Financial Data and Key Metrics Changes - The company reported a sequential increase in total assets by 22%, returning to levels seen in Q3 2019, with Leliq securities now comprising 21% of total assets, up from nearly 5% in the prior quarter [41] - Comparable net financial income increased nearly 1% to AR$7.4 billion sequentially, despite a sharp decline in market interest rates [49] - Return on average equity improved to nearly 8% this quarter from negative 13% in Q4 2019 [62] Business Line Data and Key Metrics Changes - Total loans contracted by 7% sequentially, reflecting economic contraction and uncertainty, with declines in both peso and U.S. dollar-denominated loans [42] - The loan portfolio saw a 3% sequential increase in April, primarily driven by SME loans at a 24% interest rate [44] - Net service fee income rose by 15% sequentially, driven by higher deposit account fees and asset management revenues [51] Market Data and Key Metrics Changes - Economic activity in Argentina experienced a sharp contraction of nearly 12% year-on-year in March, exacerbated by the COVID-19 lockdown [32] - System liquidity remained high, with total system deposits up nearly 18%, driven by a 25% increase in peso deposits [37] - Inflation dropped to 7.8% in the quarter, with a further decline to 1.5% in April [34] Company Strategy and Development Direction - The company is focusing on digital transformation to adapt to a low-touch environment, enhancing online functionalities and ATM infrastructure [11] - There is a strong emphasis on maintaining liquidity and capitalization levels to ensure long-term sustainability amid the crisis [10] - The company aims to capture growth opportunities by focusing on cross-selling non-credit products and expanding its digital offerings [68] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the timing of economic recovery, which is dependent on various factors including the depth of the pandemic and government measures [66] - The company is proactively monitoring its credit portfolio and expects to make provisions in the near future as visibility improves [24] - Management remains confident in the company's foundation to navigate through the crisis, highlighting strong liquidity and an experienced management team [69] Other Important Information - The company has implemented measures to support communities affected by COVID-19, including monetary donations and supplies [31] - The adoption of IFRS 9 has led to increased provisions based on expected losses, with a focus on adjusting models as the situation evolves [52][80] Q&A Session Summary Question: Loan growth perception and demand for corporate loans - Management noted an increase in loan demand from large corporates for liquidity and from SMEs due to government programs, but emphasized a selective approach to credit quality [72][75] Question: Asset quality and macro assumptions for provisions - Management indicated that macro assumptions include a projected GDP decline of 5% in real terms, with ongoing adjustments as the situation develops [80] Question: Operating cash flow implications of loan support programs - Management confirmed that while collections are deferred, liquidity levels have increased due to Central Bank measures, allowing for effective cash flow management [88][90] Question: Future expectations for margins and provisions - Management plans to increase coverage levels in anticipation of potential impacts from COVID-19, while maintaining a focus on high margins compared to the market [101][104]

GRUPO I SUPERVIELLE 1Q20 Earnings Couference Call | --- | --- | |-------|-------| | | | | | | This presentation contains certain forward- looking statements that reflect the current views and/or expectations of Grupo Supervielle and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "seek," "future," "should" and other similar expressions to ...

[PART I](index=10&type=section&id=PART%20I) [Key Information](index=10&type=section&id=Item%203%20Key%20Information) This section provides a high-level financial overview of Grupo Supervielle, including selected consolidated financial data for the fiscal years 2017, 2018, and 2019, prepared under IFRS and adjusted for hyperinflation (IAS 29), along with a comprehensive analysis of significant risks [Selected Financial Data](index=10&type=section&id=Item%203.A%20Selected%20Financial%20Data) The company's financial statements are presented under IFRS, restated for hyperinflation as of December 31, 2019, due to Argentina's economic conditions - The company's consolidated financial statements were prepared in accordance with IFRS for the first time for the year ended December 31, 2018, and are restated in terms of the measuring unit current as of December 31, 2019, as required by IAS 29 due to Argentina's hyperinflationary economy[46](index=46&type=chunk)[48](index=48&type=chunk) Consolidated Income Statement Data (IFRS, in thousands of Argentine Pesos) | Indicator | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net interest income | 9,881,144 | 20,002,646 | 21,467,567 | | Net Financial Income | 30,518,040 | 31,443,278 | 27,526,655 | | Net Operating Income | 27,925,867 | 26,270,968 | 28,997,855 | | Net loss for the year | (2,153,622) | (4,702,117) | (1,161,834) | | Comprehensive Loss | (2,201,455) | (4,330,500) | (1,089,714) | Consolidated Statement of Financial Position Data (IFRS, in thousands of Argentine Pesos) | Indicator | As of Dec 31, 2019 | As of Dec 31, 2018 | As of Dec 31, 2017 | | :--- | :--- | :--- | :--- | | Total Assets | 148,684,691 | 218,032,810 | 208,027,788 | | Loans and other financing | 88,010,011 | 118,771,635 | 134,001,359 | | Deposits | 89,008,177 | 145,996,201 | 128,119,290 | | Total Liabilities | 125,249,296 | 191,930,415 | 176,812,474 | | Total Shareholders' Equity | 23,435,395 | 26,102,395 | 31,215,314 | Selected Ratios | Ratio | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Return on average equity | (9.2%) | (16.2%) | (4.7%) | | Return on average assets | (1.1%) | (1.9%) | (0.6%) | | Efficiency Ratio | 62.7% | 61.8% | 66.3% | | Non-performing loans as a percentage of Total Loans | 7.4% | 4.1% | 3.1% | | Coverage Ratio | 96.0% | 147.2% | 162.3% | [Risk Factors](index=14&type=section&id=Item%203.D%20Risk%20Factors) The company's operations are highly dependent on Argentina's macroeconomic, regulatory, social, and political conditions, exposing it to significant risks - The company's operations are substantially located in Argentina, making its financial condition highly dependent on the country's macroeconomic, regulatory, social, and political conditions[64](index=64&type=chunk) - Key risks related to Argentina include: - **COVID-19 Pandemic:** Government measures like lockdowns and loan payment postponements are adversely affecting business and results, with the ultimate impact remaining highly uncertain[65](index=65&type=chunk) - **Economic and Political Instability:** Argentina's history of volatility, negative growth, high inflation, and currency devaluation poses significant risks, with the new Fernández administration's policies creating uncertainty[73](index=73&type=chunk) - **Inflation:** High inflation, reaching **53.8% in 2019**, undermines the economy, increases operating costs, and negatively affects the business[86](index=86&type=chunk) - **Sovereign Debt:** The government's limited access to international financing and ongoing debt restructuring efforts could impair economic growth and the company's own ability to access credit - **Currency Fluctuations:** Significant devaluation of the Peso negatively impacts businesses with foreign currency debt and fuels inflation - Key risks related to the Argentine Financial System include: - **Depositor Confidence:** A history of financial crises has undermined confidence, and a contraction in the deposit base could negatively impact liquidity and operations[136](index=136&type=chunk) - **Competition and Consolidation:** Increased competition in the banking sector could reduce margins and market share[146](index=146&type=chunk) - **Regulatory Environment:** The company operates in a highly regulated environment, and changes in regulations by the Central Bank, CNV, or other agencies could adversely affect profitability and operations[155](index=155&type=chunk) - Key risks related to the company's business include: - **Loan Portfolio Quality:** Exposure to SMEs and middle/lower-middle-income individuals makes the loan portfolio more susceptible to economic downturns[168](index=168&type=chunk) - **Market and Interest Rate Risk:** Results depend heavily on net financial income, which is sensitive to changes in interest rates and currency volatility[171](index=171&type=chunk) - **Holding Company Structure:** As a holding company, its ability to invest and pay dividends depends on the cash flow and dividend-paying capacity of its subsidiaries, particularly the Bank[176](index=176&type=chunk) - **Cybersecurity:** The