Macro Bank Q1 2024 Earnings Report

Macro Bank EPS Results

• Actual EPS: $5.02
• Consensus EPS: $2.19
• Beat/Miss: Beat by +$2.83
• One Year Ago EPS: N/A

Macro Bank Revenue Results

• Actual Revenue: $1.87 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Macro Bank Announcement Details

• Quarter: Q1 2024
• Date: 5/23/2024
• Time: N/A
• Conference Call Date: Friday, May 24, 2024
• Conference Call Time: 12:00PM ET

Macro Bank (NYSE:BMA) (NYSE: BMA) is the American depositary receipt program of Banco Macro S.A., one of the largest privately owned banks in Argentina. Headquartered in Buenos Aires, the institution delivers a comprehensive suite of banking solutions to retail, corporate and agricultural customers across the country. Through its extensive branch network and digital platforms, Macro Bank aims to serve diverse client segments with tailored financial products and services.

The bank’s offerings span traditional deposit accounts—including checking, savings and term deposits—alongside payment and transaction services. On the lending side, Macro Bank provides mortgage financing, consumer loans and credit card facilities, as well as commercial and small and medium enterprise (SME) credit. Additional services include mutual funds, insurance brokerage, leasing arrangements and electronic banking, enabling clients to manage accounts and investments via mobile and online channels.

Founded in 1976 under the name Banco Llao Llao, the company expanded rapidly in the late 1980s and 1990s through the acquisition of regional state banks, adopting the Macro brand in 1998. The bank launched its ADR program on the New York Stock Exchange in 2006 under the symbol BMA. Over time, Macro Bank has focused on strengthening its risk management framework, advancing digital transformation and broadening financial inclusion in Argentina’s underserved provinces.

Macro Bank Q1 2024 Earnings Call Transcript

Key Takeaways

• Q1 net income was ARS 275.2 billion, down 61% quarter-on-quarter but up 626% year-on-year, delivering an annualized ROE of 37.0% and ROA of 11.9%.
• Net interest income fell 40% quarter-on-quarter and 56% year-on-year, driven by lower interest income from private-sector loans amid decreasing loan volumes and lending rates.
• The bank’s efficiency ratio improved to 14.7% from 18.6% in Q4 2023 and 25.5% a year ago, reflecting a 12% decline in administrative and personnel expenses.
• A ARS 1.27 trillion gain from financial assets and liabilities at fair value, mainly on government and inflation-linked securities, significantly supported Q1 results.
• Management forecasts 10–15% loan growth and a ~20% average ROE for FY 2024, expecting lending to pick up as inflation and interest rates normalize.

Presentation

[Operator]

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's first quarter 2023 earnings conference call. We would like to inform you that first quarter 2023 press release is available to download at the Investor Relations website of Banco Macro at www.macro.com.ar/relaciones-inversores/. Also, this event is being recorded, and all participants will be in a listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer session. At that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to signal the operator. 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. Nicolás Torres, IR.

[Operator]

Now I will turn the conference over to Mr. Nicolás Torres. You may begin.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

Thank you, Dave. Good morning, and welcome to Banco Macro's first quarter 2024 conference call. Any comment we 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. First quarter 2024 press release was distributed on Wednesday, and it's available at our website. All figures are in Argentine pesos and have been restated in terms of the measured unit current at the end of the reporting period. As 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, previous, previous quarters have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2024.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

I will now briefly comment on the bank's first quarter 2024 financial results. Banco Macro's net income for the quarter was ARS 275.2 billion, 61% or ARS 422 billion lower than in the fourth quarter of 2023, and 626%, or ARS 237.3 billion higher than the result posted a year ago. The bank's analyzed ROE and ROA of 37.4% and 11.9%, respectively, remain healthy and shows the bank earnings potential. Net operating income before general, administrative, and personnel expenses for the first quarter of 2024 was ARS 1.62 trillion, decreasing 19% or ARS 388 billion quarter-on-quarter.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

