Q4 2024 Grupo Supervielle SA Earnings Call
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By an improving macro environment, we saw continued momentum.
Our loan book expanded to 27% quarter over quarter, and 120, <unk> hundred 7% year on year more than doubling the 50% industry growth, while gaining 90 basis points of market share.
Patricio: Our loan book expanded 27%, quarter of a quarter, and 107% year-on-year, more than doubling the 50% industry growth, while gaining 90 basis points. Higher Margin Retail Loans increased to 48% of our total portfolio, up from 44% in the prior quarter, and from 40% a year. Our deposit base grew 7% sequentially with U.S.
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.
Patricio: dollar deposits reaching record levels up 178% year-over-year and gaining 80 basis points during the year. We continued to operate from a position of strength with the non-performing loan ratio increasing slightly to 1.3% but still within historical low levels.
We continued to operate from a position of strength with the nonperforming loan ratio, increasing slightly to one 3%, but still within historical low levels.
Our CET one.
Patricio: CTE-1 ratio of 16.1% positions us well to continue to drive Net Interest Margin stood at 25%, adjusting to current inflation and interest rate levels, with annual profitability reaching a ROE of 15.7% in line with our target for the year, as we successfully executed on our strategic road.
Ratio of 16, 1%, 4% 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.
<unk> of 15, 7% in line with our target for the year as we successfully executed on our strategic roadmap.
Beyond the numbers.
Patricio: Beyond the Numbers 2024 was about laying the groundwork for long term sustainable. The second half of the year, in particular the league, clearly demonstrated the impact of our transformation efforts. We successfully implemented a major digitalization strategy which has fundamentally enhanced our operating system.
2024 was about laying the groundwork for long term sustainable growth.
The second half of the year in particularly clearly demonstrated the impact of our transformation efforts.
We successfully implemented a major digitization strategy, which has fundamentally enhance our operating model. We are now a more agile tech.
Patricio: We are now a more agile, tech-driven institution ready to... in the tier 9.
Driven institution ready to scale.
In video online.
Further solidify our position as.
Patricio: to further solidify our position as Argentina's leading digital retail brokerage platform, well positioned to contribute significantly to our fee income and profitability, as Diego Pizzulli will discuss shortly.
As Argentina's leading digital retail brokerage truck platform, well positioned to contribute significantly to our fee income and profitability as Diego peacefully will discuss shortly.
This was also a year of leadership and organizational readiness with.
Patricio: This was also a year of leadership and organizational readiness with two key businesses led by two exceptional CEOs that report directly. Marco Manrique appointed CEO of Banco Supervielle last October has swiftly redefined our commercial strategy to position the bank for 2025 and while Diego Pizzulli continues to drive I.O.L. in Virginia online.
Two key businesses led by two exceptional Ceos that report directly to me.
Enrique: Backroom Enrique.
Enrique: Appointed CEO of Banco Super via last October has swiftly redefine our commences tragedy to position the bank for 2025 and beyond.
Enrique: While the Europe is really continues to drive I O L infotainment and expansion.
Patricio: I'm very pleased. to have these two outstanding leaders as partners, working together to take Grupo Supervielle to the next level of profitability. As we move forward, our strategic focus remains We are committed to consolidating profitability, driving sustainable growth, and strengthening our culture as a key enabler for our success. By building on our solid foundation, executing with discipline and capitalizing on new opportunities, we are well positioned to enhance shareholder value while expanding our role in Argentina's evolving financial landscape. Profitability.
Enrique: I'm very pleased to have.
Enrique: These two outstanding leaders as partners working together to take group a superb year to the next level of profitability and growth.
Enrique: As we move forward.
Enrique: Our strategic focus remains clear where.
Enrique: We're committed to consolidating profitability.
Enrique: Driving sustainable growth and strengthening our culture as a key enabler for our success.
Enrique: By building on our solid foundation, a secured ing with discipline and capitalizing on new opportunities, we are well positioned to enhance shareholder value, while expanding our role in argentinas evolving financial landscape.
Enrique: Profitability.
Patricio: Growth and Culture, these three pillars define our vision and will continue guiding us into the future. With confidence in our strategy, we approach 2025 with optimism.
Enrique: Rose and culture. These three pillars define our vision and we'll continue guiding us into the future.
Enrique: With confidence in our strategy, we approach 2025.
With optimism.
Enrique: Now, let me discuss some of the specifics of our strategy.
Patricio: Now let me discuss some of the specifics of our strategy. Our strategic growth priorities are centered on developing value propositions that can compete effectively with fintechs that are not easily replicable by encampments. A strong focus on funding and payroll loans is key to becoming the principal bank for more of our time. Pensioner banking has been a historically strong segment for Supervielle and we are committed to reinforcing our leadership position in this. At the same time, we continue to expand our presence in dynamic industries and value chains such as oil and gas and mining, where Argentina's resource wealth presents significant long-term growth opportunities.
Enrique: Our strategic growth priorities are centered on developing value propositions that Duncan can compete effectively with fintech and they're not easily replicable by income in bags.
Enrique: Our strong focus on funding and payroll loans is key to becoming the principle.
Enrique: Bank for more of our customers.
Enrique: Cheniere banking has been historically strong segment for supervision and we are committed to reinforcing our leadership position in this segment.
Enrique: At the same time, we'll continue to expand our presence in dynamic industries and value chains, such as oil and gas and mining where Argentina's resource wealth present significant long term growth opportunities.
Enrique: Pent up demand is fueling group credit expansion and creating a unique opportunity to accelerate accelerate loan growth.
Patricio: Pent-Up Demand is fueling credit expansion and creating a unique opportunity to accelerate loan growth. To capture this demand, we are shifting our portfolio mix towards higher margin retail lending, optimizing capital efficiency and profitability. As a result, the retail loans are expected to reach 50 to 60% of total loans, up from 40% at year-end 2023. Our capital allocation strategy is focused on driving balance sheet growth while maintaining strong risk management distance. Our differentiated business model is designed to drive higher profitability and long-term value creation. with industry-leading net interest margins and a stronger return on equity as we optimise capital efficiency, expand fee-based income and continue to streamline costs and headcount, we are well positioned to generate sustainable growth.
Enrique: After these demand we are shifting our portfolio mix towards higher margin retail lending optimizing capital efficiency and profitability.
Enrique: As a result of the retail loans are expected to reach 50% to 60% of total loans up from 40% a year a year and 2020 free.
Enrique: Our capital allocation strategy is focused on driving balance sheet growth, while maintaining strong risk management discipline.
Enrique: Our differentiated business model is designed to drive higher profitability and long term value creation with industry, leading net interest margins and a stronger return on equity as we optimize capital efficiency expand fee based income and <unk>.
Enrique: Tina to streamline costs and head count, we are well positioned to generate sustainable capital supporting continued growth and reinforcing our competitive advantage in argentinas evolving financial landscape.
Patricio: supporting continued growth and reinforcing our competitive advantage in Argentina's evolving financial landscape. Inverter Online is in the strongest position to play an even larger role in our profitability as we expand the product offer. further integrated.
Enrique: Lastly.
Enrique: In Victorian line is in the strongest position to play an even larger role in our profitability as we expand the product offering.
Enrique: Further integrated.
Patricio: into our banking ecosystem and capture the nascent and growing opportunities in Argentina's financial market by offering a broad range of financial services tailored to the retail wealth and small business sector.
Enrique: Into our banking ecosystem and capture the nascent and growing opportunities in Argentina, as a national market by offering a broad range of financial services tailored to the retail world and small business segments.
Speaker Change: I am excited about the opportunities ahead, and confident that supervalu is positioned to play a leading role.
Patricio: I am excited about the opportunities ahead and confident that Supervielle is positioned to play a leading role in Argentina's economic recovery.
Enrique: In Argentina's economic recovery.