company depends on uninterrupted internet-based systems and is exposed to risks like phishing and data breaches, which could damage its reputation and financial condition[188](index=188&type=chunk) [Information on the Company](index=36&type=section&id=Item%204%20Information%20of%20the%20Company) This section details the company's long-standing history in the Argentine financial system, outlining its growth through key acquisitions and an IPO, its multi-brand business model, segments, competitive strengths, strategic vision, regulatory environment, and physical properties [History and Development of the Company](index=36&type=section&id=Item%204.A%20History%20and%20development%20of%20the%20Company) Grupo Supervielle's history dates back to 1887, evolving through strategic acquisitions and mergers to form its modern structure - Grupo Supervielle traces its origins to 1887 with the establishment of Supervielle y Cía. Banqueros, with the modern group formed through a series of strategic acquisitions and mergers[211](index=211&type=chunk)[213](index=213&type=chunk) - Key milestones in the company's development include: - **2005:** Banco Banex S.A. acquires a majority stake in Banco Société Générale S.A., which is then renamed Banco Supervielle S.A[219](index=219&type=chunk) - **2007:** Merger of Banco Banex S.A. into Banco Supervielle S.A[224](index=224&type=chunk) - **2010:** Acquisition of Cordial Compañía Financiera S.A., expanding into consumer finance[230](index=230&type=chunk) - **2013:** Acquisition of Supervielle Seguros S.A., entering the insurance market[238](index=238&type=chunk) - **2016:** Successful Initial Public Offering (IPO) with listings on the NYSE and ByMA - **2018:** Acquisitions of Micro Lending S.A.U. (car financing) and InvertirOnline (online trading platform) [Business Overview](index=42&type=section&id=Item%204.B%20Business%20Overview) As of December 31, 2019, Grupo Supervielle served 1.8 million active customers with total assets of Ps.146.5 billion, operating through a multi-brand, multi-channel platform with 316 access points - As of December 31, 2019, Grupo Supervielle served **1.8 million active customers** with total assets of **Ps.146.5 billion**, operating through a multi-brand, multi-channel platform with **316 access points**, including bank branches and consumer finance sales points[250](index=250&type=chunk)[253](index=253&type=chunk) Market Share as of December 31, 2019 | Product/Segment | Market Share | | :--- | :--- | | Personal loans (private system) | 7.0% | | Leasing (private banks) | 19.9% | | Factoring (private system) | 9.5% | | MasterCard credit cards | 9.3% | - The company's business is organized into six main segments: Retail Banking, Corporate Banking, Treasury, Consumer Finance, Insurance, and Asset Management and Other Services[266](index=266&type=chunk) - The company's strategy focuses on digital transformation, enhancing value propositions for target segments, increasing customer acquisition and cross-selling, streamlining operations, and developing new products to expand its franchise[292](index=292&type=chunk) - The Argentine banking sector is highly regulated by the Central Bank, which sets requirements for minimum capital, liquidity (LCR and NSFR), solvency, loan classification, and dividend distribution, with recent regulations in response to the COVID-19 pandemic including temporary suspension of dividend distributions, postponement of loan payments, and fee waivers for ATM transactions[615](index=615&type=chunk)[617](index=617&type=chunk)[853](index=853&type=chunk) [Organizational Structure](index=147&type=section&id=Item%204.C%20Organizational%20structure) Grupo Supervielle S.A. operates as a holding company with a portfolio of subsidiaries across various financial service areas, as illustrated by its ownership structure - Grupo Supervielle S.A. is a holding company with a portfolio of subsidiaries operating in different financial service areas, with the provided diagram illustrating the ownership structure as of the report date[914](index=914&type=chunk) Key Subsidiaries and Business Lines | Subsidiary | Business Line | | :--- | :--- | | Banco Supervielle S.A. | Commercial Banking | | Cordial Compañía Financiera S.A. | Consumer Finance | | Tarjeta Automática S.A. | Consumer Finance & Credit Cards | | Supervielle Seguros S.A. | Insurance | | Supervielle Asset Management S.A. | Asset Management | | InvertirOnline S.A.U. | Online Brokerage | | Micro Lending S.A.U. (MILA) | Car Financing | [Property, Plants and Equipment](index=148&type=section&id=Item%204.D%20Property%2C%20Plants%20and%20Equipment) The company owns office space and retail branch properties in key Argentine locations, while the majority of its administrative buildings and headquarters are leased - The company owns office space and retail branch properties in key locations like Buenos Aires, Mendoza, Córdoba, and San Luis, with the majority of its administrative buildings, headquarters, and other branches being leased[916](index=916&type=chunk)[918](index=918&type=chunk) Loan Portfolio by Type (in thousands of Pesos) | Loan Type | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | :--- | | Overdrafts | 5,598,311 | 7,292,439 | 8,214,818 | | Promissory notes | 19,620,906 | 24,107,254 | 35,192,489 | | Personal loans | 16,295,241 | 29,266,364 | 38,064,143 | | Credit card loans | 12,953,381 | 14,168,278 | 18,093,001 | | **Total loans and other financings** | **88,010,011** | **118,771,635** | **134,001,359** | Past Due Loans and Other Financing (in thousands of Pesos) | Period | Total Past Due Loans | | :--- | :--- | | As of Dec 31, 2019 | 7,068,384 | | As of Dec 31, 2018 | 6,913,200 | | As of Dec 31, 2017 | 3,406,916 | [Operating and Financial Review and Prospects](index=172&type=section&id=Item%205%20Operating%20and%20Financial%20Review%20and%20Prospects) This section provides management's detailed analysis of the company's financial performance for the fiscal years 2017-2019, covering operating results, liquidity, capital resources, funding strategies, trend information, and contractual obligations [Operating Results](index=172&type=section&id=Item%205.A%20Operating%20Results) The company reported an attributable comprehensive loss of **Ps.2.2 billion** in 2019, an improvement from the **Ps.4.3 billion** loss in 2018, despite impacts from hyperinflation adjustments - The company reported an attributable comprehensive loss of **Ps.2.2 billion** in 2019, an improvement from the **Ps.4.3 billion** loss in 2018, with the 2019 results impacted by a **Ps.5.4 billion** loss from hyperinflation adjustments, less severe than the **Ps.9.3 billion** loss in 2018[1108](index=1108&type=chunk)[1112](index=1112&type=chunk) - Net financial income decreased by **2.9%** to **Ps.30.5 billion** in 2019 from **Ps.31.4 billion** in 2018, driven by a **50.6% drop in Net Interest Income** largely offset by an **80.4% increase in NIFFI and Exchange Rate Differences**, primarily from holdings of high-yield Central Bank securities[1114](index=1114&type=chunk)[1118](index=1118&type=chunk) - Loan loss provisions decreased slightly by **2.9%** to **Ps.7.7 billion** in 2019, due to lower provisioning needs for delinquent commercial loans compared to consumer loans, despite a rise in NPLs in the corporate segment[1159](index=1159&type=chunk) - The COVID-19 pandemic and related government measures are adversely affecting operations, with key impacts including temporary branch closures, postponement of loan payments, fee waivers, and a likely deterioration in asset quality, while the company has implemented remote work protocols and is focusing on digital channels to serve customers[1006](index=1006&type=chunk)[1010](index=1010&type=chunk)[1017](index=1017&type=chunk) [Liquidity and Capital Resources](index=210&type=section&id=Item%205.B%20Liquidity%20and%20Capital%20Resources) The company's primary liquidity source is the Bank's deposit base, which decreased by **39.0%** to **Ps.89.0 billion** in 2019 due to a significant drop in U.S. dollar-denominated deposits - The company's main source of liquidity is the Bank's deposit base, with total deposits as of December 31, 2019, at **Ps.89.0 billion**, a **39.0% decrease** from 2018, primarily due to a significant drop in U.S. dollar-denominated deposits following market uncertainty[1279](index=1279&type=chunk)[1291](index=1291&type=chunk)[1292](index=1292&type=chunk) Consolidated Cash Flows (in thousands of Pesos) | Cash Flow From | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Operating Activities | (2,407,296) | 8,196,460 | (27,815,906) | | Investing Activities | (1,303,808) | (6,828,224) | (613,058) | | Financing Activities | (14,850,160) | (1,367,478) | 28,428,029 | | **Net (Decrease)/Increase in Cash** | **(44,328,683)** | **23,603,182** | **21,586,042** | - The Bank maintains a Global Program for the Issuance of Medium-Term Notes for up to **U.S.