Business Context and Reporting Period
Company: Macro Bank Inc. (Banco Macro S.A.)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Nine months ended September 30, 2011 (Interim)
Business Overview: A commercial bank operating in Argentina, offering traditional banking products to companies and individuals. The bank operates through subsidiaries including Banco del Tucumán S.A. and Banco Privado de Inversiones S.A. It maintains exclusive financial agency agreements with several provincial governments (Misiones, Salta, Jujuy, Tucumán).
Key Financial Metrics (Consolidated)
Figures in thousands of Argentine Pesos (ARS), unless otherwise noted.
| Metric | Sept 30, 2011 | Dec 31, 2010 |
|---|---|---|
| Total Assets | 38,575,336 | 33,524,407 |
| Total Liabilities | 34,117,061 | 29,371,565 |
| Shareholders' Equity | 4,458,275 | 4,152,842 |
| Net Income (9-month) | 829,668 | 735,991 |
| Gross Intermediation Margin | 2,077,603 | 1,750,409 |
| Provision for Loan Losses | 164,264 | 86,166 |
| Cash and Cash Equivalents | 6,602,032 | 5,990,480 |
| Corporate Bonds Outstanding | 1,305,383 | 1,234,934 |
Material Changes vs. Prior Period
- Asset Growth: Total assets increased by approximately 15% (ARS 5.05 billion) compared to year-end 2010, driven primarily by growth in loans to the non-financial private sector and deposits.
- Profitability: Net income for the nine-month period increased by 12.7% to ARS 829.7 million. This was supported by a 18.7% increase in Gross Intermediation Margin.
- Loan Portfolio Expansion: Loans to the non-financial private sector grew significantly, with personal loans increasing from ARS 5.8 billion to ARS 8.4 billion and credit card loans rising from ARS 1.55 billion to ARS 2.4 billion.
- Provisions: The provision for loan losses more than doubled to ARS 164.3 million, reflecting increased risk management or portfolio expansion.
- Dividends: The bank paid cash dividends of ARS 505.3 million during the period.
Guidance, Outlook, Risks, and Contingencies
- Accounting Standards: Financial statements are prepared under Central Bank of Argentina (BCRA) rules, which differ from Argentine professional accounting standards and US GAAP. If professional standards were applied, shareholders' equity would decrease by approximately ARS 284.5 million.
- Legal and Regulatory Risks: The bank faces ongoing legal actions related to the 2001-2002 economic crisis ("recursos de amparo"). Courts have ordered reimbursement of dollar-denominated deposits at specific exchange rates. The bank has capitalized differences related to these court orders in intangible assets and recorded provisions for additional payables.
- Tax Claims: The Federal Public Revenue Agency (AFIP) has challenged income tax returns for prior years regarding the deductibility of credits with collateral security. Management believes there are no additional significant effects beyond those already recognized.
- Share Repurchase: The Board authorized the repurchase of up to 20 million common shares. As of September 30, 2011, the bank had acquired 803,110 shares.
- Derivatives: The bank maintains significant positions in derivative instruments, including forward foreign currency transactions and interest rate swaps, primarily for hedging and intermediation purposes.
Key Facts for Investor Verification
- Currency Risk: Verify the impact of Argentine peso volatility and exchange rate controls on the bank's foreign currency assets and liabilities.
- Government Exposure: Assess the concentration of deposits and loans related to provincial governments (Misiones, Salta, Jujuy, Tucumán) and the associated sovereign risk.
- Accounting Adjustments: Review Note 5 to understand the material differences between BCRA accounting rules and professional accounting standards, specifically regarding the valuation of government securities and goodwill.
- Legal Provisions: Monitor the status of provisions related to court-ordered deposit dollarization and potential future liabilities from the 2001 crisis.
- Capital Adequacy: Confirm compliance with BCRA minimum capital requirements, noting the bank's issuance of subordinated corporate bonds to support computable equity.