Paco: With that, let me turn it over to Paco, who will provide an overview of key initiatives being undertaken at Banco Superville and views ahead. 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 rates and a surge in dollar deposits, we revitalize our commercial approach to capitalize on these positive dynamics and position ourselves for 2025, which we expect to be a year of real economic acceleration.
Enrique: With that let me turn it over to Michael who will provide an overview of key initiatives being undertaken at bankers supervision and views ahead.
Michael: Thank you Patricia and good.
Enrique: They draw.
Enrique: Since joining Banco do Brasil in outdoor my priority has been to sharpen our strategic focus accelerating growth and positioning the bank for long term sustainable profitability.
Enrique: Given Argentina's and ballroom microeconomic environment of lower inflation declining nominal interest rate and a surge in dollar deposits, we revealed really daily site, our commercial approach to capitalization on these positive dynamics and position ourselves for.
Enrique: 225, which we expect to be a year of real economic acceleration.
Enrique: Our stream layer structure now enables faster decision, making.
Paco: Our streamlined structure now enables faster decision making and greater operational efficiency, ensuring that we can shiftly adapt to market opportunities and better serve our 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-sale opportunities and growth. During the fourth quarter, we 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 engagement. The loan portfolio increased 27% quarter over quarter.
Enrique: Greater operational efficiency and ensuring that we can shipley adapt to market opportunities and better serve our customers.
Enrique: At the same time, we are conducting a comprehensive risk management and in the near term oil customers are expected to have some great offer enhancing precipitous EBIDTA reality cross sale opportunities and grow.
Enrique: During the fourth quarter, we move shifted on quick wins, leveraging our existing customer base to drive immediate immediate risk.
Enrique: The result, why leave the you don't work for their future growth.
Enrique: In Germany, our customer base expanded by three 6%, reflecting improvement acquisition and engagement.
Enrique: The loan portfolio increased 27% quarter over quarter Valvoline industry growth year on year, a key milestone was the record level of personal lower origination of 254% sequences sequences Ali.
Paco: Dublin 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 demands. Lastly, we maintain a disciplined approach to cost reduction, lowering headcount by 2.4% in the quarter.
Enrique: Underscoring our ability to meet rising grid demand.
Enrique: Lastly, we maintain a disciplined aided our approach to cost reduction lowering head count by two 4% in the quarter. These results underscore our our ability to drive profitable growth, we are while maintaining operational efficiency.
Paco: These results underscore our ability to drive profitable growth while maintaining operational efficiency, ensuring a strong foundation for 2025 and beyond.
Ensuring a strong foundation for 2025 and beyond.
Enrique: Turning to slide six our Guangzhou Superville, we're jogging bold steps to deepen our customer focus concentration concentrating on the most profitable segments and boobs, where we can rapidly differently different.
Paco: 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 capital. Starting with our customer centric and technology enabled strategy, on this front, we are shaping our credit and service capabilities, streamlining service model and leveraging technology to the faster and more disruptive. Rather than acting as a universal player, we are focusing on the most profitable segments where we can truly complete head-to-head and win. We are experienced financial industry leaders executing shifts and strategic moves that set us apart and reinforce our leadership in the key sectors.
Enrique: Jade and win.
Enrique: Doubly profitability is our main copy.
Enrique: They're starting with our customer centric and technology enables towards AG.
Enrique: On this front, we are reshaping our grade and service copied Cabo capabilities.
Jim Leyland: Jim Leyland.
Jim Leyland: Service model and leveraging technology to the faster and more disruptive.
Speaker Change: Rather than I've seen us on Universal player, we are focusing on the most profitable segments, where we can truly compete head to head and we.
Jim Leyland: We are experiencing.
Jim Leyland: Explain shaded financial industry leaders executing shift is that as you move that set us apart and reinforce our leadership in the key segments.
Paco: Next, we are implementing a cluster-based strategy and segmenting our customer and marketing strategy. We provide highly tailored, differentiated value proposition aimed at incentive deposits and bundled solutions that enhance customer retention. This approach creates a unique competitive advantage that is difficult to replicate.
Jim Leyland: Next we are implementing a cluster basis strategy and segmenting, our customer our marketing strategy, we provide highly tailored differentiated value proposition aim at.
Jim Leyland: And Devin incentive deposits unbundled solution that they face customer retentions. This approach okay. Our unique competitive advantages that are difficult to replicate let.
Paco: Let me briefly touch on two such segments. In payroll and corporate solutions, we are rolling out of a shared benefits model designed to attract both companies and their employees. Our end-to-end payroll account offering aims to drive customer acquisition and deepen relations with corporates, making Supervielle the preferred banking partner for the payroll solution. Also, in the SME segment, we are enhancing credit options and cash management solutions. Through strategic partnerships with leading Argentine companies, we have reinforced our presence in the key industries and products.
Jim Leyland: Let me briefly touch on Jews such segments in payroll in corporate solutions. We are rolling out of our shared benefits model designed to drive both from both companies and their employees. Our end to end payroll account offering aims to drive customer acquisition and deep.
Jim Leyland: In relation with corporate making us begging suburbia their preferred banking partner for the payroll solution also in the SME segment, where encasing grid options and cash management solutions.
Jim Leyland: Throw little DG partnerships with leading Argentina Argentine companies, we have reinforced our presence in the key industries and probes.
Paco: We are also. Prioritizing Targeted Corporate Segments where we can create differentiated value long-term relationships. Our focus is on the high-growth industries such as oil and gas, mining, and other export-driven sectors while executing disciplined capital allocation and strengthening our position as a principal bank for this cause. Reflecting this commitment, a dedicated team from Banco Supervielle recently participated in the Mining Convention in Toronto, the world leading mining industry event which was also attended by Argentine government officials and provincial leaders. This alliance with our strategy to deepen relationships is a key sector that drives the country's economic growth.
Jim Leyland: We are also.
Jim Leyland: But <unk> seen targeted corporate segment, where we can create differentiated value long term relationships. Our focus is on the high growth industries, such as oil and gas mining and other export driven sectors, while executing discipline added capital.
Jim Leyland: The allegation and strengthening our position as a principal bank for these companies.
Jim Leyland: Reflecting this commitment a dedicated team from bankers for burial recently participated in the.
Jim Leyland: Mainly convention in Toronto, the World, leading mining industry event, which was also attended by urgent in government or fishers and Parisian provincial leaders.
Jim Leyland: This aligns with our strategy to deepen relationships is a key sector that right the country economic Roe.
Paco: The province of Mendoza remains a strategic market for Banco Supervielle, where we have a long-standing leadership position and deepened road-customer relationships. We are committed to strengthening our presence in the province. Further solidification of our role as the leading financial institution in the province. We are also pursuing a selective expansion in the public sector banking, complementing our corporate banking strategy by providing tailored financial solutions to government institutions and state-linked organizations. Lastly, we are boosting, enhancing and cross-selling with your customers, offering them a comprehensive suite of investment banking and vintage solutions, capturing high-value customers and broadening our reach.
Jim Leyland: The Proteasome endorser remains as the DG market for one goes about a year, where we have a long standing leadership.
Jim Leyland: Seizure and deepen road customer relationships, we are committed to a strange thing our presses in the pro and the 44 further solidification our role as the leading financial institution in there Richard.
Jim Leyland: We are also pursuing a selective boundary in the public sector banking complementing our corporate banking authority by providing tailor financial solutions to government institutions and estate link organization.
Jim Leyland: Lastly, we are boosting encase here I'm cross selling with your customer offering them a comprehensive suite of investment banking I'm printing solution.
Jim Leyland: During high value customers will broaden our reach currently 97% of your customers do not bank with.
Paco: Currently, 97% of your customers do not bank with us. presenting a significant, a huge opportunity to capture high value clients and broaden our reach.