$2.3 billion** to access capital markets for funding, with outstanding unsubordinated and subordinated corporate bonds totaling **Ps.6.1 billion** and **Ps.2.1 billion**, respectively, as of December 31, 2019[1296](index=1296&type=chunk)[1299](index=1299&type=chunk)[1303](index=1303&type=chunk) Consolidated Capital Ratios (Bank and CCF) | Ratio | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Tier 1 Capital / Risk weighted assets | 10.8% | 10.8% | | Regulatory capital/risk weighted assets | 11.6% | 11.9% | [Trend Information](index=217&type=section&id=Item%205.D%20Trend%20Information) Argentina's economy is projected to contract by **5.7%** in 2020 according to the IMF, with the financial system expected to face asset quality deterioration due to the pandemic - Due to the COVID-19 pandemic, the IMF projects Argentina's economy will contract by **5.7%** in 2020, while the Central Bank's Market Expectations Report (REM) forecasts a **4.3% contraction** for the same year[1315](index=1315&type=chunk)[1316](index=1316&type=chunk) - The Argentine financial system is expected to face a deterioration in asset quality due to the economic disruption from the pandemic, making previously expected credit recovery unlikely, though liquidity is expected to remain high due to Central Bank measures[1321](index=1321&type=chunk) - The company plans to continue its strategy of digital transformation, enhancing value propositions, increasing cross-selling, and streamlining operations to navigate the volatile and challenging scenario[1323](index=1323&type=chunk) [Contractual Obligations](index=228&type=section&id=Item%205.F%20Contractual%20Obligations) This section details the company's contractual obligations as of December 31, 2019, including deposits, financing from financial institutions, and corporate bonds Contractual Obligations as of December 31, 2019 (in thousands of Pesos) | Obligation | Less than 1 year | 1 - 3 years | 3 - 5 years | After 5 years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Deposits | 92,268,574 | 2,245 | 0 | 0 | 92,270,819 | | Financing from financial institutions | 8,573,139 | 927,621 | 339,929 | 0 | 9,840,689 | | Unsubordinated corporate bonds | 5,946,348 | 3,186,553 | 707,853 | 0 | 9,840,754 | | Subordinated corporate bonds | 1,500,837 | 862,185 | 0 | 0 | 2,363,022 | | Lease commitments | 502,481 | 498,849 | 133,801 | 168,845 | 1,303,976 | [Directors, Senior Management and Employees](index=228&type=section&id=Item%206%20Directors%2C%20Senior%20Management%20and%20Employees) This section provides detailed information on the company's leadership and workforce, including biographical details for the Board of Directors, senior management, and Supervisory Committee, along with compensation policies, committee structures, and employee numbers - The Board of Directors is composed of eight members, with Julio Patricio Supervielle serving as Chairman and Jorge Oscar Ramírez as First Vice-Chairman and CEO, and directors appointed for two-year terms in staggered elections[1330](index=1330&type=chunk)[1332](index=1332&type=chunk)[1335](index=1335&type=chunk) Compensation for Fiscal Year 2019 (in millions of Pesos) | Group | Aggregate Compensation | | :--- | :--- | | Directors | 218.5 | | Senior Management | 224.2 | | Supervisory Committee | 2.3 | - The company has several key committees, including an Audit Committee composed of three independent directors, an Anti-Money Laundering Committee, a Risk Management Committee, and a Nomination and Remuneration Committee[1410](index=1410&type=chunk)[1418](index=1418&type=chunk)[1422](index=1422&type=chunk)[1436](index=1436&type=chunk) Employee Headcount | Year | Total Employees | | :--- | :--- | | As of Dec 31, 2019 | 5,019 | | As of Dec 31, 2018 | 5,253 | | As of Dec 31, 2017 | 5,236 | [Major Shareholders and Related Party Transactions](index=249&type=section&id=Item%207%20Shareholders%20and%20Related%20Party%20Transactions) This section details Grupo Supervielle's ownership structure, highlighting the controlling interest of its Chairman, Julio Patricio Supervielle, and describes material transactions conducted with related parties [Major Shareholders](index=249&type=section&id=Item%207.A%20Major%20Shareholders) As of April 28, 2020, Julio Patricio Supervielle is the controlling shareholder, holding **35.1%** of the total capital stock and controlling **57.9%** of the total votes due to his ownership of high-vote Class A shares - As of April 28, 2020, Julio Patricio Supervielle is the controlling shareholder, holding **35.1%** of the total capital stock but controlling **57.9%** of the total votes due to his ownership of high-vote Class A shares[1501](index=1501&type=chunk) Ownership Structure as of April 28, 2020 | Shareholder | Class A Shares (5 votes) | Class B Shares (1 vote) | % of Capital Stock | % of Total Votes | | :--- | :--- | :--- | :--- | :--- | | Julio Patricio Supervielle | 61,738,188 | 98,684,713 | 35.12% | 57.89% | | Other | — | 296,299,421 | 64.88% | 42.11% | [Related Party Transactions](index=256&type=section&id=Item%207.B%20Related%20Party%20Transactions) Grupo Supervielle provides management services to its subsidiaries, including financial advisory, fiscal planning, and auditing policy definition, with fees totaling **Ps.104.9 million** in 2019 - Grupo Supervielle provides management services to its subsidiaries, including financial advisory, fiscal planning, and auditing policy definition, with fees for these services totaling **Ps.104.9 million** in 2019[1506](index=1506&type=chunk)[1509](index=1509&type=chunk) - The Bank provides accounting, administrative, legal, and treasury services to the holding company under an operator services agreement[1510](index=1510&type=chunk) - Financial assistance, such as loans, granted to directors, officers, and related parties is conducted in the ordinary course of business on terms comparable to those for non-related parties, with the aggregate financial exposure to related parties being **Ps.963.0 million** as of December 31, 2019[1512](index=1512&type=chunk)[1515](index=1515&type=chunk)[1517](index=1517&type=chunk) [Financial Information](index=258&type=section&id=Item%208%20Financial%20Information) This section covers legal proceedings and the company's dividend policy, noting that while no legal actions are expected to materially impact results, dividend distributions are subject to Argentine law, regulatory requirements, and recent Central Bank suspensions - The company and its subsidiaries are party to legal proceedings, including class actions related to alleged overcharging, but do not expect any to have a material adverse effect on results[1521](index=1521&type=chunk)[1523](index=1523&type=chunk) - Dividend payments are determined by shareholders based on Board recommendations and depend on operating results, cash flow, and legal and regulatory requirements, with the holding company's ability to pay dividends relying on distributions from its subsidiaries, particularly the Bank[1527](index=1527&type=chunk)[1533](index=1533&type=chunk) - The Bank's dividend distributions are restricted by Central Bank regulations, which require prior approval and compliance with liquidity and solvency standards, and on March 19, 2020, the Central Bank temporarily suspended dividend distributions by financial entities until June 30, 2020, due to the COVID-19 crisis[1534](index=1534&type=chunk)[199](index=199&type=chunk) - For 2018 and 2017, Grupo Supervielle paid dividends totaling approximately **Ps.466.1 million** and **Ps.505.1 million**, respectively, and for 2019, the shareholders' meeting approved the creation of a voluntary reserve of **Ps.426 million** for future dividend distribution[1537](index=1537&type=chunk)[1533](index=1533&type=chunk) [Additional Information](index=262&type=section&id=Item%2010%20Additional%20Information) This section provides supplementary details regarding the company's securities, material contracts, and the complex regulatory landscape for exchange controls and taxation in Argentina, including significant foreign exchange restrictions and a summary of relevant tax considerations [Exchange Controls](index=262&type=section&id=Item%2010.D%20Exchange%20Controls) In September 2019, the Argentine government reinstated foreign exchange controls to manage market volatility, consolidating them under Communication "A" 6844 and subsequent amendments - In September 2019, the Argentine government reinstated foreign exchange controls to manage market volatility, with these controls consolidated under Communication "A" 6844 and subsequent amendments[1557](index=1557&type=chunk)[1558](index=1558&type=chunk) - Key exchange control measures include: - **Exports:** Exporters of goods and services are required to repatriate and settle their foreign currency proceeds in the local market (MLC) within specified timeframes[1558](index=1558&type=chunk) - **Debt:** Proceeds from new foreign financial debt must be repatriated