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6-K 1 tm2316549d1_6k.htm FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

 

 

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

May 24, 2023

 

 

 

Commission File Number: 001-32827

 

 

 

MACRO BANK INC.

(Translation of registrant’s name into English)

 

 

 

Av. Eduardo Madero 1182

Buenos Aires C1106ACY

Tel: 54 11 5222 6500 

(Address of registrant’s principal executive offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes o No x

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes o No x

  

 

 


 

 

BANCO MACRO SA

 

Financial Statements as of December 31, 2022 together with the Independent Auditor’s Reports on Financial Statements

 


 

BANCO MACRO SA
 
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022
 
CONTENT
 
 
Cover sheet
 
 
Consolidated Financial Statements
 
Consolidated statement of financial position
Consolidated statement of income
Consolidated statement of other comprehensive income
Consolidated statement of changes in shareholders’ equity
Consolidated statement of cash flows
 
 
Notes to the consolidated Financial Statements  
 
Note 1: Corporate information
Note 2: Operations of the Bank
Note 3: Basis for the preparation of these Financial Statements and applicable accounting standards
Note 4: Contingent transactions
Note 5: Derivative financial instruments
Note 6: Repo transactions
Note 7: Other financial assets
Note 8: Loans and other financing
Note 9: Loss allowance for expected credit losses on credit exposures not measured at fair value through profit or loss
Note 10: Financial assets delivered as guarantee
Note 11: Equity instruments at fair value through profit or loss – Prisma Medios de Pago SA
Note 12: Fair value quantitative and qualitative disclosures
Note 13: Business combinations
Note 14: Investment in associates and joint arrangements
Note 15: Other non-financial assets
Note 16: Related parties
Note 17: Deposits
Note 18: Other financial liabilities
Note 19: Leases
Note 20: Provisions
Note 21: Other non-financial liabilities
Note 22: Employee benefits payable
Note 23: Analysis of financial assets to be recovered and financial liabilities to be settled
Note 24: Disclosures by operating segment
Note 25: Income tax
Note 26: Commissions income
Note 27: Differences in quoted prices of gold and foreign currency
Note 28: Other operating income
Note 29: Employee benefits
Note 30: Administrative expenses
Note 31: Other operating expenses
 

 


 

BANCO MACRO SA
 
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022
 
CONTENT (contd.)
 
 
Notes to the consolidated Financial Statements (contd.)
 
Note 32: Additional disclosures in the statement of cash flows
Note 33: Capital stock
Note 34: Earnings per share – Dividends
Note 35: Deposit guarantee insurance
Note 36: Restricted assets
Note 37: Trust activities
Note 38: Compliance with CNV regulations
Note 39: Accounting items that identify the compliance with minimum cash requirements
Note 40: Penalties applied to the entity and summary proceedings initiated by the BCRA
Note 41: Corporate bonds issuance
Note 42: Off balance sheet transactions
Note 43: Tax and other claims
Note 44: Restriction on dividends distribution
Note 45: Capital management, corporate governance transparency policy and risk management
Note 46: Changes in the Argentine macroeconomic environment and financial and capital markets
Note 47: Events after reporting period
Note 48: Accounting principles – explanation added for translation into English
 
 
Consolidated exhibits
 
Exhibit A: Detail of government and private securities
Exhibit B: Classification of loans and other financing by situation and collateral received
Exhibit C: Concentration of loans and financing facilities
Exhibit D: Breakdown of loans and other financing by terms
Exhibit E: Detailed information on interest in other companies
Exhibit F: Change of property, plant and equipment
Exhibit G: Change in intangible assets
Exhibit H: Deposit concentration
Exhibit I: Breakdown of financial liabilities for residual terms
Exhibit J: Changes in provisions
Exhibit L: Foreign currency amounts
Exhibit N: Credit assistance to related parties
Exhibit P: Categories of financial assets and liabilities
Exhibit Q: Breakdown of statement of income
Exhibit R: Value adjustment for credit losses – Allowances for uncollectibility risk

 

 

Separate Financial Statements
 
Separate Financial Statements
Notes to the separate Financial Statements
Separated exhibits

 


 

BANCO MACRO SA
 
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022
 
CONTENT (contd.)
 
Earnings distribution proposal
 

 


 

BANCO MACRO SA

 

Corporate name: Banco Macro SA

 

Registered office: Avenida Eduardo Madero 1182 – Autonomous City of Buenos Aires

 

Corporate purpose and main activity: Commercial bank

 

Central Bank of Argentina: Authorized as “Argentine private bank” under No. 285

 

Registration with the public Registry of Commerce: Under No. 1154 - By-laws Book No. 2, Folio 75 dated March 8, 1967

 

By-Laws expiry date: March 8, 2066

 

Registration with the IGJ (Superintendency of Corporations): Under No. 9777 – Corporations Book No. 119 Volume A of Sociedades Anónimas, dated October 8, 1996

 

Personal tax identification number: 30-50001008-4

 

Registration dates of amendments to By-Laws:

 

August 18, 1972, August 10, 1973, July 15, 1975, May 30, 1985, September 3, 1992, May 10, 1993, November 8, 1995, October 8, 1996, March 23, 1999, September 6, 1999, June 10, 2003, December 17, 2003, September 14, 2005, February 8, 2006, July 11, 2006, July 14, 2009, November 14, 2012, August 2, 2014, July 15, 2019.

 


 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
ASSETS                        
Cash and Deposits in Banks   12   P     250,089,093       335,692,114  
Cash             27,612,616       51,862,712  
Central Bank of Argentina             143,526,540       207,729,609  
Other Local and Foreign Entities             78,937,819       76,087,274  
Other             12,118       12,519  
Debt Securities at fair value through profit or loss   12   A and P     211,054,112       63,125,824  
Derivative Financial Instruments   5 and 12   P     42,899       2,524  
Repo transactions   6 and 12   P     61,929,317       61,176,357  
Other Financial Assets   7, 9 and 12   P and R     57,944,523       68,497,221  
Loans and other financing   8, 9 and 12   B, C, D, P and R     598,601,030       686,328,426  
Non-financial Public Sector             2,206,935       4,628,306  
Other Financial Entities             927,272       2,941,876  
Non-financial Private Sector and Foreign Residents             595,466,823       678,758,244  
Other Debt Securities   9 and 12   A, P and R     737,506,031       557,069,190  
Financial Assets delivered as guarantee   10, 12 and 36   P     30,620,278       34,993,147  
Current Income Tax Assets   25         -       1,058,582  
Equity Instruments at fair value through profit or loss   11 and 12   A and P     839,458       4,245,510  
Investment in associates and joint arrangements   14   E     1,141,599       953,520  
Property, plant and equipment       F     101,863,737       102,991,484  
Intangible Assets       G     17,439,760       16,370,965  
Deferred Income Tax Assets   25         73,569       93,092  
Other Non-financial Assets   15         12,452,870       4,541,843  
Non-current Assets held for sale             8,856,247       6,314,263  
TOTAL ASSETS             2,090,454,523       1,943,454,062  

 

Delfín Jorge Ezequiel Carballo
Chairperson

- 1 -


 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
LIABILITIES                        
Deposits   12 and 17   H, I and P     1,295,395,069       1,147,041,028  
Non-financial Public Sector             109,952,253       109,868,280  
Financial Sector             1,653,447       1,872,336  
Non-financial Private Sector and Foreign Residents             1,183,789,369       1,035,300,412  
Liabilities at fair value through profit or loss   12   I and P     526,027       3,170,711  
Derivative Financial Instruments   5 and 12   I and P     2,371       4,933  
Other Financial Liabilities   12 and 18   I and P     135,091,316       131,278,389  
Financing received from the Central Bank of Argentina and other financial institutions   12   I and P     2,449,342       852,660  
Issued Corporate Bonds   12 and 41   I and P     2,715,556       5,825,893  
Current Income Tax Liabilities   25         10,849,439       684,304  
Subordinated Corporate Bonds   12 and 41   I and P     72,129,837       81,762,819  
Provisions   20   J and R     2,713,078       3,197,675  
Deferred Income Tax Liabilities   25         13,278,200       11,087,721  
Other Non-financial Liabilities   21         42,809,291       93,758,925  
TOTAL LIABILITIES             1,577,959,526       1,478,665,058  
SHAREHOLDERS’ EQUITY                        
Capital Stock   33         639,413       639,413  
Non-capital contributions             12,429,781       12,429,781  
Adjustments to Shareholders’ Equity             173,290,106       173,290,106  
Earnings Reserved             282,844,496       237,309,036  
Unappropriated Retained Earnings             136,606       (17,376,187 )
Accumulated Other Comprehensive Income             31,388       5,590,301  
Net Income for the fiscal year             43,038,519       52,832,766  
Net Shareholders’ Equity attributable to controlling interest             512,410,309       464,715,216  
Net Shareholders’ Equity attributable to non-controlling interests             84,688       73,788  
TOTAL SHAREHOLDERS’ EQUITY             512,494,997       464,789,004  
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES             2,090,454,523       1,943,454,062  

 

The notes 1 to 48 to the consolidated Financial Statements and exhibits A to J, L, N and P to R are an integral part of the consolidated Financial Statements

 

Delfín Jorge Ezequiel Carballo
Chairperson

- 2 -


 

CONSOLIDATED STATEMENT OF INCOME
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
Interest income     Q     612,465,374       439,126,515  
Interest expense     Q     (307,140,282 )     (183,872,424 )
Net Interest Income         305,325,092       255,254,091  
                         
Commissions income   26   Q     75,402,581       72,042,451  
Commissions expense     Q     (7,413,595 )     (6,878,052 )
Net Commissions Income         67,988,986       65,164,399  
Subtotal (Net Interest income plus Net Commissions income)         373,314,078       320,418,490  
                         
Net gain from measurement of financial instruments at fair value through profit or loss     Q     47,846,601       38,576,987  
Profit from sold or derecognized assets at amortized cost         169,626       475,397  
Differences in quoted prices of gold and foreign currency   27       62,273,582       9,053,376  
Other operating income   28       21,176,536       15,259,712  
Allowance for loan losses           (6,558,455 )     (4,782,700 )
Net Operating Income       498,221,968       379,001,262  
                         
Employee benefits   29       (77,638,291 )     (76,906,728 )
Administrative expenses   30       (39,155,671 )     (39,137,679 )
Depreciation and amortization of fixed assets     F and G     (15,248,627 )     (13,880,389 )
Other operating expenses   31       (74,992,991 )     (66,692,124 )
Operating Income         291,186,388       182,384,342  
                         
(Loss) / Income from associates and joint arrangements   14       (113,516 )     170,439  
Loss on net monetary position             (228,573,138 )     (126,481,993 )
Income before tax on continuing operations         62,499,734       56,072,788  
                         
Income tax on continuing operations   25.c)     (19,454,138 )     (3,238,566 )
Net Income from continuing operations         43,045,596       52,834,222  
Net Income for the fiscal year         43,045,596       52,834,222  
Net Income for the fiscal year attributable to controlling interest             43,038,519       52,832,766  
Net Income for the fiscal year attributable to non-controlling interest             7,077       1,456  

 

Delfín Jorge Ezequiel Carballo
Chairperson

- 3 -


 

CONSOLIDATED EARNINGS PER SHARE
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   12/31/2022     12/31/2021  
Net Profit attributable to Parent’s shareholders     43,038,519       52,832,766  
Plus: Potential diluted earnings per common share     -       -  
Net Profit attributable to Parent’s shareholders adjusted as per diluted earnings     43,038,519       52,832,766  
Weighted average of outstanding common shares for the fiscal year     639,413       639,413  
Plus: Weighted average of the number of additional common shares with dilution effects     -       -  
Weighted average of outstanding common shares for the fiscal year adjusted as per dilution effect     639,413       639,413  
Basic earnings per share (in pesos)     67.3094       82.6270  

 

Delfín Jorge Ezequiel Carballo
Chairperson

- 4 -


 

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes     Exhibits     12/31/2022     12/31/2021  
Net Income for the fiscal year                 43,045,596       52,834,222  
Items of Other Comprehensive Income that will be reclassified to profit or loss                            
                             
Foreign currency translation differences in Financial Statements conversion                 (718,989 )     (1,492,767 )
Foreign currency translation differences for the fiscal year                 (718,989 )     (1,492,767 )
                             
Profit or loss from financial instruments measured at fair value through other comprehensive income (FVOCI) (IFRS 9(4.1.2)(a))                 (4,839,924 )     3,779,030  
                             
Profit or loss for the fiscal year from financial instruments at fair value through other comprehensive income (FVOCI)         Q       (3,077,630 )     965,318  
Adjustment for reclassification for the fiscal year                 (4,208,221 )     5,164,359  
Income tax   25.c)           2,445,927       (2,350,647 )
                             
Total Other Comprehensive (Loss) / Income that will be reclassified to profit or loss                 (5,558,913 )     2,286,263  
                             
Total Other Comprehensive (Loss) / Income                 (5,558,913 )     2,286,263  
                             
Total Comprehensive Income for the fiscal year                 37,486,683       55,120,485  
Total Comprehensive Income attributable to controlling interest                 37,479,606       55,119,029  
Total Comprehensive Income attributable to non-controlling interest                 7,077       1,456  

 

The notes 1 to 48 to the consolidated Financial Statements and exhibits A to J, L, N and P to R are an integral part of the consolidated Financial Statements

 

Delfín Jorge Ezequiel Carballo
Chairperson

- 5 -


 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Capital
stock
  Non-capital
Contributions
      Other Comprehensive
Income
  Earnings Reserved                  
Changes   Notes   Outstanding
shares
  Additional
paid-in
capital
  Adjustments
to
Shareholders’
Equity
  Accumulated
foreign
currency
translation
difference in
Financial
Statements
conversion
  Other   Legal   Other   Unappropriated
Retained
Earnings
  Total
controlling
interests
  Total Non-
controlling
interests
  Total
Equity
 

Restated amount at the beginning of the fiscal year

      639,413   12,429,781   173,290,106   1,169,053   4,421,248   94,354,253   142,954,783   35,456,579   464,715,216   73,788   464,789,004  
Total comprehensive income for the fiscal year                                                  
- Net income for the fiscal year                                   43,038,519   43,038,519   7,077   43,045,596  
- Other comprehensive loss for the fiscal year                   (718,989 ) (4,839,924 )             (5,558,913 )     (5,558,913 )
Distribution of unappropriated retained earnings as approved by Shareholders´ Meeting held on April 29, 2022                                                  
Legal reserve                           7,091,317       (7,091,317 )            
Reserve for dividends pending authorization from the BCRA   34                           38,444,143   (27,637,010 ) 10,807,133       10,807,133  
Personal property tax on business corporation                                   (591,646 ) (591,646 )     (591,646 )
Other changes                                           3,823   3,823  
Amount at the end of the fiscal year       639,413   12,429,781   173,290,106   450,064   (418,676 ) 101,445,570   181,398,926   43,175,125   512,410,309   84,688   512,494,997  

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Capital
stock
  Non-capital
Contributions
      Other Comprehensive
Income
  Earnings Reserved                  
Changes   Notes   Outstanding
shares
  Additional
paid-in
capital
  Adjustments
to
Shareholders’
Equity
  Accumulated
foreign
currency
translation
difference in
Financial
Statements
conversion
  Other   Legal   Other   Unappropriated
Retained
Earnings
  Total
controlling
interests
  Total Non-
controlling
interests
  Total
Equity
 
Restated amount at the beginning of the fiscal year       639,413   12,429,781   173,290,106   2,661,820   642,218   94,354,253   228,532,620   (77,162,594 ) 435,387,617   5,493   435,393,110  
Total comprehensive income for the fiscal year                                                  
- Net income for the fiscal year                                   52,832,766   52,832,766   1,456   52,834,222  
- Other comprehensive income for the fiscal year                   (1,492,767 ) 3,779,030               2,286,263       2,286,263  
Distribution of unappropriated retained earnings as approved by Shareholders´ Meeting held on April 30, 2021                                                  
- Cash dividends                               (25,011,252 )     (25,011,252 )     (25,011,252 )
- Absorption of Accumulated loss                                                  
Facultative reserve                               (1,300 ) 1,300              
Facultative reserve for future distribution of earnings                               (59,785,107 ) 59,785,107              
Personal property tax on business corporation                               (780,178 )     (780,178 )     (780,178 )
Other changes                                           66,839   66,839  
Amount at the end of the fiscal year       639,413   12,429,781   173,290,106   1,169,053   4,421,248   94,354,253   142,954,783   35,456,579   464,715,216   73,788   464,789,004  

 

The notes 1 to 48 to the consolidated Financial Statements and exhibits A to J, L, N and P to R are an integral part of the consolidated Financial Statements.

 

Delfín Jorge Ezequiel Carballo
Chairperson

- 6 -


 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   12/31/2022     12/31/2021  
Cash flows from operating activities                    
Income for the fiscal year before income tax         62,499,734       56,072,788  
Adjustment for the total monetary effect for the fiscal year         228,573,138       126,481,993  
                     
Adjustments to obtain cash flows from operating activities:                    
Amortization and depreciation         15,248,627       13,880,389  
Allowance for loan losses         6,558,455       4,782,700  
Difference in quoted prices of foreign currency         (84,617,122 )     (33,568,600 )
Other adjustments         146,428,135       97,880,267  
Net (decrease) / increase from operating assets:                    
Debt Securities at fair value through profit or loss         (147,937,755 )     98,545,297  
Derivative Financial Instruments         (40,375 )     18,739  
Repo transactions         (752,960 )     54,732,918  
Loans and other financing                    
   Non-financial Public Sector         2,421,371       6,000,091  
   Other Financial Entities         2,014,604       2,417,129  
   Non-financial Private Sector and Foreign Residents         76,537,798       55,283,683  
Other debt securities         45,093,362       (66,861,892 )
Financial assets delivered as guarantee         4,372,869       7,029,825  
Equity instruments at fair value through profit or loss         3,406,052       644,162  
Other assets         9,927,205       (14,255,818 )
Net increase / (decrease) from operating liabilities:                    
Deposits                    
   Non-financial Public Sector         83,973       (106,431,724 )
   Financial Sector         (218,889 )     (175,291 )
   Non-financial Private Sector and Foreign Residents         148,488,957       (183,368,916 )
Liabilities at fair value through profit or loss         (2,644,684 )     3,170,711  
Derivative financial instruments         (2,562 )     4,256  
Repo transactions         -       (1,818,749 )
Other liabilities         4,979,837       (11,639,183 )
Income Tax Payments         (2,690,271 )     (21,553,893 )
Total cash from operating activities (A)         517,729,499       87,270,882  

 

Delfín Jorge Ezequiel Carballo

Chairperson

 

- 7 -


 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   12/31/2022     12/31/2021  
Cash flows from investing activities                    
Payments:                    
Acquisition of PPE, intangible assets and other assets         (24,326,413 )     (13,426,064 )
Other payments related to investing activities         (3,823 )        
Control obtained in subsidiaries and other businesses                 (69,450 )
Total cash used in investing activities (B)         (24,330,236 )     (13,495,514 )
Cash flows from financing activities                    
Payments:                    
Dividends         (19,094,765 )     -  
Non-subordinated corporate bonds         (5,096,519 )     (7,966,533 )
Financing to local financial entities         -       (1,546,812 )
Subordinated Corporate Bonds         (4,654,071 )     (5,870,991 )
Other payments related to financing activities         (1,037,329 )     (1,520,684 )
Collections/Incomes:                    
Non subordinated corporate bonds         2,949,563          
Financing to local financial entities         1,954,296       -  
Total cash used in financing activities (C)         (24,978,825 )     (16,905,020 )
Effect of exchange rate fluctuations (D)         126,319,062       52,772,391  
Monetary effect on cash and cash equivalents (E)         (448,538,096 )     (280,977,767 )
Net increase/ (decrease) in cash and cash equivalents (A+B+C+D+E)         146,201,404       (171,335,028 )
Restated cash and cash equivalents at the beginning of the fiscal year   32     603,726,214       775,061,242  
Cash and cash equivalents at the end of the fiscal year   32     749,927,618       603,726,214  

 

The notes 1 to 48 to the consolidated Financial Statements and exhibits A to J, L, N and P to R are an integral part of the consolidated Financial Statements

 

Delfín Jorge Ezequiel Carballo

Chairperson

 

- 8 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

1. CORPORATE INFORMATION

 

Banco Macro SA (hereinafter, the Bank) is a stock corporation (sociedad anónima), organized in the Argentine Republic that offers traditional banking products and services to companies, including those companies operating in regional economies as well as to individuals, thus strengthening its goal to be a multiservice bank. In addition, through its subsidiaries, the Bank performs transactions as a trustee agent, manager and administrator of mutual funds and renders stock exchange services, electronic payments services and granting of guarantees.

 

Macro Compañía Financiera SA was created in 1977, as a non-banking financial institution. In May 1988, it received the authorization to operate as a commercial bank and was incorporated as Banco Macro SA. Subsequently, as a result of the merger process with other entities, it adopted other names (among them, Banco Macro Bansud SA) and since August 2006, Banco Macro SA.

 

The Bank’s shares have been publicly listed on Bolsas y Mercados Argentinos (BYMA) since November 1994; and as from March 24, 2006 they are listed on the New York Stock Exchange (NYSE). Additionally, on October 15, 2015, they were authorized to be listed on the Mercado Abierto Electrónico SA (MAE).

 

Since 1994, Banco Macro SA’s market strategy has mainly focused on the regional areas outside the Autonomous City of Buenos Aires (CABA, for its acronym in Spanish). Following this strategy, in 1996, Banco Macro SA started the process to acquire entities and assets and liabilities during the privatization of provincial and other banks.

 

During 2020 and 2021, the Bank made contributions in the company Play Digital SA for a total amount of 253,557 (not restated). On July 21 and January 17, 2022, the Bank made irrevocable capital contributions for an amount of 245,539 and 130,758 (not restated), respectively. On October 4, 2022, the Bank sold 22,112,340 shares for an amount of 61,889. As a consequence, the Bank’s new interest in this company is 8.9927% (see also note 14). The company’s purpose is to develop and market a payment solution linked to bank accounts held by financial system users in order to bring significant improvement to their payment experience.

 

Additionally, on October 1, 2021, Banco Macro SA decided to exercise a call option to reach 24.99% of the equity interest in Fintech SGR. The amount paid on October 15, 2021 was 33,488 (not restated). As it is explained in note 3 section “Basis for consolidation”, Fintech SGR is a structured entity in which the Bank has control. The purpose of this company is to enable small and medium-sized companies (PyMES, for its acronym in Spanish), to have access to credit by granting guarantees.

 

In addition, on October 1, 2021 Banco Macro SA paid 50,850 (not restated) in order to purchase shares representing 50% of the capital stock and votes of Finova SA. The main purpose of this company is to develop and market the website www.facturbo.com.ar, a digital solution that allows customers to negotiate credit instruments issued and accepted by large companies in favor of small and medium-sized companies (MiPyMES, for its acronym in Spanish). See also note 14.

 

On February 23, 2023, the Board of Directors approved the issuance of these consolidated Financial Statements. Even when the Shareholders’ Meeting has the power to amend these consolidated Financial Statements after issuance, in Management’s opinion it will not happen.

 

2. OPERATIONS OF THE BANK

 

2.1. Agreement with the Misiones Provincial Government

 

The Bank and the Misiones Provincial Government entered into a special-relationship agreement whereby the Bank was appointed, for a five-year term since January 1, 1996, as the Provincial Government’s exclusive financial agent as well as revenue collection and obligation payment agent.

 

On November 25, 1999, December 28, 2006 and October 1, 2018, extensions to such agreement were agreed upon, making it currently effective through December 31, 2029.

 

As of December 31, 2022 and 2021, the deposits held by the Misiones Provincial Government with the Bank amounted to 21,301,169 and 17,672,411 (including 1,615,790 and 2,017,923, related to court deposits), respectively.

 

- 9 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

2.2. Agreement with the Salta Provincial Government

 

The Bank and the Salta Provincial Government entered into a special-relationship agreement whereby the Bank was appointed, for a ten-year term since March 1, 1996, as the Provincial Government’s exclusive financial agent as well as revenue collection and obligation payment agent.

 

On February 22, 2005, and August 22, 2014, extensions to such agreements were agreed upon, making it currently effective through February 28, 2026.

 

As of December 31, 2022 and 2021, the deposits held by the Salta Provincial Government with the Bank amounted to 34,510,592 and 12,575,320 (including 3,456,827 and 4,287,043, related to court deposits), respectively.

 

2.3. Agreement with the Jujuy Provincial Government

 

The Bank and the Jujuy Provincial Government entered into a special-relationship agreement whereby the Bank was appointed, for a ten-year term since January 12, 1998, as the Provincial Government’s exclusive financial agent as well as revenue collection and obligation payment agent.

 

On April 29, 2005 and July 8, 2014, extensions to such agreement were agreed upon, making it currently effective through September 30, 2024.

 

As of December 31, 2022 and 2021, the deposits held by the Jujuy Provincial Government with the Bank amounted to 7,776,867 and 16,415,761 (including 2,224,501 and 3,718,351, related to court deposits), respectively.

 

2.4. Agreement with the Tucumán Provincial Government

 

The Bank acts as an exclusive financial agent and as revenue collection and obligation payment agent of the Tucumán Provincial Government, the Municipality of San Miguel de Tucumán and the Municipality of Yerba Buena. The services agreements with the Provincial and Municipal Governments are effective through years 2031, 2028 and 2025, respectively. As established in the original agreement, the service agreement with the Municipality of San Miguel de Tucumán was extended until 2028.

 

As of December 31, 2022 and 2021, the deposits held by the Tucumán Provincial Government, the Municipality of San Miguel de Tucumán and the Municipality of Yerba Buena with the Bank amounted to 34,684,101 and 34,098,539 (including 9,263,053 and 9,992,623, related to court deposits), respectively.

 

Additionally, the Bank granted loans to the Tucumán Provincial Government, the Municipality of San Miguel de Tucumán and the Municipality of Yerba Buena as of December 31, 2022 for an amount of 524,301, as well as to the Tucumán Provincial Government and the Municipality of Yerba Buena as of December 31, 2021 for an amount of 3,580,730.

 

 

3. BASIS FOR THE PREPARATION OF THESE FINANCIAL STATEMENTS AND APPLICABLE ACCOUNTING STANDARDS

 

Presentation basis

 

Applicable Accounting Standards

 

These consolidated Financial Statements of the Bank were prepared in accordance with the accounting framework established by the Central Bank of Argentina (BCRA, for its acronym in Spanish) in its Communiqué “A” 6114 as supplemented. Except for the exceptions established by the BCRA which are explained in the following paragraph, such framework is based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Argentine Federation of Professionals Councils in Economic Sciences (FACPCE, for its acronym in Spanish). The abovementioned international standards include the IFRS, the International Accounting Standards (IAS) and the interpretations developed by the IFRS Interpretations Committee (IFRIC) or former IFRIC (SIC).

 

- 10 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The transitory exceptions and regulatory guidelines established by BCRA to the application of effective IFRS, that affect the preparation of these consolidated Financial Statements are as follows:

 

a) According to Communiqué “A” 6114, as supplemented, and in the convergence process through IFRS, the BCRA established that since fiscal years beginning on or after January 1, 2020, financial institutions defined as “Group A” by BCRA rules, in which the Bank is included, begin to apply section 5.5 “Impairment” of the IFRS 9 “Financial Instruments” (sections B5.5.1 to B5.5.55), except for the temporary exclusion for the debt securities of the non-financial public sector established by BCRA Communiqué “A” 6847. As of the date of issuance of these consolidated Financial Statements, the Bank is in the process of quantifying the effect of the full application of the abovementioned standard.

 

b) As of December 31, 2021 the Bank measured its holding in Prisma Medios de Pago SA (Prisma), according to the Memorandums received from the BCRA on March 12 and 22, 2021, which established specific guidelines related to measure such holding. Taking into account such guidelines, the Bank adjusted its fair value previously determined (see note 11). In March 2022, the shares related to the abovementioned holding were transferred, recording the profit for this transaction in the quarter ended March 31, 2022. If, for the fair value measurement purpose previously mentioned, IFRS had been applied, the profit or loss for the previous fiscal years and for the fiscal year ended December 31, 2022, should have been modified. However, this situation does not generate differences in the shareholders’ equity as of December 31, 2022.

 

Except for what was mentioned in the previous paragraphs, the accounting policies applied by the Bank comply with the IFRS as currently approved and are applicable to the preparation of these consolidated Financial Statements in accordance with the IFRS as adopted by the BCRA through Communiqué “A” 7642. Generally, the BCRA does not allow the anticipated application of any IFRS, unless otherwise expressly stated.

 

Going concern

 

The Bank’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt on the Bank’s ability to continue as a going concern. Therefore, these consolidated Financial Statements continue to be prepared on the going concern basis.

 

Transcription into books

 

As of the date of issuance of these consolidated Financial Statements, the analytical detail is in the process of being transcribed into the Bank’s inventory book (“Libro Inventario”), general ledger and the consolidated Financial Statements into the Bank’s balance book (“Libro Balances”) of Banco Macro SA.

 

Figures expressed in thousands of pesos

 

These consolidated Financial Statements disclose figures expressed in thousands of Argentine pesos in terms of purchasing power as of December 31, 2022, and are rounded up to the nearest amount in thousands of pesos, except as otherwise indicated (see section “Measuring unit” of this note).

 

Statement of financial position - Disclosure

 

The Bank presents its statement of financial position in order of liquidity, as established by BCRA Communiqué “A” 6324. The analysis referred to the recovery of assets and settlement of liabilities during the 12 months after the reporting date and more than 12 months after the reporting date is disclosed in note 23.

 

Financial assets and financial liabilities are generally reported in gross figures in the consolidated statement of financial position. They are only offset and reported in net figures when there is a legal and enforceable right to offset such financial assets and liabilities and the Management also intends to settle them on a net basis or to realize assets and settle liabilities simultaneously.

 

These consolidated Financial Statements were prepared on a historical cost basis except for certain financial instruments which were valued at fair value through Other Comprehensive Income (OCI) or at Fair Value through Profit or Loss. For further information see Exhibit P “Categories of financial assets and liabilities”. In addition, in the case of derivative instruments (Futures and Forwards) both assets and liabilities were valued at Fair Value through Profit or Loss.

 

- 11 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Comparative information

 

The statement of financial position as of December 31, 2022 and the statement of income and other comprehensive income, the statement of changes in shareholders’ equity and the statement of cash flows for the fiscal year ended December 31, 2022, are presented comparatively with the immediately preceding fiscal year.

 

The figures related to comparative information have been restated to consider the changes in the general purchasing power of the functional currency and, as a result, are stated in terms of the current measuring unit at the end of the reporting period (see the following section “Measuring unit”).

 

Measuring unit

 

These consolidated Financial Statements have been restated for the changes in the general purchasing power of the functional currency (Argentine pesos) of the Bank, as of December 31, 2022, as established by IAS 29 “Financial Reporting in Hyperinflationary Economies” and considering, in addition, specific rules established by BCRA through Communiqués “A” 6651, 6849, as amended, which established the obligation to apply this method, from fiscal years beginning on or after January 1, 2020, and determined as the transition date December 31, 2018.

 

According to IFRS, the restatement of Financial Statements is needed when the functional currency is the currency of a hyperinflationary economy. To achieve consistency in identifying an economic environment of that nature, IAS 29 establishes (i) certain nonexclusive qualitative indicators, consisting in analyzing the general population behavior, prices, interest rates and wages with changes in price indexes and the loss of purchasing power, and (ii) as quantitative characteristic, which is the most used condition in practice, to test if a three-year cumulative inflation rate is around 100% or more. Due to miscellaneous macroeconomic factors, the three-year inflation rate exceeded that figure and the Argentine government goals and other available estimates also indicate that this trend will not be reversed in the short term.

 

The restatement was applied as if the economy had always been hyperinflationary, using a general price index that reflects changes in general purchasing power. To apply the restatement, a series of indexes were used, as prepared and published on a monthly basis by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE, for its acronym in Spanish), which combines the consumer price index (CPI) on a monthly basis published by the Argentine Institute of Statistics and Censuses (INDEC, for its acronym in Spanish) since January 2017 (baseline month: December 2016) with the wholesale prices indexes published by the INDEC until that date. For the months of November and December 2015, for which the INDEC did not publish the wholesale price index (WPI) variation, the CPI variation for CABA was used.

 

Considering the abovementioned indexes, the inflation rate was 94.79% and 50.94% for the fiscal years ended on December 31, 2022 and 2021, respectively.

 

Below is a description of the restatement mechanism provided by IAS 29 “Financial Reporting in Hyperinflationary Economies” and the restatement process for Financial Statements established by BCRA Communiqué “A” 6849, as supplemented:

 

Description of the main aspects of the restatement process for statements of financial position:

 

(i) Monetary items (the ones that are already stated in terms of the current measuring unit) are not restated because they are already expressed in terms of the monetary unit current at the end of the reporting period. In an inflationary period, an entity holding monetary assets generates purchasing power loss and holding monetary liabilities generates purchasing power gain, provided that the assets and liabilities are not linked to an adjustment mechanism that offsets to some extent such effects. The net gain or loss on a monetary basis is included in profit or loss for the fiscal year.

 

(ii) Assets and liabilities subject to adjustments based on specific agreements are adjusted in accordance with such agreements.

 

(iii) Non-monetary items stated at current cost at the end of the reporting period, are not restated for presentation purposes in the statement of financial position, but the adjustment process must be completed to determine, in terms of constant measurement unit, the income or loss produced by holding these non-monetary items.

 

- 12 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

(iv) Non-monetary items carried at historical cost or at current cost at some earlier date before the reporting date, are restated by an index that reflects the general level of price variation from the acquisition or revaluation date to the closing date, proceeding then to compare the restated amounts of those assets with their recoverable amounts. Income or loss for the fiscal year related to depreciation of property, plant and equipment and amortization of Intangible Assets and other non-monetary assets cost are determined over the new restated amounts.

 

(v) When an entity capitalizes borrowing cost in the non-monetary assets, the part of the borrowing cost that compensates for the inflation during the same fiscal year is not capitalized.

 

(vi) The restatement of non-monetary assets in terms of a current measurement unit at the end of the reporting period, without an equivalent adjustment for tax purposes generates a taxable temporary difference and a deferred income tax liability is recognized and the contra account is recognized as profit or loss for the fiscal year. When, beyond the restatement, there is a revaluation of non-monetary assets, the deferred tax related to the restatement is recognized in profit or loss for the fiscal year and deferred tax related to the revaluation is recognized in other comprehensive income for the fiscal year.

 

Description of the main aspects of the restatement process for statements of income and other comprehensive income:

 

(i) Income and expenses are restated from the date the items were recorded, except for those income or loss items that reflect or include, in their determination, the consumption of assets measured at the currency purchasing power from a date prior to that which the consumption was recorded, which is restated using as a basis the acquisition date of the assets related to the item, except for income or losses arising from comparing the two measurements at currency purchasing power of different dates, for which it requires to identify the compared amounts, to restate them separately and to repeat the comparison, with the restated amounts.

 

(ii) The gain or loss from monetary position will be classified based on the item that generated it and will be separately disclosed reflecting the inflationary effects over such items.

 

Description of the main aspects of the restatement process for the statements of changes in shareholders’ equity:

 

(i) As the transition date (December 31, 2018), the Bank has applied the following procedures:

 

(a) The components of equity, except the ones mentioned below, were restated from the dates the components were contributed or otherwise arose according to BCRA Communiqué “A” 6849, for each item.

 

(b) Earnings reserved, including the special reserve for the first-time application of IFRS, were stated at nominal value at the transition date (legal amount not restated).

 

(c) The unappropriated retained earnings were determined as a difference between the restated net asset at the transition date and the other components of equity, restated as disclosed in the abovementioned paragraphs.

 

(d) The accumulated balances of other comprehensive income were recalculated in terms of measuring unit current at the transition date.

 

(ii) After the restatement on the abovementioned transition date in (i) above, all equity components are restated by applying a general price index as mentioned before from the beginning of the fiscal year and each variation of those components is restated from the contribution date or from the moment it was produced in any other way, and the accumulated OCI balances are redetermined according to the items that give rise to it.

 

Description of the main aspects of the restatement process for the statement of cash flows:

 

(i) All items are restated in terms of the measuring unit current at the end of the reporting period.

 

(ii) The monetary gain or losses generated by cash and cash equivalents are separately disclosed in the statement of cash flows after the cash flow from operating investment activities and financing activities, in a separate and independent line, under the description “Monetary effect on cash and cash equivalents”.

 

- 13 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Basis for consolidation

 

These consolidated Financial Statements include the Financial Statements of the Bank and its subsidiaries as of December 31, 2022.

 

Subsidiaries are all the entities controlled by the Bank. The Bank controls another entity when it is exposed, or has rights, to variable returns from its continuing involvement with such other entity, and has the ability to use its power to direct the operating and financing policies of such other entity, to affect the amounts of such returns.

 

This generally happens when there is a shareholding of more than half of its shares having voting rights.

 

Notwithstanding the above, under certain particular circumstances, the Bank may still have control with less than a 50% interest or may not have the control even if it holds more than half of the shares of such other entity.

 

Upon evaluating whether it has power over the controlled entity, and therefore controls the variation of its returns, the Bank shall consider all relevant facts and circumstances, including:

 

- The purpose and design of the controlled entity.

 

- What the relevant activities are and how decisions about those activities are made and whether the Bank has the ability to direct such relevant activities.

 

- Contractual arrangements such as call rights, put rights and liquidation rights.

 

- Whether the Bank is exposed, or has rights, to variable returns from its involvement with such controlled entity, and whether the Bank has the ability to use its power over the controlled entity to affect the amount of the Bank’s returns.

 

The structured entities have been designed to reach a specific business goal and for voting or similar rights not to be the dominant factor in deciding who controls the entity, such as when any voting rights are related to the administrative tasks only and the relevant activities are directed by means of contractual agreements.

 

As explained in note 1, on October 1, 2021, the Bank acquired an investment in Fintech SGR. Even though the Bank holds 49.9939% of Class B shares held by the protector partners, and the 24.99% in the total capital stock of this company, the Bank has the power to direct Fintech’s relevant activities. Therefore, the Bank controls this structured entity and consolidates its Financial Statements together with the risk funds (“Fondo de Riesgo”).

 

Subsidiaries are completely consolidated since the date of the effective transfer of the control over them to the Bank and consolidation ceases when the Bank loses control over the subsidiaries. These consolidated Financial Statements include the assets, liabilities, income and each component of other comprehensive income of the Bank and its subsidiaries. Transactions between consolidated entities are completely eliminated.

 

Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions. However, if a parent company loses control of a subsidiary, it shall derecognize the assets (including any goodwill) and liabilities of the subsidiary, any non-controlling interests in the former subsidiary and other capital components, while any profit or loss derived from the transaction, event or circumstances that resulted in the loss of control shall be recognized as in profit or loss, and any investment retained in the former subsidiary shall be recognized at its fair value on the date control is lost.

 

The Financial Statements of the subsidiaries have been prepared as of the same dates and for the same accounting periods as those of the Bank, using uniform accounting policies consistent with those applied by the Bank. If necessary, adjustments shall be made to the Financial Statements of the subsidiaries so that the accounting policies used by the group are uniform.

 

The Bank considers the Argentine peso as its functional and presentation currency. To such effect, before consolidation, the Financial Statements of its subsidiary Macro Bank Limited, originally stated in US dollars, were translated to pesos (presentation currency) using the following method:

 

a) Assets and liabilities were converted at the reference exchange rate of the BCRA, in force for US Dollars at the closing of business on the last business day of each year.

 

- 14 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

b) Figures related to the owners’ contributions (capital stock, non-capital Contributions and irrevocable capital contributions) were translated applying the effective exchange rates as of the date on which such contributions were paid in.

 

c) Income for the fiscal years ended December 31, 2022 and 2021, were translated into pesos on a monthly basis, using the monthly average of the reference exchange rate of the BCRA.

 

d) Foreign currency translation differences arising as a result of the preceding paragraphs are recognized as a separate component within the Shareholders’ Equity account reporting them in the statement of other comprehensive income, which is called “Foreign currency translation differences in Financial Statements conversion”.

 

On the other hand, non-controlling interests represent the portion of income and equity not directly or indirectly attributable to the Bank. In these consolidated Financial Statements they are disclosed as a separate line in the statement of financial position, the statement of income, the statement of other comprehensive income and the statement of changes in shareholders’ equity.

 

As of December 31, 2022 and 2021, the Bank has consolidated into its Financial Statements the Financial Statements of the following companies:

 

Subsidiaries Principal Place of Business Country Main Activity
Macro Securities SAU (1) Ave. Eduardo Madero 1182 – CABA Argentina Stock exchange services
       
Macro Fiducia SAU Ave. Eduardo Madero 1182 – 2nd floor. CABA Argentina Services
       
Macro Fondos SGFCISA Ave. Eduardo Madero 1182 – 24th floor, Office B–. CABA Argentina Management and administration of mutual funds
       
Macro Bank Limited (2) Caves Village, Building 8 Office 1 – West Bay St., Nassau Bahamas Banking entity
       
Argenpay SAU Ave. Eduardo Madero 1182 – CABA Argentina Electronic payments services
       
Fintech SGR (Structured entity) San Martín 140- 2th floor –CABA Argentina Granting of guarantees

 

(1) Consolidated with Macro Fondos SGFCISA (80.90% equity interest and voting rights).
(2) Consolidated with Sud Asesores (ROU) SA (100% voting rights – Equity interest: 34,063).

 

- 15 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

As of December 31, 2022 and 2021, the Bank’s equity interest and voting rights in the companies it consolidates is as follows:

 

· As of December 31, 2022:

 

    Shares     Bank’s interest     Non-controlling interest  
Subsidiaries   Type   Number     Total capital
stock
   

Voting

Rights

    Total capital
stock
   

Voting

rights

 
Macro Securities SAU   Common     12,885,683       100.00 %     100.00 %                
Macro Fiducia SAU   Common     47,387,236       100.00 %     100.00 %                
Macro Fondos SGFCISA   Common     327,183       100.00 %     100.00 %                
Macro Bank Limited   Common     39,816,899       100.00 %     100.00 %                
Argenpay SAU (1)   Common     341,200,000       100.00 %     100.00 %                
Fintech SGR (Structured entity)   Common     119,993       24.999 %     24.999 %     75.001 %     75.001 %

 

(1) On January 30, 2023, the Bank made a new irrevocable capital contribution in this company for an amount of 330,000.

 

· As of December 31, 2021:

 

    Shares     Bank’s interest     Non-controlling interest  
Subsidiaries   Type   Number     Total capital
stock
   

Voting

rights

    Total capital
stock
   

Voting

rights

 
Macro Securities SAU   Common     12,776,680       99.925 %     99.932 %     0.075 %     0.068 %
Macro Fiducia SAU   Common     46,935,318       99.046 %     99.046 %     0.954 %     0.954 %
Macro Fondos SGFCISA   Common     327,183       99.939 %     100.00 %     0.061 %        
Macro Bank Limited   Common     39,816,899       99.999 %     100.00 %     0.001 %        
Argenpay SAU   Common     341,200,000       100.00 %     100.00 %                
Fintech SGR (Structured entity)   Common     119,993       24.999 %     24.999 %     75.001 %     75.001 %

 

Total assets, liabilities and Shareholders’ equity of the Bank and all its subsidiaries as of December 31, 2022 and 2021 are as follows:

 

Balances as of 12/31/2022  

Banco

Macro SA

    Macro Bank
Limited
   

Macro
Securities

SAU

   

Macro

Fiducia SAU

   

Argenpay

SAU

   

Fintech

SGR

    Eliminations     Consolidated  
Assets     2,057,885,941       16,056,324       33,920,825       197,691       2,534,924       5,311,270       (25,452,452 )     2,090,454,523  
Liabilities     1,545,475,632       11,096,822       23,422,991       4,926       1,598,066       5,198,348       (8,837,259 )     1,577,959,526  
Equity attributable to the owners of the Bank     512,410,309       4,959,502       9,991,335       192,765       936,858       112,922       (16,193,382 )     512,410,309  
Equity attributable to non-controlling interests                     506,499                               (421,811 )     84,688  

 

- 16 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Balances as of 12/31/2021  

Banco

Macro SA

    Macro Bank
Limited
    Macro
Securities
SAU
   

Macro

Fiducia SAU

   

Argenpay

SAU

   

Fintech

SGR

    Eliminations     Consolidated  
Assets     1,913,375,537       17,819,385       29,383,987       238,359       2,307,368       2,717,603       (22,388,177 )     1,943,454,062  
Liabilities     1,448,660,321       12,034,621       22,812,220       5,591       1,353,194       2,627,811       (8,828,700 )     1,478,665,058  
Equity attributable to the owners of the Bank     464,715,216       5,784,764       6,236,163       232,768       954,174       89,792       (13,297,661 )     464,715,216  
Equity attributable to non-controlling interests                     335,604                               (261,816 )     73,788  

 

The Bank’s Management considers there are no other companies or structured entities to be included in the consolidated Financial Statements as of December 31, 2022.

 

Summary of significant accounting policies

 

Below there is a description of the principal valuation and disclosure criteria used for the preparation of these consolidated Financial Statements as December 31, 2022:

 

3.1 Assets and liabilities denominated in foreign currency:

 

The Bank considers the Argentine Peso as its functional and presentation currency. The assets and liabilities denominated in foreign currency, mainly in US dollars, were valued at BCRA benchmark US dollar exchange rate effective as of the closing date of transactions on the last business day of each fiscal year.

 

Additionally, assets and liabilities denominated in other foreign currencies were translated at the repo exchange rate in US Dollars communicated by the BCRA’s dealing room. Foreign exchange differences were recorded in the related Statements of income as “Difference in quoted prices of gold and foreign currency”.

 

3.2 Financial Instruments

 

Initial Recognition and Measurement

 

The Bank recognizes a financial instrument when it becomes party to the contractual provisions thereof.

 

The purchase and sale of financial assets requiring the delivery of assets within the term generally established by the rules and regulations or the market conditions are recorded on the transaction’s trading date, i.e. on the date the Bank undertakes to acquire or sell the relevant asset.

 

At initial recognition, the financial assets and liabilities were recognized at fair value. Those financial assets and liabilities not recognized at fair value through profit or loss, were recognized at fair value adjusted for transaction costs directly attributable to the acquisition or issue of the financial asset or liability.

 

At initial recognition, the fair value of a financial instrument is generally the transaction price. Nevertheless, if part of the consideration received or paid is for something other than the financial instrument, the Bank estimates the fair value of the financial instrument. If the fair value is based on a valuation technique that uses only data from observable markets, the Bank shall recognize the difference between fair value at the initial recognition and the transaction price as gain or loss. When the fair value is based on a valuation technique that uses data from non-observable markets, the Bank shall recognize that deferred difference in profit or loss only to the extent that it arises from a change in a factor (including time) that market participants would take into account when pricing the asset or liability, or when the instrument is derecognized.

 

Finally, in the normal course of business, the Bank arranges repo transactions. According to IFRS 9, assets involved in repurchase and reverse repurchase transactions and received from or delivered to third parties, respectively, do not qualify to be recognized or derecognized, respectively (see note 6).

 

- 17 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Subsequent measurement – Business Model

 

The Bank established three categories for the classification and measurement of its debt instruments, in accordance with the Bank’s business model to manage them and the contractual cash flow characteristics thereof:

 

- At amortized cost: the objective of the business model is to hold financial assets in order to collect contractual cash flows.

 

- At fair value through other comprehensive income: the objective of the business model is both collecting the contractual cash flows of the financial asset and/or of those derived from the sale of the financial asset.

 

- At fair value from profit or loss: the objective of the business model is generating income derived from the purchase and sale of financial assets.

 

Therefore, the Bank measures its financial assets at fair value, except for those that meet the following two conditions and are measured at amortized cost:

 

- The financial assets are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows.

 

- The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

The Bank’s business model is determined at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.

 

The business model is not assessed on an instrument-by-instrument approach, but it should rather be determined on a higher level of aggregation and is based on observable factors such as:

 

- How the performance of the business model and the financial assets held within that business model are evaluated and reported to the Bank’s key management personnel.

 

- The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way in which those risks are managed.

 

- The expected frequency, value, timing and reasons of sales are also important aspects.

 

The assessment of the business model is performed on the basis of scenarios that the Bank reasonably expects to occur, without taking into account the scenarios such as the so-called ‘worst case’ or ‘stress case’ scenarios. If after the initial recognition cash flows are realized in a way that is different from the Bank’s expectations, the classification of the remaining financial assets held in that business model does not change, but it rather considers all relevant information to assess the newly originated or newly purchased financial assets.

 

Test of solely payments of principal and interest (the SPPI test)

 

As part of the classification process, the Bank assessed the contractual terms of its financial assets in order to determine if such financial instruments give rise to cash flows on specific dates which are solely payments of principal and interest on the principal amount outstanding.

 

For the purposes of this assessment, “principal” is defined as the fair value of the financial asset at initial recognition, provided such amount may change over the life of the financial instrument, for example, if there are repayments of principal or premium amortization or discount.

 

The most significant elements of interest within a loan agreement are typically the consideration for the time value of money and credit risk.

 

For the SPPI test, the Bank applies judgment and considers relevant factors such as the currency in which the financial asset is denominated and the period for which the interest rate is set.

 

However, contractual terms that introduce exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. In such cases, financial assets are required to be measured at fair value through profit or loss.

 

Therefore, the financial assets were classified pursuant to the above expressed as “Financial assets at fair value through profit or loss”, “Financial assets at fair value through other comprehensive income” or “Financial assets at amortized cost”. Such classification is disclosed in exhibit P.

 

- 18 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

· Financial assets and liabilities at fair value through profit or loss

 

This category presents two subcategories: financial assets at fair value held for trading and financial assets initially designated at fair value by the Management or under section 6.7.1. of IFRS 9. The Bank’s Management has not designated, at the beginning, financial assets at fair value through profit or loss.

 

The Bank classifies the financial assets as held for trading when they have been acquired or incurred principally for the purpose of selling or repurchasing them in the short term or when they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking.

 

Financial assets and liabilities at fair value through profit or loss are recognized at fair value in the statement of financial position. Changes in fair value are recognized under the item “Net gain from measurement of financial instruments at fair value through profit or loss” in the statement of income, as well as interest income or expenses and dividends pursuant to the contractual terms and conditions, or when the right to receive payment of the dividend is established.

 

The fair value estimation is explained in detail in section “Accounting judgments, estimates and assumptions” of this note, and note 12 describes the valuation process of financial instruments at fair value.

 

· Financial assets at fair value through other comprehensive income (OCI)

 

A financial asset shall be measured at fair value through other comprehensive income if (i) the financial instrument is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and (ii) the contractual terms of the financial asset meet the determination that cash flows are solely payments of principal and interest on the principal amount outstanding.

 

Debt instruments at fair value through other comprehensive income are recognized in the statement of financial position at fair value. Profit and loss derived from changes in fair value are recognized in other comprehensive income as “Net gain from financial instruments measured at fair value through other comprehensive income”. Interest income (calculated by the “effective interest method”, which is explained in the following section), profit and loss from translation differences and impairment are recognized in the statement of income in the same manner as for financial assets measured at amortized cost and are disclosed as “Interest income”, “Differences in quoted prices of gold and foreign currency” and “Allowance for loan losses”, respectively.

 

When the Bank has more than one investment on the same security, it must be considered that they shall be disclosed using the first-in first-out costing method.

 

On derecognition, accumulated gains and losses previously recognized in OCI are reclassified to profit or loss.

 

· Financial assets at amortized cost – Effective interest method

 

They represent financial assets held in order to collect contractual cash flows and the contractual terms of which give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

After initial recognition, these financial assets are recognized in the statement of financial position at amortized cost using the effective interest method, less a loss allowance for expected credit losses (ECL), considering the exceptions established by BCRA Communiqué “A” 6847, detailed in section 3.2.4.

 

Interest income and impairment are disclosed in the statement of income as “Interest income” and “Allowance for loan losses”, respectively. Changes in the allowance for ECL are presented in note 9 and exhibit R “Value adjustment for credit losses – Allowance for uncollectibility risk”.

 

The effective interest method uses the rate that allows the discount of estimated future cash payments or receipts through the expected life of the financial instrument or lesser term, if applicable, to the net carrying amount of such financial instrument. When applying this method, the Bank identifies points paid or received, fees, premiums, discounts and transaction costs, incremental and direct costs as an integral part of the effective interest rate (hereinafter, EIR). For such purposes, interest is the consideration for the time value of money and for the credit risk associated with the amount of principal outstanding during a specific period of time.

 

- 19 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

3.2.1 Cash and deposits in banks

 

They were valued at their nominal value plus the relevant accrued interest, if applicable. Accrued interests were allocated in the statement of income as “Interest income”.

 

3.2.2 Repo transactions (purchase and sale of financial instruments)

 

These transactions were recognized in the statement of financial position as financing granted (received), under “Repo transactions”.

 

The difference between purchase and sale prices of such instruments were recognized as interest accrued during the effective term of the transactions using the effective interest method and were allocated in the statement of income as “Interest income” and “Interest expense”.

 

3.2.3 Loans and other financing

 

They are non-derivative financial assets that the Bank holds within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of which give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

After initial recognition, loans and other financing were measured at amortized cost using the effective interest method, less a loss allowance for ECL. The amortized cost was calculated taking into account any discount or premium incurred in the origination or acquisition, and origination fees or commissions, which are part of the EIR. Income from interest was allocated in the statement of income as “Interest income”.

 

3.2.4 Impairment of financial assets

 

The accounting policy adopted on the impairment of financial assets not measured at fair value through profit or loss is detailed below:

 

3.2.4.1 Overview of the ECL principles

 

Except for disclosures to the public sector, which were temporarily excluded by BCRA Communiqué “A” 6847, the Bank recognizes a loss allowance for ECL on loans, other financing and other debt instruments not measured at fair value through profit or loss along with loan commitments and financial guarantee contracts (not measured at fair value through profit or loss) and contract assets and accounts receivable on loans; hereinafter, the “financial instruments”. Investments in equity instruments are not subject to impairment under IFRS 9. According to Communiqué “A” 6847, for disclosures to the public sector, BCRA standards on minimum loan loss allowances still apply, which, particularly for this type of sector, indicate that they are not subject to allowances.

 

The loss allowance for ECL is based on credit losses expected to arise during the life of a financial asset (lifetime ECL), unless there was no significant increase in credit risk since initial recognition, in which case the loss allowance is based on 12-month ECL. The Bank’s policies to determine whether credit risk increased significantly are included in note 45.1.1 “Assessment of credit risk impairment”, section “Definitions of significant increase in risk (SICR), impairment and default”.

 

12-month ECL is the portion of lifetime ECL that results from default events on a financial instrument that are possible within the 12 months after the reporting date.

 

Lifetime ECL and 12-month ECL are calculated on individual or collective bases according to the nature of the portfolio of financial instruments. The Bank’s policy to group the financial assets measured on a collective basis are explained in note 45.1.1, sections “Customers analyzed on a collective basis” and “Customers analyzed on an individual basis”.

 

- 20 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The Bank adopted a policy to assess, at the end of each reporting period, whether there was a significant increase in the credit risk of a financial instrument since initial recognition considering the change in risk that the default may occur during the remaining life of a financial instrument. This is further explained in note 45.1.1, section “Definitions of significant increase in risk (SICR), impairment and default”.

