6-K 1 tm219322d1_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

 

March 10, 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

 

 

 

 

 

 

 

 4Q20 Earnings Release

 

Banco Macro Announces Results for the Fourth Quarter of 2020

 

Buenos Aires, Argentina, March 10, 2021 – Banco Macro S.A. (NYSE: BMA; BYMA: BMA) (“Banco Macro” or “BMA” or the “Bank”) announced today its results for the fourth quarter ended December 31, 2020 (“4Q20”). 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 2019 and 2020 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through December 31, 2020.

 

Summary

 

• The Bank’s net income totaled Ps.6.1 billion in 4Q20. This result was 2% higher than the result posted in 3Q20 and 11% lower than in 4Q19. In 4Q20, the accumulated annualized return on average equity (“ROAE”) and the accumulated annualized return on average assets (“ROAA”) were 20.9% and 4.3%, respectively. Net Income for FY2020 totaled Ps.30.3 billion, 14% higher than the Ps.26.5 posted in FY2019. Total Comprehensive Income for FY2020 totaled Ps.25.3 billion, 5% lower than in FY2019.

 

• In 4Q20, Banco Macro’s financing to the private sector decreased 2% or Ps.6.1 billion quarter over quarter (“QoQ”) totaling Ps.252.5 billion and 13% or Ps.36.7 billion year over year (“YoY”). In the quarter, within consumer loans, Credit card loans stood out; with a 9% increase QoQ, meanwhile within commercial loans Documents stood out with a 10% increase QoQ, mainly driven by loans to SMEs.

 

• In 4Q20, Banco Macro’s total deposits decreased 11% or Ps.59.8 billion QoQ, totaling Ps.488.7 billion and representing 79% of the Bank’s total liabilities. Private sector deposits decrased 4% or Ps.15.9 billion QoQ. In FY2020, within private sector deposits, both time and demand deposits increased 41% and 14% respectively YoY.

 

• Banco Macro continued showing a strong solvency ratio, with an excess capital of Ps.132.1 billion, 34.2% regulatory capital ratio – Basel III and 27.1% Tier 1 Ratio. In addition, the Bank’s liquid assets remained at an adequate level, reaching 90% of its total deposits in 4Q20.

 

• In 4Q20, the Bank’s non-performing to total financing ratio was 0.78% and the coverage ratio improved to 479.2%.

 

4Q20 Earnings Release Conference Call  
  IR Contacts in Buenos Aires:
Thursday, March 11, 2021  
Time: 11:00 a.m. Eastern Time | 1:00 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 03/11/2021 through 03/25/2021 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

 4Q20 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

 4Q20 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.

 

Results

 

Earnings per outstanding share were Ps.10.8 in 4Q20, 2% higher than in 3Q20 and 11% lower than the result posted a year ago.

 

In FY2020 earnings per outstanding share were Ps.47.34, 14% higher than in FY2019.

 

EARNINGS PER SHARE  MACRO Consolidated       Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   FY2019    FY2020    QoQ    YoY 
                                    
Net income -Parent Company- (M $)   7,745    6,765    6,906    26,476    30,269    2%   -11%
Average # of shares outstanding (M)   639    639    639    639    639    0%   0%
Average #of treasury stocks (shares repurchased) (M)   0    -    -    18    0    -    - 
Book value per avg. Outstanding share ($)   223    233    232    223    232    0%   4%
Shares Outstanding (M)   639    639    639    639    639    0%   0%
Earnings per avg.  outstanding share ($)   12.11    10.59    10.80    41.41    47.36    2%   -11%
EOP FX (Pesos per USD)   59.8950    76.1750    84.1450              10%   40%
Book value per avg. issued ADS (USD)   37.23    30.59    27.57    37.23    27.57    -10%   -26%
Earnings per avg. outstanding ADS (USD)   2.02    1.39    1.28    7.91    6.54    -8%   -37%

 

Banco Macro’s 4Q20 net income of Ps.6.1 billion was 2% or Ps.141 million higher than the previous quarter and 11% or Ps.839 million lower YoY. This result represented an accumulated ROAE and ROAA of 20.9% and 4.3% respectively.

 

In FY2020 net income for the period totaled Ps.30.3 billion, 14% higher than the Ps.26.5 billion posted in FY2019. Total comprehensive income totaled Ps.25.3 billion, 5% lower than a year ago.

 

Net operating income (before G&A and personnel expenses) was Ps.17.4 billion in 4Q20, decreasing 20% or Ps.4.4 billion compared to 3Q20 and decreased 55% or Ps.21.6 billion compared to the previous year due to lower net interest income, lower net fee income and higher loan loss provisions.

 

In FY2020 Net operating income (before G&A and personnel expenses) totaled Ps.95.2 billion, 12% lower than the previous year.

 

In 4Q20 Provision for loan losses totaled Ps.2.2 billion, 11% or Ps.211 million higher than in 2Q20. In the previous quarter 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 three main groups showing signs of credit deterioration were included in the estimates; i) Ps.666 million related to loans with deferred installments (both commercial and consumer), ii) Ps.1.5 billion related to refinancing of outstanding credit card balances and iii) Ps.68 million related to the 24% loans extended to SMEs, from sectors or activities which the Bank considered troubled o likely to have some trouble.

 

Operating income (after G&A and personnel expenses) was Ps.523 million in 4Q20, 89% or Ps.4.4 billion lower than in 3Q20 and 97% or Ps.19.1 billion lower than a year ago, nonetheless despite the lower result registered in 4Q20, Operating Income (after G&A and personnel expenses) in FY2020 totaled Ps.29.2 billion and was 5% higher than in FY2019.

