Q4 2021 Grupo Supervielle SA Earnings Call
Again, everyone on when it comes to political forces, but we added four sports so 2021 score.
And finally, my shirt Nio, a slide presentation, which accompanies today's webinar, which is available.
Perfection, almost a previous investor relations website.
Today's conference call is being recorded every month remainder caused by the Cassini eating only mode. There will be an opportunity for your questions at the end of two experts debate.
If you want to ask a point, so you'll need to be connected.
For any from any device.
It would not be able to take the west coast. If you are connected from a cold.
So please make sure your name or less they must be open digital platform, you'll use to Alaska why somebody voice piece, but the ratio of five times, okay disease in this whole basketball I'm impressed Rachel.
The aim towards Australia or what.
You can also.
Yes.
When they bought in the Sone platform anytime to do what the board would love you to limit yourself to one follow.
What I'm thinking from Rachel laying this out as well.
It can go into these cars would be felt they just would go yes, our chairman and CEO and Mike M E.
I want to finance.
Or it's still the jockey not the kind of thing.
Just take on my chairman of divorce.
And of course, the immediate hearthside chairman of the board and they come in and help them both met about server.
You're right, we don't so he's joining us what's related to corn oil would be available for the Q&A session.
Reminders delays caused with constrained for what is a mess.
So it makes so much sense kind of batesville piece, and that's subject to a number of risks.
Yes.
It's really not somebody says Oh, that's nice to see something that makes them I refer you to a forward looking statements that shut off or released.
I think it.
We assume no obligation swap baseball revise any forward looking statement.
Like New York changed lifestyles people stuff.
Yeah, Yeah, I want to hit full with dogs that caused assessing all the performance of the sports that for me.
Hum.
Absolutely.
Our chairman and CEO with Florida with unless based on that we'll make some additions.
Yeah.
Thank you Anna good morning, everyone. Thank you for joining us today.
They started to slide four of our RV is personalization.
Yeah.
What are they gonna only got D V D could you name to roll about prevented any leather market conditions.
He goes my girlhood military changes.
Including isolation negative real interest rates weakening currency.
The three loans are at historical lows.
B W.
The quarter was negatively impacted by one time expenses related to cryptography research.
Together with others, but you do reflecting inflation on a year long enough for me.
Central Bank relationships.
There's also the battery performance.
This result is attributable that's most of it.
Probably about 17 medium thresholds.
We posted breakeven profitability when excluding nonrecurring charges.
That's at a ratio of our energy after operating inefficiencies.
Allowed us to reduce the burden of a matter of fact.
Excluding medical coverage of your retirement charges, our efficiency ratio improved 170 basis points sequentially always remain highly impacted by a lower revenue base.
We also retained strong liquidity in other ways the capital base.
During the year with a tier one ratio of 12, 7%.
Supports our strategic transformation initiatives and long term sustainability.
Adult women hedge against inflation.
Real estate investment mortgages and corporate bonds.
For the ESG flows in line with our goal to more broadly integrated ESG criteria.
Are you planning will begin reporting under the bus. The framework you know we're in 2021 and sustainability report expiring in the point of coverage, where you reported.
Our opinion or our commitment to long term value creation, but Michelle will discuss shortly how we are advancing on our value creation strategy to drive ROE improvement and related goals for 2022.
Now please turn to slide five.
In terms of lending.
We recover market share year over year, even with a lower group posted a low single digit construction remaining at historical lows.
Average peso loans were up just over 2% year on year compensating the decline in U S dollar denominated results.
Yeah.
Now moving on to funding on slide six.
Liquidity levels remained strong.
Bedroom with a loan to deposit ratio at nearly 56%.
Corporate deposits.
5% sequentially as we continued to expand our share and size of deposits from both retail and corporate customers.
Total vessel deposits, however was down 5% as we exercise.
Liquidity management lowered institutional funding.
Yeah.
Turning to slide seven.
Yeah.
Those are the best for me and funded 140 basis points sequentially to just over 18%.
This was driven mainly by a 100 basis points reduction, resulting from a better funding mix.
During the quarter, we continue to address low or no interest bearing deposits, while reducing pardon me.
Higher inflation also drove higher personal needs.
Turn peso loan portfolio declined 30 basis points.
The decrease in cost of funds could not upset.
20 basis points sequential decline in the average yield on personal loans I'm still where interest rates are still worth interest earned on mandatory great. My friends at do it for me I prefer that CR rate and higher credit card audience drove year over year.
Moving on towards the 40 G on slide eight.
Our total NPL ratio.
101 basis point sequentially.
