Banco Macro S.A. (NYSE:BMA) Q2 2019 Earnings Conference Call August 8, 2019 12:00 PM ET Company Participants Nicolas Torres - Investor Relations Jorge Scarinci - Chief Financial Officer Conference Call Participants Gabriel Nobrega - Citibank Ernesto Gabilondo - Bank of America Jason Mollin - Scotiabank Alonso Garcia - Credit Suisse Yuri Fernandes - JPMorgan Carlos Gomez - HSBC Operator Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Mac ...

Financial Data and Key Metrics Changes - Banco Macro's net income for Q1 2019 was ARS 7.3 billion, a 40% increase or ARS 2.1 billion higher than Q4 2018, and a 106% increase compared to ARS 3.5 billion a year ago [4] - The bank's Q1 2019 ROE and ROA were 50% and 8.4%, respectively, indicating strong earnings potential [4] - Net operating income for Q1 2019 was ARS 19.1 billion, an 18% increase or ARS 2.9 billion quarter-over-quarter and a 78% increase or ARS 8.5 billion year-over-year [6] - The efficiency ratio improved to 28.6% from 39.7% in Q4 2018 and 35.6% in Q1 2018 [16] Business Line Data and Key Metrics Changes - Net interest income totaled ARS 12.9 billion, a 5% increase or ARS 643 million higher than Q4 2018, and a 63% increase or ARS 5 billion higher than the previous year [7] - Net fee income for Q1 2019 was ARS 3.3 billion, a 2% increase from Q4 2018 and a 40% increase or ARS 951 million year-over-year [12] - Net income from financial assets and liabilities at fair value through profit or loss was ARS 2 billion, a 442% increase or ARS 1.6 billion compared to Q4 2018 [13] Market Data and Key Metrics Changes - Banco Macro's market share over private sector loans reached 7.7% as of March 2019, with total deposits growing 15% quarter-on-quarter and 82% year-on-year [17][18] - Private sector deposits grew 12% quarter-on-quarter and 80% year-on-year, with transactional accounts representing approximately 37% of total deposits [18] Company Strategy and Development Direction - The bank's strategy in Q1 2019 included selling US dollars in the spot market and investing in LELIQs, which proved to be profitable [9] - The focus is on maintaining asset quality and profitability rather than market share, leading to a conservative approach in lending [37] Management's Comments on Operating Environment and Future Outlook - Management indicated that the economic environment remains challenging, with high interest rates and a projected real GDP decline of more than 1% to 1.5% in 2019 [27] - Nonperforming loans (NPLs) are expected to remain around 2% to 2.1%, with no major deterioration anticipated [28][29] - Future loan growth is expected to be nominally below inflation, with a potential pickup in demand next year if interest rates decrease [32][34] Other Important Information - The effective income tax rate for Q1 2019 was 30.1%, down from 31% in Q4 2018 [17] - The bank's liquidity remains strong, with a liquid assets to total deposits ratio of 66% [20] Q&A Session Summary Question: Why did the bank decide to fully write off the exposure to Molca? - Management stated that the decision was made by the credit committee and the Board, despite the possibility of future recoveries [23] Question: What was the direct exposure to Molca? - The direct exposure was approximately ARS 390 million [24] Question: What is the outlook for NPL ratios in the retail portfolio? - Management noted that 93% of personal loans are tied to payrolls, and they expect NPLs to remain around 2% to 2.1% going forward [26][28] Question: What are the volume growth expectations for this year? - Management indicated that loan growth has been sluggish due to the poor economic environment, with nominal growth expected to be around 30% for the year [32][34] Question: Is the bank's strategy focused on market share or asset quality? - The strategy is focused on maintaining asset quality and profitability, even if it results in a loss of market share [37] Question: How will the recent credit card regulation impact earnings? - The impact on bottom lines is estimated to be between 2.7% and 3%, but management plans to take measures to mitigate this effect [46]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934 or ☒ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2018 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to or ☐ Shell Company Report Pursuant to Se ...

Financial Data and Key Metrics Changes - Banco Macro's net income for Q4 2018 was ARS 5.2 billion, a 37% increase or ARS 1.4 billion higher than Q3 2018 and also 37% higher than ARS 3.1 billion from a year ago, driven by increases in net interest income and net fee income [5][6] - The bank's return on equity and return on assets for Q4 2018 were 30.7% and 5.8%, respectively, indicating strong earning potential [5] - For fiscal year 2018, net income totaled ARS 15.8 billion, a 55% increase from ARS 10.1 billion in fiscal year 2017 [6] Business Line Data and Key Metrics Changes - Net interest income for Q4 2018 was ARS 4.3 billion, a 19% increase from Q3 2018 and 66% higher year-over-year, attributed to a 128% increase in interest income and a 276% increase in interest expenses [7][8] - Net fee income for Q4 2018 totaled ARS 3.1 billion, a 38% increase year-over-year, while for fiscal year 2018, it reached ARS 11.1 billion, a 31% increase from fiscal year 2017 [14] - Other operating income increased by 54% quarter-over-quarter and 69% year-over-year [15] Market Data and Key Metrics Changes - The bank's financing to the private sector grew by 2% quarter-over-quarter and 36% year-over-year, with a market share of 7.9% in private sector loans as of December 2018 [19] - Total deposits grew by 12% quarter-over-quarter and 65% year-over-year, with private sector deposits increasing by 14% quarter-over-quarter and 67% year-over-year [19][20] Company Strategy and Development Direction - Banco Macro aims to maintain a strong focus on asset quality control, especially in light of the economic downturn in Argentina, and plans to be cautious with lending in 2019 [24][32] - The bank is monitoring M&A opportunities but currently has no official deals on the table, preferring to wait for favorable conditions post-elections [35] Management's Comments on Operating Environment and Future Outlook - Management indicated that the NPL ratio is expected to stabilize in the first half of 2019, with a potential improvement by the end of the year, forecasting a range of 1.5% to 1.7% [24][25] - The economic outlook for 2019 is cautious, with expectations of negative real GDP growth, leading to conservative lending practices [32] Other Important Information - The bank's efficiency ratio improved to 37.9% in fiscal year 2018, better than the 40% in fiscal year 2017, reflecting a 38% increase in expenses and a 45% increase in income [18] - As of December 2018, the bank's nonperforming to total financing ratio was 1.91%, with a coverage ratio of 117.74% [21] Q&A Session Summary Question: Coverage of NPLs and outlook for NPL ratio - Management acknowledged the decrease in NPL coverage to slightly above 100% and indicated a target range of 120% to 140% by year-end, with expectations of stability in the NPL ratio around 1.9% in the first half of 2019 [23][24] Question: Financial instruments results and liquidity management - Management clarified that income from securities is classified under interest income, and they plan to continue investing excess liquidity in short-term instruments [29][30] Question: Guidance for net interest income and M&A activity - Management expects loan growth to align with inflation rates of 30% to 32% and remains open to M&A opportunities but currently has no active deals [35][36]