Greetings, and welcome to the Bolsa Mexicana de Valores fourth quarter 2022 earnings call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ramón Güémez , CFO for Bolsa Mexicana de Valores. Thank you. You may begin.
Thank you. Good morning, and welcome to Bolsa Mexicana de Valores fourth quarter 2022 earnings conference call. Before proceeding, I'd like to provide a brief safe harbor statement. This presentation contains forward-looking statements and information related to Bolsa that are based on the analysis and expectations of its management, as well as assumptions made and information currently available at Bolsa. Such statements reflect the current views of Bolsa relating to future events, are subject to risks, uncertainties, and assumptions. Many factors could cause the current results, performance, or achievements of Bolsa to be somewhat different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental, and business conditions, both in a global scale and in the individual countries in which Bolsa does business.
Such as changes in monetary policies and inflation rates and prices, in business strategy and various other factors. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary considerably from those described herein as anticipated, believed estimated, expected, or targeted. Bolsa does not intend and does not assume any obligation to update these forward-looking statements. I would also like to remind participants that today's call is being recorded and a replay of this call will be available online on February 16th at Bolsa's corporate website, www.bmv.com.mx. During this call, all figures are in Mexican pesos and compared to the fourth quarter of 2021, unless stated otherwise. This call is intended for the financial community only. The floor will be open at the end to address any questions you may have.
Joining us for today's call are José-Oriol Bosch, CEO. José Manuel Allende , Chief Capital Formation Markets and Information Services Officer. Roberto González , Chief Post Trade Officer. Claudio Vivian, Chief Information Officer. Hugo Contreras, Chief Compliance and Regulation Officer. Alfredo Guillén , Managing Director, Equity Markets. José Miguel de Dios , Managing Director of Derivatives Markets. Gabriel Rodríguez , Chief ICAP CEO. Rosa Crespo, Managing Director of Human Resources. Luis René Ramón , Director of Industrial Relations. myself, Ramón Güémez, CFO. I would now like to turn the call over to our CEO, José-Oriol Bosch.
Gracias, Ramón, good morning and thank you for joining us for the fourth quarter and full year 2022 earnings conference call. As for today's format, first, we will go over the financial highlights, and then we will focus on the main drivers of each business line. Finally, we will conclude with our project plan status. Please let's get started in slide 3 to review the fourth quarter financial highlights. In slide 3, you can see the key financial highlights, and we have achieved a resilient result this quarter despite challenging market conditions and high comparison base due to one-time events registered last year. The revenue was MXN 973 million, down MXN 77 million. It is important to note that in 2021, we recorded non-recurring revenue of MXN 70 million in Indeval and other revenue.
Additionally, the number of cross-border transactions and settlements for the global market was down in Indeval. On the positive side, derivatives and OTC trading in Chile showed a strong performance during this period. Expenses were MXN 458 million, up MXN 50 million. Last year's comparison base was low due to a lower personal expenses, mainly variable compensation, as well as consulting fees. After adjusting 2021 personal cost to the ongoing rate, expenses were up only 6% in the quarter. EBITDA and net income reached MXN 568 million and MXN 379 million, respectively. As for the full year 2022 financial results, please turn now to slide number 4. BMV Group's diversified business portfolio continues to make sound financial and operational progress.
Once again, I am glad to share with you that in 2022, we have reported all-time highs in revenue, operating income, EBITDA, and net income. Revenue was up MXN 175 million or MXN 4.5 billion-MXN 4.1 billion pesos. MXN 41 million more from recurring operations, mainly in information services, derivatives, and OTC trading, and MXN 134 million from extraordinary concepts in Indeval and SIF ICAP. Expenses were up MXN 69 million, or only 3.9% to MXN 1.8 billion pesos for the full year, maintaining our cost discipline as BMV Group continues its technology transformation. EBITDA was up 4% to MXN 2.5 billion pesos and EBITDA margin was recorded at 61%, a similar figure to 2021. Earnings per share were MXN 2.87, up 6% from MXN 2.72 per share.