Two four points, 3% declining across business segments.
At the bank the NPL ratio dropped to 6%, reaching agreement that makes a real recession levels.
Are you still posted a 100 basis 0.2 points of growth in the NPL ratio, mainly as we started to write those influencing the England zone customers.
Note that when you buy them.
After the expiration of the 12 months with females roof by the Central Bank.
Note that during the quarter, we reassessed our.
We'll go to the public works construction sector.
I feel from the IMF agreement because of the flooding.
10 of the expected, except the hygiene and the ability of public spending.
Going back we decided to write off a portion of the portfolio, reducing our exposure to the sector impacting cost of risk and coverage.
Our coverage ratio at yearend stood at one 7%.
Turning to capitalization on slide nine.
To close the year with a tier one capital ratio of 12, 7% contracted 140 basis points sequentially, mainly explained by the following factors.
Uh huh.
Bottom line was impacted by accelerating.
Recently, which increased severance costs.
Second.
Till 'twenty one we also increased investments in digital.
Digital transformation initiatives, which are deducted from tier one capital.
This investment.
Without any investment lineup of procurement phase 3 billion pesos with York, He's calling from previous quarters.
But.
Certain write offs for the quarter, mainly related to the public infrastructure sector.
Do you expect that those will be pulling through easing <expletive> teachings, putting capital part of it's affects approximately 40 basis points when they recovered during 2022.
Finally, increasing risk weighted assets was more than offset by inflation is definitely coming up.
With respect to anything to another place tier one capital in the range of 12% to 13%.
Slide 10.
Why guidance remains suspended due to continuous immediate.
Got it.
David we share our views on the main drivers of our business for this year.
That's what they were in the remainder of consumer and commercial loans.
Two growing slightly above inflation as we continue to support our goal of gaining market share loss from 2020 , one we took a mark or somebody abroad.
In gaming.
Both in real terms would be lower however, if I'm, an insulator washers like salaries about 65%.
At the same time.
Both of these drugs can make poster by foreign exchange was three shows an interest rate floors from time deposits, we expect deposits to grow slightly above inflation.
In terms of what it.
Does it make you npls ratio declined in the fourth quarter I don't expect it to remain stable or decline nice easy here.
We also anticipate the provisions to grow about 2021 level language. So wrong. When it goes off rate is expected to remain at similar levels of last year.
With respect respect to Martin we expect move to increase slightly in 2021 about 'twenty 'twenty 111th.
Mainly driven by sustaining program funding mix. It keep you know Marc did you plan together with anticipated growth in higher marketing personnel levels.
Martin is also expected to benefit from the impact of items station when you place them in testing assets, including government bonds and mortgages I know with a net positive effect from the Central Bank regulations enacted last January or.
Pittsburgh relationships can be fun earnings reports.
At the same time, we expect peak income from what we did was to increase in line with inflation waiting Schwartz, who can be slightly to throw in real time at premiums to recover from the lower levels observed in the last two years.
Personally I don't know.
Expenses are anticipated.
This is slightly above inflation driven by additional costs related to the execution of our transformation strategy.
Our plan also close Portland limitation.
If.
We move ahead with our French on channel reciting.
In connection with our network and did you have transformational initiatives, we plan to invest approximately $5 one.
One 2 billion vessels, respectively during 2022.
Lastly, capital on liquidity I expect it to remain that way because even with a tier one ratio is anticipated to range between 12 and 15% of he knows about it.
Also recall that at 100% of capital remains a hedge against inflation.
Now, let me turn the call to basket.
Ed who will provide an update on our strategy.
Please go ahead.
Thank you. Thank you Mariano and good day everyone.
While work is being done to stabilize the economy.
Financially the sector in Argentina, we continue to face macroeconomic and regulatory challenges that we expect will go beyond this year.
Concurrently the pandemic has changed.
And business lives through accelerated due to adoption of remote work.
And along with these changes week to have accelerated as our initiatives to NTT data archives, you'll needs and the changing environment in which we operate.
In this context, we reaffirm our focus long term value creation and financing on our six strategic pillars to improve return on equity.
Hi.
The rate guidance acquisition expand digital adoption continued to capture operating efficiencies and lower cost of funding and maintained healthy are supported.
We are executing our strategy on three key fronts.
First.
Accelerating to teach us and operational transformation of bunkers, obl's scaling customer acquisition and executing on our omni channel and branch transformation was truck.
Second our.
Do you do we are transforming the business model from our consumer finance business into a full digital banking platform to drive profitability.
And the third at courtyard MEP, but he is joining Brookfield online we aim to diversify our revenue generation young of Argentina.
