6-K 1 tm2117798d1_6k.htm FORM 6-K

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

 

 

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

May 27, 2021

 

 

 

Commission File Number: 001-32827

 

 

 

MACRO BANK INC.

(Translation of registrant’s name into English)

 

 

 

Avenida Eduardo Madero 1182

Ciudad Autónoma de Buenos Aires C1106 ACY

Tel: 54 11 5222 6500

 

(Address of registrant’s principal executive offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes ¨ No x

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes ¨ No x

 

 

 

 

 

 

 

 

 1Q21 Earnings Release

 

Banco Macro Announces Results for the First Quarter of 2021

 

Buenos Aires, Argentina, May 27, 2021 – Banco Macro S.A. (NYSE: BMA; BYMA: BMA) (“Banco Macro” or “BMA” or the “Bank”) announced today its results for the first quarter ended March 31, 2021 (“1Q21”). All figures are in Argentine pesos (Ps.) and have been restated in terms of the measuring unit current at the end of the reporting period. As of 1Q20, 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 2020 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2021.

 

Summary

 

• The Bank’s net income totaled Ps.2.2 billion in 1Q21. This result was 39% lower than the result posted in 4Q20 and 77% lower than in 4Q19. In 1Q21, the annualized return on average equity (“ROAE”) and the annualized return on average assets (“ROAA”) were 5.4% and 1.1%, respectively.

 

• Operating income (after G&A and personnel expenses) was Ps.18.9 billion in 1Q21, 16% or Ps.2.6 billion higher than in 4Q20 and 19% or Ps.4.5 billion lower than a year ago.

 

• In 1Q21, Banco Macro’s financing to the private sector decreased 9% or Ps.25.8 billion quarter over quarter (“QoQ”) totaling Ps.259.4 billion and 17% or Ps.54.1. billion year over year (“YoY”).

 

• In 1Q21, Banco Macro’s total deposits decreased 17% or Ps.94.8 billion QoQ, totaling Ps.457.3 billion and representing 77% of the Bank’s total liabilities. Private sector deposits decrased 14% or Ps.66.9 billion QoQ.

 

• Banco Macro continued showing a strong solvency ratio, with an excess capital of Ps.157.4 billion, 37.7% regulatory capital ratio – Basel III and 30.3% Tier 1 Ratio. In addition, the Bank’s liquid assets remained at an adequate level, reaching 94% of its total deposits in 1Q21.

 

• In 1Q21, the efficiency ratio reached 35.7%, improving from the 38.8% posted in 4Q20 and higher than the 31.1% posted a year ago.

 

• In 1Q21, the Bank’s non-performing to total financing ratio was 0.92% and the coverage ratio reached 387.82%.

 

1Q21 Earnings Release Conference Call  
  IR Contacts in Buenos Aires:
Friday, May 28, 2021  
Time: 11:00 a.m. Eastern Time | 12:00 p.m. Buenos Aires Time Jorge Scarinci
  Chief Financial Officer
To participate, please dial:  
Argentina Toll Free: Nicolás A. Torres
(011) 3984 5677 Investor Relations
Participants Dial In (Toll Free): Webcast Replay: click here  
+1 (844) 450 3847 Phone: (54 11) 5222 6682
Participants International Dial In: Available from 05/28/2021 through 06/11/2021 E-mail: investorelations@macro.com.ar
+1 (412) 317 6370    
Conference ID: Banco Macro Visit our website at:
Webcast: click here www.macro.com.ar/relaciones-inversores

 

2

 1Q21 Earnings Release

  

Disclaimer

 

This press release includes forward-looking statements. We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Many important factors could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things: inflation; changes in interest rates and the cost of deposits; government regulation; adverse legal or regulatory disputes or proceedings; credit and other risks of lending, such as increases in defaults by borrowers; fluctuations and declines in the value of Argentine public debt; competition in banking and financial services; deterioration in regional and national business and economic conditions in Argentina; and fluctuations in the exchange rate of the peso.

 

The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this press release because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this press release might not occur and are not guarantees of future performance.

 

This report is a summary analysis of Banco Macro's financial condition and results of operations as of and for the period indicated. For a correct interpretation, this report must be read in conjunction with all other material periodically filed with the Comisión Nacional de Valores (www.cnv.gob.ar), the Securities and Exchange Commission (www.sec.gov), Bolsas y mercados Argentinos (www.byma.com.ar) and the New York Stock Exchange (www.nyse.com). In addition, the Central Bank (www.bcra.gov.ar) may publish information related to Banco Macro as of a date subsequent to the last date for which the Bank has published information.

 

Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Consequently, any matters of interpretation should be referred to the original version in Spanish.

 

3

 1Q21 Earnings Release

 

This Earnings Release has been prepared in accordance with the accounting framework established by the Central Bank of Argentina (“BCRA”), based on International Financial Reporting Standards (“I.F.R.S.”) and the resolutions adopted by the International Accouting Standards Board (“I.A.S.B”) and by the Federación Argentina de Consejos Profesionales de Ciencias Económicas (“F.A.C.P.E.”). As of January 2020 the Bank started reporting with the application of (i) Expected losses of IFRS 9 “Financial Instruments” and (ii) IAS 29 “Financial Reporting in Hyperinflationary Economies”. Data and figures shown in this Earnings Release may differ from the ones shown in the 20-F annual report. As of fiscal year 2021, the monetary result accrued by items of a monetary nature measured at fair value with changes in Other Comprehensive Income (OCI), is recorded in the Result form the Net Monetary Position integrating the Net Result of the period in accordance with Communication “A” 7211 of the Central Bank of Argentina. Previous quarters of 2020 have been restated in accordance with said Communication in order to make a comparison possible.

 

Results

 

Earnings per outstanding share were Ps.3.41 in 1Q21, 39% lower than in 4Q20 and 77% lower than the result posted a year ago.

 

EARNINGS PER SHARE  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Net income -Parent Company- (M $)   9,604    8,246    6,078    3,587    2,187    -39%   -77%
Average # of shares outstanding (M)   639    639    639    639    639    0%   0%
Average #of treasury stocks (shares repurchased) (M)   0    0    0    -    -    -    -100%
Book value per avg. Outstanding share ($)   266    253    264    262    266    2%   0%
Shares Outstanding (M)   639    639    639    639    639    0%   0%
Earnings per avg.  outstanding share ($)   15.02    12.90    9.51    5.61    3.41    -39%   -77%
                                    
EOP FX (Pesos per USD)   64.4697    70.4550    76.1750    84.1450    91.9850    9%   43%
Book value per avg. issued ADS (USD)   41.26    35.91    34.66    31.14    28.92    -7%   -30%
Earnings per avg. outstanding ADS (USD)   2.33    1.83    1.25    0.67    0.37    -44%   -84%

 

Banco Macro’s 1Q21 net income of Ps.2.2 billion was 39% or Ps.1.4 billion lower than the previous quarter and 77% or Ps.7.4 billion lower YoY. This result represented an annualized ROAE and ROAA of 5.4% and 1.1% respectively.

 

Net operating income (before G&A and personnel expenses) was Ps.37.2 billion in 1Q21, increasing 5% or Ps.1.8 billion compared to 4Q20. In the quarter the improvement in Net Operating income was due to lower loan loss provisions and higher income from financial instruments at fair value through profit or loss. On a yearly basis Net operating income decreased 10% or Ps.4.1 billion compared due to lower net interest income and lower net fee income.

 

In 1Q21 Provision for loan losses totaled Ps.2 million, Ps.2.4 billion lower than in 4Q20, given that in previous quarters loan loss provisions were explained by additional provisions made by the Bank based on estimations of the macroeconomic impact of the current Covid-19 pandemic. In this quarter no additional provisions were deemed necessary.

 

Operating income (after G&A and personnel expenses) was Ps.18.9 billion in 1Q21, 16% or Ps.2.6 billion higher than in 4Q20 and 19% or Ps.4.5 billion lower than a year ago.

 

It is important to emphasize that this result was obtained with a leverage of only 4.5x assets to equity ratio.