All in all, BMV Group has delivered solid full-year results with good underlying performance in transactional businesses and Information Services. Please go to slide number 5, Revenue by Business Line 2022. Our operations are well diversified across the value chain, with highly recurring revenue in nature and a strong customer retention. Transactional businesses, which consist of equity trading and clearing derivatives, trading and clearing, and OTC trading were up 3%, 17%, and 15% respectively. Information Services, which is made up of data, analytics, indices, valuation, and financial risk management services, is up 10%, driven by better understanding of customer needs and development of new products and services. The Central Securities Depository is in line with last year's figures.
Capital formation is down 1% due to fewer listings in 2021. Other revenue is down 11% due to the cancellation of provisions in fourth quarter 2021. In total, BMV Group growth for the first time, the MXN 4 billion mark to MXN 4.1 billion in annual revenue, growing 4.5% year-over-year. On slide number 6 on equity trading and clearing, cash equity trading revenue was down MXN 8 million versus the third quarter of 2021 to MXN 68 million, the average daily traded value, the ADTV, at BMV decreased by 8% at MXN 14.7 billion. During the period, the demand for the local market was stronger, growing 6%, while the value traded for the global market decreased by 22%.
The latest regulatory changes regarding the best execution rule or the way we see it, the forced allocation of trades, was implemented in August 2022. Due to these changes, BMV Group decreased its market share to 83% in the fourth quarter, 87% in the local market and 78% in the global market. As for the full year, BMV's market share was 88% compared to 92% last year. These changes will not have a material impact in our top line. However, we expect them to have a negative influence in the Mexican financial market. As for the equity clearing house, CCV's revenue was in line with fourth quarter 2021 even though the ADTV for the total Mexican equity market was 3% higher. This is explained by a larger number of cross trades in the period, which only require to be registered.
On slide number 7, Derivatives and Trade Including, the revenue in MexDer and Asigna was up 43% and 27% respectively due to higher trading of dollar futures and longer tenors traded of TS swaps. The open interest of dollar futures is at a historic record high at 1.6 million contracts, 100% more than in 2021. The notional value amounted to $358 million, the highest since 2014. The average margin deposits were MXN 36 billion in the fourth quarter, up 17%, mainly due to the higher trading of dollar futures with institutional clients and longer tenors swaps. Average margin deposits for the full year are up 2% to MXN 34 billion, in line with our expectations because of the new risk management methodology released in February 2022, which allows collateral and capital optimization.
We are searching for new ways to grow the derivatives market in Mexico. MexDer continues in the authorization process to list options and futures of shadow-listed foreign securities in Mexico, given the success of the global market or SIC. On slide 8, regarding the OTC trading, SIF ICAP revenue was MXN 23 million, or 15% higher compared to the Q4 of 2021. SIF ICAP Mexico was down MXN 1 million due to lower volume traded from clients. On the other hand, SIF ICAP Chile was MXN 24 million due to higher volatility and robust trading activity because of interest rate adjustments due to inflation expectations. For the full year, SIF ICAP revenue increased MXN 96 million, out of which MXN 37 million are the result of non-recurring tax refunds in Chile. The VAT refunds have no impact on personal expenses.
On slide number 9, on capital formation, the listing revenue reached MXN 24 million, 5% up versus the fourth quarter of 2021. In the debt market, 272 short-term debt issues were placed for an amount of MXN 49 billion. That's 28% higher versus fourth quarter of 2021. 24 long-term issues for an amount of MXN 82 billion, 38% higher versus fourth quarter 2021. As for the full year, the amount placed in long-term debt increased 53% year-over-year. It is important to point out that the trend in the outstanding balance has changed and growing once again. As you may recall, over the last four years, the reduction in fees and low activity because of the pandemic had a strong impact on this business line.
