Banco Macro S.A. ADR (representing Ten Class B Common Shares)

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's 4th Quarter 25 earnings conference call. We would like to inform you that the 4Q25 press release is available to download at the Investor Relations website of Banco Macro at www.macro.com.ar. Also, this event is being recorded and all participants will be in list and 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 Scarinchi, 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.

Thank you, and good morning. Good morning, and welcome to Banco Macros' fourth quarter 2025 conference call. Any comment we may make today may include forward written statements, which are subject to various conditions, and these are provided in our 20-act, which we will file to the SEC, and it's available on our website. For report 2020-2025, we'll release what we distributed yesterday, and it's available on our website. All figures are acknowledged on BankPexos and have been restated in terms of the measure and units performed at the end of the reporting period. As of 2020, the Bank began reporting shots of high hyperinflation accounting in accordance with IFRS IAS 29, as established by the Central for each period from December 31st, 2025. I will now briefly comment on the advanced quarter of 2025 financial results. In the fourth quarter of 2025, NACMA gross net income totaled 100 billion pesos, 297 billion pesos in fiscal year 2025. The problem from the loss posted in the previous quarter. The result was 26% of 34.4 billion pesos 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 82.9 billion pesos of normal current expenses in fourth quarter 2025, net income would have totaled 183 billion pesos and 393.7 billion pesos through fiscal year 2025. And accumulated ROE and ROA would have been 6.6% and 1.8% respectively. In fiscal year 2025, net income totaled 290.7 billion pesos, 32% lower than in fiscal year 2024, total comprehensive income totaled 303 billion pesos, and was 1% higher than in fiscal year 2024. In the fourth quarter of 2025, 82.9 billion pesos restructuring expenses were recorded related to our refining plans and provisions for seven statements. Excluding non-recurring expenses, fourth quarter 25 net income would have been and fiscal year 2025 net income would have totaled 393.7 billion pesos, excluding the third quarter and fourth quarter 2025 non-recurring expenses, representing an accumulated ROE and ROA of 6.6% and 1.8% per sector. In the fourth quarter of 2025, operating income before general and initial and present expenses totaled 1.17 billion pesos, 39% of that 324.2 billion pesos higher than than in the third quarter of 2025, and 9% from $94.4 billion, so it's higher than in the same period of last year. In fiscal year 2025, net operating income before general administrative and personal expenses totaled $4.1 trillion, 33% lower than in fiscal year 2024. In the fourth quarter of 2025, provision for loan losses totaled $169.3 million, 1% from $1.8 billion, lower than in the third quarter of 2025. On a yearly basis, provision for loan losses increased 243% or 120 billion pesos. In fiscal year 2025, provision for loan losses totaled 538.1 billion pesos and were 274% higher than fiscal year 2024. In the quarter, land interest income totaled 836.5 billion pesos, 13% or 96.4 billion pesos higher than the third quarter of 2025, and 19% or 135.9 billion pesos higher year in 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 3.1 trillion pesos and was 44% higher than in fiscal year 2004. Interest income increased 8% when interest expense decreased 23%. In the fourth quarter of 2025, interest income totaled 1.4 billion and 7% of 91.6 billion higher than in the third quarter of 2025. 30% of 324.1 billion higher than the fourth quarter of 2024. In fiscal year 2025, interest income totaled 5 trillion, 8% higher than fiscal year 2024. Income from interest on loans and other finances totaled 1.04 trillion pesos, 3% or 33.5 billion pesos higher compared with the previous quarter, mainly due to our 141 basis points increasing 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%, worth $379.3 billion, and in fiscal year 2025, income from interest on loans and other financial totaled $3.61 trillion, 30% higher than in fiscal year 2024. In the fourth quarter of 2024, interest on loans increased 74% to total interest income. In the fourth quarter of 2025, income from government and private securities increased fiscal year 2024. In the fourth quarter of 2025, in terms of FX, the batch strategy to remain short in US 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 US dollars resulted in a net gain of 26.3 billion pesos. In