Operator: Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's First Quarter 2023 Earnings Conference Call. We would like to inform you that first quarter 2023 press release is available to download at the Investor Relations website of Banco Macro at www.macro.com.ar/relaciones-inversores/. Also, this event is being recorded and all participants will be in a listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer session. At that time further instructions will be given. [Operator instructions] It is now my pleasure to introduce our speakers joining us from Argentina are Mr. Gustavo Manriquez, Chief Executive Officer; Mr. Jorge Scarinci, Chief Financial Officer; and Mr. Nicolas Torres, IR. Now I will turn the conference over to Mr. Nicolas Torres. You may begin.

Nicolas Torres: Thank you, Dave. Good morning and welcome to Banco Macro's first quarter 2024 conference call. Any comments we make today may include forward-looking statements which are subject to various conditions and these are applied in our 20-F which was filed to the SEC and it's available at our website. First quarter 2024 press release were distributed on Wednesday and it's available at our website. All figures are in Argentine pesos and have been restated in terms of the measurement unit current at the end of the reporting period. As of 2020, the bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29 as established by the Central Bank. For recent comparison, figures of previous quarters have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2024. I will now briefly comment on the bank's first quarter 2024 financial results. Banco Macro's net income for the quarter was ARS275.2 billion, 61% or ARS422 billion lower than in the fourth quarter of 2023 and 626% or ARS237.3 billion higher than the result posted a year ago. The bank's analyzed ROE and ROA of 37.4% and 11.9%, respectively, remained healthy and shows the bank earnings potential. Net operating income before general, administrative, and personal expenses for the first quarter of 2024 was ARS1.62 trillion, increasing 19%, or ARS388 billion quarter-on-quarter. On a yearly basis, net operating income before general, administrative and personnel expenses increased 149% or ARS969 billion. In the first quarter of 2024, provision for loan losses totaled ARS18.9 billion, 32% or ARS8.7 billion lower than in the previous quarter. On a yearly basis, provision for loan losses increased 40% or ARS5.4 billion. Operating income after general, administrative, and personal expenses was ARS1.25 trillion, 20% or ARS322.7 billion lower than in the fourth quarter of 2023, and 211% or ARS850 billion higher than the first quarter of 2023. In the quarter, net interest income totaled ARS167.5 billion, 40% or ARS111 billion lower than the result posted in the fourth quarter of 2023, and 56%, or ARS211.3 billion lower than the result posted one year ago. Interest income decreased 18% while interest expenses decreased 7%. In the first quarter of 2024, interest income totaled ARS714.8 billion, 18% or ARS154.5 billion lower than in the fourth quarter of 2023 and 19%, or ARS172 billion lower than the previous year. Income from interest on loans and other financing totaled ARS462 billion, 18% or ARS102.8 billion lower compared with the previous quarter, mainly due to a 16% decrease in the average volume of private sector loans and a 118 basis points decrease in the average lending rate. On a yearly basis, income from interest on loans increased 39%, or ARS129.8 billion. In the first quarter of 2024, interest on loans represented 65% of total interest income. In the first quarter of 2024, income from government and private securities decreased 42% or ARS68.3 billion quarter-on-quarter due to the unwinding of our Leliq portfolio and decreased 82% or ARS429.3 billion compared with the same period of last year. In the fourth quarter of 2024, income from Repos totaled ARS151.9 billion, 19% or ARS24.3 billion higher than the previous quarter and 482% or ARS125.8 billion, higher than a year ago. In the first quarter of 2024, FX income totaled ARS80.6 billion, 71% or ARS196.5 billion lower than the previous quarter, and 43% or ARS61.6 billion lower than a year ago. FX income gain was due to the 6.1% Argentine peso depreciation against the US dollar and the Bank's long dollar position during the quarter. It is important to notice that the Bank's long dollar position decreased 96% during the quarter. In the first quarter of 2024, interest expense totaled ARS547.3 billion, 7% or ARS43.5 billion lower compared to the fourth quarter of 2023 and 8% or ARS39.3 billion higher on a yearly basis. Within interest expenses, interest on deposits decreased 8% or ARS46.5 billion quarter-on-quarter, mainly driven by 970 basis points decrease in the average interest rate paid on deposits, while the average volume of private sector deposits increased 5%. On a yearly basis, interest on deposits increased 6% or ARS31.5 billion. In the first quarter of 2024, interest on deposits represented 96% of the bank's financial expenses. In the first quarter of 2024, the bank's net interest margin, including FX was 26% lower than the 52.1% posted in the fourth quarter of 2023 and the 33.6% posted in the first quarter of 2023. In the first quarter of 2024, Banco Macro's net fee income totaled ARS74.1 billion, 12% or ARS10.2 billion lower than the fourth quarter of 2023 and was 13% or ARS11.4 billion lower than the same period of last year. In the first quarter of 