 

According to the aforementioned process, the Bank groups its financial instruments into Stage 1, Stage 2 and Stage 3, also covering purchased or originated financial instruments that are credit impaired, as described below:

 

· Stage 1: When financial instruments are recognized for the first time, the Bank recognizes a loss allowance according to 12-month ECL. Stage 1-financial instruments also include credit lines in which credit risk improved within the parameters established by the Bank and the financial instrument was reclassified to another stage.

 

· Stage 2: When a financial instrument shows a SICR since initial recognition, the Bank books a loss allowance for lifetime ECL. Stage 2-financial instruments also include credit lines in which credit risk improved within the parameters established by the Bank and the financial instrument was reclassified to Stage 3.

 

· Stage 3: Financial instruments which credit value is impaired (as described in note 45.1.1, section “Definitions of significant increase in risk (SICR), impairment and default”.) The Bank books a loss allowance for lifetime ECL.

 

· Purchased or originated financial instruments that are credit impaired: financial instruments that are credit impaired upon initial recognition. Purchased or originated financial instruments that are credit impaired are booked at fair value upon initial recognition and interest income is recognized subsequently at a credit-adjusted effective interest rate. The loss allowance of ECL is only recognized or reversed provided that there is a subsequent change in ECL. The Bank did not purchase or generate credit-impaired financial instruments.

 

The Bank reduces the carrying amount of the financial instruments which amount owed it does not expect to recover in part or in full. This is considered a derecognition of the financial instrument.

 

3.2.4.2 The calculation of ECL

 

The key parameters to calculating ECL are as follows:

 

· Probability of default (PD): It is an estimate of the probability of default during a certain time horizon. A default may occur only at a certain time during the period assessed if the credit line was not derecognized before and is still part of the portfolio. The concept of probability of default is explained in note 45.1.1, section “Probability of default (PD)”.

 

· Exposure at default (EAD): It is an estimate of the exposure to a future default date considering the expected changes in exposure after reporting date, including the settlement of principal and interest, whether they are scheduled by the agreement or otherwise, the expected disbursements on committed credit lines and interest accrued on late payments. The exposure at default is explained in note 45.1.1 section, “Exposure at default (EAD)”.

 

· Loss given default (LGD): It is an estimate of the loss arising in the event of default in a certain term. It is based on the difference between contractual cash flows and cash flows expected by the lender, including the performance of a guarantee or credit improvements related to the loan. In general, it is expressed as a percentage of the exposure at default. Further information of LGD is included in note 45.1.1, section “Loss given default (LGD)”.

 

- 21 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

For overdrafts which include both a loan and an unused loan commitment, ECL are calculated and disclosed with the loan. For loan commitments (including credit cards) and financial guarantee contracts, ECL are recognized in “Provisions”.

 

The method for calculating ECL is summarized below:

 

· Stage 1: 12-month ECL are calculated as a portion of lifetime ECL, accounting for the ECL of financial instruments from default within the 12 months subsequent to year-end. The Bank calculates the allocation of 12-month ECL based on the expectation of default within 12 months after year-end. These expected 12-month probabilities of default are applied to an EAD and multiplied by the expected LGD and discounted to the original effective interest rate.

 

· Stage 2: When a financial instrument shows a significant increase in credit risk since initial recognition, the Bank books a loss allowance for lifetime ECL. The method is similar to the one explained above, including the use of different scenarios, but PD is estimated over the remaining life of the instrument. Expected cash shortfalls are discounted to the original effective interest rate.

 

· Stage 3: For financial instruments considered credit-impaired, the Bank recognizes the ECL for the remaining life of these financial instruments. The method is similar to those used by Stage 2-financial instruments, with a PD set at 100%.

 

· Loan commitments and credit cards: Upon estimating the lifetime ECL for loan commitments, the ECL are the present value of the difference between the cash flows owed to the bank and the expected cash flows if the loan is withdrawn during the 12 months or expected lifetime. The cash flows are discounted at the original effective interest rate of each transaction.

 

· Guarantees and other commitments: The Bank’s liability under each guarantee is measured at the higher of the amount initially recognized less cumulative amortization recognized in the statement of income and the ECL provision. To such end, the Bank estimates the ECL based on the present value of the payments expected to be disbursed to the guarantee holder should the debtor fail to pay the debt. Cash flows are discounted by the risk-adjusted interest rate relevant to the disclosure. The ECL related to financial guarantee contracts are recognized in “Provisions”.

 

In all these scenarios, the ECL are adjusted on a forward-looking base, weighing the three probable macroeconomic scenarios, as explained in section 3.2.4.3 “Prospective information”.

 

3.2.4.3 Prospective information

 

To determine a loss allowance in the calculation of ECL, the impact of the main macroeconomic variables should be analyzed to adjust historical information to the current conditions and short-term prospects. To such end, different and probable macroeconomic scenarios (base case, favorable and downside) should be weighed upon using relevant variables in assessing credit risk (such as GDP growth, interest rate and CPI).

 

The inputs and models used for calculating ECL may not always capture all market characteristics as of the date of these consolidated Financial Statements. Consequently, the Bank may consider certain qualitative temporary adjustments to ensure that they are taken into account if they are material. Further information is included in note 45.1.2 “Prospective information used in ECL models”.

 

3.2.4.4 Debt instruments measured at fair value through other comprehensive income

 

The ECL of the debt instruments measured at fair value through other comprehensive income does not reduce the carrying amount of these financial instruments in the statement of financial position, which remains at fair value. Instead, an amount equal to the correction of value from these assets measured at amortized cost is recognized in “Other comprehensive income” as a cumulative impairment amount with the related charge to income. Cumulative loss recognized in “Other comprehensive income” is reclassified to the statement of income when the assets are derecognized.

 

- 22 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

3.2.4.5 Credit cards and other revolving credit lines

 

In the case of credit cards and other revolving lines of credit, the Bank does not limit its exposure to expected losses to the contractual notice period, but rather calculates ECL over a period that reflects the Bank’s expectations of customer behaviors, their unused credit commitments, the probability of default and the Bank’s future risk mitigation expectations, which may include reducing or settling the lines of credit.

 

The interest rate used to discount the ECL for credit cards is based on the average effective interest rate that is expected to be charged over the expected period of exposure to these lines of credit. This estimate considers that some of these lines of credit may be settled every month fully and consequently no interest would be charged.

 

3.2.4.6 Applications

 

Financial instruments are settled in part or in full after the first month in which the Bank has no reasonable expectations of recovering the financial instrument or part of the instrument. Should the amount to be settled be higher than the loss allowance for accumulated losses, the difference is considered an addition to the loss allowance that is then applied against the gross carrying amount. Any subsequent recovery is disclosed in the statement of income for the year of recovery in “Other operating income.”

 

3.2.4.7 Forborne and modified loans

 

The Bank considers a loan forborne when such modification is a result of the borrower’s present or expected financial difficulties. The renegotiation may include the extension of the payment terms and the agreement of new loan conditions. Once the conditions are renegotiated, the impairment is measured using the original effective interest rate as calculated before the conditions were amended. The Bank monitors forborne loans to ensure the continuity of future payments. Derecognition decisions and the classification between Stages 2 and 3 are determined on a case-by-case basis for the commercial portfolio and collectively for the consumer portfolio. Should these procedures identify a loss related to a loan, it is disclosed and managed as an impaired Stage 3 forborne asset until it is collected or derecognized.

 

When the loan is renegotiated or modified but is not derecognized, the Bank also considers whether the assets should be classified in Stage 3. Once an asset is classified as renegotiated, it will continue in Stage 2 until it is collected in full or impaired (Stage 3).

 

If the modifications are substantial, the loan is derecognized and a new loan with different conditions is recognized.

 

3.2.4.8 Valuation of collaterals

 

To mitigate the risks of its financial instruments, the Bank seeks to use, when possible, collaterals. Collateral comes in various forms, such as cash, securities, letters of credit, real estate, receivables, other non-financial assets and credit enhancements, such as netting arrangements. Collateral, except for attached assets, is not recorded in the Bank’s statement of financial position. However, the fair value of collateral affects the calculation of ECL in certain products and customers assessed on an individual basis. The assessment is usually made at least at the beginning date and it is reassessed on a regular basis.

 

Whenever possible, the Bank uses active market data to assess the financial instruments maintained as collateral. Other financial instruments that do not have readily determinable market values are valued using internal methods. Non-financial collateral, such as real estate, is valued based on data provided by third parties, such as mortgage brokers.

 

- 23 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

3.2.5 Collateral repossessed

 

The Bank’s policy is to determine whether an attached asset can be best used internally or should be sold. Assets determined to be useful internally are transferred to their relevant asset category at the lower of their attached value or the carrying value of the original secured asset.

 

The assets for which selling is determined to be a better option are transferred to assets held for sale at their fair value (if financial assets) and fair value less cost of sales for non-financial assets at attachment date according to the Bank’s policy.

 

During the normal course of business, the Bank does not include in its portfolio the properties and other attached assets but rather uses external agents to recover the funds, generally through auctions, to settle the outstanding payable. Any surplus fund is reimbursed to the customer/debtor. Hence, residential properties under attachment proceedings are not booked in the balance sheet.

 

3.2.6 Financial liabilities

 

After initial recognition, certain financial liabilities were measured at amortized cost using the effective interest method, except for derivatives that were measured at fair value through profit or loss. Interests were allocated in the statement of income as “Interest expense”.

 

Within other financial liabilities the Bank included guarantees granted and eventual liabilities, which must be disclosed in the notes to the Financial Statements, when the documents supporting such credit facilities are issued and are initially recognized at fair value of the commission received, in the statement of financial position. After initial recognition, the liability for each guarantee was recognized at the higher of the amount of the loss allowance and the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles under IFRS 15 “Revenue from contracts with customers”. The commission received has been recognized as “Commissions income” in the statement of income, based on the amortization thereof following the straight-line method over the effective term of the financial guarantee granted.

 

3.2.7 Derivative financial instruments

 

Receivables and payables from forward transactions without delivery of underlying assets

 

It includes forward purchase and sale transactions of foreign currency without delivery of the traded underlying asset. Such transactions were measured at the fair value of the contracts and were performed by the Bank for intermediation purposes on its own account. The originated income was allocated in the consolidated statement of income as “Net gain from measurement of financial instruments at fair value through profit or loss”.

 

Derecognition of financial assets and liabilities

 

A financial asset (or, if applicable, a part of a financial asset or a part of a group of similar financial assets) shall be derecognized when: (i) the contractual rights to the cash flows from the financial asset expire, or (ii) the Bank transfers the contractual rights to receive the cash flows of the financial asset or retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows received immediately to a third party pursuant to a transfer agreement.

 

A transfer shall qualify for derecognition of the financial asset only if (i) the Bank has transferred substantially all the risks and rewards of ownership of the financial asset, or (ii) it has neither transferred nor retained substantially all the risks and rewards of ownership of the financial asset, but has transferred the control of the financial asset, considering that the control is transferred if, and only if, the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer.

 

If the Bank neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and has retained the control over it, the Bank shall continue to recognize such transferred asset to the extent to which it is exposed to changes in the value of the transferred asset.

 

- 24 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The Bank derecognizes a loan when the terms and conditions have been renegotiated and if, substantially, it becomes a new loan, recognizing the difference for derecognition in profit or loss. If the modification does not generate substantially different cash flows, the modification does not result in derecognition of the loan. The Bank recalculates the gross carrying amount of the assets as present value of modified contractual cash flows, using for the discount the original EIR and recognizes profit or loss from modification as explained in section 3.2.4.7 “Forborne and modified loans”.

 

On the other hand, a financial liability is derecognized when the obligation specified in the relevant contract is discharged, cancelled or expires. When there is an exchange between an existing borrower and lender of debt instruments with substantially different terms, or the terms are substantially modified, such exchange or modification shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, recognizing the difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, in the statement of income as “Other operating income”.

 

3.3 Leases

 

The Bank assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

 

3.3.1 The Bank as a lessee

 

The Bank applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets, which payments are recognized as rent expense on a straight-line basis. The Bank recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

 

· Right-of-use assets

 

The Bank recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right of use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment, as described in section 3.10 of this note.

 

The right-of-use assets are also subject to impairment, as explained in section 3.10 of this note.

 

· Lease liabilities

 

At the commencement date of the lease, the Bank recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Bank and payments of penalties for terminating a lease, if the lease term reflects the Bank exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs.

 

In calculating the present value of lease payments, the Bank uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

 

- 25 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

3.3.2 The Bank as a lessor

 

The Bank grants loans through financial leases, recognizing the current value of lease payments as a financial asset, which is registered in the statement of financial position in the item “loans and other financing”. The difference between the total lease receivables and the current value of financing is recognized as interest to be accrued. This income is recognized during the term of the lease using the EIR method, which reflects a constant rate of return and is recognized in the statement of income as “Interest income”. Losses originated for impairment are included in the statement of income as “Allowance for loan losses” and changes in this accounting item are disclosed in exhibit R “Loss allowance– Allowance for uncollectibility risk”.

 

3.4 Business combinations

 

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquired company, measured under IFRS.

 

The Bank determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organized workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.

 

When the Bank acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date.

 

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9, is measured at fair value with the changes in fair value recognized in the statement of profit or loss. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss.

 

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.

 

After initial recognition, goodwill is measured at cost less any accumulated impairment losses as explained in section 3.10.

 

3.5 Investment in associates and joint arrangements

 

An associate is an entity over which the Bank has significant influence, i.e. the power to participate in the financial and operating policy decisions of such controlled entity, but without having the control thereof.

 

- 26 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

A joint arrangement is an arrangement of which the Bank and other party or parties have joint control. Under IFRS 11 “Joint Arrangements”, investments in these arrangements are classified as joint ventures or joint operations depending on the contractual rights and obligations of each investor, regardless of the legal structure of the arrangement. A joint venture is an arrangement pursuant to which the parties having joint control of the arrangement have rights to the net assets of such arrangement. A joint operation is an arrangement pursuant to which the parties having joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. The Bank has assessed the nature of its joint arrangements and determined that they are joint ventures.

 

These investments are accounted for using the equity method from the date on which they become an associate or a joint venture. On acquisition of the investment, any difference between the cost of the investment and the Entity’s share of the net fair value of the investee’s identifiable assets and liabilities are accounted: (i) as a goodwill, which is included in the carrying amount of the investment and is under impairment as explained in section 3.10; or (ii) any excess of the Entity´s share of the net fair value of the investee’s identifiable assets and liabilities over the cost of the investment is included as income. The Bank’s share in the profit or loss after the acquisition of its associates was accounted in the statement of income, and its share in other comprehensive income after the acquisition was accounted for in the consolidated statement of other comprehensive income. See also note 14.

 

3.6 Property, plant and equipment

 

The Bank chose the cost model for all kinds of assets accounted for in this accounting item. These assets were carried at their cost less any accumulated depreciation and any accumulated impairment losses, if applicable. The historical cost of acquisition includes all expenses directly attributable to the acquisition of the assets. Maintenance and repair costs were accounted for in the statement of income as incurred. Any replacement and significant improvement of an item of property, plant and equipment is recognized as an asset only when it is likely to produce any future economic benefits exceeding the return originally assessed for such asset.

 

Depreciation of the items of property, plant and equipment was assessed in proportion to the estimated months of useful life, depreciating completely the acquisition month of the assets and not the derecognition date. In addition, at least at each financial year-end, the Bank reviews if expectations regarding the useful life of each item of property, plant and equipment differ from previous estimates, in order to detect any material changes in useful life which, if confirmed, shall be adjusted applying the relevant correction to the depreciation of property, plant and equipment accounting item. Depreciation charges are recorded in the related statement of income as “Depreciation and amortization of fixed assets”.

 

The residual value of the assets, as a whole, does not exceed their recoverable amount.

 

3.7 Intangible Assets

 

Intangible assets acquired separately were initially measured at cost. After initial recognition, they were accounted for at cost less any accumulated depreciation (for those to which finite useful lives have been allocated) and any accumulated impairment losses, if applicable.

 

For internally generated intangible assets, only disbursements related to development are capitalized while the other disbursements are not capitalized and are recognized in the statement of income for the period in which such expenditure is incurred.

 

Useful lives of intangible assets may be finite or indefinite.

 

Intangible assets with finite useful lives are amortized over their economic useful lives and are reviewed in order to determine whether they had any impairment loss to the extent there is any evidence that indicates that the intangible asset may be impaired. The period and method of amortization for an intangible asset with a finite useful life are reviewed at least at the financial year-end of each reporting period. Depreciation charges of intangible assets with finite useful lives are accounted for in the statement of income as “Depreciation and amortization of fixed assets”.

 

Intangible assets with indefinite useful lives are not amortized and are subject to annual tests in order to determine whether they are impaired, either individually or as part of the cash-generating unit to which such intangible assets were allocated. The Bank has no intangible assets with indefinite useful lives.

 

- 27 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The gain or loss arising from the derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset, and it shall be recognized in the Statement of income when the asset is derecognized.

 

Development expenditure incurred in a specific project shall be recognized as intangible asset when the Bank can demonstrate all of the following:

 

- the technical feasibility of completing the intangible asset so that it will be available for use or sale,

 

- its intention to complete the intangible asset and use or sell it,

 

- how the intangible asset will generate probable future economic benefits,

 

- the availability of adequate resources to complete the development, and

 

- its ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

After initial recognition of the development expenditure as an asset, such asset shall be carried at its cost less any accumulated amortization and any applicable accumulated impairment losses. Amortization shall begin when the development phase has been completed and the asset is available for use. The asset amortizes over the period in which the asset is expected to generate future benefits. Amortization is accounted for in the statement of income as “Depreciation and amortization of fixed assets”. During the development phase, the asset is subject to annual tests to determine whether there is any impairment loss.

 

3.8 Investment Property

 

The Bank included certain real properties that holds for undetermined future use, which were recognized pursuant to IAS 40 “Investment Property”.

 

For this kind of property, the Bank chose the cost model as described in note 3.6 Property, plant and equipment.

 

An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the statement of income in the period of the retirement or disposal as “Other operating income”.

 

An entity shall transfer a property to, or from, investment property when, and only when, there is a change in use. For a transfer from investment property to an item of property, plant and equipment, the property’s deemed cost for subsequent accounting is its fair value on the date of change in use. If an item of property, plant and equipment becomes an investment property, the Bank recognizes the asset up to the date of change in use in accordance with the policy established for property, plant and equipment.

 

3.9 Non-current Assets Held for Sale

 

The Bank reclassifies in this category non-current assets of which the carrying amount will be recovered principally through a sale transaction rather than through continuing use. The asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable.

 

Non-current assets classified as held for sale are measured, when they are reclassified to this category, at the lower of carrying amount and fair value less costs to sell and are disclosed in a separate item in the statement of financial position. Once these assets are classified as held for sale, depreciation and amortization ceased.

 

Profit or loss generated in the sale of assets held for sale is recorded in the statement of income as “Other operating income”.

 

3.10 Impairment of Non-financial Assets

 

The Bank evaluates, at least at each fiscal year-end, whether there are any events or changes in the circumstances that may indicate the impairment of non-financial assets or whether there is any evidence that a non-financial asset may be impaired.

 

- 28 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

When there is any evidence or when an annual impairment test is required for an asset, the Bank shall estimate the recoverable amount of such asset. If the carrying amount of an asset exceeds its recoverable amount, such asset is deemed impaired and its carrying amount shall be reduced to its recoverable amount. As of the date of issuance of these consolidated Financial Statements, there is no evidence of impairment of non-financial assets.

 

3.11 Provisions

 

The Bank recognizes a provision if and only if the following circumstances are met: (a) the Bank has a present obligation as a result of a past event; (b) it is probable (i.e. it is more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation.

 

In order to determine the amount of provisions, the risks and uncertainties were considered taking into account the opinion of independent and internal legal advisors of the Bank. Where the effect of the time value of money is material, the provisions shall be discounted using a pre-tax rate that reflects, if applicable, current risks specific to the liability. When the discount is recognized, the effect of the provision derived from the lapse of time is accounted for as “Interest expense” in the statement of income. Based on the analysis carried out, the Bank recognized as provision the amount of the best estimate of the expenditure required to settle the present obligation at the end of each fiscal year.

 

The provisions accounted for by the Bank are reviewed at the end of each reporting period or fiscal year, as applicable, and adjusted to reflect the current best available estimate.

 

In addition, provisions are recognized with specific allocation to be used only for the expenditures for which they were originally recognized.

 

In the event: a) the obligation is possible; or b) it is not probable that an outflow of resources will be required for the Bank to settle the obligation; or c) the amount of the obligation cannot be estimated reliably, the contingent liability shall not be recognized and shall be disclosed in notes. Nevertheless, when the possibility of an outflow of resources is remote, no disclosures shall be made.

 

3.12 Recognition of income and expenses

 

3.12.1. Revenue from interests income and interests expense

 

Revenue from interest received and expenses for interest paid were recognized according to their accrual period, applying the effective interest method, which is explained in section “Financial assets at amortized cost – Effective interest method”.

 

Revenue from interest received includes the return on fixed income investments and negotiable instruments, as well as the discount and premium on financial instruments.

 

Bond coupons were recognized at the time they were declared.

 

3.12.2. Loan commissions

 

Commission charges and direct incremental costs related with the granting of financing facilities were deferred and recognized adjusting the EIR thereof.

 

3.12.3. Service commissions

 

These revenues are recognized when (or to the extent) the Bank satisfies each performance obligation by transferring promised services for an amount that reflects the consideration to which the Bank expects to be entitled in exchange for such services.

 

At each contract inception, the Bank assesses the services promised in a contract and identifies as a performance obligation each promise to transfer a distinct service or a series of distinct services that are substantially the same and that have the same pattern of transfer.

 

- 29 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

3.12.4. Non-financial revenue and expenses

 

These items are recognized according to the recognition criteria established in the Conceptual Framework, e.g. revenues should be accrued.

 

3.13 Customer Loyalty Program

 

The loyalty program offered by the Bank consists in accumulating points generated by purchases made with the credit cards, which can be exchanged by any reward (including, among other offers, products, benefits and awards) available in the program platform.

 

The Bank concluded that the rewards to be granted originate a separate performance obligation. Therefore, at the end of each fiscal year, the Bank recognized a provision for the rewards to be granted in “Other financial liabilities”.

 

Based on the variables that the Bank takes into account in order to estimate the fair value of the points granted to customers (and the relation thereof with the exchange of the reward), it is worth mentioning that such estimates are subject to a significant level of uncertainty (and variation) that should be considered. These considerations are described in detail in the section “Accounting judgments, estimates and assumptions” of this note.

 

3.14 Income Tax (see note 25)

 

Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). This tax is accounted in the consolidated statement of income, except in the case of accounting items that are to be recognized directly in the statements of other comprehensive income. In this case, each accounting item is presented before assessing their impact on Income Tax, which is accounted for in the relevant accounting item.

 

- Current income tax: the consolidated current income tax expense is the sum of the income tax expenses of the different entities that compose the Group (see note 1), which were assessed, in each case, by applying the tax rate to taxable income, in accordance with Income Tax Law, or equivalent rule or provision, of the countries in which any subsidiary operates.

 

- Deferred income tax: it is assessed based on the separate Financial Statements of the Bank and of each of its subsidiaries and reflects the effects of temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Assets and liabilities are measured using the tax rate that is expected to be applied to taxable income in the years in which these differences are expected to be settled or recovered. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that will follow from the manner in which the Bank and its subsidiaries expect, at the end of the reporting period, to recover or settle the carrying amount of their assets and liabilities. Deferred tax assets and liabilities are measured by their nominal figures, without discount, the tax rates that are expected to be applied in the fiscal year in which the asset shall be realized or the liability shall be settled. Deferred tax assets are recognized when it is probable that taxable profit will be available against which the deductible temporary difference can be utilized.

 

3.15 Earnings per share

 

Basic earnings per share shall be calculated by dividing Net profit attributable to parent’s shareholders of the Bank by the weighted average number of ordinary shares outstanding during the fiscal year. See also note 34.

 

3.16 Fiduciary activities and investment management

 

The Bank renders custody, administration, investment management and advisory services to third parties that originate the holding or placement of assets in the name of such third parties. These assets and income on them are not included in these consolidated Financial Statements, since they are not owned by the Bank. The commissions derived from these activities are accounted for as “Commissions income” in the statement of income. See also notes 37, 38.3 and 42.

 

- 30 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Accounting judgments, estimates and assumptions

 

The preparation of these consolidated Financial Statements requires the Bank’s Management to consider significant accounting judgments, estimates and assumptions that impact on the reported assets and liabilities, income, revenues and expenses, as well as the assessment and disclosure of contingent assets and liabilities, as of the end of the fiscal year. The Bank’s reported amounts are based on the best estimate regarding the probability of occurrence of different future events and, therefore, the uncertainties associated with the estimates and assumptions made by the Bank’s Management may drive in the future to final amounts that may differ from those estimates and may require material adjustments to the reported amounts of the affected assets and liabilities.

 

In certain cases, the Financial Statements prepared in accordance with the accounting framework established by BCRA, require that the assets and liabilities to be recognized and/or presented at their fair value. The fair value is the amount at which an asset can be exchanged, or at which a liability can be settled, in mutual independent terms and conditions between participants of the principal market (or most advantageous market) duly informed and willing to transact in an orderly and current transaction. When prices in active markets are available, the Bank has used them as basis for valuation. When prices in active markets are not available, the Bank estimates those values as values based on the best available information, including the use of models and other assessment techniques. See additionally note 12.

 

In estimating accrued taxes, the Bank assesses the relative risks of the appropriate tax treatment considering judicial and regulatory guidance in the context of the tax position. Because of the complexity of tax laws and regulations, interpretation can be difficult and subject to legal judgment. It is possible that others, given the same information, may reach different reasonable conclusions regarding the estimated amounts of accrued taxes (for additional information regarding income tax see note 25).

 

In the normal course of business, the Bank is a party to lawsuits of various types. In note 43, contingent liabilities are disclosed with respect to existing or potential claims, lawsuits and other legal proceedings, and is booked an accrual for litigation when it is probable that future costs will be incurred and these costs can be reasonably estimated.

 

The measurement of impairment losses under IFRS 9 across all categories of financial instruments, taking into account the temporary exceptions established by Central Bank Communiqué “A” 6847, requires judgement, in particular, the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes that can result in different levels of allowances (for additional information regarding impairment losses under IFRS 9, see notes 3.2.4 and 45.1).

 

New standards adopted in the fiscal year

 

For the fiscal year beginning on January 1, 2022, the following amendments to IFRS are effective and they did not have a material impact on these consolidated Financial Statements:

 

Amendments to IFRS 3 - Reference to the Conceptual Framework.

 

The amendments are intended to replace a reference to a previous version of the IASB’s Conceptual Framework with a reference to the current version issued in March 2018 without significantly changing its requirements. The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” or IFRIC 21 “Levies”, if incurred separately. The exception requires entities to apply the criteria in IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date. At the same time, the amendments add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date.

 

This amendment did not have a material impact on these consolidated Financial Statements since currently, the Bank has not performed business combination transactions with contingent assets and liabilities.

 

- 31 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Amendments to IAS 16 - Property, Plant and Equipment (PP&E): proceeds before Intended Use.

 

The amendment prohibits entities to deduct from the cost of an item of PP&E any proceeds of the sale of items produced while bringing that asset to the location and under the conditions required to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss.

 

This amendment did not have a material impact on these consolidated Financial Statements considering that the Bank does not have this type of item.

 

Amendments to IAS 37 - Onerous Contracts – Costs of Fulfilling a Contract.

 

The IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. The amendments apply a ‘directly related cost approach’. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract. The impact of these amendments on entities that previously applied the incremental cost approach is that they will see provisions increase to reflect the inclusion of costs related directly to contract activities, whilst entities that previously recognized contract loss provisions using the guidance from the former standard, IAS 11 Construction Contracts, will be required to exclude the allocation of indirect overheads from their provisions.

 

This amendment did not have a material impact on these consolidated Financial Statements considering that the Bank does not have this type of item contract.

 

Annual improvement cycle (2018-2020): the following is a summary of the amendments from the 2018-2020 annual improvements cycle.

 

· IFRS 1 First-time Adoption of International Financial Reporting – Subsidiary as a first-time adopter: the amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to IFRS. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.

 

This amendment did not have a material impact on these consolidated Financial Statements.

 

· IFRS 9 Financial Instruments Fees in the ’10 per cent’ test for derecognition of financial liabilities: the amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf.

 

This amendment did not have a material impact on these consolidated Financial Statements.

 

New pronouncements

 

Pursuant to Communiqué “A” 6114 of the BCRA, as new IFRS are approved and existing IFRS are amended or revoked and, once these changes are approved through the notices of approval issued by the FACPCE, the BCRA shall issue a statement on the approval thereof for financial entities. Generally, financial institutions shall not apply any IFRS in advance, except as specifically authorized at the time of the adoption thereof.

 

The new and amended standards and interpretation that are issued, but not yet effective, up to the date of issuance of these consolidated Financial Statements are disclosed below. The Bank intends to adopt these standards, if applicable, when they become effective.

 

a) Amendments to IAS 1 “Presentation of Financial Statements” and IFRS Practice Statement 2 – Disclosures to accounting policies: the amendments require that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policies and examples of when an accounting policy likely. Therefore, a guidance with explanations and examples denominated “four-step materiality process” was developed. This amendment is applicable as of January 1, 2023. The Bank does not expect this standard to have a material impact on the Financial Statements.

 

- 32 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

b) Amendments to IAS 8 “Accounting policies, changes in accounting estimates and Errors” – Definition of Accounting Estimates: the amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates. The amended standard clarifies that the effects on an accounting estimate of a change in an input or a change in a measurement technique are changes in accounting estimates if they do not result from the correction of prior period errors. The previous definition of a change in accounting estimate specified that changes in accounting estimates may result from new information or new developments. Therefore, such changes are not corrections of errors. This amendment is applicable as of January 1, 2023. The Bank does not expect this standard to have a material impact on the Financial Statements.

 

c) Amendments to IAS 12 “Income Tax” – Deferred Tax related to Assets and Liabilities arising from a Single Transaction: the IASB issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences. The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of professional judgment (having considered the applicable tax law) whether such deductions are attributable for tax purposes to the liability recognized in the Financial Statements (and interest expense) or to the related asset component (and interest expense). Professional judgment is important in determining whether any temporary differences exist on initial recognition of the asset and liability. This amendment is applicable as of January 1, 2023. The Bank does not expect this standard to have a material impact on the Financial Statements.

 

d) Amendments to IFRS 16 “Leases” – Sale and Leaseback: the amendment to IFRS 16 specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. The amendment does not prescribe specific measurement requirements for lease liabilities arising from a leaseback. The initial measurement of the lease liability arising from a leaseback may result in a seller-lessee determining ‘lease payments’ that are different from the general definition of lease payments. The seller lessee will need to develop and apply an accounting policy that results in information that is relevant and reliable in accordance with IAS 8. This amendment is applicable as of January 1, 2024. The Bank does not expect this standard to have a material impact on the Financial Statements.

 

4. CONTINGENT TRANSACTIONS

 

In order to meet specific financial needs of customers, the Bank’s credit policy also includes, among others, the granting of guarantees, securities, bonds, letters of credit and documentary credits. The Bank is also exposed to overdrafts and unused agreed credits on credit cards of the Bank. Since they imply a contingent obligation for the Bank, they expose the Bank to credit risks other than those recognized in the statement of financial position and, therefore, they are an integral part of the total risk of the Bank.

 

As of December 31, 2022 and 2021, the Bank maintains the following maximum exposures to credit risk related to this type of transactions:

 

Composition   12/31/2022     12/31/2021  
Undrawn commitments of credit cards and checking accounts     668,911,187       432,278,523  
Guarantees granted (1)     7,208,822       4,424,104  
Overdraft and unused agreed commitments (1)     613,294       1,699,653  
Subtotal     676,733,303       438,402,280  
Less: Allowance for Expected Credit Losses (ECL)     (696,767 )     (664,446 )
Total     676,036,536       437,737,834  

 

(1) Includes transactions not covered by BCRA debtor classification standard. The Guarantees granted include an amount of 36,911 and 50,826 as of December 31, 2022 and 2021, respectively. The Overdraft and unused agreed commitments include an amount of 453,507 and 187,409 as of December 31, 2022 and 2021, respectively.

 

Disclosures related to the allowance for ECL are detailed in item 9.5 of note 9 “Loss allowance for expected credit losses on credit exposures not measured at fair value through profit or loss”.

 

- 33 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Risks related to the contingent transactions described above have been evaluated and are controlled within the framework of the Bank’s credit risk policy, as described in note 45.

 

5. DERIVATIVE FINANCIAL INSTRUMENTS

 

The Bank performs derivative transactions for trading purposes through Futures and Forwards. These are contractual agreements to buy or sell a specific financial instrument at a given price and a fixed date in the future. Future contracts, in turn, correspond to transactions for standardized amounts, executed in a regulated market and subject to daily cash margin requirements. Forward contracts are customized contracts traded on an over-the-counter market. The main differences in risks associated with these types of contracts are the credit risk and the liquidity risk. In forward contracts there is counterparty risk since the Bank has credit exposure to counterparties of the agreements. The credit risk related to futures contracts is deemed very low because daily cash margin requirements help guarantee these contracts are always fulfilled. In addition, forward contracts are generally settled in gross terms and, therefore, they are deemed to have a higher settlement risk than future contracts that, unless they are chosen to be performed by delivery, are settled on a net basis. Both types of contracts expose the Bank to market risk.

 

At the beginning, derivatives often imply only a mutual exchange of promises with little or no investment. Nevertheless, these instruments frequently imply high levels of leverage and are quite volatile. A relatively small movement in the value of the underlying asset could have a significant impact in profit or loss. Furthermore, over-the-counter derivatives may expose the Bank to risks related to the absence of an exchange market in which to close an open position. The Bank’s exposure for derivative contracts is monitored on a regular basis as part of its general risk management framework. Information on the Bank’s credit risk management objectives and policies is included in note 45.

 

Notional values indicate the amount of the underlying pending transactions at year end and are not indicative of either the market risk or the credit risk. The fair value of the derivative financial instruments recognized as assets or liabilities in the consolidated statement of financial position is presented as follows. Changes in fair values were accounted for in profit or loss, the breakdown of which is disclosed in exhibit Q “Breakdown of profit or loss”.

 

          12/31/2022     12/31/2021  
Derivative financial assets   Underlying
Notional
Value
    Notional
Value (in
thousand)
     

Fair

Value

    Notional
Value (in
thousand)
     

Fair

Value

 
Transactions of foreign currency contract without delivery of underlying asset   Dollars     62,971       42,899     1,270       2,524  
Total derivatives held for trading         62,971       42,899     1,270       2,524  

 

          12/31/2022     12/31/2021  
Derivative financial liabilities   Underlying
Notional
Value
    Notional
Value (in
thousand)
     

Fair

Value

    Notional
Value (in
thousand)
     

Fair

Value

 
Transactions of foreign currency contract without delivery of underlying asset   Dollars     985       2,371     870       4,933  
Total derivatives held for trading         985       2,371     870       4,933  

 

Derivatives held for trading are generally related to products offered by the Bank to its customers. The Bank shall also take positions expecting to benefit from favorable changes in prices, rates or indexes, i.e. take advantage of the high level of leverage of these contracts to obtain yields, assuming at the same time high market risk. Additionally, they may be held for arbitrage, i.e. to obtain a benefit free of risk for the combination of a derivative product and a portfolio of financial assets, trying to benefit from anomalous situations in the prices of assets in the markets.

 

- 34 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

6. REPO TRANSACTIONS

 

As of December 31, 2022 and 2021, the Bank has agreed-upon repurchase and reverse repurchase transactions of government and private securities, in absolute value, for 61,929,317 and 61,176,357, respectively. Maturity of the agreed-upon transactions as of December 2022 occurred during the month of January 2023. Furthermore, the securities received guarantee repurchase transactions as of December 31, 2022 and 2021, total 68,130,397 and 68,389,352, respectively and were recognized as an off balance sheet transaction.

 

Profit generated by the Bank as a result of its repurchase transactions arranged during the fiscal years ended on December 31, 2022 and 2021, total 13,284,829 and 16,627,587, respectively, and were accounted for in “Interest income” in the consolidated statement of income. In addition, losses generated by the Bank as a result of its reverse repurchase transactions arranged during the fiscal years ended on December 31, 2022 and 2021 total 975,643 and 573,796, respectively, and were recognized as “Interest expense” in the consolidated statement of income.

 

7. OTHER FINANCIAL ASSETS

 

The composition of the other financial assets as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Sundry debtors (see note 11)     26,404,763       19,599,371  
Receivables from spot sales of foreign currency pending settlement     16,005,430       30,130,186  
Receivables from other spot sales pending settlement     10,245,861       13,401,002  
Private securities     4,508,266       4,033,290  
Receivables from spot sales of government securities pending settlement     488,596       176,965  
Other     382,648       1,207,925  
Subtotal     58,035,564       68,548,739  
Less: Allowances for ECL     (91,041 )     (51,518 )
Total     57,944,523       68,497,221  

 

Disclosures related to allowance for ECL are detailed in item 9.4 of note 9 “Loss allowance for expected credit losses on credit exposures not measured at fair value through profit or loss”.

 

8. LOANS AND OTHER FINANCING

 

The composition of loans and other financing as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Non-financial Public sector (1)     2,206,935       4,628,306  
Other Financial Entities     927,272       2,941,876  
Other Financial Entities     935,413       2,948,987  
Less: allowance for ECL     (8,141 )     (7,111 )

 

- 35 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

 

Composition (contd.)   12/31/2022     12/31/2021  
Non-financial Private Sector and Foreign Residents     595,466,823       678,758,244  
Overdrafts     49,250,055       47,516,346  
Documents     81,773,760       82,408,943  
Mortgage loans     61,905,907       81,213,071  
Pledge loans     9,581,277       14,727,607  
Personal loans     142,529,651       190,678,438  
Credit cards     190,779,144       184,981,594  
Financial leases     1,386,801       931,091  
Other     69,254,426       95,055,283  
Less: allowance for ECL     (10,994,198 )     (18,754,129 )
Total     598,601,030       686,328,426  

 

(1) As explained in note 3, ECL are not calculated to public sector exposures.

 

9. LOSS ALLOWANCE FOR EXPECTED CREDIT LOSSES ON CREDIT EXPOSURES NOT MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS

 

The Bank recognizes a loss allowance for expected credit losses on all credit exposures not measured at fair value through profit or loss, like debt instruments measured at amortized cost, debt instruments measured at fair value through other comprehensive income, loan commitments and financial guarantee contracts (not measured at fair value through profit or loss), contract assets and lease receivables.

 

Exhibit P discloses financial assets measured at fair value on a recurring basis and financial assets not recognized at fair value. This classification is made pursuant to the expressed in note 3 “Basis for the preparation of these Financial Statements and applicable accounting standards”. Additionally, note 12 explains the information related to the valuation process.

 

Moreover, considering the temporary exclusion established by BCRA mentioned in note 3 “Applicable accounting standards” the Bank applies the impairment requirements for the recognition and measurement of a loss allowance for financial assets measured at amortized cost or at fair value through other comprehensive income, except for public sector exposures. In addition, the Bank applies the impairment requirements for guarantees granted, undrawn commitments of credit cards and checking accounts, letter of credits, which are not recognized in the consolidated statement of financial position.

 

For the purpose of assessing the Bank’s credit risk exposure and identifying material credit risk concentration, disclosures regarding credit risk of financial assets and items not recognized in the statement of financial position are as follows:

 

9.1 Loans and other financing measured at amortized cost

 

According to the nature of the information to be disclosed and the loan characteristics, the Bank groups them as follows:

 

Composition   12/31/2022     12/31/2021  
Loans and other financing     609,603,369       705,089,666  
Individual assessment     108,933,970       167,931,016  
Collective assessment     500,669,399       537,158,650  
Less: Allowance for ECL (1)     (11,002,339 )     (18,761,240 )
Total     598,601,030       686,328,426  

 

(1) As explained in note 3, ECL are not calculated to public sector exposures.

 

- 36 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

As explained in note 45.1.3 “Additional Forward-looking allowances based on expert credit judgment”, section “Adjustment for uncertainty about conditions of accessing loans to MIPYMES”, as of December 31, 2022 and as a result of the incremental effect estimated in the allowance for ECL for covering an uncertainty scenario about the condition of accessing loans to PYMES, the Bank decided to record an adjustment on a forward-looking basis. As of December 31, 2022, the estimated amount was 1,514,000.

 

The following table shows the credit quality and the carrying amount of credit risk, based on the Bank’s credit risk rating system, the probability of default (PD) and the year-end stage classification, taking into account what was mentioned in the previous paragraph. The amounts are presented gross of the impairment allowances.

 

              12/31/2022  
Internal rating grade     Range PD       Stage 1       Stage 2       Stage 3       Total       %  
Performing             580,654,510       12,586,012               593,240,522       97.32  
High grade     0.00% - 3.50%       540,102,835       2,466,546               542,569,381       89.00  
Standard grade     3.51% - 7.00%       23,952,353       3,046,375               26,998,728       4.43  
Sub-standard grade     7.01% -  33.00%       16,599,322       7,073,091               23,672,413       3.89  
Past due but not impaired (1)     33.01% - 99.99%       3,787,155       7,563,530               11,350,685       1.86  
Impaired     100%                       5,012,162       5,012,162       0.82  
Total       584,441,665       20,149,542       5,012,162       609,603,369       100  
%       95.87       3.31       0.82       100          

 

              12/31/2021  
Internal rating grade     Range PD       Stage 1       Stage 2       Stage 3       Total       %  
Performing             665,422,537       16,843,145               682,265,682       96.76  
High grade     0.00% - 3.50%       559,233,631       1,616,123               560,849,754       79.54  
Standard grade     3.51% - 7.00%       82,840,667       4,895,725               87,736,392       12.44  
Sub-standard grade     7.01% - 33.00%       23,348,239       10,331,297               33,679,536       4.78  
Past due but not impaired (1)     33.01% - 99.99%       6,163,005       10,235,284               16,398,289       2.33  
Impaired     100%                       6,425,695       6,425,695       0.91  
Total       671,585,542       27,078,429       6,425,695       705,089,666       100  
%       95.25       3.84       0.91       100          

 

(1) It also includes transactions which are more than 5 days past due independently of the PD range assigned.

 

- 37 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

9.1.1 Loans on an individual assessment

 

The table below shows the credit quality and the debt balance to credit risk of commercial loans by grade on the Bank’s internal credit rating system, PD range and year-end stage classification. The Bank’s internal credit rating systems and the evaluation and measurement approaches are explained in note 45 section “Credit risk”.

 

          12/31/2022  
Internal rating grade   Range PD     Stage 1     Stage 2     Stage 3     Total     %  
Performing             104,988,725       2,570,188               107,558,913       98.74  
High grade     0.00% - 3.50%       98,109,324       1,240,943               99,350,267       91.20  
Standard grade     3.51% - 7.00%       3,643,178       626,775               4,269,953       3.92  
Sub-standard grade     7.01% - 33.00%       3,236,223       702,470               3,938,693       3.62  
Past due but not impaired (1)     33.01% - 99.99%                                          
Impaired     100%                       1,375,057       1,375,057       1.26  
Total       104,988,725       2,570,188       1,375,057       108,933,970       100  
%       96.38       2.36       1.26       100          

 

          12/31/2021  
Internal rating grade   Range PD     Stage 1     Stage 2     Stage 3     Total     %  
Performing             157,218,100       6,971,767               164,189,867       97.77  
High grade     0.00% - 3.50%       118,533,334       842,799               119,376,133       71.09  
Standard grade     3.51% - 7.00%       31,814,097       2,447,336               34,261,433       20.40  
Sub-standard grade     7.01% - 33.00%       6,870,669       3,681,632               10,552,301       6.28  
Past due but not impaired (1)     33.01% - 99.99%               2,253,730               2,253,730       1.34  
Impaired     100%                       1,487,419       1,487,419       0.89  
Total       157,218,100       9,225,497       1,487,419       167,931,016       100  
%       93.62       5.49       0.89       100          

 

(1) It also includes transactions which are more than 5 days past due independently of the PD range assigned.

 

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to commercial lending is as follows:

 

- 38 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

    Stage        
    1     2     3     Total  
Gross Carrying amount as of January 1, 2022     157,218,100       9,225,497       1,487,419       167,931,016  
Assets originated or purchased (1)     126,856,246       1,567,141               128,423,387  
Assets derecognized or repaid (1)     (96,228,005 )     (3,653,073 )     (499,552 )     (100,380,630 )
Transfers to Stage 1     24,929       (24,929 )                
Transfers to Stage 2                                
Transfers to Stage 3     (193,159 )     (1,602,140 )     1,795,299          
Amounts Written Off                                
Monetary effects     (82,689,386 )     (2,942,308 )     (1,408,109 )     (87,039,803 )
As of December 31, 2022     104,988,725       2,570,188       1,375,057       108,933,970  

 

    Stage        
    1     2     3     Total  
Gross Carrying amount as of January 1, 2021     200,916,176       12,926,836       4,594,640       218,437,652  
Assets originated or purchased (1)     199,095,323       8,122,700               207,218,023  
Assets derecognized or repaid (1)     (160,666,314 )     (7,054,896 )     (2,635,883 )     (170,357,093 )
Transfers to Stage 1     1,051       (1,051 )                
Transfers to Stage 2             255,556       (255,556 )        
Transfers to Stage 3     (2,014,633 )     (324,031 )     2,338,664          
Amounts Written Off                     (1,796,735 )     (1,796,735 )
Monetary effects     (80,113,503 )     (4,699,617 )     (757,711 )     (85,570,831 )
As of December 31, 2021     157,218,100       9,225,497       1,487,419       167,931,016  

 

(1) It includes the increases /decreases of the gross carrying amount for existing transactions at the beginning of the fiscal year.

 

    Stage        
    1     2     3     Total  
ECL amount as of January 1, 2022     1,297,006       4,892,299       1,204,240       7,393,545  
Assets originated or purchased (1)     1,271,329       314,458               1,585,787  
Assets derecognized or repaid (1)     (850,583 )     (2,685,539 )     (720,269 )     (4,256,391 )
Transfers to Stage 1     15,564       (15,564 )                
Transfers to Stage 2                                
Transfers to Stage 3     (124,148 )     (1,064,701 )     1,188,849          
Amounts Written Off                                
Monetary effects     (666,406 )     (1,108,839 )     (903,876 )     (2,679,121 )
As of December 31, 2022     942,762       332,114       768,944       2,043,820  

 

- 39 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

    Stage        
    1     2     3     Total  
ECL amount as of January 1, 2021     1,943,642       2,229,728       2,301,119       6,474,489  
Assets originated or purchased (1)     3,460,588       6,433,039               9,893,627  
Assets derecognized or repaid (1)     (1,783,177 )     (1,232,125 )     (1,235,429 )     (4,250,731 )
Transfers to Stage 1     38       (38 )                
Transfers to Stage 2             57,010       (57,010 )        
Transfers to Stage 3     (1,634,225 )     (82,961 )     1,717,186          
Amounts Written Off                     (887,975 )     (887,975 )
Monetary effects     (689,860 )     (2,512,354 )     (633,651 )     (3,835,865 )
As of December 31, 2021     1,297,006       4,892,299       1,204,240       7,393,545  

 

(1) It includes the increases /decreases of the ECL amount for existing transactions at the beginning of the fiscal year.

 

9.1.2 Loans on a collective assessment

 

The table below shows the credit quality and the debt balance to credit risk of loans portfolio under collective assessment, by grade of credit risk classification based on the Bank’s internal credit rating system, PD range and year-end stage classification. The Bank’s internal credit rating systems and the evaluation and measurement approaches are explained in note 45.

 

          12/31/2022  
Internal rating grade   Range PD     Stage 1     Stage 2     Stage 3     Total     %  
Performing             475,665,785       10,015,824               485,681,609       97.01  
High grade     0.00% - 3.50%       441,993,511       1,225,603               443,219,114       88.53  
Standard grade     3.51% - 7.00%       20,309,175       2,419,600               22,728,775       4.54  
Sub-standard grade     7.01% - 33.00%       13,363,099       6,370,621               19,733,720       3.94  
Past due but not impaired (1)     33.01% -99.99%       3,787,155       7,563,530               11,350,685       2.27  
Impaired     100 %                     3,637,105       3,637,105       0.72  
Total       479,452,940       17,579,354       3,637,105       500,669,399       100  
%       95.76       3.51       0.73       100          

 

          12/31/2021  
Internal rating grade   Range PD     Stage 1     Stage 2     Stage 3     Total     %  
Performing             508,204,437       9,871,378               518,075,815       96.45  
High grade     0.00% - 3.50%       440,700,297       773,324               441,473,621       82.19  
Standard grade     3.51% - 7.00%       51,026,570       2,448,389               53,474,959       9.95  
Sub-standard grade     7.01% - 33.00%       16,477,570       6,649,665               23,127,235       4.31  
Past due but not impaired (1)     33.01% -99.99%       6,163,005       7,981,554               14,144,559       2.63  
Impaired     100 %                     4,938,276       4,938,276       0.92  
Total       514,367,442       17,852,932       4,938,276       537,158,650       100  
%       95.76       3.32       0.92       100          

 

- 40 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

(1) It also includes transactions which are more than 5 days past due independently of the PD range assigned.

 

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to consumer lending is as follows:

 

    Stage        
    1     2     3     Total  
Gross Carrying amount as of January 1, 2022     514,367,442       17,852,932       4,938,276       537,158,650  
Assets originated or purchased (1)     447,961,742       9,317,412               457,279,154  
Assets derecognized or repaid (1)     (159,048,675 )     (1,273,146 )     (807,303 )     (161,129,124 )
Transfers to Stage 1     6,163,988       (6,037,876 )     (126,112 )        
Transfers to Stage 2     (10,086,275 )     10,262,715       (176,440 )        
Transfers to Stage 3     (3,810,466 )     (782,063 )     4,592,529          
Amounts Written Off     (276,975 )     (516,975 )     (2,003,678 )     (2,797,628 )
Monetary effects     (315,817,841 )     (11,243,645 )     (2,780,167 )     (329,841,653 )
As of December 31, 2022     479,452,940       17,579,354       3,637,105       500,669,399  

 

    Stage        
    1     2     3     Total  
Gross Carrying amount as of January 1, 2021     531,047,239       32,272,387       4,313,911       567,633,537  
Assets originated or purchased (1)     500,417,533       12,081,472               512,499,005  
Assets derecognized or repaid (1)     (250,178,218 )     (15,028,105 )     (1,962,542 )     (267,168,865 )
Transfers to Stage 1     12,587,619       (12,329,136 )     (258,483 )        
Transfers to Stage 2     (11,613,367 )     11,764,486       (151,119 )        
Transfers to Stage 3     (5,570,742 )     (1,258,523 )     6,829,265          
Amounts Written Off     (295,452 )     (555,071 )     (1,317,105 )     (2,167,628 )
Monetary effects     (262,027,170 )     (9,094,578 )     (2,515,651 )     (273,637,399 )
As of December 31, 2021     514,367,442       17,852,932       4,938,276       537,158,650  

 

(1) It includes the increases /decreases of the gross carrying amount for existing transactions at the beginning of the fiscal year.

 

    Stage        
    1     2     3     Total  
ECL amount as of January 1, 2022     5,466,567       1,955,166       3,945,962       11,367,695  
Assets originated or purchased (1)     6,203,517       1,026,424               7,229,941  
Assets derecognized or repaid (1)     (2,720,013 )     500,743       680,084       (1,539,186 )
Transfers to Stage 1     697,130       (593,329 )     (103,801 )        
Transfers to Stage 2     (212,325 )     314,878       (102,553 )        
Transfers to Stage 3     (1,896,929 )     (139,667 )     2,036,596          
Amounts Written Off     (16,666 )     (114,855 )     (1,643,923 )     (1,775,444 )
Monetary effects     (3,063,405 )     (1,137,933 )     (2,123,149 )     (6,324,487 )
As of December 31, 2022     4,457,876       1,811,427       2,689,216       8,958,519  

 

- 41 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

    Stage        
    1     2     3     Total  
ECL amount as of January 1, 2021     13,347,709       7,072,534       2,574,132       22,994,375  
Assets originated or purchased (1)     7,101,540       1,375,224               8,476,764  
Assets derecognized or repaid (1)     (11,127,080 )     (2,932,836 )     951,902       (13,108,014 )
Transfers to Stage 1     2,603,881       (2,444,389 )     (159,492 )        
Transfers to Stage 2     (538,509 )     619,609       (81,100 )        
Transfers to Stage 3     (3,013,428 )     (494,401 )     3,507,829          
Amounts Written Off     (32,106 )     (220,682 )     (844,929 )     (1,097,717 )
Monetary effects     (2,875,440 )     (1,019,893 )     (2,002,380 )     (5,897,713 )
As of December 31, 2021     5,466,567       1,955,166       3,945,962       11,367,695  

 

(1) It includes the increases /decreases of the ECL amount for existing transactions at the beginning of the fiscal year.

 

  9.2 Other debt securities at amortized cost

 

    For purchased corporate bonds, PD and LGD parameters calculated for loan exposures of those issuers were used. The corporate bonds’ EAD is considered equal to the debt balance.
     
    For financial trusts at amortized cost, the criteria that was used in the calculation of ECL is based on credit risk ratings given by a credit rating agency for each type of debt securities that compose each financial trust. That is, the factor to be used will vary in relation to the holding debt securities class (A or B). It is assumed that the EAD is equal to the debt balance.
     
    The table below shows the exposures gross of impairment allowances by stage:

 

    12/31/2022  
Composition   Stage 1     Stage 2     Stage 3     Total     %  
Corporate bonds     1,039,008                       1,039,008     77.11  
Financial trust     308,364                       308,364     22.89  
Total     1,347,372                       1,347,372     100  
%     100                       100        

 

    12/31/2021  
Composition   Stage 1     Stage 2     Stage 3     Total     %  
Corporate bonds     168,471                       168,471     32.67  
Financial trust     347,130                       347,130     67.33  
Total     515,601                   515,601     100  
%     100                       100        

 

The related ECL for corporate bonds as of December 31, 2022 and 2021 amounted to 555 and 1,032, respectively. The ECL related to financial trusts as of December 31, 2022 and 2021 amounted to 241 and 25, respectively. During 2022 and 2021, there were no transfers between stages.

 

- 42 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

  9.3 Government securities at amortized cost or fair value through OCI

 

This group includes federal government securities, provincial or BCRA instruments measured at amortized cost or fair value through OCI. For these assets, an individual assessment of the related parameters was performed. However, under domestic standards and according to Communiqué “A” 6847, no ECL was calculated for these instruments.

 

A breakdown of these investments and their characteristics is disclosed in exhibit A.

 

9.4 Other financial assets

 

The table below shows the exposures gross of impairment allowances by stage:

 

    12/31/2022  
Composition   Stage 1     Stage 2     Stage 3     Total     %  
Other financial assets     53,527,298                   53,527,298       100  
Total     53,527,298                       53,527,298       100  
%     100                       100          

 

    12/31/2021  
Composition   Stage 1     Stage 2     Stage 3     Total     %  
Other financial assets     64,515,449                       64,515,449       100  
Total     64,515,449                   64,515,449       100  
%     100                       100          

 

The ECL related to these types of instruments amounted to 91,041 and 51,518 as of December 31, 2022 and 2021, respectively, including the ECL related to the payments to be collected for the transaction mentioned in note 11. During 2022 and 2021, there were no transfers between stages.

