Banco Macro SA (BMA) Q4 2020 Earnings Call Transcript

Image source: The Motley Fool.

Banco Macro SA (BMA 0.20%)
Q4 2020 Earnings Call
Mar 11, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's 4Q '20 Earnings Conference Call. We would like to inform you that the 4Q '20 press release is available for download at the Investor Relations website of Banco Macro, www.macro.com.ar/relaciones-inversores/. [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.

Nicolas Torres -- Investor Relations

Good morning and welcome to Banco Macro's fourth quarter 2020 conference call. Any comment, 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 on our website.

Fourth quarter 2020 press release was distributed yesterday and it's also available on our website. All figures are in Argentine pesos, and have been restated in terms of the measuring unit current at the end the reporting period. As of the first quarter 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, previous quarters have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through December 31st, 2020.

I will now briefly comment on the Bank's fourth quarter 2020 financial results. Banco Macro's net income for the quarter was ARS6.9 billion, 2% higher than in the third quarter of 2020 and 11% lower than the result posted a year ago. The Bank's fourth quarter 2020 accumulated ROE and ROA of 20.9% and 4.3% respectively remained healthy and show the Bank's earnings potential.

In fiscal year 2020, total comprehensive income totaled ARS25.3 billion, 5% lower than the result posted in fiscal year 2019. Net operating income before general and administrative and personnel expenses for the fourth quarter of 2020 was ARS17.4 billion, decreasing 20% or ARS4.4 billion quarter-on-quarter and 55% or ARS21.6 billion lower than a year ago.

In fiscal year 2020, net operating income before general and administrative and personnel expenses totaled ARS95.2 billion, 12% lower than the previous year. Operating income after general and administrative expenses were ARS523 million, 89% or ARS4.4 billion lower than in the third quarter of 2020 and 97% lower than in the fourth quarter of 2019.

In the quarter, net interest income totaled ARS21.7 billion, 8% or ARS1.8 billion lower than the result posted in the third quarter of 2020 and 32% or ARS10.5 billion lower than the result posted one year ago. In fiscal year 2020, net interest income was 19% lower than in fiscal year 2019 as a result of different regulations adopted by the Central Bank that set caps on lending rates and floors on deposit rates. In the fourth quarter of 2020, interest income totaled ARS41.6 billion, 2% or ARS651 million higher than in the third quarter of 2020, due to higher income from government securities and 11% or ARS5 billion lower than in the previous year.

Within interest income, interest on loans decreased 1% or ARS164 million quarter-on-quarter. Interest income decreased 38% or ARS11.8 billion year-on-year. In the fourth quarter of 2020, interest on loans represented 47% of total interest income. In fiscal year 2020, interest on loans totaled ARS85.6 billion and decreased 23% compared to fiscal year 2019.

Net income from government and private securities increased 4% or ARS680 million quarter-on-quarter due to higher income from government securities. Compared to the fourth quarter of 2019, net income from government and private securities decreased 38% or ARS5.4 billion. In the fourth quarter of 2020, FX gains including investments in dilutive financing totaled ARS1.2 billion, an increase compared to the third quarter of 2020 due to the 10% Argentine peso depreciation against the US dollar and the Bank's long spot dollar position.

In the fourth quarter of 2020, interest expense totaled ARS19.8 billion, 14% or ARS2.4 billion higher compared to the third quarter of 2020 and 38% or ARS5.4 billion higher on a yearly basis. Within interest expense, interest on deposits increased 14% or ARS2.4 billion quarter-on-quarter, mainly driven by a 320 basis points increase in the average interest rate paid on deposits.

The average target rate increased 452 basis points quarter-on-quarter. On a yearly basis, interest on deposits increased 40% or ARS5.4 billion. In the fourth quarter of 2020, interest on deposits represented 94% of the Bank's financial expenses. In the fourth quarter of 2020, the Bank's net interest margin including FX was 16.3% lower than the 17.1% posted in the third quarter of 2020 and 33.6% registered in the fourth quarter of 2019.

In the fourth quarter of 2020, net fee income totaled ARS5.7 billion, 4% or ARS209 million lower than in the third quarter of 2020. On a yearly basis, net fee income decreased 3% or ARS170 million. In fiscal year of 2020, net fee income was 7% lower than in the previous year. In the fourth quarter of 2020, net income from financial assets and liabilities at fair value through profit or loss totaled ARS10.7 billion loss, as a consequence of the inflation adjustment applied to our Leliq holdings. Higher inflation was observed in the quarter together with higher Leliq volume.

