Good morning, everyone, and welcome to Grupo Supervielle’s Fourth Quarter and Year End 2024 Earnings Call. I'm Ana Bartesaghi, Treasurer and IRO. Today's conference call is being recorded. As a reminder, all participants will be in listen-only mode. [Operator Instructions]. Speaking today will be Patricio Supervielle, our Chairman and CEO; Gustavo Manriquez, Banco Supervielle's CEO; Diego Pizzulli, CEO of Invertironline and Mariano Biglia, our CFO. All will be available during the Q&A session. Before we begin, I'd like to remind you that today's call may include forward-looking statements, which are based on management's current expectations and beliefs and subject to risks and uncertainties. For more details, refer to the forward-looking statements section in our earnings release and recent SEC filings. Patricio, please go ahead.

Thank you, Ana. Good morning, everyone and thank you for joining us today. As we enter 2025, we look back on 2024 as a year of significant transformation, not just for Supervielle, but for Argentina's financial systems as a whole. Last year marked an inflection point to banks as we are able to return to our core purpose, financing growth and creating value for the communities we serve. At Supervielle, we anticipated this shift early on, took decisive action and continued to make the right long term investment to drive sustainable value. With a clear focus on profitable growth, we prioritize completing the digital transformation started in 2020, while expanding our loan book and strengthening our deposit base as conditions improved. This approach enabled us to gain market share across key segments, while maintaining strong asset quality and solid capital ratios. In the fourth quarter, driven by an improving macro environment, we saw continued momentum. Our loan book expanded 27% quarter-over-quarter and 107% year-on-year, more than doubling the 50% industry growth while gaining 90 basis points of market share. Higher margin retail loans increased to 48% of our total portfolio, up from 44% in the prior quarter and from 40% a year ago. Our deposit base grew 7% sequentially with U.S. dollar deposits reaching record levels up 178% year-over-year and gaining 80 basis points during the year. We continued to operate from a precision of strength with the non-performing loan ratio increasing slightly to 1.3%, but still within historical low levels. A CTE1 ratio of 16.1% positions us well to continue to drive growth. Net interest margin stood at 25% adjusting to current inflation and interest rate levels, with annual profitability reaching ROE of 15.7% in line with our target for the year as we successfully executed on our strategic…

Thank you, Patricio, and good day to all. Since joining Banco Supervielle in October, my priority has been to sharpen our strategic focus, accelerating growth and positioning the bank for long-term sustainable profitability. Given Argentina's evolving macroeconomic environment of lower inflation, declining nominal interest rate and a surge in dollar deposits, we revitalize our commercial approach to capitalize on this positive dynamics and position ourselves for 2025, which we expect to be a year of real economic acceleration. Our streamlined structure now enables faster decision making and greater operational efficiency, ensuring that we can swiftly adapt to market opportunities and better serve our customers. At the same time, we are conducting a comprehensive risk management. And in the near term, all customers are expected to have some great offer, enhancing profitability, cross sell opportunities and growth. During the fourth quarter, we moved shifted on quick wins, leveraging our existing customer base to drive immediate results while laying the groundwork for the future growth. In turn, our customer base expanded by 3.6%, reflecting improvement acquisition and encasement. The loan portfolio increased 27% quarter-over-quarter, doubling industry growth year-on-year. A key milestone was the record level of personal loan origination, up to 54% sequentially, underscoring our ability to meet rising credit demand. Lastly, we maintain a disciplined approach to cost reduction, lowering headcount by 2.4% in the quarter. These results underscore our ability to drive profitable growth while maintaining operational efficiency, ensuring a strong foundation for 2025 and beyond. Turning to Slide 6, at Banco Supervielle. We are taking bold steps to deepen our customer focus, concentrating on the most profitable segments and products where we can rapidly differentiate and win. Notably, profitability is our main [Indiscernible]. Starting with our customer-centric and technology enabled strategy, on this front, we are shaping our great…

