Financial Data and Key Metrics Changes - The company reported a net loss of ARS 50.3 billion in Q3 2025, significantly impacted by high real interest rates and tight monetary policy [3][4] - Net financial income declined by 43% sequentially, with the NIM for pesos falling to 11.7% and total NIM to 10.8%, down 1,100 and 1,000 basis points respectively [6][7] - The CET1 ratio reached 13.2% at the end of the quarter and improved to 14.5% in October [5] Business Line Data and Key Metrics Changes - Loan growth was solid, up 8% in real terms, primarily driven by corporate lending, while retail lending slightly declined due to tightened origination standards [4] - The NPL ratio rose to 3.9%, mainly due to retail loans, but the NPL share of individuals remains below the retail loan share [4][5] - Deposit growth was strong, increasing by 15% quarter-on-quarter and over 40% year-on-year, with dollar deposits reaching a record high, up 31% sequentially [4] Market Data and Key Metrics Changes - The company anticipates real loan growth of 35%-40% for the full year 2025, led by corporate lending, with retail gradually resuming growth as disposable income improves [7][8] - The forecast for deposits is a growth of 30%-35%, with further gains in U.S. dollar-denominated deposits [8] Company Strategy and Development Direction - The company is focused on enhancing customer engagement and expanding cross-sell opportunities, particularly through its super app and InvertirOnline [5] - Strategic initiatives are aimed at unlocking the full value of the franchise, with a commitment to return to profitability and sustained long-term value [2][5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about post-election stabilization, with improving confidence and declining interest rates [3][4] - The company expects a gradual improvement in asset quality and loan growth as macroeconomic conditions normalize [7][8] Other Important Information - The company is maintaining tight control on costs, which declined by 2% quarter-on-quarter and 12% year-to-date in real terms [5] - The management is preparing for potential strategic alliances and partnerships to enhance resilience and adapt to market changes [66][68] Q&A Session Summary Question: Long-term growth expectations and segment growth - Management indicated that loan growth is expected to come mainly from corporates and SMEs, with retail picking up later in 2026 as economic conditions improve [32][33] Question: ROE expectations for next year - Management anticipates a medium-term target ROE of high single digits to low double digits for 2026, depending on the pace of economic recovery [51][52] Question: Corporate vs. retail loan mix - The current loan mix is tilted towards corporate loans, but management expects a more balanced approach by the end of 2026 as retail demand increases [59][60] Question: Asset quality and NPL dynamics - Management believes that the NPL ratio may peak in Q4 2025, with expectations for gradual improvement as macro conditions normalize [76][77] Question: Liquidity conditions and potential constraints - Management noted that increasing money demand post-elections should support deposit growth, and they are prepared to tap international markets if conditions allow [86]

Financial Data and Key Metrics Changes - The company reported a net loss of ARS 50.3 billion in Q3 2025, significantly impacted by high real interest rates and tight monetary policy [3][4][6] - Net financial income declined by 43% sequentially due to increased funding costs and local market volatility [6] - The CET1 ratio was 13.2% at the end of the quarter, improving to 14.5% in October [5] Business Line Data and Key Metrics Changes - Loan growth was solid, up 8% in real terms, primarily driven by the corporate segment, while retail lending slightly declined [4] - The NPL ratio rose to 3.9%, mainly due to retail loans, but the NPL share of individuals remains below the retail loan share [4][5] - Deposit growth was strong, increasing by 15% quarter on quarter and over 40% year on year, with dollar deposits reaching a record high [4] Market Data and Key Metrics Changes - The company anticipates real loan growth of 35%-40% for the full year 2025, led by corporate lending [7] - NIM is projected to be between 15%-18% for the full year, reflecting the impact of high interest rates [8] - The company expects an NPL ratio between 4.7%-5.1% and a net cost of risk of 5.8%-6.3% for the full year [8] Company Strategy and Development Direction - The company is focused on enhancing customer engagement and expanding cross-sell opportunities, particularly through its super app and Invertir Online [5] - Strategic initiatives are aimed at unlocking the full value of the franchise and returning to profitability [2][5] - The company plans to tap into international markets for funding if conditions allow, indicating a strategy to increase leverage [82] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the post-election environment, noting early signs of stabilization and improving confidence [2][3] - The company is preparing for a gradual recovery in loan demand, particularly from corporates and SMEs, as economic conditions improve [31] - Management acknowledged the challenges faced in Q3 but emphasized a focus on controlling costs and investing in business growth [5][6] Other Important Information - The political landscape in Argentina is shifting, with significant changes expected in governance and economic reforms following the recent elections [10][11] - The company is open to strategic alliances and partnerships to adapt to the evolving market conditions [67][68] Q&A Session Summary Question: Long-term growth expectations and segment growth - Management indicated that loan growth is expected to be led by corporates and SMEs, with retail lending picking up later in 2026 as economic conditions improve [31][32] Question: ROE expectations for next year - Management expects ROE to be in the high single digits or low double digits for 2026, depending on the pace of economic recovery and regulatory changes [51][52] Question: Corporate vs. retail loan mix - The company aims for a balanced loan mix, with corporate loans currently exceeding 50% of the total, and expects retail loans to increase as consumer confidence improves [58][59] Question: Asset quality and NPL dynamics - Management anticipates that NPLs may peak in Q4 2025, with gradual improvement expected as macroeconomic conditions stabilize [76][77] Question: Liquidity conditions and growth constraints - Management noted that liquidity conditions are improving post-elections, with expectations for increased deposit growth and a focus on capturing stable deposits [86]

