Earnings Call Transcript - BMA Q4 2025

Nicolas Torres, Investor Relations

Thank you, and good morning. Good morning, and welcome to Banco Macro's Fourth Quarter 2025 Conference Call. Any comments 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 2025 press release was distributed yesterday and it's available on our website. All figures are in Argentina pesos and have been restated in terms of the units referring 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 recent comparison, figures of previous quarters have been restated behind IAS 29 to reflect the accumulated effect of inflation adjustment for each period through December 31, 2025. I will now briefly comment on Banco's fourth quarter 2025 financial results. In the fourth quarter 2025 Banco Macro's net income totaled ARS 100 billion, ARS 290.7 billion in fiscal year 2025 recurring 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 our assets were 5.1% and 1.4%, respectively. Excluding ARS 82.9 billion of nonrecurring expenses in the fourth quarter of 2025, net income would have totaled ARS 183 billion and ARS 393.7 billion in 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 the fiscal year 2024. In the fourth quarter of 2025, ARS 82.9 billion restructuring expenses were recorded related to our retirement plans and provisions for severance statements. Excluding nonrecurring expenses fourth quarter '25 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 nonrecurring expenses. Representing an accumulated ROE on our rate of 6.6% and 1.8% respectively. In the fourth quarter of 2025, operating income before general, administrative and personnel expenses totaled ARS 1.17 trillion, 39% or ARS 324.2 billion higher than in the third quarter of 2025 and 9% or ARS 94.4 billion higher than in the same period of last year. Fiscal year 2025, net operating income before general, administrative and personnel expenses totaled ARS 4.1 trillion, 33% lower than fiscal year 2024. In the fourth quarter of 2025, provision for loan losses totaled ARS 169.3 million, 1% from ARS 1.8 million lower than in the third quarter of 2025. On a yearly basis, provision for loan losses increased 243% or ARS 120 million. In Fiscal year 2025, provision for loan losses totaled ARS 538.1 million 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 giving a 7% increase in interest income and a 1% decrease in interest expense. In fiscal year 2025, net interest income totaled ARS 3.1 trillion and was 44% higher than fiscal year 2024. Interest income of 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 2025, up 30% or ARS 324.1 billion higher than the fourth quarter of 2024. In fiscal year 2025, interest income totaled ARS 5 trillion, 8% higher than fiscal year 2024. Income from interest on loans and other financing totaled ARS 1.44 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%, totaling ARS 379.3 billion and in fiscal year 2025, income from interest on loans and other finance will total ARS 3.61 trillion, 13% higher than the fiscal year 2024. In the fourth quarter of 2024, interest on loans represent 74% of the total interest income. In the fourth quarter of 2025, income from government and private securities stood at 105% to ARS 306 million quarter-on-quarter and decreased 1% or ARS 6.2 million compared with the same period of last year. Fiscal year 2025, income from the government of private securities totaled ARS 176 trillion, 58% lower than fiscal year 2024. The fourth quarter of 2025 in terms of FX, 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 favorable 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 193 trillion, 23% lower than fiscal year 2024. Within interest expenses, interest on deposits decreased quarter-on-quarter due to 168 basis points decrease 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% or ARS 107.6 million. In the fourth quarter of 2025, net interest margin, including FX, was 21.7% higher than the 18% posted in the third quarter of 2025 and lower than 24.7% posted in the fourth quarter 2024. In the fourth quarter of 2025, net income totaled ARS 192.4 billion versus 1% or ARS 1.2 billion higher than in the third quarter of 2025 and was 8% or ARS 89 billion higher than the same period last year. Fiscal year 2025, net income totaled ARS 767.4 million, which was 20% higher than fiscal year 2024. In the quarter, other operating income totaled ARS 72.3 billion, 3% or 2.1% lower than in the third quarter of 2025 due to lower other income and lower service-related fees, which were partially offset by higher income from fees. On a yearly basis, our operating income increased 30%. In fiscal year 2025, our operating income totaled ARS 292.1 billion, a change from fiscal year 2024. In the fourth quarter of 2025, Banco Macro's 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%. 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-on-quarter. Compensation and bonuses increased 156% or ARS 68.7 billion. In the fourth quarter of 2025, the bank recorded ARS 82.9 billion restructuring expenses related to early retirement plans and severance payment provisions. Excluding restructuring expenses, employee benefits would have decreased 8%. On a yearly basis, employee benefits increased by 30% and excluding restructuring expenses, employee benefits would have been 7% lower. In fiscal year 2025, employee benefits associated with personnel involved in restructuring expenses totaled ARS 49 billion. In the fourth quarter of 2025, 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 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 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 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 5.97% in the third quarter of 2025. In fiscal year 2025, the result from the net monetary position totaled ARS 1.05 trillion loss, 66% lower than the one posted in fiscal year 2024. Inflation in 2025 reached 31.5%. In fourth quarter of 2025, Banco Macro's effective income tax rate was 42.7%. In fiscal year 2025, the effective tax rate was 43.1%, higher than the 9.2% registered in fiscal year 2024. Further information is provided in Note 24 of our Financial Statements. In terms of loan growth, the bank's total financing reached ARS 10.71 trillion, decreasing 2% or ARS 211 billion quarter-on-quarter and increasing 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 US dollar financing decreased 20%. In fiscal year 2025, both peso financing and U.S. dollar financing increased 36% and 12% respectively. It is important to mention that Banco Macro's market share over private sector loans as of December 2025 was 8.3%. On the funding side, total deposits increased 8% or ARS 958.1 billion quarter-on-quarter totaling ARS 13.7 trillion and increased 24% or ARS 2.6 trillion year-on-year. Private sector deposits increased 11% or ARS 1.26 trillion quarter-on-quarter while public sector deposits decreased 33% or ARS 310.4 billion quarter-on-quarter. The increase in private sector deposits was offset by time deposits which increased 17% or ARS 978.5 billion while demand deposits increased 5% or ARS 308.1 billion quarter-on-quarter. In the quarter, peso deposits increased 3% or ARS 234.9 billion, while US dollar deposits increased 10%. 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 over private sector deposits as of December 2025 totaled 7.9%, 90 basis points higher than December 2024. In terms of asset quality, Banco Macro's non-performing to total financing ratio reached 3.87%. The coverage ratio, measured as total allowances under expected credit losses over non-performing loans under central 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%. In terms of capitalization, Banco Macro accounted an excess capital of ARS 3.6 trillion, which represented a capital adequacy 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 total deposits ratio reached 73%. Overall, we have accounted for another positive quarter. We continue to show a solid financial position. Asset quality remains under control and closely monitored. We keep on working to improve our efficiency standards and maintain a well-optimized deposit base. At this time, we would like to take the questions you may have.

