Good morning, and welcome to the Grupo Supervielle First Quarter 2020 Earnings Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Grupo Supervielle's Investor Relations website, www.gruposupervielle.com. As a reminder, all participants will be in a listen-only mode. There will be an opportunity for you to ask questions at the end of today’s presentation. As a reminder today's conference is being recorded. At this time, I'll turn the call over to Ana Bartesaghi, Treasurer and IRO. Please go ahead.

Thank you. Good morning, everyone and thank you for joining us today. Speaking during today's call will be Patricio Supervielle, our Chairman of the Board of Directors, who will discuss the overall macro environment; and Jorge Ramirez, our Chief Executive Officer and Vice Chairman of the Board, who will review our results for the quarter. Also joining us is Alejandra Naughton, Chief Financial Officer; and Alejandro Stengel, Chief Operating Officer of the bank. All will be available for the Q&A session. Please note that starting this quarter as per Central Bank regulations we have begun reporting results applying hyperinflation accounting in accordance with IFRS rule IAS 29. For its comparability, we have restated 2019 results, quarterly and for the year applying IAS 29 to reflect the effects of inflation adjustment for each period. Therefore, all results in this presentation are presented adjusted for inflation as of March 31, 2020 unless otherwise noted. For your convenience, we have also included in our earnings report managerial results in nominal terms. This means we are including first Q 2020 financial results ex-IAS 29, isolating the IAS 29 impact for the quarter and also showing quarterly figures for 2019 in nominal terms as they were previously reported until December 31, 2019. You can find more details on hyperinflation accounting in our earnings report filed yesterday after the close of the market, as well as in the investor education presentation we have uploaded to our IR site along with earnings materials for the quarter. Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, including as a result of the COVID-19 pandemic and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. I would now like to turn the call over to our Chairman, Patricio Supervielle.

Thank you, Ana. Good morning, everyone. Thank you for joining us today. We hope you and your loved ones are healthy and safe in this challenging time. If you're following the presentation please turn to slide 2. I'm very proud of how quickly our team responded to the first signs of the COVID-19 pandemic, implementing protocols to ensure the health and well-being of our employees and customers while also maintaining the continuity of our operations. Through prudent management, we enter this crisis with a high level of liquidity and comfortable capitalization levels fortifying the organization's long-term sustainability in this rapidly-changing environment. Going into this unprecedented period, we have already began a transformational process spanning the organization. With a heightened need to support our customers in a low-touch environment, we have accelerated our digital transformation adding online functionalities and implemented significant redeployment of ATM infrastructure. We also made requisite adjustments to our operations to promote safe banking across all our customer segments. Importantly, we also provided financial relief in areas that I will go on the next slide. We are supporting our communities through monetary donations and supplies in addition to organizing opportunities for giving by our employees and customers. Turning to our financial performance, we delivered higher profitability this quarter despite the increasingly challenging macro environment. Efficiency ratio -- efficiency also improved reflecting the streamline undertaken last year and strict cost control. We reported sequentially higher cost of risk and low loan provision reflecting the adoption of rule IFRS 9 resulting in increased coverage. Both coverage and the NPL ratio benefited from the regulatory easing on debtor classification. Please turn to slide 3. On March 19, the government established a nationwide mandatory lockdown, which has been extended in several instances and remain currently in place. Bank branches opened for specific…

