Q2 2025 Grupo Supervielle SA Earnings Call

Good morning, everyone and welcome to the parcel, but we had a second quarter earnings call. It a money out of the site Crusher a narrow today's conference call is being recorded as a reminder, all participants will be in listen only mode.

To ask questions during the Q&A session and show your first and last name appear on the <unk> platform questions can be asked by voice or through the Q&A box speaking today will be Patricio <unk>, our chairman and CEO and Mike <unk>, Our Chief financial Officer with power bi commentary against.

<unk> will be shortly see of investing online will also be available during the Q&A session.

Q.

Good.

Good morning, everyone and thank you for joining us today.

We executed well Amit is two transitional macro backdrop.

Loan growth outpaced the industry led by strong performance in commercial lending.

By contrast, we took a more cautious approach to retail origination in response to the slight deterioration in asset quality in line with industry and historical levels.

This follows the rapid retail expansion of prior quarters and returned to credit normalization.

On funding U S dollar balances, which record levels, gaining 100 basis points in market share over the past 12 months underscoring both.

Competitive position in client Trust we.

We maintain a solid capital position with a CET one ratio of 13, 9% and delivered <unk>.

6% return on equity and real terms further supported by disciplined cost management and improved NIM.

While the macro environment still presents some near term headwinds in connection with the election related uncertainty.

Tide, Persil liquidity and high real interest rates the broader backdrop remains supportive with public government supported nearly 50% fiscal consolidation.

Consolidation ongoing deregulation and inflation trending down we expect economic growth in credit expansion to resume after the October 26 elections supported by structural reforms anticipated to begin in the post election period.

These conditions combined with our strategic execution solid capital position us to continue capturing opportunities as the credit gains momentum.

On slide four.

Our strategic transition towards a more credit driven balance sheet is progressing although at a slower pace.

In this election year and in line with monetary policy loans accounted for 48% of towards assets up 25 percentage points. Since December 2020, free while we reduced our investment portfolio by 28% percentage points to 22% of assets.

This deliberate rebalancing supports private sector credit growth.

To benefit from the gradual recovery in economic activity.

Our loan to deposit ratio increased to nearly 72% while leverage stood at six five times well below historical levels, providing ample capacity to continue expanding our portfolio in a disciplined profitable way.

On slide five.

I am pleased to share that we are seeing tangible early results across the four key initiatives, which are central to how we engage builds in how we engage clients build out their loyalty and drive cross sell.

Patricio Supervielle: Levels, providing ample capacity to continue expanding our portfolio in a disciplined, profitable way. On slide five, I am pleased to share that we are seeing tangible, early results across the four key initiatives which are central to how we engage clients, build loyalty, and drive cross-sell. First, our innovative remunerated account that we are selectively offering in line with our cluster-based strategy continues to deepen primary banking relationships and expand our deposit base. Payroll-linked balances increased sequentially by 27% in pesos and 18% in US dollars, with new payroll accounts increasing by 53% year to date. Among SMEs, checking accounts increased 14% in pesos and 43% in dollars. Second, Tienda Supervielle, our online store hosted on MercadoLibre and integrated into our app, has surpassed half a million sessions since launch.

First our innovative Remington rated account that we are selectively offering in line with our cluster based strategy continues to deepen primary banking relationships and expand our deposit base.

11, providing ample capacity to continue expanding for you in a disciplined, profitable way.

On slide 5.

Payroll linked balances increased sequentially by 27% in pesos and 18% in U S dollars with a new with new payroll accounts, increasing by 53% year to date.

I'm pleased to share that we are seeing tangible early results across the 4 key initiatives, which are Central to how we engage builds in hole, we engage clients, build loyalty and drive. Crossle

Among Smes checking accounts increased 14% in pesos and 43% in dollars.

Second the industrial burial our online store hosted on Mercado Libre and integrated into our App.

First, our innovative remunerated account, which we are selectively offering in line with our cluster-based strategy, continues to deepen primary banking relationships and expand our deposit base.

US surpass how.

Half a million sessions since launch this initiative, which complements our value proposition with mainly platform.

<unk> in more than 175000 customers transacting with over 400000.

Payroll linked balances, increase sequentially by 27% in pesos and 18%, in US dollars with a new with new payroll accounts increasing by 53% year to date.

We reduced credit cards. This is further evidence that we are embedding ourselves in our in our clients' lives daily lives.

I'm on SMS, checking accounts, increase 14% in pesos and 43% in dollars.

Increasing engagement beyond traditional banking.

Second the in the super are online store hosted on Marcado Libre and integrated into our app has surpassed.

Third.

Patricio Supervielle: This initiative, which complements our value proposition with the MELI platform, resulted in more than 175,000 customers transacting with over 400,000 registered credit cards. This is further evidence that we are embedding ourselves in our clients' daily lives and increasing engagement beyond traditional banking. Third, our GenAI-powered WhatsApp channel was recently enhanced with new transactional features, including credit card purchases, authorizations, transportation card reloads, and mobile top-ups, turning WhatsApp into a daily banking companion. Adoption is growing rapidly. In July alone, the channel registered over 150,000 interactions, posting exponential growth since launch, reinforcing its role as a scalable, convenient service touchpoint. Fourth, new synergies between the bank and IOL invertironline, our leading online broker, are delivering solid results, leveraging IOL invertironline's 1.7 million customers to showcase banking products while preserving IOL invertironline's core identity as an investment platform.

Jen AI powered Whatsapp channel was recently enhanced with new transactional features including credit card purchases.

Originations transportation car reloads and mobile top ups.

Half a million sessions since Lounge this initiative, which complements our value proposition with the melee platform resulted in more than 175,000 customers transacting with over 400,000.

Turning whatsapp into a.

Daily banking companion.

Adoption is growing rapidly in July alone channel reduced it over 150000 interaction posting exponential growth since launch for enforcing its role as a scalable convenient service touch points unfolds.

Registered credit cards are further evidence that we are embedding ourselves in our clients' daily lives and increasing engagement beyond traditional banking.

New synergies between the bank and interacting online our leading online broker.

Are delivering solid results leveraging <unk>, one 7 million customers to showcase.

Third, our geni powered WhatsApp channel was recently. Enhanced with new transactional features including credit card purchases or authorizations Transportation car reloads and mobile top-ups turning WhatsApp into a a daily banking companion.

Banking products, while preserving yields caused identity as an investment platform in.

In just four weeks since launch over 4700 inventory online clients placed.

Adoption is growing rapidly; in July alone, your channel registered over 150,000 interactions, posting exponential growth since Lounge, reinforcing its role as a scalable and convenient service touchpoint.

$28 million in.

New synergies between the bank and in online are leading online. Broker

Dollar time deposit of the bank.

With nearly one third for trends over 180 days with only 3% of yours clients currently banking with US we are launching a targeted cross sell strategy with a compelling suite of products aimed at deepening relationships and expanding.

We are delivering solid results by leveraging our 1.7 million customers to showcase.

Patricio Supervielle: In just four weeks since launch, over 4,700 IOL invertironline clients placed $28 million in dollar-term deposits at the bank, with nearly one-third for terms over 180 days. With only 3% of IOL invertironline's clients currently banking with us, we are launching a targeted cross-sell strategy with a compelling suite of products aimed at deepening relationships and expanding our retail footprint. Lastly, since adding the IOL invertironline button to our mobile app just two months ago, we have seen a clear increase in investment activity among bank customers. These early outcomes give us confidence that our strategy can drive engagement, diversify revenues, and capture growth opportunities as our team embarks on a renewed expansion cycle. With that, I will turn the call over to Mariano Biglia, who will walk you through our financial performance and perspectives for the year.

Banking products while preserving yolles cos identity as an investment platform.

Our retail footprint.

In just 4 weeks since launch, over 4,700 Invershin line clients have placed.

Lastly, since adding the yields pattern through our mobile App just two months ago, we've seen a clear increase in investment activity among bank customers.

28 million in dollar time deposit at the bank.

These early outcome.

Give us confidence that our strategy can drive engagement diversify revenues and capture growth opportunities Arjun Gina embarks on a renewed expansion cycle.

With nearly one-third for terms of 180 days, and with only 3% of Y's clients currently banking with us, we are launching a targeted cross-sell strategy with a compelling suite of products. Our aim is to deepen relationships and expand our retail footprint.

Lastly, since

With that I'll turn the call over to <unk>, who will walk you through our financial performance and perspective for the year.

Adding the Y's pattern to our mobile app. Just two months ago, we've seen a clear increase in investment activity among bank customers.

These early outcome.

Thank you Patricia and good day to all.

Let's turn to slide <unk>.

Net income was $13 6 billion pesos in the second quarter.

Up 62% sequentially with ROE at 6% driven by higher net financial income and lower inflation of Jasper.

Give us confidence that our strategy can drive engagement diversify revenues and capture growth opportunities as Argentina and Barks On Our renewed expansion cycle.

Client net financial income was up 10% supported by wider spreads on higher loan volumes, while market related net financial income benefited from gains in our treasury portfolio.

With that, I'll turn the call over to Mariano biglia who will walk you through our financial performance and perspectives for the year.

Mariano Biglia: Thank you, Patricio, and good day to all. Let's turn to slide six. Net income was 13.6 billion pesos in the second quarter, up 62% sequentially, with ROE at 6%, driven by higher net financial income and lower inflation adjustments. Clients' net financial income was up 10%, supported by wider spreads on higher loan volumes, while market-related net financial income benefited from gains in our treasury portfolio, growing 15% quarter-on-quarter. Inflation adjustments decreased 34%, reflecting the lower impact in the net monetary position from declining inflation versus the prior quarter. By contrast, net fee income was down 13% as banking fees were not adjusted in the quarter, though repricing is underway in the third quarter. A lower contribution from our brokerage business since the lifting of FX restrictions in line with the industry trend also impacted fee income.

Thank you, Patricia, and good day to all.

Let's turn to slide 6.

Growing 15% quarter over quarter.

Inflation adjustment decreased 34%, reflecting the lower impact in the net monetary position from declining inflation versus the prior quarter.

Net income was 13.6 billion pesos in the second quarter, up 62% sequentially, with ROE at 6%, driven by higher net financial income and lower inflation adjustment.

By contrast, net fee income was down 13%.

Banking fees were not adjusted in the quarter. The repricing is underway in the third quarter.

Clients, net, Financial income was up, 10% supported by wider spreads on higher loan volumes while Market related net Financial income benefited from gains in our treasury portfolio.

Lower contribution from our brokerage business since the lifting of FX rest ratios in line with the industry trend also impacted fee income.

Growing 15% quarter on quarter.

Expenses were up 4% as costs were seasonally lower in the prior quarter.

Inflation adjustment decreased 34% reflecting the lower impact in the net monetary position from the declining inflation versus the prior quarter.

Year to date net.

Fee income was up 19%, while expenses declined 11% as we continue to simplify our structure and reduce fixed costs.

By contrast, net fee income was down 13%.

The repricing is on the way in the third quarter.

Loan loss provisions rose, 32%, reflecting loan growth and higher risk weighting from retail lending.

