SUPV3.BA - Earnings call transcript Q3 2022

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Ana Bartesaghi

Good morning, everyone. Welcome to the Grupo Supervielle Third Quarter 2022 Earnings Call. This is Ana Bartesaghi, Treasurer and IRO. A slide presentation will accompany today's webinar, which is available in Investors section of Grupo Supervielle's Investor Relations website. Today's conference call is being recorded. today's and be Financial Mariano during Chairman Supervielle, Officer. Speaking CEO; and Biglia, Instructions] call Patricio will our [Operator our Chief Board Also Vice-Chairman Supervielle. Alejandro is and the joining Banco CEO Stengel, of us of First will All available Q&A for session. be the

reflect CFO, the the new contain refer call by management's and events call forward-looking will please look We our or section you SEC. at subject to reminder, take Patricio Afterwards, and and and statements circumstances. start risks several key Chairman Patricio, go earnings expectations our forward-looking recent of will the ahead. profitability. Supervielle, a initiatives statements obligation based a certain release perspectives. filings followed no As transformation and to deeper beliefs our or any be to changed performance revise today's This will discussing on our a to our current will uncertainties. with our and assume and near-term I session. Biglia, statements CEO, update Q&A past or Mariano forward-looking

Patricio Supervielle

for Good earnings you Slide everyone. Thank X today. presentation. us you, Ana. turn Thank on Please morning, our joining to

with enhancing are our experience ongoing execute while ahead track, third in equity, macroeconomic back to services. highest into of the majority bank, level continue operational we products our IUDU's and finance, expect rates complete can branch hiked and demand rightsizing which environment interest a client the pillars business this Banco quarter in segment moving to the strategy increasingly of percentage we're while Supervielle the the process seamless XX financial experience. In on key with customer the decades, driving broad consumer quarter, and along on efficiencies, XX% of context, Integrating landing points. office this of improve assortment fourth the offering through seizing loan return We omnichannel transformation they lows. this in year, of while and customer we the access to the designed an Inflation of is strategic all-time the base in at operating on adverse its with hit network, our efficiencies,

traction our financial also business, low-performing increased branches including strong Luis while productivity. serve transferred We service of of a transforming network, entirely branch in We the San driving agent that gained the to government continue our Province XX and month, private branches, total close to leverage, another in a branches regulator region of a virtual through the operational of with franchise client reaching XX Seeking we a XX. this this additional combination five filed hubs. request

to expect during merger quarter first finalize We the of these branches next year. of the

stable maintain and a funding market performance Narvaez] to approach and to industry and advancing Improving despite interest high NPLs acquisition X.X%. the subsidiary we'll our with this capital Central are quality but update our asset repricing a inflation interest a current risk wait Bank prioritize minimum challenging to impacted consolidated weather reported I market peso prudent shortly, ratio the liquidity loans. loss on Tier Mariano rates net rule challenges, in quarter, while cost context. quality the basis hedge economic reported a we key finalized stand-alone of will of where of macro are pillars of to an gain two a demand, market mainly and a accelerating We rates our strategy, improving detail high customer the target bank shortly. inflation share X.X% and continue on profitability cross-sell on the regulatory [de in we We provide are return With overall also On low accelerating dropping a greater weighing financial heavily net capital terms, of our asset has XX.X%. favorable loan low enough for can allowed and - circumstances. weak loan of equity average Argentine lag will sequentially. by interest in to inflation and on remain quarter basis, And real offer to rates for and X the discuss more by while demand, us the

turn to Now please Page X.

established have second of profitability a We of path to close clear towards XXXX. Q the the

our the review pathway. me Let structural drivers underlying

next us remain most finance be has IUDU has operations. office customers to our First, this dragging the a serve economic the With business allow will source high Transferring to initiative efficiency that segment the levels year, will from the efficiently. in this and of and at a to a crisis factor inflation in expected back suffered consumer worsening macro. major been sector more bank