Thank you, Patricio. Good day, everyone. As Ana noted earlier, remember that this quarter we have adopted rule IAS 29. And for recent comparability, we have also restated 2019 figures to reflect this. Now turn to slide 10. We decided to releverage our balance sheet this quarter taking advantage of higher spreads of the 7-day Leliq securities issued by the Central Bank. This drove a 22% sequential increase in total assets back to third Q 2019 levels. This brought the share of Leliq securities to 21% of total assets, up from nearly 5% in the prior quarter and 18% in the third Q 2019. Turning to our loan book on slide 11. Total loans contracted 7% sequentially reflecting the economic contraction and overall uncertainty. We experienced high single-digit declines in both peso and U.S. dollar-denominated loans in original currency. Overall, we saw sequential declines in the range of 6% to 9% across our loan segments. Note also that starting January 1 and to align our SME business to a heightened implementation of digitalization already in place among individual customers, we transferred our SME loan book from Corporate Banking to the Personal and Business Banking segment. This newly created segment includes; SME loans which this quarter accounted for 5% of total loans, plus our traditional retail banking operations. The corporate segment now includes middle-market companies with annual sales between AR$700 million and AR$2.5 billion and large corporates with annual sales over AR$2.5 billion. On slide 12 in April, our total loan portfolio was up 3% sequentially. Growth was mainly driven by SME loans at a 24% interest rate reaching AR$5 billion and accounting for 5% of our loan portfolio at the end of April. Also 3% of total loans with maturities subject to regulatory refinancing requested stock debit in line with…

Thank you. [Operator Instructions] Thank you. And our first question is from Ernesto Gabilondo with Bank of America.

Hi, good morning, Patricio, Jorge, Alejandra and Alejandra Naughton. Thanks for the opportunity to take questions. My first question is on loan growth. Just want to know how are you perceiving the demand for corporate loans. Are you seeing companies withdrawing credit lines to improve liquidity? And are you implementing structure lending to privileged asset quality over loan growth? And how should we think about the loan growth for the year or if we can have a trend for the rest of the year?

Good morning, Ernesto. Thank you for your question. I hope you and your loved one are safe. We wish for the rest of the people who are listening in today. And we have seen in a couple of things throughout -- since the whole pandemic crisis started and throughout April and May. In the first place we saw very large corporate increasing loan demand for liquidity purposes and we were able to lend to some of these companies and being very selective in terms of the credit quality, and both of the company in itself by their own merits, but also in terms of the sectors that we are supporting. Most results in some increases in value chains related to agricultural production and food production mostly, which is something that we believe is a pretty safe in this whole pandemic crisis. The second thing that we saw in terms of loan demand is increases in demand by SMEs following these programs at the Central Bank and the government have put in place 24% credit lines -- 24% annual rate credit lines. And a substantial portion of them carry a guarantee from FOGAR, which is a fund, which is administered by BSE, which is a public-owned bank or state-owned bank. And we continue to be very selective in terms of credit quality, and to which companies we do help and assist in this crisis. In terms of the second part of your question of looking ahead, it's very difficult to say our loan growth will be for the rest of the year. I think it's going to be highly dependent on when restrictions of the mandatory shelter-in-place and lockdown of the economy are lifted and how gradually or how fast the economy starts to reopen. We are coming from two years of a pretty deep recession. So one of the things that I think makes the whole situation for Argentina different to some other parts of the world in terms of the unwinding that you saw is that the companies had already deleveraged a lot in the past two years mostly because of the very high interest rates we had since 2018 and most importantly in 2019. So we have a pretty unleveraged market. The total size of the Argentine market as a percentage of GDP is closer to 9% of the GDP so it's a pretty small impact. So how fast this will recover and the percentage of growth for the year, it's clearly very difficult for me to tell you at this point because again it's going to depend on factors, which are very difficult to predict accurately at this stage.

Thank you, Jorge. And my second question is in asset quality. We noticed you have created additional provisions based on expected losses except for the consumer portfolio. So, I just want to know, which are the macro assumptions that you are considering to build your respective loss model. And when do you expect the peak in provision charges just considering how the relief program is structured? Probably you will not see defaults from some clients in some quarters. So I'm just wondering when do you see the peak in provision charges. And within your portfolio, which are the industries that you think would be suffering the most?