On a yearly basis, net operating income before general, administrative, and personnel expenses increased 149%, or ARS 969 billion. In the first quarter of 2024, provision for loan losses totaling ARS 18.9 billion, 32% or ARS 8 billion lower than in the previous quarter. On a yearly basis, provision for loan losses increased 40%, or ARS 5.4 billion. Operating income after general, administrative, and personnel expenses was ARS 1.25 trillion, 20% or ARS 322.7 billion lower than the fourth quarter of 2023, and 211% or ARS 850 billion higher than the first quarter of 2023.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the quarter, net interest income totaled ARS 167.5 billion, 40%, or ARS 111 billion lower than the result posted in the fourth quarter of 2023, and 56%, or ARS 211.3 billion lower than the result posted one year ago. Interest income decreased 18%, while interest expenses decreased 7%. In the first quarter of 2024, interest income totaled ARS 714.8 billion, 18%, or ARS 154.5 billion lower than in the fourth quarter of 2023, and 19%, or ARS 172 billion lower than the previous year.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

Income from interest on loans and other financing totaled ARS 462 billion, 18%, or ARS 102.8 billion lower compared with the previous quarter, mainly due to a 16% decrease in the average volume of private sector loans and a 118 basis points decrease in the average lending rate. On a yearly basis, income from interest on loans increased 39%, or ARS 129.8 billion. In the first quarter of 2024, interest on loans represented 65% of total interest income.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the first quarter of 2024, income from government and private securities decreased 42%, or ARS 68.3 billion quarter-over-quarter, due to the unwinding of our Leliq portfolio, and increased 82%, or ARS 429.3 billion compared with the same period of last year. In the first quarter of 2024, income from Repos totaled ARS 151.9 billion, 19% or ARS 24.3 billion higher than the previous quarter, and 482%, or ARS 125.8 billion higher than a year ago.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the first quarter of 2024, FX income totaled ARS 80.6 billion, 31%, or ARS 196.5 billion lower than the previous quarter, and 43%, or ARS 61.6 billion lower than a year ago. FX income gain was due to the 6.1 Argentine peso depreciation against the US dollar and the bank's long dollar position during the quarter. It is important to notice that the bank's long dollar position decreased 96% during the quarter. In the first quarter of 2024, interest expense totaled ARS 547.3 billion, 7%, or ARS 43.5 billion lower compared to the fourth quarter of 2023, and 8% or ARS 39.3 billion higher on a yearly basis....

[Nicolás Torres, Head of Investor Relations at Banco Macro]

Within interest expenses, interest on deposits decreased 8% of the ARS 6.5 billion quarter-on-quarter, mainly driven by a 970 basis points decrease in the average interest rate paid on deposits, while the average volume of private sector deposits increased 5%. On a year-over-year basis, interest on deposits increased 6% of ARS 31.5 billion. In the first quarter of 2024, interest on deposits represented 96% of the bank's financial expenses. In the first quarter of 2024, the bank's net interest margin, including FX, was 26% lower than the 52.1% posted in the fourth quarter of 2023, and the 33.6% posted in the first quarter of 2023.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the first quarter of 2024, Banco Macro's net fee income totaled ARS 74.1 billion, 12% or ARS 10.2 billion lower than the fourth quarter of 2023, and was 13% or ARS 11.4 billion lower than the same period of last year. In the first quarter of 2024, net income from financial assets and liabilities at fair value through profit or loss totaled 1.27 trillion ARS gain, mainly due to the mark-to-market of some government securities, mainly inflation-adjusted bonds. In the quarter, other operating income totaled ARS 44.4 billion, increasing 16% or ARS 6.2 billion compared to the fourth quarter of 2023. On a yearly basis, other operating income increased 100% or ARS 22.2 billion.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the first quarter of 2024, Banco Macro's administrative expenses, plus employee benefits, totaled ARS 202.3 billion, 12% or ARS 28.9 billion lower than the previous quarter, due to lower employee benefits, which decreased 1%, and lower administrative expenses, which decreased 28%. On a yearly basis, administrative expenses, plus employee benefits, increased 49% or ARS 66.1 billion. As of the first quarter of 2024, the efficiency ratio reached 14.7%, improving substantially from the 18.6% posted in the fourth quarter of 2023 and the 25.5% posted one year ago. In the first quarter of 2024, expenses decreased 13%, while net interest income, plus net fee income, plus other operating income, decreased 11% compared to the fourth quarter of 2023.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the first quarter of 2024, the result from the net monetary position totaled ARS 889 billion loss, 12% or ARS 92 billion higher than the loss posted in the fourth quarter of 2023, and 159% or ARS 546.2 billion higher than the loss posted one year ago. Our net monetary position increased 84% during the quarter, while low inflation was observed in the first quarter of 2024, one hundred and sixty-seven basis points below inflation registered in the fourth quarter of 2023. Inflation was 51.6% in the first quarter of 2024, compared to 53.3% in the fourth quarter of 2023.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In the first quarter of 2024, Banco Macro's effective tax rate was 24.5%, lower than the 31.4 registered in the fourth quarter of 2023. Further information is provided in Note 21 to our financial statements. In terms of loan growth, the bank's total financing reached ARS 2.5 trillion, increasing 10% or ARS 279.6 billion quarter-on-quarter, and 8% or ARS 205.9 billion lower year-on-year. Within commercial loans, overdrafts stand out with a 21% or ARS 92.6 billion decrease. Documents decreased 21% or ARS 10 billion, while others increased 2% or ARS 9.3 billion.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

