Prepared remarks
Good morning, and welcome to Banco Macro's Second Quarter 26 Earnings Conference Call.
Thank you all for joining us today. Banco Macro's second quarter earnings release was distributed yesterday and it is available on our Investor Relations website. For this quarter's call, we are also introducing an earnings call presentation which will accompany today's remarks. The presentation will be available on our website following the call. Please note that this call may include forward-looking statements and please refer to our SEC filings for further information. All figures discussed today are in Argentine pesos and have been restated in terms of the measuring unit current at the end of the reporting period, in accordance with Central Bank regulations. With that, let me briefly introduce today's speakers. We have with us today Juan Martin Parma, Chief Executive Officer of Banco Macro; Jorge Francisco Scarinci, Chief Financial Officer of Banco Macro; and myself, Nicolas Torres, Investor Relations from Banco Macro. I will then briefly comment on the second quarter 26 macro context before moving on to the bank's second quarter 26 financial performance. Economic activity moderated after the first quarter with April and May economic activity averaging 0.8% below the first quarter of 26. Agriculture and mining offset weakness in manufacturing and commerce. Inflation declined throughout the quarter from 2.6% in April to 1.9% in June. Nominal rates declined from 26.3% at the end of March to 22.7% at the end of June. The exchange rate: the peso depreciated 7.3% during the quarter, remaining stable throughout April and May before weakening in June. On credit, growth remained muted. Finally, systemic quality remained under pressure. System NPLs increased from 7.2% in March to 7.7% in May, which is the latest available data, with household delinquency at 12.8% versus 3.5% for corporates. Coverage declined from 109.1% to 86.3%. Turning to our main figures. Starting on the left, second quarter net income totaled ARS 2.8 billion, increasing 39% quarter on quarter and 4% year on year. The improvement was mainly driven by higher results from financial instruments at fair value through P&L, lower loan loss provisions, and a smaller loss from the net monetary position. Net operating income before administrative expenses reached ARS 1.29 trillion, down 2% quarter on quarter and up 1% year on year. Operating income after administrative expenses was ARS 603.8 billion, down 1% quarter on quarter and up 1% year on year. Moving to the left-hand side, adjusted net income reached ARS 221 million, in line with plan, and adjusted annualized ROE of 14.3%. This excludes ARS 14.2 billion in after-tax restructuring expenses, in line with the restructuring impact that we saw in the first quarter. On efficiency, our efficiency ratio was 33.9%, stable year on year; we continue to execute on the balanced efficiency transformation. Finally, our reported NPL ratio was 6.25% as of June 2026. This remained below the 7.7% reported for the system as of May 2026, while our coverage ratio stood at 95.4%, above the market's 86.3% as of May. Before moving on to the detailed financial performance, let's review the main highlights of the quarter. First, we delivered double-digit net income growth with net income up 39% quarter on quarter to ARS 206.8 billion. This result represents an annual ROE of 13.4%; adjusted ROE is 14.3%, up 4.4 percentage points from the last quarter. Second, margins remained stable. Net interest income remained stable, while deposits continued to represent 76% of liabilities. The average cost of interest-bearing liabilities fell below 20%. Third, we continue executing on efficiency, including another 18 branch closures during the quarter. The after-tax restructuring charges remained almost unchanged quarter over quarter at ARS 14 billion. Fourth, asset quality continued to outperform the system with NPLs at 6.25% below the system at 7.7% and, moreover, coverage stood at 95.4% above the system at 86.3%. Fifth, lending growth remained challenging. Total lending increased 3% quarter on quarter supported by commercial growth, while on a yearly basis total financing decreased 5%. Our private sector loan market share remained stable at 8.2%. And sixth, our balance sheet remained strong with a Tier 1 ratio of 28% and ample liquidity — both fundamental for future growth and strategic opportunities. Now let's turn to the quarter-over-quarter P&L operations breakdown. Net income increased ARS 57 billion quarter on quarter due to higher income from government securities at fair value through profit or loss, lower loan loss provisions, and a lower loss from the net monetary position. Net interest income decreased 1% or ARS 7.4 billion quarter on quarter as lower funding costs mostly offset lower loan yields and average lending volumes. Income from securities decreased 18% to ARS 30.5 million quarter on quarter; in the first quarter of 26, a ARS 71 million one-off result from the sale of bonds was recorded. Net fee income decreased 2% to ARS 4.6 million in the quarter as higher mutual funds and securities fees were offset by lower debit card fees as well as lower covered services fees. Loan loss provisions decreased 24% or ARS 60.7 billion in the quarter, mainly reflecting lower commercial delinquency while keeping coverage at an adequate level. Personnel