Banco Macro S.A. ($BMA)

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 2026 Earnings Conference Call. We would like to inform you that the first quarter '26 press release is available to download at the Investor Relations website of Banco Macro, www.macro.com.ar/relaciones-inversores. Also, this event is being recorded [Operator Instructions] It is now my pleasure to introduce our speakers. Joining us from Argentina are 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 your conference.

Good morning, and welcome to Banco Macro's First Quarter 2026 Conference Call. Any comments 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 in the SEC and is available on our website. First quarter 2026 press release was distributed yesterday, and it's available at our website. All figures are in Argentina pesos and have been restated in terms of the measuring unit occurring 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, 2026. I will now briefly comment on the bank's first quarter 2026 financial results. Banco Macro's net income totaled ARS 139.8 billion in the first quarter of 2026, 28% or ARS 30.2 billion higher than the surplus in the previous quarter, and 131% or ARS 79.2 billion higher than a year ago. In the first quarter of 2026, the annualized return on average equity and the annualized return on our assets were 10% and 2.4%, respectively. Excluding restructuring expenses, ARS 4.9 billion after cash, the first quarter of 2026 net income would have totaled ARS 152.9 billion, and the annualized ROE and ROA would have been 10.9% and 2.6%, respectively. In the first quarter of 2026, operating income before general and administrative and personnel expenses totaled ARS 123 trillion, 3% or ARS 43.6 billion lower than the fourth quarter of 2025, and 16% or ARS 169.2 billion higher than the same period of last year. In the first quarter of 2026, operating income after general administrative and personnel expenses was ARS 569.8 billion and 15% or ARS 73.8 billion higher than the fourth quarter of 2025, and 24% or ARS 108.6 billion higher than a year ago. The bank's first quarter 2026 net interest income totaled ARS 975.2 billion, 7% or ARS 59.7 billion higher than the fourth quarter of 2025, and 27% or ARS 207.2 billion higher year-on-year. This result is due to a 5% decrease in interest income and a 21% increase in interest expense. In the first quarter of 2026, interest announced represented 72% of total interest income. In the first quarter of 2026, the bank strategy to remain short in U.S. dollars proved successful. The combination of the shorter position together with a [ lump ] interest position and the allocation of the pesos generated by said same of U.S. dollars resulted in a net gain. The bank's first quarter 2026 interest expense totaled ARS 485.7 billion, decreasing 21% or ARS 132.7 billion compared to the previous quarter and 27% or ARS 104 billion higher compared to the first quarter of 2025. In the first quarter of 2026, interest on deposits represented 93% of the bank's total interest expense decreasing 22% or ARS 129.1 billion quarter-on-quarter due to a 407 basis point decrease in the average rate paid on deposits, while the average volume of product sector deposits increased 1%. On a yearly basis, interest on costs increased 24% or ARS 87.1 billion. In the first quarter of 2026, the bank's net interest margin, including FX, was 25.3%, higher than the 21.7% posted in the fourth quarter of 2025 and the 23.2% posted in the first quarter of 2025. In the first quarter of 2026, Banco Macro's administrative expenses plus employee benefits totaled ARS 349.8 billion, 22% or ARS 101.5 billion lower than the previous quarter. Due to lower grade benefits, which decreased 28% and lower administrative expenses, which decreased 9%. On a yearly basis, administrative expenses plus employee benefits increased 3% or ARS 9 billion. Employee benefits decreased 28% or ARS 89.6 billion quarter-on-quarter. Compensation and balances decreased 61% or ARS 74.8 billion. In the first quarter of 2026, the bank recorded ARS 19.9 billion