Over the next I will discuss how leading indicators of our transformation confirm we are on the right track of these initiatives and elaborate on our key goals for this year.
No. Please on slide 12.
Starting with Banca Super meal retail customer base.
Please feel free to all of the new retail customers in 'twenty, and 'twenty, one of which over 80% digital.
Digitize times in turn increased over 30% year on year.
We also expanded the Sheryl did yourself or nomadic person alone.
Consumers of our retail customers by five percentage points.
Points to 40% that you referenced.
Asset management retail customers were up 80% year on year with assets under management more than doubling.
Priest Shadow, Florida.
All key goals for this year on these strong seafood.
Further accelerates even digital customer position.
Continued cross selling digital projects, including launching and expanding personal finance management projects as part of our initiatives to increase share of wallet.
We will also continue to leverage our coal.
Card loan allowances, including our recent alliance with Kovack.
Expand our share as the leader in the pre owned car loans market.
Moving on to slide 12, that's.
Let me share. Some examples of the successes we are having in boosting shuttle, Florida at the bank alone driving higher guest transactions, among Smes and corporate customers.
We reached the top five ranking these brand awareness among private banks in the country, while increasing our customer base and share of wallet.
As we show on the left chart.
During the year, we expanded SME and mid market customers by nearly 4%. Moreover.
20% of our sales to SME customers, what did yourself following long term digital on boarding early last year.
We also increased our share of total system customers by over 40 basis points in New York, 5% regaining our leading market position easing.
Posted sharp increases across payroll services size of deposits and assets among others.
Looking ahead, we expect continued acceleration in digital customer acquisition, while also launching new features and services, including digital lending to drive two project by Channel go ahead.
Please turn to page to page 14.
14.
To see the traction we are making on enhancing the customer experience.
The share of total digitized retail customers increased consistently during the year up nearly seven percentage points.
Also saw significant advances corpus guidance as we more than doubled the number of monthly collections and payments reductions.
The share of online.
Nobody can carry transactions continued to increase to nearly 90% of total transactions by year end, while we show sustained road E checks volumes and customers ranking number six this segment above our natural market share.
We expect to continue advancing on.
I'm driving.
Did you tell the adoption of the Bang, while scaling digital onboarding and sales throughout the year.
Please turn to slide 16, as we show.
During 2021, we also buy in advance on the improving funding reported another key pillar of our strategic back.
The share of corporate.
Customer deposits increased 80 basis points year on year.
At the same time to show retail customer deposits was up five basis points against year end 2020, and recovered sequentially by 70 basis points contributing to improve our funding mix.
During the year, we aim to continue expanding corporate site audits, keeping our focus on driving growth and transactional products managing resources.
Processes with corporate customers and increasing share of wallets to become the primary bank for more of our customers.
Please turn to slide 16 for that.
Based on our initiatives to scale, our brand transformation and innovation.
Starting with a hybrid model last year, we began to scale, our mutual hops, expanding our footprint and enabling banking anywhere anytime.
The only challenge modules combined efficiencies of about digital hub with its trend or face to face interaction and a correspondent strategy too.
To date, we have implemented three digital hubs offering a superior customer experience with <unk>.
Internal customer satisfaction score at $4 five over five and we are working towards scaling this model to other regions and segments.
We also made significant progress on our brand transformation from implementing a new service model and modernizing our network by year end, we modernized and expanded services Smbs and multi segment businesses in 16 branches and until then we're exclusively dedicated to <unk>.
<unk>.
In addition, we increased 24, all the servers to 40% of the total branch area, enabling extended banking hours and high efficiency.
This year.
We will continue working towards back towards expanding our digital footprint, while boosting customer acquisition on the back of beautiful hubs.
Yes.
As we show on slide 17.
We are advancing on right sizing our branch network and accelerating efficiencies. We are 19 customer service and productivity introducing best in class technologies will allow us to extend service hours and facility self service banking and some reps. We're also congrats in some brands.
Well.
Foodservice self service formats.
We closed one branch last year and that's our plan to close another 16 Bcf subject to Central Bank authorization does include seven branches that were expected to be closed out here, but that's subject to central bank approval.
These initiatives allow us to reduce head count by nearly 6% year on year and 11%.
And that seems to December 2018.
During this year, we expect to obtain additional head count efficiencies and remain vigilant for opportunities to extract further value generation.
<unk>.
Please turn to slide 18 to review, our strategic pillar related to maintaining healthy asset quality of the bank.
So by the NSA earlier.