Thank you, Ernesto. Alejandra speaking. Yes as you mentioned, we are from this quarter apply in IFRS 9. And you know that IFRS 9 make us calculate the segment inflation expected losses considering the past behaviors of our customers and we're still looking forward with favors. So it's pretty difficult to assess as of March the adjustment. As you may have read we didn't enjoy use of much higher provisions connected specifically with COVID-19. And it has to do with the past. Did not teach us a lot about which could be the effects on COVID, because COVID is a very, very new situation happening all across the world. And looking forward, again, it's difficult to assess because in looking-forward assumptions, what we have done is slightly adjustment to the assumptions that we have already put in place as of December adding additional impact on GDP. Let's say a decline of GDP by 5% in real terms. However, to be completely sincere, this is a continuing update, because the longer the lockdown, the higher the impact on GDP on economic activity. So up to now, I will say that, we didn't change dramatically our assumptions, because of lack of visibility. But however what is clear is that along the math, we will be updating that model and we did not discard it to observe higher provisions. Regarding activities one thing that makes us think that we are of okay as of March again it has to do with the – that we do not have exposures on those economic activities that are then identified the most affected because of the pandemia like the airlines, the entertainment or tourism. So all-in-all what we are doing is concentrating our commercial efforts on those activities that we consider to be less impacted like for example agrobusiness activities that has had a good dynamic during April and May for example. So, I think that – I don't know if it's – if I answer your question. But this is all in all – all the pieces moving behind the calculation of expected losses, we will be monitoring. And of course, it's clear that the economic activity will be worsening along the month, so we will be taking actions in terms of position our balance and be prudent regarding the building of our loan loss provisions.

Thank you very much, Alejandra.

You are welcome Ernest.

Thank you. Our next question is from the line of Jason Mollin with Scotiabank. Please proceed with your question.

Hi. Thank you for the detailed presentation and Q&A session. My question is based on what you described or describing the Central Bank and government measures freezing mortgage and auto loan payments, postponing credit card payments, the loan support programs for SMEs at 24% annual interest rate. Can you talk about the operating cash flow implications of this? So, I mean, I imagine this means that you're not collecting any payments on these products for the next months. You did talk about your liquidity metrics, which sounds positive. But how are you managing the bank in terms of cash flow in this construct? And maybe you can give us some sense of the size. You showed the growth in SME loans, I presume at a 24% interest rate. But if you can just talk us through about operating a bank in this environment, thank you – in terms of cash flow?

Good morning, Jason. Thank you. I mean, yes you're right in terms of the impact that that has in terms of extension of installments. In the case of the inflation adjusted mortgages, what essentially is happening is that the adjustment that occurs in the period in which this is frozen has to be collected in three consecutive installments starting October this year. So they're being added up it's – I mean, you're still collecting, but you're not collecting the adjustment, okay? The way we're managing mostly the cash flow is we keep a very close eye to liquidity. The Central Bank simultaneously with these easing measures for debtors has also released a lot of liquidity into the market. So the liquidity at the customer of the bank has not been heavily impacted. And I must say not just for us, but in general for the banking system has not been heavily impacted by this deferment of collections. And actually we have increased our liquidity levels since the whole crisis started. On the first hand as a precautionary measure. On the second hand also because of the Central Bank measures in terms of injecting more liquidity into the market. So my take on that is, they're reasonable -- those are reasonable measures that the Central Bank has taken because I think they're understanding what the challenges are. And if you're asking the whole population to stay at home for a prolonged period of time, it is only logical that you try to provide some relief. Regarding the question about the SMEs, we have increased more or less by around AR$ 5 million our portfolio by the end of April. Current project stands at around slightly above that. It's probably around AR$ 6 million, the amount outstanding under those programs. It is more or less 6% of our total portfolio. So it's -- I mean the effective interest rate that we get out of those loans because of reliefs we get in terms of minimum cash reserve requirements is closer to a 30% mark -- 32% mark. And it's also enabling us to get other ancillary businesses from these companies. So all in all, we believe it's a reasonable size compared to the overall size of our portfolio. And I think we're handling it okay.