and administrative expenses increased ARS 26.6 million led by personnel, marketing, and logistics costs as we progress in achieving structural efficiency. The other major positive driver of the quarter was the result from the net monetary position: that loss was ARS 102.1 billion smaller than the first quarter, reflecting the decline in domestic inflation. Finally, income tax and other items contributed ARS 7 billion to the quarter-on-quarter value efficiency. Lower other operating expenses more than offset the higher income tax rates registered in the quarter. All of these factors explained the increase in reported ROE from 10% in the first quarter to 13.4% in the second quarter. Slide 8 shows the impact of the restructuring program on reported profitability. Reported net income was ARS 206.8 million during the quarter; we recorded ARS 14.2 million of restructuring charges, related mainly to early retirement plans and certain severance provisions. Excluding these charges, adjusted net income would have reached ARS 221 million in line with plan, an adjusted annualized ROE of 14.3% and adjusted ROE of 3.5%. These expenses are part of the efficiency program we have been implementing to create a more agile operating model and a lower structural cost base. Moving to our second quarter 26 assets and liabilities performance. You can see the evolution of our balance sheet mix and pricing of both assets and liabilities. On the asset side, loans increased 3% at quarter end and represent 45% of total assets. Government securities make up 25% of our assets. Asset yield declined 280 basis points quarter on quarter from 44% to 41% in the second quarter. The 27 basis points decline in average lending rate and the average volume levels decreased 3%. On the liability side, deposits continue to represent 76% of total liabilities. Total deposits reached ARS 14.7 trillion, down 1% quarter on quarter and up 4% year on year. Funding costs declined 550 basis points quarter on quarter from 24% to 19% due to a 310 basis points decline in the average rate paid on deposits while the average volume of deposits decreased 3%. Funding costs declined faster than the asset yield driven by lower private sector peso rates. Turning to Slide 10, the gross credit portfolio shown on the left, we have seen growth of ARS 212.6 billion, increasing 3% quarter on quarter. Commercial lending was the main driver of the increase, while consumer lending grew more moderately and represented 71% of the gross portfolio at quarter end, compared with 29% for commercial loans. Loans and other financing reached ARS 11.7 trillion with private sector financing up 3% quarter on quarter, including 2% growth in peso lending and 1% growth in U.S. dollar lending, while our private sector loan market share remains stable at 8.2%. On the right-hand side, net interest income reached ARS 1.03 trillion, stable compared with the first quarter and 11% above the second quarter of last year. Net interest margin, including FX, declined from 25% to 24%, mainly due to our lower FX contribution. Excluding FX, net interest margin increased 30 basis points from 23.8% in the first quarter to 23.5% in the second quarter. Moving on to asset quality, the left-hand chart shows our reported NPL ratio increasing from 5.4% in the first quarter of 26 to 6.5% in the second quarter. As we explained last quarter, the reported NPL ratio is affected by mandatory prudential classification that takes into account a customer's behavior across the financial system. Our Stage 3 loans ratio increased 30 basis points from 3.8% to 4.1%. Our coverage ratio stood at 95.4%, which remained above the 86.3% level for the system as of May 2026. It is important to mention that coverage on Stage 3 loans reached 148.8% in the second quarter. The right-hand chart shows different trends by segments. Commercial NPLs improved to 0.9% from 1.3% in the first quarter and remained well below the system average of 3.5%. Consumer NPLs increased to 8.4% from 6.9% last quarter, but also remained below the 12.8% reported for the system. Turning to efficiency, operating expenses shown on the left reached ARS 58.7 billion in the second quarter. Employee benefits increased 7% quarter on quarter and administrative expenses increased 8%. As a result, the fees interest rates increased from 32% to 34%. The chart on the right shows the continuous streamlining of our operating model. We ended the quarter with 402 branches, 18 fewer than March and 89 fewer than a year ago. Headcount declined to 8.18 thousand employees, down 1% quarter-on-quarter and 8% year-on-year. These actions are part of the restructuring program with the objective of increasing efficiency and agility by preserving the reach and service capabilities of our franchise. Slide 13 shows the capital and liquidity and remaining key strengths. On the left, our Tier 1 capital ratio stood at 28% compared with an 11.5% requirement. On the right, the ratio of liquid assets to total deposits increased to 79%, while liquid assets remained equivalent to 74% of our total deposits. Our capital and liquidity positions therefore continue to provide significant capacity to support growth and evaluate strategic opportunities. Before opening the call for questions, I would like to spend a few minutes on our long-term transformation. I will now welcome Juan Martin Parma, our CEO, to comment on strategy.