 

4

 1Q21 Earnings Release

 

INCOME STATEMENT  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Net Interest Income   30,386    27,130    26,607    24,590    23,829    -3%   -22%
Net fee income   6,321    6,293    6,628    6,394    5,928    -7%   -6%
Net Interest Income + Net Fee Income   36,707    33,423    33,235    30,984    29,757    -4%   -19%
Net Income from financial instruments
 at fair value through P&L		   2,348    3,072    3,395    3,708    4,562    23%   94%
Income from assets at amortized cost   1,216    25    77    142    60    -58%   -95%
Differences in quoted prices of gold
 and foreign currency		   760    1,063    1,518    1,437    1,216    -15%   60%
Other operating income   1,568    1,439    1,486    1,572    1,649    5%   5%
Provision for loan losses   1,229    3,171    2,200    2,439    2    -100%   -100%
Net Operating Income   41,369    35,852    37,510    35,405    37,242    5%   -10%
Employee benefits   6,742    7,763    7,795    7,744    7,258    -6%   8%
Administrative expenses   3,815    3,931    4,275    4,402    3,415    -22%   -10%
Depreciation and impairment of assets   1,193    1,246    1,277    1,257    1,288    2%   8%
Other operating expenses   6,167    5,561    5,767    5,636    6,357    13%   3%
Operating Income   23,453    17,351    18,395    16,366    18,924    16%   -19%
Result from associates & joint ventures   29    11    19    -67    23    -134%   -21%
Result from net monetary postion   -8,252    -5,591    -8,357    -12,016    -14,443    20%   75%
Result before taxes from continuing operations   15,230    11,771    10,057    4,283    4,504    5%   -70%
Income tax   5,626    3,525    3,979    696    2,317    233%   -59%
Net income from continuing operations   9,604    8,246    6,078    3,587    2,187    -39%   -77%
         -    -                     
Net Income of the period   9,604    8,246    6,078    3,587    2,187    -39%   -77%
Net income of the period attributable
 to parent company		   9,604    8,245    6,078    3,587    2,187    -39%   -77%
Net income of the period attributable
 to minority interest		   -    1    -    -    -    -    - 
Other Comprehensive Income   -997    1,230    960    -134    588    -    - 
Foreign currency translation differences in
financial statements conversion		   -10    105    65    -25    -97    -    - 
Profits or losses from financial assets measured
at fair value  through other comprehensive income
(FVOCI)  (IFRS 9(4.1.2)(a)		   -987    1,125    895    -109    685    -    - 
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD   8,607    9,476    7,038    3,453    2,775    -20%   -68%
Total Comprehensive Income attributable
to parent Company		   8,607    9,476    7,038    3,453    2,775    -20%   -68%
Total Comprehensive Income attributable
to non-controlling interests		   -    -    -    -    -    -    - 

 

The Bank’s 1Q21 net interest income totaled Ps.23.8 billion, 3% or Ps.761 million lower than in 4Q20 and 22% or Ps.6.6 billion lower YoY as a result of different regulations adopted that set caps on lending rates and floors on deposit rates.

 

In 1Q21 interest income totaled Ps.45.1 billion, 4% or Ps.1.9 billion lower than in 4Q20 and 2% or Ps.1 billion higher than in 1Q20.

 

Income from interest on loans and other financing totaled Ps.22.3 billion, 1% or Ps.184 million higher compared with the previous quarter. On a yearly basis Income from interest on loans decreased 20% or Ps.5.4 billion.

 

In 1Q21 income from government and private securities decreased 6% or Ps.1.3 billion QoQ (due to lower income from Government securities) and 31% or Ps.4.9 billion compared with the same period of last year. This result is explained 88% by income from government and private securities through other comprehensive income

 

(Leliqs and Other government securities) and the remaining 12% is explained by income from sovereign bonds in pesos at amortized cost.

 

5

 1Q21 Earnings Release

 

In 1Q21 income from Repos totaled Ps.2.1 billion, 26% or Ps.741 million lower than the previous quarter and 303% or Ps.1.6 billion higher than a year ago.

 

In 1Q21 FX income totaled Ps.1.2 billion, 15% or Ps.221 million lower than the previous quarter and 60% or Ps.456 million higher than a year ago. FX income gain was due to the 9% argentine peso depreciation against the US dollar, the Bank’s long spot dollar position during the quarter and FX trading results.

 

FX INCOME  MACRO Consolidated   Variation 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   4Q20   1Q21   QoQ   YoY 
                          
(1) Differences in quoted prices of
 gold and foreign currency		   760    1,437    1,216    -15%   60%
Translation of FX assets and liabilities to Pesos   690    1,210    1,094    -10%   59%
Income from foreign currency exchange   70    227    122    -46%   75%
                          
(2) Net Income from financial assets and
liabilities at fair value through P&L		   51    7    0    -100%   -100%
Income from investment in derivative
financing instruments		   51    7    0    -100%   -100%
                          
(1) +(2) Total Result from Differences in quoted
prices of gold and foreign currency		   811    1,444    1,216    -16%   50%

 

 

 

INTEREST INCOME  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Interest on Cash and due from Banks   87    19    36    3    3    0%   -97%
Interest from government securities   14,901    13,191    20,914    21,829    20,565    -6%   38%
Interest from private securities   833    469    332    183    103    -44%   -88%
Interest on loans and other financing                                   
             To the financial sector   359    338    247    198    168    -15%   -53%
             To the public non financial sector   1,208    842    730    557    462    -17%   -62%
             Interest on overdrafts   5,379    3,557    1,726    1,551    1,697    9%   -68%
             Interest on documents   1,816    1,236    1,002    1,322    1,384    5%   -24%
             Interest on mortgages loans   2,564    2,019    1,951    2,586    3,054    18%   19%
             Interest on pledged loans   152    130    133    122    111    -9%   -27%
             Interest on personal loans   9,498    9,439    8,999    8,989    9,246    3%   -3%
             Interest on credit cards loans   3,903    3,087    3,150    2,861    2,715    -5%   -30%
             Interest on financial leases   32    15    6    11    22    100%   -31%
             Interest on other loans   2,842    3,749    4,390    3,951    3,473    -12%   22%
Interest on Repos                                   
             From the BCRA   459    1,984    2,634    2,798    2,078    -26%   353%
             Other financial institutions   60    1    12    35    14    -60%   -77%
Total Interest income   44,093    40,076    46,262    46,996    45,095    -4%   2%
                                    
Income from Interest on loans   27,753    24,412    22,334    22,148    22,332    1%   -20%

 

The Bank’s 1Q21 interest expense totaled Ps.21.3 billion, decreasing 5% or Ps.1.1 billion compared to the previous quarter and 55% or Ps.7.6 billion higher compared to 1Q20.

 

In 1Q21, interest on deposits represented 95% of the Bank’s total interest expense, decreasing 5% or Ps.1 billion QoQ, due to a 7% decrease in the average volume of deposits from the private sector which was partially offset by a 64 b.p. increase in the average rate paid on deposits. On a yearly basis, interest on deposits increased 61% or Ps.7.7 billion.

 

6

 1Q21 Earnings Release

 

INTEREST EXPENSE  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Deposits                                   
              Interest on checking accounts   172    151    532    1,377    727    -47%   323%
              Interest on saving accounts   208    167    156    208    231    11%   11%
              Interest on time deposits   12,112    11,407    17,796    19,567    19,189    -2%   58%
Interest on other financing from BCRA
and financial inst.		   31    19    22    40    43    8%   39%
Repos                                   
              Other financial institutions   94    27    2    98    55    -44%   -41%
Interest on corporate bonds   406    486    437    419    352    -16%   -13%
Interest on subordinated bonds   654    674    694    686    664    -3%   2%
Interest on other financial liabilities   29    16    16    11    5    -55%   -83%
Total financial expense   13,706    12,947    19,655    22,406    21,266    -5%   55%
                                    
Expenses from interest on deposits   12,492    11,725    18,484    21,152    20,147    -5%   61%

 

In 1Q21, the Bank’s net interest margin (including FX) was 17.4%, higher than the 16.3% posted in 4Q20 and lower than the 25.2% posted in 1Q20.

 

In 1Q21 Net Interest Margin (excluding FX) was 16.5%, higher than the 15.4% posted in 4Q20 and lower than the 24.6% posted in 1Q20.

 

In 1Q21 Net Interest Margin (Pesos) was 18.6%, higher than the 17.7% posted in 4Q20 and lower than the 30.3% posted in 1Q20; meanwhile Net Interest Margin (USD) was 2.3%, higher than the 2% posted in 4Q20 and lower than the 3.9% registered in 1Q20.

