Banco Macro - Q4 2025

Transcript

Operator (participant)

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's fourth quarter 2025 earnings conference call. We would like to inform you that the 4Q 2025 press release is available to download at 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 listen-only mode during the company's presentation. After the company's remarks are completed, there will be a Q&A section. At that time, further instructions will be given. It's now my pleasure to introduce our speakers. Joining us from Argentina are Mr. Juan Parma, Chief Executive Officer, Mr. Jorge Scarinci, Chief Financial Officer, and Mr. Nicolas Torres, Investor Relations. Now, I'll turn the conference over to Mr. Nicolas Torres. You may begin your conference, sir.

Nicolás Torres (Director of Investor Relations)

Thank you and good morning. Good morning, and welcome to Banco Macro's fourth quarter 2025 conference call. Any comment we may make today may include forward-looking statements, which are subject to various conditions, and these are applied in our 20-F we would file to the SEC, and it's available on our website. Fourth quarter 2025 press release was distributed yesterday, and it's available at our website. All figures are in Argentine pesos and have been restated in terms of the million units 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 ease of comparison, figures for previous quarters have been restated applying IAS 29 to reflect the accumulated effect of inflation adjustments for each period through December 31st, 2025.

I will now briefly comment on Banco's fourth quarter 2025 financial results. In the fourth quarter of 2025, Banco Macro's net income totaled ARS 100 billion, ARS 290.7 billion in fiscal year 2025, recovering from the loss posted in the previous quarter. The result was 26% or ARS 34.4 billion lower than the result posted in the fourth quarter of 2024. In the fourth quarter of 2025, the accumulated annualized return on average equity and accumulated annualized return on average assets were 5.1% and 1.4% respectively.

Excluding ARS 82.9 billion of non-recurring expenses in Q4 2025, net income would have totaled ARS 183 billion and ARS 393.7 billion for fiscal year 2025, and accumulated ROE and ROA would have been 6.6% and 1.8% respectively. In fiscal year 2025, net income totaled ARS 290.7 billion, 32% lower than in fiscal year 2024. Total comprehensive income totaled ARS 303 billion and was 1% higher than in fiscal year 2024. In the Q4 of 2025, ARS 82.9 billion restructuring expenses were recorded related to early retirement plans and provisions for severance payments.

Excluding non-recurring expenses, fourth quarter 2025 net income would have been ARS 183 billion, and fiscal year 2025 net income would have totaled ARS 393.7 billion. Excluding the third quarter and fourth quarter 2025 non-recurring expenses, representing an accumulated ROE and ROA of 6.6% and 1.8% respectively. In the fourth quarter of 2025, operating income before general, administrative, and personal expenses totaled ARS 1.17 billion, 39%, or ARS 324.2 billion higher than in the third quarter of 2025, and 9% from ARS 94.4 billion higher than in the same period of last year. In fiscal year 2025, net operating income before general, administrative, and personal expenses totaled ARS 4.1 billion, 33% lower than fiscal year 2024.

In the fourth quarter of 2025, provision for loan losses totaled ARS 169.3 billion, 1%, or ARS 1.8 billion lower than in the third quarter of 2025. On a yearly basis, provision for loan losses increased 243% or ARS 120 billion. In fiscal year 2025, provision for loan losses totaled ARS 538.1 billion and were 274% higher than fiscal year 2024. In the quarter, net interest income totaled ARS 836.5 billion, 13%, or ARS 96.4 billion higher than the third quarter of 2025, and 19%, or ARS 135.9 billion higher year-on-year.

This result is due to a 7% increase in interest income and a 1% decrease in interest expense. In fiscal year 2025, net interest income totaled ARS 3.1 billion and was 44% higher than fiscal year 2024. Interest income increased 8%, while interest expense decreased 23%. In the fourth quarter of 2025, interest income totaled ARS 1.4 billion and 7% from ARS 91.6 billion higher than the third quarter of 2025, and 30% or ARS 300.41 billion higher than the fourth quarter of 2024. In fiscal year 2025, interest income totaled ARS 5 trillion, 8% higher than in fiscal year 2024.

Income from interest on loans and other finances totaled ARS 1.4 trillion, 3%, or ARS 33.5 billion higher compared with the previous quarter, mainly due to a 141 basis points increase in the average lending rate, while the average volume of private sector loans remained almost unchanged. On a yearly basis, income from interest on loans increased 58% or ARS 307.3 billion, and in fiscal year 2025, income from interest on loans and other finances totaled ARS 3.61 trillion, 13% higher than in fiscal year 2024. In the fourth quarter of 2024, interest on loans represented 74% total interest income.

