Banco Macro SA (NYSE:BMA) Q2 2020 Earnings Conference Call - Final Transcript

Sep 01, 2020 • 11:00 am ET


Banco Macro SA (NYSE:BMA) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's Second Quarter 2020 Earnings Conference Call. We would like to inform you that Q2 '20 press release is available to download at the Investor Relations website of Banco Macro, at [Operator Instructions]

After the Company's remarks are completed, there will be a question-and-answer session. And at that time, further instructions will be given. [Operator Instructions]

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

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

Nicolas Torres

Thank you. Good morning, and welcome to Banco Macro's second quarter 2020 conference call. Any comment, we may make today may include forward-looking statements, which are subject to various conditions and these are outlined in our 20-F, which was filed to the SEC, and it's available at our website. Second quarter 2020 press release was distributed yesterday, and it's also available at our website.

All figures are in Argentine Pesos and have been restated in terms of the measuring unit current at the end of the reporting period. As of January 2020, the Bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29 as established by the Central Bank. For ease of comparison, figures of previous quarters of 2019 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through June 30, 2020.

I will now briefly comment on the Bank's second quarter 2020 financial results. Banco Macro's net income for the quarter was ARS6.4 billion, 14% lower than in the first quarter of 2020 and 111% higher than the ARS3 billion posted a year ago. The Bank's second quarter 2020 accumulated ROE and ROA of 23% and 5.2%, respectively, remained healthy and showed the Bank's earnings potential.

Net operating income before general and administrative and personnel expenses for the second quarter of 2020 was ARS22.2 billion, decreasing 9%, or ARS2.3 billion quarter-on-quarter, but 27% or ARS4.7 billion higher than a year ago. Operating income after general and administrative expenses, plus ARS8.5 billion, 24%, or ARS2.7 billion lower than in the first quarter of 2020, but ARS8.3 billion higher than in the second quarter of 2019.

In the quarter, net interest income totaled ARS20 billion, 11%, or ARS2.4 billion lower than the result posted in 1Q '20 and 19%, or ARS4.6 billion lower than the result posted one-year ago. In the second quarter of 2020, interest income totaled ARS29.6 billion, 9% or ARS3 billion lower than in 1Q '20, due to lower income from loans and lower income from government securities and 36% or ARS16.4 billion lower than the previous year. Within interest income, interest on loans decreased 4%, or ARS2.5 billion quarter-on-quarter, due to a 408 basis points decrease in the average