restructuring expenses related to our term plans and several payment provisions. On a yearly basis, employee benefits increased 3% or ARS 6 billion and excluding of certain expenses, employee benefits would have decreased 8% or ARS 18.7 billion quarter-on-quarter and 6% or ARS 13.9 billion year-on-year. It is worth mentioning that in the first quarter of 2026, Banco Macro reduced its branch network by 24 branches, down to 420 from 444 in December of 2025, and reduced its head count by 3%. In the first quarter of 2026, the result from the net margin position totaled ARS 349.8 billion loss, 15% or ARS 46 billion higher than the loss posted in the fourth quarter of 2025, and 1% or ARS 4.4 billion lower than the loss posted 1 year ago. Higher inflation was observed during the quarter, 158 basis points above the fourth quarter of 2025. Inflation was 9.44% in the first quarter of 2026 compared to 7.86% in the fourth quarter of 2025. In the fourth quarter -- in the first quarter of 2026, Banco Macro's effective income tax rate was 34.3%. In the first quarter of 2025 [indiscernible] 2026, Banco Macro's total financial decreased 9% or ARS 1.1 trillion quarter-on-quarter, totaling ARS 10.63 trillion and increased 5% or ARS 458.9 billion year-on-year. In the first quarter of 2026, peso financing decreased 9%, while U.S. dollar financing decreased 6%. It's important to measure that Banco Macro's market share over private sector levels as March 2026, reached 8.2%, decreasing 40 basis points compared to December 2025. On the funding side, Banco Macro's total deposits decreased 7% from ARS 993.7 billion quarter-on-quarter and increased 10% from ARS 1.22 trillion year-on-year, totaling ARS 13.99 trillion and represents 76% of the bank's total liabilities. Brand sector deposits decreased 8% or ARS 1.1 trillion quarter-on-quarter, and the first quarter of 2026, peso deposits decreased 4%, while U.S. dollar deposits decreased 7%. Banco Macro's market share over private sector deposits as of March 2026 totaled 7.9%, unchanged from the previous quarter. In terms of asset quality, Banco Macro's nonperforming total financial ratio reached 5.4%. It is worth work mentioning that Banco Macro's non-performing total financial ratio and under expected credit losses, Stage 3 plus 90 days past due loans deteriorated 84 basis points during the first quarter of 2026, totaling 3.64% versus 2.8% in the fourth quarter of 2025. The final number non-performing ratio is effective by [indiscernible] bank growth, taking into consideration customers behavior across the financial system. Banco Macro's non-performing total financial ratio, excluding mandatory indication of customers increased 109 basis points, reaching 4.73% in the first quarter of 2026, versus 3.64% in the fourth quarter of 2025. Consumer portfolio nonperforming loans deteriorated 168 basis points up to 6.92% from 5.23% in the fourth quarter of 2025. While commercial portfolio non-performing loans deteriorated 66 basis points in the first quarter of 2026, up to 1.34% from 0.68% in the fourth quarter of 2025. The coverage ratio, measured as total allowances under credit losses over nonperforming loans and the [indiscernible] reached 109.79% in the first quarter of 2026. And the coverage ratio has been 90%, which is similar to the current ratio of other private banks in Argentina. Net income in the first quarter of 2026 would have totaled ARS 219.7 billion, represented an adjusted ROE of 15.7%. Banco Macro continued showing a strong solvency ratio, with an excess cap of ARS 4 trillion, 32.4% capital adequacy ratio and 32.4% Tier 1 ratio. In addition, the banks liquid assets remain at an adequate level, reaching 78% of its total deposits in the first quarter of 2026. The bank seems to make the best use of this excess capital. Overall, we have accounted for another positive quarter. We continue to show a solid financial position. Asset quality remain under control and closing [indiscernible]. 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 Instructions] Our first question comes from Brian Flores with Citi.