Jim Leyland: Us <unk>.
Jim Leyland: Sending a significant a huge opportunity to capture high value clients and broaden our reach in some 224 was a year of transformation.
Paco: In sum, 2024 was a year of transformation and 2025 will be a year of acceleration. by executing with speed, focusing on high-value segments, and driving synergies across our ecosystem, our own ecosystem. We are building a stronger, more sustainable profitability, Banco Supervielle, well-positioning for long-term success.
Jim Leyland: 225 will be a year or acceleration by executing with speed focusing on high value segments and driving synergies across our ecosystem. Our old negotiator, we are building a stronger more sustainable profitability Banco <unk>.
Speaker Change: Superville well positioning for long term success, let me now turn to the call today will be truly CEO of Jan <unk>, who will review journey generally for performance key strategy and it initiatives and expectations for 2025.
Diego Pizzulli: Let me now turn to the call to Diego Pizzulli, CEO of YOL, Inverting Online, who will review 2024 performance, key strategic initiatives, and expectations for 2024. Paco and good day to everyone. 2024 was also a year of a strong movement. continue to expand our Close December with 1.4 million accounts, up 57% year-on-year. The main highlight was the development of EOLA's management, where we successfully... and now ranking as the 4th largest fund in needs as a class in the country. and Improved Ratings, Ratingsoft 4.0 Notably, Julio was the most downloaded and active investment broker app in Argentina.
Speaker Change: Thank you Pat Quango day to everyone.
Speaker Change: Similar to what you have heard throughout today's presentation 21, affordable homes, a year of strong momentum for yield.
Speaker Change: We continue to expand our customer base increase transaction volumes and solidify our position as Argentina's leading retail visit our brokerage platform.
Speaker Change: 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 200.
Speaker Change: Yeah.
Speaker Change: Transaction activity remained robust with daily average.
Speaker Change: Actions up 67% year on year to over 100000.
Speaker Change: Good performance drove total transactions to 26 million 24 up from 15 million in 'twenty, three but enforcing the go to platform for retail investors.
Speaker Change: Our assets under custody reached one $7 billion up 44% year on year, reflecting the strong adoption of our platform.
I guess kind of what the development of your asset management, where are we successfully launch it.
Speaker Change: U S dollar denominated mutual fund, reaching $126 million in AUM in just four months now ranking at the four largest fun it needs a surplus in the commentary, including among managed funds.
Speaker Change: Our commitment to user experience remain a priority perfectly in over 160 cellphone App reveals and improve ratings ratings of four six stars on Google play and 4.8.
The upstart.
Speaker Change: Not only euro of the modern loading and active members and that will get us up in Argentina play processor and importance in our micro liters in this segment.
Diego Pizzulli: For my financial perspective, you all contributed 15% of Grupo Supervielle's net income and 20% of Total Fee Income, reinforcing its growth. delivered 17 billion pesos in net income at 36% year-on-year. R-O-E-R and many more.
Speaker Change: From a financial perspective, Youll contributed 15% of our repo saverio, something and 20% of total fee income.
Speaker Change: It's growing so there's your gorilla ones.
Speaker Change: We delivered 17 billion pesos in net income.
Speaker Change: Up 36% year on year with a ROI of 108, 7%, while revenues increased 20% to 50 $51 million basis.
Diego Pizzulli: Thank you. Financial position was underscored by cash flow generation of nearly $18 million. Demonstrating the sustainability During 2024, we successfully scale our. We also expanded our work. for Clients by False Fold, Executing 33 Corporate Bonds 2024 was a milestone year for E.O.L. When continue to innovate, expand our product offering, and deepen our. We are confident in our abilities. We strive to further growth and reinforce our leadership in Argentina. Early indications for 2025 are positive, with a more stable macroeconomic environment, lower interest rates, and a controlled economy. More investors and businesses looking for financing through debt and equity agencies in a true Our focus will be.
Speaker Change: Originally.
Speaker Change: Regionally, our strong financial position with some of those correlate cash flow generation of nearly.
Speaker Change: $18 million, demonstrating the sustainability of our expansion I thought machine.
Speaker Change: Lastly.
Speaker Change: During 'twenty 'twenty four we successfully scaled our crypto is capitalizing on a number of them November a bull run and seen over 22019 monthly crypto clients at peak levels.
Speaker Change: We also expanded our corporate debt placement business among our clients by default fall executing 33 corporate bond issuances.
Speaker Change: Significantly significantly from just seven in 2023.
Speaker Change: This position.
Speaker Change: As a key player in Argentina turmoil in capital market landscape.
Speaker Change: In some.
Speaker Change: 'twenty one of four was a milestone year for year and continue to innovate and expand our product offerings and deepen our integration with Google spiral we are confident in our ability to drive.
Speaker Change: Order growth and reinforce our leadership in Argentina in Bozeman system.
Speaker Change: Early indications for 2025 are positive with a more stable macroeconomic environment lower interest rates.
Speaker Change: And they control a fixed spread.
Speaker Change: This is expected to lead to a deepening capital market.
Speaker Change: Martin bottles and business is looking for financing through debt and equity issuances in a true flywheel effect.
Speaker Change: To capitalize on this our focus will be on three key areas.
Speaker Change: First strengthening retail and investment offerings.
Diego Pizzulli: Thank you for listening to Retail and Investment offerings. Our one-stop Making it easier for retail investors to access all our services. Greater Freedom... in the Central Light, Yield General. We offer traditional Manquean products, including...
Speaker Change: Enhancing our one stop shopping platform.
Speaker Change: Making it easier for retail investors to access all Atlas in a single place.
Speaker Change: With greater freedom and capital mobility, we expect renewed interest in direct investment in U S assets replicating patterns from the past periods.
Speaker Change: We are also developing crypto related investment solutions, including the centralized yield generating products to meet increasing demand.
Speaker Change: Additionally.
Speaker Change: Our partnership with Banco Suburbia, we will offer traditional banking products Inc.
Speaker Change: Including time deposit benefits training integrating deeper into the broader financial ecosystem.
Speaker Change: Second.
Speaker Change: Spanning SMB in wealth management solution.
Diego Pizzulli: Thank you for listening.
Diego Pizzulli: SMB and welcome. We are scaling our SMB business by offering 24-hour... We also plan to expand our newly established World Inc. Having a leveraging Supervielle's branch network. And finally, Scaling Investment as a Service, Asset Management and Capitalization. and the Argentinian Capital Markets Evolve.
Speaker Change: We are scaling our SMB business by offering 24 hour account opening and $24 seven liquidity management.
Speaker Change: We also plan to expand our newly established wealth management business through personalized products and advisory services tailored to offering individuals, including having a physical presence in key strategic locations leveraging superb years branch network.
Speaker Change: And finally <unk>.
Speaker Change: <unk> nimbus necessary asset management and capital markets other than capital markets evolve, we see opportunities to enhance our offerings.
Diego Pizzulli: Intensa World Through Investment as a Service, we provide Management, we will launch a new income-focused mutual fund, complementing our Finally, we will continue to expand our rolling We are entering a new executive phase of growth. But our focus is not only on scaling with the world. Also on deepening institutional offerings, expanding our products and integrating further into Argentina.
Speaker Change: Through investment of the service, we provide our bankers with LDL with brokerage infrastructure supporting each business investment platform in asset management, we will launch a new income focused mutual fund.
Speaker Change: Complementing our successful dollar denominated fund to provide the best products with more long term options.
Speaker Change: Finally, we will continue to expand our role in capital markets are scaling our corporate debt placement business.
Speaker Change: As more companies seek capital market financing our goal is to be the leading digital retail platform facilitating these transactions.
Speaker Change: Wrapping up we are entering a new exciting phase of growth for you all.
Speaker Change: What our focus is not only on a scale in particular brokerage, but also on deepening institutional offerings, expanding our products and integrating further into Argentina financial system.
