4Q21 profitability mainly impacted by one-time
early retirement charges together with losses at IUDÚ reflecting
inflation and higher LLPs. Total AR$ NIM up 140 bps QoQ
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- and twelve-month periods ended
December 31, 2021.
Starting 1Q20, the Company began reporting results applying
Hyperinflation Accounting, in accordance with IFRS rule IAS 29
(“IAS 29”) as established by the Central Bank. According to Central
Bank regulation until December 31, 2020, the Other Comprehensive
Income also reflected the result from the changes in the purchasing
power of the currency results on securities classified as available
for sale. Through communication "A" 7211, effective January 1,
2021, the Central Bank established that the monetary result of
items measured at fair value with changes in Other Comprehensive
Income should be recognized in profit or loss under the line item
"Result from exposure to changes in the purchasing power”. As this
change in the accounting policy was applied retrospectively to all
comparative figures, figures for all quarters of 2020 have been
restated applying this new rule. This report also includes
Managerial figures which exclude the IAS29 adjustment for 4Q21,
3Q21, 2Q21, 1Q21 and 4Q20
Management Commentary
Commenting on fourth quarter 2021 results, Patricio
Supervielle, Grupo Supervielle's Chairman & CEO, noted:
“During 2021 we made significant strides across the Company
toward achieving our strategic goals. With the aim of improving ROE
and driving value creation, our strategic initiatives are centered
on six key pillars: enhance the customer experience, attract new
customers, advance on digital transformation, drive efficiency
gains, improve funding and maintain healthy asset quality.”
“Our digital transformation and innovation investments started
to bear fruit during the year expanding the bank´s customer base by
over 53,000 clients to 1.5 million in 2021. Over 80% of these new
clients are digital, with digitized customers increasing 32% during
the year.
“With regard to lending, we increased market share year-on-year.
We also regained our leading market position in leasing. Our new
strategic alliance with Kavak will enable us to further develop our
Mobility Vertical, consolidate our leadership position in
Argentina´s pre-owned car financing market, and create more
customer acquisition and cross-selling opportunities.
“We have also made progress against our strategy to lower cost
of funding. Our initiatives to capture greater share of wallet and
become the principal bank of more customers are gaining traction.
During the quarter we continued to increase our share in sight
deposits, both from retail and corporate customers which together
with liability management, contributed to marginally lower funding
costs.
“Maintaining our focus on asset quality, total NPLs improved
sequentially by 100 basis points to 4.3% in 4Q21, while our
coverage ratio stood at 110%. More importantly, bank NPLs declined
to 2.6% from 3.7% in the prior quarter, converging to lower
pre-pandemic levels, while NPLs at IUDÚ showed a slight decrease
and are expected to continue gradually decline in the coming
quarters.”
“Our network transformation and branch right-sizing, along with
more self-service areas and virtual hubs that enable anywhere
banking and that efficiently expand our reach, have allowed us to
lower operating expenses, excluding one-time early retirement
personnel expenses. In addition, while NIM improved sequentially,
mainly driven by a marginal improvement in the funding mix, our
bottom line was negatively impacted by a challenging regulatory
framework and higher taxes. Also impacting net profit were charges
related to the acceleration of our strategy to capture operating
efficiencies together with losses at IUDÚ resulting from the impact
of inflation and higher loan loss provisions.
“We are also making significant progress transforming our IUDÚ
subsidiary from a business that was previously offering personal
loans and credit cards with an on-site model to a 100% digital
banking platform that is taking retail deposits to lower cost of
funds and offering a growing range of financial services to a
broader lower-risk customer base, leveraging its position as a
regulated financial entity.”
“Looking ahead, the financial services industry in Argentina
continues to face significant macroeconomic and regulatory
challenges, including high fiscal deficit, tax levels and
inflation, along with a weakening currency, that go beyond this
year. In this difficult context, we reaffirm our focus on long-term
value creation, with leading indicators of our transformation
confirming that we are on track to accelerate digital customer
acquisition and continue to capture efficiencies. Moreover, the
bank´s capital remains hedged against inflation through real estate
investments, mortgages, and sovereign bonds.”
“Finally, underscoring our commitment to ESG, we will begin
disclosing, in accordance with the Sustainability Accounting
Standards Board (SASB), additional metrics in our 2021
Sustainability Report. The enhanced disclosure will expand on our
current reporting under the Global Reporting Initiative to more
broadly integrate ESG criteria in the Company´s strategic
planning.”
Attributable Net loss of AR$664.0 million in 4Q21,
compared to a net gain of AR$1.3 billion in 4Q20 and a net loss of
AR$66.3 million in 3Q21.
In 4Q21 and FY21, net income excluding non-recurring severance
charges in both periods, would have been profits of AR$1.9 million
and AR$1.0 billion respectively, with ROAE in real terms at
approximately 0% and 1.9%, respectively.