Operator, Operator

Our first question comes from Brian Flores from Citi.

Brian Flores, Analyst

I have a first question here on your guidance. I just wanted to know if there is 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. So, I just wanted to check if any of these variables in your view has 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 recurring in nature and how much stemming from the volatility that we had in the election cycle?

Jorge Scarinci, CFO

Yes, we are likely going to adjust our guidance slightly based on local economists revising down the real GDP growth for 2026 to between 2.8% and 3%. Additionally, the consensus now estimates a higher inflation rate for 2026, updated from 20% to 27%. Due to these changes in the two macroeconomic factors, we are fine-tuning our growth guidance for 2026. We expect real loan growth of 20% in 2026 and deposit growth of 6% in real terms. In the recent press release, we began to report both reported ROE and ROA and adjusted ROE and ROA due to the restructuring charges in the fourth quarter, with some additional charges expected between the first and second quarters of 2026. For adjusted ROE in 2026, we are targeting around 8%, while for ROA, we’re looking at approximately 1.8% to 2%. Regarding the weak quarter we experienced as of September, it was mainly due to poor performance in the bond portfolio linked to increased volatility around the election occurred on October 27th. However, in the fourth quarter, the trend reversed with declining nominal and real interest rates and a recovery in the local peso securities we hold. I would attribute most of this to the repricing we observed in the fourth quarter, which contrasted the circumstances seen in the third quarter of last year.