 

ASSETS & LIABILITIES PERFORMANCE (AR$)  MACRO Consolidated 
In MILLION $  1Q20   2Q20   3Q20   4Q20   1Q21 
(Measuring Unit Current at EOP)  AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL 
Yields & rates in annualized
nominal %		  BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE 
                                                                            
Interest-earning assets                                                                           
Loans & Other Financing                                                                           
Public Sector   8,884    17.8%   54.7%   8,486    15.0%   39.9%   6,319    11.9%   46.0%   4,663    1.7%   47.5%   3,720    -1.4%   50.4%
      Financial Sector   3,021    11.4%   46.3%   3,202    17.0%   42.3%   2,423    7.6%   40.4%   2,114    -5.4%   37.3%   1,988    -12.0%   34.3%
Private Sector   240,580    7.1%   40.7%   251,194    10.9%   34.9%   253,533    0.9%   31.6%   252,925    -9.2%   31.7%   240,643    -11.8%   34.6%
Other debt securities                                                                           
      Central Bank Securities (Leliqs)   103,129    10.9%   45.7%   114,875    13.1%   37.5%   153,058    5.4%   37.5%   135,986    -5.5%   37.1%   136,403    -9.9%   37.5%
      Government & Private Securities   28,765    18.7%   55.9%   38,646    7.4%   30.6%   90,758    -0.6%   29.7%   113,258    -8.5%   32.7%   90,358    -10.8%   36.1%
Repos   4,761    9.5%   43.8%   46,225    -3.5%   17.3%   54,992    -8.7%   19.1%   33,501    -7.9%   33.6%   23,441    -10.7%   36.2%
Total interest-earning assets   389,140    9.3%   43.6%   462,628    9.9%   33.6%   561,083    1.1%   31.9%   542,447    -7.9%   33.6%   496,553    -10.9%   35.9%
                                                                            
Non interest-earning assets   128,690              138,881              87,812              102,351              102,333           
Total Average Assets   517,830              601,509              648,895              644,798              598,886           
                                                                            
Interest-bearing liabilities                                                                           
Deposits                                                                           
Public Sector   16,548    -4.5%   25.4%   24,769    -0.3%   21.3%   65,565    -4.3%   24.8%   63,278    -12.0%   27.6%   36,906    -14.9%   29.8%
Private Sector   202,270    -6.9%   22.3%   242,266    -3.8%   17.0%   281,971    -7.9%   20.2%   281,519    -14.8%   23.6%   278,584    -17.9%   25.3%
BCRA and other financial institutions   490    -3.9%   26.3%   537    -4.2%   16.5%   513    -8.5%   19.4%   617    -12.4%   27.1%   674    -16.7%   27.1%
Corporate bonds   7,781    -7.9%   21.0%   6,547    6.8%   29.9%   6,241    -2.0%   27.9%   5,674    -10.8%   29.4%   5,077    -16.0%   28.1%
Repos   1,641    -6.4%   23.0%   1,180    -10.2%   9.2%   62    -13.5%   12.8%   1,284    -10.1%   30.4%   712    -13.9%   31.3%
Total int.-bearing liabilities   228,730    -6.8%   22.5%   275,299    -3.2%   17.7%   354,352    -7.2%   21.1%   352,372    -14.2%   24.5%   321,953    -17.5%   25.9%
                                                                            
Total non int.-bearing liabilities   133,295              174,956              186,900              188,514              169,770           
                                                                            
Total Average Liabilities   362,025              450,255              541,252              540,886              491,723           
                                                                            
Assets Performance        42,146              38,609              45,015              45,784              43,899      
Liabilities Performance        12,811              12,098              18,838              21,665              20,563      
Net Interest Income        29,335              26,511              26,177              24,119              23,336      
Total interest-earning assets        389,140              462,628              561,083              542,447              496,553      
Net Interest Margin (NIM)        30.3%             23.0%             18.6%             17.7%             18.6%     

 

7

 1Q21 Earnings Release

 

ASSETS & LIABILITIES PERFORMANCE USD  MACRO Consolidated 
In MILLION $  1Q20   2Q20   3Q20   4Q20   1Q21 
(Measuring Unit Current at EOP)  AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL   AVERAGE   REAL INT   NOMINAL 
Yields & rates in annualized
nominal %		  BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE   BALANCE   RATE   INT RATE 
                                                                            
Interest-earning assets                                                                           
Cash and Deposits in Banks   43,924    0.3%   0.8%   54,712    13.0%   0.1%   56,083    1.7%   0.3%   57,364    -2.4%   0.0%   58,856    -9.7%   0.0%
Loans & Other Financing                                                                           
Public Sector   0    0.0%   0.0%   0    0.0%   0.0%   0    0.0%   0.0%   0    0.0%   0.0%   0    0.0%   0.0%
      Financial Sector   656    6.2%   6.7%   86    18.2%   4.7%   70    7.2%   5.7%   30    0.0%   0.0%   23    0.0%   0.0%
Private Sector   60,082    11.6%   12.2%   49,425    26.1%   11.7%   31,283    16.8%   15.2%   27,357    14.8%   17.6%   24,165    8.1%   19.7%
Other debt securities                                                                           
      Government & Private Securities   3,992    1.7%   2.2%   5,592    13.5%   0.5%   5,763    2.5%   1.1%   6,738    0.0%   0.0%   5,657    -8.5%   1.3%
Total interest-earning assets   108,654    6.7%   7.2%   109,815    19.0%   5.4%   93,199    6.8%   5.3%   91,489    2.8%   5.3%   88,701    -4.7%   5.5%
                                                                            
Non interest-earning assets   62,266              56,702              116,985              106,277              112,020           
Total Average Assets   170,920              166,517              210,184              197,766              200,721           
                                                                            
Interest-bearing liabilities                                                                           
Deposits                                                                           
Public Sector   2,822    0.6%   1.1%   1,784    13.9%   0.9%   976    1.8%   0.4%   928    -2.0%   0.4%   1,454    -9.4%   0.3%
Private Sector   80,659    0.5%   1.0%   64,597    14.1%   1.0%   63,309    2.1%   0.7%   53,812    -2.1%   0.3%   56,399    -9.5%   0.2%
BCRA and other financial institutions   1,814    5.7%   6.2%   813    20.7%   6.9%   643    7.1%   5.6%   636    2.5%   5.0%   385    -5.9%   4.2%
Subordinated bonds   36,861    6.6%   7.1%   37,992    20.9%   7.1%   38,742    8.6%   7.1%   38,241    4.6%   7.1%   37,901    -3.3%   7.1%
Total int.-bearing liabilities   122,156    2.4%   2.9%   105,186    16.5%   3.2%   103,670    4.6%   3.1%   93,617    0.7%   3.1%   96,139    -7.0%   3.0%
                                                                            
Total non int.-bearing liabilities   39,306              50,491              49,310              45,910              46,334           
                                                                            
Total Average liabilities   161,462              155,677              152,980              139,527              142,473           
                                                                            
Assets Performance        1,947              1,467              1,247              1,212              1,196      
Liabilities Performance        895              849              817              741              703      
Net Interest Income        1,052              618              430              471              493      
Total interest-earning assets        108,654              109,815              93,199              91,489              88,701      
Net Interest Margin (NIM)        3.9%             2.3%             1.8%             2.0%             2.3%     

 

In 1Q21 Banco Macro’s net fee income totaled Ps.5.9 billion, 7% or Ps.466 million lower than in 4Q20 and 6% or Ps.393 million lower than the same period of last year.

 

In the quarter, fee income totaled Ps.6.5 billion, 7% or Ps.472 million lower than in 4Q20. Fees charged on credit cards decreased 19% QoQ and were partially offset by increases in AFIP & Collection services (8%) and ATM fees (3%). On a yearly basis, fee income decreased 6% or Ps.415 million.

 

In the quarter, total fee expense decreased 1% or Ps.7 million. On a yearly basis, fee expenses decreased 4% or Ps.22 million.

 

NET FEE INCOME  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Fees charged on deposit accounts   2,535    2,594    2,795    2,500    2,455    -2%   -3%
Credit card fees   1,533    1,393    1,448    1,496    1,205    -19%   -21%
Corporate services fees   768    578    693    697    690    -1%   -10%
ATM transactions fees   578    559    644    637    655    3%   13%
Insurance fees   440    452    452    463    431    -7%   -2%
Debit card fees   360    406    438    467    427    -9%   19%
Financial agent fees (Provinces)   341    348    351    381    352    -8%   3%
Credit related fees   216    285    165    155    147    -5%   -32%
Mutual funds & securities fees   121    137    189    168    129    -23%   7%
AFIP & Collection services   34    21    25    25    27    8%   -21%
ANSES fees   16    16    15    13    10    -23%   -38%
Total fee income   6,943    6,790    7,215    7,000    6,528    -7%   -6%
                                    
Total fee expense   622    496    587    607    600    -1%   -4%
                                    
Net fee income   6,321    6,294    6,628    6,393    5,928    -7%   -6%

 

In 1Q21 Net Income from financial assets and liabilities at fair value through profit or loss totaled a Ps.4.6 billion gain, 23% or Ps.854 million higher than the previous quarter. This gain is mostly related to higher income from Government Securities and investment in equity instruments (mainly the mark to market of our PRISMA stake).

