Macro Bank Q2 2024 Earnings Call Transcript

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August 23, 2024

Key Takeaways

  • Net loss of ARS 233.2 billion in Q2, down ARS 559.6 billion QoQ and ARS 397.3 billion YoY, mainly driven by mark-to-market losses on government securities and lower FX gains.
  • Operating income before expenses rose 36% YoY to ARS 2.38 trillion, and net operating income increased 41% YoY to ARS 1.59 trillion.
  • Net interest margin fell to 19.9% in Q2 from 26.2% in Q1 and 38.3% in Q2 2023 as interest income declined faster than funding costs.
  • Total loans grew 17% QoQ (5% YoY), with consumer lending up 29% for personal loans and 11% for credit cards, and commercial lending also expanding.
  • The bank maintained a strong capital base with a 35.7% capital adequacy ratio, 34% Tier 1 ratio, and ARS 2.36 trillion in excess capital for future growth or dividends.
AI Generated. May Contain Errors.
Earnings Conference Call
Macro Bank Q2 2024
00:00 / 00:00

There are 8 speakers on the call.

Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to the Banco Macro's 2Q 2024 Earnings Conference Call. We would like to inform you that the 2Q 2024 press release is available to download at the Investor Relations website of Banco Macro at www.macro.com.arrelesoresinvestores. Also, this event is being recorded and all participants will be in listen only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer session.

Operator

At that time, further instructions will be given. It is now my pleasure to introduce our speakers. Joining us from Argentina are Mr. Gustavo Menuequez, Chief Executive Officer Mr. Jorge Scarinci, Chief Financial Officer and Mr.

Operator

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

Speaker 1

Thank you, Nico. Good morning and welcome to Banco Macro's Q2 2024 conference call. Any comment we may make today may include forward looking statements, which are subject to various conditions and these are outlined in our 20 F, which was filed to the SEC and is available at our website. 2nd quarter 2024 press release was distributed yesterday and is available at our website. All figures are in Argentine pesos and have been restated in terms of the measuring unit current at the end of the reporting period.

Speaker 1

As of 2020, the bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29 as established by the Central Bank of Argentina. For ease of comparison, figures of previous quarters have been restated applying IAS 29 to reflect the cumulative effect of the inflation adjustment for each period through June 30, 2024. I will now briefly comment on the bank's Q2 2024 financial results. In the 6 months ended June 30, 2024, Bank of America's net income totaled Ps. 93,100,000,000.

Speaker 1

This result was 55% or Ps. 115,900,000,000 lower than in the 6 months of 2023. As of the Q2 of 2024, the accumulated annualized return on average equity and accumulated annualized return on average assets were 5.4% and 1.7%, respectively. In the 6 months ended June 30, 2024, operating income before general, administrative and personal expenses totaled COP 2,380,000,000,000, 36 percent or COP 628,200,000,000 higher than in the 6 months of 2023. Net operating income before general and administrative expenses for the first half of twenty twenty four were ARS 1,590,000,000,000, increasing 41 percent or ARS 460 4,700,000,000 when compared to the first half of twenty twenty three.

Speaker 1

Banco Macro's Q2 2024 net income totaled ARS 233,200,000,000 loss, which was COP559.6 billion lower than the previous quarter and COP397.3 billion lower year on year, mainly due to the mark to market of government securities, financial assets at fair value to profit or loss and lower FX gains registered in the quarter. It is important to note that if government securities including financial assets at fair value to profit or loss, namely inflation adjusted bonds due in 2027 have been valued instead at amortized cost to Q2 2024 net income would have been Ps.605,500,000,000 higher. Furthermore, as it is probably known, Banco Macro recently exercised about half of some of the put options that help certain inflation adjusted securities. Given the current breakdown of our government securities portfolio, the bank estimates that net income could have been around Ps. 300,000,000,000 higher had the remaining inflation adjusted securities being valued at amortized cost.

Speaker 1

In the Q2 of 2024, provision for loan losses totaled MXN 16,500,000,000, 26 percent or MXN 5,900,000,000 lower than in the Q1 of 2024. On a yearly basis, provision for loan losses decreased 20 percent or Ps. 4,000,000,000. Operating income after general and administrative and personnel expenses were Ps. 199,100,000,000 in the Q2 of 2024, 93 percent or MXN 1,400,000,000 lower than in the Q1 of 2024 and 85 percent or MXN544 billion lower than a year ago.