 

It is important to emphasize that this result was obtained with a leverage of only 5.2x assets to equity ratio.

 

4

 4Q20 Earnings Release

 

 

INCOME STATEMENT  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Net Interest Income   32,238    23,555    21,770    119,000    96,246    -8%   -32%
Net fee income   5,830    5,869    5,660    24,276    22,696    -4%   -3%
Net Interest Income + Net Fee Income   38,068    29,424    27,430    143,276    118,942    -7%   -28%
Net Income from financial instruments  at fair value through P&L   -351    -8,395    -10,682    -44,398    -26,653    27%   2943%
Income from assets at amortized cost   73    68    126    37    1,293    85%   73%
Differences in quoted prices of gold  and foreign currency   1,860    1,345    1,272    4,761    4,230    -5%   -32%
Other operating income   1,276    1,316    1,391    10,457    5,370    6%   9%
Provision for loan losses   1,977    1,948    2,159    5,830    8,003    11%   9%
Net Operating Income   38,949    21,810    17,378    108,303    95,179    -20%   -55%
Employee benefits   7,057    6,902    6,856    28,865    26,599    -1%   -3%
Administrative expenses   4,664    3,784    3,897    17,427    14,540    3%   -16%
Depreciation and impairment of assets   1,058    1,130    1,113    4,093    4,402    -2%   5%
Other operating expenses   6,542    5,109    4,989    30,088    20,471    -2%   -24%
Operating Income   19,628    4,886    523    27,830    29,167    -89%   -97%
Result from associates & joint ventures   36    16    -59    1,223    -7    -469%   -264%
Result from net monetary postion   -6,284    5,385    7,058    14,429    13,349    31%   -212%
Result before taxes from continuing operations   13,380    10,287    7,522    43,482    42,509    -27%   -44%
Income tax   5,635    3,522    616    17,006    12,240    -83%   -89%
Net income from continuing operations   7,745    6,765    6,906    26,476    30,269    2%   -11%
                                    
Net Income of the period   7,745    6,765    6,906    26,476    30,269    2%   -11%
Net income of the period attributable  to parent company   7,745    6,765    6,906    26,476    30,269    2%   -11%
Net income of the period attributable  to minority interest   0    0    0    0    0    -    - 
Other Comprehensive Income   -64    -534    -3,850    296    -4,963    -    - 
Foreign currency translation differences in financial statements conversion   -190    58    -22    116    120    -138%   -88%
Profits or losses from financial assets measured at fair value  through other comprehensive income (FVOCI)  (IFRS 9(4.1.2)(a)   126    -592    -3,828    180    -5,083    -    - 
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD   7,681    6,231    3,056    26,772    25,306    -51%   -60%
Total Comprehensive Income attributable to parent Company   7,681    6,231    3,056    26,772    25,306    -51%   -60%
Total Comprehensive Income attributable to non-controlling interests   -    -    -    -    -    -    - 

 

The Bank’s 4Q20 net interest income totaled Ps.21.7 billion, 8% or Ps.1.8 billion lower than in 3Q20 and 32% or Ps.10.5 billion lower YoY.

 

In FY2020 net interest income was 19% lower than in FY2019 as a result of different regulations adopted that set caps on lending rates and floors on deposit rates.

 

In 4Q20 interest income totaled Ps.41.6 billion, 2% or Ps.651 million higher than in 3Q20 and 11% or Ps.5 billion lower than in 4Q19.

 

Income from interest on loans and other financing totaled Ps.19.6 billion, 1% or Ps.164 million lower compared with the previous quarter. On a yearly basis Income from interest on loans decreased 38% or Ps.11.8 billion.

 

In FY2020 interest on loans totaled Ps.85.6 billion and decreased 23% compared to FY2019.

 

In 4Q20 income from government and private securities increased 4% or Ps.680 million QoQ (due to higher income from Government securities) and increased 38% or Ps.5.4 billion compared with the same period of last year. This result is explained 91% by income from government and private securities through other comprehensive income (Leliqs and Other government securities) and the remaining 9% is explained by income from sovereign bonds in pesos at amortized cost.

 

5

 4Q20 Earnings Release

 

In FY2020 income from government and private securities decreased 29% compared with FY2019.

 

In 4Q20 income from Repos totaled Ps.2.5 billion, 7% or Ps.165 million higher than the previous quarter and Ps.1.5 billion higher than a year ago.

 

In 4Q20 FX income totaled Ps.1.3 billion, 5% or Ps.73 million lower than the previous quarter and 32% lower than a year ago. FX income gain was due to the 10% argentine peso depreciation against the US dollar, the Bank’s long spot dollar position during the quarter and FX trading results.

 

In FY2020 FX income totaled a Ps.4.2 billion gain, 11% lower than FY2019.