 

9.5 Loans commitment

 

The table below shows the exposures gross of impairment allowances by stage:

 

    12/31/2022  
Composition   Stage 1     Stage 2     Stage 3     Total     %  
Undrawn commitments of credit cards and checking accounts     658,112,548       10,797,137       1,502       668,911,187       98.92  
Guarantees granted     7,171,911                       7,171,911       1.06  
Overdraft and unused agreed commitments     159,787                       159,787       0.02  
Total     665,444,246       10,797,137       1,502       676,242,885       100  
%     98.40       1.60       0.0       100          

 

- 43 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

    12/31/2021  
Composition   Stage 1     Stage 2     Stage 3     Total     %  
Undrawn commitments of credit cards and checking accounts     428,815,172       3,456,762       6,589       432,278,523       98.65  
Guarantees granted     4,261,606       111,672               4,373,278       1.00  
Overdraft and unused agreed commitments     1,512,244                       1,512,244       0.35  
Total     434,589,022       3,568,435       6,589       438,164,045       100  
%     99.18       0.82       0.00       100          

 

The related ECL for undrawn commitments of credit cards and checking accounts as of December 31, 2022 and 2021 amounted to 651,247 and 625,820, respectively. The ECL related to guarantees granted as of December 31, 2022 and 2021 amounted to 45,447 and 32,783, respectively. The ECL related to overdraft and unused agreed commitments as of December 31, 2022 and 2021 amounted to 73 and 5,843, respectively.

 

For undrawn commitments of credit cards and checking accounts, during 2022 there were transfers of the carrying amounts to Stage 1, Stage 2 and Stage 3 for an amount of (5,850,199), 5,793,518 and 56,681, respectively, and there were transfers of the ECL to Stage 1, Stage 2 and Stage 3 for an amount of 49,643, (49,896) and 253, respectively. For the other items, there were no transfers between stages during 2022 and 2021.

 

In exhibit R “Value adjustment for credit losses – Allowance for uncollectibility risk”, the ECL movements by portfolio and products are also disclosed.

 

10. FINANCIAL ASSETS DELIVERED AS GUARANTEE

 

The composition of financial assets delivered as guarantee as of December 31, 2022 and 2021 is as follows:

 

    Carrying amount  
Composition   12/31/2022     12/31/2021  
For transactions with the BCRA     24,824,547       30,242,005  
For guarantee deposits     5,795,731       4,751,142  
Total     30,620,278       34,993,147  

 

The Bank’s Management considers there shall be no losses due to the restrictions on the above listed financial assets.

 

11. EQUITY INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS – PRISMA MEDIOS DE PAGO SA

 

The composition of equity investment at fair value through profit or loss as of December 31, 2022 and 2021, is detailed in the Exhibit A.

 

In relation to the Bank’s holding in Prisma Medios de Pago SA (Prisma), on January 21, 2019, the Bank, together with the other shareholders, accepted a purchase offer made by AI ZENITH (Netherlands) B.V. (a company related to Advent International Corporation) for the acquisition of 1,933,051 common shares of par value Ps.1 each and entitled to one vote, representing 4.6775 % of its share capital, equivalent to 51% of the Bank’s capital stock in such company.

 

- 44 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

On February 1, 2019, the Bank completed the transfer of such shares for a total purchase price of (in thousands) USD 64,542 out of which the Bank received on the date hereof (in thousands) USD 38,311 and the payment of the balance for an amount of (in thousands) USD 26,231 shall be deferred for 5 years as follows: (i) 30% of such amount in pesos adjusted by Unit of Purchasing Power (UVA, for its acronym in Spanish) at a 15% nominal annual rate; and (ii) 70% in US Dollars at a 10% nominal annual rate. The purchase price is guaranteed by the issuance of notes in favor of the Bank and pledges of the transferred shares.

 

During July 2019, the process to determine the final selling price of the shares of Prisma was completed and the final price was (in thousands) USD 63,456. The difference arising from a final price lower than the estimated price was deducted from the price balance, therefore there was no need for the Bank to return any amounts received. All other payment conditions were not modified and remain in full force and effect under the terms described in this note.

 

On October 1, 2021, the Bank, together with the other class B Shareholders of Prisma, gave notice with respect to the exercise of the existing put option and therefore started the procedure to sell the remaining 49% of the capital stock of Prisma.

 

As of December 31, 2021, the holding of the Bank in Prisma (equivalent to 49%), was recorded in “Equity instruments at fair value through profit or loss” determined from valuations performed by independent experts, which was adjusted in less, according to Memorandums issued by the BCRA on March 12 and 22, 2021.

 

On March 18, 2022, the Bank completed the transfer of all remaining shares held in Prisma in favor of AI ZENITH (Netherlands) BV, representing 4.4941% of Prisma’s capital stock.

 

The price of such shares is (in thousands) USD 33,018 and shall be paid as follows: (i) 30% in pesos at UVA plus a nominal annual rate of 15% that shall be paid 50% on March 18, 2027 and the remaining on March 18, 2028, and (ii) 70% in US Dollars at a nominal annual rate of 10% that shall be paid 50% on March 18, 2027 and the remaining on March 18, 2028. The profit generated for the sale of those shares is recorded in the statement of income under “Net gain from measurement of financial instruments at fair value through profit or loss”.

 

On the other hand, the parties agreed that: (i) the 40% of the outstanding balance of the sale of 51% mentioned in the first paragraph of this note was paid on March 30, 2022 and (ii) the remaining balance shall be paid in two installments, on January 31, 2026 and January 31, 2027, respectively.

 

Finally, sellers retained the usufruct (dividends) of the shares sold to be declared by Prisma for the year ended December 31, 2018, which were collected on April 26, 2019. Besides the proportion applicable to the buyer of the dividends to be reported for the following fiscal years –with the buyer’s commitment to voting in favor of the distribution of certain minimum percentages– will be used to create a guarantee trust to repay the deferred price amount through the concession by the buyer and Prisma of a usufruct over the economic rights of the shares in favor of such trust. On March 18, 2022 an agreement updated was performed for the 100% of the shares.

 

12. FAIR VALUE QUANTITATIVE AND QUALITATIVE DISCLOSURES

 

The fair value is the amount at which an asset can be exchanged, or at which a liability can be settled, in mutual independent terms and conditions between participants of the principal market (or the most advantageous market) who are duly informed and willing to transact in an orderly and current transaction, at the measurement date under the current market conditions whether the price is directly observable or estimated using a valuation technique under the assumption that the Bank is an ongoing business.

 

When a financial instrument is quoted in a liquid and active market, its price in the market in a real transaction provides the most reliable evidence of its fair value. Nevertheless, when there is no quoted price in the market or it cannot be evidence of the fair value of such instrument, in order to determine such fair value, the entities may use the market value of another instrument with similar characteristics, the analysis of discounted cash flows or other applicable techniques, which shall be significantly affected by the assumptions used.

 

Notwithstanding the above, the Bank’s Management has used its best judgment to estimate the fair values of its financial instruments; any technique to perform such estimate implies certain inherent fragility level.

 

- 45 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

  

Fair value hierarchy

 

The Bank uses the following hierarchy to determine and disclose the fair value of financial instruments, according to the valuation technique applied:

 

- Level 1: quoted prices (unadjusted) observable in active markets that the Bank accesses to at the measurement day for identical assets or liabilities. The Bank considers markets as active only if there are sufficient trading activities with respect to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available at each reporting period.

 

- Level 2: Valuation techniques for which the data and variables having a significant impact on the determination of the fair value recognized or disclosed are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices, such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments to level 2 inputs may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Bank will classify the instruments as Level 3.

 

- Level 3: Valuation techniques for which the data and variables having a significant impact on the determination of the fair value recognized or disclosed are not based on observable market information.

 

Exhibit P presents the hierarchy in the Bank’s financial asset and liability at fair value measurement.

 

Description of the valuation process

 

The fair value of instruments categorized as Level 1 was assessed by using quoted prices effective at the end of each fiscal year, in active markets for identical assets or liabilities, if representative. Currently, for most of the government and private securities, there are two principal markets in which the Bank operates: BYMA and MAE. Additionally, in the case of derivatives, both MAE and Mercado a Término de Rosario SA (ROFEX) are deemed active markets.

 

On the other hand, for certain assets and liabilities that do not have an active market, categorized as Level 2, the Bank used valuation techniques that included the use of market transactions performed under mutual independent terms and conditions, between interested and duly informed parties, provided that they are available as well as references to the current fair value of another instrument being substantially similar, or otherwise the analysis of cash flows discounted at rates built from market information of similar instruments.

 

In addition, certain assets and liabilities included in this category were valued using price quotes of identical instruments in “less active markets”.

 

Finally, the Bank has categorized as level 3 those assets and liabilities for which there are no identical or similar transactions in the market. To determine the market value of these instruments the Bank used valuation techniques based on own assumptions and independent appraisers’ valuations. For this approach, the Bank mainly used the cash flow discount model.

 

As of December 31, 2022 and 2021, the Bank has neither changed the techniques nor the assumptions used to estimate the fair value of the financial instruments.

 

Below is the reconciliation between the amounts at the beginning and at the end of the fiscal year, of the financial assets recognized at fair value categorized as level 3:

 

- 46 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

  As of December 31, 2022  
Reconciliation     Debt instruments       Other financial
assets
      Equity instruments
at fair value
through profit or
loss
 
Amount at the beginning     2,175,359       60,427       4,114,042  
Transfers to Level 3                        
Transfers from Level 3                        
Profit and loss     731,241       5,064       3,596  
Recognition and derecognition     (801,964 )     21,061       (2,508,037 )
Monetary effects     (1,072,772 )     (37,137 )     (924,618 )
Amount at the end of the fiscal year     1,031,864       49,415       684,983  

 

  As of December 31, 2021  
Reconciliation     Debt instruments       Other financial
assets
      Equity instruments
at fair value
through profit or
loss
 
Amount at the beginning     1,112,717       76,973       4,860,694  
Transfers to Level 3                        
Transfers from Level 3                        
Profit and loss     686,775       3,562       1,211,173  
Recognition and derecognition     978,699       10,002       (43,437 )
Monetary effects     (602,832 )     (30,110 )     (1,914,388 )
Amount at the end of the fiscal year     2,175,359       60,427       4,114,042  

 

Quantitative information about Level 3 fair value measurements

 

The following table provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of substantially all of Level 3 principal assets measured at fair value on a recurring basis for which the Bank uses an internal model (with the exception of the Bank’s holding in Prisma for the reasons described in note 11 as of December 31, 2021).

 

                  Range of inputs  
    Fair value of         Significant   12/31/2022  
    Level 3 Assets     Valuation   unobservable    Range of inputs  
Composition   12/31/2022     technique   inputs   Low     High     Unit  
Provisional Debt Securities of Financial Trusts     593,120     Income approach (discounted cash flow)   Discount rate in pesos     69.99       83.83           %
Corporate bonds     434,678     Income approach (discounted cash flow)   Discount rate in pesos     76.98       86.47           %

 

- 47 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

                  Range of inputs  
    Fair value of         Significant   12/31/2021  
    Level 3 Assets     Valuation   unobservable    Range of inputs  
Composition   12/31/2021     technique   inputs   Low     High     Unit  
Provisional Debt Securities of Financial Trusts     626,600     Income approach (discounted cash flow)   Discount rate in pesos     43.32       46.14           %
Corporate bonds     1,543,003     Income approach (discounted cash flow)   Discount rate in pesos     26.19       40.99           %

 

  

The table below describes the effect of changing the significant unobservable inputs to reasonably possible alternatives. Sensitivity data were calculated using a number of techniques including analyzing price dispersion of different price sources, adjusting model inputs to analyze changes within the fair value methodology.

 

    12/31/2022     12/31/2021  
    Favorable
changes
    Unfavorable
changes
    Favorable
changes
    Unfavorable
changes
 
Provisional Debt Securities of Financial Trusts     1,223       (1,176 )     300       (295 )
Corporate bonds     2,622       (2,537 )     29,777       (27,449 )

 

Changes in fair value levels

 

The Bank monitors the availability of information in the market to evaluate the classification of financial instruments into the fair value hierarchy as well as the resulting determination of transfers between levels 1, 2 and 3 at each period end.

 

As of December 31, 2022 and 2021, the Bank has not recognized any transfers between levels 1, 2 and 3.

 

Financial assets and liabilities not measured at fair value

 

Next follows a description of the main methods and assumptions used to determine the fair values of financial instruments not recognized at their fair value in these consolidated Financial Statements:

 

- Instruments with fair value similar to the carrying amount: financial assets and liabilities that are liquid or have short-term maturities (less than three months) were deemed to have a fair value similar to the carrying amount.

 

- Fixed and variable rate of financial instruments: the fair value of financial assets was recognized discounting future cash flows at current market rates for each fiscal year, for financial instruments of similar characteristics. The estimated fair value of fixed-interest rate deposits and liabilities was assessed discounting future cash flows by using estimated interest rates for deposits or placings with similar maturities to those of the Bank’s portfolio.

 

- For public listed assets and liabilities, or those for which the prices are reported by certain renowned pricing providers, the fair value was determined based on such prices.

 

- 48 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The following table shows a comparison between the fair value and the carrying amount of financial instruments not measured at fair value as of December 31, 2022 and 2021:

 

      12/31/2022  
Composition     Carrying
amount
      Level 1       Level 2       Level 3       Fair value  
Financial assets                                        
Cash and deposits in banks     250,089,093       250,089,093                       250,089,093  
Repo transactions     61,929,317       61,929,317                       61,929,317  
Other financial assets     53,436,257       53,436,257                       53,436,257  
Loans and other financing     598,601,030                       521,939,679       521,939,679  
Other debt securities     599,594,038       511,722,746       82,669,663       96,304       594,488,713  
Financial assets delivered as guarantee     30,620,278       30,620,278                       30,620,278  
Total     1,594,270,013       907,797,691       82,669,663       522,035,983       1,512,503,337  
Financial liabilities                                        
Deposits     1,295,395,069       649,076,325               645,261,404       1,294,337,729  
Other financial liabilities     135,091,316       130,781,463       4,371,904               135,153,367  
Financing received from the BCRA and other financial institutions     2,449,342       2,382,151       51,963               2,434,114  
Issued corporate bonds     2,715,556               2,638,551               2,638,551  
Subordinated corporate bonds     72,129,837               58,815,433               58,815,433  
Total     1,507,781,120       782,239,939       65,877,851       645,261,404       1,493,379,194  

 

      12/31/2021  
Composition     Carrying
amount
      Level 1       Level 2       Level 3       Fair value  
Financial assets                                        
Cash and deposits in banks     335,692,114       335,692,114                       335,692,114  
Repo transactions     61,176,357       61,176,357                       61,176,357  
Other financial assets     64,463,931       64,416,765                       64,416,765  
Loans and other financing     686,328,426                       637,724,702       637,724,702  
Other debt securities     46,838,533       44,550,843       1,265,887       304,156       46,120,886  
Financial assets delivered as guarantee     34,993,147       34,993,147                       34,993,147  
Total     1,229,492,508       540,829,226       1,265,887       638,028,858       1,180,123,971  
Financial liabilities                                        
Deposits     1,147,041,028       650,045,751               496,348,778       1,146,394,529  
Other financial liabilities     131,278,389       129,516,534       2,794,914               132,311,448  
Financing received from the BCRA and other financial institutions     852,660       771,790       74,752               846,542  
Issued corporate bonds     5,825,893               5,128,186               5,128,186  
Subordinated corporate bonds     81,762,819               67,123,964               67,123,964  
Total     1,366,760,789       780,334,075       75,121,816       496,348,778       1,351,804,669  

 

- 49 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

13. BUSINESS COMBINATIONS

 

On October 1, 2021, the Bank exercised a call option to reach 24.99% of the equity interest in Fintech SGR, being this a structured entity in which the Bank has control (see also note 1).

 

Assets acquired and liabilities assumed

 

The fair value of the identifiable assets and liabilities of Fintech SGR and the risk fund (“Fondo de Riesgo”), as of the date of acquisition, were as follows:

 

      Fair value recognized on acquisition  
Composition     SGR       Risk fund  
Assets     115,632       1,673,303  
Cash and deposits in Banks     487       180,729  
Debt Securities at fair value through profit or loss             1,211,953  
Other financial assets     77,082       279,840  
Property, plant and equipment     1,108          
Deferred tax assets     7,724          
Other non-financial assets     29,231       781  
Liabilities     97,776       1,673,303  
Other financial liabilities             1,658,508  
Other non-financial liabilities     97,776       14,795  
Net assets acquired at fair value     17,856          

 

The goodwill generated by the acquisition of Fintech SGR amounted to 44,460.

 

The total consideration transferred amounted to 33,488 (not restated) and it was performed through an irrevocable capital contribution made by the Bank in order to increase the capital stock of Fintech SGR, which was approved by the Fintech SGR’s Ordinary and Special Shareholders’ Meeting involving class “A” and class “B”, held on October 18, 2021.

 

14. INVESTMENT IN ASSOCIATES AND JOINT ARRANGEMENTS

 

14.1 Associates

 

a) Macro Warrants SA

 

The Bank holds an investment in the associate Macro Warrants SA. The existence of significant influence is evidenced by the representation the Bank has in the Board of Directors of the associate. In order to measure this investment, the Bank used accounting information of Macro Warrants SA as of September 30, 2022. Additionally, the Bank has considered, when applicable, the material transactions or events occurring between October 1, 2022 and December 31, 2022.

 

- 50 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The following table presents the summarized financial information on the Bank’s investment in the associate:

 

Summarized statement of financial position   12/31/2022     12/31/2021  
Total assets     127,243       173,171  
Total liabilities     15,965       24,560  
Shareholders’ equity     111,278       148,611  
Proportional Bank’s interest     5 %     5 %
Investment carrying amount     5,564       7,431  

 

As of December 31, 2022 and 2021, the investment carrying amount in the net income for the fiscal years amounted to (1,621) and 549, respectively.

 

b) Play Digital SA

 

As explained in note 1, the Bank holds an investment in the associate Play Digital SA. The existence of significant influence is evidenced by the representation the Bank has in the Board of Directors of the associate. In order to measure this investment, the Bank used accounting information of Play Digital SA as of September 30, 2022. Additionally, the Bank has considered, when applicable, the material transactions or events occurring between October 1, 2022 and December 31, 2022.

 

The following table presents the summarized financial information on the Bank’s interest in the associate:

 

Summarized statement of financial position   12/31/2022     12/31/2021  
Total assets     4,321,080       3,630,568  
Total liabilities     446,741       306,601  
Shareholders’ equity     3,874,339       3,323,967  
Effects of the irrevocable capital contributions made during 2022 pending capitalization (see note 1)     (4,596,480 )        
Adjusted Shareholders’ equity     (722,141 )     3,323,956  
Proportional Bank’s interest (see note 1)     8.9927 %     10.0197 %
Equity interest     (64,940 )     333,052  
Irrevocable capital contribution made in January and July 2022 (see note 1)     487,899          
Investment carrying amount     422,959       333,052  

 

As of December 31, 2022 and 2021, the investment carrying amount in the net income for the fiscal years amounted to (414,107) and (146,964), respectively.

 

14.2. Joint ventures

 

The Bank participates in the following joint ventures:

 

a) Banco Macro SA – Wordline Argentina SA Unión transitoria

 

On April 7, 1998, the Bank executed an agreement with Siemens Itron Services SA to organize an joint venture (UTE, for its acronym in Spanish) controlled on a joint basis through a 50% interest, the purpose of which is to facilitate a data processing center for the tax administration, to modernize the systems and tax collection processes of the Province of Salta and manage and recover municipal taxes and fees.

 

- 51 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The following table presents the summarized financial information on the Bank’s investment in the UTE:

 

Summarized statement of financial position   12/31/2022     12/31/2021  
Total assets     1,551,310       1,381,302  
Total liabilities     265,824       321,017  
Shareholders’ equity     1,285,486       1,060,285  
Proportional Bank’s interest     50 %     50 %
Investment carrying amount     642,743       530,143  

 

As of December 31, 2022 and 2021, the investment carrying amount in the net income for the fiscal years amounted to 322,924 and 339,521, respectively.

 

b) Finova SA

 

As explained in note 1, on October 1, 2021, the Bank acquired the 50% of Finova SA. The Bank has common control over this company, as the decisions about the relevant activities require unanimous consent. In order to measure this investment, the Bank used accounting information of Finova SA as of September 30, 2022. Additionally, the Bank has considered, when applicable, the material transactions or events occurring between October 1, 2022 and December 31, 2022.

 

The following table presents the summarized financial information on the Bank in this company, which as explained in note 3, section 3.5 “Investment in associates and joint arrangements”, is measured at equity method plus goodwill:

 

Summarized statement of financial position   12/31/2022     12/31/2021  
Total assets     50,945       75,747  
Total liabilities     8,287       7,967  
Shareholders’ equity     42,658       67,780  
Proportional Bank’s interest     50 %     50 %
Equity interest     21,329       33,890  
Goodwill     49,004       49,004  
Investment carrying amount     70,333       82,894  

 

As of December 31, 2022 and 2021, the investment carrying amount in the net income for the fiscal years amounted to (12,562) and (22,562), respectively.

 

For further information on the Bank’s interest in associates and joint arrangements, see exhibit E “Detailed information on interest in other companies”.

 

15. OTHER NON-FINANCIAL ASSETS

 

The composition of the other non-financial assets as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Investment property (see Exhibit F)     8,689,946       1,694,136  
Advanced prepayments     2,347,616       1,617,108  
Tax advances     1,230,143       855,688  
Other     185,165       374,911  
Total     12,452,870       4,541,843  

 

- 52 -


 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

16. RELATED PARTIES

 

A related party is a person or entity that is related to the Bank:

 

- has control or joint control of the Bank;

- has significant influence over the Bank;

- is a member of the key management personnel of the Bank or of the parent of the Bank;

- members of the same group;

- one entity is an associate (or an associate of a member of a group of which the other entity is a member).

 

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly. The Bank considers as key management personnel, for the purposes of IAS 24, the members of the Board of Directors and the senior management members of the Risk Management Committee, the Assets and Liabilities Committee and the Senior Credit Committee.

 

As of December 31, 2022 and 2021, amounts balances and profit or loss related to transactions generated with related parties are as follows:

 

    As of December 31, 2022  
    Main subsidiaries (1)                          
    Macro Bank
Limited
    Macro
Securities
SAU
    Macro
Fondos
SGFCISA
    Argenpay
SAU
    Fintech
SGR
    Associates     Key
management
personnel (2)
    Other
related
parties
    Total  
Assets                                                                      
Cash and deposits in banks     1,419                                                             1,419  
Other financial assets                                     3,017,035               232,533       19     3,249,587  
Loans and other financing (3)                                                              
Overdraft                                                     56,268       420,910     477,178  
Credit cards                                                     189,716       49,820     239,536  
Lease                                                             66,686     66,686  
Personal loans                                                     1,162             1,162  
Mortgage loans                                                     542,582             542,582  
Other loans             2,113,373                                       151,849       1,400,121     3,665,343  
Guarantee granted                                                             1,540,021     1,540,021  
Other non-financial assets                                                                      
Total assets     1,419       2,113,373                       3,017,035               1,174,110       3,477,577     9,783,514  
                                                                       
Liabilities                                                                      
Deposits             2,936,305       65,353       58,138       116       84,710       4,161,737       2,299,339     9,605,698  
Liabilities at fair value through profit or loss                                                             164,605     164,605  
Other financial liabilities                                                   51,690       12,028     63,718  
Issued corporate bonds             109,275       178,907                                             288,182  
Subordinated corporate bonds                                     144,549                             144,549  
Other non-financial liabilities                                                             20,216     20,216  
Total liabilities             3,045,580       244,260       58,138       144,665       84,710       4,213,427       2,496,188     10,286,968  
                                                                       
Income / (loss)                                                                      
Interest income             4,323                                       293,908       1,983,298     2,281,529  
Interest expense                                             (22,970 )     (104,453 )     (69,030 )   (196,453 )
Commissions income             24,841       156               792       345       61       105,069     131,264  
Commissions expense                                     (10,647 )             (51 )     (1,143 )   (11,841 )
Other operating income     5                       40       1,304,736                       52     1,304,833  
Allowance for loan losses             (374 )                                                   (374 )
Administrative expense                                                             (585,739 )   (585,739 )
Other operating expense             (14,511 )                                             (70,829 )   (85,340 )
Total Income / (loss)     5       14,279       156       40       1,294,881       (22,625 )     189,465       1,361,678     2,837,879  

 

(1) These transactions are eliminated during the consolidation process.
(2) Includes close family members of the key management personnel.
(3) The maximum financing amount for loans and other financing as of December 31, 2022 for Macro Securities SAU, Fintech SGR, Key management personnel and other related parties amounted to 4,528,425, 2,535,472, 1,319,372 and 16,840,167, respectively.

 

- 53 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

    As of December 31, 2021
    Main subsidiaries (1)                        
    Macro Bank
Limited
    Macro
Securities
SAU
    Macro
Fondos
SGFCISA
    Argenpay
SAU
    Fintech
SGR
    Associates     Key
management
personnel (2)
    Other
related
parties
    Total  
Assets                                                    
Cash and deposits in banks     1,603                                                             1,603  
Other financial assets                                     1,477,165               290,117       281,735     2,049,017  
Loans and other financing (3)                                                                      
Documents                                                             55,596     55,596  
Overdraft                                                     156,620       492,704     649,324  
Credit cards                                                     139,924       105,138     245,062  
Lease                                                             55,956     55,956  
Personal loans                                                     2,776             2,776  
Mortgage loans                                                     499,837             499,837  
Other loans             2,697,732                                       148,709       3,095,126     5,941,567  
Guarantee granted                                                             1,993,430     1,993,430  
Other non-financial assets                                                     47             47  
Total assets     1,603       2,697,732                       1,477,165               1,238,030       6,079,685     11,494,215  
                                                                       
Liabilities                                                                      
Deposits     8       3,097,952       318,915       133,622       60       102,927       7,197,104       3,339,357     14,189,945  
Financial liabilities at fair value through profit or loss                                                             3,169,891     3,169,891  
Other financial liabilities                                                     95,016       485,510     580,526  
Subordinated corporate bonds                                     81,844                             81,844  
Other non-financial liabilities                                                             29,963     29,963  
Total liabilities     8       3,097,952       318,915       133,622       81,904       102,927       7,292,120       7,024,721     18,052,169  
                                                                       
Income / (loss)                                                                      
Interest income             6,960                                       317,425       2,798,993     3,123,378  
Interest expense             (8,205 )                             (33,765 )     (74,764 )     (109,111 )   (225,845 )
Commissions income             42,841       232               56       434       37       196,373     239,973  
Commissions expense                                     (699 )             (45 )     (343 )   (1,087 )
Profit from measurement of financial instruments at fair value through profit or loss                                     45,691                             45,691  
Other operating income     8       6,693                       13,049                       62     19,812  
Administrative expense                                                             (468,070 )   (468,070 )
Other operating expense                                                             (144,963 )   (144,963 )
Total Income / (loss)     8       48,289       232               58,097       (33,331 )     242,653       2,272,941     2,588,889  

 

(1) These transactions are eliminated during the consolidation process.
(2) Includes close family members of the key management personnel.
(3) The maximum financing amount for loans and other financing as of December 31, 2021 for Macro Securities SAU, Fintech SGR, Key management personnel and other related parties amounted to 2,720,419, 1,477,165, 1,395,627 and 11,912,135, respectively.

 

- 54 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Transactions generated by the Bank with its related parties for transactions arranged within the course of the usual and ordinary course of business were performed in normal market conditions, both as to interest rates and prices and as to the required guarantees.

 

The Bank does not have loans granted to directors and other key management personnel secured with shares.

 

Total remunerations received as salary and bonus by the key management personnel as of December 31, 2022 and 2021, totaled 1,057,003 and 1,131,565, respectively.

 

In addition, fees received by the Directors as of December 31, 2022 and 2021 amounted to 1,802,678 and 2,227,536, respectively.

 

Additionally, the composition of the Board of Directors and key management personnel of the Bank and its subsidiaries is as follows:

 

Composition   12/31/2022     12/31/2021  
Board of Directors     22       21  
Senior managers of the key management personnel     12       12  
Total     34       33  

 

- 55 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

17. DEPOSITS

 

The composition of deposits as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Non-financial Public Sector     109,952,253       109,868,280  
Financial sector     1,653,447       1,872,336  
Non-financial Private Sector and Foreign Residents     1,183,789,369       1,035,300,412  
Checking accounts     159,123,762       196,484,984  
Saving accounts     419,740,050       360,846,573  
Time deposits     569,021,981       447,350,444  
Investment accounts     20,484,440       13,237,020  
Other     15,419,136       17,381,391  
Total     1,295,395,069       1,147,041,028  

 

18. OTHER FINANCIAL LIABILITIES

 

The composition of the other financial liabilities as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Credit and debit card settlement - due to merchants     73,511,478       64,371,122  
Amounts payable for spot purchases of foreign currency pending settlement     16,050,423       30,215,931  
Amounts payable for other spot purchases pending settlement     14,735,430       13,776,398  
Amounts payable for spot purchases of government securities pending settlement     9,780,493       3,161,103  
Payment orders pending to foreign exchange settlement     5,692,820       5,793,940  
Collections and other transactions on account and behalf of others     2,805,941       4,736,909  
Finance leases liabilities (see note 19)     1,965,258       2,766,394  
Other     10,549,473       6,456,592  
Total     135,091,316       131,278,389  

 

19. LEASES

 

19.1   The Bank as a lessee

 

The Bank has lease contracts mainly for real properties recognized in the item “Property, plant and equipment”. Generally, the Bank is restricted from assigning or subleasing the leased assets.

 

As of December 31, 2022 and 2021, the carrying amount of assets recognized for the right-of-use assets identified in the lease contracts, depreciation expense for the fiscal year and the additions to right-of-use assets are disclosed in Exhibit F to these consolidated Financial Statements.

 

Set out below are the carrying amounts of lease liabilities and the movements during the fiscal year:

 

Movements   2022     2021  
At the beginning of the fiscal year     2,766,394       3,456,332  
Additions     636,104       962,042  
Accretion of interest     385,368       426,069  
Difference in foreign currency     710,151       435,238  
Payments     (1,023,305 )     (1,505,130 )
Monetary effects     (1,509,454 )     (1,008,157 )
At the end of the fiscal year (see note 18)     1,965,258       2,766,394  

 

- 56 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The short term leases were recognized as expense for an amount of 14,024 and 15,554 for the years ended December 31, 2022 and 2021, respectively.

 

The table below shows the maturity of the lease liabilities as of December 31, 2022 and 2021:

 

Lease liabilities   Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months
and up to
6 months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months
and up to
24 months
    Over 24
months
    Total
over 12
months
 
Balances as of 12/31/2022     102,002       167,767       230,466       375,032       875,267       459,239       630,752       1,089,991  
Balances as of 12/31/2021     117,881       205,207       281,639       477,223       1,081,950       719,887       964,557       1,684,444  

 

19.2 The Bank as a lessor

 

The Bank, as lessor, entered into financial lease contracts, under the usual characteristics of this kind of transactions, without there being any issues that may differentiate them in any aspect from those performed in the Argentine financial market in general. The lease contracts in force do not represent significant balances with respect to the total financing granted by the Bank.

 

The following table shows the reconciliation between the total gross investment of financial leases and the current value of the minimum payment receivables for such leases:

 

    12/31/2022     12/31/2021  
    Current value
of minimum
payments
    Total gross
Investment
    Current value
of minimum
payments
    Total gross
investment
 
Up to 1 year     1,045,035       694,131       449,698       217,952  
From 1 to 5 years     1,151,911       692,670       1,073,166       713,319  
Total     2,196,946       1,386,801       1,522,864       931,091  

 

Income for non-accrued interests amounted to 810,145 and 591,773, for the years ended December 31, 2022 and 2021, respectively.

 

20. PROVISIONS

 

This item includes the amounts estimated to face a liability of probable occurrence, which if occurring, would originate a loss for the Bank.

 

Exhibit J “Changes in Provisions” presents the changes in provisions as of December 31, 2022 and 2021.

 

- 57 -


 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The expected terms to settle these obligations are as follows:

 

    12/31/2022              
Composition   Within 12
months
    Over 12
months
    12/31/2022     12/31/2021  
For administrative, disciplinary and criminal penalties             500       500       972  
Letters of credits, guarantees and other commitments (1)     696,767               696,767       664,446  
Commercial claims in progress (2)     170,878       323,732       494,610       618,540  
Labor lawsuits     220,529       45,837       266,366       419,573  
Pension funds - reimbursement     303,631       214,859       518,490       206,987  
Other     12,370       723,975       736,345       1,287,157  
Total     1,404,175       1,308,903       2,713,078       3,197,675  

 

(1) These amounts correspond to the ECL calculated for contingent transactions, which are mentioned in note 4.

 

(2) See also note 43.2.

 

In the opinion of the Bank’s Management and its legal counsel, there are no other significant effects other than those disclosed in these consolidated Financial Statements, the amounts and settlement terms of which have been recognized based on the current value of such estimates, considering the probable settlement date thereof.

 

21. OTHER NON-FINANCIAL LIABILITIES

 

The composition of other non-financial liabilities as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Withholdings     15,864,725       13,681,499  
Salaries, bonuses and payroll taxes payables     10,968,737       12,823,688  
Taxes payables     7,711,416       6,263,018  
Miscellaneous payables     2,954,543       3,700,097  
Retirement pension payment orders pending settlement     1,124,896       824,014  
Fees payables     686,058       606,697  
Dividends payables (see note 34)             51,776,837  
Other     3,498,916       4,083,075  
Total     42,809,291       93,758,925  

 

22. EMPLOYEE BENEFITS PAYABLE

 

The table below presents the amounts of employee benefits payable as of December 31, 2022 and 2021:

 

Short-term employee benefits   12/31/2022     12/31/2021  
Salaries, bonuses and payroll taxes payables     6,274,225       6,276,869  
Vacation accrual     4,694,512       6,546,819  
Total short-term employee benefits     10,968,737       12,823,688  

 

The Bank has not long-term employee benefits or post-employment benefits as of December 31, 2022 and 2021.

 

- 58 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

23. ANALYSIS OF FINANCIAL ASSETS TO BE RECOVERED AND FINANCIAL LIABILITIES TO BE SETTLED

 

The following tables show the analysis of financial assets and liabilities the Bank expects to recover and settle as of December 31, 2022 and 2021:

 

12/31/2022   Without due
date
    Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months and
up to 24
months
    Over 24
months
    Total over 12
months
 
Assets                                                                        
Cash and deposits in banks     250,089,093                                                                  
Debt securities at fair value through profit or loss             3,606,944       23,020,407       81,818,949       82,227,649       190,673,949       13,052,363       7,327,800       20,380,163  
Derivative financial instruments             8,486       15,431       18,982               42,899                          
Repo transactions             61,929,317                               61,929,317                          
Other financial assets     11,450,388       34,052,024       13,881       670,485               34,736,390               11,757,745       11,757,745  
Loans and other financing (1)     1,456,402       263,317,290       49,526,049       56,306,665       60,009,135       429,159,139       58,903,976       109,081,513       167,985,489  
Other debt securities             524,424,144       103,201,972       4,775,989       53,229,670       685,631,775       13,748,089       38,126,167       51,874,256  
Financial assets delivered as guarantee     30,620,278                                                                  
Equity instruments at fair value through profit or loss     839,458                                                                  
Total assets     294,455,619       887,338,205       175,777,740       143,591,070       195,466,454       1,402,173,469       85,704,428       166,293,225       251,997,653  
                                                                         
Liabilities                                                                        
Deposits     640,314,252       533,536,796       104,045,528       16,006,720       1,471,095       655,060,139       6,295       14,383       20,678  
Liabilities at fair value through profit or loss             526,027                               526,027                          
Derivative financial instruments             1,715       656                       2,371                          
Other financial liabilities             130,625,153       361,232       307,095       632,952       131,926,432       882,492       2,282,392       3,164,884  
Financing received from the BCRA and other financial institutions             291,701       511,370       1,603,567       42,704       2,449,342                          
Issued corporate bonds                     6,488                       6,488       2,709,068               2,709,068  
Subordinated corporate bonds                             1,420,220               1,420,220               70,709,617       70,709,617  
Total liabilities     640,314,252       664,981,392       104,925,274       19,337,602       2,146,751       791,391,019       3,597,855       73,006,392       76,604,247  

 

(1) The amounts included in “without due date” are related to the non-performing portfolio.

 

- 59 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

12/31/2021   Without due
date
    Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months and
up to 24
months
    Over 24
months
    Total over 12
months
 
Assets                                                                        
Cash and deposits in banks     335,692,114                                                                  
Debt securities at fair value through profit or loss             1,525,952       1,474,529       20,176,091       19,065,153       42,241,725       11,294,313       9,589,786       20,884,099  
Derivative financial instruments                             2,524               2,524                          
Repo transactions             61,176,357                               61,176,357                          
Other financial assets     7,874,914       49,496,919       111,957       1,528,837               51,137,713               9,484,594       9,484,594  
Loans and other financing (1)     319,135       253,753,858       59,795,231       64,027,592       73,753,392       451,330,073       77,414,659       157,264,559       234,679,218  
Other debt securities             274,716,307       866,332       102,873,519       87,212,086       465,668,244       83,487,292       7,913,654       91,400,946  
Financial assets delivered as guarantee     34,993,147                                                                  
Equity instruments at fair value through profit or loss     4,245,510                                                                  
Total assets     383,124,820       640,669,393       62,248,049       188,608,563       180,030,631       1,071,556,636       172,196,264       184,252,593       356,448,857  
                                                                         
Liabilities                                                                        
Deposits     638,343,581       399,889,458       96,274,539       11,568,297       903,931       508,636,225       60,388       834       61,222  
Liabilities at fair value through profit or loss             3,170,711                               3,170,711                          
Derivative financial instruments                             4,933               4,933                          
Other financial liabilities             127,634,084       342,630       328,624       772,335       129,077,673       1,231,714       969,002       2,200,716  
Financing received from the BCRA and other financial institutions             458,183       349,829       22,788       11,922       842,722       9,938               9,938  
Issued corporate bonds                             5,825,893               5,825,893                          
Subordinated corporate bonds                             1,782,882               1,782,882               79,979,937       79,979,937  
Total liabilities     638,343,581       531,152,436       96,966,998       19,533,417       1,688,188       649,341,039       1,302,040       80,949,773       82,251,813  

 

(1) The amounts included in “without due date” are related to the non-performing portfolio.

 

24. DISCLOSURES BY OPERATING SEGMENT

 

For management purposes the Bank’s Management has determined that it has only one operating segment related to the banking business. In this sense, the Bank supervises the operating segment income (loss) for the fiscal year in order to make decisions about resources to be allocated to the segment and assess its performance, which is measured on a consistent basis with the profit or loss in the Financial Statements.

 

25. INCOME TAX

 

a) Inflation adjustment on income tax

 

Tax Reform Law 27430, amended by Laws 27468 and 27541, established the following, regarding inflation adjustment on income tax for the fiscal years beginning on January 1, 2018:

 

i) Such adjustment will be applicable in the fiscal year in which the variation of the IPC is higher than 100% for the thirty-six months before the end of the tax period.
ii) Regarding the first, second and third fiscal year after its effective date, this procedure will be applicable if the variation of the abovementioned index, calculated from the beginning until the end of each of those fiscal years exceeds 55%, 30% and 15% for the first, second and third fiscal years of application, respectively.

 

- 60 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

iii) The positive or negative inflation adjustment, as the case may be, corresponding to the first, second and third fiscal years beginning on January 1, 2018, shall be allocated one third in the fiscal year for which the adjustment is calculated and the remaining two thirds in equal parts in the following two immediate fiscal years.
iv) The positive or negative inflation adjustment, corresponding to the first and second fiscal years beginning on January 1, 2019, shall be allocated one sixth to the fiscal year in which the adjustment is determined and the remaining five sixth in the following immediate fiscal years.
v) For fiscal years beginning on January 1, 2021, 100% of the adjustment may be deducted in the year in which it is determined.

 

As of December 31, 2022 and 2021, all the conditions established by the income tax Law to practice the inflation adjustment are met and the current and deferred income tax was recognized, including the effects of the application of the inflation adjustment on income taxes established by Law (see section “Tax inflation adjustment – Fiscal years 2019 and 2020” of this note).

 

b) Income tax rate

 

On June 16, 2021, through Decree No. 387/2021, Law No. 27630 was issued. This law established for fiscal years beginning on or after January 1, 2021, a progressive tax rates scheme of 25%, 30% and 35% which will be applied, on a progressively basis, to the taxable accumulated net profit at the end of each fiscal year.

 

c) The main items of deferred income tax:

 

Composition   12/31/2022     12/31/2021  
Deferred tax assets                
Loans and other financing     3,624,426       5,120,431  
Provisions and employee benefits     1,547,519       2,131,922  
Allowances for contingencies     895,959       894,586  
Leases     333,342       342,289  
Investments in other companies     62,489          
Other     731,636       774,998  
Total deferred tax assets     7,195,371       9,264,226  
                 
Deferred tax liabilities                
Property, plant and equipment and other non-financial assets     11,098,037       10,996,258  
Intangible assets     6,062,959       5,712,776  
Tax effects on forward sales     3,093,064       1,816,643  
Investments in other companies             1,306,131  
Other     145,942       427,047  
Total deferred tax liabilities     20,400,002       20,258,855  
Net deferred tax liabilities     13,204,631       10,994,629  

 

In the consolidated Financial Statements, tax assets (current and deferred) of an entity of the Group shall not be offset with the tax liabilities (current and deferred) of another entity of the Group because they correspond to income tax applicable to different taxpayers and also they are not legally entitled before the tax authority to pay or receive only one amount to settle the net position.

 

- 61 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Changes in net deferred tax assets and liabilities as of December 31, 2022 and 2021 are summarized as follows:

 

Composition   12/31/2022     12/31/2021  
Net deferred tax liabilities at beginning of the fiscal year     10,994,629       18,311,974  
Loss / (Profit) for deferred taxes recognized in the statement of income     2,210,002       (7,317,345 )
Net deferred tax liabilities at fiscal year end     13,204,631       10,994,629  

 

The main items of income tax expense in the consolidated Financial Statements are as follows:

 

Composition   12/31/2022     12/31/2021  
Current income tax expense     17,244,136       10,555,911  
Loss / (Profit) for deferred taxes     2,210,002       (7,317,345 )
Income tax loss recorded in the statement of income     19,454,138       3,238,566  
Income tax (profit) / loss recorded in other comprehensive income     (2,445,927 )     2,350,647  
Total     17,008,211       5,589,213  

 

The table below shows the reconciliation between income tax and the amounts obtained by applying the current tax rate in Argentina to the income carrying amount:

 

Composition   12/31/2022     12/31/2021  
Income carrying amount before income tax     62,499,734       56,072,788  
Applicable income tax rate     35 %     35 %
Income tax on income carrying amount     21,874,907       19,625,476  
Net permanent differences and other tax effects including the fiscal inflation adjustment     (2,420,769 )     (16,386,910 )
Total income tax     19,454,138       3,238,566  

 

As of December 31, 2022 and 2021, the effective income tax rate is 31.1% and 5.8%, respectively. During fiscal year 2021, the effective income tax rate was affected by the inflation adjustment determined for accounting and income tax purposes, both current and deferred.

 

Fiscal years 2019 and 2020

 

As decided by the Board of Directors in the meeting held on May 11, 2020, considering certain case law on the matter assessed by its legal counsel and tax advisors, on May 26 of that year, the Bank filed with the Administración Federal de Ingresos Públicos (AFIP, for its acronym in Spanish) its annual income tax return considering the total effect of the inflation adjustment on income tax (see section a) iv) of this note). As a result, the current income tax determined by Banco Macro SA for fiscal year 2019 amounted to 7,002,124 (not restated). The same criterion was applied to determine the annual income tax report for 2020, which generated accrued income tax for Banco Macro SA for such fiscal year that amounted to 9,933,210 (not restated).

 

In addition, on July 23, 2021, the Bank filed a reimbursement action with the AFIP requesting that 254,305 (not restated) paid as income tax for the 2020 tax period be reimbursed.

 

As to the tax periods mentioned in previous paragraphs, on November 1, 2021, the AFIP notified the beginning of an income tax audit, which is in progress.

 

- 62 -


 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Along with the filings mentioned in the first paragraph of this section, on December 28, 2021, the Bank filed petitions for declaratory judgment with the Federal Administrative Contentious Court for the periods under analysis. The file 22274/2021, for the fiscal year 2019, is in process in Court No. 12 and the file 22278/2021, for the fiscal year 2020, is in process in Court No. 1.

 

Fiscal year 2021

 

On October 17, 2022, Banco Macro SA filed a reimbursement action with the AFIP requesting that 382,189 paid as income tax for the 2021 tax period be reimbursed.

 

On January 3, 2023, the AFIP notified the beginning of an income tax audit related to the abovementioned fiscal year, which is in progress.

 

Reimbursement actions – Fiscal years 2013 to 2017 and 2018

 

On October 24, 2019, Banco Macro SA filed with the AFIP-DGI (Argentine tax authorities) two reimbursement actions under the terms established by the first paragraph of section 81, Law No. 11683 requesting the reimbursement of 4,782,766 and 5,015,451 (not restated amounts) paid to tax authorities as income tax during tax periods 2013 through 2017 and 2018, respectively, arising from the impossibility to apply the adjustment for inflation and other adjustment mechanisms set forth by Income Tax Law (prior to the amendments introduced by Laws No. 27430 and 27468 for periods 2013 through 2017, and as revised in 2019 and amended for the 2018 tax period), plus the related compensatory interest (SIGEA [case and file management system] files No. 19144-14224/2019 and 19144-14222/2019). Since tax authorities have not yet issued a resolution with respect to the abovementioned claims, on August 7, 2020, the Bank filed both reimbursement requests under the terms of section 81, Law No. 11683 with the Federal Contentious and Administrative Trial Courts, which are pending in Courts No. 8 and 2 of such jurisdiction, respectively (cases No. 11285/2020 and 11296/2020). Currently, the file for the fiscal year 2018 is in the evidence stage.

 

In connection with the tax periods mentioned in the previous paragraph, on December 19, 2019, the AFIP notified the beginning of the income tax audit for the 2018 tax period, and on May 3, 2021, it notified the beginning of the income tax audit for periods 2013 through 2017. On October 4, 2021, the AFIP ended the audit for periods 2013 through 2017 as the Bank had exercised in due time its right to resort to justice, and that the admission of reimbursement is subject to a court decision.

 

26. COMMISSIONS INCOME

 

Composition   12/31/2022     12/31/2021  
Performance obligations satisfied at a point in time                
Commissions related to obligations     42,688,825       39,677,960  
Commissions related to credit cards     24,778,637       23,596,621  
Commissions related to insurance     4,226,128       4,450,781  
Commissions related to trading and foreign exchange transactions     1,527,054       1,701,807  
Commissions related to securities value     1,263,515       1,477,199  
Commissions related to loans and other financing     432,533       322,779  
Commissions related to financial guarantees granted     10,385       11,527  
Performance obligations satisfied over certain time period                
Commissions related to credit cards     407,727       716,392  
Commissions related to trading and foreign exchange transactions     59,020       75,697  
Commissions related to loans and other financing     7,186       9,377  
Commissions related to obligations     1,571       2,127  
Commissions related to financial guarantees granted             184  
Total     75,402,581       72,042,451  

 

- 63 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

27. DIFFERENCES IN QUOTED PRICES OF GOLD AND FOREIGN CURRENCY

 

Composition   12/31/2022     12/31/2021  
Translation of foreign currency assets and liabilities into pesos     61,080,728       7,984,321  
Income from foreign currency exchange     1,192,854       1,069,055  
Total     62,273,582       9,053,376  

 

28. OTHER OPERATING INCOME

 

Composition   12/31/2022     12/31/2021  
Services     9,657,167       8,395,016  
Adjustments and interest from other receivables     2,379,227       2,179,393  
Other receivables for financial intermediation     947,942       1,833,714  
Adjustments from other receivables with CER clauses     1,679,397       681,084  
Sale of investment in properties and other non-financial assets             76,116  
Other     6,512,803       2,094,389  
Total     21,176,536       15,259,712  

 

 

29. EMPLOYEE BENEFITS

 

Composition   12/31/2022     12/31/2021  
Remunerations     53,579,236       54,584,335  
Payroll taxes     13,220,901       12,594,534  
Compensations and bonuses to employees     8,115,316       7,611,677  
Employee services     2,722,838       2,116,182  
Total     77,638,291       76,906,728  

 

30. ADMINISTRATIVE EXPENSES

 

Composition   12/31/2022     12/31/2021  
Taxes     6,415,867       5,704,624  
Maintenance, conservation and repair expenses     6,236,440       6,461,974  
Armored truck, documentation and events     5,273,648       5,650,513  
Other fees     3,778,624       3,317,564  
Security services     3,761,984       3,972,295  
Electricity and communications     3,464,711       3,959,287  
Software     2,492,439       3,103,996  
Advertising and publicity     2,374,900       1,699,823  
Fees to directors and syndics     1,975,113       1,522,421  
Representation, travel and transportation expenses     683,335       470,077  
Insurance     412,674       529,174  

 

- 64 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Composition (Contd.)   12/31/2022     12/31/2021  
Stationery and office supplies     271,787       245,587  
Hired administrative services     266,705       242,991  
Leases     173,521       227,280  
Other     1,573,923       2,030,073  
           Total     39,155,671       39,137,679  

 

31. OTHER OPERATING EXPENSES

 

Composition   12/31/2022     12/31/2021  
Turnover tax     41,332,037       35,193,119  
From credit cards     17,189,552       14,978,007  
Charges for other provisions     2,382,793       3,161,543  
Deposit guarantee fund contributions     1,913,030       2,029,167  
Other adjustments and interests for miscellaneous obligations     1,205,618       504,379  
Taxes     842,900       921,221  
Loss from sale or impairment of investment in properties and other non-financial assets     542,323       140,151  
Insurance claims     436,033       174,484  
Donations     420,267       57,492  
From administrative, disciplinary and criminal penalties             81,094  
Other     8,728,438       9,451,467  
Total     74,992,991       66,692,124  

 

32. ADDITIONAL DISCLOSURES IN THE STATEMENT OF CASH FLOWS

 

The statement of cash flows presents the changes in cash and cash equivalents derived from operating activities, investing activities and financing activities during the fiscal year. For the preparation of the statement of cash flows, the Bank adopted the indirect method for operating activities and the direct method for investment activities and financing activities.

 

The Bank considers as “Cash and cash equivalents” the item Cash and deposits in banks and those financial assets that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 

For the preparation of the statement of cash flows the Bank considered the following:

 

- Operating activities: the normal revenue-producing activities of the Bank as well as other activities that cannot qualify as investing or financing activities.
- Investing activities: the acquisition, sale and disposal by other means of long-term assets and other investments not included in cash and cash equivalents.
- Financing activities: activities that result in changes in the size and composition of the shareholders’ equity and liabilities of the Bank and that are not part of the operating or investing activities.

 

- 65 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The table below presents the reconciliation between the item “Cash and cash equivalents” in the statement of cash flows and the relevant accounting items of the statement of financial position:

 

Reconciliation   12/31/2022     12/31/2021     12/31/2020  
Cash and deposits in banks     250,089,093       335,692,114       382,135,611  
Debt Securities at fair value through profit or loss             9,467          
Other debt securities     498,952,883       267,023,884       391,688,599  
Loans and other financing     885,642       1,000,749       1,237,032  
Total     749,927,618       603,726,214       775,061,242  

 

33. CAPITAL STOCK

 

The Bank’s subscribed and paid-in capital from December 31, 2019 to December 31, 2022, amounted to 639,413. The capital stock composition is detailed in Exhibit K to the separated Financial Statements.

 

34. EARNINGS PER SHARE - DIVIDENDS

 

Basic earnings per share were calculated by dividing net profit attributable to common shareholders of the Bank by the weighted average number of common shares outstanding during the fiscal year.

 

To determine the weighted average number of common shares outstanding during the fiscal year, the Bank used the number of common shares outstanding at the beginning of the fiscal year adjusted, if applicable, by the number of common shares bought back or issued during the fiscal year multiplied by the number of days that the shares were outstanding in the fiscal year. Note 33 provides a breakdown of the changes in the Bank’s capital stock.

 

The calculation of basic earnings per share is disclosed in the table of Earnings per share included in the consolidated statement of income. See additionally note 44.

 

Dividends paid and proposed

 

During 2020 and 2021, the BCRA issued Communiqués that suspended the payment of earnings distributions resolved by the Shareholders’ Meetings. As a consequence of the abovementioned suspensions, as of December 31, 2021 dividends pending distribution amounted to 26,580,415 (not restated), which had been approved by the Shareholders’ Meetings held on April 30 and October 21, 2020 and April 30, 2021, and were recorded under other non-financial liabilities (see note 21).

 

In addition, on December 16, 2021, the BCRA issued Communiqué “A” 7421, which established as follows: (i) from January 1, 2022, through December 31, 2022, financial institutions will be allowed to distribute up to 20% of the amount of earnings that should have been distributed if the “Earnings distributions” rules had been applied, and (ii) financial institutions that have the BCRA’s authorization for the earnings distributions have to perform it in 12 equal, monthly and consecutive installments.

 

On May 12, 2022, the BCRA approved the dividends distribution requested by the Bank in accordance with the Communiqué mentioned in the previous paragraph for an amount of 19,751,444 (not restated), which were paid during the fiscal year according to the schedule. Additionally, the balance of the dividends approved that are still to be paid because they exceed the abovementioned limit, amounted to 6,828,971 (not restated).

 

Moreover, the Shareholders’ Meeting held on April 29, 2022, resolved to distribute cash dividends or dividends in kind, in this case, measured at market value for an amount of 14,187,873 (not restated), representing 22.18 pesos per share, subject to prior authorization from the BCRA which, added to the dividends still to be paid because they exceed the abovementioned limited, amounted to 21,016,844 (not restated) and were recorded in a “Reserve for dividends pending authorization from the BCRA”. Through Communiqué “A” 7659 issued on December 15, 2022, the BCRA established the suspension on earning distributions for financial entities from January 1, 2023 up to December 31, 2023.

 

For further information see also note 44 together with the earnings distribution proposal.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

35. DEPOSIT GUARANTEE INSURANCE

 

Law No. 24485 and Decree No. 540/1995 created the Deposit Guarantee Insurance System, which was featured as a limited, compulsory and onerous system, aimed at covering the risks of bank deposits, as subsidiary and supplementary to the deposit privilege and protection system established under the Financial Entities Law. The abovementioned legislation also provided for the incorporation of Sedesa with the exclusive purpose of managing the Deposit Guarantee Fund (DGF). Sedesa was incorporated in August 1995.

 

Banco Macro SA holds a 7.7330% interest in the capital stock of Sedesa according to the percentages disclosed by BCRA Communiqué “B” 12305 on March 17, 2022.

 

All deposits in pesos and foreign currency placed in participating entities in the form of checking accounts, savings accounts, certificates of deposits or other forms of deposit that the BCRA may determine from time to time shall be subject to the abovementioned Deposit Guarantee Insurance System up to the amount of 1,500 which must meet the requirements provided for in Presidential Decree 540/1995 and other requirements that the regulatory authority may determine from time to time. In addition, through Communiqué “A” 7661 issued on December 22, 2022, the BCRA resolved that from January 1, 2023, the guarantee will be up to 6,000.

 

On the other hand, the BCRA provided from the exclusion of the guarantee system, among others, of any deposits made by other financial entities, deposits made by persons related to the Bank and securities deposits.

