customers (2.1 million digital customers) across 23 of the 24 Provinces in Argentina and over 139,356 corporate customers.

 

4Q23  Earnings Release Conference Call
Thursday, February 29, 2024

Time:
11:00 a.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 02/29/2024 through 03/14/2024

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-fourth-quarter-of-2023-302074855.html

SOURCE Banco Macro S.A.

FAQ

What was Banco Macro's net income in the fourth quarter of 2023?

Banco Macro's net income in 4Q23 was Ps.460 billion, showing significant growth.

How did Banco Macro's operating income in 4Q23 compare to previous quarters?

Operating income before and after expenses saw substantial growth in 4Q23 compared to previous periods.

Did Banco Macro's total financing increase or decrease in 4Q23?

Total financing increased quarter over quarter in 4Q23, showing positive growth.

What is Banco Macro's solvency ratio in 4Q23?

Banco Macro maintained a strong solvency ratio with excess capital and adequate liquid assets in 4Q23.

How many retail customers does Banco Macro serve?

Banco Macro serves 4.96 million retail customers, including 2.1 million digital customers.

What was Banco Macro's non-performing to total financing ratio in 4Q23?

In 4Q23, the bank's non-performing to total financing ratio was 1.29%.