Good morning ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's Third Quarter 2022 Earnings Conference Call. We would like to inform you that this third quarter 2022 press release is available to download at the Investor Relations website at www.macro.com.ar/relaciones-inversores. Also, this event is also being recorded and all participants will be in a listen-only mode during the company’s presentation. [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, Mr. Nicolas Torres, Investor Relations. Now, I would like to turn the conference over to Mr. Nicolas Torres. You may begin your conference, sir.

Thank you. Good morning, and welcome to Banco Macro's third quarter 2020 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. Third quarter 2022 press release was distributed last Wednesday 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 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 September 30, 2022. I will now briefly comment on the bank's third quarter 2022 financial results. Banco Macro's net income for the quarter was ARS8.9 billion, 76% higher than the second quarter of 2022 and 34% lower than the result posted a year ago. As of the third quarter of 2022 the bank's accumulated annualized ROE and ROA of 7.7% and 1.9%, respectively, remained healthy and showed the bank's earnings potential. Net operating income before general and personnel expenses in the third quarter of 2020 was ARS122 billion, 22% or [ARS22 billion] [ph] higher quarter-on-quarter due to higher income from financial instruments at fair value [to profit] [ph] or loss and higher FX gains. On a yearly basis, net operating income increased 54% or ARS42.6 billion due to higher income from financial instruments at fair value for profit and loss and higher FX gains. Operating income after general and administrative expenses was ARS75.1 billion, 39% or ARS21 billion higher…

[Operator Instructions] And the first question will come from Alonso Garcia with Credit Suisse. Please go ahead.

Hi, good morning everyone and thank you for taking my question. My question is regarding your exposure to the public sector, especially to the National Treasury. I mean I understand that in this environment [indiscernible] of negative free interest rates and very low grade demand, it's the way you can protect your shareholders equity right from inflation. But is there – and I noticed that in this quarter, you had a – in relative terms, right, as a percentage of your total assets, you had a slight decline in your exposure to public sector, compared to the previous quarter. Just wanted to hear your thoughts on your exposure to the national treasury going forward, considering that next year, most likely [great demand] [ph] might remain subdued and that interest rates might remain as well in negative territory in real terms. So, I don't know if you have any kind of internal limits or anything – any color you can provide on this exposure going forward? Thank you.

Hi Alonso, good morning. This is Jorge Scarinci. No, honestly, we do not have an internal benchmark in terms of exposure to the public sector. This is ranging differently into the quarters, taking to consideration the behavior of interest rates, the different instruments that the treasury is issuing in terms of getting that from the market. Honestly, we feel comfortable with the exposure that we have. Again, this might change depending on the quarter. We think that the public sector that has no problem to be renewed going forward.

Perfect. Those were my questions. Thanks you very much.

Welcome Alonso.

The next question will come from Nicolas Riva with Bank of America. Please go ahead.

Thanks very much [indiscernible] for taking my questions. I have two questions. Jorge, first, if you can give us a bit of an outlook for 2023 in terms of when do you expect to see – if you expect to see some recovery in credit demand next year, we have seen continued negative loan growth in real terms, but if you can discuss the outlook for 2023? As well as for NPLs and ROEs, where you're reporting ROEs very close to 10% in real terms, which I think is not bad compared to nominal ROE and current inflation in our [LatAm margin] [ph] market, but if you can disclose – if you can discuss again the outlook for loan growth NPLs and ROEs next year? And then second, more specific, I did see an increase on the net loan position in dollars this quarter, which before was around $400 million, and it increased to about $1.2 billion in the quarter. If you can discuss what drove this increase if it was deliberate? And if we should read it as the bank positioning for a stronger devaluation in the official exchange rate in the short-term? Thanks.

Hi Nicolas, how are you? On your first question in terms of the outlook for 2023, honestly, according to local economies, they are expecting a, kind of a slow economic activity. In 2022, real GDP is expected to be up close to 5%. And for next year, according to the consensus that we've seen economies are expecting between 1% and 2% positive growth in Argentina. So, kind of a slow than compared to 2022. So, in terms of the behavior of loan demand, we expect that nominal interest rate will continue at high levels. So, we are not expecting a recovery in loan demand in real terms for 2023. And even though the slowdown we are not expecting a pickup in NPLs. We believe that the level of coverage with provisions and what we are seeing in terms of the behavior of the different sectors in Argentina we're not expecting a pick-up there. So, in terms of NPLs, that could be ranging between the current level and the 1.5% along 2023. ROE, we are expecting to continue this level to be ranging between 8% to 12% in positive levels. So, no big difference compared to what we are delivering right now. In terms of your second question, on the net [loan position in] [ph] dollars, there are no changes in regulation. So, banks can be 0% [loan] [ph] in what is U.S. dollar, the position that – or the increase that you are seeing there is mainly driven by the increase in bonds linked to the dollars and these bonds are – follow the behavior of the official effects. So that is the increase that you are seeing in the quarter. That is the way that we find in order to hedge the equity of the bank, both to the inflation, investing in bonds that are tied to the SAR that is the inflation behavior and the – what we call the dollar-linked bonds that are in pesos that follow the depreciation of the official FX.

