Grupo Supervielle S.A. Q1 FY2025 earnings call

• Introduced a cluster-based strategy to strengthen value proposition for retail and commercial customers. - Launched Argentina's first remunerated account, Tienda Supervielle on Mercado Libre, AI-powered customer interactions via WhatsApp, and an investment platform powered by invertironline. - Retail loans now over half of the portfolio, with 53% of loans to individuals tied to payroll/pension accounts and 57% of retail loans fully collateralized. - Maintained cost discipline, reducing expenses and achieving mid-single-digit ROE in real terms.

Total loans were up 3% sequentially and doubled year-over-year in real terms. Retail lending led, comprising nearly 52% of the total loan portfolio (up from 36% a year ago). Personal loans were up 29% quarter-on-quarter, car loans rose 12% sequentially, and credit cards increased 5% quarter-on-quarter. Commercial lending declined 4% sequentially. The NPL ratio reached 2% this quarter, aligned with industry levels, with the cost of risk rising to 5% but expected to be between 4%-4.5% for the full year. Client-related net financial income rose 17% sequentially, and the loan portfolio NIM improved 60 bps to 21.3%.

• Real loan growth expected 50%-60% for the full year, with retail loans remaining above 50% of the portfolio. - Total deposits expected to grow 40% in real terms, supported by rising dollar balances and remunerated accounts. - NIM expected to normalize in the 18%-20% range. - ROE expected to be between 12%-15% for the full year. - CET1 ratio expected to be in the 12%-13% range by year-end.

• Normalization of NPLs from historically low levels. - Impact of market volatility on the investment portfolio. - Potential challenges in maintaining capital levels due to aggressive loan growth and regulatory changes. - Dependence on macroeconomic factors like inflation, currency volatility, and IMF milestone agreements.

Q: On asset quality, NPL ratio, cost of risk. Elaboration on corporate and agriculture sector.

A: NPLs are a normalization from very low levels. Retail loan growth driving NPL increase. No issues in agriculture or corporate sectors, NPLs in corporate stable. Cost of risk expected to improve in following quarters.

Q: On capital, risk appetite, market share.

A: Risk appetite unchanged. Gradual shift to retail loans to sustain capital levels. Cost controls in place. Focus on expanding leverage to maintain ROE.

Q: On deposit growth, funding alternatives.

A: 12% QoQ deposit increase, driven by remunerated accounts for payroll customers. Launch of Cuenta Remunerada to change customer behavior, covering costs with expense cuts.

Q: On NIM compression, net income, ROE expectations.

A: NIM compression due to investment portfolio volatility. Loan portfolio NIM increased. Full year ROE expected 12%-15%.

Q: On government measures for non-declared dollars.

A: Positive impact on consumption, but details pending. Changes in Central Bank regulations expected to affect capital requirements.

Q: On risk weights, capital regulation.

A: Risk weights higher for loans than treasuries. Operational risk regulation change impacting capital, expecting Central Bank review to adjust.