Grupo Supervielle SA (SUPV) Q2 2025 Earnings Call Highlights: Record Net Income and Strategic ...

Release Date: August 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Grupo Supervielle SA (NYSE:SUPV) reported a 62% sequential increase in net income, reaching 13.6 billion pesos, driven by higher net financial income and lower inflation adjustment. The company achieved a record high in US dollar deposits, which increased by 154% year on year and 16% sequentially, demonstrating strong client trust and a solid funding base. Loan growth outpaced the industry, with a 14% sequential increase and a 71% year-on-year increase in real terms, particularly in commercial lending. Grupo Supervielle SA (NYSE:SUPV) maintained a solid capital position with a CD1 ratio of 13.9% and delivered a 6% return on equity in real terms. The company is seeing early success in its strategic initiatives, such as the innovative remunerated account and the GEI-powered WhatsApp channel, which are enhancing client engagement and expanding the deposit base.

Negative Points

The company faced a 32% increase in loan loss provisions due to higher risk weighting from retail lending, reflecting early signs of industry-wide asset quality deterioration. Net fee income decreased by 13% as banking fees were not adjusted in the quarter, and there was a lower contribution from the brokerage business. Expenses rose by 4% due to seasonally lower costs in the prior quarter, impacting overall profitability. The NPL ratio increased from 2% to 2.7%, indicating a deterioration in asset quality, particularly in the retail segment. The macroeconomic environment remains challenging with tight peso liquidity, high real interest rates, and election-related uncertainty affecting growth prospects.

Q & A Highlights

Warning! GuruFocus has detected 3 Warning Sign with SUPV.

Q: My first question will be on asset quality and cost to risk. The NPL ratio remains below historical peaks, but the cost of risk appears high. Has the peak already happened in the second quarter, and what is the trend for next year? A: (Patricio Superviel, CEO) The NPL ratio increased from 2% to 2.7% over the last two quarters, which is significant but still below historical standards. This is part of an industry-wide trend of credit normalization. We are adapting underwriting standards to ensure portfolio health. (Mariano Viglia, CFO) We expect the cost of risk to peak at 4.5% this quarter and stabilize between 5% and 5.5% for the year and into 2026.

Q: What are your ROE expectations for next year, given this year's range of 5% to 10%? A: (Mariano Viglia, CFO) We expect ROE to improve towards the end of this year, potentially reaching 15% for 2026, with an increase quarter over quarter. The monetary policy is expected to stabilize post-October elections, which should help improve ROE.

Story Continues

Q: You revised your growth guidance downwards. Is this due to organic funding issues or capital constraints? A: (Patricio Superviel, CEO) The current macroeconomic transition with restrictive monetary policy impacts growth. We expect a relaxation post-elections, leading to better business confidence and credit demand. We are addressing funding issues with strategic initiatives and do not feel constrained by capital at this stage.

Q: Regarding the volatility in interest rates in Argentina, how is it affecting the banking system, and how long will it last? A: (Mariano Viglia, CFO) The current high real interest rates are temporary and not sustainable long-term. The central bank prioritizes controlling exchange rate volatility over interest rates, which should ease after the upcoming elections.

Q: With the stabilization of the Argentinian economy, are international financial institutions interested in entering the market, and are there any concerns? A: (Patricio Superviel, CEO) We see new players entering the market, which is a positive signal for Argentina. We are focused on strengthening our competitive position and simplifying operations to compete effectively, particularly in the SME sector.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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