Speaker Change: These results underscore our ability to drive profitable growth, while maintaining operational efficiency enjoying strong foundation for 2025.
Speaker Change: With this let me turn the call to Marcelo who will go over our perspectives for 2025.
Unknown Executive: Let me turn the 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 donor-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.
Speaker Change: Go ahead.
Marcelo: Thank you Diego and good day everyone.
Speaker Change: Now turning to slide seven to reveal our perspectives for 2025.
Which is hill and while inflation in the neighborhood of 25% and GDP growth of at least 5%.
Speaker Change: Loans more than doubled year on year with peso loans accounting for 75% of this growth and 25% by dollar denominated loans.
Speaker Change: 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.
Speaker Change: Turning to deposits.
Unknown Executive: Turn it to the boss. We saw 7% sequential growth last quarter. However, deposits declined 6% year-on-year, reflecting the sharp drop in industry peso deposits. 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 loan-to-deposit ratio continuing to improve. We expect to continue to gain sharing in dollar deposits. On asset quality, the NPL ratio stood at a low of 1.3% in 4Q24, even despite the impact from single clients in the agribusiness sector, which was wholly collateralized and represented just 0.4% of our total low book.
Speaker Change: We saw 7% sequential growth last quarter, however, deposits declined 6% year on year, reflecting the sharp drop in industrial peso deposits.
Speaker Change: In the first quarter of 2024, which was only partially or fully offset by the recovery that followed.
Speaker Change: For 2025, we anticipate deposits to continue expanding by approximately 40% in the year with a loan to deposit ratio continuing to improve.
Speaker Change: We expect to continue to gain share in dollar deposits.
Speaker Change: While asset quality at the end.
Speaker Change: PL ratio stood at a low of one 3% and four skilled 24.
Speaker Change: Even despite the impact from single clients in the agribusiness sector, which was fully collateralized and represented just 0.4% of our total loan book.
Speaker Change: Looking ahead to 2025, we expect the NPL ratio to gradually converge toward normalized levels in the range of two to two 2%, reflecting the anticipated increase in lending activity and a more balanced mix between retail and corporate loans in.
Unknown Executive: Looking ahead to 2025, we expect the NPL ratio to gradually convert toward normalized levels in the range of 2 to 2.2 percent, 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 3.7% and 4%. maintaining a prudent approach to risk management while supporting portfolio growth. With respect to NIM, we delivered a NIM of 24.8% in 4Q24 in line with the prior quarter level even despite lower inflation and a higher share of dollar loans in the quarter.
In languages trends, we anticipate our cost of risk to range between three or four 7% and 4%.
Speaker Change: I'm training program approach to risk management, while supporting portfolio growth.
Speaker Change: With respect to <unk>, we delivered <unk> of 24, 8% in <unk> 24 in line with the prior quarter level, even despite lower inflation.
Speaker Change: The higher share of dollar loans in the quarter.
Unknown Executive: for 2025, we expect the NIM to adjust downwards to the range of 18 to 20%, reflecting the impact of further lower inflation and an increase in levels. While we see some pressure on the spreads, we expect that an increase in volumes and leverage will contribute to support financial margin.
For 2025, we expect the loan to a J.
Speaker Change: Dow rewards to the range of 18% to 20%, reflecting the impact of further lower inflation.
Speaker Change: An increase in leverage.
Speaker Change: While we see some pressure on spreads, we expect that increasing volumes and leverage will contribute to support financial margin.
Speaker Change: Now please turn to slide eight.
Unknown Executive: Now, please turn to slide eight. Next, we expect net fee income to grow above 10% supported by multiple revenue. Bank net fees are anticipated to increase, driven by higher fee income and lower fee expense. Brokerage fields, in turn, are expected to continue expanding as we further leverage our retail customer base and introduce new business models. Asset Management Fee Income Growth is expected to track the expansion of assets under management. Lastly, we see further upside in our insurance business benefiting from higher customer penetration. Next, operating expenses increased 1% sequentially in the fourth quarter, including a 7% reduction in personal costs and a 15% increase in other costs related to advertising initiatives.
Speaker Change: We expect net income to grow about 10% supported by multiple revenue drivers bank.
Speaker Change: <unk> net sales are anticipated to increase driven by higher fee income and lower <unk> expenses.
Speaker Change: Brokerage peers, who in turn are expected to continue expanding as we further leverage our retail customer base and introduce new business lines.
Speaker Change: Asset management fee income growth is expected to attract and expansion of assets under management.
Speaker Change: Lastly, we see further upside in our insurance business benefits from higher customer penetration.
Speaker Change: Next operating expenses increased 1% sequentially.
Speaker Change: Fourth quarter, including a 7% reduction in personnel costs.
Speaker Change: 15% increase in other costs related to advertising initiatives.
Unknown Executive: Year-on-year, operating expenses declined for team. for 2025, we expect expenses to continue declining in real terms, reflecting ongoing efficiencies across health count and other cost-saving issues. In terms of profitability, in the fourth quarter of 2024, with a levered ROE of 13.8%, bringing the four-year figure to 15.7%. in line with orders. For 2025, we expect ROE to improve progressively each quarter supported by loan portfolio expansion and increased leverage anticipating a full year ROE ranging between 12% and 15%. Lastly, we expect strong Tier 1 capital to range between 12% to 13% at year-end, with risk-weighted assets increasing following long growth and regulatory changes.
Speaker Change: Year on year operating expenses declined 14%.
Speaker Change: For 2025, we expect expenses to continue declining in real terms, reflecting ongoing efficiencies across head count and other cost saving initiatives.
Speaker Change: In terms of profitability in the fourth quarter of 2024, with a levered Roe of 13.8%, bringing the full year figure to 15, 7%.
In line with our expectations.
Speaker Change: For 2025, we expect our ROA to improve progressively each quarter supported by loan portfolio expansion and increased leverage anticipating a full year Roe range.
Speaker Change: Ranging between 12% and 15%.
Speaker Change: Lastly, we expect the struggle tier one capital to range between 12% to 13% at year end with risk weighted assets, increasing following low growth and regulatory changes.
Speaker Change: Before opening the floor for Q&A. Please note that additional details on our quarterly and full year 2024 performance can be found on the appendix of our earnings presentation.
Unknown Executive: Before opening the floor for Q&A, please note that additional details on our quarterly and full year 2024 performance can be found on the appendix of our earnings presentation.
Speaker Change: With that we're ready to take your questions.
Unknown Executive: With that, we are ready to take your.
Ana Bender: Ana, please go ahead. Thank you, Mariano. At this time, we will be conducting the question and answer session. As a reminder, to ask a question, you need to be connected to a Zoom Plus. To ask a question, please raise your hand button and press it again to withdraw your question. You can also send your question in written form via the Q&A box.
Speaker Change: Please go ahead.
Mariano: Thank you Mariano.
Mariano: Or will you be conducting the question answer session.
Mariano: As a reminder.
Mariano: We go next to us.
Mariano: Sure Scott.
Right right.
Mariano: Yes.
Mariano: And your question.
Mariano: Thank you.
Mariano: Yes.
Mariano: Well with that.
Ana Bender: We will ask you to limit yourself to one question and ask for the word and then you can raise your hand again in another round.
Mariano: One question about the what Anthony.
Mariano: Alright.
Mariano: Okay.
Mariano: So our.
Carlos Gomez: So, our first question comes from Carlos Gomez from HLC. 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 from me. The first one refers to capital, and you had the consumption of capital because of your long 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 one to be at 12-13%.
Mariano: Question comes from Amit.
Mariano: Good morning.
Mariano: Morning, Carlos how are you.
Mariano: Hello. Good morning, Thank you for taking my question.
Mariano: Congratulations on the results in 2024, so two questions from me.