Npls declined to below the two 6% levels observed in first Q 'twenty 90, while net cost of risk contracted significantly at low single digits as we implement portfolio limits.
The optimized economic sector as well as our exposure to our top 10 customers looking ahead, we spend to maintain low levels of limits on deals.
Finally, a stretch of Youtube in the fall.
Uh huh.
This segment 19, finally, especially to conform our consumer finance business to a neo bank yeah.
Our fully digital bank.
Up you would do is picking up speed, we are well positioned to continue to attract new customers with a wide range of offerings, including savings accounts, thus net loans credit cards insurance wellness offerings, and many others that would be launched in the current year to increased custom.
Our engagement with the aim of making Youtube in Sky primary bank.
As I noted in our last call we launched.
The retail digital savings account in the fourth quarter with the aim of attracting lower cost funding for these businesses between December and February with often nearly 70000, new deposits and while we have almost 30 300000 downloads of the App in 2021 in January and for.
February alone of this year, we saw over unintelligent additional dominoes.
And we reduced in 'twenty.
All of the digital customers and that's not the principal in the first two months of 'twenty two closing February with Dnb.
Digital customers.
Our strategy to conduct its business online.
Reducing due to physical presence in 2020 , one we're able to reduce head count about seven 7% and expect an additional 25% of production by the end of the first quarter 2022, along with branch closes.
In the coming months in summary.
While the financial services industry faced significant macro and regulatory challenges ahead.
Beyond this year, we remain focused on executing on our six strategic business to improve return on it.
Leading indicators demonstrate we are on track to further accelerate digital digital customer acquisition and capture operating efficiencies with long term demand resume.
Oh, while lowering cost of funding and maintaining healthy at some point.
Now we're ready to open the floor for questions and please.
Please go ahead.
Yeah.
We will be conducting the question.
As a reminder, last couple of months and you need to be connected to the platform.
We will not be able to take your questions is that for next time.
Catherine.
Thanks, Pete perhaps a range of outcomes.
Awesome and friendship.
So Australia.
And then the final terms.
Oh, Yeah Q&A Paul.
Who was that you would limit yourself to one question.
No what I'm, saying is suffering.
Yeah.
One moment when risk spreads were flat.
Yeah.
Yeah.
Okay.
The first question comes from M&A, so having some not.
Please go ahead.
Thank you.
Hi, good morning, Patricia Mariano team.
Thanks for your presentation and for the opportunity.
I have three questions, but I will make one question and then I will raise my hand again. So my question is on <unk>.
We continue to see high level of Npls and comes to risk off around 19% and 16% respectively.
And also when looking to the reserve coverage ratio view do.
It seems to be low at 60%.
For these type of segment.
So it will be interesting to know.
What would be you those targets for asset quality.
And when do you expect to start like Chicago, and some key performance indicators for you to and when do you expect <unk> to become profitable.
So related to the same question what will be interesting to understand the users the strategy in the short term.
Would it be more focused on client growth over profitability or the use big boat to be aligned in the short term. Thank you.
There might be I know we.
We'd like to two months ago, there's a question on asset quality.
But for sure yes.
Thank you for your question.
Regarding npls.
We are seeing.
You know radio Ah.
In 19 and 20%.
What's what we expect we still are seeing the effects of the automotive sector.
And then.
At the end of March.
Regarding personal loans.
Ended up a year ago.
Onto slide 21.
So we still have a N P S from desktop portfolio.
With.
Much more punitive towards his business segment I spoke about.
Uh huh.
So we're still working.
A recovery of his portfolio.
Finally is I feel it would be event plenty not recover will be written off.
Uh huh.
The last part of April 2022 next quarter, we might see some write offs, which will lower the cost of rate a lower <unk> ratio.
Without the distortion of Ssds portfolio right.
Uh huh.
And then going into 2022.
When we start to see with what we expect to come.
Kevin most even out to them.
Mcdonald.
Trend, which we expect.
So we start.
By this point lower at the right dose.
And then keep lowering.
Of the year.
Remember these east segment.
Yes.
New customer profile, it's not all the old customer profile product.
One of our stores now in terms of what.
And so we expect to see a it'd be forever.
Yeah.
Everything profile of customers with better.
But its behavior, but we still.
Is.
It'd be a better woman.
Yes, there's still more borne itself affecting T. That's.
What we can expect at the bank level.
So we.
We expect to have you know would be eligible.
We did greenfield, but because of the focus that our sales cycle.
People something to work with it.
Thank you Mariano.
You can take the part of restructuring.
But the straight answer when you ask us whether the.
The structure is focused more on growth over profitability or both our ally.