 

36. RESTRICTED ASSETS

 

As of December 31, 2022 and 2021, the following Bank’s assets are restricted:

 

Composition   12/31/2022     12/31/2021  
Cash and Deposits in Banks                
·  Fondo de Riesgo Fintech SGR – Deposits in other entities (1).     58       2  
Subtotal Cash and Deposits in Banks     58       2  
                   
Debt securities at fair value through profit or loss and other debt securities            
·  Fondo de Riesgo Fintech SGR – Debt securities at fair value through profit or loss and other debt securities (1).     4,741,056       2,065,517  
·  Letters of National Estate in pesos adjusted by CER – Maturity: 02/17/2023.     148,920          
·  Discount bonds in pesos regulated by Argentine legislation, maturing in 2033 for the minimum statutory guarantee account required for Agents to act in the new categories contemplated under Resolution No. 622/2013, as amended, of the Argentine Securities Commission (CNV).     92,856       94,847  
·  Federal Government Treasury Bonds in pesos adjusted by CER 1.40%, maturity 03/27/2023, securing the sectoral Credit Program of the Province of San Juan, production investment financing fund.     83,319       86,975  
·  Federal Government Treasury Bonds in pesos adjusted by CER 1.40%, maturity 03/27/2023, securing the regional economies Competitiveness Program – IDB loan No. 3174/OC-AR.     33,682       35,160  
·  Federal Government Treasury Bonds in pesos adjusted by CER 1.40%, maturity 03/27/2023, for the contribution to the Guarantee Fund II in BYMA according to section 45, Law 26831, and supplementary regulations established by CNV standards (NT 2013, as amended).     14,891       15,545  
  Subtotal debt securities at fair value through profit or loss and other debt securities     5,114,724       2,298,044  

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Composition (contd.)   12/31/2022     12/31/2021  
Other financial assets                
·  Interests derived from contributions made as protector partner (2).     2,413,559       1,485,299  
·  Mutual fund shares for minimum statutory guarantee account required for Agents to act in the new categories contemplated under Resolution No. 622/13, as amended, of the CNV.     145,451       293,643  
·  Fondo de Riesgo Fintech SGR – Mutual fund shares (1).     120,502       396,548  
·  Sundry debtors – Other.     8,787       9,792  
·  Sundry debtors – attachment within the scope of the claim filed by the DGR against the CABA for turnover tax differences.     827       1,610  
  Subtotal Other financial assets     2,689,126       2,186,892  

 

Loans and other financing – non-financial private sector and foreign residents            
·  Fondo de Riesgo Fintech SGR – Loans and other financing (1).     5,100       4,036  
  Subtotal loans and other financing     5,100       4,036  

 

Financial assets delivered as a guarantee                
·  Special guarantee checking accounts opened in the BCRA for transactions related to the electronic clearing houses and similar entities.     24,824,547       30,242,005  
·  Guarantee deposits related to credit and debit card transactions.     4,043,563       2,567,119  
·  Other guarantee deposits.     1,752,168       2,184,023  
  Subtotal Financial assets delivered as guarantee     30,620,278       34,993,147  
                 
Other non-financial assets                
·  Real property related to a call option sold.     2,456,151       421,571  
·  Fondo de Riesgo Fintech SGR – Other non-financial assets (1).     12,958       654  
  Subtotal other non-financial assets     2,469,109       422,225  
Total     40,898,395       39,904,346  

 

(1) According to Law 24467, as amended, and Fintech SGR By-Law, this entity has a risk fund (“Fondo de Riesgo”) which its main objective is to cover the guarantees granted to the protector partners and third parties. The assets of the risk fund could only be applied to partners’ withdrawals, to cover guarantees and other direct expenses.

 

(2) As of December 31, 2022 and 2021 it is related to the risk fund Fintech SGR and Garantizar SGR. In order to keep tax benefits related to these contributions, they must be maintained between two and three years from the date they were made.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

37. TRUST ACTIVITIES

 

The Bank is related to several types of trusts. The different trust agreements according to the business purpose sought by the Bank are disclosed below:

 

37.1. Financial trusts for investment purposes

 

Debt securities include mainly prepayments towards the placement price of provisional trust securities of the financial trusts under public and private offerings (Confibono and Secubono). The assets managed for these trusts are mainly related to securitizations of consumer loans. Trust securities are placed once the public offering is authorized by the CNV. Upon expiry of the placement period, once all trust securities have been placed on the market, the Bank recovers the disbursements made, plus an agreed-upon compensation. If after making the best efforts, such trust securities cannot be placed, the Bank will retain the definitive trust securities.

 

In addition, the Bank’s portfolio is completed with financial trusts for investment purposes, trust securities of definitive financial trusts in public and private offering (Secubono and Confibono) and certificates of participation (Arfintech).

 

As of December 31, 2022 and 2021, debt securities and certificates of participation in financial trusts for investment, amounted to 950,899 and 1,034,155, respectively.

 

According to the latest accounting information available as of the date of issuance of these consolidated Financial Statements, the corpus assets of the trusts exceed the carrying amount in the related proportions.

 

37.2. Trusts created using financial assets transferred by the Bank (securitization)

 

The Bank transferred financial assets (loans) to trusts for the purpose of issuing and selling securities for which collection is guaranteed by the cash flow resulting from such assets or group of assets. Through this way the funds that were originally used by the Bank to finance the loans are obtained earlier.

 

As of December 31, 2022 and 2021, considering the latest available accounting information as of the date of issuance of these consolidated Financial Statements, the assets managed through Macro Fiducia SAU (subsidiary) of this type of trusts amounted to 11,680 and 18,708, respectively.

 

37.3. Trusts guaranteeing loans granted by the Bank

 

As it is common in the Argentine banking market, the Bank requires, in some cases, that the debtors present certain assets or entitlements to receive assets in a trust as a guarantee for the loans granted. This way, the risk of losses is minimized and access to the security is guaranteed in case of the debtor's non-compliance.

 

Trusts usually act as conduits to collect cash from the debtor’s flow of operations and send such cash to the Bank for the payment of the debtor’s loans and thus ensure compliance with the obligations assumed by the trustor and guaranteed through the trust.

 

Additionally, other guarantee trusts manage specific assets, mainly real property.

 

Provided there is no non-compliance or delays by the debtor in the obligations assumed with the beneficiary, the trustee shall not execute the guarantee and all excess amounts as to the value of the obligations are reimbursed by the trustee to the debtor.

 

As of December 31, 2022 and 2021, considering the latest available accounting information as of the date of issuance of these consolidated Financial Statements, the assets managed by the Bank amounted to 2,721,267 and 3,942,468, respectively.

 

37.4. Trusts in which the Bank acts as Trustee (Management)

 

The Bank, through its subsidiaries, performs management duties of the corpus assets directly according to the agreements, performing only trustee duties and has no other interests in the trust.

 

In no case shall the Trustee be liable with its own assets or for any obligation deriving from the performance as trustee. Such obligations do not imply any type of indebtedness or commitment for the trustee and they will be fulfilled only through trust assets. In addition, the trustee will not encumber the corpus assets or dispose of them beyond the limits established in the related trust agreements. The fees earned by the Bank from its role as trustee are calculated according to the terms and conditions of the agreements.

 

- 69 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Trusts usually manage funds derived from the activities performed by trustors, for the following main purposes:

 

- Guaranteeing, in favor of the beneficiary the existence of the resources required to finance and/or pay certain obligations, such as the payment of amortization installments regarding work or service certificates, and the payment of invoices and fees stipulated in the related agreements.

 

- Promoting the production development of the private economic sector at a provincial level.

 

- Being a party to public work concession agreements granting road exploitation, management, keeping and maintenance.

 

As of December 31, 2022 and 2021, considering the latest available accounting information as of the date of issuance of these consolidated Financial Statements, the assets managed by the Bank amounted to 17,810,671 and 23,690,901, respectively.

 

38. COMPLIANCE WITH CNV REGULATIONS

 

38.1 Compliance with CNV standards to act in the different agent categories defined by the CNV:

 

38.1.1 Operations of Banco Macro SA

 

Considering Banco Macro SA’s current operations, and according to the different categories of agents established by CNV rules (as per General Resolution No. 622/2013, as amended), the Bank is registered with this agency as agent for the custody of collective investment products of mutual funds (AC PIC FCI, for their acronyms in Spanish) – Comprehensive Depositary company, clearing and settlement agent and trading agent (ALyC and AN – comprehensive, for their acronyms in Spanish) and Guarantee Entity (in the process of being registered), and is registered in the “List of Authorized companies to guarantee capital market instruments”.

 

Additionally, the Bank’s shareholders’ equity as of December 31, 2022 stated in UVAs amounted to 2,765,002,747 and exceeds the minimum amount required by such regulation for the different categories of agents in which the Bank is registered, amounting to 470,350 UVAs as of that date, and the minimum required statutory guarantee account of 235,175 UVAs, which the Bank paid-in with government securities as described in note 36 and the cash deposits in BCRA accounts 000285 and 80285 belonging to the Bank.

 

38.1.2 Operations of Macro Securities SAU

 

Considering the current operations of this subsidiary, and according to the provisions established by CNV effective as of the approval of General Resolution No. 622/2013, as amended, issued by such agency, such Company is registered under the following categories: clearing and settlement agent, trading agent, comprehensive trading agent and mutual investment funds placement and distribution agent and comprehensive mutual investment funds placement and distribution agent (ALyC, AN – comprehensive, ACyD FCI and ACyDI FCI).

 

Additionally, the shareholders’ equity of such Company as of December 31, 2022 stated in UVAs amounted to 54,318,228 and exceeds the minimum amount required by such regulation, amounting to 470,350 UVAs and the minimum statutory guarantee account required a minimum of 50% of the minimum amount of Shareholders’ equity, which the Company paid-in with mutual fund shares. Moreover, as result of the Company acting as “ACyD FCI and ACyDI FCI” an amount of 163,500 UVAs will be added to minimum Shareholder’s equity.

 

38.1.3 Operations of Macro Fondos Sociedad Gerente de Fondos Comunes de Inversión SA

 

Considering the current operations of this subsidiary, and according to the provisions established by CNV effective as of the approval of General Resolution No. 622/2013, as amended, issued by such agency, such Company is registered as agent for the Administration of Collective Investment Products of Mutual Funds.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Additionally, the shareholders’ equity of this Company as of December 31, 2022 stated in UVAs amounted to 14,855,693 and exceeds the minimum amount required by such regulation, amounting to 150,000 UVAs plus 20,000 UVAs per each additional mutual fund it manages. The minimum statutory guarantee account required a minimum of 50% of the minimum amount of Shareholders’ equity, which the Company paid-in with mutual fund shares.

 

38.1.4 Operations of Macro Fiducia SAU

 

Considering the current operations of this subsidiary and according to the provisions established by CNV effective as of the approval of General Resolution 622/2013, as amended, issued by such agency, such Company is registered as financial trustee agent and non-financial trustee agent.

 

Additionally, the shareholders’ equity of such Company as of December 31, 2022 stated in UVAs amounted to 1,045,210 an exceeds the minimum amount required by General Resolution 795 established in 950,000 UVAs. The minimum statutory guarantee account required a minimum of 50% of the minimum amount of Shareholders’ equity, which the Company paid-in with mutual fund shares.

 

38.2 Documents in custody

 

As a general policy, the Bank delivers for custody to third parties the documentary support of its aged accounting and management operations, i.e. those whose date is prior to the last fiscal year-end, except for the Inventory Book, in which aging is deemed to include those with a date prior to the five fiscal years ended. In compliance with CNV General Resolution No. 629 requirements, the Bank has placed (i) the Inventory Books for fiscal years ended up to and including December 31, 2017, and (ii) certain documentation supporting the economic transactions for fiscal years ended up to and including December 31, 2017, under the custody of the following companies: AdeA Administradora de Archivos SA (warehouse located at Ruta 36, km 31.5, Florencio Varela, Province of Buenos Aires) and ADDOC Administración de Documentos SA (warehouse located at Avenida Circunvalación Agustín Tosco with no number, Colectora Sur, between Puente San Carlos and Puente 60 blocks, Province of Córdoba and Avenida Luis Lagomarsino 1750, formerly Ruta 8 Km 51,200, Pilar, Province of Buenos Aires).

 

In addition, the documentary support on a digital format is protected on the Bank’s servers.

 

38.3 As depositary of mutual funds

 

As of December 31, 2022 Banco Macro SA, in its capacity as depositary company, holds in custody the shares in mutual funds subscribed by third parties and assets from the following mutual funds:

 

Funds   Number of shares     Equity  
Argenfunds Abierto Pymes     3,368,464,766       13,209,510  
Argenfunds Ahorro Pesos     68,665,665       1,483,665  
Argenfunds Infraestructura     124,707,305       200,913  
Argenfunds Liquidez     10,487,802,190       35,478,857  
Argenfunds Renta Argentina     95,229,288       1,716,424  
Argenfunds Renta Balanceada     714,552,012       7,640,633  
Argenfunds Renta Capital     17,579,499       3,156,160  
Argenfunds Renta Crecimiento     7,416,062       1,243,800  
Argenfunds Renta Dinámica     55,111,867,139       3,110,104  
Argenfunds Renta Fija     268,962,626       7,901,050  
Argenfunds Renta Flexible     136,970,768       939,800  
Argenfunds Renta Global     223,046,965       1,858,292  
Argenfunds Renta Mixta     2,456,709,951       3,110,839  

 

- 71 -


 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Funds (contd.)   Number of shares     Equity  
Argenfunds Renta Mixta Plus     1,165,105       177,582  
Argenfunds Renta Pesos     204,190,813       4,657,582  
Argenfunds Renta Total     548,961,979       1,311,417  
Argenfunds Renta Variable     2,281,738,860       149,062  
Argenfunds Retorno Absoluto     214,491,575       956,396  
Pionero Acciones     13,492,368       1,665,300  
Pionero Ahorro Dólares     10,920,588       1,818,596  
Pionero Argentina Bicentenario     424,876,097       2,746,821  
Pionero Capital     2,091,257,043       4,283,954  
Pionero Desarrollo     4,815,845,697       5,869,207  
Pionero Empresas FCI Abierto Pymes     204,630,659       2,329,663  
Pionero FF     46,155,016       1,635,163  
Pionero Gestión     1,871,950,929       5,661,357  
Pionero Pesos     1,231,510,642       22,630,750  
Pionero Pesos Plus     15,160,985,615       167,680,294  
Pionero Renta     39,925,450       5,399,159  
Pionero Renta Ahorro     242,765,317       10,689,989  
Pionero Renta Ahorro Plus     811,963,183       6,338,065  
Pionero Renta Balanceado     12,507,475,184       21,234,806  
Pionero Renta Estratégico     702,329,083       5,867,099  
Pionero Renta Fija Dólares     2,863,198       353,113  
Pionero Renta Mixta I     77,051,608       870,677  
Pionero Retorno     1,391,845,010       1,674,448  

 

39. ACCOUNTING ITEMS THAT IDENTIFY THE COMPLIANCE WITH MINIMUM CASH REQUIREMENTS

 

The items recognized by the Bank to constitute the minimum cash requirement effective for December 2022 are listed below, indicating the amounts as of month-end of the related items:

 

Items   Banco Macro SA  
Cash and deposits in banks        
Amounts in BCRA accounts     143,526,540  
Other debt securities        
Government securities computable for the minimum cash requirements     159,809,912  
Financial assets delivered as guarantee        
Special guarantee accounts with the BCRA     24,824,547  
    Total     328,160,999  

 

- 72 -


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

40. PENALTIES APPLIED TO THE ENTITY AND SUMMARY PROCEEDINGS INITIATED BY THE BCRA

 

BCRA Communiqué “A” 5689, as supplemented and amended, requires financial institutions to disclose in their Financial Statements certain information regarding summaries and penalties received from certain regulatory authorities, regardless of the amounts involved and the final conclusions of each case.

 

There follows a description of the situation of Banco Macro SA as of December 31, 2022:

 

Summary proceedings filed by the BCRA

 

Financial summary proceedings: No. 1496 dated 02/24/2016.

 

Reason: control observations over subsidiaries. Penalty amount: 30,608 (not restated).

 

Proceeding filed against: Banco Macro SA and the Members of the Board of Directors (Jorge Horacio Brito, Delfín Jorge Ezequiel Carballo, Jorge Pablo Brito, Marcos Brito, Juan Pablo Brito Devoto, Luis Carlos Cerolini, Carlos Enrique Videla, Alejandro Macfarlane, Guillermo Eduardo Stanley, Constanza Brito and Emanuel Antonio Alvarez Agis).

 

Status: On 04/07/2016, the Bank filed the defenses and evidence on the BCRA. On 05/18/2016 the Bank requested on behalf of Mr. Delfín Jorge Ezequiel Carballo the resolution of the motion for lack of standing to be sued. On 09/09/2020, the BCRA filed Resolution No. 132/20 (notified on 02/22/2021) which acquitted Delfín Jorge Ezequiel Carballo and imposed a fine to the Bank and other responsible directors. On 03/01/2021 the Bank paid the fines. On 03/15/2021 the Bank filed a direct appeal against such resolution to the BCRA, which will be decided at Courtroom I of the Federal Civil and Commercial Court of Appeals (CNACAF, for its acronym in Spanish), where resolution is pending. The fine imposed to Mr. Jorge Horacio Brito was abrogated due to his passing. On 12/03/2021, the BCRA answered the notice of the direct appeal, requesting the dismissal. At the same date the CNACAF decided to include the process into the agreement to issue a sentence. As of the date of issuance of these consolidated Financial Statements, this proceeding is pending resolution.

 

Criminal foreign exchange summary proceedings: No. 7642 dated 10/18/2021.

 

Reason: Supposed non-compliance with article 1 incs. e) and f) of the Criminal Foreign Exchange Regime (TO by Decree No. 480/95), together with points 5, 9 15 and 18 of BCRA Communiqué “A” 6770, and points 1.2 and 5.3 of the BCRA Communiqué “A” 6844.

 

Responsibles: Banco Macro SA, Foreign Exchange Team Leader (Alfredo Muscari), head of Foreign Exchange and Banking Operations manager (Eduardo Roque Covello) and Compliance manager (Gustavo Emilio Pessagno).

 

Status: On 12/29/2021, Banco Macro SA and the natural persons subject to summary proceedings filed their joint defenses, offering evidence and requesting an acquittal. On 03/15/2022, the BCRA dismissed the previous defenses performed by the Bank and the rest of the responsibles who, on 03/25/2022, filed an extraordinary appeal and a nullity request which was dismissed by the BCRA. Against such resolution, on 04/25/2022 a complaint appeal was filed to the Economic Federal Court, Courtroom No. 5, which dismissed the abovementioned appeal and submitted the file to an administrative area to continue with the proceeding. As of the date of issuance of these consolidated Financial Statements, the file is on evidence stage in the BCRA.

 

Penalties imposed by the Financial Information Unit (UIF)

 

File: No. 248/2014 (UIF Note Presidency 245/2013 11/26/2013) dated 07/30/2014.

 

Reason: alleged deficiencies in preparing certain “Reports on suspicious transactions (ROS)” due to cases of infringement detected in certain customer files. Penalty amount: 330 (not restated).

 

Penalty imposed on: Banco Macro SA, the members of the Board and those in charge of anti-money laundering regulation compliance (Luis Carlos Cerolini –both as Compliance Officer and Director- and Jorge Horacio Brito, Delfín Jorge Ezequiel Carballo, Juan Pablo Brito Devoto, Jorge Pablo Brito, Alejandro Macfarlane, Carlos Enrique Videla, Guillermo Eduardo Stanley, Constanza Brito, Emanuel Antonio Alvarez Agis, Marcos Brito and Rafael Magnanini, as Directors of Banco Macro SA).

 

Status: on 12/26/2016 the UIF passed Resolution No. 164/16 imposing fines on those responsible and issuing a favorable decision on the plea of lack of capacity to be sued lodged by Messrs. Carballo and Magnanini. On 01/26/2017 the fines imposed were paid. Against such resolution, the Bank and the individuals liable filed direct appeals, which will be decided at Room III of the CNACAF. Such appeals were dismissed through a final sentence dated 07/18/2019. On 08/15/2019, the Bank filed a federal extraordinary appeal which was dismissed through resolution dated 09/26/2019. On 10/03/2019 the Bank filed a complaint appeal before Argentine Supreme Court (CSJN, for its acronym in Spanish) which, as of the date of issuance of these consolidated Financial Statements, is still pending resolution.

- 73 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Additionally, there are pending summary proceedings before the CNV and the UIF, as described below:

 

File: No. 1480/2011 (CNV Resolution No. 17529) dated 09/26/2014.

 

Reason: potential non-compliance with the obligation to inform a “Significant Event”. Penalty amount: 500 (not restated).

 

Persons subject to summary proceedings: Banco Macro SA, the members of the Board, the regular members of the Statutory Audit Committee and the person/s responsible for market relations (Jorge Horacio Brito, Delfín Jorge Ezequiel Carballo, Juan Pablo Brito Devoto, Jorge Pablo Brito, Luis Carlos Cerolini, Roberto Julio Eilbaum, Alejandro Macfarlane, Carlos Enrique Videla, Guillermo Eduardo Stanley, Constanza Brito, Daniel Hugo Violatti, Ladislao Szekely, Santiago Marcelo Maidana and Herman Fernando Aner).

 

Status: on 10/28/2014 the Bank and the persons involved filed their defenses offering evidence and requesting their acquittal. On 08/03/2015 the term to produce evidence was closed and on 08/19/2015 the defendants lodged their memorials. On 03/04/2021, the Board of Directors of the CNV filed a resolution dismissing the nullity and imposing a fine to the Bank jointly and severally with its Directors at the moment when the facts where investigated. Against such resolution, on 05/03/2021 a direct appeal was filed. In December 2021, the CNV referred the proceedings to the Federal Civil and Commercial Court of Appeals (CNACCF, for its acronym in Spanish), under the file number 14633/2021, styled “Szekely, Ladislao et al v. CNV on appealed administrative resolution” which as of the date of issuance of these consolidated Financial Statements, is pending.

 

File: No. 137/2015 (UIF Resolution No. 136/2017) dated 12/19/2017.

 

Reason: alleged breach to the contents of the Code of Procedure applicable to Anti-money Laundering and Terrorism Financing as Settlement and Clearing Agent at the time of an inspection of the CNV and to the Internal Audit Process referred to in its capacity as comprehensive settlement and clearing agent (UIF Resolution No. 229/2011, as amended). Penalty amount: 50 (not restated).

 

Persons subject to summary proceedings: Banco Macro SA, members of the Management Body during the period that is the subject matter of these summary proceedings (Jorge Horacio Brito, Jorge Pablo Brito, Juan Pablo Brito Devoto, Constanza Brito, Marcos Brito, Delfín Jorge Ezequiel Carballo, Delfín Federico Ezequiel Carballo, Carlos Enrique Videla, Alejandro Macfarlane, Guillermo Eduardo Stanley, Emmanuel Antonio Alvarez Agis, Nicolás Alejandro Todesca, Carlos Alberto Giovanelli, José Alfredo Sanchez, Martín Estanislao Gorosito, Roberto Julio Eilbaum, Mario Luis Vicens, Nelson Damián Pozzoli, Luis María Blaquier, Ariel Marcelo Sigal, Alejandro Eduardo Fargosi, Juan Martin Monge Varela and Luis Cerolini in his double capacity as Compliance Officer and member of the Management Body).

 

Status: on 04/23/2019, UIF passed Resolution No. 41, whereby it resolved the lack of responsibility of Mr. Juan Martín Monge Varela, Luis Maria Blaquier and Mario Luis Vicens, and also imposed fines to the rest liable. On 05/15/2019 the imposed fines were paid and on 06/12/2019, the Bank, its Board of Directors and its statutory audits filed a direct appeal against such resolution, requesting a repeal of the penalty imposed. Such appeal is in process at CNACAF. The file was submitted to Courtroom V of CNACAF that received the proceedings on 06/21/2019. On 05/11/2021, Courtroom V of the CNACAF issued a sentence dismissing the direct appeal filed by the Banco Macro SA and against that on 05/26/2021, this Bank filed a federal extraordinary appeal. On 12/09/2021 the CNACAF decided to allow the imposed Extraordinary appeal, on 12/10/2021, ordered that the case file be submitted to the CSJN, which took place on 12/30/2021, and the case file was received by the latter on 02/03/2022. As of the date of issuance of these consolidated Financial Statements, the CSJN had not issued a decision on the appeal filed.

 

File: No. 1208/2014 (UIF Resolution No. 13/2016) dated 1/15/2016.

 

Reason: alleged failure to comply with Anti-Money Laundering Law, as amended, and UIF Resolution No. 121/11.

 

Persons subject to the summary proceedings: Banco Macro SA, Jorge Horacio Brito, Delfín Jorge Ezequiel Carballo, Juan Pablo Brito Devoto, Jorge Pablo Brito, Luis Carlos Cerolini, Alejandro Macfarlane, Carlos Enrique Videla, Guillermo Eduardo Stanley, Constanza Brito, Marcos Brito and Emmanuel Antonio Álvarez Agis.

 

- 74 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Status: on 05/17/2018 UIF passed resolution No. 13/2016, whereby it filed the summary proceedings related to observations over an overall inspection performed by the BCRA. On 06/15/2018, the liable parties filed their defenses. On 07/02/2018, the UIF sustained the lack of capacity to be sued by Delfín Jorge Ezequiel Carballo, discarding his responsibility in this summary proceeding. On 01/08/2021 UIF filed Resolution No. 80 which imposed a fine to the Bank and the other liable parties. On 01/26/2021 through the BCRA account, the fine was paid for an amount of 60 (not restated). On 03/02/2021, against such resolution a direct appeal to CNACAF was deducted. The proceedings will be decided at Room IV of such jurisdiction. On 05/05/2021, the UIF became a party to the case file and answered the notice served of the direct appeal imposed by the responsibles. On 08/12/2021, the CNACAF dismissed the direct appeal filed by the Bank. On 08/27/2021 a Federal extraordinary appeal against such decision was filed. On 10/04/2021, the CNACAF dismissed the extraordinary appeal filed, where it was held that there was no federal grievance and no manifest arbitrariness in the resolution. On 10/18/2021 the bank filed a petition for the denied extraordinary appeal to CSJN. As of the date of issuance of these consolidated Financial Statements, the petition file has not been resolved by the CSJN.

 

File: No. 379/2015 (UIF Resolution No. 96/2019) dated 09/17/2019.

 

Reason: alleged failure to comply with Anti-Money Laundering Law, as amended, and UIF Resolution No. 121/11.

 

Persons subject to the summary proceedings: Banco Macro SA, Jorge Horacio Brito, Delfín Jorge Ezequiel Carballo, Jorge Pablo Brito, Marcos Brito, Juan Pablo Brito Devoto, Carlos Enrique Videla, Alejandro Macfarlane, Guillermo Eduardo Stanley, Emanuel Antonio Alvarez Agis, Constanza Brito and Luis Carlos Cerolini.

 

Status: On 10/02/2019, Banco Macro SA and the liable individuals were notified about the initiation of the proceedings. On 10/31/2019, the Bank and the individuals subject to summary proceedings filed their defense. On 01/07/2020, the party hearing the summary proceedings considered the defense filed and deferred the motion to dismiss for lack of capacity to be sued and statute of limitations upon issuing an opinion about the substance of the case. The administrative terms were suspended due to the social and preventive lockdown declared in the country due to the Covid-19 pandemic (DNU 297/2020), up to and including 11/29/2020. On 11/30/2020, terms were resumed (DNU 876/2020). On 03/02/2021, the passing of Mr. Jorge Horacio Brito was informed and the lapse of the action against him was requested. In addition, as part of the BCRA summary proceedings styled “File No. 100889/15 – Banco Macro SA, Summary Proceedings No. 1496”, Resolution No. 2020-132-E-GDEBCRA-SEFYC#BCRA was issued, whereby penalties were imposed on Banco Macro SA and the parties subject to those proceedings, currently pending before the CNACAF, Courtroom I (File No. 3784/2021). The transactions for which the parties are investigated have already been subject to penalties in the abovementioned BCRA summary proceedings; therefore, there cannot be simultaneous penalties based on the same subject matter. As a result, a request was made to prevent the application of all types of penalties to the parties subject to the summary proceedings. On 04/22/2021, the judge in charge of the summary proceedings informed that the pleas filed will be resolved in the final ruling; therefore, the brief will be added to the case file without analyzing the issue, expecting the issuance of a resolution. On 08/18/2021, it was resolved to set the case for the production of evidence and to summon all the parties involved to give testimony as parties subject to the summary proceedings. As of the date of issuance of these consolidated Financial Statements, the case is on the final report stage.

 

Although the penalties described above do not involve material amounts, as of the date of issuance of these consolidated Financial Statements, the total amount of monetary penalties received, pending payment due to any appeal lodged by the Bank, amounts to 500 and was recognized according to the BCRA Communiqués “A” 5689 and 5940, as amended and supplemented.

 

The Bank’s Management and its legal counsel consider no further significant accounting effects could arise from the final outcome of the above mentioned judicial proceedings.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

41. CORPORATE BONDS ISSUANCE

 

The corporate bonds liabilities recorded by the Bank are as follows:

 

Corporate Bonds   Original value       Residual face
value as of
12/31/2022
    12/31/2022     12/31/2021  
Subordinated Resettable – Class A   USD 400,000,000 (1)     USD 400,000,000       72,129,837       81,762,819  
Non-subordinated – Class E   USD 17,000,000 (2)     USD 17,000,000       2,715,556          
Non-subordinated – Class B   $ 4,620,570,000 (3)                       5,825,893  
Total                       74,845,393       87,588,712  

 

On April 26, 2016, the general regular shareholders’ meeting approved the creation of a Global Program for the Issuance of Medium-Term Debt Securities, in accordance with the provisions of Law No. 23576, as amended and further applicable regulations, up to a maximum amount outstanding at any time during the term of the program of USD 1,000,000,000 (one billion US dollars), or an equal amount in other currencies or power units, under which it is possible to issue simple corporate bonds, not convertible into shares in one or more classes. Also, on April 28, 2017, the General and Special Shareholder’ Meeting resolved to extend the maximum amount of the abovementioned Global Program up to USD 1,500,000,000 (one thousand five hundred millions US dollars), and on April 27, 2018, the abovementioned Shareholders’ Meeting resolved to increase the maximum amount of the Global Program for the Issuance of Corporate Bonds, in face value, from USD 1,500,000,000 to USD 2,500,000,000 or an equal amount in other currencies, as determined by the Board of Directors in due time. Finally, on October 20, 2021 due to a Board of Director resolution, the Bank required from the CNV a five-year extension of the abovementioned program, which was approved by the Regulator through a note issued on December 15, 2021.

 

(1) On November 4, 2016, under the abovementioned Global Program, the Bank issued Subordinated Resettable Corporate Bonds, class A, at a fixed rate of 6.750% p.a. until reset date, fully amortizable upon maturity (November 4, 2026) for a face value of USD 400,000,000 (four hundred million US dollars), under the terms and conditions set forth in the pricing supplement dated October 21, 2016. Interest is paid semiannually on May 4 and November 4 of every year and the reset date was November 4, 2021.

 

As of the date of issuance of these consolidated Financial Statements, the reset rate was established until the maturity date at 6.643% as a result of the benchmark reset rate plus 546.3 basis points, according to the abovementioned terms and conditions. As the Bank had not exercised the option to fully or partially redeem the issuance on the reset date and under the conditions established in the pricing supplement, it was established up to maturity.

 

On the other hand, it could be fully redeemed, not partially, and only for tax or regulatory purposes. The Bank used the funds derived from such issuance to grant loans in accordance with BCRA guidelines.

 

(2) On May 2, 2022, under the abovementioned Global Program, the Bank issued Class E non-subordinated simple corporate bonds not convertible into shares, for a face value of USD 17,000,000 at a fixed rate of 1.45%, fully amortizable upon maturity (May 2, 2024), under the terms and conditions set forth in the price supplement dated April 21, 2022. Interest is paid quarterly on August 2, 2022, November 2, 2022, February 2, 2023, May 2, 2023, August 2, 2023, November 2, 2023, February 2, 2024, and May 2, 2024.

 

At any time, according to the current regulations, particularly the BCRA’s foreign exchange regulations, the Bank may opt to redeem, Class E Corporate Bonds in full, not partially, at a price equal to (a) 102% of the outstanding principal if the Bank decides to make the redemption from the date of issuance and settlement through the term of 9 months therefrom, including the last business day; (b) 101% of outstanding principal if the Bank decides to make the redemption within the term starting 9 months after the date of issuance and settlement until the Class E maturity date, in all cases, along with the additional amount and accrued and unpaid interest, excluding the redemption date.

 

(3) On May 8, 2017, under the Global Program mentioned in item a.1), Banco Macro SA issued non-subordinated simple corporate bonds Class B not convertible into shares, at a fixed rate of 17.50%, fully amortizable upon maturity (May 8, 2022) for a face value of pesos 4,620,570,000 equivalent to USD 300,000,000 (three hundred million US dollars), under the terms and conditions set forth in the price supplement dated April 21, 2017. Interest is paid semiannually on November 8 and May 8 of every year, beginning on November 8, 2017.

 

On the other hand, the Bank may fully redeem the issuance for tax matters, but not partially. The Bank used the funds derived from such issuance to grant loans in accordance with BCRA guidelines.

 

- 76 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

On October 17, 2018 and October 16, 2019, the Board of Directors decided to pay off these corporate bonds for a face value of 1,229,518,000 and 501,861,000, respectively, equivalent to the amount of purchases made as of those dates.

 

On May 9, 2022, the Bank fully paid the principal and interest for a face value of 2,889,191,000.

 

42. OFF BALANCE SHEET TRANSACTIONS

 

In addition to note 4, the Bank maintains different off balance sheet transactions, pursuant to the BCRA standards. The composition of the amounts of the main off balance sheet transactions as of December 31, 2022 and 2021, is as follows:

 

Composition   12/31/2022     12/31/2021  
Custody of government and private securities and other assets held by third parties     724,968,797       757,383,931  
Preferred and other collaterals received from customers (1)     187,502,326       234,703,412  
Outstanding checks not yet paid     19,943,141       15,796,202  
Checks already deposited and pending clearance     16,828,520       21,715,717  

 

(1) Related to collaterals used to secure loans transactions and other financing, under the applicable rules in force on this matter.

 

43. TAX AND OTHER CLAIMS

 

43.1. Tax claims

 

The AFIP and tax authorities of the relevant jurisdictions have reviewed the tax returns filed by the Bank related to income tax, minimum presumed income tax and other taxes (mainly turnover tax). As a result, there are claims pending at court and/or administrative levels, either subject to discussion or appeal. The most significant claims are summarized below:

 

a) AFIP’s challenges against the income tax returns filed by former Banco Bansud SA (for the fiscal years from June 30, 1995, through June 30, 1999, and for the irregular six-month period ended December 31, 1999) and by former Banco Macro SA (for the fiscal years ended from December 31, 1998, through December 31, 2000).

 

  The matter under discussion that has not been resolved as yet and on which the regulatory agency bases its position is the impossibility of deducting credits that have collateral security, an issue that has been addressed by the Federal Administrative Tax Court and CSJN in similar cases, which have issued resolutions that are favorable to the Bank’s position.

 

b) The AFIP’s ex-officio undocumented expenses determinations for the periods February, April, May 2015 and from July 2015 through January 2018, both included of date April 19, 2021. On October 5, 2021, the Bank filed an appeal to the Federal Tax Court which is in process in Courtroom B, Office 6, under file 2021-96970075.

 

c) Ex-officio turnover tax determinations in progress and/or adjustments, as a withholding agent and over municipal fees, pending resolution by the tax authorities of certain jurisdictions.

 

The Bank’s Management and its legal counsel consider no further significant accounting effects could arise from the final outcome of the abovementioned proceedings other than those disclosed in these consolidated Financial Statements.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

43.2. Other claims

 

Before merging with and into the Bank, Banco Privado de Inversiones SA (BPI) had a pending class action styled “Adecua v. Banco Privado de Inversiones on ordinary proceedings”, File No. 19073/2007, pending with Commercial Court No. 3 in and for the CABA, Clerk’s Office No. 5, whereby it was required to reimburse to its clients the life insurance amounts overcharged to amounts payable as well as to reduce the amounts charged in this regard in the future; this legal proceeding was concluded upon the abovementioned merger because BPI complied in full with the terms of the court-approved agreement reached with Adecua before answering the complaint. However, in March 2013, when BPI had already been merged with and into the Bank, the trial court resolved to amend the terms of the agreement and ordered the reimbursement of amounts of money to a larger number of clients as compared to the number arising from the terms approved by the court in due time. Such resolution was appealed by the Bank as BPI’s surviving company. The appeal was dismissed by the Court of Appeals, which abrogated both the trial court decision and the court-approved agreement, thus ordering the Bank to answer the complaint. This gave rise to the filing of an extraordinary appeal against such decision as well as the subsequent filing of a complaint for the extraordinary appeal denied. On May 5, 2021, the Bank was notified of the dismissal of the complaint appeal, ordering the return of the main process to the CNACAF for continuing with the proceedings, who also submitted them to the trial court, which received them on 09/27/2021 and were requested as effectum vivendi in proceedings “Estado Nacional – Ministerio Producción de la Nación c/ Asociación de Defensa de los Consumidores y Usuarios de la R.A y otros s/Ordinario” (File No. 6757/2013), in which the Bank is not a party, by the commercial court, clerk’s office No. 11. As of the date of issuance of these consolidated Financial Statements, resolution is still pending.

 

Moreover, the Bank is subject to a class actions for the same purpose, currently pending with Commercial Court No. 7 in and for the CABA, Clerk’s Office No. 13, styled Unión de Usuarios y Consumidores v. Nuevo Banco Bisel on ordinary proceedings, File No. 44704/2008.

 

There are also other class actions initiated by consumer protection associations in relation to the collection of certain commissions and/or financial charges or practices and certain withholdings made by the Bank to individuals as CABA stamp tax withholding agent.

 

The Bank’s Management and its legal counsel consider no further significant accounting effects could arise from the final outcome of the abovementioned proceedings other than those disclosed in these consolidated Financial Statements.

 

44. RESTRICTION ON DIVIDENDS DISTRIBUTION

 

a) According to BCRA regulations, 20% of Banco Macro SA income for the year, without including Other comprehensive income, for the year plus/less prior-year adjustments and less accumulated losses as for the prior year-end, if any, should be allocated to the legal retained earnings. As a consequence, the following Shareholders’ Meeting will apply 8,607,704 from Unappropriated retained earnings to increase the legal retained earnings.

 

b) Through Communiqué “A” 6464, as amended, the BCRA establishes the general procedure to distribute earnings. According to that procedure, earnings may only be distributed if certain circumstances are met, such as no records of financial assistance from the BCRA due to illiquidity or shortages in payments of minimum capital or minimum cash requirement deficiencies and not being subject to the provisions of sections 34 and 35 bis of the Financial Entities Law (sections dealing with tax payment and restructuring agreements and reorganization of the Bank), among other conditions listed in the abovementioned communiqué that must be met. In addition, the earnings distribution approved by the Shareholders’ Meeting of the Bank could only be formalized once the Superintendence of Financial and Foreign Exchange Institutions approved it.

 

- 78 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

In addition, profits may only be distributed to the extent that the financial institution has positive results, after deducting, on a non-accounting basis, from retained earnings and the optional reserves for the future distribution of profits, (i) the amounts of the legal and other earnings reserves which are mandatory, (ii) all debit amounts of each one of the accounting items recognized in “Other Comprehensive Income”, (iii) income from of the revaluation of property, plant and equipment, intangible assets and investment property, (iv) the positive net difference between the amortized cost and the fair value of government debt instruments and/or monetary regulation instruments issued by the BCRA for those instruments recognized at amortized cost, (v) the adjustments identified by the Superintendence of Financial and Exchange Entities of the BCRA or by the independent external auditor and that have not been recognized in the accounting records and (vi) certain franchises granted by the BCRA. Additionally, no profit distributions shall be made out of the profit originated as a result of the first-time application of the IFRS, for which a normative reserve was created, and its balance as of December 31, 2022 was 21,402,113 (nominal value: 3,475,669).

 

As of December 31, 2022, the related adjustments to be made on unappropriated retained earnings of Banco Macro SA are as follows:

 

i. Other comprehensive income for 816,164.

 

ii. The positive net difference between the amortized cost and the fair value of government debt instruments and/or monetary regulation instruments issued by the BCRA for those instruments recognized at amortized cost for 6,145,736.

 

The Bank must verify that, after completion of the earning distribution, a capital maintenance margin equal to 3.5% of risk-weighted assets is kept, apart from the minimum capital required by law, to be integrated by Tier 1(Con1) ordinary capital, net of deductible items (CDCOn1).

 

According to BCRA Communiqué “A” 7312, the earning distribution was suspended up to December 31, 2021. Through Communiqué “A” 7421, effective since January 1 and up to December 31, 2022, the BCRA allowed financial institutions, which had its authorization, to distribute their earnings up to 20% of the amount that would have been distributed in 12 equal, monthly and consecutive installments.

 

In addition, through Communiqué “A” 7659 the BCRA suspended the earnings distribution from January 1, 2023 up to December 31, 2023. Lastly, it is worth noting that the BCRA, in the process of authorization of the earning distribution for an amount of 19,751,444 (not restated), as explained in note 34, required to the Bank to deduct the outstanding balance from the sale of Prisma Medios de Pago SA (see note 11). As of the date of issuance of these consolidated Financial Statements, the BCRA has not issued a decision about the application of the abovementioned situation for the fiscal year 2022.

 

c) Pursuant to CNV General Resolution No. 622, the Shareholders’ Meeting in charge of analyzing the annual Financial Statements will be required to decide on the application of the Bank’s retained earnings, such as the actual distribution of dividends, the capitalization thereof through the delivery of bonus shares, the creation of earnings reserves additional to the legal earnings retained or a combination of any of these applications.

 

In compliance with the previous comments, the General Regular Shareholders’ Meeting of Banco Macro SA held on April 29, 2022 considering that at the end of the fiscal year ended December 31, 2021, the Bank recorded a negative adjustment to unappropriated retained earnings as of December 31, 2021 for 8,920,325 (not restated) because the monetary effect accrued in relation to monetary items measured at fair value through other comprehensive income had been recorded in the previous period, resolved to distribute the unappropriated retained earnings for 18,202,171 (not restated) as follows (the abovementioned figures are stated in constant pesos as of December 31, 2021):

 

a) 3,640,434 to the legal reserve;

 

b) 373,864 to the Personal Asset Tax on Business Companies (Impuesto sobre los Bienes Personales Sociedades y Participaciones), and;

 

c) 14,187,873 to pay a cash dividend and/or a dividend in kind, in the latter case valued at market value, prior BCRA authorization.

 

- 79 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

45. CAPITAL MANAGEMENT, CORPORATE GOVERNANCE TRANSPARENCY POLICY AND RISK MANAGEMENT

 

As a financial institution, the activities of Banco Macro SA are governed by Financial Entities Law No. 21,526, as supplemented, and the regulations issued by the BCRA. Moreover, the Bank adheres to the good banking practices included in the Financial Entities Corporate Governance Guidelines, as supplemented of the BCRA.

 

The Bank publicly trades its shares on the Buenos Aires Stock Exchange (BCBA, for its acronym in Spanish) and, thus, it is subject to the regulations issued by the CNV.

 

Through General Resolution No. 797/19, the CNV established the minimum contents of the Corporate Governance Code, adding notions of good corporate governance to corporate management as guidelines or recommendations that seek to provide transparency thereto. The CNV annually requires the issuance of a report in which financial institutions have to explain how the recommendations are implemented or to explain the reasons why it decided not to adopt the good practices described in such resolution. The Bank annually publishes a document called Corporate Governance Explanatory Report together with the Annual Report to the Shareholders for the fiscal year, required by regulations, which is available on the Bank’s website and on that of such enforcement agency.

 

This regulation reinforces the notions contained in Capital Markets Law establishing principles such as “full disclosure”, “transparency”, “efficiency”, “public investor protection”, “equal footing between investors” and “protection of the stability of financial entities and financial intermediaries”.

 

On the other hand, as the Bank lists its shares on the NYSE, qualifying as a foreign private issuer, it is required to comply with certain corporate governance standards as established in section 303A of the NYSE’s Listed Company Manual, as amended.

 

The main guidelines under the BCRA standards contemplated in the revised text “Financial Entities Corporate Governance Guidelines”, as supplemented, are as follows:

 

·          Ownership structure

 

As of December 31, 2022, the Bank’s shareholders are:

 

Full name / corporate name   Participating
Interest
    Voting Interest  
Fideicomiso de Garantía JHB BMA (1)     17.28       19.65  
Carballo Delfín Jorge Ezequiel     18.38       20.04  
ANSES FGS Law No. 26425     28.80       26.91  
Grouped shareholders (Local Stock Exchanges)     11.79       11.21  
Grouped shareholders (Foreign stock exchanges)     23.75       22.19  

 

(1) As of the date of issuance of these consolidated Financial Statements and due to the passing of Mr. Jorge Horacio Brito on November 20, 2020 and as a testamentary disposition, his shares were transferred, ad referendum of BCRA, to Fideicomiso de Garantía JHB BMA, which the beneficiaries are his forced heirs.

 

·          Board of Directors and Senior Management

 

The Bank’s Board of Directors is currently made up of 12 regular directors and 2 alternate directors. Members are renewed by thirds and the appointed Directors remain in office for three fiscal years. Directors are selected and appointed by the Shareholders’ Meeting. Once elected, the BCRA must confirm the designation of the Directors, expressly authorizing them to accept the designation, pursuant to the terms as to experience and knowledge, contained in the rules CREFI 2-Creation, Operation and Expansion –XV- Financial Entities Authorities.

 

- 80 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Name Position
Delfín Jorge Ezequiel Carballo Chairperson
Jorge Pablo Brito Vice chairperson
Carlos Alberto Giovanelli Director
Nelson Damián Pozzoli Director
Fabian Alejandro De Paul (1) Director
Constanza Brito Director
Sebastián Palla (1) Director
Mario Luis Vicens (1) Director
Delfín Federico Ezequiel Carballo Director
Marcos Brito Director
Mariano Ignacio Elizondo (1)(2) Director
Guillermo Merediz (1)(2) Director
Santiago Horacio Seeber Alternate director
Alan Whamond (1) Alternate director

 

(1) Independent directors.

 

(2) Designated by Anses-Fgs proposal.

 

Directors should be morally suitable, experienced and knowledgeable in the banking business and meet the requirements established in the effective regulations, issued by the BCRA. Compliance with these requirements is assessed when the Shareholders’ Meeting appoints the directors and on a regular basis during their term of office.

 

At present, six Directors are independent, pursuant to the provisions of the CNV rules and regulations and the provisions of the Financial Entities Corporate Governance Guidelines issued by the BCRA.

 

Senior Management is directed by a General Manager appointed by the Board and also includes officers reporting directly to the general manager, forming the Senior Management, as well as officers of four staff areas reporting directly to the Board. Members are detailed below:

 

Name Position
Gustavo Alejandro Manriquez CEO
Gerardo Adrian Álvarez Human resources and administration manager
Alberto Figueroa Risk management manager
Ernesto López Legal manager
Ana María Magdalena Marcet Credit risk manager
Juan Domingo Mazzon Government and Management control manager
Ernesto Eduardo Medina System manager
Brian Anthony Commercial banking manager
Francisco Muro Distribution and sales manager
Jorge Francisco Scarinci CFO
Agustín Devoto Investment banking manager
Adrian Mariano Scosceria Corporate banking manager

 

- 81 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

·   Committees

 

The corporate by-laws state that the Board of Directors may establish the Committees that it deems appropriate for the business of the Bank, as well as appoint their members. The Bank currently features the following Committees:

 

Committee Functions
CNV Audit / SEC They are established in Capital Markets Law, as supplemented.
Internal Audit Overseeing the proper operation of the internal control systems defined at the Bank through a periodic assessment thereof and contributing to improving the effectiveness of internal controls.
Risk Management It is in charge of monitoring Senior Management’s activities involving the management of credit, market, liquidity, operational, compliance and reputation risks, among others. It advises the Board of Directors on the Bank’s risks.
Assets and Liabilities Setting out the Bank’s financial strategy, analyzing the markets and establishing the policies on assets and liabilities, management of market, liquidity, interest rate and currency risks.
IT Overseeing the proper operation of the information technology environment and contributing to improving the effectiveness thereof.
Credit Approving credit transactions based on credit capacity.
Legal Recovery Engaged in defining payment arrangements exceeding the predetermined parameters, as well as reclassifying portfolio to be subject to legal proceedings or accounting derecognitions
Personnel Incentives Ensuring the financial incentives for personnel system is consistent with the culture, the objectives, the business in the long term, the strategy and the control environment of the Bank.
Ethics and Compliance Ensuring the Bank has the proper means to promote correct decision-making and compliance with internal and external regulations.
Corporate Governance and Designations The Committee’s duties include those related to the process of renewing and replacing Senior Management members and the succession plans. It is also in charge of applying the Corporate Governance Code at the Bank and at its subsidiaries.
Anti-money Laundering of assets and terrorism financing Planning and coordinating compliance with the policies established by the Board of Directors on the matter.
Financial Services User Protection The duties of this Committee include those related to ensure the existence and maintenance of a financial services user protection process and a customer service system.

 

· Code of ethics

 

The Bank has established a Code of Ethics for directors and senior management, expecting that their members act according to the highest standards of personal and professional integrity in all aspects of their activities; to comply with the applicable law, to discourage reproachable behaviors and to comply with the Bank’s Code of Conduct and other policies and procedures governing employee conduct. This Code of ethics is supplemental to the Bank’s Code of Conduct.

 

· Code of Conduct

 

The Entity promotes a work environment where responsibility, execution, commitment, results, loyalty, honesty, good communication and teamwork are encouraged.

 

The goal is to base daily relationships on mutual respect, trust and cordial and simple behavior between coworkers and bosses as well as with suppliers and customers, developing all the activities with the highest ethical working and personal principles.

 

- 82 -


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

In that direction, the Code of Conduct is intended to establish the principles and values that all Bank members must comply with. The trust provided by shareholders, customers and the general public depends to a large extent on compliance with these principles.

 

· Ethical line

 

According to ethical behavior standards, an Ethical line or a report channel was implemented for the Bank and its subsidiaries, Macro Securities SA, Macro Fondos SGFCI SA, Macro Fiducia SA, Argenpay SAU and Fintech SGR, which is managed by an external third party, ensuring compliance with anonymity and confidentiality principles.

 

Reports are received by the Ethical and Compliance Committee, which becomes aware of them, as well as the resolution of cases, following the protocols.

 

Branches

 

As of the date of issuance of these consolidated Financial Statements, the Bank has 467 branches throughout the entire country.

 

Subsidiaries

 

The Bank carries out certain transactions through its subsidiaries, which are identified in note 3 to these consolidated Financial Statements.

 

Business lines

 

The Bank’s business lines and transactions with trusts are mentioned in notes 1 and 37, respectively.

 

·       Incentive practices

 

The Bank adopts a compensation policy that comprises fixed and variable compensation; the latter is granted within the framework of an objective and competency assessment process.

 

The variable compensation program, in the context of the compensation policy, is consistent with the Bank’s mission, values, organization, objectives, long-term business sustainability, strategy, control environment and the prudent assumption of risk. It is aimed at recognizing the extraordinary performance displayed by employees according to:

 

ü Their contribution to the results reached.

 

ü Their management in keeping with the Bank’s mission and values.

 

The key variables in determining compensation are:

 

ü The level of responsibility and complexity of the position.

 

ü The person’s competencies and potential.

 

ü The person’s performance and outcomes.

 

ü The position with respect to the benchmark market.

 

ü The results reached by the Bank.

 

The Incentives Committee is in charge of ensuring the financial incentives for personnel system are consistent with the culture, the objectives, the business in the long term, the strategy and the control environment of the Bank, and the prudent assumption of risks.

 

The Bank aims at compensating personnel ensuring performance recognition, internal equity, competitiveness, productivity, efficiency and added value.

 

·          Role of financial agent

 

The Bank acts as financial agent in the Provinces of Misiones, Salta, Jujuy and Tucumán and the Municipalities of San Miguel de Tucumán and Yerba Buena.

- 83 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

·          Corporate Sustainability Policy

 

The Bank is aware of its responsibility towards the surrounding communities. The Corporate Sustainability area promotes this development by fostering and implementing policies and actions that exert a positive social, environmental and economic impact.

 

Thus, it engages in constant dialogue with the different areas and stakeholders with the ultimate goal of creating social value and drafting policies aimed at promoting a fair, supporting and equal world.

 

These sustainability values are disclosed in the Comprehensive Report as a major milestone to align the financial information (in documents such as the Letter to the Shareholders and Financial Statements) and ensure their integration and consistency with corporate sustainability.

 

·          Anticorruption policy

 

Pursuant to Law No. 27401 (Law on Corporate Criminal Liability), the Board establishes that officers and employees of the Bank and its subsidiaries shall not offer to pay, pay or authorize the payment of money or anything of value to (public) officers to obtain or keep a business. It also extends these guidelines to the private sphere. These principles are contained in the Code of Ethics for directors and senior managers, and the Code of Conduct for all employees. Besides, the Bank has a Code of Conduct for suppliers.

 

The laws of other jurisdictions with similar prohibitions apply, especially the Foreign Corrupt Practices Act (FCPA), because Banco Macro SA is a foreign company that lists its shares in the NYSE and is subject to SEC control and oversight.

 

The Group companies that wish to perform any transaction involving any public administration officer, public agency or public company, either Argentine or foreign, shall communicate this event in advance to the Board through the General Manager and inform, before the transaction is conducted, the agents or intermediaries that may be involved in the transaction. The Bank also has a manual with guidelines for interacting with public officers.

 

This communication duty is not mandatory for the transactions derived from agreements with provincial financial agents (except for the subscription of framework agreements), ordinary bank transactions (for example, payroll processing) and the transactions that do not pose any major risk due to the minimum amounts involved.

 

Although these anticorruption policies are aimed at transactions within the public sector, they also apply to transactions between private parties, as specifically set forth in the Code of Ethic and the Code of Conduct.

 

The Bank has in place an Anticorruption Policy and an Integrity Program. The Ethics and Compliance Committee will be responsible for its adoption, follow-up and period reporting to the Board.

 

·          Transactions with related parties – Policy on conflict of interest

 

As an authorized financial institution, Banco Macro SA complies with the provisions and reporting requirements established in Financial and Foreign Exchange Entities Law No. 21526 and the regulations issued by the regulatory agency (BCRA).

 

As established by law (Argentine Business Company Law No. 19550), specific applicable regulations (Capital Markets Law, as supplemented), professional accounting standards (Technical Resolution No. 21), IAS 24 and best practice recommendations, the Bank reports on the transactions with related parties in notes to the Financial Statements. Such transactions are carried out under usual market conditions. See also note 16 to these consolidated and separate Financial Statements.

 

Under current Argentine legislation, directors are required to perform their duties with the loyalty and diligence of a prudent businessman. Directors are jointly and severally liable to the Bank, the shareholders and third parties for a poor performance of duties and infringements to the law, bylaws and regulations, as the case may be, and are responsible for repairing the damages caused by fraud, abuse of authority or negligence.

 

- 84 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The loyalty duties of a director are considered to include: (i) the ban from using corporate assets and the confidential information to which he/she may have access for personal purposes; (ii) the ban from taking advantage or, due to errors or omissions, allowing a third party to take advantage of the Bank’s business opportunities, (iii) the obligation of acting as director only for the purposes established in the law, the Bank’s bylaws or the intention of the shareholders or the Board of Directors; and (iv) the obligation of taking extreme care so that the acts conducted by the Board of Directors have no direct or indirect effects against the Bank’s interests.