Within consumer lending, personal loans decreased 12% or ARS 44.8 billion, while credit card loans decreased 18% or ARS 132.1 billion. Peso financing decreased 20% or ARS 513.9 billion, while US dollar financing increased 75% or $254 million. It is important to mention that Banco Macro's market share over private sector loans as of March 2024, reached 9.4%. On the funding side, total deposits decreased 1% or ARS 74.3 billion quarter-on-quarter, to ARS 205 trillion, and decreased 11% or ARS 644 billion year-on-year.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

Private sector deposits decreased 6% or ARS 291.2 billion pesos quarter-on-quarter, while private sector deposits increased 83% or ARS 234.2 trillion pesos in the quarter. The decrease in private sector deposits was led by demand deposits, which decreased 26% or ARS 777.3 billion pesos quarter-on-quarter, while time deposits increased 27% or ARS 422.6 billion pesos. Within private sector deposits, peso deposits increased 10% or ARS 365.2 billion pesos, while US dollar deposits decreased 32% or $622 million. As of March 2024, Banco Macro's transactional accounts represented approximately 46% of total deposits. Banco Macro's market share over private sector deposits as of March 2024 totaled 7.5%.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

In terms of asset quality, Banco Macro's non-performing total financial ratio reached 1.14%, and the coverage ratio, measured as total allowances under expected credit losses over non-performing loans under Central bank rules, reached 222.7%. Consumer portfolio non-performing loans deteriorated 12 basis points up to 1.7% from 1.35% the previous quarter, while commercial portfolio non-performing loans improved 49 basis points in the first quarter of 2024, down to 0.72% from 1.2% in the last quarter. In terms of capitalization, Banco Macro has accounted an excess capital of ARS 2.59 trillion, which represented a capital adequacy ratio of 46.5% and a Tier 1 ratio of 44.5%. The bank's aim is to make the best use of this excess capital.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

The bank's liquidity remained more than appropriate. Liquid assets to total deposit ratio reached 124%. Overall, we have accounted for another positive quarter. We continue to show a solid financial position. Asset quality remain under control and closely monitored, and we keep on working to improve more our efficiency standards, and we keep our well-automized deposit base. At this time, we would like to take the questions you may have.

[Operator]

Okay, at this time, we're going to open it up for questions and answers. If you would like to ask a question, please press star one on your touchtone phone. Please unmute your phone and record your name clearly when prompted. One moment, please, for the first question. Our first question comes from Ernesto Gabilondo with Bank of America. Please go ahead.

[Ernesto Gabilondo, Analyst at Bank of America]

Thank you. Hi, good morning, Gustavo, Jorge, and Nicolás, and thanks for the opportunity. My first question will be on your loan expectations, and also if you can provide us what will be behind that, in terms of GDP for this and next year, inflation levels and interest rates. And then my second question will be on your evolution of your loan-to-deposit ratio. Given that the Argentine banks are starting to resume loan growth, how would you see this ratio in the next years? And finally, I would like to ask you about your ROE expectations. How you see the ROE for the year, and also if you can provide us some color on how should we see the evolution of the ROE during the year?