A lower contribution from our brokerage business since the lifting of FX restrictions in line with the industry Trend. Also impacted the income,

Mariano Biglia: Expenses were up 4% as costs were seasonally lower in the prior quarter. Year to date, net fee income was up 19%, while expenses declined 11% as we continue to simplify our structure and reduce fixed costs. Loan loss provisions rose 32%, reflecting loan growth and higher risk weighting from retail lending. Other losses increased 40%, mainly from the sale of non-core properties, while income tax benefited from a higher level of tax efficiency. Moving next to slide seven. Total loans increased 14% sequentially and 71% year-on-year in real terms. Growth in retail loans moderated to 2% sequentially after several quarters of strong expansion as we tightened underwriting policies in response to early signs of industry-wide asset quality deterioration. Other retail products, including credit cards, mortgages, and car loans, continued to expand modestly. Year-on-year, retail loans were up 130%, accounting for 47% of our total loan book.

Other losses increased 40% mainly from the sale of non core properties, while income tax benefited from a higher level of tax efficiency.

Expenses were up 4%, as costs were seasonally lower in the prior quarter.

Moving next to slide seven.

Year to date. Net income was up 19%, while expenses declined 11%, as we continue to simplify our structure and reduce 6 costs

Yes.

Total loans increased 14% sequentially.

71% year on year in real terms.

No loss, Provisions, Rose, 32%, reflecting, long growth and higher risk. Waving from Rich and Landing.

Growth in retail loans moderated to 2% sequentially. After several quarters of strong expansion as we tighten our underwriting policies in response to early signs of industry wide asset quality deterioration.

Other losses, increased 40% mainly from the sale of non-core properties. While income tax many features from a higher level of tax efficiency.

Moving next to slide 7.

The retail products, including credit cards mortgages car loans continued to expand modestly.

Total loans in.

14% sequentially.

Year on year retail loans were up 130% accounting for 47% of our total loan book.

Commercial lending was up 23% quarter over quarter led by strong growth from foreign trade loans promissory notes and overdrafts as corporate activity accelerated with commercial now representing 53% of our portfolio.

And send 71% year-on-year in real terms growth in retail loans moderated to 2% sequentially. After several quarters of strong expansion, as we tighten it underwriting policies in response to early signs of industry-wide assets, quality deterioration.

This rebalancing towards commercial lending.

Other retail products including credit cards, mortgages and car loans continue to expand modestly.

Our disciplined credit standards, while retail remains an integral part of our strategy for the long term.

Mariano Biglia: Commercial lending was up 23% quarter-on-quarter, led by strong growth in foreign trade loans, promissory notes, and overdrafts as corporate activity accelerated with commercial, now representing 53% of our portfolio. This rebalancing toward commercial lending reflects our disciplined credit stance, while retail remains an integral part of our strategy for the long term. Turning to slide eight, our NPL ratio was 2.7% in line with both historical and industry levels. Retail delinquency was 4.5%, reflecting credit normalization following the 130% year-on-year growth in retail loans and the impact of a lower inflationary environment on repayment dynamics. The NPL ratio was a low 1.4% for corporate and SMEs loans. Coverage is prudent at 130%, and we continue to fine-tune origination and collection strategies to preserve portfolio health. Provisions rose 32% sequentially to 44.5 billion pesos, lifting net cost of risk by 70 basis points to 5.5%.

Year on year, written loans were up 130% accounting for 47% of our total loan book.

Okay.

Yes.

Turning to slide eight our NPL ratio was two 7% in line with both historical and industry levels retail delinquency was four 5%, reflecting credit normalization following their warehouse around 30% year on year growth in retail loans and the impact of lower inflationary environment.

Commercial lending was up 23% quarter on quarter, led by strong growth in foreign trade, loans promising, notes, and overdraft, as corporate activity accelerated. Commercial lending now represents 53% of our portfolio.

Our repayments dynamics.

Is rebalancing toward commercial, lending, reflects or disciplined credit stands. While retail remains an integral part of our strategy for the long term.

The NPL ratio was a low one 4% for corporate and SME loans.

Coverage is programmed at 130%, we'll continue to fine tune origination and collection strategies to preserve portfolio have broker.

Provisions rose, 32% sequentially to $44 5 billion pesos.

Net cost of risk by 70 basis points to 45.

At 8 or ntl ratio was 2.7% in line with both historical and Industry levels reached the inquiry was 4.5% reflecting credit normalization following the 130% year-on-year growth in retail loans and the impact of lower inflation and environment on repayment Dynamics.

Five 5%.

This was mainly due to higher provisioning needs in retail loans under our forward looking credit models.

The MPR radio was a low 1.4% for corporate and SME loans.

Fortunately delinquency levels remained fully within the assumptions embedded in our pricing and we are adjusting our origination where appropriate.

Coverage is present at 130% and we continue to fine-tune origination and collection strategies to preserve portfolio health.

<unk> continue to fund demand in segments with the strongest risk adjusted returns.

Mariano Biglia: This was mainly due to higher provisioning needs in retail loans under our forward-looking credit models. Importantly, delinquency levels remain fully within the assumptions embedded in our pricing, and we are adjusting origination where appropriate while continuing to find demand in segments with the strongest risk-adjusted returns. Turning to slide nine, total funding increased 30% year-on-year and 6% sequentially, supported by strong dollar deposit inflows and a growing contribution from corporate notes, which now account for 6% of total funding. Peso deposits were up 24% year-on-year and up 1% sequentially. US dollar deposits were up 154% year-on-year and 16% sequentially, setting another record high at $943 million as we deepened transactional relationships with our clients. The positive trend continued into July, with US dollar deposits exceeding $1.1 billion. This solid funding base positions us to continue expanding loans while maintaining a prudent liquidity profile.

Yes.

Provisions, Rose 32%, sequentially to 44.5 billion pesos lifting net cost of Risk by 70 basis, points to 5.5%.

Turning to slide nine total funding increased 30% year on year, and 6% sequentially supported by a strong dollar deposit inflows and a growing contribution from corporate notes, which now account for 6% of total funding peso.

This was mainly due to higher provisioning needs in retail loans, under our forward-looking credit models.

Personal deposits were up 24% year on year.

1% sequentially.

Importantly delinquency levels remain fully within the assumptions embedded in our pricing and we are adjusting origination where appropriate while continuing to find demand in segments with the strongest risk have just returns.

Total deposits were up 154% year on year and 16% sequentially.

Setting another record high at $943 million as we deepen transactional relationships with our client deposits.

The positive trend continued into July with U S dollar deposits exceeding $1 1 billion.

Turning to slide 9 total funding increased 30% year on year and 6%. Sequentially supported by strong dollar deposit inflows and a growing contribution from corporate notes which now account for 6% of total funding.

This solid funding base positions us to continue expanding loans, while maintaining a prudent liquidity profile.

Peso deposits were up 24% year-on-year and up 1% sequentially.

The recent increase in the minimum cash requirement for money market funds unifying reserve requirement on demand deposits across all deposit towards allows us to pay the same interest rate to a corporate checking account to our money market funds, allowing banks to compete with money market funds in attracting customers.

US dollar deposits were up 154% year on year and 16% sequentially.

Setting, another record high at 943 million. As we deepen, transactional, relationships with our clients, the positive trend continued into July with US dollar deposits exceeding, 1.1 billion.

And thus improve the deposit mix.

Mariano Biglia: The recent increase in the minimum cash requirements for money market funds, unifying reserve requirements on demand deposits across all depositors, allows us to pay the same interest rate to a corporate checking account as to a money market fund, allowing banks to compete with money market funds in attracting customers and thus improve the deposit mix. On slide 10, net interest margin expanded 150 basis points sequentially to 20.8%, supported by strong spreads in both client and market-related portfolios. Total net financial income expanded 12% from the first quarter as client-related net financial income increased 10% on higher spreads and loan growth, while market-related net financial income rose 15%, driven by better investment returns as treasury bond yields stabilized after last quarter's sharp correction ahead of the IMF agreement in April. As shown on the right-hand chart, loan portfolio margins improved to 22.8% and investment portfolio margins to 20.1%.

This solid funding based positions us to continue expanding loans while maintaining a prudent liquidity profile.

On slide 10, net interest margin expanded 160 basis points sequentially to 28% supported by strong spreads in both client and market related portfolios.

Total net financial income expanded 12% from the first quarter as client related net financial income increased 10% on higher spreads and loan growth.

The recent increase in the minimum cash requirements for money market funds, unifying reserve requirements on demand deposits across all depositors, allows us to pay the same interest rate to the corporate checking account as to a money market fund. This enables banks to compete with money market funds in attracting customers and thus improves the deposit needs.

While market related net financial income rose, 15% driven by better investment returns as treasury bond yields stabilized after last quarters sharp correction ahead of value agreement in April.

Watching expanded 150 basis points. Sequentially to 20.8% supported by strong spreads, in both client and Market created portfolios.

As shown on the right hand chart loan portfolio margins improved to 22, 8% and investment portfolio margins to 21%.

Total net Financial income expanded 12% from the first quarter or higher spreads and non growth.

Interest spread also widened to 100 basis points to 23, 1% supporting the overall NIM recovery.

Yes.

Turning to slide 11.

While markets related, net, Financial income Rose, 15% driven by better investment, returns as treasury. Bond yields stabilized after last, quarter's sharp. Correction ahead of the IMF agreement in April.

Reflecting the election year and a longer transition period towards a more normal centric balance sheet moved to 2026, we are updating our 2025 perspective.

Mariano Biglia: The peso interest spread also widened 200 basis points to 23.1%, supporting the overall NIM recovery. Turning to slide 11, reflecting the election year and a longer transition period towards a more loan-centric balance sheet into 2026, we are updating our 2025 perspectives. We now expect real loan growth between 40% and 50%, contingent on monetary policy and regulatory developments and a more balanced mix between retail and corporate loans. On deposits, we anticipate growth of 20% to 30%, with continued improvements in the loan-to-deposit ratio. Peso deposits' growth will depend on monetary policy, while we see further share gains in US dollar deposit balances. In terms of asset quality, we expect the NPL ratio to stabilize at historical levels between 3% and 3.5%, with net cost of risk at the 5% to 5.5% range, reflecting ongoing credit normalization and the higher share of retail loans.

We now expect real loan growth between 40, and 50% contingent on monetary policy and regulatory developments and a more balanced mix between retail and corporate loans.

As shown on the right hand, charts long portfolio, margins, improved to 22.8% and Investment Portfolio. Margins to 20.1% the peso interest spread. Also widened 200 basis points to 23.1% supporting the overall new recovery.

On deposits, we anticipate growth of 20% to 30% with continued improvement in the loan to deposit ratio.

Turning to slide 11.

Deposit growth will depend on monetary policy, while we see further share gains in U S dollar deposit balances.

Reflecting the election year and a longer transition period towards a more non-bank sheet into 2026. We are updating our 2025 birth perspective.

In terms of asset quality, we expect the NPL ratio to stabilize at historical levels between 3% and three 5% with net cost of risk at <unk>.

We now, expect real long growth between 40 and 50% contingent on monetary policy and Regulatory developments. And the more balanced links between retail and corporate loans.

5% to five 5% range, reflecting ongoing credit normalization.

On the positives, we anticipate growth of 20% to 30%, with continued improvements in the loan-to-deposit ratio.

And the higher share of retail loans.

Finally NIM.

NIM is expected to trend between 18% and 20% slightly below 2024 levels as inflation continues to decline leverage increases following restrictive monetary policy.

Peso deposits growth will depend on monetary policy while we see further share gains in US dollar deposit balance.