In the fourth quarter of 2025, income from government and private securities increased 105%, or ARS 306 million quarter-on-quarter, and increased 1% or ARS 6.2 billion compared with the same period of last year. In fiscal year 2025, income from governmental private securities totaled ARS 1.76 trillion, 58% lower than fiscal year 2024. In the fourth quarter of 2025, in terms of effects, the bank's strategy to remain short in U.S. dollar during the second half of 2025 proved successful. The combination of the short dollar position, together with the long future position and the allocation of the pesos generated by the sale of U.S. dollars, resulted in a net gain of ARS 26.3 billion.

In the fourth quarter of 2025, interest expense totaled ARS 565.1 billion, decreasing 1% or ARS 4.8 billion compared to the previous quarter, and 50% higher compared to the fourth quarter of 2024. In fiscal year 2025, interest expense totaled ARS 1.93 billion, 23% lower than in fiscal year 2024. Within interest expenses, interest on deposits increased 1% from ARS 5.6 billion quarter-on-quarter, due to a 168 basis points increase in the average rate paid on deposits, while the average volume of private sector deposits increased 7%. On a yearly basis, interest on deposits increased 48% for ARS 107.6 billion.

In the fourth quarter of 2025, the bank's net interest margin, including effects, was 21.7%, higher than the 18% posted in the third quarter of 2025 and lower than the 24.7% posted in the fourth quarter of 2024. In the fourth quarter of 2025, Banco Macro net income totaled ARS 192.4 billion, which is 1% or ARS 1.2 billion higher than the third quarter of 2025, and was 8% or ARS 18 billion higher than the same period last year. In fiscal year 2025, net income totaled ARS 767.4 billion, that's just 20% higher than in fiscal year 2024.

In the quarter, other operating income totaled ARS 73.3 billion, 3% or ARS 2.1 billion, you know, lower than in the third quarter of 2025, due to lower other income and lower other service related fees, which were partially offset by higher income from in charge recognition of loans. On a yearly basis, other operating income increased 13% or ARS 8.2 billion. In fiscal year 2025, other operating income totaled ARS 292.1 billion, unchanged from fiscal year 2024. In the fourth quarter of 2025, Banco Macro administrative expenses plus employee benefits totaled ARS 412.4 billion, 15% or ARS 54.8 billion higher than the previous quarter, due to higher employee benefits, which increased 18% and higher administrative expenses, which increased 8%.

On a yearly basis, administrative expenses plus employee benefits increased 20% or ARS 68 billion. In fiscal year 2025, administrative expenses plus employee benefits were unchanged compared to fiscal year 2024. Employee benefits increased 18% or ARS 45.8 billion quarter-over-quarter. Compensation and benefits increased 156% or ARS 68.7 billion. In the fourth quarter of 2025, the bank required ARS 82.9 billion to supplement expenses related to early retirement plans and severance payment provisions. Excluding restructuring expenses, employee benefits would have decreased 8% or ARS 17.1 billion. On a yearly basis, employee benefits increased 30% or ARS 67.5 billion, and excluding restructuring expenses, employee benefits would have been 7% or ARS 15.4 billion lower.

In fiscal year 2025, employee benefits associated with personnel involved in restructuring expenses totaled ARS 49 billion. In the fourth quarter of 2025, the efficiency ratio reached 38.7%, improving from the 46.5% posted in the third quarter of 2025, and the 39.4% posted 1 year ago. In the fourth quarter of 2025, expenses increased 13%, while net interest income plus net fee income plus other operating income increased 36% compared to the third quarter of 2025. It is worth mentioning that during the fiscal year 2025, Banco Macro reduced its branch network by 75 branches, down to 444 branches from 519 branches in December 2024, and reduced its headcount by 514 employees.

All this was achieved while gaining market share, both in private sector loans and private sector deposits. In the fourth quarter of 2025, the result from the net monetary position totaled ARS 277 billion loss, 27% or ARS 58.6 billion higher than the loss posted in the third quarter of 2025, and 5% or ARS 13.2 billion lower than the loss posted one year ago. Higher inflation was observed during the quarter, 189 basis points above the third quarter of 2025. Inflation was 7.86% compared to 5.87% in the third quarter of 2025.

In fiscal year 2025, the result from the net monetary position totaled an ARS 1.5 trillion loss, 66% lower than the one posted in fiscal year 2024. Inflation in 2025 reached 31.5% compared to the 117.8% registered in 2024. In the fourth quarter of 2025, Banco Macro income tax rate was 47.2%. In the fiscal year 2025, effective tax rate was 43.1%, higher than the 9.2% registered in fiscal year 2024. Further information is provided in Note 24 to our financial statements.

In terms of loan growth, the bank total financing reached ARS 10.71 trillion, increasing 2% or ARS 211 billion quarter-on-quarter, increased 40% or ARS 3.1 trillion year-on-year. In the fourth quarter of 2025, peso financing increased 2% or ARS 196.4 billion, while U.S. dollar financing increased 20% or $407 million. In fiscal year 2025, both peso financing and U.S. dollar financing increased 36% and 12% respectively. It's important to mention that Banco Macro's market share of private sector loans as of December 2025, was 8.3%, increasing 30 basis points compared to December 2024.