In the quarter, other operating income totaled ARS1.4 billion, increasing 6% compared to third quarter of 2020. On a yearly basis, other operating income decreased 9% or ARS115 million. In the fourth quarter of 2020, Banco Macro's personnel and administrative expenses totaled ARS10.8 billion, 1% or ARS67 million higher than the previous quarter due to higher administrative expenses.

On a yearly basis, personnel and administrative expenses decreased 8% or ARS968 million. In fiscal year 2020 administrative expenses plus employees benefits decreased 11% compared to fiscal year 2019, showing the strict cost control policies adopted by the Bank's senior management.

In the fourth quarter of 2020, the efficiency ratio reached 50.7% deteriorating from the 49.9% posted in the third quarter of 2020. In the quarter, expenses increased 1% while net interest income plus net fee income plus other operating income decreased 16%. In fiscal year 2020, Banco Macro's effective tax rate was 28.8% lower than the 39.1% registered during the fiscal year 2019.

In terms of loan growth, the Bank's financing to the private sector totaled ARS252.5 billion decreasing 2% or ARS6.1 billion quarter-on-quarter and 12% or ARS31.9 billion lower year-on-year. As a consequence of the economic recession that affected Argentina during 2020. Within commercial loans, Documents stand out with a 10% or ARS2.4 billion increase quarter-on-quarter, mostly due to loans extended to SMEs. Meanwhile, Others decreased 20% or ARS9.7 billion. On the consumer side, credit card loans increased 9% or ARS5.3 billion in the quarter.

Within private sector financing, peso financing decreased 1% or ARS3.4 billion, while US dollar financing decreased 19% or $64 million. It is important to mention that Banco Macro's market share over private sector loans as of December 2020 reached 7.1%. On the funding side, total deposits decreased 11% or ARS59.8 billion quarter-on-quarter and increased ARS138.6 [Phonetic] billion year-on-year.

Private sector deposits decreased 4% quarter-on-quarter, while public sector deposits decreased 37% quarter-on-quarter. The decrease in private sector deposits was led by time deposits, which decreased 8% or ARS18.8 billion quarter-on-quarter, while demand deposits increased 2% or ARS4.2 billion. Within private sector deposits, peso deposits decreased 1% of ARS3.9 billion, while US dollar deposits decreased 22% or ARS249 million.

As of December 2020, Banco Macro's transactional accounts represented approximately 48% of total deposits. Banco Macro's market share over private deposit as of December 2020 totaled 6.4%. In terms of asset quality, Banco Macro's non-performing total financial ratio reached 0.78%, the coverage ratio measured as total allowances under expected credit losses over non-performing loans under Central Bank rules improved significantly and totaled 479.2%.

Consumer portfolio non-performing loans improved 23 basis points, down to 0.73% from 0.96% in the previous quarter. While commercial portfolio non-performing loans improved 65 basis points in the fourth quarter of 2020, down 0.9% from 1.55% in the quarter. The improvement in commercial non-performing loans can be traced to the write-off of a specific agro exporter client. Asset quality continues to be positively affected by recent measures adopted by the Central Bank of Argentina in the current pandemic COVID-19 context, particularly the 60-day grace period that was added to debtor classification before a loan is considered as non-performing.

In terms of capitalization, Banco Macro's accounted an excess capital of ARS132.1 billion which represented a total regulatory capital ratio of 34.2% and a Tier 1 ratio of 27.1%. It should be noted that on October 21st, 2020, the Special Shareholders' meeting decided on a supplementary dividend of up to ARS3.8 billion. The supplementary dividend is calculated by multiplying ARS20 per share dividend already declared and approved by the shareholders' meeting held in April 2020 by the variation in the Consumer Price Index between April and the date in which the Central Bank's FFO is granted. The ARS3.8 billion from the supplementary dividend were deducted from the shareholders' equity in the fourth quarter of 2020.

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 total deposit ratio reached 90%. Overall, we have accounted for another positive quarter, we continue showing a solid financial position. Asset quality remain under control and closely monitored. We keep on working to improve more our efficiency standards and we keep a well optimized deposit base.

