1Q25 Net Income at AR$7.9 billion with ROAE at 3.5%. Navigated a Transitional Macro Environment; Maintain Confidence in Our Core Strengths to Drive Growth

BUENOS AIRES, Argentina--(BUSINESS WIRE)--May 27, 2025-- 

Grupo Supervielle S.A. (NYSE: SUPV; BYMA: SUPV), ("Supervielle" or the "Company") a universal financial services group headquartered in Argentina with a nationwide presence, today reported results for the three-month period ended March 31, 2025.

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

Management Commentary

Commenting on first quarter 2025 results, Patricio Supervielle, Grupo Supervielle's Chairman & CEO, noted: "We continued to make solid progress in advancing our long-term strategy across the organization. At Banco Supervielle, we are accelerating our transformation by scaling differentiated solutions that strengthen our position against both fintechs and traditional banks. At the core of our strategy are four key initiatives aimed at meeting and anticipating customer expectations:

   -- 
 First, responding to the growing demand for simple, high-yield 
      solutions, in April we launched our innovative Remunerated Account. 
      Supervielle is the only bank in Argentina offering daily interest on both 
      Payroll and SME accounts, in pesos and U.S. dollars. This innovation 
      enhances the customer experience and reinforces our deposit base. We are 
      confident it will also support organic client growth and deepen primary 
      banking relationships. 
 
 
   -- 
 Second, as part of our client-centric innovation strategy, this month 
      we launched Tienda Supervielle on Mercado Libre, Latin America's leading 
      e-commerce platform, becoming the first bank to have an official online 
      store hosted on their marketplace and also fully accessible through the 
      Supervielle mobile app. This initiative marks a key milestone in our 
      Super App journey, expanding our digital ecosystem and redefining how 
      customers interact with financial services by connecting everyday 
      commerce and banking in a single, fully digital experience. 
 
 
   -- 
 Third, as part of our ongoing efforts to elevate the customer 
      experience and improve efficiency, we are integrating Gen AI-powered 
      interactions via WhatsApp, enhancing accessibility while also ensuring 
      clients can always reach a human when needed, combining technology with 
      the personalized service that defines Supervielle. 
 
 
   -- 
 And fourth, we continue to expand IOL, our leading online brokerage 
      platform, which delivers integrated investment solutions to both its 
      clients and the Bank's customer base. 
 

While Argentina faced temporary headwinds this quarter, we remain confident in the underlying strength and momentum of our business. After a strong start to the year, industry loan demand eased amid a mix of external factors, including tight peso liquidity, FX volatility, and heightened devaluation expectations ahead of the IMF agreement. We view these pressures as transitory and remain focused on capturing opportunities as macro conditions stabilize.

Client lending remained resilient, underscoring the strength of our core banking operations, while a sharp correction in treasury bond prices, amid uncertainty and prior to the confirmation of strong IMF support in April, negatively impacted investment portfolio performance. Our loan book increased 3% sequentially and 104% year-over-year in real terms, gaining 40 bps in market share over the past 12 months. Retail remained the main growth driver, now accounting for 52% of total loans, up from 48% in 4Q24 and 36% a year ago. Asset quality remains healthy. The NPL ratio rose to 2%, reflecting credit normalization following the rapid expansion in retail lending. Importantly, delinquency remains within expected levels embedded in pricing models, and we continue to refine origination and collection strategies to safeguard portfolio quality. On the funding side, deposits increased up 8% quarter-over-quarter, with market share rising 30 basis points to 3%. Together, these trends underscore the resilience of our business and provide a strong foundation for sustained, profitable growth.

Net fee income rose 32% year-on-year in real terms, supported by strong growth in banking fees, brokerage and asset management revenues, and deeper insurance penetration. In line with our efficiency strategy, operating expenses declined 12% sequentially and 17% year-over-year, reflecting continued progress on structural cost reduction and a leaner operating model.