Thank you, Paco, and good day to everyone. Similar to what you have heard throughout today's presentation, 2024 was also a year of strong momentum for IOL. We continue to expand our customer base, increase transaction volumes and solidify our position as Argentina's leading retail digital brokerage platform. We closed December with 1.4 million accounts, up 57% year-on-year with average monthly active user for the full year increasing 70% to over 280,000. Transaction activity remained robust with daily average revenue transactions up 67% year-on-year to over 100,000. This good performance drove total transactions to $26 million in 2024, up from $15 million in 2023, reinforcing IOL as a go to platform for retail investors. Our assets under custody reached $1.7 billion up 44% year-on-year, reflecting the strong adoption of our platform. A key highlight was the development of IOL Asset Management where we successfully launched a U.S. dollar nominated mutual fund, reaching $126 million in AUM in just four months, now ranking as the fourth largest fund in its asset class in the country, including bank managed funds. Our commitment to user experience remain a priority reflected in over 160,000 app reviews and improved ratings of 4.6 stars on Google Play and 4.8 on the App Store. Notably, IOL was the most downloaded and active investment brokers up in Argentina, reinforcing our market leadership in this segment. From a financial perspective, IOL contributed 15% of Banco Supervielle's net income and 20% of total fee income, by enforcing its growing strategic relevance. We delivered ARS17 million in net income, up 36% year-on-year with an ROE of 107%, while revenues increased 20% to ARS51 million. Additionally, our strong financial position was underscored by cash flow generation of nearly $18 million demonstrating the sustainability of our expansion strategy. Lastly, during 2024, we successfully…

Thank you, Diego, and good day, everyone. Now turning to Slide 7, to review our perspectives for 2025, which assume annual inflation in the neighborhood of 25% and GDP growth of at least 5%. Loans more than doubled year-on-year with peso loans accounting for 75% of this growth and 25% by dollar denominated loans. For this year, we expect loans to grow above 60% in real terms with retail loans continuing to gain share of total loans, rising to approximately 50% of total. Turning to deposits. We saw 7% sequential growth last quarter. However, deposits declined 6% year-on-year, reflecting the sharp drop in industry peso deposits in the first quarter of 2024, which was only partially fully offset by the recovery that followed. For 2025, we anticipate deposits to continue expanding by approximately 40% in the year with the low to deposit ratio continuing to improve. We expect to continue to gain share in dollar deposits. On asset quality, the NPL ratio stood at a low of 1.3% in 4Q ‘24, even despite the impact from single client in the agribusiness sector, which was wholly collateralized and represented just 0.4% of our total low book. Looking ahead to 2025, we expect the NPL ratio to gradually convert toward normalized levels in the range of 2% to 2.2%, reflecting the anticipated increase in lending activity and a more balanced mix between retail and corporate loans. In line with this trend, we anticipate our cost of risk to range between 3.74%, maintaining a prudent approach to risk management while supporting portfolio growth. With respect to NIM, we delivered a NIM of 24.8% in 4Q ‘24, in line with the prior with the prior quarter level even despite lower inflation and a higher share of dollar loans in the quarter. For 2025, we…

Thank you, Mariano. At this time, we will be conducting the question-and-answer session. [Operator Instructions] So our first questions come from Carlos Gomez from HSBC. Hello. Good morning, Carlos. How are you?

Hello. Good morning. Thank you for taking my question and congratulations on the results in 2024. So two questions for me. The first one refers to capital. You had the consumption of capital because of loan growth throughout the year. But in particular, this fourth quarter, it was 300 basis points. And I noticed that 1.2% of the total capital is because of deferred tax assets. Could you explain in particular why that happened and what your, tier -- I mean, you also mentioned that you expect the Tier 1 to be at 13%. Is that the level that you want to operate in ideally, or would you consider an even lower one? And second, could you comment on how spreads are today? I mean, we have seen everybody grow a lot, but we have a sense that margins are declining and that competition has increased. Can you tell us how do you see the competitive environment going forward into 2025? Thank you.

Thank you, Carlos. Can you, Mariano, can you answer those questions?