On the funding side, total deposits increased 8% from ARS 958.1 billion quarter-on-quarter, to ARS 13.7 trillion, and increased 24% to ARS 2.6 trillion year-on-year. Private sector deposits increased 11% to ARS 1.26 trillion quarter-on-quarter, while public sector deposits decreased 33% to ARS 310.4 billion quarter-on-quarter. The increase in private sector deposits was led by term deposits, which increased 17% to ARS 978.5 billion, while demand deposits increased 5% to ARS 308.1 billion quarter-on-quarter. In the quarter, peso deposits increased 3% or ARS 234.9 billion, while U.S. dollar deposits increased 10% for $300 million.

On a yearly basis, peso deposits increased 18%, while dollar deposits decreased 4%. As of December 2025, Banco Macro's transactional accounts represented approximately 47% of total deposits. Banco Macro's market share of private deposits as of December 2025, totaled 7.9%, 90 basis points higher than in December 2024. In terms of asset quality, Banco Macro's non-performing total financial ratio reached 3.87%. The coverage ratio measured as total allowances under expected credit losses over non-performing loans under certain bank rules, reached 119.86%. Commercial portfolio non-performing loans improved 17 basis points, down to 0.68% from 0.85% in the previous quarter.

While consumer portfolio non-performing loans deteriorated 93 basis points in the fourth quarter of 2025, up to 5.23% from 4.3% in the third quarter of 2025. In terms of capitalization, Banco Macro accounted in excess capital of ARS 3.6 trillion, which represented a Capital Adequacy Ratio of 30.6%, and a Tier 1 ratio of 30.6%. The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate, liquid assets to deposit ratio was 73%. We have accounted for another positive quarter. We continue to show a solid financial position, asset quality remain under control and closely monitored. We keep on working to improve more our existing standards, and we keep our optimized deposit base.

At this time, we would like to take the questions you may have.

Operator (participant)

Thank you. At this time, we are going to open it up for questions and answers. If you would like to ask a question, please press the Q&A button at the bottom of your screen, or to ask questions on audio, click on Raise Hand. You will then receive a request to activate your microphone. One moment, please, for the first question. Our first question comes from Brian Flores from Citi. Please, Mr. Flores, your microphone is open.

Brian Flores (VP of Equity Research)

Hi. Hi, team. Thank you for the opportunity. I have a first question here on your guidance. Just wanted to know if there's an update on the soft guidance you provided in the last months after the election? I think it was 35% in real terms for loans, 25% in deposits, and low teens in ROE. Just wanted to check if any of these variables in your view, have changed. I know it's a very fluid environment in Argentina, just checking on that. A second question, just very quick. We saw strong security gains, recovering from public securities.

Just wanted to understand how, in your view, would this be considered or how much would be considered recurring in nature, and how much stemming from the volatility that we have in the election cycle? Thank you.

Jorge Scarinci (CFO)

Hi, Brian, this is Jorge Scarinci. How are you? Yes, on your first question, yes, we are going to maybe modify a little bit our guidance. Basically, according to local consensus of economists, are reducing a little bit the real GDP growth for 2026 to levels of between 2.8%-3%. Also, in addition to that, there is also, the consensus is estimating a higher inflation for 2026, compared to the one that we were working with in the last quarter of last year. That was 20%, and now the new update is 27%. Due to those, I mean, modifications on those two macroeconomic variables, we are also fine-tuning our guidance for a growth for 2026.

In terms of loans, we're expecting 20% real growth in the calendar year of 2026, and deposit growth of 6% in real terms. Also, as you could see in this press release, we have started to report a kind of reported ROE and ROA, and also an adjusted ROE and ROA, due to the restructuring charges that we posted in the fourth quarter. We expect some other of this type to come between first and second quarter of 2026. In terms of, I would say adjusted ROE for 2026, we are working with a level of 8% area. Basically in terms of ROE and in terms of ROA, close to 1.8%-2% area.

Right. That is answering your first question in terms of guidance. In terms of your second question, in terms of the security gains, I would say that one of the main drivers for the weak quarter that we posted in as of September, was a bad performance of the bond portfolio related to the increased volatility in the macroeconomic variables due to the election or the midterm election that took place the 27th of October. What we saw in the fourth quarter was a reversal of that trend, some declining nominal and real interest rates, and some rebound in the local peso securities that we hold in our portfolio.

I would attribute most of these to the repricing that we saw in the first quarter as a kind of a positive effect compared to the one that we saw in the third quarter of last year.