Financial Data and Key Metrics Changes - The company reported a net loss of ARS 50.3 billion in Q3 2025, significantly impacted by high real interest rates and tight monetary policy [4][5] - Net financial income declined by 43% sequentially, with the peso NIM falling to 11.7% and total NIM to 10.8%, down 1,100 and 1,000 basis points respectively [7][9] - The CET1 ratio reached 13.2% at quarter end and improved to 14.5% in October, supported by lower deferred asset tax deductions [6] Business Line Data and Key Metrics Changes - Loan growth was solid, up 8% in real terms, primarily driven by the corporate segment, while retail lending declined slightly due to tightened origination standards [5] - The NPL ratio rose to 3.9%, mainly due to the retail segment, although the NPL share of individuals remains below the retail loan share [5][56] - Deposit growth was strong, increasing by 15% quarter on quarter in real terms and over 40% year on year, with dollar deposits reaching a record high, up 31% sequentially [5] Market Data and Key Metrics Changes - The company anticipates real loan growth of 35%-40% for the full year 2025, led by corporate lending, with retail gradually resuming growth as disposable income improves [9] - Deposits are forecasted to grow 30%-35%, with further share gains in US dollar-denominated deposit balances [9] Company Strategy and Development Direction - The company is focused on controlling costs, with a 2% decline quarter on quarter and a 12% decline year to date in real terms [6] - Strategic initiatives include scaling the super app, enhancing customer engagement, and expanding cross-sell opportunities, particularly at Invertir Online [6] - The company is committed to returning to profitability and delivering long-term value, supported by the expected easing of monetary conditions [3][4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about post-election stabilization, with improving confidence and declining interest rates [4] - The company expects a gradual improvement in asset quality, with NPLs projected to peak in Q4 2025 [56] - Future ROE is anticipated to range between negative 5% and 0% for the full year, with expectations for improvement in 2026 as economic conditions normalize [10][41] Other Important Information - The political landscape in Argentina is changing, with a shift towards a more fragmented political environment, which may impact economic reforms [12][18] - The company is open to strategic alliances and partnerships to enhance its competitive position in the market [53] Q&A Session Summary Question: Long-term growth expectations and segment growth - The company guided for real loan growth of 35%-40% this year, with expectations for corporate lending to lead growth and retail to pick up later [30][31] Question: ROE expectations for next year - The company expects ROE to be in the high single digits or low double digits for next year, depending on the pace of economic recovery [41][42] Question: Balance between corporate and retail loans - The company aims for a balanced loan mix, with corporate loans currently exceeding 50% of the mix, expecting retail to catch up as conditions improve [44][46] Question: Asset quality dynamics and NPL expectations - The company anticipates that NPLs may peak in Q4 2025, with a coverage ratio expected to remain between 110-120% [55][57] Question: Liquidity conditions and growth constraints - The company sees a rebound in money demand post-elections, which should support deposit growth and mitigate liquidity constraints [62]