and settled in Pesos to gain access to the MLC for future debt service payments[1566](index=1566&type=chunk) - **Dividends:** Access to the MLC for paying dividends to non-resident shareholders is restricted, subject to a cap based on capital contributions and other conditions[1584](index=1584&type=chunk) - **Individuals:** Argentine residents' access to the MLC for savings is capped at **US$200 per month** through bank accounts and **US$100 in cash**[1587](index=1587&type=chunk) [Taxation](index=268&type=section&id=Item%2010.E%20Taxation) Dividends from profits generated from 2018 to 2020 are subject to a **7%** withholding tax for Argentine resident individuals and non-Argentine residents, increasing to **13%** for profits generated from 2021 onwards - Dividends from profits generated from 2018 to 2020 are subject to a **7%** withholding tax for Argentine resident individuals and non-Argentine residents, with this rate increasing to **13%** for profits generated from 2021 onwards[1601](index=1601&type=chunk) - Capital gains from the sale of shares or ADSs are generally exempt from income tax for both Argentine residents and non-residents if the securities are traded on markets authorized by the CNV and the non-resident is from a "cooperative jurisdiction"[1607](index=1607&type=chunk)[1608](index=1608&type=chunk) - The company is required to pay Personal Assets Tax on behalf of its individual and foreign entity shareholders at a rate of **0.50%** for tax period 2019, levied on the proportional net worth value of the shares[1616](index=1616&type=chunk) - Law No. 27,541 introduced the "PAIS Tax," a federal tax for a five-year period on certain purchases of foreign currency for savings and payments for goods and services abroad, with rates ranging from **8% to 30%**[1624](index=1624&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=280&type=section&id=Item%2011%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the Group's framework for managing market risk, encompassing interest rate, foreign exchange, liquidity, and operational risks, overseen by the Risk Management Committee using tools like a risk map and Value at Risk (VaR) methodology - The company manages market risk through policies approved by the Risk Management Committee, using a Value at Risk (VaR) methodology to estimate potential losses from adverse market changes, assuming a ten-day holding period and a **99% confidence interval**[1678](index=1678&type=chunk)[1683](index=1683&type=chunk)[1684](index=1684&type=chunk) - Interest rate risk is managed by analyzing mismatches between asset and liability interest rates, using an internal model (MVE-VaR) and a Standardized Framework required by the Central Bank to evaluate the impact on its economic value[1686](index=1686&type=chunk)[1689](index=1689&type=chunk) - As of December 31, 2019, the Bank's consolidated total net asset foreign currency position subject to risk was **Ps.873.9 million**, generating a market risk capital requirement of **Ps.70.5 million**[1700](index=1700&type=chunk) - Liquidity risk is managed by focusing on sources of liquidity and monitoring key metrics, including the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR), to ensure sufficient liquid assets to meet obligations under stress scenarios[1701](index=1701&type=chunk)[1703](index=1703&type=chunk) [Description of Securities Other Than Equity Securities](index=285&type=section&id=Item%2012%20Description%20of%20Securities%20Other%20Than%20Equity%20Securities) This section details the fees and expenses associated with the company's American Depositary Shares (ADSs), outlining the fees payable by ADS holders to the depositary, The Bank of New York Mellon, for services such as issuance, cancellation, and cash distributions Depositary Fees for ADS Holders | Fee | For: | | :--- | :--- | | $5.00 (or less) per 100 ADSs | Issuance or cancellation of ADSs | | $0.05 (or less) per ADS | Any cash distribution | | $0.05 (or less) per ADS per calendar year | Depositary services | - The depositary, The Bank of New York Mellon, may reimburse the company for expenses related to the ADS program, with reimbursements totaling **U.S.$46,001** in 2019[1717](index=1717&type=chunk) [PART II](index=287&type=section&id=PART%20II) [Controls and Procedures](index=287&type=section&id=Item%2015%20Controls%20and%20Procedures) This section contains management's assessment of the company's internal controls, concluding that as of December 31, 2019, its disclosure controls and procedures, as well as its internal control over financial reporting, were effective, a conclusion confirmed by the independent registered public accounting firm - Management evaluated the effectiveness of disclosure controls and procedures and concluded they were effective as of the end of the period covered by the annual report (December 31, 2019)[1723](index=1723&type=chunk) - Management assessed the effectiveness of internal control over financial reporting using the COSO 2013 framework and concluded that it was effective as of December 31, 2019[1726](index=1726&type=chunk) - The independent registered public accounting firm, Price Waterhouse & Co. S.R.L., has audited and issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[1727](index=1727&type=chunk)[1776](index=1776&type=chunk) [Corporate Governance](index=288&type=section&id=Item%2016%20Corporate%20Governance) This section covers key aspects of the company's corporate governance framework, including the audit committee's financial expert, the Code of Ethics, fees paid to its principal accountant, and a comparison of its governance practices against NYSE standards for U.S. domestic issuers - Laurence Nicole Mengin de Loyer is identified as the audit committee's financial expert and is an independent member of the committee[1730](index=1730&type=chunk) - The company has adopted a Code of Ethics applicable to all employees, which was updated effective January 1, 2020, to include guidelines on social media use and reporting corrupt practices[1731](index=1731&type=chunk) Principal Accountant Fees (in thousands of Pesos) | Fee Type | 2019 | 2018 | | :--- | :--- | :--- | | Audit Fees | 76,963 | 53,726 | | Audit Related Fees | 3,335 | 18,431 | | Tax Fees | 3,107 | 747 | | All Other Fees | 2,030 | 10,094 | | **Total** | **85,435** | **82,998** | - As a foreign private issuer, the company follows Argentine corporate governance practices, which differ from NYSE standards for U.S. domestic companies, with key differences including not having a majority of independent directors and not being required to have separate nominating or compensation committees composed entirely of independent directors[1741](index=1741&type=chunk)[1743](index=1743&type=chunk)[1746](index=1746&type=chunk) [Financial Statements](index=295&type=section&id=Item%2018%20Financial%20Statements) This section contains the complete set of audited consolidated financial statements for Grupo Supervielle S.A. and its subsidiaries for the fiscal years ended December 31, 2019, 2018, and 2017, prepared in accordance with IFRS and adjusted for hyperinflation (IAS 29) - The independent registered public accounting firm, Price Waterhouse & Co. S.R.L., issued an unqualified opinion on the consolidated financial statements, stating they present fairly, in all material respects, the financial position and results of operations in conformity with IFRS[1776](index=1776&type=chunk) - Note 1 confirms the financial statements are prepared on a going concern basis and apply IAS 29 for hyperinflationary economies, using the National Consumer Price Index (CPI) for restatement, with the three-year accumulated inflation rate as of December 31, 2019, being **183.4%**[1811](index=1811&type=chunk)[1815](index=1815&type=chunk)[1817](index=1817&type=chunk) - Note 29 details the acquisition of Futuros del Sur S.A. on December 18, 2019, for a total price of **Ps.6.96 million**, resulting in a goodwill of **Ps.3.77 million**[2243](index=2243&type=chunk)[2245](index=2245&type=chunk) - Note 34 discusses subsequent events, primarily the significant impact of the COVID-19 pandemic, which has led to a nationwide lockdown in Argentina and various Central Bank measures affecting the banking sector, with the company stating that while its business will be impacted, it expects to serve its financial obligations for the next fiscal year[2258](index=2258&type=chunk)[2261](index=2261&type=chunk)

Grupo Supervielle S.A. (NYSE:SUPV) Q4 2019 Earnings Conference Call February 20, 2020 12:00 PM ET Company Participants Ana Bartesaghi - Treasurer & IRO Patricio Supervielle - Chairman of the Board Jorge Ramirez - Chief Executive Officer & Vice Chairman of the Board Alejandra Naughton - Chief Financial Officer Alejandro Stengel - Chief Operating Officer Conference Call Participants Gabriel Nobrega - Citi Ernesto Gabilondo - Bank of America Yuri Fernandes - JPMorgan Operator Good afternoon and welcome to the ...