So these loans that have been rescheduled, if you want to call it that or postponed payments the interest is being accrued but without penalties, or how is that being reflected in the financial statements? Jorge Ramírez: Yes that's correct. I mean the contractual interest -- I mean you have two different situations. If it's a loan you continue accruing the contractual interest rate. If it's a credit card loan the Central Bank has imposed the cap on interest rates on credit cards which stand at a 43% per annum. Originally, they were 49% and they lowered it to 43%. And they're accruing that contractual interest rate. There is no penalty interest rate.

Okay. A separate question related to what you show on chart -- on Slide 7, where you show the gap between the blue chip swap rate and the official exchange rate at 77%. How do you expect that to proceed or be worked out? And what are the implications for the economy and your bank? Jorge Ramírez: That's a million-dollar question. I mean, if you look at past history normally what tends to happen is that at some point in time both rates tend to converge. And what past history in Argentina shows is that normally the one that is below that goes up; another one that is above that comes down. However we could -- it's very difficult to establish the timing on this situation because it depends on the level of reserves that the Central Bank has. And I think that in this particular situation it will depend a lot in terms of the agreement or not Argentina makes in terms of restructuring its foreign debt -- foreign sovereign debt. So, we might see large gaps within the official exchange rate and the blue chip swap rate for a prolonged period of time. That's probably one situation. Secondly the Central Bank has been taking a lot of measures in terms of trying to put this under control. Yesterday night, the Central Bank issued a new regulation stating that, if you -- if a company or a person has assets abroad or has dollars in cash in Argentina not deposited in a bank account, they cannot access the official exchange market, okay? So all of these measures are put at or are taking in terms of the Central Bank trying to make the gap converge and reserves increase by year, by increasing the bank deposits through this measure, if you want to access the official exchange rate market or by preventing people from getting reserves on the Central Bank to make foreign payments, if they do have U.S. dollar liquidity available mostly outside of Argentina or in cash within Argentina. So, we're seeing these measures practically every single week. I mean if you look at when this whole lockdown started back in March 19, we've had in 70 days, which is 10 weeks, 97 Central Bank regulations. So that's partly an average of 10 regulations per week. So -- and we believe that this might continue for a while until the situation starts normalizing.

Thank you. Our next question comes from the line of Yuri Fernandes with JPMorgan. Please proceed with your question.

Thank you, Patricio, Jorge, Alejandra. Hope you are all well. My first question is regarding margins as a follow-up in the previous one. So if I understood correctly, we should not see a pressure on NII in the second Q. The bank will continue to recognize the interest on those renegotiated loans. My question is what you expect in the future, right? Because many of those loans at some point they may be default. And those NII accrued, they may never be real, right? So how to think about that? Should we see impairments in the future? This will come through higher provisions? How should we read this? And my second question regarding margins. We saw some changes on deposits that now banks they need to offer inflation-linked deposits to choose small amounts. And I know that the spread banks they make on deposit, they are pretty important for your NII. So my question is how should we see margins behaving? And we have this positive new regulation in addition to the credit card cap, the 55% that as you said today, it's 43% given like it's a mandatory renegotiation for credit cards. So how do you think margins in this kind of environment? Like how big they will be able to make money in this kind of scenario? And my third question is regarding expected losses. I got you're not getting big anticipating provisions for COVID, but do you plan to build in the second Q or like something ahead of the losses? Thank you. Jorge Ramírez: Good morning, Yuri. Okay. Your -- regarding your first question is in our consumer finance company one of the things that we're doing is, despite the Central Bank grace extended of 60 days extension, we are continuing to provisioning following the prior…

[Operator Instructions] Thank you. At this time, we've come to the end of our Q&A session. And I will turn the call back to Ana Bartesaghi for closing comments.

Thank you for joining us today. We appreciate your interest in our company. We look forward to meeting more of you over the coming months and providing financial and business updates next quarter. In the interim, we remain available to answer any questions that you may have. Thank you and stay safe and healthy.

Thank you. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.