2024, net income from financial assets and liabilities at fair value of the profit or loss totaled a ARS1.27 trillion gain mainly due to the mark-to-market of some government securities, mainly inflation-adjusted bonds. In the quarter other operating income totaled ARS44.4 billion increasing 16% or ARS6.2 billion compared to the fourth quarter of 2023. On a yearly basis, other operating income increased 100% or ARS22.2 billion. In the first quarter of 2024, Banco Macro's administrative expenses plus employee benefits totaled ARS202.3 billion, 12% or ARS28.9 billion lower than the previous quarter, due to lower employee benefits which decreased 1% and lower administrative expenses which decreased 28%. On a yearly basis, administrative expenses plus employee benefits increased 49% or ARS66.1 billion. As of the first quarter of 2024, the efficiency ratio reached 14.7%, improving substantially from the 18.6% posted in the fourth quarter of '23 and the 25.5% posted one year ago. In the first quarter of 2024, expenses decreased 13%, while net interest income plus net fee income plus other operating income decreased 11% compared to the fourth quarter of 2023. In the first quarter of 2024, the result from the net monetary position totaled ARS889 billion loss, 12% or ARS92 billion higher than the loss posted in the fourth quarter of 2023 and 159% or ARS546.2 billion higher than the loss posted one year ago. Our net monetary position increased 84% during the quarter, while lower inflation was observed in the first quarter of '24, 167 basis points below inflation registered in the fourth quarter of 2023. Inflation was 51.6% in the first quarter of 2024 compared to 53.3% in the fourth quarter of 2023. In the first quarter of 2024, Banco Macro's effective tax rate was 24.5% lower than the 31.4% registered in the fourth quarter of 2023. Further information is provided in Note 21 to our financial statements. In terms of loan growth, the bank's total financing reached ARS2.5 trillion, decreasing 10% or ARS279.6 billion quarter-on-quarter and 8% or ARS205.9 billion lower year-on-year. Within commercial loans, overdrafts stand out with a 21% or ARS92.6 million decrease, documents decreased 21% or ARS10 billion while others increased 2% or ARS9.3 billion. Within consumer lending, personal loans decreased 12% or ARS44.8 billion while credit card loans decreased 18% or ARS132.1 billion. Peso financing decreased 20% or ARS513.9 billion while US dollar financing increased 75% or $254 million. It is important to mention that Banco Macro's market share over private sector loans as of March 2024 reached 9.4%. On the funding side, total deposits decreased 1% or ARS74.3 billion quarter-on-quarter totaling ARS5 trillion and decreased 11% or ARS644 billion year-on-year. Private sector deposits decreased 6% or ARS291.2 billion quarter-on-quarter, while private sector deposits increased 83% or ARS234.2 trillion in the quarter. The decrease in private sector deposits was led by demand deposits which decreased 26% or ARS777.3 billion quarter-on-quarter, while time deposits increased 27% or ARS422.6 billion. Within private sector deposits, peso deposits increased 10% or ARS365.2 billion, while US dollar deposits decreased 32% or $622 million. As of March 2024, Banco Macro's transactional accounts represented approximately 46% of total deposits. Banco Macro's market share over private sector deposits as of March 2024 totaled 7.5%. In terms of asset quality, Banco Macro's non-performing total financial ratio reached 1.14%. The coverage ratio measured as total allowances under expected credit losses over non-performing loans under Central Bank rules reached 222.7%. Consumer portfolio non-performing loans deteriorated 12 basis points up to 147% from 135% the previous quarter, while commercial portfolio non-performing loans improved 49 basis points in the first quarter of 2024, down to 0.72% from 1.2% in the last quarter. In terms of capitalization, Banco Macro accounted an excess capital of ARS2.59 trillion, which represented a capital adequacy ratio of 46.5% and a Tier 1 ratio of 44.5%. The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate, liquid assets total deposit ratio reached 124%. Overall, we have accounted for another positive quarter. We continue to show a solid financial position. Asset quality remain under control and closely monitored. And we keep on working to improve more our efficiency standards. And we will keep a well atomized deposit base. At this time, we would like to take the questions you may have.

Operator: [Operator instructions] Our first question comes from Ernesto Gabilondo with Bank of America. Please go ahead.

Ernesto Gabilondo: Thank you. Hi, good morning. Gustavo, Jorge, and Nicolas, and thanks for the opportunity. My first question will be on your long-road expectations, and also if you can provide us what will be behind that in terms of GDP for this --next year inflation levels and interest rates. And then my second question will be on your evolution of your loan-to-deposit ratio. Given that the Argentine banks are starting to assume loan growth, how would you see this ratio in the next years? And finally, I would like to ask you about your ROE expectations, how you see the ROE for the year, and also if you can provide us some color on how should we see the evolution of the ROE during the year now. First quarter was a kind of high ROE, so how should we think about second quarter and then the second half for the ROE? Thank you.