 

A director should notify the Board of Directors and the Audit Committee about any conflict of interest such director may have in a transaction proposal and should refrain from voting on the matter.

 

·          Public information

 

The information related to corporate governance at the Bank is included within the transparency policy contained in such precepts and, hence, is available to interested members of the public on the website www.macro.com.ar (“Conocenos” – Relaciones con Inversores) and additionally, some guidelines are disclosed in other notes and exhibits to these consolidated Financial Statements. Moreover, the Bank’s public information is disclosed on the websites of the BCRA (www.bcra.gob.ar) and the CNV (www.cnv.gob.ar).

 

In addition, the Bank publishes the Market Discipline Report, pursuant to the guidelines established by the BCRA for such information regime, in accordance with the criteria of the Basel Banking Supervision Committee, which is available at the Bank’s website.

 

Integral Risk management

 

Within the framework of the Corporate Governance policy, the Board of Directors of the Bank resolved the creation of a Risk Management Committee. The Bank has appointed a Risk Manager who reports directly to the Board of Directors.

 

Its duties include ensuring that an independent risk management be established, establishing policies, procedures and measurement methodologies and report systems which allow the identification, measurement and monitoring of the risk under its charge and also the duties of each organizational level in the process.

 

The risk management process includes the establishment of the exposure limits for each risk by the Board of Directors, a follow-up on the exposure to each limit by the persons in charge, the preparation of regular reports for the Risk Management Committee, a follow-up on the alerts and the implementation of action plans regarding the alerts and the guidelines for developing stress tests.

 

The system supplements the policies and procedures specific to each risk (Financial, Credit, Operational, Counterparty Credit, Country Risk, Securitization, Reputational, Compliance, Strategic Risks, among others).

 

In addition, the Credit Risk Management area is in charge of interpreting, executing and guaranteeing the application of the General Credit Policy as approved by the Board of Directors, pursuant to the internal and external standards and regulations on the matter. Credit Risk Management reports functionally to the General Manager.

 

Risk Management

 

The Risk Management area is in charge of the Financial Risk, Credit Risk and Operating and Technology Risk areas.

 

The main procedures carried out by the Risk Management Department are:

 

·          Stress tests

 

The process of stress test includes documenting and formalizing the program as well as the persons in charge of carrying it out, the frequency of testing and the validation of the system. It also contemplates the Contingency Plan based on the test results. The Risk Management Committee leads and coordinates this application.

 

- 85 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

·          Economic Capital Calculation

 

The Risk Management Department estimates the economic capital for each one of the individual risks (Market, Liquidity, Interest Rate, Credit, Counterparty Credit, Concentration, Operational, Securitization, Strategic and Reputational) determined for the Bank on a consolidated basis with its subsidiaries with the same scope as the regulation. The methods used to deal with subsidiaries are exactly the same.

 

The economic capital sufficiency evaluation process is an integral part of the corporate governance and risk management culture of the entities.

 

Quantified economic capital was implemented as a formal procedure, both currently and prospectively, and is a tool used in the day-to-day management of risks, in preparing the Business Plan and the Stress Tests.

 

The methods used to measure the economic capital of each risk were documented and approved by the Management, pursuant to the internal rules on Corporate Governance and Risk Management.

 

The results must serve to support decision-making, including strategic decisions adopted by the Board and the Senior Management. In this way they may:

 

- Estimate the level and trend of the relevant risks and the effects thereof on capital needs.

 

- Evaluate the reasonability of the basic assumptions used in the capital measuring system and the sensitivity of the results to changes in those assumptions.

 

- Determine whether the Bank has sufficient regulatory capital to cover the different risks and if it meets the capital sufficiency goals required.

 

- Consider its future capital requirements based on the risk profile and, according thereto, introduce the necessary adjustments into the strategic plan.

 

The essential elements of the capital evaluation include:

 

- Policies and proceedings ensuring the risk management process.

 

- A process connecting economic capital with risk level.

 

- A process establishing capital sufficiency goals based on the risks, taking into account the strategic approach and the business plan.

 

- An internal control process, in order to secure a comprehensive risk management.

 

The Bank actively uses guarantees to mitigate its credit risk.

 

Excessive risk concentration:

 

To avoid excessive risk concentrations, the Bank’s policies and procedures include specific guidelines to focus on keeping a diversified portfolio. The identified credit risk concentrations are controlled and managed accordingly. The selective coverage is used at the Bank to manage risk concentrations both in terms of relationships and industry.

 

In addition, note that the Bank meets the provisions established by the BCRA as regards maximum assistance limits to given groups of debtors, in order to atomize the portfolio, reducing credit risk concentration.

 

The main types of risks that the Bank is exposed to are those related to credit risk, liquidity risk, market risk, interest rate risk, foreign currency exchange rate risk, and operational risk.

 

- 86 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Minimum capital requirements:

 

The table below shows the minimum capital requirements measured on a consolidated basis, effective for the month of December 2022, together with the integration thereof (computable equity) as of the end of such month:

 

Item   12/31/2022  
Minimum capital requirements     105,060,980  
Computable equity     515,330,432  
Capital surplus     410,269,452  

 

The following are the policies and processes aimed at identifying, assessing, controlling and mitigating each one of the main risks:

 

45.1 Credit Risk

 

Credit risk is the risk that the Bank incurs a loss because its customers or counterparties fail to discharge their contractual obligations.

 

The Bank manages and controls credit risk by setting limits on the amount of risk it is willing to accept and by establishing indicators for monitoring.

 

The Board approves the credit and risk assessment policy to provide a framework to generate businesses to achieve a proper relationship between the risk assumed and profitability. The Bank has procedure manuals detailing the related guidelines, compliance with effective regulations and limits set. The goals are:

 

· Achieving an adequate portfolio segmentation per type of customer and economic sector.

 

· Enhancing the use of tools to analyze and assess risk that best adjust to the customer’s profile.

 

· Establishing consistent guidelines to grant loans following conservative parameters based on the customer’s solvency, cash flows and profitability in the case of companies, and revenues and equity in the case of individuals.

 

· Establishing limits to individual powers to grant credits according to their amount, tending to the existence of specific committees, which, according to their scope of influence, will define the levels of assistance.

 

· Enhancing the quality of the risk assumed, with proper guarantees according to the term of the loan and the level of risk involved.

 

· Monitoring on an ongoing basis the loan portfolio and customer level of compliance.

 

Credit risk management involves the existence of a structure with the characteristics needed to attain the organizational goals during the stages of the credit cycle: admission, follow-up, monitoring and recovery.

 

The risk assessment process is differentiated based on whether customers belong to Corporate Banking or Retail Banking.

 

To assess Corporate Banking customers, the Bank has different methods involving different responsibility levels that become increasingly complex according to the size of the transactions in terms of assistance types and amounts, weighed by terms and hedges with guarantees.

 

For the authorization of assistance involving small amounts, self-liquidating collaterals or temporary assistance, the Bank grants special credit powers, on a personal basis, to higher-ranking officials based on their knowledge, experience and training. At any rate, the use of these powers is associated with the outcome of an objective assessment, avoiding any discretion in the credit approvals.

 

- 87 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

To grant predefined products and restricted amounts to the Small Companies and Agro segments, the Bank has standardized assessment systems that are used on a decentralized manner and include origination scoring and screening methods to admit and assign limits, based on the customers’ economic, financial and equity information. There is also a centralized massive qualification periodic process that Credit Risk Management makes available to branches on a continuous basis.

 

When transactions in amount the instances of authorization by delegated powers or through the decentralized risk analysis, ratings are approved in the Credit Committees. The powers vested on the different decision-making bodies are continuously reviewed to adjust them to the Bank’s volume of transactions and thus improve credit rating.

 

The risk analysis of assistance addressed in the Credit Committees is carried out at the Corporate Risk Management Department by specialized risk analysts that prepare separate risk reports per customer or group of companies, which are provided to Committee members to support the credit decisions made.

 

Risk reports include, at least, information regarding the use of loans and their source of repayment, the debtor’s historical and current behavior and the group of companies to which it belongs; the debtor’s repayment capacity based on cash flows; the guarantees that will cover the transactions, the ownership status, the enforcement possibilities and their sensibility to the changes in the economy; the market in which the debtor operates and the debtor’s position, and the debtor’s equity, economic and financial position and possibility of accessing loans.

 

The Committees’ resolutions include the terms and conditions applicable to the assistance in terms of the amount, currency, terms, guarantees and follow-up provisions, among others. The decisions are based on the debtor’s cash flows and payment capacity and only to a secondary extent on debtor’s equity and risk mitigating factors.

 

Credit risk assessment for Retail Banking customers, is governed by specific policies that consider customers’ inclusion in one of the following segments:

 

·  Salary Plan customers (Public and Private) and retirees whose their retirements and pensions are deposited in the Bank.

 

·  Open Market customers.

 

To speed up origination circuits, the Credit Risk Management has widened the use of scoring methods, which impose a minimum limit for the customer to be admitted for credit purposes, considering an acceptable delinquency level.

 

Consumer portfolio qualifications are available on a permanent basis to branches in the system called Customer Relationship Management (CRM) and to customers through digital channels, which allows operating within the limits and conditions approved by the Credit Risk Management on a centralized basis. This modality restricts the operating risks that are inherent to the assessment.

 

For new nonprequalified customers, the originator enters the requested transactions in the risk assessment system related to the customer segment, which approves or rejects the transaction; if approved, maximum assistance amounts by product are provided. Assessment systems are mainly based on an admission and certain maximum indebtedness rules and installment/income ratio. The assessment systems are based mainly on a qualification score and certain maximum indebtedness and installment/income relationship rules.

 

There are specific rules regarding the debtor’s file integration to duly document the data entered into the assessment systems. Credit risk officers also define a credit power system based on the margins to be approved and, if applicable, the exceptions admitted.

 

The assessment process and its relationship with the loan settlement process, is fully automated: all customers must have a CRM-approved (individual or massive) assessment, an essential requirement to be granted a credit product. In addition, as part of the assessment process, the exception flow and the control of credit powers are also automated. These actions managed to reduce operating risks and allowed tracing transactions and their approval levels.

 

- 88 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The Bank adopts processes to detect interrelated debtor groups with correlated risk (group of companies) and to group risk exposures with the same debtor or counterparty in different lines of credit.

 

Before the transactions are settled, a series of controls are implemented to reduce related credit and operating risks and classify transactions within the technical relationships regulatory framework.

 

The Bank implements a formal, robust and well-defined process to manage nonperforming loans. These procedures are differentiated based on the type of portfolio and delinquency status.

 

To mitigate credit risk, guarantees are requested on agreed financing. A particular area of the Credit Risk Management Department manages all guarantees received by the Bank and assesses and updates regularly the appraisal value and effective term to monitor the quality of risk mitigators.

 

Debtor classification according to the BCRA:

 

As a general regulatory policy for classifying debtors, the Bank follows BCRA related regulations, which provide grouping levels in decreasing order of quality, in direct relation to the customer’s uncollectibility risk.

 

Classification guidelines also vary depending on whether they are commercial loans or consumer or housing loans.

 

The basic criterion to classify the commercial portfolio is the future payment capacity of the commitment assumed. The Bank reviews the classification of customers included in this portfolio according to the minimum regularity established by the BCRA, which provides as general rule an annual review of such classification, growing to a semiannual or quarterly frequency based on the increasing order of the debt.

 

According to their risk of default, the commercial portfolio is classified as follows:

 

1-Performing

2-a) In a watch list

2-b) Under negotiation or with refinancing agreements

2-c) Under special treatment

3-Nonperformign

4-With high insolvency risk

5-Irrecoverable

 

To classify the customers of the consumer portfolio and the commercial portfolio with payables of up to 227,220, for which the BCRA authorizes the Bank to follow a simplified method comparable to a consumer loan portfolio, the BCRA defines classification levels according to the days of arrears recorded at the end of the month.

 

1-Performing: Up to 31 days

2-Low risk: Up to 90 days

3-Medium risk: Up to 180 days

4-High risk: Up to 1 year

5-Irrecoverable: Over 1 year

 

Credit risk allowances of the loan portfolio

 

As from 2020, the Bank’s policy concerning credit risk allowances is based on the calculation of ECL based on analytical models (statistical models related to loan portfolio management) pursuant to IFRS 9. According to the guidelines in section 5.5. on Impairment (including the principles and methods to recognize ECL due to significant increases in credit risk and the subsequent impairment of financial assets for ECL), the Bank recognizes the impairment of its financial assets.

 

- 89 -


 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The criterion to assess whether an instrument is impaired will depend on the type of analysis to which customers are exposed: to estimate ECL on a collective basis, disclosures are grouped based on customer segments showing similar risk characteristics that are relevant for their analysis, while the purpose of the individual assessment is the ECL estimate for customers with significant risk or customers which require a specific treatment, or do not have consistent characteristics with other portfolio segments for which the statistic information is insufficient to predict future behavior.

 

Under no circumstance could allowances calculated according to IFRS 9 be lower than the minimum allowances established by the BCRA in the revised text of minimum loan loss reserves. If they were lower, the difference should not be booked as loan losses in the Financial Statements, but rather as a deduction of computable equity under BCRA regulations.

 

The following chart shows the composition of loan loss allowances according to the type of financial instrument as of December 31, 2022, and 2021:

 

Composition   12/31/2022     12/31/2021  
Loans and other financing     11,002,339       18,761,240  
Loans commitment     696,767       664,446  
Other financial assets     91,041       51,518  
Other debt securities at amortized cost     796       1,057  
Total     11,790,943       19,478,261  

 

The Credit Risk Management manages credit risk, which consists of identifying, assessing, following up, controlling and mitigating this risk across credit cycle stages.

 

The Credit Risk Management Office designs and develops ECL models. It reports to the Credit Risk Management, which is also in charge of designing and calculating rating and scoring models to quantify credit risk and the measures to calculate PD, EAD and LGD, as well as other models to calculate the impact of the prospective view.

 

The Administration and Credit Operation Management, through the Credit Review area, analyze the entire portfolio under individual assessment and classifies customers in different credit risk stages. Together with the Corporate Risk and Credit Recovery Management Departments (that contribute their view from a standpoint of risk assessment and recovery management), they calculate ECL for corporate customers in stage 2 and stage 3.

 

The definitions and assessment of ECL are regularly presented to the Risk Management Committee, which approves the model methodologies, adjustments and validation.

 

45.1.1  Assessment of credit risk impairment

 

Definitions of significant increase in risk (SICR), impairment and default

 

The Bank recognizes the impairment of its financial assets according to point 5.5. of IFRS 9. To such end, the Bank calculates the ECL of financial instruments over a three stage risk model based on the changes in credit quality detected since the initial recognition, as summarized below:

 

· Stage 1: includes financial instruments which credit risks have not increased significantly since initial recognition;

 

· Stage 2: includes financial instruments which significantly SICR but it is not yet considered credit-impaired, and

 

· Stage 3: comprises credit-impaired financial instruments.

 

- 90 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

 

The Bank measures ECL according to the following definitions:

 

· For financial instruments included in Stage 1, the Bank measures ECL as the portion of lifetime ECL that result from potential default events within the next 12 months.

 

· For financial instruments included in Stages 2 and 3, the Bank measures lifetime ECL.

 

· To calculate ECL, prospective information is considered according to IFRS 9.

 

Default:

 

The default status is defined according to the type of portfolio and segment, and thus, the impairment model is applied in accordance with the risk of each transaction. The default status is defined as follows:

 

· For the Commercial Portfolio: there is a “Default” if the customer, based on an individual analysis, has been classified in Stage 3, as described in “Customers analyzed on an individual basis.”

 

· For the Medium-sized and large companies and Corporate segments of the Commercial Portfolio Comparable to Consumer: there is a “Default” if the customer has a transaction that is more than 90 days past due or if a refinancing loan has been granted.

 

· For the Consumer Portfolio or the Commercial Portfolio Comparable to Consumer (excluding Medium-sized and large companies and Corporate segments): there is a “Default” if the transaction is more than 90 days past due or if a refinancing loan has been granted in relation to the product assessed in the performance period.

 

Customers analyzed on a collective basis:

 

For the group of transactions in the Consumer portfolio and the Commercial Portfolio Comparable to Consumer, which is deemed a collective analysis portfolio, the Bank defined the application of the following delinquency criteria under IFRS 9:

 

· Stage 2: it involves the transactions that are more than 30 days past due, refinanced transactions that are more than 90 days past due, and those with PD differences between the time of transaction observation and origination and implying a SICR in absolute and relative terms.

 

· Stage 3: transactions that are more than 90 days past due.

 

Thus, summing up, the criterion used by the Bank to define the different transaction staging rules, according to its reporting structure, depend on the following characteristics:

 

· Type of product

· Segment

· Portfolio

· Delinquency

· Refinancing

· SICR under qualitative criterion

 

ECL calculation:

 

The ECL is calculated using the following formula, the parameters of which are described below:

 

  ECL = PD x EAD x LGD

 

Probability of default (PD)

 

The PD represents the probability of not paying for a transaction within a given term.

 

To calculate expected losses, the Bank considers the creation of two types of probabilities of default:

 

· PD at 12 months (Point in Time – PIT): this is the estimated probability of occurrence of a default in the next 12 months of life of the instrument after the analysis date. The Bank uses this criterion for the transactions with no SICR.

 

· PD Lifetime: this is the estimated probability of occurrence of a default throughout the remaining life of an instrument, i.e. the PD referring to the maximum contractual term during which the entity is exposed to the credit risk. The Bank applies this criterion to transactions with SICR (Stage 2), as established in IFRS 9.

 

- 91 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The PDs are assessed per customer in individual analyses and per product in the case of customers analyzed collectively.

 

The PDs are amended by the macroeconomic models applied for the prospective vision.

 

The proposals to implement PD models are submitted for approval to the Risk Management Committee. The methods, variables, development population, observation windows and results that support the preparation of these models are tested and adjusted at least once a year.

 

The following table discloses the risk levels score and rating arising from the Bank’s models:

 

    12/31/2022     12/31/2021  
Category  

Weighted

PD

    % Gross
Carrying
Amount
   

Weighted

PD

    % Gross
Carrying
Amount
 
Performing     1.54 %     97.32 %     2.05 %     96.76 %
High grade     0.93 %     89.00 %     1.02 %     79.54 %
Standard grade     5.00 %     4.44 %     5.05 %     12.44 %
Sub-standard grade     11.58 %     3.88 %     11.26 %     4.78 %
Past due but not impaired     29.73 %     1.86 %     30.27 %     2.33 %
Impaired     100.00 %     0.82 %     100.00 %     0.91 %
Total             100.00               100.00  

 

Exposure at default (EAD)

 

The EAD represents the exposure of a financial instrument on the date of the analysis, i.e. the level to which the Bank is exposed to credit risk in the event of a potential default by the counterparty.

 

To calculate the EAD, segmentation is performed at product level, according to the following differentiation:

 

· Products with no exposure certainty: in the case of revolving products (credit cards and saving accounts) in stages 1 and 2, in order to calculate the EAD, it is necessary to estimate a credit conversion factor (CCF). For these transactions, the CCF represents the average percentage of exposure increase that may be observed in a contract from measurement to default. For these products, in stage 3, no additional increase is considered in the exposure.

 

· Products with exposure certainty: in these types of products (generally amortizable loans), future exposure is known because the counterparty cannot increase its exposure beyond what was agreed upon in the contractual schedule. Therefore, the CCF does not apply to these products, and the EAD varies at each moment in time by reflecting the amortization of the loan balance due.

 

Loss given default (LGD)

 

LGD is the estimated loss in the case of default. It is based on the difference between all contractual cash flows and the cash flows expected by the lender (i.e., all cash shortfalls), considering the proceeds from the realization of collateral.

 

It is the supplement to the unit of the recovery rate; that is, the proportion not collected by the Bank with respect to the EAD. Consequently, the amount at default is compared with the present value of the amounts recovered after the date of default.

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

LGD varies based on the type of counterparty, aging, type of claim and the existence of guarantees securing credits. It is expressed as a percentage of the loss for EAD.

 

Just as the PDs, to assess the LGD, a distinction is made per customer in individual analyses and per product in the case of customers analyzed collectively. The Bank bases its estimates on the historical information observed regarding the recoveries obtained on customers or default transactions, discounted at the effective interest rate of such agreements and measured upon default.

 

Once the recovery rates are obtained, this behavior is projected through the triangle method to estimate the periods with less maturity. Finally, the weighted average of the loss for each portfolio is determined.

 

The LGDs are also amended by the macroeconomic models applied for the prospective vision.

 

Customers analyzed on an individual basis:

 

The Bank’s credit risk impairment assessment model is set to analyze individually all Corporate Portfolio customers, as defined by the BCRA, financial institutions, the public sector and government and private securities.

 

To make such an assessment, some objective data were defined to analyze whether there is a SICR and to determine whether it should be reclassified to stage 2 or to stage 3 when a default is produced or expected, or whether they should remain in stage 1. Those events comprise mainly material delays in the main credit lines granted, the Bank’s legal action for the assistance granted, the petition for insolvency proceedings or bankruptcy, and past due loans with pending principal, among others.

 

All the customers subject to the individual analysis are examined on a monthly basis to define the stage, following different criteria for each one of them:

 

Stage 1: the customers whose individual assessment reflects the following characteristics are deemed included:

 

· The financial instruments did not experience significant risk increases.

· The customer’s cash flow analysis shows that it has the ability to meet all its obligations adequately.

· It has a liquid financial position, with low level of indebtedness.

· Cash flows are not subject to drastic changes in the event of major variations in the behavior of own and sector variables.

· It regularly pays its obligations, even when it suffers minor and insignificant delays.

 

This stage also includes:

 

· The customers previously included in stages 2 or 3 who improved their credit risk indicators and meet the parameters defined for stage 1.

 

Stage 2: this stage includes the customers that, based on the individual analysis of their payment capacity, have a SICR that is not sufficiently severe to set default as defined for stage 3.

 

Some elements considered upon defining the existence of a significant increase in credit risk are:

 

· Profitability, liquidity and solvency indicators that tend to weaken, or some of the indications of impairment:

 

o There is a significant increase in payables without a consistent rise in revenues.

o There is a major decline in operating margins, or existence of operating loss.

o There are adverse changes in the context that exert a negative effect on future financial flows.

o There is a drastic decline in demand or negative changes in the business plans.

o There are significant changes in the value of the guarantees received

 

- 93 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

· The arrears in payment to the Bank are due to current operating or extraordinary circumstances, and a prompt resolution is expected.

 

This stage also includes:

 

· The customers that, having been included in stage 3, improved their credit risk indicators and are no longer at default, but which status prevents them from being reclassified to stage 1.

 

Stage 3: it includes the customers that, after an individual analysis, experience some of the following situations:

 

· Significant delays in the main credit lines granted, with no agreement with the Bank.

· Have been subject to complaints filed the Bank for the recovery of the assistance granted.

· Filed for insolvency proceedings or went into bankruptcy

· Refinance their payables systematically and have still not settled over 5% of the refinanced principal.

· Cash flows analysis shows that it is highly unlikely that the customer may meet all its obligations in the agreed-upon conditions.

 

The Credit Administration and Transactions Department analyzes all the portfolio under this approach, with special emphasis on customers in stages 2 and 3 in the previous month and those showing objective data that could evidence the existence of a SICR. The study is supplemented with the macroeconomic context and other news in relation to the performance of customers. Its staging proposal is submitted to the consideration of Corporate Risk and Credit Recovery Management Departments, which incorporate their own vision of the customer or the activity sector. The final assessment of the stage assigned to each customer is approved by the Credit Risk Management and is used as an input to estimate the ECL of the customers analyzed on an individual basis.

 

ECL calculation for customers included in an individual analysis:

 

Stage 1: the estimates of the customers classified in stage 1 arise from the parameters under expected credit loss models, whose characteristics are described in the previous sections on PD, EAD and LGD.

 

Stages 2 and 3: based on the evidence gathered upon the analysis, the Credit Risk Management –considering the level of progress of collection negotiations, as well as the evidence from a potential sale of collateral received or other credit improvements making up the contractual terms– prepares three potential recovery scenarios for each credit transaction of stage 2 and 3 customers, calculating the current value of expected flows for each scenario, which are weighted in view of their probability of occurrence. The expected loss of each transaction is the difference between the book payable of each transaction and the present weighted value of expected cash flows.

 

45.1.2  Prospective information used in ECL models

 

The calculation of ECL for risk impairment includes and is adjusted prospectively with respect to the portfolio behavior. To such end, the Bank examines the macroeconomics variables which have an impact on PD and LGD and designed 4 models which differ by customer type: Retail, Agro, Pymes and Commercial.

 

The main economic variables that impact on the expected losses used to calculate ECL for each economic scenario are changes in GDP, changes in interest rates, among others.

 

As established in IFRS 9, impact is calculated based on the different behavior scenarios of the variables; to such end, a 36-month estimate on the variables used for the models is requested from a well-known economic consulting firm. This estimate is prepared for three alternative macroeconomic scenarios, to which a likelihood of occurrence is assigned.

 

- 94 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Finally, the Bank calculates ECL by applying the alternative scenarios on a weighted basis, which are updated on a quarterly basis in each calendar quarter.

 

The value of the macroeconomic variables used in calculating the forward-looking adjustment is restricted to econometric model calculations and the estimates of the independent consultant in relation to those variables. However, in line with the “Guidance on credit risk and accounting for expected credit losses” of the Basel Banking Supervision Committee, the Bank applies its own criterion based on experience in order to consider reasonable and sustainable prospective information in due manner (including macroeconomic factors) and, as applicable, to determine the proper level of value corrections.

 

The following table shows the estimated values for macroeconomic variables used in the models for each scenario (base case, favorable and downside), with the assigned probability of occurrence to each scenario for the fiscal year 2023:

 

Key Drivers   ECL Scenario   Assigned
Probabilities
    2023  
            %     %
    Base case     70       1.00  
GDP growth %   Favorable     10       2.48  
    Downside     20       (3.01 )
                     
    Base case     70       67.97  
Interest rates %   Favorable     10       58.72  
    Downside     20       88.19  
                     
    Base case     70       107.45  
CPI %   Favorable     10       85.82  
    Downside     20       170.55  

 

45.1.3  Additional Forward-looking allowances based on expert credit judgment

 

Adjustment for uncertainty in external obligation restructuring

 

At the end of the fiscal year 2021, the Bank decided to record an additional adjustment, based on expert credit judgment and on a prospective basis after estimating an incremental effect on ECL allowances in order to cover an uncertain macroeconomic scenario due to the lack of an agreement between the Argentine Government and the IMF to restructure the debt. As of December 31, 2021, this adjustment amounted to 3,868,593.

 

When the agreement with the IFM was reached and approved by the Federal Congress, the Bank began to reverse the additional ECL. As of December 31, 2022 the Bank decided that the circumstances that generated the additional adjustment ceased to exist, therefore no other adjustment was recorded for this concept.

 

Adjustment for uncertainty about conditions of accessing loans to MIPYMES

 

As of December 31, 2022, the ECL were calculated with adjusted parameters considering the period November 2020 through October 2022. This adjustment determined a reduction in the default rates of MIPYMES that is explained by the application of the government policies of regulated and subsidized interest rates through financing programs to MIPYMES, which benefits the Commercial Portfolio Comparable to Consumer and MIPYMES’s natural persons from the Consumer Portfolio, enabling them to have access to loans with negative interest rates, in an growing inflationary context.

 

- 95 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

As of the date of issuance of these consolidated Financial Statements, the Management considers that there is uncertainty about the conditions of the interest rate policy and the access to loans from the portfolio that was able to reduce its default rates. It is also understood that there are doubts as to whether these conditions will prevail in the future.

 

Therefore, the Bank decided to record an additional allowance for 1,514,000 that represents the difference between the ECL amount generated by the application of the adjustment for MIPYMES´s portfolio and the estimated impact that it would have on the ECL for companies on an individual basis if there is a negative change in the interest rate policy.

 

45.1.4  Portfolio quality

 

The Bank discloses in Exhibit B “Classification of loans and other financing by situation and collateral received” in these consolidated Financial Statements, a breakdown of loans and other financing by classification levels and collateral received.

 

In addition, the table below shows the analysis by aging of performing loans in arrears (in days):

 

    12/31/2022  
    Delinquent, performing (in days)  
Portfolio Type   0 to 31     From 32 to
90
    From 91 to
180
    From 181 to
360
    Over 360  
Commercial loans     98.8 %     1.2 %     0.0 %     0.0 %     0.0 %
Commercial loans comparable to consumer     99.9 %     0.1 %     0.0 %     0.0 %     0.0 %
Consumer loans     100.0 %     0.0 %     0.0 %     0.0 %     0.0 %
Total     99.8 %     0.2 %     0.0 %     0.0 %     0.0 %

 

    12/31/2021  
    Delinquent, performing (in days)  
Portfolio Type   0 to 31     From 32 to
90
    From 91 to
180
    From 181 to
360
    Over 360  
Commercial loans     98.9 %     0.9 %     0.0 %     0.2 %     0.0 %
Commercial loans comparable to consumer     99.7 %     0.3 %     0.0 %     0.0 %     0.0 %
Consumer loans     99.5 %     0.5 %     0.0 %     0.0 %     0.0 %
Total     99.4 %     0.5 %     0.0 %     0.1 %     0.0 %

 

- 96 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

The following table shows the loans and other financing portfolio under credit risk by industry sector, classified by risk stage and identifying the expected loss calculated under individual or collective basis:

 

    1     2              
    Collective     Individual     Collective     Individual     3     12/31/2022  
Loans and other financing     479,452,940       104,988,725       17,579,354       2,570,188       5,012,162       609,603,369  
Non-financial public sector     213,611       1,993,184       29               111       2,206,935  
Other financial entities     127       935,286                               935,413  
Non-financial private sector     479,239,202       102,060,255       17,579,325       2,570,188       5,012,051       606,461,021  
Individuals     274,924,089       3,148,236       12,067,795               2,668,258       292,808,378  
Manufacturing Industry     31,183,788       24,274,647       746,964       1,329,244       403,405       57,938,048  
Agricultural and cattle industry     44,869,029       17,883,431       799,999       1,240,944       1,268,562       66,061,965  
Services     65,880,196       8,552,942       2,522,295               351,183       77,306,616  
Commercial activities     44,682,587       23,420,277       1,061,948               226,414       69,391,226  
Exploration of mines and quarries     2,247,027       7,225,151       21,074               3,182       9,496,434  
Financial intermediation     2,480,513       9,527,822       60,956               25,963       12,095,254  
Construction activities     9,787,338       7,874,875       184,136               43,311       17,889,660  
Electricity supply and gas     503,461       152,874       7,295               1,609       665,239  
Public administration     2,496,835               104,849               20,125       2,621,809  
Water supply and public sanitation     184,339               2,014               39       186,392  

 

    1     2            
    Collective     Individual     Collective     Individual     3     12/31/2021  
Loans and other financing     514,367,442       157,218,100       17,852,932       9,225,497       6,425,695       705,089,666  
Non-financial public sector     139,590       4,488,641       75                       4,628,306  
Other financial entities     4,086       2,944,901                               2,948,987  
Non-financial private sector     514,223,766       149,784,558       17,852,857       9,225,497       6,425,695       697,512,373  
Individuals     323,205,610       2,745,926       10,040,814               3,296,663       339,289,013  
Manufacturing Industry     31,780,091       46,464,909       845,026       3,533,350       193,016       82,816,392  
Agricultural and cattle industry     40,312,462       22,054,630       3,065,295       5,692,147       1,015,275       72,139,809  
Services     61,670,626       19,022,152       2,421,080               578,179       83,692,037  
Commercial activities     39,999,096       27,407,746       1,011,514               304,296       68,722,652  
Exploration of mines and quarries     2,312,433       12,006,425       35,904               908,802       15,263,564  
Financial intermediation     2,817,845       11,867,948       94,079               10,206       14,790,078  
Construction activities     8,346,506       7,923,998       221,929               93,261       16,585,694  
Electricity supply and gas     643,481       290,824       25,968               3,348       963,621  
Public administration     3,025,323               69,117               22,184       3,116,624  
Water supply and public sanitation     110,293               22,131               465       132,889  

 

- 97 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

45.1.5 Collateral and other credit improvements

 

·  Guarantees received for the entirely portfolio

 

The following table shows the amounts of guarantees received for the entire portfolio as of December 31, 2022.

 

          Fair value of collateral                    
Class of financial
instrument
  Maximum
exposure to
credit risk
    Pledges on
time
deposits
    Deferred
payment
checks
    Mortgage
on real
property
    Pledges on
vehicles and
machinery
    Pledges on
personal
property
    Other     Total
collateral
    Net
exposure
    Associated
ECL
 
Loans and other financing     609,603,369       1,892,396       28,716,066       39,795,825       9,011,936       3,284,991       100,749,510       183,450,724       426,152,645       11,002,339  
Loans commitment     676,242,884       130,635               61354       6517       376514       3,476,582       4,051,602       672,191,282       696,767  
Other financial assets     53,527,298                                                               53,527,298       91,041  
Other debt Securities at amortized cost     1,347,372                                                               1,347,372       796  
Total     1,340,720,923       2,023,031       28,716,066       39,857,179       9,018,453       3,661,505       104,226,092       187,502,326       1,153,218,597       11,790,943  

 

· Guarantees received for the portfolio in Stage 3

 

The following table shows the amounts of guarantees for the portfolio in Stage 3 as of December 31, 2022.

 

          Fair value of collateral                    
Class of financial
instrument
  Maximum
exposure to
credit risk
    Pledges on
time
deposits
    Deferred
payment
checks
    Mortgage on
real property
    Pledges on
vehicles and
machinery
    Pledges on
personal
property
    Total
collateral
    Net exposure     Associated
ECL
 
Loans and other financing     5,012,162               1,084,295       85,325       26,074       345,272       1,540,966       3,471,196       3,458,160  
Total     5,012,162                      1,084,295       85,325       26,074       345,272       1,540,966       3,471,196       3,458,160  

 

· Guarantees received for the entirely portfolio

 

The following table shows the amounts of guarantees received for the entire portfolio as of December 31, 2021.

 

          Fair value of collateral                    
Class of financial
instrument
  Maximum
exposure to
credit risk
    Pledges on
time
deposits
    Deferred
payment
checks
    Mortgage on
real
property
    Pledges on
vehicles and
machinery
    Pledges on
personal
property
    Other     Total
collateral
    Net
exposure
    Associated
ECL
 
Loans and other financing     705,089,666       2,637,949       34,658,789       63,571,525       13,880,051       3,377,364       115,127,407       233,253,085       471,836,581       18,761,240  
Loans commitment     438,164,047       4,542               146,385               115,666       1,183,734       1,450,327       436,713,720       664,446  
Other financial assets     64,515,449                                                               64,515,449       51,518  
Other debt Securities at amortized cost     515,601                                                               515,601       1,057  
Total     1,208,284,763       2,642,491       34,658,789       63,717,910       13,880,051       3,493,030       116,311,141       234,703,412       973,581,351       19,478,261  

 

- 98 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

· Guarantees received for the portfolio in Stage 3

 

The following table shows the amounts of guarantees for the portfolio in Stage 3 as of December 31, 2021.

 

          Fair value of collateral                    
Class of financial
instrument
  Maximum
exposure to
credit risk
    Pledges on
time
deposits
    Deferred
payment
checks
    Mortgage on
real property
    Pledges on
vehicles and
machinery
    Pledges on
personal
property
    Total
collateral
    Net exposure     Associated
ECL
 
Loans and other financing     6,425,695                      613,180       161,038       29,463       1,689,672       2,493,353       3,932,342       5,150,202  
Total     6,425,695               613,180       161,038       29,463       1,689,672       2,493,353       3,932,342       5,150,202  

 

45.2 Liquidity Risk

 

The liquidity risk is defined as the possibility that the Bank may not be able to comply with expected and unexpected current and future cash flows effectively, as well as guarantees, without affecting daily transactions or its financial position.

 

In addition, the market liquidity risk refers to the risk that the Bank may not be able to clear or delete a position at market price:

 

· because the assets involved have no sufficient secondary market; or

 

· due to market variations.

 

The Bank features policies regarding liquidity, the purpose of which is to manage liquidity efficiently, optimizing cost and diversification of funding sources, and maximizing the profit from placements through prudent management that ensures the necessary funds to allow the continuity of transactions and compliance with the rules and regulations in force.

 

In order to reduce the liquidity risk, the Bank has been established a policy with the following main aspects:

 

Assets: a high-liquidity assets portfolio will be maintained to cover at least 25% of total liabilities, comprising deposits, the corporate bonds issued by the Bank, the repo agreements taken and the financial and interbank loans borrowed.

 

Liabilities: to minimize the unintended effects of illiquidity, deriving from the possible withdrawal of deposits and the repayment of interbank loans taken, the Bank:

 

- Seeks the proper diversification of financing sources to enable the constant availability of funds and fulfill institutional obligations within a market variability environment.

 

- Gives priority to attracting retail deposits to have an atomized deposit portfolio and lower risks in relation to material withdrawals concentrated in a few depositors.

 

- Does not depend excessively on obtaining repo transactions and interfinancial loans as a permanent funding source.

 

In addition, the Bank implemented a series a risk measurement and control tools, including the regular monitoring of liquidity gaps, separated by currency, as well as different liquidity ratios, including the “bi-monetary liquidity ratio”, “Liquidity Coverage Ratio” (LCR) and “Net Stable Funding Ratio” (NSFR), among others.

 

The Executive Risk Management Department regularly monitors compliance of the different levels set by the Board of Directors in relation to liquidity risk, which include minimum levels of liquidity, maximum concentration levels allowed by type of deposit and by type of customer, among others.

 

- 99 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

In the event of a liquidity crisis, the Bank has a contingency plan with different actions, like as follows:

 

· Financing through call banking and repo agreements with the BCRA. 

· Spot sale of securities government portfolio. 

· Limit credit assistance to private sector. 

· Increase deposit rates in order to capture deposits.

 

The following table shows the liquidity ratios during the fiscal years 2022 and 2021, which arise from dividing net liquid assets, made up of cash and cash equivalents, by total deposits.

 

    2022     2021  
December, 31     93.65 %     87.37 %
Average     93.59 %     88.63 %
Max     95.25 %     92.77 %
Min     92.45 %     85.50 %

 

The Bank discloses in exhibit D “Breakdown of loans and other financing by terms” and exhibit I “Breakdown of financial liabilities by residual terms” to the accompanying consolidated Financial Statements the breakdown by contractual maturity, of financial assets and liabilities, respectively.

 

45.3 Market Risk

 

Market risk is defined as the possibility of suffering losses in positions on and off the Bank's balance sheet as a result of the adverse fluctuations in the market prices of different assets.

 

Market risks arise from interest rate, currency and price positions, all of which are exposed to general and specific market changes and changes in the price volatility such as interest rates, credit margins, foreign currency exchange rates and prices of shares and securities, among others.

 

The Bank determines the market risk exposure arising from the fluctuation in the value of portfolios of investments for trading, which result from changes in market prices, the Bank's net positions in foreign currency, and government and private securities with normal quoted prices.

 

These risks arise from the size of the Bank’s net positions and/or the volatility of the risk factors involved in each financial instrument.

 

The Bank features Market Risk Management Policies in which the Bank establishes the proceedings to monitor and control risks derived from the variations in the quotes of financial instruments in order to optimize the risk-return ratio, making use of the appropriate structure of limits, models and management tools. In addition, the Bank features proper tools and proceedings allowing the Risk Management Committee and the Assets and Liabilities Committee to measure and administer this risk.

 

Risks to which those investment portfolios are exposed are monitored through Montecarlo simulation techniques of “Value at Risk” (VaR). The Bank applies the VaR methodology to calculate the market risk of the main positions adopted and the expected maximum loss based on a series of assumptions for a variety of changes in market conditions.

 

In order to carry out the abovementioned simulation, the Bank needs to have the Price historical series of those instruments that compose the portfolio.

 

Prices are corrected by purging the effects of coupon payments and dividend payments, in the case of shares, in order to avoid affecting returns.

 

The method consists in creating return or price scenarios concerning an asset through the generation of random numbers. This is based on the selection of a stochastic model describing the performance of prices for each asset with the resulting specification of certain parameters required for calculation purposes. The model used is the geometric Brownian motion.

 

Once all “n” potential scenarios are obtained for valued positions, the P&L vector must be calculated as the difference between the estimated value of the future portfolio and its value upon calculation. Then profit and loss will be placed in order to obtain the value at risk according to the 99% percentage applied.

 

- 100 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

Finally, the Economic Capital by market risk is obtained as the difference between the current value of the portfolio and the critical value previously obtained.

 

45.4 Interest Rate Risk

 

The interest rate risk is defined as the possibility that changes occur in the Bank's financial condition as a result of adverse interest rate fluctuations with a negative impact on the Shareholders’ equity and profit or loss.

 

Within the framework of the interest rate risk management the Bank features a series of policies, procedures and internal controls included in the Structural Risk Management.

 

The Bank monitors the net present value of its assets, liabilities and off balance sheet items, upon certain disturbance scenarios and interest rate stress through Montecarlo simulation techniques.

 

For this purpose, the maximum potential loss is determined considering a temporal line of three months and 99% confidence level interval.

 

The Equity Value Model (EVM) is determined as the net sum of cash flows (interest and principal losses) that the Bank can generate, discounted at market interest rate curve. If the market interest rate curve used for the discount is affected, the effect of such variation impacts directly on the value of the Bank. Generally speaking, reports related to EVM seek to analyze the Bank’s long-term solvency.

 

It is noteworthy that the use of that approach does not avoid losses beyond those limits in the event of the most significant market changes.

 

As of December 31, 2022 and 2021, the Bank’s economic capital by type of risk is as follows:

 

Economic capital (EC – in millions)   12/31/2022     12/31/2021  
Interest rate risk     12,656       9,124  
Currency Exchange rate risk     10,687       7,454  
Price risk     12,362       3,719  

 

45.5 Foreign Currency Exchange Rate Risk

 

The Bank is exposed to fluctuations in foreign currencies exchange rates in its financial position and cash flows. The larger proportion of assets and liabilities kept are related to US dollars.

 

The foreign currency position includes assets and liabilities expressed in pesos at the exchange rate as of the closing dates mentioned below. An institution’s open position comprises assets, liabilities and memorandum accounts stated in foreign currency, where an institution assumes the risk. Any devaluation / revaluation of those currencies affect the Bank’s statement of income.

 

The Bank’s open position, stated in Argentine pesos by currency, is disclosed in exhibit L “Foreign currency balances” to these consolidated Financial Statements.

 

45.6 Operational Risk

 

Operational risk is defined as the risk of loss arising from the inadequacy or failure of internal processes, human errors and/or internal system failures, or those originated by external events. This definition includes the Legal Risk but excludes the Strategic Risk and Reputational Risk.

 

Within such framework, the legal risk (which may occur from within the Bank or externally) comprises, among other aspects, the exposure to penalties, sanctions or other economic consequences or results for failure to comply with any rule or regulation or contractual obligation.

 

- 101 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

  

On the other hand, the Bank implemented an operational risk management system that meets the guidelines and provisions established by the BCRA in its Communiqué “A” 5398, as amended, and under Communiqué “A” 5272 the BCRA provided for a minimum capital requirement under this description, effective as of February 1, 2012.

 

The operating risk management system is formed by:

 

a) Organizational structure: the Bank has an Operational Risk Management that is in charge of managing operational risk and a Risk Management Committee.

 

b) Policies: the Bank has a “Manual for the Operational Risk Management” approved by the Board of Directors, which define the main concepts, roles and responsibilities of the Board of Directors, the Senior Management and all the areas involved in this risk management.

 

c) Procedures: the Bank features a procedure for the “Collection of events and losses from Operational Risk” that includes a process to gather the Operational Events and Losses to register on a systematic basis the frequency, severity, category and other relevant aspects related to the events and losses from Operational Risk.

 

d) The objective is to assess the Bank’s situation upon occurrence of events, in order to better understand the Operational Risk profile and, if applicable, take the necessary corrective actions.

 

In addition, the Bank has a procedure that establishes the guidelines to prepare risk self-assessments and, in the event of risks exceeding allowed tolerance levels, guidelines to establish risk indicators and action plans.

 

e) Computer Systems: the Bank has computer systems that allow managing all Operational and Technology Risks.

 

f) Database: the Bank has an operational risk event database prepared pursuant to the guidelines established in Communiqué “A” 4904, as supplemented.

 

g) Information systems to measure risks: the Risk Management Department generates and sends, on a regular basis, reports to the Board of Directors, the Risk Management Committee and the Senior Management. With such reports the Risk Management Department communicates the results of the follow-up of the management of the main risks to which the Bank is exposed. Each report contains information on risk measurement, evolution, trends, principal exposures, control of main limits and the capital level required for each type of risk.

 

At the meeting of the Risk Management Committee, the Comprehensive Risk Management Department shall submit for consideration the results of the performance of such department and the reports issued during the period under analysis. The resolutions adopted by the Committee shall be recorded in Minutes to be considered by the Board of Directors, who shall subsequently approve, in this manner, the performance and risk level of the analyzed period.

 

h) Stress tests: stress tests are a support tool to manage risks and a supplement of the results reported by the measurement models of the different risks, which in general show risk measurements that are valid for “normal situations”.

 

They are also an instrument to evaluate the risk profile since they are used to quantify the potential impact in a situation of significant fluctuation of the variables affecting each risk. Stress tests are as well used in the process of internal assessment of economic capital sufficiency.

 

Stress tests are aimed at evaluating the Bank’s financial vulnerability potential faced with the sensibility of the main variables affecting each risk. Generally, it is considered a variation of low probability of occurrence, but if materialized may cause significant excess of the tolerance limits established for each risk.

 

i) Assessment of economic capital sufficiency: each year, the Bank calculates the economic capital for those risks which, for their significance, may, eventually, affect the Bank’s solvency.

 

- 102 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

At present, the Bank calculates the economic capital of the following risks: Credit, Concentration, Market, Operational, Interest Rate, Liquidity and Concentration of Funding Sources, Securitization, Reputational and Strategic.

 

Risk management is directly related to economic capital assessment. Thus, it is expected that with a better management and follow-up, the Bank will need to allocate less amount of capital.

 

Based on the internal models developed, Banco Macro manages its risks, determines its risk profile and calculates, therefore, the necessary capital to develop its activities and businesses, adjusting each risk to its relevant exposure level.

 

j) Transparency: as a supplement to this Manual and as part of the Corporate Governance policy, the Bank features an Information Policy aimed at allowing shareholders, investors and the market in general to evaluate aspects of the Bank related to capital, risk exposure, risk assessment procedures and capital adequacy.

 

46. CHANGES IN THE ARGENTINE MACROECONOMIC ENVIRONMENT AND FINANCIAL AND CAPITAL MARKETS

 

During the second half of 2019, in a political context of federal general elections which gave rise to a change in the federal authorities, the existing volatility was accentuated for the market values of government and private financial instruments and a process of rescheduling maturities and swaps of certain government debt instruments started. In addition, material increases were observed in the country’s risk and in the exchange rate between the Argentine peso and the US dollar.

 

Subsequently, among other regulations, relevant modifications to the tax regulation system were introduced, including changes in the income tax, withholdings related to foreign exchange transactions and for the acquisition of foreign currency for hoarding purposes, and material restrictions to the exchange market access were also established.

 

At the same time, the government’s debt restructuring process continued under domestic and foreign legislation, including several voluntary swaps and the reached agreements regarding the country’s indebtedness with the International Monetary Fund and the Paris Club, among others.

 

Particularly, regarding to the price of US dollar, since the end of 2019, the gap between the official price of the US dollar -used mainly for foreign trade- and the alternative values that arise through the stock market operation and also with respect to the unofficial value, began to widen around 95% as of the date of issuance of these consolidated Financial Statements.

 

Even though, at the date of issuance of these consolidated Financial Statements certain volatility levels previously mentioned have been decreased, the local and international macroeconomic context generates certain degree of uncertainty regarding its future progress, considering the effects of the pandemic declared for Coronavirus (COVID – 19) that recently has significantly affected the international economy activity and the military conflict between Russia and Ukraine in the level of the global economic recovery.

 

Therefore, the Bank’s Management permanently monitors any changes in the abovementioned situations in international and local markets, to determine the possible actions to adopt and to identify the possible impact on its financial situation that may need to be reflected in the future Financial Statements.

 

47. EVENTS AFTER REPORTING PERIOD

 

No other significant events occurred between the end of the fiscal year and the issuance of these consolidated Financial Statements that may materially affect the financial position or the profit and loss for the fiscal year, not disclosed in these consolidated Financial Statements.

 

- 103 -


 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency)

 

48. ACCOUNTING PRINCIPLES – EXPLANATION ADDED FOR TRANSLATION INTO ENGLISH

 

These consolidated Financial Statements are presented in accordance with the accounting framework established by the BCRA, as mentioned in note 3. These accounting standards may not conform to accounting principles generally accepted in other countries.

 

 
- 104 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT A
 
DETAIL OF GOVERNMENT AND PRIVATE SECURITIES
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Holdings     Position  
          12/31/2022     12/31/2021     12/31/2022  
Name   Identification     Fair value     Fair
value
level
    Book
amounts
    Book
amounts
    Position
without
options
    Options     Final position  
DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS                                                              
- Local                                                              
Government securities                                                              
Federal government bonds in dual currency at discount - Maturity: 07-21-2023     9146             1       58,946,978               58,946,978               58,946,978  
Federal government treasury bonds linked at dollar - Maturity: 04-28-2023     5928             1       56,990,201       49       56,990,201               56,990,201  
Federal government bonds in dual currency at discount - Maturity: 09-29-2023     9147             1       21,913,191               21,913,191               21,913,191  
Federal government bonds in dual currency at discount - Maturity: 06-30-2023     9145             1       20,739,047               20,739,047               20,739,047  
Federal government treasury bonds in pesos adjustment by CER - Maturity: 03-25-2023     5492             1       14,667,234       7,499,991       14,667,234               14,667,234  
Federal government bonds in dual currency at discount - Maturity: 02-28-2023     9156             1       11,476,239               11,476,239               11,476,239  
Federal government treasury bonds in pesos adjustment by CER - Maturity: 03-06-2023     5324             1       5,841,908       3,334,906       5,841,908               5,841,908  
Letters of National Estate in pesos adjustment by CER at discount - Maturity: 01-20-2023     9105             1       2,969,113               2,969,113               2,969,113  
Letters of National Estate in pesos adjustment by CER at discount - Maturity: 02-17-2023     9111             1       2,184,546               2,184,546               2,184,546  
Federal government treasury bonds in pesos adjustment by CER - Maturity: 05-19-2023     9127             1       2,137,825               2,137,825               2,137,825  
Other                           6,966,936       48,832,493       6,966,936               6,966,936  
Subtotal local government securities                           204,833,218       59,667,439       204,833,218               204,833,218  
                                                               
Private securities                                                              
Corporate bonds Genneia SA Class 031 - Maturity: 09-02-2027     96105             1       1,329,598               1,329,598               1,329,598  
Corporate bonds Transportadora de Gas del Sur SA Class 002 - Maturity: 05-02-2025     92902             2       708,031               708,031               708,031  
Corporate bonds Pampa Energía SA Class I - Maturity: 01-24-2027     91977             2       591,753               591,753               591,753  
Corporate bonds Tarjeta Naranja SA Class 53 Series 01 - Maturity: 04-05-2023     56056             3       434,678               434,678               434,678  
Debt Securities in Financial Trusts Confibono                   3       417,426               417,426               417,426  
Corporate bonds Pan American Energy Argentina S.L Class 21 - Maturity: 07-21-2025     82424             2       335,505               335,505               335,505  
Corporate bonds Telecom Argentina SA Class 001 - Maturity: 07-18-2026     94390             1       276,554       78,938       276,554               276,554  
Corporate bonds Pan American Energy Argentina S.L Class 012 - Maturity: 04-30-2027     95806             1       252,830       257,440       252,830               252,830  
Corporate bonds Arcor SAIC Class 018 - Maturity: 10-09-2027     96504             1       244,342               244,342               244,342  
Corporate bonds CT Barragan SA  Class 006 - Maturity: 05-16-2025     56137             1       189,080               189,080               189,080  
Other                           1,441,097       3,122,007       1,441,097               1,441,097  
Subtotal local private securities                           6,220,894       3,458,385       6,220,894               6,220,894  
TOTAL DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS                                  211,054,112       63,125,824       211,054,112                      211,054,112  

 

 
- 105 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

EXHIBIT A

(continued)

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Holdings     Position  
          12/31/2022     12/31/2021     12/31/2022  
Name   Identification     Fair
Value
    Fair
value
level
    Book
amounts
    Book
amounts
    Position
without
options
    Options     Final position  
OTHER DEBT SECURITIES                                                              
Measured at fair value through other comprehensive income                                                              
- Local                                                              
Government securities                                                              
Letters of National Estate in pesos adjusted by CER at discount - Maturity: 02-17-2023     9111             1       44,938,818               44,938,818               44,938,818  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 03-25-2023     5492             1       34,466,456       20,285,891       34,466,456               34,466,456  
Letters of National Estate in pesos adjustment by CER at discount - Maturity: 01-20-2023     9105             1       13,323,179               13,323,179               13,323,179  
Letters of National treasury in pesos at discount - Maturity: 02-28-2023     9141             1       11,626,524               11,626,524               11,626,524  
Letters of National treasury in pesos at discount - Maturity: 03-31-2023     9164             1       10,732,116               10,732,116               10,732,116  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 08-13-2023     5497             1       8,802,301       6,030,797       8,802,301               8,802,301  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 05-19-2023     9127             1       2,849,299               2,849,299               2,849,299  
Letters of National Estate in pesos at discount - Maturity: 04-28-2023     9142             1       1,406,688               1,406,688               1,406,688  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 03-06-2023     5324             1       1,354,629               1,354,629               1,354,629  
Bonds of federal government in dollars Step up - Maturity: 07-09-2030     5921             1       520,270       793,058       520,270               520,270  
Other                           460,401       216,097,027       460,401               460,401  
Subtotal local government securities (1)                           130,480,681       243,206,773       130,480,681               130,480,681  
                                                               
Central Bank of Argentina Bills                                                              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-04-2022                                   41,921,012                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-27-2022                                   36,776,261                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-18-2022                                   36,305,152                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-11-2022                                   34,527,730                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-13-2022                                   34,092,263                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-25-2022                                   32,241,669                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-06-2022                                   30,950,258                          
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-20-2022                                   12,203,612                          
Subtotal Central Bank of Argentina Bills                                   259,017,957                          
- Foreign                                                              
Government securities                                                              
US Treasury Bill – Maturity: 01-10-2023                   1       3,894,153               3,894,153               3,894,153  
US Treasury Bill – Maturity: 01-17-2023                   1       2,652,942               2,652,942               2,652,942  
US Treasury Bill – Maturity: 01-19-2023                   1       884,217               884,217               884,217  
US Treasury Bill – Maturity: 01-20-2022                                   8,005,927                          
Subtotal foreign government securities                               7,431,312       8,005,927       7,431,312                  7,431,312  
Total Other debt securities measured at fair value through other comprehensive income (2)                           137,911,993       510,230,657       137,911,993               137,911,993  

 

(1) During January 2023, the Bank entered into a voluntary debt swap. The following instruments entered into that swap:

 

Letters of National Estate in pesos adjusted by CER – Maturity 02-17-2023 (X17F3) for a nominal amount of 20,900,000,000.
Letters of National Estate in pesos at discount – Maturity 02-28-2023 (S28F3) for a nominal amount of 12,893,000,000.
Letters of National Estate in pesos adjusted by CER – Maturity 01-20-2023 for a nominal amount of 290,000,000.

