Macro Bank Q1 Earnings Call Highlights

Key Points

• Banco Macro posted stronger Q1 2026 earnings, with net income rising 28% sequentially to ARS 139.8 billion and management reiterating full-year guidance. Net interest income also improved as funding costs fell, helping lift the bank’s net interest margin to 25.3%.
• Credit demand appears to be recovering after a weak start to the year, and executives said April and May trends were improving in both peso and dollar lending. Despite a first-quarter decline in total financing and deposits, the bank kept its targets for 42% nominal loan growth and 34% deposit growth for 2026.
• Asset quality weakened but may be stabilizing, with the non-performing loan ratio reaching 5.4% and consumer delinquencies rising sharply. Management said deterioration may have peaked in February and emphasized that Banco Macro remains conservatively provisioned with strong capital and liquidity.

Macro Bank NYSE: BMA reported higher first-quarter 2026 profit and maintained its annual guidance, while executives said credit demand was recovering after a seasonally weak start to the year and asset-quality deterioration appeared to be nearing a peak.

Investor Relations representative Nicolás Agustín Torres said Banco Macro’s net income totaled ARS 139.8 billion in the first quarter, up 28% from the prior quarter and 131% from a year earlier. Annualized return on average equity was 10%, while annualized return on average assets was 2.4%. Excluding restructuring expenses, Torres said net income would have been ARS 152.9 billion, with ROE of 10.9% and ROA of 2.6%.

Operating income before general and administrative and personnel expenses was ARS 1.23 trillion, down 3% sequentially but up 16% year over year. Operating income after those expenses totaled ARS 569.8 billion, up 15% from the fourth quarter and 24% from the prior-year period.

Net Interest Income Rises as Funding Costs Fall

Net interest income rose to ARS 975.2 billion, up 7% from the fourth quarter and 27% year over year. Torres attributed the performance to a 5% decrease in interest income and a 21% drop in interest expense. Interest on loans represented 72% of total interest income during the quarter.

Banco Macro’s net interest margin, including foreign exchange, reached 25.3%, compared with 21.7% in the fourth quarter of 2025 and 23.2% in the year-earlier period. Torres said the bank’s strategy of remaining short U.S. dollars, combined with a long futures position and allocation of pesos generated by the dollar sale, resulted in a net gain.

Interest expense was ARS 485.7 billion, down 21% from the previous quarter. Interest on deposits accounted for 93% of total interest expense and declined 22% sequentially, helped by a 470-basis-point decrease in the average rate paid on deposits.

Asked by Goldman Sachs analyst Tito Labarta about whether the quarter’s NIM level was sustainable, CFO Jorge Scarinci said the bank expects a “small contraction” in NIM, with the full-year average likely similar to last year’s average. He said lower inflation should bring nominal interest rates down, with somewhat more pressure on asset yields than on funding costs.

Expenses Decline as Bank Reduces Branches and Headcount

Administrative expenses plus employee benefits totaled ARS 349.8 billion, down 22% from the previous quarter and up 3% year over year. Employee benefits fell 28% sequentially, while administrative expenses declined 9%.

Torres said the bank recorded ARS 19.9 billion in restructuring expenses related to early retirement plans and severance payment provisions. During the quarter, Banco Macro reduced its branch network by 24 branches to 420 and cut headcount by 3%.

Executives said the bank expects continued reductions in operating costs in real terms, excluding restructuring expenses. Juan Parma, identified on the call as CEO, said the bank is investing in “sustainable saves” and that investors should continue to see restructuring costs in quarterly results alongside lower recurring operational costs in real terms.

Loan and Deposit Guidance Maintained

Total financing fell 9% sequentially to ARS 10.63 trillion, while rising 5% from a year earlier. Peso financing declined 9% quarter over quarter, and U.S. dollar financing fell 6%. The bank’s market share in private-sector loans was 8.2% as of March, down 40 basis points from December 2025.

Total deposits decreased 7% sequentially to ARS 13.99 trillion, representing 76% of total liabilities, and increased 10% year over year. Private-sector deposits fell 8% from the previous quarter. Peso deposits declined 4%, while U.S. dollar deposits declined 7%. The bank’s private-sector deposit market share remained unchanged at 7.9%.

Scarinci said Banco Macro is maintaining its guidance for 42% nominal loan growth and 34% nominal deposit growth this year, based on an inflation assumption of about 28%. He said the first quarter included a decline in loans, but that some lending lines, including pledge loans, personal loans, discounted documents and mortgages, were growing more than 20% year over year. He also said the bank saw recovering credit demand in April and May in both pesos and dollars.

For U.S. dollar loans, Scarinci said the bank is seeing more recovery in the second quarter than in peso loans, though both are positive. He said sectors including energy, oil and gas, mining and agribusiness could drive demand for dollar loans.

Asset Quality Deteriorates, but Executives See Signs of Stabilization

Banco Macro’s non-performing total financing ratio reached 5.4% in the first quarter. Torres said the Stage 3 expected-credit-loss measure plus loans more than 90 days past due deteriorated by 84 basis points to 3.64%, from 2.8% in the fourth quarter. Excluding mandatory classification of customers under central bank rules, the non-performing ratio increased to 4.73% from 3.64%.

Consumer non-performing loans deteriorated to 6.92% from 5.3%, while commercial non-performing loans increased to 1.34% from 0.68%. The coverage ratio was 109.79%.

In response to Citi analyst Brian Flores, Scarinci said that despite the deterioration, Banco Macro still had the best NPL-to-total-loan ratio among peers and the highest coverage ratio. He said February appeared to be a peak for consumer Stage 3 deterioration, with March and April showing better trends, while commercial deterioration had slowed.

Parma said Banco Macro is being more conservative than peers in provisioning, both through its model design and by recalibrating more frequently. He said regulation requires banks to recalibrate at least annually, but Banco Macro has done so more often during the upward delinquency cycle to keep coverage adequate.

Capital Position, Dividends and Banco Sáenz

Torres said Banco Macro ended the quarter with excess capital of ARS 4 trillion, a 32.4% capital adequacy ratio and a 32.4% Tier 1 ratio. Liquid assets reached 78% of total deposits.

Asked about capital allocation, Parma said Banco Macro has historically maintained a strong capital position to manage cycles and support both organic and inorganic growth. He cited Argentina’s low loan-to-GDP ratio relative to regional peers and said the bank wants to be ready for opportunities, including potential consolidation in the financial system. He also noted that Central Bank rules limited dividend payments to 60% of announced results for last year.

On Banco Sáenz, Parma said Banco Macro has filed for Central Bank approval and expects, in its central scenario, to begin operating an integrated business with the Personal Pay wallet and Banco Sáenz bank-as-a-service platform by the first quarter of next year, subject to approval. He said the company is working in parallel on technology, staffing and risk-management capabilities to move quickly once approval is received.

Executives also said they remain cautiously optimistic about Argentina’s economic recovery. Scarinci pointed to improving industrial production indicators, a strong harvest and less negative trends in mass consumer sectors. He said the recovery should eventually have a positive impact on delinquency, though the timing remains uncertain.

About Macro Bank NYSE: BMA

Macro Bank NYSE: BMA is the American depositary receipt program of Banco Macro SA, 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.

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