Sure. Yes. Thank you, Carlos, for your comments and your questions. Regarding the capital level, and let me explain further on your questions regarding the tax asset. The 4Q, we recognized deferred tax and deferred tax assets, which is related to tax loss carryforwards that came back from, the EU operation back in 2022 when it was merged with the bank. But in that time, following a prudent approach, we haven't recognized those assets. So now that, we know that we will be able to use them, we recognize them in the balance sheet that keeps again the income tax line item of the income statement. But at the same time, as a deferred tax asset, it's a deduction to the capital position. Remember, the capital position, we have the common equity, but then we deduct certain items. The most important are all intangible assets and deferred tax assets. So that's why during the quarter, part of the consumption of capital is related to these assets. So we recognize the gain, but at the same time then we deduct it. In 2025, it's important to highlight that as long as we produce results and we apply that, tax asset, the deduction will be reduced and finally eliminated. And then you asked also about the level of capital that we're getting in our in our guidance. That's a level we feel comfortable with. Eventually, if loan growth continues to be solid, not 2025, but following in 2026, we could operate at the level of 12% or even below, maybe 11%. Also, remember that this is right now, the 16% and the guidance we gave is a Tier 1 ratio that is 100% CET1. But during the year, we will also add capital on a Tier 2 component by issuance subordinated that that is also some of the options that we consider.

When we talk about, 13%, therefore, that is total capital or Tier 1?

That is tier one. If we add Tier 2, total capital would be higher.

Right. So to understand what you feel comfortable with, you would feel comfortable with an 11% of total capital or 11% of Tier 1?

Of Tier 1.

Of Tier 1. Which means that by the end of the year, you'll be close to your limit. So it's imaginable that if growth continues at this level, you will probably be looking to add capital sometime in 2026. Is that a reasonable assumption?

Yeah. Sure. I think that's a reasonable assumption because we see what we project is a very solid, loan growth for 2025 and continuing to 2026. So it will be reasonable to think that although we are adding profits to capital at some point, probably in 2026, we would want to add capital. Sure.

Sure. Makes sense.

Carlos, let me add to the answer of Mariano. While we move in 2025, there is a gradual portfolio shift towards more retail loans proportion rather than corporate. And that means that for instance, we expect that in the fourth quarter of 2025, the proportion will move towards 50% retail loans, 50% corporate loans. This area may be even higher in retail loans. And so that implies that if you annualize we expect that annualizing the fourth quarter 2025 will give us capital creation to sustain growth in 2026. But of course, we need to understand the market dynamics at that moment to see what decisions we want to make regarding capital and regarding Tier 2 capitals.

Thank you. And about the spreads?

Regarding spreads, as inflation goes down, we're seeing interest rate will also go down. Probably, next decrease in in interest rates will not be earlier than April, but during the remainder part of the year, we think the interest rate will continue to hold down. And then that will add pressure to spreads because at a lower interest rate level, of course spreads tend to compress. But at the same time, we are growing our loan portfolio with very good spread, and we are shifting a mix from, it was a couple of quarters ago, 65% corporates and 35% individuals. Now it's closer to 50% each. And during 2025, we'll continue to give a better way to the individual's portfolio where we have not just threats on mainly on personal loans and car loans. So those will be the moving pieces during 2025.

So bottom line in terms of, let's say, corporate spreads, they should decline with interest rates?

If you compare it to the -- to what we call the transfer rate, the difference between the funds that we get and the loans to corporate, I think spread will be stable, but at a lower interest rate level. So the mean -- that's why we gave a guidance of 18% to 20%. The mean for the whole balance sheet will be lower. But the spreads of corporate loans compared to the to the cost of funding or to the cost of to the opportunity cost would be, to put that money into a treasury bond for instance, will stay the same. But the complete minimum of the balance sheet would be lower because of lower interest rate environment.

Thank you.

Thank you, Carlos. Our next question comes from [Indiscernible] with JPMorgan. Hello. Good morning, [Indiscernible]. How are you? Please go ahead.

Hello. Good morning, everyone. Thanks for the opportunity of asking questions. And my first question is related to profitability. So like considering this mix shift towards retail, like what would be a more normalized, like ROE target for coming years? Should it be above those 15% you're targeting for this year? And my second question is a follow-up on asset quality. And we saw, like, the corporate case increased NPLs and drove, like, a large consumption of coverage, which of course was high. But the question is, like, what would be a comfortable coverage level that you would be comfortable operating with, considering the next shift towards retail? Thank you.

