Business Context and Reporting Period
This Form 6-K, filed on April 11, 2019, by Macro Bank Inc. (Banco Macro S.A.), discloses a Merger Prospectus regarding the absorption of Banco del Tucumán S.A. (the non-surviving company) by Banco Macro S.A. (the surviving company). The transaction is based on a Preliminary Merger Agreement executed on March 8, 2019, with a retroactive effective date of January 1, 2019. The filing provides financial data as of December 31, 2018, and outlines the strategic rationale, including economies of scale and the elimination of duplicate management structures.
Key Financial Metrics
The filing presents special consolidated financial statements of merger as of December 31, 2018. Key figures (in thousands of ARS unless noted) include:
- Shareholders’ Equity: Banco Macro (pre-merger) reported ARS 54,846,570; Banco del Tucumán reported ARS 2,446,257. The consolidated post-merger equity is ARS 54,636,979.
- Total Assets: The consolidated post-merger total assets are ARS 341,637,487.
- Deposits: Consolidated deposits total ARS 237,557,534.
- Loans and Financing: Consolidated loans and other financing amount to ARS 178,652,538.
- Debt Structure:
- Short-term debt: ARS 18,074,309.
- Long-term debt: ARS 21,591,291.
- Outstanding Corporate Bonds include USD 400 million in Subordinated Resettable Bonds (Class A) and ARS 3.24 billion in Non-subordinated Bonds (Class B and C).
- Key Ratios (Post-Merger):
- Assets/Equity: 6.3
- Liquidity of Shareholders’ Equity: 74%
- Allowances/Irregular Portfolio: 118%
Material Changes and Merger Mechanics
The merger results in the dissolution of Banco del Tucumán without liquidation. Banco Macro, which already held 99.945% of Banco del Tucumán, will issue 15,662 new Class B common shares to the minority shareholders of Banco del Tucumán. The exchange ratio is set at 0.65258 common shares of Banco Macro for each nominal value ARS 1 of common share of Banco del Tucumán. The capital stock of Banco Macro will increase from ARS 669,663,021 to ARS 669,678,683. The transaction eliminates intercompany balances and goodwill adjustments totaling ARS 2,960,093 in the consolidation process.
Outlook, Risks, and Management Commentary
Management Commentary: The merger aims to integrate operations, reduce fixed costs, and enhance resource allocation efficiency. Banco Macro plans to continue its focus on retail and corporate banking, emphasizing customer segmentation and financial inclusion. The bank intends to maintain its leadership in consumer loans and expand its salary plan portfolio.
Risks and Contingencies: The merger is subject to approval by the Argentine Central Bank (BCRA), the Argentine Securities Exchange Commission (CNV), and other applicable entities. The filing notes that the special consolidated financial statements do not reflect actual historical operations on a consolidated basis but rather a pro forma view. Regulatory compliance regarding liquidity, solvency, and credit risk concentration is confirmed as met on a consolidated basis as of December 31, 2018.
Investor Verification Checklist
- Confirm receipt of regulatory approvals from the BCRA and CNV for the merger to become effective.
- Verify the final exchange ratio and the issuance of 15,662 new Class B shares to minority shareholders.
- Review the impact of the merger on the bank's capital adequacy ratios and liquidity positions under BCRA regulations.
- Monitor the integration of Banco del Tucumán's loan portfolio, particularly regarding the 118% coverage of irregular portfolios.
- Check for any updates on the outstanding corporate bond issuances (Class A, B, and C) and their redemption terms.