The first one is the usual one we have. If you have any revision on guidance, we know some of your peers have revised growth a bit in both loans and deposits. So just checking with you if the previous ranges you provided are still valid? And then I wanted to maybe do a double click on asset quality. We saw still obviously some NPL deterioration. And we know you kept the coverage ratio at healthy levels. I just wanted to check with you if going forward, or are you already seeing better trends in terms of provisioning and customer behavior?

Brian. This is Jorge Scarinci. On your first question about guidance in terms of growth, loans and deposits. For the moment, we are maintaining the guidance that we gave in the last quarter. What we are seeing basically is that in the first quarter, when you look at growth in loans, there was a decline, there was an increase in real time when you compare that on a yearly basis. Something to mention here is what you have a look at advances -- sorry, overdraft, that is one of the components of our loans, this line is usually used as a way of allocating excess liquidity. As of March 2026, the market share in this line was 14.6%, well below the 18.1% market share that we posted 1 year ago. So this is quite affecting, and that's why the 5% growth on an annual basis. However, when you have a look at other lines like pledging, personal loans, discounted documents or mortgages, they are growing above 20% on a yearly basis. So because of this and also because of what we've seen in April credit demand, both in pesos and in dollars, and what is going on in May that we are seeing a recovery in loan demand. That's why that we are maintaining our guidance for loans. Similar trend with the deposits. We are maintaining the guidance on the deposits, even though on a quarterly basis, there was a decrease. We are seeing some upward trend in the current quarter onwards. In terms of your second question, asset quality, I think that is worth mentioning here that even though there was a deterioration that we've seen in the whole portfolio that reached 5.4%, we are still showing the best NPL to total loans ratio among our peers. And also, when you look at the coverage ratio, that is almost 110%, this is also a ratio that we are showing the highest among our peers. And we commented in the press release that we would be going down to a level of 90% of coverage, and that is the average of our peers. The adjusted ROE for the quarter, of course, annualized, would have been 15.7%. It is also worth mentioning that what we saw between February and March and also between March and April, there was a positive behavior on the consumer Stage 3 trend. So what we saw is that February apparently was a kind of a peak for the Stage 3 consumer, having March and April showing better trends or positive trends there. And also we saw in terms of commercial, that the deterioration speed was a slowdown in both months. So going forward, we are also maintaining our cost of risk guidance, and we believe that we are close to the peak on this deterioration of asset quality trend that we have seen in the last 12 months. So that's it, Brian.

Perfect. So 5.2 or approximately 5.2 cost of risk, real ROE close to 8%, right? So just confirming this?

Yes. Well, I mean in terms of -- I mean, when I was talking about guidance for growth in terms of loans and deposits and also in terms of asset quality, cost of risk, yes, it's going to be, I think, more than between 5.5 and 6. In terms of profitability, it is pretty clear that we posted, I would say, the best quarter among Argentine banks. And it was slightly above the annualized ROE guidance that we gave last quarter. Also when -- because of what we are seeing in terms of growth in the second quarter should be another good quarter for the bank. For the moment, I think that we are going to be maintaining the ROE guidance of area, 8% on the adjusted ROE, that is without the nonrecurring items that we are showing in the quarter. We would like to wait about a quarter to see if we are going to increase our ROE guidance. So for the moment, ROE guidance is the same 8% area for adjusted ROE.

Our next question comes from Tito Labarta with Goldman Sachs.

I guess following up on the ROE guidance, in particular, more -- if we look at the churn rate of cost of risk is likely to come down as asset quality maybe stabilizes. You had some good NIM performance in the quarter, mainly due on lower funding cost. Do you expect that to revert where NIM should come down for the rest of the year? Or can you sustain this level of NIM, which would then imply perhaps upside risk to that ROE guidance? Just maybe thinking how the NIM should evolve from here and impact profitability?

Tito, in terms of NIMs, we are seeing, going forward, I think, a small contraction. I would say that the NIM for the first Q was slightly above the one that we were expecting. So I would say that the average of the year should be quite similar than the average of last year. So I think that is one of the reasons that could be, at some point, compensating the level of -- maintain the same cost of risk going forward. So that's why we are maintaining this ROE guidance. But again, we want to be, here, a bit conservative and wait one more quarter to see or to crystallize if the bottom line is performing better than expected.

Okay. No, that's clear, Jorge. Maybe just a follow-up there. The pressure on NIM, would it become -- because you expect funding costs to go up? Or do you think there'll be some pressure on the asset yields as rates have come down? Also because you're growing loans faster than deposits, could that also put some pressure on NIM? Just to understand where the NIM pressure could come from.

Yes. What we are seeing that inflation levels should be going slightly down on a monthly basis going forward. That is going to bring nominal interest rates slightly down, but I would say that we could be seeing a slightly more pressure from asset yields compared to the funding cost, that is also going to go down but make more pressure on the asset side.

Our next question comes from Ernesto Gabilondo with Bank of America.

