Grupo Supervielle forecasts 35-40% real loan growth for 2025 as post-election stabilization begins

Earnings Call Insights: Grupo Supervielle S.A. (SUPV) Q3 2025

MANAGEMENT VIEW

* CEO Julio Patricio Supervielle opened by highlighting Argentina's post-election environment as a "new era" and emphasized that "the financial system is poised to play a critical role in enabling this transition." Despite optimism about reforms and the sector's future, he acknowledged that "systemic pressures and a very tight monetary policy characterized by unsustainably high real interest rates and historic reserve requirements ahead of the elections had a severe impact on economic activity and particularly the entire banking sector," resulting in a net loss of ARS 50.3 billion for the quarter.
* The CEO reported solid loan growth, up 8% in real terms, led by the corporate segment, while retail declined slightly due to tightened origination standards. Asset quality weakened, with the NPL ratio rising to 3.9%. Deposit growth was strong at 15% quarter-on-quarter, and dollar deposits reached another record high, up 31%. He also noted, "Our CET1 ratio reached 13.2% at quarter end and rose to 14.5% in October, supported by lower deferred asset tax deductions."
* Supervielle confirmed continued investment in strategic initiatives, scaling the SuperApp, and expanding cross-sell opportunities, especially at Yole. He stated, "We are focused on controlling what we can control and continue to invest in our business to further advance our competitive position and ensuring long-term success."
* CFO Mariano Biglia stated, "Our third quarter results were heavily impacted by temporary macro and regulatory headwinds, which drove a 43% sequential decline in net financial income," and explained that funding costs increased by ARS 56 billion due to high interest rates and strict reserve requirements. He detailed additional negative impacts from bond market volatility and a negative spread on the UVA mortgage portfolio.

OUTLOOK

* Biglia provided updated guidance, saying, "We now anticipate real loan growth of between 35% to 40%, led by corporate lending with retail gradually resuming growth as disposable income improves." Deposit growth is forecast at 30% to 35% with further share gains in U.S. dollar-denominated balances. The NPL ratio is now expected between 4.7% to 5.1%, while net cost of risk is projected at 5.8% to 6.3%. NIM is anticipated between 15% to 18%. Net fee income growth is now forecast at 5% in real terms, and operating expenses are projected to decline 8% to 10%. Full-year ROE is now expected to range between negative 5% and 0%. The CET1 ratio is expected between 12.5% and 13.5% at year-end. Management intends to provide a preliminary 2026 outlook early next year.

FINANCIAL RESULTS

* Grupo Supervielle reported a net loss of ARS 50.3 billion for Q3 2025, with profitability most impacted by margin compression and higher cost of risk. Peso NIM declined to 11.7% and total NIM fell to 10.8%, down 1,100 basis points and 1,000 basis points, respectively, quarter-over-quarter. Cost controls were maintained, with operating expenses declining 2% quarter-on-quarter and 12% year-to-date in real terms. The CET1 ratio improved to 14.5% in October. Deposit growth remained robust, and dollar deposits set another record high.

Q&A

* Ernesto María Gabilondo Márquez, BofA Securities, asked about loan growth expectations and ROE for next year. Supervielle explained that "loan growth this year was constrained by tight monetary conditions" but expects corporate and SME lending to lead recovery, with retail resuming in the second quarter of 2026. He noted, "If... macro reforms and the deflation continues, we see real loan growth in 2026 reaching in the area of 30% to 40%." On ROE, he described a constructive long-term view and said, "while the path to 15% and 20% ROE may be extended, we are building all the necessary blocks... as leverage normalizes and reform takes traction, Supervielle can converge towards ROE levels in line with peers in the region."
* Brian Flores, Citigroup, asked about achieving a balanced loan mix and the timing of NIM recovery. Supervielle described a strategy aimed at balance but stated, "the balance between enterprises... is tilted towards enterprises, corporations" and expects this to persist through the first half of 2026, with retail recovery later. Biglia anticipated recovery in risk-adjusted NIMs could occur earlier than late 2026.
* Flores also asked about risk management if reforms stall. Supervielle acknowledged risks if reserve policies persist but asserted, "we are working always to improve our resiliency... and we are prepared to competition."
* Camila Villaça Azevedo, UBS, inquired about asset quality and NPL trends. Supervielle said the rise was expected and manageable, while Biglia projected the NPL peak in Q4 and coverage to remain above 100%.
* Ricardo Cavanagh, Itaú, asked about actions and risks for 2026. Supervielle emphasized increasing bank leverage and the potential to tap international debt markets.
* Pedro Offenhenden, Latin Securities, questioned liquidity constraints. Supervielle noted a rebound in money demand and outlined strategies to capture more stable deposits, with an eye on tapping international markets.

SENTIMENT ANALYSIS

* Analysts displayed a neutral to slightly positive tone, focusing on clarification of guidance, asset quality, and risk management, with few overt challenges.
* Management maintained cautious optimism, frequently referencing early signs of stabilization and strategic positioning, but acknowledged the quarter's significant challenges. Supervielle said, "It was a difficult quarter, but... I'm optimistic for 2026."
* Compared to the previous quarter, analyst tone remained steady, while management shifted from highlighting strong performance to addressing macro headwinds and future recovery.

QUARTER-OVER-QUARTER COMPARISON

* Guidance was reset lower for 2025: real loan growth now forecast at 35%-40% vs. the previous 40%-50%; NPL ratio guidance widened to 4.7%-5.1% from 3%-3.5%; and NIM outlook was reduced to 15%-18% from 18%-20%. ROE guidance was revised to a negative 5% to 0% range, down from the prior 5%-10%.
* Management tone became more guarded, emphasizing macro and regulatory headwinds. Key concerns shifted from capital and funding constraints to margin compression and asset quality.
* Analysts’ questions in both quarters centered on asset quality and growth, but Q3 saw increased focus on risk management strategies.

RISKS AND CONCERNS

* Management cited ongoing systemic pressures, persistent high interest rates, and regulatory uncertainties as key risks. The CEO noted the risk of Central Bank reserve policies, and acknowledged potential volatility in the global environment. Efforts to mitigate these risks include tighter origination standards, cost controls, and strategic investment in digital capabilities and ecosystem expansion. Analysts raised concerns about sustained high reserve requirements, asset quality deterioration, and the pace of macroeconomic reforms.

FINAL TAKEAWAY

Grupo Supervielle closed a challenging quarter marked by macroeconomic and regulatory headwinds, reporting a significant net loss and margin compression. Management reset guidance lower for 2025 but remains focused on operational efficiencies, strategic investment, and capturing opportunities as Argentina’s post-election landscape stabilizes. Early signs of improvement in funding conditions and confidence, as well as continued focus on cost control and digital initiatives, are central to the company’s path toward restored profitability and longer-term growth.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/supv/earnings/transcripts]

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