the fourth quarter of 2025, the previous quarter, and 50% higher compared to the fourth quarter of 2024. In fiscal year 2025, interest expense totaled 1.95 trillion pesos, 23% lower than in fiscal year 2024. Within interest expenses, interest on deposits increased 1% from 5.6 trillion pesos per quarter, due to a 168 basis points decrease in the average rate for annual deposits, while the average volume of private sector deposits increased 7%. In the fourth quarter of 2025, the managed net interest margin, including the PEX, 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, Bancomat's net income totaled 192.4 billion pesos, 1% or 1.2 billion higher than in the third quarter of 2025, and was 8% of 18 million pesos higher than the same period of last year. In fiscal year 2025, net income totaled some $167.4 billion, versus 20% higher than in fiscal year 2024. In the quarter, other operating income totals of $17.3 billion, versus 3% for 2.1 in a lower than in the third quarter of 2005, due to lower other income and lower other service fiscal year 2025, hourly rate of income toward 282.1 billion pesos, and change from fiscal year 2024. The fourth quarter of 2025, bank members have measured the expenses, plus employee benefits, total of 4.4 billion pesos, 15% of 54.8 billion pesos higher than the previous quarter. If you higher the employee benefits, which increased 18% and compared to fiscal year 2024. Employee benefits increased 18% for 45.8 billion pesos quarter-on-quarter. Compensation and benefits increased 156% for 68.7 billion pesos. In the fourth quarter of 2025, the bank recorded 82.9 billion pesos reserve economic expenses related to early retirement plans and severance payment provisions. Excluding reserve economic expenses and and excluding restructuring expenses, employee benefits would have been 7% or 15.4 billion pesos lower. In fiscal year 2025, employee benefits associated with personnel involved in restructuring expenses totaled 49 billion pesos. 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 one year ago. In the fourth quarter of 2025, It is worth mentioning that during fiscal year 2005, Banco Macro reduced its branch network by 75 branches down to 444 branches from 519 branches in December 2024 and reduced the headcount by 514 employees. All this was achieved while gaining market share, both in private sector loans and private sector deposits. 6 billion pesos higher than the last posted in the third quarter of 2025, and 5% of 13.2 billion lower than the last 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 587% in the third quarter of 2025. In fiscal year 2025, the results from the net monetary position took a 1.5%. Nutrition in 2025 reached 31.5% compared to the 117.8% registered in 2024. In the fourth quarter of 2025, McManus effective income tax rate was 47.2%. And in 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's total financing rate quarter and increased 40% of 3.1 trillion pesos year-on-year. In the fourth quarter of 2025, Peso financing increased 2% or 196.4 billion pesos, 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 is important to mention that VAT marks market share over private sector loans as of December On the funding side, total deposits increased 8% from 958.1 billion pesos per quarter, totaling 13.7 trillion pesos, and increased 24% to 2.6 trillion pesos year-on-year. Private sector deposits increased 11% to 1.26 trillion pesos per quarter, while public sector deposits decreased 33% to 310.4 billion pesos per quarter. The increase in private sector deposits was led by 10 deposits which increased 17% from 978.5 billion pesos while even deposits increased 5% of their 308.1 billion pesos quarter-on-quarter. In the quarter, personal deposits increased 3% or 230. 90 basis points higher than in December 2024. In terms of asset quality, the bank's non-performance total financial ratio reached 3.87%, the covered ratio measured as total allowances under expected trading laws over non-performing loans, and the second bank's growth reached 119.86%. percent in the third quarter of 2025. In terms of capitalization, La Comalco accounted an excess capital of 3.6 trillion pesos, which represented a capital and deposit ratio of 30.6 percent and a tier one ratio of 30.6 percent. The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate, liquid assets and deposit ratio reached 73 percent. Overall, La Comalco accounted for another positive quarter. We continue to show a solid financial position, asset quality remained under control a close we keep on working to improve more RPC standards and we keep our optimized deposit base. At this time, we would like to take the questions you may have.