Juan, Jorge, Nicolas, congrats on your results. My first question will be a follow-up on Brian's questions on asset quality. You mentioned in the press release you made a recalibration of your model based on the behavior of the customers of the system, and that this was required by the Central Bank. In Mexico, we follow a similar practice, and in the first quarter, the Mexican banks also created higher provisions based on expected losses of the system, and they were considering the asset quality deterioration of the fintechs. Having said that, I asked to your peers in their conference calls if this practice is followed in Argentina, and they say, no. So it came to my surprise that you were the only one implementing it during the quarter. So can you elaborate on why are you implementing it and the other banks don't and especially as it was required by the regulator? And also, you are the only bank with an adequate reserve coverage ratio above 100%, the others don't. So I also just want to understand if you are conservative in your ratio or you are just following the international standards?

Ernesto, this is Juan. Thanks for your question. Let me take this one. As you saw in the release, we are quoting 3 metrics of delinquency: 5.4, 4.7 and 3.6, okay? 5.4 is the more [ acid ] one, which includes the loans that are delinquent with us, plus the loans with us that are not delinquent, plus delinquencies outside Banco Macro. That's the most acid one, and it's the one that Central Bank uses for reporting. There's the second indicator, 4.7, which is the loans that are delinquent with us, plus the loans that are current with us on the same customer. So basically, what you do is you include in your delinquency ratio, assets that are current in your books, but that are attracted by assets with the same customer that are delinquent. Stage 3 is the methodology that we use for provisioning. So the cost of credit that you see in our results is driven by the Stage 3 delinquency calculation. That Stage 3 delinquency calculation is driven by our model, which is in alignment with accounting standards, and includes actual delinquencies, plus indicators of risk of some loans that might be current, but are higher risk, for example, because of its score range, okay? So that's the 3 distinctions, but it's important to define that our cost of credit, the provisions that we book in our results, is driven by the Stage 3 calculation, in our case, for the first quarter of '26, 3.64%. In that metric is where Jorge mentioned that for the consumer book in Stage 3 metric, we've seen, from February to March and from March to April, 2 consequent months of reduction. We have not seen yet a reduction on the commercial book in this Stage 3 metric, but we have seen a slowdown in the speed of deterioration. Have I made a complex topic clear, Ernesto? Is that...

Super helpful. Just wanted to understand that in these plus indicators of risk, you are being more conservative than the other banks? Or is it just that your loan mix is showing you to recognize higher provisioning? I just wanted to understand this.

Yes. Sorry, we missed that second part of your question. Bottom line, the short answer is, yes, we are being more conservative. This does not, in our view, have to do with the outlook, it has to do with how conservative we are in our coverage. And that conservatism is reflected in 2 ways. One is the model itself. Each bank has its own model. The model needs to comply with standards, but it might vary. That's one thing. The model itself. But the second one is the recalibration. The recalibration is something that by regulation banks need to do at least once a year. And what you do when you recalibrate is see the last 12 months and recalculate the probabilities of default. So when you are in an upward cycle of delinquency, every time you recalibrate and you take a look to the last 12 months instead of the last -- previous 12 months, naturally, the probability of default for each of the clusters of the model increase. What we've done is -- because the regulation says that you need to recalibrate at least once a year. But you are free to recalibrate if you want every month. We have been more conservative, and then more frequent recalibrations to keep our coverage adequate. Because if not, what happens is by the end of the year, if you don't do the recalibration early on, if you are in an upward cycle of delinquency, you may have a hit. So bottom line, again, we are being more conservative, both on the model design itself, but also on the periodicity of recalibration versus our peers. The difference is significant. As you've seen, the average of our peers is in the [ 90% ], and we are almost 110. Naturally, we should expect to, as delinquency reduces to reduce the coverage as the recalibration starts reflecting those improvements. But that's how we see it, Ernesto. Is that clear?