For FY21 the Company reported an Attributable Net loss of
AR$860.4 million, compared to a net gain of AR$5.1 billion in FY20.
Net Income for the year was impacted by several factors, including:
i) low credit demand from the private sector, which is at historic
lows, ii) increasing Central Bank regulations on volumes and prices
of banking assets and liabilities impacting financial margin, iii)
higher turnover tax, mainly from the City of Buenos Aires but also
from other Provinces, iv) higher expenses incurred in accelerating
our strategy to capture operating efficiencies, and v) an increase
in loan loss provisions at IUDÚ due to the impact of the pandemic
on its customers base and following the Central Bank deferral
programs regulations that rescheduled loan installment maturities
along 12 months.
ROAE was negative 4.9% in 4Q21 compared with positive
9.4% in 4Q20 and negative 0.5% in 3Q21.
ROAE, excluding the consumer finance lending business was
negative 0.4% in 4Q21, a 450-bps gap with the reported ROAE. This
compares to gaps of 450 bps and 380 bps in 3Q21 and 4Q20
respectively.
ROAA was negative 0.7% in 4Q21 compared to positive 1.3%
in 4Q20 and negative 0.1% in 3Q21.
Net Financial Income of AR$13.4 billion in 4Q21 down 8.3%
YoY and up 3.8% QoQ. While the Bank´s Net Financial Income
increased on a stand-alone basis 5.8% QoQ to AR$12.1 billion,
IUDÚ´s Net Financial Income declined 29.4% QoQ to AR$831.2. FY21
Net Financial Income was down 14.5% or AR$ 9.0 billion when
compared to FY20.
Net Interest Margin (NIM) of 17.9% was down 230 bps YoY,
and increased 130 bps QoQ. The AR$ NIM was 18.1%, down 180 bps YoY
and up 147 bps QoQ.
The total NPL ratio was 4.3% in 4Q21 and 5.3% in 3Q21.
The NPL ratio as of 4Q20 was 3.7%. As of December 31, 2021, the
Bank NPL was 2.6%, while IUDÚ NPL was 19.3%.
Loan loss provisions (LLP) totaled AR$1.6 billion in
4Q21, up 6.6% YoY and 2.9% QoQ. Loan loss provisions, net, which
includes reversed provisions, amounted to AR$1.3 billion in 4Q21
compared to AR$1.3 billion in 3Q21, flat QoQ.
The Coverage ratio was 109.9% as of December 31, 2021,
125.1% as of September 30, 2021, and 191.5% as of December 30,
2020. As of December 31, 2021, 78% of the commercial non-performing
loans portfolio was collateralized, compared to 76% as of September
30, 2021 and 80% as of December 31, 2020.
Efficiency ratio was 76.6% in 4Q21, compared to 71.5% in
4Q20 and 74.9% in 3Q21. The QoQ performance was mainly driven by a
2.5% increase in expenses reflecting one-time severance and early
retirement charges, while revenues were flat. Excluding
non-recurring severance payments and early retirement charges, the
4Q21 and 3Q21 efficiency ratios would have been 69.4% and 71.4%
respectively, improving sequentially. The Efficiency ratio was
74.6% in FY21 compared to 64.3% in FY20. This reflects a 16.5%
decrease in revenues, that more than offset the 3.1% decline in
non-interest expenses.
Total Deposits of AR$288.5 billion decreasing 6.4% QoQ
and increasing 7.0% up YoY. AR$ deposits declined 5.0% QoQ and rose
12.1% YoY. Average AR$ deposits decreased 1.5% QoQ. Foreign
currency deposits (measured in US$) decreased 6.5% YoY and 12.8%
QoQ. As of December 31, 2021, FX deposits represented 10.0% of
total deposits.
Loans declined 3.2% YoY and 1.9% QoQ to AR$161.2 billion,
while average volume of loans declined 3.0% YoY and increased 1.7%
QoQ. The AR$ Loan portfolio increased 1.5% YoY and 0.8% QoQ, while
the average AR$ loans increased 2.1% YoY and 5.6% QoQ.
Total Assets increased 4.0% YoY and declined 3.5% QoQ, to
AR$392.2 billion as of December 31, 2021.
Common Equity Tier 1 Ratio as of December 31, 2021, was
12.7% decreasing 140 bps when compared to 3Q21 and 110 bps when
compared to December 31, 2020. 4Q21 Tier 1 Capital Ratio was
impacted by: i) higher deductions from Tier 1 capital on higher IT
investments, ii) accelerated headcount efficiencies in the quarter
impacting net results, iii) write offs that reduced the expected
loss regulatory easing on capital, and iv) a 10% increase in risk
weighted assets which was more than offset by inflation adjustment
of capital.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220302006100/en/
Ana Bartesaghi ana.bartesaghi@supervielle.com.ar
Grupo Supervielle (NYSE:SUPV)
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