 

FX INCOME  MACRO Consolidated           Variation 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
(1) Differences in quoted prices of  gold and foreign currency   1,860    1,345    1,273    4,761    4,230    -5%   -32%
Translation of FX assets and liabilities to Pesos   385    836    1,072    -194    3,278    28%   179%
Income from foreign currency exchange   1,475    509    201    4,955    952    -61%   -86%
                                    
(2) Net Income from financial assets and liabilities at fair value through P&L   325    1    6    2056    76    500%   -98%
Income from investment in derivative financing instruments   325    1    6    2,056    76    500%   -98%
                                    
(1) +(2) Total Result from Differences in quoted prices of gold and foreign currency   2,185    1,346    1,279    6,817    4,306    -5%   -41%

 

 

INTEREST INCOME  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Interest on Cash and due from Banks   94    32    2    355    128    -94%   -98%
Interest from government securities   12,756    18,518    19,330    88,034    62,718    4%   52%
Interest from private securities   1,361    294    162    1,943    1,608    -45%   -88%
Interest on loans and other financing                                   
             To the financial sector   622    219    176    2,822    1,012    -20%   -72%
             To the public non financial sector   759    646    493    1,840    2,953    -24%   -35%
             Interest on overdrafts   9,486    1,528    1,373    21,176    10,813    -10%   -86%
             Interest on documents   1,780    887    1,170    7,594    4,759    32%   -34%
             Interest on mortgages loans   3,166    1,727    2,290    11,032    8,074    33%   -28%
             Interest on pledged loans   179    118    108    856    476    -8%   -40%
             Interest on personal loans   9,082    7,967    7,958    40,830    32,690    0%   -12%
             Interest on credit cards loans   4,087    2,789    2,533    17,979    11,511    -9%   -38%
             Interest on financial leases   40    5    10    247    57    100%   -75%
             Interest on other loans   2,233    3,883    3,494    7,164    13,213    -10%   56%
Interest on Repos                                   
             From the BCRA   534    2,332    2,477    553    6,972    6%   364%
             Other financial institutions   457    11    31    3,919    96    182%   -93%
Total Interest income   46,636    40,956    41,607    206,344    157,080    2%   -11%
                                    
Income from Interest on loans   31,434    19,769    19,605    111,540    85,558    -1%   -38%

 

The Bank’s 4Q20 interest expense totaled Ps.19.8 billion, increasing 14% or Ps.2.4 billion compared to the previous quarter and 38% (Ps.5.4 billion) compared to 4Q19.

 

6

 4Q20 Earnings Release

 

In 4Q20, interest on deposits represented 94% of the Bank’s total interest expense, increasing 14% or Ps.2.4 billion QoQ, due to a 320 b.p. increase in the average rate paid on deposits (up from 17.9% in 3Q20 to 21.1% in 4Q20, this increase can be traced to a 456 b.p QoQ increase in the average Badlar rate). The average volume of deposits from the private sector decreased 3%. On a yearly basis, interest on deposits increased 40% or Ps.5.4 billion.

 

In FY2020 interest expense decreased 30% compared with FY2019.

 

INTEREST EXPENSE  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Deposits                                   
              Interest on checking accounts   38    471    1,219    537    1,976    159%   3108%
              Interest on saving accounts   256    138    184    896    654    33%   -28%
              Interest on time deposits   13,036    15,756    17,323    79,268    53,900    10%   33%
Interest on other financing from BCRA
and financial inst.
   66    19    36    360    99    89%   -45%
Repos                                   
              Other financial institutions   46    2    87    458    196    4250%   89%
Interest on corporate bonds   275    387    371    3,250    1,548    -4%   35%
Interest on subordinated bonds   609    615    608    2,319    2,398    -1%   0%
Interest on other financial liabilities   72    13    9    256    63    -31%   -88%
Total financial expense   14,398    17,401    19,837    87,344    60,834    14%   38%
                                    
Expenses from interest on deposits   13,330    16,365    18,726    80,702    56,529    14%   40%

 

In 4Q20, the Bank’s net interest margin (including FX) was 16.3%, lower than the 17.1% posted in 3Q20 and the 33.6% posted in 4Q19.

 

In 4Q20 Net Interest Margin (excluding FX) was 15.4%, lower than the 16.2% posted in 3Q20 and than the 31.7% posted in 4Q19.

 

In 4Q20 Net Interest Margin (Pesos) was 17.7%, lower than the 18.6% posted in 4Q20 and than the 40.3% in 4Q19; meanwhile Net Interest Margin (USD) was 2%, higher than the 1.8% posted in 3Q20 and lower than the 3.5% registered in 4Q19.

 

ASSETS & LIABILITIES PERFORMANCE (AR$)  MACRO Consolidated 
In MILLION $  4Q19    3Q20    4Q20 
(Measuring Unit Current at EOP)   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 
                                              
Interest-earning assets                                             
Loans & Other Financing                                             
      Public Sector   3,910    20.8%   77.0%   5,594    11.8%   45.9%   4,128    1.7%   47.5%
      Financial Sector   4,522    5.1%   54.0%   2,145    7.6%   40.4%   1,872    -5.3%   37.4%
  Private Sector   236,948    0.8%   47.6%   224,459    0.9%   31.6%   223,921    -9.2%   31.7%
Other debt securities                                             
      Central Bank Securities (Leliqs)   30,900    37.2%   101.0%   135,506    5.4%   37.5%   120,392    -5.4%   37.2%
      Government & Private Securities   28,285    27.8%   87.2%   80,350    -0.6%   29.7%   100,270    -8.5%   32.7%
Repos   4,867    23.4%   80.8%   48,686    -8.7%   19.1%   29,659    -7.9%   33.6%
Total interest-earning assets   309,432    7.6%   57.6%   496,740    1.1%   31.9%   480,242    -7.9%   33.6%
                                              
Non interest-earning assets   125,117              77,742              90,614           
Total Average Assets   434,549              478,349              516,031           
                                              
