Grupo Supervielle Sa Class B · BCBA:SUPV
Grupo Supervielle Sa Class B — Morgan Stanley 12th Annual Latin America Executive Conference 2020
40 slides from Grupo Supervielle Sa Class B's conference presentation, Jan 13, 2020
Slide 1: Company Presentation
Company Presentation 1.10.2020
Slide 2: Company Presentation
Company Presentation 1.10.2020
Slide 3: Disclaimer
This presentation contains certain forward- terms, which may limit our ability to fund looking statements that reflect the current existing operations and to finance new views and/or expectations of Grupo Supervielle activities, (v) changes in government regulation, and its management with respect t
Slide 4: Contents
SUPV Presentation Contents Annex I, 3Q19 Performance Annex II, Support Material
Slide 5: SUPV Presentation
GRUPO a SUPERVIELLE TTY SUPV Prestutation
Slide 6: Why Supervielle: High growth potential financial services franchise
INVESTMENT THESIS Why SUPERVIELLE, High growth potential financial services franchise once the economy rebounds TRACK RECORD Loan Market Share [%] Financial System - Excluding Public Banks Strong PRESENCE in ARGENTINA’S major REGIONS for Growth: 7.0 6.0 Track record of strong organic growth combined
Slide 7: Business Strategy
BUSINESS STRATEGY Evolving our Business Model and Transforming SUPERVIELLE for success in a digital world High-Growth Post IPO Adverse Macro Slowing Demand Digital Transformation May 2016 – March 2018 April 2018 - 2019 2019 - 2023 • Delivering Capital deployment • Key customer segments significantly
Slide 8: Our Digital Transformation Journey
OUR DIGITAL TRANSFORMATION JOURNEY Evolving our Business Model and Transforming SUPERVIELLE for success in a digital world Banking Business Consumer Finance New Brands Innovation Online 1) Chat Bot Banking NEW 20K conversations DIGITAL MiCa per month BRAND 1) • CX / Digital Onboarding Transform Cent
Slide 9: Creating the Supervielle Ecosystem
CREATING THE SUPERVIELLE ECOSYSTEM That anticipate and address our customer’s diverse needs developing positive emotional engagements FINANCING • Canales Supervielle • Partnerships E-WALLET INSURANCE SOLUTIONS • Access and Financial • Canales Supervielle Connectivity • Partnerships Customer ASSET MA
Slide 10: Macro Trends
MACRO TRENDS Central Bank Securities “Leliqs” Balances and Rates declining in recent months Leliqs & Repo [AR$ MM] Market Interest rate & Inflation 1,500,000 83.3 1,400,000 78.4 1,191,433 1,300,000 73.9 70.7 62.7 1,200,000 68.2 60.4 65.0 68.0 1,100,000 59.3 61.9 60.9 63.0 1,000,000 55.8 57.3 55.8 53
Slide 11: Macro Trends [Cont.]
MACRO TRENDS [Cont.] International Reserves and Fx rate stabilized by year end with stringent Exchange Controls in place FX Rates BCRA Reserves [BN] 77.5 (44)%, (34)bn 95.0 FX Controls 77.951 85.0 Oct 28, 2019 September 2, 2019 75.0 65.0 43.4 44.8 55.0 45.0 59.81 35.0 25.0 29/10 26/9 2/1 10/10 10/12
Slide 12: Financial Sector
FINANCIAL SECTOR Resilient financial system with high liquidity levels. Loan demand remained weak along 2019. Expected to improve as interest rates decline. Loans to Private Sector [AR$ Bill.] 5% 8% 1.6% QoQ 87.5 15.1% YoY 83.4 6.6% -3.8% 2.1% 81.8 0.4% 82.1 80.2 2,232 -4.2% 2,137 3.6% 2,215 -0.2% 2
Slide 13: Financial Sector [Cont.]