Brian Flores, Analyst

No, super clear. Just a quick follow-up on maybe the gap between loans and deposits, right? Because it used to be, I would say, narrower. Now it's widening. So I just wanted to understand, 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 of 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%. So even though in relative terms, we are growing or we are expecting to grow more in loans and 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.

Operator, Operator

Our next question comes from Lindsey Shema from Goldman Sachs.

Lindsey Shema, Analyst

First off, I mean, we saw some continued deterioration in consumer asset quality and 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 is 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?

Jorge Scarinci, CFO

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 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.

Juan Parma, CEO

Maybe Jorge, if I may add to that, this is Juan Parma. We took early action during 2025 by constraining 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. So 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.

Jorge Scarinci, CFO

And Lindsey, in terms of your second question, I would say that in the last 3, 4 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 '25 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 our 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 Milei is going to open the ordinary session of the Congress and he is 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 clear-eyed for 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.

Juan Parma, CEO

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 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. So that's their strategy. They will try to improve the competitiveness of the economy by reducing the Argentine cost, 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 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. And 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. So that's a good outcome for the bank and for the industry as a whole.

Operator, Operator

Our next question comes from Yuri Fernandes from JPMorgan.

Yuri Fernandes, Analyst

Congratulations on the profitability recovery this quarter. I would like to gain some insight into the mark-to-market on securities, particularly regarding trading gains. This area tends to be volatile and difficult to predict, so any guidance on how to better approach this line item and what influenced the gains this quarter, especially relating to the sovereign bonds in Argentina, would be appreciated. Additionally, I understand there's been a 6% real growth in deposits, which seems a bit low. The industry had expectations for deposit growth around 20% to 25% in real terms. My question is how do you plan to grow loans with such limited potential for deposit growth? Are there any changes in reserve requirements that we should be aware of? I'm just trying to clarify the situation regarding liabilities.

Jorge Scarinci, CFO

I will start by your second question. Yes. Basically, I mean, I think I answered before, why we're expecting a 6% real growth in deposits on the fine-tuning of macroeconomic variables and also on 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 '25. '25 was a great year, 40% in real term was a great year. And again, we have, as I mentioned before, this securities portfolio that in the case that loans are growing above what we are 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. So that is going to be maintained. You are going to see a kind of 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 pace of the bond gains on a quarterly basis.

Operator, Operator

Our next question comes from Pedro Leduc from Itau BBA.

Pedro Leduc, Analyst

We observe that net interest margins are recovering significantly. However, we are still experiencing some pressures on credit quality. My question is regarding the risk-adjusted net interest margins for 2026. I know the average for 2025 may be somewhat unusual to analyze, but could you provide insight into whether the fourth quarter serves as a solid foundation for assessing risk-adjusted net interest margins and what the factors are that we should consider for 2025 and 2026?

Jorge Scarinci, CFO

I would say just as a starting point, the fourth quarter is kind of a reasonable measure. Going forward, we're expecting a little bit of pressure on rates, maybe on margins a little bit. So we finished '25 with a net interest margin on the area slightly above 20% and 21.5%, approximately. 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 as overall, I would say that slight compression on the NIM adjusted by credit quality in '26.

Pedro Leduc, Analyst

Versus the average of '25, no, but from the starting point.

Jorge Scarinci, CFO

Yes, from the starting point, yes.

Operator, Operator

Our next question comes from Pedro Offenhenden from Latin Securities.

Pedro Offenhenden, Analyst

I wanted to ask about the additional personnel expenses you mentioned for the upcoming quarters. Could you clarify how much of the total restructuring costs were already recognized this quarter?