Interest-bearing liabilities                                             
Deposits                                             
  Public Sector   10,882    -5.1%   39.0%   58,046    -4.3%   24.8%   56,022    -12.0%   27.6%
  Private Sector   164,942    -12.0%   28.9%   249,636    -7.9%   20.2%   249,236    -14.8%   23.6%
BCRA and other financial institutions   296    32.3%   93.8%   454    -9.2%   18.4%   546    -12.5%   27.0%
Corporate bonds   7,832    -22.3%   13.9%   5,525    -2.0%   27.9%   5,023    -10.8%   29.4%
Repos   353    3.6%   51.7%   55    -12.2%   14.5%   1,137    -10.1%   30.4%
Total int.-bearing liabilities   184,305    -11.9%   29.0%   313,716    -7.2%   21.1%   311,964    -14.2%   24.5%
                                              
Total non int.-bearing liabilities   118,539              165,467              166,896           
                                              
Total Average Liabilities   302,844              479,183              478,860           
                                              
Assets Performance        44,888              39,852              40,535      
Liabilities Performance        13,475              16,677              19,180      
Net Interest Income        31,413              23,175              21,355      
Total interest-earning assets        309,432              496,740              480,242      
Net Interest Margin (NIM)        40.3%             18.6%             17.7%     

 

7

 4Q20 Earnings Release

 

ASSETS & LIABILITIES PERFORMANCE USD   MACRO Consolidated 
In MILLION $  4Q19    3Q20    4Q20 
(Measuring Unit Current at EOP)   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 
                                              
Interest-earning assets                                             
Cash and Deposits in Banks   37,086    -20.0%   1.0%   49,652    1.7%   0.3%   50,786    -2.4%   0.0%
Loans & Other Financing                                             
      Financial Sector   429    -15.6%   6.5%   62    7.9%   6.4%   27    0.0%   0.0%
  Private Sector   53,794    -11.3%   11.9%   27,696    16.8%   15.2%   24,220    14.8%   17.6%
Other debt securities                                             
      Government & Private Securities   2,342    -16.9%   4.9%   5,102    2.5%   1.1%   5,965    0.0%   0.0%
Total interest-earning assets   93,651    -14.9%   7.4%   82,512    6.8%   5.3%   80,998    2.8%   5.3%
                                              
Non interest-earning assets   62,311              103,570              94,090           
Total Average Assets   155,962              186,082              175,088           
                                              
Interest-bearing liabilities                                             
Deposits                                             
  Public Sector   1,457    -18.6%   2.7%   864    1.9%   0.5%   822    -1.9%   0.5%
  Private Sector   72,567    -19.6%   1.4%   56,049    2.1%   0.7%   47,641    -2.1%   0.3%
BCRA and other financial institutions   3,517    -16.1%   5.9%   569    7.1%   5.6%   563    2.4%   4.9%
Subordinated bonds   34,554    -15.2%   7.0%   34,299    8.6%   7.1%   33,856    4.6%   7.1%
Total int.-bearing liabilities   112,095    -18.1%   3.3%   91,781    4.6%   3.1%   82,882    0.8%   3.2%
                                              
Total non int.-bearing liabilities   34,940              43,655              40,645           
                                              
Total Average liabilities   147,035              135,436              123,527           
                                              
Assets Performance        1,748              1,104              1,072      
Liabilities Performance        923              724              657      
Net Interest Income        825              380              415      
Total interest-earning assets        93,651              82,512              80,998      
Net Interest Margin (NIM)        3.5%             1.8%             2.0%     

 

In 4Q20 Banco Macro’s net fee income totaled Ps.5.7 billion, 4% or Ps.209 million lower than in 3Q20 and 3% or Ps.170 million lower than the same period of last year.

 

In FY2020 net fee income was 7% lower than in the previous year.

 

In the quarter, fee income totaled Ps.6.2 billion, 3% or Ps.190 million lower than in 3Q20. Fees charged on deposit accounts decreased 11% QoQ and were partially offset by increases in Credit Card fees (3%) and financial agent fees (9%). On a yearly basis, fee income decreased 4% or Ps.204 million.

 

In the quarter, total fee expense increased 4% or Ps.19 million. On a yearly basis, fee expenses decreased 13% or Ps.79 million.

 

NET FEE INCOME  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Fees charged on deposit accounts   2,276    2,475    2,213    10,519    9,230    -11%   -3%
Credit card fees   1,298    1,282    1,324    5,578    5,196    3%   2%
Corporate services fees   763    614    617    2,904    2,422    0%   -19%
ATM transactions fees   554    570    564    1,486    2,141    -1%   2%
Insurance fees   374    400    410    1,592    1,601    2%   10%
Debit card fees   324    388    413    1,348    1,479    6%   27%
Financial agent fees (Provinces)   457    310    338    1,377    1,258    9%   -26%
Credit related fees   219    146    137    1,043    726    -6%   -37%
Mutual funds & securities fees   87    168    149    372    544    -11%   71%
AFIP & Collection services   80    22    22    189    93    0%   -73%
ANSES fees   15    13    11    60    53    -15%   -27%
Total fee income   6,447    6,388    6,198    26,468    24,743    -3%   -4%
                                    
Total fee expense   617    519    538    2,192    2,047    4%   -13%
                                    
Net fee income   5,830    5,869    5,660    24,276    22,696    -4%   -3%

 

8

 4Q20 Earnings Release

 

In 4Q20 Net Income from financial assets and liabilities at fair value through profit or loss totaled a Ps.10.7 billion loss, higher than the Ps.8.4 billion loss posted in the previous quarter. This loss can be traced to a higher loss related to sale of financial assets at fair value as a consequence of the inflation adjustment applied to our Leliq holdings (higher inflation was observed during 4Q20) which was partially offset by a Ps.212 million increase in profit from government securities. On a yearly basis the loss related to Net income from financial assets and liabilities at fair value through profit or loss increased Ps.10.3 billion.