[Ernesto Gabilondo, Analyst at Bank of America]

Now, first quarter was a kind of high ROE, so, how should we think about second quarter and then the second half for, for the ROE? Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Ernesto, how are you? This is Jorge Scarinci. Well, it's a bunch of questions. Let's start for the first one. In terms of loan growth, we're expecting some positive loan growth for this fiscal year 2024. What we are seeing is basically that the first quarter, that is a seasonally lowest quarter in Argentina, we posted some negative growth in real terms. However, in second quarter, and we think that in the second half of the year, the trend of pick up in loan demand as a consequence of a decline in inflation, inflation expectations, and of course, nominal interest rates, we're going to finish the year with approximately a positive in the area of 10%-15% loan growth.

[Jorge Scarinci, CFO at Banco Macro]

Inflation, according to the market consensus, is expected to keep on going in the downward trend. May is expected to be between 5 and 6. The market is expecting that the CPI index could reach 3 or below 3, monthly number for the last quarter of the year. And as a consequence of that, what we think is that we are going to start seeing positive real interest rates in the fourth quarter of 2024. In terms of loans to deposit ratio, I think that, yes, we are in not only Macro, but I think in Argentina, banks are pretty under leverage. This is a consequence of many quarters of sluggish loan demand, and of course, liquidity still went into the banking sector, and we have to find other sources of allocation of those funds.

[Jorge Scarinci, CFO at Banco Macro]

Going forward, we think that, maybe not this year, we're not going to see a big change in the loans to deposit ratio this year, but if the trends continue, without any doubt, we could reach 60-65% loans to deposit ratio in the next couple of years. ROE guidance, as you mentioned, yes, the first quarter ROE was pretty good, pretty high. We think that the trend is going to go a bit downwards in the coming quarters. Remember that what happened in the fourth quarter of last year and also in the first quarter of this year was a consequence of a good track record in bonds prices. What we are seeing in the second quarter is that bond prices are not growing that much.

[Jorge Scarinci, CFO at Banco Macro]

Therefore, we think that we could be finishing this fiscal year, 2024, with an approx of 20% ROE on average for the year.

[Ernesto Gabilondo, Analyst at Bank of America]

Okay. Thank you very much.

[Jorge Scarinci, CFO at Banco Macro]

Yeah. Yeah, tell me.

[Ernesto Gabilondo, Analyst at Bank of America]

No, no. Thank you. Thank you very much, Jorge. Just to follow up on your macro expectations. Can you repeat again how you're expecting for GDP growth for this next year, inflation for this next year, and rates for this next year?

[Jorge Scarinci, CFO at Banco Macro]

Well, GDP for this year is expected to be down between 2.8% and 3%. Of course, we're going to see a recovery in the second half of the year. And this would imply that for 2025, the market is expecting a positive real growth in GDP of around 6%. Inflation, the market is expecting between 150% to 170% inflation this year. For next year, of course, the trend is much downward, between 35% and 55% inflation for next year. Interest rate, I think this is not that easy to forecast. But again, let me not give you some nominal levels, but give you some real levels.

[Jorge Scarinci, CFO at Banco Macro]

We think that we are going to see in the area of 2-3 percentage point real interest rate on a monthly basis, starting in the fourth quarter of this year.

[Ernesto Gabilondo, Analyst at Bank of America]

Excellent. Excellent. And just one last macro assumption, in terms of the effects, what are you expecting for this year?

[Jorge Scarinci, CFO at Banco Macro]

I mean, we think that the effects, of course, is going to keep on going with a crawling of 2%. We are seeing for the end of the year, the FX reaching between 1,150 and 1,200 approx. That is what we think that the effects could be by the end of the year. Yes.

[Ernesto Gabilondo, Analyst at Bank of America]

Perfect. Excellent. Thank you very much.

[Jorge Scarinci, CFO at Banco Macro]

You're welcome, Alberto.

[Operator]

The next question comes from Brian Flores with Citibank. Please go ahead.

[Brian Flores, Analyst at Citibank]

Hi, team. Thank you for the opportunity to ask questions. I have two. The first one is, I mean, we're already finishing May. Just wanted to get a sense on how are you sensing consumer and companies after this really strong shock, right? We have seen some improvements in fiscal accounts. The Milei administration has been showing some positive signs. However, the trade-off is a big shock to the economy, right? So I know we're talking about finishing the year on a strong note in real terms regarding growth, but can you talk a little bit on how are you sensing your clients, both on the corporate side and the consumer side, with regards to demand so far in this quarter? And where are you gonna prioritize growth? Is it gonna be with companies or with consumers?