Mariano: The first one refers to capital.
Mariano: The consumption of capital because of your loan growth.
Mariano: Throughout the year, but in particular this fourth quarter. It was 300 basis points and I notice that 1.2% of the total capital is because of deferred tax assets could you explain in particular why that happened and what your.
Mariano: Here I mean, you also mentioned that you expect the tier one to be at 12, 30% is at the level that you want to operate in.
Mariano Biglia: 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, that competition has increased. Can you tell us how do you see the competitive environment going forward into 2025? Thank you. Thank you, Carlos. Thank you, Mariano. Thank you. Sure. Yes, thank you, Carlos, for your comments and your questions. Regarding the capital level, and let me explain further on your question of regarding the tax assets, on the form Q, we recognize deferred tax Unknown Attendee, Julio Supervielle, Mariano Biglia, Gustavo Manriquez, Diego Pizzulli, Income Statement.
Mariano: Uh huh.
Mariano: Ideally or would you would you consider it even lower one and second could you comment on how spreads are today I mean, we have seen everybody grow a lot.
Mariano: But we have a sense that margins are declining.
Mariano: Competition has increased can you tell us how do you see the competitive environment going forward into 2025.
Mariano: Yes.
Carlos: Thank you Carlos.
Mariano: Yes.
Mariano: Sure.
Mariano: Yes. Thank you Carlos for your comments on your questions.
Mariano: Regarding.
Mariano: Let me explain further on your question.
Mariano: Regarding the.
Mariano: The farm fuel we have reorganized.
Mariano: Thanks.
Mariano: Yeah.
Mariano: Okay.
Mariano: So that loss.
Mariano: Going forward.
Mariano: Thanks, Ron.
Mariano: Oh operational back in 2022 way it was March.
Mariano: Bob.
Speaker Change: What are we get Brent.
Mariano: The approach we have is a free.
Speaker Change: So no.
Speaker Change: We know that it would it be able to use them were recognized in the balance sheet.
Speaker Change: Thanks.
Speaker Change: Slide 19.
Speaker Change: Income statement.
Mariano Biglia: But at the same time, as a deferred tax asset, it's a deduction to the capital position. Remember, in the capital position, we have the common equity, but then we deduct certain items. The most important are all individual assets. and Big Bird Lab. So that's why, during the quarter, part of the consumption of capital is related to this asset. So we recognize the gain, but at the same time, gain with the tax. 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 And then you asked also about the level of capital that we're getting in our CAYTAN.
Speaker Change: But at the same time.
Speaker Change: So the capital position remember the capital position.
Speaker Change: And then within that sort of thing.
Speaker Change: Items.
Speaker Change: Most importantly, our oil.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: So that's why.
Speaker Change: During the quarter.
Speaker Change: Okay.
Speaker Change: It's related to the car.
Speaker Change: So.
Speaker Change: Again.
Speaker Change: And we did that.
Speaker Change: 2025.
Speaker Change: Yes.
Speaker Change: No.
Speaker Change: He is with us.
Speaker Change: Does.
Speaker Change: That asset.
Speaker Change: These actions reduced I'll finally.
Speaker Change: And then you asked also about the level of capital.
Speaker Change: In our guidance.
Mariano Biglia: That's the level we feel comfortable with. Eventually, if long growth continues to be solid, not only in 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 CAYTAN we get is a year one ratio. 100% T1. But during the year, we will also add capital on a tier two component by issuing subordinates. That is also some of the options that we are considering. When we talk about 12-13% therefore that is total capital or tier 1? That is tier one.
Speaker Change: That's a level, we feel comfortable with.
Speaker Change: No.
Speaker Change: Loan growth continues to be solid, even though 2025 going into 2028.
Speaker Change: Operator.
Speaker Change: Well you know maybe 11%.
Also remember that.
Speaker Change: Now.
Speaker Change: 10%.
Speaker Change: Yes.
Speaker Change: The year one ratio.
Speaker Change: 100%.
Speaker Change: One.
Speaker Change: During the year we.
Speaker Change: Also as Kathy does on a tear.
Speaker Change: Tier two.
Speaker Change: Component right.
Speaker Change: So looking at it.
Speaker Change: Okay.
Speaker Change: No.
Speaker Change: When we talk about it.
Speaker Change: 13%, therefore that is total capital or tier one.
Speaker Change: Is that a tier one in Europe.
Mariano Biglia: And you would think we are tier two, 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 one. of Tier One, which means that you know, 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, long growth for 2025 and continue into 2026.
Speaker Change: Total capital would be higher right. So it's hard to understand what do you feel comfortable with you would feel comfortable with an 11% of total capital or 11% of tier one.
Speaker Change: Tier one of tier one which means that you know by the end of the year you will be.
Speaker Change: Close to your limit it imaginable that if growth continues at this level.
Speaker Change: Probably be looking to add capital sometime in 2026% had reasonable assumption.
Speaker Change: Yes, sure I think that the original assumption because we have seen.
Speaker Change: She said are very solid.
Speaker Change: On growth.
Speaker Change: So 2026.
Mariano Biglia: So it would be reasonable to think that although we are adding profit to capital, at some point, probably in 2026, we would want to add capital, sure.
Speaker Change: We reached another tool.
Speaker Change: So seeing that although we are adding prophage to capital.
Speaker Change: Rather than changing worldwide.
Speaker Change: Sure sure sure.
Speaker Change: Okay makes sense.
Speaker Change: Alright.
Mariano Biglia: 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 we expect that in the fourth quarter of 2025, we will have a more The proportion will move towards 50% retail loans, 50% corporate loans. In this area, maybe even higher in retail loans. And so that implies that if we analyze, we expect that annualizing the fourth quarter of 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 capital loans.
Speaker Change: Carlos.
Speaker Change: Yes.
Speaker Change: The answer is no.
Speaker Change: While we move in 2025.
These are gradual portfolio shift.
Speaker Change: More retail loans proportion rather than corporate and Thats.
Speaker Change: That means that we.
Speaker Change: We expect that in the fourth quarter of 2025.
Speaker Change: Proportion will move towards 50% retail loans and corporate loans.
Speaker Change: Maybe even even higher.
Speaker Change: And so that that implies.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Rice.
Speaker Change: I'm realizing.
Speaker Change: Fourth quarter 2025.
Speaker Change: Will give us.
Speaker Change: Capital creation.
Speaker Change: The sustained growth.
Speaker Change: I E.
Speaker Change: And of course, we need to understand the market dynamics at that moment.
Speaker Change: See what decisions.
Speaker Change: We want to make regarding capital.
Speaker Change: Regarding capitals.
Speaker Change: Yeah.
Speaker Change: Thank you and about the spreads.
Mariano Biglia: Thank you and about the spread. Regarding spread, as inflation goes down, with the interest rate will also go down, probably next decreasing. Interest rates will not be earlier than April, but during the remainder part of the year when the interest rate will continue to go down, and then that will add pressure to spread because at a lower interest rate level, of course, spreads tend to compress. But at the same time, we are growing our own portfolio with very good spreads, and we are shifting It was a couple of quarters ago, 55% corporates and 35% individuals, now it's closer to 50% each and in 2025 we will continue to give a better weight to the individual's portfolio where we have larger threats mainly on personal loans and capital.
Speaker Change: Yeah.
Speaker Change: Hey, Justin.
Speaker Change: Spread.
Speaker Change: As inflation goes down.
Speaker Change: Interest rates will also go down probably.
Speaker Change: Next decreasing interest rates will be.
Brent: Thanks Brent.
Speaker Change: During the remainder part of the year with it.
Speaker Change: We continue to move out.
Speaker Change: Doesn't mean that the fresh ore.
Speaker Change: Because.
Speaker Change: Lower interest rate level.
Speaker Change: Spread.