 

In FY2020 Net Income from financial assets and liabilities at fair value through profit or loss totaled a Ps.26.6 billion loss and was 40% smaller than the loss posted in FY2019.

 

NET INCOME FROM FINANCIAL ASSETS AND LIABILITIES
AT FAIR VALUE THROUGH PROFIT OR LOSS
  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Profit or loss from government securities   2,780    2,885    3,097    2,570.0    10,077.0    7%   11%
Profit or loss from private securities   375    304    135    1,134.0    848.0    -56%   -64%
Profit or loss from investment in derivative financing instruments   325    1    6    2,056.0    76.0    500%   -98%
Profit or loss from other financial assets   71    -5    0    250.0    4.0    -100%   -100%
Profit or loss from investment in equity instruments   20    -119    -44    2,592    49    -63%   -320%
Profit or loss from the sale of financial assets at fair value   -3,922    -11,463    -13,876    -52,992    -37,705    21%   254%
Income from financial assets at fair value through profit or loss   -351    -8,397    -10,682    -44,390    -26,651    27%   2943%
                                    
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   -351    -8,395    -10,682    -44,398    -26,653    27%   2943%

 

In the quarter Other Operating Income totaled Ps.1.4 billion, 9% or Ps.115 million higher than in 3Q20. On a yearly basis Other Operating Income decreased 9% or Ps.115 million.

 

In FY2020 Other Operating Income was 49% lower than in FY2019, due to the sale of the 51% stake in Prisma being recorded in 1Q19.

 

OTHER OPERATING INCOME  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Credit and debit cards   60    31    40    300    123    29%   -33%
Lease of safe deposit boxes   157    216    197    584    780    -9%   25%
Other service related fees   379    485    342    1,689    1,870    -29%   -10%
Other adjustments and interest
from other receivables
   259    209    230    1,072    899    10%   -11%
Initial recognition of loans   49    -13    -8    163    0    -    - 
Sale of property, plant and equipment   0    6    2    0    8    -67%   - 
Others   372    382    588    6,649    1,690    54%   58%
Other Operating Income   1,276    1,316    1,391    10,457    5,370    6%   9%

 

In 4Q20 Banco Macro’s administrative expenses plus employee benefits totaled Ps.10.8 billion, 1% or Ps.67 million higher than the previous quarter, due to higher administrative expenses (3%). On a yearly basis administrative expenses plus employee benefits decreased 8% or Ps.968 million.

 

In FY2020 administrative expenses plus employee benefits decreased 11% compared to FY2019, showing the strict cost control policies adopted by the Bank’s senior management.

 

9

 4Q20 Earnings Release

 

Employee benefits decreased 1% or Ps.46 million QoQ (remunerations were 4% lower but were offset by higher compensation and which increased 35% QoQ). On a yearly basis Employee benefits decreased 3% or Ps.201 million.

 

In 4Q20 administrative expenses increased 3% or Ps.113 million, due to higher Directors and statutory auditors fees (106% or Ps.311 million) and higher advertising and publicity fees (110% or Ps.92 million) related to legal expenses which were partially offset by lower (28% or Ps.371 million) other expenses.

 

In 4Q20, the efficiency ratio reached 50.7%, deteriorating from the 45.9% posted in 3Q20 and similar to the 50.7% posted a year ago. In 4Q20 expenses (employee benefits + G&A expenses + depreciation and impairment of assets) increased 1%, 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 16% compared to 3Q20.

 

PERSONNEL & ADMINISTRATIVE EXPENSES  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Employee benefits   7,057    6,902    6,856    28,865    26,599    -1%   -3%
              Remunerations   5,121    5,141    4,943    19,958    19,678    -4%   -3%
              Social Security Contributions   1,162    1,140    1,139    5,858    4,413    0%   -2%
              Compensation and bonuses   586    458    619    2,382    1,950    35%   6%
              Employee services   188    163    155    667    558    -5%   -18%
Administrative Expenses   4,664    3,784    3,897    17,427    14,540    3%   -16%
              Taxes   500    451    482    2,063    1,854    7%   -4%
              Maintenance, conservation fees   697    565    644    2,336    2,270    14%   -8%
              Directors & statutory auditors fees   799    294    604    2,820    1,623    105%   -24%
              Security services   405    345    340    1,612    1,415    -1%   -16%
              Electricity & Communications   408    380    364    1,614    1,529    -4%   -11%
              Other professional fees   359    229    213    1,378    888    -7%   -41%
              Rental agreements   58    11    18    307    91    64%   -69%
              Advertising & publicity   218    84    177    644    432    111%   -19%
              Personnel allowances   66    27    33    270    128    22%   -50%
              Stationary & Office Supplies   28    24    21    139    91    -13%   -25%
              Insurance   42    48    46    165    171    -4%   10%
              Hired administrative services   1    2    0    6    3    -100%   -100%
             Other   1,083    1,324    955    4,073    4,045    -28%   -12%
Total Administrative Expenses   11,721    10,686    10,753    46,292    41,139    1%   -8%
                                    
Total Employees   8,768    8,651    8,561                     
Branches   463    463    463                     
Efficiency ratio   34.5%   57.1%   71.5%                    
                                    
Accumulated efficiency ratio   50.7%   45.9%   50.7%                    

 

In 4Q20, Other Operating Expenses totaled Ps.5 billion, decreasing 2% or Ps.120 million QoQ, due to lower Turnover Tax (6% or Ps.172 million). On a yearly basis Other Operating Expenses decreased 24% or Ps.1.5 billion.