XX at IUDU and and XX% levels. including from includes have XX reduced process been Second, XX% headcount count consolidated reduction Moreover, has by This XX% rightsized. been branches, in the in an XXXX head bank. at

San of a will on a the quarter are and model. to of drive private in Following the towards keeping positive the province, us agent efficient of the related end profitability, allow with relationship through Luis, to the this both equity business corporates us transfer initiatives solid These individuals the sector more we XXXX. return properties a second financial of adding

growth. Digital onboarded and up of last addition revenue we by times the with from strong of X%, increase Corporate digitally X.X focused up this, year-on-year, are September clients, a customers customers turn Beyond added remain encouraged customers we on year-on-year in clients. year. XXX,XXX We've XX% up SME from X,XXX of and to a retail also XX% number the growing XX% posted driving ago. rose new clients, year total

As growth call more ahead. With to me let structure driving a improve, this, and deliver efficient expect to turn market sustainable with to loan Mariano, Please, the acquisition profitability. go we customer Mariano. conditions begin

Mariano Biglia

contributing everyone. drivers to and turn second reported Thank improvement ARSX.X a the loss ARSXXX you, billion reduction X. a sequential Patricio, million, from quarter. and We line loss in good day, to net Please included. main of Slide the The the items

reflecting trade. net billion, higher to increasing market First, X% financial income, ARSX.X mainly equivalent

personnel provisions salaries Efficiencies terms. XX% of billion contributed ARSX.X And were per by These in reflecting loss the loss were lower ARSX.X to mainly as tax sequential higher on taxable accelerated increase headcount drop in increases decline a quality. expenses reductions, based a a forward. up real billion, also subsidiaries offset or ramping anticipate billion impacting partially wages that in tax benefits to in to ARSX.X negatively asset as reflected equal quarter, Patricio costs. at third, inflation a the loan carry discussed, inflation in Second, XX% reducing income IUDU's income and higher of

consequent inflation the reflecting inflation, X. credit Slide for increased the and below across segments. weak demand Total the quarter to loans Turning of impact accelerated

Notably, over we loans performance weighting the the trend decline at the sequentially point with loans government contracted loan line Province in San when total serves XX% of business to overall Our that was consumer of book. slow in as the total inflationary excluding industry resulting financial Luis. down in originations IUDU agent sequential an continued the increasingly loan a percentage nearly our context, of

funding Total Moving sequentially in as Argentine deposits terms Slide on institutional peso liquidity, declined real in the we reducing funding. X. to on manage high teens

low-cost down the of our we sustained pillar focus were the by while service. seasonally it Average funding deposits nearly while market core our Year-on-year, deposits base, were key on deposits our share X% of down strengthening core transfer the impacted were peso a agent in quarter-on-quarter, average financial deposits, X.X%. In reflecting gained lower, business strategy. was peso addition, inside

more driven income a basis NIM combined Slide higher points shown to Bank X% of with peso cost volume As is offset interest average In by lack minimum weak expansion to on turn, basis in a funds, by rules interest driven was the mainly It the X, repricing net increased in billion. XXX demand. total of over was the low Central single-digit loans net up XX%. rates ARSXX.X credit for in financial XXX margin than regulatory and peso quarter-on-quarter volumes increase sequentially rates lower of by interest decline points and Leliqs.

