Banco Macro SA (NYSE:BMA) Q4 2019 Earnings Conference Call - Final Transcript

Feb 20, 2020 • 11:00 am ET

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Banco Macro SA (NYSE:BMA) Q4 2019 Earnings Conference Call - Final Transcript

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Operator
Operator

Good morning, ladies and gentlemen. And thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's 4Q '19 Earnings Conference Call. We would like to inform you that the 4Q '19 press release is available to download at the Investor Relations website of Banco Macro, www.macro.com.ar/relaciones-inversores. [Operator Instructions] After the company's remarks are completed there will be a question-and-answer session at that time further instructions will be given. [Operator Instructions]

It is now my pleasure to introduce our speakers. Joining us from Argentina are Mr. Gustavo Manriquez, Gustavo Manriquez, Chief Executive Officer; Mr. Jorge Scarinci, Chief Financial Officer; and Mr. Nicolas Torres, IR.

Now, I will turn the conference over to Mr. Nicolas Torres. You may begin your conference, sir.

Executive
Nicolas Torres

Good morning. And welcome to Banco Macro's 4Q '19 conference call. Any comment we may make today may include forward-looking statements, which are subject to various conditions, and these are applied in our 20-F, which was filed to the SEC, and it's available at our website. 4Q '19 press release was distributed yesterday and it's also available at our website. I will now briefly comment on the bank's 4Q '19 financial results.

Banco Macro's net income for the quarter was ARS13.3 billion, 1% higher than in 3Q '19 and 153% higher than the ARS5.2 billion posted a year ago, based on an increase in net interest income and in net fee income. The bank's 4Q '19 accumulated ROAE and ROAA of 59% and 10.4%, respectively, remains healthy and show the bank's earnings potential.

On a fiscal year basis, Banco Macro earned ARS40.8 billion in fiscal year 2019, 159% higher than the ARS15.7 billion earned in fiscal year 2018. Net operating income before general and administrative and personnel expenses for 4Q '19 was ARS29.7 billion, increasing 13% or ARS3.5 billion quarter-on-quarter, and 83% higher than a year ago.

Operating income after general and administrative expenses and personnel expenses was ARS16.4 billion, 38% or ARS4.5 billion higher than in 3Q '19 and 117% or ARS8.9 billion higher than in 4Q '18.

In fiscal year 2019, operating income totaled ARS48.1 billion, 114% higher than in fiscal year 2018. In the quarter, net interest income totaled ARS22.7 billion, 13% or ARS2.7 billion higher than the result posted in 3Q '19 and 85% or ARS10.4 billion higher than the result posted one year ago. This performance can be traced to an 8% quarter-on-quarter decrease in interest income and a 35% decrease in interest expenses.

In fiscal year 2019, net interest income totaled ARS72.5 billion, 83% higher than the ARS39.6 billion registered in fiscal year 2018. In 4Q '19, interest income totaled ARS32.8 billion 8% or ARS2.8 billion lower than in 3Q '19 and 38% or ARS9 billion higher than the previous year.

Within interest income, interest on loans increased 38% or ARS6.1 billion quarter-on-quarter and 42% year-on-year. In 4Q '19, interest on loans represented 67% of total interest income. During fiscal year 2019, interest on loans totaled ARS67.5 billion, increasing