 

(2) Changes in business model

 

During the fiscal year, the Bank’s Management decided to update the objective related to certain investments which were reclassified from fair value through OCI to fair value through profit or loss.

 

During June 2022, the investments in Letters of National Estate in pesos adjusted by CER at discuount maturing on July 29, 2022 and August 16, 2022 were reclassified. At the reclasification date, the fair value of these investments amounted to 88,734,390.

 

In addition, during August 2022, the investments in Federal government treasury bonds linked to dollar at 0.30% maturing on April 28, 2023 (TV23) were reclassified. At the reclassification date, the fair value of these investments amounted to 48,064,512.

 

  - 106 - Delfín Jorge Ezequiel Carballo
Chairperson


 

EXHIBIT A

(continued)

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Holdings     Position  
          12/31/2022     12/31/2021     12/31/2022  
Name   Identification     Fair
Value
    Fair
value
level
    Book
amounts
    Book
amounts
    Position
without
options
    Options     Final position  

OTHER DEBT SECURITIES

Measured at amortized cost

                                                             
- Local                                                              
Government securities                                                              
Bonds of treasury of federal government in pesos - Maturity: 05-23-2027     9132       39,222,468     2       40,469,619               40,469,619               40,469,619  
Bonds of treasury of federal government in pesos Badlar x 0.7 - Maturity: 11-23-2027     9166       8,374,568     1       8,400,364               8,400,364               8,400,364  
Discount bonds denominated in pesos at 5.83% - Maturity: 12-31-2033     45696       657,742     1       507,009       517,875       507,009               507,009  
Debt securities of Province of Río Negro in pesos - Maturity: 04-12-2023     42534       203,896     2       200,378               200,378               200,378  
Treasury bills of Province of Río Negro Series 02 in pesos - Maturity: 06-15-2023     42555       198,801     1       199,044               199,044               199,044  
Bonds of treasury of federal government in pesos at 22% - Maturity: 05-21-2022     5496                             44,306,545                          
Treasury bills of Province of Neuquén Series 1 Class 1 - Maturity: 04-07-2022     42382                             607,285                          
Debt securities of Province of Río Negro in pesos - Maturity: 04-12-2022     42385                             425,837                          
Treasury bills of Province of Río Negro Series 02 Class 01 - Maturity: 06-15-2022     42479                             377,125                          
Treasury bills of Province of Neuquén Series 4 Class 1 in pesos - Maturity: 02-28-2022     42426                             89,322                          
Subtotal local government securities                           49,776,414       46,323,989       49,776,414               49,776,414  
Central Bank of Argentina Bills                                                              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-03-2023             62,002,563     1       62,250,767               62,250,767               62,250,767  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-24-2023             61,833,200     1       62,080,786               62,080,786               62,080,786  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-05-2023             61,755,250     1       62,003,011               62,003,011               62,003,011  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-26-2023             61,586,655     1       61,833,224               61,833,224               61,833,224  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-10-2023             61,020,500     1       61,386,248               61,386,248               61,386,248  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-12-2023             60,897,625     1       61,141,456               61,141,456               61,141,456  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-17-2023             60,292,313     1       60,533,736               60,533,736               60,533,736  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-19-2023             60,032,938     1       60,292,343               60,292,343               60,292,343  
Internal letters of BCRA exchange rate of reference to rate 0 - Maturity – Maturity: 09-20-2023             3,610,530     2       3,796,524               3,796,524               3,796,524  
Internal letters of BCRA exchange rate of reference to rate 0 - Maturity – Maturity: 09-22-2023             3,478,168     2       3,660,475               3,660,475               3,660,475  
Other                           37,386,546               37,386,546               37,386,546  
Subtotal Central Bank of Argentina Bills                           536,365,116               536,365,116               536,365,116  
Central Bank of Argentina Notes                                                              
Liquidity notes of Central Bank of Argentina in pesos - Maturity: 01-04-2023             12,059,395     1       12,105,932               12,105,932               12,105,932  
Subtotal Central Bank of Argentina Notes                           12,105,932               12,105,932               12,105,932  
Private securities                                                              
Corporate Bonds Vista Energy Argentina SAU Class 13 - Maturity:  08-08-2024 (3)     56207       1,011,196     1       521,919               521,919               521,919  
Corporate Bonds Vista Oil y Gas Argentina SAU Class 15 - Maturity: 01-20-2025 (3)     56637       878,912     2       481,671               481,671               481,671  
Debt Securities in Financial Trusts Confibono Series 65 Class A - Maturity: 07-20-2023     56428       116,458     2       116,483               116,483               116,483  
Debt Securities in Financial Trusts Secubono Series 221 Class A - Maturity: 07-28-2023     56583       91,182     2       90,941               90,941               90,941  
Debt Securities in Financial Trusts Secubono Series 222 Class A - Maturity: 08-28-2023     56660       60,975     3       75,880               75,880               75,880  
Corporate Bonds YPF SA Class 043 - Maturity: 10-21-2023     50939       38,684     2       34,863       108,511       34,863               34,863  
Debt Securities in Financial Trusts Secubono Series 219 Class A - Maturity: 04-28-2023     56366       35,329     3       24,819               24,819               24,819  
Debt Securities in Financial Trusts Red Surcos Series 020 Class A - Maturity: 07-15-2022     55767                             83,953                          
Debt Securities in Financial Trusts Secubono Series 209 Class A - Maturity: 05-30-2022     55616                             60,149                          
Corporate Bonds Banco Santander Rio SA Class 021 - Maturity:  01-26-2022     53219                             51,914                          
Other                                   210,017                          
Subtotal local private securities                           1,346,576       514,544       1,346,576               1,346,576  
Total other debt securities measurement at amortized cost                                      599,594,038       46,838,533       599,594,038                   599,594,038  
TOTAL OTHER DEBT SECURITIES                           737,506,031       557,069,190       737,506,031               737,506,031  

 

(3) This fair value was obtained from price quotations in pesos.

 

  - 107 - Delfín Jorge Ezequiel Carballo
Chairperson


 

EXHIBIT A

(continued)

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Holdings     Position  
          12/31/2022     12/31/2021     12/31/2022  
Name   Identification     Fair
Value
    Fair
value
level
    Book
amounts
    Book
amounts
    Position
without
options
    Options     Final position  
Equity Instruments                                                              
Measured at fair value through profit or loss                                                              
- Local                                                              
Mercado Abierto Electrónico SA                   3       462,536       400,992       462,536               462,536  
C.O.E.L.S.A                   3       87,563       73,232       87,563               87,563  
Matba Rofex SA                   3       58,306       61,161       58,306               58,306  
Sedesa                   3       21,291       29,835       21,291               21,291  
AC Inversora SA                   3       19,583       19,826       19,583               19,583  
Mercado a Término Rosario SA                   3       14,627       14,442       14,627               14,627  
Provincanje SA                   3       14,506       17,253       14,506               14,506  
Pampa Energía SA     457             1       721       531       721               721  
Argencontrol SA                   3       478       793       478               478  
San Juan Tennis Club SA                   3       437       851       437               437  
Other                           10       3,490,243       10               10  
Subtotal local                           680,058       4,109,159       680,058               680,058  
- Foreign                                                              
Cedear Exxon Mob     8019             1       22,559       6,298       22,559               22,559  
Banco Latinoamericano de Comercio Exterior SA                       1       20,957       24,266       20,957                   20,957  
Cedear Berkshire Hathaway Inc.     8529             1       19,363       9,384       19,363               19,363  
Cedear Pepsico     8146             1       18,785       9,348       18,785               18,785  
Cedear McDonald     8030             1       17,874       9,425       17,874               17,874  
Cedear Vista Oil & Gas     8527             1       14,711       2,556       14,711               14,711  
Cedear Wells F&C     8047             1       11,506       6,407       11,506               11,506  
Cedear Bankof America Corp.     8281             1       9,267       6,348       9,267               9,267  
Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales                   3       5,646       5,415       5,646               5,646  
Cedear Aztrazden     8244             1       3,657       2,435       3,657               3,657  
Other                           15,075       54,469       15,075               15,075  
Subtotal foreign                           159,400       136,351       159,400               159,400  
Total measured at fair value through profit or loss                           839,458       4,245,510       839,458               839,458  
TOTAL EQUITY INSTRUMENTS                           839,458       4,245,510       839,458               839,458  
TOTAL GOVERNMENT AND PRIVATE SECURITIES                           949,399,601       624,440,524       949,399,601               949,399,601  

 

  - 108 - Delfín Jorge Ezequiel Carballo
Chairperson


 

EXHIBIT B

 

  CONSOLIDATED CLASSIFICATION OF LOANS AND OTHER FINANCING

  BY SITUATION AND COLLATERAL RECEIVED

  AS OF DECEMBER 31, 2022 AND 2021

  (Translation of the Financial Statements originally issued in Spanish – See Note 48)

  (Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

COMMERCIAL   12/31/2022     12/31/2021  
In normal situation     110,879,468       163,874,686  
With senior “A” collateral and counter-collateral     14,400,986       22,331,788  
With senior “B” collateral and counter-collateral     18,362,596       31,494,559  
Without senior collateral or counter-collateral     78,115,886       110,048,339  
                 
Subject to special monitoring             4,151,452  
In observation                
With senior “A” collateral and counter-collateral             2,871  
With senior “B” collateral and counter-collateral             3,434,738  
Without senior collateral or counter-collateral             713,843  
                 
Troubled     1,400,613       1,462,761  
With senior “A” collateral and counter-collateral     71,834          
With senior “B” collateral and counter-collateral     925,521       214,487  
Without senior collateral or counter-collateral     403,258       1,248,274  
                 
With high risk of insolvency     806,278       224,904  
With senior “A” collateral and counter-collateral     87,077       196,727  
With senior “B” collateral and counter-collateral     594,265       13,431  
Without senior collateral or counter-collateral     124,936       14,746  
                 
Subtotal Commercial     113,086,359       169,713,803  

 

  - 109 - Delfín Jorge Ezequiel Carballo
Chairperson


 

EXHIBIT B

(continued)

 

CONSOLIDATED CLASSIFICATION OF LOANS AND OTHER FINANCING

BY SITUATION AND COLLATERAL RECEIVED

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

CONSUMER AND MORTGAGE   12/31/2022     12/31/2021  
Performing     497,279,321       532,302,833  
With senior “A” collateral and counter-collateral     33,019,973       37,210,683  
With senior “B” collateral and counter-collateral     29,623,850       45,245,051  
Without senior collateral or counter-collateral     434,635,498       449,847,099  
                 
Low risk     3,860,072       3,767,760  
With senior “A” collateral and counter-collateral     59,378       122,391  
With senior “B” collateral and counter-collateral     84,565       224,462  
Without senior collateral or counter-collateral     3,716,129       3,420,907  
                 
Low risk - in special treatment     29,386       121,389  
With senior “B” collateral and counter-collateral             39,833  
Without senior collateral or counter-collateral     29,386       81,556  
                 
Medium risk     2,642,620       2,827,324  
With senior “A” collateral and counter-collateral     18,388       17,964  
With senior “B” collateral and counter-collateral     68,202       116,648  
Without senior collateral or counter-collateral     2,556,030       2,692,712  
                 
High risk     2,013,089       3,236,432  
With senior “A” collateral and counter-collateral     22,707       41,261  
With senior “B” collateral and counter-collateral     78,242       219,598  
Without senior collateral or counter-collateral     1,912,140       2,975,573  
                 
Irrecoverable     902,056       1,528,819  
With senior “A” collateral and counter-collateral     30,675       37,369  
With senior “B” collateral and counter-collateral     142,725       372,094  
Without senior collateral or counter-collateral     728,656       1,119,356  
                 
Subtotal consumer and mortgage     506,726,544       543,784,557  
Total     619,812,903       713,498,360  

 

  - 110 - Delfín Jorge Ezequiel Carballo
Chairperson


 

 

EXHIBIT B

(continued)

 

CONSOLIDATED CLASSIFICATION OF LOANS AND OTHER FINANCING
BY SITUATION AND COLLATERAL RECEIVED
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

This exhibit discloses the contractual figures as established by the BCRA. The conciliation with the consolidated statement of financial position is listed below:

 

    12/31/2022     12/31/2021  
Loans and other financing     598,601,030       686,328,426  
Added:                
Allowances for loans and other financing     11,002,339       18,761,240  
Adjustment amortized cost and fair value     1,687,107       2,200,184  
Debt securities of financial trust - Measured at amortized cost     308,364       347,130  
Corporate bonds     1,039,008       168,471  
Subtract:                
Interest and other accrued items receivable from financial assets with impaired credit value     (156,643 )     (192,613 )
Guarantees provided and contingent liabilities     7,331,698       5,885,522  
Total computable items     619,812,903       713,498,360  

 

  - 111 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT C

 

CONSOLIDATED CONCENTRATION OF LOANS AND FINANCING FACILITIES
AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

  12/31/2022     12/31/2021  
Number of customers   Cut off balance     % of total
portfolio
    Cut off balance     % of total
portfolio
 
10 largest customers     21,767,167       3.51       35,792,772       5.02  
50 next largest customers     40,039,176       6.46       56,740,431       7.95  
100 next largest customers     32,753,709       5.28       41,199,572       5.77  
Other customers     525,252,851       84.75       579,765,585       81.26  
                                 
Total (1)     619,812,903       100.00       713,498,360       100.00  

 

(1) See reconciliation in Exhibit B.

 

  - 112 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT D

 

CONSOLIDATED BREAKDOWN OF LOANS AND OTHER FINANCING BY TERMS
AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022) 

  

            Remaining terms to maturity          
Item     Matured       Up to 1
month
      Over 1
month and
up to 3
months
      Over 3
months
and up to 6
months
      Over 6
months and
up to 12
months
      Over 12
months and
up to 24
months
      Over 24
months
      Total  
Non-financial government sector     108       1,354,472       574,763       104,041       186,988       292,711       172,905       2,685,988  
Financial sector             49,118       66,153       558,685       203,511       305,741       93,406       1,276,614  
Non-financial private sector and foreign residents     3,479,647       262,631,874       72,764,504       88,437,289       111,848,422       119,772,924       151,596,150       810,530,810  
Total     3,479,755       264,035,464       73,405,420       89,100,015       112,238,921       120,371,376       151,862,461       814,493,412  

 

CONSOLIDATED BREAKDOWN OF LOANS AND OTHER FINANCING BY TERMS
AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022) 

  

            Remaining terms to maturity    
Item     Matured       Up to 1
month
      Over 1
month and
up to 3
months
      Over 3
months
and up to 6
months
      Over 6
months and
up to 12
months
      Over 12
months and
up to 24
months
      Over 24
months
      Total  
Non-financial government sector             451,655       1,215,393       948,547       2,397,187       930,619               5,943,401  
Financial sector             498,131       1,297,578       72,892       252,966       1,419,953       261,144       3,802,664  
Non-financial private sector and foreign residents     2,947,910       262,744,595       82,388,879       94,106,166       124,267,841       146,635,855       223,868,192       936,959,438  
Total     2,947,910       263,694,381       84,901,850       95,127,605       126,917,994       148,986,427       224,129,336       946,705,503  

 

This exhibit discloses the contractual future cash flows that include interest and charges to be accrued until maturity of the contracts.

 

  - 113 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT E

 

CONSOLIDATED DETAILED INFORMATION ON INTERESTS IN OTHER COMPANIES
AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Information of the issuer
    Shares of interest               Data from latest Financial Statements
Name   Class   Unit
face
value
  Votes
per
share
  Number   Amount
12/31/2022
  Amount
12/31/2021
  Main business
activity
  Year-
end date
period /
year
  Capital
stock
  Shareholders'
equity
  Income
for the
Period /
Year
 
In complementary services companies                                                                
- Associates and joint ventures                                                                
Local                                                                
Uniones Transitorias de Empresas (See Note 14.2 a)                             642,743     530,143   Management of tax services                        
Play Digital SA (See Note 14.1 b)     Common     1     1     193,604,736     422,959     333,052   Electronic, technological and computer services   09/30/22     2,152,921     3,874,339     (2,875,476 )
Finova SA (See Note 14.2.b)     Common     1     1     225,000     70,333     82,894   Informatics services   09/30/22     450     42,658     (48,233 )
Subtotal local                             1,136,035     946,089                            
Total in complementary services associates companies and joint ventures                             1,136,035     946,089                            
Total in complementary services companies                             1,136,035     946,089                            
In other associates                                                                
- Associates and joint ventures                                                                
Local                                                                
Macro Warrants S.A. (See Note 14.1 a)     Common     1     1     50,000     5,564     7,431   Issue of warrants   09/30/22     1,000     111,278     (19,793 )
Subtotal local                             5,564     7,431                            
Total in other associates  and joint ventures                             5,564     7,431                            
Total investments in other companies                             1,141,599     953,520                            

 

 

  - 114 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT F

 

CONSOLIDATED CHANGE OF PROPERTY, PLANT AND EQUIPMENT
AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original                            Depreciation for the fiscal year    Residual   
Item   value at
beginning of
fiscal year
  Total life
estimated
in years
  Increases   Decreases   Transfers     Difference
for
conversion
    Accumulated   Transfers     Decrease   Difference
for
conversion
    For the
fiscal
year
  At the end   value at the
end of the
fiscal year
 
Cost                                                              
Real property   93,362,070   50   595,519   122,169   1,368,237           9,384,580   (78,527 )   20,995         2,047,203   11,332,261   83,871,396  
Furniture and facilities   12,879,168   10   413,627   1,654   1,491,837     (181 )   6,344,990   4     549   (145 )   1,149,876   7,494,176   7,288,621  
Machinery and equipment   18,318,136   5   2,098,953   5,590   1,052,134     (179 )   12,646,651   (1,535 )   5,358   (457 )   2,692,115   15,331,416   6,132,038  
Vehicles   2,602,997   5   449,948   176,501   (9,208 )   7,739     2,134,400   (699 )   115,344   14     263,049   2,281,420   593,555  
Other   1,739   3                 (911 )   828             (1,058 )   558   328   500  
Work in progress   3,089,819       2,709,731       (4,503,132 )                                     1,296,418  
Right of use real property   7,353,968   5   867,251   96,195         (3,095 )   4,104,964         59,692   (255 )   1,395,703   5,440,720   2,681,209  
Total property, plant and equipment   137,607,897       7,135,029   402,109   (600,132   3,373     34,616,413   (80,757 )   201,938   (1,901 )   7,548,504   41,880,321   101,863,737  

 

CONSOLIDATED CHANGE OF PROPERTY, PLANT AND EQUIPMENT
AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original                           Depreciation for the fiscal year   Residual  
Item   value at
beginning
of fiscal
year
  Total life
estimated
in years
  Increases   Decreases   Transfers
(1)
    Difference
for
conversion
    Accumulated   Transfers
(1)
    Decrease   Difference
for
conversion
    For the
fiscal
year
  At the end   value at
the end of
the fiscal
year
 
Cost                                                              
Real property   89,603,312   50   581,468   170,251   3,347,541           7,337,992   191,404     21,520         1,876,704   9,384,580   83,977,490  
Furniture and facilities   11,676,005   10   378,954   3,915   828,386     (262 )   5,253,668   261     2,039   (218 )   1,093,318   6,344,990   6,534,178  
Machinery and equipment   16,148,014   5   1,244,554   59,966   987,034     (1,500 )   10,158,717   (1,371 )   9,007   (984 )   2,499,296   12,646,651   5,671,485  
Vehicles   2,508,068   5   250,176   161,513   6,266           2,052,788   348     142,235         223,499   2,134,400   468,597  
Other   2,591   3   614   808         (658 )   1,199         808   (354 )   791   828   911  
Work in progress   2,465,445       4,292,728       (3,668,354 )                                     3,089,819  
Right of use real property   6,104,186   5   1,274,776   47,589   31,279     (8,684 )   2,648,786   1,423     40,239   (2,628 )   1,497,622   4,104,964   3,249,004  
Total property, plant and equipment   128,507,621       8,023,270   444,042   1,532,152     (11,104 )   27,453,150   192,065     215,848   (4,184 )   7,191,230   34,616,413   102,991,484  

 

(1) During the fiscal year 2021, under this item transfers were made to Non-current assets held for sale.

 

  - 115 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

EXHIBIT F

(Continued)

 

CONSOLIDATED CHANGE IN INVESTMENT PROPERTY
AS OF DECEMBER 31, 2022
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at
                                  Depreciation for the fiscal year     Residual
value at
   
Item   beginning
of fiscal
year
    Useful life
estimated in
years
    Increases     Decreases     Transfers
(1)
    Difference
for
conversion
    Accumulated     Transfers
(1)
    Decrease     Difference
for
conversion
  For the
fiscal
year
    At the
end
    the end of
the fiscal
year
   
Cost                                                                                                      
Leased properties     449,989       50       1,156               (54,526 )             16,256       38,437                   5,268       59,961       336,658    
Other investment properties     1,370,837       50       9,976,486       26,330       (2,688,777 )     (4)       110,434       (5,699 )     2,297           176,486       278,924       8,353,288    
Total investment property     1,820,826               9,977,642       26,330       (2,743,303 )     (4)       126,690       32,738       2,297           181,754       338,885       8,689,946    

 

CONSOLIDATED CHANGE IN INVESTMENT PROPERTY
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 46)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at
                                Depreciation for the fiscal year     Residual
value at
 
Item   beginning
of fiscal
year
    Useful life
estimated in
years
    Increases     Decreases     Transfers     Difference
for
conversion
    Accumulated     Transfers     Decrease     Difference
for
conversion 
  For the
fiscal
year
  At the
end
    the end of
the fiscal
year
 
Cost                                                                                                
Leased properties     647,497       50       0       0       (197,508 )             106,305       (96,629 )               6,580     16,256       433,733  
Other investment properties     2,490,034       50       247,628       46,210       (1,320,485 )     (130 )     149,274       (94,776 )     7,571         63,507     110,434       1,260,403  
Total investment property     3,137,531               247,628       46,210       (1,517,993 )     (130 )     255,579       (191,405 )     7,571         70,087     126,690       1,694,136  

 

(1) During the fiscal year 2022, under this item transfers were made to Non-current assets held for sale.

 

  - 116 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT G

 

CONSOLIDATED CHANGE IN INTANGIBLE ASSETS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at  
                            Depreciation for the fiscal year     Residual
value  at
 
Item   beginning
of fiscal
year
    Useful life
estimated in
years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal year
    At the end     the end of
the fiscal
year
 
Cost                                                                                        
Licenses     9,760,068       5       1,311,705       0       89,994       5,970,420       3,376       0       1,842,469       7,816,265       3,345,502  
Other intangible assets     31,680,407       5       7,299,511       33,558       (79,756 )     19,099,090       (1,330 )     1,314       5,675,900       24,772,346       14,094,258  
Total intangible assets     41,440,475               8,611,216       33,558       10,238       25,069,510       2,046       1,314       7,518,369       32,588,611       17,439,760  

 

CONSOLIDATED CHANGE IN INTANGIBLE ASSETS
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at
                            Depreciation for the fiscal year     Residual
value at
 
Item   beginning
of fiscal
year
    Useful life
estimated in
years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal year
    At the end     the end of
the fiscal
year
 
Cost                                                                                        
Licenses     8,084,142       5       1,695,543               (19,617 )     4,193,712       (660 )             1,777,368       5,970,420       3,789,648  
Other intangible assets     25,374,163       5       6,306,426       182               14,257,429               43       4,841,704       19,099,090       12,581,317  
Total intangible assets     33,458,305               8,001,969       182       (19,617 )     18,451,141       (660 )     43       6,619,072       25,069,510       16,370,965  

 

  - 117 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT H

 

CONSOLIDATED DEPOSIT CONCENTRATION

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    12/31/2022     12/31/2021  
Number of customers   Outstanding
balance
    % of total
portfolio
    Outstanding
balance
    % of total
portfolio
 
10 largest customers     153,647,145       11.86       89,303,162       7.79  
50 next largest customers     131,918,351       10.18       68,803,839       6.00  
100 next largest customers     61,561,487       4.75       43,712,679       3.81  
Other customers     948,268,086       73.21       945,221,348       82.40  
Total     1,295,395,069       100.00       1,147,041,028       100.00  

 

  - 118 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT I

 

CONSOLIDATED BREAKDOWN OF FINANCIAL LIABILITIES

FOR RESIDUAL TERMS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Remaining terms to maturity        
Item   Up to 1 month     Over 1
month
and up to
3 months
    Over 3
months
and up to
6 months
    Over 6
months
and up to
12 months
    Over 12
months
and up to
24 months
    Over 24
months
    Total  
Deposits     1,186,832,473       113,538,635       19,753,491       1,902,154       12,295       36,840       1,322,075,888  
From the non-financial government sector     107,790,689       3,384,960       1,019,697       4,497                       112,199,843  
From the financial sector     1,653,447                                               1,653,447  
From the non-financial private sector and foreign residents     1,077,388,337       110,153,675       18,733,794       1,897,657       12,295       36,840       1,208,222,598  
Liabilities at fair value through profit or loss     526,027                                               526,027  
Derivative instruments     1,715       656                                       2,371  
Other Financial Liabilities     130,773,020       426,282       387,072       736,506       1,225,622       2,830,997       136,379,499  
Financing received from the Central Bank of Argentina and other financial institutions     292,382       517,458       1,616,892       44,969                       2,471,701  
Issued corporate bonds             9,974       9,649       19,948       2,748,859               2,788,430  
Subordinated corporate bonds                     2,349,534       2,349,534       4,699,067       80,135,250       89,533,385  
Total     1,318,425,617       114,493,005       24,116,638       5,053,111       8,685,843       83,003,087       1,553,777,301  

 

This exhibit discloses contractual future cash flows that include interests and charges to be accrued until maturity of the contracts.

 

  - 119 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT I

 

CONSOLIDATED BREAKDOWN OF FINANCIAL LIABILITIES

FOR RESIDUAL TERMS

AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Remaining terms to maturity        
Item   Up to 1 month     Over 1
month
and up to 3
months
    Over 3
months
and up to 6
months
    Over 6
months
and up to 12
months
    Over 12
months
and up to 24
months
    Over 24
months
    Total  
Deposits     1,040,999,187       101,780,527       12,548,302       1,071,555       84,281       2,462       1,156,486,314  
From the non-financial government sector     104,125,831       4,116,058       2,304,904       5,076                       110,551,869  
From the financial sector     1,872,336                                               1,872,336  
From the non-financial private sector and foreign residents     935,001,020       97,664,469       10,243,398       1,066,479       84,281       2,462       1,044,062,109  
Liabilities at fair value through profit or loss     3,170,711                                               3,170,711  
                                                         
Derivative instruments                     4,933                               4,933  
Other Financial Liabilities     129,482,229       343,991       308,099       502,578       736,092       969,392       132,342,381  
Financing received from the Central Bank of Argentina and other financial institutions     458,364       356,378       26,334       16,203       11,150               868,429  
Issued corporate bonds                     6,120,392                               6,120,392  
Subordinated corporate bonds                     2,657,150       2,657,152       5,314,305       95,941,472       106,570,079  
Total     1,174,110,491       102,480,896       21,665,210       4,247,488       6,145,828       96,913,326       1,405,563,239  

 

This exhibit discloses contractual future cash flows that include interests and charges to be accrued until maturity of the contracts.

 

  - 120 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

EXHIBIT J

 

CONSOLIDATED CHANGES IN PROVISIONS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Amounts at
beginning of
            Decreases     Monetary effects
generated by
         
Item   fiscal year     Increases     Reversals     Charge off     provisions     12/31/2022  
Provisions for eventual commitments     664,446       480,012                     (447,691 )     696,767  
For Administrative, disciplinary and criminal penalties     972                           (472 )     500  
Other     2,532,257       2,627,844               1,785,245       (1,359,045 )     2,015,811  
Total Provisions     3,197,675       3,107,856               1,785,245       (1,807,208 )     2,713,078  

 

CONSOLIDATED CHANGES IN PROVISIONS
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Amounts at
beginning of
            Decreases     Monetary effects
generated by
         
Item   fiscal year     Increases     Reversals     Charge off     provisions     12/31/2021  
Provisions for eventual commitments     50,593       720,236             2,476       (103,907 )     664,446  
For Administrative, disciplinary and criminal penalties     2,112       81,094       491       80,987       (756 )     972  
Other     3,782,909       2,836,625             2,923,633       (1,163,644 )     2,532,257  
Total Provisions     3,835,614       3,637,955       491       3,007,096       (1,268,307 )     3,197,675  

 

  - 121 -

Delfín Jorge Ezequiel Carballo

Chairperson


 

EXHIBIT L

 

CONSOLIDATED FOREIGN CURRENCY AMOUNTS
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Item   12/31/2022     12/31/2021  
  Total parent
company
and local
    Total per currency     Total    
  branches     US dollar     Euro     Real     Other      
Assets                                    
Cash and deposits in banks     210,633,760       209,280,210       906,888       39,623       407,039       237,705,445  
Debt securities at fair value through profit or loss     177,936,106       177,936,106                               2,403,624  
Other financial assets     15,674,298       15,673,799       499                       11,667,552  
Loans and other financing     35,940,193       35,940,193                               29,871,080  
From the non-financial private sector and foreign residents     35,940,193       35,940,193                               29,871,080  
Other debt securities     53,834,855       53,834,855                               65,977,832  
Financial assets delivered as guarantee     4,897,889       4,886,503       11,386                       4,474,038  
Equity Instruments at fair value through profit or loss     159,400       159,400                               136,351  
Total assets     499,076,501       497,711,066       918,773       39,623       407,039       352,235,922  
Liabilities                                                
Deposits     171,020,993       170,830,412       190,581                       188,175,885  
Non-financial government sector     6,163,095       6,163,095                               14,953,269  
Financial sector     1,399,299       1,399,299                               1,481,552  
Non-financial private sector and foreign residents     163,458,599       163,268,018       190,581                       171,741,064  
Liabilities at fair value through profit or loss     526,027       526,027                               246,045  
Other financial liabilities     16,098,638       15,901,667       175,733               21,238       12,676,197  
Financing from Central Bank and other financial institutions     2,397,637       2,397,637                               538,958  
Issued corporate bonds     2,715,556       2,715,556                                  
Subordinated corporate bonds     72,129,837       72,129,837                               81,762,819  
Other non-financial liabilities     54,067       54,067                               78,773  
Total liabilities     264,942,755       264,555,203       366,314               21,238       283,478,677  

 

  - 122 -

Delfín Jorge Ezequiel Carballo

Chairperson


 

EXHIBIT N

 

CONSOLIDATED CREDIT ASSISTANCE TO RELATED PARTIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    In normal     Troubled / Medium risk              
Item   situation     Matured     12/31/2022     12/31/2021  
Loans and other financing                                
Overdrafts     347,065       6       347,071       689,480  
Without senior collateral or counter-collateral     347,065       6       347,071       689,480  
Documents                             55,596  
With senior “A” collateral and counter-collateral                             5,421  
Without senior collateral or counter-collateral                             50,175  
Mortgage and pledge     514,164               514,164       449,150  
With senior “B” collateral and counter-collateral     223,888               223,888       189,972  
Without senior guarantees or counter-guarantees     290,276               290,276       259,178  
Personal     3,100               3,100       3,497  
Without senior collateral or counter-collateral     3,100               3,100       3,497  
Credit cards     250,142               250,142       277,222  
With senior “A” collateral and counter-collateral                             310  
Without senior collateral or counter-collateral     250,142               250,142       276,912  
Other     3,634,566               3,634,566       7,364,545  
With senior “A” collateral and counter-collateral                             10,682  
With senior “B” collateral and counter-collateral     56,412               56,412       44,935  
Without senior collateral or counter-collateral     3,578,154               3,578,154       7,308,928  
Total loans and other financial     4,749,037       6       4,749,043       8,839,490  
Eventual commitments     8,805               8,805       267,598  
Total     4,757,842       6       4,757,848       9,107,088  
Allowances     55,954       4       55,958       127,562  

 

  - 123 -

Delfín Jorge Ezequiel Carballo

Chairperson


 

EXHIBIT P

 

CONSOLIDATED CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Fair value
through P/L
    Fair value hierarchy  
Item   Amortized
cost
    Fair value
through OCI
    Obligatory
measurement
    Level 1     Level 2     Level 3  
Financial assets                                                
Cash and deposits in banks                                                
Cash     27,612,616                                          
Financial institutions     222,464,359                                          
Other     12,118                                          
Debt securities at fair value through profit or loss                     211,054,112       206,559,906       3,462,342       1,031,864  
Derivative financial instruments                     42,899       19,193       23,706          
Repo transactions                                                
BCRA     61,929,317                                          
Other financial assets     53,436,257               4,508,266       4,458,851               49,415  
Loans and other financing                                                
To the non-financial government sector     2,206,935                                          
Other financial institutions (1)     927,272                                          
To the non-financial private sector and foreign residents                                                
Overdrafts     49,250,055                                          
Documents     81,773,760                                          
Mortgage loans     61,905,907                                          
Pledge loans     9,581,277                                          
Personal loans     142,529,651                                          
Credit cards     190,779,144                                          
Financial leases     1,386,801                                          
Other (1)     58,260,228                                          
Other debt securities     599,594,038       137,911,993               137,911,993                  
Financial assets delivered as guarantee     30,620,278                                          
Equity Instruments at fair value through profit or loss                     839,458       154,475               684,983  
Total Financial Assets     1,594,270,013       137,911,993       216,444,735       349,104,418       3,486,048       1,766,262  

 

(1) Includes totals provisions of sector.

 

  - 124 -

Delfín Jorge Ezequiel Carballo

Chairperson


 

EXHIBIT P

(continued)

 

CONSOLIDATED CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Fair value
through P/L
    Fair value hierarchy  
Item   Amortized
cost
    Fair value
through OCI
    Obligatory
measurement
    Level 1     Level 2     Level 3  
Financial liabilities                                                
Deposits                                                
From the non-financial government sector     109,952,253                                      
From the financial sector     1,653,447                                      
From the non-financial private sector and foreign residents                                            
Checking accounts     159,123,762                                      
Savings accounts     419,740,050                                      
Time deposits and Investment accounts     569,021,981                                      
Other     35,903,576                                      
Liabilities at fair value through profit or loss                   526,027       526,027                  
Derivative financial instruments                   2,371       2,371                  
Other financial liabilities     135,091,316                                      
Financing received from Central Bank and other financial institutions     2,449,342                                      
Issued corporate bonds     2,715,556                                      
Subordinated corporate bonds     72,129,837                                      
Total Financial Liabilities     1,507,781,120                         528,398       528,398                                   

 

  - 125 -

Delfín Jorge Ezequiel Carballo

Chairperson


 

 

        EXHIBIT P
         
CONSOLIDATED CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Fair value
through P/L
    Fair value hierarchy  
Item   Amortized
cost
    Fair value
through OCI
    Obligatory
measurement
    Level 1     Level 2     Level 3  
Financial assets                                                
Cash and deposits in banks                                                
Cash     51,862,712                                        
Financial institutions     283,816,883                                        
Other     12,519                                        
Debt securities at fair value through profit or loss                     63,125,824       60,387,495       562,970       2,175,359  
Derivative financial instruments                     2,524       771       1,753        
Repo transactions                                                
BCRA     61,176,357                                          
Other financial assets     64,463,931               4,033,290       3,972,863             60,427  
Loans and other financing                                                
To the non-financial government sector     4,628,306                                          
Other financial institutions (1)     2,941,876                                          
To the non-financial private sector and foreign residents                                                
Overdrafts     47,516,346                                          
Documents     82,408,943                                          
Mortgage loans     81,213,071                                          
Pledge loans     14,727,607                                          
Personal loans     190,678,438                                          
Credit cards     184,981,594                                          
Financial leases     931,091                                          
Other (1)     76,301,154                                          
Other debt securities     46,838,533       510,230,657             283,454,369       226,776,288        
Financial assets delivered as guarantee     34,993,147                                
Equity Instruments at fair value through profit or loss                   4,245,510       131,468             4,114,042  
Total Financial Assets     1,229,492,508       510,230,657       71,407,148       347,946,966       227,341,011       6,349,828  

 

(1) Includes totals provisions of sector.

 

  - 126 - Delfín Jorge Ezequiel Carballo
Chairperson


 

        EXHIBIT P
         (continued)
         
CONSOLIDATED CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Fair value
through P/L
    Fair value hierarchy  
Item   Amortized
cost
    Fair value
through OCI
    Obligatory
measurement
    Level 1     Level 2     Level 3  
Financial liabilities                                                
Deposits                                                
From the non-financial government sector     109,868,280                                          
From the financial sector     1,872,336                                          
From the non-financial private sector and foreign residents                                                
Checking accounts     196,484,984                                          
Savings accounts     360,846,573                                          
Time deposits and Investment accounts     447,350,444                                          
Other     30,618,411                                          
Liabilities at fair value through profit or loss             2,924,666        246,045        3,170,711                   
Derivative financial instruments                     4,933               4,933          
Other financial liabilities     131,278,389                                          
Financing received from Central Bank and other financial institutions     852,660                                          
Issued corporate bonds     5,825,893                                          
Subordinated corporate bonds     81,762,819                                          
Total Financial Liabilities     1,366,760,789       2,924,666       250,978       3,170,711       4,933          

 

  - 127 - Delfín Jorge Ezequiel Carballo
Chairperson


 

    EXHIBIT Q
     
CONSOLIDATED BREAKDOWN OF STATEMENT OF INCOME
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Net financial Income/ (Loss)  
    Mandatory measurement  
Items   12/31/2022     12/31/2021  
For measurement of financial assets at fair value through profit or loss                
Gain from government securities     18,344,550       32,948,561  
Gain from private securities     19,736,146       2,421,027  
Gain from derivative financial instruments                
Forward transactions     752,927          
Loss from other financial assets     (26,383 )     (28,188 )
Gain from equity instruments at fair value through profit or loss     6,750,429       2,025,507  
Gain from sales or decreases of financial assets at fair value (1)     2,288,932       1,392,533  
For measurement of financial liabilities at fair value through profit or loss                
Loss from derivative financial instruments                
Forward transactions             (182,453 )
Total     47,846,601       38,576,987  

 

(1) Net amount of reclassifications to profit of instruments classified at fair value through other comprehensive income that were derecognized or charged during the fiscal year.

 

  - 128 - Delfín Jorge Ezequiel Carballo
Chairperson


 

    EXHIBIT Q
    (Continued)

     
CONSOLIDATED BREAKDOWN OF STATEMENT OF INCOME
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Interest and adjustment for the application of the effective   Net financial Income/(Loss)  
interest rate of financial assets measured at amortized cost   12/31/2022     12/31/2021  
Interest income                
for cash and bank deposits     400,119       25,671  
for government securities     208,959,332       14,675,565  
for debt securities     193,000       589,979  
for loans and other financing                
Non-financial public sector     1,513,955       3,536,708  
Financial sector     535,913       1,316,785  
Non-financial private sector                
    Overdrafts     25,399,566       15,724,087  
    Documents     25,583,152       18,258,697  
    Mortgage loans     37,615,857       29,769,779  
    Pledge loans     2,976,314       2,071,559  
    Personal loans     89,374,385       93,771,253  
    Credit cards     40,706,936       28,693,425  
    Financial leases     344,679       164,129  
    Other     26,952,978       30,183,129  
for repo transactions                
  Central Bank of Argentina     12,635,845       16,524,973  
  Other financial institutions     648,984       102,614  
Total     473,841,015       255,408,353  
Interest expenses                
for Deposits                
Non-financial Private sector                
Checking accounts     (15,477,783 )     (2,563,967 )
Saving accounts     (3,807,897 )     (2,409,161 )
Time deposits and investments accounts     (280,598,419 )     (169,973,426 )
for Financing received from Central Bank of Argentina and other financial institutions     (505,838 )     (304,567 )
for repo transactions                
Other financial institutions     (975,643 )     (573,796 )
for other financial liabilities     (887,190 )     (47,111 )
for issued corporate bonds     (259,358 )     (1,679,267 )
for other subordinated corporate bonds     (4,628,154 )     (6,321,129 )
Total     (307,140,282 )     (183,872,424 )

 

  - 129 - Delfín Jorge Ezequiel Carballo
Chairperson


 

        EXHIBIT Q
        (Continued)
         
CONSOLIDATED BREAKDOWN OF STATEMENT OF INCOME
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Interest and adjustment for the
application of the effective
interest rate of financial assets
measured at fair value through
  Income for the
fiscal year
    Other
comprehensive
income
    Income for
the fiscal
year
    Other
comprehensive
income
 
other comprehensive income   12/31/2022     12/31/2022     12/31/2021     12/31/2021  
for debt government securities     138,624,359       (3,077,630 )     183,718,162       965,318  
Total     138,624,359       (3,077,630 )     183,718,162       965,318  

 

    Income for the fiscal year  
Items   12/31/2022     12/31/2021  
Commissions income                
Commissions related to obligations     42,690,396       39,680,087  
Commissions related to credits     439,719       332,156  
Commissions related to loans commitments and financial guarantees     10,385       11,711  
Commissions related to securities value     1,263,515       1,477,199  
Commissions for credit cards     25,186,364       24,313,013  
Commissions for insurances     4,226,128       4,450,781  
Commissions related to trading and foreign exchange transactions     1,586,074       1,777,504  
Total     75,402,581       72,042,451  
Commissions expenses                
Commissions related to trading with debt securities     (66,660 )     (3,743 )
Commissions related to trading and foreign exchange transactions     (249,774 )     (298,075 )
Other                
Commissions paid ATM exchange     (4,974,761 )     (4,611,640 )
Checkbooks commissions and clearing houses     (1,385,594 )     (1,231,636 )
Credit cards and foreign trade commissions     (736,806 )     (732,958 )
Total     (7,413,595 )     (6,878,052 )

 

  - 130 - Delfín Jorge Ezequiel Carballo
Chairperson


 

                    EXHIBIT R  

 

 VALUE ADJUSTMENT FOR CREDIT LOSSES - CONSOLIDATED ALLOWANCES FOR UNCOLLECTIBILITY RISK AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 48)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Movements between stages for the fiscal year              
                ECL of remanent life of financial asset              
Item   Balances at
beginning of the
fiscal year
    ECL of the next
12 months
    Financial instruments
with a significant
increase in credit risk
    Financial
instruments with
impairment
    Monetary effect
generated by provisions
    12/31/2022  
Other financial assets     51,518       83,398                       (43,875 )     91,041  
Loans and other financing     18,761,240       2,366,876       (2,457,152 )     1,334,983       (9,003,608 )     11,002,339  
Other financial institutions     7,111       4,355                       (3,325 )     8,141  
To the non-financial private sector and foreign residents                                                
Overdrafts     1,379,806       262,728       4,475       (555,527 )     (564,614 )     526,868  
Documents     1,873,117       (31,027 )     (457,508 )     19,672       (838,080 )     566,174  
Mortgage loans     3,892,318       283,428       (2,423,987 )     853,110       (1,410,953 )     1,193,916  
Pledge loans     240,677       93,647       (17,479 )     (13,082 )     (114,124 )     189,639  
Personal loans     4,831,973       993,152       528,409       547,543       (2,753,411 )     4,147,666  
Credit cards     3,146,400       664,224       532,864       319,120       (1,896,823 )     2,765,785  
Financial leases     28,477       13,196       36       (4,696 )     (15,377 )     21,636  
Other     3,361,361       83,173       (623,962 )     168,843       (1,406,901 )     1,582,514  
Eventual commitments     664,446       431,853       95,930               (495,462 )     696,767  
Other debt securities     1,057       387                       (648 )     796  
Total of allowances     19,478,261       2,882,514       (2,361,222 )     1,334,983       (9,543,593 )     11,790,943  

 

 VALUE ADJUSTMENT FOR CREDIT LOSSES - CONSOLIDATED ALLOWANCES FOR UNCOLLECTIBILITY RISK AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 48)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Movements between stages for the fiscal year              
                ECL of remanent life of financial asset              
Item   Balances at
beginning of the
fiscal year
    ECL of the next
12 months
    Financial instruments
with a significant
increase in credit risk
    Financial
instruments with
impairment
    Monetary effect
generated by provisions
    12/31/2021  
Other financial assets     55,651       17,093                       (21,226 )     51,518  
Loans and other financing     29,468,864       (4,744,489 )     988,053       2,782,390       (9,733,578 )     18,761,240  
Other financial institutions     48,844       (30,322 )                     (11,411 )     7,111  
To the non-financial private sector and foreign residents                                                
Overdrafts     2,016,222       237,488       133,387       (508,956 )     (498,335 )     1,379,806  
Documents     1,571,917       509,591       350,713       14,226       (573,330 )     1,873,117  
Mortgage loans     2,213,852       96,637       2,097,718       353,688       (869,577 )     3,892,318  
Pledge loans     395,013       (5,495 )     (77,549 )     66,956       (138,248 )     240,677  
Personal loans     8,367,150       (1,610,244 )     (648,480 )     2,110,841       (3,387,294 )     4,831,973  
Credit cards     9,964,072       (3,449,300 )     (1,518,902 )     879,522       (2,728,992 )     3,146,400  
Financial leases     29,542       19,834       (8 )     (12,572 )     (8,319 )     28,477  
Other     4,862,252       (512,678 )     651,174       (121,315 )     (1,518,072 )     3,361,361  
Eventual commitments     50,593       616,850       88,726               (91,723 )     664,446  
Other debts securities     3,949       (2,108 )                     (784 )     1,057  
Total of allowances     29,579,057       (4,112,654 )     1,076,779       2,782,390       (9,847,311 )     19,478,261  

 

  - 131 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
ASSETS                        
Cash and Deposits in Banks   12   P     240,012,345       326,918,809  
Cash             27,611,519       51,860,984  
Central Bank of Argentina             143,526,540       207,729,609  
Other Local and Foreign Entities             68,862,168       67,315,697  
Other             12,118       12,519  
Debt Securities at fair value through profit or loss   12   A and P     196,736,900       55,120,422  
Derivative Financial Instruments   5 and 12   P     42,899       2,524  
Repo transactions   6 and 12   P     61,929,317       61,176,357  
Other Financial Assets   7, 9 and 12   P and R     43,260,905       50,807,274  
Loans and other financing   8, 9 and 12   B, C, D, P and R     598,375,914       687,818,816  
Non-financial Public Sector             2,206,935       4,628,306  
Other Financial Entities             927,336       2,941,876  
Non-financial Private Sector and Foreign Residents             595,241,643       680,248,634  
Other Debt Securities   9 and 12   A, P and R     729,460,768       548,213,850  
Financial Assets delivered as guarantee   10, 12 and 35   P     30,096,021       34,470,761  
Current Income Tax Assets   25                 1,058,582  
Equity Instruments at fair value through profit or loss   11 and 12   A and P     705,940       4,138,309  
Investment in subsidiaries, associates and joint arrangements   14   E     17,801,251       14,508,928  
Property, plant and equipment       F     101,790,787       102,899,584  
Intangible Assets       G     17,322,741       16,322,215  
Other Non-financial Assets   15         11,493,906       3,604,843  
Non-current Assets held for sale             8,856,247       6,314,263  
TOTAL ASSETS             2,057,885,941       1,913,375,537  

 

  - 132 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
LIABILITIES                        
Deposits   12 and 17   H, I and P     1,287,889,944       1,139,660,478  
Non-financial Public Sector             109,952,253       109,868,280  
Financial Sector             1,653,447       1,872,336  
Non-financial Private Sector and Foreign Residents             1,176,284,244       1,027,919,862  
Derivative Financial Instruments   5 and 12   I and P     2,371       4,933  
Other Financial Liabilities   12 and 18   I and P     114,905,708       114,974,304  
Financing received from the Central Bank of Argentina and other financial institutions   12   I and P     2,448,871       852,127  
Issued Corporate Bonds   12 and 40   I and P     3,003,738       5,825,893  
Current Income Tax Liabilities   25         8,955,866          
Subordinated Corporate Bonds   12 and 40   I and P     72,274,386       81,844,664  
Provisions   20   J and  R     2,702,835       3,181,778  
Deferred Income Tax Liabilities   25         13,220,625       11,087,721  
Other Non-financial Liabilities   21         40,071,288       91,228,423  
TOTAL LIABILITIES             1,545,475,632       1,448,660,321  
SHAREHOLDERS’ EQUITY                        
Capital Stock   33   K     639,413       639,413  
Non-capital contributions             12,429,781       12,429,781  
Adjustments to Shareholders’ Equity             173,290,106       173,290,106  
Earnings Reserved             282,844,496       237,309,036  
Unappropriated Retained Earnings             136,606       (17,376,187 )
Accumulated Other Comprehensive Income             31,388       5,590,301  
Net Income of the fiscal year             43,038,519       52,832,766  
TOTAL SHAREHOLDERS’ EQUITY             512,410,309       464,715,216  
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES             2,057,885,941       1,913,375,537  

 

Notes 1 to 47 to the separate Financial Statements and exhibits A to L and N to R are an integral part of the separate Financial Statements.

 

  - 133 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE STATEMENT OF INCOME
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
Interest income       Q     611,905,338       438,561,466  
Interest expense       Q     (306,346,909 )     (183,875,297 )
Net Interest Income             305,558,429       254,686,169  
                         
Commissions income   26   Q     74,621,355       71,079,473  
Commissions expense       Q     (6,145,536 )     (6,188,314 )
Net Commissions Income             68,475,819       64,891,159  
Subtotal (Net Interest income plus Net Commissions income)             374,034,248       319,577,328  
                         
Net gain from measurement of financial instruments at fair value through profit or loss       Q     38,144,496       36,866,081  
Profit from sold or derecognized assets at amortized cost             169,626       475,397  
Differences in quoted prices of gold and foreign currency   27         61,215,523       8,680,673  
Other operating income   28         16,923,844       11,600,300  
Allowances for loan losses             (6,545,768 )     (4,778,374 )
Net Operating Income             483,941,969       372,421,405  
                         
Employee benefits   29         (76,055,967 )     (75,650,690 )
Administrative expenses   30         (38,050,082 )     (38,555,910 )
Depreciation and amortization of fixed assets       F and G     (15,029,187 )     (13,775,377 )
Other operating expenses   31         (73,666,969 )     (66,125,358 )
Operating Income             281,139,764       178,314,070  
                         
Income from subsidiaries, associates and joint arrangements   14         3,662,118       1,712,719  
Loss on net monetary position             (225,363,008 )     (125,179,198 )
Income before tax on continuing operations             59,438,874       54,847,591  
                         
Income tax on continuing operations   25         (16,400,355 )     (2,014,825 )
Net Income from continuing operations             43,038,519       52,832,766  
Net Income for the fiscal year             43,038,519       52,832,766  

 

  - 134 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE EARNINGS PER SHARE
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   12/31/2022     12/31/2021  
Net Profit attributable to Parent’s shareholders     43,038,519       52,832,766  
Plus: Potential diluted earnings per common share                
Net Profit attributable to Parent’s shareholders adjusted as per diluted earnings     43,038,519       52,832,766  
Weighted average of outstanding common shares for the fiscal year     639,413       639,413  
Plus: Weighted average of the number of additional common shares with dilution effects                
Weighted average of outstanding common shares for the fiscal year adjusted as per dilution effect     639,413       639,413  
Basic earnings per share (in pesos)     67.3094       82.6270  

 

  - 135 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes   Exhibits   12/31/2022     12/31/2021  
Net Income for the fiscal year             43,038,519       52,832,766  
Items of Other Comprehensive Income that will be reclassified to profit or loss                        
Foreign currency translation differences in Financial Statements conversion             (718,989 )     (1,492,767 )
Foreign currency translation differences for the fiscal year             (718,989 )     (1,492,767 )
Profit or loss from financial instruments measured at fair value through other comprehensive income (FVOCI) (IFRS 9(4.1.2)(a))             (4,542,436 )     4,126,249  
Profit or loss for the period from financial instruments at fair value through other comprehensive income (FVOCI)       Q     (2,780,142 )     1,312,537  
Adjustment for reclassification for the fiscal year             (4,208,221 )     5,164,359  
Income tax   25.b)         2,445,927       (2,350,647 )
Interest in Other Comprehensive Income of associates and joint ventures accounted for using the participation method             (297,488 )     (347,219 )
Loss for the fiscal year from interest in Other Comprehensive Income of associates and joint ventures accounted for using the participation method             (297,488 )     (347,219 )
                         
Total Other Comprehensive (Loss) / Income that will be reclassified to profit or loss             (5,558,913 )     2,286,263  
Total Other Comprehensive (Loss) / Income             (5,558,913 )     2,286,263  
Total Comprehensive Income for the fiscal year             37,479,606       55,119,029  

 

Notes 1 to 47 to the separate Financial Statements and exhibits A to L and N to R are an integral part of the separate Financial Statements.

 

  - 136 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Capital
stock
  Non-capital
Contributions
      Other Comprehensive
Income
  Earnings Reserved          
Changes   Notes   Outstanding
shares
  Additional
paid-in
capital
  Adjustments
to
Shareholders’
Equity
  Accumulated
foreign
currency
translation
difference in
Financial
Statements
conversion
  Other   Legal   Other   Unappropriated
Retained
Earnings
  Total
Equity
 
Restated amount at the beginning for the fiscal year       639,413   12,429,781   173,290,106   1,169,053   4,421,248   94,354,253   142,954,783   35,456,579   464,715,216  
Total comprehensive income for the fiscal year                                          
- Net income for the fiscal year                                   43,038,519   43,038,519  
- Other comprehensive loss for the fiscal year                   (718,989 ) (4,839,924 )             (5,558,913 )
Distribution of unappropriated retained earnings as approved by Shareholders´ Meeting held on April 29, 2022                                          
Legal reserve                           7,091,317       (7,091,317 )    
Reserve for dividends pending authorization from the BCRA   (1)                           38,444,143   (27,637,010 ) 10,807,133  
Personal property tax on business corporation                                   (591,646 ) (591,646 )
Amount at the end of the fiscal year       639,413   12,429,781   173,290,106   450,064   (418,676 ) 101,445,570   181,398,926   43,175,125   512,410,309  

 

(1) See note 34 to the consolidated Financial Statements.

 

SEPARATE STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Capital
stock
  Non-capital
Contributions
      Other Comprehensive
Income
  Earnings Reserved          
Changes   Notes   Outstanding
shares
  Additional paid-in
capital
  Adjustments
to
Shareholders’
Equity
  Accumulated
foreign
currency
translation
difference in
Financial
Statements
conversion
  Other   Legal   Other   Unappropriated
Retained
Earnings
  Total
Equity
 
Restated amount at the beginning of the fiscal year       639,413   12,429,781   173,290,106   2,661,820   642,218   94,354,253   228,532,620   (77,162,594 ) 435,387,617  
Total comprehensive income for the fiscal year                                          
- Net income for the fiscal year                                   52,832,766   52,832,766  
- Other comprehensive loss for the fiscal year                   (1,492,767 ) 3,779,030               2,286,263  
Distribution of unappropriated retained earnings as approved by Shareholders´ Meeting held on April 30, 2021                                          
- Dividends                               (25,011,252 )     (25,011,252 )
- Absorption of loss accumulated                                          
Facultative reserve                               (1,300 ) 1,300      
Facultative reserve for future distribution of earnings                               (59,785,107 ) 59,785,107      
Personal property tax on business corporation                               (780,178 )     (780,178 )
Amount at the end of the fiscal year       639,413   12,429,781   173,290,106   1,169,053   4,421,248   94,354,253   142,954,783   35,456,579   464,715,216  

 

Notes 1 to 47 to the separate Financial Statements and exhibits A to L and N to R are an integral part of the separate Financial Statements.