Yes, very clear. And I just have a -- also a follow-up, just if you can repeat your guidance for loan growth and deposit growth for this year? I know that you're not changing it, but just to double check how was it before? And then also another question in terms of your OpEx growth. Can you also remind us how should we think about the recurring OpEx growth for this year, excluding the restructuring costs? And my last question is on your earnings expectations and ROE evolution throughout the year. I know you are right now at 11% and that you mentioned that you will wait for the second quarter to see if you can improve your guidance. But how should we think about the seasonality of the ROE so the second quarter should be a little bit lower and then should be trending up. I just wanted to understand how it should be -- how should we think about the earnings and the ROE evolution throughout the year to meet your guidance?

Ernesto, in terms of the guidance for growth, we are still maintaining the loan growth guidance of 42% nominal growth for the year and 34% nominal growth in deposits for the year. That is the guidance that we are maintaining in terms of growth.

Sorry, in real terms?

It depends the inflation that you have in your model, but we have an inflation level of 28%.

Perfect.

And second question, in terms of expenses going forward. It is pretty clear, and we have explicitly commented before that we are in a process of making the bank more efficient, even though we were showing excellent efficiency levels. But we are in the process of becoming more efficient. Honestly, the idea is to continue, at least second quarter, with the may parts of the third quarter. It depends on how this evolves. But in the way that we are reducing the number of employees and the number of branches. Of course, we do not have exactly the numbers going forward, but a very important proof is that when you look at expenses on a yearly basis, we are in a negative in real terms. So the idea is to continue going forward in the following quarters to show slightly negative numbers in terms of the evolution of expenses in real terms.

And if you allow me, Jorge, this is in line also with the guidance we gave by the end of last year -- in the fourth quarter last year regarding this matter. That you should continue seeing in our quarterly results, restructuring costs and continued reduction in operational loss cause in real terms. So you're seeing it again in the first quarter, and we expect that trend of investing in creating sustainable sales going forward in the next quarters.

Okay. So just for me to understand, if we exclude the restructuring costs, should we expect OpEx a little bit declining or relatively flat this year?

If you are excluding this going forward, the idea is to keep on showing negative real rate of growth.

Okay. Understood. Perfect.

If you take -- and this is -- I'm just quoting the comments in the release, but if you take out the restructuring costs, our recurrent costs would have decreased 6% year-on-year, which Jorge mentioned before. And we expect that trend of reduction in real terms of cost, excluding restructuring, to be maintained.

Okay. This could be a little bit messy because also in the fourth quarter of last year, you created a lot of -- some nonrestructuring costs now. So just wanted to understand if we should be thinking on a yearly basis about this 6% decrease or it could be, also considering fourth quarter also created some of these?

I mean that is something that we are showing the first quarter, and we might be showing the second quarter to continue reducing expenses in real terms. So that's the idea on what Juan was commenting.

To be specific, we do not provide guidance to this granularity level. We provide guidance on volume growth and ROE and trends in terms of guidance, but not specifics at this granularity level. But we said that you would continue seeing reductions, you are and you will.

Perfect. And just the last question on the seasonality of the earnings and the ROE.

Yes. You are asking me to answer more like an analyst than a CFO. But honestly, I think that's your word, you're a specialist here. But going forward, we want to see if the trends that we are seeing in the second quarter materialized in another good second quarter, in order to have more elements to be more positive and increase ROE guidance. I think that's the seasonality on the ROE always the fourth quarter is the good one. It will depend on many macroeconomic variables, what happened in the second and third.

Well, let me put it in other word, guys. We've had an encouraging first quarter in comparison with our guidance. We've said that we are expecting another encouraging quarter for the second quarter. So what we are saying is we are not changing previous guidance because it may be too early, but we are optimistic based on what we've seen in the first quarter, which is encouraging. Jorge mentioned, slightly above guidance. I think that was a bit conservative. Actually, 8% guidance was adjusted ROE and our adjusted ROE for the first quarter is 11.6%. So it's encouraging. We are seeing encouraging numbers for the second quarter. Of course, we quote forward-looking specifics. So in essence, what we are saying here is we want to be cautious before we update, okay?

Our next question comes from Yuri Fernandes with JPMorgan.