Good morning, everyone. Pleased to be here with you. I am going to cover quickly a couple of slides of our trajectory to 2030, basically the execution of our strategic plan that we presented back in December last year. So as a recap, our purpose is to be the leading bank for a thriving Argentina, recognized for excellence in customer service and value proposition. We have four strategic pillars and four enablers. The four strategic pillars are: simplicity, which means providing customers with simple, intuitive, and increasingly digital day-to-day banking experiences; once customers find us simple to operate, they will give us their primacy. As we know, primary customers are 8 to 9x more profitable than non-primary ones. So it is critical to move to the second pillar, which is moving customers from non-primary to primary. The third is development, which has to do with helping and supporting our customers to develop into the future with wealth management, long-term lending, and insurance to protect their wealth, their families, and their lives. We multiply the value of our customers with more cross-sell and future-looking value propositions. And finally, how we service our customers, which has to do with the application of data, technology, internet, and artificial intelligence in our distribution models—while keeping the human touch. That is digital plus human. And, of course, as enablers we have data and AI, our talent, and efficiency. To fund our investment in strategic areas, we need to reduce our physical structure and less value-adding expenses to fund our investment into the growth areas. And finally, risk management to make our results sustainable into the future. The good thing is that this is our first year of executing the five-year plan, and it is under execution. We are moving ahead with the transformation of the bank following these four strategic pillars. For example, and this is just an example — it is not exhaustive — some things the bank has deployed across this second quarter of the year include: under the simplicity pillar, we have almost completed the deployment of the new retail banking app with unified digital onboarding processes for retail customers. We have launched extended hours to operate during the weekends for commercial customers. On primacy, we have launched a first-mover loyalty program; we are the first bank in Argentina using loyalty programs like those airlines or some advanced fintechs and digital banks use globally. This will create a platform for us to move customers at scale from non-primary to primary. We are also implementing relationship pricing to ensure we price each customer according to their profitability potential, risk, and loyalty. One initiative to help primacy with commercial customers is the launch of our acquiring platform. On development, many things as well: our wealth management app is live. Insurance was an underdeveloped area for the bank, and we have launched auto insurance across the network, which will be a driver of future fee income growth. We are preparing for the launch of Banco Macro's private bank proposition, and we are hiring and preparing our talent with a cutting-edge, innovative wealth and private banking academy for our people. Finally, on digital plus human, another breakthrough of the quarter is that we launched the first conversational banking WhatsApp channel in the industry at scale. Six million customers can operate the bank intuitively using day-to-day language, sending us audios, images, and text, and our AI agent can respond. No other bank is doing this at this scale in Argentina, so this gives us competitive differentiation and makes the use of AI in banking in Argentina real. We continue transforming the physical network, reducing our number of branches while modernizing and investing in wealth centers and commercial centers — what we call hubs. We are reducing square footage and branch count while investing in customer service centers to service the segments most profitable for the bank. This is what is going on; there is much more under execution. We expect to continue bringing to these calls quarter by quarter the progress that we are making on our way to 2030. Of course, there are variables in the macroeconomic and political context that are not in our control. We will continue navigating the situation in this pre-electoral year but we remain confident in the future of Argentina, and that is why we will continue building the bank of the future for a thriving Argentina.
Thank you, Juan. This concludes our prepared remarks. At this time, we would like to take the questions you may have.
Questions and answers
Operator, please open the line for Q&A. Okay. At this time, we are going to open it up for questions and answers. If you would like to ask a question, please press the Q&A button at the bottom of the screen. Or to ask a question by audio, click on raise hand. We will then receive a request to activate your microphone. One moment please for the first question. Our first question comes from Yuri Fernandes with JPMorgan.