Brian Flores (VP of Equity Research)

Super clear. Just a quick follow-up on maybe the gap between loans and deposits, right? Because it used to be. You are seeing basically a change in maybe the savings capacity of people, if you think maybe this, as you mentioned, this lower or slower GDP is translating into this change in behavior, or any color you could give as to why deposits are at this expectation that is maybe significantly lower than the previous base case?

Jorge Scarinci (CFO)

Well, first, we continue to hold almost 24% of total assets in terms of securities that could be used in case that we need to finance the gap between the increasing loans and deposits, even though that we continue to have a loan-to-deposit ratio, of course, below 100%. Even though in relative terms, we are growing or we are expecting to grow more in loans than in deposits, but in absolute terms, the difference is not going to be that much. Besides of that, we are forecasting that for the moment, real interest rates to be slightly positive, and that's why we are not forecasting a big increase in terms of deposits in 2026.

Brian Flores (VP of Equity Research)

No, super clear. Thank you, team.

Jorge Scarinci (CFO)

You're welcome.

Operator (participant)

Our next question comes from Lindsey Shema from Goldman Sachs. Please, Mrs. Shema, your microphone is open.

Lindsey Shema (Equity Research Associate)

Hi, team. Thank you for taking my questions. First off, I mean, we saw some continued deterioration in consumer asset quality. Also seems like the macro scenario is still a bit tougher. That there was some incremental improvement in cost of risk. Maybe just how are the early indicators looking for asset quality, and what makes you feel a little bit more constructive on cost of risk going forward? Do you see that kind of deterioration coming back? For my second question on the political landscape, it seems like labor reform is on track to be enacted, the vote tomorrow. What do you think is next on the administration's agenda? What do you, as a bank, really need to see to give you greater certainty going forward? Thank you.

Jorge Scarinci (CFO)

Hi, Lindsey. In terms of your first question, what we are seeing is that the speed of the deterioration of the consumer portfolio has been reduced. As you could see, in terms of cost of risk, we posted slightly below levels of the one that we posted in the third quarter. In the first quarter, we are seeing kind of for the moment neutral news. I would say that it's kind of relatively stable in terms of the figures that we are seeing, at least as of January, compared to December. However, going forward, we expect to have maybe positive, more positive news by the end of the first and second quarter of this year. That's why we are forecasting for 2026, a cost of risk of 5.2%.

This is slightly below the 5.6% that we posted in the calendar year of 2025.

Juan Parma (CEO)

In terms of, maybe, Jorge, if I may add to that. This is Juan Parma. We took early action during 2025 by constraining the loan origination back from April last year. What we are seeing is that in terms of new vintages and new origination, the performance of the vintages is better than the portfolio as a whole, and back to the levels we used to see in 2024. That recomposition of the portfolio with better new origination is what is actually driving the stabilization and positive outlook in terms of cost of credit.

Basically, it's what we are seeing in the new originations that we tightened up since around April, May last year. Sorry, Jorge.

Jorge Scarinci (CFO)

No, it's okay. Lindsey, in terms of your second question, I would say that in the last three, four months, the government, I would say that is leading the agenda, managing all the political issues going on, like introducing the labor reform at the end of 2025, and that was approved by the Congress in January, by deputies in general, and in February, deputies in particular, and also expected to have the Senate to approve it. Also, we expect a tax reform to come at some point in the next month or so.

I would say that next Sunday, that is going to be the first of March, President Milei is going to open the ordinary session of the Congress, and he's going to, in our view, give a speech on the coming reforms or projects to be sent to the Congress. I think that we have to be in clear alert on his speech next Sunday in order to have a more, I would say, better landscape on what's going to be on the agenda of the government in 2026.

Juan Parma (CEO)

What I would say, adding to Jorge, that what we have seen after last year, a very positive outcome in terms of the midterm elections, is the government using its political capital and its majority in Congress to push on their strategy to keep a tight monetary policy and a tight FX policy, focusing on reducing inflation while maintaining fiscal surplus and solving for the competitiveness of the economy by deregulation. That's their strategy. They will try to improve the competitiveness of the economy by reducing the Argentina cost, right? Both in fiscal terms with the tax reform, labor costs with the labor reform, using their renewed political capital after the midterm elections.

The recent approval that needs to be finally validated by Congress this Friday on the labor reform, is a demonstration of that. As Jorge was mentioning, we expect President Milei, in his opening speech of the Congress session for this year, to outline what is his agenda in terms of pushing reforms using this political capital through the year, and we expect that to continue. There is one comment that I think is relevant for the banking industry, in the labor reform, by the way, which is that as part of the labor law, there was a relevant article that defined whether if banks or fintech wallets are the ones to pay salaries.

It was a positive outcome for the banking industry because the law confirmed that the only way to pay salaries or pension payments in Argentina is only through bank accounts, not through wallets or digital accounts. That's a good outcome for the bank and for the industry as a whole.

Lindsey Shema (Equity Research Associate)

Great, very clear. Thank you so much.