[Brian Flores, Analyst at Citibank]

Then I'll ask my second question. Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Hi, Brian. Now, what we are seeing is that the commercial lending is starting to pick up earlier than consumer. What we think is that consumer lending is going to catch up the commercial lending growth, maybe by the end of the year, more in 2025, when we expect to see some recovery in the real wages. So we think that companies are going. What we are seeing right now is companies are starting to demand for new loans and more loans. We are going to focus. We are a universal bank, therefore, we focus in all the segments throughout the country. So if the demand is coming from the commercial, we are going there. When the demand comes from the consumer, we are ready to go for them also.

[Jorge Scarinci, CFO at Banco Macro]

We have the liquidity, the excess capital to tackle any potential loan demand coming. The sooner that recovery, the better for us.

[Brian Flores, Analyst at Citibank]

Oh, okay. I, I just wanted to ask, I mean, at the beginning of Milei's administration, we heard, you know, there were some meetings with banks, et cetera. I just wanted to get a sense on how are you sensing Milei's administration now? Are they receiving your feedback? Are they open? How technical these discussions have been? Just any, any color you can share with us, it would be very, very important. Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Yes. What we are seeing is that the current administration, on those areas that are related to our business, that is to say, the central bank and the economy ministry, both are very receptive, and we have fluent communications with them. They want our feedback on how we are seeing the market in maybe regulations that should be erased, et cetera, et cetera. So I think that they are very receptive, and we have a good communication with the two areas, and I think that that is very important for all the changes and the challenges that we have in front. So I think that is very positive.

[Brian Flores, Analyst at Citibank]

Perfect. And then maybe just a final one, and I promise this is the real final one. On dividends, I know you said capital is very strong. So do you think we should continue seeing, let's say, a dividend shareholder-friendly policy going forward, or are you gonna prioritize growth and maybe limit dividends in the short term? Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Well, the next dividend to be paid is gonna happen next year, in one year. So, I would say that the board is going to consider macroeconomic conditions at that time, future expectations on the economy. And we are- I think that, the board is going to evaluate the better dividend policy at that time in order to have a find an equilibrium on the dividend and the organic growth. And of course, going forward- we cannot say that, another inorganic opportunities could be appearing in the horizon. So, those conditions are going to be on the table, in March, April next year. And with those elements, the board is going to decide the dividends.

[Brian Flores, Analyst at Citibank]

Perfect. Thank you.

[Jorge Scarinci, CFO at Banco Macro]

You're welcome.

[Operator]

The next question comes from Marina Mertens with Latin Securities. Please go ahead.

[Marina Mertens, Analyst at Latin Securities]

Hi, good morning, and thank you for the opportunity to ask a question. So the fourth and first quarter results were mainly driven by gains from your securities portfolio. You've been decreasing your exposure to the central bank instruments by shifting towards dual bonds and CPI linkers. With the Treasury now issuing more fixed rate instruments, can we expect to see a change in your portfolio in the second quarter towards LECAPS? And also, do you think these securities will continue to be the main earnings driver in the following quarters? Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Hi, Marina. We are evaluating on. We have invested a bunch of money in some of the fixed rate LECAPS, but something that is important to consider is that we have to care about the, how we hedge the equity of the bank against inflation. And inflation is running for the moment at 9% or according to April's numbers, 9% a month. That is still above the 3.5-3.7% of what the LECAP is delivering. So for the moment, we think that we have to cover the equity, we have to hedge the equity, and on the excess of that, we are evaluating where to allocate that excess on the amount of money that we are covering, hedging the equity.

[Jorge Scarinci, CFO at Banco Macro]

So that is something that we are constantly monitoring the markets, basically, so we haven't have a decision yet. Your second question is, I mean, for the moment, I think that second and third quarter, the bottom line is going to be highly affected by bond prices, basically because our bond portfolio is quite high. So I think that unless the economic conditions change in a deeper way than what we are expecting, I think that second and third quarter, at least, bottom line, are going to be governed by bond prices.

[Marina Mertens, Analyst at Latin Securities]

Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Welcome, Marina.

