BMA

Business Context and Reporting Period

Company: Macro Bank Inc. (Banco Macro S.A.)
Filing Type: Form 6-K (Foreign Private Issuer)
Reporting Period: Three months ended March 31, 2009
Filing Date: June 2, 2009
Business Overview: A commercial bank authorized by the Central Bank of Argentina (BCRA), operating primarily in regional areas outside Buenos Aires. The bank offers traditional banking products to companies and individuals and operates through subsidiaries including Nuevo Banco Bisel S.A. and Banco del Tucumán S.A.

Key Financial Metrics (Consolidated)

All figures in thousands of Argentine Pesos (ARS), unless otherwise noted.

Material Changes vs. Prior Period

• Profitability: Net income increased by approximately 2.9% to 155.96 million ARS, driven by a significant 40% increase in Gross Intermediation Margin (from 354.9 million to 496.7 million ARS).
• Asset Growth: Total assets grew by 10.4% to 24.76 billion ARS, primarily due to an increase in Government and Private Securities (up 36.5%) and Deposits (up 9.2%).
• Loan Portfolio: Net loans decreased slightly by 3.8% to 10.85 billion ARS, reflecting a reduction in loans to the non-financial government sector.
• Cash Flow: Operating cash flow turned positive at 379.6 million ARS, a stark contrast to the negative 546.5 million ARS in the prior year period.
• Income Tax: Income tax expense more than quadrupled to 155.2 million ARS compared to 38.3 million ARS in Q1 2008.

Guidance, Outlook, Risks, and Unusual Items

• Merger Activity: On March 19, 2009, the Bank entered a preliminary merger agreement to merge Nuevo Banco Bisel S.A. into Banco Macro S.A., retroactive to January 1, 2009. Shareholder meetings were scheduled for May 27, 2009.
• Share Repurchase: The Bank authorized the repurchase of its own shares. As of March 31, 2009, it had acquired 89.57 million shares. A capital reduction was approved by shareholders in April 2009.
• Macroeconomic Environment: The filing highlights volatility in global financial markets and economic deceleration in Argentina. The Bank exchanged guaranteed loans for new Argentine Government Bonds (Bonar XIV) in early 2009.
• Legal Contingencies (Amparos): Significant legal actions regarding the "dedollarization" of deposits (recursos de amparo) continue. The Bank has capitalized certain differences related to court orders as intangible assets and recorded provisions for additional payables. Management believes no significant effects beyond those recognized are expected.
• Accounting Standards: Financial statements are prepared under BCRA rules, which differ from Argentine professional accounting standards and US GAAP. Notable differences include the valuation of government securities, goodwill treatment, and deferred tax recognition. If professional standards were applied, shareholders' equity would have decreased by approximately 450.8 million ARS.

Investor Verification Checklist

• Merger Approval: Verify the final approval status of the Nuevo Banco Bisel S.A. merger and the exchange ratio (0.337614 shares of Macro per share of Bisel).
• Capital Reduction: Confirm the registration of the capital reduction approved in April 2009 with the CNV (Comisión Nacional de Valores).
• Accounting Adjustments: Review Note 5 to understand the potential impact on equity if professional accounting standards (rather than BCRA rules) were applied, specifically regarding government securities valuation and goodwill.
• Legal Provisions: Monitor the status of "amparo" lawsuits regarding deposit dedollarization and the adequacy of the recorded provisions (approx. 19.5 million ARS consolidated).
• Dividend Restrictions: Note that dividend distribution is subject to BCRA authorization and specific reserve requirements, including a special reserve for subordinated bond interest payments.