 

On a yearly basis Net income from financial assets and liabilities at fair value through profit or loss increased 94% or Ps.2.2 billion.

 

8

 1Q21 Earnings Release

 

NET INCOME FROM FINANCIAL ASSETS AND LIABILITIES
AT FAIR VALUE THROUGH PROFIT OR LOSS		  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Profit or loss from government securities   1,896    2,729    3,259    3,498    4,042    16%   113%
Profit or loss from private securities   323    138    344    153    162    6%   -50%
Profit or loss from investment in derivative
financing instruments		   51    26    2    7    0    -100%   -100%
Profit or loss from other financial assets   -8    15    -5    0    -10    -    - 
Profit or loss from investment in equity instruments   129    111    -134    -50    398    -    209%
Profit or loss from the sale of financial assets at fair value   -43    53    -71    100    -30    -    - 
Income from financial assets at fair value through profit or loss   2,348    3,072    3,395    3,708    4,562    23%   94%
                                    
Profit or loss from derivative financing instruments   0    0    0    0    0    -    - 
Income from financial liabilities at fair value through profit or loss   0    0    0    0    0    -    - 
                                    
NET INCOME FROM FINANCIAL ASSETS AT FAIR
VALUE THROUGH PROFIT OR LOSS		   2,348    3,072    3,395    3,708    4,562    23%   94%

 

 

 

In the quarter Other Operating Income totaled Ps.1.6 billion, 5% or Ps.77 million higher than in 4Q20. On a yearly basis Other Operating Income increased 5% or Ps.81 million.

 

OTHER OPERATING INCOME  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Credit and debit cards   35    23    35    45    52    16%   49%
Lease of safe deposit boxes   191    224    244    222    206    -7%   8%
Other service related fees   688    491    548    386    420    9%   -39%
Other adjustments and interest
from other receivables		   288    232    236    260    270    4%   -6%
Initial recognition of loans   0    24    -15    -9    3    -    - 
Sale of property, plant and equipment   0    1    6    2    2    0%   - 
Others   366    444    432    666    696    5%   90%
Other Operating Income   1,568    1,439    1,486    1,572    1,649    5%   5%

 

In 1Q21 Banco Macro’s administrative expenses plus employee benefits totaled Ps.10.7 billion, 12% or Ps.1.5 billion lower than the previous quarter, due to lower administrative expenses (-22%) and employee benefits. On a yearly basis administrative expenses plus employee benefits decreased 1% or Ps.116 million.

 

Employee benefits decreased 6% or Ps.486 million QoQ. On a yearly basis Employee benefits increased 8% or Ps.516 million.

 

In 1Q21 administrative expenses decreased 22% or Ps.1 billion, due to lower Directors and statutory auditors fees (85% or Ps.577 million), lower advertising and publicity fees (71% or Ps.141 million) and lower maintenance and conservation fees (20% or Ps.145 million).

 

In 1Q21, the efficiency ratio reached 35.7%, improving from the 38.8% posted in 4Q20 and higher than the 31.1% posted a year ago. In 1Q21 expenses (employee benefits + G&A expenses + depreciation and impairment of assets) decreased 11%, while income (net interest income + net fee income + differences in quoted prices of gold and foreign currency + other operating income + net income from financial assets at fair value through profit or loss – (Turnover Tax + Insurance on deposits)) decreased 3% compared to 4Q20.

 

9

 1Q21 Earnings Release

 

PERSONNEL & ADMINISTRATIVE EXPENSES  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                                    
Employee benefits   6,742    7,763    7,795    7,744    7,258    -6%   8%
              Remunerations   4,968    5,869    5,805    5,584    5,232    -6%   5%
              Social Security Contributions   1,104    1,306    1,288    1,286    1,178    -8%   7%
              Compensation and bonuses   521    466    518    699    691    -1%   33%
              Employee services   149    122    184    175    157    -10%   5%
Administrative Expenses   3,815    3,931    4,275    4,402    3,415    -22%   -10%
              Taxes   549    492    509    544    541    -1%   -1%
              Maintenance, conservation fees   578    621    638    727    582    -20%   1%
              Directors & statutory auditors fees   433    387    332    682    105    -85%   -76%
              Security services   419    406    389    384    377    -2%   -10%
              Electricity & Communications   444    443    429    412    399    -3%   -10%
              Other professional fees   262    243    258    240    254    6%   -3%
              Rental agreements   33    37    12    21    31    48%   -6%
              Advertising & publicity   82    112    94    199    58    -71%   -29%
              Personnel allowances   48    30    31    37    29    -22%   -40%
              Stationary & Office Supplies   28    25    27    24    20    -17%   -29%
              Insurance   37    51    54    52    46    -12%   24%
              Hired administrative services   1    1    2    0    2    -    100%
             Other   901    1,083    1,500    1,080    971    -10%   8%
Total Administrative Expenses   10,557    11,694    12,070    12,146    10,673    -12%   1%
                                    
Total Employees   8,732    8,706    8,651    8,561    8,459           
Branches   463    463    463    463    463           
Efficiency ratio   31.1%   36.3%   36.8%   38.8%   35.7%          
                                    
Accumulated efficiency ratio   50.7%   43.6%   40.2%   45.9%   35.7%          

 

In 1Q21, Other Operating Expenses totaled Ps.6.4 billion, increasing 13% or Ps.721 million QoQ, due to higher Turnover Tax (19% or Ps.556 million). On a yearly basis Other Operating Expenses increased 3% or Ps.190 billion.

 

OTHER OPERATING EXPENSES  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Turnover Tax   3,487    3,151    3,135    2,940    3,496    19%   0%
Other provision charges   428    265    329    244    399    64%   -7%
Deposit Guarantee Fund Contributions   173    194    232    237    225    -5%   30%
Donations   154    31    1    5    1    -80%   -99%
Insurance claims   21    22    16    12    11    -8%   -48%
Initial loan recognition   4    -4    0    54    0    -100%   -100%
Others   1,900    1,902    2,054    2,144    2,225    4%   17%
Other Operating Expenses   6,167    5,561    5,767    5,636    6,357    13%   3%

 

In 1Q21 the result from the net monetary position totaled a Ps.14.4 billion loss, 20% or Ps.2.4 billion lower than the loss posted in 4Q20. On a yearly basis the loss related to the net monetary position increased 75% or Ps.62 billion. This is the first quarter in which the result from net monetary position is shown pursuant to Communication “A” 7211 of the Central Bank of Argentina in which the inflation adjustment on our Leliqs and other government securities holdings is included (previously shown in Net Income from financial instruments at fair value through P&L). Previous quarters of 2020 have been restated in accordance with Communication “A” 7211 in order to make a comparison possible. Also higher inflation was observed during the quarter (163 b.p. above 4Q20 level, up from 11.33% to 12.95%) generating a negative result.

 

OPERATING RESULT  MACRO consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Operating Result (exc. Loss from net monetary position)   23,453    17,351    18,395    16,366    18,924    16%   -19%
Result from net monetary position (i.e. inflation adjustment)   -8,252    -5,591    -8,357    -12,016    -14,443    20%   75%
Operating Result (Inc. Loss from net monetary position)   15,201    11,760    10,038    4,350    4,481    3%   -71%

 

 

10

 1Q21 Earnings Release

 

In 1Q21 Banco Macro's effective income tax rate was 51.4%, higher than the 16.3% effective tax rate of 4Q20 and the 36.9% registered one year ago. For more information see note 15 to our Financial Statements.

 

Financial Assets

 

Private sector financing

 

The volume of “core” financing to the private sector (including loans, financial trust and leasing portfolio) totaled Ps.259.4 billion, decreasing 9% or Ps.25.8 billion QoQ and 17% or Ps.54.1 billion YoY as a consequence of the economic recession that affected Argentina during 2020.