The answer is yes.
Absolutely aligned.
Profitability in the kind of growth.
Let me, let me take a risk.
Description of what.
What's the context, we see.
In Argentina.
Well Neal Bunge.
If you.
Look at the performance of Neo banks in Argentina.
They are not profitable.
None of them are and by the same token another aspect, which is a critical aspect I believe which is D.
Finally on the funding side.
Although.
Let's say some of the let's say the best.
Neo banks in Argentina in terms of UX, a number of customers need it.
They've achieved certain level of funding is frankly, very low and it's almost irrelevant I will like to two to two to show a comparison.
What happens.
We find that.
Our.
Managed by the.
The biggest company in Argentina, with a fantastic UX Mcdonald's Mcdonald's bottleneck alone even if they.
They they have maybe two 5 million customers, but the finance.
They they match.
It's.
It's.
The volume is around 1% of the fund industry choice frankly irrelevant.
And even though it's a fantastic company with a with a UX, which is absolutely fantastic.
Have not been able to attract funding.
And I believe that the neo banks to be successful they need to attract customers that become that they did the deal.
On the phone or they choose us as their principal back. This is a key factor in order to do this you need to be able to offer a certain types of services that we.
We believe that we are doing and we are providing which other services that are produced.
Take a traditional bank fast, which is which are loans credit cards and insurances.
If you look at the transaction on Hum.
Savings Oh.
In Argentina there are.
They are mainly in the banks or in the fund industry, but nothing neo banks other stuff.
So all in all in Big Tex Dart is a traditional bank so our target for us.
To do is to I thought with a disruptive move to attract customers from traditional banks and and get their principality without company. This is the way we want to go further and we have.
In.
Thanks.
Yeah.
Sweeps that we have we believe will enable us to attract.
Our quietest decided to beat guidance.
By the same token are as I said for US has stunted the structures you would will be and not only growth, but also our efficiency and profitability for us. This year will be a transformational year in terms of embracing this model and you will.
See a drastic reduction in cost.
All in all your 2022.
And I think then we will become we expect that our company will become profitable at 20.
2023.
No. This is very very helpful. Thank you very much.
Yeah.
Thank you and our next question I think you are just fabulous ranking your ethane link cut off some of our next question comes from.
Yeah.
Yeah.
And on top of it.
Yes, good morning.
Hi, Good morning, Thank you for the opportunity this is pivotal mountain.
Fillingim for rodeo and install them once again, congratulations on the clarity of the disclosures there.
Really helpful.
Well in your presentation, you talk about the transformation of the wrong the bronchus you're embarking.
The banks cant control when you think like the macro or Central Bank regulations can you comment briefly on what Youre doing to address your current weak spots on minimizing the negative impacts of the operating environment.
Okay.
Yeah.
On the contrary to luxury.
Yes. Thank you for your question, rather useful sorry favorable.
Hum.
You your Yokohama, it's actually Ryan zone, and we are focusing on the things that regardless of the context, we can control one of them is very tight expense controls.
This includes every efficiency that we can make it.
And it extends to right sizing our network, we believe that the transformation, we have embarked with embark for some time now is allowing us to be able to capture many efficiencies while at the same time enhancing customer experience and extending our reach through.
Digital a digital network.
The only thing we're focusing on is enhancing our cost of funding.
This is very important in the context that we face and we are as we presented showing some.
Progress in that regard.
And finally to continue their digital transformation.
Transformation that will allow us to <unk>.
Increase our acquisition of digital clients.
Two adults or if a higher proportion of our customer base to continue to adopt.
Digital and automatic channels and also to leverage cross sell opportunities in our portfolio. These are the key things that we're focusing on in what Youre well described as a challenging environments.
Thank you very much.
And it all.
Our next question comes from one another.
When it comes to mind.
Hi.
Why.
Yeah.
Okay. Thank you for taking my question can you give me one.
Yeah.
Yes, <unk> P M.
Okay.
So.
I have two questions. One is related to you do on car and the relationship we were dwarfs what used to be Walmart. So how are you leveraging that partnership the partnership with now.
The income how are you Brian .
I've seen that partnership to benefit you do can you elaborate as for example, the claim the Cobranded credit cards to being more cost too much to you do for example.
That would be the first question.
The second one would be related to this.
Dividends.
We know that there is this new regulation from the central bank that limits the.
That's one piece.
Profits that can be distributed dividends, so what what should we expect in terms of dividend payments for 2022.
And regarding to the question.
Hum.
Let's see the range pension transfer.
With the couponing otherwise.
Basically.
We.