 

In FY2020 Other Operating Expenses were 32% lower than in FY2019.

 

10

 4Q20 Earnings Release

 

OTHER OPERATING EXPENSES  MACRO Consolidated           Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20    FY2019      FY2020     QoQ    YoY 
                                    
Turnover Tax   3,702    2,775    2,603    13,929    11,255    -6%   -30%
Other provision charges   433    292    216    1,949    1,122    -26%   -50%
Deposit Guarantee Fund Contributions   157    205    210    784    740    2%   34%
Donations   189    0    4    381    169    -    -98%
Insurance claims   21    14    11    81    63    -21%   -48%
Initial loan recognition   0    0    48    0    48    -    - 
Others   2,041    1,823    1,897    12,963    7,074    4%   -7%
Other Operating Expenses   6,543    5,109    4,989    30,088    20,471    -2%   -24%

 

In 4Q20 the result from the net monetary position (excluding Leliqs) totaled a Ps.7.1 billion gain, Ps.1.7 billion higher than the Ps.5.4 billion gain posted in 3Q20. This result is explained by the breakdown of monetary assets and monetary liabilities and their behavior during the quarter; an increase in monetary assets (loans, and government securities) and a bigger increase in monetary liabilities (deposits), and higher inflation observed during the quarter (368 b.p. above 3Q20 level, up from 7.65% to 11.33%) generating a positive result. If we include the inflation adjustment on our Leliqs holdings and Other government securities (Ps.43.6 billion loss in FY2020) the total result from the monetary position (including Leliqs and Other government securities) would be a Ps.30.2 billion loss in FY2020.

 

In FY2020 Banco Macro's effective income tax rate 28.8%, lower than the 39.1% effective tax rate of FY2019.

 

RESULT FROM NET MONETARY POSITION   BANCO MACRO           
In MILLION $ (Measuring Unit Current at EOP)   1Q20   2Q20   3Q20   4Q20   FY2020 
                          
Result from Net Monetary Position (Consolidated)   373    533    5,384    7,058    13,348 
Change in Consumer Price Index   7.80%   5.37%   7.65%   11.33%     
                          
RECPPC MONETARY ASSETS & LIABILITIES (*)                         
Monetary Assets (MA)                         
Cash and deposits in banks   -9,219    -6,916    -9,010    -11,441    -36,586 
Government and private securities   -2,009    -1,359    -3,056    -9,829    -16,253 
Loans   -20,838    -14,526    -19,334    -27,366    -82,063 
Other financial assets   -969    -2,832    -6,099    -6,622    -16,523 
Other receivables   -21    -11    0    -14    -46 
Investment in other companies   -700    -473    -708    -1,029    -2,911 
Others   -27    -22    -37    -26    -112 
Total RECPPC Monetary Assets   -33,783    -26,139    -38,244    -56,327    -154,494 
                          
Monetary Liabilities (ML)                         
Deposits   27,222    21,429    35,959    51,353    135,962 
Other financial liabilities   2,662    1,721    2,504    4,284    11,171 
Other liabilities   1,730    1,682    2,545    3,975    9,932 
Subordinated Corporte Bonds   2,455    1,766    2,530    3,664    10,414 
Others   11    12    20    9    52 
Provisions   150    104    140    168    562 
Total RECPPC Monetary Liabilities   34,229    26,713    43,698    63,453    168,094 
                          
Result from Net Monetary Position   446    574    5,454    12,652    13,600 
                          
RECPPC Leliqs   -7,113    -4,758    -9,270    -12,815    -33,956 
RECPPC Other Government Securities (FVPL)                       -3,713 
RECPPC Other Government Securities (OCI)                       -5,910 
Result from Net Monetary Position (inc. Leliqs)   -7,707    -3,627    -4,331    -9,654    -30,231 

 

RECPPC: Result from changes in purchasing power of currency

(*)Banco Macro, not consolidated

 

11

 4Q20 Earnings Release

 

Financial Assets

 

Private sector financing

 

The volume of “core” financing to the private sector (including loans, financial trust and leasing portfolio) totaled Ps.252.5 billion, decreasing 2% or Ps.6.1 billion QoQ and 13% or Ps.36.7 billion YoY as a consequence of the economic recession that affected Argentina during 2020.

 

Within commercial loans, Documents stand out with a 10% or Ps.2.4 billion increase QoQ (mostly due to loans extended to SMEs) meanwhile Others decreased 20% or Ps.9.7 billion.

 

Within consumer lending credit card loans increased 9% or Ps.5.3 billion QoQ.

 

Within private sector financing, peso financing decreased 1% or Ps.3.4 billion, while US dollar financing decreased 19% or USD 64 million.

 

As of 4Q20, Banco Macro´s market share over private sector loans was 7.1%.