Turning to slide 12.

Maintain expectations of net fee income growing 10% in real terms this year driven by higher bank fees asset management growth and improved insurance penetration in brokerage, we expect to leverage new business lines to offset the lower revenues of <unk> transactions.

Mariano Biglia: Finally, NIM is expected to trend between 18% and 20%, slightly below 2024 levels as inflation continues to decline, leverage increases, and following restrictive monetary policy. Turning to slide 12, we maintain expectations of net fee income growing 10% in real terms this year, driven by higher bank fees, asset management growth, and improved insurance penetration. In brokerage, we expect to leverage new business lines to offset lower revenues of dollar-map transactions following the lifting of FX controls. On expenses, our focus remains on driving sustained efficiencies in headcount and other costs, contributing to a contraction in expenses of between 5% to 8%, driving stronger operating leverage.

In terms of asset quality, we expect the MPL ratio to stabilize at historical levels between 3% and 3.5% with net, cost of risk at the 5%, to 5.5% range, reflecting ongoing, credit normalization and the higher share of retail loans.

Finally.

Knowing the lifting of FX controls.

Name is expected to Trend between 18% and 20% slightly below. 2024 levels as inflation. Continues to decline, leveraging increases and following restrictive monetary policy.

On expenses, our focus remains on driving sustained efficiencies from head count and other costs contributing to a contraction of <unk> expenses of between 5% to 8%.

Driving a stronger operating leverage.

With this we now expect our ROE to improve towards year end to a range of 5% to 10% below our original full year guidance after inflation towards a more leveraged balance sheet is longer than expected due to a tighter monetary policy and higher volatility ahead of the elections.

Turning to slide 12, we maintain expectations of net fee income growing 10% in real terms. This year, driven by higher Bank fees, Asset Management growth and improved Insurance penetration.

In brokerage, we expect to leverage new business lines to upset lower revenues of total map transactions, following the lifting of FX contracts.

This revised outlook.

On expenses, our focus remains on driving sustained efficiencies in headcount and other costs, contributing to a contraction in expenses of between 5% to 8%.

Flex margin stabilization stronger fee contributions in the second half and the full impact of our cost efficiency initiatives, while factoring in the dynamics of election year.

Mariano Biglia: With this, we now expect ROE to improve toward year-end to a range of 5% to 10% below our original full-year guidance as transition towards a more leveraged balance sheet is longer than expected due to a tighter monetary policy and higher volatility ahead of legislative elections. This revised outlook reflects margin stabilization, stronger fee contributions in the second half, and the full impact of our cost efficiency initiatives, while factoring in the dynamics of our election year. Lastly, we now anticipate the CET1 ratio to close the year between 12% and 13%. There is potential for upside if regulators approve Basel III preoperational risk treatment for Group 2 banks in line with systemic banks, in which case our CET1 ratio would have been approximately 16.7% as of June 30, 2025.

driving stronger, operating Leverage

Lastly, we now anticipate the CET one ratio to close the year between 12 and 13%.

There is potential for upside if regulators approved basal III operational risk treatment for group two banks in language systemic banks in which case, our CET one ratio.

With this, we now expect ROE to improve to a range of 5% to 10% below our original full year guidance. A transition towards a more leveraged balance sheet is taking longer than expected due to tighter monetary policy and higher volatility ahead of the upcoming digital elections.

It would have been approximately 16, 7% as of June 32025.

This revised Outlook reflects, margin stabilization stronger, see contributions in the second half and the full impact of our cost efficiency initiatives while factoring in the Dynamics of our election year.

Overall these targets reflect our disciplined I'm confident approach to balancing growth profitability and capital strength as we navigate an election year.

Lastly, we now anticipate the C1 ratio to close the year between 12% and 13%.

Still evolving macro environment.

Additional details on our quarterly performance are available in the appendix of our earnings presentation. We are ready to take your questions and please go ahead.

there is potential for upside if Regulators approved, Basel free, operational risk treatment for group 2 banks, in line with systemic banks, in which case, our C1 ratio

Mariano Biglia: Overall, these targets reflect our disciplined and confident approach to balancing growth, profitability, and capital strength as we navigate an election year and its still evolving macro environment. Additional details on our quarterly performance are available in the appendix of our earnings presentation. We are ready to take your questions. Ana, please go ahead.

Would have been approximately 16.7% as of June 3025.

Overall.

Reflect or discipline.

Confident approach.

To balancing growth.

Yeah.

Thank you Mariano at this time, we'll be conducting the question and answer session. As a reminder to ask a question unique to the connect platform.

profitability and capital strength as we navigate an election year and

is still evolving macro environment.

Platform.

To ask a question please press <unk>.

Additional details on our quarterly performance are available in the appendix of earnings presentation.

Turning to Australia question and you can also send your questions. Please.

We are ready to take your question. And now, please go ahead.

Your line.

<unk>.

We will ask you Tony maybe just have one question on that front.

Ana Bartesaghi: 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 the Zoom platform. To ask a question, please press the raise your hand button and press it again to withdraw your question. You can also send your questions in written form via the Q&A box. We will ask you to limit yourself to one question and a follow-up. Then, you can raise your hand again in another round. One moment while we poll for questions. The first questions come from Ernesto Garridondo at Bank of America. Hello, good morning, Ernesto.

Thank you.

Yeah.

One moment, while we poll sunquest cash.

Our first question comes from Amit <unk>.

Thank you. Maria know. 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 the zoom platform.

Not bank of America.

Morning, Amit.

Good morning, Thank you.

Hi, Good morning, Patricio buckle on Mariana and good morning toward your team and thanks for the opportunity to ask questions.

To draw your question, you can also send your questions in region form via the Q&A box.

My first question will be one on asset quality and cost of risk.

We will ask you to limit yourself to one question and a follow-up, and then you can raise your hand again in another round.

When looking to the NPL ratio remains.

1 moment while we pull for questions.

Still below.

Historical peak.

Ernesto Garridondo: Good morning, Ana. Thank you. Hi, good morning, Patricio, Paco, and Mariano, and good morning to all your team, and thanks for the opportunity to ask questions. My first question will be on asset quality and cost of risk. When looking to the NPL ratio, it remains still below historical peaks, but in terms of the cost of risk, it appears to be a little bit high. So, just wondering if the peak already happened in the second quarter and how should be the trend for next year.

But in terms of the cost of risk it appears to be a little bit high.

So just wondering if is the peak already happening in the second quarter.

And how should we the trend for next year.

The first questions, come from America. Hello, good morning. Good morning, Anna. Thank you. Um, hi. Good morning, Patricia Paco, and Mariano and good morning to all your team and thanks for the opportunity to ask questions.

Thank you Amit.

Yes, it's true.

Uh, my first question will be on on asset quality and, and cost of risk. Um, we're looking to the MPL ratio it remains.

<unk> ratio.

And the last two quarters increased from 2% to two.

Still below historical Peaks.

<unk>, which is which is a meaningful increase.

As you said.

Remained squill below historical standards.

We believe it's part of an industry wide trend and with the credit normalization.

But in terms of the cost of risk, it it appears to be a little bit high. So just wondering if if the peak already happening in the second quarter um and and how it should be the trend uh for next year.

Mariano Biglia: Thank you, Ernesto. Yes, it is true. The NPL ratio in the last two quarters increased from 2% to 2.7%, which is a meaningful increase. But as you said, it remains well below historical standards, and we believe it is part of an industry-wide trend with credit normalization following very, very low historical NPLs. We believe that at this stage, the economy, what is happening is also not creating jobs. Employment is stable, but it is not creating jobs. There is also a behavioral change related to a new pattern because before there was inflation, and with inflation, customers would take a loan and they would expect that the installments in real terms, they would dilute. This is no longer happening. So there is a learning curve for customers. We still think that overall the credit portfolio is healthy, and we basically are continually adapting underwriting standards more stringent.

<unk>.

Following a very very low.

Thank you, Ernesto.

No.

<unk> historical Npls.

We believe that at this stage the economy, what's happening is also not creating drops.

This component is stable, but it's not creating jobs and it's also a result saw a behavioral change.

Sure.

Related to <unk>.

Two.

New par turn because.

Before there were there was inflation.

Inflation.

Customers.

So I just want to take a known.

Got it.

<unk>.

In real terms they would die.

And this is no longer happening. So there is a learning curve for customers.

So.

But we still think that overall.

Trading portfolio is as healthy and.

It's, it's yes, it's true. Uh, the npl, uh, ratio, uh, in the last 2 quarters increased from 2% to 2.7%, which is, which is a meaningful increase. Uh, but as you said, it, it remains well below. Historical standards and, uh, uh, we believe it's part of a, of an industry-wide Trend, uh, with a credit normalization. Um, uh, following a very, very, very low, uh, npls historical npls. Um, we believe that at this stage, the economy was happening, is also not creating jobs. It's it's it's employment is stable, but it's not creating jobs and it's also. There is also a behavioral change um um um related to uh to um, a new partner because bill before they were there was inflation and with inflation. Um, uh you, the customers would take

We basically we are.

Continually adapting.

Until underwriting standards more stringent and this dynamic of course in order to make sure that.

Sure.

Portfolio remains healthy.

And by the way onshore recall data.

On the retail side, we mostly work.

<unk> dot.

Cash flow based studies.

A loan, and they would expect that the installments, uh, um, in real terms, they would they would dilute, um, and, uh, this is no longer happen. So, there is a learning curve for customers. And, uh, so, uh, but we we, we still think that, uh, overall. The the credit portfolio is is healthy. And, uh, and we, uh, basically we are uh, continually

Accounts payable at the salaries and we collect.

Mariano Biglia: This is dynamic, of course, in order to make sure that our portfolio remains healthy. By the way, also recall that on the retail side, we mostly work with clusters that are cash flow based. That is payroll accounts where we pay the salaries and we collect loans or senior citizens who have a historical good performance in terms of loans or car loans. Sorry, I do not know if you want to ask.

Launch all our senior citizens.

We'll have our historical performance.

Performance in terms of launch <unk> launch so sorry.

Sorry, I don't know if you want trial, yes, I will address.

Sure.

Two things.

Patricia mentioned the customer suffered.

Big change in equity shares.

Because they know how to work with deflation in the bus and now they need to understand how is this.

This scheme, we dealt inflation. So these are big change in their behavior also in term of management.

Ernesto Garridondo: Oh, yes. I would like to ask two things. As Patricio mentioned, the customers suffered a big change in their behavior because they know how to work with inflation in the past, and now they need to understand how this scheme is without inflation. This is a big change in their behavior. Also, in terms of management, I took several measures, actions in order to make change in the scores and also in the trade policy. Basically, I have a weekly meeting, one hour, one and a half, one hour, one and a half, and a half in order to observe all the trends and all the sales and all the binge touch in order to dip down the credit ratio. We are looking at several measures and we are observing that on a weekly basis. Thank you very much.

Duke surely measures auctions in early Q.

To make a change in the scores north of Austin.

The trade policy.

Basically a hub.

Adapting, um, under underwriting standards more stringent and this is dynamic, of course, uh, in order to make sure that uh, our um, portfolio remains healthy. Uh, and by the way, also recall that, uh, uh, we on the retail side, we mostly work with clusters that, uh, are cash flow based that is, um, payroll accounts where we pay the, the salaries, and we collect the loans or, or senior citizens who, who, who have a historical good performance in terms of, of loans or car loans. So, um, sorry, I don't know if you want to ask. Oh, yes. I would like to ask. I would like to ask 2 things, uh, strategic mentioned. The, the customers suffered a big change in their behavior, the behavior, because they know how to work with inflation in the past.