Speaker 1

In the quarter, net interest income totaled MXN 188,000,000,000, 6% or MXN12.7 billion lower than in the Q1 of 2024 and 53 percent or MXN213.1 billion lower year on year. Interest income decreased 27%, while interest expenses decreased 33%. In the Q2 of 2024, interest income totaled MXN 619,700,000,000, 27 percent or MXN 229,800,000,000 lower than in the Q1 of 2024 and 46 percent or MXN 521.4 billion lower than in the Q2 of 2023. Income from interest on loans and other financing totaled ARS410.2 billion, 20 6 percent or ARS 142.7 billion lower compared with the previous quarter, mainly due to a 25.9 percentage point decrease in the average lending rate, which was partially offset by a 9% increase in the average volume of private sector loans. On a yearly basis, income from interest on loans decreased 10% or MXN 45.2 billion.

Speaker 1

In the Q2 of 2024, interest and loans represented 66 percent of total interest income. In the Q2 of 2024, income from government and private securities increased 40% or MXN 44,700,000,000 quarter on quarter and decreased 74% or MXN 47,200,000,000 compared with the same period of last year. In the Q2 of 2024, income from prepos totaled MXN48,700,000,000, 73 percent or MXN 131,400,000,000 lower than the previous quarter and 29% or MXN 19,500,000,000 lower than a year ago. In the Q2 of 2024, FX income totaled MXN 25,600,000,000, 73 percent or MXN 69,900,000,000 lower than the previous quarter and 91% or MXN 256,100,000,000 lower than a year ago. FX income gain was due to the 6.3 percent Argentine peso depreciation against the U.

Speaker 1

S. Dollar and the bank's long dollar position during the quarter. It is important to notice that the bank's average long dollar position decreased 59% during the quarter. In the Q2 of 2024, interest expense totaled ARS431,700,000,000, decreasing 33 percent or ARS217,100,000,000 compared to the previous quarter and 42 percent or ARS308.3 300,000,000 lower when compared to the Q2 of 2023. Within interest expense, interest on deposits decreased 33 percent or Ps.

Speaker 1

208,800,000,000 quarter on quarter due to a 25.4 percentage points decrease in the average rate paid on deposits, while the average volume of deposits from the private sector increased 16%. On a yearly basis, interest on deposits decreased 42% or ARS 304,500,000,000. In the Q2 of 2024, the bank's net interest margin including FX was 19.9%, lower than the 26.2% posted in the Q1 of 2024 and the 38.3% posted in the Q2 of 2023. In the Q2 of 2024, Banco Macro's net fee income totaled ARS 95,700,000,000, 8 percent or ARS 6,800,000,000 higher than the Q1 of 2024 and was 2% or ARS 2,100,000,000 lower than the same period of last year. In the Q2 of 2024, net income from financial assets and liabilities at fair value to profit or loss totaled ARS 121,200,000,000 gain, decreasing 92 percent or ARS 1,390,000,000 in the quarter.

Speaker 1

This gain was smaller due to the negative mark to market of some government securities, basically inflation adjusted bonds and in the amount of ARS 1,410,000,000,000. In the quarter, other operating income totaled ARS 46,200,000,000, 7 percent or ARS 3,300,000,000 lower than in the Q1 of 'twenty four. On a yearly basis, other operating income increased 62 percent or ARS 17,800,000,000. In the Q2 of 2024, Banco Macro's administrative expenses plus employee benefits totaled ARS 203,500,000,000, 15 percent or ARS 35,300,000,000 lower than in the previous quarter due to lower employee benefits, which decreased 14% and lower administrative expenses, which decreased 17%. On a yearly basis, administrative expenses plus employee benefits increased 14% or Ps.

Speaker 1

25,600,000,000. As of the Q2 of 2024, the accumulated efficiency ratio reached 22.2%, deteriorating from the 14.7% posted in the Q1 of 2024 and the 22.2% posted 1 year ago. In the Q2 of 2024, expenses decreased 14% while net interest income plus net fee income plus other operating income decreased 77% compared to the Q1 of 2024. In the Q2 of 2024, the result from the net monetary position totaled ARS462.7 billion loss, 56 percent or ARS591.3 billion lower than the loss posted in the Q1 of 2024 and 14% ARS 56,100,000,000 higher than the loss posted a year ago. This result is a consequence of lower inflation during the quarter.