Okay. Thank you, [Indiscernible], for your questions. Regarding your first questions of ROE, we have a target of 15% -- 12% to 15% for this year. And the longer term ROE should go closer to a 20% level. We should raise that target gradually quarter-over-quarter, increasing profitability as we increase our loan portfolio because there's a very important mix in the source of revenue where we see a decrease in the income generated by government securities, and we build the loan portfolio to compensate for that decrease in revenues. So we can sustain our financial margin. And on top of that, we expect to grow at double digit levels in net fee income, also which we are a very important part of our revenues, and also to decrease expenses. So all those components are the ones that will lead you gradually, as I said to a 15% or 20% ROE in the longer term. And then, regarding NPLs as you said, we saw an increase this quarter that's related to a single customer on the every business sector that is fully collateralized. And that also makes a consumption of the coverage of NPL. But also because, at the end of 2024, as opposed to the end of 2023, the outlook for the economy and -- for model is much better. So the components, of the outlook in the expected loss model also reduces the need for coverage. So it didn't make sense to have, like, 200 almost 300 we had at the certain level of coverage, and now we are at 160. And, as long as the NPL stabilizes going to 2.2 by the end of the year, coverage should continue to be partially consumed, but we will always be for sure at the level of about 100%. So we are always applying the expected loss model, so we are always anticipating any losses that that we foresee on the loan portfolio.

Very clear. Thank you.

Thank you, [Indiscernible]. I think we have another question from Pedro Offenhenden at Latin Securities. Hello. Good morning, Pedro. How are you?

Hello, Ana. Hello, everyone. Thank you for the call. I have a couple of questions on securities. How do you see the weight of them evolving in 2025? And do you have any projections for the loan to asset ratio and security to asset ratio for the year?

Can I take your question? Can can you please -- I'm sorry, Pedro. Can you please repeat the first part of your question?

Yes. Sorry. How do you see the securities evolving in 2025?

Okay. Yes. Well, first, in terms of volume and weight on the balance sheet, we think that it will decrease the weight on the balance sheet. Because, as I said before we are migrating to a higher wave of our loan portfolio within our assets. That is shifting from securities to loans, but also increasing the leverage, so increasing both sides of the balance sheet. So in terms of volumes, the decrease in the securities portfolio will be mitigated somehow. And it shouldn't be as large as the increase in our portfolio because part of that will be funded by new sources of part of funding. But, of course, the weight of the securities in the balance sheet will decrease. And the spreads will also decrease as they have been decreasing in the last quarters. And that's because on one side, we have the inflation adjusted bond portfolio with produces lower revenues with lower inflation and then also decreasing short term interest rates on other treasury bonds. So the dynamics will be lower weight both on the balance sheet and in our total revenues.

Thank you, Mariano. And do you have any ratio of security to asset in mind for this year?

Well, our ratio should decrease. I will tell you our loan portfolio, which is now a loan to assets of almost 50% should increase closer to 60%. And with that, the securities portfolio should decrease maybe to 20%.

Perfect. Thank you very much.

Thank you. I think we have some Q&A, some questions in the Q&A box. Some come from Brian Flores, Citi. So I think one is repeated, but in your 2025 guidance, you mentioned a CET1 ratio of 12.13% [ph] by year end. Does this incorporate the change in operation with weights already?

Yes. The answer is yes. We do consider the change in operating risk with assets. Remember that the central bank introduced changes to regulation in the requirement of capital for credit risk and operational risk. The changes in credit risk have already been implemented as of December 31, 2024, and the changes in or requirements of operational risk will be implemented as of the end of the first quarter 2025. So in our projection projections, they are incorporated.

There is another one in terms of deposits. What should happen for deposits to match loan growth in our view?

I think in in my view, we expect to see both loans and deposits growing at very solid numbers in 2025, but, loans with loans having a much darker growth than deposits. For deposits to match the growth in loans, I think, we will have to see, the central bank, expanding the monetary base, which is not the scenario that that we are seeing. And, I mean, expanding significantly the monetary base to increase the amount of pesos that are in the financial system. And the other source of deposit growth would be, the increase in foreign currency, basically dollar denominated deposits. At some point, we think the Central Bank could remonorate minimum cash reserves in dollars, and that should make a very strong incentive for individuals and companies to use their dollars and put them in the financial system. And that would be another source of growth.

