Banco Macro SA (NYSE:BMA) Q3 2020 Earnings Conference Call - Final Transcript

Dec 01, 2020 • 10:00 am ET

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Banco Macro SA (NYSE:BMA) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
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 Third Quarter 2020 Earnings Conference Call. We would like to inform you that the 3Q '20 press release is available to download at the Investor Relations website of Banco Macro, www.macro.com.ar/relaciones-inversores. [Operator Instructions]

It is now my pleasure to introduce our speakers. 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 conference over to Mr. Nicolas Torres. You may begin your conference.

Executive
Nicolas A. Torres

Good morning, and welcome to Banco Macro's third 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 is available at our website. Third 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 the first quarter of 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 inflation, adjustment for each period through September 30, 2020.

I will now briefly comment on the bank's third quarter financial results. Banco Macro's net income for the quarter was ARS6.1 billion, 12% lower than in the second quarter of 2020 and 33% lower than the result posted a year ago. The bank's third quarter 2020 accumulated ROE and ROA of 21.5% and 4.6% respectively remained healthy and show the bank's earnings potential.

Net operating income before general and administrative and personnel expenses for the third quarter of 2020 was ARS19.6 billion, decreasing 18% or ARS4.3 billion quarter-on-quarter, and 5% or ARS1.1 billion lower than a year ago. Operating income after general and administrative expenses was ARS4.4 billion, 52% or ARS4.8 billion lower than in the first quarter of 2020, but ARS4.5 billion higher than in the third quarter of 2019.

In the quarter, net interest income totaled ARS21.2 billion, 2% or ARS417 million lower than the result posted in the second quarter of 2020 and 26% or ARS7.6 billion lower than the result posted one year ago. In the third quarter of 2020, interest income totaled ARS36.8 billion, 15% or ARS4.9 billion higher than in the second quarter of 2020 due to higher income from government securities, and 28% or ARS14.3 billion lower than the previous year.

Within interest income, interest on loans decreased 9% or ARS1.7 billion quarter-on-quarter due to a 155 basis points decrease in the average lending rate, down to 30% from 31.5% in the second quarter of 2020, while the average volume of private sector loans decreased 5% in the