Weekly meeting.

One hour.

On our behalf in order to observe all the trends and all the sales and on the <unk> touch in order to keep down the.

Great.

And now they are they need to understand how is the this scheme without inflation. So these are big change in their behavior. Also, in term of management, I I took several measures actions in order to

So we are to get that sort of measures we are observing.

Weekly basis.

To make change in the scores and also in the in the great policy. And basically, I have

So thank you very much and then just on Costa race, because that explains the NPL ratio, but then on cost of risk how should we think about it you mentioned it could be between five to five 5% I think it was above.

6% in this quarter. So again just wanted to confirm if it has peaked for you.

And how should we be volume for next year.

Table.

A man holds a weekly meeting of one hour, one and a half hours, one hour, and one and a half hours in order to observe all the trends and all the sales and all the vintage in order to keep down the great ratio. So we are talking about several measures, and we are observing that on a weekly basis.

Randy.

Ernesto Garridondo: Then just on cost of risk, because that explains the NPL ratio, but then on cost of risk, how should we think about it? You mentioned it could be between 5% to 5.5%. I think it was above 6% in this quarter. Again, just wanted to confirm if it has peaked for you and how should we be evolving for next year? Should it be stable? Is there a rating or improving after all these policy metrics that you are implementing?

Moving after all these.

The policy metrics that you're implementing.

Yes.

Let me take that part of your question.

Yes efficacy.

The cost of risk.

Add to that.

Sure.

Being a peak at this point.

5%.

Net cost of risk on a quarter.

So we expect it to range between five five months.

For the year.

Mariano Biglia: Yes, hi, Ernesto. Let me take that part of your question. Yes, effectively, we expect the cost of risk to be at a peak at this 4.5% net cost of risk for the quarter. We expect it to range between 5% and 5.5% for the year. It should be stable within that range or also into 2026. As Patricio Supervielle mentioned, this is also a normalization of the trade portfolio, particularly in the retail segment. Changes will be more dependent on the mix of retail versus corporate, but we do not expect to go higher on this range.

And and how should we be evolving for next year? Should should it be stable is the rating or improving after all these policy metrics that you are implementing?

It should be stable within that range also into 2026.

Us.

Chris You mentioned.

That is also in our monetization of pay and great portfolio particular.

Yes, let me take that part of your question. Uh yes effectively. Uh we expect the cost of risk uh to um to to be in a big that is a 4.5%.

Our retail segment.

I think changes will be more dependent upon the mix of retail vessels.

Right.

But we don't expect a lot.

Paul higher Springs.

Perfect. Thank you Mariano and then just my second question.

Net cost of risk for the water. So we expect it to range between 5 and 5.5% for the, for the year. Um, it should be stable within that range all also into 2026

It will be on your ROE expectations.

For next year.

You mentioned for this year could be around five to 10.

But just wondering.

You mentioned that it is also a normalization of the great portfolio, particularly in the written segment.

What should be the level that the ROE could be.

Getting into next year.

And then changes will be more depending on on the mix of retail versus Corporate.

An idea.

But we don't expect.

Can it grow again.

Ernesto Garridondo: Perfect. Thank you, Mariano. My second question will be on your ROE expectations for next year. As you mentioned, for this year, it could be around 5% to 10%. I am just wondering what level the ROE could be getting into next year, just an idea of where it can go again.

Go higher on these brands.

Sure, Yes, I'll, just add that we expect our ROE to range between 5% to 10%.

D a.

Monetary policies.

Sorry <unk>.

Volatility ahead of the October elections.

Perfect. Thank you Mariano. And then just my, my second question, it will be on your Roe expectations. But for next year, as you mentioned for this year, could be around 5 to 10. Uh, but just wondering

<unk>.

Then the monetary policy to stabilize and interest rates go back down again.

<unk>.

What should be the level that the Roe could be getting into next year? You just an idea of where can it go again?

Mariano Biglia: Yes. As you said, we expect ROE to range between 5% to 10% this year as the monetary policy is still very stringent and there is some volatility ahead of the October elections. We expect the monetary policy to stabilize and interest rates go back down again after the October elections, which are by the end of October. So maybe the upside in the ROE and the presuming low growth in high growth rates will be only for the end of this year. We will see the benefits entering into 2026, where we expect to have an increase in ROE. It could be 15% for a year, but increasing quarter over quarter. It is still too early to tell how we are going to be in the fourth quarter of 2026, but we could be over that average for the year of 15%, maybe at levels between 15% and 20%.

The October elections, which are by the end of October so maybe the upside in the row and there we're assuming no growth in <unk>.

Growth rates will be.

Are you at the end of this year. So we will see the benefits entering into 2026, while we expect to have an IND.

Accretion Roe.

It could be.

Sure? Yeah, yes. As you said we expect Roe to range between 5 to 10% this year as the, uh, the the monetary policy is still very restricting. And there is some volatility ahead of the October elections, but we expect the, the, the monetary policy to stabilize and interest rates. Go back, go down again after

15% for the year, but increasing quarter over quarter. So.

Gina.

Too early to tell how we are going to be in the fourth quarter of 2020.

Could be.

All of our average for the Euro.

The October elections which are by the end of October. So maybe the upside in the Roe and the, and presuming no growth in, in high growth rates will be H, only

And maybe at levels between.

Perfect Super helpful. Thank you very much.

Yes.

Thank you Mr.

For the end of this year. So, so we will see the, the benefits entering into 2026 where we expect to have an increase in Roe. Uh, it could be, uh,

And our.

The next question comes from Ryan, Flonase, which Cte Hello, <unk> morning, Brian.

15% for the year but increasing importance of our quarter. So,

Please go ahead.

Hi, Tim Good morning, Thank you for the opportunity.

I have a question on growth because you revised your guidance downwards.

Ernesto Garridondo: Perfect. Super helpful. Thank you very much.

Still to early to tell how we are going to be in the fourth quarter of 2026. But uh, we will be uh, oh over that average for the year of 15%, maybe in levels between 15 and

And I wanted to ask you. If this has more to do with.

Mariano Biglia: Gracias, Ernesto.

No, perfect. Super helpful. Thank you very much.

Ana Bartesaghi: Thank you, Ernesto. Our next question comes from Brian Flores with CITI. Hello, good morning, Brian. Please go ahead.

Thank you.

What is happening with organic funding, which deposits right also revised downwards.

Do you think it has to do more with capital your tier one ratio because as you saw we have seen you perhaps have one of the lowest tier.

I am Flores with City. Hello. Good morning, Brian. Please go ahead.

Brian Flores: Hi, team. Good morning. Thank you for the opportunity. I have a question on growth because you revised your guidance downwards. I wanted to ask you if this has more to do with what is happening with organic funding, which is deposits, right? You also revised downwards. Or do you think it has to do more with capital? Your CET1 ratio, because as you saw and as we have seen, you perhaps have one of the lowest CET1 ratios in the system. Of course, you mentioned there could be some regular tailwinds. Just if you could explain a bit on what changed your risk appetite and also on that front, on the Basel III implementation that could happen for your segment, if you have a timeline as to when could you have this impact if you know there's any provision here.

<unk> ratio is in the system of course, you mentioned.

Hi team. Good morning, thank you for for the opportunity.

There could be some regulatory tailwind. So just if you could explain a little on what changed your risk appetite.

Uh, I have a, a question on growth because you revised your guidance downwards.

And also on that front on the basal III implementation that could happen for us.

Jure segment, if you have a timeline as to when could you have this impact.

Theres any any provision here.

And I wanted to ask you if this has more to do with, uh, what's happening with organic funding, which deposits, right? You also revised downwards, or do you think it has to do more with capital, you know, your Tier 1 ratio? Because, as you saw and as we have seen, you perhaps have one of the lowest.

Well, let me start maybe it will be complemented by.

My team, but basically.

We are going through at this stage.

Macroeconomic transition.

Uh, T1 ratio in the system, of course you mentioned. Uh, there could be some regular Tailwind. So just if you could explain a bit on on what changed your risk appetite and also on that front on the basis of 3 implementation that could happen for

Of course with our fees.

Anchor and.

Foreign exchange on car and this inflation.

Uh, your segment. If you have a timeline as to, when could you have this impact? If, you know, uh, there's any any provision here?

Mariano Biglia: Let me start. Maybe I will be complemented by my team. Basically, we are going through, at this stage, a macroeconomic transition, of course, with the fiscal anchor and also foreign exchange anchor. This inflation process will continue up to next year with a very restrictive monetary policy. While we believe that there will be a relaxation, as I think Mariano Biglia mentioned, after elections, this is, of course, having an impact this year in terms of growth because there is scarcity of funding in the system with pesos, particularly not with dollars, but with pesos. However, we believe that there is going to be an upside following elections in the sense that with the reform agenda of President Milei, there will be a new, a much better business confidence, more investments, and therefore more credit demand.

Two the inflation process.

Continue to next year.

And at this stage.

Monetary policy is fine.

While we believe that there will be a relaxation.

Mariano mentioned.

Elections.

This is of course, having an impact this year in terms of growth.

<unk>.

Because there is there is scarcity of funding in the system.

Basically with peso, particularly.

Um, uh, well, let me let me start. Uh, maybe I will be complemented by, uh, by my team but basically, um, uh, we we, we are going through at this stage, um, um, macroeconomic transition. And with a f, of course, with the fiscal anchor and uh and also foreign exchange anchor. And this, this inflation that is inflation process will continue to next year uh with a very and at this stage the the monetary policy is very restrictive.

Not withdraw.

However.

We believe that there.

There is.

There's going to be an upside.

Following elections.

And the SaaS that.

With that the reform agenda of Huntington delay.

That will be.

And you are much better.

Business confidence more investments and therefore more demand and in our case, what we I think we are doing.

There is scarcity of funding in the system, with, with a, with basically, with pesos, particularly not withdraw that, but with pesos. However, um, we we believe that there is, um,

Playing.

The ground work for the rig for the loan recovery.

Bye.

We have done in the past three months we launch.

On the graphs the base strategy, how from Minera <unk> accounts for.

Mariano Biglia: In our case, what I think we are doing is laying the groundwork for the loan recovery by what we have done in the past three months. We launched a cluster-based strategy of remunerating accounts for payroll accounts as well as SMEs. This is showing a very strong effect, driving principality with those clusters. It is, of course, increasing the funding. So we are very happy with the results. We will continue. By the way, we are about to launch in the next few weeks a joint marketing campaign between Banco Supervielle and IOL invertironline in order to make sure that we propose this remunerated, I mean, this value proposition, even a stronger value proposition than the one we have today, through to IOL invertironline clients in order to attract funding. So looking forward, we believe that we are handling, we are tackling the funding issue.

Payroll payroll accounts as well as Smes.

And this is this is showing a very strong effect.

Driving principality windows.

With those customers and it is it is of course an increase.

The funding so.

We're very happy with our results will continue.

And by the way we were about to launch in the next few weeks a joint marketing campaign with the.

Between Bank call Superman and in fact, it online in order to make sure that we propose.