 

Commercial loans decreased 13% or Ps.17.9 billion, among which Others stand out (mostly loans extended to SMEs at 24% interest rate as part of the Covid-19 relief package)

 

Consumer lending decreased 5% or Ps.7.6 billion. Credit card loans decreased 9%, returning to average levels of the beginning of 2020.

 

Within private sector financing, peso financing decreased 9% or Ps.23.9 billion, while US dollar financing decreased 15% or USD 47 million.

 

As of 1Q21, Banco Macro´s market share over private sector loans was 7.3%.

 

FINANCING TO THE PRIVATE SECTOR  MACRO Consilidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Overdrafts   45,877    27,715    21,615    19,287    14,513    -25%   -68%
Discounted documents   32,677    29,579    26,861    29,562    26,808    -9%   -18%
Mortgage loans   18,202    17,557    17,167    15,230    14,110    -7%   -22%
Pledged loans   5,311    4,994    4,550    3,681    3,318    -10%   -38%
Personal loans   82,165    78,197    76,215    75,786    74,828    -1%   -9%
Credit Card loans   63,174    61,542    66,165    72,150    65,488    -9%   4%
Others   39,775    51,892    55,453    44,515    36,029    -19%   -9%
Interest   22,332    22,810    21,830    22,321    21,927    -2%   -2%
Total loan portfolio   309,513    294,286    289,856    282,532    257,021    -9%   -17%
                                    
Total loans in Pesos   253,823    255,461    261,677    257,384    233,646    -9%   -8%
                                    
Total loans in USD   55,690    38,825    28,179    25,148    23,375    -7%   -58%
Financial trusts   2,357    1,133    457    643    294    -54%   -88%
Leasing   280    210    168    134    124    -7%   -56%
Others   1,367    1,317    1,563    1,850    1,933    4%   41%
Total other financing   4,004    2,660    2,188    2,627    2,351    -11%   -41%
                                    
Total other financing in Pesos   2,628    1,293    1,004    1,462    1,266    -13%   -52%
                                    
Total other financing in USD   1,376    1,367    1,184    1,165    1,085    -7%   -21%
                                    
Total financing to the private sector   313,517    296,946    292,044    285,159    259,372    -9%   -17%
                                    
EOP FX (Pesos per USD)   64.4697    70.4550    76.1750    84.1450    91.9850    9%   43%
                                    
USD financing / Financing to the private sector   18%   14%   10%   9%   9%          

 

11

 1Q21 Earnings Release

 

Public Sector Assets

 

In 1Q21, the Bank’s public sector assets (excluding LELIQs) to total assets ratio was 16.9%, lower than the 17.5% registered in the previous quarter, and higher than the 5% posted in 1Q20.

 

In 1Q21, a 16% or Ps.23.5 billion decrease in Leliqs and a 15% or Ps.21.7 billion decrease in Government Securities stand out. Since 2Q20 the Bank decided to invest in CER adjustable and Badlar bonds.

 

PUBLIC SECTOR ASSETS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Leliqs   101,911    142,696    158,988    145,343    121,861    -16%   20%
Other   30,032    70,370    157,738    147,947    126,276    -15%   320%
Government securities   131,943    213,066    316,726    293,290    248,137    -15%   88%
Provincial loans   5,766    8,562    4,890    3,889    3,138    -19%   -46%
Loans   5,766    8,562    4,890    3,889    3,138    -19%   -46%
Purchase of government bonds   173    176    175    173    166    -4%   -4%
Other receivables   173    176    175    173    166    -4%   -4%
                                    
TOTAL PUBLIC SECTOR ASSETS   137,882    221,804    321,791    297,352    251,441    -15%   82%
                                    
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)   35,971    79,108    162,803    152,009    129,580    -15%   260%
                                    
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)/TOTAL ASSETS   5.0%   9.3%   17.7%   17.5%   16.9%          

 

Funding

 

Deposits

 

Banco Macro’s deposit base totaled Ps.457.3 billion in 1Q21, decreasing 17% or Ps.94.8 billion QoQ and a 3% or Ps.13.2 billion decrease YoY and representing 77% of the Bank’s total liabilities.

 

On a quarterly basis, both public and private sector deposits decreased with a 33% or Ps.27.3 billion decrease and a 14% or Ps.66.9 billion decrease respectively.

 

The decrease in private sector deposits was led by demand deposits, which decreased 16% or Ps.37.3 billion, while time deposits decreased 13% or Ps.29.7 billion QoQ.

 

Within private sector deposits, peso deposits decreased 19% or Ps.90.6 billion, while US dollar deposits decreased 13% or USD 134 million.

 

As of 1Q21, Banco Macro´s market share over private sector deposits was 5.6%.

 

12

 1Q21 Earnings Release

 

DEPOSITS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Public sector   38,957    80,776    132,834    83,094    55,361    -33%   42%
                                    
Financial sector   415    473    555    787    694    -12%   67%
                                    
Private sector   404,715    468,387    486,179    468,167    401,232    -14%   -1%
Checking accounts   76,581    96,652    90,169    73,872    69,534    -6%   -9%
Savings accounts   136,160    143,842    135,494    156,500    122,929    -21%   -10%
Time deposits   181,598    215,501    250,459    229,258    199,544    -13%   10%
Other   10,376    12,392    10,057    8,537    9,225    8%   -11%
Total   444,087    549,636    619,568    552,048    457,287    -17%   3%
                                    
Pesos   332,961    445,537    520,532    464,961    374,407    -19%   12%
Foreign Currency (Pesos)   111,126    104,099    99,036    87,087    82,880    -5%   -25%
                                    
EOP FX (Pesos per USD)   64.4697    70.4550    76.1750    84.1450    91.9850    9%   43%
Foreign Currency (USD)   1,724    1,478    1,300    1,035    901    -13%   -48%
                                    
USD Deposits / Total Deposits   25%   19%   16%   16%   18%          

 

Banco Macro’s transactional deposits represent approximately 49% of its total deposit base as of 1Q21. These accounts are low cost and are not sensitive to interest rate increases.

 

Other sources of funds

 

In 1Q21, the total amount of other sources of funds increased 1% or Ps.1.8 billion compared to 4Q20. On a yearly basis other sources of funds decreased 1% or Ps.2.4 billion. In 1Q21 Shareholder’s Equity increased 2% or Ps.2.8 billion; also in the quarter subordinated corporate bonds decreased 2% or Ps.594 million while non subordinated corporate bonds decreased 9% or Ps.511 million.

 

It should be noted that the Shareholders’ meeting held on April 30, 2021 approved a Ps.10 billion dividend. This amount will be deducted from reserved earnings and therefore subtracted from Shareholders’ Equity during 2Q21.

 

OTHER SOURCES OF FUNDS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Central Bank of Argentina   23    25    24    23    20    -13%   -13%
Banks and international institutions   741    744    505    401    521    30%   -30%
Financing received from Argentine financial institutions   468    678    335    614    608    -1%   30%
Subordinated corporate bonds   37,953    38,787    39,648    38,743    38,149    -2%   1%
Corporate bonds   7,793    6,564    6,311    5,565    5,054    -9%   -35%
Shareholders' equity   169,851    161,365    168,403    167,259    170,035    2%   0%
Total other source of funds   216,829    208,163    215,226    212,605    214,387    1%   -1%

 

Liquid Assets

 

In 1Q21, the Bank’s liquid assets amounted to Ps.427.6 billion, showing a 14% or Ps.70 billion decrease QoQ, and a 33% or Ps.105.9 billion increase on a yearly basis.

 

In 1Q21, Net Repos decreased 71% or Ps.30.4 billion while LELIQs own portfolio decreased 16% or Ps.23.5 billion and Other government securities decreased 15% or Ps.21.3 billion.

 

In 1Q21 Banco Macro’s liquid assets to total deposits ratio reached 94%.

 

13

 1Q21 Earnings Release

 

LIQUID ASSETS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Cash   175,915    140,648    142,011    146,802    153,515    5%   -13%
Guarantees for compensating chambers   12,409    15,273    13,743    13,600    11,952    -12%   -4%
Call   856    0    189    56    1,100    1864%   29%
Leliq own portfolio   101,911    142,696    158,988    145,343    121,861    -16%   20%
Net Repos   585    91,336    67,867    43,829    12,890    -71%   2103%
Other government & private securities   30,032    70,370    157,738    147,947    126,276    -15%   320%
Total   321,708    460,323    540,536    497,577    427,594    -14%   33%
                                    
Liquid assets to total deposits   72%   84%   87%   90%   94%          

 

Solvency

 

Banco Macro continued showing high solvency levels in 1Q21 with an integrated capital (RPC) of Ps.201 billion over a total capital requirement of Ps.43.5 billion. Banco Macro’s excess capital in 1Q21 was 362% or Ps.157.4 billion. Since the beginning of 2020 and due to inflation adjustments Equity has increased significantly leading to higher solvency levels (shown under Ordinary Capital Level 1).