Moving on X. to Page

Our quarter-on-quarter loss quality NPL with sequentially cost us report reducing low and increasingly of a loan on of to Total risk of net exposure protecting ratio risk dropping net focus to X.X%. provisions total allowed were asset a stable. by a X.X% down XX% appetite, our itemizing

asset of Province following San financial quality, provisions the addition of lower of cost in reflects transfer with release healthy granted agreement agency the a In Luis. under the loans to risk

We ratio rated We're also restated which accelerated contributed IUDU. In context the The began we a ratio reducing stable the to adoption to 'XX. loans considering credit goal. citizens insurance senior explain credit policy of quarter at detail accounting at shortly. total lowered new expected of our contracted for loan against transfer the more bank. in and this to I also second IUDU provisions nearly inflation, stood and for will loss XXX%, customers at coverage the origination

the in ratio driven a X.X%, NPL basis loans the portfolio to ratio NPL XXX stood XX.X%, the down loan its decline non-performing bank, points in at Finally, IUDU reduction a consumer the high-XXs. around in of while posted at by

Now impairment loss X on for IUDU, to to please based transferring model to models requires at Slide instruments. quarter, the financial IFRS and bank, Together reserves recognized turn loans the the IUDU customers also with we XX. expected adopted which loan this be loss

the they Expected produce quarter the loan was to loans have to loans results the where January different the provisions reduced, IUDU the credit reserve were loss loss allowing and in with X, accounting XXXX, accounting comparison standard. loan As do result, of allocating same accounting results to losses migrate the the a standard. bank retrospectively book, when at same balances loan change IUDU not and dates related thus adopted to the to

Shareholders over provisions XXXX, as The year of affected percentage ratio by central net added first importantly, than and back was offset loan Under inflation loan-loss position. loan second higher improved ARSX under a capital. credit Tier billion, loss bank points where ratios loss and Slightly loss loss by IFRS lower year million to this higher loan by the compared reserves, adjustment X equity figures expected as half reported reserves at the loss loss the rose to beginning monetary four reserves the X been adopting the loss to which XXXX, decreased capital result, increased a not have ARSXXX first ARSX quarters IUDU. model, reported the XXX%. But billion. IFRS more coverage quarters net minimum the reserves X Tier at were the XX full of As reduced X of of for XXXX restated are restated. exceed before year net by for

year. real charges down The XX.X% lagged inflation effects mainly Page quarter quarter, XX% and to XX. in transformation. a and efficiency to administrative a retirement points sequentially. reflects efficiency in This government the from in ratio both in ongoing of to contributed The cost in second in was this and lower from cost the as Moreover, sharp declined supporting related sequential will the holdings. declined security the by decline and driven prices terms. acquisition personnel and year-on-year customer we drop have just transformation offset from efficiency programs excluding over quarter our and the second XX% period. in the It quarter been Expenses execution IUDU, digital by negatively improvement increase to turn This X% our union X% increases impacted expenses, terms. salary salary the increasing of the improvement by driven of turning our is in increased efficiency improved early a when X% resulting when in this XXX implementation opposite quarters, XX.X% projects benefit prior basis revenues, was costs has at in headcount. sequential comparable bank points drop quarter that the in Together, severance partially this in increases anticipating ratio to a nearly expenses Now percentage real by X the inflation, the experienced

full a contracted Slide views earlier, the drivers contributes our our the XXXX. year new risks this loan senior XX, cost our policy the for to to business main cover segment. share by citizen As this quarter, I bank for noted and includes loss which we perspectives On lower segment, of also the within the introduce insurance starting of for life provisions

expect deposits, XXXX below we end now to levels In inflation. terms of with

we Before inflation. line expecting with were in to grow

inflation as During see above in gain checking additional to expect our customer XXXX, accounts. continue in expanding we a to pickup share base we grow growth, deposits and

the to year-end expected increase XXXX. adequate high-and-low by XX.X% X XX at levels, both between Tier XXX% range. our against the ratio that XX.X% This ranging of Finally, a of the and XXXX Recall is bps and is capital hedged remains end in inflation. remain

for recap XXXX. prior these, XXXX challenging all book our to let Beyond to unchanged next In views. and this below context, remain grow views our me loan elaborate And for inflation expect from in Starting continue year. expectations on loans. metrics our that quarter with

line XX% we the for With with growing continue see in market to similar Note Survey of that we calls year-to-date. loans those for XXXX, levels consensus as risk this of annual month. For per asset Bank the quality, inflation. published inflation cost at to reported year respect to for XXXX, anticipate Central