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

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question will come from Ernesto Gabilondo with Bank of America. Please go ahead.

Ernesto Gabilondo -- Bank of America -- Analyst

Hi, good morning, Jorge and Nicolas. Thanks for the opportunity. My question is on your expectations for the payment behavior of the deferred portfolio once clients have finished their grace period. Also can you share with us, what is the percentage of your portfolio that is under a grace period or that is deferred? And what was the amount of additional provisions related to COVID-19 that were yield during 2020? Because I think also in the press release you would also have mentioned that in the fourth quarter, you start to create provisions, but more related to corporates. So if you can separate, how much are related to COVID, how much are related to those corporates? And how do you think you have already created the provisions for the expected NPL peak in the second quarter? Thank you.

Jorge Scarinci -- Chief Financial Officer

Ernesto, good morning. This is Jorge Scarinci. How are you? Thanks for your questions. In terms of the portfolio that we have -- that we have under these 60-day grace period, it's approximately 13.5% of total loans. We complete that, in pesos is approximately ARS34 billion. We can split that between approximately ARS2.1 billion in corporates. And then individuals approximately ARS32 billion. I would say that almost ARS25 billion would be loans and about ARS7 billion in credit cards. And in terms of the additional provisions that we posted in 2020 related to the COVID-19 ARS3.1 billion including corporates and individuals.

Nicolas Torres -- Investor Relations

Is that OK?

Ernesto Gabilondo -- Bank of America -- Analyst

Yeah. So thank you, Jorge. So on the ARS30 billion -- on the ARS34 billion, that is on the grace period, how are your expectations after the client finish this grace period? How much of this will be paying or could be related, just to have an idea is the provisions related to COVID-19 are enough for the year?

Jorge Scarinci -- Chief Financial Officer

I would say that, these 60-day period grace could be -- may be extended by the Central Bank. But this will depend on a declining activity that pick up on the economy. I would say that, the Central Bank is trying to maintain the credit quality health of the system. So this could be extended. Honestly, we don't know, it is going to happen and how long it's going to be -- or the extension of this regulation. I have to say that meanwhile, we are going to maintain the level of provisioning. We are forecasting for 2021 between 2.5% and 3% the cost of risk to our books. We are forecasting for 2021 recovery in the economy in the area of 7% in real terms. And the consensus for inflation, for 2021 is 44%. And so for the moment, we think that these -- today is going to be extended, because we might see some positive recovery figures for the economy starting by late of the second quarter of 2021. That is what the market is expecting.

Ernesto Gabilondo -- Bank of America -- Analyst

Okay, perfect. Thank you. And then just, let me make another question in terms of NIMs. What are you expecting on NIMs considering the subsidies [Phonetic] on loans and the [Indecipherable] on credit cards and the provisional deposits, how should we think of NIMs this year?

Jorge Scarinci -- Chief Financial Officer

That's a good question, Ernesto. Honestly, what we saw in the past, in 2020 was a narrowing of our margin along the industry. We think that at least first and second quarter, might be third quarter, we are going to keep on seeing this level of NIM. We are not expecting an expansion on the NIM. We think that the mix between the increase in lending, and increasing deposits, we are not seeing many -- a big variation in rates and volumes in order to affect the NIM here. So I would assume for 2021, our NIM between what we saw in the third quarter and the fourth quarter kind of an average of that we could see something happen by the end of the year. But honestly, it is not easy to forecast that. So our forecast is approximately on average between the third and fourth quarter of 2020.

Ernesto Gabilondo -- Bank of America -- Analyst

Okay, perfect. Very helpful. Thank you very much.

Jorge Scarinci -- Chief Financial Officer

You are welcome, Ernesto.

Operator

And the next question will come from Juan Recalde from Scotiabank. Please go ahead.

Juan Recalde -- Scotiabank -- Analyst

Hi, good morning Gustavo, Jorge, Nicolas. Thank you for taking my question. I have two questions, one related to the ROE outlook, and the second one related to the other comprehensive income. In terms of the early outlook for 2021, you mentioned that you expect inflation to be around 44%, that's higher than inflation in 2020. So how should we think about the ROE for 2021? What's your base case for ROE in 2021? And the second question related to the -- is related to the OCI, we saw a sizable negative comprehensive income of around ARS3 million I think in the fourth quarter. Can you talk a little bit about what drove that, and what we should expect this losses to reverse in the future?