 

  - 137 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE STATEMENT OF CASH FLOWS
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes     12/31/2022     12/31/2021  
Cash flows from operating activities                        
Income for the fiscal year before income tax             59,438,874       54,847,591  
Adjustment for the total monetary effect of the fiscal year             225,363,008       125,179,198  
Adjustments to obtain cash flows from operating activities:                        
Amortization and depreciation             15,029,187       13,775,377  
Allowance for loan losses             6,545,768       4,778,374  
Difference in quoted prices of foreign currency             (80,777,733 )     (32,030,051 )
Other adjustments             138,432,659       81,898,784  
Net increase / (decrease) from operating assets:                        
Debt Securities at fair value through profit or loss             (141,625,945 )     101,270,330  
Derivative Financial Instruments             (40,375 )     18,739  
Repo transactions             (752,960 )     56,989,218  
Loans and other financing                        
Non-financial Public Sector             2,421,371       6,000,091  
Other Financial Entities             2,014,540       2,417,129  
Non-financial Private Sector and Foreign Residents             78,381,162       54,231,891  
Other debt securities             44,857,900       (67,324,262 )
Financial Assets delivered as guarantee             4,374,740       7,312,975  
Equity instruments at fair value through profit or loss             3,432,369       750,988  
Other assets             3,942,453       (4,372,006 )
Net increase / (decrease) from operating liabilities:                        
Deposits                        
Non-financial Public Sector             83,973       (106,431,724 )
Financial Sector             (218,889 )     (175,291 )
Non-financial Private Sector and Foreign Residents             148,364,382       (180,045,129 )
Derivative financial instruments             (2,562 )     4,256  
Repo transactions                     (1,818,749 )
Other liabilities             873,589       16,950,335  
Income Tax Payments             (1,691,713 )     (20,759,005 )
Total cash from operating activities (A)             508,445,798       113,469,059  

 

  - 138 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SEPARATE STATEMENT OF CASH FLOWS
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Items   Notes     12/31/2022     12/31/2021  
Cash flows from investing activities                        
                         
Payments:                        
Acquisition of PPE, intangible assets and other assets             (24,136,113 )     (13,109,399 )
Other paymenyts related investing activities             (44,708 )        
Control obtained in subsidiaries and other businesses                     (69,450 )
Total cash used in investing activities (B)             (24,180,821 )     (13,178,849 )
                         
Cash flows from financing activities                        
                         
Payments:                        
Dividends             (19,094,765 )        
Non-subordinated corporate bonds             (4,743,590 )     (7,966,533 )
Financing to local financial entities                     (1,546,932 )
Subordinated corporate bonds             (4,529,710 )     (5,789,146 )
Other payments related to financing activities             (1,025,341 )     (1,496,919 )
Collections/Incomes:                        
Non Subordinated Corporate Bonds             2,949,563       1,284,763  
Financing to local financial entities             1,954,046          
Total cash used in financing activities (C)             (24,489,797 )     (15,514,767 )
Effect of exchange rate fluctuations (D)             122,479,673       51,233,842  
Monetary effect on cash and cash equivalents (E)             (436,667,170 )     (265,050,077 )
Net increase/ (decrease) in cash and cash equivalents (A+B+C+D+E)             145,587,683       (129,040,792 )
Restated Cash and cash equivalents at the beginning of the fiscal year     32       585,946,233       714,987,025  
Cash and cash equivalents at the end of the fiscal year     32       731,533,916       585,946,233  

 

Notes 1 to 47 to the separate Financial Statements and exhibits A to L and N to R are an integral part of the separate Financial Statements.

 

  - 139 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

1. CORPORATE INFORMATION

 

Banco Macro SA (hereinafter, the “Bank”) is a business corporation (sociedad anónima) organized in the Republic of Argentina that offers traditional banking products and services to companies, including those companies operating in regional economies as well as to individuals, thus strengthening its goal to be a multiservice bank. In addition, the Bank performs certain transactions through its subsidiaries Macro Bank Limited (a company organized under the laws of Bahamas), Macro Securities SAU, Macro Fiducia SAU, Macro Fondos SGFCISA, Argenpay SAU and Fintech SGR.

 

Macro Compañía Financiera SA was created in 1977 as a non-banking financial institution. In May 1988, it received the authorization to operate as a commercial bank and was incorporated as Banco Macro SA. Subsequently, as a result of the merger process with other entities, it adopted other names (among them, Banco Macro Bansud SA) and since August 2006, Banco Macro SA.

 

The Bank’s shares are publicly listed on Bolsas y Mercados Argentinos (BYMA) since November 1994 and as from March 24, 2006, they are listed on the New York Stock Exchange (NYSE). Additionally, on October 15, 2015 they were authorized to be listed on the Mercado Abierto Electrónico SA (MAE).

 

Since 1994, Banco Macro SA’s market strategy has mainly focused on the regional areas outside the Autonomous City of Buenos Aires (CABA, for its acronym in Spanish). Following this strategy, in 1996, Banco Macro SA started the process to acquire entities and assets and liabilities during the privatization of provincial and other banks.

 

In 2001, 2004, 2006 and 2010, the Bank acquired the control of Banco Bansud SA, Nuevo Banco Suquía SA, Nuevo Banco Bisel SA and Banco Privado de Inversiones SA, respectively. Such entities merged with and into Banco Macro SA in December 2003, October 2007, August 2009 and December 2013, respectively. In addition, during the fiscal year 2006, the Bank acquired control over Banco del Tucumán SA, which was merged with Banco Macro SA in October 2019.

 

During 2020 and 2021 the Bank made irrevocable capital contributions in the company Play Digital SA for a total amount of 253,557 (not restated). On July 21 and January 17, 2022, the Bank made irrevocable capital contributions in Play Digital SA for 245,539 and 130,758 (not restated). On October 4, 2022, the Bank sold 22,112,340 shares for an amount of 61,889. As a consequence, the Bank’s new interest in this company is 8.9927%. See note 1 to the consolidated Financial Statements.

 

In addition, on October 1, 2021 the Bank decided to exercise a call option to increase up to 24.99% the Bank’s interest in the capital stock of Fintech SGR. As it is explained in note 3 under “Basis for consolidation” to the consolidated Financial Statements, Fintech SGR is a structured entity in which the Bank has control. See note 1 to the consolidated Financial Statements.

 

Additionally, on October 1, 2021, the Bank paid 50,850 (not restated) in order to purchase shares representing 50% of the capital stock and votes of Finova SA. See also note 1 to the consolidated Financial Statements.

 

On February 23, 2023, the Board of Directors approved the issuance of these separate Financial Statements. Even when the Shareholders’ Meeting has the power to amend these separate Financial Statements after issuance, in Management’s opinion it will not happen.

 

2. OPERATIONS OF THE BANK

 

Note 2 to the consolidated Financial Statements includes a detailed description of the agreements that relate the Bank with the Provincial and Municipal governments.

 

- 140 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

3. BASIS FOR THE PREPARATION OF THESE FINANCIAL STATEMENTS AND APPLICABLE ACCOUNTING STANDARDS

 

Applicable Accounting Standards

 

These separate Financial Statements of the Bank were prepared in accordance with the accounting framework established by the Central Bank of Argentina (BCRA, for its acronym in Spanish), in its Communiqué “A” 6114 as supplemented. Except for the exceptions established by the BCRA which are explained in the following paragraph, such framework is based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Argentine Federation of Professionals Councils in Economic Sciences (FACPCE, for its acronym in Spanish). The abovementioned international standards include the IFRS, the International Accounting Standards (IAS) and the interpretations developed by the IFRS Interpretations Committee (IFRIC) or former IFRIC (SIC).

 

The transitory exceptions and regulatory guidelines established by BCRA to the application of effective IFRS, that affect the preparation of these separate Financial Statements are as follows:

 

a) According to Communiqué “A” 6114, as supplemented, and in the convergence process through IFRS, the BCRA established that since fiscal years beginning on or after January 1, 2020, financial institutions defined as “Group A” by BCRA rules, in which the Bank is included, begin to apply section 5.5 “Impairment” of the IFRS 9 “Financial Instruments” (sections B5.5.1 to B5.5.55), except for the temporary exclusion for the debt securities of the non-financial public sector established by BCRA Communiqué “A” 6847. As of the date of issuance of these separate Financial Statements, the Bank is in the process of quantifying the effect of the full application of the abovementioned standard.

 

b) As of December 31, 2021 the Bank measured its holding in Prisma Medios de Pago SA (Prisma), according to the Memorandums received from the BCRA on March 12 and 22, 2021, which established specific guidelines related to measure such holding. Taking into account such guidelines, the Bank adjusted its fair value previously determined (see note 11). In March 2022, the shares related to the abovementioned holding were transferred, recording the profit for this transaction in the quarter ended March 31, 2022. If, for the fair value measurement purpose previously mentioned, IFRS had been applied, the profit or loss for the previous fiscal years and for the fiscal year ended December 31, 2022, should have been modified. However, this situation does not generate differences in the shareholders’ equity as of December 31, 2022.

 

Applicable Accounting Standards

 

Except for what was mentioned in the previous paragraphs, the accounting policies applied by the Bank comply with the IFRS as currently approved and are applicable to the preparation of these annual separate Financial Statements in accordance with the IFRS as adopted by the BCRA through Communiqué “A” 7642. Generally, the BCRA does not allow the anticipated application of any IFRS, unless otherwise expressly stated.

 

Note 3 to the consolidated Financial Statements, presents further detailed descriptions of the basis for the presentation of such Financial Statements and the main accounting policies used and the relevant information of the subsidiaries. All that is explained therein shall apply to these separate Financial Statements, except for the goodwill generated by the business combination, as mentioned in note 13, which according to BCRA Communiqué “A” 6618, in the separate Financial Statements, is included in the net investment of the subsidiary.

 

Going concern

 

The Bank’s Management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt on the Bank’s ability to continue as a going concern. Therefore, these separate Financial Statements continue to be prepared on the going concern basis.

 

Subsidiaries

 

As mentioned in note 1, the Bank performs certain transactions through its subsidiaries.

 

Subsidiaries are all the entities controlled by the Bank. An entity controls another entity when it is exposed, or has rights, to variable returns from its continuing involvement with such other entity and has the ability to use its power to direct the operating and financing policies of such other entity, to affect the amounts of such returns.

 

- 141 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

As provided under IAS 27 “Consolidated and Separate Financial Statements”, investments in subsidiaries were accounted for using the “equity method”, established in IAS 28 “Investment in associates and joint ventures”. When using this method, investments are initially recognized at cost, and such amount increases or decreases to recognize investor’s interest in profit and loss of the entity after the date of acquisition or creation.

 

Shares in profit and loss of subsidiaries and associates are recognized under “Income / (loss) from subsidiaries, associates and joint ventures” in the separate statement of income. Ownership interest in other comprehensive income of subsidiaries is accounted for under “Income / (loss) for the fiscal year from interest in other comprehensive income of subsidiaries, associates and joint ventures accounted for using the participation method”, in the separate statement of other comprehensive income.

 

Transcription into books

 

As of the date of issuance of these separate Financial Statements, the analytical detail is in the process of being transcribed into the Bank’s inventory book (“Libro Inventario”), general ledger and the separate Financial Statements into the Bank’s balance book (“Libro Balances”) of Banco Macro SA.

 

New standards adopted

 

New standards adopted are described in note 3 to the consolidated Financial Statements.

 

New pronouncements

 

New pronouncements are described in note 3 to the consolidated Financial Statements.

 

4. CONTINGENT TRANSACTIONS

 

In order to meet specific financial needs of customers, the Bank’s credit policy also includes, among others, the granting of guarantees, securities, bonds, letters of credit and documentary credits. The Bank is also exposed to overdrafts and unused agreed credits on credit cards of the Bank. Since they imply a contingent obligation for the Bank, they expose the Bank to credit risks other than those recognized in the statement of financial position and, therefore, they are an integral part of the total risk of the Bank.

 

As of December 31, 2022 and 2021, the Bank maintains the following maximum exposures to credit risk related to this type of transactions:

 

Composition   12/31/2022     12/31/2021  
Undrawn commitments of credit cards and checking accounts     668,911,187       432,278,523  
Guarantees granted (1)     5,193,158       3,624,788  
Overdraft and unused agreed commitments (1)     613,294       1,699,653  
Subtotal     674,717,639       437,602,964  
Less: Allowance for Expected credit losses (ECL)     (686,524 )     (648,549 )
Total     674,031,115       436,954,415  

 

(1) Includes transactions not covered by BCRA debtor classification standard. The Guarantees granted include an amount of 36,911 and 50,826 as of December 31, 2022 and 2021, respectively. The Overdraft and unused agreed commitments include an amount of 453,507 and 187,409 as of December 31, 2022 and 2021, respectively.

 

Risks related to the contingent transactions described above have been evaluated and are controlled within the framework of the Bank’s credit risk policy, as described in note 45 to the consolidated Financial Statements

 

- 142 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

5. DERIVATIVE FINANCIAL INSTRUMENTS

 

The Bank performs derivative transactions for trading purposes. In note 5 to the consolidated Financial Statements, the Bank discloses the reasons, types of derivative financial transactions performed by the Bank, the notional value and the fair value of the financial instruments recognized as assets or liabilities in the statement of financial position.

 

6. REPO TRANSACTIONS

 

Repo transactions performed by the Bank are detailed in note 6 to the consolidated Financial Statements.

 

7. OTHER FINANCIAL ASSETS

 

The composition of the other financial assets as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Sundry debtors (see note 11)     26,697,667       19,283,304  
Receivables from spot sales of foreign currency pending settlement     16,002,229       30,130,171  
Receivables from spot sales of government securities pending settlement     219,987       176,965  
Private securities     49,415       60,427  
Other     382,648       1,207,925  
Subtotal     43,351,946       50,858,792  
Less: Allowances for ECL     (91,041 )     (51,518 )
Total     43,260,905       50,807,274  

 

Disclosures related to allowance for ECL are detailed in note 9 “Loss allowance for expected credit losses on credit exposures not measured at fair value through profit or loss”.

 

8. LOANS AND OTHER FINANCING

 

The composition of loans and other financing as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Non-financial Public sector (1)     2,206,935       4,628,306  
Other Financial Entities     927,336       2,941,876  
Other Financial Entities     935,477       2,948,987  
Less: allowance for ECL     (8,141 )     (7,111 )
Non-financial Private Sector and Foreign Residents     595,241,643       680,248,634  
Overdrafts     49,233,372       47,465,357  
Documents     81,100,874       82,408,943  
Mortgage loans     61,905,907       81,213,071  
Pledge loans     9,581,277       14,727,607  
Personal loans     142,529,651       190,678,438  
Credit cards     190,779,144       184,981,594  
Financial leases     1,386,801       931,091  
Other     69,706,352       96,594,839  
Less: allowance for ECL     (10,981,735 )     (18,752,306 )
Total     598,375,914       687,818,816  

 

- 143 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

(1) As explained in note 3, ECL are not calculated to public sector exposures.

 

9. LOSS ALLOWANCE FOR EXPECTED CREDIT LOSSES ON CREDIT EXPOSURES NOT MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS

 

Note 9 to the consolidated Financial Statements, details the allowances recognized by the Bank under this concept.

 

In addition, exhibit R “Value adjustment for credit losses – Allowance for uncollectibility risk” also discloses the ECL movements by portfolio and products.

 

10. FINANCIAL ASSETS DELIVERED AS GUARANTEE

 

The composition of financial assets delivered as guarantee as of December 31, 2022 and 2021 is as follows:

 

  Carrying amount  
Composition   12/31/2022     12/31/2021  
For transactions with the BCRA     24,824,547       30,242,005  
For guarantee deposits     5,271,474       4,228,756  
Total     30,096,021       34,470,761  

 

The Bank’s Management considers there shall be no losses due to the restrictions on the above listed financial assets.

 

11. EQUITY INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS – PRISMA MEDIOS DE PAGO SA

 

The composition of equity instruments at fair value through profit or loss, as of December 31, 2022 and 2021, is detailed in Exhibit A. For the Bank’s investment in Prisma Medios de Pago SA see also note 11 to the consolidated Financial Statements.

 

12. FAIR VALUE QUANTITATIVE AND QUALITATIVE DISCLOSURES

 

Note 12 to the consolidated Financial Statements describes the methods and assumptions used to determine the fair value, both of the financial instruments recognized at fair value as of those not accounted for at such fair value in these separate Financial Statements.

 

In addition, the Bank discloses the relevant information as to instruments included in Level 3 of the fair value hierarchy.

 

Even though the Bank’s Management has used its best judgment to estimate the fair values of its financial instruments, any technique to perform such estimate implies certain inherent fragility level.

 

Fair value hierarchy

 

The Bank uses the following hierarchy to determine and disclose the fair value of financial instruments, according to the valuation technique applied:

 

- Level 1: quoted prices (unadjusted) observable in active markets that the Bank accesses to at the measurement day for identical assets or liabilities. The Bank considers markets as active only if there are sufficient trading activities with respect to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available at each reporting period.

 

- 144 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

- Level 2: Valuation techniques for which the data and variables having a significant impact on the determination of the fair value recognized or disclosed are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices, such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments to level 2 inputs may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Bank will classify the instruments as Level 3.

 

- Level 3: Valuation techniques for which the data and variables having a significant impact on the determination of the fair value recognized or disclosed are not based on observable market information.

 

Exhibit P “Categories of Financial Assets and Liabilities” presents the hierarchy in the Bank’s financial asset and liability at fair value measurement.

 

Below is the reconciliation between the amounts at the beginning and the end of the fiscal year, for the financial assets recognized at fair value, categorized as level 3:

 

    As of December 31, 2022  
Reconciliation   Debt instruments     Other financial
assets
   

Equity instruments

at fair value

through profit or
loss

 
Amount at the beginning     2,175,359       60,427       4,114,042  
Transfers to Level 3                        
Transfers from Level 3                        
Profit and loss     731,241       5,064       3,596  
Recognition and derecognition     (801,964 )     21,061       (2,508,037 )
Monetary effects     (1,072,772 )     (37,137 )     (924,618 )
Amount at the end of the fiscal year     1,031,864       49,415       684,983  

 

    As of December 31, 2021  
Reconciliation   Debt instruments     Other financial
assets
   

Equity instruments

at fair value

through profit or
loss

 
Amount at the beginning     1,112,717       76,973       4,860,694  
Transfers to Level 3                        
Transfers from Level 3                        
Profit and loss     686,775       3,562       1,211,173  
Recognition and derecognition     978,699       10,002       (43,437 )
Monetary effects     (602,832 )     (30,110 )     (1,914,388 )
Amount at the end of the fiscal year     2,175,359       60,427       4,114,042  

 

Note 12 to the consolidated Financial Statements, details the valuation techniques and significant unobservable inputs used in the valuation of assets at Level 3.

 

Changes in fair value levels

 

The Bank monitors the availability of information in the market to evaluate the classification of financial instruments into the fair value hierarchy as well as the resulting determination of transfers between levels 1, 2 and 3 at each fiscal year.

 

As of December 31, 2022 and 2021, the Bank has not recognized any transfers between levels 1, 2 and 3 of the fair value hierarchy.

 

- 145 -


 

 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

Financial assets and liabilities not measured at fair value

 

The following table shows a comparison between the fair value and the carrying amount of financial instruments not recognized at fair value as of December 31, 2022 and 2021:

 

    12/31/2022  
Composition   Carrying
amount
    Level 1     Level 2     Level 3     Fair value  
Financial assets                                        
Cash and deposits in banks     240,012,345       240,012,345                       240,012,345  
Repo transactions     61,929,317       61,929,317                       61,929,317  
Other financial assets     43,211,490       43,211,490                       43,211,490  
Loans and other financing     598,375,914                       521,939,679       521,939,679  
Other debt securities     599,594,038       511,722,746       82,669,663       96,304       594,488,713  
Financial assets delivered as guarantee     30,096,021       30,096,021                       30,096,021  
Total     1,573,219,125       886,971,919       82,669,663       522,035,983       1,491,677,565  
                                         
Financial liabilities                                        
Deposits     1,287,889,944       642,191,216               644,641,388       1,286,832,604  
Other financial liabilities     114,905,708       110,605,835       4,371,904               114,977,739  
Financing received from the BCRA and other financial institutions     2,448,871       2,382,151       51,492               2,433,643  
Issued corporate bonds     3,003,738               2,933,474               2,933,474  
Subordinated corporate bonds     72,274,386               58,986,558               58,986,558  
Total     1,480,522,647       755,179,202       66,343,428       644,641,388       1,466,164,018  

 

    12/31/2021  
Composition   Carrying
amount
    Level 1     Level 2     Level 3     Fair value  
Financial assets                                        
Cash and deposits in banks     326,918,809       326,918,809                       326,918,809  
Repo transactions     61,176,357       61,176,357                       61,176,357  
Other financial assets     50,746,847       50,746,847                       50,746,847  
Loans and other financing     687,818,816                       637,724,702       637,724,702  
Other debt securities     46,838,533       44,550,843       1,265,887       304,156       46,120,886  
Financial assets delivered as guarantee     34,470,761       34,470,761                       34,470,761  
Total     1,207,970,123       517,863,617       1,265,887       638,028,858       1,157,158,362  
                                         
Financial liabilities                                        
Deposits     1,139,660,478       643,214,212               495,799,566       1,139,013,778  
Other financial liabilities     114,974,304       112,179,459       2,794,914               114,974,373  
Financing received from the BCRA and other financial institutions     852,127       771,258       74,752               846,010  
Issued corporate bonds     5,825,893               5,128,186               5,128,186  
Subordinated corporate bonds     81,844,664               67,191,154               67,191,154  
Total     1,343,157,466       756,164,929       75,189,006       495,799,566       1,327,153,501  

 

- 146 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

13. BUSINESS COMBINATIONS

 

On October 1, 2021, the Bank exercised the call option to reach 24.99% of the equity interest in Fintech SGR, being this a structured entity in which the Bank has control. Details generated by this transaction are described in note 13 to the consolidated Financial Statements.

 

14. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT ARRANGEMENTS

 

The Bank’s interests in associates and joint ventures are disclosed in note 14 to the consolidated Financial Statements. For further information on the Bank’s interest in subsidiaries, associates and joint ventures, see also Exhibit E “Detailed information on interest on other companies”.

 

15. OTHER NON-FINANCIAL ASSETS

 

The composition of other non-financial assets as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Investment property (see Exhibit F)     7,956,684       890,858  
Advanced prepayments     2,305,661       1,597,689  
Tax advances     1,190,918       834,882  
Other     40,643       281,414  
Total     11,493,906       3,604,843  

 

16. RELATED PARTIES

 

A related party is a person or entity that is related to the Bank:

 

- has control or joint control of the Bank;

 

- has significant influence over the Bank;

 

- is a member of the key management personnel of the Bank or of a parent of the Bank;

 

- members of the same group;

 

- one entity is an associate (or an associate of a member of a group of which the other entity is a member).

 

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly. The Bank considers as key management personnel, for the purposes of IAS 24, the members of the Board of Directors and the senior management members of the Risk Management Committee, the Assets and Liabilities Committee and the Senior Credit Committee.

 

- 147 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

As of December 31, 2022 and 2021, amounts balances and profit or loss related to transactions generated with related parties are as follows:

 

    As of December 31, 2022  
    Main subsidiaries                          
    Macro Bank
Limited
    Macro
Securities
SAU
    Macro
Fondos
SGFCISA
    Argenpay
SAU
    Fintech
SGR
    Associates     Key
management
personnel
(1)
    Other
related
parties
    Total  
Assets                                                                        
Cash and deposits in banks     1,419                                                               1,419  
Other financial assets                                     3,017,035                               3,017,035  
Loans and other financing (2)                                                                        
Overdraft                                                     56,251       420,927       477,178  
Credit cards                                                     163,213       49,820       213,033  
Lease                                                             66,686       66,686  
Personal loans                                                     1,162               1,162  
Mortgage loans                                                     542,582               542,582  
Other loans             2,113,373                                       151,849       1,400,121       3,665,343  
Guarantee granted                                                             1,540,021       1,540,021  
Total assets     1,419       2,113,373                       3,017,035               915,057       3,477,575       9,524,459  
                                                                         
Liabilities                                                                        
Deposits             2,936,305       65,353       58,138       116       84,710       1,002,317       1,196,288       5,343,227  
Other financial liabilities                                                     513       11,672       12,185  
Issued corporate bonds             109,275       178,907                                               288,182  
Subordinated corporate bonds                                     144,549                               144,549  
Other non-financial liabilities                                                             20,216       20,216  
Total liabilities             3,045,580       244,260       58,138       144,665       84,710       1,002,830       1,228,176       5,808,359  
                                                                         
Income / (loss)                                                                        
Interest income             4,323                                       288,313       1,928,422       2,221,058  
Interest expense                                             (22,970 )     (103,386 )     (69,031 )     (195,387 )
Commissions income             24,841       156               792       345       59       47,043       73,236  
Commissions expense                                     (10,647 )             (19 )     (412 )     (11,078 )
Other operating income     5                       40       1,304,736                       52       1,304,833  
Allowance for loan losses             (374 )                                                     (374 )
Administrative expense                                                             (585,739 )     (585,739 )
Other operating expense             (14,511 )                                             (70,829 )     (85,340 )
Total Income / (loss)     5       14,279       156       40       1,294,881       (22,625 )     184,967       1,249,506       2,721,209  

 

(1) Includes close family members of the key management personnel.
(2) The maximum financing amount for loans and other financing as of December 31, 2022 for Macro Securities SAU, Fintech SGR, Key management personnel and other related parties amounted to 4,528,425, 2,535,472, 1,267,855 and 16,840,167, respectively.

 

- 148 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

    As of December 31, 2021  
    Main subsidiaries                          
    Macro Bank
Limited
    Macro
Securities
SAU
    Macro
Fondos
SGFCISA
    Argenpay
SAU
    Fintech
SGR
    Associates     Key
management
personnel
(1)
    Other
related
parties
    Total  
Assets                                                                        
Cash and deposits in banks     1,603                                                               1,603  
Other financial assets                                     1,477,165                               1,477,165  
Loans and other financing (2)                                                                        
Documents                                                             55,596       55,596  
Overdraft                                                     156,620       492,663       649,283  
Credit cards                                                     139,924       87,404       227,328  
Lease                                                             55,956       55,956  
Personal loans                                                     2,776               2,776  
Mortgage loans                                                     499,837               499,837  
Other loans             2,697,732                                       148,709       3,095,126       5,941,567  
Guarantee granted                                                             1,989,329       1,989,329  
Total assets     1,603       2,697,732                       1,477,165               947,866       5,776,074       10,900,440  
                                                                         
Liabilities                                                                        
Deposits     8       3,097,952       318,915       133,622       60       102,927       911,474       2,124,631       6,689,589  
Other financial liabilities                                                     382       10,357       10,739  
Subordinated corporate bonds                                     81,844                               81,844  
Other non-financial liabilities                                                             29,963       29,963  
Total liabilities     8       3,097,952       318,915       133,622       81,904       102,927       911,856       2,164,951       6,812,135  
                                                                         
Income / (loss)                                                                        
Interest income             6,960                                       313,510       2,675,551       2,996,021  
Interest expense             (8,205 )                             (33,765 )     (63,380 )     (109,113 )     (214,463 )
Commissions income             42,841       232               56       434       31       43,945       87,539  
Commissions expense                                     (699 )             (45 )     (343 )     (1,087 )
Profit from measurement of financial instruments at fair value through profit or loss                                     45,691                               45,691  
Other operating income     8       6,693                       13,049                       62       19,812  
Administrative expense                                                             (468,070 )     (468,070 )
Other operating expense                                                             (144,963 )     (144,963 )
Total Income / (loss)     8       48,289       232               58,097       (33,331 )     250,116       1,997,069       2,320,480  

 

(1) Includes close family members of the key management personnel.
(2) The maximum financing amount for loans and other financing as of December 31, 2021 for Macro Securities SAU, Fintech SGR, Key management personnel and other related parties amounted to 2,720,419, 1,477,165, 1,341,171 and 11,912,135, respectively.

 

Transactions generated by the Bank with related parties for transactions arranged within the course of the usual and ordinary course of business were performed in normal market conditions, both as to interest rates and prices and as to the required guarantees.

 

The Bank does not have loans granted to Directors and other key management personnel secured with shares.

 

Total remunerations received as salary and bonus by the key management personnel as of December 31, 2022 and 2021, totaled 909,402 and 997,395, respectively.

 

- 149 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

In addition, fees received by the Directors as of December 31, 2022 and 2021 amounted to 1,658,985 and 2,117,929, respectively.

 

Additionally, the composition of the Board of Directors and key management personnel is as follows:

 

Composition   12/31/2022     12/31/2021  
Board of Directors     12       13  
Senior managers of the key management personnel     11       11  
Total     23       24  

 

17. DEPOSITS

 

The composition of deposits as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Non-financial Public Sector     109,952,253       109,868,280  
Financial sector     1,653,447       1,872,336  
Non-financial Private Sector and Foreign Residents     1,176,284,244       1,027,919,862  
Checking accounts     149,669,947       187,256,260  
Saving accounts     422,308,756       363,243,763  
Time deposits     568,401,965       446,801,428  
Investment accounts     20,484,440       13,237,020  
Other     15,419,136       17,381,391  
Total     1,287,889,944       1,139,660,478  

 

18. OTHER FINANCIAL LIABILITIES

 

The composition of other financial liabilities as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Credit and debit card settlement - due to merchants     73,511,478       64,371,122  
Amounts payable for spot purchases of foreign currency pending settlement     16,050,423       30,215,931  
Amounts payable for spot purchases of government securities pending settlement     9,780,493       3,097,733  
Payment orders pending to foreign exchange settlement     5,161,399       5,793,940  
Collections and other transactions on account and behalf of others     2,805,832       4,736,340  
Finance leases liabilities (note 19)     1,955,278       2,744,791  
Other     5,640,805       4,014,447  
Total     114,905,708       114,974,304  

 

19. LEASES

 

19.1 The Bank as a lessee

 

As explained in note 19.1 to the consolidated Financial Statements, the Bank has lease arrangements mainly for real properties recognized in the item “Property, plant and equipment”.

 

- 150 -


 

 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

Set out below are the carrying amounts of lease liabilities and the movements during the fiscal year:

 

Movements   2022     2021  
At the beginning of the fiscal year     2,744,791       3,444,123  
Additions     624,820       924,936  
Accretion of interest (see note 31)     385,368       426,069  
Difference in foreign currency     710,151       435,238  
Payments     (1,011,317 )     (1,481,365 )
Monetary effects     (1,498,535 )     (1,004,210 )
At the end of the fiscal year (see note 18)     1,955,278       2,744,791  

 

The short term leases were recognized as expense for an amount of 14,024 and 15,554 for the years ended December 31, 2022 and 2021, respectively.

 

The table below shows the maturity of the lease liabilities as of December 31, 2022 and 2021:

 

Lease liabilities   Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months
and up to
6 months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months
and up to
24 months
    Over 24
months
    Total
over 12
months
 
Balances as of 12/31/2022     100,311       164,384       226,322       374,270       865,287       459,239       630,753       1,089,992  
Balances as of 12/31/2021     115,707       200,861       276,170       471,536       1,064,274       715,960       964,557       1,680,517  

 

19.2 The Bank as a lessor

 

In note 19.2 to the consolidated Financial Statements, are detailed the Bank´s transactions when acts as a lessor.

 

20. PROVISIONS

 

This item includes the amounts estimated to face a liability of probable occurrence, which if occurring, would originate a loss for the Bank.

 

Exhibit J “Changes in Provisions” presents the changes in provisions as of December 31, 2022 and 2021.

 

The expected terms to settle these obligations are as follows:

 

    12/31/2022              
Composition   Within 12
months
    Over 12
months
    12/31/2022     12/31/2021  
For administrative, disciplinary and criminal penalties             500       500       972  
Letters of credits, guarantees and other commitments (1)     686,524               686,524       648,549  
Commercial claims in progress (2)     170,878       323,732       494,610       618,540  
Labor lawsuits     220,529       45,837       266,366       419,573  
Pension funds - reimbursement     303,631       214,859       518,490       206,987  
Other     12,370       723,975       736,345       1,287,157  
Total     1,393,932       1,308,903       2,702,835       3,181,778  

 

(1) These amounts correspond to the ECL calculated for contingent transactions, which are mentioned in note 4.
(2) See also note 42.2.

 

- 151 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

21. OTHER NON-FINANCIAL LIABILITIES

 

The composition of other non-financial liabilities as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Withholdings     15,754,918       13,608,455  
Salaries, bonuses and payroll taxes payables     10,659,434       12,570,741  
Taxes payables     7,711,416       6,263,018  
Miscellaneous payables     2,790,806       3,570,449  
Retirement pension payment orders pending settlement     1,124,896       824,014  
Fees payables     560,130       506,715  
Dividends payables (see note 43)             51,776,837  
Other     1,469,688       2,108,194  
Total     40,071,288       91,228,423  

 

22. EMPLOYEE BENEFITS PAYABLE

 

The table below presents the amounts of employee benefits payable as of December 31, 2022 and 2021:

 

Short-term employee benefits   12/31/2022     12/31/2021  
Salaries, bonuses and payroll taxes payables     6,016,668       6,085,996  
Vacation accrual     4,642,766       6,484,745  
Total short-term employee benefits     10,659,434       12,570,741  

 

The Bank has not long-term employee benefits or post-employment benefits as of December 31, 2022 and 2021.

 

23. ANALYSIS OF FINANCIAL ASSETS TO BE RECOVERED AND FINANCIAL LIABILITIES TO BE SETTLED

 

The following tables show the analysis of financial assets and liabilities the Bank expects to recover and settle as of December 31, 2022 and 2021:

 

12/31/2022   Without due
date
    Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months and
up to 24
months
    Over 24
months
    Total over 12
months
 
Assets                                                                        
Cash and deposits in banks     240,012,345                                                                  
Debt securities at fair value through profit or loss             1,288,529       19,934,801       81,060,489       81,144,792       183,428,611       12,235,910       1,072,379       13,308,289  
Derivative financial instruments             8,486       15,431       18,982               42,899                          
Repo transactions             61,929,317                               61,929,317                          
Other financial assets     10,008,572       20,810,222       13,881       670,485               21,494,588               11,757,745       11,757,745  
Loans and other financing (1)     1,456,402       263,092,174       49,526,049       56,306,665       60,009,135       428,934,023       58,903,976       109,081,513       167,985,489  
Other debt securities             516,992,832       103,140,469       4,775,989       53,229,670       678,138,960       13,727,439       37,594,369       51,321,808  
Financial assets delivered as guarantee     30,096,021                                                                  
Equity instruments at fair value through profit or loss     705,940                                                                  
Total assets     282,279,280       864,121,560       172,630,631       142,832,610       194,383,597       1,373,968,398       84,867,325       159,506,006       244,373,331  

 

- 152 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

12/31/2022   Without due
date
    Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months
and up to
24
months
    Over 24
months
    Total over 12
months
 
Liabilities                                                                        
Deposits     633,429,143       532,916,780       104,045,528       16,006,720       1,471,095       654,440,123       6,295       14,383       20,678  
Derivative financial instruments             1,715       656                       2,371                          
Other financial liabilities             110,565,046       356,056       280,311       539,411       111,740,824       882,492       2,282,392       3,164,884  
Financing received from the BCRA and other financial institutions             291,230       511,370       1,603,567       42,704       2,448,871                          
Issued corporate bonds                     7,177                       7,177       2,996,561               2,996,561  
Subordinated corporate bonds                             1,423,066               1,423,066               70,851,320       70,851,320  
Total liabilities     633,429,143       643,774,771       104,920,787       19,313,664       2,053,210       770,062,432       3,885,348       73,148,095       77,033,443  

 

(1) The amounts included in “without due date” are related to the non-performing portfolio.

 

12/31/2021   Without due
date
    Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Total up to
12 months
    Over 12
months and
up to 24
months
    Over 24
months
    Total over 12
months
 
Assets                                                                        
Cash and deposits in banks     326,918,809                                                                  
Debt securities at fair value through profit or loss             633,209       404,629       19,520,451       15,259,990       35,818,279       10,847,218       8,454,925       19,302,143  
Derivative financial instruments                             2,524               2,524                          
Repo transactions             61,176,357                               61,176,357                          
Other financial assets     3,902,051       35,779,835       111,957       1,528,837               37,420,629               9,484,594       9,484,594  
Loans and other financing (1)     319,135       255,244,248       59,795,231       64,027,592       73,753,392       452,820,463       77,414,659       157,264,559       234,679,218  
Other debt securities             266,710,380       866,332       102,873,519       87,212,086       457,662,317       83,487,292       7,064,241       90,551,533  
Financial assets delivered as guarantee     34,470,761                                                                  
Equity instruments at fair value through profit or loss     4,138,309                                                                  
Total assets     369,749,065       619,544,029       61,178,149       187,952,923       176,225,468       1,044,900,569       171,749,169       182,268,319       354,017,488  
                                                                         
Liabilities                                                                        
Deposits     631,512,047       399,340,442       96,274,539       11,568,297       903,931       508,087,209       60,388       834       61,222  
Derivative financial instruments                             4,933               4,933                          
Other financial liabilities             112,141,476       338,284       300,953       494,491       113,275,204       730,098       969,002       1,699,100  
Financing received from the BCRA and other financial institutions             457,650       349,829       22,788       11,922       842,189       9,938               9,938  
Issued corporate bonds                             5,825,893               5,825,893                          
Subordinated corporate bonds                             1,784,666               1,784,666               80,059,998       80,059,998  
Total liabilities     631,512,047       511,939,568       96,962,652       19,507,530       1,410,344       629,820,094       800,424       81,029,834       81,830,258  

 

(1) The amounts included in “without due date” are related to the non-performing portfolio.

 

24. DISCLOSURES BY OPERATING SEGMENT

 

The Bank has an approach of its banking business that is described in note 24 to the consolidated Financial Statements.

 

- 153 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

25. INCOME TAX

 

a) Inflation adjustment and tax rate on income tax

 

Note 25 to the consolidated Financial Statements are detailed the legal aspects of the inflation adjustment on income tax and the corporate tax rate on tax rate.

 

b) The main items of deferred income tax:

 

Composition   12/31/2022     12/31/2021  
Deferred tax assets                
Loans and other financing     3,626,197       5,124,894  
Provisions and employee benefits     1,529,978       2,111,591  
Allowances for contingencies     895,959       894,586  
Leases     333,342       342,289  
Investments in other companies     62,489          
Other     523,739       503,131  
Total deferred tax assets     6,971,704       8,976,491  
                 
Deferred tax liabilities                
Property, plant and equipment and other non-financial assets     10,910,128       10,813,704  
Intangible assets     6,062,959       5,712,776  
Tax effects on forward sales     3,093,064       1,816,643  
Investments in other companies             1,306,131  
Other     126,178       414,958  
Total deferred tax liabilities     20,192,329       20,064,212  
Net deferred tax liabilities     13,220,625       11,087,721  

 

Changes in net deferred tax assets and liabilities as of December 31, 2022 and 2021 are summarized as follows:

 

Composition   12/31/2022     12/31/2021  
Net deferred tax liabilities at beginning of the fiscal year     11,087,721       18,497,764  
Loss / (Profit) for deferred taxes recognized in the statement of income     2,132,904       (7,410,043 )
Net deferred tax liabilities at fiscal year end     13,220,625       11,087,721  

 

The main items of income tax expense in the consolidated Financial Statements are as follows:

 

Composition   12/31/2022     12/31/2021  
Current income tax expense     14,267,451       9,424,868  
Loss / (Profit) for deferred taxes     2,132,904       (7,410,043 )
Income tax loss recorded in the statement of income     16,400,355       2,014,825  
Income tax (profit) / loss recorded in other comprehensive income     (2,445,927 )     2,350,647  
Total     13,954,428       4,365,472  

 

- 154 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

The table below shows the reconciliation between income tax and the amounts obtained by applying the current tax rate in Argentina to the income carrying amount:

 

Composition   12/31/2022     12/31/2021  
Income carrying amount before income tax     59,438,874       54,847,591  
Applicable income tax rate     35 %     35 %
Income tax on income carrying amount     20,803,606       19,196,657  
Net permanent differences and other tax effects including the fiscal inflation adjustment     (4,403,251 )     (17,181,832 )
Total income tax     16,400,355       2,014,825  

 

As of December 31, 2022 and 2021, the effective income tax rate is 27.6% and 3.7%, respectively. During fiscal year 2021, the effective income tax rate was affected by the inflation adjustment determined for accounting and income tax purposes, both current and deferred.

 

Fiscal years 2019 and 2020

 

As decided by the Board of Directors in the meeting held on May 11, 2020, considering certain case law on the matter assessed by its legal counsel and tax advisors, on May 26, 2020, the Bank filed with the Administración Federal de Ingresos Públicos (AFIP, for its acronym in Spanish) its annual income tax return considering the total effect of the inflation adjustment on income tax (see section a) iv) of note 25 to the consolidated Financial Statements). As a result, the current income tax determined by Banco Macro SA for fiscal year 2019 amounted to 7,002,124 (not restated). The same criterion was applied to determine the annual income tax report for 2020, which generated accrued income tax for Banco Macro SA for such fiscal year that amounted to 9,933,210 (not restated).

 

In addition, on July 23, 2021, the Bank filed a reimbursement action with the AFIP requesting that 254,305 (not restated) paid as income tax for the 2020 tax period be reimbursed.

 

As to the tax periods mentioned in previous paragraphs, on November 1, 2021, the AFIP notified the beginning of an income tax audit, which is in progress.

 

Along with the filings mentioned in the first paragraph of this section, on December 28, 2021, the Bank filed petitions for declaratory judgment with the Federal Administrative Contentious Court for the periods under analysis. The file 22274/2021, for the fiscal year 2019, is in process in Court No. 12 and the file 22278/2021, for the fiscal year 2020, is in process in Court No. 1.

 

Fiscal year 2021

 

On October 17, 2022, the Bank filed a reimbursement action with the AFIP requesting that 382,189 paid as income tax for the 2021 tax period be reimbursed.

 

On January 3, 2023, the AFIP notified the beginning of an income tax audit related to the abovementioned fiscal year, which is in progress.

 

Reimbursement actions – Fiscal years 2013 to 2017 and 2018

 

On October 24, 2019, Banco Macro SA filed with the AFIP-DGI (Argentine tax authorities) two reimbursement actions under the terms established by the first paragraph of section 81, Law No. 11683 requesting the reimbursement of 4,782,766 and 5,015,451 (not restated amounts) paid to tax authorities as income tax during tax periods 2013 through 2017 and 2018, respectively, arising from the impossibility to apply the adjustment for inflation and other adjustment mechanisms set forth by Income Tax Law (prior to the amendments introduced by Laws No. 27430 and 27468 for periods 2013 through 2017, and as revised in 2019 and amended for the 2018 tax period), plus the related compensatory interest (SIGEA [case and file management system] files No. 19144-14224/2019 and 19144-14222/2019). Since tax authorities have not yet issued a resolution with respect to the abovementioned claims, on August 7, 2020, the Bank filed both reimbursement requests under the terms of section 81, Law No. 11683 with the Federal Contentious and Administrative Trial Courts, which are pending in Courts No. 8 and 2 of such jurisdiction, respectively (cases No. 11285/2020 and 11296/2020). Currently, the file for the fiscal year 2018 is in the evidence stage.

 

- 155 -


 

 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

In connection with the tax periods mentioned in the previous paragraph, on December 19, 2019, the AFIP notified the beginning of the income tax audit for the 2018 tax period, and on May 3, 2021, it notified the beginning of the income tax audit for periods 2013 through 2017. On October 4, 2021, the AFIP ended the audit for periods 2013 through 2017 as the Bank had exercised in due time its right to resort to justice, and that the admission of reimbursement is subject to a court decision.

 

26. COMMISSIONS INCOME

 

Composition   12/31/2022     12/31/2021  
Performance obligations satisfied at a point in time                
Commissions related to obligations     42,576,947       39,653,921  
Commissions related to credit cards     24,778,637       23,596,621  
Commissions related to insurance     4,226,128       4,450,781  
Commissions related to trading and foreign exchange transactions     1,527,054       1,701,807  
Commissions related to securities value     610,305       552,621  
Commissions related to loans and other financing     416,395       308,418  
Commissions related to financial guarantees granted     10,385       11,527  
                 
Performance obligations satisfied over certain time period                
Commissions related to credit cards     407,727       716,392  
Commissions related to trading and foreign exchange transactions     59,020       75,697  
Commissions related to loans and other financing     7,186       9,377  
Commissions related to obligations     1,571       2,127  
Commissions related to financial guarantees granted             184  
Total     74,621,355       71,079,473  

 

27. DIFFERENCES IN QUOTED PRICES OF GOLD AND FOREIGN CURRENCY

 

Composition   12/31/2022     12/31/2021  
Translation of foreign currency assets and liabilities into pesos     60,022,668       7,611,619  
Income from foreign currency exchange     1,192,855       1,069,054  
Total     61,215,523       8,680,673  

 

28. OTHER OPERATING INCOME

 

Composition   12/31/2022     12/31/2021  
Services     4,140,776       4,693,608  
Adjustments and interest from other receivables     3,669,477       2,225,082  
Adjustments from other receivables with CER clauses     1,679,397       681,084  
Other receivables for financial intermediation     947,942       1,833,714  
Sale of investment in properties and other non-financial assets             76,116  
Other     6,486,252       2,090,696  
Total     16,923,844       11,600,300  

 

- 156 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

29. EMPLOYEE BENEFITS

 

Composition   12/31/2022     12/31/2021  
Remunerations     52,753,996       53,886,491  
Payroll taxes     12,970,225       12,405,544  
Compensations and bonuses to employees     7,610,940       7,243,454  
Employee services     2,720,806       2,115,201  
Total     76,055,967       75,650,690  

 

30. ADMINISTRATIVE EXPENSES

 

Composition   12/31/2022     12/31/2021  
Taxes     6,291,269       5,605,097  
Maintenance, conservation and repair expenses     6,142,377       6,379,009  
Armored truck, documentation and events     5,260,049       5,631,941  
Security services     3,761,984       3,972,295  
Other fees     3,605,405       3,198,275  
Electricity and communications     3,456,562       3,952,079  
Software     2,487,680       3,102,540  
Advertising and publicity     2,316,936       1,693,442  
Fees to directors and syndics     1,808,419       1,390,481  
Representation, travel and transportation expenses     647,984       442,357  
Insurance     404,296       519,742  
Stationery and office supplies     269,390       243,719  
Hired administrative services     266,403       242,756  
Leases     173,494       227,185  
Other     1,157,834       1,954,992  
Total     38,050,082       38,555,910  

 

31. OTHER OPERATING EXPENSES

 

Composition   12/31/2022     12/31/2021  
Turnover tax     40,895,424       34,905,903  
From credit cards     17,189,552       14,978,007  
Charges for other provisions     2,373,338       3,160,367  
Deposit guarantee fund contributions     1,913,030       2,029,167  
Taxes     842,584       920,997  
Loss from sale or impairment of investment in properties and other non-financial assets     542,323          
Insurance claims     436,033       174,484  
Donations     417,558       56,647  
Other adjustments and interests for miscellaneous obligations (see note 19)     385,368       426,069  
From administrative, disciplinary and criminal penalties             81,094  
Other     8,671,759       9,392,623  
Total     73,666,969       66,125,358  

 

- 157 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

32. ADDITIONAL DISCLOSURES IN THE STATEMENT OF CASH FLOWS

 

The statement of cash flows presents the changes in cash and cash equivalents derived from operating activities, investing activities and financing activities during the fiscal year. For the preparation of the statement of cash flows the Bank adopted the indirect method for operating activities and the direct method for investment activities and financing activities.

 

The Bank considers as “Cash and cash equivalents” the item Cash and Deposits in Banks and those financial assets that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 

For the preparation of the statement of cash flows the Bank considered the following:

 

- Operating activities: the normal revenue-producing activities of the Bank as well as other activities that cannot qualify as investing or financing activities.

 

- Investing activities: the acquisition, sale and disposal by other means of long-term assets and other investments not included in cash and cash equivalents.

 

- Financing activities: activities that result in changes in the size and composition of the shareholders´ equity and liabilities of the Bank and that are not part of the operating or investing activities.

 

The table below presents the reconciliation between the item “Cash and cash equivalents” in the statement of cash flows and the relevant accounting items of the statement of financial position:

 

Reconciliation   12/31/2022     12/31/2021     12/31/2020  
Cash and deposits in banks     240,012,345       326,918,809       336,649,511  
Debt Securities at fair value through profit or loss             9,467          
Other debt securities     491,521,571       259,017,957       378,337,514  
Total     731,533,916       585,946,233       714,987,025  

 

33. CAPITAL STOCK

 

The Bank’s subscribed and paid-in capital from December 31, 2019 to December 31, 2022, amounted to 639,413. See also Exhibit K.

 

34. DEPOSIT GUARANTEE INSURANCE

 

Note 35 to the consolidated Financial Statements describes the Deposit Guarantee Insurance System and the scope thereof.

 

Banco Macro SA holds a 7.7330% interest in the capital stock according to the percentages disclosed by BCRA Communiqué “B” 12305 issued on March 17, 2022.

 

- 158 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

35. RESTRICTED ASSETS

 

As of December 31, 2022 and 2021 the following Bank’s assets are restricted:

 

Composition   12/31/2022     12/31/2021  
Debt securities at fair value through profit or loss and other debt securities                
· Discount bonds in pesos regulated by Argentine legislation, maturing in 2033 for the minimum statutory guarantee account required for Agents to act in the new categories contemplated under Resolution No. 622/2013, as amended, of the CNV.     92,856       94,847  
· Federal Government Treasury Bonds in pesos adjusted by CER 1.40%, maturity 03/27/2023, securing the sectoral Credit Program of the Province of San Juan, production investment financing fund.     83,319       86,975  
· Federal Government Treasury Bonds in pesos adjusted by CER 1.40%, maturity 03/27/2023, securing the regional economies Competitiveness Program – IDB loan No. 3174/OC-AR.     33,682       35,160  
· Federal Government Treasury Bonds in pesos adjusted by CER 1.40%, maturity 03/27/2023, for the contribution to the Guarantee Fund II in BYMA according to section 45, Law 26831, and supplementary regulations established by CNV standards (NT 2013, as amended).     14,891       15,545  
  Subtotal debt securities at fair value through profit or loss and other debt securities     224,748       232,527  
                 
Other financial assets                
· Interests derived from contributions made as protector partner (1).     2,413,559       1,485,299  
· Sundry debtors – attachment within the scope of the claim filed by the DGR against the CABA for turnover tax differences.     827       1,610  
  Subtotal Other financial assets     2,414,386       1,486,909  
                 
Financial assets delivered as a guarantee                
· Special guarantee checking accounts opened in the BCRA for transactions related to the electronic clearing houses and similar entities.     24,824,547       30,242,005  
· Guarantee deposits related to credit and debit card transactions.     4,043,563       2,567,119  
· Other guarantee deposits.     1,227,911       1,661,637  
  Subtotal Financial assets delivered as guarantee     30,096,021       34,470,761  
                 
Other non-financial assets                
· Real property related to a call option sold.     2,456,151       421,571  
  Subtotal other non-financial assets     2,456,151       421,571  
Total     35,191,306       36,611,768  

 

(1) As of December 31, 2022 and 2021 it is related to the risk fund Fintech SGR and Garantizar SGR. In order to keep tax benefits related to these contributions, they must be maintained between two and three years from the date they were made.

 

36. TRUST ACTIVITIES

 

Note 37 to the consolidated Financial Statements describes the different trust agreements according to the business purpose sought by the Bank, which may be summarized as follows:

 

36.1 Financial trusts for investment purposes

 

As of December 31, 2022 and 2021, the debt securities with investment purposes and certificate of participation in financial trusts amounted to 950,899 and 1,034,155, respectively.

 

According to the latest accounting information available as of the date of issuance of these separate Financial Statements, the corpus assets of the trusts exceed the carrying amount in the related proportions.

 

- 159 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

36.2 Trusts created using financial assets transferred by the Bank (Securitization)

 

As of December 31, 2022 and 2021, considering the latest available accounting information as of the date of issuance of these separate Financial Statements, the assets managed through Macro Fiducia SAU of this type of trusts amounted to 11,680 and 18,708, respectively.

 

36.3 Trusts guaranteeing loans granted by the Bank

 

As of December 31, 2022 and 2021, considering the latest available accounting information as of the date of issuance of these separate Financial Statements, the assets managed by the Bank amounted to 2,721,267 and 3,942,468, respectively.

 

36.4 Trusts in which the Bank acts as Trustee (Management)

 

As of December 31, 2022 and 2021, considering the latest available accounting information as of the date of issuance of these separate Financial Statements, the assets managed by the Bank amounted to 4,086,750 and 5,786,674, respectively.

 

37. COMPLIANCE WITH CNV REGULATIONS

 

Considering Banco Macro SA’s current operations, and according to the different categories of agents established by CNV rules (as per General Resolution 622/2013, as amended), the Bank is registered with this agency as Agent for the Custody of Collective Investment Products of Mutual Funds (AC PIC FCI, for their acronyms in Spanish) – Comprehensive Depositary Company, clearing and settlement agent and trading agent (ALyC and AN – comprehensive, for their acronyms in Spanish) and is registered in the “List of Authorized companies to guarantee capital market instruments”, as described in note 38.1.1 to the consolidated Financial Statements. Note 38.3 to the mentioned Financial Statements describes the number of shares subscribed by third parties and the assets held by the Bank in its capacity as depositary company.

 

Additionally, the Bank’s shareholders’ equity as of December 31, 2022 stated in Units of Purchasing Power (UVA, for its acronym in Spanish) amounted to 2,765,002,747 and exceeds the minimum amount required by such regulation for the different categories of agents in which the Bank is registered, amounting to 470,350 UVAs as of that date, and the minimum required statutory guarantee account of 235,175 UVAs, which the Bank paid-in with government securities as described in note 35 and the cash deposits in BCRA accounts 000285 and 80285 belonging to the Bank.

 

In addition, note 38.2 to the consolidated Financial Statements presents the general policy of documents in custody, describing which information has been disclosed and delivered to third parties for custody.

 

38. ACCOUNTING ITEMS THAT IDENTIFY THE COMPLIANCE WITH MINIMUM CASH REQUIREMENTS

 

The items recognized by the Bank to constitute the minimum cash requirement effective for December 2022 are described in note 39 to the consolidated Financial Statements.

 

39. PENALTIES APPLIED TO THE ENTITY AND SUMMARY PROCEEDINGS INITIATED BY THE BCRA

 

Note 40 to the consolidated Financial Statements describes the penalties applied and the summary proceedings filed by the BCRA against the Bank, classified as follows:

 

- Summary proceedings filed by the BCRA.

- Penalties applied by the BCRA.

- Penalties applied by the UIF.

 

The Bank’s Management and its legal counsel consider no further significant accounting effects, other than those previously mentioned, should be recorded or disclosed.

