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01/10 16:12
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong retail loan growth and improved NIM, but concerns about rising NPL ratios and cost of risk persist. The Q&A revealed management's evasiveness on sector-specific issues, particularly in agriculture. Although there is optimism in deposit growth and new product launches, economic and regulatory uncertainties loom. The lack of a share buyback program and a decline in net financial income further temper optimism. Given these mixed signals, the stock price is likely to remain stable, resulting in a neutral sentiment.
Total Loans Up 3% sequentially and doubled year-over-year in real terms, driven by retail lending which rose 196% year-on-year.
Retail Loans Increased by 196% year-on-year, now representing nearly 52% of total loan portfolio, up from 36% a year ago.
Commercial Lending Up 58% year-on-year but contracted slightly sequentially due to softer demand from corporate clients.
NPL Ratio Reached 2%, reflecting rapid expansion in retail loans, in line with industry benchmarks.
Cost of Risk Rose to 5%, reflecting higher provisions aligned with retail loan growth.
Client-related Net Financial Income Rose 17% sequentially, reflecting momentum in retail lending.
Loan Portfolio NIM Improved 60 bps to 21.3%, benefiting from a growing share of higher yield products.
Total Net Financial Income Declined 12% quarter-over-quarter due to correction in bond valuations and more restrictive monetary policy.
Peso Deposits Up 12% sequentially, while dollar-denominated deposits were practically flat.
Operating Expenses Down 12% sequentially and 17% year-on-year, reflecting focus on driving real-term reductions.
ROE Delivered a mid-single-digit ROE in real terms, expected to improve progressively, reaching between 12% and 15% for the year.
CET1 Ratio Expected to remain between 12% to 13%, factoring in loan growth and regulatory adjustments.
New Product Launch: In April, we launched Argentina's first remunerated account allowing payroll and SME clients to earn daily interest in Peso and U.S. dollars. We launched Tienda Supervielle in the Mercado Libre platform, integrated into our mobile app, enhancing customer experience. An investment platform was launched to enable customers to conduct investment transactions powered by invertironline.
Market Expansion: Retail loans now comprise over 52% of total loan portfolio, up from 36% a year ago, indicating a strategic shift towards higher-margin products.
Operational Efficiency: Operating expenses were down 12% sequentially and 17% year-on-year, reflecting a focus on cost reduction. Customer-related net financial income increased in the high teens, highlighting core franchise strength.
Strategic Shift: Introduced a cluster-based strategy to strengthen value proposition across retail and commercial customers. Finalized strategic road map to position Supervielle as a differentiated player blending traditional banking with fintech agility.
Loan Demand Risks: Short-term softness in loan demand due to external factors including limited peso liquidity, currency volatility, and caution ahead of the IMF milestone agreement.
NPL Ratio Risks: NPL ratio rose to 2%, primarily due to rapid expansion in retail loans, indicating potential risks in asset quality as the retail loan book grows.
Economic Factors: Economic uncertainties including inflation, foreign exchange restrictions, and the impact of monetary policy adjustments on peso and dollar-denominated deposits.
Regulatory Issues: Ongoing deregulation measures in Argentina may present both opportunities and challenges, requiring careful navigation of the evolving regulatory landscape.
Market Volatility: Market volatility affecting the investment portfolio, leading to a decline in net financial income from investments.
Funding Challenges: Dependence on peso deposits which remain sensitive to monetary policy, posing risks to funding stability.
Cost of Risk Adjustments: Increased expectations for cost of risk due to a higher share of retail loans, now projected between 4% to 4.5%.
Cluster-based Strategy: Introduced to strengthen value proposition across retail and commercial customers, aiming to attract new clients.
Retail Loan Growth: Retail loans now comprise over 50% of total loan portfolio, up from a third a year ago, emphasizing higher margin segments.
Remunerated Account Launch: Launched Argentina's first remunerated account for payroll and SME clients, enhancing client experience and funding base.
Tienda Supervielle Launch: Introduced a fully integrated platform in Mercado Libre for seamless customer financing, shopping, and investing.
AI-powered Customer Interactions: Implemented AI interactions via WhatsApp for real-time support, enhancing customer service.
Investment Platform Launch: Launched an investment platform powered by invertironline to facilitate investment transactions.
Loan Growth Expectations: Expect real loan growth between 50% to 60% for the full year, down from over 60%.
NPL Ratio Guidance: Expect NPL ratio to range between 2.2% to 2.5% at year-end, up from 2% to 2.2%.
Cost of Risk Expectations: Net cost of risk now expected to range between 4% to 4.5%, up from 3.7% to 4%.
NIM Expectations: Expect NIM to normalize in the 18% to 20% range.
Fee Income Growth: Expect fee income to grow by at least 10% in real terms in 2025.
ROE Expectations: Expect ROE to improve progressively, reaching between 12% and 15% for the year.
CET1 Ratio Expectations: Maintain year-end CET1 ratio expectations of 12% to 13%.
Share Buyback Program: None
The earnings call highlights several negative factors: rising NPL ratio, significant decline in NIM, net loss, and regulatory uncertainties. The Q&A reveals optimism for future growth but lacks specific details, and management's vague responses on key issues add uncertainty. Despite some positive elements like deposit growth and potential long-term ROE improvement, the immediate financial challenges and lack of clear guidance suggest a negative short-term market reaction.
The earnings call presents a mixed picture: strong loan growth and NIM expansion are positive, but increased loan loss provisions and a rising NPL ratio are concerning. The Q&A section reveals uncertainties around NPL trends and cost of risk, with management providing vague responses on key issues. Although some strategic initiatives are promising, the revised growth guidance and macroeconomic challenges temper optimism. Overall, the sentiment remains neutral as positive elements are balanced by risks and uncertainties.
The earnings call presents mixed signals. Basic financial performance shows modest loan growth and a rise in deposits, but NPL ratios increased, indicating risk. Product development efforts like the remunerated account and AI integration are positive, but market volatility and regulatory risks persist. The Q&A section reveals management's optimism but also avoidance of specific issues. The absence of a share buyback program and uncertain economic conditions further temper expectations. Overall, these factors suggest a neutral stock price movement in the short term.
The earnings call highlights strong retail loan growth and improved NIM, but concerns about rising NPL ratios and cost of risk persist. The Q&A revealed management's evasiveness on sector-specific issues, particularly in agriculture. Although there is optimism in deposit growth and new product launches, economic and regulatory uncertainties loom. The lack of a share buyback program and a decline in net financial income further temper optimism. Given these mixed signals, the stock price is likely to remain stable, resulting in a neutral sentiment.
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