FINANCIAL SECTOR [Cont.] Resilient financial system with high liquidity levels to absorb drop in deposits, even after US$ deposit outflows in 3rd and 4th quarter 2019. US$ deposits stabilized by year end. Private Sector Deposits [AR$ Bill.] 5% 30% 6.9% QoQ 2.7% 112.6 102.1 25.3% YoY 109.7 -9.4% 15.6
Slide 14: Annex I: 3Q19 Performance
Annex I 3Q19 Performance
Slide 15: Third Quarter 2019 Results Highlights
THIRD QUARTER 2019 RESULTS HIGHLIGHTS Results impacted by Argentine short-term notes reprofiling; franchise structurally performing well in complex macro environment. MARGIN ASSET QUALITY PROFITABILITY EXPENSES • Net Financial Income -20% QoQ • Loan Loss Provisions 79% QoQ • Reported Pre-Tax Loss •
Slide 16: Supervielle Assets Performance
SUPERVIELLE ASSETS PERFORMANCE Total assets decreased 4% QoQ as the bank applied liquidity in US$ held in the Central Bank following U$S deposit outflows, along with lower holdings of Central Bank securities. Assets Evolution [AR$ Mill.]1) Total Assets Breakdown [%] 9.4% 146,123 141,115 163,849 166,
Slide 17: Supervielle Loan Performance
SUPERVIELLE LOAN PERFORMANCE Total loans up 7% QoQ, driven by increases of 17% in US$ loans reflecting FX devaluation and of 3% in AR$ loans. In original currency, US$ loans declined 14% QoQ. Loans [AR$ Mill]1) Total Loans Breakdown [AR$ Mill]1) 3Q19 Breakdown [AR$ Mill]1) 5.0% Loans & Leasing, plus
Slide 18: Funding & Deposit Base
FUNDING & DEPOSIT BASE Stable AR$ deposit base, while US$ deposits declined 45% sequentially. Maintains significant liquidity levels. Funding [AR$ Mill.] Deposits & Liquidity [Mill, %] AR$ Mill 8.5% 15.6% -2.6% 17.1% 3.1% -1.8% 55.5% -3.7% 15.6% 0.8% -3.2% 156,058 157,356 152,296 140,307 17,771 19,3
Slide 19: Supervielle Deposits
SUPERVIELLE DEPOSITS AR$ retail and corporate deposits increased while short-term wholesale deposits decreased reflecting migration of local asset managers to operate directly with the Central Bank. DEPOSITS Breakdown [%] AR$ Deposits Non interest Bearing Non interest Bearing Checking Accounts Check
Slide 20: Net Financial Income (NFI) & NIM
NET FINANCIAL INCOME (NFI) & NIM NFI & NIM down 20% and 470bps QoQ, respectively reflecting AR$2.0 BN loss from Argentine government debt reprofiling (3% of total assets). Loans to individuals continued repricing. Net Financial Income [AR$ Mill.] NIM [%] 3Q18 4Q18 1Q19 2Q19 3Q19 20.3% 49.0% Total 18
Slide 21: Service Fee Income & Income from Insurance Activities
SERVICE FEE INCOME & INCOME FROM INSURANCE ACTIVITIES Net service fee income up 9% QoQ after repricing on bundled services, non-credit related insurance and higher credit card transactions, while income from insurance rose 19% QoQ. Net Service Fee Income [AR$ Mill.] Income From Insurance Activities
Slide 22: Asset Quality
ASSET QUALITY NPL ratio up to 6.9% with CoR at 9.6% reflecting certain commercial loans that became delinquent in 3Q19. Collateralization levels of non-performing commercial loans more than doubled. Loan Loss Provisions Evolution Retail NPLS vs +90 days Delinquency Coverage ratio [%] 4.6 4.5 4.5 4.0
Slide 23: Asset Quality Consumer Finance
ASSET QUALITY CONSUMER FINANCE NPL creation down 57% QoQ and 66% YoY, reflecting earlier credit scoring tightening. Consumer Finance – NPL Creation [AR$ Mill.] 605 538 479 423 403 379 328 324 138 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2017 2018 2019 22
Slide 24: Administrative Expenses & Efficiency Ratio
ADMINISTRATIVE EXPENSES & EFFICIENCY RATIO Efficiency ratio of 70.4% reflects weaker revenues due to impact from the debt reprofiling. Excluding reprofiling, efficiency ratio would have improved to 53%. Personnel and Administrative Expenses, D&A & Efficiency Ratio [AR$ Mill.] 43.5% 48.5% 12,491.5 14
Slide 25: Profitability
PROFITABILITY Pre-tax results impacted by debt reprofiling and non-performing commercial loans. Excluding debt reprofiling, pre-tax profit would have risen 88% YoY and 23% QoQ. Profit Before Income Tax [AR$ Mill.] Attributable Comprehensive Income [AR$ Mill.] -16.3% 55.5% 4.2 Bn 465.0 2,504.0 7.7 23
Slide 26: Capitalization
CAPITALIZATION Solid capitalization levels in a particularly challenging quarter with common Equity Tier 1 Ratio (Consolidated Proforma) of 11.8% in 3Q19. Capital Deployment [Tier I Ratio %]1) 0.8 0.2 (0.40 ) ( 0.5 ) ( 0.3 ) 0.1 11.9 11.8 TIER1 Capital Capital Creation Dividends Fx Impact on RWA Def
Slide 27: Ownership Grupo Supervielle
OWNERSHIP GRUPO SUPERVIELLE 2.9% 95% 5.0% 2.5% 5.0% 10% 97.1% 5.0% 95.0% 87.5% BOLSILLO DIGITAL SAU 95.0% 100.0% 5.0% 95.0% 65% 35% 100.0% Float Julio Patricio 5.0% Supervielle 95.0% 100.0% Votes: 58.1% Invertir Grupo Supervielle Espacio Supervielle Online.com S.A. Bolsillo Banco Supervielle Tarjeta
Slide 28: Annex II: Support Material
Annex II Support Material
Slide 29: Support Material: Under-developed Banking System
SUPPORT MATERIAL The Argentine banking business has the potential for a growth cycle when the economy rebounds. Under-developed Banking System 4.7% 3.0% 2.8% 1.7% 2.3% 2.2% Estimated 9.6 December 93 2019 47 47 15 32 22 Chile Brazil Colombia Peru Mexico Argentina Loans to the Private Sector as a % of
Slide 30: Support Material: Small industry size and low leverage
SUPPORT MATERIAL Small industry size and low leverage levels with ample room for growth ARGENTINA: Third largest economy of Latin America but small industry size 263.9 141.1 257.5 748.3 60.5 80.1 Small financial industry considering the size of the 16.2% economy 20.6% 20.5% 14.9% 26.0% 14.2% 3,365 2
Slide 31: Ranking: Competition in the Argentine Financial System
RANKING Competition | Financial System in million of Ps as of September 2019 Argentine Financial 11th System in terms of Loans 13th inArgentine Financial System terms of Deposits Loans Share Assets Share Deposits Share Banco de la Nación Argentina S.A. 430.208,8 16,5% 1.233.517,2 19,6% 1.030.884,3 2
Slide 32: Key Macro Indicators
KEY MACRO INDICATORS Lastest 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 information 2019e GDP real growth (%) 8.0 9.0 4.1 (5.9) 10.1 6.0 (1.0) 2.4 (2.5) 2.7 (2.1) 2.7 (2.5) (2.3)1 (2.6) Primary fiscal balance (excludes 3.1 2.7 2.4 0.5 -0.1 -0.6 -1.0 -2.1 -3.1 -3.7 -4.2 -3.8 -2.