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, please don't raise your hand. You can 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.

Hi, Tim. Thank you for the opportunity. I have a first question here on your guidance. I just wanted to know if there's an update on the self-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 things in ROE. So I just wanted to check if any of these variables in your view have changed. I know it's a very fluid environment in Argentina, so just checking on that. And then a second question, just very quick. We saw strong security gains recovering from public securities. So, I just wanted to understand how, in your view, would this be considered or how much would be considered recovering in nature and how much stemming from the volatility that we have in the election cycle?

Thank you. Hi, Brian. This is Jorge Canizzi. How are you? Yes, and 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 to 3%. And also, in addition to that, there is also the consensus is estimating a higher inflation for 26 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%. So, due to those, I mean, modifications on those two macroeconomic variables, we are also fine-tuning our guidance for 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. And we expect some other of this type to come between first and second quarter of 26. So in terms of, I would say, adjusted ROE for 26, we are working with 11 of 8% area, basically in terms of ROE and in terms of ROA close to 1.8 to 2% area. Right. So 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 week quarter that we posted in 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. And 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. So I would attribute most of these to the repricing that we saw in the first quarter as a kind of a policy defect compared to the one that we saw in the third quarter of last year.

No, 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?

Well, first, we continue to hold a almost 24% of total assets in terms of securities that could be used in case of that we need to find out the gap between the increasing loans and deposits. Even though that, we continue to have a loan to deposit ratio of course below 100%. So even though in relative terms, we are expecting to grow more in loans and in deposits, but in absolute terms, the difference is not going to be that much. And 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.

Super clear. Thank you, Tim.

You're welcome.

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

Hi, team. Thank you for taking my questions. First off, I mean, we saw some continued deterioration in consumer asset quality, and it also seems like the macro scenario is still a bit tougher, but that there was some incremental improvement in cost of risk. So 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, or do you see that kind of deterioration coming back? And then 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? And what do you as a bank really need to see to give you greater certainty going forward? Thank you.

Hi, Lindsay. 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 the 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 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 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 25. In terms of, maybe Jorge, if I may add to that, this is Juan Palma.

We took early action during 2025 by constraining the loan origination back from April last year. What we are seeing is 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 2034. So that recomposition of the portfolio with better new origination is what is actually driving 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. No, it's okay.

And Liz, in terms of your second question, I would say that in the last three, four months, the government's I would say that he's leading the agenda, managing all the political issues going on, like introducing the labor reform at the end of 25, 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 1st of March, President Millet 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. So 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 of what's going to be on the agenda of the government in 2026.

But 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 inflation while maintaining fiscal surplus and solving for the competitiveness of the economy by deregulation. So that's their strategy. They will try to improve the competitiveness of the economy by reducing the Argentina costs, 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. And as Jorge was mentioning, we expect President Millet in his opening speech of the Congress session for this year to outline 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 because the law confirms that the only way to pay salaries or pension payments in Argentina is only through bank accounts, not through wallets or digital accounts. So that's a good outcome for the bank and for the industry as a whole.

Great. Very clear. Thank you so much.

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

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-mark on the securities, like the trading gains. Like this line is always volatile, right, and it's hard to predict, right? But if you can help us understand how to better think this line, how to better model, and what drove, you know, like probably the sovereign bond in Argentina. But I would like to know also what drove the gains during this quarter. And 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. So 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. So just try to understand a little bit, you know, like the message on liability. Thank you.

I'm sorry for your second question. Basically, I mean, I think I answered before why we're expecting a 6% real growth in deposits. economic variables and also on a slightly narrower positive real interest rate expected for 26. Even though that, we are expecting to grow loans by 20% in real terms. This is slightly below what we grew our loan book in in 25. 25 was a great year. 40% in real terms was a great year. And again, We have, as I mentioned before, this securities portfolio that indicates that loans are growing above what we're expecting can be used to finance the gap if deposits are growing at six 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. So 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, ups and downs, that is going to affect the payoff of the bond gains on a quarterly basis.

Thank you. Thank you very much. Super clear.

Our next question comes from Pedro Leduc from Itaú PBA. Please, Mr. Leduc, your microphone's open.

Hi, guys. Thank you very much for taking my question. We see NIMS recovering almost halfway here. At the same time, we're seeing still some credit quality pressures. Question to you is when we think about 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 2026. Thank you.

Hi, Pedro. I would say this is 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. So we finished 25 with a net interest margin on the area slightly above 20 and 21 and a half across. We're seeing this maybe in the level of 20 for 26. And as an opposite effect, we are seeing slightly below cost of risk in 26 compared to 25. So, overall, I would say that slight compression on the NIEM adjusted by credit quality in 26.

Versus the average of 25? No, but from the starting points, no?