Speaker 1

Inflation was 18.6% in the Q2 of 2024 compared to the 51.6% registered in the Q1 of 2024, while the net monetary position remained unchanged. In the Q2 of 2024, given Macro's negative net income for the quarter, no income tax charge was recovered. Part of that information is provided in Note 21 to our financial statements. In terms of loan growth, the bank's total financial reached ARS 3 point 47,000,000,000,000, increasing 17 percent or ARS 504,100,000,000 quarter on quarter and 5% or ARS 154,500,000,000 higher year on year. Within commercial loans, documents stand out with a 7% or Ps.

Speaker 1

43,600,000 increase, while others increased 27% or Ps. 158. Within consumer lending, personal loans increased 29 percent or MXN111,900,000,000 while credit card loans increased 11% or MXN 77,800,000,000. Pesa financing increased 20% or MXN563,800,000,000 in the quarter, while U. S.

Speaker 1

Dollar financing increased 2,000,000 dollars It is important to mention that Banco Macro's market share over private sector loans as of June 2024 reached 9.1%. On the funding side, total deposits increased 13% or ARS769.5 billion quarter on quarter, totaling ARS6.74 trillion and decreased 5% or ARS329.3 billion year on year. Private sector deposits increased 11% or ARS 590 1,500,000,000 quarter on quarter, while private sector deposits increased 30% or ARS 181,900,000,000 quarter on quarter. The increase in private sector deposits was led by divan deposits, which increased 23% or Ps.581.5 billion, while time deposits decreased 2% or Ps. 54.5 billion quarter on quarter.

Speaker 1

Within private sector deposits, peso deposits increased 17% or ARS774,600,000,000 while U. S. Dollar deposits decreased 6% or $97,000,000 As of June 2024, Bancorp Macros transactional accounts represented approximately 52% of total deposits. Bancorp Macro's market share over private sector deposits as of June 2024 totaled 8.1%. In terms of asset quality, Bancorp Macro's non performing to total financial ratio reached 1.23%.

Speaker 1

The coverage ratio measured as total allowances under expected credit losses over non performing loans under Central Bank rules, reached 181.4%. Consumer portfolio of non performing loans deteriorated 5 basis points, up to 152 percent from 147 percent in the previous quarter, while commercial portfolio non performing loans deteriorated 1 basis point in the Q2 of 2024. In terms of capitalization, Banco Macro's accounted an excess capital of ARS 2,360,000,000,000, which represented a capital adequacy ratio of 35.7 percent and a Tier 1 ratio of 34%. The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate.

Speaker 1

Liquid assets to total deposit ratio reached 90 8% in the Q2 of 2024. Overall, we have accounted for a positive first half of twenty twenty four. We continue showing a solid financial position, asset quality remain under control and closely monitored. We keep on working to improve more our efficiency standards and we keep our well atomized deposit base. At this time, we would like to take the questions you may have.

Operator

At this time, we are going to open it up for questions and answers. And our first question today will come from Ernesto Gabriondo with Bank of America. Please go ahead.

Speaker 2

Thank you. Hi, good morning, Jorge and Nico. Thanks for the opportunity to ask questions. My first question will be on the loan growth and asset quality expectations for this next year. And then my second question is, if you can elaborate a little bit more on the puts at macro executed with the Central Bank?

Speaker 2

And also if you know the time line and the implications of the repos that the Central Bank is proposing? And also, can you remind us how much is your position on securities linked to inflation? And what will be your strategy going forward with these instruments? Finally, my last question is on ROE. How do you see it for the end of the year?

Speaker 2

And what do you think will be the sustainable level? Thank you.

Speaker 3

Hi, Alberto. This is Jorge speaking. How are you? About your first question in terms of asset quality, I think that on the level that we are showing is extremely good and low. I think that going forward, if the common economy will recover as is expected for 2025, We are going to be a bit more aggressive in growing in lending and therefore delinquency could rise a little bit.

Speaker 3

But to manageable levels, Again, I think that this is already commented this before, but since 2,008, the peak that we had in our delinquency rate was 3% in 2,009. So I think that without any problems, we could be rising this the current ratio to levels of between 2% and 2.5% without any problem in the case that we become more aggressive in lending. I will go to your 3rd question. I will leave your second question for the last one. The third question about the bonds that we have that are adjusted to inflation.

