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 2022 Earnings Conference Call. We would like to inform you that 1Q '22 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. 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 your conference.

Thank you, Dave. Good morning, and welcome to Banco Macro's first quarter 2022 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 to the SEC and is available at our website. First quarter 2022 press release was distributed yesterday and it's also available at our website. All figures are in Argentine pesos and have been restated in terms of the measuring unit current at the end of the reporting period. As of the year 2020, the bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29, as established by the Central Bank of Argentina. For ease of comparison, figures of previous quarters have been restated applying IAS 29, to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2022. I will now briefly comment on the bank's first quarter '22 financial results. Banco Macro's net income for the quarter was ARS 6 billion, 51% lower than in the fourth quarter of 2021, but 77% higher than the result posted 1 year ago. The bank's first quarter '22 annualized ROE and ROA of 9% and 2.2%, respectively, remained healthy and showed the bank's earnings potential. Net operating income before general, administrative and personnel expenses in the first quarter of 2022 was ARS 64.2 billion, ARS 6.5 billion higher quarter-on-quarter, due to higher income from financial instruments at fair value through profit or loss, higher FX gains and lower loan loss provisions. On a yearly basis, net operating income increased 11% or ARS 6.4 billion (sic) [ ARS 6.5 billion ] due to higher net interest income and higher net fee income. Operating income after general administrative and personnel expenses was ARS 36.5 billion, 41%…

[Operator Instructions] The first question comes from Juan Recalde with Scotiabank.

My question is related to the profitability outlook for the rest of the year. Do you think that we have reached a bottom in terms of the ROE inflation-adjusted terms in the first Q 2022? Cost inflation is expected to decelerate, so that should help profitability coming in the rest of the year. But on the other hand, you had, I think, a benefit from the Prisma sale in this quarter. And also a sizable FX gains. So that will be my first question related to the profitability outlook for the rest of the year.

Hi, Juan. This is Jorge Scarinci answering. How are you? It is not very easy to forecast what will happen in terms of profitability for the year. Regarding that, we are having -- the inflation is accelerating -- at least has been accelerating in the first 4 months of the year. According to some local economist, the range for inflation for this year goes from 65 to 75. And so I would say, going forward, and of course, it depends on how the economy also evolves that we think is going to be positive plus 2%, approximately in terms of real terms. We believe that could be kind of a bottom. So we are forecasting ROE adjusted by inflation to be ranging between 10 to 12 in 2022. But again, it depends on many issues, many variables. It is not a clear picture to forecast profitability in Argentina this year, at least.

That's helpful. And one follow-up, if I may. So you mentioned that now inflation is expected to be from like 65% to 75% in this year. So with that in mind, how do you see loan growth evolving -- loan growth for the full year in 2022? And if you can comment on where you think that consumer loans are going to continue outperforming commercial loans? Or how should we think about the dynamics in terms of consumer versus commercial loans?

Well, Juan, the forecast of the 65% to 75% is not from us, it's from local economist. But regarding your question in terms of loans performance for this year, we believe that the loan book is going to be slightly below inflation, maybe 2, 3 percentage points below the inflation for the year. We believe that the composition is that consumer growth will be maybe outpacing commercial loans in 2022.

Our next question comes from Carlos Gomez with HSBC.

My first question refers to your exposure to the public sector, like all the banks who have been increasingly getting more involved in Central Bank bonds and current paper. Is there a limit that you want to set as to how much exposure you're going to have to one or the other? And the second is, given that you have accumulated all this capital, there is no immediate use for it, loans have actually been declining for the last 3 years. Maybe a possible use of the capital may be to repurchase the stake that ANSES has in the company. Would you consider approaching them? And do you think that, that could have any possibility of such?

Hi Carlos, Good to hear from you. On the first question, in terms of exposure to the public sector, you know that when you commented on that, that all the banks here are maybe increasing that exposure. From a regulatory point of view, we can go up to 75% of our equity in terms of lending to the Treasury, that is not including lending to the Central Bank. And so I would say, March, we were slightly above 65% in terms of our exposure to the treasury. But it's very important to -- for us, it's very important to differentiate the risk between Central Bank and Treasury. When you look back in our history, the Central Bank never defaulted here in Argentina. So for us, are different risks. So in terms of how we split the exposure to the Central Bank and the Treasury, we are up to the max that we can go in terms of the Central Bank. Again, from a regulatory point of view, we can have the exact number of LELIQs as the number of time deposits that we have on the previous month. So in that sense, we are at the maximum. And little by little, we want to switch from the treasury to the Central Bank as much as we can. So going forward, the idea is to maybe slightly reduce the exposure to the treasury. In terms of your second question, honestly, we haven't approached the ANSES in terms of maybe buying back that exposure. When we did that in the past many years ago, they didn't want. We believe that at these prices will not be reasonable for them to sell. But honestly, as far as I know, we haven't approached them to ask if they are maybe willing to sell. So that's the answer there.

