Business Context and Reporting Period
This Form 6-K filing by Macro Bank Inc. (Banco Macro S.A.) dated April 12, 2019, serves as a response to an information request from the Fondo de Garantía de Sustentabilidad (ANSES) regarding the General and Special Shareholders' Meeting scheduled for April 30, 2019. The filing details corporate governance, financial statement compliance, and specific agenda items for the upcoming meeting, including a proposed merger with Banco del Tucumán S.A.
Key Financial Metrics and Capital Structure
The filing provides specific data regarding capital stock, retained earnings, and proposed distributions as of March 31, 2019, and for the fiscal year ended December 31, 2018.
- Capital Stock: Total capital stock is AR$ 669,663,021, comprised of 11,235,670 Class A shares and 658,427,351 Class B shares.
- Shareholder Structure:
- Other Shareholders (Foreign Stock Exchange): 29.04%
- ANSES-F.G.S.: 27.49%
- Delfin Jorge Ezequiel Carballo: 16.68%
- Jorge Horacio Brito: 16.59%
- Other Shareholders (Local Stock Exchange): 5.68%
- Repurchased Stock: 4.52%
- Retained Earnings (FY 2018): Total retained earnings to be evaluated are AR$ 19,204,911,966.83. A discrepancy of approximately AR$ 210,927,000 exists between this figure and the Consolidated Statement of Changes in Shareholders' Equity due to the elimination of goodwill in consolidated IFRS reporting.
- Proposed Earnings Application:
- Legal Reserve Fund: AR$ 3,145,848,599.32
- Statutory Reserve Fund (Special IFRS): AR$ 3,475,668,970.21
- Optional Reserve Fund for Future Profit Distributions: AR$ 12,583,394,397.30
- Proposed Cash Dividend: Separation of AR$ 6,393,977,460 from the Optional Reserve Fund for cash dividend payment.
- Compensation (FY 2018):
- Board of Directors Fees: AR$ 659,862,001
- Supervisory Committee Fees: AR$ 1,305,540
- Independent Auditor Remuneration: AR$ 24,716,000 (plus VAT)
The filing does not provide specific values for revenue, net profit, operating cash flow, or debt levels for the reporting period.
Material Changes and Corporate Actions
Several significant corporate actions and structural changes are proposed for shareholder approval:
- Merger with Banco del Tucumán S.A.: A preliminary merger agreement dated March 8, 2019, proposes merging Banco del Tucumán S.A. into Banco Macro S.A. This will result in a capital increase from AR$ 669,663,021 to AR$ 669,678,683 via the issuance of 15,662 new Class B shares to minority shareholders of the merged entity. The filing states this will not materially change the participating interest of existing Banco Macro shareholders.
- Capital Reduction: A proposal to reduce capital by AR$ 30,265,275 through the cancellation of 30,265,275 Class B shares previously repurchased by the bank. This action aims to stabilize share prices following market volatility in 2018.
- Financial Reporting Standards: The bank confirms that financial statements for the fiscal year ended December 31, 2018, are not expressed in uniform currency. The application of the uniform currency reformulation method is mandated to begin for fiscal years starting January 1, 2020, per BCRA Communiqué "A" 6651.
Guidance, Outlook, and Risks
Management Commentary and Outlook:
- Dividend Policy: The Board deems the creation of an Optional Reserve Fund for Future Profit Distributions reasonable to maintain solvency and liquidity margins required by the Central Bank of the Republic of Argentina (BCRA). The separation of funds for actual dividend payment will be evaluated by the Shareholders' Meeting in due time.
- Share Repurchase Rationale: The decision to repurchase and cancel shares was driven by a significant decline in listing prices due to negative macroeconomic circumstances in 2018. The Board views capital reduction as the only permanent solution to reduce market supply and stabilize prices.
Risks and Contingencies:
- Regulatory Compliance: Profit distributions are subject to strict limits under BCRA regulations to ensure solvency, including a capital conservation margin of 2.5% of risk-weighted assets and an additional 1% for systemically relevant entities like Banco Macro.
- Merger Approval: The merger is contingent upon administrative approval and registration by competent authorities. The Board is seeking authorization to execute the Final Agreement and handle necessary filings.
Key Facts for Investor Verification
- Verify the final approval of the merger with Banco del Tucumán S.A. and the exact exchange ratio for minority shareholders.
- Confirm the timing and execution of the proposed cash dividend of AR$ 6,393,977,460.
- Monitor the impact of the capital reduction (cancellation of 30.2M shares) on the share price and earnings per share.
- Review the upcoming transition to uniform currency financial reporting starting January 1, 2020, and its effect on reported figures.
- Check the status of the independent auditor's appointment for the 2019 fiscal year (Pistrelli, Henry Martin y Asociados S.R.L. proposed).