Grupo Supervielle’s Earnings Call Highlights Growth and Challenges

Grupo Supervielle S.A. ((SUPV)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Grupo Supervielle S.A. painted a picture of robust performance coupled with strategic challenges. The company demonstrated significant growth in its loan book and U.S. dollar deposits, alongside a successful digital transformation and solid profitability. However, challenges such as a slight increase in the non-performing loan ratio and a decline in peso deposits were noted, with anticipated pressure on net interest margins due to macroeconomic conditions.

Strong Loan Book Expansion

Grupo Supervielle’s loan book saw a remarkable expansion, growing by 27% quarter-over-quarter and 107% year-on-year. This growth significantly outpaced the industry average of 50%, showcasing the company’s strong market position and effective lending strategies.

Record U.S. Dollar Deposits

The company achieved record levels in U.S. dollar deposits, which increased by 178% year-over-year. This growth translated into a gain of 80 basis points during the year, highlighting the bank’s ability to attract and retain foreign currency deposits.

Successful Digital Transformation

Grupo Supervielle completed its digital transformation, which began in 2020. This strategic shift has enhanced its operating model, making it a more agile and tech-driven institution, better positioned to meet the demands of modern banking.

Invertironline’s Strong Performance

The company’s online investment platform, Invertironline, reported a 57% year-on-year increase in its customer base. Assets under custody also grew significantly, reaching $1.7 billion, up 44% year-on-year, indicating strong performance and customer trust.

Continued Profitability

Grupo Supervielle delivered a return on equity (ROE) of 15.7% for the year, aligning with its targets. The bank also achieved a net interest margin of 25%, underscoring its continued profitability amidst challenging economic conditions.

Increased Non-Performing Loan Ratio

The non-performing loan ratio saw a slight increase to 1.3%. While this is still within historically low levels, it indicates a minor rise that the company will need to monitor closely.

Decline in Peso Deposits

Peso deposits declined by 6% year-on-year, reflecting a broader industry trend of a sharp drop in peso deposits during the first quarter of 2024. This decline presents a challenge for the bank in maintaining its deposit base.

Challenges in Maintaining Margins

Grupo Supervielle anticipates a decrease in its net interest margin to a range of 18% to 20% in 2025. This expectation is due to lower inflation and interest rate levels, posing a challenge for maintaining profitability.

Forward-Looking Guidance

Looking ahead to 2025, Grupo Supervielle provided comprehensive guidance. The company expects a loan portfolio expansion of over 60% in real terms, with a focus on increasing retail loans to 50% of total loans. Deposits are anticipated to grow by approximately 40%, particularly U.S. dollar deposits. The bank aims to maintain a strong Tier 1 capital ratio of 12% to 13% and expects the non-performing loan ratio to normalize between 2% and 2.2%. Profitability is set to improve progressively, with a targeted annual ROE of 12% to 15%, supported by digital transformation and asset quality enhancement.

In summary, Grupo Supervielle’s earnings call highlighted a strong performance with significant growth in key areas, despite facing challenges in deposit retention and margin maintenance. The forward-looking guidance suggests a strategic focus on expanding the loan portfolio, enhancing digital capabilities, and maintaining asset quality to drive sustainable growth and profitability.