Hi, all. Good morning and thank you for the opportunity to ask questions. I have a follow-up on asset quality, and thank you for the slide presenting some of the metrics. It is clear that this model update drove some adjustments here, but still there was an ongoing worsening and a drop in your coverage ratio. Can you give us some outlook on how you see cost of risk and how you see NPLs evolving for the second half? And regarding the coverage, should this be like the minimum? Because I know Macro still has a good level when we compare to some peers, but the delta narrowed this quarter. If you can also give us a message regarding the coverage ratio. Thank you.
Hi, Yuri. This is Jorge Francisco Scarinci. Thanks for your question. In terms of asset quality, I think across the board the second quarter in the Argentine market was about a quarter of quality deterioration in NPLs. What we saw is that the deterioration in the portfolio continued, maybe at a lower pace than we saw in the first quarter. There was also a pickup in the rhythm of deterioration in the corporate portfolio. I would say it is important to make the difference between our own-risk customers and the contagion effect from customers being non-current in other banks or digital wallets. It is very important to highlight the difference between the 4.1% in our own risk and the 6.3% with the contagion effect. Also, on coverage ratios, looking at Stage 3, the coverage ratio is almost 149%, which is something we are cautiously looking at and is, of course, very healthy. In terms of the total coverage ratio at 95.4% coming down from 109.8% in the previous quarter, that is something we were monitoring because we were kind of the only bank being above the 100% level before the rest of the system was going downwards. So we did the same, but always keeping an eye on Stage 3 coverage, which is very important for us. That being said, for the end of the year we think cost of risk, which was down this quarter compared to the previous one, will be between 6.5% and 7% by the end of 26. And NPLs to be ranging between 5.5% and 6%. Those NPLs are for the total portfolio, not Stage 3. Stage 3, of course, we expect to remain well below 4% by the end of 26. In terms of coverage ratio, for the moment we are not seeing total coverage going below 90%. We will monitor the industry, but that number is a target rather than a barrier. The important one is Stage 3, which for sure will remain well above 100% by the end of the year. Regarding your second question on growth: last week there was a measure to flexibilize dollar lending, I believe, allowing banks to lend up to 15% of their dollar deposits to companies that are not generating dollars. We think that is something that will bring some growth to the portfolio; for the moment we are not expecting a boom or a huge increase in the near term, but it could have more impact in 2027. We see this measure as positive for the system and for the country. On loan growth, we are starting the pre-electoral year and the government has focused on maintaining inflation under control. That has had an impact on domestic interest rates that have increased a little bit compared to the second quarter. Therefore our forecast for loan growth is being reduced to around 5% in real terms and maybe slightly downwards, so a range between 2% and 5% in real terms for the whole portfolio. We assume peso loans will grow until the end of the year at a rate similar to monthly inflation; dollar-denominated loans we assume will grow at about 2% to 2.5% per month. We are also assuming a slight devaluation of the peso between June and December of around 12% to 13%. If you do the math, you can get to the 2%–5% in real terms that we are discussing.
Our next question comes from Giuliano Jara with Goldman Sachs.
Hi, everyone. Good morning, and thank you for taking my questions. I just have two follow-ups. One is on your asset quality: could you share more color on how your write-offs and recovery trends are going and how you expect them to trend going forward? And second is on loan growth: this year is an election year and loan growth should be more muted. How do you think about next year already; could you share some broad expectations for loan growth next year? Thank you.
Hi, Giuliano. In terms of your first question, our write-off policy is that when the debtor reaches category 5 it is a 100% provision and we do a write-off there. We have maintained this policy for many years and will continue to do so. In terms of recoveries, for the moment we are seeing some small recoveries on loans that have been written off; we think recoveries will be slightly higher in 2027 when the cycle enters a more positive phase. In terms of your second question, it is a bit early to give guidance for loan growth in 2027. We would like to see how we finish 2026 and how macroeconomic variables evolve in 2027. We are receiving preliminary data from the economists we work with, so let me have at least one more quarter before providing 2027 guidance for loan growth.
Our next question comes from Ernesto Gabilondo with Bank of America.
Thank you. Hi. Good morning, Juan, Jorge, and Nicolas. Thanks for the opportunity to ask questions. My first question is on the political side. We have started to see some surveys or initial polls ahead of the presidential election. It is early, but can you provide what you are seeing on your side? How is business sentiment and consumer confidence ahead of the election? My second question is on your earnings expectations and ROE evolution throughout the rest of the year. Your recurring adjusted ROE is already double-digit at 14% this quarter. How should we think about the evolution of adjusted ROE for the second half and for the full year? Thank you.
