Business Context and Reporting Period
This Form 6-K filing by Macro Bank Inc. (Banco Macro S.A.) is dated September 29, 2020. The document serves as a translation of a submission to the Argentine Securities Commission (CNV) and the National Administration of Social Security (ANSES). It addresses regulatory inquiries regarding a Special Shareholders' Meeting scheduled for October 21, 2020, specifically concerning the evaluation of a supplementary dividend and the status of the Optional Reserve Fund for Future Profit Distributions.
Key Financial Metrics and Capital Structure
The filing does not provide standard operating financial metrics such as revenue, net profit, cash flow, margins, or debt levels for the reporting period. Instead, it focuses on capital reserves and dividend history:
- Approved Dividend (April 2020): AR $20 per share, pending distribution.
- Reserve Separation for Dividend: AR $12,788,268,160 was separated from the Optional Reserve Fund to fund the April 2020 dividend.
- Optional Reserve Fund History: Created in 2012 with an initial balance of AR $2,443,140,742.68. It has been increased annually through 2020, with the 2020 addition being AR $32,428,893,419.28.
- Inflation Adjustment: As of June 30, 2020, the Optional Reserve Fund increased by AR $21,190,324,840.41 due to the application of the inflation accounting method.
Material Changes and Regulatory Constraints
The primary material change discussed is the regulatory suspension of profit distributions. The Central Bank of Argentina (BCRA) issued Communiqué "A" 6939 on March 19, 2020, suspending profit distributions until June 30, 2020. This suspension was extended by Communiqué "A" 7035 on June 4, 2020, until December 31, 2020. Consequently, the dividend approved on April 30, 2020, remains unpaid as the required prior authorization from the BCRA has not been granted. The Board is proposing a supplementary dividend to preserve the value of the payment against inflation, as the original authorization is unlikely to be obtained before the suspension deadline.
Outlook, Risks, and Management Commentary
Management Commentary: The Board of Directors, in a meeting on August 31, 2020, called for a Special Shareholders' Meeting to evaluate a supplementary dividend. This action is intended to protect shareholder value given the delay in BCRA authorization and the ongoing suspension of distributions.
Risks and Contingencies:
- Regulatory Risk: The ability to distribute profits is entirely contingent on BCRA authorization, which is currently suspended until the end of 2020.
- Inflation Risk: The filing highlights the application of inflation accounting methods (effective January 1, 2020) to adjust financial statements and reserve funds to constant currency values.
- Liquidity Constraint: While the funds are separated in the Optional Reserve Fund, they cannot be distributed without regulatory approval.
Investor Verification Checklist
- Verify the status of the BCRA authorization request submitted on March 13, 2020, for the April 2020 dividend.
- Confirm the outcome of the Special Shareholders' Meeting scheduled for October 21, 2020, regarding the supplementary dividend proposal.
- Monitor BCRA Communiqué "A" 7035 for any extensions or modifications to the profit distribution suspension beyond December 31, 2020.
- Review the impact of the inflation accounting method on the bank's reported capital reserves and future dividend capacity.