Jorge Scarinci -- Chief Financial Officer

Hi. Juan, how are you? Related to your first question, the ROE that we are expecting with the scenario that I described before is in real terms between 10% and 15% for 2021. Again we do not speculate inflation, we always take the consensus of the market, for the moment is 44% for 2021. A recovery in the GET [Phonetic] as I mentioned before in the area of 7%. Loans and deposits growing slightly above the inflation would assume between 5% and 10% increase in both loans and deposits above inflation. So that is how we are reaching the 10% to 15% ROE for 2021.

In terms of your second question, there was a change in the accounting of public bonds on sovereign bonds exactly within -- in the 4Q, that was the impact on the oil in the negative. Going forward, I would say in 2021, we are going to see a much, I would say a tiny income statement, because of regulation that was put out by the Central Bank in order to put all the inflation affecting not only the Leliqs, but also the public bonds to put that above the net income line. So we are going to see much tighter income statement in 2021 compared to the one that we saw in 2020.

Juan Recalde -- Scotiabank -- Analyst

Okay. Got it. Thank you.

Jorge Scarinci -- Chief Financial Officer

You're welcome.

Operator

And the next question will be from Gabriel Nobrega with Citi. Please go ahead.

Gabriel Nobrega -- Citi -- Analyst

Hi, everyone. Good afternoon and thank you for the opportunity to ask questions. And so actually, just coming back to this part of profitability, it really called our attention here and that you reached AMR, a real ROE of almost 20% on top of very high capital base and now you are seeing that this is going to compress to around 10% to 15% mainly because of the EBM pressures, which we are seeing on provisions and also because NIMs are going to be sort of flattish. And so I was just wondering, are there any other strategies, which you could maybe implement, be it on the P&L or maybe a faster capital deployments, which could even provide some upside to these ROE figures? And I'll make a second question afterwards. Thank you.

Jorge Scarinci -- Chief Financial Officer

Hi, Gabriel. How are you? Honestly, what we are seeing is, first of all, a higher inflation scenario, than what we are seeing is that, as I mentioned before, the margin is going to remain at least the first three quarters of the year similar level than the one that we saw in the fourth quarter. And in the fourth quarter, part of -- at the beginning of the fourth quarter, we continue having some extra net interest margin, I would say that were measures that were passed by mid or beginning of the fourth quarter.

So no, and I would assume that -- taking into consideration that the conservative scenario and of course the struggle, that we are going to carry out in terms of expenses, trying to maintain expenses similar or below inflation levels. That's why that we are forecasting between 10%, 15% real return. But in terms of the capital that we are going to deploy as we have been showing in the past, we try to deploy capital in those asset that develops or said the best rate, risk return rate for the bank. So, we are forecasting again a recovery starting by late second quarter of the year. So basically, those are the assumption that we have in order to reach these ROE expectations.

Gabriel Nobrega -- Citi -- Analyst

Okay, that's very clear. And that's part of my second question, could you maybe just elaborate on what happened with your effective tax rate because when we look here in the quarter -- in the May estimates, it was around 8%, but in the other quarters, it was between 30% to 35%. So if you could just maybe give us a bit more color of what's happening here? Thank you.

Jorge Scarinci -- Chief Financial Officer

Now, basically the statutory rate, here on the income side is 30%. The thing here is that we made the adjustments on inflation to the income tax in the fourth quarter and that's why we are showing a lower income tax -- effective income tax rate. That was an accounting issue, basically -- but if you have to forecast, going forward consider 30% rate.

Gabriel Nobrega -- Citi -- Analyst

All right. Perfect. Thank you very much.

Jorge Scarinci -- Chief Financial Officer

You're welcome, Gabriel.

Operator

The next question is from Alonso Garcia with Credit Suisse. Please go ahead.

Alonso Garcia -- Credit Suisse -- Analyst

Good morning, everyone. Thank you for taking my question. I wanted to check with you, I mean, a quick question, you mentioned that 13.5% of the total loans were under this original 60 day period grace, that let's until ramping for calculating NPL. So basically picking 90 days to 150 days. So I wanted to check if besides that, if there is any portion of your portfolio that is currently still on the repayment holidays as the ones that you have back in April last year? And also regarding quality, if you could mention, when do you expect the NPL ratio to peak [Phonetic] at which level and from current levels, if you expect the commercial or the retail segment to drive that deterioration? Thank you.

