Grupo Supervielle Reports 4Q23 Results

Grupo Supervielle S.A. (NYSE: SUPV; BYMA: SUPV), (“Supervielle” or the “Company”) a universal financial services group headquartered in Argentina with a nationwide presence, today reported results for the three and twelve-months period ended December 31, 2023.

Starting 1Q20, the Company began reporting results applying Hyperinflation Accounting, in accordance with IFRS rule IAS 29 (“IAS 29”) as established by the Central Bank.

Management Commentary

Commenting on fourth quarter 2023 results, Patricio Supervielle, Grupo Supervielle’s Chairman & CEO, noted: “We closed the year with a strong quarter delivering record high ROAE of 27% in real terms, even as we navigate a complex macro and political environment characterized by high inflation, market volatility, and weak loan demand. NIM spiked to an unusually high level in the quarter, mainly driven by a significant sequential increase in net financial income supported by our nimble asset and liability management capabilities in the context of the sharp peso devaluation in December and the strong performance of Argentine bonds. Share gains in low-cost corporate sight deposits also contributed to this good performance. NIM still remained unusually strong in January 2024.

Noteworthy, the NPL ratio continued to improve, reaching a record low of 1.2%, reflecting a shift in loans to middle-market corporates and payroll customers along with significantly lower exposure to consumer loans, together with the tightening of credit scoring standards throughout the year. In turn, the coverage ratio increased to 262%.

For the full year, ROE in real terms improved to 17% from negative 5% in 2022. Higher profitability was mainly driven by 44% growth in Net financial income, while a healthier loan mix contributed to a 22% decline in loan loss provisions, further supported by a 5% reduction in operating expenses. Advancing on our transformation process, we evolved our organization by deepening our client-centric and product-focused operational model, enabling us to better address customer needs by strengthening our digital product culture and accelerating time to market. As we move towards becoming an increasingly digital bank, we continue to enhance our service model, improving digital, virtual, and automatic channels while transforming our branch network to deliver higher-value transactions to customers, while boosting cross-selling efforts. This has contributed to our improved NPS and positioned our Virtual Hub to become a highly efficient transactional channel. As a result, we consolidated 7 branches in the fourth quarter and 28 during 2023, leaving us with 137 branches, down from 183 when we started this process in 2020. In turn, we reduced our staff by 4% while advancing digital adoption and increasing the number of customers per branch by 17% during the year. This, together with the strong revenue performance, contributed to a sustained improvement in the efficiency ratio to 55%, down from 89% in 2022.