 

The regulatory capital ratio (as a percentage of risk-weighted assets- RWA) was 37.7% in 1Q21; TIER1 Ratio stood at 30.3%.

 

The Bank’s aim is to make the best use of this excess capital.

 

MINIMUM CAPITAL REQUIREMENT  MACRO Consolidated   Change 
In MILLION $  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Credit risk requirement   23,808    24,046    23,972    28,025    29,047    4%   22%
Market risk requirement   694    1,122    1,172    1,556    1,538    -1%   121%
Operational risk requirement   8,606    9,493    10,604    11,777    12,934    10%   50%
Total capital requirements   33,108    34,660    35,749    41,358    43,519    5%   31%
                                    
Ordinary Capital Level 1 (COn1)   115,532    116,048    131,531    146,350    171,410    17%   48%
Deductible concepts Level 1 (COn1)   -12,442    -10,011    -11,768    -9,150    -9,889    8%   -21%
Capital Level 2 (COn2)   26,427    30,427    32,854    36,248    39,442    9%   49%
Integrated capital - RPC (i)   129,517    136,464    152,618    173,449    200,964    16%   55%
                                    
Excess capital   96,409    101,804    116,869    132,091    157,445    19%   63%
                                    
Risk-weighted assets - RWA (ii)   405,179    424,501    438,129    506,766    533,407    5%   32%
                                    
Regulatory Capital ratio [(i)/(ii)]   32.0%   32.1%   34.8%   34.2%   37.7%          
                                    
Ratio TIER 1 [Capital Level 1/RWA]   25.4%   25.0%   27.3%   27.1%   30.3%          

 

RWA - (ii): Risk Weighted Assets, considering total capital requirements.

 

14

 1Q21 Earnings Release

 

Asset Quality

 

In 1Q21, Banco Macro’s non-performing to total financing ratio (under Central Bank rules) reached a level of 0.92%, up from 0.78% in 4Q20, and down from the 1.14% posted in 1Q20.

 

Consumer portfolio non-performing loans increased 16b.p. (up to 0.89% from 0.73%) while Commercial portfolio non-performing loans increased 10b.p. in 4Q20 (up to 1% from 0.9%).

 

Consumer portfolio non-performing loans ratio continues to be positively impacted by recent measures adopted by the Central Bank of Argentina in the current Covid19 pandemic context, particularly the 60 day grace period that was added to debtor classification before a loan is considered as non performing and the possibility to refinance outstanding credit card balances.

 

The coverage ratio (measured as total allowances under Expected Credit Losses over Non Performing loans under Central Bank rules) reached to 387.82% in 1Q21. Write-offs over total loans totaled 0.36%.

 

The Bank is committed to continue working in this area to maintain excellent asset quality standards.

 

ASSET QUALITY  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Commercial portfolio   141,728    110,633    95,611    86,356    75,912    -12%   -46%
  Non-performing   1,930    1,709    1,484    779    757    -3%   -61%
Consumer portfolio   192,468    212,917    218,424    219,074    201,700    -8%   5%
  Non-performing   2,618    3,203    2,096    1,592    1,795    13%   -31%
Total portfolio   334,196    323,550    314,035    305,430    277,612    -9%   -17%
  Non-performing   4,548    4,911    3,580    2,370    2,552    8%   -44%
Commercial non-perfoming ratio   1.36%   1.54%   1.55%   0.90%   1.00%          
Consumer non-perfoming ratio   1.36%   1.50%   0.96%   0.73%   0.89%          
                                    
Total non-performing/ Total portfolio   1.36%   1.52%   1.14%   0.78%   0.92%          
                                    
Total allowances   7,890    10,345    10,846    11,359    9,897    -13%   25%
Coverage ratio w/allowances   173.48%   210.65%   302.96%   479.28%   387.82%          
Write Offs   745    686    793    1,122    993    -12%   33%
Write Offs/ Total portfolio   0.22%   0.21%   0.25%   0.37%   0.36%          

 

Expected Credit Losses (E.C.L) (I.F.R.S.9)

 

The Bank records an allowance for expected credit losses for all loans and other debt financial assets not held at fair value through profit or loss, together with loan commitments and financial guarantee contracts, in this section all referred to as ‘financial instruments’. Equity instruments are not subject to impairment under IFRS 9. The ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the 12 months expected credit loss.(For further information please see our 2020 20-F)

 

15

 1Q21 Earnings Release

 

CER Exposure and Foreign Currency Position

 

CER EXPOSURE  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
CER adjustable ASSETS                                   
                                    
Government Securities   3,687    26,514    55,592    57,827    71,288    23%   1833%
                                    
Loans (*)   22,456    22,219    21,700    21,059    20,666    -2%   -8%
Private sector loans   9,974    9,294    8,732    7,921    7,201    -9%   -28%
Mortgage loans (UVA adjusted)   12,478    12,921    12,963    13,130    13,457    2%   8%
Other loans   4    4    5    8    8    0%   100%
Total CER adjustable assets   26,143    48,733    77,292    78,886    91,954    17%   252%
                                    
CER adjustable LIABILITIES                                   
Deposits (*)   1,598    3,029    1,201    1,558    3,618    132%   126%
UVA Unemployment fund   882    818    873    875    916    5%   4%
Total CER adjustable liabilities   2,480    3,847    2,074    2,433    4,534    86%   83%
                                    
NET CER EXPOSURE   23,663    44,886    75,218    76,453    87,420    14%   269%

 

(*) Includes Loans &Time Deposits CER adjustable (UVAs)   

 

FOREIGN CURRENCY POSITION  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Cash and deposits in Banks   97,819    108,272    116,128    119,414    117,240    -2%   20%
       Cash   6,406    5,892    9,705    11,075    7,921    -28%   24%
       Central Bank of Argentina   44,420    46,926    73,212    46,732    55,301    18%   24%
       Other financial institutions local and abroad   46,987    55,448    33,206    61,601    54,012    -12%   15%
       Others   6    6    6    6    6    0%   0%
Net Income from financial instruments at fair value through P&L   200    45    5    7    38    443%   -81%
Other financial assets   5,799    5,554    5,745    5,622    5,651    1%   -3%
Loans and other financing   56,960    40,109    29,382    26,308    24,453    -7%   -57%
       Other financial institutions   101    80    49    24    24    0%   -76%
       Non financial private sector & foreign residents   56,858    40,028    29,332    26,284    24,429    -7%   -57%
Other debt securities   5,301    5,796    5,695    6,653    3,936    -41%   -26%
Guarantees received   2,981    2,899    1,982    2,058    1,806    -12%   -39%
Investment in equity instruments   9    10    11    13    12    -8%   33%
Total Assets   169,069    162,685    158,948    160,076    153,137    -4%   -9%
Deposits   111,126    104,099    99,036    87,087    82,880    -5%   -25%
       Non financial public sector   4,457    4,572    3,189    4,742    4,089    -14%   -8%
       Financial sector   351    364    495    648    634    -2%   81%
       Non financial private sector & foreign residents   106,318    99,163    95,352    81,697    78,157    -4%   -26%
Other liabilities from financial intermediation   8,282    7,377    7,153    20,839    18,455    -11%   123%
Financing from the Central Bank and other fin. Inst   981    961    679    530    604    14%   -38%
Subordinated corporate bonds   37,953    38,787    39,648    38,743    38,149    -2%   1%
Other non financial liabilities   44    81    70    23    26    13%   -41%
Total Liabilities   158,386    151,306    146,586    147,222    140,114    -5%   -12%
                                    
NET FX POSITION (Pesos)   10,683    11,379    12,362    12,854    13,023    1%   22%
EOP FX (Pesos per USD)   64.4697    70.4550    76.1750    84.1450    91.9850    9%   43%
NET FX POSITION (USD)   166    162    162    153    142    -7%   -15%

 

16

 1Q21 Earnings Release

 

Relevant and Recent Events

 

·Interest and Principal Payment of Class C Peso denominated Notes. In April 2021, the Bank paid quarterly interest on Class C Peso denominated notes in the amount of Ps.223,752,035.96 and principal in the amount of Ps.2,413,000,000.