Jorge Scarinci -- Chief Financial Officer

Hi, Alonso. How are you? Launching in category 3 to 5 all of the one that are being included in the 60 day period are included in those categories between 3 to 5. So they are included there. On the question on the recovery on loans, basically what we are seeing is some recovery on the corporate side on export-oriented industries and agribusiness, then we can see some recovery or pickup in construction compared to last year. In terms of individual, some recovery also in consumption in personal loans, but again that is going to happen second quarter afterwards.

Alonso Garcia -- Credit Suisse -- Analyst

Thank you. But I mean in terms of the NPL ratio, do you expect it to pick, I mean, I know it will depend on Central Bank's regulation. But what is your best case on when the NPL ratio will pick and what level do you expect to be that peak and what segment are you most concerned about in terms of asset quality, it's their retail portfolio or is it the commercial portfolio at this point? Thank you.

Jorge Scarinci -- Chief Financial Officer

Yes, it will depend on the extension on this regulation of 60-day grace period. Depending on that, we could see deterioration on the NPL ratio maybe level of between 2 and 2.5 could be, honestly we have to say when that could be happening because it will depends on the extension on the tool. No basically, I would say that, well, last year was a disaster for the world. But for Argentina, I think that was a very bad year, because we had some, apart from the COVID-19, we had some internal issues going on. And therefore the recession was maybe deeper than expected and deeper than in other countries. And what we saw on -- and we are still seeing some consumers having problem for payment basically because some layoffs happened in Argentina and of course the economic activity collapse for every company and also some, on the range of SMEs on the corporates that depending on the industry did -- they are showing field problem to recover. But again, if the scenario is what the system is expecting the consensus is expecting that from second quarter onwards we are going to see a recovery there. We could see some healthier behaviors of SMEs and consumers going forward.

Alonso Garcia -- Credit Suisse -- Analyst

Got it. Thank you.

Jorge Scarinci -- Chief Financial Officer

You're welcome.

Operator

[Operator Instructions] The next question will come from Carlos Gomez with HSBC. Please go ahead.

Carlos Gomez -- HSBC -- Analyst

Hi, good afternoon. Could you reiterate the comment about the tax rate, we have seen them higher for most of your competitors, but lower in your case. So I wanted to understand the discrepancy. And also if you continue to see a 30% tax rate on inflation adjusted results for the coming one or 2 years. And because in profitability, so you are targeting 10% to 15% in real ROE for next year. What could change that more? Is it more growth or the elimination of regulations or lower inflation?

Jorge Scarinci -- Chief Financial Officer

Hi, Carlos. How are you? No I think, commented before, basically an accounting issue that we made all the adjustments on inflation to this line in the fourth quarter, but going forward, as I mentioned before, you can use the 30% rate in order to forecast our P&L. In terms of, yes, we could see that, I mean this 10% to 15% ROE expectations is based on what I commented before, a 44% inflation as a consensus for the season here in Argentina. I would say that, yes, if we see low inflation, we are going to be above the 15% for sure in terms of return. And if there is a recovery, higher than the one that we are expecting, the impact could be of course positive, but less than the impact of a lower inflation in Argentina. So our P&L is more sensitive to inflation, then a recovery considering that the current interest rates on loans and deposits.

Carlos Gomez -- HSBC -- Analyst

Okay, that's clear. And if I can follow up. You also mentioned that interest rate look to be stable through the third quarter. I mean that seems to imply that you think that by the end of the year, we might see some type of adjustment in macroeconomic policy. It's very hard, but what are you ambition and then how are you preparing yourself?

Jorge Scarinci -- Chief Financial Officer

I mean, when you look at what's going on in the financial sector, all the economic books will abide you to increase interest rates and to maybe increase more the lending or asset rates than the borrowing rates. However, we are in Argentina, and of course, we challenge all the economic books and also considering that we have elections, mid-term elections in October. I would assume that the Central Bank will try not to increase interest rates in order not to affect the recovery of the economy and that could be affecting a potential good record in the election for the official party. So that's what we are forecasting.

Carlos Gomez -- HSBC -- Analyst

Thank you very much.

Jorge Scarinci -- Chief Financial Officer

You are welcome, Carlos.