Maybe I can take the first question on the political side. As you can imagine, we try to avoid making forward-looking political predictions. Having said that, it is clear, as Jorge mentioned, this is a pre-electoral year, and as the election approaches, unless there is a clear winner emerging, there will likely be more volatility. The government and the central bank have been preparing for that from a fiscal, FX, and reserves standpoint, which I think is welcome. Comparing this pre-electoral year with past years, a good sign is that U.S. dollar deposits remain at record highs, which is a sign of confidence from the public. But as it is a pre-electoral year, we will likely see more volatility as usual. That said, we believe the government is preparing better than in previous years.
Thanks, Juan. Ernesto, in terms of ROE, yes, we are increasing our ROE guidance for 2026. The previous level for adjusted ROE was around 8%; we are moving up this guidance to around 12% for the average of 2026. There was a good first half in terms of margins — margins remain much better than expected — and we believe this trend will be maintained going forward. So we are increasing the adjusted ROE target from 8% to around 12%.
Our next question comes from Brian Flores with Citi.
Hi, team. Good morning. Thank you for the opportunity. I wanted to ask two things. First, on your 2030 strategic plan: which levers should drive ROE to your midterm target? Where do you see the bank in terms of real ROE, and what could drive it? I'm asking because, as Jorge mentioned, NIMs should structurally come down and need to be compensated by higher volumes. You are running at an efficiency ratio that seems historically good for you, but you will need to invest in customer acquisition strategies. What levels of ROE are you looking for on a sustainable basis, and what are the key levers to get there? Second, on sentiment: you are revising ROE up and the industry is improving unit economics, but valuations seem to be coming down sharply. The market seems worried — is this because of lower growth expectations or political uncertainty? Any insights would be helpful. Thank you.
Hi, Brian. On the valuation question, from a corporate perspective we are increasing adjusted ROE for 2026 from 8% to around 12%. The first half was better than expected, and we think the trend will be maintained over the next two quarters. I agree that valuations or stock prices for the Argentine universe are down year-to-date. I think that is linked not only to local risk but also to global turmoil: U.S. long-term interest rates are up and global fiscal positions are under pressure, which makes investors move toward perceived safer assets. So part of the valuation contraction is global rather than purely local. I will let Juan comment on the strategic levers for 2030.
I'll add to Jorge's comments. The valuation pressure is partly global and also linked to the pre-electoral year; once elections pass and the political outlook becomes clearer, we would expect some normalization. On the levers to achieve long-term ROE: if Argentina continues its stabilization process and inflation/rates continue to fall, there will be a trade-off — margins compress while volumes expand. Short-term, margins compress before volumes pick up; that's the transition we expect over the next five years. For the industry, loans-to-GDP today are around 11% versus regional averages of 30%–50% — so there is significant room to grow. For Banco Macro, our levers are: capturing growth by increasing market share and scale; moving customers from non-primary to primary (we expect to increase the share of primary customers materially); growing fee income from insurance and wealth management as the middle and affluent classes expand; and efficiency — recycling costs from nonproductive areas to fund investments. We are already reducing branch count and FTEs, and those savings help fund growth initiatives while keeping efficiency levels solid.
To add a number: if Argentina continues on the stabilization path and we leave inflation accounting behind by around 2028, the ROE we report in 2030 should be nominal and we expect it to be in the area of about 20% ROE by 2030.
Our next question comes from Pedro Le Duc with Itau BBA.
Hello, everybody. Thank you for the call and taking my question. Can we explore a little more on the efficiency side? You've been doing many changes in the footprint and modernizing tech and the consumer-facing stack. I'm trying to model forward the balance of savings and investments. Thinking less about efficiency because the top line moves a lot, but more in real terms to see where we are with the balance of savings and investments that you are doing. Thank you.
Hi, Pedro. As Juan commented, the idea is to continue reducing branches: by the end of the year we should be in the area of 370 branches and employees below 8 thousand. At the same time we are investing in technology across different areas to modernize systems. Going forward, nominal expenses may be similar, but we expect a decline in employee remuneration costs as FTEs decline, and an increase in software expenses. The objective is to dilute this nominal level of expenses within higher volumes of net interest and fee income, so we will work on both sides of the equation: expenses and the generation of interest and fee income.