 

FINANCING TO THE PRIVATE SECTOR  MACRO Consilidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
Overdrafts    50,561    19,136    17,075    -11%   -66%
Discounted documents   26,761    23,780    26,172    10%   -2%
Mortgage loans   17,343    15,198    13,483    -11%   -22%
Pledged loans   5,455    4,028    3,259    -19%   -40%
Personal loans   75,678    67,475    67,095    -1%   -11%
Credit Card loans   57,393    58,578    63,876    9%   11%
Others   30,831    49,095    39,411    -20%   28%
Interest   21,064    19,327    19,761    2%   -6%
Total loan portfolio   285,086    256,617    250,132    -3%   -12%
Total loans in Pesos   233,918    231,669    227,868    -2%   -3%
Total loans in USD   51,168    24,948    22,264    -11%   -56%
Financial trusts   2,637    405    569    40%   -78%
Leasing   312    149    119    -20%   -62%
Others   1,171    1,383    1,638    18%   40%
Total other financing   4,120    1,937    2,326    20%   -44%
Total other financing in Pesos   2,716    889    1,294    46%   -52%
Total other financing in USD   1,404    1,048    1,032    -2%   -26%
Total financing to the private sector   289,206    258,554    252,458    -2%   -13%
EOP FX (Pesos per USD)   59.8950    76.1750    84.1450    10%   40%
USD financing / Financing to the private sector   18%   10%   9%          

 

Public Sector Assets

 

In 4Q20, the Bank’s public sector assets (excluding LELIQs) to total assets ratio was 17.5%, slightly lower than the 17.7% registered in the previous quarter, and higher than the 6.3% posted in 3Q19.

 

In 4Q20, a 9% or Ps.12.1 billion decrease in Leliqs and a 6% or Ps.8.7 billion decrease in Government Securities stand. Since 2Q20 the Bank decided to invest in CER adjustable and Badlar bonds.

 

12

 4Q20 Earnings Release

 

PUBLIC SECTOR ASSETS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
Leliqs   62,532    140,756    128,676    -9%   106%
Other   29,026    139,650    130,981    -6%   351%
Government securities   91,558    280,406    259,657    -7%   184%
Provincial loans   8,591    4,330    3,443    -20%   -60%
Loans   8,591    4,330    3,443    -20%   -60%
Purchase of government bonds   155    155    153    -1%   -1%
Other receivables   155    155    153    -1%   -1%
                          
TOTAL PUBLIC SECTOR ASSETS   100,304    284,891    263,253    -8%   162%
                          
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)   37,772    144,135    134,577    -7%   256%
                          
TOTAL PUBLIC SECTOR ASSETS (net of LEBAC/NOBAC/LELIQ)/TOTAL ASSETS   6.3%   17.7%   17.5%          

  

Funding

 

Deposits

 

Banco Macro’s deposit base totaled Ps.488.7 billion in 4Q20, decreasing 11% or Ps.59.8 billion QoQ and a 37% or Ps.130.8 billion increase YoY and representing 79% of the Bank’s total liabilities.

 

On a quarterly basis, both public and private sector deposits decreased with a 37% or Ps.44 billion decrease and a 4% or Ps.15.9 billion decrease respectively.

 

The decrease in private sector deposits was led by time deposits, which decreased 8% or Ps.18.8 billion, while demand deposits increased 2% or Ps.4.2 billion QoQ.

 

Within private sector deposits, peso deposits decreased 1% or Ps.3.9 billion, while US dollar deposits decreased 22% or USD 249 million.

 

In FY2020, within private sector deposits, time deposits increased 14% while demand deposits increased 41%.

 

As of 4Q20, Banco Macro´s market share over private sector deposits was 6.4%.

 

DEPOSITS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
Public sector   23,907    117,601    73,565    -37%   208%
                          
Financial sector   428    491    696    42%   63%
                          
Private sector   333,531    430,427    414,480    -4%   24%
Checking accounts   54,625    79,829    65,401    -18%   20%
Savings accounts   123,518    119,956    138,553    16%   12%
Time deposits   144,416    221,738    202,968    -8%   41%
Other   10,972    8,904    7,558    -15%   -31%
Total   357,866    548,519    488,741    -11%   37%
                          
Pesos   249,386    460,840    411,641    -11%   65%
Foreign Currency (Pesos)   108,480    87,679    77,100    -12%   -29%
                          
EOP FX (Pesos per USD)   59.8950    76.1750    84.1450    10%   40%
Foreign Currency (USD)   1,811    1,151    916    -20%   -49%
                          
USD Deposits / Total Deposits   30%   16%   16%          

 

13

 4Q20 Earnings Release

 

Banco Macro’s transactional deposits represent approximately 48% of its total deposit base as of 3Q20. These accounts are low cost and are not sensitive to interest rate increases.

 

Other sources of funds

 

In 4Q20, the total amount of other sources of funds decreased 1% or Ps.2.3 billion compared to 3Q20. On a yearly basis other sources of funds increased 1% or Ps.1.8 billion. In 4Q20 Shareholder’s Equity decreased 1% or Ps.1 billion; also in the quarter subordinated corporate bonds decreased 2% or Ps.801 million while non subordinated corporate bonds decreased 12% or Ps.660 million.

 

The decrease in Shareholders’ equity is explained by the inflation adjustment applied to Other government securities (not Leliqs) that are registered in Other Comprehensive Income that totaled a Ps.3.9 billion loss and a Ps.4.1 billion decrease in reserved earnings due to the supplementary dividend (Ps.3.8 billion) approved in October by the Special Shareholders’ meeting.

 

OTHER SOURCES OF FUNDS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
Central Bank of Argentina   37    22    20    -9%   -46%
Banks and international institutions   2,502    447    355    -21%   -86%
Financing received from Argentine financial institutions   517    296    543    83%   5%
Subordinated corporate bonds   33,098    35,101    34,300    -2%   4%
Corporate bonds   7,522    5,587    4,927    -12%   -34%
Shareholders' equity   142,753    149,092    148,079    -1%   4%
Total other source of funds   186,429    190,545    188,448    -1%   1%

 

Liquid Assets

 

In 4Q20, the Bank’s liquid assets amounted to Ps.440.5 billion, showing a 8% or Ps.38 billion decrease QoQ, and an 84% or Ps.201.5 billion increase on a yearly basis.