Juan, Jorge, Nicolas, I would like to ask more a macro question on how you're seeing Argentina today, right? I think February was bumpy. March, the data was pretty good. So how are you feeling, Jorge, Nicolas, like the economy, right? Are you seeing a recovery? Are you seeing, I don't know, more demand? And on top of that, I know we already had some questions on asset quality. But if you have any early delinquency indicator, right? How are you seeing like April and May? Because when we go to your new NPL formation, the new bad loans, they are still a little bit up, but you're doing more provisions, and they are kind of stable, right? They are growing, but they are growing less. So my question is maybe -- I know it's hard to talk about credit peaks in Argentina. And I think you are being good in being conservative on your figures. But I'm just trying to get 2 colors here. One, if the economy is improving and you are seeing that? And two, if it is recurring, the economy is also translating to this kind of early delinquents in NPLs kind of somewhat peaking? And then I can ask a second topic after this question.

Yuri, yes, I think that the economy is showing some sign of recovery. When you look at industrial production indexes, they are up on a monthly and yearly basis. What we are seeing is that the harvest at this time of the year is again reaching record levels. I would say that the massive consumer sectors that were showing a bad performance, the negative numbers that they are showing are less negative. So I think that there are some things that the economy is recovering, slowly, but recovering. What we are seeing -- and again, I think that we commented this before is that we are seeing some good trend in the consumer Stage 3 between February, March and April. In terms of the commercial portfolio, if it is still deteriorating, but the speed is lower than the one that we saw before. I think that the recovery of the economy is going to have a positive impact in terms of delinquency. The million dollar question here is when this is going to impact the delinquency trend. So we still don't know if this is going to happen in May or June or this will happen in the third quarter. But for sure, the recovery of the economy is going to have a positive impact in terms of the delinquency sample.

No. Super helpful. And if I may, another one, just on deposits, I know there is seasonality in the first quarter, and this explained the quarter-over-quarter drop. But on year-over-year, checking accounts and savings accounts, what you call the transactional deposits, right, like the cheaper funding, they are growing less. I think they are now 41% of total. They were 48%, one year ago, of your total private deposits. Why is that? Why deposits, especially the cheaper ones -- I know inflation has been coming down. So I would expect those deposits that have like some kind of cost of opportunity to not decrease. So just checking if you have any color on why the cheap deposits, they were a little bit weaker this quarter?

Well, I mean, you said it before, it's holiday seasons in Argentina. So I think it's quite reasonable and logic that in terms of deposits, there were no growth, and in terms of transactional deposits, there was a decline. That's why we do not keep only the trend that we've seen in the first quarter because it's seasonally always the lowest quarter in terms of trend of deposits going forward. We think that this trend is going to turn around. And if we are going to show some increase in pesos and dollar deposits, as I mentioned before, the 34% nominal growth in total deposits for the bank for the year, keeping the guidance.

Our next question comes from Carlos Gomez with HSBC.

Juan, Jorge, Nicolas 2 questions. One is you have a securities gains of ARS 70 billion on your bonds, amortized at cost. So that we understand, that is a voluntary sale of bonds that had appreciated. It should not in itself be recurring. It's the normal operation, and you have bond gain this quarter. I just want to make sure about that. Second, can you tell us about your -- the rest of your amortized bond portfolio and whether you, at this point, have a gain or a loss in that portfolio? And finally, what do you expect for the currency by the end of the year?

Carlos, the first part of the question, the ARS 70 billion or trillion gain that we posted the quarter was not a repricing of the bond portfolio. It was a sale that we made on part of the bonds that are due in June 2027. We sold part of that portfolio. And the price that -- the market price was above the accounting price. So that is reflecting the ARS 70 billion or trillion. And also, we bought with those pesos longer duration and higher yield bonds that are due in September [ 28 ], also tied to inflation. Third -- sorry, second question in terms of -- can you repeat me that because...

The unrealized gain or loss in your -- in terms of you held-to-maturity securities.

Unrealized gains? No. Basically, are more gains than losses. Honestly, I do not have that number here. I can give it to you later, even though we are not disclosing that as a public information, but I try to get it, Carlos. Third question was? Third question?

It was the exchange rate. What do you expect for the currency by the end of the year?

I mean, basically, we work with 2 or 3 different local economies. When you look at inflation of CapEx prices, I think that the consensus for the market is a devaluation of the currency that is below the inflation level. So the range of a devaluation of the currency between 20%, 22% for the year when inflation is between 27%, 28%. So a number that is ranging between 1,700 to 1,800 by the end of the year. That is what the consensus of the economy that we are working with have.