 

·Interest Payment Class A Subordinated Notes. In May 2021, the Bank paid semiannual interest on Class A subordinated notes in the amount of USD 13,500,000.

 

·Interest Payment Class B Peso denominated Notes. In May 2021, the Bank paid semiannual interest on Class B Peso denominated notes in the amount of Ps.252,804,212.

 

·General and Extraordinary Shareholders’ meeting. The Shareholders’ Meeting held on April 30, 2021, resolved to distribute as dividend to the shareholders the amount of up to Ps.10,000,425,701.12, a cash dividend or dividend in kind, in this case valued at market price, or in any combination of both alternatives, which represents AR$15.64 per share, and delegated to the Board the powers to determine how, when and under what terms shall such dividend be made available thereof to the shareholders in proportion to their respective shareholdings. The effective distribution of the dividends as approved on the date hereof is subject to BCRA’s authorization. Pursuant to the provisions of Communication “A”7181 issued by the BCRA, the distribution of profits by financial entities is suspended until June 30,2021. As to the total amount of dividends to be distributed, please be advised that it is subject to a 7% withholding rate according to section 97 of the abovementioned Income Tax Law, as amended and restated in 2019.

 

·Covid-19: In early March 2020, the World Health Organization recognized Coronavirus (Covid-19) as a pandemic that is severely affecting almost all countries around the world. The spread of this disease globally has forced the authorities to take drastic health and financial measures to contain and mitigate its effects on health and economic activity. Particularly in the Argentine Republic, on March 19, 2020, through Decree No. 297/2020, the Government established the “social, preventive and compulsory isolation” measure until March 31, 2020, which was then extended until June 7, 2020. Along with health protection rules, tax and financial measures were taken to mitigate the impact on the economy associated with the pandemic, including public direct financial assistance measures for part of the population, the establishment of financial and fiscal facilities for both individuals and companies. As regards measures related to the Entity’s business, the BCRA established maturities extensions, froze the mortgage loan installments and encouraged banks to lend to companies at reduced rates. In addition, the distribution of dividends of the finance institutions was suspended until June 30, 2020. In addition, in the mandatory quarantine context, the BCRA ruled that financial institutions would not be able to open their branches for public service during that period and should continue to provide services to users remotely. They could also trade with each other and their clients in the exchange market remotely. During quarantine, remote trading of stock exchanges and capital markets authorized by the CNV, the custodians and capital market agents registered with the CNV was admitted. In view of the extension of mandatory quarantine, the BCRA then decided that financial institutions would open their branches from Friday, April 3, 2020 for public attention through previous appointments obtained by the Bank’s website. The Bank is developing its activities under the conditions detailed above, giving priority to the compliance of social isolation measures by its employees, with the primary objective of taking care of the public health and well-being of all its stakeholders (employees, suppliers, customers, among others). To this end, it has put in place contingency procedures and has enabled its staff to carry out their tasks remotely. From a commercial point of view, it has emphasized maintaining a close relationship with its customers, trying to respond to their needs at this difficult time, sustaining all virtual channels of care to ensure operability and good response to requirements, monitoring compliance with their business obligations and monitoring the active portfolio in order to detect possible delays in collection and set new conditions for them. Considering the size of the abovementioned situation, the Bank’s Management estimates that this situation could have an impact on its operations and the financial situation and the results of the Bank, which are under analysis, and will ultimately; depend on the extent an duration of the health emergency and the success of the measures taken.

 

17

 1Q21 Earnings Release

 

Regulatory Changes

 

·Inflation Adjustment (Other Comprehensive Income) In January 2021 through Communication “A” 7221 with starting in fiscal year 2021, the monetary result accrued with respect to items of a monetary nature that are measured at fair value with changes in Other Comprehensive Income (OCI), must be recorded in results for the period/fiscal year. Consequently, the unallocated results must be adjusted and recorded in the account "Adjustments to results from previous years" at the beginning of fiscal year 2021, in order to incorporate the accumulated monetary results of the aforementioned items as of that date that will be recorded in OCI. All the comparative information for the next periods/fiscal years must consider this change in the exposure criteria.

 

·Mandatory Lending SMEs. The Central Bank establishes the extension of Productive Investment Financing lines (until September 30, 2021 for the 2021 quota). It also requires financial institutions to assign an official accountable for the enforcement of this credit line and to report to the Superintendence of Financial and Exchange Institutions within 10 calendar days since the issuance of this regulation.

 

·Minimum Reserve Requirements. Universal Free Accounts. In May 2021, through Communication “A” 7254, the Central Bank established the reduction of the average minimum reserve requirement in pesos for financial institutions that implement the remote and on-site opening of Universal Free Accounts, based on

 

oFinancing granted as of April 1, 2021 to individuals and SMEs that are not reported by financial institutions in the “Financial system debtor database” (CENDEU).

oThe growth rate in the use of electronic means through sight accounts whose beneficiaries are individuals.

oThe evolution of documents issued through electronic means (ECHEQ) and electronic credit invoices (FCE).

oOperability of ATMs

 

·Debtor Classification. In March 2021, through Communication “A” 7245 the Central Bank of Argentina established a gradual transition in the criteria of debtor classification for clients who decided to delay installment payments (up to March 2021, with no further extensions). For this matter, financial institutions will have to extend late-payment periods to classify their debtors in stages 1, 2 and 3, both for commercial and retail portfolios, as follows

 

oi) until March 31, 2021, in 60 days

oii) until May 31, 2021, in 30 days

oiii) as of June 1, 2021, they will have to classify debtors pursuant to general criteria for non-performing loans

 

18

 1Q21 Earnings Release

 

QUARTERLY BALANCE SHEET  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
ASSETS                                   
Cash and deposits in Banks   175,915    140,648    142,011    146,802    153,515    5%   -13%
           Cash   26,472    21,499    25,340    28,716    23,651    -18%   -11%
           Central Bank of Argentina   102,449    63,582    83,454    56,471    75,836    34%   -26%
           Other local & foreign entities   46,989    55,561    33,211    61,610    54,023    -12%   15%
           Other   5    6    6    5    5    0%   0%
Debt securities at fair value through profit & loss   2,422    16,944    20,807    62,104    38,381    -38%   1485%
Derivatives   59    23    17    8    -    -100%   -100%
Repo Transactions   585    93,062    67,867    44,528    12,890    -71%   2103%
Other financial assets   17,394    15,179    19,577    21,333    17,467    -18%   0%
Loans & other receivables   321,117    307,555    298,874    290,658    265,031    -9%   -17%
          Non Financial Public Sector   5,997    8,783    5,041    4,083    3,290    -19%   -45%
          Financial Sector   3,960    2,959    2,246    2,059    2,663    29%   -33%
          Non Financial private sector and foreign   311,160    295,813    291,587    284,516    259,078    -9%   -17%
Other debt securities   138,772    201,922    302,105    236,211    212,608    -10%   53%
Financial assets in guarantee   14,265    18,845    15,377    16,144    13,742    -15%   -4%
Investments in equity instruments   2,259    2,180    2,045    1,878    2,056    9%   -9%
Investments in other companies
(subsidiaries and joint ventures)		   240    202    228    230    247    7%   3%
Property, plant and equipment   39,315    38,943    38,856    38,821    38,866    0%   -1%
Intangible assets   5,630    5,582    5,573    5,765    5,818    1%   3%
Deferred income tax assets   82    88    89    71    56    -21%   -32%
Other non financial assets   2,084    2,633    2,611    2,522    2,567    2%   23%
Non-current assets held for sale   2,780    2,762    2,826    2,551    2,549    0%   -8%
TOTAL ASSETS   722,919    846,568    918,863    869,626    765,793    -12%   6%
                                    