GRUPO I SUPERVIELLE 4Q19 Earnings Couference Call | --- | --- | |-------|-------| | | | | | | This presentation contains certain forward- looking statements that reflect the current views and/or expectations of Grupo Supervielle and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "seek," "future," "should" and other similar expressions to ...

Financial Data and Key Metrics Changes - Total assets declined nearly 4% sequentially due to liquidity management in U.S. dollars and lower holdings of Central Bank securities [17] - Net financial income decreased nearly 20% sequentially to ARS 5.3 billion, primarily impacted by a ARS 2 billion loss from mark-to-market accounting on the investment portfolio [21] - The pretax loss for the quarter was ARS 117 million compared to a gain of ARS 1.6 million in the prior quarter, but excluding the debt reprofiling, pretax profit would have been ARS 1.9 billion, a 23% sequential increase [32] Business Line Data and Key Metrics Changes - The loan book increased nearly 7% sequentially, driven by a 17% increase in U.S. dollar-denominated loans, while in original currency, the U.S. dollar-denominated loan book contracted 14% [18] - Consumer finance loans contracted nearly 4% sequentially and 22% year-on-year, while retail loans increased just over 4% sequentially due to higher credit card volumes [18] - Net service fee income rose 9% sequentially, reflecting strong performance in bundled services and credit card divisions [23] Market Data and Key Metrics Changes - U.S. dollar-denominated private sector deposits declined 42% sequentially, with a slight deceleration in October, showing a 10% decrease in line with the industry [16] - The Argentine financial system experienced a 31% sequential decline in U.S. dollar-denominated private deposits, yet remained highly capitalized and liquid [14] - Total industry loans to the private sector grew just 9.5% quarter-on-quarter, primarily due to FX depreciation impacts on commercial loans [15] Company Strategy and Development Direction - The company is focused on maintaining liquidity and controlling expenses amid a challenging macro environment, with a Tier 1 capital ratio of 11.8% [10][33] - Management emphasized the importance of digital transformation and efficiency improvements to compete against fintechs and other banks [62] - The company is well-positioned to capture growth in consumer lending if the new administration promotes internal consumption [37] Management's Comments on Operating Environment and Future Outlook - Management noted significant macro uncertainty due to the presidential elections and the impact of debt reprofiling on financial results [7][12] - The company expects a potential recovery in the economy, leveraging its long operating history across different economic cycles [11] - Management anticipates that interest rates may begin to decline, which could stimulate loan demand in the first half of the following year [43] Other Important Information - The total non-performing loan (NPL) ratio increased to 6.9%, with corporate loans NPL ratio rising to 7.2% [28] - Coverage for non-performing loans was reported at 86.1%, deemed adequate given the increased collateralization levels [29] - The efficiency ratio deteriorated to 70%, but would have improved to 53% excluding the impact of debt reprofiling [31] Q&A Session Summary Question: Expectations regarding the next administration policies - Management indicated uncertainty about the new government's policies but noted a potential market-friendly stance and focus on internal consumption [36][37] Question: Future of securities gains and interest rates - Management acknowledged that current gains are likely at a peak due to declining interest rates and anticipated lower yields on securities [40] Question: Impact of SME directed loans on net interest income - Management suggested a high likelihood of SME directed loans being implemented, but the impact on net interest income remains uncertain [46][47] Question: Coverage levels for delinquent companies - Management confirmed that delinquency was primarily from two companies, with coverage levels deemed adequate despite not being 100% [52] Question: Measures to defend margins against new reserve requirements - Management is streamlining liquidity and managing NPL exposure to recover liquidity for better-performing investments [90]

Grupo Supervielle SA (NYSE:SUPV) Q2 2019 Earnings Conference Call August 13, 2019 9:00 AM ET Company Participants Ana Bartesaghi - IR Officer & Treasurer Julio Supervielle - Chairman Jorge RamÃrez - First Vice-Chairman & CEO Conference Call Participants Gabriel Nóbrega - Citigroup Jason Mollin - Scotiabank Yuri Fernandes - JPMorgan Chase & Co. Operator Good morning, and welcome to the Grupo Supervielle Second Quarter 2019 Earnings Call. A slide presentation will accompany today's webcast, which is available ...

Grupo Supervielle S.A. (NYSE:SUPV) Q1 2019 Results Earnings Conference Call May 10, 2019 9:00 AM ET Company Participants Ana Bartesaghi - Treasurer and IRO Patricio Supervielle - Chairman of the Board of Directors Jorge Ramirez - CEO & Vice Chairman of the Board Conference Call Participants Marlon Medina - JPMorgan Operator Good morning, and welcome to the Grupo Supervielle First Quarter 2019 Earnings Call. A slide presentation will accompany today's webcast, which is available in the Investor section of Gr ...

PART I [Identity of Directors, Senior Management and Advisors](index=11&type=section&id=Item%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisors) The report indicates this section is not applicable - The report indicates this item is not applicable[46](index=46&type=chunk) [Offer Statistics and Expected Timetable](index=11&type=section&id=Item%202.%20Offer%20Statistics%20and%20Expected%20Timetable) The report indicates this section is not applicable - The report indicates this item is not applicable[47](index=47&type=chunk) [Key Information](index=11&type=section&id=Item%203.%20Key%20Information) [Selected Financial Data](index=11&type=section&id=Item%203.A%20Selected%20Financial%20Data) The company's 2018 and 2017 consolidated financial data, prepared under IFRS and restated for hyperinflation per IAS 29, shows a net loss of Ps. 3.06 billion in 2018 and Ps. 0.76 billion in 2017, with total assets growing to Ps. 141.7 billion - The company adopted IFRS for the first time for the year ended December 31, 2018, with a transition date of January 1, 2017[49](index=49&type=chunk) - Argentina's cumulative three-year inflation rate exceeding 100% as of July 1, 2018, led the company to apply IAS 29 for financial reporting in a hyperinflationary economy[52](index=52&type=chunk) Consolidated Income Statement Data (IFRS) | Indicator | 2018 (in thousands of Pesos) | 2017 (in thousands of Pesos) | | :--- | :--- | :--- | | Net interest income | 13,002,882 | 13,955,166 | | Net Financial Income | 20,439,958 | 17,893,925 | | Income / (loss) before taxes | (2,045,761) | 416,709 | | Net loss for the year | (3,056,649) | (755,260) | | Comprehensive Loss | (2,815,076) | (708,378) | Consolidated Statement of Financial Position Data (IFRS) | Indicator | As of Dec 31, 2018 (in thousands of Pesos) | As of Dec 31, 2017 (in thousands of Pesos) | | :--- | :--- | :--- | | TOTAL ASSETS | 141,733,996 | 135,230,150 | | TOTAL LIABILITIES | 124,765,922 | 114,938,382 | | SHAREHOLDERS' EQUITY | 16,968,074 | 20,291,768 | Selected Ratios | Ratio | 2018 | 2017 | | :--- | :--- | :--- | | Return on average equity | (14.6)% | (4.4)% | | Return on average assets | (1.8)% | (0.6)% | | Efficiency Ratio | 53.7% | 57.5% | | NPL as a percentage of Total Loans | 4.1% | 3.1% | | Coverage Ratio | 147.2% | 162.3% | [Risk Factors](index=15&type=section&id=Item%203.D%20Risk%20Factors) The company faces significant risks from Argentina's volatile macroeconomic and political environment, the stability of its financial system, business-specific vulnerabilities like loan portfolio quality and cybersecurity, and potential limitations on shareholder rights and dividend repatriation - **Risks Relating to Argentina:** The company's financial condition is highly dependent on Argentina's historically volatile macroeconomic, regulatory, and political conditions, given its almost exclusive operations in the country[67](index=67&type=chunk)[68](index=68&type=chunk) - **Risks Relating to the Argentine Financial System:** System stability is contingent on depositor confidence, which past crises have undermined, alongside risks from increased competition, high regulation, and potential class action lawsuits[144](index=144&type=chunk)[153](index=153&type=chunk)[163](index=163&type=chunk) - **Risks Relating to Our Business:** The loan portfolio's concentration in middle and lower-middle-income individuals and SMEs makes it vulnerable to economic downturns, compounded by market volatility, cybersecurity threats, and dependence on the ANSES agreement[180](index=180&type=chunk)[183](index=183&type=chunk)[200](index=200&type=chunk) - **Risks Relating to Shares and ADSs:** Dividend payments depend on subsidiary performance and regulatory approvals, while shareholders face risks from potential Argentine tax law changes, foreign exchange controls impacting repatriation, and differing shareholder rights[213](index=213&type=chunk)[220](index=220&type=chunk)[226](index=226&type=chunk) [Information of the Company](index=40&type=section&id=Item%204.