Juan Parma, CEO

So maybe you can talk, Jorge, about the restructuring costs we booked in '25 and how much of that is still to benefit '26 and we can talk about what to expect going forward. Maybe I can take it both of it. From the ARS 82 billion that we booked in '25 concentrated in the fourth quarter, there are still ARS 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 quarters. 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 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 sense, reporting or talking about reported and adjusted results and reported and adjusted ROEs, but we expect to continue in the following quarters with this action, which we believe is 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 this as inflation goes down, rates go down, margins compress, we are reacting on the cost side to compensate this effect.

Operator, Operator

Our next question comes from Carlos Gomez-Lopez, HSBC.

Carlos Gomez-Lopez, Analyst

First, to confirm what you said earlier, which is that adjusting for the 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 exciting acquisition of Personal Pay? Any update you can give us versus the call that you had 2 or 3 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 20%, but actually 20% is an improvement from where we are today, when do you see the trend breaking and starting to see some more activity in the system?

Jorge Scarinci, CFO

Thanks, 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 et cetera, we are expecting 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 loans 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 loan growth. In terms of Personal Pay...

Juan Parma, CEO

I can comment on that, Jorge, thank you. Yes. We announced the acquisition of 50% of Personal Pay, which is Telecom's wallet. This 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 have to use the wallet and then do financial intermediation with a bank-as-a-service model. As I think have 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 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.

Operator, Operator

Our next question comes from an unknown analyst.

Unknown Analyst, Analyst

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

Jorge Scarinci, CFO

I would say that in terms of both headcount and branches, we're expecting a reduction in both similar levels than the one that we saw in '25 just to give you some guidance there. And 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 '26 on the impact on restructuring charges on ROE.

Unknown Analyst, Analyst

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

Jorge Scarinci, CFO

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

Operator, Operator

Our next question comes from Matias Cattaruzzi from Adcap.

Matias Cattaruzzi, Analyst

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 nondollar earners, if at all?

Juan Parma, CEO

I will respond from the bank's perspective. There's a question regarding the enablement of this matter, which relates to regulation. I understand you're knowledgeable about the current regulatory environment, so I’ll start by explaining it for those who may not be as familiar. In Argentina, lending in dollars is restricted to clients whose revenues are also in dollars, primarily exporters. This limitation confines our ability to utilize dollar deposits exclusively to this customer segment. However, when using our own dollar reserves, we can lend to any client. Currently, dollar-denominated deposits have increased in the banking system, rising from 25% to 37% of total deposits. This constraint can create a bottleneck, as we cannot effectively deploy these deposits. The government is considering options to address this issue. I cannot predict when or if these changes will occur, as they depend on regulatory changes, which I cannot comment on. If regulations change, each bank will decide how to leverage their dollar lending capability. We are optimistic about this potential, as we believe we could collaborate with high-quality clients in both commercial and individual segments to effectively utilize our dollar lending capacity. If regulations evolve to facilitate this, it would likely benefit the bank since we have a positive outlook on the market in this regard. However, we are reliant on regulatory changes to seize this opportunity.

Operator, Operator

Our next question comes from Ernesto Gabilondo from Bank of America.

Ernesto Gabilondo, Analyst

Congrats on 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 when do you see them trending down in 2026? Any color in terms of fee 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 loan growth 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.

