1Q19 Net Income of AR$589 million on track with
full year 2019 guidance in challenging macro environment
BUENOS AIRES, Argentina–(BUSINESS WIRE)–Grupo Supervielle S.A. (NYSE: SUPV) (BYMA: SUPV), (“Supervielle”
or the “Company”) a universal financial services group headquartered in
Argentina with a nationwide presence, today reported results for the
three-month periods ended March 31, 2019. All figures presented
throughout this document are expressed in nominal Argentine pesos (AR$)
and all financial information has been prepared in accordance with IFRS
in compliance with the adoption ruled by the Argentine Central Bank.
First Quarter 2019 Highlights
-
Revenues up 7.3% QoQ, driven by increases of 4.2% in Net Financial
Income and 15.0% in Net Service Fee Income. YoY total revenues rose
51.1% supported by growth of 51.2% in Net Financial Income and 38.6%
in fee income. -
Net Financial Income of AR$5.5 billion up 51.2% YoY and 4.2% QoQ
reflecting increases in average volumes of assets and deposits.
Interest on loans benefitted from additional repricing in personal
loans and lagged repricing in commercial loans. Net Financial Income
also includes a net gain from US$ denominated operations and
securities of AR$ 211.9 million. -
Net Interest Margin (NIM) of 19.1% down 70 bps YoY and 120 bps QoQ
reflecting higher volumes invested in high-yield Central Bank 7-days
Leliqs but at marginally lower-spreads. By contrast, the AR$ Loan
portfolio NIM increased 70 bps in the quarter to 23.2% from 22.5% in
4Q18 driven by continuing repricing in Loans to individuals and lagged
repricing in commercial loans while the average badlar rate decreased
in the quarter. -
Loan Loss Provisions increased 36.9% QoQ and Cost of Risk stood at
9.9% in 1Q19 by maintaining 100% NPL Coverage. 1Q19 LLPs include a
delinquent commercial loan that was fully anticipated in FY19
guidance. Excluding a voluntary AR$462 million LLP in excess of the
25% regulatory provisioning related to the above-mentioned loan, cost
of risk would have been 7.5%. -
Efficiency ratio was 59.0% in 1Q19 unchanged YoY, but improved from
61.9% in 4Q18. QoQ performance reflects a 7.3% revenue increase, above
the 2.3% increase in costos. -
Attributable Net income of AR$589.1 million, declined 18.5% YoY, or
AR$133.5 million, and 16.7% QoQ, or AR$117.7 million. Excluding the
additional voluntary LLP for the above-mentioned commercial loan to
maintain 100% NPL coverage, Attributable Net Income would have
increased 29.5% YoY and 32.4% QoQ. ROAE of 13.6% in 1Q19 (21.6%
excluding additional LLP) compares with 19.9% in 1Q18 and 17.1% in
4Q18. ROAA of 1.5% in 1Q19 (2.4% excluding additional LLP), versus
3.2% in 1Q18 and 2.0% in 4Q18. -
Loans to deposits ratio of 74.6% in 1Q19 compared to 119.7% in 1Q18,
and 84.5% in 4Q18, reflecting higher deposit base and weak loan demand. -
Deposits increased 97.5% YoY and 15.6% QoQ to AR$109.7 billion. AR$
deposits rose 80.4% YoY and 16.0% QoQ, while foreign currency deposits
(measured in US$) increased 13.8% YoY and were flat QoQ. -
Loans up 23.1% YoY and 2.1% QoQ to AR$81.8 billion. AR$ Loan portfolio
rose 11.2% YoY but fell 1.4% QoQ. FX loans, measured in US$, declined
22.4% YoY and 2.5% QoQ, but rose 67.0% YoY and 11.8% QoQ measured in
local currency. -
Total assets up 69.7% YoY and 16.1% QoQ, to AR$ 163.8 billion
outpacing loan growth, mainly due to larger holdings of Central Bank
securities. YoY comps also reflect higher cash regulatory minimum
reserve requirements. -
NPLs increased by 210 bps YoY and 120 bps QoQ to 5.3% in 1Q19, mainly
impacted in 1Q19 by the above mentioned delinquent commercial loan.
Corporate segment NPL at 3%, but excluding delinquent loan would have
been 1.5%. Both Retail and Consumer Finance loans showed marginal
deterioration due to a combination of lower loan portfolio origination
and weaker asset quality as a result of the recession in Argentina and
high inflation levels which continue to impact consumers disposable
income. - Common Equity Tier 1 Ratio (Consolidated Proforma) of 12.1% in 1Q19.
Commenting on first quarter 2019 results, Jorge Ramirez, Grupo
Supervielle’s CEO, noted: “Our first quarter results were in
line with our expectations, which reflects an anticipated slower first
half of the year dovetailing with the macro environment. We expanded our
deposit base well above system growth, achieved higher revenue
generation even when comparing against a seasonally stronger fourth
quarter, and maintained 100% NPL loan coverage. This performance is
reflective of the strength and flexibility of our franchise which has
proven over time to be resilient in periods of low credit demand and
more volatile financial markets.