Operator (participant)

Our next question comes from Yuri Fernandes from JP Morgan. Please, Mr. Fernandes, your microphone is open.

Yuri Fernandes (Executive Director)

Thank you very much, and congrats on the profitability recovery in the quarter. I would like to understand a little bit just the mark to market on the securities, like the trading gains. Like, this line is always volatile, right? It's hard to predict, but if you can help us understand how to better think this line, how to better model, and what drove, you know, like, the probably the sovereign bond in Argentina, but I would like to know also what drove the gains during this quarter. Then I can ask a second quarter regarding deposits. I guess I heard well, the 6% real growth. It sounds a little bit low, right?

I think expectations for the industry was that deposit would still grow, I don't know, 20%, 25% in real terms. My question is how to grow loans, right, with such a low potential growth of deposits? If you are seeing any change on reserve requirements. Just try to understand a little bit, you know, like the message on liabilities. Thank you.

Jorge Scarinci (CFO)

Thank you, Yuri. I will start with by your second question. Yeah, basically, I mean, I think I answered before why we are expecting a 6% real growth in deposits on the fine-tuning of macroeconomic variables and also on a slightly narrower positive real interest rate expected for 2026. Even though that, we're expecting to grow loans by 20% in real terms, this is slightly below what we grew our loan book in 2025. 2025 was a great year, 40% in real terms was a great year. Again, we have, as I mentioned before, this securities portfolio, that in the case that loans are growing above what we're expecting, can be used to finance the gap, if deposits are growing at 6% and not growing more than that.

In terms of your first question, it is not very easy to answer. I would say that because we have a combination of I would say 68% of our bonds that are tied to inflation and another 32% which are tied to variable rates, I would say that the best way to model this is what you are expecting for domestic prices or, I mean, for inflation or the wholesale rate going forward. That is going to be maintained. You are going to see a kind of gradual and steady income on a quarterly basis on our bond portfolio. However, if you are expecting some volatility there on ups and downs, that is going to affect the pay off of the bondings on a quarterly basis.

Yuri Fernandes (Executive Director)

Thank you. Thank you very much. Very clear.

Jorge Scarinci (CFO)

Welcome.

Operator (participant)

Our next question comes from Pedro Leduc from Itaú BBA. Please, Mr. Leduc, your microphone is open.

Pedro Leduc (Lead Equity Research Analyst)

Hi, guys. Thank you very much for taking my question. We see NIMS now recovering almost halfway here. At the same time, we're seeing still some credit quality pressures. Question to you is when we think about, you know, risk-adjusted NIMs for 2026, I know the average for 2025 is a bit weird to look at, but if you could help us understand a bit if the fourth quarter is a good starting point for us to build upon for risk-adjusted NIMs, and what the drivers are for us to look at this line in 2025, 2026. Thank you.

Jorge Scarinci (CFO)

Hi, Pedro. I would say this as a starting point, the fourth quarter is a kind of a reasonable measure. Going forward, we're expecting a little bit of pressure on rates and maybe on margins, a little bit. We finished 2025 with a net interest margin on the area, slightly above 20% and 21.5% across. We're seeing this maybe in the level of 20% for 2026. As an opposite effect, we are seeing slightly below cost of risk in 2026 compared to 2025. Overall, I would say that slight compression on the NIM adjusted by credit quality in 2026.

Pedro Leduc (Lead Equity Research Analyst)

Versus the average of 2025? No, but from the starting point.

Jorge Scarinci (CFO)

Yeah, from the starting point. Yes.

Pedro Leduc (Lead Equity Research Analyst)

Okay. Okay, appreciate it. Thank you.

Jorge Scarinci (CFO)

Welcome.

Operator (participant)

Our next question comes from Pedro Offenhenden from Latin Securities. Please, Mr. Pedro, your microphone is open.

Pedro Offenhenden (Senior Analyst)

Hi, team. Thank you for the call. I wanted to ask on, you mentioned additional personal expenses in the following quarters. Could you help us to frame this remaining impact as how much of the total restructuring cost were already recognized this quarter?

Juan Parma (CEO)

Maybe you can talk, Jorge, about the restructuring costs we booked in 2025, and how much of that is still to benefit 2026. We can talk about what to expect going forward.

Maybe I can take both of them. From the ARS 82 billion pesos that we booked in 2025, concentrated in the fourth quarter, there are still ARS 36 billion of that will help personnel exits that will benefit 2026. In terms of additional restructuring costs, you should expect similar numbers for the following quarters. You should note that the condition for us to report an expense as a restructuring cost is one that will take out operational expenses on a permanent basis. The likes of reduction in personnel that won't be replaced. That's what we define by restructuring costs.