Is going to be an upside, uh, uh, following elections, uh, in the sense that, uh, uh, with the reform agenda of President mle. Um, there will be an, um, uh, new, uh, a much better, um, um, business confidence, more Investments and therefore, more credit demand. And, uh, in our case, what we are. I think we are doing is, is is laying, um, the the, the groundwork, for the, for the loan recovery, um, by uh, what we have done, uh, in the past 3 months, we we launched uh, um, on a a trusted based strategy of remunerating accounts for uh, payroll, uh, payroll accounts as well as SMS. And, uh, this is this is showing a very strong effect, uh, driving principality with those SEC with those

<unk> <unk>.

This value proposition, even a stronger value proposition and the one we have today.

<unk>.

<unk> clients in order to.

Attract funding so.

Looking forward, we believe that we are handling we are targeting a funding issue.

The capital issue that you mentioned.

And when we don't feel.

On strain.

Capital at this stage.

Of course that if.

Conditions arise in the sense that there is.

Very strong loan demand next year.

<unk>.

And.

Mariano Biglia: Concerning the capital issue that you mentioned, we do not feel constrained with capital at this stage. Of course, if conditions arise in the sense that there is a very strong loan demand next year and the market conditions are there, then it might be possible that we tap the market. We are looking into opportunities of tapping the market in equity as well as in debt. It is important to highlight that capital is not restricting the loan growth for this year. The loan growth that we are projecting is more related to the profit in deposit and structural funding. We are also looking at other sources of funding, as Patricio Supervielle said.

Market conditions are there than it might be possible that we tapped the market and.

We are looking into opportunities of talking to the market and equity joined us in depth.

Okay.

ERS. And uh, it is, it is, of course, increasing the funding. So, uh, we we are very happy with the results we will continue. Uh, and by the way, uh, we are about to launch to launch in the next few weeks. A joint marketing campaign with, uh, between, um, banko superville and inverted online in order to make sure that we propose. Uh, this remunerated. I mean, at this, this uh, value proposition, even a stronger value. Proposition on the 1, we have today through uh, to invert your online clients, in order to, um, attract funding. So, um, looking forward we we believe that we are handling. We are tackling the funding issue, concerning the capital issue that you, you mentioned. Uh, we we don't feel uh, constrained with with capital at this stage, um, uh, of course.

Yes, it's important to highlight that debt and capital is not restricting the loan growth.

Our D C are the lower cost we are protecting.

It's more related to.

Coffee the positive structural funding.

But also we are looking at other sources of funding.

Thank you Sir.

And you asked also about <unk>.

That if uh, conditions arise in the sense that there is a um um a very strong loan demand next year. Um, uh and uh, the the market conditions are there, then it it might be possible that we tap the market, uh, that we all we are looking into opportunities of tapping, the market in equity as well as in depth.

Based on fee capture for regulation.

Of course, we cannot anticipate.

When or whether there isn't a lot greater.

Change is regulation, but we are optimistic because we think it was not.

Yes, sir. It's important to highlight that. A capital is not restricting the loan growth for this year. The logo that we are projecting is is more related to to the

Our reputation to be more punitive.

Prophet in deposit and structural funding.

Yeah.

Second group of banks.

But also, we are looking at other sources of funding.

Mariano Biglia: Regarding you asked also about the Basel III and Central Bank regulation, of course, we cannot anticipate when or whether the Central Bank will change this regulation, but we are optimistic because we think it was not in the spirit of the regulation to be more punitive with the second group of banks. So if they fix it before year-end, there will be a significant increase in CET1 ratio too. We are optimistic on that.

No.

They.

And before year end.

Would it be.

And regarding you as also about the Basel III and Supervielle Bank regulation. Of course, we cannot anticipate uh.

Got it.

Tier one ratio.

We are optimistic.

Yeah.

No. Thank you.

But there's a super careful wanted to make a quick follow up on it but it didn't line.

So I think this was the first quarter, where not only we saw the Greece and I think this is Greece you mentioned it in the press release has to do with it.

when or whether the the central bank will change this regulation, but we are optimistic because we think it was not in in the spirit of the regulation to be more punitive with the the second group of banks.

Deliberate decision on the effects that naturally hurts, maybe if some of the spreads.

I think what was touching her attention here is we saw decreases in the active users in the platform.

so if they if they fix it before year end, we that that will be a a significant increase in

Year 1 ratio too.

Ernesto Garridondo: Thank you, Mariano and Patricio. Super helpful. I wanted to make a quick follow-up on IOL invertironline because I think it was the first quarter where not only we saw a decrease, and I think this decrease, you mentioned it in the press release, has to do with the liberalization of the FX that naturally hurts maybe some of the spreads. I think what was catching our attention here is we saw a decrease in the active users in the platform. I know you have here in the team maybe who can provide a better explanation as to what has happened, but is this an increase in competition? Is this an increase on, I do not know, promotions by other teams? I just wanted to understand why this decrease in active customers happened during the quarter. Thank you.

We are optimistic on that.

I know.

You have here in the team.

Who can provide a better explanation as to what has happened and what is this an increasing competition.

No, thank you. Uh uh Marion and Patricio, super helpful, wanted to make a quick follow-up on inverting online.

Increasingly I don't know.

Motions by other teams just wanted to understand why these decrease inactive customers happened during the quarter. Thank you.

Yes.

Hi, Brian So I'll probably have to fund.

Your line is all of our business.

The first one.

Yeah.

We saw no more.

Volumes by retail customers.

Yes.

Mainly.

Hey, <unk>.

So that was a trend that will continue.

So I think this was the first quarter where not only, we saw the increase and I think this decrease, you mentioned it in the press release has to do with um, the liberalization of the effects, the naturally hurts, maybe some of the spreads, but I think what was uh, catching our attention here is we saw a decrease in the, in the active users in the platform. I know the uh, you have here in the team. Maybe who can provide a better explanation as to what has happened in but is this an increasing competition? Is this something an increase on? I don't know promotions by other teams, just wanted to understand why this uh decreasing active customers happen during the quarter. Thank you.

Mariano Biglia: Yeah. Hi, Brian. We have two factors that influenced our business in Q1 and Q2 also. The first one was that we saw lower traded volumes by retail customers in the Argentinian stock market, mainly equities and CDRs. That was a trend that started in February, was heading down until July when it reversed. The other one was the dollar map and the lifting of the restriction in the market. We do not see an issue in our value proposition regarding our competitors. We have a strong value proposition. We are leading in the retail market, Brazilian, and we are a solid position there. What we saw is some behavior of investors in Argentina, in Argentinian securities, with the lateral market since January and something that we brought now in July.

Hi Marie.

Jill.

Taiwan reversed and the other one was.

No.

Yeah.

Hum.

So.

We don't see.

Uneasy.

Our value proposition.

Right.

Somebody in Austin, we are leading in that.

Um, with this answer.

Yes.

Market.

Anyhow, we now.

So, that was a trend that started in February. Uh,

So.

was heading down until

We saw.

Some.

Behavior of investors in Argentina in Argentina.

July 1st, and the other one was the dollar map and the...

Securities.

Listing of the restrictions in the market.

so,

Not all of our markets John.

we don't see.

John how are you.

An issue.

Jonathan reversed.

And also.

And you mentioned amount deliveries even off of our.

In our value proposition, not in our company. We have a strong value proposition. We are pleasing in the, um,

Our two chunks.

We are now competing with banks.

Market.

Yes.

Opex, we must before OLED business and now with your banks.

Sure.

And we are so positioned there. So what we saw is some behavior of investors in Argentina in Argentinian, um,

We think.

Okay.

Moving forward.

Securities, uh, with the lateral Market since January.

We believe that.

Mariano Biglia: Also, the thing you mentioned about the liberalization of restrictions in effects, of course, we are now competing with banks for that part of the business and effects because it was before only a business for brokers and now it is banks and other institutions. We think it is moving forward and making overall, we believe that it is a good. We are optimistic about the future on the transactions and the volumes are operating because with inflation going down and the effects under control, both preconditions to have a strong capital market, we are very well positioned to capitalize on that.

and something that reversed, uh,

Good.

We are optimistic.

and also the thing you mentioned about the liberalization of, um,

Future on.

Okay.

Good morning, Michelle and Ddos.

Partitions in effects. Of course, we are now competing with banks for for that part of the business and and

Going down on the FX under control.

Our conditions to have a strong capital market.

Affect because it was before only a business for brokers, and now it's banks and other institutions. But we think, uh,

We are pretty well positioned.

Thank you.

New environment bodies.

It's a move forward. Anything forward. We believe that it's a good.

From a conversation.

<unk> received.

Too much capital market, we come capital, we see now.

On the retail business, but also find out.

In banking and SME.

we have the mistake about the the future on the transactions, uh and the volumes are operated because uh, with inflation going down and the uh, effects under control, uh, both uh,

A fever.

In this environment.

Bob.

Mariano Biglia: We think in this new environment that is a transition, as we see it, to a more mature capital market, we can capitalize in our not only retail business, but also in our private banking, SMEs, and institutional business that probably in this environment will thrive and will deliver a very good opportunity to capitalize on that.

We believe we are.

preconditions to to have a strong Capital Market. Uh, we are very well positioned to capitalize on that.

Thanks, a lot.

I think in this uh, new environment that is um,

No perfect Super clear thank you.

Thank you Brian.

So our next question comes from Carlos Gomez with HSBC.

Thank you for asking questions. Please go ahead.

the transition uh, as as we see it uh, to a more mature Capital Market, we can capitalize in our uh, not only retail business but also in our, uh, private banking SMS and institutional business that

Hello, Good morning, and thank you for holding the call.

probably in this environment, will Thrive and

The first question.

With delivery are available.

You are.

Ernesto Garridondo: Perfect. Super clear. Thank you.

Ferring with the current volatility interest rates that we're seeing.

No perfect. Super clear. Thank you.

Ana Bartesaghi: Thank you, Brian.

Container in the very high levels that we have seen recently is that firstly material is it going to affect the banking system in general.

Thank you, Brian.

Mariano Biglia: Thank you, Brian.

Ana Bartesaghi: Our next questions come from Carlos Gomez with HSBC. Hello, good morning, Carlos. Thank you for asking questions. Please go ahead.

And how long do you think it will last.

And the second going back to the company.

Carlos Gomez: Hello, good morning, and thank you for holding the call. The first question is, I would like to know how you are faring with the current volatility in interest rates that we are seeing in Argentina and the very high levels that we have seen recently. Is that first, is it material? Is it going to affect the banking system in general? How long do you think it will last? Going back to the capital, I just wanted to verify, the rules have not changed from the first to the second quarter, right? So the banks have not been able to use Basel III. When was that implemented? My point is that the decline in 150 basis points or so in this quarter, that I mean, that would have happened with or without the capital rules. Is that correct?

So, uh, our next questions come from Carlo Gomez with HFBC. Hello. Good morning, Carlo. Thank you for asking questions. Please go ahead.

I'll go back to the capital I just wanted to verify that.

From the first to the second quarter right.

The banks have not been able to.

The banks of your size have also been able to use vessels III.

When was that implemented my point is that the declining 150 basis points at all in this quarter.

That would have happened with or without.

The capital is that correct.

I will ask.

But from a cyclical question because at charter.

It's correct.

Changing duration on our risk capital requirement was implemented the first quarter.

