Grupo Supervielle Reports 2Q23 Results - Seite 2

Today, our branches serve a larger number of clients more efficiently while our digital capabilities have allowed us to maintain a consolidated footprint and expand our reach across the country. This year we have also been focusing on cross-selling products to our existing base of individual customers. Additionally, we see many opportunities ahead to continue serving our customers through the launch of new products and services. Starting June 3, we expanded the timeframe our customers can invest in money market funds through our App to 24/7 from 24/5, helping protect transactional funds against inflation, and positioning us as the first bank to offer this convenient service. This initiative has been well received with 90,000 clients already investing through this platform.

Looking ahead, in our view the recent Primary elections reflect a desire of Argentine citizens for a sustainable economic model with a lower tax burden and tighter monetary and fiscal discipline. After the presidential elections we look forward to a more business friendly environment while position to grow and to further develop our franchise supported by our 15.7% Tier 1 capital ratio. Our capital is hedged against inflation,” concluded Mr. Supervielle.

Second quarter 2023 Highlights

Attributable Net Income of AR$6.3 billion in 2Q23, compared to a net loss of AR$3.8 billion in 2Q22 and a net gain of AR$690.0 million in 1Q23. In 1H23, Attributable Net Income was AR$6.9 billion compared to a loss of AR$4.4 billion in 1H22.

YoY, Net Income performance reflects the result of the execution on the Company’s strategic plan implemented in 2022 and 2023 to optimize operations and streamline its branch network.

ROAE was 17.6% in 2Q23 compared with negative 10.2% in 2Q22 and positive 2.0% in 1Q23. ROAE also benefited from a lower turnover tax burden starting this quarter. 1H23 ROAE was 9.9% compared to -6.0% in 1H22.

ROAA was 2.7% in 2Q23 compared to negative 1.4% in 2Q22 and positive 0.3% in 1Q23. 1H23 ROAA was 1.4% compared to -0.8% in 1H22.

Profit before income tax of AR$9.0 billion in 2Q23 compared to a loss of AR$4.7 billion in 2Q22 and a gain of AR$2.1 billion in 1Q23. Profit before income tax of AR$ 11.1 billion in 1H23 compared to a loss of AR$ 5.2 billion in 1H22.

YoY performance is explained by: i) higher spread and higher volumes in the investment portfolio on the back of higher interest rates, ii) a decrease of 51.6%, or AR$ 2.8 billion, in Loan loss provisions reflecting mainly a lower share of consumer finance loans, iii) a 5.9%, or AR$ 2.1 billion, decrease in expenses, reflecting the results of the operations optimization, iv) higher revenues from the brokerage and asset management businesses on increased activity and assets under management, and v) a lower turnover tax as in line with the Central Bank claim for the unconstitutionality of the turnover tax on income from Leliqs and Repos with the national monetary authority, the Bank is not taxing Leliqs in Buenos Aires and Mendoza since April and January this year, respectively. In addition, both Banking Associations ADEBA and ABA and the majority of financial institutions operating in these jurisdictions followed suit. These were partially offset by: i) weak credit demand with loan portfolio increasing below the 105.6% inflation; and ii) a 10.8%, or AR$ 734.0 million, increase in the loss from exposure to inflation mainly due to the 19% increase in net monetary assets excluding income tax credits while inflation increased to 105.6% YoY.