Our next question comes from Rodrigo Nistor with AR Partners.

In this scenario of 70% or higher inflation for the year, what's the bank's strategy to minimize the negative impact on your P&L and protect your equity?

Hi, Rodrigo. That is what we try to do every single day. It is not easy because you know that there are not many instruments where we can allocate the liquidity in order to protect the equity. And also, we have a regulation from the Central Bank that put some caps on, for example, how long dollars we can go up to [ 0 ] right now. So what we are trying to do is to go maybe as far as we can in terms of dollars through basically some dollar linked bonds that are in the market. And then on the inflation-adjusted bonds issued by the treasury. But it's not very easy, again, all the banks have a net positive monetary position. And when you adjust that by inflation, you have a monthly loss, as you have noticed in our P&L and also similar other banks. So it is not very easy to monetize or to change abruptly the composition of that net positive monetary position. So we have to deal with that. It's not an easy task here in Argentina with that level of inflation and with some caps on regulatory issues where we can allocate the money.

A quick follow-up. Given that you have competitive funding costs, trade demand remains very weak and as it was mentioned before, the exposure to the public sector and maybe Central Bank is growing, so is there a reference level that will offset or significantly reduce the negative impact of inflation? Do you have that in mind?

Yes. I think that we need to have some maybe higher nominal rates but -- because the current level of rates are negative in real terms. But apart from that because on the -- of the floor rate that we are imposed to pay on the time deposits, the margins here are really narrowed. So in order to build on this inflationary environment, we not also need maybe higher nominal rates, but also maybe some wider margins. It's not only in terms of rates.

Our next question comes from Nicolas Riva with Bank of America.

So my first question, if you can comment on your liquidity in dollars. So you have a page in the press release where you talked about the foreign currency position. And I see ARS 46 billion or a bit more than $400 million in dollar deposits held in Argentina and abroad. If you can comment if most of that is held offshore? And also, so you recently paid the peso-linked bond, which was payable in dollars for the equivalent, I think, of about $30 million. Do you have any other relevant dollar liabilities for the rest of this year and for 2023 aside from the coupon payments on the [ 2026 ]? And then finally, on the [ 2026 ], did you buy back any of the [ 2026 ] in the first quarter? And is that something that you would consider doing? And if you do, would you need approval from the Central Bank to buy back some of the [ 2026 ]?

Nicolas, well, In terms of the liquidity in dollars, you know that we have 100% liquidity. I mean, in terms of the deposits that we have in dollars, they are back in either pre-financial exports that are at a very low level and then deposits at the Central Bank. So that is completely hedged. In terms of the other dollars, I mean those are the commercial dollars, the one that we mentioned before. The financial dollars, I mean, when you look at the '26, the $400 million we have in a liability, the $400 million we have, those are deposit abroad in the correspondent banks. So 100% liquidity in both commercial and financial dollars. We have been maintaining these levels for many years, and we are willing to continue maintaining them. In terms of second question, yes, we paid the peso in bonds, and we do not have any important [ new ] payments on 2022 apart from the coupon of the 2026. And your third question, no, we haven't bought any 2026. And yes, we will have in the case that we [indiscernible] we have to ask for permission to the central bank.

Awesome. And just one follow-up on the first answer. So then the about $400 million offshore that you have, that's basically reserved for the maturity in the '26. You haven't used basically the proceeds from the '26? And that's reserved for that?

Yes. I mean, money is fungible. But in this case, yes, we have $400 million of growth that are as a counterpart of the $400 million liability that we have in '26, yes.

Our next question comes from Robert Gilman. He's a private investor.

My first question is the dividends that are being paid, how much of that you pay in U.S. dollars for the dividend payment?

We are going to send to the -- our depository bank that they are going to deposit the dollars in the account. So it will depend on the exchange rate the day that they receive the money. So honestly, I cannot say you right now exactly the amount of dollars.

My second question is, do you intend to pay another dividend in the near future?

Yes, these are the first 6 installments that we are paying altogether. And there are other 6 installments more that are going to come, one per month in the next 6 months.

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

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. Thank you, Dave.

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