 

- 160 -


 

 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

40. CORPORATE BONDS ISSUANCE

 

The corporate bonds liabilities recorded by the Bank are as follows:

 

Corporate Bonds   Original value     Residual face
value as of
12/31/2022
    12/31/2022     12/31/2021  
Subordinated Resettable – Class A   USD 400,000,000     USD 400,000,000       72,274,386       81,844,664  
Non-subordinated – Class E   USD 17,000,000     USD 17,000,000       3,003,738          
Non-subordinated – Class B   $ 4,620,570,000                       5,825,893  
Total                     75,278,124       87,670,557  

 

Note 41 to the consolidated Financial Statements describes liabilities for corporate bonds recognized by the Bank.

 

41. OFF BALANCE SHEET TRANSACTIONS

 

In addition to note 4, the Bank recognizes different off balance sheet transactions, pursuant to the BCRA standards. The composition of the amounts of the main off balance sheet transactions as of December 31, 2022 and 2021 is as follows:

 

Composition   12/31/2022     12/31/2021  
Custody of government and private securities and other assets held by third parties     619,972,455       591,389,869  
Preferred and other collaterals received from customers (1)     186,767,881       234,168,943  
Outstanding checks not yet paid     19,943,141       15,796,202  
Checks already deposited and pending clearance     16,828,520       21,715,717  

 

(1) Related to collaterals used to secure loans transactions and other financing, under the applicable rules in force on this matter.

 

42. TAX AND OTHER CLAIMS

 

42.1. Tax claims

 

Note 43.1 to the consolidated Financial Statements describes the most relevant claims pending resolution and filed by the AFIP and the tax authorities of the relevant jurisdictions.

 

The Bank’s Management and its legal counsel consider no further significant accounting effects could arise from the final outcome of the abovementioned proceedings other than those disclosed in these separate Financial Statements.

 

42.2. Other claims

 

Note 43.2 to the consolidated Financial Statements describes the most relevant claims pending resolution and filed by the different consumers’ associations.

 

The Bank’s Management and its legal counsel consider no further significant accounting effects could arise from the final outcome of the above mentioned proceedings other than those disclosed in these separate Financial Statements.

 

- 161 -


 

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency)

 

43. RESTRICTION ON DIVIDENDS DISTRIBUTION

 

Note 44 to the consolidated Financial Statements describes the main legal provisions regulating the restriction on profit distribution.

 

As of December 31, 2022, the related adjustments to be made on unappropriated retained earnings of Banco Macro SA are as follows:

 

i. Other comprehensive income for 816,164.

ii. The positive net difference between the amortized cost and the fair value of government debt instruments and/or monetary regulation instruments issued by the BCRA for those instruments recognized at amortized cost for 6,145,736.

 

44. CAPITAL MANAGEMENT, CORPORATE GOVERNANCE TRANSPARENCY POLICY AND RISK MANAGEMENT

 

Note 45 to the consolidated Financial Statements describes the main guidelines of the Bank as to capital management, corporate governance transparency policy and risk management.

 

45. CHANGES IN THE ARGENTINE MACROECONOMIC ENVIRONMENT AND FINANCIAL AND CAPITAL MARKET

 

The international and domestic macroeconomics environments in which the Bank operates, and its impacts are described in note 46 to the consolidated Financial Statements.

 

46. EVENTS AFTER REPORTING PERIOD

 

No other significant events occurred between the end of the fiscal year and the issuance of these separate Financial Statements that may materially affect the financial position or the profit and loss for the fiscal year, not disclosed in these separate Financial Statements.

 

47. ACCOUNTING PRINCIPLES – EXPLANATION ADDED FOR TRANSLATION INTO ENGLISH

 

These separate Financial Statements are presented in accordance with the accounting framework established by the BCRA, as mentioned in note 3. These accounting standards may not conform to accounting principles generally accepted in other countries.

 

  - 162 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT A

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Holdings   Position  
        12/31/2022   12/31/2021   12/31/2022  
Name   Identification   Fair
Value
  Fair
value
level
  Book
amounts
  Book
amounts
  Position without options   Options   Final position  
DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS                                    
- Local                                    
Government securities                                    
Federal government bonds in dual currency at discount - Maturity: 07-21-2023     9146     1   58,644,665       58,644,665     58,644,665  
Federal government treasury bonds linked to dolar - Maturity: 04-28-2023     5928       1   56,988,590       56,988,590       56,988,590  
Federal government bonds in dual currency at discount - Maturity: 09-29-2023     9147       1   21,773,638       21,773,638       21,773,638  
Federal government bonds in dual at discount - Maturity: 06-30-2023     9145     1   20,540,723       20,540,723       20,540,723  
Federal government treasury bonds in pesos adjusted by CER - Maturity: 03-25-2023     5492       1   12,542,445   7,499,991   14,669,745       14,669,745  
Federal government bonds in dual at discount - Maturity: 02-28-2024     9156       1   11,476,239       11,476,239       11,476,239  
Federal government treasury bonds in pesos adjusted by CER - Maturity: 03-06-2023     5324       1   5,523,468   3,334,906   5,523,468       5,523,468  
Letters of National Estate in pesos adjusted by CER at discount - Maturity: 02-17-2023     9111       1   1,846,948       1,846,948       1,846,948  
Federal government treasury bonds in pesos adjusted by CER - Maturity: 06-19-2023     9127       1   1,814,052       1,814,052       1,814,052  
Federal government treasury bonds in pesos adjusted by CER - Maturity: 11-09-2026     5925       1   1,260,311   1,210,579   1,260,311       1,260,311  
Other                 3,293,957   40,899,587   3,293,957       3,293,957  
Subtotal local government securities                 195,705,036   52,945,063   197,832,336       197,832,336  
Private securities                                    
Corporate Bonds Tarjeta Naranja S.A. Class 53 Series 01- Maturity: 04-05-2023     56056       3   434,678       434,678       434,678  
Debt Securities in Financial Trusts Confibono             3   417,426       417,426       417,426  
Debt Securities in Financial Trusts Secubono             3   175,694   374,604   175,694       175,694  
Securities of companies of public services             3   4,066   5,756   4,066       4,066  
Corporate Bonds Tarjeta Naranja S.A. C048- Maturity: 04-26-2022     55317               1,050,971              
Corporate Bonds Ledesma S.A. Class 10- Maturity: 05-27-2022     55500               492,032              
Debt Securities in Financial Trusts Surcos                     251,996              
Subtotal local private securities                 1,031,864   2,175,359   1,031,864       1,031,864  
TOTAL DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS                 196,736,900   55,120,422   198,864,200       198,864,200  

 

  - 163 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT A

(continued)

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Holdings   Position  
        12/31/2022   12/31/2021   12/31/2022  
Name   Identification   Fair
Value
  Fair
value
level
  Book
amounts
  Book
amounts
  Position without options   Options   Final
position
 
OTHER  DEBT SECURITIES                                  
Measured at fair value through other comprehensive income                                  
- Local                                  
Government securities                                  
Letters of National Estate in pesos adjusted by CER at discount - Maturity: 02-17-2023   9111     1   44,938,818       44,938,818     44,938,818  
Federal government treasury bonds in pesos adjusted by CER - Maturity: 03-25-2023   5492       1   34,466,456   20,285,891   34,466,456       34,466,456  
Letters of National Estate in pesos adjusted by CER at discount - Maturity: 01-20-2023   9105       1   13,323,179       13,323,179       13,323,179  
Letters of National treasury in pesos at discount - Maturity: 02-28-2023   9141       1   11,565,021       11,565,021       11,565,021  
Letters of National treasury in pesos at discount - Maturity: 03-31-2023   9164       1   10,732,116       10,732,116       10,732,116  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 08-13-2023   5497       1   8,802,301   6,030,797   8,802,301       8,802,301  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 05-19-2023   9127       1   2,849,299       2,849,299       2,849,299  
Letters of National Estate in pesos at discount - Maturity: 04-28-2023   9142       1   1,406,688       1,406,688       1,406,688  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 03-06-2023   5324       1   1,354,629       1,354,629       1,354,629  
Bonds of treasury of federal government in pesos adjusted by CER - Maturity: 07-26-2024   5405       1   414,991       414,991       414,991  
Other               13,232   216,040,672   13,232       13,232  
Subtotal local government securities (1)               129,866,730   242,357,360   129,866,730       129,866,730  
Central Bank of Argentina Bills                                  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-04-2022                   41,921,012              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-27-2022                   36,776,261              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-18-2022                   36,305,152              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-11-2022                   34,527,730              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-13-2022                   34,092,263              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-25-2022                   32,241,669              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-06-2022                   30,950,258              
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-20-2022                   12,203,612              
Subtotal Central Bank of Argentina Bills                   259,017,957              
Total Other debt securities measured at fair value through  other comprehensive income               129,866,730   501,375,317   129,866,730       129,866,730  

 

(1) During January 2023, the Bank entered into a voluntary debt swap. The following instruments entered into that swap:

 

· Letters of National Estate in pesos adjusted at discount by CER – Maturity 02-17-2023 (X17F3) for a nominal amount of 20,900,000,000.

· Letters of National Estate in pesos at discount – Maturity 02-28-2023 (S28F3) for a nominal amount of 12,893,000,000.

 

  - 164 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT A

(continued)

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

      Holdings   Position  
        12/31/2022   12/31/2021   12/31/2022  
Name   Identification   Fair
Value
  Fair
value
level
  Book
amounts
  Book
amounts
  Position
without
options
  Options  

Final

 position

 
OTHER DEBT SECURITIES (continued)                                  
Measured at amortized cost                                  
- Local                                
Government securities                                  
Bonds of treasury of federal government in pesos - Maturity: 05-23-2027   9132   39,222,468   2   40,469,619       40,469,619       40,469,619  
Bonds of treasury of federal government in pesos Badlar x 0.7 - Maturity: 11-23-2027   9166   8,374,568   1   8,400,364       8,400,364       8,400,364  
Discount bonds denominated in pesos at 5.83% - Maturity: 12-31-2033   45696   657,742   1   507,009   517,875   507,009       507,009  
Debt securities of Province of Río Negro in pesos - Maturity: 04-12-2023   42534   203,896   2   200,378       200,378       200,378  
Treasury bills of Province of Río Negro Series 02 in pesos - Maturity: 06-15-2023   42555   198,801   1   199,044       199,044       199,044  
Bonds of treasury of federal government in pesos at 22% - Maturity: 05-21-2022   5496               44,306,545              
Treasury bills of Province of Neuquén Series 1 Class 1 - Maturity: 04-07-2022   42382               607,285              
Debt securities of Province of Río Negro in pesos - Maturity: 04-12-2022   42385               425,837              
Treasury bills of Province of Río Negro Series 2 Class 1 - Maturity: 06-15-2022   42479               377,125              
Treasury bills of Province of Neuquen Series 4 Class 1 in pesos - Maturity: 02-28-2022   42426               89,322              
Subtotal local government securities               49,776,414   46,323,989   49,776,414       49,776,414  
Central Bank of Argentina Bills                                  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-03-2023       62,002,563   1   62,250,767       62,250,767       62,250,767  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-24-2023       61,833,200   1   62,080,786       62,080,786       62,080,786  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-05-2023       61,755,250   1   62,003,011       62,003,011       62,003,011  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-26-2023       61,586,655   1   61,833,224       61,833,224       61,833,224  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-10-2023       61,020,500   1   61,386,248       61,386,248       61,386,248  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-12-2023       60,897,625   1   61,141,456       61,141,456       61,141,456  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-17-2023       60,292,313   1   60,533,736       60,533,736       60,533,736  
Liquidity letters of Central Bank of Argentina in pesos - Maturity: 01-19-2023       60,032,938   1   60,292,343       60,292,343       60,292,343  
Internal letters of BCRA exchange rate of reference to rate 0 - Maturity - Vto. 09-20-2023       3,610,530   2   3,796,524       3,796,524       3,796,524  
Internal letters of BCRA exchange rate of reference to rate 0 - Maturity - Vto. 09-22-2023       3,478,168   2   3,660,475       3,660,475       3,660,475  
Other               37,386,546       37,386,546       37,386,546  
Subtotal Central Bank of Argentina Bills               536,365,116       536,365,116       536,365,116  
Central Bank of Argentina Notes                                  
Liquidity notes of Central Bank of Argentina in pesos - Maturity: 01-04-2023       12,059,395   1   12,105,932       12,105,932       12,105,932  
Subtotal Central Bank of Argentina Notes               12,105,932       12,105,932       12,105,932  
Private securities                                  
Corporate Bonds Vista Energy Argentina SAU Class 013 -Maturity: 08-08-2024 (2)   56207   1,011,196   1   521,919       521,919       521,919  
Corporate Bonds Vista Oil y Gas Argentina SAU Class 015 -Maturity: 01-20-2025 (2)   56637   878,912   2   481,671       481,671       481,671  
Debt Securities in Financial Trusts  Confibono Series 065 Class A - Maturity: 07-20-2023   56428   116,458   2   116,483       116,483       116,483  
Debt Securities in Financial Trusts  Secubono Series 221 Class A - Maturity: 07-28-2023   56583   91,182   2   90,941       90,941       90,941  
Debt Securities in Financial Trusts  Secubono Series 222 Class A - Maturity: 08-28-2023   56660   60,975   3   75,880       75,880       75,880  
Corporate Bonds YPF SA Class 043 -Maturity: 10-21-2023   50939   38,684   2   34,863   108,511   34,863       34,863  
Debt Securities in Financial Trusts  Secubono Series 219 Class A - Maturity: 04-28-2023   56366   35,329   3   24,819       24,819       24,819  
Debt Securities in Financial Trusts Red Surcos Series 020 Class A - Maturity: 07-15-2022   55767               83,953              
Debt Securities in Financial Trusts  Secubono Series 209 Class A - Maturity: 05-30-2022   55616               60,149              
Corporate Bonds Santander Río Bank S.A. Class 021 -Maturity: 01-26-2022   53219               51,914              
Other                   210,017              
Subtotal local private securities               1,346,576   514,544   1,346,576       1,346,576  
Total Other debt securities measured at cost amortized               599,594,038   46,838,533   599,594,038       599,594,038  
TOTAL OTHER DEBT SECURITIES               729,460,768   548,213,850   729,460,768       729,460,768  

 

This fair value was obtained from price quotations in pesos.

 

  - 165 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

EXHIBIT A
(continued)
 
DETAIL OF GOVERNMENT AND PRIVATE SECURITIES
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

        Holdings     Position  
        12/31/2022     12/31/2021     12/31/2022  
Name   Identification   Fair
Value
    Fair
value
level
    Book
amounts
    Book
amounts
    Position
without
options
    Options     Final
position
 
Equity Instruments                                                        
Measured at fair value through profit or loss                                                        
- Local                                                        
Mercado Abierto Electrónico SA               3       462,536       400,992       462,536             462,536  
C.O.E.L.S.A               3       87,563       73,232       87,563             87,563  
Matba Rofex SA               3       58,306       61,161       58,306             58,306  
Sedesa               3       21,291       29,835       21,291             21,291  
AC Inversora SA               3       19,583       19,826       19,583             19,583  
Mercado a Término Rosario SA               3       14,627       14,442       14,627             14,627  
Provincanje SA               3       14,506       17,253       14,506             14,506  
Argencontrol SA               3       478       793       478             478  
San Juan Tennis Club SA               3       437       851       437             437  
Garantizar SGR               3       10       19       10             10  
Other                               3,490,224                        
Subtotal local                       679,337       4,108,628       679,337             679,337  
- Foreign                                                        
Banco Latinoamericano de Comercio Exterior SA               1       20,957       24,266       20,957             20,957  
Sociedad de Telecomunicaciones Financieras Interbancarias Mundiales               3       5,646       5,415       5,646             5,646  
Subtotal foreign                       26,603       29,681       26,603             26,603  
Total measured at fair value through profit or loss                       705,940       4,138,309       705,940             705,940  
TOTAL EQUITY INSTRUMENTS                       705,940       4,138,309       705,940             705,940  
TOTAL GOVERNMENT AND PRIVATE SECURITIES                       926,903,608       607,472,581       929,030,908             929,030,908  

 

- 166 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT B

 

CLASSIFICATION OF LOANS AND OTHER FINANCING
BY SITUATION AND COLLATERAL RECEIVED
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

COMMERCIAL   12/31/2022     12/31/2021  
In normal situation     110,649,544       164,569,197  
With senior “A” collateral and counter-collateral     14,400,986       22,331,788  
With senior “B” collateral and counter-collateral     18,362,596       31,494,559  
Without senior collateral or counter-collateral     77,885,962       110,742,850  
                 
Subject to special monitoring             4,151,452  
In observation                
With senior “A” collateral and counter-collateral             2,871  
With senior “B” collateral and counter-collateral             3,434,738  
Without senior collateral or counter-collateral             713,843  
                 
Troubled     1,400,613       1,459,517  
With senior “A” collateral and counter-collateral     71,834          
With senior “B” collateral and counter-collateral     925,521       214,487  
Without senior collateral or counter-collateral     403,258       1,245,030  
                 
With high risk of insolvency     806,278       224,904  
With senior “A” collateral and counter-collateral     87,077       196,727  
With senior “B” collateral and counter-collateral     594,265       13,431  
Without senior collateral or counter-collateral     124,936       14,746  
                 
Subtotal Commercial     112,856,435       170,405,070  

 

- 167 - Delfín Jorge Ezequiel Carballo
Chairperson

 

              EXHIBIT B

              (continued)

 

CLASSIFICATION OF LOANS AND OTHER FINANCING
BY SITUATION AND COLLATERAL RECEIVED
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

CONSUMER AND MORTGAGE   12/31/2022     12/31/2021  
Performing     495,262,163       532,302,833  
With senior “A” collateral and counter-collateral     32,546,090       37,210,683  
With senior “B” collateral and counter-collateral     29,571,729       45,245,051  
Without senior collateral or counter-collateral     433,144,344       449,847,099  
                 
Low risk     3,857,703       3,767,246  
With senior “A” collateral and counter-collateral     59,378       122,391  
With senior “B” collateral and counter-collateral     84,565       224,462  
Without senior collateral or counter-collateral     3,713,760       3,420,393  
                 
Low risk - in special treatment     29,386       121,389  
With senior “B” collateral and counter-collateral             39,833  
Without senior collateral or counter-collateral     29,386       81,556  
                 
Medium risk     2,642,620       2,825,822  
With senior “A” collateral and counter-collateral     18,388       17,964  
With senior “B” collateral and counter-collateral     68,202       116,648  
Without senior collateral or counter-collateral     2,556,030       2,691,210  
                 
High risk     2,012,771       3,236,432  
With senior “A” collateral and counter-collateral     22,707       41,261  
With senior “B” collateral and counter-collateral     78,242       219,598  
Without senior collateral or counter-collateral     1,911,822       2,975,573  
                 
Irrecoverable     898,582       1,528,819  
With senior “A” collateral and counter-collateral     30,675       37,369  
With senior “B” collateral and counter-collateral     142,725       372,094  
Without senior collateral or counter-collateral     725,182       1,119,356  
Subtotal consumer and mortgage     504,703,225       543,782,541  
Total     617,559,660       714,187,611  

 

- 168 - Delfín Jorge Ezequiel Carballo
Chairperson

 

              EXHIBIT B

              (continued)

 

CLASSIFICATION OF LOANS AND OTHER FINANCING
BY SITUATION AND COLLATERAL RECEIVED
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

This exhibit discloses the contractual figures as established by the BCRA. The reconciliation with the separated statement of financial position is listed below:

 

    12/31/2022     12/31/2021  
Loans and other financing     598,375,914       687,818,816  
Added:                
Allowances for loans and other financing     10,989,876       18,759,417  
Adjustment  amortized cost and fair value     1,687,107       2,200,184  
Debt securities of financial trust - Measured at amortized cost     308,364       347,130  
Corporate bonds     1,039,008       168,471  
Subtract:                
Interest and other accrued items receivable from financial assets with impaired credit value     (156,643 )     (192,613 )
Guarantees provided and contingent liabilities     5,316,034       5,086,206  
Total computable items     617,559,660       714,187,611  

 

- 169 - Delfín Jorge Ezequiel Carballo
Chairperson

 

  EXHIBIT C

 

CONCENTRATION OF LOANS AND FINANCING FACILITIES
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    12/31/2022     12/31/2021  
Number of customers   Cut off
balance
    % of total
portfolio
    Cut off
balance
    % of total
portfolio
 
10 largest customers     22,460,061       3.64       36,296,186       5.08  
50 next largest customers     40,393,012       6.54       58,470,029       8.19  
100 next largest customers     32,031,601       5.19       41,199,576       5.77  
Other customers     522,674,986       84.63       578,221,820       80.96  
Total (1)     617,559,660       100.00       714,187,611       100.00  

 

(1) See reconciliation in Exhibit B.

 

- 170 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

EXHIBIT D

 

BREAKDOWN OF LOANS AND OTHER FINANCING BY TERMS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Remaining terms to maturity        
Item   Matured     Up to 1
month
    Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to
12 months
    Over 12
months and
up to
24 months
    Over 24
months
    Total  
Non-financial government sector     108       1,354,472       574,763       104,041       186,988       292,711       172,905       2,685,988  
Financial sector             49,118       66,153       558,685       203,511       305,741       93,406       1,276,614  
Non-financial private sector and foreign residents     3,468,982       268,956,364       70,704,813       86,547,754       108,058,374       119,604,406       150,836,128       808,176,821  
Total     3,469,090       270,359,954       71,345,729       87,210,480       108,448,873       120,202,858       151,102,439       812,139,423  

 

BREAKDOWN OF LOANS AND OTHER FINANCING BY TERMS
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Remaining terms to maturity        
Item   Matured     Up to
1 month
    Over 1
month and
up to 3
months
    Over 3
months and
up to
6 months
    Over 6
months and
up to
12 months
    Over 12
months and
up to
24 months
    Over 24
months
    Total  
Non-financial government sector             451,655       1,215,393       948,547       2,397,187       930,619               5,943,401  
Financial sector             498,131       1,297,578       72,892       252,966       1,419,953       261,144       3,802,664  
Non-financial private sector and foreign residents     2,942,651       265,153,863       81,191,203       93,835,298       124,168,980       146,635,855       223,720,839       937,648,689  
Total     2,942,651       266,103,649       83,704,174       94,856,737       126,819,133       148,986,427       223,981,983       947,394,754  

 

This exhibit disclosures contractual future cash flows that include interests and charges to be accrued until maturity of the contracts.

 

  - 171 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT E

 

DETAILED INFORMATION ON INTERESTS IN OTHER COMPANIES

AS OF DECEMBER 31, 2022 AND 2021

  (Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                      Information of the issuer
    Shares of interest                     Data from latest Financial Statements
Name   Class     Unit
face
value
    Votes
per
share
    Number     Amount
12/31/2022
    Amount
12/31/2021
    Main business
activity
  Year-end
date /
Period
  Capital
stock
    Shareholders'
equity
    Income for
the year /
Period
 
In financial institutions                                                                                
- Subsidiaries Foreign                                                                                
                                                                                 
Macro Bank Limited     Common       1       1       39,816,899       4,959,505       5,784,763     Financial Institution   12-31-2022     86,501       4,959,505       191,219  
Subtotal foreign                                     4,959,505       5,784,763                                  
                                                                                 
Total in financial institutions subsidiaries                                     4,959,505       5,784,763                                  
                                                                                 
Total in financial institutions                                     4,959,505       5,784,763                                  
In complementary services companies                                                                                
- Subsidiaries                                                                                
Local                                                                                
Macro Securities SAU     Common       1       1       12,885,683       9,991,335       6,183,412     Brokerage house   12-31-2022     12,886       10,066,254       3,892,181  
Macro Fondos SGFCISA     Common       1       1       327,183       506,499       335,605     Management company of FCI   12-31-2022     1,713       2,753,057       2,199,818  
Macro Fiducia SAU     Common       1       1       47,387,236       192,765       230,547     Services   12-31-2022     47,387       193,698       1,002  
Argenpay SAU     Common       1       1       341,200,000       936,858       954,173     Services of electronic payments   12-31-2022     341,200       938,069       (557,720 )
Fintech SGR     Common       1       1       119,993       72,690       66,908     Mutual guarantee company   12-31-2022     480       112,240       66,342  
Subtotal local                                     11,700,147       7,770,645                                  
Total in complementary services subsidiary companies                                     11,700,147       7,770,645                                  
- Associates and joint ventures                                                                                
Local                                                                                
Uniones Transitorias de Empresas                                     642,743       530,143     Management of tax services                            
Play Digital SA     Common       1       1       193,604,736       422,959       333,052     Electronic, technological and computer services   09-30-2022     2,152,921       3,874,339       (2,875,476 )
Finova SA     Common       1       1       225,000       70,333       82,894     Informatics services   09-30-2022     450       42,658       (48,233 )
Subtotal local                                     1,136,035       946,089                                  
                                                                                 
Total in complementary services associates companies and join ventures                                     1,136,035       946,089                                  
Total in complementary services associates companies and join ventures                                     12,836,182       8,716,734                                  
                                                                                 
In other associates                                                                                
                                                                                 
- Associates and joint ventures                                                                                
Local                                                                                
Macro Warrants SA     Common       1       1       50,000       5,564       7,431     Issue of warrants   09-30-2022     1,000       111,278       (19,793 )
Subtotal local                                     5,564       7,431                                  
Total in other associates                                     5,564       7,431                                  
Total investments in other companies                                     17,801,251       14,508,928                                  

 

  - 172 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT F

 

CHANGE OF PROPERTY, PLANT AND EQUIPMENT

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
value at
beginning 
    Total life                        Depreciation for the fiscal year     Residual
value at
the end of 
 
Item   of fiscal
year
    estimated
in years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal year
    At the end     the fiscal
year
 
Cost                                                                  
Real property     93,362,070       50       595,519       122,169       1,368,237       9,384,580       (78,527 )     20,995       2,047,203       11,332,261       83,871,396  
Furniture and facilities     12,725,299       10       413,627       1,178       1,491,837       6,235,329       4       73       1,142,899       7,378,159       7,251,426  
Machinery and equipment     18,288,628       5       2,097,920       290       1,052,134       12,622,197       (1,535 )     66       2,688,300       15,308,896       6,129,496  
Vehicles     2,546,557       5       449,948       176,501       (9,208 )     2,095,982       (699 )     115,344       254,368       2,234,307       576,489  
Work in progress     3,089,819               2,709,731               (4,503,132 )                                             1,296,418  
Right of use real property     7,314,636       5       855,968       84,912               4,089,337               48,409       1,379,202       5,420,130       2,665,562  
Total property, plant and equipment     137,327,009               7,122,713       385,050       (600,132 )     34,427,425       (80,757 )     184,887       7,511,972       41,673,753       101,790,787  

 

CHANGE OF PROPERTY, PLANT AND EQUIPMENT

AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
value at
beginning 
    Total life                        Depreciation for the fiscal year     Residual
value at
the end of 
 
Item   of fiscal
year
    estimated
in years
    Increases     Decreases     Transfers(1)     Accumulated     Transfers(1)     Decrease     For the
fiscal year
    At the end     the fiscal
year
 
Cost                                                                  
Real property     89,603,312       50       581,468       170,251       3,347,541       7,337,992       191,404       21,520       1,876,704       9,384,580       83,977,490  
Furniture and facilities     11,535,939       10       363,798       2,824       828,386       5,153,924       261       948       1,082,092       6,235,329       6,489,970  
Machinery and equipment     16,111,673       5       1,242,178       52,257       987,034       10,130,556       (1,371 )     1,298       2,494,310       12,622,197       5,666,431  
Vehicles     2,448,098       5       237,035       144,842       6,266       2,010,732       348       126,745       211,647       2,095,982       450,575  
Work in progress     2,465,445               4,292,728             (3,668,354 )                                   3,089,819  
Right of use real property     6,069,007       5       1,230,063       15,713       31,279       2,625,818       1,423       8,363       1,470,459       4,089,337       3,225,299  
Total property, plant and equipment     128,233,474               7,947,270       385,887       1,532,152       27,259,022       192,065       158,874       7,135,212       34,427,425       102,899,584  

 

(1) During the fiscal year 2021, under this item transfers were made to Non-current assets held for sale.

 

  - 173 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT F

(Continued)

 

CHANGE IN INVESTMENT PROPERTY

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at
                            Depreciation for the fiscal year     Residual
value at
 
Item   beginning
of fiscal
year
    Useful life
estimated
in years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal
year
    At the end     the end of
the fiscal
year
 
Cost                                                                  
Leased properties     449,989       50       1,156               (54,526 )     16,256       38,437                      5,268       59,961       336,658  
Other investment properties     495,670       50       9,872,434       19,990       (2,688,777 )     38,545       (5,699 )           6,465       39,311       7,620,026  
Total investment property     945,659               9,873,590       19,990       (2,743,303 )     54,801       32,738             11,733       99,272       7,956,684  

 

CHANGE IN INVESTMENT PROPERTY
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at
                            Depreciation for the fiscal year     Residual
value at
 
Item   beginning
of fiscal
year
    Useful life
estimated
in years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal
year
    At the end     the end of
the fiscal
year
 
Cost                                                                  
Leased properties     647,497       50                     (197,508 )     106,305       (96,629 )                  6,580       16,256       433,733  
Other investment properties     1,856,029       50       5,543       45,417       (1,320,485 )     123,860       (94,776 )     7,571       17,032       38,545       457,125  
Total investment property     2,503,526               5,543       45,417       (1,517,993 )     230,165       (191,405 )     7,571       23,612       54,801       890,858  

 

(1) During the fiscal year 2022, under this item transfers were made to Non-current assets held for sale.

 

  - 174 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT G

 

CHANGE IN INTANGIBLE ASSETS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at 
                            Depreciation for the fiscal year     Residual
value at  
 
Item   beginning
of fiscal
year
    Useful life
estimated
in years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal
year
    At the end     the end of
the fiscal
year
 
Cost                                                                  
Licenses     9,760,068       5       1,311,705               89,994       5,970,420       3,376               1,842,469       7,816,265       3,345,502  
Other intangible assets     31,600,806       5       7,218,183       33,386       (79,756 )     19,068,239       (1,330 )     1,314       5,663,013       24,728,608       13,977,239  
Total intangible assets     41,360,874               8,529,888       33,386       10,238       25,038,659       2,046       1,314       7,505,482       32,544,873       17,322,741  

 

CHANGE IN INTANGIBLE ASSETS
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Original
Value at 
                            Depreciation for the fiscal year     Residual
value at  
 
Item   beginning
of fiscal
year
    Useful life
estimated
in years
    Increases     Decreases     Transfers     Accumulated     Transfers     Decrease     For the
fiscal
year
    At the end     the end of
the fiscal
year
 
Cost                                                                                             
Licenses     8,084,142       5       1,695,543               (19,617 )     4,193,712       (660 )             1,777,368       5,970,420       3,789,648  
Other intangible assets     25,340,646       5       6,260,299       139               14,229,054                       4,839,185       19,068,239       12,532,567  
Total intangible assets     33,424,788               7,955,842       139       (19,617 )     18,422,766       (660 )             6,616,553       25,038,659       16,322,215  

 

  - 175 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

 

EXHIBIT H 

 

DEPOSIT CONCENTRATION

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

  

    12/31/2022     12/31/2021  
Number of customers   Outstanding
balance
    % of total
portfolio
    Outstanding
balance
    % of total
portfolio
 
10 largest customers     153,647,145       11.93       89,303,162       7.84  
50 next largest customers     133,766,370       10.39       70,276,986       6.17  
100 next largest customers     62,255,164       4.83       44,088,955       3.87  
Other customers     938,221,265       72.85       935,991,375       82.12  
Total     1,287,889,944       100.00       1,139,660,478       100.00  

 

  - 176 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT I

 

BREAKDOWN OF FINANCIAL LIABILITIES FOR RESIDUAL TERMS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

  

    Remaining terms to maturity        
Item   Up to 1 month     Over 1
month and
up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Over 12
months and
up to 24
months
    Over 24
months
    Total  
Deposits     1,179,327,347       113,538,635       19,753,491       1,902,154       12,295       36,840       1,314,570,762  
From the non-financial government sector     107,790,689       3,384,960       1,019,697       4,497                       112,199,843  
From the financial sector     1,653,447                                               1,653,447  
From the non-financial private sector and foreign residents     1,069,883,211       110,153,675       18,733,794       1,897,657       12,295       36,840       1,200,717,472  
Derivative instruments     1,715       656                                       2,371  
Other financial liabilities     110,595,810       422,899       382,928       735,744       1,225,622       2,830,997       116,194,000  
Financing received from the Central Bank of Argentina and other financial institutions     291,911       517,458       1,616,892       44,969                       2,471,230  
Issued corporate bonds             11,005       10,646       22,010       3,032,952               3,076,613  
Subordinated corporate bonds                     2,353,327       2,353,327       4,706,653       80,264,626       89,677,933  
Total     1,290,216,783       114,490,653       24,117,284       5,058,204       8,977,522       83,132,463       1,525,992,909  

 

This exhibit discloses contractual future cash flows that include interests and charges to be accrued until maturity of the contracts.

 

  - 177 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT I

 

BREAKDOWN OF FINANCIAL LIABILITIES FOR RESIDUAL TERMS

AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Remaining terms to maturity        
Item   Up to 1 month     Over 1 month
and up to 3
months
    Over 3
months and
up to 6
months
    Over 6
months and
up to 12
months
    Over 12
months and
up to 24
months
    Over 24
months
    Total  
Deposits     1,033,618,626       101,780,527       12,548,302       1,071,555       84,281       2,462       1,149,105,753  
From the non-financial government sector     104,125,831       4,116,058       2,304,904       5,076                       110,551,869  
From the financial sector     1,872,336                                               1,872,336  
From the non-financial private sector and foreign residents     927,620,459       97,664,469       10,243,398       1,066,479       84,281       2,462       1,036,681,548  
Derivative instruments                     4,933                               4,933  
Other financial liabilities     112,142,980       339,645       302,629       496,890       732,165       969,392       114,983,701  
Financing received from the Central Bank of Argentina and other financial institutions     457,832       356,378       26,334       16,203       11,150               867,897  
Issued corporate bonds                     6,120,392                               6,120,392  
Subordinated corporate bonds                     2,659,192       2,659,194       5,318,386       96,015,155       106,651,927  
Total     1,146,219,438       102,476,550       21,661,782       4,243,842       6,145,982       96,987,009       1,377,734,603  

 

This exhibit discloses contractual future cash flows that include interests and charges to be accrued until maturity of the contracts.

 

  - 178 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT J

 

CHANGES IN PROVISIONS

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

  

    Amounts at
beginning of
          Decreases     Monetary effects
generated by
       
Item   fiscal year     Increases     Reversals     Charge off     provisions     12/31/2022  
Provisions for eventual commitments     648,549       521,115                       (483,140 )     686,524  
For administrative, disciplinary and criminal penalties     972                               (472 )     500  
Other     2,532,257       2,360,517               1,173,534       (1,703,429 )     2,015,811  
Total Provisions     3,181,778       2,881,632                  1,173,534       (2,187,041 )     2,702,835  

 

CHANGES IN PROVISIONS
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Amounts at
beginning of
          Decreases     Monetary effects
generated by
       
Item   fiscal year     Increases     Reversals     Charge off     provisions     12/31/2021  
Provisions for eventual commitments     50,593       704,339               2,476       (103,907 )     648,549  
For administrative, disciplinary and criminal penalties     2,112       81,094       491       80,987       (756 )     972  
Other     3,782,909       2,836,625               2,923,633       (1,163,644 )     2,532,257  
Total Provisions     3,835,614       3,622,058       491       3,007,096       (1,268,307 )     3,181,778  

 

  - 179 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT K

 

COMPOSITION OF CAPITAL STOCK

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

  

Shares   Capital Stock  
Class   Stock number     Face
value
    Votes per
share
    Issued
outstanding
    Paid in  
Registered common stock A     11,235,670       1       5       11,236       11,236  
Registered common stock B     628,177,738       1       1       628,177       628,177  
Total     639,413,408                       639,413       639,413  

 

COMPOSITION OF CAPITAL STOCK

AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

 

Shares   Capital Stock  
Class   Stock number     Face
value
    Votes per
share
    Issued
outstanding
    Paid in  
Registered common stock A     11,235,670       1       5       11,236       11,236  
Registered common stock B     628,177,738       1       1       628,177       628,177  
Total     639,413,408                       639,413       639,413  

 

  - 180 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

EXHIBIT L

 

FOREIGN CURRENCY AMOUNTS
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    12/31/2022     12/31/2021  
    Total parent
company and
    Total per currency        
Items   local branches      US dollar     Euro     Real     Other     Total  
Assets                                    
Cash and deposits in banks     200,557,826       199,395,450       715,714       39,623       407,039       228,933,093  
Debt securities at fair value through profit or loss     169,514,773       169,514,773                               105,261  
Other financial assets     13,177,939       13,177,440       499                       10,879,820  
Loans and other financing     34,202,754       34,202,754                               28,832,545  
From the non-financial private sector and foreign residents     34,202,754       34,202,754                               28,832,545  
Other debt securities     45,851,095       45,851,095                               57,122,492  
Financial assets delivered as guarantee     4,388,959       4,388,959                               3,971,220  
Equity instruments at fair value through profit or loss     26,603       26,603                               29,681  
Investments in subsidiaries, associates and joint ventures     4,959,505       4,959,505                               5,784,763  
Total assets     472,679,454       471,516,579       716,213       39,623       407,039       335,658,875  
Liabilities                                                
Deposits     163,018,828       163,018,828                               179,636,165  
Non-financial government sector     6,163,095       6,163,095                               14,953,269  
Financial sector     1,399,299       1,399,299                               1,481,552  
Non-financial private sector and foreign residents     155,456,434       155,456,434                               163,201,344  
Other financial liabilities     7,900,439       7,703,468       175,733               21,238       9,317,297  
Financing from the Central Bank and other financial institutions     2,397,166       2,397,166                               538,425  
Issued corporate bonds     3,003,738       3,003,738                                  
Subordinated corporate bonds     72,274,386       72,274,386                               81,844,664  
Other non-financial liabilities     14,188       14,188                               15,253  
Total liabilities     248,608,745       248,411,774       175,733               21,238       271,351,804  

 

  - 181 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT N

CREDIT ASSISTANCE TO RELATED PARTIES

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    In normal    

Troubled /
Medium risk

             
Item   situation     Matured     12/31/2022     12/31/2021  
Loans and other financing                                
Overdrafts     330,382       6       330,388       689,480  
Without senior collateral or counter-collateral     330,382       6       330,388       689,480  
Documents                             55,596  
With senior “A” collateral and counter-collateral                             5,421  
Without senior collateral or counter-collateral                             50,175  
Mortgage and pledge     514,164               514,164       449,150  
With senior “B” collateral and counter-collateral     223,888               223,888       189,972  
Without senior collateral or counter-collateral     290,276               290,276       259,178  
Personal     3,100               3,100       3,497  
Without senior collateral or counter-collateral     3,100               3,100       3,497  
Credit cards     250,142               250,142       277,222  
With senior “A” collateral and counter-collateral                             310  
Without senior collateral or counter-collateral     250,142               250,142       276,912  
Other     3,634,566               3,634,566       7,364,545  
With senior “A” collateral and counter-collateral                             10,682  
With senior “B” collateral and counter-collateral     56,412               56,412       44,935  
Without senior collateral or counter-collateral     3,578,154               3,578,154       7,308,928  
                                 
Total loans and other financial     4,732,354       6       4,732,360       8,839,490  
Eventual commitments     8,805               8,805       267,597  
Total     4,741,159       6       4,741,165       9,107,087  
Allowances     55,787       4       55,791       127,562  

 

  - 182 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT O

 

DERIVATIVE FINANCIAL INSTRUMENTS
AS OF DECEMBER 31, 2022
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Type of
contract
  Purpose of
the
transactions
performed
  Underlying
asset
  Type of
settlement
  Negotiation
environment or
counter-party
  Originally
agreed
weighted
  average
term
(months)
    Residual
weighted
average
term
(months)
    Weighted
daily
average
term
settlement
of
differences
(days)
    Amount (1)  
Futures (2)   Intermediation
- own account
  Foreign
currency
  Daily settlement of differences   ROFEX (over-the-counter electronic market)     4       4       1       12,642,710  
Forward (2)   Intermediation
- own account
  Foreign
currency
  Maturity settlement of differences   Over The Counter  - Residents in Argentina - Non financial sector     5       2       30       1,632,334  
Repo transactions   Intermediation
- own account
  Local government securities   With delivery of underlying asset   Other countries of local     1       1               68,130,397  
Options   Intermediation
- own account
  Other   With delivery of underlying asset   Over The Counter  - Residents in Argentina - Non financial sector     30       21               2,458,718  

 

(1) Related to the valuation of the underlying traded, disclosed in absolute values.

 

(2) Related to compensated operations forward (OCT).

 

  - 183 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT P
 
CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2022
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Amortized     Fair value     Fair value
through P/L
Obligatory
    Fair value hierarchy  
Item   cost     through OCI     measurement     Level 1     Level 2     Level 3  
Financial assets                                                
Cash and deposits in banks                                                
Cash     27,611,519                                          
Financial institutions     212,388,708                                          
Other     12,118                                          
Debt securities at fair value through profit or loss                     196,736,900       195,705,036               1,031,864  
Derivative financial instruments                     42,899       19,193       23,706          
Repo transactions                                                
BCRA     61,929,317                                          
Other financial assets     43,211,490               49,415                       49,415  
Loans and other financing                                                
To the non-financial government sector     2,206,935                                          
Other financial institutions (1)     927,336                                          
To the non financial private sector and foreign residents                                                
Overdrafts     49,233,372                                          
Documents     81,100,874                                          
Mortgage loans     61,905,907                                          
Pledge loans     9,581,277                                          
Personal loans     142,529,651                                          
Credit cards     190,779,144                                          
Financial leases     1,386,801                                          
Other (1)     58,724,617                                          
Other debt securities     599,594,038       129,866,730               129,866,730                  
Financial assets delivered as guarantee     30,096,021                                          
Investments in equity instruments                     705,940       20,957               684,983  
Total Financial Assets     1,573,219,125       129,866,730       197,535,154       325,611,916       23,706       1,766,262  

 

(1) Includes totals provisions of sector.

 

  - 184 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT P
 (continued)
 
CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2022
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

              Fair value
through P/L
     
          Fair value     Obligatory     Fair value hierarchy  
Item   Amortized cost     through OCI      measurement     Level 1     Level 2     Level 3  
Financial liabilities                                                
Deposits                                                
From the non-financial government sector     109,952,253                                          
From the financial sector     1,653,447                                          
From the non-financial private sector and foreign residents                                                
Checking accounts     149,669,947                                          
Savings accounts     422,308,756                                          
Time deposits and Investment accounts     568,401,965                                          
Other     35,903,576                                          
Derivative financial instruments                     2,371       2,371                  
Other financial liabilities     114,905,708                                          
Financing received from Central Bank and other financial institutions     2,448,871                                          
Issued corporate bonds     3,003,738                                          
Subordinated corporate bonds     72,274,386                                          
Total Financial Liabilities     1,480,522,647                      2,371       2,371                         

 

  - 185 - Delfín Jorge Ezequiel Carballo
Chairperson

 

 

        EXHIBIT P
         
CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Fair value
through P/L
    Fair value hierarchy  
Item   Amortized
cost
    Fair value
through OCI
    Obligatory
measurement
    Level 1     Level 2     Level 3  
Financial assets                                                
Cash and deposits in banks                                                
Cash     51,860,984                                        
Financial institutions     275,045,306                                        
Other     12,519                                        
Debt securities at fair value through profit or loss                   55,120,422       52,945,063               2,175,359  
Derivative financial instruments                   2,524       771       1,753        
Repo transactions                                          
BCRA     61,176,357                                      
Other financial assets     50,746,847               60,427                       60,427  
Loans and other financing                                              
To the non-financial government sector     4,628,306                                          
Other financial institutions (1)     2,941,876                                          
To the non financial private sector and foreign residents                                              
Overdrafts     47,465,357                                          
Documents     82,408,943                                          
Mortgage loans     81,213,071                                          
Pledge loans     14,727,607                                          
Personal loans     190,678,438                                          
Credit cards     184,981,594                                          
Financial leases     931,091                                          
Other (1)     77,842,533                                          
Other debt securities     46,838,533       501,375,317               274,599,027       226,776,290          
Financial assets delivered as guarantee     34,470,761                                        
Investments in equity instruments                   4,138,309       24,267               4,114,042  
Total Financial Assets     1,207,970,123       501,375,317       59,321,682       327,569,128       226,778,043       6,349,828  

 

(1) Includes totals provisions of sector.

 

  - 186 - Delfín Jorge Ezequiel Carballo
Chairperson

 

        EXHIBIT P
         (continued)
         
CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

                Fair value
through P/L
    Fair value hierarchy  
Item   Amortized
cost
    Fair value
through OCI
    Obligatory
measurement
    Level 1     Level 2     Level 3  
Financial liabilities                                                
Deposits                                                
From the non-financial government sector     109,868,280                                          
From the financial sector     1,872,336                                          
From the non-financial private sector and foreign residents                                                
Checking accounts     187,256,260                                          
Savings accounts     363,243,763                                          
Time deposits and Investment accounts     446,801,428                                          
Other     30,618,411                                          
Derivative financial instruments                     4,933               4,933          
Other financial liabilities     114,974,304                                          
Financing received from Central Bank and other financial institutions     852,127                                          
Issued corporate bonds     5,825,893                                          
Subordinated corporate bonds     81,844,664                                          
Total Financial Liabilities     1,343,157,466               4,933               4,933          

 

  - 187 - Delfín Jorge Ezequiel Carballo
Chairperson

 

  EXHIBIT Q
   
BREAKDOWN OF STATEMENT OF INCOME
AS OF DECEMBER 31, 2022 AND 2021
(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

    Net financial Income/(Loss)  
    Mandatory measurement  
Items   12/31/2022     12/31/2021  
For measurement of financial assets at fair value through profit or loss                
Gain from government securities     32,908,643       34,786,176  
Gain from private securities     737,035       686,775  
Gain from derivative financial instruments            
Forward transactions     752,927        
Loss from other financial assets     (40,622 )     (31,121 )
Gain from equity instruments at fair value through profit or loss     1,551,421       301,958  
Gain from sales or decreases of financial assets at fair value (1)     2,235,092       1,304,746  
For measurement of financial liabilities at fair value through profit or loss            
Loss from derivative financial instruments            
Forward transactions           (182,453 )
Total     38,144,496       36,866,081  

 

(1) Net amount of reclassifications to profit of instruments classified at fair value through other comprehensive income that were derecognized or charged during the fiscal year.

 

  - 188 - Delfín Jorge Ezequiel Carballo
Chairperson

 

  EXHIBIT Q

  (Continued)

 

BREAKDOWN OF STATEMENT OF INCOME

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

  Net financial income/(Loss)  
Interest and adjustment for the application of the effective interest rate of financial assets measured at amortized cost   12/31/2022     12/31/2021  
Interest income                
for cash and bank deposits     400,116       25,671  
for government securities     208,959,332       14,675,565  
for private securities     193,000       589,973  
for loans and other financing                
Non-financial public sector     1,513,955       3,536,708  
Financial sector     535,913       1,316,785  
Non-financial private sector                
     Overdrafts     25,399,139       15,724,479  
     Documents     25,572,829       18,258,697  
     Mortgage loans     37,615,857       29,769,779  
     Pledge loans     2,976,314       2,071,559  
     Personal loans     89,374,385       93,771,253  
     Credit cards     40,706,936       28,395,069  
     Financial leases     344,665       164,409  
     Other     26,883,876       30,173,720  
for repo transactions                
Central Bank of Argentina     12,635,845       16,524,973  
Other financial institutions     648,984       102,614  
Total     473,761,146       255,101,254  
Interest expenses                
for Deposits                
Non-financial Private sector                
Checking accounts     (15,477,783 )     (2,563,967 )
Saving accounts     (3,807,897 )     (2,409,161 )
Time deposits and investments accounts     (280,598,419 )     (169,981,631 )
for financing received from Central Bank of Argentina and other financial institutions     (505,837 )     (304,567 )
for repo transactions                
Other financial institutions     (975,643 )     (573,796 )
for other financial liabilities     (93,818 )     (41,779 )
for issued corporate bonds     (259,358 )     (1,679,267 )
for other subordinated corporate bonds     (4,628,154 )     (6,321,129 )
Total     (306,346,909 )     (183,875,297 )

 

  - 189 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT Q

(Continued)

 

BREAKDOWN OF STATEMENT OF INCOME

AS OF DECEMBER 31, 2022 AND 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

Interest and adjustment for the application of the
effective interest rate of financial assets measured at fair
  Income of the
fiscal year
    Other
comprehensive
income
    Income of the
fiscal year
    Other
comprehensive
income
 
value through other comprehensive income   12/31/2022     12/31/2022     12/31/2021     12/31/2021  
for debt government securities     138,144,192       (2,780,142 )     183,460,212       1,312,537  
Total     138,144,192       (2,780,142 )     183,460,212       1,312,537  

 

    Income of the fiscal year  
Items   12/31/2022     12/31/2021  
Commissions income                
Commissions related to obligations     42,578,518       39,656,048  
Commissions related to credits     423,581       317,795  
Commissions related to loans commitments and financial guarantees     10,385       11,711  
Commissions related to securities value     610,305       552,621  
Commissions to credit cards     25,186,364       24,313,013  
Commissions to insurances     4,226,128       4,450,781  
Commissions related to trading and foreign exchange transactions     1,586,074       1,777,504  
Total     74,621,355       71,079,473  
Commissions expenses                
Commissions related to trading with debt securities     (1 )        
Commissions related to trading and foreign exchange transactions     (249,774 )     (298,075 )
Other                
Commissions paid ATM exchange     (3,795,993 )     (3,940,669 )
Checkbooks commissions and clearing houses     (1,385,594 )     (1,231,636 )
Credit cards and foreign trade commissions     (714,174 )     (717,934 )
Total     (6,145,536 )     (6,188,314 )

 

 
- 190 - Delfín Jorge Ezequiel Carballo
Chairperson

 

EXHIBIT R

 

VALUE ADJUSTMENT FOR CREDIT LOSSES - ALLOWANCES FOR UNCOLLECTIBILITY RISK

AS OF DECEMBER 31, 2022

(Translation of the Financial Statements originally issued in Spanish – See Note 47)

(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Movements between stages of the fiscal year              
                ECL of remanent life of financial asset              
Item   Amounts at
beginning
of the fiscal
year
    ECL of the next
12 months
    Financial
instruments with
a significant
increase in credit
risk
    Financial
instruments
with
impairment
    Monetary effect
generated by
provisions
    12/31/2022  
Other financial assets     51,518       83,398                       (43,875 )     91,041  
Loans and other financing     18,759,417       2,353,232       (2,457,152 )     1,334,983       (9,000,604 )     10,989,876  
Other financial institutions     7,111       4,355                       (3,325 )     8,141  
To the non-financial private sector and foreign residents                                                
Overdrafts     1,379,210       263,130       4,475       (555,527 )     (564,556 )     526,732  
Documents     1,873,117       (36,800 )     (457,508 )     19,672       (837,807 )     560,674  
Mortgage loans     3,892,318       283,428       (2,423,987 )     853,110       (1,410,953 )     1,193,916  
Pledge loans     240,677       93,647       (17,479 )     (13,082 )     (114,124 )     189,639  
Personal loans     4,831,973       993,152       528,409       547,543       (2,753,411 )     4,147,666  
Credit cards     3,146,400       664,224       532,864       319,120       (1,896,823 )     2,765,785  
Financial leases     28,477       13,196       36       (4,696 )     (15,377 )     21,636  
Other     3,360,134       74,900       (623,962 )     168,843       (1,404,228 )     1,575,687  
Eventual commitments     648,549       424,385       95,930               (482,340 )     686,524  
Other debt securities     1,057       387                       (648 )     796  
Total allowances     19,460,541       2,861,402       (2,361,222 )     1,334,983       (9,527,467 )     11,768,237  

 

VALUE ADJUSTMENT FOR CREDIT LOSSES - ALLOWANCES FOR UNCOLLECTIBILITY RISK

AS OF DECEMBER 31, 2021

(Translation of the Financial Statements originally issued in Spanish – See Note 47)
(Figures stated in thousands of pesos in constant currency as of December 31, 2022)

 

          Movements between stages for the fiscal year              
                ECL of remanent life of financial asset              
Item   Amounts at
beginning of
the fiscal
year
    ECL of the next 12
months
    Financial
instruments with
a significant
increase in credit
risk
    Financial
instruments
with
impairment
    Monetary effect
generated by
provisions
    12/31/2021  
Other financial assets     55,651       17,093                       (21,226 )     51,518  
Loans and other financing     29,472,082       (4,751,539 )     988,051       2,782,390       (9,731,567 )     18,759,417  
Other financial institutions     48,844       (30,322 )                     (11,411 )     7,111  
To the non-financial private sector and foreign residents                                                
Overdrafts     2,016,222       236,806       133,387       (508,956 )     (498,249 )     1,379,210  
Documents     1,571,917       509,591       350,713       14,226       (573,330 )     1,873,117  
Mortgage loans     2,213,852       96,637       2,097,718       353,688       (869,577 )     3,892,318  
Pledge loans     395,007       (5,495 )     (77,549 )     66,956       (138,242 )     240,677  
Personal loans     8,367,154       (1,610,238 )     (648,480 )     2,110,841       (3,387,304 )     4,831,973  
Credit cards     9,964,088       (3,449,300 )     (1,518,902 )     879,522       (2,729,008 )     3,146,400  
Financial leases     29,542       19,834       (8 )     (12,572 )     (8,319 )     28,477  
Other     4,865,456       (519,052 )     651,172       (121,315 )     (1,516,127 )     3,360,134  
Eventual commitments     50,593       600,419       88,726               (91,189 )     648,549  
Other debts securities     3,949       (2,108 )                     (784 )     1,057  
Total allowances     29,582,275       (4,136,135 )     1,076,777       2,782,390       (9,844,766 )     19,460,541  

 

 
- 191 - Delfín Jorge Ezequiel Carballo
Chairperson

  

EARNING DISTRIBUTION PROPOSAL

FOR THE FISCAL YEAR

ENDED DECEMBER 31, 2022

(Translation of Financial Statements originally issued in Spanish - See Note 48 to the consolidated Financial Statements)

(Figures stated in thousands of pesos)

 

UNAPPROPRIATED RETAINED EARNINGS (1)     203,171,939  
To legal retained reserve     (8,607,704 )
Adjustments (Point 2.3. of BCRA rules regarding "Earnings distribution") (2)     (6,145,736 )
SUBTOTAL 1     188,418,499  
Adjustments (Point 2.1. of BCRA rules regarding “Earnings distribution") (2)     (816,164 )
SUBTOTAL 2     187,602,335  
         
DISTRIBUTABLE AMOUNT (3)     187,602,335  

 

(1) Includes normative reserve for future distribution of earnings amounting to 159,996,814 (See aditionally Note 34).
(2) See note 43 to the Separate Financial Statements.
(3) The earnings distribution will be admitted, provided that the minimum cash requirement, on average (in pesos or foreign currency) is lower be shorter than the closing date position or the projected one, considering the earnings distribution effects.

 

The Board of Directors will evaluate in due time the proposed use to be given to profit, which shall be submitted for Shareholders’ Meeting consideration.

 

Daniel H. Violatti Gustavo A. Manriquez Delfín Jorge
Accounting General management Ezequiel Carballo
Manager   Chairperson

 

 
- 192 - Delfín Jorge Ezequiel Carballo
Chairperson

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

Date: May 24, 2023

 

 

  MACRO BANK INC.  
       
       
  By: /s/ Jorge F. Scarinci  
  Name: Jorge F. Scarinci  
  Title: Chief Financial Officer