BMA

Business Context and Reporting Period

Company: Macro Bank Inc. (Banco Macro S.A.)
Filing Type: Form 6-K (Foreign Private Issuer)
Reporting Period: Nine months ended September 30, 2009
Filing Date: November 16, 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 and services to companies and individuals. It operates through subsidiaries including Banco del Tucumán S.A. and Macro Bank Limited.

Key Financial Metrics (Consolidated)

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

Material Changes vs. Prior Period

• Profitability: Net income increased by approximately 7.2% to Ps. 510.1 million, driven by a significant rise in the Gross Intermediation Margin (up 57.4%) and Service-Charge Income (up 20.0%).
• Asset Growth: Total assets grew by 16.7%, primarily due to an increase in Government and Private Securities (up 58.9%) and Deposits (up 17.1%).
• Loan Portfolio: Net loans decreased slightly by 3.3% to Ps. 10.9 billion, despite growth in personal loans and credit cards, offset by a reduction in loans to the non-financial government sector.
• Provisions: The provision for loan losses increased by 37.2% to Ps. 132.9 million, reflecting higher risk provisioning.
• Merger Impact: Comparative figures for 2008 have been restated to reflect the retroactive merger of Nuevo Banco Bisel S.A. (effective Jan 1, 2009).

Guidance, Outlook, Risks, and Unusual Items

• Merger Activity: The bank completed the merger with Nuevo Banco Bisel S.A. in August 2009. This transaction was accounted for retroactively to January 1, 2009.
• Capital Management: The bank executed two capital stock reductions in 2009 (April and September) totaling Ps. 90.6 million, related to the reacquisition of own shares due to market fluctuations.
• Derivatives: The bank maintains significant positions in derivative financial instruments, including forward foreign currency transactions (net asset position of Ps. 1.87 billion) and interest rate swaps, primarily for intermediation and hedging purposes.
• Legal and Regulatory Risks:
  • Court Orders (Amparos): The bank faces ongoing legal actions related to the "dedollarization" of deposits following the 2001 economic crisis. The bank has capitalized differences related to court orders as intangible assets and recorded provisions for potential additional liabilities.
  • Tax Disputes: Several tax claims are pending with federal and provincial authorities regarding turnover tax and income tax assessments for prior years. Management believes no significant additional effects beyond recognized amounts are expected.
• Accounting Standards: Financial statements are prepared under BCRA rules, which differ from Argentine professional accounting standards (FACPCE) and international standards in valuation methods for government securities, goodwill, and deferred taxes. Note 5 details significant differences that would alter asset and liability values if professional standards were applied.

Key Facts for Investor Verification

• Accounting Basis: Verify the impact of BCRA-specific accounting rules versus IFRS/GAAP, particularly regarding the valuation of government securities and the treatment of goodwill from acquisitions.
• Merger Integration: Confirm the full integration and financial impact of the Nuevo Banco Bisel S.A. merger on the loan portfolio and deposit base.
• Legal Contingencies: Monitor the status of "amparo" lawsuits regarding deposit dedollarization and potential future liabilities beyond current provisions.
• Capital Structure: Review the implications of recent capital stock reductions and share buybacks on future dividend capacity and capital adequacy ratios.
• Derivative Exposure: Assess the risk profile associated with the large notional values of forward foreign currency transactions and interest rate swaps.