Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Grupo Supervielle SA (SUPV, Financial) reported a solid loan volume growth and market share gains, driven by an early-mover strategy.
- The company achieved a record low non-performing loan (NPL) ratio and a coverage ratio of over 300%, indicating strong asset quality.
- Digital adoption among retail customers has increased significantly, with 65% of the customer base now digital, reducing the cost to serve.
- The company's online brokerage platform in Argentina contributed 19% of total fee income, with assets under management growing 23% sequentially.
- Grupo Supervielle SA (SUPV) has a robust capitalization with a CET1 ratio of 21%, positioning it well for continued growth.
Negative Points
- Net interest margin (NIM) declined during the quarter due to lower spreads following a sharp drop in interest rates.
- Net fee income declined by 7% as fees increased below the accumulated inflation rate of 272%.
- The company faced a 255% increase in inflation adjustments on higher net monetary assets.
- Grupo Supervielle SA (SUPV) is experiencing a challenging environment with expected ROEs below 10% in the second half of the year.
- The company is transitioning its asset base from Central Bank securities to private sector loans, which may involve increased risk.
Q & A Highlights
Q: Can you provide more details on the turnover tax provision and its future implications?
A: The provision is ARS 33 billion, related to turnover tax imposed by the City of Buenos Aires on revenues from Central Bank securities. We are conservative with this provision and have made a claim with the Supreme Court, which could take years to resolve. The provision is not directly linked to inflation but includes interest rates if the tax is paid. (Mariano Biglia, CFO)
Q: What is the outlook for capital consumption and risk-weighted asset growth?
A: We expect continued growth in risk-weighted assets, primarily from corporate loans in dynamic industries like oil and gas. The CET1 ratio is anticipated to range between 17% and 20% by year-end, reflecting increased loan demand. (Mariano Biglia, CFO)
Q: Can you elaborate on the implications of undoing positions with the Central Bank and the impact on repos?
A: We agreed to sell put options on treasury notes to the Central Bank, as these are part of our long-term investment portfolio. The government is shifting debt responsibility to the treasury, which we view as a positive move for fiscal accountability. (Mariano Biglia, CFO)
Q: What industries are driving the current loan demand, and what is your ROE outlook?
A: Loan demand is strong in oil and gas, mining, and agribusiness. We expect ROE to be below 10% in the second half of the year, with a long-term target of 20% as loan demand and economic conditions improve. (Emerico Alejandro Stengel, CEO of Banco Supervielle)
Q: How is the mortgage operation progressing, and what are the challenges?
A: We are originating mortgages successfully, with an average ticket size of $80,000. Growth is contingent on regulatory changes for securitization, which we are working on to manage capital exposure. (Emerico Alejandro Stengel, CEO of Banco Supervielle)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