Moreover, 44% of the total long-term debt issued in BMV during 2022 is sustainable through thematic, green, social, sustainable, and blue bonds and sustainability-linked bonds. We will continue promoting this market for our digital platforms and education programs as we contribute to a sustainable economic development. Regarding the equity market, one follow-on stands out in 2022. Fibra Mty for MXN 3.5 billion related to the demand for industrial space in the northern parts of Mexico. Maintenance fees were down MXN 3 million in the quarter and MXN 10 million for the full year, due to lower listings in 2021. The good news is that long-term debt listings are recovering and the trend in the outstanding balance has shifted. If this continues, we should expect a maintenance revenue growth starting 2024.
On slide number 10, on the central securities depository, Indeval's revenue was MXN 279 million, down MXN 74 million. Last year, during the fourth quarter, we registered non-recurring revenue for MXN 50 million due to the prescription of liabilities. Not considering this extraordinary concept, revenues decreased by MXN 24 million, mainly explained by a lower number of cross-border, as well as lower average value of assets under custody in the global market. The market correction in the U.S. and Europe has had a negative impact in the value of the global assets under custody, down 11% to MXN 1.5 trillion. However, the value of assets under custody in local markets increased 3% to MXN 30 billion, mainly due to government debt. It is relevant to mention that Indeval received authorization from the U.S. Internal Revenue Service to operate as qualified intermediary.
During 2023, we expect to have a lower subcustody expense because we will control the tax withholding process for American securities listed in the global market. It will bring several operational efficiencies to our clients. On slide number 11, in Information Services. Information Services reported revenues of MXN 170 million in the fourth quarter of 2022, down MXN 3 million due to last year's one-time licensing sales of our portfolio management software environment, partially offset by new international clients and data for retail accounts. For 2022, revenue increased 10% to MXN 692 million. The continued acceleration in revenue reflects our investment in broadening and deepening our data and analytics offerings. We expect Information Services to continue growing at double-digit rates given the demand for our data locally and internationally.
As for the revenue, it decreased MXN 19 million year-over-year due to the cancellation of provisions during the last quarter of last year. Let's look at our operating expenses in slide 12. Operating expenses in the fourth quarter of 2021 were atypical due to low personal expenses and non-recurring consulting fees. After adjusting for these two term items, expenses in the fourth quarter of 2022 increased 6% versus the 12% shown in the report. As for the full year, expenses were up only 3.9% to MXN 1.8 billion.
Personnel expenses up MXN 34 million in 2022, MXN 20 million because of lower variable compensation in 2021, and MXN 14 million due to increased wages and higher revenue in SIF ICAP. Technology up MXN 30 million, MXN 9 million more due to a reclassification of consulting fees to technologies related to hardware management services, and MXN 21 million due to new licenses, consultancies, cloud services, and lease extensions to maximize the useful life of our hardware. Depreciation was down MXN 13 million. We have finished amortizing two platforms, the main trading engine and surveillance software, as well as extending some hardware leases. Rent maintenance up MXN 12 million because of higher maintenance costs and building renovations.
Consulting fees up MXN 1 million, MXN 10 million more in information security services, VAT refunds in Chile, and the segregation of post-trade infrastructure, and MXN 9 million less due to a reclassification of certain concepts to technology mentioned earlier. To custody down MXN 4 million due to lower costs associated with the administration of tax forms and W-8 forms. We expect savings to continue in 2023 since Indeval has been authorized as a qualified intermediary. BNPB fees, as you know, are linked to inflation, are up 7.4%. Other increased MXN 9 million because of events and promotional activities, as well as a reserve for our uncollectible accounts. Even though Mexico, together with most countries in the world, are experiencing high inflation, we continue executing with cost discipline towards increased operational leverage while investing for growth. Please turn to slide 13 to review the status of our project plan.
