Growing loans without hurting asset quality key challenge for Macro in 2011 - Moody's

Thursday, March 31, 2011

Growing its loan portfolio without deteriorating its asset quality will be key for Argentina's Banco Macro (NYSE: BMA) to keep increasing its recurring net income in 2011, Moody's VP and senior credit officer María Andrea Manavella told BNamericas.

"Obviously this is not specific to Banco Macro, but taking into consideration that it has one of the largest franchises in the country, it's clearly a fundamental task for them," she said.

On Wednesday (Mar 30), the agency changed to positive from stable the outlook on the bank's D financial strength rating (BFSR), as well as on its Ba2 global local currency deposit rating, supported by Macro's strengthened business franchise, which has boosted its consolidated financial fundamentals, including profitability and asset quality.

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The bank's lending to the private sector grew 40% to 16.4bn pesos (US$4.05bn) as of end-December, compared with the same time in 2009, with asset quality improving to 2.09% from 3.23% a year ago.

At Macro's latest conference call, CFO Jorge Scarinci said the bank is projecting loans to expand by 30% this year, mainly fueled by retail lending.

Thanks to successive acquisitions, including several provincial banks, Banco Macro is currently the second-largest domestically owned private bank in Argentina, with US$7bn in assets, equivalent to a 6% market share and a nationwide footprint of 404 branches, especially in the northwest of the country.

Banco Macro's net income totaled 274mn pesos in 4Q10, 13% higher than in the same quarter in 2009.

To read Moody's full report in English, go to this link