BMA

Business Context and Reporting Period

This Form 6-K filing by Macro Bank Inc. (Banco Macro S.A.) reports the audited financial statements for the fiscal year ended December 31, 2010. The bank operates as a commercial bank in Argentina, with a strategy focused on regional areas outside Buenos Aires. The financial statements are prepared in accordance with the accounting standards of the Central Bank of Argentina (BCRA), which differ in certain valuation and disclosure aspects from professional accounting standards effective in Argentina and U.S. GAAP.

Key Financial Metrics (Year Ended Dec 31, 2010)

Note: All figures are in thousands of Argentine Pesos. The filing includes both stand-alone and consolidated figures; the table above reflects stand-alone data unless otherwise noted in the text.

Material Changes vs. Prior Period

• Asset Growth: Total assets increased by approximately 25% (Ps. 6.1 billion) compared to 2009, driven primarily by a 45% increase in the loan portfolio.
• Profitability: Net income rose 34% to Ps. 1.01 billion. This increase occurred despite a decrease in Net Income Before Tax (Ps. 1.33 billion in 2010 vs. Ps. 1.37 billion in 2009), largely due to a significant reduction in income tax expense (Ps. 318 million in 2010 vs. Ps. 614 million in 2009).
• Loan Portfolio Expansion: Loans to the non-financial private sector grew significantly, with personal loans increasing from Ps. 3.4 billion to Ps. 4.9 billion and credit card loans rising from Ps. 893 million to Ps. 1.47 billion.
• Deposit Growth: Total deposits increased by Ps. 4.4 billion (26%), with time deposits and checking accounts showing substantial growth.
• Acquisition Activity: In September 2010, the bank acquired 100% of Banco Privado de Inversiones S.A. for USD 23.3 million, booking Ps. 56.2 million in goodwill.

Guidance, Outlook, Risks, and Contingencies

• Accounting Differences: The filing highlights significant differences between BCRA rules and Argentine professional accounting standards. If professional standards were applied, shareholders' equity would have decreased by Ps. 269.7 million and income would have decreased by Ps. 273.7 million for 2010.
• Legal and Tax Contingencies: The bank faces ongoing tax claims from federal (AFIP) and provincial authorities regarding income tax and turnover tax for prior years. Management believes no additional significant effects beyond those recognized in the books are expected. There are also ongoing legal actions related to the "recursos de amparo" (constitutional rights protection actions) regarding the dollarization of deposits, with provisions recorded for potential liabilities.
• Derivative Instruments: The bank maintains significant positions in derivative financial instruments, including repurchase agreements, forward transactions, and interest rate swaps, to manage market and liquidity risks. The net liability position of repurchase agreements was Ps. 2.25 billion.
• Earnings Distribution: The maximum distributable amount for the year ended December 31, 2010, is calculated at Ps. 1.79 billion. The board proposed cash dividends of Ps. 0.85 per share (totaling Ps. 505.3 million).

Key Facts for Investor Verification

• Accounting Basis: Verify the impact of BCRA-specific accounting rules versus international standards, particularly regarding the valuation of government securities and the treatment of goodwill.
• Tax Exposure: Review the status of tax claims with AFIP and provincial authorities, as well as the adequacy of provisions for the "recursos de amparo" legal actions.
• Loan Quality: Examine the breakdown of the loan portfolio by risk category (Normal, Observation, Troubled, Irrecoverable) and the adequacy of loan loss allowances (Ps. 470.7 million).
• Related Party Transactions: Review the Ps. 612 million in credit assistance and investments in related parties, including subsidiaries and joint ventures.
• Dividend Capacity: Confirm the calculation of the distributable earnings limit based on BCRA capital requirements and the proposed dividend payout.