As slide 13 shows, direct custody, CCP for bonds, and accepting securities as margin deposits continue pending regulatory approvals. We have discussed our projects with the new financial authorities and showed them the benefit that de-risk projects will bring to the whole Mexican financial market. Together with the brokerage house association, the AMIB, and regulators, we are currently working to introduce several changes to the securities market law with the aim of developing a more efficient, agile, and secure market. post-trade segregation is on track to separate the technology infrastructure for Indeval, Asigna, and CCV. We have received all the hardware needed for this project, which you will see as a MXN 10 million depreciation expense per quarter for the next 5 years. This initiative is part of our effort to continue enhancing our resilience for all market infrastructures, as well as complying with the regulations.
Regarding historical market, we continue performing trials. As you may know, we are working with a global third-party provider to deliver agile and high-precision data to perform in-depth analysis, back-testing a very large amount of data with the goal of attracting quants and Algo trading. Data is the insight that drives trading, and those trades generate new data and so on. It is a virtuous circle. Turning to slide 14, in summary, I would like to share with you a couple of highlights. As I have said before, the Mexican Stock Exchange is a vital institution that serves as an engine in the Mexican economy's transition toward sustainable development.
This year, BMV Group was included in the S&P Sustainability Yearbook 2023 as a recognition to the progress the company has made in implementing and promoting ESG standards in both developing and sustainable financial markets and implementing several initiatives within the company. Over 7,800 companies were evaluated worldwide, only 708 made the cut. Out of those, 14 are Mexican companies, including the Mexican Stock Exchange. Regarding BMV's technology transformation, we are strengthening our platforms with the aim of having an evergreen and seamless technology across all divisions. We have started boosting our monitoring capabilities to track and evaluate the quality of the services being delivered, as well as allowing a more proactive approach to correct any malfunctions before they occur.
Additionally, we are analyzing updating BMV's communication platform between issuers, the Mexican Stock Exchange, and the market with the goal of automaticizing processes, minimizing operational risks, and manual repetitive tasks. Updating this platform we will provide a better user experience to our clients. Furthermore, we have started a direct custody with a third-party market infrastructure to analyze gaps and evaluate the need of upgrading our post-trade platform to enhance our product offering and simplify our operations. There is still a lot of uncertainty in the markets about the current macroenvironment, including many variables like inflation rates and recession risk, to name a few. Given that uncertainty, BMV Group is ready and well-positioned to navigate an environment like this. The combination of our strategy and our business model makes Bolsa a very compelling option.
By first diversifying and recovering revenue, second, a strong customer rotation, third, investing for further growth and building a more agile organization, and fourth, a strong cash flow and balance sheet light business model. With that, I thank you for your time, and together with my colleagues, we will gladly answer any questions you may have.
Thank you.
Thank you.
Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Ernesto Gabilondo with Bank of America. Please proceed with your question.
Hi. Good morning, Oriol, Ramon, and good morning to all your teams and everybody. Thank you for the presentation and for the opportunity. I have three questions from my side. The first one is on the potential regulatory changes to the Mexican Securities Law and also the implications of the new pension reform on the Afores that is implying a higher workers contribution from 2023 to 2030. Just wondering how these two positive regulations could translate into higher revenues for Bolsa. I think it will be gradual, but it's something that could be very positive in the medium term. I would like to hear your thoughts on this. My second question is on your expectations for maintenance fees in 2023.
As you were mentioning in your presentation, there was a better activity in debt issuances in 2022. After contractions in the last 3 years in this line, are you expecting an inflection point? Would it be reasonable to expect around a single-digit growth for this line in 2023? My last question is on how you think the reassuring theme could be translating into higher debt issuances or potential listings for the Mexican exchange. Thank you.
Hi, Ernesto. Thank you very much for attending and for the questions. The first one, regarding the changes in the Ley del Mercado de Valores, we are still working on that. It has been delayed. As you know, we were expecting that to be released by the end of last year, so it's taking more time than we wanted. However, on the positive side, I think that the good news is that the scope of the original project has been increased. Now we are working in more than the three topics that we were initially looking.