 

In 4Q20, LELIQs own portfolio decreased 9% or Ps.12.1 billion. Net Repos decreased 35% or Ps.21.3 billion.

 

In 4Q20 Banco Macro’s liquid assets to total deposits ratio reached 90%.

 

                     
LIQUID ASSETS  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
Cash   137,066    125,726    129,967    3%   -5%
Guarantees for compensating chambers   10,127    12,167    12,041    -1%   19%
Call   136    167    50    -70%   -63%
Leliq own portfolio   62,532    140,756    128,676    -9%   106%
Net Repos   116    60,084    38,803    -35%   33351%
Other government & private securities   29,026    139,650    130,981    -6%   351%
Total   239,003    478,550    440,518    -8%   84%
                          
Liquid assets to total deposits   67%   87%   90%          

 

14

 4Q20 Earnings Release

 

Solvency

 

Banco Macro continued showing high solvency levels in 4Q20 with an integrated capital (RPC) of Ps.173.5 billion over a total capital requirement of Ps.41.4 billion. Banco Macro’s excess capital in 4Q20 was 319% or Ps.132.1 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 34.2% in 4Q20; TIER1 Ratio stood at 27.1%.

 

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

 

MINIMUM CAPITAL REQUIREMENT  MACRO Consolidated   Change 
In MILLION $  4Q19(¹)   3Q20(²)   4Q20(²)   QoQ   YoY 
                     
Credit risk requirement   21,404    23,972    28,025    17%   31%
Market risk requirement   591    1,172    1,556    33%   163%
Operational risk requirement   7,563    10,604    11,777    11%   56%
Total capital requirements   29,558    35,749    41,358    16%   40%
                          
Ordinary Capital Level 1 (COn1)   83,090    131,531    146,350    11%   76%
Deductible concepts Level 1 (COn1)   -10,637    -11,768    -9,150    -22%   -14%
Capital Level 2 (COn2)   26,113    32,854    36,248    10%   39%
Integrated capital - RPC (i)   98,566    152,618    173,449    14%   76%
                          
Excess capital   69,008    116,869    132,091    13%   91%
                          
Risk-weighted assets - RWA (ii)   361,678    438,129    506,766    16%   40%
                          
Regulatory Capital ratio [(i)/(ii)]   27.3%   34.8%   34.2%          
                          
Ratio TIER 1 [Capital Level 1/RWA]   20.0%   27.3%   27.1%          

 

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

(¹) Figueres are not inflation adjusted. Expressed in Pesos current at end of each quarter

(²) Figures are inflaiton adjusted. Expressed in Pesos current at EOP

 

Asset Quality

 

In 4Q20, Banco Macro’s non-performing to total financing ratio (under Central Bank rules) reached a level of 0.78%, down from 1.14% in 3Q20, and down from the 2.07% posted in 4Q19.

 

Consumer portfolio non-performing loans improved 23b.p. (down to 0.73% from 0.96%) while Commercial portfolio non-performing loans improved 65b.p. in 4Q20 (down to 0.9% from 1.55%).

 

The improvement in Commercial non-performing loans can be traced to the write off of a specific agro exporter client.

 

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) improved to 479.2% in 4Q20. Write-offs over total loans totaled 0.37%.

 

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

 

15

 4Q20 Earnings Release

 

                     
ASSET QUALITY  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
Commercial portfolio   141,754    84,647    76,453    -10%   -46%
  Non-performing   1,892    1,314    690    -48%   -64%
Consumer portfolio   173,538    193,376    193,951    0%   12%
  Non-performing   4,643    1,856    1,409    -24%   -70%
Total portfolio   315,291    278,023    270,405    -3%   -14%
  Non-performing   6,535    3,170    2,099    -34%   -68%
Commercial non-perfoming ratio   1.33%   1.55%   0.90%          
Consumer non-perfoming ratio   2.68%   0.96%   0.73%          
                          
Total non-performing/ Total portfolio   2.07%   1.14%   0.78%          
                          
Total allowances   6,930    9,602    10,056    5%   45%
Coverage ratio w/allowances   106.04%   302.90%   479.20%          
Write Offs   839    702    993    41%   18%
Write Offs/ Total portfolio   0.27%   0.25%   0.37%          
                          

 

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 2019 20-F)

 

The table below shows, under the E.C.L model, the allowances for credit losses with their respective classification in stages, and the impact the transition to I.F.R.S. 9 has on earnings.

 

16

 4Q20 Earnings Release

 

CER Exposure and Foreign Currency Position

 

CER EXPOSURE  MACRO Consolidated   Change 
In MILLION $ (Measuring Unit Current at EOP)   4Q19   3Q20   4Q20   QoQ    YoY 
                          
CER adjustable ASSETS                         
                          
Government Securities   5,595    49,217    51,196    4%   815%
                          
Loans (*)   19,795    19,211    18,644    -3%   -6%
Private sector loans   9,488    7,731    7,013    -9%   -26%
Mortgage loans (UVA adjusted)   10,307    11,476    11,624    1%   13%
Other loans   0    4    7    75%   - 
Total CER adjustable assets   25,390    68,428    69,840    2%   175%
                          
CER adjustable LIABILITIES                         
Deposits (*)   560    1,063    1,379    30%   146%
UVA Unemployment fund   758    773    775    0%   2%
Total CER adjustable liabilities   1,318    1,836    2,154