Okay. Thanks very much for all of that Jorge.

Welcome Nicolas.

The next question will come from Carlos Gomez with HSBC. Please go ahead. Mr. Gomez your line is open. The next question will come from Alejandra Aranda with Itau. Please go ahead.

Hi, good morning. Hi, Jorge. I'm wondering, looking at the system and how a lot of banks are struggling in terms of profitability. What are you seeing? What's your view on the current situation of the system and what do you think would be a way forward for the Argentine financial sector and how do you picture Macro playing on that process?

Hi Alejandra, thanks for your question. What we are seeing is that the banking sector in Argentina continues to be healthy, very liquid both in pesos and in dollars. The only thing is that because we adjust our P&L to inflation, of course, banks are suffering losses because of the net asset position there, but we continue to see profitability on average on the banking sector. Of course, it's much easier for banks as macro that has a much larger size than smaller banks, but overall, we believe I'm going to continue to see that the health of the banking sector in Argentina is pretty good. Going forward, we think that at some point, maybe not in 2023, but maybe in 2024, maybe in the second half of that year, if there is a new government at the end of 2023 with a more stabilization economic program that could bring a bit more of stability and kind of demand from loans if inflation is going to go down, but we have to wait until second half of 2024 for that to happen. So meanwhile, I think that banks will continue to show a flat or negative real performance on loans, basically on the back of high nominal interest rates and that we are having elections next year. Good level of NPLs, ROEs range in the area of 10%. Not big changes going forward [indiscernible].

Okay. If I may, a second one, you pointed out that you don't see loan growth for next year in real terms, which makes perfect sense. How do you balance profitability and exposure to the public sector, thinking about that? Are you thinking of lowering or try to lower the amount of deposits or – I don't know what you're thinking there, Jorge?

Yes. Alejandra, if that would be the case of decreasing exposure to the public sector, we have to, at some point decrease liabilities or deposits, yes, of course. For the moment, that is not our view. We are going to keep on trading [of profitability] [ph] and exposure to the public sector. Again, we believe that the debt with the Central Bank back on the [indiscernible] are having no problems. And what we are seeing is that the debt on the treasury that we use that to hedge our equity is showing good performance, and we are not seeing for the moment problem for the treasury to roll over the debt. Of course, this is a dynamic process, and we are going to continue monitoring that This might change in the first or second quarter of next year, depending on market conditions. If that would be the case, we are going to consider a reduction there. But – for the moment, we feel pretty comfortable with the level of exposure to the public sector.

Thank you very much Jorge.

Welcome Alejandra.

The next question will come from Carlos Gomez with HSBC. Please go ahead.

Hello Jorge, apologies for the technical difficulties before. I wanted to get your opinion about your use of capital and your capital ratio has been for a while, is interestingly getting bigger and bigger. Is there any possibility to anticipate any M&A in the coming two years or we have to – or higher dividends or do we have to wait until 2024 when the economic cycle might provide uses for that capital? Thank you.

Hi Carlos. Good to [indiscernible]. Thanks for the question. It's not easy. Honestly, we know that we have a huge excess of capital. The point here is that will depend on the Central Bank authorization on a higher dividend, and that is going to be discussed in March, April next year. I couldn't be that positive there. So, I think that my best scenario for next year is a, kind of similar dividend than the one that we delivered this year. And of course, we are always open to any M&A activity depending of course, the target and the price. But we believe that in the current conditions, it is not easy to find out, but of course, we are open to every [indiscernible] the transaction to be on the table.

Okay. But it doesn't sound like you think it is [very lightly] [ph].

No, I mean, – this is, you know that we are working in a not easy, let's say, in that word, not easy environment. So, we are trying to make the best use of this excess capital. It is, again, it's quite difficult considering the current economic scenario in Argentina. So, we are trying to find any potential solutions to that. [Believe me] [ph] that the Board is committed on a monthly basis to do that, but for the moment, we are not finding further solutions to that.

Thank you very much.

Thanks Carlos.

The next question will come from Santiago Petri with Franklin Templeton. Please go ahead.

Hi, Jorge and Nicolas. Thanks for the call. My question is focused on the net income from financial assets of fair value for P&L line. I don't know if you could give us more color on the drivers of the [indiscernible] camp in this line. Was it the revaluation of assets? Was it related to inflation, SAR, I would like to know if you can help us on the drivers of that line? Thank you.

Hey Santiago, how are you? I mean the [indiscernible] we put in this line are basically the dollar [indiscernible] bonds and what we call the [indiscernible] bond that can be adjusted by inflation or the performance of the FX, the higher. So, these bonds are mark-to-market. They are – you could see volatility in the quarterly performance of this line depending on the – how the price of the bonds evolve. So, basically, those are the main important elements on this line.

Okay, thanks a lot.

Welcome Santiago.

There are no questions at this time. This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Nicolas Torres for any final considerations. Please go ahead.

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

The call has now concluded. Thank you for your participation. You may now disconnect.