Argentina is entering a new chapter. Recent measures, including the lifting of FX controls supported by the IMF and multilateral organizations, mark a shift toward greater openness and stability. This turning point is restoring confidence and creating conditions for long-term investment. At Supervielle, we are committed to supporting this transition by providing the credit and financial solutions our clients need to grow, staying close to those who produce, invest, and build. With a strong CET1 ratio of 15.3%, we are well-positioned to capture the opportunities ahead. I am proud of the digitally integrated, customer-centric platform we've built across banking, insurance, asset management, and online investing which is designed to give clients greater control, transparency, and simplicity. As Argentina moves toward normalization, our innovation-led strategy and evolving platform will be key to deepening engagement, expanding our client base, and driving profitable growth," concluded Mr. Supervielle.

First quarter 2025 Highlights

Attributable Net Income of AR$7.9 billion in 1Q25, compared to net gains of AR$72.5 billion in 1Q24 and AR$30.6 billion in 4Q24.

ROAE was 3.5% in 1Q25, compared to 33.9% in 1Q24 and 13.9% in 4Q24. While profitability declined sequentially, underlying performance continued to reflect the successful execution of the Company's focus on loan growth. Client Net Financial Margin increased in the mid to high teens, supported by higher spreads and loan volumes, while operating efficiency improved, with expenses declining in real terms. These positive changes were more than offset by: i) a sharp reduction in Market-related Net Financial Margin, reflecting lower yields on government securities, and ii) an increase in loan loss provisions due to the expansion of the retail portfolio which entails higher provisioning and the release of LLPs in 4Q24 resulting from improved macroeconomic conditions embedded in the ECL model. Lower YoY ROAE reflects an exceptionally high base in 1Q24, which had recorded extraordinary high results on government securities..

ROAA was 0.6% in 1Q25 compared to 7.4% in 1Q24 and 2.6% in 4Q24.

Profit before income tax totaled AR$10.2 billion in 1Q25 compared to AR$112.9 billion in 1Q24 and AR$24.6 billion in 4Q24. The sequential decline was mainly explained by: i) a 46.6%, or AR$ 43.3 billion, decline in market related Net Financial Income due to lower prices of government securities, ii) a 118.0%, or AR$ 16.7 billion, increase in loan loss provisions driven by strong growth in retail lending which entails higher provisioning and a lower comparison base in 4Q24, and iii) a 5.2%, or AR$ 645.1 million, decline in brokerage fees amid increased market volatility. These effects were partially offset by: i) a 17.2%, or AR$ 18.5 billion, increase in client net financial income, ii) a 12.3%, or AR$ 17.4 billion, decline in operating expenses, iii) a 3.4%, or AR$ 1.2 billion, increase in fee income from our banking business as fees repriced above inflation, and iv) a 2.8%, or AR$ 208.0 billion, increase in revenues from the asset management business.

Revenues (net financial income + net fee income -- turnover tax) totaled AR$206.9 billion in 1Q25, compared to AR$477.2 billion in 1Q24 and AR$232.9 billion in 4Q24.

Net Financial Income totaled AR$175.4 billion in 1Q25, down 62.4% YoY and 12.4% QoQ. The QoQ decline was mainly driven by a 46.6%, or AR$43.3 billion, decrease in the Market-related Net Financial Income, reflecting lower yields on government securities amid uncertainty prior to the agreement reached with the IMF in April. In contrast, the Client Net Financial Income rose 17.2%, or AR$18.5 billion, supported by strong spreads on increased loan volumes.

Adjusted Net Financial Income (Net Financial Income + Result from exposure to inflation) totaled AR$133.6 billion in 1Q25, decreasing 55.6% YoY, and 17.7% QoQ.

Net Interest Margin $(NIM)$ declined to 19.2% in 1Q25 from 24.9% in 4Q24. Margins from client lending remained resilient, with loan portfolio NIM improving to 21.2% from 20.7% in 4Q24, reflecting wider spreads, underscoring the strength of our core banking operations. In contrast, Investment Portfolio NIM dropped significantly to 17.7% from 33.6%, reflecting a sharp correction in treasury bond yields. The YoY comparison reflects the normalization of extraordinary factors that drove the unusually high 61.8% NIM in 1Q24, including gains from the sale of government securities previously recorded at amortized cost, high AR$ spreads on government securities and loans, and lower funding costs following the removal of deposit rate floors that quarter.

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May 27, 2025 16:28 ET (20:28 GMT)