That's why, in the following quarters, you should expect us to continue reporting with the same type of language, being consistent to the point that restructuring cost is cost to take us out, cost on a permanent basis, and in that, in that sense, reporting or talking about reported and adjusted results, and reported and adjusted ROIs. We expect to continue in the following quarters with this, with this action, which we believe is positive, because it will the year with a, with a lower recurrent cost base for the company, and back to the previous point, compensating the margin compression that Jorge was talking about. That's why we are doing it. As inflation goes down, rates go down, margins compress, we are reacting on the cost side to compensate this effect.

Pedro Offenhenden (Senior Analyst)

Okay, super clear. Thank you very much.

Operator (participant)

Our next question comes from Carlos T. Gomez-Lopez from HSBC. Please, Mr. Carlos, your microphone is open.

Carlos Gomez-Lopez (Head of EM and LatAm Financials)

Now it is. Okay, thank you. Thank you for the call. First, to confirm what you said earlier, which is that, adjusting for these ex- restructuring charges, you think that something like an 8% ROE for the year is realistic? Second, I would like to know if you have any update on your, you know, exciting acquisition of Personal Pay. Any update that you can give us versus the call that you had 2 or 3 weeks ago? Finally, when you look at loan growth, I mean, it has been coming down and down and down, and, I mean, you are already giving us the expectation that it will be at 20%, but actually 20% is an improvement from where we are today.

When do you see the trend breaking and then starting to see some more activity in the system? Thank you.

Jorge Scarinci (CFO)

Thank you, Carlos. On the first question, yes, we think that including all these restructure charges and all the guidance in terms of growth in both loan deposits, et cetera, we are expecting to deliver an adjusted ROE in the area of 8% in 2026. I mean, the Our main business is to lend money, and of course, we would like to lend as much money as we can, of course, considering credit risk and all that. Of course, what we are not seeing for the moment is the economy growing at very high rates. The guidance that we are giving is, like, between maintaining share and gaining a little bit of basis points each year.

We are not reducing our share in terms of loans, and you can see in the quarter that we reported, that we are growing the shares in both loans and deposits. The idea is to continue in that path going forward, but of course, we need the macroeconomy of Argentina to push harder in order to see a high level of loan growth.

Juan Parma (CEO)

In terms of Personal Pay, I can comment on that, Jorge. Thank you. Okay. Yeah, we announced the acquisition of 50% of Personal Pay, which is Telecom's wallet. It was a cash-in transaction, so all our equity investment went into the company, to develop the company.

This will be built as a Banking as a Service business, where we will, on one hand, work on engaging the around 30 million customers that Telecom have to use the wallet, and then, do financial intermediation with a Banking as a Service model. As I think I explained when we talked about this with some of you, in the specific call we had on Personal Pay about 3 weeks or 4 weeks ago, we have the option to do this through Banco Macro or do this through an existing or a new subsidiary of Banco Macro. We are considering those options while we build the technology and the services to connect the wallet with the Banking as a Service.

More to come on this front, and, we will update you accordingly once we know, how exactly this Banking as a Service, model will be built.

Carlos Gomez-Lopez (Head of EM and LatAm Financials)

Thank you, Juan. Thank you, Jorge.

Juan Parma (CEO)

Welcome.

Operator (participant)

Our next question comes from Marcos Seru, from Allaria. Please, Mr. Seru, your microphone is open.

Marcos Seru (Equity Research Analyst)

Hi, thank you for the presentation. I wanted to ask, regarding the restructuring, if you have any target for headcount and for number of branches by the end of 2026, and which is the impact in ROE, because of these restructuring charges?

Jorge Scarinci (CFO)

I would say that in terms of both headcounts and branches, we're expecting a reduction in both, similar level than the one that we saw in 2025. Just to give you some guidance there. I would say that approx, the impact on ROE in terms of these restructuring charges are approximately 3 percentage points. That is what we are calculating on 2026, on the impact on restructuring charges on ROE.

Marcos Seru (Equity Research Analyst)

Just to check, reported ROE will be around 5%, right?

Jorge Scarinci (CFO)

Approximately in the area of 5%, and the, and the adjusted in the area of 8%.

Marcos Seru (Equity Research Analyst)

Thank you.

Jorge Scarinci (CFO)

Welcome.

Operator (participant)

Our next question comes from Matías Cattaruzzi from AdCap. Please, Mr. Cattaruzzi, your microphone is open.

Matías Cattaruzzi (Senior Equity Research Analyst)

Hi. I wanted to ask you a question about the recent rise in dollar liquidity in the system. As it improved, how are you thinking about the possibility of gradually expanding USD lending beyond traditional dollar generating clients? Under what conditions would Macro feel comfortable lending dollars to non-dollar earners, if at all?