Let me add to that that, ACO [ph] is implementing a cluster based value proposition for payroll accounts as well as SMEs that we expect that will improve our competitiveness in getting more funds to participate and to be able to find all the loan growth. So we are quite optimistic on that also.

Okay. There is another one for Invertironline. So this is for Diego. Invertironline continues advancing with very strong profitability numbers and return on equity. However, we see a decline in users in the last quarter. Could you elaborate on these dynamics, and what do you expect for 2025?

Yeah. Sure. The first thing I want to highlight is that if you look at the average monthly active user for 2024, compared to 2023, it grew 70%. So the underlying trend is positive and it's growing fast. Third quarter had two effects that affected the monthly active users. That were the volatility we have throughout July when the effects spread reached the level of 50%. And also, something that is happening or happens in Argentina is that you have, the 13th salary that people get at the end of June and applies for July, and also it drove more activity. So those outliers are the ones that make the comparison not very far between fourth quarter and third quarter. But aside of that effect, if you look at fourth quarter, average monthly active users, they were higher than first quarter than second quarter. And then on the line trend, as I said before, it's 70% higher year-on-year against 2023. So it's very healthy. And aside from July, it was a growth trend.

Before we take another question from Carlos at with HSBC, there is a question here of where are we filing the financial statements. We are filing them today. So now, Carlos, I think you have a new question.

Yes. If there is one for it. So a follow-up. You mentioned your economic assumptions, and you expect the currency to be at 1,200 by the end of the year. So, again so that we understand, you do not expect any deviation from the current 1% depreciation, per month. If there was one, if there was, in connection with the IMF agreement a change in the exchange rate, how would that affect the bank? That will be my first question. And the second one on the expenses, you expect to grow below inflation. Is that compatible with the loan growth of 60% in the year? One would imagine you have more activity, you have more promotions, and inevitably you will have higher expenses? Thank you.

Yes. Carlos, let me take first your first question regarding the export rate. As you said, we expect the government to continue at the devaluation monthly devaluation rate of 4% if in an agreement with the IMF or lifting of FX regulations. There were we saw an increase in the evaluation rate at least, on a onetime evaluation. We think it will not be very tight because the government was always committed also to control inflation. And how would that impact, well probably, the government at that moment will stop or suspend any decreasing interest rates. And if regulations are lifted, we think we strongly believe that, we will see positive real interest rates. So interest rates will always be at a higher level of, let's say, three months following expected inflation. But the impact in the balance sheet, as we are or can manage our positions, foreign currency to be balanced, and we shouldn't see important onetime results. We could see an increase in the weight of dollar loans and deposits because when ARS22, they go to a higher number. But I don't see any other major impacts also because overall lending in U.S. dollars is to companies that generate dollars because they are exporters or they work with exporters, so we shouldn't also see any deterioration in the loan portfolio. And then your second question, sorry. It was?

On expenses, you expect them to grow below the inflation.

Yes. That's our plan because it's true that with higher activity on some items, you can increase your expenses, but let me tell you or explain it in two fronts. First, we are reducing headcount. Also last year, we reduced some branches, but now we got that savings during the whole year. And we also continue to reduce headcount at the bank level that allows us to work more efficiently. We are not reducing commercial positions. In fact, we had some additions in in commercial positions for example for corporates. Also, during these times that credit penetration was so low, we didn't reduce the workforce for instance, for commercial positions or for credit and the right, so we don't need to hire new people. And remember, personal expenses are 60% of our total expenses approximately. So recent headcount has a very important impact in our expenses adjusted by inflation. And then we also -- as we told in the first part of the presentation, we have a very focused strategy. So we want to concentrate our efforts in the segments, in the products where we want to grow, and that will allows us to focus also the efforts on the expense side and also on the fee expenses, not only the additional expenses.

Basically, Carlos, in order to deliver a better ROE, we found some opportunities in the expenses side. So we can be more productive and efficient in order to deliver a very good error rate. So we are working on that. That's why we increase less than inflation our expenses.

Okay. Thank you so much.

Thank you, Carlos. I think there are no more questions for today. So we have reached the end of our Q&A session. Thank you for joining us today, and we appreciate your interest in our company. So we look forward to -- I'm sorry. We are we look forward to meeting you in the incoming months. And any please do not hesitate any question you may have, you can contact us. Thank you, and have a good day.