Business Context and Reporting Period
Company: Macro Bank Inc. (Banco Macro SA)
Filing Type: Form 6-K (Foreign Private Issuer)
Reporting Period: Condensed interim financial statements for the nine months ended September 30, 2023.
Submission Date: February 7, 2024
Accounting Basis: Prepared in accordance with BCRA regulations and IFRS, restated for hyperinflation (IAS 29). Figures are in thousands of Argentine pesos in constant currency as of September 30, 2023.
Key Financial Metrics
| Metric | 9 Months Ended 09/30/2023 | 9 Months Ended 09/30/2022 |
|---|---|---|
| Net Interest Income | 421,202,857 | 450,432,127 |
| Net Commissions Income | 107,769,642 | 103,451,519 |
| Net Operating Income | 992,584,113 | 745,416,344 |
| Operating Income | 641,841,317 | 432,719,913 |
| Net Income (Consolidated) | 83,365,561 | 53,695,569 |
| Net Income (Attributable to Controlling Interest) | 83,275,349 | 53,701,040 |
| Total Assets (09/30/2023) | 3,708,274,221 | 4,246,776,220 (12/31/2022) |
| Total Deposits (09/30/2023) | 2,009,154,591 | 2,631,606,153 (12/31/2022) |
| Shareholders' Equity (09/30/2023) | 1,007,735,565 | 1,041,137,966 (12/31/2022) |
Note: Comparisons between periods are impacted by hyperinflation restatement and significant monetary effects.
Material Changes vs. Prior Period
- Profitability: Net income attributable to controlling interest increased by approximately 55% year-over-year (from 53.7B to 83.3B pesos), driven largely by a significant gain in "Differences in quoted prices of gold and foreign currency" (401.5B pesos for 9M 2023 vs. 64.4B pesos for 9M 2022).
- Monetary Position: The bank recorded a "Loss on net monetary position" of 510.9B pesos for the nine-month period, reflecting the impact of holding net monetary liabilities in a hyperinflationary environment.
- Asset Composition: Total assets decreased from 4.25T (12/31/2022) to 3.71T (09/30/2023) in constant currency terms. This includes a reduction in "Other debt securities" (from 1.50T to 0.60T) and "Loans and other financing" (from 1.22T to 1.15T), partially offset by an increase in "Debt securities at fair value through profit or loss" (from 0.43T to 0.81T).
- Deposits: Total deposits declined from 2.63T to 2.01T between year-end 2022 and Q3 2023.
Guidance, Outlook, Risks, and Unusual Items
- Business Combinations:
- Macro Agro SAU: Acquired 100% of the capital stock on May 18, 2023, for USD 5.22 million. The transaction is being paid via dividends from the acquired entity.
- Banco Itaú Argentina: On November 2, 2023, the Central Bank of Argentina authorized the acquisition of 100% of Banco Itaú Argentina SA, Itaú Asset Management SA, and Itaú Valores SA for USD 50 million. This transaction is pending closing.
- Macroeconomic Environment: The filing highlights significant volatility in the Argentine economy, including a widening gap between official and alternative exchange rates (approx. 185% as of issuance) and high inflation (103.15% for the nine months ended Sept 30, 2023). The bank notes the recent change in government following the November 2023 elections.
- Regulatory Risks: The bank is subject to ongoing summary proceedings and penalties from the BCRA and the Financial Information Unit (UIF) regarding anti-money laundering compliance and foreign exchange regulations. Management believes no further significant accounting effects will arise beyond those disclosed.
- Dividend Restrictions: Dividend distributions are subject to BCRA authorization. In 2023, the BCRA allowed distribution of up to 40% of earnings in six installments. The bank paid all installments of the dividend approved in April 2023.
Investor Verification Checklist
- Hyperinflation Restatement: Verify the impact of IAS 29 restatement on comparability between periods, specifically the "Loss on net monetary position" and "Differences in quoted prices of gold and foreign currency."
- Itaú Acquisition: Monitor the closing status and integration costs of the authorized acquisition of Banco Itaú Argentina assets.
- Regulatory Proceedings: Review the status of pending BCRA and UIF summary proceedings (e.g., File No. 1496, File No. 7642) for potential future penalties.
- Government Securities: Assess the exposure to Argentine government debt swaps and the associated put options with the Central Bank of Argentina.
- Deposit Base: Analyze the trend in deposit outflows (down ~24% from year-end 2022) and its impact on liquidity and funding costs.