Yeah, from the starting points, yes.

Okay, appreciate it. Thank you.

You're welcome.

Our next question comes from Pedro Offenhanden from Lighting Securities. Please, Mr. Pedro, your microphone's open.

Hi, Tim. Thank you for the call. I wanted to ask, 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?

So maybe you can talk, Jorge, about the restructuring costs we booked in 2025 and how much of that is still to benefit 2026. And we can talk about what to expect going forward. Maybe I can take both of them. From the 82 billion pesos that we booked in 25 concentrated in the fourth quarter, there are still 36 billion of that that will help personnel exits that will benefit 26. In terms of additional restructuring costs, you should expect similar numbers for the following orders. But 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. So, the likes of reduction in personal debt won't be 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 sense, reporting or talking about reported and adjusted results and positive because it will end the year 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.

Okay, super clear. Thank you very much.

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

Now it is. Okay, thank you. Thank you for the call. First, to confirm what you said earlier, which is that adjusting for these restructuring charges, you think that something like an 80% ROE for this year is realistic. Second, I would like to know if you have any update on your exciting acquisition of personal pay. Any update that you can give us versus the call that you had two or three weeks ago. And 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. Today, when do you see the trend breaking and starting to see some more activity in the system? Thank you.

Thank you, Carlos. On the first question, yes, we think that including all these restructuring charges and all the guidance in terms of growth in both loan deposits, etc., we are expecting to to deliver an adjusted ROE in the area of 8% in 26. I'm going to the third question. I mean, 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. But of course, what we are not seeing for the moment is the economy growing at very high rates. So the guidance that we are giving is like between maintaining share and gaining a little bit of basis points in share. 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 close and deposits. So the idea is to continue in that path going forward, but of course we need the macro economy of Argentina to push harder in order to see a high level of long-growth.

In terms of personal pay, I can comment on that, Jorge, thank you. Yeah, we announced the acquisition of 50% of personal pay, which is Telecom's wallet, there was a cash-in transaction, so all our equity investment went into the company, to develop the company. This will be built as a bank-as-a-service business, where we will, on one hand, work on engaging the around 30 million customers that Telecom has, to use the wallet and then do financial intermediation with a bank as a service model. As I think I've explained, we've talked about this with some of you in the specific call we had on personal pay about three weeks or four 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. So we are considering those options while we build the technology and the services to connect the wallet with the bank as a service. So more to come on this front and we will update you accordingly once we know how exactly this bank as a service model will be built.

Thank you, Jorge.

Welcome. Our next question comes from Marcus Seru from Alaria. Please, Mr. Seru, your microphone is open.

Hi. Thank you for the presentation. I wanted to ask regarding the restructuration 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 restructuration charges?

I would say that in terms of both headcounts and branches We're expecting a reduction in both similar levels than the one that we saw in 2025, just to give you some guidance there. And I would say that the impact on ROE in terms of these restructuring charges are approximately three percentage points. That is what we are calculating on 26, on the impact on restructuring charges on ROE.

Okay, so just to check, reported ROE will be around 5%, then, right?

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

Thank you.

Welcome.

Our next question comes from Matias Gattarusi from AdCap. Please, Mr. Gattarusi, your microphone is open.

Hi. I wanted to ask you a question about the recent rise in dollar liquidity in the system. Has 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?

So I will answer from the bank's perspective. Then there is the question, which is around the enablement of this, which is a question around regulation. So as I listen to your question, I understand you're well versed on how the regulation is today. So 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. So that limits your ability to deploy dollar deposits to only those type of customers. With your you can lend to anyone. The reality is that if you take the total deposits in the system, denominated in dollars, they move from being one-fourth of total deposits, measured all in dollars, 25%, to now 37%. So, there's an advancement of 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 of regulation, and I cannot speak to that, we are prepared to lend, because it will be, if the regulation changes, then it will be up to each bank to define the appetite 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 dollar lending capacity. So 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. But we depend on the regulation to change or to evolve to take advantage of that opportunity.

Great. Thank you so much.