Speaker Change: 10 two.
Speaker Change: Great.
Speaker Change: At the same time.
Speaker Change: We are growing our loan portfolio.
Speaker Change: Well the spread we are shifting our mix.
Speaker Change:
Speaker Change: A couple of them or does it go to 5% corporate.
Speaker Change: It is now closer to.
Speaker Change: So 50% each.
Speaker Change: At June <unk>.
Speaker Change: 75 will continue.
Speaker Change: Wait you need less portfolio, where we not just maybe.
Carlos: Thank you Carlos.
Speaker Change: So those would be the moving.
Mariano Biglia: So those will be there at the moment. So bottom line in terms of, let's say corporate spread, they should decline with interest. If you compare it to what we call the transfer rate, the difference between the funds that we get and the loans to corporates, I think the 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 percent, the mean for the whole balance sheet will be lower. by the spread of corporate loans compared to the cost of funding or Contra positivo, Coach of the opportunity call...
Carlos: Right.
Carlos: Okay.
Carlos: So bottom line in terms of let's say corporate of the spirits.
Carlos: They shoot declined with interest rates.
Carlos: If you compare it.
Carlos: Yes.
Carlos: Yes.
Carlos: Okay.
Carlos: Transfer rates.
Carlos: Difference between.
Carlos: We get.
Carlos: Loans to corporate.
I think credit will be stable.
Carlos: Nowhere.
Carlos: Interest rate level.
Carlos: So.
Carlos: And that's why we gave the guidance.
Carlos: 20% they move for the whole balance sheet.
Carlos: Sure.
Carlos: By this spread so corporate loan comparison.
Carlos: The cost of funding.
Carlos: The opportunity cost.
Mariano Biglia: would be to put that money into a treasury account, for instance, will it stay the same? Well, the completion of the balance sheet was due to the lower interest rate. Thank you, Carlos.
Carlos: What's the.
Carlos: Turning to attrition for anytime.
Carlos: With us today.
Carlos: Right.
Carlos: Political upheaval in the balance sheet.
Carlos: Low interest rate environment.
Carlos: Yeah.
Carlos: Thank you.
Carlos: Yeah.
Our next question comes from maybe now.
Marina Mertens: Our next question comes from Marina RodrÃguez with J.P. Morgan. Hello, good morning, Marlon. How are you? Please go ahead.
Carlos: J P Morgan.
Carlos: Morning.
Carlos: Please go ahead.
Carlos: Hello, Good morning, everyone.
Marina Mertens: Hello, good morning, everyone. Thanks for the opportunity of asking questions. And my first question is related to profitability. So like, considering this mix towards retail, like, what would be a more normalized like ROE target for for coming years? Should it be above those 15% you're targeting for, for this year?
Carlos: Thank you for.
Carlos: Asking questions and my first question is related to profitability. So considering this mix towards retail.
Carlos: What would be a more normalized ROE targets for the coming years should it be above those 15% of our targeting for for this year and my second question is a follow up on asset quality and we saw like the corporate case increased mpls and drove.
Mariano Biglia: And my second question is a follow up on asset quality. And we saw like the corporate case increased MPLs and drove, like, large consumption of coverage, which, of course, was was high. But the question is, like, what would be a comfortable coverage level that you would be comfortable operating with, considering the mix shift towards, towards retail? Thank you. Okay, thank you Marlon for your question. Regarding your first question of ROE, we have a target of 15% to 15% for GCR and the longer term ROE We should reach that target gradually, quarter to quarter, increasing profitability as we increase our loan portfolio, because that's a very important mix in terms of revenue where we see a decrease in the income generated by government securities, and we build a loan portfolio to compensate for that decrease.
Carlos: 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 mix shift towards retail. Thank you.
Malone Mitchell: Hey, Thank you Malone Mitchell.
Speaker Change: Regarding your first question of ROE.
Malone Mitchell: Therefore, we have it.
Speaker Change: 2%.
Speaker Change: 15% for this year and the longer term our OE.
Speaker Change: Sure This will go.
Closer to 20%.
Speaker Change: We should raise the target Rod, let me put it over quarter, increasing profitability as we increase our loan portfolio.
Speaker Change: Yes.
Speaker Change: Very importantly.
Speaker Change: Revenue of where we see increasing.
Speaker Change: Income generated by government Securities.
Speaker Change: The loan portfolio.
Speaker Change: To compensate for that.
Mariano Biglia: Revenues. So we can sustain our financial margins. And on top of that, we expect to grow at double digit levels in net fee income, also, which is a very important part of our revenue, 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 MPL, as you said, which one increases water, that's related to a single customer on the agribusiness sector that is fully collateralized. And that also makes a consumption of the coverage of MPL.
Speaker Change: Revenue, so we can sustain our financial margin and on top of that.
Speaker Change: We expect to grow.
Speaker Change: Double digit level in net fee income also which we are very important part of our revenue.
Speaker Change: Im also.
Speaker Change: These expenses so all those component.
Speaker Change: Otherwise that with <unk>.
Speaker Change: Slide 15 or 20.
Speaker Change: ROE and the longer term.
Speaker Change: And then regarding MTS.
Speaker Change: The sale is final quarter.
Speaker Change: A single customer.
Speaker Change: On the agribusiness sector that is.
Speaker Change: Alright.
Speaker Change:
Speaker Change: Also.
Speaker Change: Thanks, Tom shown on the coverage of Npls.
But also because.
Mariano Biglia: but also because at the end of 2024, as opposed to The end of 2023, the outlook for the economy and for debtors is much better, so that the components of the outlook in the expected loss model also reduces the need for coverage. It didn't make sense to have like 200, almost 300, we had a 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 So we always apply the expected model, so we are always anticipating any losses that we foresee on the portfolio.
Speaker Change: At the end of 2024 as opposed to us.
Speaker Change: At the end of 2023.
Speaker Change: Sure.
Speaker Change: Joining me for <unk>.
Speaker Change: A much better so the covenants.
The expected loss model also reduces the need for coverage so.
Speaker Change: It makes sense to have 200 almost 300.
Speaker Change: 11 of coverage and now we are at 108.
Speaker Change: As long as the.
Speaker Change: MTN stabilizes.
Speaker Change: Going to two.
Speaker Change: 2% by the end of the year coverage.
Speaker Change: Continue to be partially.
Speaker Change: Zero.
Speaker Change: All right.
Speaker Change: We're at that level.
Speaker Change: Perfect.
Speaker Change: So.
Speaker Change: So we are where we supply the expected loss model.
We are always.
Speaker Change: And he knows it.
Speaker Change: Yes.
Speaker Change: Accordingly.
Very clear thank you.
Mariano Biglia: Very clear. Thank you. Okay, thank you, Marlon.
Speaker Change: Yes.
Speaker Change: Okay. Thank you.
Pedro: I think we have another question from Pedro of Attendment and Security. Hello. Good morning, Pedro. How are you? Hello, Ana. Hello, everyone. Thank you for the call. I have a couple of questions on securities.
Speaker Change: Ron.
Speaker Change: Thank you.
Speaker Change: Hi.
Speaker Change: Is it all often kelman.
Speaker Change: Good morning.
Speaker Change: Thank you.
Speaker Change: Hello, Hello, everyone. Thank you for the call I have a couple of questions from securities.
Mariano Biglia: 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 you please repeat the first part of your question? Yes, sorry. How do you see the security 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 weight of our loan portfolio. Unknown Attendee, Julio Supervielle, Mariano Biglia, Carlos Gomez, Brian Flores, Mariano 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 the portfolio because part of that will be funded by new sources of funds.
Speaker Change: Do you see the weight of them evolving.
Speaker Change: And do you have any predictions for the loan to asset ratio.
Speaker Change: Great Joe unsecured to us at retail for the year.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Question.
Speaker Change: Hey, Peter.