“In the current environment, we have heightened our focus on
productivity improvements, driving synergies and striving to operate as
a leaner organization. We are also strengthening our efforts on
enhancing the customer journey, driving loyalty and increasing
efficiencies as we make progress on our digital transformation. A key
part of these initiatives is streamlining the management structure at
the bank subsidiary. I am pleased that we were able to begin this
reorganization during the quarter and finalizing the process early April.
“As we look to the remainder of the year, while we expect the macro
environment will be further challenged as this is a presidential
election year, we are maintaining our full-year guidance. In sum, as we
continue to navigate the current economic scenario, we remain fully
committed on further solidifying the foundation of the business and
investing to better position the Company for long-term success,” concluded
Mr. Ramirez.
Financial Highlights & Key Ratios
| (In millions of Argentine Ps.) | % Change | |||||||||||||
| INCOME STATEMENT | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q18 | QoQ | YoY | |||||||
| Net Interest Income | 1,218.3 | 2,023.2 | 2,722.9 | 2,898.2 | 2,818.1 | -39.8% | -56.8% | |||||||
| NIFFI & Exchange Rate Differences | 4,259.4 | 3,235.0 | 1,663.4 | 716.8 | 805.5 | 31.7% | 428.8% | |||||||
| Net Financial Income | 5,477.7 | 5,258.1 | 4,386.2 | 3,615.0 | 3,623.6 | 4.2% | 51.2% | |||||||
| Net Service Fee Income (excluding income from insurance activities) | 1,227.8 | 1,065.1 | 1,026.9 | 1,004.9 | 884.6 | 15.3% | 38.8% | |||||||
| Income from Insurance activities | 204.0 | 180.4 | 183.1 | 145.3 | 148.7 | 13.0% | 37.1% | |||||||
| Loan Loss Provisions | -1,893.0 | -1,382.8 | -1,122.5 | -989.2 | -726.1 | 36.9% | 160.7% | |||||||
| Personnel & Administrative Expenses | -3,597.7 | -3,591.2 | -3,045.2 | -2,760.9 | -2,446.5 | 0.2% | 47.1% | |||||||
| Profit before income tax | 748.7 | 903.8 | 1,027.6 | 456.0 | 1,020.4 | -17.2% | -26.6% | |||||||
| Attributable Net income | 589.1 | 706.8 | 867.4 | 270.7 | 722.6 | -16.7% | -18.5% | |||||||
| Attributable Comprehensive income | 615.4 | 935.3 | 874.5 | 475.3 | 744.8 | -34.2% | -17.4% | |||||||
| Earnings per Share (AR$) | 1.29 | 1.55 | 2.01 | 0.59 | 1.58 | |||||||||
| Earnings per ADRs (AR$) | 6.45 | 7.75 | 10.03 | 2.96 | 7.91 | |||||||||
| Average Outstanding Shares (in millions) | 456.7 | 456.7 | 456.7 | 456.7 | 456.7 | |||||||||
| BALANCE SHEET | mar 19 | dec 18 | sep 18 | jun 18 | mar 18 | QoQ | YoY | |||||||
| Total Assets | 163,849.3 | 141,115.5 | 146,122.7 | 120,789.0 | 96,569.6 | 16.1% | 69.7% | |||||||
| Average Assets1 | 156,054.4 | 143,525.2 | 128,633.2 | 104,287.2 | 90,832.7 | 8.7% | 71.8% | |||||||
| Total Loans & Leasing | 81,827.1 | 80,171.5 | 83,378.1 | 75,830.0 | 66,479.5 | 2.1% | 23.1% | |||||||
| Total Deposits | 109,676.8 | 94,906.0 | 97,185.5 | 75,672.7 | 55,540.2 | 15.6% | 97.5% | |||||||
|
Attributable Shareholders’ Equity |
17,771.0 | 17,155.6 | 16,220.0 | 15,345.4 | 15,114.2 | 3.6% | 17.6% | |||||||
| Average Attributable Shareholders’ Equity1 | 17,361.2 | 16,547.0 | 15,638.9 | 15,044.8 | 14,490.1 | 4.9% | 19.8% | |||||||
| KEY INDICATORS | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q18 | |||||||||
| Profitability & Efficiency | ||||||||||||||
| ROAE | 13.6% | 17.1% | 22.2% | 7.2% | 19.9% | |||||||||
| ROAA | 1.5% | 2.0% | 2.7% | 1.0% | 3.2% | |||||||||
| Net Interest Margin (NIM) | 19.1% | 20.3% | 18.2% | 17.3% | 19.8% | |||||||||
| Net Fee Income Ratio | 20.7% | 19.2% | 21.4% | 24.3% | 22.3% | |||||||||
| Cost / Assets | 9.7% | 10.3% | 9.7% | 10.9% | 11.1% | |||||||||
| Efficiency Ratio | 59.0% | 61.9% | 59.3% | 66.3% | 59.0% | |||||||||