Our next question comes from Mario Estrella with Itau.
Hey, guys. Morning. Just one question on margins. This quarter funding costs went down but that was offset by lower asset yields. We're seeing more volatility in local rates at the start of the third quarter. Could the evolution of the margin the rest of the year be more challenging if funding costs reverse while asset yields keep being pressured? What is the danger here for margin evolution and for guidance?
Hi, Mario. As I commented before, margins in the first half were slightly wider than expected. Going forward, we believe this level of margins will be maintained. At the beginning of the year we were expecting net interest margin around 20% as guidance; after the first half we expect to be above the 20% net interest margin guidance. The idea is to relatively maintain margins in the next couple of quarters. Regarding loan growth guidance, the earlier guidance of 15%–20% was from two quarters ago; the new guidance is between 2% and 5% in real terms as I explained previously.
Our next question comes from Camila Villaça Azevedo with UBS.
Hi, everyone. Thanks for taking my question. I have two follow-ups. First on growth: can you give your sense on recent performance in the last month and starting August? In the second quarter by economic sector or customer segments, which were the main drivers behind growth that you expect? Also, how are you seeing retail demand currently given higher spreads? How should we expect demand to evolve in the second half of the year? Thank you.
Hi, Camila. In terms of growth, for the next two quarters we expect commercial lending to outpace consumer lending. Consumer growth is slightly below inflation and commercial lending is closer to inflation levels on a monthly basis. Sectors where we see demand are the winners in the current economic model: mining, oil and gas, and agribusiness. We expect some pickup in construction in the next couple of quarters. Massive consumption sectors and automobile are weaker in this model, so we are not seeing big demand there. Regarding margins and spreads, in net interest margin we include income from bond portfolio and FX; intermediation rates should narrow a little, but income from bonds and FX can compensate that decline, which is why we forecast some stability in net interest margin.
Our next question comes from Pedro Offenhenden with Latin Securities.
Hello, Juan, Jorge, Nicolas. Thank you for taking the call. When you look at NPL and loan trends, are you seeing any meaningful difference in credit behavior between the interior of the country and the City or Province of Buenos Aires, either in demand or delinquency trends?
Hi, Pedro. Because our footprint is more concentrated in the interior and we have less exposure in Buenos Aires, I think it's important to look at banks with more presence in Buenos Aires to see some trends. Our Stage 3 and own-risk loans are behaving much better than what you could see for Buenos Aires clients. That is due not only to geography but because Banco Macro has a more cautious, stricter credit policy, which helps our performance.
The next question comes from Federico Cavalli with EdCap.
Hello, everyone. I want to ask regarding your restructuring plan. Should we expect these expenses to continue in the second half of the year and in 2027? You guided adjusted ROE at 12% for the year — how will these expenses impact ROE and what is your reported ROE guidance for the year?
Hi. Yes, restructuring will continue as we close additional branches and reduce FTEs. During 2026 you will see the impact of the layoffs' costs, and in 2027 we will see the savings from fewer FTEs and fewer branches. The adjusted ROE we forecast at around 12% anticipates these dynamics. The reported ROE should be in the area between 9% and 10% for the full year; however, we focus on the adjusted ROE as it reflects the clean P&L without one-time charges.
The next question comes from Guido Labarta with Goldman Sachs.
Hi. Good morning. Jorge, Juan, Nicolas — thanks. To follow up a little: how do you see the health of the consumer? NPLs are rising, unemployment is still somewhat high. On consumers' capacity to repay, are you writing off these loans or working with consumers? How does this affect your ability to accelerate consumer loan growth next year given the economy and consumer health? Any color would be helpful. Thank you.
Hi, Guido. The consumption sentiment is a bit sluggish. If inflation cools down, that's the main driver for wages recovery and we could see a recovery in consumption in 2027. For the rest of 2026 we expect consumer loans to grow roughly in line with inflation; we are not seeing a pickup for 2026 in consumer loans.
I would add that until real wages start to improve and consumer lending capacity increases, we are recycling the portfolio toward better-quality loans even in a more restrictive scenario for consumers. For personal loans, for example, 50% of the portfolio is already originated from vintages since around May last year, when we introduced stricter credit policy. So the improvement in NPLs depends not only on macro improvements but also on our own actions. We are already seeing new vintages with much better quality impacting the books month by month from May to June and June to July, and we expect that to continue.