Speaker Change: All right.
Speaker Change: The first part.
Speaker Change: Joe.
Speaker Change: Yes, sorry.
Do you see the securities.
Speaker Change: 895.
Speaker Change: Okay, Yes.
Speaker Change: In terms of volume on wave.
Speaker Change: On the balance sheet.
Speaker Change: Yes.
Speaker Change: Great.
Speaker Change: That way from the budget because as I said before we are migrating.
Speaker Change: <unk> of our loan portfolio.
Speaker Change: In our process.
Speaker Change: Shifting from securities to loans, but also increasing their reps go increasing both sides of the balance sheet.
Speaker Change: So in terms of volumes.
Speaker Change: In the securities portfolio.
Speaker Change: There will be.
Speaker Change: We mitigated somehow.
Speaker Change: <unk>.
Speaker Change: The increase in our portfolio.
Speaker Change: Because part of that would be funded by.
Speaker Change: Hi.
Speaker Change: Pardon me.
Mariano Biglia: but of course the weight of the securities in the balance sheet will decrease and the spread will also decrease as they have been decreasing in the last quarter and that's because on one side we have the Presidential Adjusted Bone Portfolio. produces at Elber Revenues with no inflation. and then also decreasing short-term interest rates on other treasury bonds. So the dynamics will be of a lower weight, fall from the balance sheet and in our total revenue.
Speaker Change: Yes.
Speaker Change: Further the Waco.
Speaker Change: Thank you reduce the balance sheet will be great.
Speaker Change: This breadth and we'd also.
Speaker Change: Right.
Speaker Change: The last quarter.
Speaker Change: Because on one side we have.
Speaker Change: Inflation adjusted portfolio.
Speaker Change: Produces over revenues with no inflation.
Speaker Change: And then also.
Increasing short term interest rates on our treasury bonds.
Speaker Change: So that's what the dynamics are.
Speaker Change: With a wave.
Speaker Change: Wave both on the battlefield.
Speaker Change: Our total revenues.
Speaker Change: Thank you Mariano and do you have any retail securities to asset in mind for this year.
Mariano Biglia: 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 and Enterprise. Perfect. Thank you very much. Thank you.
Speaker Change: Well.
Speaker Change: Our ratio.
Speaker Change: Should decrease.
Speaker Change: Our loan portfolio, which is now.
Speaker Change: And those two assets or almost 50%.
Speaker Change: Right.
Speaker Change: Closer to see.
Speaker Change: 50%.
Speaker Change: With that.
Speaker Change: The securities portfolio should decrease maybe to 20%.
Speaker Change: Yes.
Speaker Change: Perfect. Thank you very much.
Speaker Change: Okay.
Speaker Change: Thank you.
Mariano Biglia: I think we have some Q&A, some questions in the Q&A box. Some come from Brian Flores. So, I think one is repeated, but in your 2025 guidance, you mentioned a T1 ratio of 12.3 by your 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 31st, 2024, and the change in requirements of operational risk will be implemented as of the end of the first quarter 2025.
Speaker Change: No.
Speaker Change: I think what we have.
Speaker Change: Your line is open.
Speaker Change: The Q&A law.
Speaker Change: Some come from Ryan sorry.
Speaker Change: Oh.
Speaker Change: Thanks.
Speaker Change: But in your guidance you mentioned that.
Speaker Change: Very helpful.
Speaker Change: Erez.
Speaker Change: Changing a great summary.
Speaker Change: Eddie.
Speaker Change: Yes. The answer is yes, we do consider.
Speaker Change: No pricing risk weighted assets.
Speaker Change: The Central Bank introduced changes to regulation requirement.
Speaker Change: Capital for operational risk.
Speaker Change: Our R&D team.
Speaker Change: Implemented.
Speaker Change: Silver 31st 2024.
Speaker Change: Or requirements.
Speaker Change: Operational risk.
Speaker Change: With the demand.
Speaker Change: The end of the first quarter 2025, so in our project.
Mariano Biglia: So in our projections, they are in accordance with the changes in operating risk and operational risk.
Joe: Hey, Joe.
Joe: Okay perfect.
Mariano Biglia: There is another one in terms of deposit, what should happen for deposit to match loan growth in our view? I think, in my view, we expect to see both long-term deposits. growing at very solid numbers in 2025, but loans, with loans having a much larger 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 we are seeing. I mean, expanding significantly the monetary base to with the amount of pesos that are in the financial system.
Joe: I'll take one.
Joe: For the uptake.
Joe: Loan growth in <unk>.
Joe: Our meal.
Joe: I think in my view.
Joe: We expect to see on deposits.
Joe: Growing.
Joe: Slide number 25.
Joe: No no.
Joe: Let's start with growth.
Joe: Losses.
Joe: The project is to match the growth in loans.
Joe: We will have to see.
Joe: <unk> expanded the monetary base, which.
Joe: Already we are seeing.
Joe: Yes.
Joe: Okay.
Joe: Monetary Batesville.
Joe: Crazy amount of pesos.
Joe: The financial system.
Mariano Biglia: 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 remunerate 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. That would be another source of growth.
Joe: And the other source of deposit growth will be the increase in foreign currency.
Deposit.
Joe: At some point.
Joe: Thanks.
Joe: Good morning Ray.
Joe: Cash reserve data that's true yes.
Joe: Thank you very strong incentive.
Joe: Or I can give you a long time.
Joe: Sure.
Joe: Uhm.
Joe: The financials would.
Joe: It would be another source of growth.
Joe: Let me add to that.
Paco: Let me add to that, that Paco 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 fund all the long growth. So we are quite optimistic on that.
Joe: <unk>.
Joe: Alcohol.
Joe: Is implementing a cluster base.
Joe: Baidu proposition for.
Joe: For payroll accounts.
Smes.
Joe: We expect that.
Joe: Yeah.
Joe: In Peru.
Joe: Our competitiveness.
Joe: Getting more funds.
Joe: Two.
Joe: To participate.
Joe: To be able to fund holder.
Joe: Loan growth.
Joe: So we are we are quite optimistic on that.
Joe: <unk>.
Joe: Okay.
Joe: Okay.
Diego Pizzulli: Okay, there is another one for Invertir Online.
Joe: Another one.
Joe: I'm sorry.
Diego Pizzulli: So this is for Diego. Invertir Online 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?
Joe: Your line is advancing with nice chunk.
Joe: I'll be brief.
Joe: However, any running yield.
Joe: Or.
Joe: Could you elaborate on this dynamic.
Joe: Sure.
Diego Pizzulli: Diego Pizzulli Yes, 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. monthly active users, that were the volatility we have throughout July, when the effect spread, reached a big level of 50%. And also, something that is happening or happens in Argentina is that you have the 13th salary. that people get in. and also it drove more activity. So those layers are the ones that make the comparison not very fair between fourth quarter and third quarter.
Joe: Yes sure.
Joe: I want to highlight.
If you look at the average monthly active user for 2024.
Joe: To 2023.
Joe: 70%, so the underlying trend is positive and it's growing fast.
Joe: Hum.
Q.
You are perfect.
Joe: Thank you.
Joe: Yes.
Joe: The Golar igloo.
Joe: Throughout July.
Joe: It's Brandon.
Joe: <unk> reached a peak level of 50%.
Joe: Also.
Joe: That is happening.
Joe: In Argentina.
Joe: Sorry.
Joe: Salary.
Joe: People.
Joe: Yes.
Joe: Thanks Julien.
Joe: I'm also.
Joe: Rove more.
Joe: So those.
Joe: I would say one thought.
Joe: Thank you.
Joe: For the quarter.
Diego Pizzulli: But aside of that effect, if you look at fourth quarter average monthly active users, they were higher than first quarter and second quarter. And the underlying trend, as I said before, is 70% higher year on year against 2033. So very healthy. And aside from July, it was a growth.
