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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reveals several concerns: a rise in nonperforming loans, unexpected expenses, and poor bond portfolio performance. Despite optimistic loan and deposit growth forecasts, the Q&A section highlighted uncertainties, such as unclear management responses and no immediate buyback plans. The market may react negatively to the weak financial results, increased costs, and cautious outlook on returns. Given the mid-cap status of the company, these factors are likely to result in a stock price decrease of -2% to -8% over the next two weeks.
Net Income Banco Macro's net income totaled ARS 33.1 billion loss in Q3 2025, ARS 191.5 billion lower than the previous quarter. This was due to higher loan loss provisions, higher administrative expenses, lower income from government and private securities, and lower net fee income, partially offset by higher other operating income and a lower loss related to the net monetary position.
Total Comprehensive Income Total comprehensive income for Q3 2025 was ARS 28.4 billion loss. For the first 9 months of 2025, net income was ARS 176.7 billion, 35% lower than the same period last year, when it was ARS 186.9 billion. The decline was attributed to the same factors affecting net income.
Net Operating Income Net operating income before general and administrative and personnel expenses was ARS 779.6 billion in Q3 2025, 23% or ARS 233.7 billion lower compared to Q2 2025 due to lower income from government securities. Year-over-year, it decreased 29% or ARS 312.9 billion.
Provision for Loan Losses Provision for loan losses totaled ARS 156.8 billion in Q3 2025, 45% or ARS 49.4 billion higher than Q2 2025. Year-over-year, it increased 424% or ARS 128.4 billion.
Net Interest Income Net interest income was ARS 686.2 billion in Q3 2025, 7% or ARS 52.2 billion lower than Q2 2025 and 8% or ARS 63.6 billion lower year-over-year. This was due to a ARS 113.9 billion increase in interest expense, while interest income increased ARS 61.6 billion.
Interest Income Interest income totaled ARS 1.32 trillion in Q3 2025, 5% or ARS 61.6 billion higher than Q2 2025 and 7% or ARS 84.7 billion higher year-over-year. Income from interest on loans increased 74% or ARS 396.2 billion year-over-year, driven by an 11% increase in private sector loans and a 111 basis point increase in the average lending rate.
Income from Government and Private Securities Income from government and private securities decreased 24% or ARS 85.4 billion quarter-over-quarter and 52% or ARS 292.8 billion year-over-year in Q3 2025. This was mainly due to inflation-adjusted bonds.
FX Income FX income was ARS 13.8 billion loss in Q3 2025, ARS 37.5 billion lower than Q2 2025, mainly due to losses from foreign currency exchange. Year-over-year, FX income decreased 164% or ARS 35.2 billion.
Interest Expense Interest expense totaled ARS 528.4 billion in Q3 2025, increasing 27% or ARS 113.9 billion quarter-over-quarter and 39% or ARS 148.4 billion year-over-year. Interest on deposits represented 94% of total interest expense, increasing 24% or ARS 96.6 billion quarter-over-quarter and 36% or ARS 131.3 billion year-over-year.
Net Fee Income Net fee income was ARS 177.3 billion in Q3 2025, 7% or ARS 13.9 billion lower than Q2 2025. Year-over-year, it increased 14% or ARS 22.1 billion.
Net Income from Financial Assets and Liabilities Net income from financial assets and liabilities at fair value to profit or loss was ARS 19.5 billion gain in Q3 2025, decreasing 84% or ARS 101 billion quarter-over-quarter and 86% or ARS 117 billion year-over-year.
Other Operating Income Other operating income totaled ARS 69 billion in Q3 2025, 42% or ARS 20.5 billion higher than Q2 2025 due to higher credit and debit card income. Year-over-year, it increased 16% or ARS 9.7 billion.
Administrative Expenses and Employee Benefits Administrative expenses plus employee benefits totaled ARS 331.5 billion in Q3 2025, 12% or ARS 35.1 billion higher than Q2 2025 due to a 20% increase in employee benefits. Year-over-year, these expenses decreased ARS 431 million.
Efficiency Ratio The efficiency ratio was 39.1% in Q3 2025, deteriorating from 35.9% in Q2 2025 and 25.5% a year ago. This was due to a 10% increase in expenses and a 19% decrease in income.
Net Monetary Position The result from the net monetary position was ARS 203.1 billion loss in Q3 2025, 6% or ARS 13 billion lower than Q2 2025 and 46% or ARS 171 billion lower year-over-year. This was due to lower inflation during the quarter.