Jorge Scarinci (CFO)

I will answer from the bank's perspective. There is the question, which is around the enablement of this, which is a question around regulation. As I listen to your question, I understand you're well versed on how the regulation is today. Let me start by that in the benefit of others that may be not that familiar with it, in case that's the case. Today, in Argentina, you can only lend dollar from depositors to clients that have their revenue streams in dollars, so basically exporters. That limits your ability to deploy dollar deposits to only those type of customers. With your own dollars, not the dollars from depositors, but the dollars from the bank, you can do, you can lend to anyone.

The reality is that if you take the total deposits in the system, denominated in dollars, they moved from being one-fourth of total deposits, measured all in dollars, 25% to now 37%. There's an advancement of dollar-denominated deposits in the total deposits of the banking system as a whole. With this limitation, eventually, this creates a bottleneck, because you cannot deploy those deposits. The government is exploring alternatives to evolve from that situation. If that was the case, and I cannot say when and if this will happen, because this depends on a change on regulation, and I cannot speak to that, we are prepared to lend.

If the regulation changes, then it will be up to each bank to define the appetite to use that space and lend their dollar capacity. We are bullish on that. We believe that we can work with high-quality customers, both on the commercial segment and on the individual segments to deploy that lending, that dollar lending capacity. We believe that if that regulation evolves, allowing this to happen, this will turn into something positive for the bank, because we are in the bullish side of the market regarding that. We depend on the regulation to change or to evolve, to take advantage of that opportunity.

Matías Cattaruzzi (Senior Equity Research Analyst)

Great. Thank you so much.

Operator (participant)

Our next question comes from Ernesto Gabilondo, from Bank of America. Please, Mr. Gabilondo, your microphone is open.

Ernesto Gabilondo (Director of LatAm Financials)

Thank you. Hi, good morning, Juan, Jorge, and Nicolas. Thanks for the opportunity to ask questions, and congrats in your results. Very close to a recurring ROE of 7% in 2025, if excluding the restructuring costs. My first question is a follow-up on the 2026 guidance. Any color on NPLs? Can you confirm you have reached the NPL peaks, and whether you see them trending down in 2026? Any color in terms of income growth, and also in recurring OpEx growth? Removing the restructuring costs, how do you see recurring OpEx growth? Also, when do you see the ROE returning again to high teens? Can you walk us through over the next years? My second question is on your long-run expectations.

We have seen a lot of investments announced in Argentina. In your case, which would be the sectors that you are financing or that you are seeking to finance, leveraging on these announcements? Especially, you have a very strong capital base, so maybe you have the opportunity to finance projects with longer duration when compared to your peers. The last question is, in your capital ratio. How do you see your capital allocation this year in terms of buybacks, dividends, or potential M&A activity? Thank you.

Jorge Scarinci (CFO)

Ernesto, how are you? I will try to answer all your questions. In terms of asset quality going forward, in the same trend that we are seeing the cost of risk lower in terms of the level that we posted in average in 2025. We're expecting also NPLs to go in the area of between mid to low threes. That is in accordance with the 5.2% cost of risk that we are expecting for 2026, compared to the 5.6% that we saw in 2025. Basically, in terms of loan growth that you are also asking, I would say that yes, there are some investment that have been announced in Argentina, in different sectors, mostly in energy mining.

Some of those investments are going to be done this year, others are going to be done in 2027, 2028, et cetera. It is also related to the other question that you asked, we have the best capital base in Argentina, and of course, we are expecting and prepared to finance those projects this year and following years. It is pretty sure that the bank wants to make the best use of this success capital, and we have been trying to grow as much as we could in the past, and going forward. Also, in terms of dividend policy, last year and also this year, we have a 100% payout ratio in terms of cash dividend.

That is, this year, is what the board is going to propose to the shareholders meeting. Of course, we have to wait for the Central Bank to see if that dividend is going to be paid in one installment, 3, 6, or whatever. Again, we are working in order to trim down this excess capital going forward with a combination of organic, inorganic growth, cash dividend, and if it is the case, on buyback programs such as the one that we also, you know, put in place in the past. It is pretty sure that we are very well, I mean, prepared and positioned to take advantage of any positive news, both in the macroeconomic scenario and also within the financial sector in 2026 and onwards.

In terms of when we are going to be seeing mid-teens, in terms of ROE, one thing to take into consideration is that maybe in 2028, Argentina could be entering to, again, I would say, nominal reporting. If 2025, 2026, 2027, Argentina, in the three years in a row, we are having less than 100% inflation, we are going back to non-inflation adjusting reporting. We should be reporting nominal numbers, and of course, ROE, since 2028 onwards. I think that between 2028 and 2030, I think that is going to be the years where we are going to see Macro delivery, mid-teens ROEs, and maybe something about that.