Joe: But.
Joe: If you look at the fourth quarter average.
Joe: We were first quarter the last quarter.
Joe: Fair enough. Thanks.
Joe: 70% higher year on year.
Joe: 233 so.
Joe: Be healthy.
Joe: Ah trial.
Joe: Before we take another question.
Unknown Executive: Before we take another question from Carlos with HNBC, there is a question here of where are we filing the financial statements? We are filing them today.
Joe: Thank you Andy there is no question.
Joe: Yes.
Joe: Finally in the financial statement, we are finding them today.
Joe: So now.
Carlos Gomez: So now, Carlos, I think you have a new question. Yes, if there is room for it. So a follow up, you mentioned your economic assumptions, and you expect the currency to be at 1200 by the end of the year. So again, so that we understand, we 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.
Speaker Change: I think you'll have any westcott.
Speaker Change: Yes, if there is room for it so a follow up.
Speaker Change: Mentioned your economic assumptions and you expect the currency to be at 1200 by the end of the year. So again, so that we understand we do not expect any deviation from the current 1% depreciation.
Speaker Change: Uh huh.
Speaker Change: Per month.
Speaker Change: If there was one that was in <unk>.
Speaker Change: With the IMF agreement.
Speaker Change: In the sandwich, how would that affect the amount that will be my.
Speaker Change: My first question and the second one on the expenses you expect to grow.
Speaker Change: No inflation.
Speaker Change: Is that compatible with the loan growth of 60% and they get one would imagine you have more activity you have more.
Mariano Biglia: Is that compatible with a 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 part of your first question regarding the footprint. We expect the government to continue at the massive devaluation rate of 1% in an agreement with the IMF or the, you know, FX regulations, there was, we saw an increase in the evaluation rate, at least The evaluation, we think it will not be very high because the government was always committed also to control inflation.
Speaker Change: Promotions and inevitably google's how high it expenses. Thank you.
Speaker Change: Yes, and let me take first.
Speaker Change: Yes.
Speaker Change: Thank you Sir.
Speaker Change: <unk>.
Speaker Change: Rachel Lavine devaluation rate of 4%.
Speaker Change: We met with the IMF or.
Speaker Change: FX regulation.
Speaker Change: We saw.
Speaker Change: Uhm radar.
Speaker Change: One time.
Speaker Change: Uhm.
Speaker Change: We did not see.
Speaker Change: Great.
Speaker Change: Sure Matt.
Speaker Change: With media.
Speaker Change: On top of inflation.
Mariano Biglia: And how would that impact? Well, probably the government at that moment would stop or suspend any decrease in interest rates. And if effective regulations are lifted, we strongly believe that we will see positive real interest rates. So interest rates will always be at a higher level of the same three months for all expected. But the impact in the Valenciennes, as we are, or can manage, our positions foreign currency to be violent and we shouldn't see important one-time results. We could see an increase in the weight of dollar loans and deposits because when translated to pesos they go to a higher number.
Speaker Change: Uh huh.
Speaker Change: Does that impact.
Speaker Change: Well broadly.
Speaker Change: The government at that moment.
Speaker Change: With the stock or suspended increasing interest rates.
Speaker Change: FX regulations on lithium.
Speaker Change: English only relieve that.
Speaker Change: You'll see positive.
Speaker Change: And growth rates.
Speaker Change: It will always be at the.
Speaker Change: A higher level of let's say.
Speaker Change: Months.
Speaker Change: Recommendations.
Speaker Change: But the impact the balance sheet.
Speaker Change: Yeah.
Speaker Change: We are.
Speaker Change: Kevin Mannix.
Speaker Change: Our positions.
Speaker Change: Great.
Speaker Change: And we shouldn't see.
Speaker Change: Okay.
Speaker Change: It does.
Speaker Change: We could see an increasing their weight.
Speaker Change: On deposits because when threats. Thank you took vessels.
Speaker Change: So a higher number.
Speaker Change: But.
Mariano Biglia: but but but I don't see any any other major impact also because oral lending in US dollars is uh to to companies that generate dollars because they are exporters or they work with exporters or we shouldn't also see any deterioration you Um, then Your second question, I'm sorry, it was... It's true that with higher activity on some items, you can increase your expenses. But let me give you or explain it in two fronts. First, we are reducing health care. Also, last year, we reduced some branches. But now we got that saving during the whole year.
Speaker Change: I don't see any.
Speaker Change: Any other major in but also because.
Speaker Change: Lending.
Speaker Change: Yes.
Speaker Change: So company.
Speaker Change: January.
Speaker Change: Export vessel working with exports.
Speaker Change: Please proceed.
Speaker Change: If you're a ratio.
Speaker Change: Yes.
Speaker Change: And then.
Speaker Change: Your second question sorry was.
Speaker Change: On expenses, you expect them to grow.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: That's our plan vehicles.
Speaker Change: It's true that with higher activity.
Speaker Change: Items, you can increase your expenses, but.
Speaker Change: Let me give you.
Speaker Change: Okay.
Speaker Change: Two fronts at first.
Speaker Change: While reducing head count.
Speaker Change: Also last year will reduce.
Speaker Change: Ron just now.
Speaker Change: Without that that savings.
Speaker Change: The whole year.
Mariano Biglia: 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 have some addition.
Speaker Change: We also continue to reduce head count.
Speaker Change: <unk>.
Speaker Change: That allows us to work.
Speaker Change: For efficiency, we are not reducing commercial position in fact, we've got some omnichannel.
Speaker Change: Commercial positions windup for cooperates.
Speaker Change: Also during these times that risk benefit ratio was so low.
Speaker Change: We didn't reduce.
Speaker Change: Their workforce or.
Speaker Change: Got it.
Speaker Change: For commercial procedures performed great.
Speaker Change: So we don't need to hire.
Speaker Change: I don't remember personnel expenses are 80% of our total approximately total recent head count.
Mariano Biglia: Unknown Attendee, Julio Supervielle, Mariano Biglia, Gustavo Manriquez, Diego Pizzulli, 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 allow us to focus also the efforts on the expense side and also on the cost side.
Very important.
Speaker Change: Our expected adjusted by inflation and then.
Speaker Change: Russell.
Speaker Change: Total in the first part of it.
Speaker Change: We have a very focused strategy.
Speaker Change: We wanted to concentrate our efforts.
Speaker Change: In this segment in the products.
Speaker Change: We want to grow that we announced.
Speaker Change: Two to focus also on the first one on the expense side and also on that.
Speaker Change: On the fee expenses.
Speaker Change: Alright.
Carlos Gomez: Carlos Gomez, Unknown Attendee, Julio Supervielle, Mariano Biglia, Diego Pizzulli, Brian Flores, Thank you so much. Thank you, Carlos.
Speaker Change: Basically capitals.
Speaker Change: In order to deliver a bit.
Speaker Change: We found some opportunities to the expenses side, so we can be more productive and efficient.
Speaker Change: To deliver a very good.
Speaker Change: So we are working on that.
Speaker Change: That's why we wish list on inflation on our expenses.
Speaker Change: Okay. Thank you so much.
Speaker Change: Thank you.
Unknown Executive: 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 look forward to meeting. Thank you and have a good day. Goodbye.
Speaker Change: Thank you Noah.
Speaker Change: So.
Yes.
Speaker Change: Q&A.
Speaker Change: Thank you for joining us today and we appreciate your interest.
Speaker Change: Our company so we have four four.
Speaker Change: Yeah.
Speaker Change: Alright.
Speaker Change: When you look forward to meeting.
You'll read that as a company.
Speaker Change: I need to Ethernet.
Speaker Change: Next question you might have.
Speaker Change: You come from.
Speaker Change: Thank you and have I would say.
Speaker Change: Goodbye.