You know, the first one was the Mexican Rule 144A, that was probably the most important that we're looking at. Now we are working with the different participants, in particular with the brokerage houses, and the scope now is much wider. The problem is that if it is much wider, it can take more time. The risk on this side is that this, as you know, requires a change in law. Therefore, it has to go to the Congress. Going to the Congress, as the time goes by, the chances could be a bit lower of this being approved, in particular if we approach to a political year.
Hopefully we will have better news in the short term. We'll continue working on that. On the second part of the first question regarding the pension funds, as you know, this is gonna be a big benefit as the contribution for the Mexican pension funds, for the Afores are going to increase in the next seven years. However, this has just started. It has started a couple of days ago at the beginning of this year. Yes, definitely, I'm sure that we will see the benefit of this increase in the assets under management of the Afores. However, this is gonna be a mid-long-term benefit. I think that it is too early to call.
Regarding the maintenance fees, we think this year should be kind of flat. The good news is that the trend has changed for the last 5 years. The listing activity and maintenance fee has been diminishing year by year, finally this year is starting to curve. For 2023, we think it will be flat and may start growing a little bit for 2024 and so on. Regarding nearshoring, we are positive. We have been talking with companies and especially with FIBRAS, which may be the first beneficial for that investment coming into the Mexican border. FIBRAS for logistics, storage, and industrial properties are now over 99% full.
Any investment in companies that may come to the border will be requiring this infrastructure. The FIBRAS are, will be benefit, of course, for that. They will need capital, and they will come on from for follow-ons, or maybe we can see new names coming into the market. If this happens, also other companies for construction, infrastructure and some other sectors may be well impacted and will have opportunities to do investments there. They will need financing, so the exchange will be an opportunity for them.
Excellent. Very helpful, Oriol. Thank you very much.
Thank you. Our next question comes from line of Rodolfo Ramos with Bradesco BBI. Please proceed with your question.
Good morning, Oriol, Ramón. Thank you for taking my question. I also have three questions here, brief ones. The first one is, you know, you've been operating with the new rules, execution rules for a quarter. Just wondering if you expect market share to have stabilized already, and that's what we should be expecting for this year. That's the first one. The second one is on the personal expenses line. You know, on the flip side, you do benefit from higher contributions more in the medium long term.
Just wanted to see what impact you're expecting this year in terms of personal expenses in connection with, you know, these policies that the government has been implementing, whether is the, you know, the higher pension payments, higher vacation days? I don't know if the, you know, the wage, if you've seen any pressure on the wage side? That would be my second question. Lastly, if you can remind us, you know, when you look at your revenue base and your different business lines, if you can remind us what kind of inflation indexation do you have? Perhaps like, you know, what kind of lag we can see this year in terms of revenues?
You know, we saw high levels of inflation last year. Just wanted to see how that will flow through, this year in terms of your top line. Thank you, everyone.
Hi, Rodolfo. Thanks for the question. Regarding the best execution, as it was mentioned in the presentation, we have seen an evolution of that for the worst. As mentioned, this deregulation that started as a best execution regulation long time ago, it had some new changes as of August 2022. Since then, it moved more from best execution to a forced distribution of orders by the Casas de Bolsa. Now after a couple of months, I would say that it is even worse than that. I think that this is a worst execution instead of a best execution. The idea of that was adding value to the market, and I think that the effect has been the contrary.
I think that we are seeing, value destruction. A way to prove that is that if we look at the traded volume between both exchanges before August 2022, and the traded volume for both exchanges after, August 2022, it has been reduced. We are now trading in between both exchanges less than we were trading in between both exchanges before the new change in the regulation. I think that the Casas de Bolsa, not some of them, all of them, will agree on that. I think that they have been very vocal, and they have formally expressed this concern to the regulators. That's what we have heard.