We signed we signed a new contract. These contracts this is.
US are complete.
Controls a lot of our customers before what India, India, Arie, even during a period of or the era.
Walmart U.
You would go to the branches and you would see a woman financial services and then below two letters.
The name of up rats Nowadays is.
She's gone I mean all.
Customers that we.
We have let's say, we we have on.
Originated in this franchise.
They do they belong to Youtube and they know that so there's no confusion on that and we were able for us and we don't have any more of a concern whats happened. Every every time, we renegotiate with the supermarket these guidance or in our franchise and undo what we've been doing.
Is transforming them.
Did you tell clients working with the U S.
Hum looking for what the opportunities are.
The tango mass.
Franchise, we believe that importance.
In the sense that of course, there is when you have traffic in a supermarket.
There's opportunities to get new customers and.
The people from triangle mask, they have plants, probably in 'twenty two 'twenty three.
Not this year, but next year two inches to put in place a loyalty program, which they know is extremely extremely effective two two.
With you now.
Data analytics to basically and to do that at 90 and get new customers and we know that sports for that it's going to be for us. It's a powerful tool also pool to attract new customers for cause for a.
Let's see if we do do them.
But that's I would say in a nutshell, we have a very good relation with he told me that I remember.
We talked with them all the time, who Oh two basically.
But performed better in the stores and so on but they know that we the way the operational model, we'd be Foodies Ito.
Particularly for instance, when there is a post sales of cost.
Customers, if they have to put to.
To work through the App.
No longer with people in the stores.
Having said that the main.
Let's say Oh origination we believe in the next few years.
Come from let's say a internet from basically from.
All the plans we have for digital marketing trying to attract customers from traditional banks and comfort we can.
That's that's basically my answer.
Yeah.
Okay, that's very clear.
That's helpful and in terms of dividends yes.
Okay.
Yeah, let me.
Ah, Yes, I think in terms of even in a central bank regulations and Oh.
Apply for the filing.
Ooh, we'll just enjoy it.
Financial companies.
Oh.
Which are subject to sudden drawback relations.
But their clinical company what are the areas you're talking about.
Directly.
Are there any events that caused the company how rating program.
But eh.
In past years, where we have growth dividends.
So far our net profit.
We funded.
All are 100% of the dividends at the holding company was funded by senior notes received from other subsidiaries not subject to Central Bank regulation.
So those are the other asset management, mainly.
So we are not we don't expect to approve events from the virus or the group as we have ever done that.
Yes.
Even though the floor is yours.
Can you recommend a fish or hold on to our growth.
So anything to upset the personal assets.
So that's gonna be bundled with me today are strong.
Or is the order size.
Management.
Must be limited by the stipulation.
No.
Okay.
Thank you very much.
Okay. Thank you and our next question comes from Massimo menu now overlay.
It was J P Morgan.
In Japan, you can put in there.
Hello, and a hypothetical actually viewed fernandez here.
No no worries I was using them or only I have a first one on margins.
You mentioned, you're expecting a better funding we saw a decrease in deposits could which too good and loan to deposit ratio. Good liquidity ratios. So so my question is what is what are the supermarket, that's really true because we.
We saw some expansions.
But I don't know how much sustainable east even I guess, we have a new proposed regulations.
It might seem to January rates, who maybe you.
First Q2 thousand 22 may be more challenging given now I'm sure the musical ruminant regional for a larger chunk of hard opposed to Batesville. The first question is marty's what do you see what do you expect for 2020 true I have a second one regarding capital.
Saw some degrees you explained very well in the release, but my question is regarding the Arab believes we started up the way it's growing faster than loans. So he can provide more color and also your general view for capital during the year like how do you expect you to review these capital during the year or what do you see a delta of core capital.
Thank you very much.
Yeah, Marty I know thank you for your question.
So the question of margins yes.
Hello, Thanks for your questions.
Firstly regarding the margin.
I think you mentioned a little bit longer.
Recent regulations from January into February .
Although it is raised interest.
Interest rates on time deposits.
I also.
Alright.
Well I mean, it's a meal.
Okay Alright.
That said our setup.
The highest interest rate that was 39%.
He's the ratios also with great interest.
Great.
Right.
These programs commenced super fun and also grades pick up also.
Lose the space.
With credit cards.
Going from a 34% to 39% and also increasing the emphasis placed on subsidized dogs.
Well you know.
Great.
The range for both impact.
Total liabilities.
We think the net effect would be positive.
For 2022.
Also and I think are more important.
We are we expect during 2022.
Decrease also are of course, sometimes a week and that's due to the fourth quarter of 'twenty one.