Business Performance - Loan book grew by 8% QoQ, outperforming the industry growth of 7.6%[8] - Total deposits increased by 15% QoQ and 40% YoY[8] - US$ deposits reached record levels, up 31% QoQ and 56% YoY[8] - Net fee income increased by 7% QoQ and 9% YTD[8] Profitability and Asset Quality - The company experienced a net loss of 50 billion in 3Q25 due to increased Cost of Risk (COR)[8] - Net Interest Margin (NIM) declined to 11%[8] - NPL ratio increased to 3.9%[8] - Net COR was 6.4% in 3Q25 and 5.2% YTD[8] Strategic Initiatives and Capital - CET1 ratio stood at 13.2% as of September 2025, increasing to 14.5% by October 2025[8, 18] - The company continued to evolve its SuperApp[8] - Cost reduction of 2% QoQ and 12% YTD was achieved[8] Macroeconomic Context - The Central Bank Market Expectations Survey as of October 2025 projected inflation of 30%, an Fx eop at 1,532, and GDP growth of 3.9% in 2025[15, 19]

Core Viewpoint - The article expresses a bullish outlook on Argentine banks due to successful economic reforms following Javier Milei's presidential election at the end of 2023 [1]. Group 1: Economic Reforms - Economic reforms in Argentina have been successful, positively impacting the banking sector [1]. Group 2: Analyst Background - The analyst has over 18 years of experience in the financial markets, specializing in the financial sector and portfolio management [1].

Group 1 - Argentine financial markets experienced a rally following the overwhelming victory of Javier Milei's party in the midterm elections, with voters supporting economic reforms through fiscal tightening and free market measures [1][2] - The election results ensure the continuation of U.S. financial aid to Argentina, as President Trump had previously stated that support would depend on the election outcome [1] - Several Argentine stocks surged in pre-market trading, with Banco BBVA rising over 36%, Galicia Financial up 35%, Grupo Supervielle increasing by 31%, Banco Macro climbing 35%, and YPF and Pampa Energía both recording 26% gains [1] Group 2 - Despite a 17.7% year-to-date decline in the Argentine benchmark S&P MERVAL index, the Global X MSCI Argentina ETF saw a 16% increase in pre-market trading, narrowing its year-to-date loss to 10% [2] - The midterm elections involved the renewal of half of the Chamber of Deputies and one-third of the Senate, with Milei's party receiving approximately 41% of the votes compared to 31% for the leftist opposition [2] - Prior to the election, Argentine assets had experienced a downturn due to political tensions following Milei's party's losses in key local elections [2]

Core Points - The article discusses the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1] Summary by Categories Technical Requirements - Users are advised to enable Javascript and cookies in their browsers to ensure proper functionality [1] - The presence of ad-blockers can lead to being blocked from accessing certain content [1]

Group 1 - U.S. stocks showed mixed performance, with the Dow Jones index declining over 100 points on Monday [1] - PROS Holdings, Inc. shares surged 40% to $22.97 following the announcement of its acquisition by Thoma Bravo [1] - MBX Biosciences, Inc. saw a significant increase of 144% to $24.40 after its once-weekly Canvuparatide met primary endpoints in a Phase 2 trial [3] - Metsera, Inc. gained 62.8% to $54.25 amid reports of a near acquisition deal with Pfizer [3] - Anywhere Real Estate Inc. experienced a 57% rise to $11.13 due to a combination announcement with Compass in an all-stock transaction [3] - The ODP Corporation's shares increased by 33.6% to $27.82 after announcing a definitive agreement to be acquired by an affiliate of Atlas Holdings [3] - Banco BBVA Argentina S.A. shares rose 17.7% to $9.64 following U.S. Treasury Secretary Bessent's statement of support for Argentina [3] - Grupo Supervielle S.A. also saw a 16% increase to $5.83 under similar circumstances regarding U.S. support for Argentina [3] - Lumen Technologies, Inc. rose 12.5% to $6.43 after announcing significant progress in building infrastructure for the AI economy [3] - IREN Limited gained 10.7% to $42.88 after doubling its AI Cloud capacity to 23,000 GPUs [3]