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

Thank you. Hi, good morning, Juan, Jorge, and Nicolas. Thanks for the opportunity to ask questions. And congrats on your results, very close to a recurring ROE of 7% in 2025, excluding the restructuring costs. My first question is a follow-up on the 2026 guidance. Any color on MPLs? Can you confirm you have reached the MPO peaks and whether you see them trending down in 2026? Any color in terms of income growth and also in recurring OPEX growth, so removing the restructuring costs, how do you see recurring OPEX growth? And also, when do you see the ROE returning again to high teens? Can you walk us through over the next years? And my second question is on your longer expectations. We have seen a lot of investments announced in Argentina. So in your case, which would be the sectors that you are financing or that you are seeking to finance leveraging on these announcements? And 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. And 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.

How are you? I will try to answer all your questions. 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 the average in 25. We're expecting also FDLs to go in the area of between mid to low threes. in accordance with the 5.2% cost of risk that we are expecting for 26 compared to the 5.6% that we saw in 25. Basically, in terms of low-growth that you are onto asking, I would say that, yes, there are some investments 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 27, 28, etc. Of course, and 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. Of course, it is pretty sure that the bank wants to make the best use of this excess capital, and we have been trying to grow as much as we can in the past, and we're good 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 proposed to the shareholder's meeting. And of course, we have to wait for the central bank to see if that dividend is going to be paid in one installment, three, six, or whatever. But again, we are working in order to clean 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 posted or put in place in the past. So it is pretty sure that we are very well prepared and positioned to take advantage of any positive news both in the macroeconomic scenario and also within the financial sector in 26 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, because if 25, 26, 27, Argentina in the three years in a row we are having less than 100% inflation, we are going back to non-inflation adjustment reporting. So we should be reporting nominal numbers and, of course, ROE since 28 onwards. So I think that between 28 and 30, I think that is going to be the year where we're going to see micro-delivery meetings, ROEs, and maybe something about it.

And I would add to Jorge's comment 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. So the restructuring course that we talked about will continue mostly through 26, part in 27, So by the end of 27, entering into full effective 28th, 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 82 billion pesos of restructuring costs are related with costs that in 25 were 49 billion. So, we cannot talk here about future savings of these actions, but you can read into that. So, if we continue with this, you can also read into how much that full effect of restructuring costs could mean in 28. Coupled with what Jorge mentioned about the stopping if Argentina continues in the inflation-reducing trend, moving from real ROEs to nominal ROEs in 28. So by then, I'm pretty confident that we will be able to reach the mid-teen ROEs going forward. You asked, Jorge mentioned, back to the question on financing projects, longer tenures and so forth. Jorge mentioned about the capital strength of the bank, I will 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 three to four years. So 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 US dollar denominated debt. But we expect that after that cycle, then 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. So 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.

This is super helpful, Juan and Jorge. Thank you very much. Just to follow up in terms of the MPL, so just to confirm, the MPL already peaked in the fourth quarter, and you're expecting, for example, MPL to go to low to mid 3% and cost to risk to 5.2%. But how should we think about the 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? So just a little bit of color on that.

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.

Perfect. Excellent. Thank you very much.

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

Hello, hi guys, thanks for the opportunity. I have a quick on my side, please, just to follow up on Lowlands. If you are already seeing any pickup in Lowlands sequentially, because it has been weak on a quarter-over-quarter base, or if this expects us to rate more towards the second half, and second still on Lowlands, 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? So just some breakdown between both would be good as well. Thank you.

We continue to see most of these sectors, as I mentioned before, energy and within energy, oil, gas, and then you have mining, agribusiness sectors, Those are the most active. The ones that are slugging a little bit are, I would say construction could be infrastructure for the moment, even though prospects for 26 of infrastructure are positive. Maybe massive consuming sectors are also not having a good performance. We expect these sectors as I've commented, to be the other leaders or the worst performance in 26.

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 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 how much we grow in average, but be selective given this significant change in the structure of the microeconomy by sector in order to do it.

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

I think, well, always the first quarter is the seasonally lowest, so I think that it's going to be in a gradual increased trend towards the end of 26.

Okay, great. Thank you very much.

Welcome. Just as a reminder, if you wish to ask a question, please use the Q&A button or click on the Raise Hand button. Wait while we'll pool 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. Nicholas Tovis for any final remarks.

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.

Banco Macro's fourth quarter 25 conference call is now closed. You can disconnect now on and have a wonderful day.