Definitely there is a concern from the market participants, from our clients, the Casas de Bolsa, and the clients of our clients. The final clients are pretty concerned on that.
We are losing orders, as it has been mentioned in other calls, there are some negative impacts. As you know, if you send part of the order to one exchange and you do not execute the order then, the order come backs to the other exchange, and then maybe the price has moved against the client. The costs are higher because of the ratio of higher volume, lower fees. Now if you're splitting between two exchanges, maybe the fees that the customers, the both are paying are higher, et cetera. I think that this has not been good for anyone.
I don't know if Alfredo, who's the head of capital markets, want to expand on that.
Yes, Rodolfo, just a quick note. There's good news in this situation. As discretionary trades, which are the cross orders, are not subject to best execution. We have been, since last year, the end of last year and as of yesterday, we have been seeing a gradual return to the Mexican Stock Exchange looking for liquidity and depth. We are expecting this pattern to continue during this year. We have been regaining market share. As Oriol said, passive orders are not compliant with best execution rules in other markets worldwide. The Mexican Brokers Association is very vocal in changing those rules, and apparently things will change in the near future. Rodolfo, regarding your second question on personnel expenses. Fortunately, I think we have very good compensation packages, especially in benefits in the exchange.
Most of these reforms will not, or new initiatives will not have a major impact here at the Bolsa. The short answer would be we're expecting personnel expenses to increase in line with inflation.
Okay. As for the third question about the inflation-linked revenue, I would say about 30% are linked. 25% of our revenues are in dollars, especially on market data and the central securities depository. Then another 5% also in Indeval would be linked to inflation. You know, for the last two years, we used to have trading fees also linked to inflation, but for the last two years, they've been only linked to the peso. There is a variable fee and then a fixed fee, but in total it would be about 30%.
You say 30% is inflation-linked, and 35 is dollar linked.
Yeah, roughly. I've done.
Thank you.
Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from line of Edson Rabuja with SummaCap. Please proceed with your question.
Hi. Good morning. Thank you for taking my questions. I have a couple of them. The first one is regarding on being qualified intermediary from the U.S. or the SIC. As I understand, this will give you for 2023 better cost spent between U.S. and Mexico. Could you give us a little bit more detail how exactly will work? Because from our side, it's not clear exactly how you're gonna tax holding, and it's gonna improve not only operationally the performance of the Mexican Stock Exchange, but broadly speaking overall, the business, the business line with the SIC. The second question is regarding on trading hours. Because this year specifically, Mexico will not have daylight savings. Looking ahead, what will be the new standards for operational?
The differences will go on from 1-2 hours between the U.S. and the Mexican market. Thank you.
Okay. Regarding QI, I think that those are very good news in general for the market and for Indeval. The first thing is the tax processing. To give you an idea, last year we processed about $550 million in dividends and distributions for the Mexican clients that have securities within the global market. From those, if we didn't do anything, that would have requested a 30% withholding process or paid to the authorities. Because of the process that we have, and we have about 22,000 active accounts, and we have 22,000 W-8s on the entire process, those are Indeval and also through the custodian in the US, it's much more complex. Becoming a QI allows now Indeval to have full control of the entire process.
We already have the license, are using a system that allows us to get all the W-8s electronically. The forms will not go from starting this year to the custodian.
It's much more efficient for the local brokers, for the local clients, and for SIF ICAP. That will also allow us to reduce the fees that we pay for the global custodian. To give you an idea, we expect about $1 million less in fees for this year just because of the insourcing of that process. In addition to that, right now we go to the U.S. to reach DTC through our custodian. Now becoming a QI, that would allow us to move to the next model that is account operator. Since as soon as we informed the market that we were a QI, we got proposal from the largest five global custodians in the U.S. that are interested in providing those services to SIF ICAP.