Loan Growth Total financial loans reached ARS 10.1 trillion in Q3 2025, increasing 3% or ARS 332.4 billion quarter-over-quarter and 69% or ARS 4.1 trillion year-over-year. Private sector loans increased 3% or ARS 278.2 billion quarter-over-quarter and 67% or ARS 3.94 trillion year-over-year.
Deposits Total deposits increased 5% or ARS 556.4 billion quarter-over-quarter, totaling ARS 11.8 trillion in Q3 2025, and increased 11% or ARS 1.2 trillion year-over-year. Private sector deposits increased 6% or ARS 604.9 billion quarter-over-quarter.
Asset Quality The nonperforming total finance ratio was 30.2% in Q3 2025. Consumer portfolio nonperforming loans increased to 4.3% from 2.81% in the previous quarter, while commercial portfolio nonperforming loans increased to 0.85% from 0.52%.
Capitalization Banco Macro had an excess capital of ARS 3.3 trillion in Q3 2025, representing a capital adequacy ratio of 29.9% and a Tier 1 ratio of 29.2%.
Loan Growth: The bank's total financial reached ARS 10.1 trillion, increasing 3% quarter-on-quarter and 69% year-on-year. Private sector loans increased 3% quarter-on-quarter and 67% year-on-year. Commercial loans saw growth in documents and others, while overdrafts decreased. Consumer lending increased across most product lines except for credit card loans.
Deposit Growth: Total deposits increased 5% quarter-on-quarter and 11% year-on-year, totaling ARS 11.8 trillion. Private sector deposits increased 6% quarter-on-quarter, while public sector deposits decreased 5%. Demand deposits led the increase in private sector deposits.
Net Income: Banco Macro reported a net income loss of ARS 33.1 billion in Q3 2025, ARS 191.5 billion lower than the previous quarter. This was due to higher loan loss provisions, administrative expenses, and lower income from securities and fees.
Interest Income and Expense: Interest income totaled ARS 1.32 trillion, up 5% quarter-on-quarter and 7% year-on-year. Interest expense increased 27% quarter-on-quarter and 39% year-on-year, driven by higher rates on deposits.
Efficiency Ratio: The efficiency ratio deteriorated to 39.1% in Q3 2025 from 35.9% in the previous quarter and 25.5% a year ago. Expenses increased 10%, while income decreased 19% quarter-on-quarter.
Capitalization and Liquidity: Banco Macro maintained a strong capital position with an excess capital of ARS 3.3 trillion, a capital adequacy ratio of 29.9%, and a Tier 1 ratio of 29.2%. Liquidity remained robust with a liquid assets to total deposit ratio of 67%.
Net Income Loss: Banco Macro reported a net income loss of ARS 33.1 billion in Q3 2025, which is ARS 191.5 billion lower than the previous quarter. This was driven by higher loan loss provisions, increased administrative expenses, and lower income from government and private securities.
Loan Loss Provisions: Loan loss provisions increased by 45% quarter-on-quarter and 424% year-on-year, indicating a significant deterioration in asset quality and potential credit risk.
Net Interest Margin: The net interest margin, including FX, dropped to 18.7% in Q3 2025 from 23.5% in the previous quarter and 31.5% a year ago, reflecting declining profitability in core lending activities.
Nonperforming Loans (NPLs): The nonperforming total finance ratio reached 30.2%, with consumer portfolio NPLs deteriorating to 4.3% from 2.81% in the previous quarter, signaling worsening credit quality.
FX Income Loss: The bank reported an FX income loss of ARS 13.8 billion, primarily due to losses from foreign currency exchange, exacerbated by the depreciation of the Argentine peso.
Administrative Expenses: Administrative expenses, including employee benefits, increased by 12% quarter-on-quarter, driven by higher compensation and provisions for early retirement and severance payments, impacting cost efficiency.
Income from Government and Private Securities: Income from government and private securities decreased by 24% quarter-on-quarter and 52% year-on-year, reflecting reduced returns from these investments.
Efficiency Ratio: The efficiency ratio deteriorated to 39.1% in Q3 2025 from 35.9% in the previous quarter and 25.5% a year ago, indicating declining operational efficiency.
Inflation and Monetary Loss: The result from the net monetary position was a loss of ARS 203.1 billion, reflecting the impact of high inflation and monetary adjustments on the bank's financials.
