BMA

Business Context and Reporting Period

Company: Macro Bank Inc. (Reporting for Banco Macro S.A. and consolidated subsidiaries).

Filing Date: November 28, 2006.

Reporting Periods: Nine months ended September 30, 2006, and six months ended June 30, 2006, compared to the same periods in 2005.

Context: The reporting period includes the consolidation of Banco del Tucuman S.A. (acquired May 2006) and Nuevo Banco Bisel S.A. (acquired August 2006). Comparisons are provided on both a consolidated basis and a stand-alone basis (excluding acquisitions) to ensure period-to-period comparability.

Key Financial Metrics (Nine Months Ended Sept 30, 2006)

Note: The filing does not provide specific data on total debt, liquidity ratios, or cash flow statements.

Material Changes vs. Prior Period

• Revenue Growth: Consolidated financial income increased 49% (Ps.258 million) year-over-year. Stand-alone financial income grew 36%. Drivers included a 145% increase in income from government/private securities and an 87% increase in interest on loans.
• Loan Portfolio: Loans to the private sector grew 127% organically. Medium-term structured loans for corporate customers ("Other Loans") grew 101%, and overdrafts grew 97%.
• Expense Management: Provisions for loan losses decreased 26% (consolidated) due to economic growth and improved debtor profiles. However, administrative expenses rose 40% (consolidated), primarily due to a 47% increase in personnel costs from acquisitions and salary adjustments.
• Interest Rates: Interest on deposits increased 112% (consolidated) due to higher market rates (CD rates rose from 5% to over 8%) and a 51% growth in deposit volume.
• Indexation Impact: Income and expenses related to CER (benchmark stabilization coefficient) indexation fell significantly (60% and 54% respectively) due to lower inflation and a shift in asset/liability composition.

Guidance, Outlook, and Risks

• Management Commentary: The bank highlights high rates of organic growth driven by corporate lending and deposit expansion. The integration of acquired banks (Banco del Tucuman, Nuevo Banco Bisel) is a primary driver of scale and expense increases.
• Unusual Items:
  • Gain: One-time gain of Ps.8 million from the sale of an interest in the Puerto Madero Siete trust.
  • Loss: Non-recurring loss of Ps.13 million related to the offering of American Depositary Shares (ADS).
  • Comparison Note: 2005 results included a Ps.20 million non-recurring gain from Nuevo Banco Suquia regarding a loan provision reversal, which distorts year-over-year "Net Other Income" comparisons.
• Taxation: Income tax accrued increased 307% to Ps.47 million due to a new decree (1,035/06) requiring accrual basis treatment for pesification and CER-adjustments on guaranteed loans, and the utilization of prior net operating losses.
• Risks/Contingencies: The filing notes sensitivity to inflation rates (affecting CER indexation) and foreign exchange fluctuations (long position in U.S. dollars contributed to "Other" income). No specific forward-looking guidance or quantitative outlook was provided in this text.

Investor Verification Checklist

• Acquisition Integration: Verify the full financial impact and synergy realization of the Banco del Tucuman and Nuevo Banco Bisel acquisitions beyond the initial consolidation period.
• Asset Quality: Confirm the sustainability of the reduced provision for loan losses (down 26%) given the rapid 127% expansion in private sector lending.
• Interest Rate Sensitivity: Assess the impact of rising deposit costs (CD rates >8%) on future net interest margins if loan yields do not keep pace.
• Regulatory Changes: Review the long-term tax implications of Decree 1,035/06 regarding guaranteed loans and CER adjustments.
• Cash Flow: Obtain detailed cash flow statements, as this filing focuses on income statement components and does not explicitly detail liquidity or operating cash flows.