Grupo Supervielle SA Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Loan Growth: Sustained loan growth momentum with 15% sequential expansion and 60% year-to-date in real terms, gaining 60 basis points in market share.
• Deposits: Total deposits up in high-teens, mainly driven by US deposits from tax amnesty, reaching record high.
• Fee Income: Strong growth across banking, asset management, and online brokerage platforms.
• Asset Quality: Non-performing loans ratio steady at historic low.
• Digital Adoption: Mobile transactions represented 56% of total transactions.
• New Leadership: Welcome Gustavo Manriquez as new CEO of Banco Supervielle, focusing on growth and profitability.

Segment Performance

• Retail Loans: Loan book expanded 44% quarter-over-quarter. Car loans doubled in volume, mortgages grew 42%, personal loans 41%. Contributed to portfolio growth.
• Corporate Loans: Remained stable in real terms quarter-over-quarter, up 54% year-to-date. US dollar-denominated loans saw a significant uptick in October, especially in oil and gas.
• Invertironline: Contributed 21% of total fee income. Active clients reached 580,000 (14% sequential increase), transaction volumes up 21%. Assets under custody at $1.2 billion.
• Insurance: Achieved 36% quarterly growth in car insurance. Launched digital insurance solutions for corporate clients.

Guidance

• ROE: Maintain full-year ROE guidance of 15%.
• Loan Growth: Peso loans expected to expand 70%-80% in real terms in 2024, up from prior 40%. Retail loans to increase share of total loans.
• NPL Ratio: Expected to remain below 1% in 2024, starting to convert in 2025.
• NIM: Fourth quarter expected to stabilize at third quarter levels after NIM contraction in Q3.
• CET1 Ratio: Anticipated to be between 16%-18% by year-end 2024, compared to previous 17%-20%. 2025 expects inflation to recede to ~30%, creating growth opportunities.

Risks

• Macroeconomic Challenges: Central Bank's net reserves remain negative. Maintaining public support crucial as reforms continue.
• Interest Rate Environment: Normalization of monetary policy and potential impact on NIM and loan growth.

Question and Answer

Q: When will NII return to year-over-year growth?

A: Mariano Biglia mentioned NIM expected to recover as they transition to higher yield loans and inflation continues to decrease, with loan-to-deposit ratio expected to increase to 70% in 2025.

Q: Possibility of impairment on investment securities?

A: Mariano Biglia stated securities held to maturity are accounted for under IFRS, with no intention to sell unless trading below book value, and they hedge against inflation.

Q: Growth strategy and capital needs?

A: Gustavo Manriquez outlined plans to grow in commercial sites, payroll services, saving/checking accounts, and corporate segments. Capital needs manageable with current capital, no immediate need to raise capital in 2025.

Q: Plans for investment platform?

A: Diego Pizzulli discussed growth in US securities, private banking, SMEs, and streamlined operations, with focus on technology and reaching more customers.

Q: Loan book growth and market share?

A: Mariano Biglia and Gustavo Manriquez mentioned growth in personal, car loans, and corporate segments, targeting oil and gas and medium-sized corporates, expecting to outpace industry.