Loan Growth: The bank's total financial reached ARS 10.1 trillion, increasing 3% or ARS 332.4 billion quarter-on-quarter and increasing 69% of ARS 4.1 trillion year-on-year. In the third quarter of 2025, private sector loans increased 3% or ARS 278.2 billion, and on a yearly basis, private sector loans increased 67% of ARS 3.94 trillion. Within commercial loans, documents and others stand out with a 4% or ARS 60.4 billion and a 27% or ARS 453.9 billion, respectively. Meanwhile, overdrafts decreased 21% or ARS 364.9 billion. Within consumer lending, almost all product lines increased during the third quarter of 2025, except for credit card loans, which decreased 1% or ARS 21.3 billion. Personal loans, mortgage loans and pledged loans stand out with an 8% or ARS 156.8 billion, 12% or ARS 92.8 billion, 6% or ARS 13.1 billion increase, respectively. In the third quarter of 2025, peso financing decreased 2% or ARS 192.1 billion, while U.S. dollar financing increased 10% or $170 million. It is important to mention that Banco Macro's market share over private sector loans as of September 2025 reached 9%.
Funding and Deposits: Total deposits increased 5% or ARS 556.4 billion quarter-on-quarter, totaling ARS 11.8 trillion and increase 11% of ARS 1.2 trillion year-on-year. Private sector deposits increased 6% or ARS 604.9 billion quarter-on-quarter, while public sector deposits decreased 5% or ARS 49.6 billion quarter-on-quarter. The increase in private sector deposits was led by demand deposits, which increased 10% or ARS 475.2 billion, while time deposits increased 4% or ARS 202.2 billion quarter-on-quarter. Peso deposits decreased 1% or ARS 48 billion, while U.S. dollar deposits increased 3% or $95 million. As of September 2025, Banco Macro's transactional accounts represented approximately 49% of total deposits. Banco Macro's market share over private deposits as of September 2025 totaled 7.4%.
Asset Quality: Banco Macro's nonperforming total finance ratio reached 30.2%. The coverage ratio, measured as total allowances under expected credit losses over nonperforming loans under Central Bank rules reached 120.87%. Consumer portfolio nonperforming loans deteriorated 149 basis points, up to 4.3% from 2.81% in the previous quarter while commercial portfolio nonperforming loans deteriorated 33 basis points in the third quarter of 2025, up to 0.85% from 0.52% in the previous quarter.
Capitalization: Banco Macro accounted an excess capital of ARS 3.3 trillion, which represented a capital adequacy ratio of 29.9% and a Tier 1 ratio of 29.2%. The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate. Liquid assets to total deposit ratio reached 67%.
Forward-Looking Statements: Any comments 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.
The selected topic was not discussed during the call.
The earnings call summary reveals several concerns: a rise in nonperforming loans, unexpected expenses, and poor bond portfolio performance. Despite optimistic loan and deposit growth forecasts, the Q&A section highlighted uncertainties, such as unclear management responses and no immediate buyback plans. The market may react negatively to the weak financial results, increased costs, and cautious outlook on returns. Given the mid-cap status of the company, these factors are likely to result in a stock price decrease of -2% to -8% over the next two weeks.
The earnings call highlights mixed signals: while there is strong loan growth and a robust capital position, the decrease in net income and rising non-performing loans, coupled with management's cautious outlook on NIMs and asset quality, balance out the positives. The Q&A reveals concerns about volatility and rising interest rates, which could pressure margins and asset quality. However, optimistic loan and deposit growth guidance provide a counterbalance. Given the market cap of $3.7 billion, the stock is likely to see a neutral movement in the next two weeks.
The earnings call reveals a significant drop in net income and operating income, alongside increased loan loss provisions. Despite some positive aspects like deposit growth and capital adequacy, the overall financial performance is weak with declining margins and income. The Q&A further highlights concerns with lowered ROE guidance and unclear responses on M&A opportunities. The market cap suggests moderate sensitivity, leading to a predicted negative stock price movement of -2% to -8% over the next two weeks.
The earnings report reveals mixed financial performance with declining interest income and a reduced net interest margin. Despite some positive aspects like increased net fee income, the overall sentiment is negative due to higher loan loss provisions and deteriorating efficiency ratio. The Q&A section highlights concerns about inflation, modest NPL deterioration, and unclear management strategies. Additionally, the market cap of $3.7 billion suggests moderate sensitivity to earnings announcements. Overall, the report's negative aspects outweigh the positives, leading to a negative sentiment rating.
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