• Loan Book Growth: Expanded 15% sequentially and 60% year-to-date in real terms.
• Market Share Gain: Loan book gained 60 basis points in market share since the beginning of the year.
• Total Deposits: Increased in the high teens, with US deposits at a record high.
• Non-Performing Loans Ratio: Remained steady at a historic low.
• Net Interest Margin: Normalized due to lower inflation and evolving interest rate environment.
• Retail Loan Growth: Expanded 44% quarter-over-quarter.
• Car Loans: Doubled in volume, reinforcing position as the number two lender in this segment.
• Corporate Loan Book: Stable quarter-over-quarter and up 54% year-to-date.
• Invertironline Contribution: Accounted for 21% of total fee income with active clients reaching 580,000.
• Insurance Operation Growth: Achieved 36% quarterly growth in car insurance.
• Return on Equity (ROE): Reported at 5% in real terms for the quarter.
• Net Financial Income: Declined 29% sequentially to ARS161 billion.
• Operating Expenses: Increased 2% quarter-on-quarter, impacted by severance charges.
• Net Fee Income: Increased 25%, driven by brokerage and asset management fees.
• Loan Loss Provisions: Contracted 22%, reflecting healthy growth.
• Total Deposits Growth: Grew 17% sequentially, with a 90% increase in US dollar deposits.
• Loan-to-Deposit Ratio: Stood at 58%.
• CET1 Ratio: Declined 210 basis points sequentially to slightly over 19%.
• ROE Guidance: Maintained at 15% for the full year.
• Peso Loans Growth Expectation: Expected to expand between 70% to 80% in real terms for 2024.
• NPL Ratio Expectation: Expected to remain below 1% for the year.
• CET1 Ratio Expectation: Anticipated to close the year between 16% to 18%.

• Warning! GuruFocus has detected 5 Warning Signs with SUPV.

Release Date: November 26, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Grupo Supervielle SA (NYSE:SUPV) reported a 15% sequential and 60% year-to-date growth in its loan book, gaining 60 basis points in market share.
• The company achieved a record high in US deposits, driven by a tax amnesty, with total deposits up in the high teens year-to-date.
• Asset quality remains strong with a non-performing loans ratio at a historic low.
• Mobile transactions accounted for 56% of total transactions, indicating strong customer adoption of digital channels.
• Invertironline, the company's online brokerage platform, contributed 21% of total fee income, with active clients reaching a record 580,000.

Negative Points

• Grupo Supervielle SA (NYSE:SUPV) reported a lower return on equity (ROE) of 5% in real terms for the quarter.
• Net financial income declined 29% sequentially due to a drop in inflation and yield on government securities and loans.
• Operating expenses increased by 2% quarter-on-quarter, impacted by severance charges.
• The company's CET1 ratio declined by 210 basis points sequentially to slightly over 19% at quarter-end.
• The Argentine macroeconomic environment remains challenging, with Central Bank net reserves still negative and FX restrictions in place.

Q & A Highlights

Q: Considering the transition from lower investment securities to a stronger loan book expansion, when do you expect net interest income (NII) to return to year-over-year growth? How should we consider the evolution of the loan-to-deposit ratio and your capital ratio? A: As we transition to a growing loan portfolio, we expect NIM to start recovering as we continue this transition and review interest rates. We are focusing on higher yield products like personal and car loans. Regarding capital, we project the capital ratio to decrease from 19% to between 17% and 18% by year-end, depending on credit demand into 2025. - Mariano Biglia, CFO

Q: Given the low loan-to-deposit ratio, how should we think about its evolution? Should we expect it to be at 60% next year and 70% in 2026? A: We expect the loan-to-deposit ratio to increase as we transition from Central Bank and Treasury securities to loans. Currently close to 60%, we anticipate it to reach around 70% during 2025, growing loans at a higher pace while also increasing deposits. - Mariano Biglia, CFO

Q: With the impact of lower rates and inflation, is there a possibility of recognizing an impairment on investment securities held to maturity? A: No, we accrue the internal rate of return at the beginning of the instrument for inflation-linked bonds held to maturity. We will only recognize a loss if the bond is trading below its book value and sold. Our intention is to keep them as a hedge against inflation. - Mariano Biglia, CFO

Q: What are your economic forecasts for 2025 in terms of GDP growth, inflation, and currency? Also, will you need to raise capital given your growth? A: We expect a GDP increase of 4% to 5% in 2025, inflation to drop to 30%, and interest rates to decline to around 30%-31%. We do not anticipate needing to raise capital in 2025, as our current capital allows for 100% growth in real terms without going below regulatory levels. - Mariano Biglia, CFO

Q: What are the strategic plans for the investment platform, invertironline, over the next 18 months? A: We aim to grow our business in USA securities, expand private banking and SMBs, and launch new features like 24/7 cash management. We are also developing an investment-as-a-service product to reach more customers. - Diego Pizzulli, CEO of IOL Invertironline

For the complete transcript of the earnings call, please refer to the full earnings call transcript.