%20Information%20of%20the%20Company) [History and development of the Company](index=47&type=section&id=Item%204.A%20History%20and%20development%20of%20the%20Company) Grupo Supervielle, originating in 1887, expanded significantly through strategic acquisitions like Banco Société Générale (2005) and Cordial Compañía Financiera (2010), culminating in its successful IPO on the NYSE and ByMA in May 2016 - The company's modern history accelerated in 2005 with Banco Banex S.A.'s acquisition of Banco Société Générale S.A., subsequently renamed Banco Supervielle S.A.[292](index=292&type=chunk) - Grupo Supervielle expanded through strategic acquisitions, including Cordial Compañía Financiera (2010), Supervielle Seguros (2013), Micro Lending S.A. (2018), and InvertirOnline (2018)[296](index=296&type=chunk)[301](index=301&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - The company completed its IPO on May 19, 2016, listing Class B shares on ByMA and ADSs on the NYSE under the ticker 'SUPV'[304](index=304&type=chunk) [Business Overview](index=52&type=section&id=Item%204.B%20Business%20Overview) Grupo Supervielle, a leading Argentine financial group, served 1.8 million customers with Ps. 141.7 billion in assets as of December 2018, operating across six segments with a strategy focused on customer segmentation, digital transformation, and conservative risk management - As of December 31, 2018, Grupo Supervielle served **1.8 million active customers** with **total assets of Ps. 141.7 billion**, with Banco Supervielle accounting for **96.6% of total assets**[321](index=321&type=chunk) Market Share (as of Dec 31, 2018) | Product/Segment | Market Share 2018 | Market Share 2017 | | :--- | :--- | :--- | | Personal loans (private system) | 7.3% | 6.9% | | Leasing (private banks) | 17.6% | 15.2% | | Factoring (private system) | 7.4% | 7.5% | | MasterCard credit cards issued | 8.6% | 9.8% | - The company operates through six main segments: Retail Banking, Corporate Banking, Treasury, Consumer Finance, Insurance, and Asset Management & Other Services[338](index=338&type=chunk) - The business strategy focuses on increasing market presence in attractive customer segments, leveraging its distribution network, capitalizing on cross-selling, and improving efficiency through innovation and technology[359](index=359&type=chunk)[365](index=365&type=chunk)[371](index=371&type=chunk)[374](index=374&type=chunk) [Organizational Structure](index=140&type=section&id=Item%204.C%20Organizational%20Structure) The group's organizational structure positions Grupo Supervielle S.A. as the holding company, controlling various financial and non-financial subsidiaries including Banco Supervielle S.A., Cordial Compañía Financiera S.A., and InvertirOnline S.A.U. - The organizational structure is headed by the holding company, Grupo Supervielle S.A., which holds controlling interests in its various financial and non-financial service subsidiaries[1015](index=1015&type=chunk) Main Subsidiaries | Subsidiary | Business | | :--- | :--- | | Banco Supervielle S.A. | Commercial Bank | | Cordial Compañía Financiera S.A. | Consumer Finance | | Tarjeta Automática S.A. | Consumer Finance | | Supervielle Seguros S.A. | Insurance | | Supervielle Asset Management S.A. | Asset Management | | Espacio Cordial de Servicios S.A. | Retail Services | | InvertirOnline S.A.U. | Online Broker | | Micro Lending S.A.U. | Car Financing | [Property, Plants and Equipment](index=141&type=section&id=Item%204.D%20Property%2C%20Plants%20and%20Equipment) The company owns limited office and branch properties, primarily leasing its administrative buildings, while this section also details extensive financial performance statistics including loan portfolios, deposits, and interest income/expense - The Bank owns **4,346 square meters of office space** and **15,046 square meters for retail branch properties**, while most other properties, including the headquarters, are leased[1018](index=1018&type=chunk)[1020](index=1020&type=chunk) Loan Portfolio by Type (as of Dec 31) | Loan Type | 2018 (in thousands of Pesos) | 2017 (in thousands of Pesos) | | :--- | :--- | :--- | | Overdrafts | 4,740,509 | 5,340,109 | | Promissory notes | 15,671,116 | 22,877,163 | | Mortgage loans | 5,343,792 | 2,288,160 | | Personal loans | 19,024,837 | 24,743,905 | | Credit card loans | 9,210,204 | 11,761,502 | | Foreign trade loans and U.S. dollar loans | 18,896,869 | 16,559,563 | | **Total loans and other financings (net)** | **77,208,464** | **87,108,670** | - Past due loans (over 90 days) increased significantly to **Ps. 4.5 billion in 2018** from **Ps. 2.2 billion in 2017**, primarily driven by personal loans, foreign trade loans, and overdrafts[1078](index=1078&type=chunk) Composition of Deposits (as of Dec 31) | Deposit Type | 2018 (in thousands of Pesos) | 2017 (in thousands of Pesos) | | :--- | :--- | :--- | | Non-financial public sector | 11,105,477 | 9,112,185 | | Non-financial private sector and foreign residents | 83,775,301 | 74,149,615 | | **Total** | **94,906,014** | **83,284,983** | [Operating and Financial Review and Prospects](index=175&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) [Operating Results](index=175&type=section&id=Item%205.A%20Operating%20Results) The company reported a comprehensive loss of Ps. 2.8 billion in 2018, significantly higher than Ps. 707.5 million in 2017, primarily due to a Ps. 6.0 billion hyperinflation loss and increased loan loss provisions, partially offset by a 14.2% rise in Net Financial Income amid Argentina's challenging economic environment - The company's 2018 financial statements were restated under IAS 29 to reflect Argentina's hyperinflationary economy, resulting in a significant loss from changes in purchasing power[1121](index=1121&type=chunk) Key Performance Indicators (2018 vs 2017) | Indicator | 2018 (in thousands of Pesos) | 2017 (in thousands of Pesos) | Change | | :--- | :--- | :--- | :--- | | Net Financial Income | 20,439,958 | 17,893,925 | 14.2% | | Result from exposure to changes in purchasing power | (6,015,001) | (2,591,255) | 132.1% | | Loan loss provisions | (5,179,033) | (4,033,187) | 28.4% | | Net loss for the year | (3,056,649) | (755,260) | 304.7% | | Comprehensive Loss | (2,815,076) | (708,378) | 297.4% | - Loan loss provisions increased by **28.4% to Ps. 5.2 billion** in 2018, driven by a rise in the NPL ratio from **3.1% in 2017 to 4.1% in 2018**, particularly in consumer finance and corporate banking[1241](index=1241&type=chunk)[1242](index=1242&type=chunk) - Personnel and administration expenses grew by **5.3% to Ps. 14.4 billion** in 2018, primarily due to higher professional fees and other operating costs[1257](index=1257&type=chunk) [Liquidity and Capital Resources](index=209&type=section&id=Item%205.B%20Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from deposits, with net cash from operating activities turning positive to Ps. 4.0 billion in 2018, while total deposits grew 14.0% to Ps. 94.9 billion, and the pro-forma Tier 1 capital ratio stood at 12.9% as of December 31, 2018 - The main source of liquidity is Banco Supervielle's deposit base, supplemented by loan portfolio securitization and debt security issuance in capital markets[1306](index=1306&type=chunk) Consolidated Cash Flows Summary (in thousands of Pesos) | Cash Flow From | 2018 | 2017 | | :--- | :--- | :--- | | Operating Activities | 3,985,956 | (18,099,931) | | Investing Activities | (3,096,687) | (380,548) | | Financing Activities | (888,776) | 18,479,870 | | **Net Increase in Cash** | **15,343,440** | **14,032,182** | - Total deposits grew **14.0% in 2018 to Ps. 94.9 billion**, with non-financial private sector deposits increasing by **13.0%**[1316](index=1316&type=chunk) - As of December 31, 2018, the Bank