Our next question comes from Pedro Offenhenden with Latin Securities.

Juan, Jorge, Nicolas, I wanted to ask on your loan growth guidance for the year. How should we think it out the split within pesos and dollar loans? And if so far in the second quarter, you already are seeing some rebound maybe in any specific product given the more stable funding raised in this quarter?

Pedro, yes, I mean, what we are seeing in the second quarter, more recovery in dollar-denominated loans than in peso, even though both are positive. Going forward, we are seeing that in this year, dollar loan growth is going to -- in terms of the number is going [indiscernible], but a little bit the peso, even though the bimonetary portfolio is going to be above 42% nominal as we were commenting as the guidance that we gave before.

Our next question comes from Matías Cattaruzzi with [ AdCap ].

I have a quick follow-up on the loan guidance, loan growth guidance. The prior guidance that you gave us on the fourth quarter 2025 earnings call was 20% loan growth for the year. And now you told us 42% nominal. Is it with having in mind, 28% inflation? Is it lowering on the guidance?

Matías, no, the guidance that we gave last quarter was between 15 to 20 [indiscernible], and now we are now speaking in terms of nominal. So it's pretty the same.

Okay, okay. Great. And then a follow-up on regulation. Do you see room for further easing in reserve requirements in coming months? And how do you see the second part of the year for the banks? Will the growth in returns for the sector come with lowering of NPLs, of provisions, and an increase in loans? Or will come also with a tailwind from a regulatory environment?

In terms of regulations, I think that part of the increase in the reserve requirements were turnaround by the last part of last year. Going forward, I think it's -- honestly, it's something that we do not know. It's an instrument that the Central Bank has in order to inject additional liquidity. But honestly, it's hard to say that if we are going to have -- we are going to see reductions in the reserve requirement scheme going forward. In terms of what -- how we are seeing the rest of the year, I mean is what we have been talking in this conference call, what we are seeing is that the recovery in the economy that we are seeing and also this is extrapolated on the increase in loan demand that we are seeing in the second quarter. We expect at some point is to positively impact on the delinquency trends. So at some point, this is going to result in relatively lower provisions going forward. So I think that the rest of the year might be and, of course, I want to highlight the might, be good for the industry.

Great. And one last question about dollar-denominated mortgages. Do you have any comment on that? How is the business going? Is it going to be stronger part of Banco Macro's business, the U.S. dollar-denominated business with non-U.S. dollar producing clients?

I mean that credit line is especially for ABC1 clients. It's dollar mortgages 5 years. It is evolving, but the increase that we are seeing there is marginal. It's not impacting on the loan portfolio at all, and the amounts are small, relatively speaking. So they are evolving, but they are not made a big difference in the evolution of the loan portfolio of the bank.

Right. And do you expect dollar loans to gain traction throughout the year besides mortgages?

Besides mortgages, yes, because what we are seeing is that sectors like energy, oil, gas, mining, business are very strong, and those are the ones that might be demanding U.S. dollar loans, and what we are seeing in April and May is some recovery in loan demand in U.S. dollar. So going forward, we expect this trend to continue.

Our next question comes from Agustín Pacheco with Banco Mariva.

Can you hear me?

Yes.

Perfect. I would like to ask about deposit performance, which appears to have outpaced both broader system trends and peers, particularly in USD deposits. What were the main drivers behind this outperformance and system-wide deposit continue to recover? Do you expect Banco Macro to keep gaining share?

Agustin, I mean the idea is that if we want to keep on growing in our loan portfolio and gaining market share going forward, of course, deposits are the main source of funds of the bank. So the idea is to -- and depending on domestic rates, depending on loan demand, the idea is to continue growing in deposits in both pesos and dollars going forward. So this is not straight upward line. It could have some ups and downs depending on market conditions and depending on the quarters. But on a medium, long-term basis, yes, the idea is to continue gaining share in deposits.

Next question from Camila Azevedo with UBS.