[Operator]

The next question comes from Carlos Gomez with HSBC. Please go ahead.

[Carlos Gomez-Lopez, Analyst at HSBC]

Hello, good afternoon, and congratulations on the results. I want to ask you about whether you could give us an update on the integration of your Itaú acquisition, and whether you judge that you have the capacity to undertake another inorganic acquisition in the short or medium term. Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Hi, Carlos. How are you? Good to hear you. We are finishing the legal integration with the local franchise of Itaú by August of this year. And yes, going forward, I think that we're in a very good shape in order to undertake another local target if it is something on the horizon. I mean, for the moment, we are not working on any transaction, but if in the future something appears, of course, we are going to consider it without any problem.

[Carlos Gomez-Lopez, Analyst at HSBC]

Okay. Then a follow-up, part of your personal loan portfolio has traditionally been payroll loans. We understand that you know real wages and pensions having under pressure in real terms with the high inflation. Has that had any effect on the asset quality so far, or has that you know made you more cautious when it comes to lending in those segments?

[Jorge Scarinci, CFO at Banco Macro]

No, I think that, well, the level of asset quality is extremely good. I mean, the ratio is at one of the lowest levels we've seen in the last, I don't know, 15-18 years. But in the second quarter, we are not seeing, honestly, big changes on delinquency ratios. What we are seeing is that less demand coming from the consumers, basically. And there was some—of course, there were declines in nominal interest rates, so that helps. And, I mean, we continue to maintain the risk policy. We have not become more aggressive or more risk-averse for the moment on the consumer. We continue to maintain the same policy or lending policy.

[Carlos Gomez-Lopez, Analyst at HSBC]

You said that you are seeing some weakness in consumer demand, presumably that is offset by strength in corporate demand?

[Jorge Scarinci, CFO at Banco Macro]

... Yes, yes. I mean, you compare both, corporate is more active than consumer.

[Marina Mertens, Analyst at Latin Securities]

Thank you. Thank you so much.

[Jorge Scarinci, CFO at Banco Macro]

Welcome, Carlos.

[Operator]

The next question comes from David Pardo with Puente Hermanos. Please go ahead.

[David Pardo, Analyst at Puente Hermanos]

Well, hello, Jorge, and hello, team, and congratulations on another strong quarter. I have just one question, maybe hypothetical, but let's say, consumer loan or rather, loan demand starts to recover in second half of the year. Supposedly, I mean, we should see a recovery of the economy first, but I'd like to maybe get a sense on maybe which lines or rather, which segments are going to be like the triggers of loan demand recovery, let's say, corporate or commercial, and which materials maybe, it will be my assumption, will be commercial and maybe mainly working capital as the economy recovers. But that's why I'd like to maybe if you could give us your view on how that recovery could look like. Thank you.

[Jorge Scarinci, CFO at Banco Macro]

Hi, David. Yes, as I mentioned before, we are seeing some pickup in commercial lending. I would say that the sectors that are starting to be more active are agribusiness, energy, mining. Those are the three, for the moment, most active sectors starting to pick up in loan demand. Again, as I mentioned before, we think that this might be the trend for the rest of the year. And for next year, we are going to start seeing a catch-up in consumer loan demand. So that is, for the moment, how we are seeing the next quarters in terms of loan demand, with the commercial or corporate demanding first, then consumers.

[David Pardo, Analyst at Puente Hermanos]

Perfect. Thank you.

[Jorge Scarinci, CFO at Banco Macro]

You're welcome.

[Operator]

There are no more questions at this time. This concludes the question and answer session. I will now turn over to Mr. Nicolás Torres for final considerations.

[Nicolás Torres, Head of Investor Relations at Banco Macro]

Thank you all for your interest in Banco Macro. We appreciate your time and look forward to speaking with you again. Good day.

Participants

Analysts

• Brian Flores, Analyst at Citibank
• Carlos Gomez-Lopez, Analyst at HSBC
• David Pardo, Analyst at Puente Hermanos
• Ernesto Gabilondo, Analyst at Bank of America
• Jorge Scarinci, CFO at Banco Macro
• Marina Mertens, Analyst at Latin Securities
• Nicolás Torres, Head of Investor Relations at Banco Macro