Jorge Scarinci, CFO

I will do my best to address your questions. Regarding asset quality, we anticipate a continuation of the trend we observed with lower risk costs compared to the average level in 2025. We also expect non-performing loans to stabilize in the mid to low 3 percent range, aligned with the 5.2 percent risk cost projected for 2026, down from 5.6 percent in 2025. Concerning loan growth, yes, there have been several investment announcements in various sectors in Argentina, primarily in energy and mining. Some of these projects will be initiated this year, while others are planned for 2027 and beyond. This ties into your other question, as we maintain the strongest capital position in Argentina and are prepared to finance these projects in the current and upcoming years. It’s clear that the bank aims to optimize the use of our excess capital. We have been striving to grow as much as possible in the past and intend to continue this trend. Regarding our dividend policy, we maintained a 100 percent payout ratio last year and will propose the same to this year's shareholders' meeting. We will also await the Central Bank's guidance on how the dividend might be distributed—whether in one installment or multiple. We are diligently working to manage this excess capital through a combination of organic and inorganic growth strategies, cash dividends, and, if applicable, buyback programs similar to those we implemented previously. We are well prepared to capitalize on any positive developments in the macroeconomic landscape and the financial sector in 2026 and beyond. 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 would be entering to, again, I would say, nominal reporting because of '25, '26 '27, Argentina in the 3 years in a row we are having less than 100% inflation, we are going back to noninflation adjusting reporting. So we should be reporting nominal numbers and, of course, ROE since '28 onwards. So I think that's between '28 and '30, I think that is going to be the year where we are going to see macro delivery mid-teens ROEs and maybe something above that.

Juan Parma, CEO

I would like to add to Jorge's comments that by the end of 2027, our restructuring program will be fully implemented, allowing us to benefit from the restructuring. The costs we discussed will primarily continue into 2026 and partly into 2027. Therefore, by the end of 2027, as we fully transition into 2028, we will be able to realize the complete benefits of the restructuring program. In our press release and results announcement, you will notice that the 82 billion ARS restructuring costs are related to 49 billion ARS from 2025. Hence, while we can't discuss future savings from these actions explicitly, you can infer the implications. If we move forward in this direction, you can also anticipate the potential impact of the complete restructuring costs in 2028. Additionally, as Jorge mentioned concerning financing projects with longer tenors, I want to highlight the bank's capital strength, as well as its liquidity and funding robustness. Following our successful bond placement last month, we have enhanced our funding ability to support projects for the next 3 to 4 years. Another consideration is that companies in Argentina have benefitted from increased access to capital markets, issuing a significant and record volume of U.S. dollar-denominated debt. However, we expect that after this cycle, private lending will resume, particularly if U.S. rates rise at some point, creating an opportunity. We are maintaining the liquidity necessary to support the energy, mining, and infrastructure sectors in Argentina, which we believe will soon gain momentum.

Ernesto Gabilondo, Analyst

This is super helpful. Just a follow-up in terms of the NPL. So 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%. But 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? So 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 '26, some stable numbers in the first half of '26.

Operator, Operator

Our next question comes from Kaio Prato from UBS.

Kaio Prato, Analyst

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 this is expected to accelerate more towards the second half? And second is still on loans. You mentioned about this reduction in overall growth expectations and talked about GDP. But is there any segment that you are seeing specifically slow down? Or if this is mostly related to our appetite on consumers? So just some breakdown between both would be good as well.

Jorge Scarinci, CFO

We continue to see more service 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 '26 of infrastructure are positive. Maybe massive consuming sectors are also not having a good performance. We expect these sectors, as I commented to be the other leaders or the worst performance in '26.

Juan Parma, CEO

I would also add that there is a significant binary situation regarding credit quality and risk in an economy that is opening up, although deregulation will eventually help by lowering costs in Argentina. It's evident that some sectors will thrive while others will struggle. The sectors likely to thrive include mining, energy, agriculture, as well as some aspects of services and retail commerce if the economy begins to improve. The manufacturing sector is currently in focus, and specific areas like textiles, clothing, and automotive are facing challenges due to the economy opening up. Therefore, it’s important to consider not just the overall growth rate, but to be selective given the substantial changes occurring in the microeconomic structure by sector in Argentina.

Jorge Scarinci, CFO

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

Operator, Operator

There are no more questions at this time. This concludes the Q&A section. I will now turn it over to Mr. Nicolas Torres for any final remarks.

Nicolas Torres, 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, Operator

Banco Macro's Fourth Quarter '25 Conference Call is now closed. You can disconnect now and have a wonderful day.