Banco Macro’s Resilience Amid Argentine Economic Turbulence: A Deep Dive into Their 2024 Financials

Banco Macro S.A. (NYSE: BMA), Argentina’s fourth-largest bank by assets, recently filed its annual report on Form 20-F with the U.S. Securities and Exchange Commission (SEC), offering critical insights into its financial health and strategic direction amid one of the world’s most volatile economies. The filing, released April 21, 2025, reveals a bank navigating hyperinflation, currency fluctuations, and macroeconomic instability with a strong capital base but uneven profitability. Here’s what investors need to know.

Financial Highlights: Strength in Liquidity, Challenges in Profitability

Banco Macro’s 2024 results underscore its robust liquidity and capital position, even as inflation and restatements under International Financial Reporting Standards (IFRS) IAS 29—designed for hyperinflationary economies—compressed profitability. Key metrics include:

1. Capital Adequacy:

2. The bank maintained a Basel III Capital Adequacy Ratio (CAR) of 32.4%, far exceeding Argentina’s regulatory minimum of 10.5%. Its Tier 1 ratio stood at 31.6%, with excess capital of Ps.2.8 trillion (equivalent to 297% of required capital). This fortress-like balance sheet positions the bank to weather further economic shocks.

3. Liquidity:

4. Liquid assets totaled Ps.6.7 trillion, covering 79% of total deposits, ensuring the bank can meet obligations even in stressed scenarios.

5. Loan Growth:

6. Total financing surged 45% year-over-year (YoY) to Ps.5.8 trillion, driven by 14% growth in peso loans and 29% in USD-denominated financing. Management highlighted strong demand for loans since mid-2024, as inflation moderated and currency stability improved.

7. Profitability Pressures:

8. Net income fell 74% YoY to Ps.325.1 billion in 2024, with Q4 net income at Ps.102.2 billion (a 4% QoQ increase but a 90% YoY drop). The decline reflects hyperinflation’s impact on restated figures and higher provisions for loan losses, which rose 53% YoY to Ps.23 billion.

Strategic Priorities and Growth Opportunities

Banco Macro’s management outlined aggressive growth targets for 2025, leveraging its capital strength and retail-focused strategy:

• Loan Expansion:

• The bank aims for 25–35% real loan growth in 2024 and ~40% in 2025, fueled by demand from businesses and households. Excess capital of Ps.2.8 trillion (enough to fund ~48% of 2023’s total financing) eliminates the need for equity raises.

• Digital Expansion:

• Retail customers grew to 6.12 million, with 2.5 million using digital banking—a 40% increase since 2020. This shift reduces costs and enhances customer retention.

• Interest Rate Strategy:

• Net interest income is projected to grow 30–35% in real terms in 2025, as inflation-linked loan pricing offsets margin pressures from competitive USD deposit rates.

Risks and Challenges

Despite its strong fundamentals, Banco Macro faces significant hurdles tied to Argentina’s economic instability:

1. Inflation and Currency Volatility:

2. The bank assumes 25–40% inflation and 15–25% peso depreciation in 2025. While its holdings of inflation-indexed bonds mitigate some risks, FX volatility could disrupt USD-denominated deposits, which fell 18% YoY in 2024.

3. Provision Pressures:

4. Elevated provisions (up 53% YoY) reflect prudence but may constrain short-term profits. The non-performing loan (NPL) ratio remains low at 1.28%, but rapid loan growth could test asset quality.

5. Political and Regulatory Uncertainty:

6. Argentina’s upcoming October 2025 elections and ongoing negotiations with the IMF introduce policy risks that could disrupt Banco Macro’s operations.

Conclusion: A Resilient Bank in a Hostile Environment

Banco Macro’s 2024 results paint a picture of a bank that is financially resilient but profit-challenged. Its 32.4% CAR, 79% liquidity coverage, and Ps.2.8 trillion excess capital provide a solid foundation to capitalize on Argentina’s potential recovery. Strategic moves like digital expansion and aggressive loan growth could drive long-term value, particularly if inflation moderates and political stability emerges.

However, investors must weigh these positives against Argentina’s systemic risks, including hyperinflation and currency instability. Banco Macro’s stock (BMA) has underperformed the MSCI Emerging Markets Index over the past five years, reflecting these macro challenges.

For now, Banco Macro’s fortress balance sheet and growth ambitions make it a compelling long-term bet—if Argentina’s economy can stabilize. As management noted, “capital is our greatest strategic advantage”—and in 2024, they proved it.

Data as of December 31, 2024. All figures in Argentine pesos (Ps.) unless noted.