With slowed is provisions the last nine asset unchanged reported expected versus focus the year. the XXXX year. our with for loan loan and stable. MDL the also to relatively line we for growth remain in net for XXXX risk to remain XXXX and loss for of quality, first range cost months has as expect Continuing NIM level of

increase to real terms income in XXXX. in financial net expect also We

expected line bank When recover from terms is individuals in with fees views increase XXXX fee in remain premiums and anticipated regarding reprice unchanged, the of Our inflation. of the bulk XXXX. income to are to real shortfall insurance as from income with

our We with of additional digital and strategy, from implementation expectations increasing continued count slightly inflation, also efficiencies costs maintain customer acquisition expenses of transformation operating costs. reflecting costs head the above our

In to below expected grow are related to digital XX. transformation Slide addition, IT investments inflation.

improved take please for turn cutting cost to at driving look Slide a opening XX our deeper efficiency. to Before initiatives Q&A, operating

bank, of San loan base that billion, anticipated main years. ARSX.X the the As totaling the two savings XXXX, financial the client power to includes ARSX.X savings transfer also merged this ARSX This with past figures reflecting headcounts of bank the reduction from purchasing of and implementation slide, to and ARSX.X achieve the initiatives past expect over from two in in as - Province includes at being are from ARSX we cost in billion of branches billion shown the of the the XXXX, which reduction result during derived on closure to the reduction Note bank operations billion over the years, under pesos in Luis. on headcount including anticipated IUDU of book billion XXXX. of are agent are savings XX stated that transfer based being December the

go are for Ana, to we questions. floor the open ready ahead. Now please

Ana Bartesaghi

Atlantic Thank comes [indiscernible], Securities. first [Operator Our you, question Instructions] from Mariano.

Unidentified Analyst

a Hi, concise thank to you for my taking question. have hard question. yet I answer

what So its conditions? depends for what Supervielle around more What's Grupo favorable macro to hands? would on you. it take Thank operation? turn your in And

Patricio Supervielle

take, Do you want to Mariano?

Mariano Biglia

question. for Yes. your Hello, Rodrigo. Thank you

profit Let me answer regarding for for us to turn next year. around our

savings Province XX bank, with to Then as us agreement ARSX.X agent currency. relating XXXX already the which a billion Patricio into during of handled. of XXXX, and agreements. cost in Luis to of profitability of operations during based savings And San have the this that of with integration existed an the the cost discussed deploying transfer As is being been on initiatives, the IUDU first we allow of have we the initiatives presentation, of part the which reducing are financial have these what main transfer the have extending we customers efficiencies we fact, branches

the operate sector and the Luis customers, cities companies the locations are in that of San We main private main the with individuals maintaining both in province. and branches

in in XX% the bank So two level, the also And we over invertironline there in are at then last been place are decreasing years. headcount already presence are keeping cost - much reductions at the have a bank efficient the more maintaining taking already with which also - the province way.

we've increase this our which significant are revenue control in our being our of are have allowed year. us been XXX,XXX in customers and us digital the next Most individual for will transformation these onboarded to Then initiatives by strategy, on So costs digitally. has these to base under customers are customer year. working and a implemented reduction being allow very side,

is we line a that efficiency. inflation growth growth we've in - source So also year, as its And next year, also in to opposed a of our inflation. will this seen see portfolio for where below with loan

clearly increase are accelerated then main the one, the I profitability. for and will course, that margins risks, regulation which the mainly us punitive to Those control. now the context, main we caps regulation, the our there than allow not and of related under and is regulatory which very macroeconomic inflation, more the are environment our And think, flows. results So with being in this that's initiatives main related a affecting for then what punitive inflation expect those costs. to has risks been business our the are our to rate interest And also is environment, and

So main drivers environment. that that a the control. macro expect we can ones our It's profitability, the be only are drivers. very path not we In will because the to main