Financial Performance - The net income for the period was reported at 22,019,076 thousand pesos, a significant decrease from 144,080,354 thousand pesos in the previous period[14]. - Net income for the six-month period ending June 30, 2025, was 22,962,926 thousand pesos, a decrease of 77.25% compared to 100,714,844 thousand pesos for the same period in 2024[20]. - Basic and diluted earnings per share for the six-month period were 50.30 pesos, down from 227.85 pesos in the previous year, reflecting a decline of 77.94%[18]. - Total comprehensive income for the six-month period was 15,822,294 thousand pesos, down from 88,006,424 thousand pesos in the same period last year, a decline of 82.00%[20]. - Total net income for the period attributable to owners of the parent company was 22,019,076 thousand pesos, reflecting a significant loss of 56,150,921 thousand pesos in Personal and Business Banking segment[89]. Assets and Liabilities - As of June 30, 2025, total assets increased to 6,034,280,153 thousand pesos, up from 5,214,742,564 thousand pesos as of December 31, 2024, representing a growth of approximately 15.7%[12]. - Total liabilities reached 5,099,178,896 thousand pesos, up from 4,266,694,494 thousand pesos, reflecting a growth of approximately 19.4%[14]. - Deposits increased to 4,157,362,444 thousand pesos from 3,652,557,156 thousand pesos, indicating a rise of around 13.8%[14]. - Cash and cash equivalents at the end of the period reached 1,171,632,891 thousand pesos, up from 472,991,815 thousand pesos at the end of June 2024[31]. - The total financial assets as of June 30, 2025, were valued at 5,137,935,528 thousand pesos, compared to 4,202,377,359 thousand pesos as of December 31, 2024, indicating an increase of about 22.3%[108]. Income and Expenses - Net interest income for the six-month period was 348,563,897 thousand pesos, a decrease of 40.38% from 585,747,716 thousand pesos in the prior year[16]. - Interest income for the six-month period ending June 30, 2025, totaled 681,772,495, down from 1,250,456,227 for the same period in 2024, reflecting a decrease of about 45.4%[124]. - Interest expenses for the six-month period ending June 30, 2025, were 333,208,598, compared to 664,708,511 for the same period in 2024, indicating a decrease of approximately 49.9%[124]. - Service fee income increased to 115,997,415 thousand pesos for the six-month period, up 15.36% from 100,729,390 thousand pesos in 2024[16]. - Personnel expenses decreased to 147,798,293 thousand pesos, down 16.67% from 177,349,886 thousand pesos in the prior year, indicating cost control efforts[20]. Credit Risk and Provisions - Loan loss provisions for the six-month period were 78,202,209 thousand pesos, significantly higher than 29,469,962 thousand pesos in the previous year, indicating increased risk management measures[20]. - The total expected credit loss (ECL) for financial instruments is 4,101,712,553 thousand pesos, with 3,887,596,028 thousand pesos in Stage 1, 127,163,028 thousand pesos in Stage 2, and 86,953,497 thousand pesos in Stage 3[63]. - The allowances for loan losses increased from 61,461,231 thousand pesos as of December 31, 2024, to 113,902,849 thousand pesos as of June 30, 2025, reflecting significant changes in credit risk[64]. - The Group's allowances for loan losses increased to (108,567,153) as of June 30, 2025, from (56,687,378) as of December 31, 2024, representing an increase of approximately 91.7%[124]. Strategic Focus and Future Outlook - The company is focusing on expanding its financing activities and enhancing its market presence through strategic investments and partnerships[10]. - Future outlook includes continued growth in loans and deposits, with a focus on improving net income and shareholder value[10]. Regulatory and Compliance - The financial statements have been prepared in accordance with International Accounting Standard No. 34 and the accounting framework established by the Central Bank of Argentina[37]. - The Group's financial statements have been restated in constant currency as of January 1, 2020, in compliance with local regulations[48]. Shareholder Equity and Dividends - Shareholders' equity attributable to owners of the parent company decreased to 932,912,898 thousand pesos from 946,794,939 thousand pesos, a decline of about 1.5%[14]. - The company constitution of reserves amounted to 14,118,388 thousand pesos, with a distribution of dividends totaling 32,184,048 thousand pesos[27]. - The total shareholders' equity attributable to the parent company was 859,120,842 thousand pesos as of December 31, 2023[27]. Market and Economic Conditions - Cumulative inflation in Argentina reached 15.09% between January 1 and June 30, 2025, with the peso depreciating from $1,032.50/US$ to $1,194.08/US$[199]. - Argentina's GDP grew by 5.8% in the first quarter of 2025, driven by exports and private consumption[200]. - An agreement with the IMF resulted in an initial disbursement of US$12 billion, allowing the government to exit exchange rate controls[201].

