Grupo Supervielle Reports 1Q24 Results
Delivering improved profitability of AR$46.5 billion in 1Q24 with ROAE at 33.8%
Starting 1Q20, the Company began reporting results applying Hyperinflation Accounting, in accordance with IFRS rule IAS 29 (“IAS 29”) as established by the
Management Commentary
Commenting on first quarter 2024 results,
While there is still much work to do, the policies implemented over the last five months are resulting in a gradual transition in
Importantly, we regained market share in loans this quarter. Our total loan book expanded by 2.6% sequentially in real terms, gaining 40 bps in market share as the macroeconomic and political environment began to normalize and confidence returned. Corporate loans saw a 60 bp share increase, while within retail loans, car loans market share expanded by 40 bps. More recently, Supervielle became the first private bank in the country to launch new 30-year mortgage loans, which were unavailable except during a short period between 2017 and 2018.
Asset quality metrics posted further sequential improvement, reflecting our focus on middle-market, corporate, and payroll loans in the current economic slowdown. As a result, the NPL ratio reached a historic low of 1.1% in the quarter and the coverage ratio improved to 264%.
We remain steadfast in our efforts to attract new clients and capture a higher share of wallet among SMEs and Corporates, while addressing customer pain points and improving NPS. During the quarter, we scaled our Virtual Hub service model for companies in the Entrepreneurs & SMEs segment seeking to achieve greater efficiency and enhance the customer experience.
Advancing on the retail front , we continued to expand our digital client base, which accounted for 64% of total clients, up 2 pps sequentially and 7 pps year-on-year. Today, 51% of transactions are completed through our App, compared to just 37% a year ago. We are confident that our Human Banking retail relationship model will continue to further enhance customer satisfaction, increase cross-selling, and strengthen NPS. The adoption of our 24/7 “Inversion Rápida” distinctive feature, unique among Argentine banks to effectively compete with the fintech world continues to see good traction, with customers up 25% sequentially. Our Insurance business remains pivotal within our financial ecosystem, solidifying its position through continuous expansion of our digital offering, exemplified by the launch of new life and home insurance products.
Our online retail brokerage platform, IOL, continues to perform well, gaining additional share and further consolidating its leading position. The new Crypto offering, launched in January in partnership with Ripio, gained good traction among existing IOL customers. While still in the early stages, we are seeing sustained growth in customers and transactions.
Lastly, we are proud to have recently received Gold recognition in The Country Awards for Financial Innovators in the
Looking ahead
, we firmly believe that lifting FX restrictions and passing necessary reforms through
First quarter 2024 Highlights
PROFITABILITY
Attributable Net Income of AR$46.5 billion in 1Q24, compared to a net gain of AR$2.2 billion in 1Q23 and AR$34.1 billion in 4Q23.
The sharp YoY increase in Net Income reflects the successful execution of the Company’s strategic plan implemented in 2022 and 2023 to optimize operations, consolidate businesses, grow in profitable products and increase cross-sell.
ROAE increased to 33.8% in 1Q24 from 2.0% in 1Q23 and 26.9% in 4Q23. ROAA was 7.4% in 1Q24 compared to 0.3% in 1Q23 and positive 5.3% in 4Q23.
Profit before income tax increased to AR$72.4 billion in 1Q24 compared to a gain of AR$6.6 billion in 1Q23 and AR$61.2 billion in 4Q23.
QoQ performance is explained by: i) a 19.4%, or AR$23.1 billion decrease, in expenses, mainly due to lower personnel expenses as previous quarter reflected higher personnel expense provisions, and higher D&A mainly due to the impairment on the goodwill of Mila to reflect the business fair value, ii) a 2.4%, or AR$7.0 billion, increase in Net Financial Income reflecting high level on AR bonds gains and lower cost of funds following the lifting of floors on interest rate deposits, iii) a 39.7%, or AR$5.5 billion, decrease in
Net Financial Income reached AR$299.1 billion in 1Q24 increasing 137.2% YoY and 2.4% QoQ. The QoQ performance is explained by: i) higher results from the sale of government securities previously recorded at amortized cost, ii) higher yield on higher volumes of inflation linked government securities capturing the inflation peak in
Net Interest Margin (NIM) reached 61.9% compared to 21.9% in 1Q23 and 62.2% in 4Q23.
The total NPL ratio was 1.1% in 1Q24 improving 300 bps and 10 bps from 4.1% in 1Q23 and 1.2% in 4Q23, respectively. The QoQ and YoY performances reflect the shift in loans to middle-market corporates and payroll customers along with significantly lower exposure to consumer loans, better retail customer behavior and the sale of delinquent retail loans, mainly open market.
Loan loss provisions (LLPs) totaled AR$8.0 billion in 1Q24, decreasing 30.2% YoY and 47.9% QoQ. Net loan loss provisions, which is equivalent to loan loss provisions net of recovered charged-off loans and reversed allowances, amounted to AR$8.4 billion in 1Q24 compared to AR$11.0 billion in 1Q23 and AR$13.9 billion in 4Q23.
The Coverage Ratio increased to 263.7% as of
Efficiency ratio improved to 34.0% in 1Q24, from 71.8% in 1Q23 and 43.4% in 4Q23. The QoQ performance was explained by a 14.7% decrease in total expenses and a 3.0% increase in Revenues mainly reflecting higher financial margin.
Loans to Deposits Ratio was 43.6% as of
Total Deposits of AR$1,774.8 billion increasing 207.8% YoY and 14.6% QoQ in nominal terms. Total private sector deposits amounted to AR$ 1,683.8 billion and increased 207.1% YoY and 16.3% QoQ in nominal terms compared to industry growth of 170.7% YoY and 16.4% QoQ. In real terms, total deposits decreased 20.6% YoY and 24.4% QoQ while average deposits decreased 22.8% YoY but remained flat QoQ reflecting assets and liability management in a context of negative real interest rates and a tight monetary policy. Total private sector deposits decreased 20.8%, and 23.3% YoY in real terms. The leverage ratio (Assets to shareholder´s equity) decreased 210 bps to 4.6x from 6.7x as of
The QoQ and YoY performance of AR$ industry deposits in real terms reflect the impact of negative interest rates in real terms together with the use by importers of their peso deposits to pay the Bopreal bonds issued by the
Foreign currency deposits (measured in US$) amounted to
Total Assets down 17.8% QoQ and 12.9% YoY, to AR$ 2,572.0 billion as of
The QoQ performance mainly reflects a 33.8% decline in
The YoY performance reflects weak credit demand in the context of high inflation and high nominal interest rates in the period. YoY, Average AR$ Assets decreased 17.9%.
Loans expanded 198.9% YoY and 55.5% QoQ in nominal terms to AR$774.6 billion. In real terms, gross loans decreased 22.9% YoY but increased 2.6% QoQ gaining 40 bps in market share in
Common Equity Tier 1 Ratio as of
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ana.bartesaghi@supervielle.com.ar
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