Speaker 3

Currently, you have a level of ARS 3,700,000,000 or in your case it's ARS 3,000,000,000 of bonds that are tied to inflation. This is approximately 120 percent of the equity and it's also 110% of the monetary position. The monetary position is the one that is basically the one that adjusts the Awaikas statement to inflation. And in that sense, we are linked or hedged against inflation. Going forward, I think that depending on what's happening with the inflation rates that in last month was 4% on a monthly basis.

Speaker 3

And we believe that inflation is going to continue in the downward trend. However, we are according to the economies that we listen, they are not expecting inflation to become below the 2% unless until November, December and the probability of that is maybe the order of 50%. So for the moment, we are going to keep this portfolio tied to inflation. And if market conditions change, we are going to at some point maybe exercise the adoption or make into a swap into fixed rate nodes depending on market conditions. In terms of your 4th question, in terms of ROE going forward, for 2024, we think that we would be ranging between 10% 13% in real terms.

Speaker 3

Going forward and in a more sustainable level, we think that we could be delivering between 15% to 20% ROE in real terms. And your second question about the exercise of the production that we did the 1st July, Basically, the ALCO decided to execute half of the position of the bond that we have tied to inflation after the conference that the coordinator and the president of the Central Bank held saying that the amount of pesos was going to be fixed in the market. Therefore, we decided to execute that position in order to get extra liquidity and to have more elements in order to be more aggressive in future lending. And on the repos that the Central Bank is offering, I mean, that is for banks which have some transitionary liquidity problems. I think they are okay.

Speaker 3

In our case, we are extremely liquid. We are not, of course, using those repos. But the repos are always there. They have been always there. And the only thing in this new thing is that the Central Bank reduced the interest rate on the repos to a level of 48%.

Speaker 3

So to make it more accessible for Banffino to get extra liquidity. So I think I'll answer all your questions, Ernesto.

Speaker 2

Yes. Thank you very much, Jorge. Just a follow-up. The first one is well, two follow ups. 1 in terms of the loan growth.

Speaker 2

So any color on what could be the pace of loan growth for this year and for next year? And then the other follow-up, you were mentioning that you executed half of the puts. So can you just remind us how was the amount of those securities that you held before?

Speaker 3

Yes. In terms of

Speaker 4

let's go to

Speaker 3

your second question. Yes, we executed half of the put options that we had. It was like ARS 2,000,000,000,000 in bonds that we exercise and sell to the Central Bank and that amount of pesos will receive it as extra liquidity. And currently, we hold another ARS 2,000,000,000 or sorry, ARS2 1,000,000,000 in put options in case that we want to exercise these inflation linked bonds to the Central Bank. Going to the loan growth for 2024, we expect to have positive rates in the order of maybe 15% area for 2024.

Speaker 3

And we believe that with a recovery on GDP in 2025, we could be at least 30%, 35% positive rates of growth in loans for next year.

Speaker 2

Excellent. Thank you very much, Jorge.

Speaker 3

Welcome, Amestos.

Operator

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

Speaker 4

Hi, Jorge and Nicolas on team. I wanted to ask on NIMs, right? Because as you say, repos are still helping, but I think the average earned yields are decreasing. Also you have some relief on the deposit base. And I know this is a very hard question, right, because it's a very fluid environment, but when do you think NIMs could stabilize?

Speaker 4

I think that's my first question. And then on a second one, you mentioned capital, right? Do you have any updates on any regulatory changes that would allow you to distribute maybe higher dividend yields going forward? Thank you.

Speaker 3

Hey, Brian, how are you? In terms of your second question first, I mean, we have to wait till next year. For the moment, we haven't seen any new regulation coming. Remember that when we have to pay dividend fees in basically when the Board proposed to the shareholders meeting the payment of dividends in March. So we have to wait till next year.

Speaker 3

At that time, it's basically when the Central Bank always put up new regulation on the amount of dividend that basically could be delivered on the amount of installments. Remember that last year, the number of installments was 6. This year, the number of installments were reduced to 3. So I think that we are positive in the way that it's the economy conditions improve and then central banks' reserves increase going forward, we are positive that we could be allowed to pay dividends maybe in only 1 installments and that it will be positive. In terms of your first questions and NIMs, you have a chance to go through the press release, the NIM in pesos increased or expanded a little bit.