Cost of funds also will be very important are the road.
Who are starting to.
To us customers are that are Oh sure.
Second our colleagues customers and not only lending customers.
Goodbye.
Uh huh.
Uh huh.
So as we all know what inflation because of a S. R.
Perfect.
May.
Oh.
Make sure that justice into Atlanta mortgages on sovereign bonds.
Awesome.
Those will flex.
Blacks.
So those would be the main factors are they saying.
That's what I'm watching for 2022.
Regarding capital and risk weighted assets.
Wait wait methods Oh pre component that are more important.
The replay epitope already and that is there anything to that.
All of the World.
Got it.
One one to one relationship with what Theyre doing but without a diesel.
The regulations, but tends to go away with the World and then wait.
A market risk.
Risk weighted assets not operational right.
Those other two component.
Less material.
So how that plays out for the marketplace.
Thanks.
On the edge.
Okay great.
Market.
Requirement of capital.
Operation.
You may need to Oh, Brexit hasn't requirement.
It hasn't been anything to revenue.
So in the long term.
Moving to slide that says the billings, who knows but in the shorter term there can be some mismatches.
And lastly for two.
2022.
Expect to remain at adequate levels.
In the range of 12 to 13 per fan now we are.
At 12, 7% decrease over last quarter.
A quick one.
Yes.
But ah.
There's a write offs this quarter.
Sure.
An extraordinary event.
Well into the technicalities of the regulations that are allow us to recover part of the expected loss provisions and that would be done with.
Back to to recover a 44%.
Tier one ratio to a caveat so adjusting for that we would be interesting to see 1%.
So risk weighted assets.
These were small degree.
And capital ratio at all.
With that we're here about talking about that.
That's very clear thank you very much.
Thank you Julien our next question comes from them.
Please go.
Go ahead.
Hi, Good morning, Thank you for the opportunity and most of my questions have been answered that.
I think they're right sizing I mean, and how long should we expect this to continue.
And what should we expect in terms of additional cost coming from the Sun and the additional investments.
'twenty here.
The well in.
In our consumer finance.
Yeah, right sizing with the.
Particularly.
Yes.
That's a dodge.
This year it will be very large and this.
This is already we can see these.
First quarter already.
Hum.
We've seen in the first quarter of consumer finance, but as we said we stated as.
We are reducing 25%.
Of the two.
Workforce.
First of all just 'twenty.
It's a tool that change our operational model, but might we expect to continue to see these new York.
Regarding the bank.
The capture of efficiencies will continue because the transformation is.
These ongoing and and.
A lot to do with huge chunk processes automation did you tell adoption of times run transformation I don't know if you want to add something.
From that the capture of a few skus yes.
Yes.
The show was saying we.
We will continue to.
Capture efficiencies, which as you know have been driven by a combination of digital adoption that was accelerated during the pandemic and also our investments are.
Are they increasing automated channels and their availability to the public.
And in fact, what has happened is that the.
China's according to the bank a different towers extended hours and even during weekends deciding when and how to serve also served from our services and this is creating huge opportunities.
To rethink and optimize our branch network and also to extend our reach as our investments in digital transformation allow for digital acquisition of digitally native tenants.
In terms of investments I recall Mariano mentioned earlier on.
The investments planned for 2022 in terms of our network are at approximately $5 1 billion.
Just to give you an idea of second question and digital transformation.
This shift is all wrapped around the $1 2 billion pesos.
Let me comment on our investment what we mentioned in the presentation.
Why don't you.
I had a couple of cents a.
Or or idea, though it doesn't transformational related investments language in your core.
The formation of the network.
Regarding our silver as well.
That's also something that cycle.
Every night.
Turning to ensue, we got two basic email pesos Oh Sarah.
I loved about that.
The vessels.
What we started.
Actual already defaulted.
Quarter four 2022.
We're still Uh huh.
At this time I would presume.
To leather.
When it comes like 80 basis points.
What would be your vessels.
Of course, we never know.
Yes.
You'll do.
Would it be lower.
2022 maybe in real terms are tens of thousands of dollars.
But at a high level due to a foreign.
Both governments.
Okay. Thank you very much.
Thank you.
And now we're kind of going back to I P O.
I hope I got that.
Please go ahead.
Exactly.
So my last question is on your ROE expectations.
I think the ROI of last year was minus 2%. So considering now you're 22 perspectives, what do you see the arrow.
Yeah.
At this time.
Bobby I don't.
Yeah. So let me comment, although we are not giving that Roe.
Or maybe even a little data.
Hum.
No.