Any change in the capital ratio from the first quarter to second quarter, it's not related to that we're really giving.

That's all.

How the capital will be with you today.

Hello, good morning and thank you for holding the call. Um, the first question uh, is I would like to know how you are. Um sharing with the current volatility and interest rates that we are seeing in Argentina, and the very high levels that we have seen recently, uh, is that first received material, is it going to affect the banking system in general? Um, and how long do you think it will? Last, um, and the second going back to the C, should I start later going back to the capital? I just wanted to verify the rules have not changed from the first to the second quarter, right? Uh, so the banks have not been able you, the banks of your sites have not been able to use personal 3. Uh, when was that implemented? My, my my point is that the decline in 1506 points? So in this quarter at that, I mean that would have happened with or without uh, the capital rules is that correct?

Mariano Biglia: I will ask a start from the second question because it is shorter. It is correct. The change in regional risk capital requirements was implemented in the first quarter. Any change in the capital ratio from the first quarter to the second quarter is not related to that. We are only giving a guidance on how the capital will be if that regulation equalizes the group two to the group one or systemic banks level. It has already been implemented at the end of the first quarter.

That regulation equalizes ACOG due to that one.

Systemic banks level.

But this has already been.

And again that will be 200, then when we get this question 290 basis points uplift. So you'll see the one if you were able to play vessels. That's your own calculation I would imagine right.

Correct.

Okay.

Thanks.

Remember in this quarter, we had David and so that I think Julien in that and what you're mentioning.

I will ask start from the second question because it's shorter. It's it's correct, the change in was printed in the first quarter. So any change in the capital ratio from the first quarter, to the second quarter is not related to that. We are only giving a guidance on how the capital will be with, if they, if that regulation, equalizes a group 2 to the group 1,

Or systemic Banks level.

CQ, one declining from one or two.

Carlos Gomez: That will be a 200, and from your description, 280 basis points uplift to your CET1 if you were able to apply Basel III. That is your own calculation, I would imagine, right?

Thank you. Thank you.

Loan growth.

Also we had.

I meant <unk>.

Remember, we ask you to possibly yet.

Mariano Biglia: Correct. That's our own calculation.

But but it's has already been in place at the end of the first quarter, okay? And again, that will be a 200 and from your description, 280 basis points, uplift to your C1. If you were able to apply Basel 3, that's your own calculation. I would imagine, right?

A one.

Ana Bartesaghi: Just something in addition to this last question. Remember, in this quarter, we had dividend payment. That is included in what you mentioned in terms of CET1 declining from one quarter to the other one.

Correct, that's all.

My name is Nicole.

That's something. In addition to this last question.

Okay. Thank you so much.

Oh.

So yes.

Yes.

First question.

Carlos Gomez: Very clear. Thank you.

Remember, in this quarter we had a dividend payment, so that is included in what you mentioned in terms of C1 declining from one quarter to the other.

I think regarding the first question is yes, basically this uplift in interest rates has been very significant.

Ana Bartesaghi: Loan growth, but also we had dividend payment. Remember, we as a group of Supervielle, we only pay once normally in the second quarter.

Very clear. Thank you.

And.

And of course it is.

Long growth but also we had dividend payment. Remember we, as we only pay once

These are affecting.

Carlos Gomez: Okay. Thank you so much.

In the second quarter.

The monetary conditions so banks.

Okay, thank you so much.

Crunch may high interest.

Mariano Biglia: Regarding our first question, yes, this uplift in interest rates has been very significant. Of course, it is affecting the monetary conditions of banks and liquidity crunch. Very high real interest rates are harmful for the economy, but we believe that it is going to be transitory until elections. Then they will relax because basically, they want to make sure that not only inflation goes, there is no pass-through from the devaluation to prices. This is why they are extremely restrictive. I agree. This is a level of real interest rates that we have ever seen, at least in recent years. We firmly believe it is temporary. It is not a level of rate that is sustainable in the long term because it will have an impact not only in the financial industry, but in the overall economy.

Interest rates.

So regarding yeah.

Powerful.

They are harmful for the economy, but we believe that is going to be.

Transitory until elections.

And then they will relax because basically they want to make sure of that.

And not only inflation goes.

No pass through.

From the devaluation to prices and so basically this is quite yet.

Extremely restrict.

I don't know if you want to correct yes.

Yes.

This is a level of reality.

First rates.

Uh huh.

In recent year.

So so we firmly believe it.

Alright.

Great that is sustainably.

Okay.

I have an impact.

As an industry.

Over our economy.

I think regarding the first question is is, yes, it's basically this uplift in in interest rates has been very significant and uh and of course it is a it it is affecting uh um um the the monetary conditions of Banks and liquidity crunch, very high in real interest rates. Um I think half half they are harmful for the economy but we believe that it's going to be uh, transitory until elections. Um, and then they will relax because basically, they want to make sure that uh the not only inflation goes. Um, there is no pass through uh, from the the, the evaluation to prices. And so basically, uh, this is why they are, they are very extremely restrictive to me.

I don't know if you want to add.

So what we believe is that.

Central Bank and government is prioritizing.

Yes, I agree. This is a level of real.

Control of the <unk> exchange rate.

To have volatility in interest rates.

Exchange rates.

More sensitive that foreign trade show enough on consumers.

Interest rates that uh, we have never seen at this recent years. Uh, so so we firmly believe it. It's temporary uh it's not a level of trade that is a sustainability in the long term because it will

Remembering in three weeks, we have and it shows the promise of consignment.

But not only the financial industry, but

Mariano Biglia: We believe that the Central Bank and the government are prioritizing the control of the volatility in the exchange rate. I prefer to have volatility in interest rates, but not in the exchange rates. It is more sensitive for inflation or for consumers ahead of the elections. Remember, in three weeks, we have elections in the province of Buenos Aires that are like a thermometer for the national elections. This level of interest rates is after September elections or at the latest after October elections. That is our view.

Overall economy.

Alright, thank you.

Instead, our home turf far and rationale and elections so.

so the, what what we believe is that

This level of interest rates.

After after.

Central Bank and and the government is prioritizing the control of the volatility in the exchange rate.

September actuals are.

Latest after October.

Our view.

And.

What's the rate that affect your clients because we I mean, there have been all these things the monetary policy. There is no set reference rate if I understand correctly.

And I prefer to have volatility in interest rates, but not in the exchange rate. It is more sensitive to inflation and for consumers ahead of the elections. Remember, in three weeks, we have elections and the problems of ponos that...

What is the most used the benchmark.

They are like a thermometer for national elections. So, uh,

Is it different.

Marketing for sleeping how has that evolved relative to what we're seeing is that some monetary policy.

This level of interest rates is after the September elections or, at the latest, after the October election. That's.

Our view.

Carlos Gomez: What is the rate that affects your clients, right? Because we, I mean, there have been all these changes in monetary policy. There is no set reference rate, if I understand correctly. What is the most used benchmark? Is it Batlar? Is it a different market interest rate? How has that evolved relative to what we see in terms of monetary policy?

It's funny.

Tamara interest rate yourself.

50%.

The one day interest rate is 67%.

That's of course well above.

Sanction expected for the next 12 months.

25%.

So those are the rates that impact mainly.

Short term loans.

And what, uh, what is the rate that affects your clients, right? Because we I mean there have been all these things. The monetary policy there is no set reference rate if I understand correctly. Um, what is the most used Benchmark is? There is it Butler? Is it a different um, uh, Market interest rate and how has that evolved relative to to to what we think that's a monetary policy.

Mariano Biglia: Yes, for instance, the Tamar interest rate is now at 50%. The one-day interest rate is at 67%. That is, of course, well above an inflation expected for the next 12 months of 20% to 25%. So those are the rates that impact mainly in the short-term loans because for the longer-term loans, we are expecting a decrease in the interest rates. They are not as affected as one-day loans or 30-day loans. It affects mainly the corporate side of the portfolio.

Are there no longer term loans.

We are.

Yes, for instance, the Tamar interest rate is now that.

Increasingly Australia, so they are not as effective as one Daytona.

50%.

And the 1-day interest rate is at 67%.

Thank you.

So FX mainly that incorporated.

So Europe corporate to enable Ralph when you most of our contracts are based on Butler or tomorrow.

that's of course, well, above and inflation expected for the next 12 months of 20 to 25%,

What print.

So those are the rates that mainly impact the short-term lows, because.

It's the market interest rate, but.

No longer term loans.

We are.

It affected mainly by Tomorrow I'm, sorry, it's not.

expecting increasing the

Long term loan say forever right some cases.

So, they are not as effective as the 1-day loss or the 30-day.

Like that's mainly for the west waste.

Carlos Gomez: So again, your corporate, when they borrow from you, most of the contracts are based on Batlar or Tamar or what rate?

And also, it affects mainly the corporate side of the...

Market for overdrafts or.

Document.

So, so, so again, your corporate, when they borrow from you, most of the contracts are based on Butler or Tamar or what rate?

The market interest rate, but of course, it takes us a reference.

Mariano Biglia: is a market interest rate, but it is affected mainly by the Tamar interest rate. It is not that they take long-term loans at variable rates. Some cases are like that, mainly for the ones who issued in the capital markets for overdrafts or discounted documents. The market interest rate, but of course, it takes as a reference both the Tamar and the one-day interest rate because that is a funding for the very short term.

Of all of the demand on that one.

<unk> interest rate because that's the timetable for that very shortly.

it's, it's a market interest rate but it's affected mainly by by

And demand was 32% I was hoping for this product.

It's not that they take long term loans at viable rates, some cases are are are like that maybe for the ones who wish in the Capital Market.

Okay.

Thank you so much.

For overdrafts or or discounted documents.

Thank you Carlos.

Our next question will come from Frank.

And then with.

The market interest rate, but of course it takes as a reference.

Good morning, David.

Yeah.

Good morning, everyone. Thank you for the quarter.

Carlos Gomez: The Tamar was 32% or so before this volatility?

Both the TAMAR and the 1-day interest rate are important as they serve as funding sources for the very short term.

A question on following the.

Mariano Biglia: Yes, correct.

And the bank was approximately 32% or so before this volatility.

One on the Mpls didn't get it.

Carlos Gomez: Okay. Thank you so much.

Do you think retail npls have already become the second Q <unk>.

Yes, correct. Okay, thank you so much.

Ana Bartesaghi: Thank you, Carlos. Our next question comes from Pedro Enchantment with Latin Securities. Good morning, Pedro.

You'll see further pressure on.

Thank you, Carlos.

Given the rate volatility.

Yes.

<unk> seen that.

Our next question comes from Pedro, often heaven with Latin security. Good morning, Pedro.

Hey, Tom Splaine.

Carlos Gomez: Good morning. Hi, everyone, and thank you for the call. I had a question following Ernesto's one on NPLs. I did not get if you think retail NPLs have already peaked on Q2 and if you see further pressure on SMEs given the rate volatility.

Now mix of the NPS.

The retail side.

Our system is now.

Laughter.

May.

Four five okay.

Mpls.

So we are in line with our system.

Good morning. Hi everyone. And thank you for the call. I had a question following Ernesto. On NPLs, didn't get if you think retail and bills have already peaked in the second quarter, and if you see further pressure on SMS, given the rate quality.

We see a peak in the cost of risk.

