Grupo Supervielle S.A. (NYSE:SUPV) Q3 2019 Earnings Conference Call Transcript

Nov 08, 2019 • 08:30 am ET

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Grupo Supervielle S.A. (NYSE:SUPV) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Grupo Supervielle Third Quarter 2019 Earnings Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Grupo Supervielle's Investor Relations website at www.gruposupervielle.com. [Operator Instructions].

At this time, I would like to turn the call over to Ana Bartesaghi, Treasurer and IRO. Please go ahead.

Executive
Ana Bartesaghi

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.

Before we proceed, I would like to make the following Safe Harbour statements. Today's call will contain forward-looking statements and I refer you to the forward-looking statement 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 Chariman, Patricio Supervielle.

Executive
Julio Patricio Supervielle

Thank you, Ana. Good morning, everyone, and thank you for joining us today. If you are following the presentation, please turn to slide 3. We continue to operate in a complex macro environment, which worsened in the quarter with the unexpected reprofiling of the short-term Argentine debt in late August. While our holdings in Argentine government peso on U.S. dollar short-term notes accounted for just 3% of our total assets, the sharp swing in mark-to-market valuation significantly impacted our bottom-line. To a lesser extent, results were also impacted by certain commercial loans that became delinquent in the quarter. By contrast, consumer loans reported lower NPL creation in the quarter. The collateralization level of non-performing commercial more than doubled sequentially. Jorge will discuss this in more detail.

Excluding the impact from the debt reprofiling pre-tax income would have increased 23% sequentially to ARS 1.9 billion even when taking into account the higher provisions in the quarter. With liquidity management, an important priority for us, particularly in this challenging market, we have been able to maintain liquidity in pesos and U.S. dollars above 50% even despite some U.S. dollar deposit outflow industry-wide.

Moreover, we maintained a solid capital base with Tier 1 capital at 11.8%. Against the macro backdrop, we are strongly focused on maintaining a tight control on expenses, which provide some caution as we see loan growth slow. And although we are achieving efficiencies, it has been marked by the impact in the debt reprofiling on our financial results this quarter and to a lesser extent by salary increases adjustment for inflation. Our franchise is strong, although the near and medium-term visibility is not clear as we speak today, we're encouraged that with our long and successful operating history across different economic