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Higher interest on loans pushes Banco Macro's Q1 profit up 76%

Banco Macro SA's first-quarter profit improved around 76% from a year earlier as sharply higher financial and fee income more than offset a rise in provisions and administrative expenses.

The bank booked quarterly net income of about 3.56 billion Argentine pesos, or 5.32 pesos per average outstanding share, up from 2.02 billion pesos, or 3.45 pesos per share, in the year-ago period.

The company's net financial income ticked 56% higher year over year to 7.30 billion pesos from 4.69 billion pesos. The bank said interest on loans, which grew 45% on an annual basis, represented 75% of its total financial income in the first quarter. Banco Macro's net fee income, meanwhile, jumped 20% to 1.94 billion pesos from 1.62 billion pesos a year ago.

The lender's accumulated net interest margin increased to 18.7% in the first quarter from 17.7% in the linked quarter and 18.3% in the prior-year period.

The company also booked 566.8 million pesos in provisions for loan losses, which rose 56% from 363.0 million pesos in the first quarter of 2017.

At the same time, administrative expenses increased 25% annually to 3.58 billion pesos, which the bank said was mainly due to higher personnel expenses and other operating expenses.

Banco Macro said its "core" financing to the private sector increased 52% annually to reach about 142.23 billion pesos at the end of the first quarter, with mortgage loans rising 127% and personal loans growing 55%. The lender's nonperforming to total financing ratio was 1.1%, unchanged from the linked quarter but lower than the 1.36% registered a year earlier.

The bank's annualized return on average equity was at 29.4%, lower than the 34.9% in the year-ago period, while annualized return on average assets was 6.2%, higher than the 5.2% posted in the same period last year.

As of May 15, US$1 was equivalent to 25.00 Argentine pesos.