Mariano Biglia: Yes, what we are seeing, Patricio explained the dynamics of the NPLs on the retail side. The system is now, so last data published as of May, at 4.5% NPLs. We are in line with the system. We see a peak in the cost of risk. The NPLs could go a bit higher as we gave in our guidance for the overall NPLs combining retail and corporates. By year-end, we expect it to range between 3% to 3.5%, whereas we are now at 2.7%. For NPLs, they are quite deep and needed room to grow at the year-end.

Chris.

The Mpls could go.

Higher.

What we are seeing, uh, Patricia, explain the dynamics of the MPS.

We gave you our guidance for the overall empiric, combining retail <unk> corporate.

Uh, the system is now.

By PRA, we expected to range between three to three 5%, whereas we are now whatsoever.

So, last that I published, as of May, at 4.5% MPS.

So for NPS there could be.

So and we are in 9 with the system.

uh,

Through Q2.

Alright.

Yes.

We see a peak in the cost of risk, and the MPS could go a bit higher.

We.

We maintain this.

All right.

We would see some pressure.

Yes of course.

Yes.

Great.

<unk>.

Uh, as we gave in our guidance for the overall MPS, combining retail and incorporating it, by the end, we expected to range between 3% to 3.5%. Whereas we are now at 2.0%.

Sure Bill.

Yes.

<unk> seen some pressure to semi.

So for MPS, there could be...

All right.

And working capital.

Ernesto Garridondo: But yes, Pedro, if we maintain this level of rates, yes, we would see some pressure to SMEs. Yes, of course. But there's this transition. It's a short period, but yes, we are seeing some pressure to SMEs in terms of working capital, that's basically. But we are thinking, we hope that it's a very short period. But if we maintain this kind of level of rate volatility, yes, we will see some pressure to SMEs also, to the corporate, because the one-day money is very, very high.

Okay.

This room 622 to grow until year end.

Okay.

Right.

but the US is, we

We are seeing gives me confidence.

Short period.

If we maintain these kind of this level of volatility or volatility we will see some pressure to SUV segment.

We maintain this; at this level of rates, we will see some pressure on SMEs. Yes, of course. But.

Also through the corporate costs.

There's this transition in a short period, but yes.

Alright.

Okay.

Okay. Thank you all very much.

We are seeing some pressure to turn off working capital as basically.

Thank you all.

No.

Do you have any follow up.

Yeah.

No no follow up here.

Clear.

Thank you.

No I will answer maybe we will.

We we we, we are thinking we hope that it's a very short period. But if we maintain this kind of this level of of volatility or Freight volatility is, we will see some pressure to see me second

Jenny will have any at all.

Dan.

And final question.

also, to the corporate know, because the 1 de money is very very

Mariano Biglia: Okay.

high.

Julian.

Carlos Gomez: Okay. Thank you very much.

Okay.

Oh I'm sorry.

Ana Bartesaghi: Thank you, Pedro. I'm sorry, do you have any follow-up?

Michael <unk> from Nordea.

Okay, thank you very much.

Thank you.

Hey.

Thank you again, maybe this is for you.

I would like to know how much what's the charge.

I'm sorry. Do you have any follow-up? Know.

Mariano Biglia: No, no follow-up. It was clear.

Ana Bartesaghi: Okay. Thank you.

Expenses for let's say jumping noncore properties.

Mariano Biglia: That's good.

Ana Bartesaghi: Thank you. No, I will answer. Maybe we will answer first some of the Q&A we have in the box, then we have further questions on the audience. First one comes from Marco Cerú from Balanz. It is a very technical, maybe this for you, Mariano. I would like to know how much was the charge registered under other expenses for the sale of the non-core properties?

No. No. Follow-up was here. Okay. Thank you.

And then where do you think that line item was that 5 billion pesos.

So.

Total of ethylene.

Thank you. Now I will answer maybe we will answer first some of the Q&A we have in the box, and then we have further questions from the audience.

As a part of that.

Is related to the setup.

First, one comes from Marco; the second comes from malaria.

Sure.

Okay and then.

Thanks Tommy.

And my company.

What would be the case.

It's a very technical question for you, Marion. I would like to know how much was the charge registered under other expenses for the sale of the non-core properties.

Mariano Biglia: The net loss registered in that line item was 5 billion pesos. So, of the total of that line item, that is the part that is related to the sale of non-core properties.

No Sam.

All lines have line of sight.

Oh.

Uh, the net, net, net loss. Registering that line item was a 5 billion pesos.

Yes of course.

so,

The election of the promised I'm going I'm sorry. This is the first one.

Of the total battling item, that is the part that...

In September to follow.

is related to the sale of non-core property.

Ana Bartesaghi: Okay. Another from Ernesto Garridondo with Bank of America. On the macro and political landscape, what would be the key rates to follow, for example, the election of the province of Buenos Aires?

I think.

One half rent.

It will be may be difficult to understand the results because.

And maybe there will be let's.

Let's say the pending.

Okay. And then another from, we don't know with BofA on the macron, political landscape, what would be the key date to follow? For example, the election of the points of Venus

Mariano Biglia: Yes, of course. The election of the province of Buenos Aires is the first one in September to follow. I think from what I have read, it will be difficult to understand the results because there will be, depending, overall on the province one result favoring La Libertad Avanza, and another result in a particular district of the conurbano will be another winner. We do not know. What I think will be much more powerful is the October election, where we are seeing that there is a continued support for the president's policies above 50%. This will probably, if this is what we expect, be a very strong support for the second term of the mandate after the October elections.

There will be overall on the province, one result.

Favoring maybe.

<unk> may be another result in.

Uh, from, uh, yes. Of course, uh, the election of the province, I'm going to say this is the first one in, in, in September to follow and I think,

In particular.

I think that this cheap.

Is of new <unk>.

That will be another winner may be we don't know when.

Definitely.

But I think we'll be much more powerful.

And to be October election.

Definitely we are seeing.

There is a continued support for the President's policies.

About 60% so this will probably.

This is what we expect.

Very strong support for the second time among thanks Pat.

Okay.

After the October elections.

Okay.

We have another question.

For for what I have read it it it will be maybe difficult to understand the results because, um, maybe there will be, let's say, depending, uh, there will be overall on the province uh, 1 result when uh um favoring. Maybe the la la la and maybe another result in uh in uh in a particular District uh uh of the convo. Well um, where there will be another winner, maybe we don't know, but but but uh, definitely. And what I think will be much more powerful is, um, uh, the October election, where definitely we are seeing, um, that there there is a continued support,

Hi, Lisa.

And then with the 10-K.

Good morning.

Thank you for asking questions. Please.

Good morning, everybody and thank you for the call.

What's the goal line, we didn't news to us.

First question on this follow up now you hear us.

Bought for the president policies, um, above 50%. So, uh, this this will probably, uh, give. This is what we expect, uh, um, a very strong support for the second term of the Mandate in. But um, after the October elections,

Comment on is in line with it.

And <unk>.

Ana Bartesaghi: We have another question from Fernando Zabaleta, I think with Banco Pichincha, isn't it? Hello, good morning, Fernando. Thank you for asking questions. Please go ahead.

<unk>.

<unk>.

<unk> USD <unk>, 40% to 50% increase in loans, we have seen the loans increasing.

During the year, but also by the ACO mentioned before there is been a challenge to.

Fernando Zabaleta: Good morning, everybody, and thank you for the call. My question goes in line with Ernesto Garridondo's first question and this follow-up that you just commented, and it is in line with the NPL and the projections. You are still projecting a 40% to 50% increase in loans. We have seen the loans increasing during the year. Patricio Supervielle mentioned before that it has been a challenge to create jobs for the government. My question goes in line with how difficult or how important, I think Ernesto Garridondo just asked the same question, is the election that you have because the last election is in October, and how will it impact in your projections? I think it was mentioned before too how you guys are thinking on controlling the increase of the NPL and not to get to a ratio where it could be kind of difficult to manage.

Okay, we have another question from Fernando sabala, I think we good morning Fernando, thank you for asking questions, please go ahead.

To create jobs for the for the government.

My question <unk> language.

How difficult or how important I've seen in music.

Good morning, everybody, and thank you for the call. My question goes in line with Ernesto's first question and this follow-up that you just commented on, and is in line with the...

Ask the same question is then assume that your comp because the last elections in October and how would impact in your predictions and.

I think it was mentioned before to how to utilize our thinking on controlling the increase.

Affecting 40 to 50%, increase in loans. We have seen the loans increasing, uh, during the year but also Patricia mentioned, before that it's been a challenge to

The increase of the MBA.

The way to a to a ratio where it could be.

Kind of.

Difficult to manage and it goes in line to that.

Yeah.

That is still open.

And the accounting could be go in different directions.

How difficult would be Ohio would change or the difference scenarios for you right you are monitoring or they evaluate into.

To meet those proceeds and a 42% increase in loans. Thank you.

To create job for the, for the government. Uh, my question, go in line with how difficult, or how important I think and measure just just as the same question, is the election that you have? Because the last election is in October. And, and, and how will impact in, in, in your projections. And, and I think it was mentioned before, too, how to you guys are thinking on, controlling the increase of the MPL and and not to get to a, to a ratio where it could be and kind of

Fernando Zabaleta: It goes in line to that, just considering that the last election is in October and the country could be going in different directions. How difficult would it be or how it would change or the different scenarios for you guys that you are managing or evaluating to meet those projections of 40% to 50% increase in loans? Thank you.

Okay.

Okay first of all I think that.

Yeah.

Yeah.

And personally I'm very optimistic.

Difficult to manage. But it goes in line with that. It's just considering that the last election is in October, and the country could be going in different directions.

With the elections in the sense that.

These are the important ones.

Right.

Hum.

Hi, Santiago.

How, how, how difficult would it be, or how would it change, or what are the different scenarios for you guys? You are managing or evaluating to...

September election promise I'm wondering if that is what you might be difficult stacked and with different.

To meet those projections, a 40% to 50% increase in loans is expected. Thank you.

Mariano Biglia: First of all, I think that personally, I am very optimistic with what I just said with the October elections in the sense that these are the important ones. I said the September election in the province of Buenos Aires might be difficult to understand, but the October elections is basically what will give the mandate for the second part of the government. President Milei has stated that in the second part of his government, he will concentrate on fiscal reform and labor reform. I believe that also what will happen is that there will be an uplift or liberation of the foreign exchange market for corporations after the elections. The business climate will improve. We expect this, and this will drive loan demands. I do not know if I answered your question, but maybe.

Oh.

Lisa.

Difficult to understand but the October election, Skus basically what will give the mandate for the second part of our government.

first of all, I I think that

And.

Uh huh.

<unk> has stated.

And the second part of his government he will concentrate in.

Fiscal reform Labor reform.

Yeah.

I believe that.

personally, I'm very optimistic with what, as I said with the October elections, in the sense that these are the important ones. Uh, but uh, um, I said the other, the September election Province. Iris, we might be difficult to understand with different. Uh, um, um,

Also what would happen is that there will be an uplift.

Duration of the foreign exchange market for corporations.

Difficult to understand. But the October elections are basically what will give the mandate for the second part of the government.

After the elections.

and uh, uh the

<unk>.

Business climate will improve.

We expect these and this will.

Drive loan demand.

Male has stated that in the second part of his government, he will concentrate in, um, fiscal reform and labor reform.

And so I.

and,

I don't know if.