I have 2 from my side. First, on capital and dividends, you have close to ARS 4 trillion in excess capital with a coverage ratio like near 3x. Can you please update us on your capital allocation priorities? So M&A, buybacks or additional dividends beyond what's already been approved? And my second question would be on your recent acquisition of Banco Sáenz. So it is still pending the Central Bank approval. What is the expected time line? And how do you plan to integrate it into the personal pay digital ecosystem operationally?

Thank you, Camila. On your first question on capital, if you have been following Banco Macro trajectory, the bank has always had a strategic strength, keeping a strong capital position, both to manage the bank through the cycles. And as we are doing now and as you see now, keeping strong results and strong balance sheet despite a delinquency cycle that the system is digesting, but also to be ready to take opportunities of growth, both organic and inorganic. We remain positive for the outlook of Argentina and possibility of Argentina materializing loan growth, which in terms of loans to GDP, still presents one of the most attractive opportunities in the region. We are still at a level of 11% loan to GDP when you see peer countries in the region above 30%, 40%, 50% and up to 70%. So we -- as we remain positive and optimistic on that opportunity, we want to keep a strong capital position to support growth. Also, we believe that there are and there will be -- or there might be inorganic opportunities to invest. And to be specific, we have done that with the acquisition a couple of years ago and more recently, with the investment team, our complementary digital business, personal pay and Banco Sáenz, which we expect to succeed and demand capital going forward. And this is despite or irrespective of additional possible opportunities that concentration in the system may present. As you know also, compared with the other countries in the region, the automization of the system is still there. There's more concentration in other geographies. So I think all in all, we are comfortable with this capital position because of, first, the optimism in the evolution of the economy and the system and the potential for organic growth to support the recent inorganic investments that we've done, Personal Pay and Banco Sáenz, and also to be ready for additional potential opportunities that may arise if the concentration in the system continues. So that's on capital. The other thing is, as you know, in terms of dividend payment, we have been constrained by the Central Bank regulation limiting the dividend payments to 60% of the announced results for last year. So that's another factor to consider. In terms of Personal Pay and Banco Sáenz, we have presented defining for the Central Bank approval. We are transiting the process of approval as expected. I will not put specific time lines for the regulator. The regulator has its procedures, it's reviews, and this processes typically take some months. Our central scenario is that we will be ready to start operating the integrated business of the Personal Pay wallet, supported by this dedicated bank as a service platform for Banco Sáenz by the first quarter next year. And this depends on obtaining Central Bank approval in the remainder of this year. That's our expectation of our central scenario. But again, it will totally depend on the regulator, and we don't want to impose any pressure or time lines to them. In the meantime, we are working in parallel, of course, without doing -- entering in any gun-jumping risks in everything that we can do in parallel so that when we get the Central Bank approval, we are as advanced as possible and up to speed as possible to integrate the businesses as fast as possible. So we are already working in the technology front, in the people front, in the risk management front, developing the capabilities that we need so that when we have control of the bank, subject to Central Bank approval, we can integrate it as fast as possible.

Next question from Brian Flores with Citi.

Very quickly here, Jorge, I know -- I think it was Carlos' question on the securities at amortized cost. We know this portfolio is still relevant, right? So -- and you were opportunistic based on what you mentioned, the market price was higher than your carrying value. So just wondering if, from a strategic perspective, we could expect that if market conditions improve, you could be opportunistic and seize these opportunities as they come along, right? What I'm trying to say is that this is not like a sacred part of the book you could actually deploy or redeploy capital as you seize it, right? You want to check if you have this flexibility or rather you have a more fixed mandate in your head?

Yes, Brian. I mean we are always -- every bump in Argentina is very on top of the market and trying to find opportunities. I think that what we are seeing is that if you want to get maybe higher returns, you have to go maybe longer duration. So the idea is to continue looking at the market. And if there is another opportunity, we are going to go for it. But again, this is something that we cannot forecast, but because it's going to depend on market conditions and market prices. But we always try to get advantage of those conditions. I think that in past quarters or past years, we showed that we are very accurate on managing the trend of the market. So the idea is to continue doing that.

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 his for final considerations.

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.

This concludes today's presentation. You may now disconnect.