Grupo Supervielle S.A. (SUPV) Earnings

Management highlights

- **Operational Transformation & Efficiency** * The firm's right-sizing/headcount reduction program is now largely complete; 553 positions were eliminated in H1 2026 (262 in Q2). The program delivers 42 billion pesos in annualized salary savings, with full quarterly run-rate benefits starting in Q3 2026. * The operational redesign did not disrupt service quality, with net promoter score (NPS) continuing to improve and productivity rising. * The structurally lower cost base has immediately improved profitability, with structural ROE reaching 14.4% in Q2. - **Balance Sheet & Credit Strategy** * Prudence remains the top priority; the firm prioritizes risk-adjusted returns over loan volume amid still-elevated system delinquency and subdued peso credit demand. * Asset quality trends are improving: NPL formation has declined for two consecutive quarters, cost of risk is improving sequentially, and recent origination cohorts are performing meaningfully better than older cohorts. Management believes the peak for credit costs is now behind them. * The firm maintains a strong liquidity position, actively manages funding mix, and prioritizes growth of core transactional retail and corporate deposits. - **Targeted Growth Priorities** * Retail growth will focus on three priority segments: payroll loans, the premium Identité customer offering, and senior citizens. Enhanced credit scoring models allow targeted origination to higher-quality customers. * Corporate growth will focus on dynamic export-oriented sectors: Vaca Muerta energy, mining, and selected regional economies, where US dollar loan demand remains strong. The bank will target financing opportunities across the value chain of the 21 approved RIGI infrastructure/energy projects, which represent $47 billion in planned investment. * New strategic partnerships: The bank will launch P2P vehicle transaction financing with Flash Argentina (a Mercado Libre ecosystem company) starting in Q4 2026, and has a partnership with Aerolíneas Argentinas to strengthen its premium customer value proposition. - **Invertir Online (Brokerage Segment) Update** * Lower sequential net income and active account declines are due to normalization after Q1's unusual volatility-driven activity; underlying growth remains solid, with net new inflows driving Assets Under Custody growth to $3 billion, concentrated in higher-value affluent, corporate, and independent advisor clients.

Guidance

- **Loan growth**: Lowered full-year 2026 real growth guidance to 10%-15%, down from prior expectations above 20%. This still represents a material acceleration from the 7% real decline recorded in H1 2026, with growth concentrated in corporate lending and gradual retail growth expected as macro conditions improve. - **Net Interest Margin (NIM)**: Raised full-year 2026 NIM guidance to 17%-19%, up from prior guidance, after a stronger-than-expected 19.7% H1 NIM driven by faster-than-expected funding cost declines. Management expects NIM to decline from Q2's 20.3% level in H2 as asset repricing completes, but remain above weak H1 levels. - **Net fee income**: Updated guidance calls for a 5%-8% real decline in 2026, driven by softness in software-related banking activity. - **Adjusted operating expenses**: Now expect a 4%-6% real decline in 2026, a larger reduction than prior guidance, reflecting the successful completion of the headcount right-sizing program. - **Return on Equity (ROE)**: Tightened 2026 reported ROE guidance to 2%-4. Excluding extraordinary severance charges, adjusted ROE is guided to 8%-10%, which does not yet include the full annual benefit of 42 billion pesos in salary savings that will flow into 2027. - **CET1 Capital Ratio**: Raised guidance to 12%-14% due to slower-than-expected loan growth in H1. - Cost of risk guidance (5.3%-5.8%) was maintained, though management noted results are likely to come in at the lower end of the range as asset quality improves.