Jorge Scarinci: Ernesto, how are you? This is Jorge Scarinci. Well, it's a bunch of questions. Let's start for the first one. In terms of loan growth, we're expecting some positive loan growth for this fiscal year 2024. What we are seeing is basically that the first quarter that is seasonally lowest quarter in Argentina, we posted some negative growth in real terms. However, in second quarter, and we think that in the second half of the year, the trend of pickup in loan demand as a consequence of a decline in inflation, inflation expectations, and of course, nominal interest rates. We're going to finish the year with approx -- of positive in the area of 10% to 15% loan growth. Inflation, according to the market consensus is expected to keep on going in the downward trend. May is expected to be between 5% and 6%. The market is expecting that the CPI index could reach 3% or below 3% monthly number for the last quarter of the year. And as a consequence of that, what we think is that, we are going to start seeing a positive real interest rates in the fourth quarter of this 2024. In terms of loans to deposit ratio, I think that, yes, we are in not only Macro, but I think in Argentina, banks are pretty under leveraged. This is a consequence of many quarters of sluggish loan demand, and of course, liquidity still went into the banking sector and we have to find other sources of allocation of those funds. Going forward, we think that maybe not this year, we're not going to see a big change in the loans-to-deposit ratio this year. But if the trends continue, without any doubt, we could reach 60%, 65% of loans-to-deposit ratio in the next couple of years. ROE guidance, as you mentioned, yes, the first quarter we was pretty good, pretty high. We think that the trend is going to go a bit downwards in the coming quarters. Remember that what happened in the fourth quarter of last year and also in the first quarter of this year was a consequence of a good track record in bonds prices. What we are seeing in the second quarter is that bond prices are not growing that much. Therefore, we think that we could be finishing this fiscal year 2024 with an approximately 20% ROE on average for the year.

Ernesto Gabilondo: Thank you very much.

Jorge Scarinci: Yeah. Tell me.

Ernesto Gabilondo: No, no, thank you. Thank you very much, Jorge. And just a follow-up on your macro expectation. So can you repeat again how you’re expecting for GDP growth for this next year, inflation for this next year, and rates for this next year?

Jorge Scarinci: Well, GDP for this year is expected to be down between 2.8% and 3%. Of course, we're going to see a recovery in the second half of the year. And this would imply that for 2025 the market is expecting a positive real growth in GDP of around 6%. Inflation, the market is expecting between 150% to 170% inflation this year. For next year, of course, the trend is much downward between 35% and 55% inflation for next year. Interest rate, I think this is not that easy to forecast. But again, let me not give you some nominal levels, but give you some real levels. We think that we are going to see in the area of 2 to 3 percentage points real interest rates on a monthly basis starting in the fourth quarter of this year.

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

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

Ernesto Gabilondo: Perfect. Excellent. Thank you very much.

Jorge Scarinci: You’re welcome, Ernesto.

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

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

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

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

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

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

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

Brian Flores: Perfect. Thank you.

Jorge Scarinci: You're welcome.

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

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

Jorge Scarinci: Hi, Marina. We are evaluating on -- we have invested a bunch of money in some of the fixed rate Lecaps. But something that is important to consider is that we have to care about how we hedge the equity of the bank against inflation. And inflation is running for the moment at 9%, according to April's numbers, 9% a month. That is still above the 3.5%, 3.7% of what the Lecaps is delivering. So, for the moment we think that we have to cover the equity, we have to hedge the equity. And on the excess of that, we are evaluating where to allocate that excess on the amount of money that we are covering -- sorry, hedging the equity. So that is something that we are constantly monitoring the markets, basically. So we haven't had a decision yet. And your second question is, I mean, for the moment, I think that second and third quarter, the bottom line is going to be highly affected by bond prices basically because our bond portfolio is quite high. So I think that's unless the economic conditions change in a deeper way than what we are expecting, I think that second and third quarter at least, bottom line are going to be governed by bond prices.

Marina Mertens: Thank you.

Jorge Scarinci: Welcome, Marina.

Operator: And the next question comes from Carlos Gomez with HSBC. Please go ahead.

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

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

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

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

Carlos Gomez: And you said that you are seeing some weakness in consumer demand, presumably, that is offset by strength in corporate demand.

Jorge Scarinci: Yes, yes. I mean when you compare both, corporate is more active than consumer.

Carlos Gomez: Thank you so much.

Jorge Scarinci: Welcome, Carlos.

Operator: And the next question comes from David Pardo with Puente Hermanos. Please go ahead.

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

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

David Pardo: Perfect. Thank you.

Jorge Scarinci: You're welcome.

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

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

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