Slide 33: Income Statement & Balance Sheet
INCOME STATEMENT & BALANCE SHEET Income Statement [AR$ Mill] 3Q19 2Q19 1Q19 4Q18 3Q18 QoQ YoY Net Interest Income 1,523.8 1,370.7 1,218.3 2,023.2 2,722.9 11.2% -44.0% NIFFI & Exchange Rate Differences 3,754.4 5,189.6 4,259.4 3,235.0 1,663.4 -27.7% 125.7% Net Financial Income 5,278.1 6,560.3 5,477.7
Slide 34: Interest Rates and Securities
INTEREST RATES AND SECURITIES Interest Rates [%] 3Q19 2Q19 1Q19 4Q18 3Q18 QoQ YoY Interest earned on Loans 41.8% 41.0% 39.7% 42.1% 33.8% 80 806 AR$ 56.5% 54.6% 52.1% 55.0% 44.2% 197 1,238 U$S 7.2% 7.1% 6.8% 7.2% 6.1% 13 116 Yield on Investment Porfolio 35.8% 56.0% 51.2% 48.2% 57.1% (2,016) (2,126) A
Slide 35: Interest Earning Assets
INTEREST EARNING ASSETS Interest Earning Assets [AR$ Mill] 3Q19 2Q19 1Q19 4Q18 3Q18 Avg. Avg. Avg. Avg. Avg. Avg. Avg. Avg. Avg. Avg. Investment Portfolio Balance Rate Balance Rate Balance Rate Balance Rate Balance Rate Government and Corporate Securities 8,955.1 -72.0% 10,557.4 18.4% 9,984.9 38.4%
Slide 36: Interest Bearing Liabilities
INTEREST BEARING LIABILITIES Interest Bearing Liabilities [AR$ Mill] 3Q19 2Q19 1Q19 4Q18 3Q18 Avg. Avg. Avg. Avg. Avg. Avg. Avg. Avg. Avg. Avg. Balance Rate Balance Rate Balance Rate Balance Rate Balance Rate Time Deposits 40,554.5 46.6% 35,666.3 41.3% 38,735.1 37.9% 26,774.1 37.3% 23,546.8 25.4% AR
Slide 37: FX Position
FX POSITION Global Net Position[US$ Ths] Sep 19 Aug 19 Jul 19 Jun 19 May 19 Apr 19 Mar 19 Dec 18 Sep 18 Assets Cash and due from banks 248,202 311,291 445,023 450,562 415,146 421,594 393,171 432,668 385,131 Secuities at fair value through profit or loss 17,723 26,722 51,719 36,404 46,206 39,165 64,2
Slide 38: Ratios
RATIOS Key Performance Indicators [%] 3Q19 2Q19 1Q19 4Q18 3Q18 Profitability 1) This ratio includes the liquidity held at the holding company level. ROAE 6.2% 42.2% 13.6% 17.1% 22.2% 2) Regulatory capital divided by risk weighted assets taking into account ROAA 0.7% 4.7% 1.5% 2.0% 2.7% operational a
Slide 39: Supervielle Loan Portfolio
SUPERVIELLE LOAN PORTFOLIO Small Atomized, diversified and collateralized loan book Breakdown by Economic Activity [%] Collaterals of the Corporate Portfolio [%] SMES & Families and individuals 43.0% LARGE TOTAL MIDDLE MARKET Services 12.2% Collateralized Civil Construction 6.7% 42% 43% 42% Portfoli
Slide 40: Thank You!
Thank You! Company Presentation 01.10.2020
Grupo Supervielle — Morgan Stanley 12th Annual Latin America Executive Conference 2020 on 6ix