LIABILITIES                                   
Deposits   444,087    549,636    619,568    552,048    457,287    -17%   3%
         Non Financial Public Sector   38,957    80,776    132,834    83,094    55,361    -33%   42%
         Financial Sector   415    473    555    787    694    -12%   67%
         Non Financial private sector and foreign   404,715    468,387    486,179    468,167    401,232    -14%   -1%
Derivatives   229    -    -    -    -    -    -100%
Repo Transactions   -    1,726    -    699    -    -100%   0%
Other financial liabilities   33,501    38,977    36,008    55,591    49,875    -10%   49%
Financing received from Central Bank and
Other Financial Institutions		   1,234    1,448    865    1,038    1,149    11%   -7%
Issued Corporate Bonds   7,793    6,564    6,311    5,565    5,054    -9%   -35%
Current income tax liabilities   14,680    10,138    12,526    5,812    4,730    -19%   -68%
Subordinated corporate bonds   37,953    38,787    39,648    38,743    38,149    -2%   1%
Provisions   2,265    2,185    2,044    1,473    1,392    -5%   -39%
Deferred income tax liabilities   5    4,962    3,187    7,106    8,095    14%   161800%
Other non financial liabilities   11,319    30,778    30,301    34,289    30,025    -12%   165%
TOTAL LIABILITIES   553,066    685,201    750,458    702,364    595,756    -15%   8%
                                    
SHAREHOLDERS' EQUITY                                   
Capital Stock   639    639    639    639    639    0%   0%
Issued Shares premium   12,430    12,430    12,430    12,430    12,430    0%   0%
Adjustment to Shareholders' Equity   58,523    58,523    58,523    58,523    58,523    0%   0%
Reserves   84,462    128,636    128,636    124,041    124,041    0%   47%
Retained earnings   4,980    -57,157    -57,157    -57,157    -29,643    -48%   -695%
Other accumulated comprehensive income   -787    444    1,403    1,269    1,858    46%   - 
Net income for the period / fiscal year   9,604    17,850    23,929    27,514    2,187    -92%   -77%
Shareholders' Equity attributable
to parent company		   169,851    161,365    168,403    167,259    170,035    2%   0%
                                    
Shareholders' Equity attributable to
non controlling interest		   2    2    2    3    2    -33%   0%
TOTAL SHAREHOLDERS' EQUITY   169,853    161,367    168,405    167,262    170,037    2%   0%

 

19

 1Q21 Earnings Release

 

INCOME STATEMENT  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)  1Q20   2Q20   3Q20   4Q20   1Q21   QoQ   YoY 
                             
Interest Income   44,093    40,076    46,262    46,996    45,095    -4%   2%
Interest Expense   13,706    12,947    19,655    22,406    21,266    -5%   55%
 Net Interest Income   30,386    27,130    26,607    24,590    23,829    -3%   -22%
Fee income   6,943    6,790    7,215    7,000    6,528    -7%   -6%
Fee expense   622    496    587    607    600    -1%   -4%
 Net Fee Income   6,321    6,293    6,628    6,394    5,928    -7%   -6%
Subtotal (Net Interest Income + Net Fee Income)   36,707    33,423    33,235    30,984    29,757    -4%   -19%
Net Income from financial instruments
 at Fair Value Through Profit & Loss		   2,348    3,072    3,395    3,708    4,562    23%   94%
Result from assets at amortised cost   1,216    25    77    142    60    -58%   -95%
Difference in quoted prices of gold
and foreign currency		   760    1,063    1,518    1,437    1,216    -15%   60%
Other operating income   1,568    1,439    1,486    1,572    1,649    5%   5%
Provision for loan losses   1,229    3,171    2,200    2,439    2    -100%   -100%
Net Operating Income   41,369    35,852    37,510    35,405    37,242    5%   -10%
Personnel expenses   6,742    7,763    7,795    7,744    7,258    -6%   8%
Administrative expenses   3,815    3,931    4,275    4,402    3,415    -22%   -10%
Depreciation and impairment of assets   1,193    1,246    1,277    1,257    1,288    2%   8%
Other operating expenses   6,167    5,561    5,767    5,636    6,357    13%   3%
Operating Income   23,453    17,351    18,395    16,366    18,924    16%   -19%
Income from associates and joint ventures   29    11    19    -67    23    -134%   -21%
Result from net monetary position   -8,252    -5,591    -8,357    -12,016    -14,443    -    - 
Net Income before income tax on cont. operations   15,230    11,771    10,057    4,283    4,504    5%   -70%
Income tax on continuing operations   5,626    3,525    3,979    696    2,317    233%   -59%
Net Income from continuing operations   9,604    8,246    6,078    3,587    2,187    -39%   -77%
                                    
Net Income for the period   9,604    8,246    6,078    3,587    2,187    -39%   -77%
Net Income of the period attributable
to parent company		   9,604    8,245    6,078    3,587    2,187    -39%   -77%
Net income of the period attributable
to non-controlling interests		   -    1    -    -    -    -    - 
                                    
Other Comprehensive Income   -997    1,230    960    -134    588    -    - 
Foreign currency translation differences in
financial statements conversion		   -10    105    65    -25    -97    -    - 
Profits or losses from financial assets measured
at fair value  through other comprehensive income
(FVOCI)  (IFRS 9(4.1.2)(a)		   -987    1,125    895    -109    685    -    - 
                                    
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD   8,607    9,476    7,038    3,453    2,775    -20%   -68%
Total Comprehensive Income attributable
to parent Company		   8,607    9,476    7,038    3,453    2,775    -20%   -68%
Total Comprehensive Income attributable
to non-controlling interests		   -    -    -    -    -    -    - 

 

20

 1Q21 Earnings Release

 

QUARTERLY ANNUALIZED RATIOS  MACRO Consolidated 
   1Q20   2Q20   3Q20   4Q20   1Q21 
Profitability & performance                         
Net interest margin   25.2%   19.8%   17.1%   16.3%   17.4%
Net interest margin adjusted (exc. FX)   24.6%   19.1%   16.2%   15.4%   16.5%
Net fee income ratio   11.2%   12.3%   13.1%   13.9%   11.5%
Efficiency ratio   31.1%   36.3%   36.8%   38.8%   35.7%
Net fee income as % of A&G Expenses   36.0%   33.9%   35.6%   35.7%   32.2%
Return on average assets   5.6%   4.3%   2.8%   1.7%   1.1%
Return on average equity   23.4%   20.5%   14.7%   8.8%   5.4%
Liquidity                         
Loans as a percentage of total deposits   72.3%   56.0%   48.2%   52.7%   58.0%
Liquid assets as a percentage of total deposits   72.0%   84.0%   87.0%   90.0%   94.0%
Capital                         
Total equity as a percentage of total assets   23.5%   19.1%   18.3%   19.2%   22.2%
Regulatory capital as % of APR   32.0%   32.2%   34.8%   34.2%   37.7%
Asset Quality                         
Allowances over total loans   2.5%   2.5%   2.9%   3.5%   3.7%
Non-performing financing as a percentage of total financing   1.4%   1.5%   1.1%   0.8%   0.9%
Coverage ratio w/allowances   173.5%   210.7%   303.0%   479.3%   387.8%
Cost of Risk   1.6%   4.1%   3.0%   3.4%   0.0%

 

ACCUMULATED ANNUALIZED RATIOS  MACRO Consolidated 
   1Q20   2Q20   3Q20   4Q20   1Q21 
Profitability & performance                         
Net interest margin   25.2%   22.3%   20.3%   19.2%   17.4%
Net interest margin adjusted (exc. FX)   24.6%   21.6%   19.5%   18.4%   16.5%
Net fee income ratio   11.2%   11.7%   12.2%   12.6%   11.5%
Efficiency ratio   31.1%   33.6%   34.7%   35.7%   35.7%
Net fee income as % of A&G Expenses   36.0%   34.9%   35.1%   35.3%   32.2%
Return on average assets   5.6%   4.9%   4.1%   3.5%   1.1%
Return on average equity   23.4%   21.9%   19.5%   16.8%   5.4%
Liquidity                         
Loans as a percentage of total deposits   72.3%   56.0%   48.2%   52.7%   58.0%
Liquid assets as a percentage of total deposits   72.0%   84.0%   87.0%   90.0%   94.0%
Capital                         
Total equity as a percentage of total assets   23.5%   19.1%   18.3%   19.2%   22.2%
Regulatory capital as % of APR   32.0%   32.2%   34.8%   34.2%   37.7%
Asset Quality                         
Allowances over total loans   2.5%   2.5%   2.9%   3.5%   3.7%
Non-performing financing as a percentage of total financing   1.4%   1.5%   1.1%   0.8%   0.9%
Coverage ratio w/allowances   173.5%   210.7%   303.0%   479.3%   387.8%
Cost of Risk   1.6%   2.8%   2.9%   3.0%   0.0%

 

21

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

Date: May 27, 2021

  MACRO BANK INC.
     
     
  By: /s/ Jorge Francisco Scarinci
  Name: Jorge Francisco Scarinci
  Title: Chief Financial Officer