Financial Data and Key Metrics Changes - Net income for the second quarter was 13.6 billion pesos, up 62% sequentially, with a return on equity (ROE) of 6% driven by higher net financial income and lower inflation adjustment [11][12] - Clients' net financial income increased by 10%, supported by wider spreads on higher loan volumes, while market-related net financial income grew by 15% quarter on quarter [11][12] - Loan loss provisions rose by 32%, reflecting loan growth and higher risk weighting from retail lending [12][15] Business Line Data and Key Metrics Changes - Total loans increased by 14% sequentially and 71% year on year in real terms, with retail loans up 130% year on year, accounting for 47% of the total loan book [13][14] - Commercial lending grew by 23% quarter on quarter, now representing 53% of the portfolio, reflecting a disciplined credit stance [13][14] - The non-performing loan (NPL) ratio was 2.7%, with retail delinquency at 4.5%, indicating credit normalization [14][15] Market Data and Key Metrics Changes - Total funding increased by 30% year on year and 6% sequentially, with US dollar deposits up 154% year on year, reaching a record high of $943 million [16][17] - The loan to deposit ratio increased to nearly 72%, while leverage stood at 6.5x, well below historical levels [5][16] - Net interest margin expanded by 160 basis points sequentially to 20.8%, supported by strong spreads in both client and market-related portfolios [18][19] Company Strategy and Development Direction - The company is transitioning towards a more credit-driven balance sheet, with loans now accounting for 48% of total assets, up 25 percentage points since December 2023 [5] - The strategic focus includes enhancing client engagement through innovative products and services, such as a remunerated account and an integrated online store [6][7][8] - The company anticipates economic growth and credit expansion to resume post-election, supported by structural reforms [5][20] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment presents near-term headwinds due to election-related uncertainty, tight peso liquidity, and high real interest rates, but remains optimistic about post-election recovery [4][5] - The company expects real loan growth between 40% to 50% in 2025, contingent on monetary policy and regulatory developments [20][21] - Management anticipates net fee income growth of 10% in real terms this year, driven by higher bank fees and improved insurance penetration [21] Other Important Information - The CET1 ratio is expected to close the year between 12% to 13%, with potential upside if regulators approve Basel III operational risk treatment for group two banks [22] - The company is focused on driving efficiencies in headcount and costs, aiming for a contraction in expenses of 5% to 8% [21] Q&A Session Summary Question: On asset quality and cost of risk - Management acknowledged the increase in the NPL ratio but emphasized it remains below historical standards, indicating a healthy credit portfolio [26][27] - The cost of risk is expected to stabilize between 5% to 5.5% for the year, with no anticipated increases beyond this range [31][32] Question: On ROE expectations for next year - Management expects ROE to improve towards year-end, potentially reaching 15% in 2026, contingent on stabilization of monetary policy [34][35] Question: On growth guidance revision - The downward revision is attributed to macroeconomic transitions and funding scarcity, with expectations for recovery post-elections [39][41] Question: On NIM expectations - Management anticipates a balanced contribution from retail and commercial loans to NIM, with adjustments made based on credit conditions [96][97] Question: On interest rate volatility - Management believes the current high interest rates are transitory and will ease after the upcoming elections, impacting the overall economy positively [63][66] Question: On international financial institutions entering the market - There is optimism regarding new players entering the Argentine market, which is seen as a positive signal for business confidence [100][101]