Unidentified Analyst

was really you. That helpful. Thank

Ana Bartesaghi

Rodrigo. you, Thank Okay.

should a Q&A It's to IUDU. has tell but Itau. the what's Aranda, be us P&L next Alejandra asked? how have deposit from the one, to would implicit have color like process What starting was on think exposure more I XXXX? other agreement, on quarters? government this on box the marked rates, show meaning union us I efficiencies equity paper of of We loan related more to on the color Patricio, sure headcount, walk show growth, in I'm return can GDP, And in we inflation, IUDU. on carried question you you behind are etc., of we premises that the where on going through it to Hi, and positive think to are, integration this, Could to

Patricio Supervielle

to acceleration digital because the shift platforms the a shift radical said, two in idea. add strategy, inflation strategy platforms, what capture of made to really was the very We with me in Let in Mariano That a clients. XXXX. had we

to independent platform. the to was we attend at also of decided And First, only Supervielle, the a one IUDU the consumer Banco main finance platform, course, to operations. have have of idea but the engine, platform

much one will operate efficient. only we is more platform, this So and with this

and macro high the continues wider to transferred of had outlook, decided integration inflation the with although not which these array clients. hope stricter, some through Notwithstanding with and segments results to at consumer - going because originally an get with high and them provide a that with with hopefully to are Supervielle, much we that bank Banco to standards high synergies that these we better we also origination cross-selling much With inflation, they down. services commercial to is have at such inflation basically inflation, IUDU, financial

up. going In fact, it's

this have sector. we stricter at consumer basically, standards So origination much with point finance the

to don't know So at very want you take I if a add this we're low reflecting time. risk appetite to something.

Mariano Biglia

maybe asking what was are very much, the of Not process we are. Alejandra related to what we or to as where of part integration

by credit clients We and batches. quickly we would transferred the that bit the say - and moving moving are And we earlier. no are if of bank. XXX,XXX loans been there this already of cards roughly to actually to middle the little maybe a portfolio expect And around by delays have December, I process, we are complete

target very expected So we're as that moving process. and well and in on

Patricio Supervielle

the And to want Dorinka also, continued being by important is contract I'd That's to Banco I that stress. say Supervielle. another with part that like

Ana Bartesaghi

from players one facing? place the Aranda given how Okay. I taking you more as are some Alejandra and have imagine consolidation well. that Thinking situation do system the Argentina ahead,

Patricio Supervielle

historically, are I GDP to the in think I last has a years. XX basically, of least that in the lowest, in think ratio at loans the the Well, been we -

the a there was business very according There is expectation. business actions change drastic change there when behavior - past or So was a of in and history, community. when to in rapid

this change loans very more that tackle are And and business. that more to there there radical with much the and be of will that will the the for new inflation, mean starts will deregulate demand government this - will the of So change with hopefully, - demand of normalization monetization rapid be and positive it - mean will be us. banking much will and

personnel. our consolidation we We and are we've in for with of further our preparing the that the been - operating well mentioned prepared with the branches - with transformation, that we in driving efficiencies efficiencies captured digital

there I have individuals growing a capital of demand this consolidation corporations. loans - to be the have and be we a in sufficient So by we this loans, but consolidation will we so - will of think consolidation, believe first growth looking demand in that forward, solid of terms attend of

be So I what an would it organic say, consolidation. would

consolidation. very are play we this to well So placed in

Ana Bartesaghi

we'll questions new when Well, for for point wait Okay. just - second. we a

and the us Okay. We joining your of our Thank company. business In the interest to remain end meeting have. over good day. Ladies may coming quarter. to any appreciate you questions and the updates today's gentlemen, We interim, Q&A you look Have you financial a more of available months for we session. answer we and have today. next in forward reached that providing

Grupo Supervielle (SUPV) 13 Nov 222022 Q3 Earnings call transcript