On the main factors that we.
We see.
Brochu, 2022 or 'twenty two sided.
Although there is many moving box to see exactly whether the precise level.
That's the brokers or Roe.
For the full year.
A squeeze on personalization muscle thing was a net profit or loss.
Factors negatively affected by regulations.
Is that although I.
I think some improvement, but most of them will be in place during 2022.
We will also keep the.
Leather.
Insurance cost efficiencies.
They don't want.
In 2021.
But the other habits.
We'll start to.
Two reveals that and that's what they do.
Ooh.
In this segment.
But it won't be that work rates going up against.
'twenty one.
So we're expecting to reach a breakeven at the end of the year.
Sure Seth earlier.
So you've seen those from Louisville, mainly from the customer.
Deposits, which is very important that they.
They shouldn't environment that affect our company.
Or is that another piece of it.
Would be very important in 2022 also although we are keeping a.
Besides cost from efficiency is very exciting to see.
No way with both from a that the reductions were made in 2020 of them, particularly through 2021.
With a 6%.
That's got to come at the bank level.
We thought that would allow us.
Uh huh.
Personnel costs and also going into 'twenty one.
We will reduce bad debt.
We leave that for the stable NIM.
Moving to Ifr 16 savings from that already.
I'm with you.
Right.
No.
Wow.
I'm doing good.
Uh huh.
And that's what the contract.
I think maybe I was thinking.
So so those are what I explained before.
With respect to allow us to have a I've got a room.
What are your so called.
Two quick things.
Would it be that.
But.
Uh huh.
It.
Uhm.
Thank you Mariano and then can you just.
Remind us your macro expectations regarding inflation interest rates and FX.
And also you you were mentioning high inflation will help nims on high inflation and government bonds.
But how do you see this could be a.
Impacting the net monetary position.
But high inflation.
We are enhancing lesions.
Got it.
The children et cetera, as long time mortgages.
Plug in your four months ago, but at the end of the day, rather Oh, yes.
Yeah, No I think those would have a higher market.
Idaho loss from from they want to carry across Asia.
So our money starting position is now and what are you expecting this environment.
The ER.
So when inflation to cover 100% of.
On top of that you might have.
On Slide 11 will show you what's going on.
That is mainly because we expect to see higher ratios or not.
Ah so that wouldn't be a placeholder.
So in fact.
They needed to be.
The segment, but we are covered for clinical studies.
And also for loans and deposits.
Rachel we're starting to work Oh.
Through August 15th.
They show them that this work with at 85%.
They show a protective Ah.
If you're a placeholder goes your math or much higher let's say at the other 50%.
If broken at all.
Lower cause that way at some point affect.
Demand deposits, Mike pizzi, bromine at or slightly above inflation because.
Let me think about that.
Right.
Good day, ladies that.
Posters.
Together with it with a foreign exchange with Rachel for certainty.
Got it.
Yeah.
So I don't I feel like I told you or your questions.
Yes, thank you very much money on them.
Uh huh.
And yes, it's English.
Some question that I had.
Could you please provide an update on that.
Online is growing.
Thanks.
Okay. Thank you. Thank you for an opportunity to talk about you know nine mm mm last year 2021.
We.
We're able to.
Let's say increase our number of guidance around 25% in terms of like active users. We are Oh 100, and some thousand active users.
Hum.
This is the metric. This is one of the metrics bye bye, meaning active users and users that I've been using Ah I've been operating from that completely but your online over the next over the next the last 60 days.
In my opinion line, we we believe in it.
Is that to get.
For us it's important to to gain traction.
Okay.
In terms of growth in Argentina, but at least we are we are now launching in this quarter.
The new the new App mobile, which.
Which we believe will help us to gain traction as well as B R. M.
We are in the process of connecting two of clubs clubs digital what it takes to provide them.
Customers.
And to refer lets say our customers to a digital wallets that event for these days because they want to transact with.
Got it.
We are doing this.
Absolutely.
And according to the Sunday so congratulations.
Congratulations.
At the same time our.
So Samsung umbrella with people.
Repeat online engineers and software developers they are working on.
On the international platform, we all we are working.
Working.
And the implementation of our plan in order to launch services.
It seemed to reach at and these diseases process and that's basically my apps.
Yeah.
Hey, maybe test some type of alignment with have reached the end of Q1.
Thanks.
Thank you for joining us today.
Do you ever see.
I'm kind of a funny look for what we see more people over the past month.
Well I mean, I noticed that M D.
Next slide.
Pedro will make available.
Anyway, that's it thank you.
Yeah.
Yeah.
Yeah.