| Liquidity & Capital | ||||||||||||||
| Loans to Total Deposits3 | 74.6% | 84.5% | 85.8% | 100.2% | 119.7% | |||||||||
| Liquidity Coverage Ratio (LCR)4 | 143.9% | 173.4% | 132.1% | 139.0% | 116.9% | |||||||||
| Total Equity / Total Assets | 10.8% | 12.2% | 11.1% | 12.7% | 15.7% | |||||||||
| Capital / Risk weighted assets (Proforma Consolidated) 5 | 13.2% | 14.0% | 13.8% | 14.5% | 17.0% | |||||||||
|
Tier 1 Capital / Risk weighted assets (Proforma Consolidated ) 6 |
12.1% | 12.9% | 12.5% | 13.1% | 15.8% | |||||||||
| Risk Weighted Assets / Total Assets | 67.9% | 73.0% | 70.5% | 78.8% | 88.1% | |||||||||
| Asset Quality | ||||||||||||||
| NPL Ratio | 5.3% | 4.1% | 3.7% | 3.6% | 3.2% | |||||||||
| Allowances as a % of Total Loans | 5.3% | 4.1% | 3.5% | 3.3% | 2.8% | |||||||||
| Coverage Ratio | 100.0% | 100.0% | 94.0% | 89.9% | 89.7% | |||||||||
| Cost of Risk7 | 9.9% | 7.0% | 5.9% | 5.6% | 4.7% | |||||||||
| MACROECONOMIC RATIOS | ||||||||||||||
| Retail Price Index (%)8 | 11.8% | 11.5% | 14.1% | 8.8% | 6.7% | |||||||||
| Avg. Retail Price Index (%) | 51.8% | 47.3% | 35.4% | 27.1% | 25.3% | |||||||||
| UVA (var) | 9.4% | 16.2% | 10.0% | 7.5% | 6.9% | |||||||||
| Pesos/US$ Exchange Rate | 43.35 | 37.81 | 40.90 | 28.86 | 20.14 | |||||||||
| Badlar Interest Rate (eop) | 45.7% | 49.5% | 43.3% | 32.7% | 22.6% | |||||||||
| Badlar Interest Rate (avg) | 41.8% | 50.2% | 37.1% | 27.3% | 22.9% | |||||||||
| Monetary Policy Rate (eop) | 68.2% | 65.4% | 48.0% | 35.7% | 27.5% | |||||||||
| Monetary Policy Rate (avg) | 55.8% | 59.3% | 65.0% | 40.0% | 27.3% | |||||||||
| OPERATING DATA | ||||||||||||||
| Active Customers (in millions) | 1.8 | 1.8 | 1.9 | 1.9 | 1.9 | |||||||||
| Access Points9 | 325 | 325 | 351 | 351 | 340 | |||||||||
| Employees10 | 5,264 | 5,307 | 5,281 | 5,451 | 5,406 | -0.8% | -2.6% | |||||||
| 1. |
Average Assets and average Shareholder’s Equity calculated on a |
| 2. |
Total Portfolio: Loans and Leasing before Allowances. According to IFRS, this line item includes Securitized Loan Portfolio and loans transferred with recourse. |
| 3. |
Loans/Total Deposits ratio was restated in previous quarters due to the inclusion in the balance sheet of the securitized and transferred loans. |
| 4. | This ratio includes the liquidity held at the holding company level. |
| 5. |
Regulatory capital divided by risk weighted assets taking into |
| 6. |
Tier 1 capital divided by risk weighted assets taking into account |
| 7. |
Excluding a voluntary AR$462 million LLP in 1Q19, in excess of the 25% regulatory provisioning related to a delinquent commercial loan, Cost of risk would have been 7.5%. Cost of Risk in 4Q18, excluding the AR$ 231 million additional voluntary loan loss provisions made to increase coverage, was 5.9%. |
| 8. | Source: INDEC |
| 9. |
The increase in the number of Access Points in 1Q18, reflects the opening of 1 bank branches located in Neuquen and the presence in 13 Walmart Stores. The increase in the number of Access Points in 2Q18, reflects the opening of 2 bank branches and the 7 Mila commercial offices. The decrease in the number of Access Points in 4Q18, reflects the closing of certain consumer finance sales points. |
| 10. |
The decrease in the number of employees in 3Q18 reflects the reorganization process in the consumer finance business |
1Q19 Earnings Call Dial-In Information
| Date: | Friday, May 10, 2019 | |
| Time: | 9:00 AM (US ET); 10:00 AM (Buenos Aires Time) | |
| Dial-in Numbers: |
1-877-407-0789 (U.S. and Canada), 1-201-689-8562 (International), 0-800-444-6247 (Argentina), or 0800-756-3429 (U.K.) |
|
| Webcast: | ||
| Replay: |
From May 10, 2019 at 12:00 PM US ET through May 24, 2019 at 11:59 |
Contacts
IR Contact:
Ana bartesaghi
+5411 4324 8132
[email protected]