Speaker 3

Basically, you were right, there was some little increase in the cost of funds. Remember that in our case, the amount of transactional deposits where we paid almost 0% there is almost 45% of total deposits. And on the time deposit side, basically in those that we are the financial agents of the 4 provinces, we could be paying slightly below average interest rates. So this give us a kind of slight competitive advantage in order to continue expanding a little bit the NIMs. And going forward, we think that the NIMs are going to remain pretty stable.

Speaker 3

So the increase in the net interest income is going to come through the increase in lending through or hand in hand with increasing in the funding.

Speaker 4

[SPEAKER CANDIDO BOTELHO BRACHER:] Perfect. If I can follow-up just with your last comment, how is demand evolving? Where do you think or where do you see the biggest opportunities to grow your loan book right now?

Speaker 2

[SPEAKER CANDIDO BOTELHO BRACHER:] I mean,

Speaker 3

there was a decrease in interest rates in the season that was a consequence of the reduction in inflation. And we think that there was a recovery in lending. In most of the areas, basically SMEs and some consumer. Going forward, we think that we see some recovery in the real levels of salaries. We are going to see consumption pushing a little bit harder.

Speaker 3

And also if we are having these new investments on in different areas as a consequence of this RIGI program approval for companies. We are going to see also corporates or companies also demanding for new lending. So it is going to be across the board, we think, in 2025. Imagine that the level of lending that we have is pretty sluggish or pretty low. It's around 6% of loans to GDP.

Speaker 3

So we think that the potential growth here is huge.

Speaker 4

Okay. Thank you.

Speaker 3

You're welcome, Brian.

Operator

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

Speaker 5

Hi, good morning and thanks for taking my questions. So in the last in the previous two quarters, results were driven by the strong performance in the securities portfolio, which was which the trend reversed this quarter and negatively impacted results. Do you expect the securities portfolio to keep on driving results in the remainder of the year? Or when should we expect to see the increase in loans to have a more relevant impact on results? Thank you.

Speaker 3

Hi, how are you? I mean, in terms of income coming from the bond portfolio, as we stated in the press release, after executing or exercising half of our bond portfolio or the puts that we have on the bond portfolio. The remaining half of that, the ALCO decided to account it on the cost plus yield instead of having mark to market. So going forward in coming quarters, we are going to see more stability in the results coming from bonds. And we think that with the pickup in lending, we are going to start seeing that loans or in this case interest income from loans are going to start having a bit more better performance in the income statement line.

Speaker 5

Great. Thank you very much.

Speaker 3

You're welcome.

Operator

The next question comes from Yuri Fernandes with JPMorgan. Please go ahead.

Speaker 6

Thank you guys for the opportunity of asking question. Just one on these loans versus securities mix, right? And even on the securities mix, right, you have this I think it's Lafi, this new instrument that is a 1 year. Basically, my question is, like on loans and on this lessee, maybe you are increasing the duration, right, of your assets. I think the fiscal liquidity letter is 1 year.

Speaker 6

Although you have the put, you can sell this, but I think like it's to a 1 year term kind of instrument, you are growing more your loans. So trying to think about your net monetary results like inflation is moving lower, so this should be a tailwind. But having more loans and having less, I would say, inflationary income securities, how to think about your balance sheet versus inflation, right? If inflation is wrong and inflation starts accelerating, is the balance sheet getting riskier at some degree because you have more longer term maturity assets than you used to have in the past when you have more short term instruments? That's my first question.

Speaker 6

My second question is regarding further M and As, right? You just had Itau. I think there is still consolidation to happen in Argentina. So I just would like to know the appetite of Banco Macro for new opportunities. If your message is, well, let's digest Itau, let's keep working on what we have or no, we have a lot of excess capital and we are still open for new opportunities.

Speaker 6

And a third question, more on regulatory update, right? This is still, I think, an important topic. If you can remind us what can be the next Central Bank regulatory change that can benefit the banks. I think there were many moving parts on rates and reserve requirements. What should we expect for the future on the regulatory front to be a tailwind for you?

Speaker 6

Thank you.

Speaker 3

Hi, Yuri. In terms of your first question, I mean, holding these inflation leading securities, we are hedging our balance sheet against the adjustments for inflation on the monetary position. So by increasing a little bit the duration of our loan book and always having positive real rates, the impact on the balance sheet and the impact on the inflation adjusted income statement is going to be positive. So we are not seeing any challenge or any damage or risk there. So it doesn't mean that the increase in duration is going to negatively affect our exposure to inflation.