Segment performance

The full Grupo Supervielle reported attributable net income of 13 billion Argentine pesos in Q2 2026, a positive swing from an 18 billion peso net loss in Q1 2026. Excluding 23 billion pesos in after-tax extraordinary severance charges, adjusted net income reached 36 billion pesos, for an adjusted ROE of 12.4%. After incorporating full Q2 right-sizing salary savings, structural net income would have been 42 billion pesos, equal to a 14.4% structural ROE. On the balance sheet: Total loans declined ~1% sequentially and rose 9% year-over-year. Commercial lending edged higher, with US dollar commercial loans growing 6% in original currency, contributing approximately 65% of total loan volume. Retail loans declined 2% sequentially, contributing approximately 35% of total loan volume, reflecting subdued peso demand and the bank's selective origination strategy. Net financial income reached 295 billion pesos, increasing 8% sequentially. The net interest margin expanded 250 basis points sequentially to 20.3%. The NPL ratio improved 10 basis points sequentially to 5.5% (210 basis points below the industry average), with quarterly NPL formation declining for the second consecutive quarter to 20% below the Q4 peak. Net cost of risk eased to 5.6% from 6% in Q1. For Invertir Online, the investment brokerage segment, Assets Under Custody reached $3 billion, with ~$500 million in AUM for internally managed funds.

Risks & headwinds

- The macroeconomic recovery in Argentina remains uneven, and sustained progress depends on consistent execution of government structural reforms, fiscal discipline, monetary normalization, and gradual removal of foreign exchange restrictions. Delays or failures in policy execution could lead to renewed volatility, pressure on asset quality, and continued weak credit demand. - NIM is expected to face pressure in H2 2026, which will partially offset the benefits of cost savings from the right-sizing program. - Retail credit demand remains subdued, and a broad recovery in retail lending depends on continued declines in inflation and improvements in disposable income, which may progress slower than expected. - Credit costs and delinquency remain elevated despite recent improvement, and small and medium enterprises (SMEs) still face ongoing pressure that could slow asset quality improvement. - 2027 is an electoral year in Argentina, which introduces policy uncertainty that could impact business sentiment and investment activity.

Analyst Q&A

• Q: When will the full annualized 42 billion peso cost savings from right-sizing be reflected in reported efficiency metrics, and how will the 14.4% structural ROE trend through the rest of the year? /

  A: Full cost savings will be captured starting in Q3 2026, so reported adjusted SG&A and efficiency will improve meaningfully from prior quarters. While the full cost savings will boost profitability, NIM will be more pressured in H2 after Q2's sharp funding cost decline, so full-year adjusted ROE will come in near the guided 8%-10% range, below the annualized Q2 structural rate. The efficiency program was completed without service disruptions, and efficiency improvements will continue as a permanent management priority.

• Q: Full-year 2026 loan growth guidance was cut to 10%-15% from over 20%, what does this imply for loan growth in 2027, and are RIGI projects already creating tangible financing opportunities? /

  A: The 10%-15% full-year guidance already implies significant sequential growth in H2 after a 7% H1 decline, driven by targeted initiatives the bank controls, including selective retail campaigns to high-quality clients and dollar lending to dynamic export sectors. RIGI project opportunities are expected to become more tangible in 2027, after elections reduce policy uncertainty. Supervielle is focused on financing the full value chain of RIGI projects in energy, mining, and infrastructure, which should drive solid corporate loan growth next year. Retail growth will build gradually as inflation and disposable income improve.

• Q: NIM guidance of 17%-19% implies a material drop from Q2's 20.3% level; is that the correct expectation, and where will cost of risk land relative to the guided 5.3%-5.8% range? /

  A: That expectation is correct: Q2 NIM benefited from rapid funding cost declines that will not repeat in H2, so NIM will fall between Q1's weak level and Q2's elevated level, landing full-year NIM in the 17%-19% range. For cost of risk, management maintained the 5.3%-5.8% guidance as a conservative measure, but expects results to come in near the lower end of the range as asset quality continues to gradually improve, with the peak in NPLs now passed. The CEO noted he is more optimistic than the conservative guidance implies.

• Q: What is the outlook for expanded dollar lending if regulators relax rules on using dollar deposits for loans, and how much runway is there for growth in this segment? /

  A: Dollar lending to individuals is not expected to be allowed, given past negative precedents, but there is a clear path to relaxed rules for corporate lending. Corporations with strong dollar-linked business models will create new demand for dollar loans, and Supervielle is positioned to be very active in this segment. Argentina is currently recording record export levels that are expected to grow further in 2027, so there is substantial room for growth in dollar lending to the value chain of strategic export projects, with no near-term limit to this expansion.