Operator

And the next question comes from Nick Dimitrov with Morgan Stanley Investment Management. Please go ahead.

Nick Dimitrov -- Morgan Stanley -- Analyst

Hi, there, good morning. Just a quick question regarding your plans about the subordinated debts you have, but it's callable in November this year. When I look at your capital ratios, you clearly don't need a subordinated debt. Nonetheless, if [Indecipherable] so we need dollars. I think the market is pretty clear in terms of its expectations, what you're going to do with the bond, but I was just curious to hear your thoughts. Thank you.

Jorge Scarinci -- Chief Financial Officer

Hi, Nick. How are you? According to the level of today interest rates, if we are -- we've not -- I would not call the bond, the bond which are far from the 6.75 [Phonetic] fixed rate into variable step down interest rate. And honestly, we are considering different scenarios, which is also pretty clear is that even the interest rate that bond could have in this scenario, which is a lower than the 6.75 quarters, is just also true that for the moment, we cannot apply those funds to an attractive asset.

So we are considering different scenarios for this bond. Again, this is the call date for this bond is the 5th of November of this year. So we still have some -- what's happening in the interest rates and also on maybe some potential demand on dollar denominated loans that could be, I would alternative -- or a location of those funds, but for the moment, we are not seeing that demand for dollar denominated loans.

Nick Dimitrov -- Morgan Stanley -- Analyst

Right. And you mentioned different scenarios. Can you share your thoughts regarding what those scenarios could be?

Jorge Scarinci -- Chief Financial Officer

One is, calling the bond, the other one is not calling the bond. And another one could be after the call date, to buyback the bond, partially it will depend on market condition, and the rates on the economic activity in Argentina. So many assumptions to put in the equation.

Nick Dimitrov -- Morgan Stanley -- Analyst

Excellent. Thank you.

Jorge Scarinci -- Chief Financial Officer

You're welcome.

Operator

And the next question will be from Rodrigo Nistor with AR Partners. Please go ahead.

Rodrigo Nistor -- AR Partners -- Analyst

Hi, good morning and thank you for taking my question. I would like to have your view on Central Bank policies that are affecting Bank's profitability like flow rates on deposits, credit lines with negative real rates. Do you expect them to remain in place for a long time, also your assumptions take into account the continuity of these policies? And a follow-up on that, in this highly regulated context, what's your commercial strategy, does it make sense to gain market share? Thank you.

Jorge Scarinci -- Chief Financial Officer

Hi, Rodrigo. For the moment we are assuming that these regulations are going to be maintained. Of course, depending on the monthly inflation, evolution of Argentina, we could see some fine-tuning. But again, we are working with this scenario that the Central Bank does not want to change a lot. It monetary strategy going forward. And so, we are assuming that in a big portion of these 2021, we are going to have to live with this regulations.

And in terms of the commercial view, I think that's one, you can see what's happening in part of 2020 that we decrease in real terms in our lending portfolio, because we were not seeing that being aggressive was a good strategy for the bank. And of course, for the Bank's profitability. So going forward, we are going to see it is profitable for the Bank to increase share, we are going for that. If not, we're going to continue as the last two-quarter of the year. What we are assuming is that the recovery in the country it's going to be a positive incentive for the Bank to maybe margin increase in market share with a positive impact on the P&L.

Rodrigo Nistor -- AR Partners -- Analyst

Okay, thank you.

Jorge Scarinci -- Chief Financial Officer

You're welcome.

Operator

Ladies and gentlemen, there are no further questions at this time. This concludes our question-and-answer session. I would now like to turn the conference back over to Nicolas Torres for final considerations.

Nicolas Torres -- Investor Relations

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

Operator

[Operator Closing Remarks]

Duration: 40 minutes

Call participants:

Nicolas Torres -- Investor Relations

Jorge Scarinci -- Chief Financial Officer

Ernesto Gabilondo -- Bank of America -- Analyst

Juan Recalde -- Scotiabank -- Analyst

Gabriel Nobrega -- Citi -- Analyst

Alonso Garcia -- Credit Suisse -- Analyst

Carlos Gomez -- HSBC -- Analyst

Nick Dimitrov -- Morgan Stanley -- Analyst

Rodrigo Nistor -- AR Partners -- Analyst

More BMA analysis

All earnings call transcripts