On your question, but maybe.

Yes.

Silver.

Remember that these projects are based on our macro scenario, what we see.

Um, I believe that also what would happen is that there will be an uplift or liberation of the Foreign Exchange Market for corporations.

Uh, after the elections.

So shouldn't that 28% interest.

The interest rate Mark that I have mentioned before.

So, the business climate will improve.

50%.

We expected.

25% before year end.

Um, we expect this, and this will, uh, drive loan demand.

So that's it.

Scenario consistent with it.

Fernando Zabaleta: Yes. Also, remember that these projections are based on a macro scenario where we see inflation at 28%, interest rate at Tamar that I mentioned before now jumps to 50%, but we expected as low as 25% for year-end. That is a scenario consistent with the good result for the government that will foster loan growth.

Okay.

That will foster load growth.

Okay.

Thank you very clear.

Um, so, um, I don't know if I answered your question, but, uh, maybe yes. And, and also, uh, remember that these projections are based on a macro scenario where we see.

Thank you.

I think we have a follow up call.

C E.

Yes, Tim.

Tim Thank you very much for for the opportunity here.

Just wondering on your NIM expectation because I think you maintained up 18 to 20.

Station at 28% and interest rate data mark that I mentioned before now, chance 50%. But we expected as low as 25% for year end, so that that is in a scenario consistent with a good result.

The government.

And we saw the contribution from commercial loans.

Mariano Biglia: Perfect.

That will Foster low growth.

Perfect.

Carlos Gomez: Thank you. Very clear.

Growing significantly quarter over quarter, which obviously has to do with the conditions, you're seeing in terms of asset quality on the retail side. So just could you elaborate a bit on what are you expecting in terms of contribution from retail versus corporate in that prediction that youre, making on NIM is this already including I would say us.

Mariano Biglia: Thanks.

Ana Bartesaghi: Thank you, Fernando.

Thank you very clear.

Mariano Biglia: Thank you, Fernando.

Ana Bartesaghi: I think we have a follow-up from Brian Flores with CITI. Brian?

Thanks, thank you. Fernando.

I think we have a follow-up from Brian Flores with the City.

Brian Flores: Yes, team. Thank you very much for the opportunity here. Just wondering on your NIM expectation because I think you maintained at 18% to 20%. We saw the contribution from commercial loans growing significantly quarter over quarter, which obviously has to do with the conditions you are seeing in terms of asset quality on the retail side. Could you elaborate a bit on what you are expecting in terms of contribution from retail versus corporates in that projection that you are making on NIM? Is this already including, I would say, a higher contribution, sorry, from commercial loans, or is it 50/50? Just wondering here how is the composition by year-end in your view?

Yes.

Let's say a higher contribution sorry from.

Team, thank you very much for for the opportunity here. So just just wondering on your name expectations because I think you maintained at 18 to 20

Commercial loans or is it 50 50, just wondering wondering here how does the composition by yearend in your view.

and we saw the contribution from commercial loans.

Yes. Thanks.

For your question.

We expect it to have a.

Automotive on a contribution we expect portfolio.

To maintain these 60% already.

Okay pancake segments.

Yeah.

We could see some change by the end of the year, but more of a contribution to the NIM.

Growing significantly quarter over quarter, which obviously has to do with the conditions you are seeing in terms of asset quality on the retail side. So just could you elaborate a bit on what are you expecting in terms of contribution from retail versus corporates in that projection that you're making on Nim? Uh is this already? Including I would say a a a a I would say a higher contribution, sorry from commercial loans or is it 50/50 just wondering here how the composition by year end in your view.

Mariano Biglia: Yes, Brian, thank you for your question. What we expect is to have an almost even contribution. We expect the portfolio to maintain this 50% for each of the banking segments. We could see some change by the end of the year, but for the contribution to the NIM, it will be more or less balanced as we expect.

It would be fine by us.

Let's switch back.

Okay, but just a quick follow up here so yes, we.

Yes, Brian. Thank you for your question. Uh, what we expected is to have an almost even contribution, we expect the the portfolio.

We see for example, I don't know worsening conditions in in retail would you be able to be.

To maintain this 50% for each.

And be a bit more aggressive on the commercial side or or.

Banking segments.

Sure.

We'll go along with the plan because penetration is below.

Yes enough data would be more aggressive on the commercial side, but also on the retail side at least.

We could see some change by the end of the year, but for the contribution to the name, it will be more or less balanced.

As we expected.

Brian Flores: Okay. Just a quick follow-up here. If we see, for example, worsening conditions in retail, would you pivot and be a bit more aggressive on the commercial side, or will you go along with the plan because you know penetration is still low?

Longer duration loans.

Okay, but just a quick follow up here. So if

So it's not even in that case.

Alright.

The critical visuals.

Our loan portfolio.

Chuck.

A bit more aggressive on the commercial side, or will you go along with the plan because, you know, penetration is still...

Mariano Biglia: Yes, in that case, we would be more aggressive on the commercial side. On the retail side, we have longer duration loans. It is not that even in that case, if we are consistent on the credit conditions for individuals, the loan portfolio will not drop sharp. Even that in our base case scenario, in our base scenario, not best case, we expect to be adjusting our credit policies, but allowing the loan portfolio to grow in a healthy manner.

But even that our base case scenario.

Okay.

Low. Yes. In that case, we would be more aggressive on the commercial side.

Uh huh.

We expect.

To be adopted.

but uh, also uh, on the written side, we have

Policies, but allowing for the.

Okay.

Well, thank you very clear thank you.

Yes.

Yes.

A longer duration loans. Uh, so if it's not that, even in that case, is on the credit conditions for individuals, and then the loan portfolio will not, uh, draw.

What's your name box.

and,

Hi, Matt.

So first one Jim can.

But even that, in our base case scenario, in our base—and are you not best case?

Yeah.

International Finance you name it does imply that things will be I don't think.

And you always cross hatch.

We expect to be adjusting our credit policies, but allowing the number for you to grow in.

Brian Flores: Thank you. Very clear, Mariano. Thank you.

I think yes.

No, no. Thank you very much. Thank you.

Yeah.

I would say that.

Ana Bartesaghi: We have another question on the Q&A box. I think we have some five minutes to take it. First one, as the Argentinian economy stabilizes, do you see international financial institutions interested in getting into the Argentine market? Any worries, concerns?

And we've seen them move.

And we know that.

There are new players coming into the market.

Neo banks successful neo banks.

Europe.

Or.

Thanks for that.

That our plan can be come backs. So I think this is a very positive signal.

5 minutes to take it. So first 1 as the Argentinian come economy is stabilized. Just International financial institutions interested in getting into the Argentine Market, any worries concerns.

Mariano Biglia: I think, yes. I would say that we have seen and we have heard, we know that there are new players coming into the market, successful neobanks in Europe or big techs that are applying to become banks. I think this is a very positive signal, first of all, for Argentina in terms of confidence in Milei's government and what his agenda. I think this is the first thing, very positive. Of course, in our case, our challenge is to continue strengthening our competitive position, to continue simplifying and digitizing our operations to make it simpler and agile for customers. I believe that what we have done in terms of remunerating accounts has been the first bank in the country to do this. We are anticipating what the fintechs will do when they start playing in the market.

Um, I think yes. Uh,

First of all for.

Argentina.

Two two in terms of confidence in that <unk> government and what he's he's agenda I think so this is first to protein, but very positive.

Of course.

In.

In our case and our challenge is to continue.

A strengthening.

Competitive position to continue.

Simplifying and digitizing digitizing our operations to make it more simpler for.

John Faulk forecast tumors and.

<unk>.

We I believe that.

We have done in terms of Remunerating accounts.

I have been the first bank in the country to do this we are anticipating a fintech will do and when they start playing in the market. So.

I would say that, um, I am we've seen and we've, we've heard and we know that, uh, there are a new players coming in into the market. Uh, um, Neo Banks, uh, successful Neo banks in in, uh, Europe or so, uh, I think this is a very positive signal. First of all, uh, for uh, Argentina and to, to, in terms of confidence in in, uh, in Maz government and what he's his agenda, I think. So, this is first, the first thing, very positive, um, of course, we um, in our case and, uh, our challenge is to continue, uh, strengthening, uh, our competitive position to continue, um, simplifying and digitized digitizing our operations, to make it more simpler for

You see something that.

We will be will.

Um, and agile for customers and, uh, we

Give us a.

<unk> competitive position in addition.

All these international pay us they are looking to intervene to individuals.

Some of them the bottom up maybe the bottom line of the of the pyramid.

Mariano Biglia: This is something that we believe will give us a good competitive position. In addition, all these international players, they are looking to individuals. Some of them, maybe the bottom line of the pyramid, the underbank, some of them. The others, maybe another one might be on the premium side, but no one at this stage is really taking care of SMEs. We believe in a balanced approach. We believe that the way looking forward for us to compete is to have a balanced approach and to provide good services with all the SMEs, particularly the value chains of dynamic industries, and make sure that we get the cash management, making sure that we provide trade finance and leasing and so on. This is going to be our anchor as well as the payroll account. We believe that in this sense, we will be able to compete effectively.

And the bank some of that the others, maybe another one might.

Might be.

On the <unk> on the premium side, but on but.

But no one at this stage is taken care of.

<unk>.

So we believe in a balanced approach, we believe that the way looking for us for us to compete is to have a balanced approach and to.

Provide good services with all DSL means, particularly the value change of dynamic industries and make sure that we get the cash management, making sure that we provide in our trade finance and.

Leasing and so on so.

We I believe that uh what we have done in terms of remunerating accounts, uh, I've I've been the first bank in the, in the country to do this. We are anticipating what, uh, the fintechs will do, uh, when they start playing in the market. So, uh, this this is something that, uh, um, we, um, we believe that we will, will give us a a good competitive position. In addition, uh, all these International Players, they they are looking to indivi to individuals. Um, some of them, the bottom, maybe the bottom line of the of the pyramid, the the and the bank, some of them, the others, uh maybe another 1 would, might be on on on on, on the T, on the premium side, but on. But but but no 1 at this stage is really taking care of

SNES.

This is gonna be our anchor as well as payroll accounts. So we believe that.

In this sense, we will be able to compete effectively.

Okay. I think we would have reached the end of the Q&A session. So thank you for joining US today. We appreciate your interest in our company.

For one thing.

Over the coming months, providing fine.

So we believe in a balanced approach we believe that the way looking forwards for for us to compete is to have a balanced approach and to to to provide good services with all the SMS. Particularly the value chains of dynamic Industries and make sure that we get the cash management, making sure that we provide, you know, trade finance and uh and Leasing and so on. So uh and this is going to be our anchor and as well as

Shannon business updates next quarter in the interim we remain available to answer any questions that you may have so have a good day.

The payroll account. So we believe that we we in, in this sense, we will be able to compete effective.

Ana Bartesaghi: I think we have reached the end of today's Q&A session. Thank you for joining us today. We appreciate your interest in our company. We look forward to meeting more over the coming months and providing financial and business updates next quarter. In the interim, we remain available to answer any questions that you may have. Have a good day.

Okay, I think we have reached the end of today's Q&A session. Thank you for joining us today. We appreciate your interest in our company, and we look forward to meeting more of you.

Over the coming months, and providing financial and business updates, next quarter in the interim, we remain available to answer any questions that you may have.

So, have a good day.