The next question comes from Lisandro Lovera. Sir, you can open your microphone.
Can you hear me? Congratulations on the results. We saw a 1% decrease in deposits and a sharply lower loan guidance. Can you provide a pointer regarding deposit guidance for the full year? Is it updated? Thanks.
Hey, Lisandro. Yes, we are also reducing deposit growth guidance for the year to around 10% in real terms. Peso deposits may grow in line with inflation or be flat, while dollar deposits are picking up slightly faster than peso deposits.
The next question comes from Ignacio Snyhovsky with Invertir en Bolsa.
Hi. Good evening. Thank you for taking my questions. First, regarding Stage 3 loans: do you have any system-wide figures to compare with the 4.1% you reported in the second quarter? Second, regarding excess capital and the currently attractive valuations of banks, do you see any potential acquisitions at this moment or in the coming months? Thank you very much.
Hi, Ignacio. We do not have many system comparisons for Stage 3; we are trying to gather market data but currently do not have a direct comparable for the 4.1% Stage 3. We believe we are among the top banks on that ratio. Regarding excess capital, we constantly mention that it can be used for organic growth and M&A. We are always looking at markets and opportunities, and consolidation in the Argentine banking sector is not finished. We analyze potential transactions and remain alert; not all opportunities fit our return appetite, but we are open to evaluate suitable opportunities.
The next question comes via text from Carlos Gomez-Lopez with HSBC.
Could you explain the reasons for the increase in risk-weighted assets in the quarter, in particular operational risk? Is your methodology now different from other banks? Under the new models, what is the level of capital you consider adequate and how much surplus can you invest or return to shareholders? The other question: how much longer do you expect to continue your restructuring program? Is a footprint of around 400 branches adequate now?
In terms of the increase in risk-weighted assets, we implemented a new methodology for operational risk which impacted the level of capital consumption in the quarter and reduced the Tier 1 ratio from around 32% to 28%. However, we still have the highest Tier 1 ratio among Argentine banks and a very wide excess capital buffer. The idea is to make the best use of that excess capital going forward. Regarding the restructuring program, we expect to go slightly below 400 branches — in the area of 370 branches by the end of 2026.
Next question comes from Agustin Isidoro with BBVA.
Is the loans book breakdown in terms of fixed versus floating rates materially different? Thank you.
Agustin, you will find all that information in the detailed balance sheet disclosures we publish to the CNV and the stock exchange. They include a very detailed breakdown of rates and loan book composition.
The next question comes from Arturo Berner with Delphos.
Do you sense Argentina is feeling more comfortable holding pesos?
For the moment, pesos are being used for transactional purposes while U.S. dollars are used for savings. If the country continues reducing inflation, maintains fiscal discipline, strengthens institutions, and develops growth measures, Argentines will gradually lean toward holding more pesos. That's what we expect over time.
The next question comes from a private investor, Stefan Zwenger.
How do you see further development of your commercial lending as you showed some pickup in the current quarter? Also, do you plan to deploy capital for share buybacks as the share price has suffered lately and is getting close to a level where you did some buybacks last October? Thanks.
Regarding commercial lending, as I mentioned earlier, we expect the commercial portfolio to perform slightly better than the consumer portfolio for the coming two quarters. In terms of share buybacks, share buyback programs are always on the table; the Board of Directors analyzes them depending on market conditions. It is something we have used in the past and remains an option.
The next question comes from Adriano Martin with Cygnus Capital LLP.
Can you touch quickly on the capital consumption during the quarter? Obviously, 28% is still very high, but interesting how that fell so much.
We implemented a new operational risk methodology which slightly impacted the ratio, causing it to go from about 32% to 28%. But, as I said, it is still the highest among Argentine banks and we have a very wide excess capital buffer. The idea is to continue paying dividends and using capital for organic and inorganic growth where appropriate.
There are no more questions at this time. That concludes the questions and answers section. I will now turn to Mr. Nicolas Torres for final considerations.
Thank you, Juan, Jorge, and thank you all for your interest in Banco Macro and for joining us today. We appreciate your time and your questions. We look forward to speaking with you again. Have a good day.
This concludes today's presentation. You may now disconnect.