Speaker 3

No. On your second question about M and A opportunities, yes, we are going to complete the legal merge with Itau in the Q4 of this year. So by December of this year, everything is going to be under Banco Macro's umbrella. Going forward, I mean, we will be keeping a close eye to any opportunity that might happen in the banking sector. We think that we are one of the only buyers here.

Speaker 3

So any potential player that could be interested on leaving, I think that is going to knock our door. So we're going to be keeping a close eye as I mentioned before there. On the third question, Central Bank Regulation that could improve a little bit the banking industry. I think that there are many. I think that little by little, the Central Bank is working on different regulation, but to be they want to go very slowly.

Speaker 3

They do not want to make any mistakes and to have take a measure that after 2 weeks they had to turn it around. So I think that they are a little bit removing the gaps on interest rates as they remove the floor on the deposit rates. So I think that the Central Bank is working really good here, growing very slowly because there is a complete bunch of regulation that need to be removed carefully. So going forward, I think that they are going to have these new regulations on the positive for the banking sector in order to be less regulated. And that is going to be in our view positive for the big players as Banco Macro.

Speaker 6

Super clear. Thank you very

Speaker 3

much. Welcome.

Operator

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

Speaker 7

Hello, good morning. Two questions. The first one is, if you could explain in simple terms for us what happened to the bond portfolio this quarter? What is that in contrast to the previous quarters? And what we should expect in the coming quarters?

Speaker 7

What should be the normal profitability yield on securities that we might expect? And yes, and that will be it. Yes.

Speaker 3

Thanks, Carlos. How are you? Well, no, I mean, in as of June, I mean, we decided to execute or to exercise the put on half of our position, and that happened the 1st July. So at the end of this Q2, that's why the portfolio remains in terms of the amount of bonds that we have remains the same. In the Q3, you're going to see the impact on the of the exercise of the puts and a reduction in the bond portfolio.

Speaker 3

And again, and we said to make a change in the accounting instead of having mark to market is going to be at a cost plus deal mechanism. So going forward, if we are maintaining this amount of bonds, a more reasonable level for the income from the bond portfolio is going to be in the area between ARS 30,000,000,000,000 to ARS 50,000,000,000,000 on a quarterly basis.

Speaker 7

Okay. And the position that you exercise, you have now in CPI Linkers, right?

Speaker 3

Yes.

Speaker 7

Okay. Very good. And then my second question is already been asked before is regarding your capital and the fact that you're paying a big dividend. I mean, the prospects have changed. You are doing M and A.

Speaker 7

There is loan growth in the system. Would you review I mean, we know that you have a lot of excess capital. I mean, we could see a lot of it consumed pretty rapidly if longer indeed goes up. Would you consider for the coming years perhaps you want to retain more capital rather than pay more dividends?

Speaker 3

I mean, if you see the reduction in the capital ratio from 1 from the Q1 to the second, you can see that it was a reduction for Tier 1 looking at Tier 1 was from 44.5% to 34%, so 10 percentage points there because of the payment of dividends. Going forward, we agree and of course, we would like to have a more normalized level of excess capital. But the combination of organic growth that we think that we are going to need for future years plus some M and A opportunities that might have in the past that we think that would appear some other banks wanting to leave Argentina. And they are yet to continue to pay attractive cash dividends. I think that is the mix that we want to maintain.

Speaker 3

So going forward, a more sustainable rate of ratio for capital in the future for macro could be in the area of 18% to 22% Tier 1, not the current level. So that is going to be consumed through organic growth plus cash dividends first and then the opportunity for another M and A. So going forward between 2019 to 2022 seems more reasonable for us. That is we would like to have in the future with maybe higher market share performance in the system.

Speaker 7

Okay. And to go back to the M and A, and we understand you are open to all possibilities. Is there anything in the works or anything that would you anticipate that you might be considering another transaction, let's say, in the next 3 or 4 quarters?

Speaker 3

No. Honestly, we are not looking to anything for the moment. I think that if that something happens, could be next year. I don't know exactly which how many quarters, but next year or in 2026.

Speaker 7

Okay, that's clear. Thank you.

Speaker 3

Thank you, Carlos.

Operator

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

Speaker 1

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

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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