and CCF's consolidated pro-forma **Tier 1 Capital ratio was 12.9%**, and the pro-forma total capital ratio was **14.0%**[1116](index=1116&type=chunk)[1117](index=1117&type=chunk) [Trend Information](index=216&type=section&id=Item%205.D%20Trend%20Information) The company anticipates a challenging Argentine macroeconomic environment in early 2019 with gradual improvement, planning to maintain prudent risk management, grow targeted loan segments, expand consumer finance and asset management, and remain open to strategic acquisitions - Argentina's macroeconomic environment is expected to remain challenging in the first half of 2019, with recovery anticipated in late 2019 or early 2020, subject to political uncertainty from upcoming presidential elections[1342](index=1342&type=chunk)[1344](index=1344&type=chunk) - The company will continue its strategy of prudent risk management while seeking to grow its loan portfolio by targeting specific segments like high net worth individuals, senior citizens, and SMEs[1346](index=1346&type=chunk)[1348](index=1348&type=chunk) - Strategic focus includes streamlining consumer finance, growing assets under management through SAM and IOL, and exploring further acquisitions in banking and insurance[1349](index=1349&type=chunk)[1350](index=1350&type=chunk)[1351](index=1351&type=chunk) [Contractual Obligations](index=217&type=section&id=Item%205.F%20Contractual%20Obligations) As of December 31, 2018, total contractual obligations were Ps. 133.1 billion, with Ps. 115.3 billion due within one year, primarily deposits, alongside significant unsubordinated corporate bonds and lease commitments Contractual Obligations by Maturity (as of Dec 31, 2018) | Obligation Type | Less than 1 year | 1 - 3 years | 3 - 5 years | After 5 years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Deposits | 96,801,718 | 131,515 | — | — | 96,933,233 | | Financing from financial institutions | 8,119,011 | 1,283,240 | 276,853 | — | 9,679,104 | | Unsubordinated corporate bonds | 4,907,434 | 12,245,676 | 2,128,544 | — | 19,281,654 | | Subordinated corporate bonds | 96,441 | 1,491,642 | — | — | 1,588,083 | | **Total** | **115,258,202** | **15,386,403** | **2,408,411** | **—** | **133,053,016** | - The company has lease commitments totaling **Ps. 1.19 billion**, with **Ps. 446.4 million** due within one year[1357](index=1357&type=chunk) [Directors, Senior Management and Employees](index=219&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) The Board of Directors comprises eight members, supported by key committees, overseeing 5,307 employees as of December 31, 2018, with aggregate compensation for directors, senior management, and the Supervisory Committee totaling Ps. 165.9 million, Ps. 248.4 million, and Ps. 2.1 million respectively in 2018 - The Board of Directors consists of eight members, led by Chairman Julio Patricio Supervielle, with directors appointed for two-year terms[1359](index=1359&type=chunk)[1360](index=1360&type=chunk)[1364](index=1364&type=chunk) - The company has several key committees, including an Audit Committee with three independent members, a Risk Management Committee, and an Ethics, Compliance and Corporate Governance Committee[1427](index=1427&type=chunk)[1438](index=1438&type=chunk)[1447](index=1447&type=chunk) Compensation in 2018 (in millions of Pesos) | Group | Aggregate Compensation | | :--- | :--- | | Directors | 165.9 | | Senior Management | 248.4 | | Supervisory Committee | 2.1 | - As of December 31, 2018, Grupo Supervielle had **5,307 employees**, with the majority at Banco Supervielle being members of the national banking union[1496](index=1496&type=chunk)[1497](index=1497&type=chunk) [Shareholders and Related Party Transactions](index=244&type=section&id=Item%207.%20Shareholders%20and%20Related%20Party%20Transactions) [Major Shareholders](index=244&type=section&id=Item%207.A.%20Major%20Shareholders) As of April 30, 2019, Julio Patricio Supervielle is the controlling shareholder, holding 35.4% of capital stock and 69.4% of total voting rights through Class A and Class B shares Major Shareholder Ownership (as of April 30, 2019) | Shareholder Name | Class A Shares (5 votes) | Class B Shares (1 vote) | % of Capital Stock | % of Votes | | :--- | :--- | :--- | :--- | :--- | | Julio Patricio Supervielle | 126,738,188 | 35,062,713 | 35.43% | 69.40% | | Other | — | 294,921,421 | 64.57% | 30.60% | [Related Party Transactions](index=255&type=section&id=Item%207.B%20Related%20Party%20Transactions) The company engages in related party transactions, including providing management services to subsidiaries for Ps. 80.4 million in 2018, granting loans to directors totaling Ps. 783.2 million, and making irrevocable capital contributions to support subsidiary growth - Grupo Supervielle provides management, financial, and advisory services to its subsidiaries, receiving fees totaling **Ps. 80.4 million** in 2018[1518](index=1518&type=chunk)[1520](index=1520&type=chunk) - The Bank granted loans to directors and related parties in the ordinary course of business, with an aggregate financial exposure of **Ps. 783.2 million** as of December 31, 2018[1523](index=1523&type=chunk)[1527](index=1527&type=chunk) - Numerous irrevocable capital contributions were made to subsidiaries, including the Bank, CCF, and Tarjeta, during 2017 and 2018 to fund their operations and growth[1530](index=1530&type=chunk)[1531](index=1531&type=chunk)[1532](index=1532&type=chunk)[1533](index=1533&type=chunk) [Financial Information](index=258&type=section&id=Item%208.%20Financial%20Information) [Consolidated Statements and Other Financial Information](index=258&type=section&id=Item%208.A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) This section references the full audited consolidated financial statements, discusses legal proceedings not expected to have a material adverse effect, and outlines the dividend policy, which is contingent on distributable net income, legal reserve requirements, and Central Bank approvals - The company and its subsidiaries are party to various legal proceedings, including class action lawsuits common to the Argentine financial industry, but do not anticipate a material adverse effect[1543](index=1543&type=chunk)[1545](index=1545&type=chunk) - Dividends are paid from distributable net income, subject to a legal reserve requirement of **5% of yearly income** until the reserve equals **20% of adjusted capital stock**[1553](index=1553&type=chunk) - As a holding company, dividend payments depend on cash flow from subsidiaries, particularly the Bank, and are subject to Central Bank regulations that can restrict distributions[1554](index=1554&type=chunk)[1556](index=1556&type=chunk) - The Board of Directors proposed a cash dividend of **Ps. 303 million** for the 2018 fiscal year, approved by shareholders on April 26, 2019[1560](index=1560&type=chunk) [The Offer and Listing](index=261&type=section&id=Item%209.%20The%20Offer%20and%20Listing) [Markets](index=261&type=section&id=Item%209.C.%20Markets) The company's American Depositary Shares (ADSs) trade on the NYSE under 'SUPV', while its underlying Class B shares are listed on ByMA and MAE in Argentina, also under 'SUPV' - The company's ADSs are listed on the NYSE under the ticker 'SUPV'[1564](index=1564&type=chunk) - The company's Class B shares are listed on the ByMA and MAE in Argentina under the ticker 'SUPV'[1564](index=1564&type=chunk) [Additional Information](index=262&type=section&id=Item%2010.