Grupo Supervielle(US:SUPV)2022-08-18 18:56Financial Data and Key Metrics Changes - The company reported a loss of AR$2 billion for the quarter, impacted by headcount reductions and a sharp drop in government security prices [8][10] - Excluding nonrecurring charges, the consolidated net loss would have been AR$1.2 billion, with the banking business posting a net loss of AR$160 million [9] - The total net interest margin (NIM) stood at 18.8%, with a decline of 30 basis points sequentially [27][28] - The Tier 1 capital ratio closed at 13.6%, a 20 basis points sequential decline [32] Business Line Data and Key Metrics Changes - The loan book stabilized, with personal loans increasing by 1.5% sequentially to over AR$180 billion, driven by SME loans and credit card portfolio growth [25] - Consumer finance loans at IUDÚ contracted by 12%, leading to a historical low in their weighting within the total loan book [25] - The efficiency ratio was slightly over 81%, impacted by severance charges and increased operational costs [30] Market Data and Key Metrics Changes - Total Argentine peso deposits increased by 7% sequentially, with core peso deposits up by 6% [26] - The non-performing loan (NPL) ratio improved to 3.8% on a consolidated basis, with the bank's NPL ratio stable at 2.6% [29][23] Company Strategy and Development Direction - The company is focused on restructuring its consumer finance business, IUDÚ, to improve efficiency and asset quality [7][16] - A share repurchase program of AR$2 billion was approved, reflecting confidence in the company's asset value and business potential [10] - The company aims to enhance customer acquisition and digital adoption while rightsizing operations to drive efficiency [7][11] Management's Comments on Operating Environment and Future Outlook - The management highlighted the challenging macroeconomic environment in Argentina, characterized by high inflation and low credit demand [6][10] - Future profitability is expected to improve in the second half of next year, contingent on macroeconomic conditions [59][60] - The company is taking a long-term view on customer acquisition and digital transformation, which may impact short-term ROE [59] Other Important Information - The company has reduced its headcount by 18% year-to-date, with significant reductions at IUDÚ and the bank [14][30] - The integration of IUDÚ's customer base into Banco Supervielle is aimed at reducing operational costs [16] Q&A Session Summary Question: Political outlook ahead of elections - Management noted the difficulty in predicting political outcomes due to divisions among political forces and voter dissatisfaction with the current administration [40][42] Question: Buyback program and capital use - Management defended the buyback program as a means to maintain adequate capital levels and mitigate inflation impacts, despite lower ratios compared to larger banks [43][46][48] Question: Profitability outlook and trading losses - Management indicated that while restructuring efforts are ongoing, improvements in profitability are expected in the second half of next year, depending on macroeconomic conditions [55][59] Question: Lending strategy amid inflation - Management acknowledged a more restrictive lending policy in response to inflation and economic conditions, focusing on asset quality [62]