The intention is also this year to take the decision and maybe move the assets of Indeval from the custodian directly to our account at DTC and hire an account operator that would give us additional benefits, operational speaking, and potentially additional savings. That's more or less a summary of the QI process. Edson Murguia from Guillen, regarding your question in terms of the hours we will be trading. As you know, more than 90% of trading volume comes from the U.S. We will be changing trading hours. We will be starting at 7:00 A.M. with the pre-market auctions, then at 7:30 A.M. the regular market, the continuous trading, and we will end trading at 2:00 P.M.
We definitely will move those, the schedule, the trading hour schedule to comply with the U.S. We will keep that in place as long as the U.S. keeps the daylight saving schedule.
Okay. Thank you. My last as a follow-up on market share. Regarding on competition, I know it's difficult to give a looking ahead, let's say outlook. Regarding all the regulatory framework changes that you guys are working with the Mexican authorities and the other stock exchange are doing. Regarding on delayed market access, if there is a chance of the possibility or it is on the table change in the regulatory framework, what will be the impact for the Mexican stock exchange? Have you, let's say, put it on in a political collect, have you analyzed that part of the business perhaps may have an impact on that part of the changing?
No, Edson. The DMA access will remain unchanged. At this point, it is not subject to best execution, so clients decide where to route their orders from the US and other parts of the world. We definitely don't see any changes in that sense. We only are foreseeing changes in the passive order rule, the 74 rule in the regulation. Rest assured that the DMA orders and algorithmic trading, quant trading will remain the same.
Okay. Thank you so much. Congrats on the amazing result for 2022. Thank you.
Thank you.
Thank you. Our next question comes from the line of Domingos Falavina with JP Morgan. Please proceed with your question.
Good morning, Oriol. Good morning everybody. Thanks for taking the question. I had some connection issues, so I'm not sure if you already addressed this. My question was regarding financial expenses. It seems you had a little bit of a negative impact from exposure to US dollar. I just wanted like a more thorough explanation on that. Like what exactly is the gross exposure to US dollar and, you know, how does that oscillate, you know, throughout the quarter? How should we think about that, you know, hedging, unhedging and so on?
Domingo, good morning. We hold a long position in US dollars, roughly $10 million. On average, our operations generate dollars, plus we have exposure in Chile. Whenever the peso appreciates, as it has over the past months, we generate an FX loss on that long position.
Super clear. Ramon, usually that's stable, that MXN 10 million, or it oscillates from like, you know, MXN 5-MXN 30 or whatever throughout the quarter?
We try to keep it around 10. We try to keep a balance between our, the number of times our assets are larger than our liabilities. It oscillates between 10, 12, 13.
All right. No, not very much. Thank you so much, everybody..
Thank you. Our next question comes from the line of Andres Soto with Santander. Please proceed with your question.
Good morning to all, and thank you for the opportunity to ask questions. My question is a follow-up regarding expense growth for 2023. Do you have any target for EBITDA margin? Do you think it's going to be more similar to the full year 2022, which was at 61%, or it's going to be more like the fourth quarter at 58%? More generally speaking, if you can give us what is your outlook for expense growth this year. Thank you.
Andres, thank you very much for your question. We are not currently giving any guidance for 2023 results, so, I'm sorry, but, we can't comment on our EBITDA expectations or margin expectations for the year.
Understood. In terms of expense growth, do you have any number in mind? It's going to be in line with inflation or above inflation or below inflation?
I'm sorry. We can't give any specific guidance on that. My only comment would be that our goal is always to increase margins, even if it's by a little bit. We're looking at a lot of technology expenses for next year or let's say for this year. We have a lot of investments planned for our projects for the post-trade segregation, specifically for upgrading our technology. I'm sorry, I can't give you a more specific answer.
Understood, Oriol. Thank you very much.
Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Bosch for any final comments.
Okay. In the name of EF Bolsa, I would like to thank you to all of you for attending and participating in this fourth quarter earnings conference call. Thank you very much once again, and have a great day. Thank you.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.