%20Additional%20Information) [Memorandum and articles of association](index=262&type=section&id=Item%2010.B%20Memorandum%20and%20articles%20of%20association) The company's corporate purpose is financial activities, with capital stock comprising Class A (five votes) and Class B (one vote) shares, outlining voting requirements for major actions, preemptive and appraisal rights, and Argentina's tender offer regime - The company's capital is divided into Class A shares with five votes each and Class B shares with one vote each, with Class A shares holding special voting power for key decisions like mergers or dissolution[1570](index=1570&type=chunk)[1573](index=1573&type=chunk) - Shareholders have preemptive rights to subscribe to new shares in proportion to their holdings during a capital increase, exercisable within a specific timeframe[1580](index=1580&type=chunk)[1582](index=1582&type=chunk) - Argentine law provides appraisal rights, allowing dissenting shareholders to withdraw and receive payment for shares under specific corporate actions like mergers, delisting, or fundamental changes in corporate purpose[1584](index=1584&type=chunk) - The Argentine Capital Markets Law mandates a tender offer (OPA) for all shares when a controlling interest is achieved or when the company voluntarily withdraws from public listing[1600](index=1600&type=chunk)[1605](index=1605&type=chunk) [Exchange Controls](index=269&type=section&id=Item%2010.D%20Exchange%20Controls) Argentina significantly eased foreign exchange controls since late 2015, eliminating mandatory deposits and stay periods for foreign debt, granting residents free access to the foreign exchange market, and repealing exporter repatriation requirements - The mandatory deposit on certain foreign currency inflows was reduced to **0%**, and the mandatory stay period for new foreign debt was eliminated[1620](index=1620&type=chunk) - Effective July 1, 2017, a new foreign exchange regimen significantly eased access to the MLC, allowing residents to freely purchase foreign currency[1621](index=1621&type=chunk) - The requirement for Argentine exporters to repatriate and settle foreign currency proceeds through the MLC has been eliminated[1623](index=1623&type=chunk) [Taxation](index=270&type=section&id=Item%2010.E%20Taxation) This section details Argentine and U.S. federal income tax consequences for Class B shares/ADSs, including Argentine withholding tax on dividends (7-13%), capital gains exemptions for non-residents, personal assets tax, and for U.S. holders, foreign-source dividend income and PFIC considerations - **Argentine Taxation on Dividends:** Dividends from profits accrued from FY2018 onwards are subject to a withholding tax for individuals and foreign beneficiaries, at a rate of **7% for FY2018-2019** and **13% for FY2020 onwards**[1634](index=1634&type=chunk)[1636](index=1636&type=chunk) - **Argentine Taxation on Capital Gains:** Capital gains from publicly traded shares or ADSs are generally exempt for non-resident beneficiaries from cooperative jurisdictions; otherwise, a **15% tax on net gain** or **13.5% on gross price** applies[1646](index=1646&type=chunk)[1647](index=1647&type=chunk)[1649](index=1649&type=chunk) - **Personal Assets Tax:** The company pays personal assets tax (**0.25% rate**) on behalf of individual and foreign entity shareholders based on proportional net worth, with entitlement to seek reimbursement[1652](index=1652&type=chunk) - **U.S. Federal Income Tax:** For U.S. holders, dividends are treated as foreign-source income, and the company does not believe it was a PFIC for the most recent taxable year, with FATCA reporting requirements also discussed[1678](index=1678&type=chunk)[1683](index=1683&type=chunk)[1702](index=1702&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=270&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risk, including interest rate and foreign exchange risk, through a risk map with VaR limits (average Ps. 323.9 million in 2018), and manages liquidity risk via LCR and NSFR, alongside a comprehensive operational risk framework - Market risk is managed using a risk map defining authorized trades, position limits, stop-loss levels, and Value at Risk (VaR) limits, with daily monitoring by the Financial Risk Department[1712](index=1712&type=chunk) Five-day 99% VaR for Combined Trading Portfolios (in thousands of Pesos) | VaR | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Minimum | 499,968 | 33,561 | 36,590 | | Maximum | 206,802 | 128,835 | 111,622 | | Average | 323,948 | 72,739 | 72,961 | - Liquidity risk is managed through control of the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) to ensure sufficient liquid assets to meet obligations, especially in stress scenarios[1736](index=1736&type=chunk) - As of December 31, 2018, the Bank's consolidated total net asset foreign currency position subject to risk was **Ps. 393.0 million**, generating a VaR of **Ps. 32.8 million**[1732](index=1732&type=chunk) [Description of Securities Other Than Equity Securities](index=276&type=section&id=Item%2012.%20Description%20of%20Securities%20Other%20Than%20Equity%20Securities) [American Depositary Shares](index=276&type=section&id=Item%2012.D%20American%20Depositary%20Shares) This section outlines fees payable by ADR holders to the depositary, The Bank of New York Mellon, for services including ADS issuance/cancellation (up to $5.00 per 100 ADSs), cash distributions (up to $0.05 per ADS), and annual depositary services (up to $0.05 per ADS) Depositary Fees for ADS Holders | Fee | For | | :--- | :--- | | Up to $5.00 per 100 ADSs | Issuance or cancellation of ADSs | | Up to $0.05 per ADS | Any cash distribution | | Up to $0.05 per ADS per year | Depositary services | - The depositary for the ADRs is The Bank of New York Mellon, which reimbursed the company for expenses amounting to **U.S.$53,291.21** in 2018[1750](index=1750&type=chunk) [Controls and Procedures](index=277&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2018, a conclusion attested to by Price Waterhouse & Co. S.R.L., with no material changes reported during the fiscal year - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the annual report[1756](index=1756&type=chunk) - Based on an assessment using the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2018[1759](index=1759&type=chunk) - The independent registered public accounting firm, Price Waterhouse & Co. S.R.L., issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2018[1760](index=1760&type=chunk)[1806](index=1806&type=chunk) [Audit Committee Financial Expert](index=278&type=section&id=Item%2016.A%20Audit%20Committee%20Financial%20Expert) [Audit Committee Financial Expert](index=278&type=section&id=Item%2016.A%20Audit%20Committee%20Financial%20Expert) Ricardo Enrique De Lellis has been identified as the audit committee's financial expert and is an independent member as defined under Rule 10A-3 of the Exchange Act - Ricardo Enrique De Lellis serves as the audit committee's financial expert and is an independent member[1763](index=1763&type=chunk) [Code of Ethics](index=279&type=section&id=Item%2016.B%20Code%20of%20Ethics) The company adopted a code of ethics for senior financial officers and key personnel, publicly available on its website, with no modifications or waivers granted during the fiscal year ended December 31, 2018 - A code of ethics has been adopted for senior financial officers and is publicly available on the company's website[1765](index=1765&type=chunk) - No waivers were granted from the code of ethics during the fiscal year 2018[1765](index=1765&type=chunk) [Principal Accountant Fees and Services](index=279&type=section&id=Item%2016.C%20Principal%20Accountant%20Fees%20and%20Services) The company paid Price Waterhouse & Co. S.R.L. Ps. 54.0 million in 2018 and Ps. 73.4 million in 2017 for audit, audit-related, tax, and other services, all pre-approved by the audit committee Accountant Fees (in thousands of Pesos) | Fee Type | 2018 | 2017 | | :--- | :--- | :--- | | Audit Fees | 34,925 | 43,029 | | Audit Related Fees | 11,981 | 26,275 | | Tax Fees | 486 | 2,500 | | All Other Fees | 6,562 | 1,588 | | **Total** | **53,954** | **73,392** | - All audit and non-audit services provided by the principal accountant are pre-approved by the Audit Committee[1772](index=1772&type=chunk) [Corporate Governance](index=280&type=section&id=Item%2016.G%20Corporate%20Governance) As a foreign private issuer, the company follows Argentine corporate governance practices, which differ from NYSE standards, notably regarding the absence of a majority of independent directors and specific nominating or compensation committees - The company is a foreign private issuer and follows Argentine corporate governance practices, which differ from NYSE standards for U.S. companies[1776](index=1776&type=chunk) - Unlike NYSE rules for domestic issuers, Argentine law does not require a majority of independent directors on the board[1777](index=1777&type=chunk) - The company is not required to have nominating or compensation committees; director nominations are by shareholders, and a Human Resources committee advises on senior officer compensation[1782](index=1782&type=chunk)

Grupo Supervielle S.A. (NYSE:SUPV) Q4 2018 Results Conference Call March 8, 2019 9:00 AM ET Company Participants Ana Bartesaghi - Treasurer and IRO Patricio Supervielle - Chairman of the Board of Directors Jorge Ramirez - Chief Executive and Vice Chairman Alejandra Naughton - Chief Financial Officer Conference Call Participants Mario Pierry - Bank of America Merrill Lynch Gabriel da Nobrega - Citi Ernesto Gabilondo - Bank of America Merrill Lynch Yuri Fernandes - J.P. Morgan Carlos Gomez - HSBC Operator Goo ...