Juan Parma (CEO)

I would add to Jorge's comments that by the end of 2027, our restructuring program will enter in full effect in terms of being able to capture the benefits of the restructuring. The restructuring costs that we talked about will continue mostly through 2026, part in 2027. By the end of 2027, entering into full effect in 2028, we will be able to capture and harvest the full benefits of the restructuring program. Okay? If you read into our press release and results announcement, you will see that the ARS 82 billion of restructuring costs are related with costs that in 2025 were ARS 49 billion. We cannot talk here about future savings of these sections, but you can read into that.

If we continue with this, you can also read into how much that full effect of restructuring cost could mean in 2028. Coupled with what Jorge mentioned about the stopping, if Argentina continues in the inflation-reducing trend, moving from real ROEs to nominal ROEs in 2028. By then, I'm pretty confident that we will be able to reach the mid-teen ROEs going forward. You asked, if, Jorge mentioned back to the question on financing projects, longer tenors and so forth. Jorge mentioned about the capital strength of the bank.

I would also add the liquidity strength and funding strength from the bank, because after the successful placing of negotiable obligations that we did last month, we have also extended our funding capacity to support such projects for the in a range of for 3 years-4 years. We expect that. The other reality is that companies in Argentina have been benefiting from the access to capital markets and issuing a substantial amount and a record amount, I would say, of U.S. dollar-denominated debt. We expect that after that cycle, private lending, the private lending market will turn on, particularly if rates in the U.S. at some point go up, we expect this to be an opportunity for that.

We are keeping that liquidity, remaining ready to support the energy sector, the mining sector, the infrastructure sector of Argentina, that at some point will start to get traction, we believe.

Ernesto Gabilondo (Director of LatAm Financials)

This is super helpful, Juan and Jorge, thank you very much. Just to follow up in terms of the NPL. Just to confirm, the NPL already peaked in the fourth quarter, and you're expecting, for example, NPL to go to low to mid 3% and cost of risk to 5.2%. How should we think about the timing throughout 2026? Is this something that will start to go down in the first quarter? Or is this something that will go down more in the second half of this year? Just a little bit of color on that.

Jorge Scarinci (CFO)

Yes, I think that we might see numbers, more on the positive in the second half of 2026, some stable numbers in the first half of 2026.

Ernesto Gabilondo (Director of LatAm Financials)

Perfect. Excellent. Thank you very much.

Operator (participant)

Our next question comes from Kaio Prato, from UBS. Please, Mr. Prato, your microphone is open.

Kaio Prato (Stock Analyst)

Hello. Hi, guys. Thanks for the opportunity. I have a quick on my side, please. Just to follow up on loans, if you are already seeing any pickup in loans sequentially, because it has been weak on a quarter-over-quarter basis, or if it is expected to accelerate more towards the second half. Second, still on loans, you mentioned about this reduction in overall growth expectations and talking about GDP, but is there any segment that you are seeing specifically slow down, or if this is most related to lower appetite on consumers? Just some breakdown between both would be good as well. Thank you.

Jorge Scarinci (CFO)

Hi, Kaio. We continue to see most active sectors, as I mentioned before, energy, and within energy, oil, gas, and then you have mining, agribusiness sector. Those are the most active. The ones that are lagging a little bit are, I would say, construction could be, infrastructure for the moment, even though prospects for 2026 of infrastructure are positive. Maybe, massive consuming sectors are also not having a good performance. We expect these sectors, as I mentioned, to be the other leaders or the worst performers in 2026. I would also add that there is a bit of a binary situation in terms of credit quality and risk in an economy which is opening.

Although deregulation at some point will come and help by reducing the Argentina cost, it is clear that there will be winning sectors and losing sectors. Probably on the winning side is all the sectors around mining, energy, agriculture, also services, to some extent, commerce, retail, if the economy starts to pick up. The manufacturing sector is the one that is under the spotlight now, and we are seeing some specific manufacturing sectors, like the textile sector, like the clothing sector, like the automotive sector, suffering because of the opening of the economy. So another lens to look at is not only where we could or how much we grow in average, but be selective, given this significant change in the structure of the macroeconomy by sector in Argentina. Yes.

Kaio Prato (Stock Analyst)

Okay. In terms of the loan, it's clear, in terms of the loan growth, it's already improving sequentially, or should we expect more of this growth towards the second half of 2026?

Jorge Scarinci (CFO)

I think, well, always the first quarter is seasonally lowest. I think that it's going to be in a gradual increased trend, towards the end of 2026.

Kaio Prato (Stock Analyst)

Okay, great. Thank you very much.

Jorge Scarinci (CFO)

Welcome.

Operator (participant)

Just as a reminder, if you wish to ask a question, please use the Q&A button or click on Raise Hand button. We will pull for questions. There are no more questions at this time. This does conclude the Q&A section. I'll now turn it over to Mr. Nicolas Torres for any final remarks.

Nicolás Torres (Director of Investor Relations)

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.

Operator (participant)

Banco Macro's fourth quarter 2025 conference call is now closed. You can disconnect now, and have a wonderful day.